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COM 1109.000 2020-2022
Mitchell D.Roth " Deanna S. Sako Mayor , ', Director • -moor. Diane Nakagawa •o._ Deputy Director ►'�:„ire:°r�` - County of Hawaii Finance Department 25 Aupuni Street,Suite 2103 • Hilo,Hawaii 96720 o (808)961-8234 • Fax(808)961-8569 "•'' November 7, 2022 Maile Medeiros David, Council Chair and Members of the Hawaii County Council Hawai`i County Council `sa 25 Aupuni Street „ Hilo, Hawaii 96720 Re: A resolution approving the issuance of special tax revenue bonds for the County's Community Facilities District No. 1-2021 (Kaloko Heights Project); authorizing the application of the proceeds of the bonds, together with certain other available funds, to fund the costs of certain facilities relating to such district; approving the forms of the indenture, preliminary official statement, bond purchase agreement and continuing disclosure agreements relating to the bonds; and authorizing the taking of further actions relating to the bonds and the district On October 7, 2021, Ordinance No. 21-67 established a community facilities district, designated as the "County of Hawaii Community Facilities District No. 1-2021 (Kaloko Heights Project) for the purpose of financing the acquisition and construction of certain special improvements and authorized the levy of a special tax on properties within the District. Pursuant to Ordinance No. 22-33 the County has authorized the issuance of one or more series of special tax revenue bonds to fund costs associated with the District Improvements. Enclosed is a resolution authorizing the issuance and sale of up to $14,425,000 aggregate principal amount of Series 2022 Bonds, authorizing the application of the proceeds of the bonds,together with certain other available funds, to fund the costs of certain facilities relating to such district; approving the forms of the indenture, preliminary official statement, bond purchase agreement and continuing disclosure agreements relating to the bonds; and authorizing the taking of further actions relating to the bonds and the district. Also, included attachments to this communication are the following: • Kaloko Heights Bond Indenture • Preliminary Limited Offering Memorandum • Bond Purchase Agreement • County Continuing Disclosure Agreement • Property Owner Continuing Disclosure Agreement p.� Comm. No. ` 1• <Rts . (AlUV-2") Ref. To: Wu l (' - 7 2022 Ha County is an Equal Opportunity Employer and ProviderRef. Date NOV We respectfully request that a breach be authorized to submit this resolution after the October 26, 2022 submission deadline, and to waive it from the Finance Committee in order to be placed on the November 16, 2022 Council agenda. If there are any questions, please do not hesitate to call me at 961-8092. Deanna S. Sako Director of Finance Enc. c: Treasury TRUST INDENTURE By and Between COUNTY OF HAWAII and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee Dated as of , 2022 Relating to Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds Table of Contents Page ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.1. Definitions. 2 Section 1.2 Content of Certificates and Opinions 12 Section 1.3. Interpretation 13 ARTICLE II GENERAL AUTHORIZATION AND BOND TERMS Section 2.1. Authorization of Bonds 14 Section 2.2. Type and Nature of Bonds. 14 Section 2.3. Equality of Bonds and Pledge of Special Taxes. 14 Section 2.4. Description of 2022 Bonds; Interest Rates 15 Section 2.5. Place and Form of Payment 15 Section 2.6. Form of Bonds 16 Section 2.7. Execution and Authentication. 16 Section 2.8. Bond Register 16 Section 2.9. Restrictions on Registration of Exchange or Transfer 17 Section 2.10. Mutilated,Lost, Destroyed or Stolen Bonds 18 Section 2.11. Book-Entry System 18 Section 2.12. Conditions for the Issuance of Parity Bonds 20 ARTICLE III CREATION OF FUNDS AND APPLICATION OF REVENUES AND GROSS TAXES Section 3.1. Creation of Funds; Application of Proceeds. 22 Section 3.2. Deposits to and Disbursements from Special Tax Fund 23 Section 3.3. Administrative Expense Account of the Special Tax Fund. 23 Section 3.4. Interest Account and Principal Account of the Special Tax Fund 24 Section 3.5. Redemption Account of the Special Tax Fund 25 Section 3.6. Prepayment Account of the Special Tax Fund 25 Section 3.7. Reserve Account of the Special Tax Fund 26 Section 3.8. Rebate Fund 27 Section 3.9. Project Fund 29 Section 3.10. Surplus Fund 30 Section 3.11. Investments 31 Section 3.12. Trustee Not Responsible for Losses; Brokerage Confirmations 31 ARTICLE IV REDEMPTION OF BONDS Section 4.1. Redemption of 2022 Bonds 33 Section 4.2. Selection of Bonds for Redemption 35 Table of Contents Page Section 4.3. Notice of Redemption 35 Section 4.4. Partial Redemption of Bonds. 36 Section 4.5. Effect of Notice and Availability of Redemption Money 36 Section 4.6. Purchase of Bonds by County. 37 ARTICLE V COVENANTS AND WARRANTY Section 5.1. Warranty 37 Section 5.2. Covenants 37 Section 5.3. Foreclosure 40 Section 5.4. Continuing Disclosure and Reporting Requirements 40 ARTICLE VI AMENDMENTS TO INDENTURE Section 6.1. Supplemental Indentures or Orders Not Requiring Owner Consent 42 Section 6.2. Supplemental Indentures or Orders Requiring Owner Consent 42 Section 6.3. Notation of Bonds; Delivery of Amended Bonds. 43 ARTICLE VII TRUSTEE Section 7.1. Duties, Immunities and Liabilities of Trustee 44 Section 7.2. Removal of Trustee 44 Section 7.3. Resignation of Trustee. 45 Section 7.4. Liability of Trustee 45 Section 7.5. Merger or Consolidation. 47 ARTICLE VIII EVENTS OF DEFAULT; REMEDIES Section 8.1. Events of Default 47 Section 8.2. Remedies of Owners 47 ARTICLE IX DEFEASANCE Section 9.1. Defeasance 50 Table of Contents Page ARTICLE X MISCELLANEOUS Section 10.1. Cancellation of Bonds 51 Section 10.2. Execution of Documents and Proof of Ownership 51 Section 10.3. Unclaimed Moneys 52 Section 10.4. Provisions Constitute Contract 52 Section 10.5. Future Contracts. 53 Section 10.6. Further Assurances 53 Section 10.7. Severability 53 Section 10.8. Notices. 53 Section 10.9. General Authorization 53 Section 10.10. Execution in Counterparts 53 EXHIBIT A FORM OF 2022 BOND A-1 EXHIBIT B-1 FORM OF REQUISITION FOR ADMINISTRATIVE EXPENSE ACCOUNT B-1-1 EXHIBIT B-2 FORM OF REQUISITION FOR ACQUISITION AND IMPROVEMENT FUND B-2-1 EXHIBIT C RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES C-I EXHIBIT D DTC REPRESENTATION LETTER D-1 EXBIBIT E FORM OF INVESTOR LETTER E-1 3 TRUST INDENTURE THIS TRUST INDENTURE (this "Indenture"), dated as of , 2022, is by and between the COUNTY OF HAWAII, a political subdivision of the State of Hawaii (the "County"), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States of America,as trustee(the"Trustee"). WITNESSETH: WHEREAS, pursuant to Chapter 32, Hawaii CountyCode 1983 (2016 Edition, as Amended) ("Chapter 32"),and Ordinance No. 21-67 of the County enacted in accordance therewith,as amended by the below-mentioned Bond Ordinance (the "Ordinance of Formation"), the County has established a community facilities district designated as "Hawaii County Community Facilities District No. 1-2021 (Kaloko Heights Project)" (the "District") for the purpose of financing the acquisition and construction of certain special improvements (as more fully described in the Ordinance of Formation, the "Improvements");and WHEREAS,the County is authorized under Chapter 32 and the Ordinance of Formation to levy special taxes (the "Special Taxes") to fund all or a portion of the costs of the Improvements and to pay the debt service on special tax revenue bonds issued to fund such costs; and WHEREAS, pursuant to Ordinance No. 22-33 of the County (the "Bond Ordinance"), the County has (i) authorized the issuance of up to $22,000,000 aggregate principal amount (excluding refunding bonds) of special tax revenue bonds (collectively, including the "2022 Bonds" as hereinafter defined, the "Bonds")to fund all or a portion of the costs of the Improvements, all secured by a pledge of the Special Taxes as herein provided, and (ii) amended certain provisions of the Ordinance of Formation pertaining to the enforcement of the lien of the Special Taxes relating to the security for the Bonds;and WHEREAS, pursuant to Resolution No. of the County Council (the "2022 Series Resolution"), the County has authorized an initial series of Bonds (the "2022 Bonds") in an aggregate principal amount not to exceed$ ;and WHEREAS, the County and the Trustee are entering into this Indenture to provide for the authentication and delivery of the Bonds (initially, the 2022 Bonds), to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof,premium, if any,and interest thereon;and WHEREAS,the County has determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the County, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the County, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture has been in all respects duly authorized; NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH, that in order to secure the payment of the principal of, premium, if any, and the interest on all Bonds at any time issued and Outstanding (as hereinafter defined) under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set 1 forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners (as hereinafter defined) thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the County does hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time to time of the Bonds, as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings: "Account"means any account created pursuant to this Indenture. "Acquisition Price"shall have the meaning set forth in Section 2(b)of the Project Funding Agreement. "Actual Costs"shall have the meaning set forth in Section 2(b) of the Project Funding Agreement. "Administrative Expense Account" means the account by such name in the Special Tax Fund created and established pursuant to Section 3.1 hereof. "Administrative Expense Budget Amount" means, for any Fiscal Year, the budgeted amount of Administrative Expenses included in the levyof Special Taxes for such Fiscal Year, as determined P P by the County and confirmed by the Special Tax Administrator. "Administrative Expenses" means the actual or reasonably estimated costs related to the administration of the District as set forth in Chapter 32 and the Ordinance of Formation, including, but not limited to (a) "Incidental Expenses" as defined in Exhibit B to the Ordinance of Formation and supplemented by Section 2(e) of the Project Funding Agreement, and (b) "Administrative Expenses" as defined in Section A of the RMA, which definitions are incorporated herein by this reference as if fully set forth herein. "Alternative Penalty Account" means the account by such name created and established in the Rebate Fund pursuant to Section 3.1 hereof. "Annual Debt Service" means the principal amount of any Outstanding Bonds payable in a Bond Year or Fiscal Year, as applicable, either at maturity or pursuant to a Sinking Fund Payment and any interest payable on any Outstanding Bonds in such Bond Year or Fiscal Year, if the Bonds are retired as scheduled. "Authorized County Representative" means the Director of Finance of the County or any other Person or Persons designated by the Director of Finance in a written instrument signed by such Director and containing the specimen signature of each such designee. 2 "Authorized Developer Representative" means a Person or Persons designated by the Developer in a written instrument signed by the member(s), manager(s) or other appropriate officer(s) of the Developer, as applicable, and containing the specimen signature of each such designee. "Authorized Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein: (a) Direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Treasury Department, and CATS and TIGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America("Direct Obligations"); (b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): (i) U.S. Export-Import Bank ("Eximbank") - direct obligations or fully guaranteed certificates of beneficial ownership, (ii) Farmers Home Administration ("FmHA") - certificates of beneficial ownership, (iii) Federal Financing Bank, (iv) Federal Housing Administration debentures ("FHA"), (v) General Services Administration - participation certificates, (vi) Government National Mortgage Association ("GNMA" or "Ginnie Mae") - GNMA-guaranteed mortgage-backed bonds and GNMA-guaranteed pass-through obligations, (vii) U.S. Maritime Administration- guaranteed Title XI financings, and (viii) U.S. Department of Housing and Urban Development ("HUD") - project notes, local authority bonds, new communities debentures (U.S. government guaranteed debentures), and U.S. Public Housing Notes and Bonds (U.S. government guaranteed public housing notes and bonds); (c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped securities are only permitted if they have been stripped by the agency itself): (i) Federal Home Loan Bank System - senior debt obligations, (ii) Federal Home Loan Mortgage Corporation ("FHLMC" or "Freddie Mac") - senior debt obligations, 3 (iii) Federal National Mortgage Association ("FNMA" or Fannie Mae") - senior debt obligations, (iv) Student Loan Marketing Association ("SLMA" or"Sallie Mae") - senior debt obligations, (v) Resolution Funding Corp. ("REFCORP")debt obligations,and (vi) Farm Credit System Corp. - consolidated system-wide bonds and notes; (d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Securities Act of 1933 and to which Standard & Poor's has assigned a rating of AAAm-G, AAAm or AAm, and, which, if they are rated by Moody's, are rated Aaa, Aal or Aa2 (including money market funds of the Trustee and its affiliates or funds for which the Trustee or affiliates provide investment advisory or other management services); (e) Certificates of deposit secured at all times by collateral described in (a) and/or (b) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the Trustee on behalf of the Owners must have a perfected first security interest in the collateral; (f) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the Federal Deposit Insurance Corporation ("FDIC") or which are with a bank rated AA or better by Standard & Poor's and Aa or better by Moody's (including those of the Trustee and its affiliates); (g) Investment Agreements with any corporation, including banking or financial institutions,provided that: (i) the long-term debt of the provider of any such investment agreement, or in the case of a guaranteed corporation the long-term debt of the guarantor is rated, at the time of investment, in one of the two highest rating categories offered by each Rating Agency (without regard to gradations of plus or minus, or numerical gradations, within such category), and (ii) any such investment agreement shall include a provisions that in the event that the long-term debt rating of the provider or the guarantor is downgraded below AA- by Standard & Poor's or Aa3 by Moody's during the term of the agreement the provider must either (A)deliver to the Trustee or a third party custodian collateral in the form of Treasury Department or agency obligations which at least equal 102%of the principal amount invested thereunder or (B)assign the existing agreement and all of its obligations thereunder to a financial institution mutually acceptable to the provider, the County and the Trustee which is rated in one of the two highest rating categories offered by each Rating Agency (without regard to gradations of plus or minus, or numerical gradations, within such category), and (iii) any such investment agreement shall include a provision that in the event that the long-term debt rating or claims paying ability rating of the provider, or the guarantor, is downgraded below A- by Standard & Poor's or A3 by Moody's during the term of the 4 agreement the provider must repay the principal of and accrued by it unpaid interest on the invested moneys, and (iv) any such agreement shall include a provision to the effect that in the event of default under such Investment Agreement by such provider or in the event of a bankruptcy of such provider, the County has the right to withdraw or cause the Trustee to withdraw all funds invested in such agreement and thereafter to invest such funds pursuant to this Indenture,and (v) any such investment agreement permits withdrawal upon not more than three (3) days' notice (excepting only withdrawals from the Project Fund, from which withdrawals may be permitted upon not more than seven (7) days' notice) for any purpose authorized for the use of the invested funds under this Indenture; (h) Commercial paper rated, at the time of purchase, Prime - 1 by Moody's and A-1 or better by Standard& Poor's; (i) Bonds or notes issued by any state or municipality which are rated by both Rating Agencies in one of the two highest rating categories assigned by such agencies; (j) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured or unguaranteed obligation rating of Prime - 1 or A3 or better by Moody's and A-1 or A or better by Standard& Poor's; (k) Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank insured by FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated P-1 or A3 or better by Moody's, and A-1 or A- by Standard& Poor's; provided: (i) a master repurchase agreement or specific written repurchase agreement governs the transaction,and (ii) the securities are held free and clear of any lien by the Trustee or an independent third party acting solely as agent ("Agent") for the Trustee, and such third party is (i) a Federal Reserve Bank, (ii) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $50 million, or (iii) a bank approved in writing for such purpose by the County, and the Trustee shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Trustee, and (iii) a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. in such securities is created for the benefit of the Trustee, and (iv) the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two Business Days of such valuation, and 5 (v) the fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 103%. To the extent that any of the requirements concerning Authorized Investments embodies a legal conclusion, the Trustee shall be entitled to conclusively rely upon a Certificate from the appropriate party or an opinion from counsel to such party,that such requirement has been met. "Beneficial Owner" means any person which: (a) has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) including, but not limited to, the power to vote or consent with respect to any Bonds or to dispose of ownership of any Bonds; or (b) is treated as the owner of any Bonds for federal income tax purposes. "Bond Counsel" means an attorney at law or a firm of attorneys selected by the County of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia. "Bond Ordinance"shall have the meaning set forth in the Recitals hereto. "Bond Register"means the books which the Trustee shall keep or cause to be kept on which the registration and transfer of the Bonds shall be recorded. "Bonds"means the 2022 Bonds and any Parity Bonds issued pursuant to this Indenture. "Bond Year" means the twelve month period commencing on May 16 of each year and ending on May 15 of the following year, except that the first Bond Year for a Series of Bonds shall begin on the Delivery Date of the Bonds of such Series and end on the first May 15 which is not more than 12 months after the Delivery Date of the Bonds of such Series, provided that for purposes of Section 3.8 with respect to a particular Series of Bonds, "Bond Year" shall have the meaning ascribed thereto in the Tax Certificate applicable to the Bonds of such Series. "Business Day"means a day which is not a Saturday or Sunday or a day of the year on which banks in New York, New York, Honolulu, Hawaii, or the city where the Designated Office of the Trustee is located,are not required or authorized to remain closed. "Capitalized Interest"means interest on the 2022 Bonds that is funded with proceeds of such Bonds. "Capitalized Interest Subaccount" means the Subaccount by such name created and established in the Interest Account of the Special Tax Fund pursuant to Section 3.1 hereof. "Certificate"means a written certificate or report delivered pursuant to the provisions of this Indenture with respect to specified matters arising hereunder, which shall be executed by an Authorized County Representative, an Authorized Developer Representative or the authorized representatives of other Persons as required or permitted hereunder. "Chapter 19"means Chapter 19 of the County Code. "Chapter 32"shall have the meaning set forth in the Recitals hereto. 6 "Construction Account" means the Account by such name created and established in the Project Fund pursuant to Section 3.1 hereof. "Costs of Issuance" means the costs and expenses incurred in connection with the issuance and sale of any Series of Bonds, including without limitation the acceptance and initial annual fees and expenses of the Trustee, legal fees and expenses, costs of printing the Bonds and the preliminary and final official statements for the Bonds, fees of financial consultants, District formation and related administration costs and all other related fees and expenses. "Costs of Issuance Account" means the Account by that name created and established in the Project Fund pursuant to Section 3.1 hereof. "County"means the County of Hawai`i,a political subdivision of the State. "County Code"means the Hawai`i County Code 1983 (2016 Edition,as Amended). "County Council"means the Council of the County,as the legislative body of the County. "DEM" means the Department of Environmental Management of the County; provided that, when used with respect to any matter as to which DEM has delegated responsibility to the Department or Public Works or other departments of the County, references to DEM shall mean the department to which such responsibility has been delegated. "Delivery Date" means the date on which the Bonds of a Series are issued and delivered to the initial purchasers thereof. "Designated Office of the Trustee" means such office as the Trustee may designate from time to time as the office or offices at which its duties hereunder shall be performed. Initially, the Designated Office of the Trustee shall be the Trustee's office at "Developed Property" shall have the meaning set forth in the RMA "Developer" means, collectively, (i) RCFC Kaloko Heights, LLC, a Delaware limited liability company, (ii) Kaloko Heights BIA Holdings, LLC, a Delaware limited liability company, and (iii) Kaloko Heights Investors, LLC, a Delaware limited liability company, and their respective successors and assigns as"Developer" under the Project Funding Agreement. "Developer Advances" shall have the meaning set forth in Section 4(c) of the Project Funding Agreement. "District" shall have the meaning set forth in the Recitals hereto. "DTC"means The Depository Trust Company,New York,New York. and its successors and assigns. "DTC Participants" means securities brokers and dealers, banks, trust companies, clearing corporations and other organizations maintaining accounts with DTC. "Federal Securities"means any of the following: 7 (a) Cash; (b) United States Treasury Certificates, Notes and Bonds (including State and Local Government Series—"SLGS"); (c) Direct obligations of the Treasury Department which have been stripped by the Treasury Department itself, e.g., CATS, TIGRS and similar securities; (d) The interest component of Resolution Funding Corp. strips which have been stripped by request to the Federal Reserve Bank of New York and are in book-entry form, (e) Obligations issued by the following agencies if backed by the full faith and credit of the United States: (i) Eximbank - direct obligations or fully guaranteed certificates of beneficial ownership, (ii) FmHA -certificates of beneficial ownership, (iii) Federal Financing Bank, (iv) General Services Administration- participation certificates, (v) U.S. Maritime Administration -guaranteed Title XI financing,and (vi) HUD - project notes, local authority bonds, new communities debentures - U.S. government guaranteed debentures, U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds, (f) Pre-refunded municipal bonds the principal of and interest and premium (if any) on which are fully secured by securities described in clauses (a) through (e) above, which securities shall be deposited into a segregated escrow fund and shall be irrevocably pledged and used exclusively to pay such principal,premium (if any)and interest. "Fiscal Year" means the period beginning on July 1 of each year and ending on the next following June 30. "Fitch"means Fitch Ratings, or its successors and assigns. "Improvements"means the public sewer system improvements described in the Ordinance of Formation and the Project Funding Agreement. 8 "Independent Financial Consultant" means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the County, who,or each of whom: (a) is in fact independent and not under the control of the County; (b) does not have any substantial interest, direct or indirect, in the County; and (c) is not connected with the County as a member, officer or employee of the County, but who may be regularly retained to make annual or other reports to the County. "Indenture" means this Trust Indenture, together with any Supplemental Indenture entered into pursuant to Article VI. "Interest Account" means the account by such name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. "Interest Payment Date"means each May 15 and November 15, commencing May 15, 2023; provided, however, that, if any such day is not a Business Day, interest up to, but not including, the Interest Payment Date will be paid on the Business Day next following such date. "Investment Agreement" means one or more agreements for the investment of funds of the District complying with the criteria therefor as set forth in Subsection (g) of the definition of Authorized Investments herein. "Letter of Credit" means an irrevocable direct-pay letter of credit, in form and substance satisfactory to the County, issued in favor of the Trustee by a bank or other financial institution acceptable to the County. "Maximum Annual Debt Service" means the maximum amount of the Annual Debt Service for any Bond Year prior to the final maturity of the Bonds. "Maximum Special Tax" means the maximum Special Tax determined for each category of Taxable Property in accordance with the RMA. "Moody's"means Moody's Investors Service, or its successors and assigns. "Ordinance of Formation" shall have the meaning set forth in the Recitals hereto. "Outstanding" or "Outstanding Bonds" means all Bonds theretofore issued by the County hereunder, except: (a) Bonds theretofore cancelled or surrendered for cancellation in accordance with Section 10.1 hereof; (b) Bonds for payment or redemption of which moneys shall have been theretofore deposited in trust (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in this Indenture; and (c) Bonds which have been surrendered to the Trustee for transfer or exchange pursuant to Section 2.9 hereof or for which a replacement has been issued pursuant to Section 2.10 hereof. 9 "Owner" or "Bondowner" means the Person or Persons in whose name or names any Bond is registered. "Parity Bonds" means all bonds, notes or other evidences of indebtedness issued subsequent to the issuance of the 2022 Bonds for the purpose of refunding all or a portion of the Outstanding Bonds of any Series previously issued hereunder, subject to the conditions set forth in Section 2.12 hereof. "Participating Underwriter" means, with respect to the 2022 Bonds, Stifel, Nicolaus & Company, Incorporated, as the original underwriter of the 2022 Bonds. "Payment Request" shall have the meaning set forth in Section 2(b) of the Project Funding Agreement. "Person" means natural persons, firms, corporations, partnerships, limited liability companies, associations,trusts,public bodies and other entities. "Prepayment" means money received by the County as a complete or partial prepayment of Special Taxes permitted pursuant to the RMA. "Prepayment Account" means the Account by such name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. "Principal Account" means the Account by such name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. "Project Fund"means the fund by such name created and established pursuant to Section 3.1 hereof. "Project Funding Agreement" means that certain Project Funding and Acquisition Agreement dated as of , 2022, by and between the County and the Developer, together with any amendments thereto. "Qualified Purchaser" means (a) a qualified institutional buyer, as that term is defined in Securities and Exchange Commission Rule 144A promulgated under the Securities Act of 1933, as amended and (b) an "institutional accredited investor," which consists of accredited investors as defined in subsections (a)(1), (2), (3) and (7) of Securities and Exchange Commission Rule 501 promulgated under the Securities Act of 1933,as amended. "Rating Agency" means (i) Fitch, (ii) Moody's, (iii) Standard& Poor's, or (iv) such other nationally recognized rating agencies that rate municipal bonds, as designated by an Authorized County Representative "Real Property Taxes" means real property taxes, but not Special Taxes, levied by the County pursuant to Chapter 19. "Rebatable Arbitrage" shall have the meaning set forth in Section 3.8(i)(A) hereof. "Rebate Account" means the Account by such name created and established in the Rebate Fund pursuant to Section 3.1 hereof. 10 "Rebate Fund"means the fund by such name created and established pursuant to Section 3.1 hereof. "Rebate Regulations" means any final, temporary or proposed Regulations promulgated under Section 148(f)of the Tax Code. "Record Date" means the first day of the month in which the applicable Interest Payment Date occurs, regardless of whether such day is a Business Day. "Redemption Account" means the account by such name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. "Regulations" means the regulations adopted or proposed by the Treasury Department from time to time with respect to obligations issued pursuant to Section 103 of the Tax Code. "Representation Letter" means the representation letter from the County to DTC in the form attached as Exhibit D hereto. "Reserve Account" means the account by such name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. "Reserve Requirement" means, as of any date of calculation by the County, an amount equal to the lowest of(i) 10% of the original proceeds of the Bonds, less original issue discount, if any, plus original issue premium, if any, or (ii) Maximum Annual Debt Service, or (iii) 125% of the average Annual Debt Service. "RMA" means the Rate and Method of Apportionment of Special Taxes for the District, as approved by County pursuant to the Ordinance of Formation and attached hereto as Exhibit C, as such RMA may be amended from time to time (if and to the extent such amendment is consistent with the covenant set forth in Section 5.2(g) hereof). "Series" means one or more Bonds issued at the same time, or sharing some other common term or characteristic, and designated as a separate series pursuant hereto. "Series Resolution" shall mean the 2022 Series Resolution and any additional Resolution of the County Council authorizing the issuance of a series of Parity Bonds pursuant to the Bond Ordinance. "Sinking Fund Payment" means, with respect to any Term Bonds, the annual payment in those years indicated in Section 4.1(b) hereof or in the applicable Supplemental Indenture to be deposited in the Principal Account to redeem a portion of the Term Bonds in accordance with the schedule set forth herein or in the applicable Supplemental Indenture to retire the Term Bonds. "Six-Month Period" means, with respect to each Series of Bonds as to which the 1 1/2% penalty has been elected pursuant to Section 148(f) of the Tax Code, the period of time beginning on the Delivery Date of such Series of Bonds and ending six consecutive months thereafter, and each six-month period thereafter until the latest maturity date of such Series of Bonds. 11 "Special Tax Administrator" means such Person as may be designated by the County to administer the calculation and collection of the Special Taxes, or any successor acting in such capacity. "Special Tax Fund" means the fund by such name created and established pursuant to Section 3.1 hereof. "Special Taxes" means the special taxes authorized by the Ordinance of Formation to be levied on Taxable Property within the District in accordance with the RMA, together with applicable penalties and interest, but excluding proceeds of the sale of any Taxable Property upon foreclosure pursuant to this Indenture that are applied to the payment of costs related to such sale, including, but not limited to, all legal fees and expenses, court costs, consultant and title insurance fees and expenses. "Standard & Poor's" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,or its successors and assigns. "State"means the State of Hawai`i. "Supplemental Indenture"means any supplemental indenture entered into in accordance with the provisions hereof amending or supplementing this Indenture. "Surplus Fund" means the Fund by such name created and established pursuant to Section 3.1 hereof. "Taxable Property" means all parcels of property within the District that are subject to the levy of Special Taxes by the County in accordance with the RMA. "Tax Certificate" means the Certificate by that name to be executed by an Authorized County Representative on the Delivery Date of each Series of Bonds the interest on which is intended to be excluded from gross income for federal income tax purposes to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Tax Code. "Tax Code" means the Internal Revenue Code of 1986, as amended, and any regulations, rulings, judicial decisions, and notices, announcements, and other releases of the Treasury Department or Internal Revenue Service interpreting and construing it. "Tax Receipts Account" means the Account by such name created and established in the Project Fund pursuant to Section 3.1 hereof. "Tax Zone 1" shall have the meaning set forth in the RMA. "Tax Zone 1 Special Tax Requirement' shall have the meaning set forth in the RMA. "Tax Zone 2" shall have the meaning set forth in the RMA. "Tax Zone 2 Special Tax Requirement" shall have the meaning set forth in the RMA. 12 "Term Bonds"means the 2022 Term Bonds and any maturities of Parity Bonds designated as such in a Supplemental Indenture. "Treasury Department"means the United States Department of the Treasury. "Trustee" means U.S. Bank Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America, and its successors or assigns, or any other bank or trust company which may at any time be substituted in its place as provided in Sections 7.2 or 7.3 hereof and any successor thereto. "2022 Bonds" means any of the County's Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds, Series 2022, issued and Outstanding under this Indenture. "2022 Series Resolution"shall have the meaning set forth in the Recitals hereto. "2022 Term Bonds" means the 2022 Bonds maturing on May 15 of the years 20_, 20 , 20 and 20 . Section 1.2 Content of Certificates and Opinions. Every Certificate or opinion provided for herein with respect to compliance with any provision hereof shall include (i) a statement that the Person making or giving such Certificate or opinion has read such provision and the definitions herein relating thereto; (ii) a brief statement as to the nature and the scope of the examination or investigation upon which the Certificate or opinion is based; (iii) a statement that, in the opinion of such Person, he has made or caused to be made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed; and (iv) a statement as to whether, in the opinion of such Person, such provision has been complied with. Any such Certificate or opinion made or given by an Authorized County Representative may be based, insofar as it relates to legal, accounting or real property matters, upon a Certificate of an Authorized Developer Representative or a Certificate or opinion of or representation by counsel, an accountant or a management consultant, unless the Authorized County Representative knows, or in the exercise of reasonable care should have known, that the Certificate, opinion or representation with respect to the matters upon which such Certificate or statement may be based, as aforesaid, is erroneous. Any such Certificate or opinion made or given by counsel, an accountant or a management consultant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the County) upon a Certificate or opinion of or representation by an Authorized County Representative or an Authorized Developer Representative, unless such counsel, accountant or management consultant knows, or in the exercise or reasonable care should have known, that the Certificate or opinion or representation with respect to the matters upon which such Person's Certificate or opinion or representation may be based, as aforesaid, is erroneous. The same Authorized County Representative or Authorized Developer Representative, or the same counsel or accountant or management consultant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Indenture, but different Authorized County Representatives or Authorized Developer Representatives, counsel, accountants or management consultants may certify as to different matters, respectively. 13 Section 1.3. .Inter retation (a) Unless the context otherwise indicates, words P expressed in the singular shall include the plural and vice versa and the use of any gender is for convenience only and shall be deemed to mean and include all genders. (b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof. ARTICLE II GENERAL AUTHORIZATION AND BOND TERMS Section 2.1. Authorization of Bonds. The County hereby authorizes the issuance of the Bonds under and subject to the terms of this Indenture,the Bond Ordinance and other applicable laws of the County and the State. The Bonds may be issued in an aggregate principal amount not to exceed $22,000,000 (excluding Bonds issued to refund other Bonds previously issued hereunder). The Bonds may consist of one or more Series of varying denominations, dates, maturities, interest rates and other provisions, subject to the provisions and conditions contained herein. The Bonds shall be designated generally as the "Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds," each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds. Section 2.2. Type and Nature of Bonds. The Bonds are and shall be limited obligations of the County and shall be payable as to the principal thereof and interest thereon and any premiums upon the redemption thereof solely from the Special Taxes and amounts on deposit in the Special Tax Fund (other than amounts in the Administrative Expense Account of the Special Tax Fund) and the Project Fund (other than amounts in the Tax Receipts Account of the Project Fund). Neither the full faith and credit nor the taxing power (except as it pertains to the Special Taxes) of the County, the State or any political subdivision thereof is pledged to the payment of the Bonds. The County's limited obligation to pay the principal of,premium, if any, and interest on the Bonds from the Special Taxes and the amounts on deposit in the Special Tax Fund (other than amounts in the Administrative Expense Account of the Special Tax Fund) is absolute and unconditional, free of deductions and without any abatement, offset, recoupment, diminution or set-off whatsoever except as otherwise provided herein. The Bonds are not a legal or equitable pledge, charge, lien, or encumbrance upon any of the County's property, or upon any of its income, receipts or revenues, except the Special Taxes and amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) and the Project Fund (exclusive of the Tax Receipts Account) which are, under the terms of this Indenture, pledged for the payment of the Bonds and interest thereon. The County shall not be required to advance any money derived from any other source for the payment of the principal of and interest and premium (if any) on the Bonds, or for the performance of any covenants contained herein; provided that the foregoing shall not prohibit the County from electing in its sole discretion to advance funds from other sources for any such purpose. Neither the members of the County Council nor any Persons executing the Bonds,are liable personally on the Bonds by reason of their issuance. Section 2.3. Equality of Bonds and Pledge of Special Taxes. The Bonds shall be equally and ratably secured by and payable from the Special Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) and the Project Fund (exclusive of the 14 Tax Receipts Account) without priority for number, date of the Bonds, date of sale, date of execution, or date of delivery, and payment of the principal of(including Sinking Fund Payments) and interest and premium (if any) on the Bonds shall be exclusively paid from the Special Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) and the Project Fund (exclusive of the Tax Receipts Account), which are hereby pledged to the payment of the principal of and interest and premium (if any) on the Bonds. Such pledge shall constitute a first lien on such assets. Amounts in the Special Tax Fund (other than the Administrative Expense Account therein) and the Project Fund (exclusive of the Tax Receipts Account) shall constitute trust funds held for the benefit of the Owners to be applied to the payment of the principal of and interest and premium (if any) on the Bonds and so long as any of the Bonds or any premium or interest thereon remain Outstanding, such amounts shall not be used for any other purpose, except as permitted by this Indenture or any Supplemental Indenture. Notwithstanding any provision contained in this Indenture to the contrary, Special Taxes deposited in the Administrative Expense Account of the Special Tax Fund, the Rebate Fund, the Tax Receipts Account of the Project Fund and the Surplus Fund shall no longer be considered to be pledged to the Bonds; and none of the Rebate Fund, the Tax Receipts Account, the Administrative Expense Account nor the Surplus Fund shall be construed as a trust fund held for the benefit of the Owners. Section 2.4. Description of 2022 Bonds; Interest Rates. The 2022 Bonds shall be issued in the aggregate principal amount of$ , shall be in fully registered form in denominations of $100,000 or any integral multiple of $5,000 in excess thereof, and shall be numbered R-1 and consecutively upwards. The 2022 Bonds shall be designated "Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project), Special Tax Revenue Bonds, Series 2022." The 2022 Bonds shall be dated as of their Delivery Date and shall mature and be payable on May 15 in the years and in the aggregate principal amounts and shall be subject to and shall bear interest at the rates set forth in the table below payable on each Interest Payment Date: Maturity Date (May 15) Principal Amount Interest Rate Interest shall be payable on each 2022 Bond from the date established in accordance with Section 2.5 hereof on each Interest Payment Date thereafter until the principal sum of that 2022 Bond has been paid; provided, however, that if at the maturity date of any 2022 Bond (or if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption) funds are available for the payment or redemption thereof in full, in accordance with the terms of this Indenture, such 2022 Bonds shall then cease to bear interest. Interest due on the 2022 Bonds shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. Section 2.5. Place and Form of Payment. The Bonds shall be payable both as to principal and interest, and as to any premiums upon the redemption thereof, in lawful money of the United States of America. The principal of the Bonds and any premiums due upon the redemption 15 thereof shall be payable by check of the Trustee upon presentation and surrender thereof at the Designated Office of the Trustee. Interest on any Bond shall be payable from the Interest Payment Date next preceding the date of authentication of that Bond, unless (i) such date of authentication is an Interest Payment Date in which event interest shall be payable from such date of authentication, (ii) the date of authentication is after a Record Date but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication, or (iii)the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such Bond, in which event interest shall be payable from the dated date of such Bond; provided, however, that if at the time of authentication of such Bond, interest is in default, interest on that Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on that Bond, interest on that Bond shall be payable from its dated date. Interest on any Bond shall be paid to the Person whose name shall appear in the Bond Register as the Owner of such Bond as of the close of business on the Record Date. Such interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, to such Owner at his or her address as it appears on the Bond Register. In addition, upon a request in writing received by the Trustee on or before the applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account within the United States designated by such Owner. Section 2.6. Form of Bonds. The 2022 Bonds and the certificate of authentication shall be substantially in the form attached hereto as Exhibit A, which forms are hereby approved and adopted as the forms of such Bonds and of the certificate of authentication. Notwithstanding any provision in this Indenture to the contrary, the County may, in its sole discretion, elect to issue the Bonds in book entry form. Section 2.7. Execution and Authentication. The Bonds shall be signed on behalf of the County by the manual or facsimile signatures of the Mayor and Director of Finance of the County, and shall be impressed with or bear a facsimile of the seal of the County. In case any one or more of the officers who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed have been authenticated and delivered by the Trustee (including new Bonds delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds or to lost, stolen, destroyed or mutilated Bonds), such Bonds shall nevertheless be valid and may be authenticated and delivered as herein provided, and may be issued as if the Person who signed such Bonds had not ceased to hold such office. Only the Bonds that bear thereon a certificate of authentication in the form set forth in Exhibit A hereto shall be entitled to any right or benefit under this Indenture, and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee. Section 2.8. Bond Register. The Trustee will keep or cause to be kept, at the Designated Office of the Trustee, sufficient books for the registration and transfer of the Bonds which shall upon reasonable prior notice be open to inspection by the County during all regular business hours, and, subject to the limitations set forth in Section 2.9 hereof, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be transferred on said Bond Register, Bonds as herein provided. 16 The County and the Trustee may treat the Owner of any Bond whose name appears on the Bond Register as the absolute Owner of that Bond for any and all purposes, and the County and the Trustee shall not be affected by any notice to the contrary. The County and the Trustee may rely on the address of the Owner as it appears in the Bond Register for any and all purposes. It shall be the duty of the Owner to give written notice to the Trustee of any change in the Bondowner's address so that the Bond Register may be revised accordingly. Section 2.9. Restrictions on Registration of Exchange or Transfer. (a) General. Subject to the limitations set forth in the following paragraph, the registration of any Bond may, in accordance with its terms, be transferred upon the Bond Register by the Person in whose name it is registered, in person or by such Person's duly authorized attorney, upon surrender of such Bond for cancellation at the Designated Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee and duly executed by the Owner or such Owner's duly authorized attorney. Bonds may be exchanged at the office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity. The Trustee shall not collect from the Owner any charge for any new Bond issued upon any exchange or transfer, but shall require the Owner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds shall be surrendered for registration of transfer or exchange, the County shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds of the same maturity, for a like aggregate principal amount; provided that the Trustee shall not be required to register transfers or make exchanges of(i) Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed, or (ii)any Bonds chosen for redemption. (b) Additional Transfer Restrictions Applicable to 2022 Bonds. No transfer, sale or other disposition of any 2022 Bond, or any beneficial interest therein, may be made except to an entity that is a Qualified Purchaser that is purchasing such 2022 Bond for its own account for investment purposes and not with a view to distributing such 2022 Bond. Each transferee of a 2022 Bond, or any beneficial interest therein, shall be deemed to have acknowledged, represented, warranted and agreed with and to the County, the Participating Underwriter and the Trustee that (i) such transferee is a Qualified Purchaser that is purchasing such 2022 Bond for its own account for investment purposes and not with a view to distributing such 2022 Bond in violation of the Securities Act of 1933 or other applicable securities laws, (ii) the 2022 Bonds are payable solely from secured by and payable from the Special Taxes and such other funds described in the Indenture, (iii) the 2022 Bonds, or any beneficial interest therein, may only be transferred to a Qualified Purchaser and (iv) the County, the Participating Underwriter and the Trustee and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations, warranties and agreements. Each 2022 Bond shall bear a legend describing or referencing the foregoing restrictions on transferability. Neither the Participating Underwriter nor any Owner or Beneficial Owner of the 2022 Bonds shall deposit the 2022 Bonds in any trust or account under its control and sell any shares, participatory interest or certificates in such trust and account, and neither the Participating Underwriter nor any Owner or Beneficial Owner of the 2022 Bonds shall deposit the 2022 Bonds in any trust or account under its control the majority of the assets of which constitute the 2022 Bonds, and sell shares, participatory interest or certificates in such trust or account except to Qualified Purchasers. 17 Each entity that is or that becomes a Beneficial Owner of a 2022 Bond shall be deemed by the acceptance or acquisition of such beneficial ownership interest to have agreed to be bound by the provisions of this Section 2.9(b). In the event that a holder of the 2022 Bonds makes an assignment of its beneficial ownership interest in the 2022 Bonds, the assignor will notify the assignee of the restrictions on purchase and transfer described herein. Any transfer of a 2022 Bond to any entity that is not a Qualified Purchaser shall be deemed null and void. Any 2022 Bond registered in the name of DTC or Cede & Co., as nominee of DTC, shall be deemed to comply with this Indenture so long as each Beneficial Owner of such 2022 Bond is a Qualified Purchaser; provided, however, as a condition of issuance of the 2022 Bonds, each of the initial purchasers of the 2022 Bonds from the Participating Underwriter shall execute and deliver an Investor Letter in the form attached hereto as Exhibit E. Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds. If any Bond shall become mutilated, the County shall execute, and the Trustee shall authenticate and deliver, a new Bond of like tenor, date and maturity in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by the Trustee pursuant to Section 10.1 hereof. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory to the Trustee and, if indemnity satisfactory to the Trustee (and, if the ownership of such Bond is registered in the name of any Person that is not the designee of DTC, satisfactory also to the County) shall be given, the County shall execute and the Trustee shall authenticate and deliver, a new Bond of like tenor and maturity, numbered and dated as the Trustee shall determine in lieu of and in substitution for the Bond so lost, destroyed or stolen. Any Bond issued in lieu of any Bond alleged to be mutilated, lost, destroyed or stolen, shall be equally and proportionately entitled to the benefits hereof with all other Bonds issued hereunder. The Trustee shall not treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be executed, authenticated and delivered hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of delivering a new Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the Trustee may make payment with respect to such Bonds. Section 2.11. Book-Entry System. (a) All Bonds shall be initially issued in the form of a separate single certificated fully registered Bond for each maturity date of the Bonds. Upon initial issuance, the ownership of each Bond shall be registered in the Bond Register in the name of Cede & Co., as nominee of DTC. Except as provided in Section 2.11(d) hereof, all Outstanding Bonds shall be registered in the Bond Register in the name of Cede & Co., as nominee of DTC. (b) With respect to Bonds registered in the Bond Register in the name of Cede & Co., as nominee of DTC, the County and the Trustee shall have no responsibility or obligation with respect to (i)the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii)the delivery to any DTC Participant or any other Person, other than an Owner, as shown in the Bond Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii)the payment to any DTC Participant or any other Person, other than an Owner, as shown in the Bond Register, of any amount with respect to principal of, premium, if any, 18 or interest on the Bonds. The County and the Trustee may treat and consider the Person in whose name each Bond is registered in the Bond Register as the holder and absolute owner of such Bond for the purpose of payment of principal, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners, as shown in the Bond Register, as provided in Section 2.8 hereof, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the County's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the Bond Register, shall receive a certificated Bond evidencing the obligation of the County to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon deliverybyDTC to the Trustee of written notice to the effect that DTC has p determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to record dates, the word "Cede & Co." in this Indenture shall refer to such new nominee of DTC. (c) The delivery of the Representation Letter by the County and the Trustee shall not in any way limit the provisions of Section 2.11(b) hereof or in any other way impose upon the County or the Trustee any obligation whatsoever with respect to Persons having interests in the Bonds other than the Owners, as shown on the Bond Register. The Trustee shall take all action necessary for all representations in the Representation Letter with respect to the Trustee to be complied with at all times. (d) DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the County and the Trustee and discharging its responsibilities with respect thereto under applicable law. The County, in its sole discretion and without the consent of any other Person, may terminate the services of DTC with respect to the Bonds if the County determines.that either DTC is unable to discharge its responsibilities with respect to the Bonds or a continuation of the requirement that all Outstanding Bonds be registered in the Bond Register in the name of Cede & Co., or any other nominee of DTC, is not in the best interest of the beneficial owners of such Bonds. Upon the discontinuation or termination of the services of DTC with respect to the Bonds pursuant to the foregoing after which no substitute securities depository willing to undertake the functions of DTC hereunder can be found which, in the opinion of the County, is willing and able to undertake such functions upon reasonable and customary terms, the County is obligated to deliver Bond certificates, as described in this Indenture and the Bonds shall no longer be restricted to being registered in the Bond Register in the name of Cede& Co. as nominee of DTC, but may be registered in whatever name or names DTC shall designate to the Trustee in writing, in accordance with the provisions of this Indenture. (e) Notwithstanding any other provisions of this Indenture to the contrary, as long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal or, premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the manner provided in the Representation Letter. 19 Section 2.12. Conditions for the Issuance of Parity Bonds. The County may issue Parity Bonds for the purpose of refunding all or a portion of the Outstanding Bonds of any Series previously issued hereunder; subject to the terms and conditions specified below in this Section 2.12. Such Parity Bonds payable from the Special Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expense Account therein) and the Project Fund (other than in the Tax Receipts Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the 2022 Bonds and any other Parity Bonds theretofore or thereafter issued hereunder or under any Supplemental Indenture for the purposes authorized by the Ordinance of Formation and Bond Ordinance (or refunding Bonds of a prior series previously issued for such purposes) in accordance with Chapter 32 and the Ordinance of Formation. Parity Bonds may be issued subject to the following additional specific conditions, which are hereby made conditions precedent to the issuance of any such Parity Bonds: (a) The County shall be in compliance with all covenants set forth in this Indenture and any Supplemental Indenture then in effect and a Certificate of an Authorized County Representative to that effect shall have been filed with the Trustee; provided, however, that Parity Bonds may be issued notwithstanding that the County is not in compliance with all such covenants so long as immediately following the issuance of such Parity Bonds, the County will be in compliance with all such covenants. (b) The Developer shall be in compliance with all of its covenants and agreements under the Project Funding Agreement, and all applicable conditions and requirements for the issuance of such Parity Bonds under the Project Funding Agreement shall have been satisfied. (c) The issuance of such Parity Bonds shall have been duly authorized pursuant to the Bond Ordinance and shall have been provided for by a Supplemental Indenture and Series Resolution duly adopted by the County which shall specify the following: (i) The Series of Bonds to be refunded in whole or in part and the fund or funds into which the proceeds thereof are to be deposited, including amounts so deposited to pay the principal or redemption price of and interest on the Bonds to be refunded and to pay all costs of issuance with respect to the Parity Bonds; (ii) If a Letter of Credit or other security or credit enhancement is provided to secure payment of Special Taxes or the Bonds, appropriate provisions for the issuance of such Letter of Credit or other security or credit enhancement and the making of drawings thereunder by the Trustee and the application of the proceeds of such drawings, including the establishment of a special account within the Special Tax Fund for the proceeds of such drawings; (iii) The authorized principal amount of such Parity Bonds; (iv) The date and the maturity date or dates of such Parity Bonds; provided that(i) each maturity date shall fall on a May 15, and (ii) fixed serial maturities or Sinking Fund Payments, or any combination thereof, shall be established to provide for the retirement of all such Parity Bonds on or before their respective maturity dates; (v) The description of the Parity Bonds, the place of payment thereof and the procedure for execution and authentication; 20 (vi) The denominations and method of numbering of such Parity Bonds; (vii) The amount and due date of each mandatory Sinking Fund Payment, if any, for such Parity Bonds and the redemption provisions for such Parity Bonds; (viii) The amount, if any,to be deposited from the proceeds of such Parity Bonds in the Reserve Account of the Special Tax Fund to increase the amount therein to the Reserve Requirement; (ix) The form of such Parity Bonds; and (x) Such other provisions as are necessary or appropriate and not inconsistent with this Indenture. (d) The Trustee shall have received the following documents or money or securities, all of such documents dated or certified, as the case may be, as of the date of delivery of such Parity Bonds to the Trustee (unless the Trustee shall be directed by the County to accept any of such documents bearing a prior date): (i) A certified copy of the Supplemental Indenture authorizing the issuance of such Parity Bonds; (ii) A written request of the County as to the delivery of such Parity Bonds; (iii) An opinion of Bond Counsel to the effect that(a)the County has the right and power under Chapter 32 and the Bond Ordinance to adopt the Supplemental Indenture relating to such Parity Bonds, and this Indenture and all such Supplemental Indentures have been duly and lawfully adopted by the County, are in full force and effect and are valid and binding upon the County and enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights); (b)this Indenture creates the valid pledge which it purports to create of the Special Taxes and other amounts as provided in this Indenture, subject to the application thereof to the purposes and on the conditions permitted by this Indenture; (c) such Parity Bonds are valid and binding limited obligations of the County, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights) and the terms of this Indenture and all Supplemental Indentures thereto and entitled to the benefits of this Indenture and all such Supplemental Indentures, and such Parity Bonds have been duly and validly authorized and issued in accordance with Chapter 32 (or other applicable laws), the Bond Ordinance and this Indenture and all such Supplemental Indentures; and(d)assuming compliance by the County with it applicable tax covenants,the issuance of the Parity Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on any Outstanding Bonds theretofore issued on a tax-exempt basis, or the exemption from income taxation by the State of interest on any Outstanding Bonds theretofore issued; (iv) A Certificate of an Authorized County Representative containing such statements as may be reasonably necessary to show compliance with the requirements of this Indenture; 21 (v) A Certificate from an Independent Financial Consultant verifying that the Annual Debt Service on the Parity Bonds to be issued does not exceed the Annual Debt Service on the Bonds to be refunded in any Fiscal Year during which the Parity Bonds are Outstanding; and (vi) Such further documents, money and securities as are required in order to comply with applicable provisions for the issuance of such Parity Bonds pursuant to this Indenture and the Supplemental Indenture authorizing the issuance of such Parity Bonds. ARTICLE III CREATION OF FUNDS AND APPLICATION OF REVENUES AND GROSS TAXES Section 3.1. Creation of Funds; Application of Proceeds. (a) There is hereby created and established and shall be maintained by the Trustee the following funds and accounts and subaccounts within such funds: (i) The Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Fund (the "Special Tax Fund") and, within such Fund, (A) an Interest Account, which shall include a Capitalized Interest Subaccount, (B) a Principal Account, (C) a Redemption Account, (D) a Prepayment Account, (E) a Reserve Account, and(F)an Administrative Expense Account; (ii) The Hawaii County Community Facilities District No. 1-2021 (Kaloko Heights Project) Rebate Fund (the "Rebate Fund") and, within such Fund, (A) a Rebate Account and(B)an Alternative Penalty Account; (iii) The Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project) Surplus Fund (the "Surplus Fund"); and (iv) The Hawaii County Community Facilities District No. 1-2021 (Kaloko Heights Project) Project Fund (the "Project Fund") and, within such Fund, (A) a Costs of Issuance Account, (B)A Construction Account, (C) a Contingency Account and (D) a Tax Receipts Account. The amounts on deposit in the foregoing funds, accounts and subaccounts shall be held by the Trustee and the Trustee shall invest and disburse the amounts in such funds, accounts and subaccounts in accordance with the provisions of this Article III and shall disburse investment earnings thereon in accordance with the provisions of Section 3.11 hereof. (b) In connection with the issuance of the 2022 Bonds, proceeds of the sale of the 2022 Bonds received by the Trustee on behalf of the County shall be deposited and transferred as follows: (i) $ shall be deposited in the Costs of Issuance Account of the Project Fund for disbursement in accordance with Section 3.9 hereof; (ii) $ , representing Capitalized Interest on the 2022 Bonds, shall be deposited in the Capitalized Interest Subaccount within the Interest Account of the Special Tax Fund for disbursement in accordance with Section 3.4 hereof; 22 (iii) $ shall be deposited in the Reserve Account of the Special Tax Fund (equaling the initial Reserve Requirement) to be disbursed in accordance with Section 3.7 hereof; and (iv) $ shall be deposited to the Construction Account of the Project Fund for disbursement in accordance with Section 3.9 hereof. (c) In addition, in connection with the issuance of the 2022 Bonds, the Trustee shall deposit into the Contingency Account of the Project Fund, for disbursement in accordance with Section 3.9 hereof, $ in the form of(i) cash or a Letter of Credit provided by the Developer, or (ii)proceeds of the 2022 Bonds, if permitted under Section 4(e)of the Project Funding Agreement. Section 3.2. Deposits to and Disbursements from Special Tax Fund. (a) The Trustee shall, on each date on which the Special Taxes are received from the County, deposit the Special Taxes in the Special Tax Fund in accordance with the terms of this Indenture to be held by the Trustee, provided that any Prepayment shall be deposited in the funds and accounts (and in the respective amounts) specified in the Certificate of the Special Tax Administrator delivered to the Trustee in connection with the delivery of the Prepayment to the Trustee. The Trustee shall transfer the amounts on deposit in the Special Tax Fund on the dates and in the amounts set forth in the following Sections generally, in the following order of priority, but subject in any event to the provisions of the following Sections,to: (i) The Administrative Expense Account; (ii) The Interest Account; (iii) The Principal Account; (iv) The Redemption Account; (v) The Reserve Account; (vi) The Rebate Fund; (vii) The Surplus Fund. (b) At the maturity of all of the Bonds and, after all principal and interest then due on the Bonds then Outstanding has been paid or provided for and any amounts owed to the Trustee have been paid in full, moneys in the Special Tax Fund and any accounts therein may be used by the County for any lawful purpose. Section 3.3. Administrative Expense Account of the Special Tax Fund. In addition to Bond proceeds and Special Taxes deposited therein in connection with the issuance of any Series of Bonds, the Trustee shall, not less often than annually upon the written direction of an Authorized County Representative, transfer from the Special Tax Fund and deposit in the Administrative Expense Account from time to time amounts necessary to make timely payment of Administrative Expenses; provided, however, that, except as set forth below, the total amount transferred to the Administrative Expense Account in any Fiscal Year(commencing in the Fiscal Year ending June 23 30, 20 ) shall not exceed the Administrative Expense Budget Amount for such Fiscal Year until such time as there has been deposited (a) to the Interest Account and the Principal Account an amount, together with any amounts already on deposit therein, that is sufficient to pay the interest and principal on all Bonds due in such Fiscal Year, and (b) to the Reserve Account an amount sufficient, together with amounts then on deposit therein, to restore the Reserve Account to the Reserve Requirement. Notwithstanding the foregoing, amounts in excess of the Administrative Expense Budget Amount may be transferred to the Administrative Expense Account to pay Administrative Expenses incurred by the County in collecting delinquent Special Taxes (other than such Administrative Expenses paid from the proceeds of foreclosure sales) if and to the extent that such Administrative Expenses exceed the sum of(i) the amount included in the Administrative Expense Budget Amount for such purpose and (ii) the amount of unencumbered funds in the Administrative Expense Account available for such purpose. In addition to the foregoing, the Trustee shall also deposit in the Administrative Expense Account the portion of any Prepayment directed to be deposited in such Account in accordance with the Certificate of the Special Tax Administrator delivered to the Trustee in connection with such Prepayment. The Trustee shall apply amounts on deposit in the Administrative Expense Account to pay or reimburse the County for Administrative Expenses pursuant to an original or copy of an original received via e-mail or facsimile transmission of a requisition signed by an Authorized County Representative in substantially the form attached as Exhibit B-1 hereto. Section 3.4. Interest Account and Principal Account of the Special Tax Fund. The principal of and interest due on the Bonds until maturity, other than principal due upon optional or extraordinary redemption, shall be paid by the Trustee from the Principal Account and the Interest Account, respectively. For the purpose of assuring that the payment of principal of and interest on the Bonds will be made when due, the Trustee shall make the transfers described below from the Special Tax Fund on each Interest Payment Date first to the Interest Account and then to the Principal Account; provided, however, that to the extent that deposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds, the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund (exclusive of the Administrative Expense Account and the Reserve Account) are inadequate to make the foregoing transfers then any deficiency shall be made up by an immediate transfer from the Reserve Account: (a) To the Interest Account, an amount such that the balance in the Interest Account shall be equal to the installment of interest due on the Bonds on said Interest Payment Date (including interest due on Bonds called for optional redemption, mandatory sinking fund redemption or special mandatory redemption on such date) and any installment of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds as the same become due; provided that moneys in the Capitalized Interest Subaccount shall be used for the payment of interest before application of any other moneys in the Interest Account for such purpose. (b) To the Principal Account, an amount such that the balance in the Principal Account on May 15 of each year, commencing May 15, 20_, shall equal the sum of(i)the principal payment due on the Bonds maturing on such May 15, (ii)the Sinking Fund Payment due on any Outstanding Bonds upon mandatory sinking fund redemption on such May 15, and (iii) any principal payment due on a previous May 15 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds as the same become due at maturity or pursuant to the 24 Sinking Fund Payment schedules set forth in Section 4.1(b) hereof and in any Supplemental Indenture; provided, however, that in lieu or partially in lieu of any mandatory sinking fund redemption, moneys deposited in the Principal Account as set forth above may be used to purchase Outstanding Bonds pursuant to Section 4.6 hereof. In addition to the transfers to the Interest Account and Principal Account described above in this Section, the Trustee shall also transfer thereto such portions of a Prepayment as may be directed to be so transferred in the Certificate of the Special Tax Administrator delivered to the Trustee in connection with the Prepayment. In the event of any purchase of Bonds in lieu of redemption pursuant to Section 4.6 hereof, the Trustee shall also transfer from the Special Tax Fund to the Interest Account and, if the purchase is in lieu of a mandatory sinking fund redemption, to Principal Account the amounts needed to pay the respective portions of the purchase price of the Bonds representing the interest on such Bonds and the principal otherwise payable upon redemption thereof. Section 3.5. Redemption Account of the Special Tax Fund. (a) After making the deposits to the Interest Account and the Principal Account of the Special Tax Fund pursuant to Section 3.4 hereof, and in accordance with the County's election to call Bonds for optional redemption as set forth in Section 4.1(a) hereof, the Trustee shall transfer from the Special Tax Fund and deposit in the Redemption Account moneys available for the purpose and sufficient to pay the principal and the premiums, if any, payable on the Bonds called for optional redemption; provided, however, that amounts in the Special Tax Fund (other than the Administrative Expense Account therein) may be so deposited in the Redemption Account and applied to optionally redeem Bonds only if immediately following such transfer and redemption the amount in the Reserve Account will equal the Reserve Requirement. The Trustee shall also transfer funds from the Project Fund to the Redemption Account if required pursuant to Section 3.9 hereof. (b) Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and shall be applied on the redemption date to the payment of the principal of and premium, if any, on the Bonds to be redeemed upon presentation and surrender of such Bonds; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Redemption Account as set forth above may be used to purchase Outstanding Bonds pursuant to Section 4.6 hereof. Section 3.6. Prepayment Account of the Special Tax Fund. (a) Upon receipt of any Prepayment,the Trustee shall deposit in the Prepayment Account the portion of such Prepayment remaining after deduction of the portions representing (i) prepaid Administrative Expenses, which shall be deposited in the Administrative Expense Account pursuant to Section 3.3 hereof, and (ii) interest and principal coming due on the Bonds during the then current Fiscal Year, which shall be deposited in the Interest Account and Principal Account, respectively, pursuant to Section 3.4 hereof. The amounts so to be deposited shall be specified in a Certificate of the Special Tax Administrator delivered to the Trustee in connection with the delivery of such Prepayment. (b) Moneys set aside in the Prepayment Account shall be used solely for the purpose of redeeming Bonds and shall be applied on the redemption date to the payment of the principal of and premium, if any, on the Bonds to be redeemed upon presentation and surrender of such Bonds; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in 25 the Prepayment Account as set forth above may be used to purchase Outstanding Bonds pursuant to Section 4.6 hereof. Section 3.7. Reserve Account of the Special Tax Fund. (a) There shall be maintained in the Reserve Account an amount equal to the Reserve Requirement, into which moneys shall be transferred from the Special Tax Fund to the extent necessary to restore the balance in the Reserve Account to the Reserve Requirement. In addition, the County may, but shall not be obligated to, advance funds from any source of legally available funds in order to maintain the Reserve Account of the Special Tax Fund at the Reserve Requirement or to avoid a default in payment on the Bonds, in which event the County shall be reimbursed for any such advance from the amount of Special Taxes thereafter received that would otherwise be transferred from the Special Tax Fund to the Reserve Account pursuant to this Section 3.7 hereof or from funds available for such purpose in the Surplus Fund. (b) Notwithstanding any provision hereof to the contrary, the amounts in the Reserve Account shall be applied as follows: (i) Moneys in the Reserve Account shall be used solely for the purpose of(A) paying the principal of, including Sinking Fund Payments, and accrued interest on any Bonds when due in the event that the moneys in the Interest Account and the Principal Account are insufficient therefor, and (B)making any required transfer to the Rebate Fund pursuant to Section 3.8 hereof upon written direction from the County. If the amounts in the Interest Account or the Principal Account are insufficient to pay the principal of, including Sinking Fund Payments, or accrued interest on any Bonds when due, or amounts in the Special Tax Fund are insufficient to make transfers to the Rebate Fund when required, the Trustee shall withdraw from the Reserve Account for deposit in the Interest Account or the Principal Account or the Rebate Fund, as applicable, moneys necessary for such purposes. (ii) Whenever moneys are withdrawn from the Reserve Account, after making the required transfers referred to in Sections 3.3 and 3.4 hereof, the Trustee shall transfer to the Reserve Account from available moneys in the Special Tax Fund, or from any other legally available funds which the County elects to apply to such purpose, the amount needed to restore the amount of such Reserve Account to the Reserve Requirement. Moneys in the Special Tax Fund shall be deemed available for transfer to the Reserve Account only if the Trustee determines that such amounts will not be needed to make the deposits required to be made to the Interest Account or the Principal Account for the next succeeding Interest Payment Date. If amounts in the Special Tax Fund or otherwise transferred to replenish the Reserve Account are inadequate to restore the Reserve Account to the Reserve Requirement, then the County shall include the amount necessary fully to restore the Reserve Account to the Reserve Requirement in the next annual Special Tax levy to the extent of the maximum permitted Special Tax rates and to the extent permitted by Chapter 32. (iii) In connection with an optional redemption of the Bonds hereunder or a partial defeasance of the Bonds in accordance with Section 9.1 hereof, amounts in the Reserve Account may be applied to such optional redemption or partial defeasance so long as the amount on deposit in the Reserve Account following such optional redemption or partial defeasance equals the Reserve Requirement, as calculated for the Bonds to remain Outstanding immediately after such optional redemption or partial defeasance. 26 (iv) If the amount on deposit in the Reserve Account exceeds the Reserve Requirement as of any first day of any Bond Year, such excess shall be withdrawn from the Reserve Account and transferred to the Interest Account as soon as practicable. Funds on deposit in the Reserve Account during the final Bond Year for any particular Series of Bonds may be applied to pay the principal of and interest due on the Bonds of such Series in such final Bond Year so long as the amount on deposit in the Reserve Account following such payments is at least equal to the Reserve Requirement for all other Series of Bonds to remain Outstanding. In addition, funds on deposit in the Reserve Account during the final Bond Year in which any Bonds remain Outstanding may be applied to pay the principal of and interest due on the Bonds in such final Bond Year. Section 3.8. Rebate Fund. (a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the Rebate Fund and shall establish a separate Rebate Account and Alternative Penalty Account therein for the 2022 Bonds. All money at any time deposited in the Rebate Account or the Alternative Penalty Account of the Rebate Fund shall be held by the Trustee in trust, for payment to the Treasury Department. A separate subaccount of the Rebate Account and the Alternate Penalty Account shall be established for each Series of Bonds the interest on which is excluded from gross income for federal income tax purposes. All amounts on deposit in the Rebate Fund with respect to the Bonds shall be governed by this Section and the Tax Certificate for such issue, unless the County obtains an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest payments on such Bonds will not be adversely affected if such requirements are not satisfied. (i) Rebate Account. The following requirements shall be satisfied with respect to each subaccount of the Rebate Account: (A) Annual Computation. Within 55 days of the end of the third and the fifth Bond Year and each fifth Bond Year thereafter, the County shall calculate or cause to be calculated the amount of rebatable arbitrage for each Series of Bonds in accordance with Section 148(0(2) of the Tax Code and Section 1.148-3 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage described in the Tax Certificate for each issue (e.g., the temporary investments exceptions of Section 148(0(4)(B) and (C) of the Tax Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Tax Code (the "1'/2% Penalty") has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Rebate Regulations (the "Rebatable Arbitrage"). The County shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. (B) Annual Transfer. .Within 55 days of the end of each Bond Year for which Rebatable Arbitrage must be calculated as required by the Tax Certificate, upon the written direction of an Authorized County Representative, an amount shall be deposited to each subaccount of the Rebate Account by the Trustee from any funds so designated by the County if and to the extent required, so that the balance in the Rebate Account shall equal the amount of Rebatable Arbitrage so calculated by or on behalf of the County in accordance with (A) of this Subsection (a)(i). In the event that immediately following any transfer required by the previous sentence, or the date on which the County determines that no transfer is required for such Bond Year, the amount then on deposit to the credit of the applicable subaccount of the Rebate Account exceeds the amount required to be on deposit therein, upon written instructions from an Authorized County Representative, the Trustee 27 shall withdraw the excess from the appropriate subaccount of the Rebate Account and then credit the excess to the Special Tax Fund. (C) Payment to the Treasury Department. The Trustee shall pay, as directed in writing by an Authorized County Representative, to the Treasury Department, out of amounts in each subaccount of the Rebate Account, 1. Not later than 60 days after the end of(A)the fifth Bond Year and(B) each applicable fifth Bond Year thereafter, an amount equal to at least 90%of the Rebatable Arbitrage calculated as of the end of such Bond Year for each issue of Bonds; and 2. Not later than 60 days after the payment or redemption of all of the Bonds an amount equal to 100%of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year,and any income attributable to the Rebatable Arbitrage,computed in accordance with Section 148(f) of the Tax Code. In the event that, prior to the time of any payment required to be made from the Rebate Account, the amount in the Rebate Account is not sufficient to make such payment when such payment is due, the County shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this Subsection (a)(i) shall be made on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other manner as provided under the Tax Code. (ii) Alternative Penalty Account. (A) Six-Month Computation. If the 1'/2%Penalty has been elected, within 85 days of the Six-Month Period, the County shall determine or cause to be determined whether the 11/2% Penalty is payable (and the amount of such penalty) as of the close of the Six-Month Period. The County shall obtain expert advice in making such determinations. (B) Six-Month Transfer. Within 85 days of the close of the Six-Month Period, the Trustee, at the written direction of an Authorized County Representative, shall deposit an amount in the appropriate subaccounts of the Alternative Penalty Account from any source of funds held by the Trustee pursuant to this Indenture and designated by the County in such written directions or provided to it by the County, if and to the extent required, so that the balance in each subaccount of the Alternative Penalty Account equals the amount of 1'/2%Penalty due and payable to the Treasury Department determined as provided in Subsection (a)(ii)(A) above. In the event that immediately following any transfer provided for in the previous sentence, or the date on which the County determines that no transfer is required for such Bond Year, the amount then on deposit in a subaccount of the Alternative Penalty Account exceeds the amount required to be on deposit therein to make the payments required by Subsection (C) below, the Trustee, at the written direction of an Authorized County Representative, shall withdraw the excess from the applicable subaccount of the Alternative Penalty Account and credit the excess to the Special Tax Fund. (C) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Authorized County Representative, to the Treasury Department, out of amounts in a subaccount of the Alternative Penalty Account, specified by the County in writing not later than 90 days after the close of the Six-Month Period the P/2% Penalty, if applicable and payable, 28 computed in accordance with Section 148(0(4) of the Tax Code. In the event that, prior to the time of any payment required to be made from a subaccount of the Alternative Penalty Account, the amount in such subaccount is not sufficient to make such payment when such payment is due, the County shall calculate the amount of such deficiency and direct the Trustee, in writing, to deposit an amount equal to such deficiency into such subaccount of the Alternative Penalty Account from any funds held by the Trustee pursuant to this Indenture and designated by the County in such written directions prior to the time such payment is due. Each payment required to be made pursuant to this Subsection (a)(ii) shall be made on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T or shall be made in such other manner as provided under the Tax Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Accounts of the Rebate Fund after redemption and payment of the Bonds and after making the payments described in Subsection (a)(i)(C) or (a)(ii)(C) (whichever is applicable), may be withdrawn by the Trustee at the written direction of an Authorized County Representative and utilized in any lawful manner pursuant to Chapter 32. (c) Survival of Defeasance and Final Payment. Notwithstanding anything in this Section or this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance and final payment of the Bonds. (d) Amendment Without Consent of Owners. This Section may be deleted or amended in any manner without the consent of the Owners, provided that prior to such event there is delivered to the County an opinion of Bond Counsel to the effect that such deletion or amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds. (e) Trustee Responsibility. The Trustee shall be deemed conclusively to have complied with its obligations with respect to the Rebate Fund and any amounts required to be rebated to the Treasury Department hereunder by following the directions given by an Authorized County Representative pursuant to this Section, and no other obligations of the Trustee shall be implied hereunder. Section 3.9. Project Fund. (a) Pursuant to Section 3.1(a) hereof, a Costs of Issuance Account, a Construction Account and a Contingency Account are created and established within the Project Fund. Deposits into such Accounts shall be made as follows: (i) Upon the issuance of the 2022 Bonds, the Trustee shall deposit (A) proceeds of the 2022 Bonds into the Costs of Issuance Account and the Construction Account in the respective amounts specified in Section 3.1(b) hereof, and (B) cash or a Letter of Credit provided by the Developer or proceeds of the 2022 Bonds (if permitted under Section 4(e) of the Project Funding Agreement) in the amount specified in Section 3.1(c) hereof. In addition, if applicable prior to completion of the Improvements, the County shall require the Developer to make one or more deposits into the Contingency Account as required under Section 4(f) of the Project Funding Agreement. 29 (ii) Upon the issuance of each Series of Parity Bonds, proceeds of such Bonds (and proceeds of Special Taxes, if applicable) shall be deposited into the Costs of Issuance Account and the Construction Account in the amounts specified in the applicable Supplemental Indenture. (iii) In addition, if applicable, the Trustee shall transfer funds from the Surplus Fund to the Tax Receipts Account at such times and in such amounts as are directed in writing by an Authorized County Representative pursuant to Section 3.10 hereof. (b) Amounts on deposit in the applicable Accounts within Project Fund shall be applied as follows: (i) Payments of Costs of Issuance shall be made, upon requisition therefor as provided below, from the Costs of Issuance Account. In addition, upon the earlier of the first anniversary of the applicable Delivery Date or its receipt of a Certificate of an Authorized County Representative that all or a specified portion of the amount remaining in the Costs of Issuance Account for a Series of Bonds is no longer needed to pay Costs of Issuance for such Series of Bonds, the Trustee shall transfer all or such specified portion of said amount to the Construction Account. (ii) Payments of Actual Costs on account of the Acquisition Price and Incidental Expenses shall be made, upon requisition therefor as provided below, first from the Construction Account (until exhausted) and then from the Contingency Account, subject in each case to compliance with the applicable provisions of Sections 4 and 5 of the Project Funding Agreement. Without limiting the generality of the foregoing, (A) each such payment shall be properly supported by the applicable Payment Request submitted by the Developer to and approved by DEM, and (B) no payments shall be made with respect to Developer Advances made prior to the Delivery Date of the 2022 Bonds except as expressly provided in Sections 4(f)and 5(d)of the Project Funding Agreement. All such payments from the Cost of Issuance Account, the Construction Account and the Contingency Account shall be made as authorized pursuant to an original or copy of an original received via e-mail or facsimile transmission of a requisition signed by an Authorized County Representative in substantially the form attached as Exhibit B-2 hereto. (c) Upon completion of the Improvements, receipt of the Certificates of an Authorized Developer Representative and of an Authorized County Representative (which may be given in reliance upon the Certificate of the Authorized Developer Representative) confirming that the Improvements are Complete (as defined in Section 5(d) of the Project Funding Agreement) and that all Actual Costs of the Improvements have been paid in full, the Trustee shall (A) return any unexpended balance in the Contingency Account to the Developer (if originally provided by the Developer in the form of cash or a Letter of Credit), and (B) [if the amount remaining in the Construction Account is equal to or greater than $ , transfer the portion of such amount equal to the largest integral multiple of $5,000 that is not greater than such amount to the Redemption Account, to be applied to the redemption of Bonds] and after, making such transfer from the Construction Account, if any, transfer all of the amount remaining in such Account to the Interest Account,to be applied to the payment of interest on the Bonds. Section 3.10. Surplus Fund. 30 (a) After making the transfers required by Sections 3.3 through 3.9 hereof, inclusive, as soon as practicable after each May 15, and in any event prior to each August 1, the Trustee shall transfer all remaining amounts in the Special Tax Fund, if any, to the Surplus Fund, other than amounts in the Special Tax Fund which the County has deemed available in calculating the amount of the levy of Special Taxes for such Fiscal Year pursuant to Section 5.2(b) hereof. On the written direction of an Authorized County Representative, moneys deposited in the Surplus Fund shall be transferred by the Trustee, (i)to the Principal Account or the Interest Account to pay the principal of, including Sinking Fund Payments, and interest, respectively, on the Bonds when due in the event that moneys in the Special Tax Fund and the Reserve Account are insufficient therefor, (ii)to the Reserve Account in order to replenish the Reserve Account to the Reserve Requirement, and (iii) to the Administrative Expense Account to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative Expense Account are insufficient to pay Administrative Expenses. In the event unexpended amounts remain on deposit in the Surplus Fund after the foregoing transfers, if any, such unexpended amounts shall be applied, in the sole discretion of the County as directed by an Authorized County Representative, (i) to pay unpaid Actual Costs of the Improvements (in which case such unexpended amounts shall be transferred to the Construction Account of the Project Fund as directed by the Authorized County Representative), (ii) to reduce the next Fiscal Year's Special Tax levy by depositing such amount in the Special Tax Fund, (iii) to redeem Bonds upon optional redemption, or(iii)to reimburse the County for advances made pursuant to Section 3.7(a)hereof. (b) The amounts in the Surplus Fund are not pledged to the repayment of the Bonds and may be used by the County for any lawful purpose in the manner described in this Section. In the event that the County reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any Outstanding Bonds, upon the written direction of an Authorized County Representative,the Trustee will segregate such amount into a separate subaccount and the moneys on deposit in such subaccount of the Surplus Fund shall be invested in Authorized Investments the interest on which is excludable from gross income under Section 103 of the Tax Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals and corporations under the Tax Code) or in Authorized Investments at a yield not in excess of the yield on the Bonds unless, in the opinion of Bond Counsel, investment at a higher yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds. Section 3.11. Investments. Moneys held in any of the funds, accounts and subaccounts under this Indenture shall be invested at the written direction of an Authorized County Representative in accordance with the limitations set forth below and in the Tax Certificates only in Authorized Investments which shall be deemed at all times to be a part of such funds, accounts and subaccounts. Any investment earnings, gains or losses resulting from such Authorized Investments shall be credited or charged to the fund, account or subaccount from which such investment was made. Moneys in the funds, accounts and subaccounts held under this Indenture may be invested by the Trustee on the written direction of an Authorized County Representative, from time to time, in Authorized Investments subject to the following: (a) Moneys in the Interest Account, the Principal Account, the Prepayment Account and the Redemption Account shall be invested only in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of principal of, premium, if any, and interest on the Bonds as the same become due. 31 (b) Moneys in the Project Fund shall be invested in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available without penalty, as close as practicable to the date the County estimates the moneys represented by the particular investment will be needed for withdrawal from the Project Fund. (c) The amount in the Reserve Account may be invested only in Authorized Investments which mature not later than five years from their date of purchase; provided that such amounts may be invested in an Investment Agreement to the final maturity of Bonds so long as such amounts may be withdrawn at any time, without penalty, for application in accordance with Section 3.7 hereof; and provided that no such Authorized Investment of amounts in the Reserve Account allocable to the Bonds shall mature later than the final maturity date of the Bonds. (d) Moneys in the Rebate Fund shall be invested only in Authorized Investments of the type described in clause (a) of the definition thereof which by their terms will mature, as nearly as practicable, on the dates such amounts are needed to be paid to the United States Government pursuant to Section 3.8 hereof or in Authorized Investments of the type described in clause (d) of the definition thereof. (e) In the absence of written investment directions from an Authorized County Representative, the Trustee shall invest solely in money market funds that meet the requirements specified in clause (d) of the definition of Authorized Investments and are invested solely in Federal Securities. (f) The Trustee shall sell, or present for redemption, any Authorized Investment whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such funds and accounts or from such funds and accounts. For the purpose of determining at any given time the balance in any such funds and accounts, any such investments constituting a part of such funds and accounts shall be valued at their cost, except that amounts in the Reserve Account shall be valued at the market value thereof and marked to market on or before May 16 of each year. In making any valuations of investments hereunder, the Trustee may utilize computerized securities pricing services that may be available to it, including those available through its regular accounting system, and rely thereon. Notwithstanding anything herein to the contrary, the Trustee shall not be responsible for any loss from investments, sales or transfers undertaken in accordance with the provisions of this Indenture. The Trustee or an affiliate may act as principal or agent in connection with the acquisition or disposition of any Authorized Investments and shall be entitled to its customary fee therefor. Any Authorized Investments that are registrable securities shall be registered in the name of the Trustee or its nominee. (g) For investment purposes, the Trustee may commingle the funds and accounts established hereunder(other than the Rebate Fund)but shall account for each separately. (h) The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. Section 3.12. Trustee Not Responsible for Losses; Brokerage Confirmations. The Trustee shall not be responsible for losses on investments if such investments are made in compliance with the provisions of this Indenture. The Trustee shall not be required to provide brokerage confirmations on investments to the County so long as the Trustee provides periodic 32 statements to the County that include investment activity; provided that such statements shall not be required if the Trustee provides all broker confirmations to the County. ARTICLE IV REDEMPTION OF BONDS Section 4.1. Redemption of 2022 Bonds. (a) Optional Redemption. Subject to the limitations set forth below, the 2022 Bonds maturing on or after May 15, 20_may be redeemed, at the option of the County from any source of funds, other than Prepayments, on any Interest Payment Date on or after May 15, 20_, in whole, or in part in the order of maturity selected by the County and by lot within a maturity, at a redemption price equal to 100% of the principal amount to be redeemed, together with accrued interest to the date of redemption. In the event the County elects to redeem 2022 Bonds as provided above, the County shall give written notice to the Trustee of its election to so redeem, the redemption date and the principal amount of the Bonds to be redeemed. The notice to the Trustee shall be given at least 60 but no more than 90 days prior to the redemption date, or such shorter period as shall be acceptable to the Trustee. (b) Mandatory Sinking Fund Redemption. The 2022 Term Bonds maturing on May 15, 20 shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Principal Account, on May 15, 20_, and on each May 15 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 2022 Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium,as follows: Redemption Dates (May 15) Principal Amount The 2022 Term Bonds maturing on May 15, 20_ shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Principal Account, on May 15, 20_, and on each May 15 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 2022 Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Bond equal to the principal amount thereof,plus accrued interest to the redemption date, without premium, as follows: Redemption Dates (May 15) Principal Amount 33 The 2022 Term Bonds maturing on May 15, 20 shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Principal Account, on May 15, 20_, and on each May 15 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 2022 Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows: Redemption Dates Principal Amount (May 15) The 2022 Term Bonds maturing on May 15, 20_ shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Principal Account, on May 15, 20_, and on each May 15 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 2022 Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows: Redemption Dates (May 15) Principal Amount If during the Fiscal Year immediately preceding one of the redemption dates specified above in this Subsection (b)the County purchases 2022 Term Bonds, at least 45 days prior to the applicable redemption date the County shall deliver to the Trustee a Certificate of an Authorized County Representative specifying the principal amount purchased, and the principal amount of 2022 Term Bonds so purchased shall be credited at the time of purchase, to the extent of the full principal amount thereof, to reduce such upcoming Sinking Fund Payment for such Term Bonds. All 2022 34 Term Bonds purchased pursuant to this Subsection shall be cancelled pursuant to Section 10.1 hereof. In the event of a partial redemption of 2022 Term Bonds, other than as a result of Sinking Fund Payments, each of the remaining Sinking Fund Payments for such 2022 Term Bonds that were partially redeemed, as described above, will be reduced, as nearly as practicable, on a pro rata basis in increments of$5,000. (c) Special Mandatory Redemption From Prepayments. The 2022 Bonds are subject to special mandatory redemption on any Interest Payment Date from amounts on deposit in the Prepayment Account, in integral multiples of$5,000, in whole or in part as hereinafter provided, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption: Redemption Dates Redemption Prices Prior to , 20 , 20_ through , 20_ ,20_through , 20_ ,20 and thereafter The Trustee shall select 2022 Bonds for redemption pursuant to the provisions of this Subsection from the maturities of all Bonds of all Series so that the ratio of Outstanding Bonds to the Bonds originally issued shall be approximately the same in each maturity of each Series. The particular Bonds of each maturity of a Series to be redeemed shall be selected by lot in whatever manner the Trustee chooses. Section 4.2. Selection of Bonds for Redemption. If less than all of the Bonds Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of$5,000 or an integral multiple thereof. In selecting portions of such Bonds for redemption, the Trustee shall treat such Bonds as representing that number of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bonds to be redeemed in part by $5,000. The Trustee shall promptly notify the County in writing of the Bonds, or portions thereof, selected for redemption. [Adjust for $100,000 minimum denomination.] Section 4.3. Notice of Redemption. When Bonds are due for redemption under Section 4.1 hereof, the Trustee shall give notice, in the name of the County, of the redemption of such Bonds in accordance with the following: (a) Each notice of redemption shall (i) specify the CUSIP numbers (if any), the bond numbers and the maturity date or dates of the Bonds selected for redemption, except that where all of the Bonds are subject to redemption, or all the Bonds of one maturity, are to be redeemed, the bond numbers of such issue need not be specified; (ii) state the date fixed for redemption and surrender of the Bonds to be redeemed; (iii) state the redemption price; (iv) state the place or places where the Bonds are to be redeemed; (v) in the case of Bonds to be redeemed only in part, state the portion of such Bond which is to be redeemed; (vi) state the date of issue of the Bonds as originally issued; (vii) state the rate of interest borne by each Bond being redeemed; and (viii) state any other descriptive information needed to identify accurately the Bonds being redeemed as shall be specified by the Trustee. Such notice shall further state that on the date fixed for redemption, there shall become due 35 and payable on each Bond or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon shall cease to accrue and be payable. (b) At least 30 days but no more than 60 days prior to the redemption date, the Trustee shall mail a copy of such notice, by first class mail, postage prepaid,to the respective Owners thereof at their addresses appearing on the Bond Register and to the original purchaser of the Bonds. The actual receipt by the Owner of any Bond or the original purchaser of any Bond of notice of such redemption shall not be a condition precedent to redemption, and neither the failure to receive nor any defect in such notice shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest on the redemption date. A Certificate by the Trustee that notice of such redemption has been given as herein provided shall be conclusive as against all parties and the Owner shall not be entitled to show that he or she failed to receive notice of such redemption. (c) In addition to the foregoing notice, further notice shall be given by the Trustee as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption shall be sent by the Trustee by registered or certified mail, overnight delivery service or facsimile transmission or by other acceptable means to any registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and any national information services as shall be specified by the Trustee that disseminate notice of redemption of obligations such as the Bonds. (d) In the case of any optional redemption, the notice of redemption may state that such redemption is conditional upon the receipt by the Trustee, on or before the date fixed for redemption, of moneys sufficient to pay in full the redemption price of the Bonds proposed to be redeemed. If the notice contains such condition, and moneys sufficient to pay in full the redemption price of the Bonds proposed to be redeemed shall not be received by the Trustee on or prior to the date fixed for redemption, such notice of redemption shall be null and void and of no force and effect, the County shall not redeem or be obligated to redeem any Bonds, and the Trustee shall give notice, in the same manner as notice of redemption is given, that moneys sufficient to pay in full the redemption price of the Bonds proposed to be redeemed were not received on or prior to the date fixed for redemption and such redemption did not occur. In the event of the failure to redeem, all Bonds surrendered for redemption shall be promptly returned to the Owner or Owners by the Trustee. Section 4.4. Partial Redemption of Bonds. Upon surrender of any Bond to be redeemed in part only, the County shall execute and the Trustee shall authenticate and deliver to the Bondowner, at the expense of the County, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered, with the same interest rate and the same maturity. Section 4.5. Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in Section 4.3 hereof, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption: 36 (a) The Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in this Indenture, anything in this Indenture or in the Bonds to the contrary notwithstanding; (b) Upon presentation and surrender thereof at the Designated Office of the Trustee, the redemption price of such Bonds shall be paid to the Owners thereof; (c) As of the redemption date the Bonds or portions thereof so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or portions thereof shall cease to bear further interest; (d) As of the date fixed for redemption no Owner of any of the Bonds or portions thereof so designated for redemption shall be entitled to anyof the benefits of this Indenture or any P Supplemental Indenture, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available; and (e) Upon the payment of the redemption price of any Bonds being redeemed, each check or other transfer of funds issued for such purpose shall to the extent practicable bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. Section 4.6. Purchase of Bonds by County. In lieu, or partially in lieu, of any optional redemption, mandatory sinking fund redemption or special mandatory redemption of Bonds, the County may elect, prior to the selection of Bonds for redemption by the Trustee, to instruct the Trustee to purchase Bonds subject to such redemption at public or private sale at such prices as the County may in its discretion determine; provided that the purchase price thereof(including brokerage or other expenses) shall not exceed the redemption price thereof plus accrued interest to the purchase date and, in the case of purchase with funds in an optional redemption account, applicable premium. The portion of such purchase price representing the redemption price of the Bonds to be purchased shall be paid from the Redemption Account, Principal Account or Prepayment Account of the Special Tax Fund, as applicable, and the portion representing accrued interest shall be paid from the Interest Account of the Special Tax Fund. ARTICLE V COVENANTS AND WARRANTY Section 5.1. Warranty. The County shall preserve and protect the security pledged hereunder to the Bonds against all claims and demands of all Persons. Section 5.2. Covenants. So long as any of the Bonds issued hereunder are Outstanding and unpaid, the County makes the following covenants with the Bondowners under the provisions of Chapter 32 and this Indenture (to be performed by the County or its proper officers, agents or employees), which covenants are necessary and desirable to secure the Bonds and tend to make them more marketable; provided, however, that said covenants do not require the County to expend any funds or moneys other than the Special Taxes and other amounts deposited to the Special Tax Fund and the Project Fund. (a) Punctual Payment; Against Encumbrances. The County covenants that it will receive all Special Taxes in trust and will deposit such amounts with the Trustee not less often than once per 37 month, and the Countyshall have no beneficial right or interest in the amounts so deposited except as provided by this Indenture. All such Special Taxes shall be disbursed, allocated and applied solely to the uses and purposes set forth herein, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the County. The County further covenants that, in connection with the delivery of any Prepayment to the Trustee, the County will also deliver (or cause the Special Tax Administrator to deliver) to the Trustee a Certificate of the Special Tax Administrator identifying with respect to the Prepayment: (i)the Administrative Expenses, with instructions that said amount shall be deposited in the Administrative Expense Account, (ii)the amount that represents the Special Taxes levied in the current Fiscal Year on the subject Assessor's Parcel which had not been paid, with instructions to deposit portions of said amount in the Interest Account and the Principal Account of the Special Tax Fund, (iii)the amount of any reduction in the Reserve Requirement, with instructions to withdraw said amount from the Reserve Account and transfer it to the Prepayment Account in connection with the redemption of Bonds,and(iv)the amount to be deposited in the Prepayment Account. The County covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond issued hereunder, together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Bonds and in accordance with this Indenture to the extent that Special Taxes are available therefor, and that the payments into the Funds and Accounts created hereunder will be made, all in strict conformity with the terms of the Bonds and this Indenture, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures and of the Bonds issued hereunder. The County will not mortgage or otherwise encumber, pledge or place any charge upon any of the Special Taxes except as provided in this Indenture, and will not issue any obligation or security having a lien or charge upon the Special Taxes superior to or on a parity with the Bonds. Nothing herein shall prevent the County from issuing or incurring indebtedness which is payable from a pledge of Special Taxes which is subordinate in all respects to the pledge of Special Taxes to repay the Bonds. (b) Levy of Special Tax. Beginning in Fiscal Year 20_-20_ and in each Fiscal Year thereafter so long as any Bonds issued under this Indenture are Outstanding, the County covenants to levy the Special Tax pursuant to the RMA (i) on Taxable Property in Tax Zone 1 in an amount equal to the Tax Zone 1 Special Tax Requirements, and (ii) if necessary, on Taxable Property in Tax Zone 2 in an amount equal to the Tax Zone 2 Special Tax Requirement, provided that no Special Tax shall be levied on Taxable Property in Tax Zone 2 after the earlier of June 30, 2081 or the date on which the Special Taxes on such Taxable Property are deemed satisfied and cancelled in accordance with the provisions of Section I.2 of the RMA. (c) Collection of Special Taxes. Subject to the further provisions of Section 5.3 hereof, the County will diligently pursue such actions as are reasonably necessary or appropriate to collect all Special Taxes levied on properties within the District. Special Taxes on Taxable Property in Zone 1 will be billed and collected together with Real Property Taxes levied on such properties. Special Taxes on Taxable Property in Zone 2 will be billed and collected in accordance with the RMA. The County may accept partial payments on account of the Special Taxes and Real Property Taxes owed by a property owner, but such partial payments shall not diminish, extinguish or otherwise affect the property owner's obligation to pay the unpaid balance of the Special Taxes and Real Property Taxes 38 owed by such property owner. Partial payments, if accepted, shall be applied pro rata to the Special Taxes and Real Property Taxes owed by the property owner. (d) Payment of Claims. The County will pay and discharge (but solely from Funds and Accounts available for such payments in accordance with the terms of this Indenture) any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the Special Taxes or other funds in the Special Tax Fund (other than the Administrative Expense Account therein) or the Project Fund (other than the Tax Receipts Account therein), or which might impair the security of the Bonds then Outstanding; provided that nothing herein contained shall require the County to make any such payments so long as the County in good faith shall contest the validity of any such claims. (e) Books and Accounts. The County will keep proper books of records and accounts, separate from all other records and accounts of the County, in which complete and correct entries shall be made of all transactions relating to the levy of the Special Tax and the deposits to the Special Tax Fund. Such books of records and accounts shall at all times during business hours be subject to the inspection of the Owners of not less than 10% of the principal amount of the Bonds then Outstanding or their representatives authorized in writing. (f) Federal Tax Covenants. The County shall not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on any Bond under Section 103 of the Tax Code. This covenant shall survive payment in full or defeasance of the Bonds. Without limiting the generality of the foregoing: (i) The County shall comply with the requirements of the Tax Certificates, which upon execution thereof shall be deemed incorporated herein as if fully set forth herein. (ii) In the event that the County determines at any time that for purposes of this covenant it is necessary or helpful to restrict or limit the yield on the investment of any moneys held by the Trustee in any of the funds or accounts established hereunder,the County shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. (iii) If the County shall provide to the Trustee an opinion of Bond Counsel to the effect that any specified action previously taken is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on any Series of Bonds, the Trustee may conclusively rely on such opinion in complying with this covenant and the Tax Certificate, and this covenant and the Tax Certificate shall be deemed to be modified to that extent. (g) Reduction of Maximum Special Taxes or Aggregate Tax Levy. The County hereby determines that a reduction in the Maximum Special Tax authorized to be levied on Taxable Property p Y in the District below the levels provided in this Section 5.2(g) would interfere with the timely retirement of the Bonds. The County determines it to be necessary in order to preserve the security for the Bonds to covenant, and, to the maximum extent that the law permits it to do so, the County hereby does covenant, that it will take no action that would discontinue, diminish or cause the discontinuance of the Special Tax levy or the County's authority to levy the Special Tax, including the initiation of proceedings to reduce the Maximum Special Tax rates for the District or otherwise reduce the aggregate amount of Special Taxes levied in Tax Zone 1, unless (i) the Special Taxes on 39 Taxable Property in Tax Zone 2 shall have been deemed satisfied and cancelled in accordance with Section L2 of the RMA, and (ii) the County (A) receives a Certificate from the Special Tax Administrator that, on the basis of the parcels of land and improvements existing in Tax Zone 1 as of July 1 of the Fiscal Year preceding the reduction, the maximum amount of the Special Tax which may be levied on then existing Developed Property in Tax Zone 1 in each Fiscal Year will equal at least 110% of the sum of the estimated Administrative Expenses and Annual Debt Service in that Fiscal Year on all Bonds to remain Outstanding after the reduction is approved and (B) finds that any reduction made under such conditions will not adversely affect the interests of the Owners of the Bonds. Notwithstanding the foregoing, any such action shall be subject to the prior written consent of the Developer until such time as the Acquisition Price for the Improvements has been paid in full. (h) Covenant to Defend. The County covenants that in the event that any legal proceedings are taken to reduce the Maximum Special Tax below the levels specified in Section 5.2(g) hereof or to limit the power of the County to levy the Special Taxes for the purposes set forth in Section 5.2(b) hereof, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. Section 5.3. Foreclosure. Section 32-53 of the County Code provides, in relevant part, as follows: "The special tax may be collected in the same manner as general real property taxes are collected, be subject to the same penalties and the same procedure, sale, and lien priority (subject to the provisions of section 32-32(c)) in case of delinquency as is provided by general law for default on the payment of real property taxes, unless another procedure is adopted by the council in the ordinance of formation or special tax ordinance." Pursuant to the foregoing, the County shall enforce the liens of Special Taxes under Chapter 32 in the same manner as applicable to the enforcement of liens of general real property taxes under Chapter 19, except as provided in Section 3 of the Ordinance of Formation (as amended by Section 6 of the Bond Ordinance) and specified below: (a) Not later than forty-five (45) days after the due date of any installment of Special Taxes, the County will determine or cause to be determined whether or not any owners of property within the District are delinquent in the payment of all or any portion of the Special Taxes levied on such owners' properties. If such delinquencies are determined to exist, the County will take such actions as it deems reasonably necessary to pursue payment of the delinquent amounts (including penalties and interest) and shall enforce the lien of the Special Taxes by non judicial foreclosure sale as follows: (i) Section 19-38 of the County Code (as applicable to the Special Taxes under Section 32-53) provides that the County may enforce the lien of delinquent Special Taxes by non judicial foreclosure sale if such Special Taxes remain unpaid for two (2) years after their respective due dates. If any Special Taxes remain unpaid after such two-year period, the County agrees that, unless required to take such action sooner under subparagraph (ii) below, it shall promptly give notice to the delinquent property owners that the delinquent properties will be sold upon non judicial foreclosure sales and shall diligently pursue proceedings for such foreclosure sales as permitted by Sections 19-38 and 32-53 of the County Code. 40 (ii) Section 3 of the Ordinance of Formation (as amended as aforesaid) provides that, for so long as any Bonds remain Outstanding, if any Special Taxes remain unpaid for sixty (60) days after their respective due dates, the County may enforce the lien of the delinquent Special Taxes by non judicial foreclosure sale without regard to the two-year period specified in Section 19-38 of the County Code, subject to the further covenants and agreements set forth in this Indenture. Pursuant to such provision, the County hereby covenants and agrees that, for so long as any Bonds remain Outstanding (A) with respect to Taxable Property in Tax Zone 1, if it determines on any April 30 or October 31 that any such Taxable Property (or Properties) owned by the same Person is (or are) delinquent in payment of more than $10,000 of Special Taxes or that the amount of delinquent Special Taxes exceeds five percent (5%) of the total amount of Special Taxes payable as of the preceding February 15 or August 15, the County shall promptly give notice to the owner(or owners) of such delinquent Taxable Property (or Properties) of a non judicial foreclosure sale of the delinquent property or properties and shall initiate and diligently pursue proceedings for such non judicial foreclosure sale as permitted by Section 3 of the Ordinance of Formation (as amended as aforesaid), and (B) with respect to Taxable Property in Tax Zone 2, if it determines that any such Taxable Property(or Properties) is (or are) delinquent in payment of Special Taxes and if such Special Taxes remain delinquent for sixty (60) days after they are due and payable, the County shall promptly give notice to the owner (or owners) of such delinquent Taxable Property (or Properties) of a non judicial foreclosure sale of the delinquent property or properties and shall initiate and diligently pursue proceedings for such non judicial foreclosure sale as permitted by Section 3 of the Ordinance of Formation (as amended as aforesaid) . (iii) Proceeds of each foreclosure sale to enforce the lien of delinquent Special Taxes, in an amount equal to the delinquent Special Taxes plus penalties and interest thereon, shall be transferred to the Trustee for deposit in the Special Tax Fund. (b) Section 3 of the Ordinance of Formation (as amended as aforesaid) permits the liens of delinquent Special Taxes, Real Property Taxes or special assessments levied under Section 46-80, Hawaii Revised Statutes ("Special Assessments"), to be foreclosed either (i) together in a single sale to satisfy all such liens, or (ii) in separate sales to satisfy the lien of the delinquent Special Taxes, Real Property Taxes or Special Assessments; provided that, in the case of a single sale, if the proceeds of the sale are insufficient to pay the total amount due with respect to all Real Property Taxes, Special Taxes and Special Assessments on the property, then the Director may apply the amount collected first to Real Property Taxes, second to the Special Tax levied hereunder, and third to Special Assessments, together with all applicable charges for interest, penalties, costs and expenses. Notwithstanding the foregoing, for so long as any Bonds remain Outstanding, the County further covenants and agrees that it will not sell a property upon foreclosure (whether in a single sale or a separate sale to foreclose the lien on delinquent Special Taxes) for a price that produces net proceeds less than the amount required to be transferred to the Trustee pursuant to Subsection (b)(ii) above unless such sale is consented to by the Owners of not less than 67% of the aggregate principal amount of Bonds then Outstanding; except that the County may, in its sole discretion, waive penalties and interest in a foreclosure sale if the net proceeds from such sale (excluding penalties and interest) are sufficient to pay the principal of and interest on the portion of the Bonds allocable to the delinquent Special Taxes on the property in question. 41 (c) Any provisions hereof to the contrary notwithstanding, it is expressly understood that the County's covenants to collect and enforce the liens of Special Taxes under this Indenture are subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles and exercise of judicial discretion, and to applicable limitations on collection of taxes and foreclosure sales with respect to properties in which the federal government or any federal agency has or obtains an interest. Section 5.4. Continuing Disclosure and Reporting Requirements. The County covenants to comply with the terms of the Continuing Disclosure Agreement executed by it on the Delivery Date of the 2022 Bonds with respect to compliance with Rule 15c2-12 of the Securities and Exchange Commission, provided that the failure of the County to comply with the terms of said Continuing Disclosure Agreement shall not constitute an event of default under Article VIII hereof. ARTICLE VI AMENDMENTS TO INDENTURE Section 6.1. Supplemental Indentures or Orders Not Requiring Owner Consent. The County and Trustee may from time to time, and at any time, without notice to or consent of any of the Bondowners, enter into Supplemental Indentures in order to provide for the issuance of Parity Bonds pursuant to Section 2.12 hereof and for any of the following purposes: (a) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with anyotherprovision herein, or to make anyotherprovision with respect to matters orquestions arisingunder this Indenture or in anyadditional resolution or order, provided that such action is not materially adverse to the interests of the Bondowners; (b) to add to the covenants and agreements of and the limitations and the restrictions upon the County contained in this Indenture, other covenants, agreements, limitations and restrictions to be observed by the County which are not contrary to or inconsistent with this Indenture as theretofore in effect or which further secure Bond payments; (c) to modify, amend or supplement this Indenture or any Supplemental Indenture in such manner as to permit the qualification hereof or thereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, or to comply with the Tax Code or regulations issued thereunder, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Owners of the Bonds then Outstanding; or (d) to modify, alter or amend the RMA in any manner so long as such changes do not reduce the Maximum Special Tax that may be levied in each year on Taxable Property within the District to an amount which is less than that permitted under Section 5.2(g) hereof; or (e) to modify, alter, amend or supplement this Indenture in any other respect which is not materially adverse to the Bondowners. Section 6.2. Supplemental Indentures or Orders Requiring Owner Consent. Exclusive of the Supplemental Indentures described in Section 6.1 hereof, the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding shall have the right to 42 consent to and approve the execution and delivery by the County of such Supplemental Indentures as shall be deemed necessary or desirable by the County for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture; provided, however, that nothing herein shall permit, or be construed as permitting, (a) an extension of the maturity date of the principal, or the payment date of interest on, any Bond without the consent of the Owner thereof, (b) a reduction in the principal amount of, or redemption premium on, any Bond or the rate of interest thereon, without the consent of the Owner thereof, (c) a preference or priority of any Bond over any other Bond without the consent of the Owners of all of the Bonds that would lack such preference or priority, or (d) a reduction in the aggregate principal amount of the Bonds the Owners of which are required to consent to such Supplemental Indenture,without the consent of the Owners of all Bonds then Outstanding. If at any time the County shall desire to adopt a Supplemental Indenture, which pursuant to the terms of this Section shall require the consent of the Bondowners, the County shall so notify the Trustee and shall deliver to the Trustee a copy of the proposed Supplemental Indenture. The Trustee shall, at the expense of the County (payable solely from moneys available therefor in the Administrative Expense Account of the Special Tax Fund), cause notice of the proposed Supplemental Indenture to be mailed, by first class mail, postage prepaid, to all Bondowners at their addresses as they appear in the Bond Register. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file at the office of the Trustee for inspection by all Bondowners. The failure of any Bondowners to receive such notice shall not affect the validity of such Supplemental Indenture when consented to and approved by the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding as required by this Section. Whenever at any time within one year after the date of the first mailing of such notice, the Trustee shall receive an instrument or instruments purporting to be executed by the Owners of a majority in aggregate principal amount of the Bonds Outstanding, which instrument or instruments shall refer to the proposed Supplemental Indenture described in such notice, and shall specifically consent to and approve the adoption thereof by the County substantially in the form of the copy referred to in such notice as on file with the Trustee, such proposed Supplemental Indenture, when duly adopted by the County, shall thereafter become a part of the proceedings for the issuance of the Bonds. In determining whether the Owners of a majority of the aggregate principal amount of the Bonds have consented to the adoption of any Supplemental Indenture, Bonds which are owned by the County or by any Person directly or indirectly controlling or controlled by or under the direct or indirect common control with the County shall be disregarded and shall be treated as though they were not Outstanding for the purpose of any such determination. Upon the adoption of any Supplemental Indenture and the receipt of consent to any such Supplemental Indenture from the Owners of not less than a majority in aggregate principal amount of the Outstanding Bonds in instances where such consent is required pursuant to the provisions of this Section, this Indenture shall be, and shall be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the County and all Owners of Outstanding Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments. Section 6.3. Notation of Bonds; Delivery of Amended Bonds. After the effective date of any action taken as hereinabove provided, the County may determine that the Bonds may bear a notation, by endorsement in form approved by the County, as to such action, and in that case upon demand of the Owner of any Outstanding Bond at such effective date and presentation of his Bond for the purpose at the office of the Trustee or at such additional offices as the Trustee may select and 43 designate for that purpose, a suitable notation as to such action shall be made on such Bonds. If the County shall so determine, new Bonds so modified as, in the opinion of the County, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding Bond at such effective date such new Bonds shall be exchanged at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, without cost to each Owner of Outstanding Bonds, upon surrender of such Outstanding Bonds. ARTICLE VII TRUSTEE Section 7.1. Duties, Immunities and Liabilities of Trustee. U.S. Bank Trust Company, National Association is hereby appointed as Trustee for the Bonds unless and until another Trustee is appointed by the County hereunder. The Trustee shall, prior to an event of default and after curing all events of default which may have occurred, perform such duties and only such duties as are specifically set forth herein. Upon the occurrence and upon the continuance of an event of default, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a reasonable corporate trustee would exercise or use as trustee under a trust indenture. The County may, at any time, appoint a successor Trustee satisfying the requirements of Section 7.2 hereof for the purpose of receiving all money which the County is required to deposit with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Trustee is hereby authorized to and shall mail or cause to be mailed by first class mail, postage prepaid, or wire transfer in accordance with Section 2.5 hereof, interest payments to the Bondowners, to select Bonds for redemption, and to maintain the Bond Register. The Trustee is hereby authorized to pay the principal of and the accrued interest and premium, if any, on the Bonds when the same are duly presented to it for payment at maturity or on call and redemption, to provide for the registration of transfer and exchange of Bonds presented to it for such purposes,to provide for the cancellation of Bonds all as provided in this Indenture, and to provide for the authentication of Bonds, and shall perform such other duties expressly assigned to or imposed on it as provided in this Indenture; provided, however, that no other duties of the Trustee shall be implied or imposed upon the Trustee other than as expressly stated hereunder. The Trustee shall keep accurate records of all funds administered by it and all Bonds paid, discharged and cancelled by it. The Trustee is hereby authorized to redeem the Bonds when duly presented for payment at maturity, or on redemption prior to maturity. The Trustee shall cancel all Bonds upon payment thereof in accordance with the provisions of Section 10.1 hereof. The County shall from time to time, subject to any agreement between the County and the Trustee then in force, pay to the Trustee compensation for its services and reimburse the Trustee for all its advances and expenditures, including, but not limited to, advances to and fees and expenses of independent accountants or counsel employed by it in the exercise and performance of its powers and duties hereunder. Section 7.2. Removal of Trustee. The County may at any time at its sole discretion remove the Trustee initially appointed, and any successor thereto, by delivering to the Trustee a written notice of its decision to remove the Trustee and may appoint a successor or successors thereto; provided that any such successor, other than the Trustee, shall be a bank or trust company 44 having (or in the case of a financial institution that is part of a bank holding company, such company shall have) a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000, and subject to supervision or examination by federal or state authority. Any removal shall become effective only upon acceptance of appointment by the successor Trustee. If any bank or trust company appointed as a successor publishes a report of condition at least annually,pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Any removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee and notice being sent by the successor Trustee to the Bondowners of the successor Trustee's identity and address. Section 7.3. Resignation of Trustee. The Trustee may at any time resign by giving written notice to the County and by giving to the Owners notice of such resignation, which notice shall be mailed to the Owners at their addresses appearing in the registration books in the office of the Trustee. Upon receiving such notice of resignation, the County shall promptly appoint a successor Trustee satisfying the criteria in Section 7.2 hereof by an instrument in writing. In the event a successor trustee shall not have been designated within 30 Business Days, the Trustee shall have the right to petition any court of competent jurisdiction for an order appointing a replacement Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. Section 7.4. Liability of Trustee. The recitals of fact and all promises, covenants and agreements contained herein and in the Bonds shall be taken as statements, promises, covenants and agreements of the County, and the Trustee assumes no responsibility and shall have no liability for the correctness of the same and makes no representations as to the validity or sufficiency of this Indenture, the Bonds, or the Preliminary Official Statement or Official Statement pertaining to any Series of Bonds, and shall incur no responsibility and have no liability in respect thereof, other than in connection with its express duties or obligations specifically set forth herein, in the Bonds or in the certificate of authentication of the Trustee. The Trustee shall be under no responsibility or duty and shall have no responsibility with respect to the issuance of the Bonds for value or the use of Bond proceeds paid out in accordance with the provisions of this Indenture. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, facsimile transmission, electronic mail, Bond, certificate of an Independent Financial Consultant or Special Tax Administrator or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered hereunder in good faith and in accordance therewith. The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, but the Trustee shall be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it hereunder. 45 The Trustee shall not be bound to recognize any Person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactorily established, if disputed. Whenever in the administration of its duties under this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be deemed to be conclusively proved and established by a written Certificate of an Authorized County Representative, and such Certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. The Trustee shall have no duty or obligation whatsoever to monitor or enforce the collection of Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any amounts received. The sole obligation of the Trustee with respect thereto shall be limited to the proper accounting for such funds as it shall actually receive. No provision in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers; and the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of the Owners unless such Owners shall have offered to the Trustee reasonable security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Trustee shall not be deemed to have knowledge of any event of default of the type described in Section 8.1(c) hereof unless and until it shall have actual knowledge thereof by receipt of written notice thereof at its corporate trust office. The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty. The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay ("unavoidable delay") in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee. The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Trustee shall have received an incumbency certificate listing the Authorized County Representatives designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the County elects to 46 give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee's understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The County agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting in good faith on unauthorized instructions, and the risk of interception and misuse by third parties. Section 7.5. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Trustee without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding; provided that such successor shall be qualified to serve as Trustee under the provisions of Section 7.2. ARTICLE VIII EVENTS OF DEFAULT; REMEDIES Section 8.1. Events of Default. Any one or more of the following events shall constitute an"event of default": (a) Default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed,by declaration or otherwise; (b) Default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; (c) Except as described in (a) or (b), default shall be made by the County in the observance of any of the agreements, conditions or covenants on its part contained in this Indenture, the Bonds, and such default shall have continued for a period of 30 days after the County shall have been given notice in writing of such default by the Trustee or the Owners of 25% in aggregate principal amount of the Outstanding Bonds; or (d) The County shall commence a voluntary case under Title 11 of the United States Code or any substitute or successor statute. The County agrees to give notice to the Trustee immediately upon the occurrence of an event of default under(a)or(b) above and within 30 days of the County's knowledge of an event of default under(c)above. Section 8.2. Remedies of Owners. Following the occurrence of an event of default. any Trustee shall have the right for the equal benefit and protection of all Owners: (a) By mandamus or other suit or proceeding at law or in equity to enforce the rights of the Owners against the County and any of the members, officers and employees of the County, and to 47 compel the County or any such members, officers or employees to perform and carry out their duties under Chapter 32 and their agreements with the Owners as provided in this Indenture including but not limited to the duty of the County to commence and pursue foreclosure proceedings if and to the extent required by Section 5.3(b) hereof; (b) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or (c) By a suit in equity to require the County and its members, officers and employees to account as the trustee of an express trust. If an event of default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Bonds and if indemnified to its satisfaction, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred above, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owners of the Bonds. In the event that the Trustee, upon the happening of an event of default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an event of default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other such litigation. Any suit, action or proceeding which any Owner of Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney in fact of the respective Owners of the Bonds for the purposes of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact. No Owner of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an event of default; (b)the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; and (d)the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder; it being 48 understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds. Nothing in this Article or in any other provision of this Indenture or the Bonds shall affect or impair the obligation of the County, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners thereof at the respective dates of maturity, as herein provided, out of the Special Taxes and other amounts pledged for such payment, or affect or impair the right of action, which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in this Indenture. A waiver of any default or breach of duty or contract by the Trustee or any Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by the Trustee or any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by Chapter 32 or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Owners, as applicable. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the County and the Owners shall be restored to their former positions, rights and remedies as if such suit,action or proceeding had not been brought or taken. No remedy herein conferred upon or reserved to the Trustee or the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by Chapter 32 or any other law. The Trustee's counsel is not and shall not be deemed counsel to the Owners. Any communication between the Trustee and its counsel shall be deemed confidential and privileged. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenture relating to the Bonds shall be applied by the Trustee in the following order upon presentation of the several Bonds: First, to the payment of the fees, costs and expenses of the Trustee in declaring such event of default and in carrying out the provisions of this Article 8, including reasonable compensation to its agents, attorneys and counsel, and to the payment of all other outstanding fees and expenses of the Trustee; and Second,eco d,to the payment of the whole amount of interest on and principal of the Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds; provided, however, that in the event such amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority: 49 (d) first to the payment of all installments of interest on the Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing, (e) second, to the payment of all installments of principal, including Sinking Fund Payments, of the Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing, and (f) third, to the payment of interest on overdue installments of principal and interest on the Bonds on a pro rata basis based on the total amount then due and owing. ARTICLE IX DEFEASANCE Section 9.1. Defeasance. If the County shall pay or cause to be paid, or there shall otherwise be paid, to the Owner of an Outstanding Bond the interest due thereon and the principal thereof, at the times and in the manner stipulated in this Indenture or any Supplemental Indenture, then the Owner of such Bond shall cease to be entitled to the pledge of Special Taxes, and, other than as set forth below, all covenants, agreements and other obligations of the County to the Owner of such Bond under this Indenture shall thereupon cease, terminate and become void and be discharged and satisfied. In the event of a defeasance of all Outstanding Bonds pursuant to this Section, the Trustee shall execute and deliver to the County all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the County's general fund all money or securities held by it pursuant to this Indenture which are not required for the payment of the principal of, premium, if any,and interest due on such Bonds. Any Outstanding Bond shall be deemed to have been paid within the meaning expressed in the first paragraph of this Section if such Bond is paid in any one or more of the following ways: (a) by paying or causing to be paid the principal of, premium, if any, and interest on such Bond, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money which, together with the amounts then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Account) and available for such purpose, is fully sufficient to pay the principal of, premium, if any, and interest on such Bond,as and when the same shall become due and payable; or (c) by depositing with the Trustee or another escrow bank appointed by the County, in trust, noncallable Federal Securities, in such amount as will be sufficient, together with the interest to accrue thereon and moneys then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Account) and available for such purpose,together with the interest to accrue thereon,to pay and discharge the principal of, premium, if any, and interest on such Bond, as and when the same shall become due and payable; then, at the election of the County, and notwithstanding that any Outstanding Bonds shall not have been surrendered for payment, all obligations of the County under this Indenture and any Supplemental Indenture with respect to such Bond shall cease and terminate, except for the obligation of the Trustee to pay or cause to be paid to the Owner of any such Bond not so surrendered and paid, all sums due thereon and except for the covenants of the County contained in Section 5.2(f) hereof or any covenants in a Supplemental Indenture relating to compliance with the 50 Tax Code. Notice of such election shall be filed with the Trustee not less than ten days prior to the proposed defeasance date, or such shorter period of time as may be acceptable to the Trustee. In connection with a defeasance under (b) or (c) above, there shall be provided to the County and the Trustee a verification report from an independent nationally recognized certified public accountant stating its opinion as to the sufficiency of the moneys or securities deposited with the Trustee or the escrow bank to pay and discharge the principal of, premium, if any, and interest on all Outstanding Bonds to be defeased in accordance with this Section, as and when the same shall become due and payable, and an opinion of Bond Counsel (which may rely upon the opinion of the certified public accountant) to the effect that the Bonds being defeased have been legally defeased in accordance with this Indenture and any applicable Supplemental Indenture. If a forward supply contract is employed in connection with an advance refunding to be effected under (c) above, (i) such verification report shall expressly state that the adequacy of the amounts deposited with the bank under (c) above to accomplish the refunding relies solely on the initial escrowed investments and the maturing principal thereof and interest income thereon and does not assume performance under or compliance with the forward supply contract, and (ii) the applicable escrow agreement executed to effect an advance refunding in accordance with (c) above shall provide that, in the event of any discrepancy or difference between the terms of the forward supply contract and the escrow agreement,the terms of the escrow agreement shall be controlling. Upon a defeasance, the Trustee, upon request of the County, shall release the rights of the Owners of such Bonds and execute and deliver to the County all such instruments as may be desirable to evidence such release, discharge and satisfaction. In the case of a defeasance hereunder of all Outstanding Bonds, the Trustee shall pay over or deliver to the County any funds held by the Trustee at the time of a defeasance, which are not required for the purpose of paying and discharging the principal or redemption price of or interest on the Bonds when due. The Trustee shall, at the written direction of the County, mail, first class, postage prepaid, a notice to the Bondowners whose Bonds have been defeased, in the form directed by the County, stating that the defeasance has occurred. ARTICLE X MISCELLANEOUS Section 10.1. Cancellation of Bonds. All Bonds surrendered to the Trustee for payment upon maturity or for redemption shall be upon payment therefor, and any Bond purchased by the County as authorized herein and delivered to the Trustee for such purpose shall be, cancelled forthwith and shall not be reissued. The Trustee shall destroy such Bonds, and, upon request of the County, furnish to the County a certificate of such destruction. Section 10.2. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Indenture to be signed or executed by Bondowners may be in any number of concurrent instruments of similar tenor may be signed or executed by such Owners in person or by their attorneys appointed by an instrument in writing for that purpose, or by the bank, trust company or other depository for such Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, and of the ownership of Bonds shall be sufficient for the purposes of this Indenture (except as otherwise herein provided), if made in the following manner: (a) The fact and date of the execution by any Owner or his or her attorney of any such instrument and of any instrument appointing any such attorney, may be proved by a signature 51 guarantee of any bank or trust company located within the United States of America. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such signature guarantee shall also constitute sufficient proof of his authority. (b) As to any Bond, the Person in whose name the same shall be registered in the Bond Register shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Bond, and the interest thereon, shall be made only to or upon the order of the registered Owner thereof or his or her legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond and the interest thereon to the extent of the sum or sums to be paid. Neither the County nor the Trustee shall be affected by any notice to the contrary. Nothing contained in this Indenture shall be construed as limiting the Trustee or the County to such proof, it being intended that the Trustee or the County may accept any other evidence of the matters herein stated which the Trustee or the County may deem sufficient. Any request or consent of the Owner of any Bond shall bind every future Owner of the same Bond in respect of anything done or suffered to be done by the Trustee or the County in pursuance of such request or consent. Section 10.3. Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Outstanding Bonds which remain unclaimed for a period ending at the earlier of two Business Days prior to the date such funds would escheat to the State or two years after the date when such Outstanding Bonds have become due and payable, if such money was held by the Trustee at such date, or for a period ending at the earlier of two Business Days prior to the date such funds would escheat to the State or two years after the date of deposit of such money if deposited with the Trustee after the date when such Outstanding Bonds become due and payable, shall be repaid by the Trustee to the County, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the County for the payment of such Outstanding Bonds; provided, however, that, before being required to make any such payment to the County, the Trustee at the written request of the County or the Trustee shall, at the expense of the County, cause to be mailed by first-class mail, postage prepaid, to the registered Owners of such Outstanding Bonds at their addresses as they appear on the registration books of the Trustee a notice that said money remains unclaimed and that, after a date named in said notice, which date shall not be less than 30 days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the County. Section 10.4. Provisions Constitute Contract. The provisions of this Indenture shall constitute a contract between the County and the Bondowners and the provisions hereof shall be construed in accordance with the laws of the State. In any legal action arising out of this Indenture,the parties hereby consent to the jurisdiction of any federal or state court of competent jurisdiction within the State, and also consent to the service of process by any means authorized by State or federal law. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and, should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners or the Trustee, then the County, the Trustee and the Bondowners shall 52 be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. After the issuance and delivery of the Bonds this Indenture shall be irrepealable, but shall be subject to modifications to the extent and in the manner provided in this Indenture, but to no greater extent and in no other manner. Section 10.5. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the County from making contracts or creating bonded or other indebtedness payable from a pledge of the Special Taxes which is subordinate to the pledge hereunder, or which is payable from the general fund of the County or from taxes or any source other than the Special Taxes and other amounts pledged hereunder. Section 10.6. Further Assurances. The County will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds the rights and benefits provided in this Indenture. Section 10.7. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this Indenture, or the application thereof to any Person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Indenture and the application of any such covenant, agreement or provision, or portion thereof, to other Persons or circumstances, shall be deemed severable and shall not be affected thereby, and this Indenture, the Bonds issued pursuant hereto shall remain valid and the Bondowners shall retain all valid rights and benefits accorded to them under the laws of the State. Section 10.8. Notices. Any notices required to be given to the County with respect to the Bonds or this Indenture shall be mailed, first class, postage prepaid, or personally delivered to the County at 4444 Rice Street, Suite 280, Lihue, Hawai`i 96766, Attention: Director of Finance, with a copy to the County Attorney at 4444 Rice Street, Suite 220, Lihue, Hawai`i 96766. All notices to the Trustee shall be mailed, first class, postage prepaid, or personally delivered to the Trustee at 700 S. Flower Street, Suite 500,Los Angeles, California 90017, Attention: Johanna Tokunaga. Section 10.9. General Authorization. The Mayor and the Director of Finance of the County and their respective designees are hereby each authorized to do and perform from time to time any and all acts and things consistent with this Indenture necessary or appropriate to carry the same into effect. Section 10.10. Execution in Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same instrument. [SIGNATURES APPEAR ON FOLLOWING PAGE] 53 IN WITNESS WHEREOF, the parties have executed and attested this Indenture by their officers duly authorized as of the date and year first written above. COUNTY OF HAWAII By: Name: Deanna Sako Its: Director of Finance U.S. BANK TRUST COMPANY,NATIONAL ASSOCIATION, as Trustee By: Name: Its: 54 EXHIBIT A FORM OF 2022 BOND THIS BOND IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.9 OF THE INDENTURE. NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS BOND, OR ANY BENEFICIAL INTEREST HEREIN, MAY BE MADE EXCEPT TO A PERSON THAT IS A QUALIFIED PURCHASER THAT IS PURCHASING THIS BOND FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTING THIS BOND. EACH TRANSFEREE OF THIS BOND, OR ANY BENEFICIAL INTEREST THEREIN, SHALL BE DEEMED TO HAVE REPRESENTED TO THE COUNTY, THE PARTICIPATING UNDERWRITER AND THE TRUSTEE THAT SUCH TRANSFEREE IS A QUALIFIED PURCHASER THAT IS PURCHASING SUCH BOND FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTING SUCH BOND. EACH ENTITY THAT IS OR THAT BECOMES AN OWNER OR A BENEFICIAL OWNER OF THIS BOND IS DEEMED BY THE ACCEPTANCE OR ACQUISITION OF THIS BOND OR SUCH BENEFICIAL OWNERSHIP INTEREST TO HAVE AGREED TO BE BOUND BY THE PROVISIONS OF SAID SECTION 2.9. ANY TRANSFER OF A BOND TO ANY ENTITY THAT IS NOT A QUALIFIED PURCHASER SHALL BE DEEMED NULL AND VOID. No. R-_ $ UNITED STATES OF AMERICA STATE OF HAWAII COUNTY OF HAWAII COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) SPECIAL TAX REVENUE BONDS, SERIES 2022 INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP NO. May 15, ,2022 REGISTERED OWNER: CEDE& CO. PRINCIPAL AMOUNT: DOLLARS THE COUNTY OF HAWAII (the "County"), FOR VALUE RECEIVED, hereby promises to pay, solely from certain amounts held under the Indenture (as hereinafter defined), to the Registered Owner named above, or registered assigns, on the Maturity Date set forth above, unless redeemed prior thereto as hereinafter provided, the Principal Amount set forth above, and to pay interest on such Principal Amount from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication hereof, unless (i)the date of authentication is an Interest A-1 Payment Date in which event interest shall be payable from such date of authentication, (ii) the date of authentication is after a Record Date (as hereinafter defined) but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication, or (iii) the date of authentication is prior to the close of business on the first Record Date in which event interest shall be payable from the Dated Date set forth above. Notwithstanding the foregoing, if at the time of authentication of this Bond interest is in default, interest on this Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment, interest on this Bond shall be payable from the Dated Date set forth above. Interest will be paid semiannually on each May 15 and November 15 (each, an "Interest Payment Date"), commencing May 15, 2023, at the Interest Rate set forth above, until the Principal Amount hereof is paid or made available for payment. The principal of and premium, if any, on this Bond are payable to the Registered Owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the office of U.S. Bank Trust Company, National Association, (the "Trustee"). Interest on this Bond shall be paid by check of the Trustee mailed by first class mail, postage prepaid, or in certain circumstances described in the Indenture by wire transfer to an account within the United States, to the Registered Owner hereof as of the close of business on the first day of the month in which the Interest Payment Date occurs, whether or not such day is a business day (the "Record Date") at such Registered Owner's address as it appears on the registration books maintained by the Trustee. This Bond is one of a duly authorized issue of "Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds, Series 2022" (the "Bonds") issued in the aggregate principal amount of$ pursuant to Chapter 32, Hawai`i County Code 1983 (2016 Edition, as Amended) ("Chapter 32"), Ordinance No. 21-67 of the County enacted in accordance therewith, as amended (the "Ordinance of Formation") and Ordinance No. 22- 33 of the County (the "Bond Ordinance" and, together with Chapter 32 and the Ordinance of Formation, the "Authorizing Acts"). The Bonds are issued upon, and are subject to, the terms and conditions specified in that certain Trust Indenture dated as of , 2022 (the "Indenture"), by and between the County and the Trustee, and this reference incorporates the Indenture herein, and by acceptance hereof the Registered Owner of this Bond assents to said terms and conditions. The Indenture is adopted under and this Bond is issued under, and both are to be construed in accordance with,the laws of the County and the State of Hawai`i, including the Authorizing Acts. Pursuant to the Authorizing Acts and the Indenture, the principal of, premium, if any, and interest on this Bond are payable solely from annual Special Taxes authorized to be levied and collected within the District and certain other amounts pledged to the repayment of the Bonds as set forth in the Indenture. The County has covenanted for the benefit of the owners of the Bonds that under certain circumstances described in the Indenture it will commence and diligently pursue to completion appropriate foreclosure proceedings in the event of delinquencies of Special Taxes levied for payment of principal and interest on the Bonds. Subject to the further limitations set forth in the Indenture, the Bonds may be redeemed, at the option of the County from any source of funds on any Interest Payment Date, in whole, or in part in the order of maturity selected by the County and by lot within a maturity, at a redemption price equal to the principal amount thereof,together with accrued interest to the date of redemption. A-2 In addition,the Term Bonds maturing on May 15 of the years 20_, 20_, 20_and 20_are subject to annual mandatory sinking fund redemption prior to maturity commencing on May 15 of the years 20_, 20_, 20 and 20 , respectively, in part, by lot, from Sinking Fund Payments (as defined in the Indenture) at a redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption, without premium, to the extent, in the manner and subject to the terms of the Indenture. In the event of a partial redemption of Term Bonds, other than as a result of Sinking Fund Payments, each of the remaining Sinking Fund Payments for the Term Bonds that were partially redeemed will be reduced, as nearly as practicable, on a pro rata basis. The Bonds are also subject to special mandatory redemption on any Interest Payment Date, in whole or in part, from certain funds derived from the prepayment of Special Taxes, at the following redemption prices, expressed as a percentage of the principal amount thereof, together with accrued interest to the date of redemption: Redemption Dates Redemption Prices Prior to 15, 20_ 103% 15,20_ through 15, 20_ 102 15,20_through 15, 20_ 101 15, 20 and thereafter 100 Notice of redemption with respect to the Bonds to be redeemed shall be mailed to the registered owners thereof not less than 30 nor more than 60 days prior to the redemption date by first class mail, postage prepaid, to the addresses set forth in the registration books. Neither a failure of the Registered Owner hereof to receive such notice nor any defect therein will affect the validity of the proceedings for redemption. All Bonds or portions thereof so called for redemption will cease to accrue interest on the specified redemption date; provided that funds for the redemption are on deposit with the Trustee on the redemption date. Thereafter, the registered owners of such Bonds shall have no rights except to receive payment of the redemption price upon the surrender of the Bonds. The County, solely for the convenience to the Bondowners, has caused CUSIP (Committee on Uniform Security Identification Procedures) numbers to be printed on the 2022 Bonds and has directed the Trustee to use CUSIP numbers in notices of redemption for the 2022 Bonds. No representation is made as to the accuracy of such numbers either as printed on the 2022 Bonds or as contained in any notice of redemption, and the County and the Trustee shall have no liability of any sort with respect thereto. This Bond shall be registered in the name of the Registered Owner hereof, as to both principal and interest, and the County and the Trustee may treat the Registered Owner hereof as the absolute owner for all purposes and shall not be affected by any notice to the contrary. The Bonds are issuable only in fully registered form in the denomination of$100,000 or any integral multiple of $5,000 in excess thereof and may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same issue and maturity, all as more fully set forth in the Indenture. This Bond is transferable by the Registered Owner hereof, in person or by such Registered Owner's attorney duly authorized in writing, at the Designated Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the A-3 Indenture, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond of authorized denomination or denominations for the same aggregate principal amount of the same issue and maturity will be issued to the transferee in exchange therefor. The Trustee shall not be required to register transfers or make exchanges of(i)any Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed, or (ii)any Bonds chosen for redemption. The rights and obligations of the County and of the registered owners of the Bonds may be amended at any time, and in certain cases without notice to or the consent of the registered owners,to the extent and upon the terms provided in the Indenture. THE BONDS DO NOT CONSTITUTE OBLIGATIONS OF THE COUNTY OF HAWAII FOR WHICH THE COUNTY OF HAWAII IS OBLIGATED TO LEVY OR PLEDGE, OR HAS LEVIED OR PLEDGED, GENERAL OR SPECIAL TAXES, OTHER THAN THE SPECIAL TAXES REFERENCED HEREIN. THE BONDS ARE LIMITED OBLIGATIONS OF THE COUNTY PAYABLE SOLELY FROM THE PORTION OF THE SPECIAL TAXES AND OTHER AMOUNTS PLEDGED UNDER THE INDENTURE BUT ARE NOT OTHERWISE A DEBT OF THE COUNTY OF HAWAII, THE STATE OF HAWAII OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OR RESTRICTION. This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Trustee. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law. IN WITNESS WHEREOF, the County of Hawai`i has caused this Bond to be dated as of the Dated Date, to be signed on behalf of the County by the Mayor of the County and the Director of Finance of the County, by their respective manual or facsimile signatures, and to be impressed with or to bear a facsimile of the Seal of the County. COUNTY OF HAWAII [SEAL] Mayor Director of Finance CERTIFICATE OF AUTHENTICATION A-4 This is one of the Bonds described in the within-defined Indenture. Dated: , 20 U.S. BANK TRUST COMPANY,NATIONAL ASSOCIATION, as Trustee By: Authorized Signatory A-5 [FORM OF ASSIGNMENT] For value received the undersigned do(es)hereby sell, assign and transfer unto (typewrite name, address and social security or federal tax identification number) the within-registered Bond and hereby irrevocably constitute(s)and appoint(s) attorney, to transfer the same on the Bond Register of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature(s) must be guaranteed by an eligible guarantor institution. Note: The signature(s)on this assignment must correspond with the name(s) as written on the face of the within-registered Bond in every particular, without alteration or enlargement or any change whatsoever. A-6 EXHIBIT B-1 REQUISITION NO. (Administrative Expense Account) HAWAII COUNTY COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) REQUISITION FOR DISBURSEMENT OF ADMINISTRATIVE EXPENSES U.S. Bank Trust Company, National Association, as Trustee (the "Trustee"), is hereby requested, pursuant to the Trust Indenture dated as of , 2022 (the "Indenture") between the Trustee and County of Hawai`i (the "County"), to pay the amount(s) specified in Schedule I attached hereto, such payments to be made from the Administrative Expense Account of the Special Tax Fund established under the Indenture to the payee(s) and for the purposes (consisting of Administrative Expenses, as defined in the Indenture) specified in such Schedule I. Such payment(s) is(are) to be made by check or wire transfer in accordance with payment instructions set forth in Schedule I. The amount(s)requisitioned hereunder is(are)due and payable under purchase order, contract or other authorization and has not formed the basis of any prior request for payment. The conditions to the release of such amount(s) from Administrative Expense Account under the Indenture have been met to the County's satisfaction. There has not been filed with nor served upon the County notice of any lien, right to lien or attachment upon, or stop notice or claim affecting the right to receive payment of the amount(s) requisitioned hereunder which has not been released or will not be released simultaneously with the payment of such amount,other than materialmen's or mechanic's liens accruing by mere operation of law. Dated: COUNTY OF HAWAII By: Authorized Officer B-1-1 SCHEDULE I Amount Payee Purpose Payment Instructions B-1-2 EXHIBIT B-2 REQUISITION NO._ (Project Fund) HAWAII COUNTY COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) REQUISITION FOR DISBURSEMENT OF COSTS OF ISSUANCE OR IMPROVEMENT COSTS U.S. Bank Trust Company, National Association, as Trustee (the "Trustee"), is hereby requested, pursuant to the Trust Indenture dated as of , 2022 (the "Indenture") between the Trustee and County of Hawai`i (the "County"), to pay the amount(s) specified in Schedule I attached hereto, such payments to be made from the Account(s), to the payee(s) and for the purpose(s) (consisting of Costs of Issuance, Incidental Expenses and/or Actual Costs of the Improvements, as such terms are defined in the Indenture) specified in such Schedule I. Such payment(s) is(are) to be made by check or wire transfer in accordance with payment instructions set forth in Schedule I. The amount(s) requisitioned hereunder is(are)due and payable under purchase order, contract or other authorization and has not formed the basis of any prior request for payment. The conditions to the release of such amount(s) from the applicable Account(s) under the Indenture (as specified in Schedule I)have been met to the County's satisfaction. There has not been filed with nor served upon the County notice of any lien, right to lien or attachment upon, or stop notice or claim affecting the right to receive payment of the amount(s) requisitioned hereunder which has not been released or will not be released simultaneously with the payment of such amount,other than materialmen's or mechanic's liens accruing by mere operation of law. Dated: COUNTY OF HAWAII By: Authorized Officer B-2-1 SCHEDULE I Account: I Amount Payee Purpose Payment Instructions Insert, as applicable: Cost of Issuance Account, Construction Account, Contingency Account and/or Tax Receipts Account. If payments from multiple Accounts are authorized by this Requisition, specify amounts, payees, purposes and payment instructions separately for each Account B-2-2 EXHIBIT C RATE AND METHOD OF APPORTIONMENT EXHIBIT D DTC REPRESENTATION LETTER EXHIBIT E FORM OF INVESTOR LETTER County of Hawai'i McCorriston Miller Mukai MacKinnon LLP Kona, Hawai'i Honolulu, Hawai'i U.S. Bank Trust Company,National Association Stifel,Nicolaus& Company, Incorporated Los Angeles, California Los Angeles, California Re: County of Hawai'i Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds,Series 2022 Ladies and Gentlemen: The undersigned (the "Investor") hereby acknowledges that it is purchasing $ aggregate principal amount of the County of Hawai'i Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds, Series 2022 (the "2022 Bonds"), issued, in authorized denominations of $100,000 or any integral multiple of $5,000 in excess thereof ("Authorized Denominations"), by the County of Hawai'i (the "Issuer"), pursuant to a Trust Indenture, dated as of 1, 2022 (the "Indenture"), by and between the Issuer and U.S. Bank Trust Company, National Association, a national banking association, as Trustee (the "Trustee"). This letter ("Investor Letter") is being provided pursuant to the Indenture. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture. The Investor acknowledges that the proceeds of the 2022 Bonds will be used for the purposes, and that the principal of and interest on the 2022 Bonds will be payable solely from the sources, described in the Preliminary Limited Offering Memorandum, dated , 2022, as amended to the date hereto (the "Offering Document"). In connection with the sale of the 2022 Bonds to the Investor, the Investor hereby makes the following representations upon which you may rely: 1. The Investor has the authority and is duly authorized to purchase the 2022 Bonds and to execute this Investor Letter and any other instruments and documents required to be executed by the Investor in connection with its purchase of the 2022 Bonds. 2. The Investor is (a) a "qualified institutional buyer" as that term is defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), or (b) an "accredited investor" as that term is defined in Rule 501(a)(1), (a)(2), (a)(3), or (a)(7) under the Securities Act, and has sufficient knowledge and experience in financial and business matters, including the purchase and ownership of municipal conduit obligations, to be able to evaluate the risks and merits of the investment represented by the 2022 Bonds. 3. The Investor acknowledges the 2022 Bonds are being acquired by the Investor (A) for investment and not with a current view to, or for resale in connection with, any distribution of the 2022 Bonds, and the Investor intends to hold the 2022 Bonds solely for its own account for investment purposes for an indefinite period of time, and does not intend at this time to dispose of all or any part of the 2022 Bonds. However, the Investor may sell the 2022 Bonds at any time the Investor deems appropriate, subject to the transfer restrictions set forth in the 2022 Bonds and in the Indenture. The Investor understands that it may need to bear the risks of this investment for an indefinite time, since there is no established market for the 2022 Bonds, none is expected to develop, and hence any resale of the 2022 Bonds, or any portion thereof, prior to maturity may not be possible. The Investor understands that the 2022 Bonds will be issued only in Authorized Denominations, and confirms that it will not allocate any 2022 Bonds to accounts in violation of such limitations; and (B)to the extent the Investor is purchasing the 2022 Bonds not on its own behalf but in its capacity as investment adviser to beneficial owners of separately managed accounts, such accounts will solely be for investors which meet the qualifications for investors as set forth in the Indenture and as described in Section 2 of this Investor Letter. The Investor understands that Stifel, Nicolaus & Company, Incorporated, as underwriter of the 2022 Bonds (the "Underwriter") will not facilitate the establishment of such accounts and that the 2022 Bonds will be issued only in Authorized Denominations, and confirms that it will not facilitate the deposit of the 2022 Bonds into accounts in violation of such limitations. 4. The Investor understands that the 2022 Bonds are not, and are not intended to be, registered under the Securities Act and that such registration is not legally required as of the date hereof, and further understands that the 2022 Bonds (a) are not being registered or otherwise qualified for sale under the "Blue Sky" laws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating agency, and (d) will be delivered in a form that may not be readily marketable. 5. The Investor has been supplied with, and has reviewed, a copy of the Offering Document for the 2022 Bonds. The Investor has had the opportunity to ask questions of and receive answers from the Issuer concerning its purchase of the 2022 Bonds and all matters relating thereto, and has received from the Issuer any additional information it deemed necessary in its decision to purchase the 2022 Bonds. The Investor acknowledges and agrees that neither the Issuer nor the Underwriter has made any representations to the Investor other than as set forth in the Offering Document. The Offering Document speaks only as of its date. 6. The Investor acknowledges and understands that the 2022 Bonds are a speculative investment and that investing in the 2022 Bonds is subject to a high degree of risk, including the risks described in the Offering Document. The Investor understands that such risks may adversely affect the timely and full payment of principal and interest on the 2022 Bonds. The Investor represents that it can bear the economic risks associated with investing in the 2022 Bonds, including that it is capable of sufferinga loss of the entiretyof its investment represented bythe 2022 Bonds. P p 7. The Investor acknowledges and agrees that the Underwriter and the Issuer take no responsibility for, and make no representation to, the Investor or any subsequent purchaser, with regard to any sale,transfer or other disposition of the 2022 Bonds, or any interest therein, in violation of the provisions of the Indenture, or any securities law or income tax law consequences thereof. The Investor also acknowledges that, with respect to the Issuer's obligations and liabilities, the Investor is solely responsible for compliance with the sales restrictions on the 2022 Bonds in connection with any subsequent transfer of the 2022 Bonds made by the Investor. 8. THE INVESTOR ACKNOWLEDGES THAT THE 2022 BONDS ARE LIMITED OBLIGATIONS OF THE COUNTY PAYABLE SOLELY FROM THE SPECIAL TAXES AND AMOUNTS ON DEPOSIT IN THE SPECIAL TAX FUND (OTHER THAN AMOUNTS IN THE ADMINISTRATIVE EXPENSE ACCOUNT OF THE SPECIAL TAX FUND), AND THAT NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER (EXCEPT AS IT PERTAINS TO THE SPECIAL TAXES) OF THE COUNTY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE 2022 BONDS. 9. The Investor agrees that it is bound by and will abide by the provisions of the Indenture relating to the transfer restrictions noted on the face of the 2022 Bonds and in this Investor Letter. The Investor also covenants to comply with all applicable federal and state securities laws, rules and regulations in connection with any resale or transfer of the 2022 Bonds by the Investor. The Investor acknowledges that the 2022 Bonds will bear the following legend (among other legends to be included), unless determined otherwise in accordance with applicable law: THIS BOND MAY BE PURCHASED BY OR TRANSFERRED ONLY TO A QUALIFIED INSTITUTIONAL BUYER OR AN ACCREDITED INVESTOR, EACH AS DEFINED IN THE INDENTURE,AND PURSUANT TO THE TERMS THEREOF 10. The Investor acknowledges that the sale of the 2022 Bonds to the Investor is being made in reliance upon the certifications, representations, and warranties herein made to the addressees hereto. 11. The interpretation of the provisions hereof shall be governed and construed in accordance with Wisconsin law without regard to principles of conflicts of laws. 12. Investor agrees to indemnify and hold harmless the Issuer with respect to any claim asserted against the Issuer that is based upon Investor's breach of any representation, warranty or agreement made by it herein, other than any claim that is based upon the willful misconduct of the person seeking indemnification. 13. All representations of the Investor contained in this Investor Letter shall survive the execution and delivery of the 2022 Bonds to the Investor as representations of fact existing as of the date of execution and delivery of this Investor Letter. Dated [ 1 By Name Title PRELIMINARY LIMITED OFFERING MEMORANDUM DATED ,2022 v. NEW ISSUE—FULL BOOK-ENTRY NOT RATED CI • In the opinion of McCorriston Miller Mukai MacKinnon LLP, Honolulu, Hawai'i, Bond Counsel, under existing federal laws, as c o presently enacted and construed, and assuming, among other things, compliance with certain covenants and the accuracy of certain E representations and certifications, interest on the 2022 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code and is not a specific item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. See "CONCLUDING INFORMATION—Certain Tax Matters" with respect to tax consequences relating to the 2022 Bonds, vyl including with respect to the alternative minimum tax imposed on certain large corporations for tax years beginning after December 31,2022. Bond Counsel is of the further opinion that,under the laws of the State of Hawaii,as presently enacted and construed, the 2022 Bonds and the income therefrom are exempt from taxation by the State of Hawaii or any political subdivision thereof except for inheritance, transfer, estate and certain franchise taxes. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition • of or the amount, accrual or receipt of interest on,the 2022 Bonds. See "CONCLUDING INFORMATION—Certain Tax Matters"herein. $14,425,000* 4 •5L1 HAWAII COUNTY o COMMUNITY FACILITIES DISTRICT NO. 1-2021 c (KALOKO HEIGHTS PROJECT) SPECIAL TAX REVENUE BONDS Dated: Date of Issuance Due: May 15,as shown on inside cover 5 a) The Hawai'i County Community Facilities District No. 1-2021 (Kaloko Heights Project)Special Tax Revenue Bonds,Series 2022(the a 7 "2022 Bonds")are being issued for the principal purposes of(i)providing funds to pay the costs of constructing a wastewater transmission line • necessary for development of land within Hawai'i County Community Facilities District No. 1-2021 (Kaloko Heights Project)(the"District"), ,• ,i . (ii)funding a deposit to a reserve account,(iii)funding capitalized interest on the 2022 Bonds through ,20 ;and(iv)paying the costs of issuing the 2022 Bonds. The 2022 Bonds are being issued in fully registered form and,when issued,will be registered in the name of Cede& Y Co.as nominee of The Depository Trust Company("DTC"),New York,New York,which will act as securities depository for the 2022 Bonds. [— C c Individual purchases of the 2022 Bonds may be made in principal amounts of$100,000 and any integral multiple of$5,000 in excess thereof - .n and will be in book-entry form only. Purchasers will not receive certificates representing their beneficial ownership of the 2022 Bonds but are expected to receive credit balances on the books of their respective nominees. The 2022 Bonds will not be transferable or exchangeable except • 5 for transfer to another nominee of DTC or as otherwise described herein. y 5 , THE PURCHASE AND HOLDING OF THE 2022 BONDS INVOLVE RISKS THAT MAY NOT BE APPROPRIATE FOR `, CERTAIN INVESTORS.SEE"CERTAIN RISK FACTORS." THE 2022 BONDS ARE BEING OFFERED AND SOLD(INCLUDING o IN SECONDARY MARKET TRANSACTIONS) ONLY TO "QUALIFIED PURCHASERS," WHICH IS DEFINED IN THE -E. G INDENTURE (AS DEFINED HEREIN) TO INCLUDE "QUALIFIED INSTITUTIONAL BUYERS" OR "INSTITUTIONAL • ,,-a cd ACCREDITED INVESTORS" (EACH AS DEFINED HEREIN). IN ADDITION, THE INITIAL PURCHASERS OF THE 2022 E y 15. BONDS WILL BE REQUIRED TO EXECUTE AND DELIVER AN INVESTOR LETTER TO THE COUNTY,THE TRUSTEE,THE o u ° UNDERWRITER AND BOND COUNSEL. See "NOTICE TO INVESTORS" and "THE 2022 BONDS—Limited Offering of 2022 g 6 Bonds;Transfer Restrictions"herein. EThe 2022 Bonds are being issued under and pursuant to(a)the provisions of Chapter 32,Hawaii County Code 1983 (2016 Edition, y .5 -5 as amended),(b)Ordinance No.21-67,as amended by Ordinance No.22-33,enacted by the County of Hawai'i(the"County")under the authority 4.1 granted to it by Section 46-80.1 of the Hawaii Revised Statutes;(c)Resolution No. ,adopted by the County on ,2022;and(d)a c Trust Indenture dated as of 1,2022(the"Indenture"),by and between the County and U.S.Bank Trust Company,National Association, e as Trustee(the"Trustee"). Interest on the 2022 Bonds is payable semiannually on May 15 and November 15 of each year,commencing May ,g 15,2023. Payment of the principal of and interest on the 2022 Bonds and redemption premiums,if any,thereon will be made by the Trustee to a — 5 Cede&Co.for subsequent disbursement to DTC Participants(as defined herein),which are obligated to remit such payments to the beneficial E 9, owners of the 2022 Bonds. See"THE 2022 BONDS—General Provisions." FN Principal of and interest on the 2022 Bonds are payable from annual special taxes(the"Special Taxes")levied by the County on certain c property in the District. See"SECURITY FOR THE 2022 BONDS—Special Taxes." The Special Taxes are required to be levied according _• >, to the rate and method of apportionment approved by the County in its Ordinance No.21-67,which formed the District,as said rate and method g of apportionment may be amended from time to time consistent with the Indenture. See APPENDIX A —"RATE AND METHOD OF • r2 •5 APPORTIONMENT OF SPECIAL TAX." The Special Taxes are to be collected in the same manner and at the same time as the County's real Y col property taxes applicable to the taxable property in the district. °' °' The District consists of approximately 387gross acres of unimproved land entitled for development of upto 1,433 total single-family r� � o PP Y P P g Y 'c •� homes and townhomes within a private, gated residential community, subject to certain conditions described in this Limited Offering c Memorandum. The property within the District is currently owned and proposed to be developed by certain affiliated entities under common - .c ownership (collectively, the"Property Owner"). See"PROPERTY OWNERSHIP AND THE DEVELOPMENT." The property within the District is divided into two zones:Zone 1,consisting of approximately 193 acres,and Zone 2,consisting of approximately 194 acres. The Special • 0 a) Tax may only be levied within Zone 2 of the District to cover delinquencies within Zone 1 of the District,and will terminate upon the satisfaction • FA of certain conditions. See "SECURITY FOR THE 2022 BONDS—Special Taxes" and APPENDIX A — "RATE AND METHOD OF • 5 APPORTIONMENT OF SPECIAL TAX." The 2022 Bonds are subject to special mandatory redemption from the prepayment of Special Taxes, mandatory sinking fund • „ redemption and optional redemption as described herein. See"THE 2022 BONDS—Redemption." Neither the full faith and credit nor the general taxing power of the County or the State of Hawai'i is pledged to the payment of the 2022 Bonds. The 2022 Bonds are not general obligations of the County. They are limited obligations of the County payable solely from the Special Taxes and certain funds and accounts held by the Trustee as provided in the Indenture. • P This cover page contains certain information for general reference only. It is not a summary of the 2022 Bonds. Prospective investors ;• , must read the entire Limited Offering Memorandum to obtain information essential to the making of an informed investment decision. MATURITY SCHEDULE (See Inside Cover) The 2022 Bonds are offered when, as and if issued and accepted by the Underwriter, subject to the approval as to their legality by McCorriston Miller Mukai MacKinnon LLP, Honolulu, Hawaii, Bond Counsel, and certain other conditions. Certain legal matters will be o- ^ passed on for the Underwriter by its counsel,Stradling Yocca Carlson&Rauth,a Professional Corporation,Newport Beach, California,for the 4857-1255-2486v10/200356-0417 Property Owner by its counsel, Dentons US LLP, Honolulu, Hawaii, and for the County by its County Attorney. It is anticipated that the 2022 Bonds in book-entry form will be available for delivery to DTC or its agent on or about ,2022. [STIFEL LOGO[ The date of this Limited Offering Memorandum is ,2022. * Preliminary,subject to change. 4857-1255-2486v10/200356-0417 $14,425,000' HAWAII COUNTY COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) SPECIAL TAX REVENUE BONDS MATURITY SCHEDULE (Base CUSIPt ) $ Serial Bonds Maturity Principal (May 15) Amount Interest Rate Yield Price CUSIPt $ %Term Bonds Due May 15,20_—Yield % Price CUSIPt No. $ %Term Bonds Due May 15,20_—Yield % Price CUSIPt No. CUSIP®is a registered trademark of the American Bankers Association. CUSIP Global Services(CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright©2022 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the Underwriter or the Community Facilities District or their agents or counsel assume responsibility for the accuracy of such numbers. *Preliminary,Subject to change. 4857-1255-2486v10/200356-0417 COUNTY OF HAWAI'I,STATE OF HAWAII MAYOR Mitchell D. Roth COUNTY COUNCIL Maile Medeiros David,Council Chair and Presiding Officer,District 6 Aaron S.Y.Chung,Council Vice Chair,District 2 Heather L. Kimball,Councilmember, District 1 Susan L.K. Lee Loy Councilmember, District 3 Ashley L.Kierkiewicz,Councilmember, District 4 Matt KAnealii-Kleinfelder,Councilmember,District 5 Rebecca Villegas,Councilmember, District 7 Holeka Goro Inaba,Councilmember, District 8 Herbert M."Tim"Richards,III,Councilmember,District 9 COUNTY OFFICERS Lee Lord, Managing Director Deanna Sako,Director of Finance Jon Henricks,County Clerk Elizabeth A. Strance,Corporation Counsel BOND COUNSEL McCorriston Miller Mukai MacKinnon LLP Honolulu, Hawai`i MUNICIPAL ADVISOR Fieldman, Rolapp&Associates,Inc. Irvine,California SPECIAL TAX CONSULTANT Goodwin Consulting Group,Inc. Sacramento,California APPRAISER Integra Realty Resources • Sacramento,California TRUSTEE U.S. Bank Trust Company,National Association Los Angeles,California 4857-1255-2486v10/200356-0417 No dealer, broker, salesperson or other person has been authorized by the County to give any information or to make any representations other than as contained in this Limited Offering Memorandum; and if given or made, such other information or representations must not be relied upon as having been authorized by the County. The County maintains a website. However, the information presented in such website is not a part of this Limited Offering Memorandum and should not be relied upon in making an investment decision with respect to the 2022 Bonds. This Limited Offering Memorandum does not constitute an offer to sell or the solicitation of an offer to buy,nor shall there be any sale of the 2022 Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer,solicitation or sale. This Limited Offering Memorandum is not to be construed as a contract with the beneficial owners of the 2022 Bonds. Statements contained in this Limited Offering Memorandum which involve estimates,forecasts or matters of opinion,whether or not expressly so described herein,are intended solely as such and are not to be construed as representations of fact. The information and expressions of opinion stated herein are subject to change without notice. The delivery of this Limited Offering Memorandum shall not,under any circumstances, create any implication that there has been no change in the affairs of the County, the Property Owner or any other future owners of the property in the District or in the condition of such property since the date hereof. All summaries of the 2022 Bonds,the Indenture and the other documents discussed herein are made subject to the provisions of such documents and do not purport to be complete statements of any or all of the provisions thereof. Reference is hereby made to the 2022 Bonds, the Indenture and such documents on file with the County's Director of Finance for further information. This Limited Offering Memorandum is submitted in connection with the sale of the 2022 Bonds referred to herein and may not be reproduced or used, in whole or in part,for any other purpose. The Underwriter has provided the following sentence for inclusion in this Limited Offering Memorandum: The Underwriter has reviewed the information in this Limited Offering Memorandum 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 Limited Offering Memorandum constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933,as amended. Such statements are generally identifiable by the terminology used such as"plan,""expect,""estimate,""project,""anticipate,""budget"or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information under the caption "THE DISTRICT" and "PROPERTY OWNERSHIP AND THE DEVELOPMENT." In connection with this offering, the Underwriter may over-allot or effect transactions which stabilize or maintain the market price of the 2022 Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced,may be discontinued at any time. The Underwriter may offer and sell the 2022 Bonds to certain dealers and others at prices lower than the public offering prices set forth on the inside cover page hereof,and such public offering prices may be changed from time to time by the Underwriter 4857-1255-2486v10/200356-0417 NOTICE TO INVESTORS The 2022 Bonds are exempt from registration under federal securities law but are being offered only to a limited number of sophisticated investors. Purchase of the 2022 Bonds involves a high degree of risk and the 2022 Bonds are a speculative investment. For such reason,the 2022 Bonds are being offered and sold(including in secondary market transactions)only to"Qualified Purchasers,"which is defined in the Indenture to include a "qualified institutional buyer," as that term is defined in Securities and Exchange Commission Rule 144A promulgated under the Securities Act of 1933,as amended and(b)an"institutional accredited investor,"which consists of accredited investors as defined in subsections (a)(1), (2), (3) and (7) of Securities and Exchange Commission Rule 501 promulgated under the Securities Act of 1933,as amended Each purchaser of a 2022 Bond,or any beneficial interest therein,will be deemed to have acknowledged, represented,warranted and agreed with and to the County,the Underwriter and the Trustee that(i)such transferee is a Qualified Purchaser that is purchasing such 2022 Bond for its own account for investment purposes and not with a view to distributing such 2022 Bond in violation of the Securities Act of 1933 or other applicable securities laws,(ii)the 2022 Bonds are payable solely from secured by and payable from the Special Taxes and such other funds described in the Indenture,(iii)the 2022 Bonds,or any beneficial interest therein,may only be transferred to a Qualified Purchaser and(iv)the County,the Underwriter and the Trustee and others will rely upon the truth and accuracy of the foregoing acknowledgements,representations,warranties and agreements. Furthermore,the initial purchasers of the 2022 Bonds from the Underwriter will be required to deliver an Investor Letter in the form attached hereto in Appendix H in connection with such purchase providing representations and assurances to the County and the Underwriter regarding their knowledge and sophistication in the evaluation and purchase of securities such as the 2022 Bonds. Each initial purchaser of the 2022 Bonds, by virtue of its purchase of the 2022 Bonds or any interest therein, is acknowledging,representing, warranting, and agreeing with and to the County,the Underwriter and the Trustee that the purchaser will be deemed to have acknowledged,among other things,that: The 2022 Bonds are limited obligations of the County payable solely from the Special Taxes and amounts on deposit in the Special Tax Fund(other than amounts in the Administrative Expense Account of the Special Tax Fund), and that neither the full faith and credit nor the taxing power(except as it pertains to the Special Taxes) of the County, the State or any political subdivision thereof is pledged to the payment of the Bonds. In addition to receipt and review of this Limited Offering Memorandum,such initial purchaser has had the opportunity to ask questions of and receive answers from the County concerning its purchase of the 2022 Bonds and all matters relating thereto, and has received from the County any additional information it deemed necessary in its decision to purchase the 2022 Bonds. Such initial purchaser acknowledges and understands that the 2022 Bonds are a speculative investment and that investing in the 2022 Bonds is subject to a high degree of risk, including the risks described in this Limited Offering Memorandum. Such initial purchaser understands that such risks may adversely affect the timely and full payment of principal and interest on the 2022 Bonds. Such initial purchaser represents that it can bear the economic risks associated with investing in the 2022 Bonds, including that it is capable of suffering a loss of the entirety of its investment represented by the 2022 Bonds The purchaser understands that each certificate representing an interest in the 2022 Bonds will bear the following securities legend (among other legends to be included), unless determined otherwise in accordance with applicable law: THIS BOND IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.9 OF THE INDENTURE. NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS BOND, OR ANY BENEFICIAL INTEREST 4857-1255-2486v10/200356-0417 HEREIN, MAY BE MADE EXCEPT TO A PERSON THAT IS A QUALIFIED PURCHASER THAT IS PURCHASING THIS BOND FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTING THIS BOND.EACH TRANSFEREE OF THIS BOND,OR ANY BENEFICIAL INTEREST THEREIN, SHALL BE DEEMED TO HAVE REPRESENTED TO THE COUNTY, THE PARTICIPATING UNDERWRITER AND THE TRUSTEE THAT SUCH TRANSFEREE IS A QUALIFIED PURCHASER THAT IS PURCHASING SUCH BOND FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTING SUCH BOND. EACH ENTITY THAT IS OR THAT BECOMES AN OWNER OR A BENEFICIAL OWNER OF THIS BOND IS DEEMED BY THE ACCEPTANCE OR ACQUISITION OF THIS BOND OR SUCH BENEFICIAL OWNERSHIP INTEREST TO HAVE AGREED TO BE BOUND BY THE PROVISIONS OF SAID SECTION 2.9. ANY TRANSFER OF A BOND TO ANY ENTITY THAT IS NOT A QUALIFIED PURCHASER SHALL BE DEEMED NULL AND VOID. 4857-1255-2486v10/200356-0417 TABLE OF CONTENTS Page INTRODUCTION ESTIMATED SOURCES AND USES OF FUNDS 4 THE 2022 BONDS 5 Authority for Issuance 5 Purpose 5 General Provisions 6 Limited Offering of 2022 Bonds;Transfer Restrictions 6 Limited Obligation 8 Redemption 8 Notice of Redemption 10 Debt Service Schedule 11 SECURITY FOR THE 2022 BONDS 12 General 12 Special Taxes 13 Debt Service Coverage 16 Covenant for Foreclosure 16 Reserve Account 18 Capitalized Interest 19 Parity Bonds For Refunding Purposes Only 19 THE DISTRICT 19 Property Values 19 Direct and Overlapping Debt;Tax Burden 20 Estimated Appraised Value-to-Lien Ratio 20 Special Tax Delinquencies 21 The District and the Island of Hawai`i 21 PROPERTY OWNERSHIP AND THE DEVELOPMENT 22 The Property Owner 22 Discretionary Approvals and Entitlements 22 Description of the Property 28 Development Status 30 Kaloko Heights Development Team 31 Property Owner's Development Expectations 32 CERTAIN RISK FACTORS 34 Introduction 34 Risks of Real Estate Secured Investments Generally 34 Limited Obligation to Pay Debt Service 35 Failure to Develop Property 35 Impact of Economic Conditions on the Development in the District 36 Increasing Mortgage Interest Rates 36 Levy of the Special Tax 36 Collection of the Special Tax 37 Property Values 37 Purchases and Transfers of 2022 Bonds Restricted to Qualified Purchasers 38 Mandatory Redemption from Prepayments of Special Taxes 38 Exempt Properties 38 Proceedings to Reduce or Terminate the Special Tax 39 Maximum Special Tax 39 Administrative Expenses 39 Concentration of Property Ownership 40 Payment of the Special Tax is Not a Personal Obligation of the Owners 40 4857-1255-2486v10/200356-0417 TABLE OF CONTENTS (continued) Page Vacation Home Development 40 Disclosures to Future Purchasers 41 Depletion of Reserve Account 41 FDIC/Federal Government Interests in Properties 41 Bankruptcy and Foreclosure 42 Geologic,Topographic and Climatic Conditions 43 Hazardous Substances 43 Zoning and Land Use Decisions 44 Endangered Species 44 No Acceleration Provision 44 Loss of Tax Exemption 44 No Rating;Absence of Secondary Market for the Bonds 45 Cyber Security 45 COVID-19(Coronavirus)Pandemic 45 CONCLUDING INFORMATION 46 Certain Legal Matters 46 Certain Tax Matters 46 Continuing Disclosure 47 No Litigation 48 No General Obligation of the County 48 No Rating 48 Underwriting 48 Municipal Advisor 49 Miscellaneous 49 APPENDIX A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX A-1 APPENDIX B APPRAISAL B-1 APPENDIX C SUMMARY OF INDENTURE C-1 APPENDIX D FORM OF COUNTY CONTINUING DISCLOSURE AGREEMENT D-1 APPENDIX E FORM OF PROPERTY OWNER CONTINUING DISCLOSURE AGREEMENT E-1 APPENDIX F FORM OF OPINION OF BOND COUNSEL F-1 APPENDIX G BOOK-ENTRY-ONLY SYSTEM G-1 APPENDIX H FORM OF INVESTOR LETTER H-1 ii 4857-1255-2486v10/200356-0417 REGIONAL MAP 4857-1255-2486v10/200356-0417 $14,425,000* HAWAII COUNTY COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) SPECIAL TAX REVENUE BONDS INTRODUCTION The purpose of this Limited Offering Memorandum, which includes the cover page and attached appendices,is to provide certain information concerning the Hawai'i County Community Facilities District No. 1-2021 (Kaloko Heights Project)Special Tax Revenue Bonds,Series 2022(the"2022 Bonds"). The 2022 Bonds are being issued under and pursuant to the provisions of(i)Chapter 32, Hawaii County Code 1983 ("County Code Chapter 32"),(ii)Ordinance No.21-67 adopted by the Council of the County of Hawai'i (the"County") on September 22,2021 and approved by the Mayor of the County on October 6,2021 under the authority granted by Section 46-80.1 of the Hawaii Revised Statutes, (iii)a Trust Indenture dated as of 1, 2022 (the "Indenture"), by and between the County and U.S. Bank Trust Company,National Association,as Trustee(the "Trustee")and(iv)a resolution adopted by the County Council on ,2022(the"Series Resolution"). The principal purposes for which the 2022 Bonds are being issued are to(i)provide funds to pay the costs of acquiring or constructing certain public facilities, (ii)fund a deposit to a reserve account (the "Reserve Account"), (iii) fund capitalized interest on the 2022 Bonds through , 20_; and (iv)pay the costs of issuing the 2022 Bonds. The 2022 Bonds are being issued in fully registered form and, when issued, will be registered in the name of Cede&Co.as nominee of The Depository Trust Company("DTC"),New York,New York,which will act as securities depository for the 2022 Bonds. Individual purchases of the 2022 Bonds may be made in principal amounts of$100,000 and any integral multiple of$5,000 in excess thereof and will be in book-entry form only. Purchasers will not receive certificates representing their beneficial ownership of the 2022 Bonds but are expected to receive credit balances on the books of their respective nominees. The 2022 Bonds are being offered and sold only to "Qualified Purchasers," which is defined in the Indenture to include Qualified Institutional Buyers as defined in Rule 144A promulgated under the Securities Act of 1933 and institutional Accredited Investors(which consists of Accredited Investors within the meaning of Rule 501(a)(1), (2),(3)or(7) under the Securities Act of 1933). Pursuant to the Indenture,the 2022 Bonds may not be registered in the name of,or transferred to,and the beneficial owner cannot be, any person except a Qualified Purchaser;provided,however,that 2022 Bonds registered in the name of DTC or its nominee shall be deemed to comply with the Indenture so long as each beneficial owner of the 2022 Bonds is a Qualified Purchaser. In addition,the face of each 2022 Bond will contain a legend indicating that it is subject to transfer restrictions as set forth in the Indenture. Each entity that is or that becomes a beneficial owner of a 2022 Bond shall be deemed by the acceptance or acquisition of such beneficial ownership interest to have agreed to be bound by the transfer restrictions under the Indenture. In the event that a holder of the 2022 Bonds makes an assignment of its beneficial ownership interest in the 2022 Bonds, the assignor will notify the assignee of the restrictions on purchase and transfer described herein. Any transfer of a 2022 Bond to any entity that is not a Qualified Purchaser shall be deemed null and void. In addition, each initial purchaser of the 2022 Bonds must execute an investor letter in the form of"APPENDIX H–FORM OF INVESTOR LETTER"in connection with its initial purchase of the 2022 Bonds. The face of each Series 2022 Bond will contain a legend indicating that such Series 2022 Bond is subject to the transfer restrictions set forth in the Indenture. See"THE 2022 BONDS — Limited Offering of 2022 Bonds" and "CERTAIN RISK FACTORS — Purchases and Transfers of 2022 Bonds Restricted to Qualified Purchasers"herein. *Preliminary,Subject to change. 1 4857-1255-2486v10/200356-0417 Interest on the 2022 Bonds is payable semiannually on May 15 and November 15 of each year, commencing May 15, 2023. Payment of the principal of and interest on the 2022 Bonds and redemption premiums, if any, thereon will be made by the Trustee to Cede& Co. for subsequent disbursement to DTC Participants(as defined herein),which are obligated to remit such payments to the beneficial owners of the 2022 Bonds. See "THE 2022 BONDS—General Provisions." The 2022 Bonds are subject to special mandatory redemption from the prepayment of Special Taxes(as defined herein),mandatory sinking fund redemption and optional redemption as described herein. See"THE 2022 BONDS—Redemption." Principal of and interest on the 2022 Bonds are payable from the special taxes (the "Special Taxes") levied by the County on certain property in Hawai'i County comprising Community Facilities District No. 1-2021 (Kaloko Heights Project) (the "District"). See "SECURITY FOR THE 2022 BONDS — Special Taxes." The Special Taxes are required to be levied according to the rate and method of apportionment approved by the County in its Ordinance No. 21-67 adopted by the Council of the County of Hawai'i (the"County") on September 22, 2021 and approved by the Mayor of the County on October 6,2021 under the authority granted by Section 46-80.1 of the Hawai`i Revised Statutes and which formed the District (the "Ordinance of Formation"), as such rate and method of apportionment may be amended from time to time consistent with the Indenture (the "Rate and Method of Apportionment"). See APPENDIX A — "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX." The term "Special Taxes" is defined in the Indenture to mean the special taxes authorized by the Ordinance of Formation to be levied on Taxable Property (as defined herein) within the District in accordance with the Rate and Method of Apportionment and includes, in addition to the regular installments of such taxes billed and received by the County, penalties and interest received by the County with respect to delinquent Special Tax installments,but excludes proceeds of foreclosure sales that are applied to the payment of costs incurred by the County in connection with such sales, such as legal fees and expenses, court costs, consultants' fees and expenses and title insurance costs. The Special Taxes are to be collected in the same manner and at the same time as the County's real property taxes applicable to the property in the District, although the County may directly bill the Special Taxes and may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations. Pursuant to the Indenture, the County has covenanted to levy the Special Tax each Fiscal Year in an amount sufficient (but not at rates higher than the applicable Maximum Special Tax), together with other amounts available in the Special Tax Fund established under the Indenture, to pay debt service on the Bonds (defined below)when due,Administrative Expenses,and any amount required to replenish the Reserve Account for the Bonds to the Reserve Requirement. See"SECURITY FOR THE 2022 BONDS." Special Taxes in an amount equal to the budgeted amount of Administrative Expenses included in the levy of Special Taxes for each Fiscal Year(the"Administrative Expense Budget Amount")are to be deposited in the Administrative Expense Account prior to deposits of Special Taxes in the Interest Account and the Principal Account of the Special Tax Fund. Additional transfers of Special Taxes to the Administrative Expense Account prior to deposits thereof in the Interest Account and the Principal Account are permitted under certain circumstances. See "SECURITY FOR THE 2022 BONDS—Special Taxes"and"CERTAIN RISK FACTORS—Administrative Expenses." Subject to the conditions set forth in the Indenture,the County may issue additional bonds payable from Special Taxes and other amounts deposited in the Special Tax Fund and secured by a lien and charge upon such amounts on a parity with the 2022 Bonds(the"Parity Bonds"and,together with the 2022 Bonds,the"Bonds"), but only for refunding purposes. See "SECURITY FOR THE 2022 BONDS — Parity Bonds for Refunding Purposes Only." The Ordinance of Formation authorizes the issuance of bonds for the District in an aggregate principal amount of up to$22,000,000(exclusive of bonds issued to refund previously issued bonds). The District consists of approximately 387 gross acres of unimproved land entitled for development of up to 1,433 total single-family homes and townhomes within a private,gated residential community, subject to the reclassification of Zone 2 of the District as described under the caption"PROPERTY OWNERSHIP AND THE DEVELOPMENT—Discretionary Approvals and Entitlements." The public facilities whose acquisition or construction may be funded with proceeds of the Series 2022 Bonds will be the construction by the Property Owner(as defined below)of a wastewater transmission line and related improvements within Hina Lani Street 2 4857-1255-2486v10/200356-0417 and Ane Keohokahole Highway to connect to the County's existing wastewater transmission line and collection system in Ane Keohokalole Highway near the County's West Hawaii Civic Center(the"Sewer Line"). Once completed,the Sewer Line will be dedicated to and owned and operated by the County. Completion of the Sewer Line will provide County wastewater treatment service to the entire Property. Completion of the Sewer Line is the final off-site infrastructure improvements to be constructed under the discretionary entitlements with respect to the property within the District. As of the date of this Limited Offering Memorandum,the Property Owner has not commenced construction of the Sewer Line and the only onsite improvement that has been completed in the District is the construction of Hina Lani Street, which bisects the property within the District, as described further herein . The Project Funding and Acquisition Agreement dated as of ,2022 by and between the County and the Property Owner, as amended to date(the"Acquisition Agreement"),requires that the Property Owner issue its notice to proceed to Goodfellow Brothers,Inc.(who is the contractor for the Sewer Line)within five days after the issuance of the 2022 Bonds. The Property Owner does not currently have any financing in place to fund the costs of the proposed development within the District other than the Sewer Line to be funded by Bond proceeds and an interim loan from an affiliate of Goodfellow Brothers, Inc. The Property Owner has entered into a construction contract for the construction of the Sewer Line with a stipulated contract price of $9,656,566. The Property Owner has deposited an amount equal to 15%of the contract price for the construction of the Sewer Line with the Trustee in accordance with the requirements of the Acquisition Agreement to fund the construction contingency for the Sewer Line. The property within the District is currently owned and proposed to be developed by RCFC Kaloko Heights, LLC, a Delaware limited liability company, Kaloko Heights B I A Holdings, LLC, a Delaware limited liability company,and Kaloko Heights Investors,LLC(collectively,the"Property Owner"). Each of the entities constituting the Property Owner is owned by its two members,PCCP Kehalani Kaloko,LLC,a Delaware limited liability company("PCCP Kehalani Kaloko"),and PMRP I Kehalani Kaloko,LLC,a Delaware limited liability company("PRMP I Kehalani,"and with PCCP Kehalani Kaloko,the Parent Entities"). PCCP Kehalani Kaloko and PMRP 1 Kehalani Kaloko are majority owned and controlled by PCCP, LLC ("PCCP") and affiliates of PCCP, a privately held real estate finance and investment management firm focused on commercial real estate debt and equity investments. The Property Owner acquired its interest in the property within the District in 2013, under a purchase and sale agreement resulting from a financial workout involving a prior developer following the 2008-2009 financial crisis. Affiliates of PCCP had a minority equity interest in the prior developer which owned the property in the District prior to the workout. The Property Owner is not a developer or homebuilder, but is planning and managing development of the property within the District with the assistance of consultants. PCCP and its affiliates are experienced in real estate development. See "PROPERTY OWNERSHIP AND THE DEVELOPMENT." As of the date of this Limited Offering Memorandum,other than for the Sewer Line,the Property Owner (and its predecessors),in conjunction with an adjacent property owner,has completed construction of Hina Lani Street, the main thoroughfare through the District connecting the District to Mamalahoa Highway and Queen Kaahumanu Highway,and completed installation of water transmission lines and electrical transmission lines to the District. The Property Owner has not solicited bids or negotiated contracts, or secured financing for construction of any of the onsite infrastructure improvements within the District. Neither the County nor the Underwriter make any assurances regarding the Property Owner's intention or financial wherewithal to obtain external financing for or to commence the construction of onsite land and infrastructure improvements as discussed above. See"CERTAIN RISK FACTORS." An appraisal of the property within the District that is subject to the Special Tax,dated ,2022(the "Appraisal"), was prepared for the County's Bond Counsel by Integra Realty Resources of Sacramento, California(the"Appraiser"). Based upon the assumptions and subject to the limitations set forth in the Appraisal, as of May 2,2022,the Appraiser was of the opinion that the market value of the property comprising the District was not less than $43,280,000. The total market value of such property as reported in the Appraisal is 3 4857-1255-2486v10/200356-0417 approximately 3.00'times the aggregate principal amount of the 2022 Bonds. See"SECURITY FOR THE 2022 BONDS — Property Values." A copy of the Appraisal is included in Appendix B to this Limited Offering Memorandum. It is a condition precedent to the issuance of the 2022 Bonds that the Appraiser deliver to the County a letter, dated the date of issuance of the 2022 Bonds, indicating that nothing has come to the attention of the Appraiser subsequent to the date of the Appraisal that would lead the Appraiser to believe that the market value of the subject property is less than$43,280,000. Purchase of the 2022 Bonds involves risks that may not be appropriate for certain investors. See "CERTAIN RISK FACTORS"for a discussion of some of the factors that should be considered, in addition to the other matters set forth herein, in evaluating the investment quality of the 2022 Bonds. Brief descriptions of the 2022 Bonds, the security for the 2022 Bonds, the Special Taxes,the County, the District and the Property Owner are included in this Limited Offering Memorandum, together with summaries of certain provisions of the 2022 Bonds, the Indenture and certain other documents. Such descriptions do not purport to be comprehensive or definitive. All references herein to the Indenture and other documents are qualified in their entirety by reference to such documents; and references herein to the 2022 Bonds are qualified in their entirety by reference to the form thereof included in the Indenture, copies of which are available for inspection at the office of the County's Director of Finance. Unless otherwise defined elsewhere in this Limited Offering Memorandum, capitalized terms used herein shall have the meanings assigned to them in the Indenture. Reference is made to Appendix C for definitions assigned to certain terms in the Indenture. ESTIMATED SOURCES AND USES OF FUNDS The estimated sources and uses of proceeds from the sale of the 2022 Bonds are shown in the following table: Estimated Sources of Funds 2022 Bonds Principal Amount of 2022 Bonds $ [Plus/less]: [Net]Original Issue [Premium/discount] Total Sources of Funds Estimated Uses of Funds Costs of Issuance Account' $ Underwriter's Discount Interest Accounttz> Reserve Accountt3> Construction Account Total Uses of Funds $ (') To pay the costs of issuing the 2022 Bonds. (2) To pay capitalized interest on the 2022 Bonds through ,20_. (3) To cause the balance therein to equal the Reserve Requirement. *Preliminary,subject to change. 4 4857-1255-2486v10/200356-0417 THE 2022 BONDS Authority for Issuance Section 12 of Article VII of the Hawai`i Constitution requires the State Legislature to authorize political subdivisions of Hawai`i to issue bonds under special improvement statutes. In satisfaction of this requirement, Section 46-80.1 of the Hawai`i Revised Statues ("HRS") authorizes any county having a charter to enact an ordinance providing for the creation of community facilities districts in order to finance special improvements in the county. In connection therewith, said section provides that the county shall have the power to levy and assess a special tax on property located in such a district and to issue bonds secured by the special taxes to provide funds for such special improvements. The County has a charter and,pursuant to the authority described above,it has adopted an ordinance to establish County Code Chapter 32"relating to special improvement financing by community facilities districts." County Code Chapter 32 establishes procedures to be followed for the formation of community facilities districts. These procedures include: (a)the adoption by the County Council of a resolution of intention to form such a community facilities district, specifying the term and boundaries of the proposed district and the special improvements to be financed by the proposed district, describing the estimated rate and proposed method of apportionment of the special tax and specifying the principal amount of debt proposed to be issued to finance the special improvements;(b)the preparation of a report with respect to the special improvements proposed to be financed through the proposed district; (c)the publication and mailing of notice of a public hearing on the proposed district; and(d)a public hearing at which protests against(i)the establishment of the district, (ii)the extent of the district,(iii)the financing of specified special improvements or(iv)the levy of a specified special tax are to be received and considered. County Code Chapter 32 provides that if the owners of more than 55% of the land proposed to be included in the community facilities district, or more than 55%of such owners, file written protests against the proposed community facilities district,the proceedings with respect to forming the district must cease. In accordance with the provisions of County Code Chapter 32, the Property Owner submitted to the County Council a petition requesting the formation of the District. In response thereto, the County Council undertook proceedings pursuant to County Code Chapter 32. As the Property Owner owns all of the land within the District, County Code Chapter 32 did not require a public hearing to be conducted. The Ordinance of Formation was adopted by the County Council on September 22,2021,and approved by the Mayor on October 6,2021.. County Code Chapter 32 also includes provisions applicable to the issuance of bonds by a community facilities district. In accordance with those provisions, following a noticed public hearing,the County Council unanimously adopted Ordinance No. 22-33(the"Bond Ordinance")on March 23,2022;and the Mayor approved it on April 7, 2022. Pursuant to the Bond Ordinance, the County is authorized to issue bonds secured by the Special Taxes in an aggregate principal amount not to exceed$22,000,000(exclusive of bonds issued to refund previously issued bonds). The Bond Ordinance provides that the sale and issuance of any such bonds are subject to the approval of the County Council, by resolution, of certain terms and conditions. On , 2022 the County Council adopted the Series Resolution as its Resolution No. specifying such terms and conditions as they apply to the 2022 Bonds. Purpose The 2022 Bonds are being issued for the principal purposes of(i) providing funds to pay the costs of constructing the Sewer Line,(ii)funding a deposit to the Reserve Account,(iii)funding capitalized interest on the 2022 Bonds through ,20_,and(iv)paying the costs of issuing the 2022 Bonds. The public facilities whose acquisition or construction may be funded with proceeds of the 2022 Bonds (collectively,the"Improvements")are the public facilities that are described in the Ordinance of Formation and 5 4857-1255-2486v10/200356-0417 the Acquisition Agreement. The Improvements consist of the Sewer Line and related improvements which are to be constructed by the Property Owner and are to be dedicated to and owned and operated by the County. See "—ESTIMATED SOURCES AND USES OF FUNDS." General Provisions The 2022 Bonds will be dated their date of delivery, will mature in the amounts and on the dates, and will bear interest at the rates per annum,set forth on the inside cover page hereof. Such interest will be payable semiannually on each May 15 and November 15,commencing May 15,2023(each,an"Interest Payment Date"), and will be calculated on the basis of a 360-day year comprised of twelve 30-day months. Interest on each 2022 Bond will be payable from the Interest Payment Date next preceding the date of authentication of that 2022 Bond,unless: (i)such date of authentication is an Interest Payment Date,in which event interest will be payable from such date of authentication;(ii)the date of authentication is after a Record Date(the first day of the month preceding the applicable Interest Payment Date),regardless of whether such day is a Business Day,but prior to the immediately succeeding Interest Payment Date, in which event interest will be payable from the Interest Payment Date immediately succeeding the date of authentication;or(iii)the date of authentication is prior to the close of business on the first Record Date, in which event interest will be payable from the date of issuance; provided, however, that if at the time of authentication of a 2022 Bond, interest is in default, interest on that 2022 Bond will be payable from the last Interest Payment Date to which the interest has been paid or made available for payment. The 2022 Bonds will be issued and delivered as fully registered bonds,registered in the name of Cede& Co. as nominee of DTC. The 2022 Bonds will be available to actual purchasers (the "Beneficial Owners") in denominations of$100,000 and any integral multiple of$5,000 in excess thereof under the book-entry system maintained by DTC through brokers and dealers who are, or who act through, DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the 2022 Bonds. Principal of, premium, if any, and interest on the 2022 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. See APPENDIX G—"BOOK-ENTRY-ONLY SYSTEM." In the event that the book-entry only system is no longer used with respect to the 2022 Bonds, the Beneficial Owners will become the registered owners of the 2022 Bonds and will be paid principal and interest by the Trustee, all as described herein. Under such circumstances, interest on each 2022 Bond will be paid to the person whose name appears as its owner in the registration books held by the Trustee at the close of business on the applicable Record Date. Interest will be paid by check of the Trustee mailed by first class mail,postage prepaid, to the Bondowner at its address on the registration books. Pursuant to a written request prior to the Record Date of an Owner of at least$1,000,000 in aggregate principal amount of 2022 Bonds,payment will be made by wire transfer in immediately available funds to a designated account in the United States. Principal of the 2022 Bonds and any premium due upon redemption is payable upon presentation and surrender of the 2022 Bonds at the principal corporate trust office of the Trustee in Los Angeles,California. Limited Offering of 2022 Bonds; Transfer Restrictions The 2022 Bonds are exempt from registration under federal securities law but are being offered only to a limited number of sophisticated investors. Purchase of the 2022 Bonds involves a high degree of risk and the 2022 Bonds are a speculative investment. For such reason,the 2022 Bonds are being offered and sold(including in secondary market transactions)only to"Qualified Purchasers,"which is defined in the Indenture to include a "qualified institutional buyer," as that term is defined in Securities and Exchange Commission Rule 144A promulgated under the Securities Act of 1933,as amended and(b)an"institutional accredited investor,"which consists of accredited investors as defined in subsections (a)(1), (2), (3) and (7) of Securities and Exchange Commission Rule 501 promulgated under the Securities Act of 1933,as amended 6 4857-1255-2486v10/200356-0417 Each purchaser of a 2022 Bond,or any beneficial interest therein,will be deemed to have acknowledged, represented,warranted and agreed with and to the County,the Underwriter and the Trustee that(i)such transferee is a Qualified Purchaser that is purchasing such 2022 Bond for its own account for investment purposes and not with a view to distributing such 2022 Bond in violation of the Securities Act of 1933 or other applicable securities laws,(ii)the 2022 Bonds are payable solely from secured by and payable from the Special Taxes and such other funds described in the Indenture,(iii)the 2022 Bonds,or any beneficial interest therein,may only be transferred to a Qualified Purchaser and(iv)the County,the Underwriter and the Trustee and others will rely upon the truth and accuracy of the foregoing acknowledgements,representations,warranties and agreements. Furthermore,the initial purchasers of the 2022 Bonds from the Underwriter will be required to deliver an Investor Letter in the form attached hereto in Appendix H in connection with such purchase providing representations and assurances to the County and the Underwriter regarding their knowledge and sophistication in the evaluation and purchase of securities such as the 2022 Bonds. Each initial purchaser of the 2022 Bonds, by virtue of its purchase of the 2022 Bonds or any interest therein, is acknowledging,representing,warranting, and agreeing with and to the County,the Underwriter and the Trustee that the purchaser will be deemed to have acknowledged,among other things,that: The 2022 Bonds are limited obligations of the County payable solely from the Special Taxes and amounts on deposit in the Special Tax Fund(other than amounts in the Administrative Expense Account of the Special Tax Fund), and that neither the full faith and credit nor the taxing power(except as it pertains to the Special Taxes) of the County, the State or any political subdivision thereof is pledged to the payment of the Bonds. In addition to receipt and review of this Limited Offering Memorandum,such initial purchaser has had the opportunity to ask questions of and receive answers from the County concerning its purchase of the 2022 Bonds and all matters relating thereto, and has received from the County any additional information it deemed necessary in its decision to purchase the 2022 Bonds. Such initial purchaser acknowledges and understands that the 2022 Bonds are a speculative investment and that investing in the 2022 Bonds is subject to a high degree of risk, including the risks described in this Limited Offering Memorandum. Such initial purchaser understands that such risks may adversely affect the timely and full payment of principal and interest on the 2022 Bonds. Such initial purchaser represents that it can bear the economic risks associated with investing in the 2022 Bonds, including that it is capable of suffering a loss of the entirety of its investment represented by the 2022 Bonds The purchaser understands that each certificate representing an interest in the 2022 Bonds will bear the following securities legend (among other legends to be included), unless determined otherwise in accordance with applicable law: THIS BOND IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.9 OF THE INDENTURE. NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS BOND, OR ANY BENEFICIAL INTEREST HEREIN, MAY BE MADE EXCEPT TO A PERSON THAT IS A QUALIFIED PURCHASER THAT IS PURCHASING THIS BOND FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTING THIS BOND.EACH TRANSFEREE OF THIS BOND,OR ANY BENEFICIAL INTEREST THEREIN, SHALL BE DEEMED TO HAVE REPRESENTED TO THE COUNTY, THE PARTICIPATING UNDERWRITER AND THE TRUSTEE THAT SUCH TRANSFEREE IS A QUALIFIED PURCHASER THAT IS PURCHASING SUCH BOND FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTING SUCH BOND. EACH ENTITY THAT IS OR THAT BECOMES AN OWNER OR A BENEFICIAL OWNER OF THIS BOND IS DEEMED BY THE ACCEPTANCE OR ACQUISITION OF THIS BOND OR SUCH BENEFICIAL OWNERSHIP INTEREST TO HAVE AGREED TO BE BOUND BY THE PROVISIONS OF SAID SECTION 2.9. ANY TRANSFER 7 4857-1255-2486v10/200356-0417 OF A BOND TO ANY ENTITY THAT IS NOT A QUALIFIED PURCHASER SHALL BE DEEMED NULL AND VOID. Limited Obligation The 2022 Bonds are not general obligations of the County but are limited obligations of the County payable solely from the Special Taxes and certain funds and accounts held by the Trustee as provided in the Indenture. Neither the full faith and credit nor the general taxing power of the County or the State is pledged to the payment of the 2022 Bonds. Although the Special Taxes constitute liens on the Taxable Property,they do not constitute a personal indebtedness of the owners of such property. There is no assurance that any current or future owner of a parcel of Taxable Property will be financially able to pay the annual Special Taxes or that such owner will pay the Special Taxes even if financially able to do so. See"CERTAIN RISK FACTORS—Limited Obligation to Pay Debt Service" and "— Payment of the Special Tax is Not a Personal Obligation of the Owners." Redemption Mandatory Sinking Fund Redemption. The Indenture establishes certain amounts(the"Sinking Fund Payments") for the mandatory redemption and payment of the 2022 Bonds that mature on May 15, 20_and May 15, 20—(the "Series 2022 Term Bonds"). Sinking Fund Payments are to be deposited in the Principal Account of the Special Tax Fund to be used and withdrawn by the Trustee at any time for the mandatory redemption or payment of the principal of the Series 2022 Term Bonds or, along with money in the Interest Account of the Special Tax Fund, for the purchase of Series 2022 Term Bonds at public or private sale as and when and at such prices(including brokerage or other expenses)as it may in its discretion determine,but not to exceed the principal amount of such Term Bonds and interest accrued thereon to the purchase date. The Series 2022 Term Bonds maturing on May 15, 20_will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Principal Account on May 15,20—,and on each May 15 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The Series 2022 Term Bonds so called for redemption will be selected by the Trustee by lot and will be redeemed at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date,without premium,as follows: Minimum Sinking Fund Account Payments for Series 2022 Term Bonds Maturing on May 15,20_ Year Ending Minimum Sinking Fund May 15 Account Payment (maturity) 8 4857-1255-2486v10/200356-0417 The Series 2022 Term Bonds maturing on May 15, 20_will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Principal Account on May 15, 20_,and on each May 15 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The Series 2022 Term Bonds so called for redemption will be selected by the Trustee by lot and will be redeemed at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date,without premium,as follows: Minimum Sinking Fund Account Payments for Series 2022 Term Bonds Maturing on May 15,20_ Year Ending Minimum Sinking Fund May 15 Account Payment (maturity) If during the Fiscal Year immediately preceding one of the redemption dates specified in any of the tables above the County purchases Series 2022 Term Bonds,at least 45 days prior to the applicable redemption date the County will deliver to the Trustee a Certificate of an Authorized Representative specifying the principal amount purchased, and the principal amount of Series 2022 Term Bonds so purchased will be credited at the time of purchase, to the extent of the full principal amount thereof, to reduce such upcoming Sinking Fund Payment for such Series 2022 Term Bonds. In the event of a partial redemption of Series 2022 Term Bonds,other than as a result of Sinking Fund Payments, each of the remaining Sinking Fund Payments for the Series 2022 Term Bonds that were partially redeemed will be reduced,as nearly as practicable,on a pro rata basis in increments of$5,000. Optional Redemption. Subject to the limitations set forth below,the 2022 Bonds maturing on or after May 15,20_may be redeemed,at the option of the County,from any source of funds,other than Prepayments, on any Interest Payment Date on or after May 15,20_, in whole,or in part in the order of maturity selected by the County and by lot within a maturity, at a redemption price equal to the principal amount thereof, together with accrued interest to the date of redemption,without premium. In the event the County elects to redeem 2022 Bonds as provided above, the County will give written notice to the Trustee of its election to so redeem,the redemption date and the principal amount of the Bonds to be redeemed. The notice to the Trustee shall be given at least 60 but no more than 90 days prior to the redemption date,or such shorter period as shall be acceptable to the Trustee. The County may, at its option, purchase Bonds in lieu of redeeming them as provided for in the Indenture. Special Mandatory Redemption from Prepayments. The Rate and Method of Apportionment permits property owners to prepay the Special Taxes applicable to their properties in whole or in part(a"Prepayment"); and the Indenture provides that the Trustee shall deposit in the Prepayment Account of the Special Tax Fund the portion of each Prepayment directed to be so deposited in a certificate of the Special Tax Administrator to be delivered to the Trustee in connection with the delivery of such Prepayment. Money on deposit in the 9 4857-1255-2486v10/200356-0417 Prepayment Account may be used solely for the purpose of redeeming Bonds or purchasing them in lieu of redemption as provided for in the Indenture. The 2022 Bonds are subject to special mandatory redemption on any Interest Payment Date from amounts on deposit in the Prepayment Account,in integral multiples of$5,000,in whole or in part as hereinafter provided,at the following redemption prices,expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption: Redemption Date Redemption Price Any Interest Payment Date through November 15,20— 103% May 15,20_and November 15,20_ 102 May 15,20_and November 15,20_ 101 May 15,20_and any Interest Payment Date thereafter 100 The Trustee shall select Bonds for redemption from prepayments of Special Taxes from the maturities of all Bonds of all Series so that the ratio of Outstanding Bonds to the Bonds originally issued shall be approximately the same in each maturity of each Series. The particular Bonds of each maturity of a Series to be redeemed shall be selected by lot in whatever manner the Trustee chooses. Such prepayments could be made by any of the owners of any of the property within the District including the Property Owner, any builder or any individual owner; and they could also be made from the proceeds of bonds issued by or on behalf of an overlapping community facilities district. The resulting redemption of Bonds that were purchased at a price greater than the applicable redemption price could reduce the otherwise expected yield on such Bonds. See"CERTAIN RISK FACTORS—Mandatory Redemption from Prepayments of Special Taxes." Notice of Redemption The Trustee shall give notice of the redemption of such Bonds at least 30 days but no more than 60 days prior to the redemption date by mailing a copy of such notice, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register and to the original purchaser of the Bonds. Such notice of redemption shall: (a)specify the CUSIP numbers (if any), the bond numbers and the maturity date or dates of the Bonds selected for redemption, except that where all of the Bonds are subject to redemption,or all of the Bonds of one maturity,are to be redeemed,the bond numbers of such issue need not be specified; (b)state the date fixed for redemption and surrender of the Bonds to be redeemed; (c)state the redemption price;(d)state the place or places where the Bonds are to be redeemed;E in the case of Bonds to be redeemed only in part, state the portion of such Bond which is to be redeemed; (f)state the date of issue of the Bonds as originally issued; (g)state the rate of interest borne by each Bond being redeemed; and (h)state any other descriptive information needed to identify accurately the Bonds being redeemed as shall be specified by the Trustee. Such notice shall further state that on the date fixed for redemption, there shall become due and payable on each Bond or portion thereof called for redemption,the principal thereof,together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon shall cease to accrue and be payable. The actual receipt by the Owner of any Bond or the original purchaser of any Bond of notice of such redemption shall not be a condition precedent to redemption,and neither the failure to receive nor any defect in such notice shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as herein provided shall be conclusive as against all parties, and the Owner shall not be entitled to show that he or she failed to receive notice of such redemption. In the case of an optional redemption, the notice of redemption may state that such redemption is conditional upon the receipt by the Trustee, on or before the date fixed for redemption,of moneys sufficient to pay in full the redemption price of the Bonds proposed to be redeemed. If a notice contains such condition,and moneys sufficient to pay in full the redemption price of the Bonds proposed to be redeemed shall not be received 10 4857-1255-2486v10/200356-0417 by the Trustee on or prior to the date fixed for redemption,such notice of redemption shall be null and void and of no force and effect;the County shall not redeem or be obligated to redeem any Bonds;and the Trustee shall give notice, in the same manner as notice of redemption is given, that moneys sufficient to pay in full the redemption price of the Bonds proposed to be redeemed were not received on or prior to the date fixed for redemption and that such redemption did not occur. So long as Cede& Co. is the registered owner of the 2022 Bonds, any notices of redemption will be given only to it and not to the Beneficial Owners of the 2022 Bonds called for redemption. Debt Service Schedule The following is the debt service schedule for the 2022 Bonds assuming that no 2022 Bonds are redeemed except from Sinking Fund Payments. Fiscal Year Ending June 30 Principal Interest Total 2023 $ $ $ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 Totals: $ $ $ Source: The Underwriter. 11 4857-1255-2486v10/200356-0417 SECURITY FOR THE 2022 BONDS General The Bonds are limited obligations of the County; and the interest on and principal of and redemption premiums, if any, on the Bonds are payable solely from the Special Taxes and, to the extent necessary, from money on deposit in various accounts in the Special Tax Fund(other than the Administrative Expense Account). Neither the full faith and credit nor the general taxing power of the County or of the State is pledged to the payment of the Bonds. Pursuant to the Indenture,the County covenants that it will(i)levy Special Taxes pursuant to the Rate and Method of Apportionment in an amount sufficient, together with other amounts on deposit in the Special Tax Fund (but in no event at rates higher than the applicable Maximum Special Tax), to pay (a)the principal (including Sinking Fund Payments)of and interest on the Bonds when due,(b)the Administrative Expenses and (c)any amounts required to replenish the Reserve Account to the Reserve Requirement and (ii)receive all Special Taxes in trust and deposit such amounts with the Trustee not less than once per month. The County will have no beneficial right or interest in the amounts so deposited except as provided in the Indenture. All Special Taxes are required to be disbursed, allocated and applied solely for the uses and purposes set forth in the Indenture and are to be accounted for separately and apart from all other money,funds,accounts or resources of the County. The County also agrees in the Indenture that it will not mortgage or otherwise encumber,pledge or place any charge upon any of the Special Taxes except as provided in the Indenture and that it will not issue any obligation or security having a lien or charge upon the Special Taxes superior to the Bonds. However, the Indenture does permit the issuance of Parity Bonds for refunding purposes only,as well as obligations which are payable from a pledge of Special Taxes that is subordinate in all respects to the pledge of Special Taxes to repay the Bonds. Although the Special Taxes constitute liens on the Taxable Property,they do not constitute a personal indebtedness of the owners of such property. There is no assurance that any current or future owner of a parcel of Taxable Property will be financially able to pay the annual Special Taxes or such owner will pay the Special Taxes even if financially able to do so. See"CERTAIN RISK FACTORS—Payment of the Special Tax Is Not a Personal Obligation of the Owners." The Special Taxes are required to be levied in accordance with the Rate and Method of Apportionment and are expected to be billed and collected in the same manner and at the same time as the County's real property taxes applicable to the property in the District(the"Real Property Taxes"). The provisions governing the levy and collection of Real Property Taxes are set forth in Chapter 19 of the Hawai`i County Code ("County Code Chapter 19"). In the event that the Special Tax is not paid when due with respect to any Taxable Property,the County may foreclose the lien of the Special Tax by way of advertisement without suit, in the same manner, except as otherwise approved by the County Council,under the same conditions and penalties and with the same effect as provided by County Code Chapter 19 for sales of real property pursuant to default in payment of Real Property Taxes. See"—Covenant for Foreclosure"below. Special Taxes and Real Property Taxes are a lien on the property on which they are levied,which lien attaches as of July 1 in each Fiscal Year and continues for six years, provided that if proceedings for the enforcement or foreclosure of such lien are brought within such six-year period, the lien continues until the termination of such proceedings or the completion of such sale. County Code Chapter 19 provides that any property on which a lien for taxes has existed for two years "may" be sold by way of foreclosure; and the Indenture includes a covenant that if any Special Taxes remain unpaid after such two-year period the County will promptly give notice to the delinquent property owners that the delinquent properties will be sold upon non- judicial foreclosure sales and will diligently pursue proceedings for such foreclosure sales as permitted by County Code Chapter 19 and County Code Chapter 32. See"—Covenant for Foreclosure"below. 12 4857-1255-2486v10/200356-0417 [Pursuant to County Code Chapter 19, Special Taxes and Real Property Taxes are billed on or before July 20 of each Fiscal Year and are payable in two equal installments,the first of which is due on August 20 and the second of which is due on February 20. (The County's current practice is to mail a second bill on or before January 20 as a reminder of the obligation to pay the second installment.) Such taxes which are not paid when due become delinquent on the applicable payment date. A penalty of up to 10%of the amount of the delinquency, as determined by the County's Director of Finance, is added to and becomes a part of any delinquent Special Taxes and Real Property Taxes. (For Fiscal Year 2022-23,the rate is 10%of the amount of the delinquency.) In addition, all delinquent taxes and penalties bear interest at the rate of 1%for each month or fraction thereof until paid, beginning with the first calendar month following the month in which the taxes first became delinquent. Such interest becomes part of the delinquent Special Taxes and Real Property Taxes and is to be collected as a part thereof. The County's practice has been to accept partial payments of taxes. However,the County's acceptance of any partial payments of taxes applicable to property within the District will not diminish, extinguish or otherwise affect the liability for the unpaid balance of Real Property Taxes and Special Taxes applicable to such property. Any such partial payments will be applied proportionately to the amount due with respect to Real Property Taxes and the amount due with respect to Special Taxes.] Special Taxes General. The principal source of funds for the repayment of the Bonds is expected to be the Special Taxes. Special Taxes include not only the amounts billed as such and received by the County in connection with the normal billing cycle applicable to Real Property Taxes levied by the County but also penalties and interest accruing with respect to delinquent Special Tax installments. See APPENDIX C — "SUMMARY OF INDENTURE—Certain Definitions"and"—Authorization of Bonds; Security for Bonds." The County is permitted under the Indenture to include in the amount of the Special Taxes to be levied each Fiscal Year an amount budgeted by the County to be required to pay the costs of administering the affairs of the District("Administrative Expenses"). Special Taxes in an amount equal to the amount so budgeted(the "Administrative Expense Budget Amount") may be deposited by the Trustee in the Administrative Expense Account prior to deposits of Special Taxes in the Interest Account and the Principal Account of the Special Tax Fund. In addition, Special Taxes in amounts in excess of the Administrative Expense Budget Amount may be transferred to the Administrative Expense Account to pay Administrative Expenses incurred by the County in collecting delinquent Special Taxes (other than such Administrative Expenses paid from the proceeds of foreclosure sales)if and to the extent such Administrative Expenses exceed the sum of(i)the amount included in the Administrative Expense Budget Amount for such purpose and(ii)the amount of unencumbered funds in the Administrative Expense Account available for such purpose. Amounts on deposit in the Administrative Expense Account are available to the County to pay Administrative Expenses; they are not pledged to the payment of debt service on the Bonds. See APPENDIX C — "SUMMARY OF INDENTURE — Administrative Expense Account of the Special Tax Fund"and CERTAIN RISK FACTORS—Administrative Expenses." The District is divided into Tax Zone 1 and Tax Zone 2. The property within Tax Zone 1 is the property referred to in this Limited Offering Memorandum as Phase 1 and the property within Tax Zone 2 is the property referred to in this Limited Offering Memorandum as Phase 2. As described further below,Developed Property within Tax Zone 2 is not taxable and Final Mapped Property and Undeveloped Property in Tax Zone 2 is only taxable to cure delinquencies in the payment of Special Taxes within Tax Zone 1. Furthermore,the Special Tax to be levied within Tax Zone 2 will terminate upon the satisfaction of certain conditions. See the caption "— Rate and Method of Apportionment—Term of Special Tax in Tax Zone 2." Rate and Method of Apportionment. As mentioned above,the Special Taxes are required to be levied in accordance with the Rate and Method of Apportionment. A copy of the Rate and Method of Apportionment is set forth in Appendix A, and capitalized terms that are not otherwise defined in this portion of this Limited 13 4857-1255-2486v10/200356-0417 Offering Memorandum shall have the respective meanings ascribed to them in the Rate and Method of Apportionment. Tax Zone 1 Special Tax Requirement. Pursuant to the Rate and Method of Apportionment the County is required to levy the Special Tax each Fiscal Year until the aggregate amount so levied equals the Tax Zone 1 Special Tax Requirement,subject to the Maximum Special Taxes described below. The Tax Zone 1 Special Tax Requirement is the amount required in any Fiscal Year to: (i) provide for Administrative Expenses up to $50,000,which amount will escalate at a rate of two percent per year beginning in Fiscal Year 2022-23;(ii)pay principal and interest on Bonds which are due in the calendar year that begins in such Fiscal Year; (iii)create and/or replenish reserve funds for the Bonds;(iv)cure any delinquencies in the payment of principal or interest on Bonds which have occurred in prior Fiscal Years or(based on existing delinquencies in the payment of Special Taxes) are expected to occur in the Fiscal Year in which the tax will be collected; (v)pay all remaining Administrative Expenses in excess of the amount determined in(i)above; and(vi)pay the costs of Authorized Improvements provided that Special Taxes are not permitted to be collected from Taxable Property Owner Association Property for this purpose. The amounts levied for debt service on the Bonds and to create or replenish reserve funds for the Bonds may be reduced in any Fiscal Year by: (i)interest earnings on or surplus balances in funds and accounts for the Bonds to the extent that such earnings or balances are available to apply against debt service pursuant to the Indenture; (ii)proceeds received by the County for the District from the collection of penalties associated with delinquent Special Taxes; and (iii)any other revenues available to pay Apportionment debt service on the Bonds as determined bythe CFD Administrator. The Rate and Method of permits the Special Tax to be levied within Tax Zone 1 for the period necessary to fully satisfy the Tax Zone 1 Special Tax Requirement but not after Fiscal Year 2060-61. Pursuant to the Rate and Method of Apportionment, each Fiscal Year, beginning with Fiscal Year 2022-23,the CFD Administrator shall determine the Tax Zone 1 Special Tax Requirement for that Fiscal Year and levy the Special Tax on all TMK Parcels of Taxable Property in Tax Zone 1 as follows: Step 1: If needed to satisfy the Tax Zone 1 Special Tax Requirement,but not accounting for Capitalized Interest, the Special Tax shall be levied Proportionately on each TMK Parcel of Developed Property Yin Tax Zone 1 up to 100%of the applicable Assigned Special Tax. Step 2: If additional monies are needed to satisfy the Tax Zone 1 Special Tax Requirement after Step 1 has been completed,and after applying Capitalized Interest,then the Special Tax shall be levied Proportionately on each TMK Parcel of Final Mapped Property in Tax Zone 1 up to 100%of the Maximum Special Tax for Final Mapped Property in Tax Zone 1. Step 3: If additional monies are needed to satisfy the Tax Zone 1 Special Tax Requirement after the first two steps have been completed,then the Special Tax shall be levied Proportionately on each TMK Parcel of Undeveloped Property in Tax Zone 1 up to 100%of the Maximum Special Tax for Undeveloped Property in Tax Zone 1. Step 4: If additional monies are needed to satisfy the Tax Zone 1 Special Tax Requirement after the first three steps have been completed, then the levy of the Special Tax on each TMK Parcel of Developed Property in Tax Zone 1 whose Maximum Special Tax is determined through the application of the Backup Special Tax shall be increased Proportionately from the Assigned Special Tax up to the Maximum Special Tax for each such TMK Parcel until the amount levied is equal to the Tax Zone 1 Special Tax Requirement. Step 5: If additional monies are needed to satisfy the Tax Zone 1 Special Tax Requirement after the first four steps have been completed,then the Special Tax shall be levied Proportionately on each TMK Parcel of Taxable Property Owner Association Property in Tax Zone 1 up to the Maximum Special Tax for Taxable Property Owner Association Property in Tax Zone 1. 14 4857-1255-2486v10/200356-0417 Notwithstanding the above, under no circumstances shall the Special Tax levied in any Fiscal Year on any TMK Parcel of Single Family Property or Other Residential Property in Tax Zone 1 for which an occupancy permit for private residential use has been issued be increased as a result of delinquency or default by the owner or owners of any other TMK Parcel or TMK Parcels within Tax Zone 1 by more than 10%above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. Tax Zone 2 Special Tax Requirement. Pursuant to the Rate and Method of Apportionment the County is required to levy the Special Tax each Fiscal Year until the aggregate amount so levied equals the Tax Zone 2 Special Tax Requirement,subject to the Maximum Special Taxes described below. The Tax Zone 2 Special Tax Requirement is the amount necessary at any point in time to cure delinquencies in the payment of Special Taxes levied in Tax Zone 1 on Final Mapped Property and Undeveloped Property. As described further below, Developed Property in Tax Zone 2 is not subject to the Special Tax. At the earliest possible date on which the County Real Property Tax Office is able to provide information to the CFD Administrator regarding the collection of Special Taxes within Tax Zone 1,the CFD Administrator shall determine the total aggregate Special Taxes levied on Final Mapped Property and Undeveloped Property within Tax Zone 1 that are delinquent. Within five business days after making such determination, the CFD Administrator shall calculate the Tax Zone 2 Special Tax Requirement and, if needed to satisfy the Tax Zone 2 Special Tax Requirement, levy the Tax Zone 2 Special Tax as described in the Rate and Method of Apportionment. Maximum Special Tax Rates. The Maximum Special Tax that may be levied in any Fiscal Year on each TMK Parcel in Tax Zone 1 classified as Developed Property is the greater of (i) the amount derived by application of the Assigned Special Tax or(ii)the amount derived by application of the Backup Special Tax. The Assigned Special Tax for TMK Parcels of Developed Property ranges from $1,663 to $3,410 per unit for Single Family Detached Property, is $1,281 per unit for Single Family Attached Property and is $11,298 per acre for Other Residential Property and Non-Residential Property. The Maximum Special Tax in Tax Zone 1 for Final Mapped Property, Undeveloped Property, and Taxable Property Owner Association Property in Tax Zone 1 shall be$11,298 per Acre in Fiscal Year 2021-22,which amount shall increase on July 1,2022,and each July 1 thereafter by an amount equal to 2.0%of the amount in effect for the prior Fiscal Year. No Special Tax shall be levied on Developed Property in Tax Zone 2. The Maximum Special Tax for Final Mapped Property, Undeveloped Property, and Taxable Property Owner Association Property in Tax Zone 2 shall be$22,596 per Acre in Fiscal Year 2021-22,which amount shall increase on July 1,2022,and each July 1 thereafter by an amount equal to 2.0%of the amount in effect for the prior Fiscal Year. Prepayment. The Special Tax obligation of a TMK Parcel in Tax Zone I may be prepaid in whole or in part; however,the Special Tax obligation of a TMK Parcel in Tax Zone 2 cannot be prepaid. Reference is made to Appendix A for the calculation of the Prepayment Amount and the Partial Prepayment Amount. Interpretation. The Rate and Method of Apportionment permits the County Council to interpret it for purposes of clarifying any vagueness or ambiguity by adopting an ordinance or resolution. Term of Special Tax in Tax Zone 1. The last year in which the Special Tax in Tax Zone 1 may be levied is Fiscal Year 2060-61, except that the Special Tax that was lawfully levied in or before such Fiscal Year and that remains delinquent may be collected in subsequent years Term of Special Tax in Tax Zone 2. The Special Tax in Tax Zone 2 may be levied for the period necessary to fully satisfy the Tax Zone 2 Special Tax Requirement,but in no event may be levied after the earlier of(i) June 30, 2081 or(ii) the date on which the CFD Administrator files with the County Council a written notification(which the CFD Administrator shall file as soon as reasonably practicable after the close of a Fiscal Year)that the following events all occurred in the prior Fiscal Year: 15 4857-1255-2486v10/200356-0417 (A) Debt Service Test. The County Council has resolved or covenanted that it will not issue any additional Bonds for the District except for refunding purposes,provided that the debt service in any Fiscal Year on all outstanding Bonds after such issuance does not exceed the debt service on the Bonds before the refunding; and (B) Special Tax Revenue Test—Developed Property. The aggregate Special Taxes received from Taxable Property in the District from the levy of such Fiscal Year's Special Tax(as opposed to receipts from prior Fiscal Years and penalties and interest)on TMK Parcels in Tax Zone 1 that were classified as Developed Property for such Fiscal Year were not less than 50%of such Fiscal Year's Tax Zone 1 Special Tax Requirement; and (C) Special Tax Revenue Test—Developed Property Plus Final Mapped Property. The aggregate Special Taxes received from Taxable Property in the District from the levy of such Fiscal Year's Special Tax (as opposed to receipts from prior Fiscal Years and penalties and interest) on TMK Parcels in Tax Zone 1 that were classified as Developed Property or as Final Mapped Property for such Fiscal Year were not less than 75% of such Fiscal Year's Tax Zone 1 Special Tax Requirement;and (D) Special Tax Revenue Test — Developed Property Plus Final Mapped Property Plus Undeveloped Property. The aggregate Special Taxes received from Taxable Property in the District from the levy of such Fiscal Year's Special Tax(as opposed to receipts from prior Fiscal Years and penalties and interest) on TMK Parcels in Tax Zone 1 that were classified as Developed Property, as Final Mapped Property, or as Undeveloped Property for such Fiscal Year were not less than 100%of such Fiscal Year's Tax Zone 1 Special Tax Requirement;and (E) Value Test. The "value of real property," as defined in Section 32-57(c) of the Code, of the Taxable Property in Tax Zone 1 is at least three times the principal amount of Bonds then outstanding;and (F) Value Test—Undeveloped Property. The aggregate Land Value of the non-delinquent TMK Parcels in Tax Zone 1 that were classified as Undeveloped Property for such Fiscal Year is not less than three times the product of the principal amount of Outstanding Bonds multiplied by a fraction,the numerator of which is the aggregate Special Taxes received from Taxable Property in the District from the levy of such Fiscal Year's Special Tax(as opposed to receipts from prior Fiscal Years and penalties and interest)on TMK Parcels in Tax Zone 1 that were classified as Undeveloped Property for such Fiscal Year,and the denominator of which is such Fiscal Year's Tax Zone 1 Special Tax Requirement. Debt Service Coverage The Special Taxes from Undeveloped Property and/or Final Map Property within Tax Zone 1 (which are applied on an acreage basis)are designed to be sufficient to provide at least 110%coverage of debt service on the 2022 Bonds. Additionally, at the Assigned Special Tax rates, the revenues from the Special Tax on Developed Property within Tax Zone 1 based on development plans described by the Property Owner are expected to generate %coverage of debt service on the 2022 Bonds. Covenant for Foreclosure The Indenture provides that the County will diligently pursue such actions as are reasonably necessary or appropriate to collect all Special Taxes levied on Taxable Property within the District. The Special Taxes are expected to be billed and collected together with the Real Property Taxes levied on such property. The County may accept partial payments on account of the Special Taxes and Real Property Taxes applicable to a particular parcel, but such partial payments will not diminish, extinguish or otherwise affect the liability for the unpaid balance of the Special Taxes and Real Property Taxes applicable to such parcel. Partial payments, if accepted, will be applied pro rata to the applicable Special Taxes and Real Property Taxes. Any partial payment of taxes will be first credited to interest,then to penalties,and then to principal. 16 4857-1255-2486v10/200356-0417 l All real property on which a lien for Special Taxes or Real Property Taxes exists may be sold by the Director of Finance by way of foreclosure without the necessity of judicial proceedings. Pursuant to County Code Chapter 32,the County is required to order foreclosure proceedings with respect to any delinquent special taxes for the payment of bond interest or principal after one hundred twenty days of delinquency of any installment of bond principal. Notwithstanding the provision for such sales,in the Indenture,the County covenants to comply with the provisions of County Code Chapter 19 and County Code Chapter 32 in enforcing the liens of Special Taxes on Taxable Property. Without limiting the generality of the foregoing, the County covenants that, not later than April 30 and October 30 in each Fiscal Year, it will determine or cause to be determined whether or not any owners of Taxable Property are delinquent in the payment of all or any portion of the Special Taxes levied on such owners' properties. If such delinquencies are determined to exist, the County covenants that it will take such actions as it deems reasonably necessary to pursue payment of the delinquent amounts(including penalties and interest)and enforce the lien of the Special Taxes by non judicial foreclosure sale as follows: (i) County Code Chapter 19 (as applicable to the Special Taxes under County Code Chapter 32) provides that the County may enforce the lien of delinquent Special Taxes by non judicial foreclosure sale if such Special Taxes remain unpaid for two years after their respective due dates. If any Special Taxes remain unpaid after such two-year period,the County agrees that,unless required to take such action sooner as described in subparagraph (ii) below, it shall promptly give notice to the delinquent property owners that the delinquent properties will be sold upon non judicial foreclosure sales and shall diligently pursue proceedings for such foreclosure sales as permitted by Sections 19-38 and 32-53 of the County Code. (ii) The Ordinance of Formation provides that,for so long as any Bonds remain Outstanding,if any Special Taxes remain unpaid for 60 days after their respective due dates,the County may enforce the lien of the delinquent Special Taxes by non judicial foreclosure sale without regard to the two-year period specified in County Code Chapter 19, subject to the covenants and agreements set forth in the Indenture. Pursuant to such provision,the County covenants and agrees in the Indenture that,for so long as any Bonds remain Outstanding (A)with respect to Taxable Property in Tax Zone 1,if it determines on any April 30 or October 30 that any such Taxable Property (or Taxable Properties)owned by the same Person is (or are)delinquent in payment of more than $10,000 of Special Taxes or the delinquent Special Taxes exceed 5%of the total amount of Special Taxes payable as of the preceding February 15 or August 15, the County will promptly give notice to the owner(or owners) of such delinquent Taxable Property (or Taxable Properties) of a non judicial foreclosure sale of the delinquent property or properties and will initiate and diligently pursue proceedings for such non judicial foreclosure sale as permitted by the Ordinance of Formation, and (B)with respect to Taxable Property in Tax Zone 2,if it determines that any such Taxable Property(or Taxable Properties)is(or are)delinquent in payment of Special Taxes and if such Special Taxes remain delinquent for 60 days after they are due and payable, the County will promptly give notice to the owner (or owners) of such delinquent Taxable Property (or Taxable Properties) of a non judicial foreclosure sale of the delinquent property or properties and shall initiate and diligently pursue proceedings for such non judicial foreclosure sale as permitted by the Ordinance of Formation. (iii) Proceeds of each foreclosure sale to enforce the lien of delinquent Special Taxes,in an amount equal to the delinquent Special Taxes plus penalties and interest thereon, are required to be transferred to the Trustee for deposit in the Special Tax Fund. The Ordinance of Formation permits the liens of delinquent Special Taxes, Real Property Taxes or special assessments levied under Section 46-80, Hawaii Revised Statutes ("Special Assessments"), to be foreclosed either(i)together in a single sale to satisfy all such liens,or(ii)in separate sales to satisfy the lien of the delinquent Special Taxes, Real Property Taxes or Special Assessments;provided that, in the case of a single sale, if the proceeds of the sale are insufficient to pay the total amount due with respect to all Real Property Taxes,Special Taxes and Special Assessments on the property,then the County may apply the amount collected first to Real Property Taxes, second to the Special Taxes, and third to Special Assessments, together with all applicable charges for interest,penalties,costs and expenses. Notwithstanding the foregoing,for so long as any 17 4857-1255-2486v10/200356-0417 Bonds remain Outstanding, the County further covenants and agrees in the Indenture that it will not sell a property upon foreclosure(whether in a single sale or a separate sale to foreclose the lien on delinquent Special Taxes) for a price that produces net proceeds less than the amount required to be transferred to the Trustee pursuant to the Indenture unless such sale is consented to by the Owners of not less than 67%of the aggregate principal amount of Bonds then Outstanding;except that the County may, in its sole discretion,waive penalties and interest in a foreclosure sale if the net proceeds from such sale(excluding penalties and interest)are sufficient to pay the principal of and interest on the portion of the Bonds allocable to the delinquent Special Taxes on the property in question. The foreclosure process does not require the commencement of judicial proceedings by the County. The County is merely required to publish notice of the proposed foreclosure sale and certain information relative thereto at least once a week for four successive weeks and to give notice to the owner of the property and any lienholder by registered mail at least 45 days prior to the sale. The sale must take place at a public place"proper for sales on execution." Once the sale has been completed,the purchaser takes title to the property free and clear of all liens,claims and encumbrances except for the lien for taxes,subject only to any mineral rights of the State and any easements in favor of any governmental entity. However,the delinquent taxpayer has the right to redeem the property within one year of the date of sale by paying to the purchaser the amount paid by the purchaser, together with all costs and expenses which the purchaser was required to pay and interest on such amount at the rate of 12%a year. The County is not required to purchase any property sold for delinquent Special Taxes;and no assurance can be given that any such property can be sold for the minimum amount required pursuant to the Indenture. Nor can any assurance be given that the foreclosure process won't be delayed. The County's covenants to collect and enforce the liens of Special Taxes are subject to various limitations. See"CERTAIN RISK FACTORS— Bankruptcy and Foreclosure"and"—FDIC/Federal Government Interests in Properties." Reserve Account Upon delivery of the 2022 Bonds there will be deposited in the Reserve Account proceeds of the 2022 Bonds in an amount sufficient to cause the balance on deposit therein to equal the Reserve Requirement in the amount of$ . The Reserve Requirement is the amount,as of any date of calculation by the County, which is the lowest of(a) 10%of the original principal proceeds of the Bonds less any original issue discount and plus any original issue premium, or(b)the Maximum Annual Debt Service payable in the current or any future Bond Year,or(c) 125%of the average Annual Debt Service payable in the current and in all future Bond Years. Subject to the limits on the maximum annual Special Taxes which may be levied within the District as described in Appendix A,the County has covenanted to levy Special Taxes 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 Reserve Account at the Reserve Requirement. In addition, the County may, but is not obligated to, advance funds from any source of legally available funds in order to maintain the Reserve Account of the Special Tax Fund at the Reserve Requirement or to avoid a default in payment of the Bonds, in which event the County is to be reimbursed for any such advance from the amount of Special Taxes thereafter received that would otherwise be transferred from the Special Tax Fund to the Reserve Account or from funds available for such purpose in the Surplus Fund. All money in the Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of (a)paying the interest on or principal of the Bonds in the event there is insufficient money in the Interest Account or the Principal Account available for this purpose and(b)making any required transfer to the Rebate Fund upon direction from the County. Any amount on deposit in the Reserve Account in excess of the Reserve Requirement as of the first day of any Bond Year shall be withdrawn from the Reserve Account and transferred to the Interest Account as soon 18 4857-1255-2486v10/200356-0417 as practicable. Funds on deposit in the Reserve Account during the final Bond Year for any particular Series of Bonds may be applied to pay the principal of and interest due on the Bonds of such Series in such final Bond Year so long as the amount on deposit in the Reserve Account following such payments is at least equal to the Reserve Requirement for all other Series of Bonds to remain Outstanding. In addition, to the extent that the Reserve Account is at the Reserve Requirement as of the first day of the final Bond Year,amounts therein may be applied to pay the principal of and interest due on the Bonds in such final Bond Year. Capitalized Interest Capitalized interest on the 2022 Bonds has been funded through , 20_. See "ESTIMATED SOURCES AND USES OF FUNDS." Parity Bonds For Refunding Purposes Only Pursuant to the Ordinance of Formation and the Indenture, Bonds may be issued in an aggregate principal amount not to exceed $22,000,000(excluding Bonds issued to refund other Bonds previously issued under the Indenture);however,the County has covenanted in the Indenture not to issue any Parity Bonds payable from Special Taxes on a parity with the 2022 Bonds except for refunding purposes,subject to certain conditions in the Indenture. See Appendix C—"SUMMARY OF THE INDENTURE." THE DISTRICT Property Values [TO BE UPDATED BASED ON UPDATED APPRAISAL] [In order to provide information with respect to the value of the property within the District that is subject to the lien of the Special Tax,the County's Bond Counsel engaged Integra Realty Resources of Sacramento, California (the "Appraiser") to prepare the Appraisal. The Appraiser's employees who signed the Appraisal have an"MAI"designation from the Appraisal Institute and have prepared numerous appraisals for the sale of land-secured municipal bonds. The Appraiser has no material relationships with the County or the Property Owner other than the relationship represented by the engagement to prepare the Appraisal. The Appraisal states that it was prepared in accordance with and is subject to the requirements of the "Uniform Standards of Professional Appraisal Practice" of the Appraisal Foundation and the"Code of Professional Ethics"and the"Standards of Professional Appraisal Practice"of the Appraisal Institute. The Appraisal includes language seeking to limit any potential liability of the Appraiser for its contents. The Appraisal is dated , 2022 and provides the Appraiser's opinion of the value of the subject property as of November 3,2022(the"Date of Value"). The property that is the subject of the Appraisal consists of approximately 387 acres of unimproved land which is entitled to be developed for residential use. As of the Date of Value, all of the property within the District was owned by the Property Owner. Based upon the assumptions and subject to the limitations set forth in the Appraisal,as of the date of the Appraisal,the Appraiser was of the opinion that the total market value of the subject property as of the Date of Value was$43,280,000. The Appraiser points out that this estimate of value takes into account the impact of the lien of the Special Taxes. Furthermore,the value conclusions in the Appraisal are subject to the extraordinary assumption that the cost of constructing all required horizontal improvements and offsite obligations is $132,087,000, an amount which was provided by the Property Owner,is accurate,and the hypothetical condition that proceeds of the 2022 Bonds have been utilized for the designated sewer infrastructure improvements and the improvements funded by the 2022 Bonds are in place. The Appraiser understands that the construction costs are estimates based on information provided to the Property Owner by one of its proposed contractors based on development plans and cost estimates for the first 46 units and extrapolated for the rest of the proposed development. As of the Date of Value,the Property Owner has a current bid for construction of the Sewer Line. The assumptions made by the Appraiser may and sometimes do differ from development plans described by the Property Owner. 19 4857-1255-2486v10/200356-0417 A copy of the Appraisal is included in Appendix B to this Limited Offering Memorandum,and 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 is not actually realized,the value of the subject property may be less than the amount reported in the Appraisal. In any case,there can be no assurance that any portion of such property would actually sell for the amount indicated by the Appraisal. The Appraisal merely indicates the Appraiser's opinion as to the market value of the subject property as of the Date of Value and under the conditions specified therein. 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 in the future. The Appraiser has specifically consented to the inclusion of the Appraisal in this Limited Offering Memorandum, but the Appraisal itself contains language which attempts to limit the Appraiser's liability to persons who rely upon it. See Appendix B. It is a condition precedent to the issuance of the 2022 Bonds that the Appraiser deliver to the County a letter, dated the date of issuance of the 2022 Bonds, indicating that nothing has come to the attention of the Appraiser subsequent to the date of the Appraisal that would lead the Appraiser to believe that the market value of the subject property is less than $43,280,000. The appraised values differ significantly from the assessed value of the property within the District. See"—Property Values-Assessed Value"below.] Direct and Overlapping Debt; Tax Burden While a portion of the Real Property Taxes levied on the Taxable Property is used by the County to pay debt service on the County's general obligation bonds,as of the date of issuance of the 2022 Bonds there will be no indebtedness, other than those general obligation bonds and the 2022 Bonds, that is secured by any tax or assessment applicable to the Taxable Property. For purposes of levying Real Property Taxes the County assesses property at 100% of its fee simple market value, but various exemptions that have the effect of reducing the otherwise applicable assessed value are available for owner-occupied residences. The Real Property Tax Division of the County's Department of Finance is responsible for establishing assessed values and approving exemptions. There are over 140,000 taxable parcels in the County and only a limited number of property appraisers to evaluate them. As a result, property inspections by the County's appraisers are normally undertaken only at the time of construction, permitted renovations/additions or appeals,and the"Mass Appraisal Method of Valuation,"in which a computer is used to update values through a land and building indexing system, is usually used to establish values thereafter. The assessed values established as of each January 1 constitute the values which will be used during the following Fiscal Year. The County's current annual rates for the period from July 1,2021 through June 30, 2022 for its Real Property Taxes applicable to property owned by residents are $6.15 per $1,000 of value for owner occupied residential property with an approved home exemption. Residential property is taxed at a rate of$11.10 per$1,000 of value for parcels with an assessed value less than$2,000,000,for residential homes with assessed values greater than $2,000,000 is taxed at a rate of$13.60 per $1,000 of value. Properties used for commercial or industrial purposes are taxed at a rate of$10.70 per$1,000 of value. Estimated Appraised Value-to-Lien Ratio The value of the Taxable Property is significant to an evaluation of the 2022 Bonds because,in the event of a delinquency in the payment of Special Taxes, the County may only foreclose against delinquent parcels. Likewise,the ratio of the value of a parcel to its"share"of the applicable Bonds is important because it provides an indication of the extent of the relative burden imposed on each parcel by the Special Tax. As indicated above, the aggregate appraised value as of the Date of Value of the estimated property that is subject to the Special Tax 20 4857-1255-2486v10/200356-0417 was not less than $43,280,000. The ratio of that value to the $14,425,000* total principal amount of the 2022 Bonds is approximately 3.00-to-1'. However, the ratio of the appraised values of the various parcels that comprise the appraised property to their respective proportionate shares of the 2022 Bonds may vary greatly. Special Tax Delinquencies The County has not levied the Special Tax within the District. It is currently expected that Fiscal Year 2023-24 will be the first year the Special Tax is levied within the District. The District and the Island of Hawaii The District is located on the slope of the Hualalai Volcano,at Kaloko and Kohanaiki in the North Kona District on the west side of the Island of Hawaii approximately four miles from the center of Kailua-Kona. Kailua-Kona is an unincorporated community also referred to as"Kona"or"Kona Town"and is the center of commerce for the west side of the Island of Hawaii. The elevation of the sloping site ranges between 770 feet and 1,080 feet above mean sea level, and the site affords magnificent views of the Kona Coast. The District is approximately 3.5 miles southeast of Keahole International Airport,the busiest airport on the Island of Hawaii. The Hawaiian Islands were formed through volcanic activity. The chain of islands was produced from volcanic eruptions as the Pacific Plate has slowly shifted across a fixed"hot spot"temporarily located underneath them. The plate is moving in a generally northwest pattern with the oldest island, Kauai, located furthest from the hot spot,and with current activity underneath the Island of Hawaii. Volcano Lava Flow Hazard Zones have been established for the Island of Hawaii due to ongoing volcanic risks. The U.S. Geological Survey (USGS) classifies all of Hualalai, including the Property, in Zone 4 (on a scale of ascending risk 9 to 1 with Zone 9 having the least risk). The possibility of eruptions affecting land in Zone 4 is significantly lower than that for the active Kilauea and Mauna Loa volcanoes. Lava coverage is proportionally smaller, about 5 percent since 1800,and less than 15 percent within the past 750 years and is of lower risk than Zone 3 which includes the City of Hilo. The Island of Hawai`i experiences seismic activity caused by eruptive processes within active volcanoes or by deep structural adjustments due to the weight of the islands on Earth's underlying crust. The Building Codes have incorporated design requirements to address the potential seismic risks. Building design must meet all appropriate seismic standards ensuring safety for the future residents. There are no other natural or geological impediments to development of the Property. The property is not subject to flood hazard. The Federal Emergency Management Agency (FEMA) classifies the property in flood zone X(outside of the 500-year floodplain)(area panel number 155 1 660730F). The USDA Soil Conservation Service characterizes the area's soils as well-drained thin organic soils over lava bedrock. Surveys of the Property revealed no species of plant, animal or bird characterized as endangered or threatened by the U.S. Fish and Wildlife Service. The Island of Hawaii has been affected by multiple hurricanes and tsunamis in the last 100 years.Given its history it is reasonable to assume a similar risk of future hurricane and tsunami impacts will continue. A Tsunami Evacuation Zone map has been published based on research by the National Oceanic and Atmospheric Administration("NOAA")which shows affected areas located along low-lying sites surrounding the island.The Property is over 2.5 miles from the shoreline,and is outside the boundary of the Tsunami Evacuation Zone. *Preliminary,subject to change. 21 4857-1255-2486v10/200356-0417 PROPERTY OWNERSHIP AND THE DEVELOPMENT The information in this section about the Property Owner the Property Owner's plans for the development of the property within the District has been provided by the Property Owner and has not been independently confirmed or verified by the Underwriter or the County. The Underwriter and the County make no representation as to the accuracy or adequacy of the information contained in this section. The information provided in this section has been included because it may be considered relevant to an informed evaluation and analysis of the 2022 Bonds. No assurance can be given, however, that the proposed development of the property within the District will occur in a timely manner or in the configuration described in this Limited Offering Memorandum, or that the Property Owner or owners or affiliates thereof or any other future property owner will or will not retain ownership of its respective property within the District. The 2022 Bonds are secured by and payable solely from the Special Taxes and amounts on deposit in the Special Tax Fund (other than amounts in the Administrative Expense Account of the Special Tax Fund). Neither the 2022 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 County may proceed with foreclosure, but has no direct recourse to the assets of such property owner or any affiliate thereof See "SPECIAL RISK FACTORS"for a discussion of certain of the risk factors that should be considered in evaluating the investment quality of the 2022 Bonds. The Property Owner RCFC Kaloko Heights, LLC, Kaloko Heights BIA Holdings LLC and Kaloko Heights Investors, LLC owned by two members, PCCP Kehalani Kaloko,and PMRP I Kehalani Kaloko(the"Parent Entities"). RCFC Kaloko Heights,LLC, Kaloko Heights BIA Holdings LLC and Kaloko Heights Investors, LLC are collectively referred to in this Limited Offering Memorandum as the "Property Owner." The Parent Entities are majority owned and controlled by PCCP and affiliates of PCCP, a privately held real estate finance and investment management firm focused on commercial real estate debt and equity investments. The following table describes the ownership of the property within the District(the "Property"). The Property Owner acquired its interest in the property within the District in 2013, under a purchase and sale agreement resulting from a financial workout involving a prior developer (in which PCCP owned a minority interest) following the 2008-2009 financial crisis. Affiliates of PCCP had a minority equity interest in a prior developer of the Property. Zone Owner Hawaii Tax Map Keys 1 RCFC Kaloko Heights,LLC 7-3-009: 057,058,060,061,062,070 and 071 1 Kaloko Heights B IA Holdings, LLC 7-3-009: 059 2 Kaloko Heights Investors, LLC 7-3-009: 019 The Property Owner is not a developer or homebuilder, and the Property Owner and affiliated entities are planning and managing the proposed development of the property within the District with the assistance of consultants. PCCP and its affiliates are experienced in real estate development. See the caption "—Kaloko Heights Development Team." Discretionary Approvals and Entitlements The following section is a description of the discretionary approvals and entitlements obtained for the Property and the infrastructure constructed and other requirements satisfied to develop the Property. State Land Use District Classification. In 1981,the then owner of the Property applied to the State of Hawaii Land Use Commission's (the "Land Use Commission") in Docket No. A81-525 to reclassify the Property from the State Land Use ("SLU") Agricultural District to the SLU Urban District. The Land Use 22 4857-1255-2486v10/200356-0417 Commission approved the reclassification, and issued its Findings of Fact, Conclusions of Law and Decision and Order on January 19, 1983. The Decision and Order granted incremental reclassification of the section of the Property comprising Zone 1 (approximately 213.473)acres north of Hina Lani Street)to the Urban District, subject to the satisfaction of certain conditions. The Land Use Commission approved reclassification of Zone 2(approximately 195.246 acres) effective on substantial completion of on-site backbone infrastructure improvements and off-site infrastructure improvements for Zone 1. The Land Use Commission's other conditions of reclassification included: 1. Providing affordable housing by offering 10%of the houses and lots for sale at prices affordable to low and moderate income Hawai'i residents as determined by State of Hawai'i or Hawai'i County housing agencies. 2. Providing public access by constructing a connector road between Queen Kaahumanu Highway to the West and Mamalahoa Highway to the east. 3. Participating in water source development for the Property with the Department of Water Supply of the County of Hawai'i. 4. Dedicating land for public facilities to the appropriate State and county agencies. Since reclassifying the Property, the Land Use Commission approved other orders modifying the original conditions,including the following: State Land Use Commission Orders Date Approval 9/8/1983 Deletion of Condition 3 in Docket No.A81-525 relating to water source development. 6/13/1990 Modification of Condition 1 in Docket No.A81-525 removing the requirement that"prior to assigning or transferring its interest in the subject property,"that the affordable housing condition must be satisfied. 12/12/2012 Granting an extension of time through January 20,2023 to substantially complete Zone 1 onsite and offsite infrastructure improvements and apply for redistricting of Zone 2. 11/22/2016 Amended Condition 1 to allow development of rental housing to satisfy the affordable housing requirements. The status of compliance with the Land Use Commission Conditions of Approval is included in the 2020-2021 Annual Progress Report. The Property Owner's predecessors and other adjacent owners constructed the connector road between Queen Kaahumanu Highway and Mamalahoa Highway and dedicated the road to the County of Hawaii. Hina Lani Street is the portion of the connector road that bisects the Property. As referenced above,the Land Use Commission,with the support of the County of Hawaii and the State's Office of Planning, granted an extension of time through January 20, 2023 to comply with the requirement to substantially complete development of Zone 1 as a condition to reclassification of Zone 2. Construction of the Sewer Line is the only remaining off-site infrastructure improvement to be completed to enable full development of the Project. As described further below under the caption "—Compliance With Land Use Commission Conditions for Zone 2 Classification,"the Property Owner intends to apply to the Land Use Commission for a further extension to allow for substantial completion of Zone 1. 23 4857-1255-2486v10/200356-0417 In its findings for the granting of the extension in 2012,the Land Use Commission acknowledged that the following conditions have been satisfied: 1. Construction and dedication to the County of Hina Lani Street; 2. Installation and dedication to the County of water lines in Hina Lani Street and installation of street lights;and 3. Subdivision and dedication of an approximately 1.38 portion of Phase 2 for a water storage tank site. In granting the extension in 2012, the Land Use Commission acknowledged that the expenditures on infrastructure by the Property Owner and its predecessors totaled over $13,000,000 in addition to payment of approximately$9,000,000 to the County Department of Water Supply in securing the 1,500 water units. As described below, since its acquisition of the Property, Property Owner has completed the construction and dedication of a one million gallon reservoir and related waterlines to the County,potable water source development and delivery infrastructure and paid the necessary sums to provide potable water service and fire protection water for the Property. Construction of the Sewer Line is the only remaining offsite infrastructure improvement required for full build out of the Property. The construction time for the Sewer Line is estimated to be 12 months to 18 months. The Property Owner is obligated to issue a notice to proceed to the contractor within five days after the issuance of the 2022 Bonds. Compliance With Land Use Commission Conditions for Zone 2 Classification. Property Owner intends to apply in November 2022 to the Land Use Commission for a time extension to satisfy the condition for substantially completing development of Zone 1 for Zone 2 reclassification by January 20,2023. The time extension request will include information that the Council of the County of Hawai'i has approved the sale and issuance of the Series 2022 Bonds, thereby establishing that financing for construction of the final offsite infrastructure requirement for the full buildout of the Project. Other conditions of Zone 2 reclassification(e.g. construction of Hina Lani Street, water source development agreements and dedication of land for public facilities such as roads and water reservoir site)have already been completed. The Property Owner believes its request for approval of another time extension request is justified given the substantial investment that has been made to date and the near completion of all offsite infrastructure. Until the time extension request is approved, the portion of the Property within Zone 2 would remain classified in the A-5a agricultural zoning district,which would allow for the development of up to 33 homes on lots of at least five acres in size. Affordable Housing Compliance. The Land Use Commission required,as a condition of approval for the reclassification of the Property,that 10%of the total number of residential units developed be sold or rented at prices affordable to low and moderate income households. In order to address this requirement, in 2015 Property Owner began discussions with Hawaii Island Community Development Corporation ("HICDC"), a locally based non-profit affordable housing developer, to address the Property's affordable housing requirements. Property Owner and HICDC agreed that Property Owner would donate approximately 10 acres of land and 100 water units to HICDC. In 2016 the Land Use Commission approved an amendment to the affordable housing condition to permit substitution of rental housing in place of for sale housing. In 2019 and 2020 Property Owner and the Hawaii County Office of Housing and Community Development("OHCD")agreed that upon dedication of the 10 acres of land and assignment of 100 water units, OHCD would award Property Owner 99 affordable housing credits("AHC")that would allow the development of up to 990 market priced residential units in the project area. In addition to the AHC secured with the HICDC- OHCD agreements,in 2017,Property Owner had acquired four affordable housing credits that would allow the development of an addition 40 market priced units. 24 4857-1255-2486v10/200356-0417 On July 8,2019, Property Owner conveyed the 10.775 acre affordable housing site along with the 100 water credits to HICDC. OHCD then assigned 99 AHC to Property Owner, thereby satisfying the County's affordable housing requirements for the construction of up to 990 market residential units. Along with the four additional credits it acquired, Property Owner may currently construct a total of 1,030 market units within the Property at this time,subject to the re-classification of Zone 2. The 2019 and 2020 OHCD Agreements further provided that upon completion of the affordable rental project by HICDC, Property Owner would receive an additional 27 AHC that would allow development of an additional 270 market priced units. At that time, Property Owner would have sufficient AHC for the development of 1,300 proposed residential units within the Property's Phase I and Phase 2. Property Owner's Affordable Housing Agreement with the County dated May14, 2020, provides that the AHC will be used to satisfy Property Owner's affordable housing obligations to develop the Property. Hawaii County General Plan. The Hawaii County General Plan provides the long range(20+years) vision for the Island of Hawaii. The Land Use Pattern Guide("LUPAG")Map designates the Property as Low Density Urban and Medium Density Urban as the desired land uses within this planning period. This designation facilitates Single Family Residential Zoning for the Property. Hawaii County of Zoning. The Hawaii County Council approved Change of Zone Ordinance No. 83-63 (effective September 19, 1983) that rezoned the Property from Agricultural to Single Family Residential 15,000 square feet (RS-15), Single Family Residential 10,000 square feet (RS-10), Single Family Residential 7,500 square feet(RS-7.5), Multiple Family Residential 3,000 square feet(RM-3.0),Neighborhood Commercial 10,000 square feet (CN-10) and Open. This Ordinance was amended by Ordinance No. 86-91 (effective August 19, 1986). The areas of the zoning district are included in the table below: Zoning Districts Phase. 1 Area Phase 2 Area Total Area Zoning (acres) (acres) (acres) RS-7.5 27 58 85 RS-10 57 78 135 RS-15 80 58 138 RM-3.0 23 0 23 CN-20 6 0 6 Total 193 194 387 The Zoning Ordinance approved the residential zoning for Phase 1,the portion of the Property north of Hina Lani Street, and conditionally approved the zoning for Phase 2, the portion of the Property south of Hina Lani Street,effective upon reclassification of Phase 2 area by the Land Use Commission and the construction of dwelling units equivalent to twenty five percent(25%)of the number of dwelling units proposed for Zone 1. The Property Owner has complied with the following applicable zoning conditions of approval for the development of the Phase 1 area: • Secured the necessary water commitments for the Property. • Secured approval of the original and revised Site Plan. • Constructed the portion of Hina Lani Street from the Property to Mamalahoa Highway, including installation of traffic signals at the Hina Lani Street/Mamalahoa Highway intersection. • Complied with the affordable housing requirements for the Property. 25 4857-1255-2486v10/200356-0417 • Secured approval of the required Archaeological Inventory Survey and Preservation and Burial Treatment Plan, and installed interim preservation fencing around all sites identified for preservation. In addition, the Property is subject to the required conditions of approval as it implements the development activities for the Phase 1 area including: • Construct the required minimum 5-acre park prior to the completion of development of the initial 100 acres of residential zoned lands. • Implement the required interim and permanent preservation site improvements in accordance with the Preservation Plan and Burial Treatment Plan (see the caption "—Archaeological Requirements." • Construct the north-south collector road(Holoholo Street extension to the north and Kealakaa Street extension to the south)in conjunction with the development of the immediate surrounding areas. • Install underground utilities as part of the subject improvements. • Comply with all applicable zoning conditions. Kaloko Heights Site Plan. Change of Zone Ordinance 83-063 as amended contained certain conditions of approval including Condition E, approval of a Site Plan for the Property. The County of Hawaii Planning Department approved the Site Plan on September 28, 1984. Following its acquisition of the Property in 2012, Property Owner completed a more detailed topographic survey of the Property. Based on the new survey that showed terrain exceeding a 20% slope in certain locations, the Property Owner determined that the original master plan was not viable. The Property Owner retained Hart Howerton,who revised the site plan for Phase 1 north of Hina Lani Street. The Hawaii County Planning Department approved the Revised Phase 1 Site Plan on September 8,2017. The current master plan proposes construction of approximately 1,141 units, excluding the affordable units being constructed by HICDC. As part of the Site Plan Approval,the County Planning Department determined that: (1)the proposed alignment of Holoholo Street through the Zone 1 portion of the Property,(2)the proposed park area,and(3)the proposed road cross sections were consistent with the requirements of the zoning conditions. Environmental Assessment. The discretionary entitlement process for the Property did not require the preparation of an environmental assessment. However, compliance with the State of Hawaii's Environmental Protection Act (NEPA), HRS Chapter 343, required the preparation of an Environmental Assessment for the Sewer Line to connect the Property area to the County's existing wastewater transmission line in Ane Keohokalole Highway. An assessment of the installation of the Sewer Line and its potential impacts on the environment was included as part of HICDC's Final Environmental Assessment ("FEA") for the proposed Kaloko Heights Affordable Housing Project. The Hawaii Housing Finance and Development Corporation accepted the FEA and issued a Finding of No Significant Impact("FONSI")for the Sewer Line on July 10,2019. Upon publication of notice of the availability of the FONSI for the Sewer Line in the State's Environmental Notice on July 23,2019,the HEPA requirements for the construction of the Sewer Line were satisfied. Archeological Requirements. HRS Chapter 6E requires an archaeological review prior to undertaking any ground disturbance activities, including construction of infrastructure. Where archaeological sites may be present, the process starts with the preparation of an Archaeological Inventory Survey ("AIS")to identify any archeological sites and archeological resources and recommend mitigation,including preservation,data recovery or that no further work is required. 26 4857-1255-2486v10/200356-0417 All necessary approvals of the archeological plans for the Phase 1 portion of the District have been obtained. The State of Hawaii Department of Land and Natural Resources, Historic Preservation Division ("SHPD") has approved the Property's AIS, data recovery plan, archeological preservation plan and burial treatment plan for the Phase 1 portion of the District in accordance with the requirements of HRS Chapter 6E: Summary of Archeological Approvals Plan Date SHPD Approval Archaeological Inventory Survey October 2005 October 24,2005 Final Data Recovery Plan June 2006 June 15,2006 Final Preservation Plan June 2006 June 15,2006 Burial Treatment Plan October 2006 November 6,2006 The AIS for the District revealed a total of 89 archeological sites within Phase 1. Preservation was recommended for 11 non-burial sites,one preservation and burial site and six burial sites. An additional 26 sites were recommended for data recovery. Data recovery work was completed in 2006 and described in a report dated April 2009. The remaining archaeological sites require no further work based on the information provided in the AIS. For the sites recommended for preservation,the required Preservation Plan and Burial Treatment Plan were prepared and approved by SHPD. These plans identified both interim and permanent actions that are required to be undertaken. The Interim Preservation measures involve mapping and installing orange construction fencing around the sites, including a buffer area to ensure they are not impacted by construction activities. The Property Owner has installed the interim fencing for the initial development area in accordance with the Plans. In addition, site monitors must be present during any ground disturbance activities near the preservation sites. The Permanent Preservation requirements are site specific, and may include installing landscaping, signage, fencing or barriers where appropriate or other actions/improvements as required by the plans. These improvements are required to be implemented once the infrastructure improvements are completed in the vicinity of the sites. The Property Owner is required to comply with interim and permanent preservation requirements, including monitoring of heavy equipment construction activities,as development progresses through Phase 1. Wastewater Treatment. Following approval of the revised Site Plan,the Property Owner initiated the planning and design for the two initial phases of development. In 2018 the Planning Department granted Tentative Subdivision Approval for the first two residential Increments in Phase 1 of the Property. Increment Al consists of a total of 49 lots within the RS-15 zoned portion of Phase 1 while Increment Bl consists of a total of 49 lots within the RS-10 portion of Phase I. The size of these increments was limited by State Department of Health rules which allow development increments of up to 49 lots utilizing Individual Wastewater Systems ("I WS")consisting of septic tanks and related improvements, rather than connection to a wastewater treatment facility. Further subdivision creating additional lots would require the completion of an on-site wastewater treatment plant or the connection to Hawaii County's Kealakehe Wastewater Treatment Plant(WWTP). However,a DOH rule limiting the combined total unit count of the two increments to a total of 49 lots between the two increments led Property Owner to conclude that it would not be feasible to proceed with the initial development phases unless the connection of the Sewer Line to the Kealakehe WWTP were constructed. A connection to the Kealakehe WWTP would be necessary for full development of the Property as it would be impractical to locate,construct and operate a wastewater treatment plant to serve the Property on site. In 2019, Property Owner and the County executed a Memorandum of Agreement(the"MOA")for the extension of the existing wastewater transmission line to provide wastewater service for the entire Property. The MOA provided the necessary assurance that the entire Property could be served by the Kealakehe WWTP. In addition,on March 28,2019 County Council approved Resolution 86-19 authorizing the extension of the public 27 4857-1255-2486v10/200356-0417 wastewater treatment system and on November 18, 2020 the Property Owner received final approval of wastewater transmission line construction plans by various County agencies(DEM,DWS,DPW). Description of the Property The Property originally consisted of approximately 410.9 acres planned for development of up to 1,433 residential units and limited commercial uses within a private, gated community. The area of the Property has subsequently been reduced by the subdivision, development and dedication of the portion of Hina Lani Street right-of-way extending through the District and the dedication of an approximately 1.0 acre site to the Hawai'i County Department of Water Supply ("DWS") for future water service use. In addition, in 2020 the Property Owner donated an approximately 10.775 acre site to HICDC for the development of an affordable rental housing project. This 10.775 acre site is not a part of the District. These exclusions have reduced the area of the Property for the Project to approximately 387 acres. Development of the Property has not commenced and the Property Owner does not currently plan to begin development activities until such time that the Sewer Line is complete. Below is a description of the Property Owner's current development plans, some or all of which may change due to changes in market dynamics or other conditions in the future. The Property is currently planned to be a private, gated residential community. While the existing entitlements allow the development of up to 1,433 residential units(including the affordable housing units),the Property's current master plan proposes to develop approximately 1,141 units in two phases: Zone 1 or Phase 1, consisting of approximately 193 acres north of Hina Lani Street, and Zone 2 or Phase 2 consisting of approximately 194 acres south of Hina Lani Street. The two zones correspond to the Land Use Commission incremental redistricting of the Property, described above and are also coterminous with Tax Zone 1 and Tax Zone 2 established under the Rate and Method of Apportionment. The Property Owner proposes to develop single family residential home sites with minimum lot sizes ranging from 7,500 to 15,000+ square feet (RS-7.5, RS-10 and RS-15 zoning districts) and multi- family residences with a maximum density of 14.5 units per acre(RM-3.0 zoning district). While the Property's zoning would allow commercial use (CN-20 zoning district) on a small portion of the Property, no commercial development is planned for the Property. Substantial onsite infrastructure will be required in order to fully develop the Property as currently planned. See the caption"—Property Owner's Development Expectations." The Property's Owner's planned community amenities include an approximately five acre private park and a community center, within Phase 1. No other community amenities are planned. Internal roads will be privately owned and maintained by the Homeowner's Association. The Property Owner's conceptual development plan for Phase 1 is depicted below. 28 4857-1255-2486v10/200356-0417 1100' Vis* qqr ' t100'g `°l I _ N1„50.nlI the4. � 4 t050' 050 itiuou,,� { I 1050 ' ' :7°rr S ,, y �."',� a 1 ' f s-.3at"c."� 'f , 4.. . .\t`A^i+R.-t • , 1----1 - .. 1000 �" t T 1 .1., ` ., s was m �. .J �' " 'i( 'u 1 J d �« - "-, a� -',s.4, , p ,,..4•,,k a 9 6 . IC " :450' �, ,,L.- tp_��"--' " # 4i`.t' € "+'- ''J00 Phare Al-:4 viit, ,,'} * ,., 1 „ t x;, ;I �` "r Sales Center 1_' " *4 .1 tea.. e.. n�. �r .t 4 r s " ���,,��e °d.650' e.n m,.,u 4s^a+.e b.. 900 nr#sa e .; + fi . _: `' °f` r ,77„-,f4-44, i. � ' "spm a850 '�tap .:. ! i � 4 t- '�i ) 'a py ��1� Phase BI-A ..Jw �, e Park v;74,,,... ..,,,,,,,„ "�. 'w a�� .�+� e r � `" 850 .1 ,r8 ,.o ' ', '800' t,_ 1 ' 30, T; ',4:, ' e'"" ' /4aVi7 1/ 800 , ,' '-r'�., .,,,4 Affordable 750' I Housing Site ,.� I-oloholo St set .,. '. -_.. 'S0 P.+ludnn I'ra11 ,it r n w«z wan I•..imt�tiaw+R:'t'.:1 ni HAiT. RTOY KALOKO HEIGHTS Exhibit 3 �P1.�t Master Plan Y.,1.:.»n. ......,.......................y„„.......-:..„..... ,.u.._-.>..wk....",.....,..,.., hems.Xawrlf .ku:'tt.!h.'Y.l!i The table below summarizes the Property Owner's proposed product mix. Kaloko Heights CFD Phase 1 Residential Unit Count Housing Product Type Total Units Total Acreage Single family RS-15 141 75 Single family RS-10 153 60 Single family RS-7.5 77 26 Multi-family Townhomes 150 22 Road Right of Way -- 4 Park and Community Center -- 6 Zone 1 Total Units 521 193 Kaloko Heights CFD Phase 2 Residential Unit Count(') Housing Product Type Total Units Total Acreage Single family RS-15 129 60 Single family RS-10 248 65 Single family RS-7.5 243 59 Future Park Area 5 Future Kealakaa St. Extension 5 Zone 2 Total Units 620 194 (I) Developed Property in Zone 2 is not taxable pursuant to the Rate and Method of Apportionment,and any Final Mapped Property and Undeveloped Property may be released from the lien of the Special Taxes under certain 29 4857-1255-2486v10/200356-0417 conditions. See the caption "SECURITY FOR THE 2022 BONDS—Special Taxes" and Appendix A – "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX." The Property Owner states that all discretionary permits and approvals necessary to develop the Property have been obtained,subject to the re-classification of Zone 2 described above under the caption"—Discretionary Approvals and Entitlements." The Property Owner must complete the Sewer Line (which constitute the Improvements to be financed with a portion of the proceeds of the 2022 Bonds) in order to obtain the final ministerial permits necessary to initiate development and marketing of the Property. The additional subdivision approvals are required to sell individual lots within Zone 1 are administrative or ministerial approvals. The Property Owner must either construct the required subdivision improvements or post a bond for completion of the subdivision improvements in order to obtain final subdivision approvals. See the caption "—Property Owner's Development Expectations." Development Status The proceeds of the 2022 Bonds are expected to be used to finance construction of the Sewer Line within portions of Hina Lani Street and Ane Keohokahole Highway to connect to the County's existing wastewater transmission line and collection system in Ane Keohokalole Highway near the County's West Hawaii Civic Center. Completion of the Sewer Line will provide County wastewater treatment service to the entire Property. The County Department of Environmental Management has approved the construction plans for the Sewer Line. Construction of the Sewer Line is the final offsite infrastructure improvements required for the full build out of the Property. When it acquired the Property in 2013, Property Owner began the process of satisfying entitlement requirements. This work included resolving grading permit violations by the previous developer and completion of a partially constructed 1.0 million gallon water reservoir at an off-site location owned by DWS. In 1982,the original developer of the Property entered into a Kona Source Agreement with DWS that provided for the development of a new water source in North Kona as well as for the construction of certain improvements including a transmission line through Hina Lani Street as well as the construction of the aforementioned 1.0 million gallon reservoir. Property Owner dedicated the reservoir to DWS upon its completion. Following dedication of the reservoir and other required improvements and the payment of water commitments in excess of water facilities charges, on March 13, 2017, DWS confirmed that water facilities charges had been paid in full and assigned 1,494 units in addition to then existing seven units of water previously assigned to the lands comprising Phase 1 and Phase 2 of the Property or a total of 1,501 water units. Property Owner has assigned 100 water units of these 1,501 water units to HICDC's affordable housing project, leaving 1,401 water units available for the development of the Phase 1 and Phase 2 lands. These water units may be allocated to lots developed on the Property as development progresses, and no further facilities charges are required by DWS for potable water service. Other than the proposed Sewer Line,all other major off-site infrastructure required for the Property as conditions of approval by the Land Use Commission and County Change of Zone Ordinance for the development of the Property have been completed, including construction of the Hina Lani Street improvements and water storage and transmission improvements.These improvements include: • Construction of a portion of Hina Lani Street providing access to the Property • Installation of required water transmission lines within Hina Lani Street • Installation of traffic signals at the intersection of Hina Lani Street and Mamalahoa Highway • Construction of an electrical substation 30 4857-1255-2486v10/200356-0417 • Construction of an off-site 1.0 million gallon water reservoir • Water commitments to serve 1,501 units • Issuance of 103 Affordable Housing Credits which allows the development of up to 1,030 market priced units within the Property. In addition, upon HICDC's completion of its affordable housing project, Property Owner will obtain an additional 27 Housing Credits allowing an increase of 270 market units to the currently allowed 1,030 market units for a total of 1,300 market rate units. The Property Owner and its predecessors have been responsible for the construction of over$13 million in off-site infrastructure as described below, including roads, water and electrical improvements to provide access and utility service to the Property,as well as the payment of$9 million in water facility fees. Category Description Expenditures Roads Hina Lani Street improvements, including Hina Lani $ 9,000,000 Street/Mamalahoa Highway intersection Water Construction of 1.0 MG reservoir and dedication of 3,500,000 improvements to Department of Water Supply Water Facilities Fee Water facilities fees and excess water commitment fees paid to 9,000,000 Department of Water Supply Electrical Construction of 10 MVA SUBSTATION 515,000 Total $22,015,000 To date,the Property Owner has expended monies for the planning, design and permitting of the Sewer Line,as well as all costs of the County to establish the formation of the CFD. GBI Holding, Inc.,an affiliate of the wastewater transmission line contractor, will provide interim financing for the construction of the Sewer Line improvements, upon the County's issuance of the 2022 Bonds. Proceeds of the 2022 Bonds are expected to thereafter cover the direct costs of construction and related costs of permits,engineering,and other soft costs. The Property Owner has entered into a construction contract for the construction of the Sewer Line with a stipulated contract price of$9,656,566. The Property Owner has deposited an amount equal to 15% of the contract price for the construction of the Sewer Line) with the Trustee in accordance with the requirements of the Acquisition Agreement to fund the construction contingency for the Sewer Line. The Property Owner will not begin construction of the Sewer Line prior to the issuance of the 2022 Bonds,and does not plan to start land development of on-site improvements needed for the development of the Property prior to the completion of the Sewer Line. Completion of the Sewer Line is also necessary for the HICDC to complete construction and allow occupancy of its affordable housing project adjacent to the District. There are no existing financial encumbrances on the Property. Interim financing of the Sewer Line improvements will be secured by a mortgage on the Property,junior in priority to the prior lien of the special taxes to be assessed in order to pay for the CFD Bonds. Proceeds of the CFD Bonds are anticipated to reimburse Property Owner for the costs associated with the construction of the Sewer Line and related expenses, at which time the interim financing mortgage will be released. Kaloko Heights Development Team The Property Owner's development team consists of Phil Russick, Mark Meyer, Development Consultant William Moore and Attorney Thomas Yeh. Mr. Meyer, Mr. Moore and Mr. Yeh are consultants to the Property Owner. 31 4857-1255-2486v10/200356-0417 Phil Russick has 25 years of extensive experience in the financing and development of residential and commercial real estate. Mr. Russick is a Managing Director at PCCP,LLC,a privately held real estate finance and investment management firm and has an ownership interest in the Property Owner. Mark Meyer is President of Haas&Haynie Corporation. Mr.Meyer has been acting as the development manager for the Property since June 2016. Mr. Meyer has worked with PCCP its PCCP affiliates on numerous development deals - some as a partner and some as a consultant - since 2006. He recently led the entitlement, planning and development of the 400-acre Carmel Creek master planned community in the Austin, TX market for a PCCP affiliate, taking the property from raw land through successful buildout and sale of over 600 residential lots and 200+acres of commercial property. William L. Moore is President of William L. Moore Planning, Inc., a Hawai'i Island based planning and development coordination firm that has been providing planning services to landowners, developers and government agencies since it was established in 1992. Mr. Moore been working with the Kaloko Heights development team since 2013 with respect to land use entitlement, development strategy and agency coordination services. Mr. Moore holds a BA in Economics from Beloit College and a Graduate Diploma in Economics from York University. Mr. Moore previously served as Deputy Planning Director of the County of Hawai'i Planning Department in 1989 – 1990, as well as in responsible positions in the County's Office of Housing and Community Development and the State of Hawaii's Department of Hawaiian Home Lands. He presently serves as Vice President of Kohala Ranch Development Corporation and Kohala Ranch Water Company,where he has been in charge of operations and project management, since 2005. Thomas Yeh, Esq. was retained by the Property Owner in 2013 as local counsel to assist the Property Owner with preserving and obtaining land use entitlements for the development, securing water commitments, and general real estate and business matters in furtherance of the development. Mr.Yeh has been practicing law since 1979. He is currently of counsel to the Law Offices of Yeh&Kim,LLC.He previously served as a Deputy Corporation Counsel for the County of Hawaii from 1981 through 1987. In that capacity he represented and advised County personnel, agencies and commissions, including the Planning Department, Planning Commission and Board of Appeals in various matters. Since entering private practice in 1987, Mr. Yeh has concentrated in real property law including administrative law and land use and zoning matters. Property Owner's Development Expectations The County has approved construction plans for the main entry road to Phase 1 and the initial 22 lots in Increment A 1 and 24 lots in Increment B1 of Phase 1. The Property Owner has stated that it intends to commence construction of onsite infrastructure improvements within Increment Al and Increment B1 of the Property (as described below),including construction of interior wastewater transmission lines,potable water lines,electrical and telecommunication systems as well as development of additional access roads and development, maintenance and preservation of various archeological and cultural preservation sites,parks,and open space and the delivery of finished lots after construction of the Sewer Line is completed, which is currently expected in late 2023 to early 2024. The site improvements for Increments A 1 and B1 described above are anticipated to take approximately eight to twelve months to complete. Construction of these subdivision improvements is currently anticipated to be completed by October 2024. Property Owner may construct the subdivision improvements in order to obtain final subdivision approval for Increment A 1 and B1 or post a bond for completion of the subdivision improvements in order to obtain final subdivision approval prior to constructing the improvements. The Property Owner and affiliated entities are planning and managing development of the property within the District with the assistance of consultants. See the caption"—Kaloko Heights Development Team." In particular, the Property Owner intends to sell to or joint venture with local Hawaii island developers and home builders to build out homes. Home Construction is expected to commence upon completion of the Increment Al and B1 lots in late 2024 to early 2025. 32 4857-1255-2486v10/200356-0417 The Property Owner has indicated that its initial development phase will consist of the construction and sale of custom homes as shown in the table below. Description of Initial Phase 1 Development Increments Property Owner's Increment Units Lot Type Estimated Sales Price Al 22 Custom homes on $2,000,000 15,000+sf lots B 1 24 Custom homes on $1,600,000 10,000+sf lots The Property Owner expects the custom homes and townhouses to include high level amenities and finishes commensurate with the overall quality of homes usually associated with resort communities. The land plan features primarily single-loaded streets with driveway entries from uphill into most home sites, thereby maximizing and enhancing the big backyard/lanai ocean sunset views that the prime hillside location affords. The homes are expected to be designed to take full advantage of the extensive vistas. The custom homes and townhomes are currently envisioned to range in square footage, excluding garages,depending on the lot size and topography as shown in the table below: Average Residence Size Lot Size/Product (Square Feet) 7,500+Square Feet(RS-7.5) 1,400 to 2,200 10,000+Square Feet(RS-10) 1,800 to 2,600 15,000+Square feet(RS-15) 2,200 to 3,000 Townhouses 800 to 1,600 Future onsite infrastructure and improvements to be constructed to serve potential development increments of Phase 1 development area include construction of the Holoholo Street improvements extending from Hina Lani Street to the north boundary of Phase 1. These future road improvements will be constructed in conjunction with the development of the areas fronting these road alignments. In addition,development of the future increments will include construction of sewer lines,potable water lines,electrical and telecommunication systems as well as development of additional access roads and development, maintenance and preservation of various preserves,parks,and open space. Based on cost estimates made as of March 18, 2022, the Property Owner estimates that land development and on-site infrastructure costs for the 521 lots in Phase 1 will be approximately $132,000,000. The Property Owner estimates the land development and infrastructure costs required for the delivery of the first 46 units in increments A 1 and BI to be approximately $15.3 million. The Property Owner does not presently have funding in place to pay for these costs. The Property Owner expects to fund land development from a combination of equity contributions from its members, joint ventures, land sales and conventional bank financing, as the Property is not presently encumbered by any mortgage. However,there can be no assurance that the Property Owner will obtain bank financing or capital contributions necessary to complete the required infrastructure. The Parent Entities currently have approximately$4.5 million cash on hand,some of which will be used to fund Property Owner's obligation to deposit a contingency amount under the Acquisition Agreement. Detailed development plans for Phase 2 have not yet been determined and will be guided by future market and economic conditions. On-site infrastructure improvements necessary to serve Phase 2 include construction of the Kealakaa Street Extension improvements in conjunction with development of adjacent properties, construction of additional wastewater transmission lines, potable water improvements and telecommunication services,development of additional access roads,community center and parks,maintenance 33 4857-1255-2486v10/200356-0417 and preservation of various preserves and open space. Furthermore, the land use classifications and zoning approvals for the development of Phase 2 with single-family homes is conditioned upon the construction of the Sewer Line and certain conditions related to the development of Phase 1. See the caption "—Discretionary Approvals and Entitlements." There can be no assurance that the Property in the District will ever be fully built-out or that at full build-out the Property will contain approximately 1,141 units or that plans for development will not change as a result of market and/or other economic conditions. CERTAIN RISK FACTORS Introduction The 2022 Bonds will be the first bonds issued for a community facilities district in the County, and the County is aware of only one other community facilities district in the State for which bonds have been issued. Thus, at this point, there is no judicial precedent construing applicable State and County laws pertaining to (i)community facilities districts, (ii) bonds issued on their behalf or (iii)special taxes levied to secure the payment of debt service on such bonds; nor is there extensive governmental experience pertaining to the administration of community facilities districts, special taxes or bonds secured by such taxes. Moreover, the Property will be one of the first large scale development projects in the State to market property on which a special tax has actually been levied pursuant to HRS Section 46-80.1. The various risk factors discussed below should be considered in this context. The principal source of payment of debt service on the Bonds will be the Special Taxes paid with respect to the Taxable Property. As discussed under"SECURITY FOR THE 2022 BONDS,"the Special Tax is to be levied annually against all such Taxable Property either at the maximum rates authorized by the Rate and Method of Apportionment or at such lower rates as are determined sufficient to raise the funds necessary to comply with the agreements, conditions, covenants and terms contained in the Indenture. The Special Taxes are to be collected on the tax roll of the County at the same time and in the same manner as Real Property Taxes are collected. The annual levy of the Special Taxes cannot be made at tax rates higher than the Maximum Special Tax rates even if those rates are insufficient to comply with the agreements, conditions, covenants and terms contained in the Indenture. See discussions below under"—Levy of the Special Tax"and"—Collection of the Special Tax." Risks of Real Estate Secured Investments Generally The Owners of the 2022 Bonds will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (i)adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the District,the supply of or demand for competitive properties in such area, and the market value of residential property or buildings and/or sites in the event of sale or foreclosure; (ii)changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangered species and hazardous materials) and fiscal policies;(iii)natural disasters(including,without limitation,earthquakes,fires and floods),which may result in uninsured losses; and (iv) high rate of inflation, rising interest rates and other economic trends that adversely affects consumers,whether cyclical or resulting from geopolitical events. No assurance can be given that the Property Owner, or any future builders or any future homeowners within the District will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See"—Bankruptcy and Foreclosure"below,for a discussion of certain limitations on the County's ability to pursue judicial proceedings with respect to delinquent parcels. 34 4857-1255-2486v10/200356-0417 Limited Obligation to Pay Debt Service The County has no obligation to pay debt service on the Bonds in the event collections of the Special Tax are insufficient for such purposes other than from additional amounts, if any,on deposit in the Special Tax Fund(other than in the Administrative Expense Account therein)or funds derived from the foreclosure sale of parcels on which levies of the Special Tax are delinquent; nor is the County obligated to advance funds to pay such debt service. Failure to Develop Property Development of property within the District may be subject to unexpected delays, disruptions and changes which may affect the willingness and ability of the Property Owner,or any other future property owner, to pay the Special Tax when due. Land development is subject to comprehensive federal, State and local regulations. Approval is required from various agencies in connection with the layout and design of developments,the nature and extent of improvements,construction activity, land use,zoning,school and health requirements,as well as numerous other matters. There is always the possibility that such approvals will not be obtained or, if obtained, will not be obtained on a timely basis. Failure to obtain any such agency approval or satisfy such governmental requirements would adversely affect planned land development. Development of land in the District is also subject to the availability of water. Finally, development of land is subject to economic considerations. The proposed development of the Property has been considered by multiple property owners for over 40 years. As of the date of this Limited Offering Memorandum,the Property Owner and its predecessors have completed construction of off site roadway,water and electrical transmission improvements to the Property,but the Property Owner has not commenced construction of any onsite improvements within the District(other than the completion of Hina Lani Street through the Property,which was completed by a previous property owner). The Property Owner does not plan to commence construction of onsite infrastructure improvements, including mass grading, internal streets to connect to Hina Lani Street, drainage improvements and internal transmission lines to connect to the offsite water transmission line and the Sewer Line with respect to the initial 46 lots within Increments A 1 and B1 within Phase 1 until such time as the Sewer Line is complete. Home construction on the initial 46 lots is not expected to commence until late 2024 early 2025 after the end of the capitalized interest period. Although the Property Owner previously solicited bids for rough grading the initial 46 lots, other than for the Sewer Line, as of the date of this Limited Offering Memorandum, the Property Owner has no current bids for,and has not obtained financing for construction of,any on-site infrastructure improvements Interest on the 2022 Bonds is anticipated to be capitalized through ,20_. Undeveloped or partially developed land is inherently less valuable than developed land and provides less security to the owners of the 2022 Bonds should it be necessary for the County to foreclose on the property due to the nonpayment of the Special Tax. The failure to complete development in the District as planned, or substantial delays in the completion of the development due to litigation or other causes may reduce the value of the property within the District and increase the length of time during which the Special Tax will be payable from undeveloped property, and may affect the willingness and ability of the owners of property within the District, including the Property Owner,to pay the Special Tax when due. There can be no assurance that land development operations within the District will not be adversely affected by future deterioration of the real estate market and economic conditions or future local, State and federal governmental policies relating to real estate development, an increase in mortgage interest rates, the income tax treatment of real property ownership,the national economy,or other economic trends that adversely affects consumers, whether cyclical or resulting from geopolitical events. A slowdown of the development process and the absorption rate could adversely affect land values and reduce the ability or desire of the property owners to pay the Special Tax. If the Special Tax is not paid,there could be a default in the payment of principal of,and interest on,the 2022 Bonds when due. 35 4857-1255-2486v10/200356-0417 Owners of 2022 Bonds should assume that any event that significantly impacts the ability to develop land in the District could cause the property values within the District to decrease from those estimated by the Appraiser and could affect the willingness and ability of the owners of land within the District, including the Property Owner,to pay the Special Tax when due. The County expects to levy the Special Tax on Taxable Property within the District beginning in Fiscal Year 2023-24. Property without vertical improvements is less valuable per unit of area than property with completed vertical improvements, especially if there are no plans to develop such land or if there are severe restrictions on the development of such land. Undeveloped property also provides less security to the owners of the 2022 Bonds should it be necessary for the County to foreclose on such property due to the nonpayment of the Special Tax. Furthermore, an inability to develop the land within the District as currently proposed will make the owners of the 2022 Bonds dependent upon timely payment of the Special Tax levied on undeveloped property. A slowdown or stoppage in the continued development of the District could reduce the willingness and ability of the Property Owner,or any other future property owner within the District,to make Special Tax payments on property that they own and could greatly reduce the value of such property in the event it has to be foreclosed upon. See"—Property Values." Impact of Economic Conditions on the Development in the District Certain events and factors which negatively affect the regional,State and national economies could have an adverse effect on the pace at which the merchant builders are able to complete and sell homes and demand by and the ability of individuals to purchase homes within the District. Such events and factors could include rising inflation and interest rates,persistent supply chain issues,further impacts of the COVID-19 pandemic and global market instability caused by the war in Ukraine. Any adverse impact of the foregoing and other economic factors on the projects in the District and the real estate market in general cannot be predicted. Increasing Mortgage Interest Rates Between approximately November 2021 and October 2022, mortgage interest rates for 30-year mortgage loans have increased from approximately 3.1% to over 6.0%. Increases in mortgage interest rates could have a negative impact on the estimated absorption rates of the planned for-sale residential units in the District described herein. With respect to entry-level households, increased mortgage interest rates may adversely impact the affordability of homes and may increase mortgage payment levels for owning a lower- priced home relative to renting a residence,thereby making purchasing less attractive. With respect to move-up households, higher mortgage interest rates may impact the desire of current homeowners to move from their present home due to the fact that their present home likely has a relatively low mortgage interest rate. In addition, in such instances,a new home would likely have a higher interest rate on a new mortgage loan as well as a higher purchase price and property taxes. Such considerations may decrease the desire for move-up households to purchase a new home. The foregoing factors could reduce demand for and/or the ability to achieve the sales prices of the planned for-sale homes within the District as described herein. Levy of the Special Tax The annual levy of the Special Tax is subject to the maximum tax rates authorized. The levies cannot be made at higher rates even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax,together with other available funds,will not be sufficient to pay debt service on the Bonds. Other funds which might be available include funds derived from the payment of delinquent Special Taxes and funds derived from the tax sale or foreclosure and sale of Taxable Property on which levies of the Special Tax are delinquent. Developed Property within Zone 2 is not taxable pursuant to the Rate and Method of Apportionment, and any Final Mapped Property and Undeveloped Property within Zone 2 is only subject to the Special Tax in the event of delinquencies within Zone 1. Furthermore,the Final Mapped Property and Undeveloped Property 36 4857-1255-2486v10/200356-0417 within Zone 2 may be released from the lien of the Special Taxes under certain conditions. See the caption "SECURITY FOR THE 2022 BONDS—Special Taxes" and Appendix A — "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX." Collection of the Special Tax To enable the County to pay debt service on the Bonds,it is necessary that the Special Tax levied against the Taxable Parcels be paid in a timely manner. If the Special Tax is not paid on time,the County has established the Reserve Account in the amount of the Reserve Requirement to pay debt service on the Bonds. The Indenture provides that the Special Tax is to be collected in the same manner as Real Property Taxes are collected and is to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for Real Property Taxes in County Code Chapter 19. Pursuant to those procedures, if taxes are unpaid for a period of three years the County is required to commence foreclosure proceedings. However, in the Indenture the County covenants to commence foreclosure proceedings sooner than required by County Code Chapter 19 under certain circumstances. See "SECURITY FOR THE 2022 BONDS—Covenant for Foreclosure." The County may be unable to make full or timely payment of debt service on the Bonds if property owners in the District fail to pay installments of the Special Tax when due, if the Reserve Account is depleted, or if the County is unable to sell foreclosed parcels for amounts sufficient to cover the delinquent installments of the Special Tax. Property Values [TO BE UPDATED BASED ON UPDATED APPRAISAL] The value of the property within the District is a critical factor in determining the investment quality of the 2022 Bonds. If a property owner is delinquent in the payment of the Special Tax,the County's only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to obtain funds to pay the Special Tax. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, fires or floods, stricter land use regulations,delays in development or other events will adversely impact the security underlying the Special Tax. See"SECURITY FOR THE 2022 BONDS." The Appraisal does not reflect any possible negative impact which could occur by reason of future slow or no growth voter initiatives, an economic downturn, any potential limitations on development occurring due to time delays,an inability of any landowner to obtain any needed development approval or permit,the presence of hazardous substances or other adverse soil conditions within the District,the listing of endangered species or the determination that habitat for endangered or threatened species exists within the District, or other similar situations. Prospective purchasers of the 2022 Bonds should not assume that the land within the District could be sold for the amount stated in the Appraisal at a foreclosure sale as a result of delinquencies in the Special Tax. In arriving at the estimate of market value by ownership,the Appraiser assumes that any sale will be sold in a competitive market after a reasonable exposure time;the Appraiser also assumes that neither the buyer or seller is under duress, which is not always true in a foreclosure sale. A critical assumption in the Appraisal is the assumed costs of the required infrastructure within the District. The Property Owner provided the Appraiser with a costs estimate for the remaining construction costs totaling $132,087,000, related to certain horizontal improvements and offsite obligations. The Appraiser understands that the construction costs are estimates based on information provided to the Property Owner by one of its contractors based on development plans for the first 46 units and extrapolated for the rest of the proposed development. See APPENDIX B—"APPRAISAL"for a description of other assumptions made by the Appraiser and for the definitions and limiting conditions used by the Appraiser. Any event which causes one of the Appraiser's assumptions to be untrue could result in a reduction of the value of the land within the District below that estimated by the Appraiser. 37 4857-1255-2486v10/200356-0417 No assurance can be given that any bid will be received for a parcel with delinquencies in the Special Tax offered for sale at foreclosure or,if a bid is received,that such bid will be sufficient to pay all delinquencies in the Special Tax. See"SECURITY FOR THE 2022 BONDS—Covenant for Foreclosure." Purchases and Transfers of 2022 Bonds Restricted to Qualified Purchasers As described in the "NOTICE TO INVESTORS"that precedes the Table of Contents of this Limited Offering Memorandum and under the caption"THE 2022 BONDS—Limited Offering of 2022 Bonds,"the 2022 Bonds are to be sold(including in secondary market transactions)only to Qualified Purchasers. The Indenture contains provisions limiting transfers of the 2022 Bonds and beneficial interests therein to Qualified Purchasers. The face of each 2022 Bond will contain a legend indicating that the 2022 Bond is subject to transfer restrictions as set forth in the Indenture. The 2022 Bonds will be issued in minimum denominations of$100,000 and any integral multiple of$5,000 in excess thereof. In light of these restrictions, purchasers should not expect that there will be an active secondary market for the 2022 Bonds. There can be no assurance that there will be a secondary market for the purchase or sale of the 2022 Bonds, and there may be no market for the 2022 Bonds depending upon prevailing market conditions, the financial condition or market position of firms who make up the secondary market and the financial position and results of operations of the Borrower. The Underwriter is not obligated to create a secondary market for the purchase or sale of the 2022 Bonds. Investors should be aware that they might be required to bear the financial risks of this investment for an indefinite period of time and/or that to the extent there is a secondary market for the 2022 Bonds, the secondary market price of the 2022 Bonds may be affected as a result of the restrictions. If a trading market for the 2022 Bonds develops, future trading prices of such 2022 Bonds will depend on many factors, including, among other things,prevailing interest rates and the market for similar instruments. Depending upon those and other factors,the 2022 Bonds may trade at a discount from their principal amount. Mandatory Redemption from Prepayments of Special Taxes The Special Taxes are subject to prepayment in whole or in part. Such prepayments could be made by any of the owners of any of the property within the District including the Property Owner, any builders or any individual owner; and they could also be made from the proceeds of bonds issued by or on behalf of an overlapping community facilities district. Any such prepayments are likely to result in a redemption of Bonds. See"THE 2022 BONDS—Redemption." The redemption of Bonds that were purchased at a price greater than the applicable redemption price could reduce the otherwise expected yield on such Bonds. Exempt Properties Up to 60 acres of certain types of properties are exempt from the Special Tax in accordance with the Rate and Method of Apportionment. In addition, under the terms of the Rate and Method of Apportionment properties owned by the County or entities of the federal or state government are exempt from the Special Tax. Notwithstanding the foregoing, leasehold estates in such property held by non-exempt persons or entities are subject to the Special Tax. Since Public Property is not subject to the Special Tax, the Rate and Method of Apportionment requires that, after the limit of 60 acres of other exempt property has been reached,the Special Tax applicable to any additional property that is expected to become Public Property must be prepaid in full prior to its transfer or dedication to a governmental agency. However,the enforceability of this requirement is not completely clear. There can be no assurance that the County will be aware of proposed transfers of property within the District to other governmental agencies. Moreover, it is not clear what recourse would be available to the County if an otherwise taxable property within the District were transferred to a governmental entity without the prior prepayment of the applicable Special Tax. With respect to properties in which federal agencies have an interest, see"—FDIC/Federal Government Interests in Properties"below. 38 4857-1255-2486v10/200356-0417 Proceedings to Reduce or Terminate the Special Tax Pursuant to County Code Chapter 32, the County Council is authorized to change the term of an established district,the authorized special improvements,or the rate or method of apportionment of a special tax or to require the levy of a new special tax, but, so long as the district or proceeds of the special tax are being utilized to retire any debt incurred pursuant to County Code Chapter 32, unless the Council determines that the reduction in the term of that district or the reduction or termination of that tax(as the case may be)would not interfere with the timely retirement or otherwise impair the security of that debt. Thus, a variety of changes to the Rate and Method of Apportionment could be considered and approved by the County Council pursuant to County Code Chapter 32 which might change the mix of the Special Taxes levied within the District as long as the County Council determines that such changes would not interfere with the timely payment of debt service on the Bonds. In the Indenture,the County determines that a reduction in the Maximum Special Tax authorized to be levied on Taxable Property in the District below the levels currently provided in the Indenture would interfere with the timely retirement of the Bonds. The County determines it to be necessary, in order to preserve the security for the 2022 Bonds,to covenant,and,to the maximum extent that the law permits it to do so,the County has covenanted, that it will take no action that would discontinue, diminish or cause the discontinuance of the Special Tax levy or the County's authority to levy the Special Tax, including the initiation of proceedings to reduce the Maximum Special Tax rates for the District, or otherwise reduce the aggregate amount of Special Taxes levied in the District, unless (i) the Special Taxes on Taxable Property in Tax Zone 2 shall have been deemed satisfied and cancelled in accordance with the Rate and Method of Apportionment, and(ii)the County (A) receives a certificate from the Special Tax Administrator that, on the basis of the parcels of land and improvements existing in the District as of July 1 of the Fiscal Year preceding the reduction, the maximum amount of the Special Tax which may be levied on then existing Developed Property in each Fiscal Year will equal at least 110%of the sum of the estimated Administrative Expenses and Annual Debt Service in that Fiscal Year on all Bonds to remain Outstanding after the reduction is approved and(B) finds that any reduction made under such conditions will not adversely affect the interests of the Owners of the Bonds. In addition,the County agrees that any reduction of the Maximum Special Tax rates shall be subject to the prior written consent of the Property Owner until such time as the costs of facilities acquired from or constructed by the Property Owner are no longer payable from the proceeds of Special Taxes under the provisions of the Acquisition Agreement. Maximum Special Tax Within the limits of the Maximum Special Tax, the County may adjust the Special Tax levied on all property in the District to provide an amount required to pay Annual Debt Service on the Bonds,and the amount, if any, necessary to cure delinquencies and replenish the Reserve Account to an amount equal to the Reserve Requirement and to pay all Administrative Expenses. However, the amount of the Special Tax that may be levied against any property in the District is subject to the Maximum Special Tax applicable to that property. There is no assurance that the Maximum Special Tax on the property in the District will be sufficient to pay the amounts required to be paid by the Indenture at all times. Furthermore, pursuant to the Rate and Method of Apportionment,the Special Tax will only be levied in Tax Zone 2 on Final Mapped Property and Undeveloped Property in the event of delinquencies in Tax Zone 1. See "SECURITY FOR THE 2022 BONDS — Special Taxes." Administrative Expenses p s As a general rule, the amount of Special Taxes that may be deposited in the Administrative Expense Account in any Fiscal Year prior to (i)depositing in the Interest Account and the Principal Account the debt service coming due on the Bonds in that Fiscal Year and (ii)restoring the Reserve Account to the Reserve Requirement, is limited to the Administrative Expense Budget Amount which is determined by the County and confirmed by the Special Tax Administrator each year. If the County incurs Administrative Expenses in collecting delinquent Special Taxes that exceed the sum of(i)the amount included in the Administrative Expense 39 4857-1255-2486v10/200356-0417 Budget Amount for such purpose and(ii)any unencumbered funds in the Administrative Expense Account, then amounts required to pay such Administrative Expenses may be transferred to the Administrative Expense Account prior to the funding of debt service and the restoration of the Reserve Account. See"SECURITY FOR THE 2022 BONDS—Special Taxes." Thus,it is possible that,if the County were to be faced with unexpectedly high Administrative Expenses in collecting delinquent Special Taxes, transfers to the Administrative Expense Account could result in insufficient Special Taxes to pay the debt service coming due on the Bonds and require a draw on the Reserve Account(to the extent funds are available there). In such a case,the amount necessary to replenish the Reserve Account would be included in the Special Tax levy for the next Fiscal Year. However, there can be no assurance that an event such as the one described above would not interfere with the timely payment of debt service on the Bonds. Concentration of Property Ownership As discussed above under the heading"PROPERTY OWNERSHIP AND THE DEVELOPMENT,"the sole owner of property within the District as of the Date of Value of the Appraisal is the Property Owner and its affiliated entities. The Property Owner is not a homebuilder. Instead, the Property Owner intends to develop the property within the District and to joint venture with local homebuilders to sell the property to individual homeowners,but there can be no assurance that the Property Owner will be successful in doing so or will do so in the time frame described by the Appraiser or that the Property Owner will not alter its development,marketing or sales plans in the future including a sale of all or substantially all of the project to another developer. The Property Owner does not currently have funding in place for the development of the Property and will be reliant on the availability of future construction financing, equity contributions from its members, lot sale proceeds and/or joint venture capital to start and complete on-site development and eventual home construction. See "SECURITY FOR THE 2022 BONDS—Property Values." Unless and until ownership of the Taxable Property becomes more diverse, the timely payment of Annual Debt Service will be largely dependent upon the willingness and ability of the Property Owner to pay the Special Taxes applicable to the property within the District. Payment of the Special Tax is Not a Personal Obligation of the Owners An owner of a Taxable Parcel is not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation only against the Taxable Parcel. If the value of a parcel is not sufficient,taking into account other obligations also payable thereby, to fully secure the Special Tax, the County has no recourse against the owner. Vacation Home Development According to the Property Owner,many of the purchasers of homes within the District are expected to be vacation home buyers, particularly from the West Coast. Thus, an important contributory demand factor to the potential successful development of the property within the District will be the continued strength of the U.S. economy in general and the economy of the West Coast in particular. There can be no assurance of such continued economic strength. Moreover,the values of vacation home properties tend to fluctuate more than the values of primary residences. In addition, the attractiveness of homes within the District as a vacation home community may be impacted by factors beyond the control of the Property Owner such as the availability and cost of transportation to and from their principal residences. However, the 2017 Tax Cuts and Jobs Act created qualified opportunity zones which are designed to spur economic development and job creation in distressed communities throughout the country and U.S. possessions by providing tax benefits to investors who invest eligible capital into these communities. Generally speaking,taxpayers may defer tax on eligible capital gains by making an appropriate investment in a Qualified Opportunity Fund and meeting other requirements. The development is located in an opportunity zone which may increase its attraction to individuals looking to build and operate their second home as a rental property. 40 4857-1255-2486v10/200356-0417 Disclosures to Future Purchasers The County has recorded copies of the Certificate of Formation of the District and the Ordinance of Formation with the State Bureau of Conveyances. While title companies normally refer to such notices in title reports,there can be no guarantee that such reference will be made or, if made,that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a parcel of property in the District or the lending of money thereon. Failure by a purchaser, lender or lessor to be aware of or to consider or understand the nature and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser, lender or lessor to pay the Special Tax when due. Depletion of Reserve Account The Reserve Account is to be maintained at an amount equal to the Reserve Requirement. If funds in the Reserve Account are withdrawn therefrom, they can be replenished from the proceeds of the levy and collection of the Special Tax that are in excess of the amounts required to be applied to make deposits in the Administrative Expense Account, Interest Account and Principal Account pursuant to the Indenture. However, no replenishment from the proceeds of a levy of the Special Tax can occur as long as the proceeds that are collected from the levy of the Special Tax at the maximum tax rates,together with other available funds,remain insufficient to pay all such amounts. Thus, it is possible that the Reserve Account will be depleted by its use to pay such amounts and will not be replenished by the levy of the Special Tax. There is no assurance that the amount in the Reserve Account will, at any particular time, be sufficient to pay all such amounts or that any amounts withdrawn from the Reserve Account will be fully replenished from the proceeds of the levy and collection of the Special Tax. FDIC/Federal Government Interests in Properties General. The ability of the County to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation(the"FDIC"),the Drug Enforcement Agency,the Internal Revenue Service,or another federal agency has or obtains an interest. The supremacy clause of the United States Constitution reads as follows: "This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby,any Thing in the Constitution or Laws of any State to the contrary notwithstanding." This is generally understood to mean that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Special Taxes within the District but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments. Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the County wishes to foreclose on the parcel as a result of delinquent Special Taxes,the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government's mortgage interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the Federal National Mortgage Association("FNMA")is a federal instrumentality for purposes of this doctrine,and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States. Based solely on a review of its real property tax roll, the County does not believe that any federal governmental entity owns fee title to any portion of the Taxable Property, the County has not undertaken to determine whether any federal governmental entity currently has, or is likely to acquire, any other interest (including a mortgage interest)in any of the parcels comprising the Taxable Property,and therefore it expresses 41 4857-1255-2486v10/200356-0417 no view concerning the likelihood that the risks described above will materialize while the 2022 Bonds are outstanding. FDIC. In the event that any financial institution making any loan which is secured by real property within the District is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, resulting in ownership of the property by the FDIC,then the ability of the County to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited. The FDIC's policy statement regarding the payment of state and local real property taxes(the"Policy Statement")provides that property owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property's value, and that the FDIC is immune from real property taxes assessed on any basis other than property value. According to the Policy Statement, the FDIC will pay its property tax obligations when they become due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution's affairs, unless abandonment of the FDIC's interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law,to the extent the interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes(including interest)on FDIC-owned property are secured by a valid lien (in effect before the property became owned by the FDIC),the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC's consent. The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes,including special assessments,on property in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed under legislation similar to County Code Chapter 32 and a special tax formula which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC's federal immunity. The Ninth Circuit issued a ruling in 2001 in which it determined that the FDIC, as a federal agency, is exempt from special taxes. The County is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within the District in which the FDIC has or obtains an interest,although prohibiting the lien of the Special Taxes to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome could cause a draw on the Reserve Account and perhaps,ultimately,if enough property were to become owned by the FDIC,a default in payment on the 2022 Bonds. Bankruptcy and Foreclosure Bankruptcy, insolvency and other laws generally affecting creditors' rights could adversely impact the interests of owners of the 2022 Bonds in at least two ways. First,the payment of property owners'taxes and the ability of the County to foreclose the lien of a delinquent unpaid Special Tax pursuant to its covenant to pursue foreclosure proceedings may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights. See "SECURITY FOR THE 2022 BONDS—Covenant for Foreclosure." Secondly, the Bankruptcy Code might prevent moneys on deposit in the Special Tax Fund from being applied to pay interest on the 2022 Bonds and/or to redeem 2022 Bonds if bankruptcy proceedings were brought by or against a landowner and if the court found that any such landowner had an interest in such moneys within the meaning of Section 541(a)(1) of the Bankruptcy Code. In particular,the Property Owner acquired its interest in the property within the District in 2012 in a distressed state, as a result of a financial workout involving a prior developer following the 2008- 2009 financial crisis. The Property Owner acquired its interest in the property within the District in 2013 under a purchase and sale agreement with a prior developer(in which PCCP had a minority interest)which resulted from a financial workout following the 2008-09 financial crisis. 42 4857-1255-2486v10/200356-0417 Although a bankruptcy proceeding would not cause the Special Taxes to become extinguished, the amount and priority of any Special Tax lien could be modified if the value of the property falls below the value of the lien. If the value of the property is less than the lien,such excess amount could be treated as an unsecured claim by the bankruptcy court. In addition,bankruptcy of a property owner could result in a delay in foreclosure proceedings. If enough parcels were involved in bankruptcy proceedings, court delays would increase the likelihood of a delay or default in payment of the principal of,and interest on,the 2022 Bonds. The various legal opinions to be delivered concurrently with the delivery of the 2022 Bonds(including Bond Counsel's approving legal opinion) will be qualified, as to the enforceability of the various legal instruments, by bankruptcy, insolvency,reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors'rights,the application of equitable principles and exercise of judicial discretion,and applicable limitations on equitable and legal remedies against counties in the State of Hawai`i. Geologic,Topographic and Climatic Conditions The value of the Taxable Parcels in the future can be adversely affected by a variety of additional factors, particularly those which may affect infrastructure and other public improvements and private improvements on Taxable Parcels and the continued habitability and enjoyment of such private improvements. See the discussion of"Natural Hazards"in the Appraisal. Such additional factors include,without limitation,geologic conditions such as earthquakes and tsunamis,topographic conditions such as earth movements, landslides and floods and climatic conditions such as hurricanes. In particular, the Island of Hawaii has been affected by multiple hurricanes and tsunamis in the last 100 years. A Tsunami Evacuation Zone map covering the island has been published based on research by the National Oceanic and Atmospheric Administration("NOAA")which shows affected areas located along low-lying sites surrounding the island;however,the District is outside the boundary of the Tsunami Evacuation Zone. Furthermore,the Federal Emergency Management Agency(FEMA)classifies the property in flood zone X(outside of the 500-year floodplain)(area panel number 1551660730F). The Hawaiian Islands were formed through volcanic activity. The chain of islands was produced from volcanic eruptions as the Pacific Plate has slowly shifted across a fixed"hot spot"temporarily located underneath them. The plate is moving in a generally northwest pattern with the oldest island, Kauai, located furthest from the hot spot, and with current activity underneath the Island of Hawaii. Volcano Lava Flow Hazard Zones have been established for the Island of Hawaii due to ongoing volcanic risks. The U.S. Geological Survey (USGS) classifies all of Hualalai,including the property within the District,in Zone 4(on a scale of ascending risk 9 to 1 with Zone 9 having the least risk). The Island of Hawaii experiences seismic activity caused by eruptive processes within active volcanoes or by deep structural adjustments due to the weight of the islands on Earth's underlying crust. Any of such conditions may result in damage to improvements of varying seriousness, such damage may entail significant repair or replacement costs,and such repair or replacement may take a substantial amount of time or never occur either because of the cost thereof or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances,the value of the Taxable Parcels may well depreciate or disappear potentially reducing the willingness of owners thereof to pay the Special Taxes and the ability of the County to foreclose upon such Taxable Parcels in a manner that realizes sufficient proceeds to continue timely payment of debt service on the 2022 Bonds. Hazardous Substances While governmental taxes,assessments,and charges are a common claim against the value of a taxable parcel, other less common claims may be relevant. One of the most serious in terms of the potential reduction in the value of Taxable Property is a claim with regard to a hazardous substance. In general, the owners and operators of a property may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, 43 4857-1255-2486v10/200356-0417 Compensation and Liability Act of 1980, sometimes referred to as "CERCLA" or the "Superfund Act," is the most well-known and widely applicable of these laws,but Hawaii laws with regard to hazardous substances are also stringent and similar. Under many of these laws,the owner(or operator)is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the Taxable Property be affected by a hazardous substance is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner,will become obligated to remedy the condition just as is the seller. Further,such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the financial and legal liability of a property owner to develop the affected parcel or other parcels, as well as the value of the property that is realizable upon a delinquency and foreclosure. The Property Owner is not aware of the presence of any hazardous materials in the District. However, it is possible that liabilities may arise in the future with regard to any portion of the Taxable Property due to the presence of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened,or may arise in the future due to a substance not presently classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a parcel of Taxable Property potentially reducing the willingness of owners thereof to pay the Special Taxes and the ability of the County to foreclose upon such Taxable Parcels in a manner that realizes sufficient proceeds to continue timely payment of debt service on the 2022 Bonds. Zoning and Land Use Decisions Land development is subject to comprehensive federal,state and local regulations. Approval is required from various agencies in connection with the layout and design of developments, the nature and extent of improvements to be required in connection therewith, construction activity, land use, zoning,school and health requirements, and numerous other matters. Failure to obtain any such approval or to satisfy any such governmental requirement in a timely manner would adversely affect the successful development of the property. Endangered Species Hawaii is home for dozens of endangered and threatened species found nowhere else in the world. During recent years,there has been an increase in activity at the State and Federal level related to the possible listing of certain plant and animal species as endangered or threatened species and the designation of areas of "critical habitat"for such species. Surveys of the property within the District revealed no species of plant,animal or bird characterized as endangered or threated by the U.S. Fish and Wildlife Service, and the Property Owner is not aware of any such endangered species within the District. However,on a regular basis,additional species are proposed to be added to the State and federal protected lists; and any future action by the State or Federal governments to protect species located on or adjacent to the property in the District could negatively affect the Property Owner's ability to complete the development of remaining undeveloped property. No Acceleration Provision The Indenture does not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Indenture. Loss of Tax Exemption As discussed under"CONCLUDING INFORMATION—Certain Tax Matters," interest on the 2022 Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of issuance, as a result of acts or omissions of the County subsequent to the issuance of the 2022 Bonds in violation of the County's covenants with respect to the 2022 Bonds. Should interest become includable in gross 44 4857-1255-2486v10/200356-0417 income, the 2022 Bonds are not subject to redemption by reason thereof and will remain outstanding until maturity or unless earlier redeemed pursuant to optional or mandatory redemption or redemption upon prepayment of the Special Tax. No Rating;Absence of Secondary Market for the Bonds No application has been made to any securities rating agency for a credit rating for the 2022 Bonds,and it is not known whether such a credit rating could be obtained either now or in the future. There can be no assurance that there will ever be a secondary market for purchase or sale of the 2022 Bonds. From time to time there may be no market for them,depending upon prevailing market conditions,the financial condition or market position of firms who may make the secondary market, the financial condition and results of operations of the owners of property located within the boundaries of the District,and the extent of the proposed development of the parcels in the District. The 2022 Bonds should therefore be considered long-term investments in which funds are committed to maturity, subject to redemption prior to maturity as described herein. See also"—Purchases and Transfers of 2022 Bonds Restricted to Qualified Institutional Buyers and Accredited Investors." Cyber Security The County, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information,the County is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the efforts of the County to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the County,or the administration of the 2022 Bonds. The County is also reliant on other entities and service providers in connection with the administration of the 2022 Bonds, including without limitation the County tax collector for the levy and collection of Special Taxes and the Trustee. No assurance can be given that the County and these other entities will not be affected by cyber threats and attacks in a manner that may affect the 2022 Bond owners. The County's Department of Information Technology ("DIT"), charged with cybersecurity planning, remediation and responding, has instituted a defense-in-depth strategy to protect the County against cybersecurity threats. The County's defensive measures range from industry standard recommendations, such as a firewall security appliance that protects and monitors ingress/egress communications,to hardening computer users with cybersecurity training for suspicious e-mail messages and websites. The County's defense-in-depth strategy aims to provide the highest level of protection for the County, information systems which could be vulnerable to ransomware, malware, viruses, and physical or electronic compromise that may result in the unintended release and distribution of private or confidential data. The County takes measures to protect its IT systems from the threat of cyber attacks. However, it is possible that the County or any of their vendors could experience a breach. If a breach occurs, the financial consequences could have an economic impact on the County,or on its ability to efficiently perform routine functions or provide services. COVID-19(Coronavirus)Pandemic The spread of the novel strain of coronavirus called COVID-19 (defined previously as "COVID-19") has had significant negative impacts throughout the world, including in the County and the State. The World Health Organization declared the COVID-19 outbreak to be a pandemic, and states of emergency have been declared by the County, State and the United States. On March 4, 2020, State Governor David Y. Ige (the "Governor")proclaimed the spread of COVID-19 in the State to be a disaster,and declared a state of emergency. The Governor of the State and the Mayor of the County both issued a series of supplemental proclamations to address the spread of COVID-19, initially closing non-essential business and government activities, then subsequently authorizing re-openings subject to safety regulations. All such proclamations and executive orders expired in March 2022. 45 4857-1255-2486v10/200356-0417 The COVID-19 pandemic is ongoing,and the ultimate spread of the virus,the duration and severity of the outbreak, and the economic and other actions and protocols that may be taken by governmental authorities to treat the impacts of COVID-19 are uncertain. However,the impact of the COVID-19 outbreak could adversely impact development within the District, including, but not limited to, one or more of the following ways: (i)potential supply chain slowdowns resulting from the unavailability of workers in locations producing construction materials; (ii)slowdowns by local governmental agencies in providing governmental permits, inspections, title and document recordation, and other services and activities associated with real estate development; (iii)delays in construction where members of the workforce becomes infected with COVID-19; (iv)continued extreme fluctuations in financial markets;(v) job losses and declines in business activity across certain sectors of the economy;(vi) economic recession;(vii) delays in sales or fewer sales due to lower traffic at model home complexes and real estate offices; and (viii)delays in sales, or cancellations, due to mortgage lending issues. The ultimate impact of COVID-19 on the development within District, the Property Owner's operations, finances and ability to complete its development within the District as planned, homebuyers' willingness and ability to pay Special Taxes when due,and the real estate market in general is unknown. CONCLUDING INFORMATION Certain Legal Matters Certain legal matters relating to the authorization,issuance,sale,and tax status of the Bonds are subject to the approval of McCorriston Miller Mukai MacKinnon LLP, Honolulu, Hawaii, Bond Counsel, whose opinion will accompany the Bonds and be delivered at closing. Certain legal matters relating to the authorization, issuance and sale of the Bonds will be passed upon for the County by its County Attorney. Certain Tax Matters In the opinion of McCorriston Miller Mukai MacKinnon LLP,Honolulu,Hawai`i,Bond Counsel,under existing federal tax laws, as presently enacted and construed, and assuming, among other things, compliance with certain covenants and the accuracy of certain representations and certifications, interest on the 2022 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), and is not a specific item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. However,it should be noted that for tax years beginning after December 31, 2022, with respect to applicable corporations as defined in Section 59(k)of the Code, generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest(and original issue discount)with respect to the 2022 Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed by Section 55 of the Code on such corporations. Bond Counsel is of the further opinion that,under the laws of the State,as presently enacted and construed,the Bonds and the income therefrom are exempt from all taxation by the State of Hawaii or any political subdivision thereof,except for inheritance,transfer,estate and certain franchise taxes. Any 2022 Bonds purchased,whether at original issuance or otherwise,for an amount greater than their principal amount payable at maturity(or,in some cases,at their earlier call date)(such 2022 Bonds being herein referred to as"Premium Bonds")will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds,like the Premium Bonds,the interest on which is excluded from gross income for federal income tax purposes. However,the amount of tax-exempt interest received, and a Beneficial Owner's basis in a Premium Bond, will be reduced by the amount of amortizable bond premium allocable to such Beneficial Owner. Prospective purchasers of Premium Bonds should consult their own tax advisors with respect to the tax consequences of beneficial ownership of 2022 Bonds purchased at a premium, including the proper treatment of the amortizable bond premium in their particular circumstances. The Code imposes certain restrictions,conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2022 Bonds. The County has made representations and certifications regarding certain facts, circumstances, estimates and expectations, and has 46 4857-1255-2486v10/200356-0417 covenanted to comply with certain restrictions, conditions and requirements, that are material to the exclusion of interest on the 2022 Bonds from federal gross income. Inaccuracy of such representations and certifications or failure to comply with such covenants may result in interest on the 2022 Bonds being included in gross income for federal income tax purposes,possibly from the date of original issuance of the 2022 Bonds. In rendering its opinion regarding the tax status of the 2022 Bonds,Bond Counsel assumes the accuracy of such representations and certifications and compliance with such covenants,and has not undertaken any independent investigation of such matters. Accordingly,the opinion of Bond Counsel may not be relied upon with respect to the accuracy of such representations and certifications or compliance with such covenants. Prospective purchasers of the 2022 Bonds should be aware that beneficial ownership or disposition of the 2022 Bonds,or the accrual or receipt of interest thereon,may have collateral tax consequences with respect to their federal and state tax liability. The nature and extent of such other tax consequences may depend on such matters as the particular tax status or other tax items of the Beneficial Owner of the 2022 Bonds. Bond Counsel expresses no opinion regarding such consequences. Current and future legislative proposals, if enacted into law, regulatory actions or court decisions may cause interest on the 2022 Bonds to be subject, directly or indirectly, in whole or in part, to federal or state income taxation,or otherwise prevent or limit realization of the current benefit of the tax status of such interest. In addition,the introduction of any such legislative proposals,the institution of any such regulatory actions or the likelihood of any such court decisions in the event of litigation, irrespective of the ultimate outcome, may also affect the market price for, or marketability of, the 2022 Bonds, and such effects may be significant. Prospective purchasers of the 2022 Bonds should consult their own tax advisors regarding the potential impact of such matters,as to which Bond Counsel expresses no opinion. Bond Counsel's opinion is based on existing laws, regulations, rulings and court decisions, and represents Bond Counsel's judgment as to the proper treatment of the 2022 Bonds thereunder for federal income tax purposes. It is not binding on the Internal Revenue Service or the courts. Further, Bond Counsel provides no assurances as to the potential effects of future changes in the Code,the applicable regulations thereunder or the interpretation or enforcement thereof by the Internal Revenue Service or by the courts. The County has covenanted,however,to comply with the requirements of the Code. Bond Counsel's engagement with respect to the 2022 Bonds ends with the issuance thereof. Bond Counsel assumes no obligation to revise or supplement Bond Counsel's opinion or otherwise advise any persons with respect to any change in law or other facts or circumstances which may come to Bond Counsel's attention subsequent to the issuance of the 2022 Bonds. Continuing Disclosure The County has covenanted to comply with the County's Continuing Disclosure Agreement and to provide certain financial information and operating data within nine months after the end of the County's fiscal year(the "Annual Report")and to provide notices of the occurrence of certain enumerated events(the"Listed Events"). The Annual Reports and notices of Listed Events are required to be filed with the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access system("EMMA"). The specific nature of the information to be included in the Annual Reports and the notices of Listed Events is set forth in Appendix D. It should be noted that the County is required to file its financial statements with its Annual Report. The inclusion of this information does not mean that the 2022 Bonds are secured by any resources or property of the County other than as described hereinabove. It should also be noted that the list of significant events which the County has agreed to report includes items which have absolutely no application whatsoever to the 2022 Bonds. Any implication from the inclusion of these items in the list to the contrary notwithstanding,there are no credit enhancements applicable to the 2022 Bonds, there are no credit or liquidity providers with respect to the 2022 Bonds,and the 2022 Bonds have not been assigned a rating. 47 4857-1255-2486v10/200356-0417 Notwithstanding any provision of the Indenture, failure of the County to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default;however,any Owner of the 2022 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the County to comply with its obligations with respect to the Continuing Disclosure Agreement. [Within the last five years .] The Property Owner has also entered into a written undertaking to provide financial and operating data and notice of listed events. The form of the Property Owner's undertaking is set forth in Appendix E. The Property Owner has not previously entered into a continuing disclosure undertaking in connection with the issuance of any municipal securities. The Property Owner's undertakings require the filing of certain reports semi-annually. No Litigation At the time of delivery of and payment for the 2022 Bonds, the County will certify that there is no action,suit,proceeding,inquiry or investigation,at law or in equity,before or by any court or regulatory agency, public board or body pending or threatened against the County affecting its existence,or the titles of its respective officers, or seeking to restrain or to enjoin the issuance, sale or delivery of the 2022 Bonds,the application of the proceeds thereof in accordance with the Indenture,or the collection or application of the Special Tax to pay the principal of and interest on the 2022 Bonds,or in any way contesting or affecting the validity or enforceability of the 2022 Bonds,the Indenture,any agreements entered into between the County and the Underwriter,or any action of the County contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Limited Offering Memorandum or any amendment or supplement thereto, or contesting the powers of the County or its authority with respect to the 2022 Bonds or any action of the County contemplated by any of said documents,nor,to the knowledge of the County, is there any basis therefor. No General Obligation of the County The 2022 Bonds are not general obligations of the County, but are limited obligations of the County payable solely from proceeds of the Special Tax and proceeds of the 2022 Bonds, including amounts in the Reserve Account and investment income on certain funds held pursuant to the Indenture(other than as necessary to be rebated to the United States of America pursuant to Section 148(f) of the Code and any applicable regulations promulgated pursuant thereto). Any tax for the payment of the 2022 Bonds shall be limited to the Special Tax to be collected within the District. No Rating The 2022 Bonds have not been rated by any securities rating agency. Underwriting The 2022 Bonds were purchased through negotiation by Stifel,Nicolaus&Company,Incorporated(the "Underwriter"), at a price of$ , which is equal to the principal amount of 2022 Bonds plus a net premium of$ and less an Underwriter's discount of$ . The Underwriter may change the initial public offering prices set forth on the cover page and may offer and sell the 2022 Bonds to certain dealers and others at prices lower than the public offering prices set forth on the cover page hereof. 48 4857-1255-2486v10/200356-0417 Municipal Advisor Fieldman, Rolapp & Associates, Inc. is employed as Municipal Advisor to the County in connection with the issuance of the 2022 Bonds. A portion of the Municipal Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the 2022 Bonds. The Municipal Advisor to the County has provided the following sentence for inclusion in this Limited Offering Memorandum: The Municipal Advisor has reviewed the information in this Limited Offering Memorandum in accordance with, and as part of, its responsibilities to the County; but the Municipal Advisor does not guarantee the accuracy or completeness of such information. Miscellaneous All of the summaries and descriptions of the Indenture,other applicable legislation,reports,agreements and other documents in this Limited Offering Memorandum, including the appendices hereto,are made subject to the provisions of such documents, legislation, reports, or agreements respectively, and do not purport to be complete or definitive statements of any or all thereof. Reference is hereby made to such documents,legislation, reports or agreements on file with the County for full and complete statements of the contents thereof or further information in connection therewith. This Limited Offering Memorandum does not constitute a contract with the purchasers of the 2022 Bonds. Any statements made in this Limited Offering Memorandum involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The execution and delivery of the Limited Offering Memorandum by the County have been duly authorized by the County Council of the County of Hawai'i on behalf of the District. COUNTY OF HAWAI'I By: Director of Finance 49 4857-1255-2486v10/200356-0417 APPENDIX A RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX HAWAII COUNTY COMMUNITY FACILITIES DISTRICT No. 1-2021 (KALOKO HEIGHTS PROJECT) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX A Special Tax applicable to each Tax Map Key Parcel in Hawaii County Community Facilities District No. 1- 2021 (Kaloko Heights Project) ("CFD No. 1-2021") shall be levied and collected according to the tax liability determined by the County Council of the County of Hawaii,through the application of the appropriate amount or rate for Taxable Property, as described below. All of the property in CFD No. 1-2021, unless exempted by law or by the provisions of Section F below, shall be taxed for the purposes, to the extent, and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre"or"Acreage"means the land area of a TMK Parcel as shown on a Tax Map, or if the land area is not shown on a Tax Map,the land area shown on the applicable Final Plat Map, Development Plan, condominium plan,or other recorded parcel map. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 1-2021: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules; the costs of collecting the Special Taxes (whether by the County or otherwise); the costs of remitting the Special Taxes to the Trustee;the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the County of complying with arbitrage rebate requirements; the costs to the County of complying with disclosure requirements associated with applicable federal and state securities laws and of the Code; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the County related to an appeal of the Special Tax;the costs associated with the release of funds from any escrow account; the County's administration fees and third party expenses;the costs of County staff time and reasonable overhead relating to CFD No. 1-2021;the costs incurred by the County in connection with the termination of the Special Tax in Tax Zone 2;and amounts estimated or advanced by the County for any other administrative purposes of CFD No. 1-2021, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assigned Special Tax"means the Special Tax for each Land Use Class of Developed Property,as determined in accordance with Section C.1.a.1 below. "Authorized Improvements"means those facilities that are authorized to be funded by CFD No. 1-2021. "Backup Special Tax"means the Special Tax for each Land Use Class of Developed Property, as determined in accordance with Section C.1.a.2 below. "Bonds" means bonds or other debt pursuant to Article 6 of the Code, whether in one or more series, issued, incurred,or assumed to fund Authorized Improvements. A-1 4857-1255-2486v10/200356-0417 Buildable Lot" means an individual lot within a Final Plat Map, for which a Building Permit may be issued without further subdivision of such lot. "Building Permit"means a single permit or set of permits required to construct a residential or non-residential structure, other than a permit issued for a foundation, parking, landscaping, or other related facility or amenity if a building permit has not yet been issued for the structure served by these facilities or amenities. "Capitalized Interest"means funds in any capitalized interest account available to pay interest on Bonds. "CFD Administrator" means the person or firm designated by the County to administer the Special Taxes according to this RMA. "CFD Formation"means the date on which the Ordinance of Formation became effective. "Code"means the Community Facilities Districts Code(1994,Ord.No. 94-77,sec.3),being Chapter 32 of the Hawaii County Code 1983 (2009 Edition,as amended). "County"means the County of Hawaii. "County Council"means the County Council of the County of Hawaii. "Developed Property"means, for each Fiscal Year, all Taxable Property,exclusive of Final Mapped Property and Taxable Property Owner Association Property,for which a Building Permit for new construction was issued prior to March 1 of the preceding Fiscal Year. "Development Plan" means a site plan or other development plan, which may be updated from time to time, that identifies such information as the type of structure, acreage, and/or square footage that is approved to be developed on Taxable Property within CFD No. 1-2021. "Expected Land Uses" means the number of Units within each Land Use Class of Residential Property, the Acreage of Other Residential Property, and the Acreage of Non-Residential Property expected within Tax Zone 1, as identified in Attachment 2 of this RMA. Attachment 2 may be updated within 30 days prior to the First Bond Sale and each time there is a Land Use Change thereafter. "Expected Maximum Special Tax Revenues"means the annual amount of revenue that would be available in Tax Zone 1 if the Maximum Special Tax was levied on the Expected Land Uses. The Expected Maximum Special Tax Revenues at the time of approval of this RMA are shown in Attachment 2,and such amount may be adjusted pursuant to Section C or if TMK Parcels within Tax Zone I prepay all or a portion of the Special Tax obligation. "Final Plat Map" means a final map approved by the County Planning Director pursuant to the Subdivision Control Code(Hawai`i County Code Chapter 23)that creates individual lots on which Building Permits for new construction may be issued without further subdivision. "Final Mapped Property"means,for each Fiscal Year,all Taxable Property,exclusive of Developed Property and Taxable Property Owner Association Property,which as of March 1 of the previous Fiscal Year was located within a Final Plat Map. The term Final Mapped Property shall include any parcel map or Final Plat Map, or portion thereof, that creates individual lots that cannot be further subdivided and for which a Building Permit may be issued(but has not actually been issued). "First Bond Sale" means issuance of the first series of Bonds secured, in whole or in part, by Special Taxes levied and collected from TMK Parcels in Tax Zone 1. A-2 4857-1255-2486v10/200356-0417 "Fiscal Year"means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, resolution, or other instrument pursuant to which Bonds are issued,as modified,amended,and/or supplemented from time to time,and any instrument replacing or supplementing the same. "Land Use Change"means a change to the Expected Land Uses within Tax Zone 1 after CFD Formation,which shall include but not be limited to,approval of Final Plat Maps that reflect a different number of Buildable Lots, issuance of Building Permits that will result in a different number of Units in a particular Land Use Class, or issuance of Building Permits that reflect a different amount of Other Residential Property Acreage or Non- Residential Property Acreage than that shown in the Expected Land Uses, as determined by the CFD Administrator. "Land Use Class"means any of the classes listed in Table 1 below. "Land Value"means the appraised value,or the assessed value on the current County Real Property Tax Office tax roll, of a TMK Parcel, whichever is less. The CFD Administrator shall direct that a Short Form Appraisal be prepared to determine the appraised value. "Maximum Special Tax"means the greatest amount of Special Tax that can be levied on a TMK Parcel in any Fiscal Year determined in accordance with Section C below. "Maximum Special Tax Revenues" means, at any point in time, the aggregate revenue that can be generated if the Maximum Special Tax is levied on all TMK Parcels of Taxable Property in Tax Zone 1. "Non-Residential Property"means,for each Fiscal Year,all TMK Parcels of Developed Property for which a Building Permit was issued by the County after January 1, 2020, and before March 1 of the prior Fiscal Year, permitting the construction of one or more non-residential structures or facilities. "Other Residential Property"means all TMK Parcels of Developed Property for which a Building Permit was issued by the County for purposes of constructing Units,excluding Single Family Attached Property and Single Family Detached Property. "Ordinance of Formation"means the ordinance adopted by the County Council to form CFD No. 1-2021. "Property Owner Association Property"means any property within the boundaries of CFD No. 1-2021 that was owned by a property owner association,including any master or sub-association,as of March 1 of the prior Fiscal Year. "Proportionately"means(i)for Developed Property in the first step of Section D.1 below,that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all TMK Parcels of Developed Property;(ii)for Developed Property in the fourth step of Section D.1 below,that the amount of the increase above the Assigned Special Tax,if necessary,is equal for all TMK Parcels of Developed Property,except that if the Backup Special Tax limits the increase on any TMK Parcel(s),then the amount of the increase shall be equal for the remaining TMK Parcels; (iii)for Final Mapped Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all TMK Parcels of Final Mapped Property,separately for Tax Zone 1 and Tax Zone 2; (iv)for Undeveloped Property,that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all TMK Parcels of Undeveloped Property, separately for Tax Zone 1 and Tax Zone 2; and(v)for Taxable Property Owner Association Property,that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all TMK Parcels of Taxable Property Owner Association Property, separately for Tax Zone 1 and Tax Zone 2. A-3 4857-1255-2486v10/200356-0417 "Public Property" means any property within the boundaries of CFD No. 1-2021 that (i)is owned by or irrevocably offered for dedication to the federal government, the State of Hawai`i, the County, or other public agency,provided however that any property leased by a public agency to a private entity and subject to taxation under Section 32-54 of the Code shall be classified and taxed in accordance with its use; or(ii)is encumbered by a road,access,public utility easement or other easement or recorded restriction for public use or preservation making impractical its use for any purpose other than that set forth in the easement or recorded restriction. "Required Coverage" means the percentage by which the Expected Maximum Special Tax Revenues must exceed the sum of annual Bond debt service and annual required Administrative Expenses, as set forth in the Indenture or other formation or Bond document that sets forth the minimum required debt service coverage. "Residential Floor Area" means all of the Square Footage of living area within the perimeter of a Unit, not including any carport,walkway,garage,overhang,patio, enclosed patio,or similar area. The determination of Residential Floor Area shall be as set forth in the Building Permit(s)issued for such TMK Parcel,or as set forth in other official records maintained by the County's Building Division or other appropriate means selected by the CFD Administrator. The actual Square Footage shall be rounded up to the next whole square foot. Once such determination has been made for a TMK Parcel, it shall remain fixed in all future Fiscal Years unless an appeal is approved that results in a change in the actual Square Footage. "Residential Property" means, for each Fiscal Year, a TMK Parcel for which a Building Permit for new construction of one or more Units was issued after January 1,2020,and before March 1 of the prior Fiscal Year. "RMA"means this Rate and Method of Apportionment of Special Tax. "Short Form Appraisal"means a limited appraisal of the land value of a TMK Parcel prepared by a qualified appraiser, as determined by the CFD Administrator, using a form similar to Fannie Mae Form 2055, which is also known as an"exterior-only inspection residential appraisal report"designed to contain a limited amount of data about the subject property and to utilize the sales comparable approach as its sole approach to concluding value. "Single Family Attached Property" means all TMK Parcels of Developed Property for which a Building Permit was issued for construction of a residential structure consisting of two or more Units that share common walls,have separate Tax Map Keys assigned to them,and may be purchased by individual homebuyers(which shall still be the case even if the Units are purchased and subsequently offered for rent by the owner of the Unit), including such residential structures that meet the statutory definition of a condominium. "Single Family Detached Property" means all TMK Parcels of Developed Property for which a Building Permit was issued for construction of a Unit, on one legal lot,that does not share a common wall with another Unit. "Single Family Property" means all TMK Parcels of Single Family Attached Property and Single Family Detached Property. "Special Tax"means a special tax levied in any Fiscal Year to pay the Tax Zone 1 Special Tax Requirement or Tax Zone 2 Special Tax Requirement. "Square Footage" or "Sq. Ft." means the floor area square footage reflected on the original construction Building Permit, or as set forth in other official records maintained by the County's Building Division or other appropriate means selected by the CFD Administrator, issued for construction of Residential Property or Non- Residential Property,plus any square footage subsequently added to a building of Non-Residential Property after issuance of a Building Permit for expansion or renovation of such building. A-4 4857-1255-2486v10/200356-0417 "Taxable Property" means all of the TMK Parcels within the boundaries of CFD No. 1-2021 that are not exempt from the Special Tax pursuant to law or Section F below. "Taxable Property Owner Association Property" means, for each Fiscal Year, all TMK Parcels of Property Owner Association Property that are not exempt from the Special Tax pursuant to law or Section F below. "Tax Map"means an official map of the County designating parcels by Tax Map Key. "Tax Map Key"or"TMK"means a unique number that is assigned by the County to identify each lot or parcel or condominium within the County's boundaries. "Tax Map Key Parcel"or"TMK Parcel"means a lot or parcel shown on a Tax Map with an assigned TMK. "Tax Zone" means a mutually exclusive geographic area, within which particular Special Tax rates may be levied pursuant to this RMA. Attachment 1 identifies the two Tax Zones in CFD No. 1-2021. "Tax Zone 1"means the geographic area that was identified at CFD Formation by TMK Parcels 3-7-3-009-057, 3-7-3-009-058, 3-7-3-009-059, 3-7-3-009-060, 3-7-3-009-061, 3-7-3-009-062, 3-7-3-009-070, and 3-7-3-009- 071, is designated in Attachment 1 of this RMA as Tax Zone 1,and is commonly referred to as Kaloko Heights Phase 1. "Tax Zone 1 Special Tax Requirement"means the sum of the amounts necessary in any Fiscal Year to: (i)pay Administrative Expenses up to $50,000, which amount shall escalate at a rate of two percent (2.0%) per year beginning in Fiscal Year 2022-23; (ii)pay principal and interest on Bonds which are due in the calendar year that begins in such Fiscal Year; (iii)create and/or replenish reserve funds for the Bonds; (iv)cure any delinquencies in the payment of principal or interest on Bonds which have occurred in prior Fiscal Years or (based on existing delinquencies in the payment of Special Taxes)are expected to occur in the Fiscal Year in which the tax will be collected; (v)pay all remaining Administrative Expenses in excess of the amount determined in(i) above; and (vi)pay the costs of Authorized Improvements provided that Special Taxes shall not be collected from Taxable Property Owner Association Property for this purpose. The amounts referred to in clauses(ii)and(iii)of the preceding sentence may be reduced in any Fiscal Year by: (i)interest earnings on or surplus balances in funds and accounts for the Bonds to the extent that such earnings or balances are available to apply against debt service pursuant to the Indenture;(ii)proceeds received by the County for CFD No. 1-2021 from the collection of penalties associated with delinquent Special Taxes;and(iii)any other revenues available to pay debt service on the Bonds as determined by the CFD Administrator. "Tax Zone 2"means the geographic area that was identified at CFD Formation by TMK Parcel 3-7-3-009-019, is designated in Attachment 1 of this RMA as Tax Zone 2, and is commonly referred to as Kaloko Heights Phase 2. "Tax Zone 2 Special Tax Requirement"means the amount necessary at any point in time to cure delinquencies in the payment of Special Taxes levied in Tax Zone 1 on Final Mapped Property and Undeveloped Property. "Trustee"means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Final Mapped Property,or Taxable Property Owner Association Property. "Unit"means an individual single-family detached or attached home,townhome, condominium, apartment, or other residential dwelling unit, including each separate living area within a half-plex, duplex,triplex, fourplex, or other residential structure. A-5 4857-1255-2486v10/200356-0417 B. DATA FOR ADMINISTRATION OF THE SPECIAL TAX Each Fiscal Year, beginning with Fiscal Year 2021-22, all Taxable Property within CFD No. 1-2021 shall be assigned to Tax Zone 1 or Tax Zone 2 and, within each Tax Zone, shall be classified as Developed Property, Final Mapped Property, Undeveloped Property,or Taxable Property Owner Association Property, and shall be subject to Special Taxes in accordance with this RMA as determined pursuant to Sections C and D below. TMK Parcels of Developed Property within Tax Zone 1 shall be further classified as Single Family Detached Property, Single Family Attached Property, Other Residential Property, or Non-Residential Property. TMK Parcels of Single Family Detached Property shall be assigned to Land Use Classes 1 through 7,as listed in Table 1 below based on the Residential Floor Area of the Units on such TMK Parcels, and TMK Parcels of Single Family Attached Property shall be assigned to Land Use Class 8. Also,Other Residential Property shall be assigned to Land Use Class 9,and Non-Residential Property shall be assigned to Land Use Class 10. The Expected Maximum Special Tax Revenues shown in Attachment 2 were calculated based on the Expected Land Uses at the time of adoption of this RMA and are subject to modification upon the occurrence of Land Use Changes and prepayments, as described below. At least quarterly after the First Bond Sale, the CFD Administrator shall review all new Building Permits,Final Plat Maps,condominium plans,and any other project information that has changed from the prior quarter. In addition, the CFD Administrator shall, on an ongoing basis,review all Land Use Changes. With each review,the CFD Administrator shall compare the revised land uses to the Expected Land Uses to evaluate the impact on the Expected Maximum Special Tax Revenues. Prior to the First Bond Sale and issuance of any subsequent series of Bonds,and together with the CFD Administrator's review on at least a quarterly basis, the owners of all TMK Parcels for which Building Permits have yet to be issued shall provide the CFD Administrator with a written confirmation of the Expected Land Uses on each TMK Parcel. C. MAXIMUM SPECIAL TAX 1. Tax Zone 1 a. Developed Property The Maximum Special Tax that may be levied in any Fiscal Year on each TMK Parcel in Tax Zone 1 classified as Developed Property shall be the greater of(i)the amount derived by application of the Assigned Special Tax or(ii)the amount derived by application of the Backup Special Tax. 1) Assigned Special Tax The Assigned Special Tax that may be levied in any Fiscal Year for each Land Use Class is shown in Table 1 on the following page. A-6 4857-1255-2486v10/200356-0417 TABLE 1 TAX ZONE 1 ASSIGNED SPECIAL TAX—DEVELOPED PROPERTY Residential Assigned Land Floor Area Special Tax Use (Square (Fiscal Year Class Description Footage) 2021-22)* 1 Single Family Detached Property < 1,601 $1,663 per Unit 2 Single Family Detached Property 1,601 — 1,800 $1,913 per Unit 3 Single Family Detached Property 1,801 —2,000 $2,163 per Unit 4 Single Family Detached Property 2,001 —2,200 $2,537 per Unit 5 Single Family Detached Property 2,201 —2,400 $2,869 per Unit 6 Single Family Detached Property 2,401 —2,600 $3,119 per Unit 7 Single Family Detached Property >2,600 $3,410 per Unit 8 Single Family Attached Property $1,281 per Unit 9 Other Residential Property $11,298 per Acre 10 Non-Residential Property $11,298 per Acre * On July 1, 2022,and on each July 1 thereafter, all of the Assigned Special Tax rates shown in Table 1 above shall be increased by an amount equal to two percent(2.0%)of the amount in effect for the prior Fiscal Year. 2) Backup Special Tax Prior to the First Bond Sale, if a Land Use Change occurs that results in a change in Expected Maximum Special Tax Revenues,no action will be needed pursuant to this Section C.1.a.2. Upon identification of the Land Use Change,the CFD Administrator shall update Attachment 2 to reflect the revised Expected Maximum Special Tax Revenues,which shall then be the amount used to size the Bonds being issued. After the First Bond Sale, if a Land Use Change occurs that results in a change in Expected Maximum Special Tax Revenues,no action will be needed pursuant to this Section C.1.a.2 as long as the Required Coverage will still be achieved. Upon identification of the Land Use Change, the CFD Administrator shall update Attachment 2 to show the revised Expected Maximum Special Tax Revenues. If the CFD Administrator determines that a Land Use Change would result in a failure to achieve the Required Coverage, the Backup Special Tax shall be calculated by application of the following steps: Step 1: Determine the Maximum Special Tax Revenues needed to maintain Required Coverage. Step 2: Increase Proportionately the Assigned Special Tax for each Land Use Class within the Expected Land Uses that was not Developed Property in the prior Fiscal Year up to the amounts needed so that the Expected Maximum Special Tax Revenues equal the amount computed in Step 1. A-7 4857-1255-2486v10/200356-0417 Step 3: The Backup Special Tax for each Land Use Class of Expected Land Uses that was not Developed Property in the prior Fiscal Year shall be the amount calculated in Step 2. Step 4: The Backup Special Taxes identified in Step 3 shall increase on July 1 of the next Fiscal Year,and each July 1 thereafter,by an amount equal to two percent(2.0%)of the amount in effect for the prior Fiscal Year. After determining the Backup Special Tax, the CFD Administrator shall adjust Attachment 2 to reflect the Expected Land Uses and Expected Maximum Special Tax Revenues after the Land Use Change that necessitated the levy of the Backup Special Tax. The duties imposed on the CFD Administrator to review Land Use Changes,Final Plat Maps,and Building Permits,and to make the calculations set forth above,are intended only to facilitate administration of the Special Tax and to better ensure the sufficiency of tax capacity to pay debt service on Bonds. Such duties are not intended to give any developer, subdivider, or owner of property in CFD No. 1-2021 any right to receive notice of the potential impact of Land Use Changes, but each such developer, subdivider,or owner of property is responsible for understanding that a Backup Special Tax may be levied because of a Land Use Change. Further, each developer, subdivider,or owner of property in CFD No. 1-2021 that is not Developed Property is required to provide information and documentation to,and to coordinate with,the CFD Administrator on at least a quarterly basis to confirm anticipated Land Use Changes and determine Expected Land Uses. The Backup Special Tax for a TMK Parcel shall not change once a TMK Parcel is classified as Developed Property;provided, however, that the Backup Special Tax on a TMK Parcel of Developed Property shall increase each July 1 by an amount equal to two percent(2.0%)of the amount in effect for the prior Fiscal Year. 3) Multiple Land Use Classes on a TMK Parcel In some instances, a TMK Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on such TMK Parcel shall be the sum of the Maximum Special Tax for all Units of Single Family Property and Acres of Other Residential Property and Non-Residential Property (based on the pro rata share of Square Footage between Other Residential Property and Non-Residential Property, according to the applicable Building Permits, Final Plat Map, parcel map, condominium plan,or other recorded County map)located on that TMK Parcel. b. Final Mapped Property, Undeveloped Property, and Taxable Property Owner Association Property The Maximum Special Tax for Final Mapped Property, Undeveloped Property, and Taxable Property Owner Association Property in Tax Zone 1 shall be $11,298 per Acre in Fiscal Year 2021-22,which amount shall increase on July 1,2022,and each July 1 thereafter by an amount equal to two percent(2.0%)of the amount in effect for the prior Fiscal Year. A-8 4857-1255-2486v10/200356-0417 2. Tax Zone 2 a. Developed Property No Special Tax shall be levied on Developed Property in Tax Zone 2. b. Final Mapped Property, Undeveloped Property, and Taxable Property Owner Association Property n The Maximum Special Tax for Final Mapped Property, Undeveloped Property, and Taxable Property Owner Association Property in Tax Zone 2 shall be $22,596 per Acre in Fiscal Year 2021-22,which amount shall increase on July 1,2022,and each July 1 thereafter by an amount equal to two percent(2.0%)of the amount in effect for the prior Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX 1. Tax Zone 1 Each Fiscal Year,beginning with Fiscal Year 2021-22,the CFD Administrator shall determine the Tax Zone 1 Special Tax Requirement for that Fiscal Year and levy the Special Tax on all TMK Parcels of Taxable Property in Tax Zone 1 as follows: Step 1: If needed to satisfy the Tax Zone 1 Special Tax Requirement, but not accounting for Capitalized Interest,the Special Tax shall be levied Proportionately on each TMK Parcel of Developed Property in Tax Zone 1 up to 100%of the applicable Assigned Special Tax. Step 2: If additional monies are needed to satisfy the Tax Zone 1 Special Tax Requirement after Step 1 has been completed,and after applying Capitalized Interest,then the Special Tax shall be levied Proportionately on each TMK Parcel of Final Mapped Property in Tax Zone 1 up to 100%of the Maximum Special Tax for Final Mapped Property in Tax Zone 1. Step 3: If additional monies are needed to satisfy the Tax Zone 1 Special Tax Requirement after the first two steps have been completed,then the Special Tax shall be levied Proportionately on each TMK Parcel of Undeveloped Property in Tax Zone 1 up to 100% of the Maximum Special Tax for Undeveloped Property in Tax Zone 1. Step 4: If additional monies are needed to satisfy the Tax Zone 1 Special Tax Requirement after the first three steps have been completed, then the levy of the Special Tax on each TMK Parcel of Developed Property in Tax Zone 1 whose Maximum Special Tax is determined through the application of the Backup Special Tax shall be increased Proportionately from the Assigned Special Tax up to the Maximum Special Tax for each such TMK Parcel until the amount levied is equal to the Tax Zone 1 Special Tax Requirement. Step 5: If additional monies are needed to satisfy the Tax Zone 1 Special Tax Requirement after the first four steps have been completed,then the Special Tax shall be levied Proportionately on each TMK Parcel of Taxable Property Owner Association Property in Tax Zone 1 up to the Maximum Special Tax for Taxable Property Owner Association Property in Tax Zone 1. Notwithstanding the above,under no circumstances shall the Special Tax levied in any Fiscal Year on any TMK Parcel of Single Family Property or Other Residential Property in Tax Zone 1 for which an occupancy permit for private residential use has been issued be increased as a result of delinquency or default by the owner or owners of any other TMK Parcel or TMK Parcels within Tax Zone 1 by more A-9 4857-1255-2486v10/200356-0417 than ten percent(10.0%) above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. 2. Tax Zone 2 At the earliest possible date on which the County Real Property Tax Office is able to provide information to the CFD Administrator regarding the collection of Special Taxes within Tax Zone 1, the CFD Administrator shall determine the total aggregate Special Taxes levied on Final Mapped Property and Undeveloped Property within Tax Zone 1 that are delinquent. Within five business days after making such determination,the CFD Administrator shall do the following: Step 1: Calculate the Tax Zone 2 Special Tax Requirement. Step 2: If needed to satisfy the Tax Zone 2 Special Tax Requirement,then the Special Tax shall be levied Proportionately on each TMK Parcel of Final Mapped Property in Tax Zone 2 up to 100%of the Maximum Special Tax for Final Mapped Property in Tax Zone 2. Step 3: If additional monies are needed to satisfy the Tax Zone 2 Special Tax Requirement after the first two steps have been completed,then the Special Tax shall be levied Proportionately on each TMK Parcel of Undeveloped Property in Tax Zone 2 up to 100% of the Maximum Special Tax for Undeveloped Property in Tax Zone 2. Step 4: If additional monies are needed to satisfy the Tax Zone 2 Special Tax Requirement after the first three steps have been completed,then the Special Tax shall be levied Proportionately on each TMK Parcel of Taxable Property Owner Association Property in Tax Zone 2 up to the Maximum Special Tax for Taxable Property Owner Association Property in Tax Zone 2. Step 5: For each TMK Parcel in Tax Zone 2 to be taxed,prepare and send a direct bill via overnight delivery to the record owner of such TMK Parcel based on ownership and address information available from the current County Real Property Tax Office tax roll. The Special Tax in Tax Zone 2 shall be due and payable within 30 days from the date of delivery of the direct tax bill. If,within 30 days from the date the direct bill was delivered,payment of the Special Tax levied against a TMK Parcel in Tax Zone 2 has not been received by the County or the CFD Administrator, foreclosure proceedings shall commence immediately against such TMK parcel. The Special Tax shall have the same priority and bear the same penalties and interest after delinquency as do ad valorem real property taxes. Notwithstanding the foregoing,the Special Tax may be collected in the same manner and at the same time as ordinary ad valorem real property taxes. E. COLLECTION OF SPECIAL TAX The Special Taxes in Tax Zone 1 will be collected in the same manner and at the same time as ordinary ad valorem real property taxes;provided, however,that prepayments are permitted as set forth in Section G below and provided further that the County may directly bill the Special Taxes and may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent TMK Parcels as permitted by the Code. F. EXEMPTIONS No Special Tax shall be levied on up to 60.0 Acres of Property Owner Association Property in Tax Zone 1. Tax- exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property within Tax Zone 1. A-10 4857-1255-2486v10/200356-0417 Property Owner Association Property that is not exempt from the Special Tax under this section shall be subject to the levy of a Special Tax and shall be taxed Proportionately as part of the fifth step in Section D.1 above,or part of the fourth step in Section D.2 above, up to 100% of the applicable Maximum Special Tax for Taxable Property Owner Association Property. Also,the nonexempt owner of a leasehold or possessory interest in Public Property shall be subject to the levy of a Special Tax pursuant to Section 32-54 of the Code and shall be classified and taxed as Developed Property, Final Mapped Property, Undeveloped Property, or Taxable Property Owner Association Property. No Special Tax shall be levied in any Fiscal Year on TMK Parcels in Tax Zone 1 that have fully prepaid the Special Tax obligation pursuant to the formula set forth below in Section G. G. PREPAYMENT OF SPECIAL TAX The Special Tax obligation of a TMK Parcel in Tax Zone 1 may be prepaid; however, the Special Tax obligation of a TMK Parcel in Tax Zone 2 cannot be prepaid. The following definitions apply to this Section G: "Construction Fund" means funds or accounts(regardless of their names) identified in the Indenture to hold monies that are available to acquire or construct public facilities eligible under the Code. "Outstanding Bonds" means all Previously Issued Bonds which remain outstanding, with the following exception: if a Special Tax has been levied against,or already paid by,a TMK Parcel making a prepayment, and a portion of the Special Tax will be used to pay a portion of the next principal payment on the Bonds that remain outstanding (as determined by the CFD Administrator), that next principal payment shall be subtracted from the total Bond principal that remains outstanding, and the difference shall be used as the amount of Outstanding Bonds for purposes of this prepayment formula. "Previously Issued Bonds"means all Bonds that have been issued on behalf of CFD No. 1-2021 prior to the date of prepayment. "Public Facilities Requirements"means either$13,229,000 in 2021 dollars, which shall increase by the Public Facilities Inflation Index on July 1, 2022, and each July 1 thereafter, or such lower number as (i)determined by the CFD Administrator as sufficient to fund the public facilities to be provided under the authorized bonding program for CFD No. 1-2021, or(ii)shall be determined by the County Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taxes levied under this RMA as described in Section D above. "Public Facilities Inflation Index"means the annual percentage change in the Honolulu Construction Cost Index: Single Family Residence,measured as of December of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published,the Public Facilities Inflation Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Honolulu Construction Cost Index: Single Family Residence. "Remaining Facilities Costs" means the Public Facilities Requirements (as defined above), minus public facility costs funded by Previously Issued Bonds(as defined above), developer equity, Special Tax prepayments,and/or any other source of funding. 1. Full Prepayment The Special Tax obligation may be prepaid and the obligation of a TMK Parcel in Tax Zone 1 to pay the Special Tax permanently satisfied as described herein, provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such TMK Parcel at the time of prepayment. An owner of a TMK Parcel intending to prepay the Special Tax obligation shall provide the County with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD A-11 4857-1255-2486v10/200356-0417 Administrator shall notify such owner of the prepayment amount for such TMK Parcel; the CFD Administrator may charge a fee for providing this service. Prepayment must be made not less than 75 days prior to any redemption date for Bonds to be redeemed with the proceeds of such prepaid Special Taxes. The Prepayment Amount shall be calculated as follows(capitalized terms as defined below): Bond Redemption Amount plus Remaining Facilities Amount plus Redemption Premium plus Defeasance Requirement plus Administrative Fees and Expenses less Reserve Fund Credit equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount shall be determined by the CFD Administrator pursuant to the following steps: Step 1: Confirm that no Special Tax delinquencies apply to such TMK Parcel. Step 2: Compute the total Maximum Special Tax that could be levied on the TMK Parcel prepaying the Special Tax in the Fiscal Year in which prepayment would be received by the County,as set forth in Section C above. For TMK Parcels of Developed Property,the Maximum Special Tax equals the greater of the Assigned Special Tax and Backup Special Tax. Step 3: (a)Divide the Maximum Special Tax computed pursuant to Step 2 for such TMK Parcel by the total estimated Maximum Special Tax Revenues that could be levied in that Fiscal Year on property within Tax Zone 1,as set forth in Section C above,excluding any TMK Parcels which have prepaid their Special Tax obligation,and (b)Divide the Maximum Special Tax computed pursuant to Step 2 for such TMK Parcel by the Maximum Special Tax Revenues that could be generated at buildout for the entire Tax Zone 1 area as determined by the CFD Administrator based on the Development Plan and other information currently available,excluding any TMK Parcels which have prepaid their Special Tax obligation. Step 4: Multiply the larger quotient computed pursuant to Steps 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). Step 5: Compute the current Remaining Facilities Costs(if any). Step 6: Multiply the larger quotient computed pursuant to Steps 3(a) or 3(b) by the amount determined pursuant to Step 5 to compute the amount of Remaining Facilities Costs to be prepaid(the "Remaining Facilities Amount"). Step 7: Multiply the Bond Redemption Amount computed pursuant to Step 4 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). Step 8: Compute the amount needed to pay interest on the Bond Redemption Amount starting with the first Bond interest payment date after which the prepayment has been received until the earliest redemption date for the Outstanding Bonds,which,depending on the Bond offering document, may be as early as the next interest payment date. • A-12 4857-1255-2486v10/200356-0417 Step 9: Compute the amount of interest the County reasonably expects to derive from reinvestment of the Bond Redemption Amount plus the Redemption Premium from the first Bond interest payment date after which the prepayment has been received until the redemption date for the Outstanding Bonds. Step 10: Take the amount computed pursuant to Step 8 and subtract the amount computed pursuant to Step 9(the "Defeasance Requirement"). Step 11: Determine the costs to compute the prepayment amount,the costs to invest the prepayment proceeds, the costs to redeem Bonds, the costs to record any notices to evidence the prepayment and the redemption, and any other administrative costs associated with the prepayment(the "Administrative Fees and Expenses"). Step 12: If and to the extent so provided in the Indenture pursuant to which the Outstanding Bonds to be redeemed were issued, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the "Reserve Fund Credit"). No Reserve Fund Credit shall be granted if reserve funds are below 100%of the reserve requirement on the calculation date. Step 13: The Special Tax prepayment is equal to the sum of the amounts computed pursuant to Steps 4, 6, 7, 10, and 11, less the amount computed pursuant to Step 12 (the "Prepayment Amount"). Step 14: From the Prepayment Amount,the amounts computed pursuant to Steps 4,7, 10,and 12 shall be deposited into the appropriate fund as established under the Indenture and used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to Step 6 shall be deposited into the Construction Fund. The amount computed pursuant to Step 11 shall be retained by the County for CFD No. 1-2021. The Special Tax Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such cases,the increment above$5,000,or integral multiple thereof, will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of Bonds or to make debt service payments as provided in the Indenture. For any TMK Parcel that is prepaid,the County Council shall cause a suitable notice to be recorded and filed with the Bureau of Conveyances and/or Land Court in compliance with the Code,to indicate the prepayment of Special Taxes and the release of the Special Tax lien on such TMK Parcel, and the obligation of such TMK Parcel to pay the Special Tax shall cease. The CFD Administrator shall mail a copy of the notice to the owner and any known lessee of the property. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Assigned Special Tax that may be levied on Taxable Property (excluding Taxable Property Owner Association Property)at buildout of the entire Tax Zone 1 area,as determined by the CFD Administrator based on the Development Plan and other information currently available, both prior to and after the proposed prepayment, is at least 1.1 times the maximum annual debt service on all Outstanding Bonds plus the estimated Administrative Expenses. 2. Partial Prepayment The Special Tax on a TMK Parcel of Taxable Property in Tax Zone 1 may be partially prepaid. The amount of the prepayment shall be calculated as in Section G.1, except that a partial prepayment shall be calculated by the CFD Administrator according to the following formula: A-13 4857-1255-2486v10/200356-0417 PP=(PF—AE)x%+AE. The terms above have the following meaning: PP = the partial prepayment PF = the Prepayment Amount(full prepayment)for the Special Tax calculated according to Section G.1 AE = the Administrative Fees and Expenses determined pursuant to Step 11 above % = the percentage by which the owner of the TMK Parcel(s) is partially prepaying the Special Tax The Special Tax partial prepayment amount must be sufficient to redeem at least a$5,000 increment of Bonds. The owner of any TMK Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax and the percentage by which the Special Tax shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax within thirty(30)days of the request and may charge a fee for providing this service. With respect to any TMK Parcel that is partially prepaid,the CFD Administrator shall (i)distribute the remitted prepayment funds according to Section G.1, and (ii)indicate in the records of CFD No. 1-2021 that there has been a partial prepayment of the Special Tax and that a portion of the Special Tax with respect to such TMK Parcel, equal to the outstanding percentage(1.00—"%", as defined above) of the Maximum Special Tax, shall continue to be levied on such TMK Parcel pursuant to Section D.1. Notwithstanding the foregoing, no Special Tax partial prepayment shall be allowed unless the amount of Assigned Special Tax that may be levied on Taxable Property (excluding Taxable Property Owner Association Property)at buildout of the entire Tax Zone 1 area,as determined by the CFD Administrator based on the Development Plan and other information currently available, both prior to and after the proposed partial prepayment, is at least 1.1 times the maximum annual debt service on all Outstanding Bonds plus the estimated Administrative Expenses. H. INTERPRETATION OF SPECIAL TAX FORMULA The County reserves the right to make minor administrative and technical changes to this document that do not materially affect the rate and method of apportioning the Special Taxes. In addition, interpretation and application of any section of this document shall be left to the County's discretion. Interpretations may be made by the County by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this RMA. TERM OF SPECIAL TAX 1. Tax Zone 1 The Fiscal Year after which no further Special Tax shall be levied or collected in Tax Zone 1 is Fiscal Year 2060-61, except that the Special Tax that was lawfully levied in or before such Fiscal Year and that remains delinquent may be collected in subsequent years. 2. Tax Zone 2 The Special Tax in Tax Zone 2 shall be levied for the period necessary to fully satisfy the Tax Zone 2 Special Tax Requirement,but in no event shall the Special Tax be levied in Tax Zone 2 after the earlier of(i)June 30, 2081, or(ii)the date on which the CFD Administrator files with the County Council a A-14 4857-1255-2486v10/200356-0417 written notification(which the CFD Administrator shall file as soon as reasonably practicable after the close of a Fiscal Year)that the following events all occurred in the prior Fiscal Year: a. Debt Service Test. The County Council has resolved or covenanted that it will not issue any additional Bonds for CFD No. 1-2021 except for refunding purposes, provided that the debt service in any Fiscal Year on all outstanding Bonds after such issuance does not exceed the debt service on the Bonds before the refunding;and b. Special Tax Revenue Test — Developed Property. The aggregate Special Taxes received from Taxable Property in CFD No. 1-2021 from the levy of such Fiscal Year's Special Tax(as opposed to receipts from prior Fiscal Years and penalties and interest)on TMK Parcels in Tax Zone 1 that were classified as Developed Property for such Fiscal Year were not less than 50%of such Fiscal Year's Tax Zone 1 Special Tax Requirement;and c. Special Tax Revenue Test — Developed Property Plus Final Mapped Property. The aggregate Special Taxes received from Taxable Property in CFD No. 1-2021 from the levy of such Fiscal Year's Special Tax(as opposed to receipts from prior Fiscal Years and penalties and interest)on TMK Parcels in Tax Zone 1 that were classified as Developed Property or as Final Mapped Property for such Fiscal Year were not less than 75%of such Fiscal Year's Tax Zone 1 Special Tax Requirement;and d. Special Tax Revenue Test — Developed Property Plus Final Mapped Property Plus Undeveloped Property. The aggregate Special Taxes received from Taxable Property in CFD No. 1-2021 from the levy of such Fiscal Year's Special Tax (as opposed to receipts from prior Fiscal Years and penalties and interest)on TMK Parcels in Tax Zone 1 that were classified as Developed Property, as Final Mapped Property, or as Undeveloped Property for such Fiscal Year were not less than 100% of such Fiscal Year's Tax Zone 1 Special Tax Requirement;and e. Value Test. The"value of real property,"as defined in Section 32-57(c)of the Code, of the Taxable Property in Tax Zone 1 is at least three times the principal amount of Bonds then outstanding;and f. Value Test — Undeveloped Property. The aggregate Land Value of the non- delinquent TMK Parcels in Tax Zone 1 that were classified as Undeveloped Property for such Fiscal Year is not less than three times the product of the principal amount of Outstanding Bonds multiplied by a fraction,the numerator of which is the aggregate Special Taxes received from Taxable Property in CFD No. 1-2021 from the levy of such Fiscal Year's Special Tax (as opposed to receipts from prior Fiscal Years and penalties and interest) on TMK Parcels in Tax Zone 1 that were classified as Undeveloped Property for such Fiscal Year, and the denominator of which is such Fiscal Year's Tax Zone 1 Special Tax Requirement. The satisfaction of the conditions listed above in the CFD Administrator's written notification to the County Council would, for purposes of Section 32-56 of the Code, be deemed a prepayment and permanent satisfaction of the obligation to pay the Special Tax applicable to the TMK Parcels in Tax Zone 2. Accordingly,the County Council shall promptly cause to be prepared and filed with the Bureau of Conveyances and/or Land Court a notice of cancellation of Special Tax for all TMK Parcels in Tax Zone 2,all as provided for in said Section 32-56 of the Code. A-15 4857-1255-2486v10/200356-0417 ATTACHMENT 1 HAWAII COUNTY COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) IDENTIFICATION OF TAX ZONES ././\ 11, 52 .62 211 TMKs Within Tax Zone 1: 21 3-7-3-009-057-0000-000 3-7-3-009-058-0000-000 3-7-3-009-059-0000-000 3-7-3-009-060-0000-000 3-7-3-009-061-0000-000 •{t0 � 3-7-3-009-062-0000-000 3-7-3-009-070-0000-000 3-7-3-009-071-0000-000 TMKs Within Tax Zone 2 / ! 3-7-3-009-019-0000-000 12 Legend ® CFD Boundaries i°‘ r Tax Zone 1 //1 Tax Zone 2 12 Lot Number A-16 4857-1255-2486v10/200356-0417 ATTACHMENT 2 HAWAII COUNTY COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) TAX ZONE 1 EXPECTED LAND USES AND EXPECTED MAXIMUM SPECIAL TAX REVENUES »AT CFD FORMATION« Number of Expected Maximum Total Residential Special Tax Expected Units&Acres of per Unit Maximums Other Residential/ or Acre for Special Tax Non Residential Fiscal Year Revenues * Expected Land Uses Property 2021-22* (FY2021-22*) Single Family Detached Property Residential Floor Area< 1,601 SF 10 Units $1,663 per Unit $16,630 Residential Floor Area 1,601 - 1,800 SF 57 Units $1,913 per Unit $109,041 Residential Floor Area 1,801 -2,000 SF 20 Units $2,163 per Unit $43,260 Residential Floor Area 2,001 -2,200 SF 66 Units $2,537 per Unit $167,442 Residential Floor Area 2,201 -2,400 SF 77 Units $2,869 per Unit $220,913 Residential Floor Area 2,401 -2,600 SF 81 Units $3,119 per Unit $252,639 Residential Floor Area>2,600 SF 60 Units $3,410 per Unit $204,600 Single Family Attached Property 150 Units $1,281 per Unit $192,150 Other Residential Property 0.0 Acres $11,298 per Acre $0 Non-Residential Property 0.0 Acres $11,298 per Acre $0 Total 521 Units $1,206,675 0.0 Acres * On July 1,2022,and on each July 1 thereafter,all dollar amounts shown in the table above shall be increased by an amount equal to two percent(2.0%) of the amount in effect for the prior Fiscal Year. A-17 4857-1255-2486v10/200356-0417 APPENDIX B APPRAISAL B-1 4857-1255-2486v10/200356-0417 APPENDIX C SUMMARY OF INDENTURE The following is a summary description of certain provisions of the Indenture. This summary does not purport to be comprehensive or definitive and, accordingly, is qualified in its entirety by the actual terms of all provisions of the Indenture,to which reference is hereby made. Copies of the Indenture shall be on file in the office of the Director of Finance of the County and the Designated Office of the Trustee(as hereinafter defined). Certain Definitions Set forth below are definitions in summary form of certain terms contained in the Indenture that are used and not otherwise defined in this Official Statement. "Administrative Expense Account" means the account by such name in the Special Tax Fund created and established pursuant to the Indenture. "Administrative Expense Budget Amount" means, for any Fiscal Year, the budgeted amount of Administrative Expenses included in the levy of Special Taxes for such Fiscal Year,as determined by the County and confirmed by the Special Tax Administrator. "Administrative Expenses"means the actual or reasonably estimated costs related to the administration of the District as set forth in Chapter 32 and the Ordinance of Formation, including, but not limited to (a) "Incidental Expenses" as defined in Exhibit B to the Ordinance of Formation and supplemented by the Acquisition Agreement, and (b) "Administrative Expenses" as defined in Section A of the RMA, which definitions are incorporated herein by this reference as if fully set forth herein. "Alternative PenaltyAccount"means the account bysuch name created and established in the Rebate Fund pursuant to the Indenture. "Annual Debt Service"means the principal amount of any Outstanding Bonds payable in a Bond Year or Fiscal Year,as applicable,either at maturity or pursuant to a Sinking Fund Payment and any interest payable on any Outstanding Bonds in such Bond Year or Fiscal Year,if the Bonds are retired as scheduled. "Authorized County Representative"means the Director of Finance of the County or any other Person or Persons designated by the Director of Finance in a written instrument signed by such Director and containing the specimen signature of each such designee. "Authorized Developer Representative" means a Person or Persons designated by the Developer in a written instrument signed by the member(s), manager(s) or other appropriate officer(s) of the Developer, as applicable,and containing the specimen signature of each such designee. "Authorized Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein: (a) Direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Treasury Department, and CATS and TIGRS)or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America("Direct Obligations"); (b) Bonds,debentures,notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America(stripped securities are only permitted if they have been stripped by the agency itself): C-1 4857-1255-2486v10/200356-0417 (i) U.S. Export-Import Bank ("Eximbank") - direct obligations or fully guaranteed certificates of beneficial ownership, (ii) Farmers Home Administration("FmHA")-certificates of beneficial ownership, (iii) Federal Financing Bank, (iv) Federal Housing Administration debentures("FHA"), (v) General Services Administration participation certificates, (vi) Government National Mortgage Association ("GNMA"or"Ginnie Mae") - GNMA- guaranteed mortgage-backed bonds and GNMA-guaranteed pass-through obligations, (vii) U.S. Maritime Administration guaranteed Title XI financings,and (viii) U.S. Department of Housing and Urban Development("HUD")- project notes, local authority bonds, new communities debentures (U.S. government guaranteed debentures), and U.S. Public Housing Notes and Bonds(U.S.government guaranteed public housing notes and bonds); (c) Bonds,debentures,notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S.government agencies(stripped securities are only permitted if they have been stripped by the agency itself): (i) Federal Home Loan Bank System-senior debt obligations, (ii) Federal Home Loan Mortgage Corporation ("FHLMC" or "Freddie Mac") - senior debt obligations, (iii) Federal National Mortgage Association ("FNMA" or "Fannie Mae") - senior debt obligations, (iv) Student Loan Marketing Association ("SLMA" or "Sallie Mae") - senior debt obligations, (v) Resolution Funding Corp.("REFCORP")debt obligations,and (vi) Farm Credit System Corp. -consolidated system-wide bonds and notes; (d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Securities Act of 1933 and to which Standard& Poor's has assigned a rating of AAAm G, AAAm or AAm, and, which, if they are rated by Moody's, are rated Aaa, Aal or Aa2 (including money market funds of the Trustee and its affiliates or funds for which the Trustee or affiliates provide investment advisory or other management services); (e) Certificates of deposit secured at all times by collateral described in(a)and/or(b)above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the Trustee on behalf of the Owners must have a perfected first security interest in the collateral; (f) Certificates of deposit,savings accounts,deposit accounts or money market deposits which are fully insured by the Federal Deposit Insurance Corporation("FDIC")or which are with a bank rated AA or better by Standard&Poor's and Aa or better by Moody's(including those of the Trustee and its affiliates); C-2 4857-1255-2486v10/200356-0417 (g) Investment Agreements with any corporation, including banking or financial institutions, provided that: (i) the long-term debt of the provider of any such investment agreement,or in the case of a guaranteed corporation the long-term debt of the guarantor is rated, at the time of investment, in one of the two highest rating categories offered by each Rating Agency(without regard to gradations of plus or minus,or numerical gradations,within such category),and (ii) any such investment agreement shall include a provisions that in the event that the long-term debt rating of the provider or the guarantor is downgraded below AA-by Standard& Poor's or Aa3 by Moody's during the term of the agreement the provider must either(A)deliver to the Trustee or a third party custodian collateral in the form of Treasury Department or agency obligations which at least equal 102%of the principal amount invested thereunder or(B)assign the existing agreement and all of its obligations thereunder to a financial institution mutually acceptable to the provider,the County and the Trustee which is rated in one of the two highest rating categories offered by each Rating Agency (without regard to gradations of plus or minus,or numerical gradations,within such category),and (iii) any such investment agreement shall include a provision that in the event that the long- term debt rating or claims paying ability rating of the provider, or the guarantor, is downgraded below A-by Standard& Poor's or A3 by Moody's during the term of the agreement the provider must repay the principal of and accrued by it unpaid interest on the invested moneys,and (iv) any such agreement shall include a provision to the effect that in the event of default under such Investment Agreement by such provider or in the event of a bankruptcy of such provider, the County has the right to withdraw or cause the Trustee to withdraw all funds invested in such agreement and thereafter to invest such funds pursuant to the Indenture, and (v) any such investment agreement permits withdrawal upon not more than three(3)days' notice(excepting only withdrawals from the Project Fund, from which withdrawals may be permitted upon not more than seven(7)days' notice)for any purpose authorized for the use of the invested funds under the Indenture; (h) Commercial paper rated, at the time of purchase, Prime-1 by Moody's and A-1 or better by Standard&Poor's; (i) Bonds or notes issued by any state or municipality which are rated by both Rating Agencies in one of the two highest rating categories assigned by such agencies; (j) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured,uninsured or unguaranteed obligation rating of Prime-1 or A3 or better by Moody's and A-1 or A or better by Standard& Poor's; (k) Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank insured by FDIC, if such broker/dealer or bank has an uninsured,unsecured and unguaranteed obligation rated P-1 or A3 or better by Moody's,and A-1 or A-by Standard& Poor's;provided: (i) a master repurchase agreement or specific written repurchase agreement governs the transaction,and (ii) the securities are held free and clear of any lien by the Trustee or an independent third party acting solely as agent("Agent")for the Trustee,and such third party is(i)a Federal Reserve Bank, (ii)a bank which is a member of the Federal Deposit Insurance Corporation and which has combined C-3 4857-1255-2486v10/200356-0417 capital,surplus and undivided profits of not less than$50 million,or(iii)a bank approved in writing for such purpose by the County, and the Trustee shall have received written confirmation from such third party that it holds such securities,free and clear of any lien,as agent for the Trustee,and (iii) a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R.350.0 et seq. in such securities is created for the benefit of the Trustee,and (iv) the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two Business Days of such valuation,and (v) the fair market value of the securities in relation to the amount of the repurchase obligation,including principal and interest, is equal to at least 103%. To the extent that any of the requirements concerning Authorized Investments embodies a legal conclusion,the Trustee shall be entitled to conclusively rely upon a Certificate from the appropriate party or an opinion from counsel to such party,that such requirement has been met. "Bond Counsel"means an attorney at law or a firm of attorneys selected by the County of nationally recognized standing in matters pertaining to the tax exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia. "Bond Ordinance"means Ordinance No.22-33,adopted by the County Council on April 22,2022 and approved by the Mayor of the County on March 7,2022,authorizing the issuance of the Bonds. "Bond Year"means the twelve month period commencing on May 16 of each year and ending on May 15 of the following year,except that the first Bond Year for a Series of Bonds shall begin on the Delivery Date of the Bonds of such Series and end on the first May 15 which is not more than 12 months after the Delivery Date of the Bonds of such Series, provided that for purposes of arbitrage rebate calculations with respect to a particular Series of Bonds,"Bond Year"shall have the meaning ascribed thereto in the Tax Certificate applicable to the Bonds of such Series. "Business Day"means a day which is not a Saturday or Sunday or a day of the year on which banks in New York,New York,Honolulu,Hawai`i,or the city where the Designated Office of the Trustee is located,are not required or authorized to remain closed. "Capitalized Interest"means interest on the 2022 Bonds that is funded with proceeds of such Bonds. "Capitalized Interest Subaccount"means the Subaccount by such name created and established in the Interest Account of the Special Tax Fund pursuant to the Indenture. "Certificate"means a written certificate or report delivered pursuant to the provisions of the Indenture with respect to specified matters arising thereunder, which shall be executed by an Authorized County Representative, an Authorized Developer Representative or the authorized representatives of other Persons as required or permitted under the Indenture. "Chapterl9"means Chapter 19 of the County Code. "Chapter 32"means Chapter 32 of the County Code. C-4 4857-1255-2486v10/200356-0417 "Construction Account"means the Account by such name created and established in the Project Fund pursuant to the Indenture. "Costs of Issuance"means the costs and expenses incurred in connection with the issuance and sale of any Series of Bonds, including without limitation the acceptance and initial annual fees and expenses of the Trustee,legal fees and expenses,costs of printing the Bonds and the preliminary and final official statements for the Bonds,fees of financial consultants,District formation and related administration costs and all other related fees and expenses. "Costs of Issuance Account" means the Account by that name created and established in the Project Fund pursuant to the Indenture. "County Code"means the Hawai`i County Code 1983 (2016 Edition,as Amended). "DEM"means the Department of Environmental Management of the County;provided that,when used with respect to any matter as to which DEM has delegated responsibility to the Department or Public Works or other departments of the County,references to DEM shall mean the department to which such responsibility has been delegated. "Delivery Date"means the date on which the Bonds of a Series are issued and delivered to the initial purchasers thereof. "Designated Office of the Trustee"means such office as the Trustee may designate from time to time as the office or offices at which its duties under the Indenture shall be performed. "Developer" means, collectively, (i) RCFC Kaloko Heights, LLC, a Delaware limited liability company, (ii) Kaloko Heights BIA Holdings, LLC, a Delaware limited liability company, and (iii) Kaloko Heights Investors, LLC, a Delaware limited liability company, and their respective successors and assigns as "Developer" under the Acquisition Agreement. Note: The Developer is referred to elsewhere in this Official Statement as the"Property Owner." "Federal Securities"means any of the following: (a) Cash; (b) United States Treasury Certificates,Notes and Bonds(including State and Local Government Series—"SLGS"); (c) Direct obligations of the Treasury Department which have been stripped by the Treasury Department itself,e.g., CATS,TIGRS and similar securities; (d) The interest component of Resolution Funding Corp.strips which have been stripped by request to the Federal Reserve Bank of New York and are in book-entry form, (e) Obligations issued by the following agencies if backed by the full faith and credit of the United States: (i) Eximbank-direct obligations or fully guaranteed certificates of beneficial ownership, (ii) FmHA -certificates of beneficial ownership, (iii) Federal Financing Bank, C-5 4857-1255-2486v10/200356-0417 (iv) General Services Administration-participation certificates, (v) U.S.Maritime Administration-guaranteed Title XI financing,and (vi) HUD - project notes, local authority bonds, new communities debentures - U.S. government guaranteed debentures, U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds, (f) Pre-refunded municipal bonds the principal of and interest and premium (if any)on which are fully secured by securities described in clauses(a)through(e)above,which securities shall be deposited into a segregated escrow fund and shall be irrevocably pledged and used exclusively to pay such principal, premium (if any)and interest. "Fiscal Year" means the period beginning on July 1 of each year and ending on the next following June 30. . "Fitch"means Fitch Ratings,or its successors and assigns. "Improvements"means the public sewer system improvements described in the Ordinance of Formation and the Acquisition Agreement. "Independent Financial Consultant"means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field,appointed and paid by the County,who,or each of whom: (a)is in fact independent and not under the control of the County; (b)does not have any substantial interest, direct or indirect, in the County; and (c)is not connected with the County as a member, officer or employee of the County,but who may be regularly retained to make annual or other reports to the County. "Indenture" means the Trust Indenture between the County and the Trustee, pursuant to which the Bonds are to be issued and secured, as amended and supplemented from time to time by any Supplemental Indentures. "Interest Account"means the account by such name created and established in the Special Tax Fund pursuant to the Indenture. "Interest Payment Date"means each May 15 and November 15,commencing May 15,2023;provided, however, that,if any such day is not a Business Day,interest up to,but not including,the Interest Payment Date will be paid on the Business Day next following such date. "Investment Agreement" means one or more agreements for the investment of funds of the District complying with the criteria therefor as set forth in Subsection (g) of the definition of Authorized Investments under the Indenture. "Letter of Credit"means an irrevocable direct-pay letter of credit,in form and substance satisfactory to the County, issued in favor of the Trustee by a bank or other financial institution acceptable to the County. "Maximum Annual Debt Service" means the maximum amount of the Annual Debt Service for any Bond Year prior to the final maturity of the Bonds. "Maximum Special Tax" means the maximum Special Tax determined for each category of Taxable Property in accordance with the RMA. "Moody's"means Moody's Investors Service,or its successors and assigns. C-6 4857-1255-2486v10/200356-0417 "Ordinance of Formation" or "Formation Ordinance" means Ordinance No. 21-67, adopted by the County Council on September 22, 2021 and approved by the Mayor of the County on October 6, 2021, establishing the District and authorizing the levy of Special Taxes on Taxable Property in the District. "Outstanding" or "Outstanding Bonds" means all Bonds issued by the County under the Indenture, except: (a)Bonds theretofore cancelled or surrendered for cancellation in accordance with the Indenture; (b)Bonds for payment or redemption of which moneys shall have been theretofore deposited in trust(whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in the Indenture; and (c)Bonds which have been surrendered to the Trustee for transfer or exchange or for which a replacement has been issued pursuant to the Indenture. "Owner" or "Bondowner" means the Person or Persons in whose name or names any Bond is registered. "Parity Bonds" means all bonds, notes or other evidences of indebtedness issued subsequent to the issuance of the 2022 Bonds for the purpose of refunding all or a portion of the Outstanding Bonds of any Series previously issued hereunder,subject to the conditions set forth in the Indenture. "Person" means natural persons, firms, corporations, partnerships, limited liability companies, associations,trusts,public bodies and other entities. "Prepayment" means money received by the County as a complete or partial prepayment of Special Taxes permitted pursuant to the RMA. "Prepayment Account" means the Account by such name created and established in the Special Tax Fund pursuant to the Indenture. "Principal Account"means the Account by such name created and established in the Special Tax Fund pursuant to the Indenture. "Project Fund"means the Fund by such name created and established pursuant to the Indenture. "Rating Agency" means (i)Fitch, (ii)Moody's, (iii)Standard & Poor's, or (iv)such other nationally recognized rating agencies that rate municipal bonds,as designated by an Authorized County Representative "Real Property Taxes"means real property taxes,but not Special Taxes,levied by the County pursuant to Chapter 19. "Rebate Account" means the Account by such name created and established in the Rebate Fund pursuant to the Indenture. "Rebate Fund"means the fund by such name created and established pursuant to the Indenture. "Rebate Regulations" means any final, temporary or proposed Regulations promulgated under Section 148(f)of the Tax Code. "Redemption Account" means the account by such name created and established in the Special Tax Fund pursuant to the Indenture. "Reserve Account" means the account by such name created and established in the Special Tax Fund pursuant to the Indenture. C-7 4857-1255-2486v10/200356-0417 "Reserve Requirement" means, as of any date of calculation by the County, an amount equal to the lowest of(i) 10%of the original proceeds of the Bonds, less original issue discount, if any, plus original issue premium, if any,or(ii)Maximum Annual Debt Service,or(iii) 125%of the average Annual Debt Service. "RM4" means the Rate and Method of Apportionment of Special Taxes for the District, as approved by County pursuant to the Ordinance of Formation and attached thereto as Exhibit C, as such RMA may be amended from time to time(if and to the extent such amendment is consistent with the covenant described under "Certain Covenants of the County-Reduction of Maximum Special Taxes or Aggregate Tax Levy"herein). "Series" means one or more Bonds issued at the same time, or sharing some other common term or characteristic,and designated as a separate series pursuant to the Indenture. "Sinking Fund Payment"means,with respect to Bonds of any Series issued as so-called"Term Bonds," the annual payment in those years indicated in the Indenture or in the applicable Supplemental Indenture to be deposited in the Principal Account to redeem a portion of such Term Bonds in accordance with the schedule set forth in the Indenture or in the applicable Supplemental Indenture to retire such Term Bonds. "Special Tax Administrator"means such Person as may be designated by the County to administer the calculation and collection of the Special Taxes,or any successor acting in such capacity. "Special Tax Fund"means the fund by such name created and established pursuant to the Indenture. "Special Taxes" means the special taxes authorized by the Ordinance of Formation to be levied on Taxable Property within the District in accordance with the RMA,together with applicable penalties and interest, but excluding proceeds of the sale of any Taxable Property upon foreclosure pursuant to the Indenture that are applied to the payment of costs related to such sale, including, but not limited to, all legal fees and expenses, court costs,consultant and title insurance fees and expenses. "Standard & Poor's" means Standard & Poor's Ratings Services, a division of The McGraw Hill Companies,or its successors and assigns. "Supplemental Indenture" means any supplemental indenture entered into in accordance with the provisions of the Indenture to amend or supplement the Indenture. "Surplus Fund"means the Fund by such name created and established pursuant to the Indenture. "Taxable Property" means all parcels of property within the District that are subject to the levy of Special Taxes by the County in accordance with the RMA. "Tax Code" means the Internal Revenue Code of 1986, as amended, and any regulations, rulings, judicial decisions, and notices, announcements, and other releases of the Treasury Department or Internal Revenue Service interpreting and construing it. "Tax Receipts Account"means the Account by such name created and established in the Project Fund, pursuant to the Indenture. "Tax Zone 1"shall have the meaning set forth in the RMA. "Tax Zone 1 Special Tax Requirement"shall have the meaning set forth in the RMA. "Tax Zone 2"shall have the meaning set forth in the RMA. "Tax Zone 2 Special Tax Requirement"shall have the meaning set forth in the RMA. C-8 4857-1255-2486v10/200356-0417 "Treasury Department"means the United States Department of the Treasury. Authorization of Bonds; Security for Bonds The Indenture authorizes the issuance of Bonds,in one or more Series,in an aggregate principal amount not to exceed$22,000,000(excluding Bonds issued to refund other Bonds previously issued under the Indenture) to fund (or refund) costs relating to the Improvements. The Bonds shall be limited obligations of the County and shall be payable as to the principal thereof and interest thereon and any premiums upon the redemption thereof solely from the Special Taxes and amounts on deposit in the Special Tax Fund (other than amounts in the Administrative Expense Account of the Special Tax Fund)and the Project Fund(other than amounts in the Tax Receipts Account of the Project Fund). Neither the full faith and credit nor the taxing power(except as it pertains to the Special Taxes) of the County, the State or any political subdivision thereof is pledged to the payment of the Bonds. The Bonds are not a legal or equitable pledge,charge,lien,or encumbrance upon any of the County's property,or upon any of its income,receipts or revenues,except the Special Taxes and amounts in the Special Tax Fund(exclusive of the Administrative Expense Account)and the Project Fund(exclusive of the Tax Receipts Account)which are, under the terms of the Indenture, pledged for the payment of the Bonds and interest thereon. The County shall not be required to advance any money derived from any other source for the payment of the principal of and interest and premium (if any) on the Bonds, or for the performance of any covenants contained in the Indenture. Neither the members of the County Council nor any Persons executing the Bonds,are liable personally on the Bonds by reason of their issuance. The Bonds shall be equally and ratably secured by and payable from the Special Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account thereof) and the Project Fund (exclusive of the Tax Receipts Account thereof) without priority for number, date of the Bonds, date of sale,date of execution,or date of delivery,and payment of the principal of(including Sinking Fund Payments) and interest and premium (if any) on the Bonds shall be exclusively paid from the Special Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) and the Project Fund (exclusive of the Tax Receipts Account),which are pledged under the Indenture to the payment of the principal of and interest and premium (if any) on the Bonds. Amounts in the Special Tax Fund (other than the Administrative Expense Account therein)and the Project Fund(exclusive of the Tax Receipts Account therein) shall constitute trust funds held for the benefit of the Owners to be applied to the payment of the principal of and interest and premium (if any)on the Bonds and so long as any of the Bonds or any premium or interest thereon remain Outstanding,such amounts shall not be used for any other purpose,except as permitted by the Indenture or any Supplemental Indenture. A portion of the Special Taxes initially deposited in the Special Tax Fund shall be transferred and deposited to the Administrative Expense Account of the Special Tax Fund,the Rebate Fund, the Tax Receipts Account of the Project Fund and the Surplus Fund in accordance with the Indenture and,upon such transfer and deposit,shall no longer be considered to be pledged to the Bonds;and none of the Rebate Fund,the Tax Receipts Account of the Project Fund,the Administrative Expense Account of the Special Tax Fund nor the Surplus Fund shall be construed as a trust fund held for the benefit of the Owners. Issuance of Parity Bonds The County may issue Parity Bonds for the purpose of refunding all or a portion of the Outstanding Bonds of any Series previously issued hereunder; subject to the terms and conditions specified below. Such Parity Bonds, if issued,shall be secured by the Indenture on a parity with the 2022 Bonds and any other Parity Bonds. The issuance of Parity Bonds is subject to compliance with certain terms and conditions specified in the Indenture, including but not limited to the following: Supplemental Indenture. The County and the Trustee shall enter into a Supplemental Indenture providing for the issuance of the Parity Bonds, specifying the purpose for which such Parity Bonds are being C-9 4857-1255-2486v10/200356-0417 issued, directing the deposit of Parity Bond proceeds into the Funds and Accounts established under the Indenture,and approving the form and terms of the Parity Bonds. Certificate Regarding Debt Service. The Trustee shall have received a Certificate from an Independent Financial Consultant verifying that the Annual Debt Service on the Parity Bonds to be issued does not exceed the Annual Debt Service on the Bonds to be refunded in any Fiscal Year during which the Parity Bonds are Outstanding: Other Documents. The County and the Trustee shall have received such other documents, including Certificates and legal opinions,as may be required to demonstrate compliance with the applicable provisions for the issuance of such Parity Bonds pursuant to the Acquisition Agreement, the Indenture and the Supplemental Indenture authorizing the issuance of such Parity Bonds. Creation of Funds and Accounts Pursuant to the Indenture, the following Funds (and Accounts and Subaccounts within Funds) are created and established and shall be maintained by the Trustee: (a) The Special Tax Fund and, within such Fund, (i)an Interest Account, which shall include a Capitalized Interest Subaccount, (ii)a Principal Account, (iii)a Redemption Account, (iv)a Prepayment Account,(v)a Reserve Account,and(vi)an Administrative Expense Account; (b) The Rebate Fund and, within such Fund,(i)a Rebate Account and(ii)an Alternative Penalty Account; (c) The Surplus Fund;and (d) The Project Fund and, within such Fund, (i)a Costs of Issuance Account, (ii)a Construction Account,(iii)a Contingency Account,and(iv)a Tax Receipts Accoount. Deposits to and disbursements from such Funds,Accounts and Subaccounts are described in the Sections that follow. Deposits to and Disbursements from Special Tax Fund. As discussed under "Certain Covenants of the County-Punctual Payment; Covenant Against Encumbrances"herein,the County covenants under the Indenture to deposit Special Taxes with the Trustee not less often that once per month. On each date on which the Special Taxes are received from the County, the Trustee shall deposit the Special Taxes in the Special Tax Fund,provided that any Prepayment shall be deposited in the funds and accounts (and in the respective amounts) specified in the Certificate of the Special Tax Administrator delivered to the Trustee in connection with the delivery of the Prepayment to the Trustee. The Trustee shall transfer the amounts on deposit in the Special Tax Fund on the dates and in the amounts set forth in the following Sections generally,in the following order of priority,but subject in any event to the provisions of the following Sections,to: (i) The Administrative Expense Account; (ii) The Interest Account; (iii) The Principal Account; (iv) The Redemption Account; C-10 4857-1255-2486v10/200356-0417 (v) The Reserve Account; (vi) The Rebate Fund;and (vii) The Surplus Fund. At the maturity of all of the Bonds and, after all principal and interest then due on the Bonds then Outstanding has been paid or provided for and any amounts owed to the Trustee have been paid in full,moneys in the Special Tax Fund and any accounts therein may be used by the County for any lawful purpose. Administrative Expense Account of the Special Tax Fund In addition to Bond proceeds and Special Taxes deposited therein in connection with the issuance of any Series of Bonds, the Trustee shall, not less often than annually, transfer from the Special Tax Fund and deposit in the Administrative Expense Account from time to time, upon the written direction of an Authorized County Representative, amounts necessary to make timely payment of Administrative Expenses; provided, however,that,except as set forth below,the total amount transferred to the Administrative Expense Account in any Fiscal Year shall not exceed the Administrative Expense Budget Amount for such Fiscal Year until such time as there has been deposited(a)to the Interest Account and the Principal Account an amount,together with any amounts already on deposit therein, that is sufficient to pay the interest and principal on all Bonds due in such Fiscal Year, and(b)to the Reserve Account an amount sufficient, together with amounts then on deposit therein, to restore the Reserve Account to the Reserve Requirement. Notwithstanding the foregoing, amounts in excess of the Administrative Expense Budget Amount may be transferred to the Administrative Expense Account to pay Administrative Expenses incurred by the County in collecting delinquent Special Taxes(other than such Administrative Expenses paid from the proceeds of foreclosure sales) if and to the extent that such Administrative Expenses exceed the sum of(i)the amount included in the Administrative Expense Budget Amount for such purpose and (ii)the amount of unencumbered funds in the Administrative Expense Account available for such purpose. In addition to the foregoing, the Trustee shall also deposit in the Administrative Expense Account the portion of any Prepayment directed to be deposited in such Account in accordance with the Certificate of the Special Tax Administrator delivered to the Trustee in connection with such Prepayment. The Trustee shall apply amounts on deposit in the Administrative Expense Account to pay or reimburse the County for Administrative Expenses as directed in writing by an Authorized County Representative. Interest Account and Principal Account of the Special Tax Fund The principal of and interest due on the Bonds until maturity,other than principal due upon optional or special mandatory redemption,shall be paid by the Trustee from the Principal Account and the Interest Account, respectively. For the purpose of assuring that the payment of principal of and interest on the Bonds will be made when due, the Trustee shall make the transfers described below from the Special Tax Fund on each Interest Payment Date first to the Interest Account and then to the Principal Account; provided, however, that to the extent that deposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds,the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund (exclusive of the Administrative Expense Account and the Reserve Account)are inadequate to make the foregoing transfers then any deficiency shall be made up by an immediate transfer from the Reserve Account: (a) To the Interest Account,an amount such that the balance in the Interest Account shall be equal to the installment of interest due on the Bonds on said Interest Payment Date (including interest due on Bonds called for optional redemption, mandatory sinking fund redemption or special mandatory redemption on such date)and any installment of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds as the same become due; provided that moneys in the Capitalized Interest Subaccount shall be used for the payment of interest before application of other moneys in the Interest Account for such purpose. C-11 4857-1255-2486v10/200356-0417 (b) To the Principal Account,on May 15 of each year in which any Bonds are payable at maturity or upon mandatory sinking fund redemption, an amount such that the balance in the Principal Account shall equal the sum of(i)the principal payment due on the Bonds maturing on such May 15, (ii)the Sinking Fund Payment due on any Outstanding Bonds upon mandatory sinking fund redemption on such May 15,and(iii)any principal payment due on a previous May 15 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds as the same become due at maturity or upon mandatory sinking fund redemption pursuant to the Sinking Fund Payment schedules set forth in the Indenture with respect to the 2022 Bonds and in the applicable Supplemental Indenture with respect to Parity Bonds;provided,however, that in lieu or partially in lieu of any mandatory sinking fund redemption, moneys deposited in the Principal Account as set forth above may be used to purchase Outstanding Bonds as described under "Redemption or Purchase of Bonds"herein. In addition to the transfers to the Interest Account and Principal Account described above,the Trustee shall also transfer thereto such portions of a Prepayment as may be directed to be so transferred in the Certificate of the Special Tax Administrator delivered to the Trustee in connection with the Prepayment,as described under "Certain Covenants of the County-Disposition of Prepayments"herein. In the event of any purchase of Bonds in lieu of redemption as described under "Redemption or Purchase of Bonds" herein, the Trustee shall also transfer from the Special Tax Fund to the Interest Account and, if the purchase is in lieu of a mandatory sinking fund redemption,to Principal Account the amounts needed to pay the respective portions of the purchase price of the Bonds representing the interest on such Bonds and the principal otherwise payable upon redemption thereof. Redemption Account of the Special Tax Fund After making the deposits to the Interest Account and the Principal Account of the Special Tax Fund pursuant as described under"Interest Account and Principal Account of the Special Tax Fund" above, and in accordance with the County's election to call Bonds for optional redemption as described under"Redemption or Purchase of Bonds"below,the Trustee shall transfer from the Special Tax Fund and deposit in the Redemption Account moneys available for the purpose and sufficient to pay the principal and the premiums, if any,payable on the Bonds called for optional redemption; provided, however, that amounts in the Special Tax Fund (other than the Administrative Expense Account therein)may be so deposited in the Redemption Account and applied to optionally redeem Bonds only if immediately following such transfer and redemption the amount in the Reserve Account will equal the Reserve Requirement. The Trustee shall also transfer from the Project Fund and deposit in the Redemption Account moneys in the amounts and at the times described under "Project Fund" herein. Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and shall be applied on the redemption date to the payment of the principal of and premium,if any,on the Bonds to be redeemed upon presentation and surrender of such Bonds; provided, however, that in lieu or partially in lieu of such call and redemption,moneys deposited in the Redemption Account as set forth above may be used to purchase Outstanding Bonds as described under"Redemption or Purchase of Bonds"herein. Prepayment Account of the Special Tax Fund Upon receipt of any Prepayment, the Trustee shall deposit in the Prepayment Account the portion of such Prepayment remaining after deduction of the portions representing (i)prepaid Administrative Expenses, which shall be deposited in the Administrative Expense Account, and(ii)interest and principal coming due on the Bonds during the then current Fiscal Year, which shall be deposited in the Interest Account and Principal Account, respectively. The amounts so to be deposited shall be specified in a Certificate of the Special Tax Administrator delivered to the Trustee in connection with the delivery of such Prepayment, as described under "Certain Covenants of the County-Disposition of Prepayments"herein. C-12 4857-1255-2486v10/200356-0417 Moneys set aside in the Prepayment Account shall be used solely for the purpose of redeeming Bonds and shall be applied on the redemption date to the payment of the principal of and premium,if any,on the Bonds to be redeemed upon presentation and surrender of such Bonds; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Prepayment Account as set forth above may be used to purchase Outstanding Bonds as described under"Redemption or Purchase of Bonds"herein. Reserve Account of the Special Tax Fund The Trustee shall maintain in the Reserve Account an amount equal to the Reserve Requirement, into which moneys shall be transferred from the Special Tax Fund to the extent necessary to restore the balance in the Reserve Account to the Reserve Requirement. In addition, the County may, but shall not be obligated to, advance funds from any source of legally available funds in order to maintain the Reserve Account of the Special Tax Fund at the Reserve Requirement or to avoid a default in payment on the Bonds,in which event the County shall be reimbursed for any such advance from the amount of Special Taxes thereafter received that would otherwise be transferred from the Special Tax Fund to the Reserve Account pursuant to the Indenture or from funds available for such purpose in the Surplus Fund. Amounts in the Reserve Account shall be applied as follows: (i) Moneys in the Reserve Account shall be used solely for the purpose of(A)paying the principal of, including Sinking Fund Payments,and accrued interest on any Bonds when due in the event that the moneys in the Interest Account and the Principal Account are insufficient therefor,and(B)making any required transfer to the Rebate Fund upon written direction from the County. If the amounts in the Interest Account or the Principal Account are insufficient to pay the principal of,including Sinking Fund Payments,or accrued interest on any Bonds when due, or amounts in the Special Tax Fund are insufficient to make transfers to the Rebate Fund when required, the Trustee shall withdraw from the Reserve Account for deposit in the Interest Account or the Principal Account or the Rebate Fund,as applicable,moneys necessary for such purposes. (ii) Whenever moneys are withdrawn from the Reserve Account, after making the required transfers to the Administrative Expense Account, the Interest Account and the Principal Account, the Trustee shall transfer to the Reserve Account from available moneys in the Special Tax Fund,or from any other legally available funds which the County elects to apply to such purpose,the amount needed to restore the amount of such Reserve Account to the Reserve Requirement. Moneys in the Special Tax Fund shall be deemed available for transfer to the Reserve Account only if the Trustee determines that such amounts will not be needed to make the deposits required to be made to the Interest Account or the Principal Account for the next succeeding Interest Payment Date. If amounts in the Special Tax Fund or otherwise transferred to replenish the Reserve Account are inadequate to restore the Reserve Account to the Reserve Requirement, then the County shall include the amount necessary fully to restore the Reserve Account to the Reserve Requirement in the next annual Special Tax levy to the extent of the maximum permitted Special Tax rates and to the extent permitted by Chapter 32. (iii) In connection with an optional redemption of the Bonds or a partial defeasance of the Bonds in accordance with the Indenture,amounts in the Reserve Account may be applied to such optional redemption or partial defeasance so long as the amount on deposit in the Reserve Account following such optional redemption or partial defeasance equals the Reserve Requirement, as calculated for the Bonds to remain outstanding immediately after such optional redemption or partial defeasance. (iv) If the amount on deposit in the Reserve Account exceeds the Reserve Requirement as of any first day of any Bond Year, such excess shall be withdrawn from the Reserve Account and transferred to the Interest Account as soon as practicable. Funds on deposit in the Reserve Account during the final Bond Year for any particular Series of Bonds may be applied to pay the principal of and interest due on the Bonds of such Series in such final Bond Year so long as the amount on deposit in the Reserve Account following such payments is at least equal to the Reserve Requirement for all other Series of Bonds to remain Outstanding. In addition, C-13 4857-1255-2486v10/200356-0417 funds on deposit in the Reserve Account during the final Bond Year in which any Bonds remain Outstanding may be applied to pay the principal of and interest due on the Bonds in such final Bond Year. Rebate Fund The Trustee shall establish and maintain the Rebate Fund and shall establish a separate Rebate Account and Alternative Penalty Account therein for the 2022 Bonds. All money at any time deposited in the Rebate Account or the Alternative Penalty Account of the Rebate Fund shall be held by the Trustee in trust,for payment to the Treasury Department. A separate subaccount of the Rebate Account and the Alternate Penalty Account shall be established for each Series of Bonds the interest on which is excluded from gross income for federal income tax purposes. Rebate Account. At the times specified in the Indenture, the County shall calculate or cause to be calculated the amount of rebatable arbitrage for each Series of Bonds in accordance with Section 148(0(2) of the Tax Code and Section 1.148 3 of the Rebate Regulations(taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage described in the Tax Certificate for each issue (e.g., the temporary investments exceptions of Section 148(0(4)(B) and (C) of the Tax Code), and taking into account whether the election pursuant to Section 148(0(4)(C)(vii)of the Tax Code(the"11/2%Penalty")has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148 1(b)of the Rebate Regulations(the"Rebatable Arbitrage"). From time to time as specified in the Indenture,the County shall direct the Trustee to deposit into the Rebate Account from any funds designated by the County the amounts required so that the balance in the Rebate Account shall equal the amount of Rebatable Arbitrage. Alternative Penalty Account. If the 11/2%Penalty has been elected,the County shall determine or cause to be determined, at the times specified in the Indenture, whether the 11/2%Penalty is payable(and the amount of such penalty). From time to time as specified in the Indenture,the County shall direct the Trustee to deposit into the Alternative Penalty Account from any funds designated by the County so that the balance in each subaccount of the Alternative Penalty Account equals the amount of 1'h% Penalty due and payable to the Treasury Department. Payment to the Treasury Department. The Trustee shall pay, as directed in writing by an Authorized County Representative at the times specified in the Indenture,to the Treasury Department,(a)out of the Rebate Account,the amounts required under the Rebate Regulations to satisfy the County's payment obligations with respect to Rebatable Arbitrage, and(b)out of the Alternative Penalty Account,the amounts required under the Rebate Regulations to satisfy the County's payment obligations with respect to the 11/2%Penalty. Survival of Defeasance and Final Payment;Amendments. The County's obligation to comply with the foregoing covenants shall survive the defeasance and final payment of the Bonds. The foregoing covenants may be deleted or amended in any manner without the consent of the Owners,provided that prior to such event there is delivered to the County an opinion of Bond Counsel to the effect that such deletion or amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds. Project Fund. Pursuant to the Indenture,a Costs of Issuance Account,a Construction Account,a Contingency Account and a Tax Receipts Account are created and established within the Project Improvement Fund. Amounts on deposit in the Costs of Issuance Account shall be used to pay Costs of Issuance. Amounts on deposit in the Construction Account, the Contingency Account and the Tax Receipts Account, as applicable, shall be used to pay costs of the Improvements in accordance with the provisions of the Acquisition Agreement. Disbursements from such Accounts shall be made pursuant to an original or facsimile transmission of a requisition signed by an Authorized County Representative substantially in the form prescribed by the Indenture. C-14 4857-1255-2486v10/200356-0417 Upon the issuance of the 2022 Bonds, (i) proceeds of such Bonds shall be deposited into the Costs of Issuance Account and the Construction Account of the Project Fund in the amounts specified in the Indenture, and(ii)cash or a Letter of Credit provided by the Developer or proceeds of the 2022 Bonds(if permitted under the Acquisition Agreement) shall be deposited into the Contingency Account in the amount specified in the Acquisition Agreement. In addition, if applicable prior to completion of the Improvements, the County shall require the Developer to make one or more deposits into the Contingency Account as required under the Acquisition Agreement. In addition,the Trustee shall transfer funds from the Surplus Fund to the Tax Receipts Account of the Project Fund at such times and in such amounts as are specified in a Certificate on an Authorized County Representative pursuant to the Indenture. Payments from the Project Fund shall be made upon requisition therefor in accordance with the Indenture and the Acquisition Agreement. The County may withhold requisitions for payments from the Project Fund,and the Developer shall not be entitled to such payments, if and to the extent provided in the Acquisition Agreement. Upon completion of the Improvements, receipt of the Certificates of an Authorized Developer Representative and of an Authorized County Representative(which may be given in reliance upon the Certificate of the Authorized Developer Representative)confirming that the Improvements are Complete(as defined in the Acquisition Agreement)and that all costs of the Improvements have been paid in full,the Trustee shall(i)return any unexpended balance in the Contingency Account to the Developer(if originally provided by the Developer in the form of cash or a Letter of Credit),and(ii) [if the amount remaining in the Construction Account is equal to or greater than$ ,transfer the portion of such amount equal to the largest integral multiple of$5,000 that is not greater than such amount to the Redemption Account,to be applied to the redemption of Bonds]and after, making such transfer from the Construction Account,if any,transfer all of the amount remaining in such Account to the Interest Account,to be applied to the payment of interest on the Bonds. Surplus Fund After making the required transfers from the Special Tax Fund to the other Accounts and Funds described above,as soon as practicable after each May 15,and in any event prior to each August 1,the Trustee shall transfer all remaining amounts in the Special Tax Fund, if any,to the Surplus Fund,other than amounts in the Special Tax Fund which the County has deemed available in calculating the amount of the levy of Special Taxes for such Fiscal Year. On the written direction of an Authorized County Representative,moneys deposited in the Surplus Fund shall be transferred by the Trustee, (i)to the Principal Account or the Interest Account to pay the principal of,including Sinking Fund Payments,and interest,respectively,on the Bonds when due in the event that moneys in the Special Tax Fund and the Reserve Account are insufficient therefor,(ii)to the Reserve Account in order to replenish the Reserve Account to the Reserve Requirement, and(iii)to the Administrative Expense Account to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative Expense Account are insufficient to pay Administrative Expenses. In the event unexpended amounts remain on deposit in the Surplus Fund after the foregoing transfers, if any, such unexpended amounts shall be applied, in the sole discretion of the County as directed by an Authorized County Representative,(i)to pay unpaid costs of the Improvements(in which case such unexpended amounts shall be transferred to the Tax Proceeds Account of the Project Fund as directed by the Authorized County Representative), (ii)to reduce the next fiscal year's Special Tax levy by depositing such amount in the Special Tax Fund, (iii)to redeem Bonds upon optional redemption, or (iv)to reimburse the County for advances made to the Reserve Account as described under "Reserve Account of the Special Tax Fund"herein. The amounts in the Surplus Fund are not pledged to the repayment of the Bonds and may be used by the County for any lawful purpose in the manner described in this Section. In the event that the County reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any Outstanding Bonds, upon the written direction of an Authorized County Representative, the Trustee will segregate such C-15 4857-1255-2486v10/200356-0417 amount into a separate subaccount and the moneys on deposit in such subaccount of the Surplus Fund shall be invested in Authorized Investments the interest on which is excludable from gross income under Section 103 of the Tax Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals and corporations under the Tax Code)or in Authorized Investments at a yield not in excess of the yield on the Bonds unless,in the opinion of Bond Counsel,investment at a higher yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds. Investments Moneys held in any of the funds,accounts and subaccounts under the Indenture shall be invested at the written direction of an Authorized County Representative in accordance with the limitations set forth below and in the Tax Certificates only in Authorized Investments which shall be deemed at all times to be a part of such funds, accounts and subaccounts. Any investment earnings, gains or losses resulting from such Authorized Investments shall be credited or charged to the fund, account or subaccount from which such investment was made. Moneys in the funds,accounts and subaccounts held under the Indenture may be invested by the Trustee on the written direction of an Authorized County Representative,from time to time, in Authorized Investments subject to the following: Moneys in the Interest Account, the Principal Account, the Prepayment Account and the Redemption Account shall be invested only in Authorized Investments which will by their terms mature,or in the case of an Investment Agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of principal of,premium, if any,and interest on the Bonds as the same become due. Moneys in the Project Fund shall be invested in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available without penalty, as close as practicable to the date the County estimates the moneys represented by the particular investment will be needed for withdrawal from the Project Fund. Moneys in the Reserve Account may be invested only in Authorized Investments which mature not later than five years from their date of purchase; provided that such amounts may be invested in an Investment Agreement to the final maturity of Bonds so long as such amounts may be withdrawn at any time, without penalty,for application in accordance with the provisions described under"Reserve Account of the Special Tax Fund"herein;and provided that no such Authorized Investment of amounts in the Reserve Account allocable to the Bonds shall mature later than the final maturity date of the Bonds. Moneys in the Rebate Fund shall be invested only in Authorized Investments of the type described in clause(a)of the definition thereof which by their terms will mature, as nearly as practicable, on the dates such amounts are needed to be paid to the Treasury Department pursuant to the provisions described under"Rebate Fund"herein or in Authorized Investments of the type described in clause(d)of the definition thereof. The Trustee shall sell, or present for redemption, any Authorized Investment whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such funds and accounts or from such funds and accounts. For the purpose of determining at any given time the balance in any such funds and accounts, anysuch investments constitutingapart of such funds and accounts shall be valued at their cost, except that amounts in the Reserve Account shall be valued at the market value thereof and marked to market on or before May 16 of each year. In making any valuations of investments under the Indenture, the Trustee may utilize computerized securities pricing services that may be available to it,including those available through its regular accounting system, and rely thereon. The Trustee shall not be responsible for any loss from investments,sales or transfers undertaken in accordance with the provisions of the Indenture. The Trustee or an affiliate may act as principal or agent in connection with the acquisition or disposition of any Authorized Investments and shall be entitled to its customary fee therefor. Any Authorized Investments that are registrable securities shall be registered in the name of the Trustee or its nominee. C-16 4857-1255-2486v10/200356-0417 For investment purposes, the Trustee may commingle the funds and accounts established under the Indenture(other than the Rebate Fund)but shall account for each separately. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee under the Indenture. Redemption or Purchase of Bonds. The Bonds shall be subject to mandatory sinking fund redemption from Sinking Fund Payments,special mandatory redemption from Prepayments and optional redemption from any source of funds other than Prepayments,all as provided in the Indenture with respect to the 2022 Bonds or in the applicable Supplemental Indenture with respect to any Series of Parity Bonds. Payment of the principal of the Bonds upon mandatory sinking fund redemption shall be made from the Principal Account of the Special Tax Fund. Payment of the principal of and premium (if any) on the Bonds upon special mandatory redemption shall be made from the Prepayment Account of the Special Tax Fund. Payment of the principal of and premium(if any)on the Bonds upon optional redemption shall be made from the Redemption Account of the Special Tax Fund. Accrued interest on such Bonds to the redemption date shall be paid from the Interest Account of the Special Tax Fund. Bonds shall be selected for redemption in the manner set forth in the Indenture in the case of the 2022 Bonds and in the applicable Supplemental Indenture in the case of any Series of Parity Bonds. Notice of each redemption shall be given in the manner provided in the Indenture and described generally in the forepart of this Official Statement under the heading"THE 2022 BONDS-Notice of Redemption." Notice of redemption having been duly given, as provided in Indenture, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption: (a)the Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in the Indenture, anything in the Indenture or in the Bonds to the contrary notwithstanding;(b)upon presentation and surrender thereof at the office of the Trustee, the redemption price of such Bonds shall be paid to the Owners thereof; (c)as of the redemption date the Bonds or portions thereof so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or portions thereof shall cease to bear further interest; (d)as of the date fixed for redemption no Owner of any of the Bonds or portions thereof so designated for redemption shall be entitled to any of the benefits of the Indenture or any Supplemental Indenture,or to any other rights,except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available; and(e)upon the payment of the redemption price of any Bonds being redeemed,each check or other transfer of funds issued for such purpose shall to the extent practicable bear the CUSIP number identifying, by issue and maturity,the Bonds being redeemed with the proceeds of such check or other transfer. In lieu, or partially in lieu, of any optional redemption, mandatory sinking fund redemption or special mandatory redemption of Bonds, the County may elect, prior to the selection of Bonds for redemption by the Trustee, to instruct the Trustee to purchase Bonds subject to such redemption at public or private sale at such prices as the County may in its discretion determine; provided that the purchase price thereof (including brokerage or other expenses)shall not exceed the redemption price thereof plus accrued interest to the purchase date and,in the case of purchase with funds in an optional redemption account,applicable premium. The portion of such purchase price representing the redemption price of the Bonds to be purchased shall be paid from the Redemption Account,Principal Account or Prepayment Account of the Special Tax Fund,as applicable,and the portion representing accrued interest shall be paid from the Interest Account of the Special Tax Fund. Certain Covenants of the County So long as any of the Bonds are Outstanding, the County makes the following covenants with the Bondowners;provided,however,that said covenants do not require the County to expend any funds or moneys other than the Special Taxes and other amounts deposited to the Special Tax Fund and the Project Fund. C-17 4857-1255-2486v10/200356-0417 Levy of Special Tax. Beginning in Fiscal Year 20_-20_and in each Fiscal Year thereafter so long as any Bonds issued under this Indenture are Outstanding,the County covenants to levy the Special Tax pursuant to the RMA (i) on Taxable Property in Tax Zone 1 in an amount equal to the Tax Zone 1 Special Tax Requirements, and (ii) if necessary, on Taxable Property in Tax Zone 2 in an amount equal to the Tax Zone 2 Special Tax Requirement,provided that no Special Tax shall be levied on Taxable Property in Tax Zone 2 after the earlier of June 30,2081 or the date on which the Special Taxes on such Taxable Property are deemed satisfied and cancelled in accordance with the provisions of Section 1.2 of the RMA.. Collection of Special Taxes. Subject to the further provisions described under"Foreclosure"below,the County will diligently pursue such actions as are reasonably necessary or appropriate to collect all Special Taxes levied on properties within the District. Special Taxes on Taxable Property in Tax Zone 1 will be billed and collected together with Real Property Taxes levied on such properties. Special Taxes on Taxable Property in Tax Zone 2 will be billed and collected in accordance with the RMA. The County may accept partial payments on account of the Special Taxes and Real Property Taxes owed by a property owner,but such partial payments shall not diminish, extinguish or otherwise affect the property owner's obligation to pay the unpaid balance of the Special Taxes and Real Property Taxes owed by such property owner. Partial payments, if accepted, shall be applied pro rata to the Special Taxes and Real Property Taxes owed by the property owner. Punctual Payment; Covenant Against Encumbrances. The County covenants that it will receive all Special Taxes in trust and will deposit such amounts with the Trustee not less often than once per month, and the County shall have no beneficial right or interest in the amounts so deposited except as provided by the Indenture. The County will not mortgage or otherwise encumber, pledge or place any charge upon any of the Special Taxes except as provided in the Indenture, and will not issue any obligation or security having a lien or charge upon the Special Taxes superior to or on a parity with the Bonds. Nothing in the Indenture shall prevent the County from issuing or incurring indebtedness which is payable from a pledge of Special Taxes which is subordinate in all respects to the pledge of Special Taxes to repay the Bonds. Disposition of Prepayments. The County further covenants that,in connection with the delivery of any Prepayment to the Trustee, the County will also deliver(or cause the Special Tax Administrator to deliver)to the Trustee a Certificate of the Special Tax Administrator identifying with respect to the Prepayment: (i)the Administrative Expenses, with instructions that said amount shall be deposited in the Administrative Expense Account, (ii)the amount that represents the Special Taxes levied in the current Fiscal Year on the subject Assessor's Parcel which had not been paid, with instructions to deposit portions of said amount in the Interest Account and the Principal Account of the Special Tax Fund, (iii)the amount of any reduction in the Reserve Requirement, with instructions to withdraw said amount from the Reserve Account and transfer it to the Prepayment Account in connection with the redemption of Bonds, and (iv)the amount to be deposited in the Prepayment Account. Payment of Claims. The County will pay and discharge(but solely from Funds and Accounts available for such payments in accordance with the terms of the Indenture)any and all lawful claims for labor,materials or supplies which,if unpaid,might become a lien or charge upon the Special Taxes or other funds in the Special Tax Fund (other than the Administrative Expense Account therein) or the Project Fund (other than the Tax Receipts Account therein), or which might impair the security of the Bonds then Outstanding; provided that nothing contained in the Indenture shall require the County to make any such payments so long as the County in good faith shall contest the validity of any such claims. Books and Accounts. The County will keep proper books of records and accounts, separate from all other records and accounts of the County,in which complete and correct entries shall be made of all transactions relating to the levy of the Special Tax and the deposits to the Special Tax Fund. Such books of records and accounts shall at all times during business hours be subject to the inspection of the Owners of not less than 10% of the principal amount of the Bonds then Outstanding or their representatives authorized in writing. C-18 4857-1255-2486v10/200356-0417 Federal Tax Covenants. The County shall not take any action,or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on any Bond under Section 103 of the Tax Code. This covenant shall survive payment in full or defeasance of the Bonds. Reduction of Maximum Special Taxes or Aggregate Tax Levy. The County has determined it to be necessary in order to preserve the security for the Bonds to covenant, and,to the maximum extent that the law permits it to do so,the County covenants that it will take no action that would discontinue,diminish or cause the discontinuance of the Special Tax levy or the County's authority to levy the Special Tax,including the initiation of proceedings to reduce the Maximum Special Tax rates for the District or otherwise reduce the aggregate amount of Special Taxes levied in the District, unless(i)the Special Taxes on Taxable Property in Tax Zone 2 shall have been deemed satisfied and cancelled in accordance with Section I.2 of the RMA, and(ii)the County (A) receives a Certificate from the Special Tax Administrator that, on the basis of the parcels of land and improvements existing in Tax Zone 1 as of July 1 of the Fiscal Year preceding the reduction, the maximum amount of the Special Tax which may be levied on then existing Developed Property (as defined in the RMA) in Tax Zone 1 in each Fiscal Year will equal at least 110%of the sum of the estimated Administrative Expenses and Annual Debt Service in that Fiscal Year on all Bonds to remain Outstanding after the reduction is approved and(B)finds that any reduction made under such conditions will not adversely affect the interests of the Owners of the Bonds. Notwithstanding the foregoing,any such action shall be subject to the prior written consent of the Developer until such time as no further costs of the Improvements are payable form the proceeds of Special Taxes under the applicable provisions of the Acquisition Agreement. Foreclosure. The County covenants that it will enforce the liens of Special Taxes by foreclosure sale of delinquent properties in accordance with the following: (a) Not later than forty five (45) days after the due date of any installment of Special Taxes, the County will determine or cause to be determined whether or not any owners of property within the District are delinquent in the payment of all or any portion of the Special Taxes levied on such owners' properties. If such delinquencies are determined to exist, the County will take such actions as it deems reasonably necessary to pursue payment of the delinquent amounts (including penalties and interest) and shall enforce the lien of the Special Taxes by non judicial foreclosure sale as follows: (i) Section 19-38 of the County Code (as applicable to the Special Taxes under Section 32-53) provides that the County may enforce the lien of delinquent Special Taxes by non judicial foreclosure sale if such Special Taxes remain unpaid for two(2)years after their respective due dates. If any Special Taxes remain unpaid after such two-year period,the County agrees that,unless required to take such action sooner under subparagraph(ii)below,it shall promptly give notice to the delinquent property owners that the delinquent properties will be sold upon non judicial foreclosure sales and shall diligently pursue proceedings for such foreclosure sales as permitted by Sections 19-38 and 32-53 of the County Code. (ii) Section 3 of the Ordinance of Formation(as amended as aforesaid)provides that, for so long as any Bonds remain Outstanding, if any Special Taxes remain unpaid for sixty(60)days after their respective due dates, the County may enforce the lien of the delinquent Special Taxes by non- judicial foreclosure sale without regard to the two-year period specified in Section 19-38 of the County Code, subject to the further covenants and agreements set forth in this Indenture. Pursuant to such provision,the County hereby covenants and agrees that, for so long as any Bonds remain Outstanding (A)with respect to Taxable Property in Tax Zone 1,if it determines on any April 30 or October 31 that any such Taxable Property(or Properties)owned by the same Person is(or are)delinquent in payment of more than $10,000 of Special Taxes or that the amount of delinquent Special Taxes exceeds five percent(5%)of the total amount of Special Taxes payable as of the preceding February 15 or August 15,the County shall promptly give notice to the owner(or owners)of such delinquent Taxable Property (or Properties)of a non judicial foreclosure sale of the delinquent property or properties and shall initiate and diligently pursue proceedings for such non judicial foreclosure sale as permitted by Section 3 of the C-19 4857-1255-2486v10/200356-0417 Ordinance of Formation (as amended as aforesaid), and (B) with respect to Taxable Property in Tax Zone 2,if it determines that any such Taxable Property(or Properties)is(or are)delinquent in payment of Special Taxes and if such Special Taxes remain delinquent for sixty(60)days after they are due and payable, the County shall promptly give notice to the owner(or owners) of such delinquent Taxable Property (or Properties) of a non judicial foreclosure sale of the delinquent property or properties and shall initiate and diligently pursue proceedings for such non judicial foreclosure sale as permitted by Section 3 of the Ordinance of Formation(as amended as aforesaid). (iii) Proceeds of each foreclosure sale to enforce the lien of delinquent Special Taxes,in an amount equal to the delinquent Special Taxes plus penalties and interest thereon,shall be transferred to the Trustee for deposit in the Special Tax Fund. (b) Section 3 of the Ordinance of Formation (as amended as aforesaid) permits the liens of delinquent Special Taxes, Real Property Taxes or special assessments levied under Section 46-80, Hawaii Revised Statutes("Special Assessments"),to be foreclosed either(i)together in a single sale to satisfy all such liens, or(ii)in separate sales to satisfy the lien of the delinquent Special Taxes, Real Property Taxes or Special Assessments;provided that,in the case of a single sale,if the proceeds of the sale are insufficient to pay the total amount due with respect to all Real Property Taxes, Special Taxes and Special Assessments on the property, then the Director may apply the amount collected first to Real Property Taxes, second to the Special Tax levied hereunder, and third to Special Assessments, together with all applicable charges for interest,penalties,costs and expenses. Notwithstanding the foregoing,for so long as any Bonds remain Outstanding, the County further covenants and agrees that it will not sell a property upon foreclosure(whether in a single sale or a separate sale to foreclose the lien on delinquent Special Taxes) for a price that produces net proceeds less than the amount required to be transferred to the Trustee pursuant to Subsection (b)(ii) above unless such sale is consented to by the Owners of not less than 67%of the aggregate principal amount of Bonds then Outstanding;except that the County may, in its sole discretion,waive penalties and interest in a foreclosure sale if the net proceeds from such sale(excluding penalties and interest)are sufficient to pay the principal of and interest on the portion of the Bonds allocable to the delinquent Special Taxes on the property in question. (c) Any provisions of the Indenture to the contrary notwithstanding,it is expressly understood that the County's covenants to collect and enforce the liens of Special Taxes under this Indenture are subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles and exercise of judicial discretion,and to applicable limitations on collection of taxes and foreclosure sales with respect to properties in which the federal government or any federal agency has or obtains an interest. Amendments and Supplements to Indenture Supplemental Indentures Not Requiring Owner Consent. The County and Trustee may from time to time,and at any time,without notice to or consent of any of the Bondowners,enter into Supplemental Indentures in order to provide for the issuance of Parity Bonds pursuant to the Indenture and for any of the following purposes: (a) to cure any ambiguity,to correct or supplement any provisions of the Indenture which may be inconsistent with any other provision thereof, or to make any other provision with respect to matters or questions arising under the Indenture or in any additional resolution or order, provided that such action is not materially adverse to the interests of the Bondowners; (b) to add to the covenants and agreements of and the limitations and the restrictions upon the County contained in the Indenture, other covenants, agreements, limitations and restrictions to be observed by the County which are not contrary to or inconsistent with the Indenture as theretofore in effect or which further secure Bond payments; C-20 4857-1255-2486v10/200356-0417 (c) to modify,amend or supplement the Indenture or any Supplemental Indenture in such manner as to permit the qualification of the Indenture or any Supplemental Indenture under the Trust Indenture Act of 1939,as amended,or any similar federal statute hereafter in effect, or to comply with the Tax Code or regulations issued thereunder, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute,and which shall not materially adversely affect the interests of the Owners of the Bonds then Outstanding;or (d) to modify, alter or amend the RMA in any manner so long as such changes do not reduce the Maximum Special Tax that may be levied in each year on Taxable Property within the District to an amount which is less than that permitted under the provision herein described in "Certain Covenants of the County-Reduction of Maximum Special Taxes or Aggregate Tax Levy;"or (e) to modify,alter, amend or supplement the Indenture in any other respect which is not materially adverse to the Bondowners. Supplemental Indentures Requiring Owner Consent. Except as otherwise provided above,the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding shall have the right to consent to and approve the execution and delivery by the County of such Supplemental Indentures as shall be deemed necessary or desirable by the County for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in the Indenture; provided, however,that nothing in the Indenture shall permit,or be construed as permitting, (a)an extension of the maturity date of the principal,or the payment date of interest on,any Bond without the consent of the Owner thereof,(b)a reduction in the principal amount of, or redemption premium on, any Bond or the rate of interest thereon, without the consent of the Owner thereof,(c)a preference or priority of any Bond over any other Bond without the consent of the Owners of all of the Bonds that would lack such preference or priority,or(d)a reduction in the aggregate principal amount of the Bonds the Owners of which are required to consent to such Supplemental Indenture, without the consent of the Owners of all Bonds then Outstanding. Concerning the Trustee The Trustee shall, prior to an event of default and after curing all events of default which may have occurred, perform such duties and only such duties as are specifically set forth in the Indenture. Upon the occurrence and upon the continuance of an event of default, the Trustee shall exercise such of the rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise,as a reasonable corporate trustee would exercise or use as trustee under a trust indenture. The County shall from time to time,subject to any agreement between the County and the Trustee then in force, pay to the Trustee compensation for its services and reimburse the Trustee for all its advances and expenditures, including, but not limited to, advances to and fees and expenses of independent accountants or counsel employed by it in the exercise and performance of its powers and duties under the Indenture. The County may at any time at its sole discretion remove the Trustee initially appointed, and any successor thereto, by delivering to the Trustee a written notice of its decision to remove the Trustee and may appoint a successor or successors thereto; provided that any such successor, other than the Trustee, shall be a bank or trust company having(or in the case of a financial institution that is part of a bank holding company, such company shall have)a combined capital(exclusive of borrowed capital)and surplus of at least$50,000,000, and subject to supervision or examination by federal or state authority. Any removal shall become effective only upon acceptance of appointment by the successor Trustee. Any removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee and notice being sent by the successor Trustee to the Bondowners of the successor Trustee's identity and address. The Trustee may at any time resign by giving written notice to the County and by giving to the Owners notice of such resignation, which notice shall be mailed to the Owners at their addresses appearing in the C-21 4857-1255-2486v10/200356-0417 registration books in the office of the Trustee. Upon receiving such notice of resignation, the County shall promptly appoint a qualified successor Trustee by an instrument in writing. In the event a successor trustee shall not have been designated within 30 Business Days, the Trustee shall have the right to petition any court of competent jurisdiction for an order appointing a replacement Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. The Trustee shall not be liable in connection with the performance of its duties under the Indenture, except for its own negligence or willful misconduct. The Trustee shall be protected in acting upon any notice, resolution, request,consent,order, certificate, report, facsimile transmission, electronic mail, Bond, Certificate of an Independent Financial Consultant or Special Tax Administrator or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered in good faith and in accordance therewith. The Trustee may execute any of the trusts or powers or perform any duties under the Indenture either directly or by or through agents or attorneys, but the Trustee shall be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it. Whenever in the administration of its duties under the Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under the Indenture, such matter(unless other evidence in respect thereof be specifically prescribed in the Indenture)may, in the absence of bad faith on the part of the Trustee, be deemed to be conclusively proved and established by a written Certificate of an Authorized County Representative,and such Certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions of the Indenture upon the faith thereof,but in its discretion the Trustee may,in lieu thereof,accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. The Trustee shall have no duty or obligation whatsoever to monitor or enforce the collection of Special Taxes or other funds to be deposited with it under the Indenture,or as to the correctness of any amounts received. The sole obligation of the Trustee with respect thereto shall be limited to the proper accounting for such funds as it shall actually receive. No provision in the Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties under the Indenture,or in the exercise of its rights or powers; and the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of the Owners unless such Owners shall have offered to the Trustee reasonable security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Trustee shall not be considered in breach of or in default in its obligations under the Indenture or progress in respect thereto in the event of enforced delay ("unavoidable delay") in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence,including,but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods,epidemics,quarantine restrictions,strikes,freight embargoes,earthquakes,explosion,mob violence,riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, shall be C-22 4857-1255-2486v10/200356-0417 the successor to the Trustee without the execution or filing of any paper or further act; provided that such successor shall be qualified to serve as Trustee under the provisions described above. Events of Default and Remedies Any one or more of the following events shall constitute an "event of default" under the terms of the Indenture: (a) Default in the due and punctual payment of the principal of or redemption premium,if any, on any Bond when and as the same shall become due and payable,whether at maturity as therein expressed,by declaration or otherwise; (b) Default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; (c) Except as described in(a)or(b),default shall be made by the County in the observance of any of the agreements,conditions or covenants on its part contained in the Indenture,the Bonds,and such default shall have continued for a period of 30 days after the County shall have been given notice in writing of such default by the Trustee or the Owners of 25% in aggregate principal amount of the Outstanding Bonds;or (d) The County shall commence a voluntary case under Title 11 of the United States Code or any substitute or successor statute. The Indenture requires the County to give notice to the Trustee immediately upon the occurrence of an event of default under(a) or(b) above ad within 30 days of the County's knowledge of an event of default under (c) above. Following the occurrence of an event of default, the Trustee shall have the right for the equal benefit and protection of all Owners: (a) By mandamus or other suit or proceeding at law or in equity to enforce the rights of the Owners against the County and any of the members, officers and employees of the County, and to compel the County or any such members, officers or employees to perform and carry out their duties under Chapter 32 and their agreements with the Owners as provided in the Indenture including but not limited to the duty of the County to commence and pursue foreclosure proceedings if and to the extent required by the Indenture(as generally described under"Certain Covenants of the County—Foreclosure" herein); (b) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners;or (c) By a suit in equity to require the County and its members, officers and employees to account as the trustee of an express trust. If an event of default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty five percent(25%)in aggregate principal amount of Outstanding Bonds and if indemnified to its satisfaction,the Trustee shall be obligated to exercise such one or more of the rights and powers conferred above, as the Trustee,being advised by counsel,shall deem most expedient in the interests of the Owners of the Bonds. In the event that the Trustee,upon the happening of an event of default, shall have taken any action,by judicial proceedings or otherwise,pursuant to its duties hereunder,whether upon its own discretion or upon the request of the Owners of twenty-five percent (25%) in aggregate principal amount of the Bonds then C-23 4857-1255-2486v10/200356-0417 Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default,discontinue,withdraw,compromise or settle,or otherwise dispose of any litigation pending at law or in equity,if at the time there has been filed with it a written request signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds opposing such discontinuance,withdrawal,compromise,settlement or other such litigation. Any suit,action or proceeding which any Owner of Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds and the Trustee shall be appointed(and the successive respective Owners of the Bonds,by taking and holding the same,shall be conclusively deemed so to have appointed it)the true and lawful attorney in fact of the respective Owners of the Bonds for the purposes of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds as a class or classes,as may be necessary or advisable in the opinion of the Trustee as such attorney in fact. No Owner of any Bond shall have the right to institute any suit,action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless(a)such Owner shall have previously given to the Trustee written notice of the occurrence of an event of default;(b)the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name;(c)said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs,expenses and liabilities to be incurred in compliance with such request;and(d)the Trustee shall have refused or omitted to comply with such request for a period of sixty(60)days after such written request shall have been received by,and said tender of indemnity shall have been made to,the Trustee. A waiver of any default or breach of duty or contract by the Trustee or any Owner shall not affect any subsequent default or breach of duty or contract,or impair any rights or remedies on any such subsequent default or breach. No delay or omission by the Trustee or any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Trustee and the Owners by Chapter 32 or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Owners,as applicable. If any suit,action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the County and the Owners shall be restored to their former positions, rights and remedies as if such suit,action or proceeding had not been brought or taken. No remedy conferred upon or reserved to the Trustee or the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given under the Indenture or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by Chapter 32 or any other law. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of the Indenture relating to the Bonds shall be applied by the Trustee in the following order upon presentation of the several Bonds: First, to the payment of the fees, costs and expenses of the Trustee in declaring such Event of Default and in carrying out the provisions of the Indenture, including reasonable compensation to its agents, attorneys and counsel,and to the payment of all other outstanding fees and expenses of the Trustee;and Second, to the payment of the whole amount of interest on and principal of the Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds;provided,however,that in the event such amounts C-24 4857-1255-2486v10/200356-0417 shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority: (a) first to the payment of all installments of interest on the Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing, (b) second, to the payment of all installments of principal, including Sinking Fund Payments,of the Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing,and (c) third, to the payment of interest on overdue installments of principal and interest on the Bonds on a pro rata basis based on the total amount then due and owing. Defeasance If the County shall pay or cause to be paid, or there shall otherwise be paid, to the Owner of an Outstanding Bond the interest due thereon and the principal thereof,at the times and in the manner stipulated in the Indenture or any Supplemental Indenture, then the Owner of such Bond shall cease to be entitled to the pledge of Special Taxes, and, other than as set forth below, all covenants, agreements and other obligations of the County to the Owner of such Bond under the Indenture shall thereupon cease, terminate and become void and be discharged and satisfied. In the event of a defeasance of all Outstanding Bonds pursuant to this Section, the Trustee shall execute and deliver to the County all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the County's general fund all money or securities held by it pursuant to the Indenture which are not required for the payment of the principal of,premium, if any, and interest due on such Bonds. Any Outstanding Bond shall be deemed to have been paid within the meaning expressed in the first paragraph of this Section if such Bond is paid in any one or more of the following ways: (a) by paying or causing to be paid the principal of,premium,if any,and interest on such Bond,as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money which,together with the amounts then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Account) and available for such purpose,is fully sufficient to pay the principal of,premium, if any,and interest on such Bond, as and when the same shall become due and payable;or (c) by depositing with the Trustee or another escrow bank appointed by the County, in trust, noncallable Federal Securities, in such amount as will be sufficient,together with the interest to accrue thereon and moneys then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Account) and available for such purpose, together with the interest to accrue thereon, to pay and discharge the principal of, premium, if any,and interest on such Bond,as and when the same shall become due and payable; then, at the election of the County, and notwithstanding that any Outstanding Bonds shall not have been surrendered for payment,all obligations of the County under the Indenture and any Supplemental Indenture with respect to such Bond shall cease and terminate,except for the obligation of the Trustee to pay or cause to be paid to the Owner of any such Bond not so surrendered and paid, all sums due thereon and except for the covenants of the County relating to compliance with the Tax Code. Notice of such election shall be filed with the Trustee not less than ten days prior to the proposed defeasance date,or such shorter period of time as may be acceptable to the Trustee. In connection with a defeasance under(b)or(c)above,there shall be provided to the County and the Trustee a verification report from an independent nationally recognized certified public accountant stating its opinion as to the sufficiency of the moneys or securities deposited with the Trustee or the escrow bank to pay and discharge the principal of, premium, if any, and interest on all Outstanding Bonds to be defeased in C-25 4857-1255-2486v10/200356-0417 accordance with this Section, as and when the same shall become due and payable, and an opinion of Bond Counsel(which may rely upon the opinion of the certified public accountant)to the effect that the Bonds being defeased have been legally defeased in accordance with the Indenture and any applicable Supplemental Indenture. If a forward supply contract is employed in connection with an advance refunding to be effected under(c)above,(i)such verification report shall expressly state that the adequacy of the amounts deposited with the bank under(c) above to accomplish the refunding relies solely on the initial escrowed investments and the maturing principal thereof and interest income thereon and does not assume performance under or compliance with the forward supply contract, and (ii)the applicable escrow agreement executed to effect an advance refunding in accordance with(c)above shall provide that,in the event of any discrepancy or difference between the terms of the forward supply contract and the escrow agreement,the terms of the escrow agreement shall be controlling. Upon a defeasance, the Trustee, upon request of the County, shall release the rights of the Owners of such Bonds and execute and deliver to the County all such instruments as may be desirable to evidence such release, discharge and satisfaction. In the case of a defeasance of all Outstanding Bonds,the Trustee shall pay over or deliver to the County any funds held by the Trustee at the time of a defeasance, which are not required for the purpose of paying and discharging the principal or redemption price of or interest on the Bonds when due. The Trustee shall, at the written direction of the County, mail, first class, postage prepaid, a notice to the Bondowners whose Bonds have been defeased, in the form directed by the County, stating that the defeasance has occurred. Unclaimed Moneys Anything in the Indenture to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Outstanding Bonds which remain unclaimed for a period ending at the earlier of two Business Days prior to the date such funds would escheat to the State or two years after the date when such Outstanding Bonds have become due and payable, if such money was held by the Trustee at such date,or for a period ending at the earlier of two Business Days prior to the date such funds would escheat to the State or two years after the date of deposit of such money if deposited with the Trustee after the date when such Outstanding Bonds become due and payable,shall be repaid by the Trustee to the County,as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the County for the payment of such Outstanding Bonds; provided, however, that, before being required to make any such payment to the County,the Trustee at the written request of the County or the Trustee shall,at the expense of the County,cause to be mailed by first class mail,postage prepaid,to the registered Owners of such Outstanding Bonds at their addresses as they appear on the registration books of the Trustee a notice that said money remains unclaimed and that,after a date named in said notice,which date shall not be less than 30 days after the date of the mailing of such notice,the balance of such money then unclaimed will be returned to the County. C-26 4857-1255-2486v10/200356-0417 APPENDIX D FORM OF COUNTY CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement, dated as of , 2022 (the "Disclosure Agreement"), is entered into by and between the County of Hawai'i (the "Issuer"), and U.S. Bank Trust Company, National Association, as dissemination agent(the"Dissemination Agent"), in connection with the issuance by the Issuer of its$ Hawai'i County Community Facilities District No. 1-2021 (Kaloko Heights Project)Special Tax Revenue Bonds,Series 2022(the"Bonds"). The Bonds are being issued pursuant to a Trust Indenture dated as of , 2022 (the "Indenture"), by and between the Issuer and U.S. Bank Trust Company, National Association, as Trustee(the"Trustee"). The Issuer and the Dissemination Agent hereby covenant and agree as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Issuer for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule. Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: Annual Report. The term "Annual Report"means any Annual Report provided by the Issuer pursuant to,and as described in,Sections 3 and 4 of this Disclosure Agreement. Beneficial Owner. The term"Beneficial Owner"means any person which: (a)has the power,directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries); or (b)is treated as the owner of any Bonds for federal income tax purposes. Disclosure Representative. The term"Disclosure Representative"means the Director of Finance of the Issuer, or his or her designee, or such other officer or employee as the Issuer shall designate in writing to the Dissemination Agent from time to time. Dissemination Agent. "Dissemination Agent" means, initially, U.S. Bank Trust Company, National Association,or any successor Dissemination Agent designated in writing by the Issuer which has filed with the then-current Dissemination Agent a written acceptance of such designation. District. The term"District"means Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project). EMMA. The term"EMMA"means the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System for municipal securities disclosures,maintained on the Internet at http://emma.msrb.org/. Financial Obligation. The term "Financial Obligation" means a: (i)debt obligation; (ii)derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or(iii)guarantee of an instrument described in clause(i)or(ii), but the term shall not include municipal securities as to which a final Limited Offering Memorandum has been provided to the Municipal Securities Rulemaking Board consistent with the Rule. Fiscal Year. The term "Fiscal Year"means the one-year period ending on the last day of June of each year. D-1 4857-1255-2486v10/200356-0417 Listed Events. The term "Listed Events"means any of the events listed in Sections 5(a) or(b) of this Disclosure Agreement. Limited Offering Memorandum. The term "Limited Offering Memorandum"means the final Limited Offering Memorandum,dated ,2022,relating to the Bonds. Participating Underwriter. The term"Participating Underwriter"means the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds. Rule. The term"Rule"means Rule 15c2-12(b)(5)adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934,as the same may be amended from time to time. Section 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent by written direction to such Dissemination Agent to,not later than nine months after the end of the Issuer's Fiscal Year(commencing with the Fiscal Year ending June 30, 2022), provide to EMMA an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Notwithstanding the foregoing, the Issuer's audited financial statements for the Fiscal Year ended June 30, 2022 shall be provided to EMMA within nine months after the end of such Fiscal Year. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided, however, that the audited financial statements of the Issuer, if any are prepared, may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report. An Annual Report shall be provided at least annually notwithstanding any Fiscal Year longer than 12 calendar months. The Issuer's Fiscal Year is currently effective from July 1 to the immediately succeeding June 30 of the following year. The Issuer will promptly notify EMMA, the Dissemination Agent and the Participating Underwriter of a change in the Issuer's Fiscal Year dates. (b) So long as the Dissemination Agent is an entity other than the Issuer, then the provisions of this Section 3(b)shall apply. Not later than fifteen(15)Business Days prior to the date specified in subsection(a)for providing the Annual Report to EMMA and the Participating Underwriter,the Issuer shall provide the Annual Report to the Dissemination Agent. If by fifteen(15) Business Days prior to such date the Dissemination Agent has not received a copy of the Annual Report,the Dissemination Agent shall contact the Issuer to determine if the Issuer will be filing the Annual Report in compliance with subsection(a). The Issuer shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. If the Dissemination Agent is an entity other than the Issuer, it may conclusively rely upon such certification of the Issuer and shall have no duty or obligation to review such Annual Report. (c) If the Issuer is the Dissemination Agent and the Issuer is unable to provide to EMMA and the Participating Underwriter an Annual Report by the date required in subsection(a),the Issuer shall, in a timely manner, send a notice to EMMA, the Participating Underwriter and the Dissemination Agent in the manner prescribed by the Municipal Securities Rulemaking Board. If the Dissemination Agent is other than the Issuer and if the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA and the Participating Underwriter by the date required in subsection (a), the Dissemination Agent shall, in a timely manner, send a notice to EMMA and the Participating Underwriter, in the form prescribed by the Municipal Securities Rulemaking Board. (d) The Dissemination Agent, if other than the Issuer, shall promptly after receipt of the Annual Report,file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Agreement and stating the date it was provided. D-2 4857-1255-2486v10/200356-0417 Section 4. Content of Annual Reports. The Annual Report shall contain or include by reference the following: (a) Financial Statements. The audited financial statements of the Issuer,if any have been prepared, for the most recent Fiscal Year of the Issuer then ended. If the audited financial statements are being prepared and are not available by the time that the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain any unaudited financial statements in a format similar to the audited financial statements contained in the final Limited Offering Memorandum, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. Audited financial statements, if any, of the Issuer shall be audited by such auditor as shall then be required or permitted by State law or the Indenture. Audited financial statements,if prepared by the Issuer,shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the Issuer may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the Issuer shall modify the basis upon which its financial statements are prepared,the Issuer shall provide a notice of such modification to EMMA, including a reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis. (b) Financial and Operating Data. (i) the principal amount of Bonds outstanding; (ii) the balance in each fund under the Indenture and the Bonds Reserve Requirement as of June 30; (iii) a table showing for each of the five most recent fiscal years the assessed value of the property within the District; (iv) the number of delinquent parcels in the District and the identity of any person owning property upon which Special Taxes have been levied in the preceding fiscal year that total more than ten percent(10%)of the Special Taxes levied within the District for such fiscal year who is delinquent in the payment of Special Taxes as of the October 30 immediately preceding the date of the Annual Report (as ownership is shown on the certified assessor's roll as finalized as of March 31 of the most recently completed fiscal year); (v) a table showing for each of the five most recent fiscal years in which Special Taxes were levied the amount of the Special Tax actually levied and the amount thereof actually collected in such fiscal year and the assessed value of the taxable property within the District;and (vi) a discussion of the status of any foreclosure proceedings commenced by the District with respect to delinquent special taxes in the District. Any or all of the items listed above may be included by specific reference to other documents,including Limited Offering Memorandums of debt issues of the Issuer or related public entities,which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final Limited Offering Memorandum,it must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5,the Issuer shall give,or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than ten(10)Business Days after the event: D-3 4857-1255-2486v10/200356-0417 1. principal and interest payment delinquencies; 2. unscheduled draws on debt service reserves reflecting financial difficulties; 3. unscheduled draws on credit enhancements reflecting financial difficulties; 4. substitution of credit or liquidity providers,or their failure to perform; 5. adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability or Notices of Proposed Issue(IRS Form 5701 TEB); 6. tender offers; 7. defeasances; 8. ratings changes; 9. bankruptcy, insolvency,receivership or similar proceedings;and 10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Issuer, any of which reflect financial difficulties. Note: For the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person,or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (b) Pursuant to the provisions of this Section 5,the Issuer shall give,or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: 1. unless described in Section 5(a)(5), adverse tax opinions or other material notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; 2. the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer,other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions,other than pursuant to its terms; 3. the appointment of a successor or additional trustee or the change of name of a trustee; 4. non-payment related defaults; 5. modifications to the rights of Bond holders; 6. notices of redemption; 7. release,substitution or sale of property securing repayment of the Bonds;and 8. incurrence of a Financial Obligation of the Issuer,or agreement to covenants, events of default,remedies,priority rights, or other similar terms of a Financial Obligation of the Issuer, any of which affect Bond holders. D-4 4857-1255-2486v10/200356-0417 (c) If the Issuer determines that knowledge of the occurrence of a Listed Event under subsection (b) would be material under applicable federal securities laws, and, if the Dissemination Agent is other than the Issuer, the Issuer shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to file a notice of such occurrence with EMMA in a timely manner not more than ten(10)Business Days after the event. (d) If the Issuer determines that the Listed Event under subsection (b) would not be material under applicable federal securities laws and, if the Dissemination Agent is other than the Issuer, the Issuer shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence. (e) The Issuer hereby agrees that the undertaking set forth in this Disclosure Agreement is the responsibility of the Issuer and, if the Dissemination Agent is other than the Issuer, the Dissemination Agent shall not be responsible for determining whether the Issuer's instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule. Section 6. Termination of Reporting Obligation. The obligations of the Issuer and the Dissemination Agent under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds,the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5 hereof. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent appointed by the Issuer may resign by providing thirty (30) days written notice to the Issuer,and upon appointment of a new Dissemination Agent hereunder. In the event a new Dissemination Agent is not designated within thirty(30)Business Days of such written notice of resignation,the Dissemination Agent shall have the right to petition any court of competent jurisdiction for an order appointing a replacement Dissemination Agent. Section 8. Amendment. (a) This Disclosure Agreement may be amended, by written agreement of the parties, without the consent of the Owners if all of the following conditions are satisfied: (1)such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law,or a change in the identity, nature or status of the Issuer,the District or the type of business conducted thereby; (2)this Disclosure Agreement as so amended would have complied with the requirements of the Rule as of the date of this Disclosure Agreement,after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; (3)the Issuer shall have delivered to the Dissemination Agent an opinion of a nationally recognized bond counsel or counsel expert in federal securities laws,addressed to the Issuer,to the same effect as set forth in clause(2)above;(4)the Issuer shall have delivered to the Dissemination Agent an opinion of nationally recognized bond counsel or counsel expert in federal securities laws,addressed to the Issuer,to the effect that the amendment does not materially impair the interests of the Owners or Beneficial Owners; and (5)the Issuer shall have delivered copies of such opinion and amendment to the Participating Underwriter. (b) This Disclosure Agreement also may be amended by written agreement of the parties upon obtaining consent of the Owners in the same manner as provided in the Indenture for amendments to the Indenture with the consent of the Owners of the Bonds;provided that the conditions set forth in Section 8(a)(1), (2),(3)and(5)have been satisfied. D-5 4857-1255-2486v10/200356-0417 (c) To the extent that any amendment to this Disclosure Agreement results in a change in the type of financial information or operating data provided pursuant to this Disclosure Agreement, the first Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided. (d) If an amendment is made to the basis on which financial statements are prepared,the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and,to the extent reasonably feasible, qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information. Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication,or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement,the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer or the Dissemination Agent to comply with any provision of this Disclosure Agreement, any Owner or Beneficial Owner of the Bonds or the Trustee on behalf of the Owners and Beneficial Owners may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order,to cause the Issuer and/or the Dissemination Agent to comply with their respective obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture,and the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties,Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Dissemination Agent's obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Dissemination Agent as required by this Disclosure Agreement. The Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof and shall have not duty or obligation to review or verify any information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, Owner, or Beneficial Owners of the Bonds or any other party. The Dissemination Agent shall have no responsibility for the Issuer's failure to report to the Dissemination Agent a Listed Event or a duty to determine the materiality thereof. The Dissemination Agent shall have no duty to determine, or liability for failing to determine,whether the Issuer has complied with this Disclosure Agreement. The Dissemination Agent may conclusively rely upon certifications of the Issuer at all times. Nothing herein contained shall be deemed to limit any rights of the Dissemination Agent with respect to claims for losses,expenses and liabilities incurred in the performance of its duties hereunder. Any Dissemination Agent other than the Issuer shall be paid: (i)compensation by the Issuer for its services provided hereunder and extraordinary fees, costs and expenses incurred with respect thereto in accordance with a schedule of fees to be mutually agreed to;and(ii)all expenses,legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and defeasance,redemption or payment of the Bonds. D-6 4857-1255-2486v10/200356-0417 The Disclosure Representative and the Dissemination Agent may,from time to time,consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement of controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and neither of them shall incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds,and shall create no rights in any other person or entity. Section 13. Notices. Notices with respect to this Disclosure Agreement should be sent in writing to: If to the Issuer: County of Hawai'i 25 Aupuni Street Hilo, Hawai`i 96720 Attention: Director of Finance If to the Dissemination Agent: U.S. Bank Trust Company,National Association If to the Participating Underwriter: Stifel,Nicolaus&Company,Incorporated One Montgomery Street, 35th Floor San Francisco,California 94104 SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF,the parties have caused their duly authorized officer to execute and deliver this Disclosure Agreement on the date first written above. COUNTY OF HAWAI'I By: Name: Title: U.S. BANK TRUST COMPANY,NATIONAL ASSOCIATION,as Dissemination Agent By: Name: Title: D-7 4857-1255-2486v10/200356-0417 APPENDIX E FORM OF PROPERTY OWNER CONTINUING DISCLOSURE AGREEMENT This Property Owner Continuing Disclosure Agreement dated as of , 2022 (this "Disclosure Agreement"), is executed and delivered by RCFC Kaloko Heights, LLC,a Delaware limited liability company, Kaloko Heights B IA Holdings,LLC,a Delaware limited liability company,and Kaloko Heights Investors,LLC, a Delaware limited liability company (collectively, the "Property Owner") for and on behalf of itself and its Affiliates, as defined below, U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), and ,as dissemination agent(the"Dissemination Agent"),in connection with the execution and delivery by the County of Hawai'i(the"County")of$ aggregate principal amount of its County of Hawai'i Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds, Series 2022 (the"Bonds"). The Bonds are being executed and delivered pursuant to a Trust Indenture dated as of 1, 2022(the"Indenture"),by and between the County and the Trustee. SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Property Owner in order to help inform Bondowners and potential purchasers of the Bonds concerning the status of the development of property within the District. Pursuant to this Disclosure Agreement, the Property Owner agrees to provide the information required to be provided by the Property Owner hereunder at the time and in the manner required hereunder. SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement not otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Affiliate" shall mean any Person which subsequently owns Property in the District which either controls the Property Owner or in which the Property Owner has a beneficial ownership interest; provided, however,that in no case shall the County be deemed to be an Affiliate of the Property Owner for purposes of this Agreement. For the purpose of this definition, "control"of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities,by contract or otherwise. "Annual Report"shall mean any Annual Report provided by the Property Owner on or prior to June 1 of each year pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. Information contained in the Annual Report shall be as of March 31 of the prior calendar year. "Beneficial Owner"shall mean any person which has or shares the power,directly or indirectly,to make investment decisions concerning ownership of the Bonds(including persons holding Bonds through nominees, depositories or other intermediaries). "Development Plan" shall mean, with respect to the Property Owner or an Affiliate, the specific improvements such Person intends to make, or cause to be made,to the portion of the Property owned by such Person in order for such portion of the Property to reach final buildout as planned by the Property Owner or Affiliate,the time frame in which such improvements are intended to be made and the estimated costs of such improvements. As of the date hereof,the development plan for the Property owned by the Property Owner and its Affiliates is described in the Limited Offering Memorandum under the caption"PROPERTY OWNERSHIP AND THE DEVELOPMENT." "Disclosure Representative" shall mean , the of the Property Owner, or his designee acting on behalf of the Property Owner,or such other officer or employee as the Property Owner shall designate in writing to the Dissemination Agent from time to time. E-1 4857-1255-2486v10/200356-0417 "Dissemination Agent" shall mean . acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Property Owner and which has filed with the Property Owner and the County a written acceptance of such designation. "District" shall mean County of Hawai'i Community Facilities District No. 1-2021 (Kaloko Heights Project)established by the County. "EMMA" shall mean the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System for municipal securities disclosures,maintained on the Internet at http:•//emma.msrb.org/. "Financing Plan"shall mean, with respect to the Property Owner or an Affiliate,the method by which such Person intends to finance its Development Plan,including specific sources of funding for such Development Plan. As of the date hereof, the Financing Plan for the Property Owner and its Affiliates is described in the Limited Offering Memorandum under the caption"PROPERTY OWNERSHIP AND THE DEVELOPMENT." "Fiscal Year"shall mean the period beginning on July 1 of each year and ending on the next succeeding June 30. "Government Authority"shall mean any national, state or local government, any political subdivision thereof, any department, agency, authority or bureau of any of the foregoing, or any other Person exercising executive, legislative,judicial,regulatory or administrative functions of or pertaining to government. "Listed Event"shall mean any of the events listed in Section 5(a)of this Disclosure Agreement. "Limited Offering Memorandum"shall mean the Limited Offering Memorandum, dated ,2022, relating to the Bonds. "Participating Underwriter"shall mean the original Underwriter of the Bonds. "Person" shall mean any natural person, corporation, partnership, firm, association, Government Authority or any other Person whether acting in an individual fiduciary,or other capacity. "Property"shall mean the parcels within the boundaries of the District subject to Special Taxes. "Semiannual Report" shall mean any report to be provided by the Property Owner on or prior to December 1 of each year pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. Information contained in the Semiannual Report shall be as of September 30 of the same calendar year. "State"shall mean the State of Hawaii. "Successor" shall mean any Person, other than the Property Owner or an Affiliate, who becomes the owner of Property within the District and is responsible for the payment of more than twenty percent(20%)of the Special Taxes levied on all of the Property in the District in the Fiscal Year following the transfer of the Property to such Successor. SECTION 3. Provision of Annual Reports. (a) The Property Owner shall (or upon its receipt of the Annual Report the Dissemination Agent shall), not later than June 1 of each year, commencing June 1, 2023, provide to EMMA, the Participating Underwriter and the County an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document or as separate documents comprising a package,and may include by reference other information as provided in Section 4 of this Disclosure Agreement provided that the audited financial statements, if any, of the Property Owner may be submitted E-2 4857-1255-2486v10/200356-0417 separately from the balance of the Annual Report and later than the date required for the filing of the Annual Report if they are not available by that date. In addition, the Property Owner shall (or upon its receipt of the Semiannual Report the Dissemination Agent shall), not later than December 1 of each year, commencing December 1,2023,provide to EMMA,the Participating Underwriter and the County a Semiannual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. (b) Not later than fifteen (15) Business Days prior to the dates specified in subsection (a) for providing the Annual Report and Semiannual Report to EMMA,the Property Owner shall provide the Annual Report or the Semiannual Report, as applicable,to the Dissemination Agent or shall provide notification to the Dissemination Agent that the Property Owner is preparing,or causing to be prepared,the Annual Report or the Semiannual Report,as applicable,and the date which the Annual Report or the Semiannual Report,as applicable, is expected to be available. The Property Owner shall provide a written certification with each Annual Report furnished to the Dissemination Agent and the Trustee to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. If by such date, the Dissemination Agent has not received a copy of the Annual Report or the Semiannual Report,as applicable,or notification as described in the preceding sentence, the Dissemination Agent shall contact the Property Owner to determine if the Property Owner is in compliance with the requirements of this subsection(b). (c) If the Dissemination Agent is unable to provide an Annual Report or Semiannual Report to EMMA by the date required in subsection(a)or to verify that an Annual Report or Semiannual Report has been provided to EMMA by the date required in subsection (a), the Dissemination Agent shall, in a timely manner, send a notice to EMMA in the form prescribed by the Municipal Securities Rulemaking Board. (d) The Dissemination Agent shall file a report with the Property Owner and the County certifying that the Annual Report or the Semiannual Report, as applicable, has been provided to EMMA pursuant to this Disclosure Agreement,and stating the date it was provided. SECTION 4. Content of Annual Report and Semiannual Report. (a) The Property Owner's Annual Report and Semiannual Report shall contain or include by reference the information which is available as of the date of the filing of the Annual Report or the Semiannual Report,as applicable,relating to the following: (i) If information regarding such Person has not previously been included in an Annual Report, a Semiannual Report or the Limited Offering Memorandum, the Development Plan of such Person; or, if information regarding such Person has previously been included in an Annual Report, a Semiannual Report or the Limited Offering Memorandum, a description of the progress made in the implementation of the Development Plan of such Person since the date of such information and a description of any significant changes in such Development Plan and the causes or rationale for such changes. (ii) If information regarding such Person has not previously been included in an Annual Report,a Semiannual Report or the Limited Offering Memorandum,the Financing Plan of such Person; or, if information regarding such Person has previously been included in an Annual Report, a Semiannual Report or the Limited Offering Memorandum,an update and a description of any significant changes in the Financing Plan of such Person and the causes or rationale for such changes. For the Property Owner, such update shall include the status of securing conventional bank financing, a joint venture partner(s)and equity contributions. (iii) A description of any sales of all or any portion of such Person's Property, including but not limited to sales to homebuilders,developers, individual homeowners or other third parties. E-3 4857-1255-2486v10/200356-0417 (iv) With respect to any portion of the Property owned by such Person and any of its Affiliates,a statement as to whether any special taxes or property taxes applicable to such portion of the Property are delinquent. (v) A description of any change in the ownership structure of such Person and/or the financial condition of such Person or any of its Affiliates if such change in ownership structure and/or financial condition could materially interfere with such Person's ability to complete its Development Plan. (vi) An update on the status of the Property Owner's application to the State Land Use Commission for a time extension for satisfying the conditions of entitlement for property within Zone 2(as described in the Limited Offering Memorandum). (vii) Any amendments to land use entitlements for any portion of the Property owned by such Person that could have a material adverse effect on such Person's most recently disclosed Financing Plan or Development Plan or on the ability of such Person, or any Affiliate of such Person, to pay installments of Special Taxes when due. (viii) Any precondition to commencement or continuation of development on any portion of the Property owned by such Person imposed by a governmental entity after the date of issuance of the Bonds which has not been previously disclosed and which could have a material adverse effect, or any change in the status of any such precondition that was previously disclosed in the Limited Offering Memorandum, an Annual Report or a Semiannual Report, which could have a material adverse effect on such Person's most recently disclosed Financing Plan or Development Plan or on the ability of such Person,or any Affiliate of such Person,to pay installments of Special Taxes when due. (ix) Any previously undisclosed legislative, administrative or judicial challenges to development on any portion of the Property owned by such Person,or any material change in the status of any such challenge that was previously disclosed in the Limited Offering Memorandum, an Annual Report or a Semiannual Report,that could have a material adverse effect on such Person's most recently disclosed Financing Plan or Development Plan or on the ability of such Person,or any Affiliate of such Person,to pay installments of Special Taxes when due. (x) A statement as to the status of construction of the Sewer Line(as defined in the Limited Offering Memorandum); provided, however, the requirement described in this subsection (ix) shall terminate once the Property Owner has disclosed in an Annual Report or a Semiannual Report that the construction of the Sewer Line has been completed and the Sewer Line has been accepted by the County. (xi) An update on the status of construction of any onsite infrastructure necessary for full development of Zone 1,as defined in the Limited Offering Memorandum. (xii) An update on the number of residential building permits issued(if any)since the most recent Annual Report or Semiannual Report. (xiii) An update of the status of any previously reported Listed Event described in Section 5. (b) Any and all of the items listed above may be included by specific reference to other documents, including Limited Offering Memorandums of debt issues which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final Limited Offering Memorandum,it must be available from EMMA. The Property Owner shall clearly identify each such other document so included by reference. E-4 4857-1255-2486v10/200356-0417 SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5,the Property Owner shall give,or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material under paragraphs (b)and(c)with respect to the Bonds: (i) failure to pay any real property taxes, special taxes or assessments levied within the District on a parcel owned by the Property Owner or any Affiliate; (ii) damage to or destruction of any of the infrastructure improvements constructed by the Property Owner or any Affiliate which has a material adverse effect on the value of the parcels owned by the Property Owner or any Affiliate; (iii) material default by the Property Owner or any Affiliate on any loan secured by property within the District owned by the Property Owner or any Affiliate; (iv) payment default by the Property Owner or any Affiliate located in the United States on any loan of the Property Owner or any Affiliate (whether or not such loan is secured by property within the District)which is beyond any applicable cure period in such loan and which may materially and adversely affect the Property Owner's development within the District; (v) the filing of any proceedings with respect to the Property Owner or any Affiliate, in which the Property Owner or any Affiliate,may be adjudicated as bankrupt or discharged from any or all of their respective debts or obligations or granted an extension of time to pay debts or a reorganization or readjustment of debts;and (vi) the filing of any lawsuit against the Property Owner or any of its Affiliates located in the United States which, in the reasonable judgment of the Property Owner, will adversely affect the completion of the development of parcels owned by the Property Owner or its Affiliates within the District, or litigation which if decided against the Property Owner, or any of its Affiliates, in the reasonable judgment of the Property Owner, would materially adversely affect the financial condition of the Property Owner or its Affiliates. (vii) the assumption of any obligation by a Successor pursuant to Section 12 hereof. (b) Whenever the Property Owner obtains knowledge of the occurrence of a Listed Event, the Property Owner shall as soon as possible determine if such event would be material under applicable federal securities laws. (c) If the Property Owner determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Property Owner shall promptly file a notice of such occurrence with the Dissemination Agent which shall then distribute such notice to the EMMA, with a copy to the County. (d) The Property Owner shall also give notice immediately upon the occurrence of any of the following events (to the extent the Property Owner has actual knowledge thereof) in accordance with the procedures set forth in(c)above: (i)a sale or transfer of all or substantially all of the Property Owner's assets, and(ii)a change in the identity of the managing member of the Property Owner. SECTION 6. Termination of Reporting Obligation. The Property Owner's obligations hereunder shall terminate upon the earliest to occur of the following events: (a) the legal defeasance,prior redemption or payment in full of all the Bonds;or E-5 4857-1255-2486v10/200356-0417 (b) if as of the date of filing the Annual Report or the Semiannual Report the Property Owner and its Affiliates own Property within the District which is responsible for less than twenty percent (20%) of the Special Taxes levied in the Fiscal Year for which the Annual Report or Semiannual Report is being prepared; provided that, notwithstanding the foregoing, if the Property Owner or its Affiliates has transferred Property in the District to a Successor that would be responsible for twenty percent (20%) or more of the Special Taxes levied in the Fiscal Year for which the Annual Report or Semiannual Report is prepared,the Property Owner's obligations hereunder shall not terminate until the earlier to occur of(i)the date on which the Property Owner's obligations hereunder have been assumed under an assumption agreement; or(ii)if as of the date of filing the Annual Report or the Semiannual Report the Successor (or any affiliate thereof) is no longer responsible for greater than twenty percent(20%)of the Special Taxes levied on the Property in the Fiscal Year for which the Annual Report or the Semiannual Report is prepared. Upon the occurrence of any such termination prior to the final maturity of the Bonds,the Property Owner shall cause the Dissemination Agent to give notice of such termination in the same manner as for a Listed Event under Section 5(c). Notwithstanding the foregoing,the Property Owner shall have no obligation to provide Semiannual Reports pursuant to Section 3 subsequent to the date on which it provides an Annual Report or a Semiannual Report which indicates that the then-applicable Development Plan for each portion of the Property has been fully implemented. Any subsequent Annual Report shall be limited to the items listed under Section 4(iii), (iv), (v) and(ix)hereof. SECTION 7. Dissemination Agent. The Property Owner may from time to time,appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. If the Dissemination Agent is not the Property Owner,the Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Property Owner pursuant to this Disclosure Agreement. The Dissemination Agent may resign (i)by providing thirty days written notice to the Property Owner, the County,the Participating Underwriter and the Trustee(if the Trustee is other than the Dissemination Agent)and (ii)upon appointment of a new Dissemination Agent hereunder. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Property Owner may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived,provided that the following conditions are satisfied: (a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) the amendment or waiver either (i)is approved by the Bondowners in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Bondowners,or(ii)does not, in the opinion of nationally recognized bond counsel addressed to the County and the Trustee, materially impair the interests of the Bondowners or Beneficial Owners of the Bonds;and (c) the Property Owner,or the Dissemination Agent,shall have delivered copies of the amendment and any opinions delivered under(b). In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Property Owner shall describe such amendment in the next Annual Report or Semiannual Report, and shall include, as applicable,a narrative explanation of the reason for the amendment or waiver and its impact on the type(or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Property Owner. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements,(i)notice of such change shall be given to EMMA,and(ii)the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if E-6 4857-1255-2486v10/200356-0417 feasible, in quantitative form)between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison of financial data described in clause(ii)of the preceding sentence shall be provided at the time financial statements, if any, are filed under Section 3(a)hereof. SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Property Owner from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication,or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Property Owner chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Property Owner shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. The Property Owner acknowledges and understands that other state and federal laws,including but not limited to the Securities Act of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to the Property Owner, and that under some circumstances, compliance with this Disclosure Agreement,without additional disclosures or other action,may not fully discharge all duties and obligations of the Property Owner under such laws. SECTION 10. Default. In the event of a failure of the Property Owner to comply with any provision of this Disclosure Agreement, any Participating Underwriter or any Bondowner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Property Owner or the Dissemination Agent to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Property Owner to comply with this Disclosure Agreement shall be an action to compel performance. SECTION 11. Duties,Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement and the Property Owner agrees to indemnify, defend and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of theirs powers and duties hereunder, including the costs and expenses(including attorneys fees) of defending against any claim of liability,but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the Property Owner,the Participating Underwriter, Bondowners or Beneficial Owners or any other party. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon a direction from the Property Owner or an opinion of nationally recognized bond counsel. The obligations of the Property Owner under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. No person shall have any right to commence any action against the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Agreement. Any company succeeding to all or substantially all of the Dissemination Agent's corporate trust business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any paper or any further act. The Dissemination Agent will not, without the Property Owner's prior written consent, settle, compromise or consent to the entry of any judgment in any pending or threatened claim,action or proceeding in respect of which indemnification may be sought hereunder unless such settlement, compromise or consent includes an unconditional release of the Property Owner and its controlling persons from all liability arising out of such claim,action or proceedings. If a claim,action or proceeding is settled with the consent of the Property Owner or if there is a final judgment(other than a stipulated final judgment without the approval of the Property Owner) for the plaintiff in any such claim, action or proceeding, with or without the consent of the Property E-7 4857-1255-2486v10/200356-0417 Owner, the Property Owner agrees to indemnify and hold harmless the Dissemination Agent to the extent described herein. SECTION 12. Reporting Obligation of Successors. The Property Owner shall, in connection with any sale or transfer of ownership of Property within the District to a Successor, cause such Successor to enter into a disclosure agreement with terms substantially similar to this Disclosure Agreement, whereby such Successor agrees to be bound by the obligations of the Property Owner under this Disclosure Agreement as an additional obligated party with respect to the Property so transferred. Notwithstanding the foregoing, the Property Owner may elect to provide the Annual Reports and Semiannual Reports on behalf of the Successor, provided that such reports would contain the information required by this Disclosure Agreement, as if the Successor were a party to this Disclosure Agreement. SECTION 13. Property Owner as Independent Contractor. In performing under this Disclosure Agreement,it is understood that the Property Owner is an independent contractor and not an agent of the County. SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. E-8 4857-1255-2486v10/200356-0417 SECTION 15. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Property Owner, the County, the Dissemination Agent, the Participating Underwriter and Bondowners and Beneficial Owners from time to time of the Bonds,and shall create no rights in any other person or entity. DEVELOPER: RCFC KALOKO HEIGHTS, LLC By: Name: AARON A. GIOVARA Its: Authorized Signatory KALOKO HEIGHTS B1A HOLDINGS,LLC By: Name: AARON A. GIOVARA Its: Authorized Signatory KALOKO HEIGHTS INVESTORS,LLC By: Name: AARON A. GIOVARA Its: Authorized Signatory , as Dissemination Agent By: Name: Title: E-9 4857-1255-2486v10/200356-0417 APPENDIX F FORM OF OPINION OF BOND COUNSEL [Closing Date] Re: Hawaii County Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds, Series 2022 Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance by the County of Hawai`i(the"County") of$ aggregate principal amount of its Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds, Series 2022, dated , 2022 (the "Bonds"). The Bonds are issued for the purpose of funding the costs of certain facilities and improvements for Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project) (the "District") formed by the County pursuant to Section 46-80.1,Hawaii Revised Statutes(the"Act"),Chapter 32,Hawai`i County Code 1983(2016 Edition, as Amended)("Chapter 32"), and Ordinance No. 21-67 of the County enacted pursuant to Chapter 32 (the "Ordinance of Formation"). The Bonds are authorized to be issued for such purpose pursuant to the Act, Chapter 32,the Ordinance of Formation,Ordinance No.22-33 of the County enacted pursuant to Chapter 32 and the Ordinance of Formation (the "Bond Ordinance"), Resolution No. adopted by the County Council pursuant to the Bond Ordinance(the"Bond Resolution"),and the Trust Indenture dated as of ,2022(the "Indenture")between the County,as issuer of the Bonds,and U.S.Bank Trust Company,National Association, as Trustee. All terms used and not otherwise defined herein shall have the meanings set forth in the Indenture. In our capacity as bond counsel, we have reviewed the Act, Chapter 32, the Ordinance of Formation, the Bond Ordinance, the Bond Resolution, the Tax Certificate of the County of even date herewith (the "Tax Certificate") and such other certificates, records, opinions and documents delivered in connection with the issuance of the Bonds as we deemed necessary for purposes of the opinions expressed herein(collectively,the "Bond Documents"). We have assumed the genuineness of all Bond Documents presented to us as originals, conformity to the originals of all Bond Documents presented to us as copies,and the due execution and delivery of all Bond Documents by,and the validity and enforceability thereof against, each party thereto other than the County. We have also assumed, without independent investigation, the accuracy of all representations and certifications and the correctness of all legal opinions set forth in such Bond Documents. We have further assumed compliance with all covenants and agreements contained in the Bond Documents, including the covenants and agreements of the County under the Tax Certificate to comply with all requirements of the Internal Revenue Code of 1986,as amended(the"Code"),that must be satisfied subsequent to the issuance of the Bonds in order for the interest on the Bonds to be and to remain excluded from gross income for federal income tax purposes under the Code. Based upon and subject to the foregoing, and subject to the further matters set forth below, we are of the opinion that: 1. The Bonds have been duly authorized and issued by the County and constitute valid and binding limited obligations of the County, enforceable in accordance with their terms and the terms of the Indenture. 2. The Indenture creates a valid pledge of, and the Bonds are payable solely from and secured solely by, the Special Taxes and amounts on deposit in certain funds and accounts established under the Indenture,as and to the extent provided in the Indenture. Except for the Special Taxes and amounts so pledged, neither the faith and credit nor the taxing power of the County, the State of Hawaii or any other political subdivision is pledged for the payment thereof. F-1 4857-1255-2486v10/200356-0417 County of Hawai`i [Closing Date] Page 2 3. Interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Code, as presently enacted and construed. Interest on the Bonds is not an item of tax preference under the Code for purposes of the alternative minimum tax imposed on individuals,but we note that such interest is included in "adjusted financial statement income" (as defined in Section 56A of the Code) of "applicable corporations"(as defined in Section 59(k)of the Code)for purposes of computing their alternative minimum tax liability under the Code. 4. Under the laws of the State of Hawaii, as presently enacted and construed,the Bonds and the income therefrom are exempt from all taxation by the State of Hawaii or any political subdivision thereof,except for inheritance,transfer,estate and certain franchise taxes. With respect to the opinions set forth in paragraphs 1 and 2 above,we call attention to the fact that the rights and obligations under the Bonds and the Bond Documents, and the enforceability of such rights and obligations, may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights,to the application of equitable principles and to applicable limitations on legal remedies against counties in the State of Hawaii. We express no opinion with respect to any indemnification,contribution,penalty,arbitration,choice of law,choice of forum,choice of venue, waiver or severability provisions contained in the Bond Documents. Except as stated in paragraphs 3 and 4 above, we express no opinion as to any federal or state tax consequences relating to the ownership or disposition of the Bonds or to the amount,accrual or receipt of interest thereon. In our capacity as bond counsel,we have not been retained to express, and do not express,any opinion as to the accuracy, adequacy or completeness of any official statement or other offering documents used in connection with the offer and sale of the Bonds. • Our engagement with respect to the Bonds has concluded with the issuance of such Bonds on the date hereof. The opinions set forth herein are expressed as of the date hereof,and we assume no obligation to revise or supplement this opinion letter to reflect any change in law that may hereafter occur or any other facts or circumstances which may hereafter come to our attention. Very truly yours, McCORRISTON MILLER MUKAI MacKINNON LLP F-2 4857-1255-2486v 10/200356-0417 APPENDIX G BOOK-ENTRY-ONLY SYSTEM The information in this Appendix concerning DTC and DTC's book-entry only system has been obtained from sources that the County and the Underwriter believe to be reliable, but neither the County nor the Underwriter take any responsibility for the completeness or accuracy thereof The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee)or such other name as may be requested by an authorized representative of DTC. One fully registered bond will be issued for each annual maturity of the Bonds,each in the aggregate principal amount of such annual maturity, and will be deposited with DTC. DTC,the world's largest securities depository,is a limited-purpose trust company organized under the New York Banking Law, a"banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a"clearing corporation"within the meaning of the New York Uniform Commercial Code, and a"clearing agency"registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues,corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants")deposit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securities transactions in deposited securities,through electronic computerized book entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations,and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust&Clearing Corporation("DTCC"). DTCC is the holding company for DTC,National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S.and non-U.S.securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive bonds representing their ownership interests in the Bonds,except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers,all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede& Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds;DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. G-1 4857-1255-2486v10/200356-0417 Conveyance of notices and other communications by DTC to Direct Participants,by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them,subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds,such as redemptions,tenders,defaults,and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative,Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede&Co.(nor any other DTC nominee)will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede& Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date(identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede& Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Authority or the Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC,the Trustee,or the Authority,subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede&Co.(or such other nominee as may be requested by an authorized representative of DTC)is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Bond Owner shall give notice to elect to have its Bonds purchased or tendered,through its Participant,to the Trustee, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant's interest in the Bonds,on DTC's records,to the Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Bonds to the Trustee's DTC account. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances,in the event that a successor depository is not obtained,physical certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event,bonds will be printed and delivered to DTC. THE TRUSTEE,AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE. G-2 4857-1255-2486v10/200356-0417 APPENDIX H FORM OF INVESTOR LETTER County of Hawai'i McCorriston Miller Mukai MacKinnon LLP Kona,Hawai'i Honolulu, Hawai'i U.S. Bank Trust Company,National Association Stifel,Nicolaus&Company, Incorporated Los Angeles,California Los Angeles,California Re: County of Hawai'i Community Facilities District No. 1-2021 (Kaloko Heights Project)Special Tax Revenue Bonds,Series 2022 Ladies and Gentlemen: The undersigned(the"Investor")hereby acknowledges that it is purchasing$ aggregate principal amount of the County of Hawai'i Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds, Series 2022(the"2022 Bonds"), issued, in authorized denominations of$100,000 or any integral multiple of$5,000 in excess thereof("Authorized Denominations"), by the County of Hawai'i (the "Issuer"), pursuant to a Trust Indenture, dated as of 1, 2022 (the "Indenture"), by and between the Issuer and U.S. Bank Trust Company, National Association, a national banking association, as Trustee (the "Trustee"). This letter("Investor Letter") is being provided pursuant to the Indenture. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture. The Investor acknowledges that the proceeds of the 2022 Bonds will be used for the purposes,and that the principal of and interest on the 2022 Bonds will be payable solely from the sources, described in the Preliminary Limited Offering Memorandum, dated , 2022, as amended to the date hereto(the"Offering Document"). In connection with the sale of the 2022 Bonds to the Investor,the Investor hereby makes the following representations upon which you may rely: 1. The Investor has the authority and is duly authorized to purchase the 2022 Bonds and to execute this Investor Letter and any other instruments and documents required to be executed by the Investor in connection with its purchase of the 2022 Bonds. 2. The Investor is(a)a"qualified institutional buyer"as that term is defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), or (b) an "accredited investor" as that term is defined in Rule 501(a)(1), (a)(2), (a)(3), or(a)(7) under the Securities Act, and has sufficient knowledge and experience in financial and business matters, including the purchase and ownership of municipal conduit obligations,to be able to evaluate the risks and merits of the investment represented by the 2022 Bonds. 3. The Investor acknowledges the 2022 Bonds are being acquired by the Investor (A) for investment and not with a current view to,or for resale in connection with,any distribution of the 2022 Bonds, and the Investor intends to hold the 2022 Bonds solely for its own account for investment purposes for an indefinite period of time, and does not intend at this time to dispose of all or any part of the 2022 Bonds. However,the Investor may sell the 2022 Bonds at any time the Investor deems appropriate,subject to the transfer restrictions set forth in the 2022 Bonds and in the Indenture. The Investor understands that it may need to bear the risks of this investment for an indefinite time, since there is no established market for the 2022 Bonds,none is expected to develop, and hence any resale of the 2022 Bonds, or any portion thereof, prior to maturity may not be possible. The Investor understands that the 2022 Bonds will be issued only in Authorized Denominations, and confirms that it will not allocate any 2022 Bonds to accounts in violation of such limitations; and(B)to the H-1 4857-1255-2486v101200356-0417 extent the Investor is purchasing the 2022 Bonds not on its own behalf but in its capacity as investment adviser to beneficial owners of separately managed accounts, such accounts will solely be for investors which meet the qualifications for investors as set forth in the Indenture and as described in Section 2 of this Investor Letter. The Investor understands that Stifel, Nicolaus & Company, Incorporated, as underwriter of the 2022 Bonds (the "Underwriter")will not facilitate the establishment of such accounts and that the 2022 Bonds will be issued only in Authorized Denominations,and confirms that it will not facilitate the deposit of the 2022 Bonds into accounts in violation of such limitations. 4. The Investor understands that the 2022 Bonds are not, and are not intended to be, registered under the Securities Act and that such registration is not legally required as of the date hereof, and further understands that the 2022 Bonds(a)are not being registered or otherwise qualified for sale under the"Blue Sky" laws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating agency,and(d)will be delivered in a form that may not be readily marketable. 5. The Investor has been supplied with, and has reviewed, a copy of the Offering Document for the 2022 Bonds. The Investor has had the opportunity to ask questions of and receive answers from the Issuer concerning its purchase of the 2022 Bonds and all matters relating thereto,and has received from the Issuer any additional information it deemed necessary in its decision to purchase the 2022 Bonds. The Investor acknowledges and agrees that neither the Issuer nor the Underwriter has made any representations to the Investor other than as set forth in the Offering Document. The Offering Document speaks only as of its date. 6. The Investor acknowledges and understands that the 2022 Bonds are a speculative investment and that investing in the 2022 Bonds is subject to a high degree of risk, including the risks described in the Offering Document. The Investor understands that such risks may adversely affect the timely and full payment of principal and interest on the 2022 Bonds. The Investor represents that it can bear the economic risks associated with investing in the 2022 Bonds, including that it is capable of suffering a loss of the entirety of its investment represented by the 2022 Bonds. 7. The Investor acknowledges and agrees that the Underwriter and the Issuer take no responsibility for,and make no representation to,the Investor or any subsequent purchaser,with regard to any sale,transfer or other disposition of the 2022 Bonds, or any interest therein, in violation of the provisions of the Indenture, or any securities law or income tax law consequences thereof.The Investor also acknowledges that,with respect to the Issuer's obligations and liabilities,the Investor is solely responsible for compliance with the sales restrictions on the 2022 Bonds in connection with any subsequent transfer of the 2022 Bonds made by the Investor. 8. THE INVESTOR ACKNOWLEDGES THAT THE 2022 BONDS ARE LIMITED OBLIGATIONS OF THE COUNTY PAYABLE SOLELY FROM THE SPECIAL TAXES AND AMOUNTS ON DEPOSIT IN THE SPECIAL TAX FUND (OTHER THAN AMOUNTS IN THE ADMINISTRATIVE EXPENSE ACCOUNT OF THE SPECIAL TAX FUND), AND THAT NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER (EXCEPT AS IT PERTAINS TO THE SPECIAL TAXES) OF THE COUNTY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE 2022 BONDS. 9. The Investor agrees that it is bound by and will abide by the provisions of the Indenture relating to the transfer restrictions noted on the face of the 2022 Bonds and in this Investor Letter. The Investor also covenants to comply with all applicable federal and state securities laws, rules and regulations in connection with any resale or transfer of the 2022 Bonds by the Investor. The Investor acknowledges that the 2022 Bonds will bear the following legend(among other legends to be included),unless determined otherwise in accordance with applicable law: THIS BOND IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.9 OF THE INDENTURE. NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS BOND, OR ANY BENEFICIAL INTEREST H-2 4857-1255-2486v10/200356-0417 HEREIN, MAY BE MADE EXCEPT TO A PERSON THAT IS A QUALIFIED PURCHASER THAT IS PURCHASING THIS BOND FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTING THIS BOND.EACH TRANSFEREE OF THIS BOND,OR ANY BENEFICIAL INTEREST THEREIN, SHALL BE DEEMED TO HAVE REPRESENTED TO THE COUNTY, THE PARTICIPATING UNDERWRITER AND THE TRUSTEE THAT SUCH TRANSFEREE IS A QUALIFIED PURCHASER THAT IS PURCHASING SUCH BOND FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTING SUCH BOND. EACH ENTITY THAT IS OR THAT BECOMES AN OWNER OR A BENEFICIAL OWNER OF THIS BOND IS DEEMED BY THE ACCEPTANCE OR ACQUISITION OF THIS BOND OR SUCH BENEFICIAL OWNERSHIP INTEREST TO HAVE AGREED TO BE BOUND BY THE PROVISIONS OF SAID SECTION 2.9. ANY TRANSFER OF A BOND TO ANY ENTITY THAT IS NOT A QUALIFIED PURCHASER SHALL BE DEEMED NULL AND VOID. 10. The Investor acknowledges that the sale of the 2022 Bonds to the Investor is being made in reliance upon the certifications,representations,and warranties herein made to the addressees hereto. 11. The interpretation of the provisions hereof shall be governed and construed in accordance with Wisconsin law without regard to principles of conflicts of laws. 12. Investor agrees to indemnify and hold harmless the Issuer with respect to any claim asserted against the Issuer that is based upon Investor's breach of any representation,warranty or agreement made by it herein,other than any claim that is based upon the willful misconduct of the person seeking indemnification. 13. All representations of the Investor contained in this Investor Letter shall survive the execution and delivery of the 2022 Bonds to the Investor as representations of fact existing as of the date of execution and delivery of this Investor Letter. Dated F � By Name Title H-3 4857-1255-2486v10/200356-0417 COUNTY OF HAWAII COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) SPECIAL TAX REVENUE BONDS, SERIES 2022 BOND PURCHASE AGREEMENT , 2022 County of Hawai`i 25 Aupuni Street Hilo, Hawaii 96720 Ladies and Gentlemen: Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (the "Bond Purchase Agreement") with the County of Hawaii (the "County") which, upon acceptance, will be binding upon the County and the Underwriter. This offer is made subject to its acceptance by the County on the date hereof, and it is subject to withdrawal by the Underwriter upon notice delivered to the County at any time prior to the acceptance by the County. Capitalized terms that are used in this offer and not otherwise defined herein shall have the respective meanings ascribed to them in the Indenture or the Limited Offering Memorandum (each as hereinafter defined), as the case may be. The County acknowledges and agrees that (i)the purchase and sale of the Bonds (as hereinafter defined) pursuant to this Bond Purchase Agreement is an arm's-length commercial transaction between the County and the Underwriter, (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and not as the agent or fiduciary of the County, (iii)the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the County with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto and is not, and has not been, acting as a"municipal advisor" (as such term is defined in Section 15B of the Securities Exchange Act of 1934, as amended), irrespective of whether the Underwriter has provided other services or is currently providing other services to the County on other matters, (iv) the Underwriter has no obligation to the County with respect to the offering contemplated by this Bond Purchase Agreement except those expressly set forth herein, (v)the Underwriter has financial interests that may differ from and be adverse to those of the County and (vi)the County has engaged Fieldman, Rolapp& Associates, Inc.to serve as its financial advisor in connection with the structuring of the Bonds and their sale to the Underwriter and has consulted with said firm and with its other advisors to the extent it has deemed appropriate. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions, and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter agrees to purchase from the County, and the County agrees to sell to the Underwriter, all (but not less than all) of the Hawai'i County 4857-1370-8327v4/200356-0417 Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds, Series 2022 (the "Bonds") in the aggregate principal amount, and at the purchase price, specified in Exhibit A hereto. The Bonds shall be dated the Closing Date (as hereinafter defined), bear interest from said date (payable semiannually on May 15 and November 15 of each year, commencing May 15, 2023) at the rates per annum, mature on the dates and in the amounts, and be subject to redemption, all as set forth in Exhibit A hereto. (b) The Bonds shall be issued under and pursuant to the provisions of(a) Chapter 32, Hawaii County Code 1983 (2016 Edition, as Amended) (the "County CFD Ordinance"), (b) Ordinance No. 22-33 adopted by the Council of the County of Hawaii (the "County Council") on March 23, 2022 and approved by the Mayor of the County on April 7, 2022 under the authority granted to the County by Section 46-80.1 of the Hawaii Revised Statutes and the resolution of the County Council approving the terms of the Bonds, adopted on , 2022 (collectively, the "Bond Ordinance") and (c)the Trust Indenture dated as of 1, 2022 (the "Indenture") by and between the County and U.S. Bank Trust Company, National Association, as Trustee (the "Trustee"). The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable and be subject to redemption as provided in, the Indenture. The Bonds and interest thereon shall be payable from a special tax (the "Special Tax") levied and collected on the taxable property within Hawai'i County Community Facilities District No. 1-2021 (Kaloko Heights Project) (the "District") in accordance with the rate and method of apportionment of special tax(the "Rate and Method of Apportionment")approved by the County's Ordinance No. 21-67 (the "Formation Ordinance") adopted by the County Council on September 22, 2021 and approved by the Mayor on October 6, 2021. Proceeds from the sale of the Bonds will be used in accordance with the provisions of the County CFD Ordinance, the Indenture, the Project Funding and Acquisition Agreement dated November _, 2022 (the "Acquisition Agreement") by and between the County and RCFC Kaloko Heights, LLC, a Delaware limited liability company, Kaloko Heights B1A Holdings, LLC, a Delaware limited liability company and Kaloko Heights Investors, LLC, a Delaware limited liability company. RCFC Kaloko Heights, LLC, Kaloko Heights B1A Holdings, LLC and Kaloko Heights Investors, LLC are collectively referred to herein as the "Landowner." (c) At or prior to the acceptance hereof by the County, the County shall cause to be delivered to the Underwriter a certificate executed by an authorized officer or officers of the Landowner in the form attached hereto as Exhibit C, with only such changes therein as shall have been accepted by the Underwriter. (d) Subsequent to its receipt of a certificate from the County deeming the Preliminary Limited Offering Memorandum for the Bonds, dated , 2022 (the "Preliminary Limited Offering Memorandum") final for purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934 ("Rule 15c2-12"), the Underwriter distributed copies of the Preliminary Limited Offering Memorandum to potential purchasers of Bonds. The County hereby ratifies the use by the Underwriter, in connection with the offer and sale of the Bonds, of the Preliminary Limited Offering Memorandum and agrees to promptly execute a final Limited Offering Memorandum relating to the Bonds, dated the date hereof, consisting of the Preliminary Limited Offering Memorandum with the inclusion of all information previously permitted to have been omitted therefrom by Rule 15c2-12 and with such changes as may be made thereto with the approval of Bond Counsel (as hereinafter defined) and the Underwriter(the "Limited Offering Memorandum"). The County authorizes the Underwriter to use and distribute the Limited Offering Memorandum, the Indenture, the Acquisition Agreement, the Continuing 2 4857-1370-8327v4/200356-0417 Disclosure Agreement dated as of , 2022 by and between the County and U.S. Bank Trust Company,National Association, as dissemination agent (the "Continuing Disclosure Agreement"), this Bond Purchase Agreement, any other documents or contracts to which the County is a party, and all information contained therein, and all other documents, certificates and statements furnished by the County to the Underwriter in connection with the transactions contemplated by this Bond Purchase Agreement. The Underwriter hereby agrees to deliver a copy of the Limited Offering Memorandum to the Municipal Securities Rulemaking Board (the "MSRB") through the Electronic Municipal Marketplace Access system of the MSRB on or before the Closing Date, to comply with the Requirements of MSRB Rule G-32 and to comply with all applicable statutes and regulations in connection with the offering and sale of the Bonds. (e) At 6:00 A.M., local time in Hawai'i, on , 2022, or at such other time or date as shall be agreed upon by the Underwriter and the County (such time and date being herein referred to as the "Closing Date"), the County will deliver (i)to The Depository Trust Company in New York, New York, or to its agent, the Bonds in definitive form (all Bonds being in book-entry form registered in the name of Cede & Co. and having the CUSIP numbers assigned to them printed thereon), duly executed by the facsimile signatures of the Mayor and Director of Finance of the County and authenticated by the Trustee, as provided in the Indenture, and (ii)to the Underwriter, at the offices of McCorriston Miller Mukai MacKinnon LLP ("Bond Counsel"), in Honolulu, Hawaii, the other documents herein mentioned; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in immediately available funds (such delivery and payment being herein referred to as the "Closing"). The Bonds, as so registered, shall be made available to the Underwriter for inspection not later than the business day before the Closing Date. 2. Public Offering and Establishment of Issue Price. (a) The Underwriter agrees to make a bona fide public limited offering of the Bonds at the initial public offering price or prices set forth on the inside cover page of the Limited Offering Memorandum and in Exhibit A hereto; and, subject to Section 2(c) and 2(d) hereof, the Underwriter reserves the right to change such initial public offering prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, and to sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices set forth in the Limited Offering Memorandum. A "bona fide public offering" shall include an offering to institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold. (b) The Underwriter agrees to assist the County in establishing the issue price of the Bonds and shall execute and deliver to the County at the Closing an "issue price" or similar certificate, together with copies of supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the County and Bond Counsel to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the County under this section to establish the issue price of the Bonds may be taken on behalf of the County by the Municipal Advisor and any notice or report to be provided to the County may be provided to the Municipal Advisor. (c) Except as otherwise set forth in Exhibit A attached hereto, the County will treat the first price at which 10%of each maturity of the Bonds(the "10% test"), identified under the column "10% Test Used" in Exhibit A, is sold to the public as the issue price of that maturity. At or 3 4857-1370-8327v4/200356-0417 promptly after the execution of this Bond Purchase Agreement, the Underwriter shall report to the County 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 County the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing has occurred, until either (i)the Underwriter has sold all Bonds of that maturity or (ii)the 10%test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter's reporting obligation after the Closing may be at reasonable periodic intervals or otherwise upon request of the County or Bond Counsel. For purposes of this section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (d) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Bond Purchase Agreement at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column "Hold the Offering Price Rule Used," as of the date of this Bond Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the County and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the County to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the "hold-the-offering-price rule"). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following: (i) the close of the fifth (5th)business day after the sale date; or (ii) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. The Underwriter will advise the County promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (e) The Underwriter confirms that: (i) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable: (1) (i)to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii)to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter, 4 4857-1370-8327v4/200356-0417 (2) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (3) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public; and (ii) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A)report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10%test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B)comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (f) The County acknowledges that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The County further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering- price rule, if applicable to the Bonds. (g) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section: (i) "public" means any person other than an underwriter or a related party; (ii) "underwriter" means (A)any person that agrees pursuant to a written contract with the County (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B)any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial 5 4857-1370-8327v4/200356-0417 sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public); (iii) a purchaser of any of the Bonds is a "related party" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii)more than 50%common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii)more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and (iv) "sale date" means the date of execution of this Bond Purchase Agreement by the County and the Underwriter. 3. Representations, Warranties and Agreements of the County. The County represents, warrants and covenants to and agrees with the Underwriter that: (a) The County Council has duly adopted the County CFD Ordinance, the Formation Ordinance and the Bond Ordinance, in each case pursuant to and consistent with the provisions of Section 46-80.1 of the Hawaii Revised Statutes (the "State CFD Law") and in the case of the Formation Ordinance and the Bond Ordinance pursuant to and consistent with the provisions of the County CFD Ordinance (such ordinances being collectively referred to herein as the "Formation Documents"). Each of the Formation Documents remains in full force and effect as of the date hereof and has not been amended except as otherwise described in the Limited Offering Memorandum. In addition, the County has caused to be recorded in the real property records of the County of Hawaii a notice of the special tax and lien applicable to property within the District in the form and within the time required by law(the"Notice of Special Tax Lien"). (b) The County is duly organized and validly existing as a county under the laws of the State of Hawaii (the "State") and has, and at the Closing Date will have full, legal right, power and authority to (i)to issue, sell and deliver the Bonds to the Underwriter as provided herein pursuant to the Bond Ordinance, and(ii)to execute,deliver, carry out, give effect to and consummate the transactions contemplated by the Formation Documents and by the Indenture, this Bond Purchase Agreement, the Acquisition Agreement and the Continuing Disclosure Agreement (collectively, the g Y "County Documents")and the Limited Offering Memorandum. (c) The County has complied, and at the Closing Date will be in compliance, in all material respects, with the Formation Documents and the County Documents; and from and after the date of issuance of the Bonds, the County will continue to comply with the covenants of the County contained in the County Documents. (d) The District has been duly and validly formed and exists as a community facilities district under and pursuant to the State CFD Law and the County CFD Ordinance; the Rate and Method of Apportionment has been duly and validly approved by the County Council and is in full force and effect; and the Special Tax authorized by the Rate and Method of Apportionment may be levied and collected as described in the Rate and Method of Apportionment and the Indenture and, 6 4857-1370-8327v4/200356-0417 when levied, constitutes a lien on the Taxable Property (as defined in the Rate and Method of Apportionment)on a parity with the lien of general real property taxes. (e) The County Council has duly and validly: (i)authorized and approved the execution and delivery of the County Documents and the Bonds, (ii) authorized the preparation and delivery of the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum, and (iii)authorized and approved the performance by the County of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by, each of the County Documents and the Limited Offering Memorandum (including,without limitation,the levy and collection of the Special Tax and the use of the Special Tax to pay debt service on the Bonds and to acquire public improvements); and, at the Closing Date, the Formation Documents will be in full force and effect, and (assuming due authorization, execution and delivery by the respective other parties thereto, where necessary) the County Documents and the Bonds will constitute the valid, legal and binding obligations of the County enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights in general and to the application of equitable principles. (f) The County is not in breach of or default under any applicable law or administrative rule or regulation of the United States or the State, or of any department, division, agency or instrumentality of either of them, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the County is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the performance by the County of its obligations under the Formation Documents, the County Documents or the Bonds; and compliance with the provisions of the Formation Documents, the County Documents and the Bonds will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the United States or the State,or of any department, division, agency or instrumentality of either of them, or under any applicable court or administrative decree or order, or a breach of or default under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the County is a party or is otherwise subject or bound. (g) Except for compliance with the"blue sky"or other state securities law filings, as to which the County makes no representations, all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the County of its obligations hereunder, or under the Formation Documents, the County Documents or the Bonds, have been obtained and are in full force and effect. (h) Until the date which is twenty five (25) days after the "end of the underwriting period" (as hereinafter defined), if any event shall occur of which the County becomes aware, as a result of which it may be necessary to amend or supplement the Limited Offering Memorandum in order to make the statements in the Limited Offering Memorandum, in light of the circumstances existing at such time, not misleading, the County shall forthwith notify the Underwriter of such event and shall cooperate fully in furnishing any information available to it for any amendment or supplement to the Limited Offering Memorandum necessary so that the statements therein, as so amended or supplemented, will not be misleading in light of the circumstances existing at such time; and the County shall promptly furnish to the Underwriter a 7 4857-1370-8327v4/200356-0417 reasonable number of copies of such amendment or supplement. If any such amendment or supplement occurs subsequent to the Closing, the County shall deliver to the Underwriter such additional legal opinions, certificates and/or other documents as the Underwriter may reasonably deem necessary to evidence the accuracy and completeness thereof. As used herein,the term"end of the underwriting period" means the later of such time as (i)the County delivers the Bonds to the Underwriter, or (ii)the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public; and, unless the Underwriter delivers written notice to the contrary to the County prior to the Closing specifying another date to be deemed the "end of the underwriting period", the "end of the underwriting period" shall be deemed to be the Closing Date. Except pursuant to the foregoing the County will not amend or supplement the Limited Offering Memorandum without the prior written consent of the Underwriter, which consent shall not be unreasonably withheld. (i) The Indenture creates a valid pledge of the Special Taxes and the moneys in the Special Tax Fund established pursuant to the Indenture (other than the Administrative Expense Account therein), including the investments thereof, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. (j) Except as disclosed in the Limited Offering Memorandum, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending or, to the knowledge of the County, threatened against the County (i)which would materially adversely affect the ability of the County to perform its obligations under the Formation Documents, the County Documents or the Bonds, or (ii) seeking to restrain or to enjoin: (A)the development of any of the land within the District, (B)the issuance, sale or delivery of the Bonds, (C)the application of the proceeds thereof in accordance with the Indenture or the Acquisition Agreement, or (D)the collection or application of the Special Tax or the Indenture's pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Formation Documents, the County Documents, any tentative or final subdivision map applicable to property within the District, or any action contemplated by any of said documents, or(iii) in any way contesting the completeness or accuracy of the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum or the powers or authority of the County with respect to the Bonds, the Formation Documents, the County Documents, or any action of the County contemplated by any of said documents; nor is there any action pending or, to the knowledge of the County, threatened against the County which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from State personal income taxation. (k) The County will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for the Underwriter to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, that the County shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any "blue sky" filing. (1) Any certificate signed by any authorized official of the County authorized to do so shall be deemed a representation and warranty to the Underwriter as to the statements made therein. 8 4857-1370-8327v4/200356-0417 (m) The County will apply the proceeds of the Bonds in accordance with the Indenture and the Acquisition Agreement and as described in the Limited Offering Memorandum. (n) The Limited Offering Memorandum (except the statements attributed to the Landowner under the captions "PROPERTY OWNERSHIP AND THE DEVELOPMENT," "CERTAIN RISK FACTORS—Vacation Home Development, "—Geologic, Topographic and Climatic Conditions," "—Hazardous Substances," and "—Endangered Species," and "CONCLUDING INFORMATION—Continuing Disclosure," as to which no view is expressed) is, as of the date hereof, and will be, as of the Closing Date, true, correct and complete in all material respects; and the Limited Offering Memorandum (except the portions thereof mentioned above, as to which no view is expressed), does not, and will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary rY to make the statements therein, in light of the circumstances under which they were made, not misleading. (o) The Preliminary Limited Offering Memorandum heretofore delivered to the Underwriter has been deemed final by the County as of its date, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2-12. Within seven (7) business days from the date hereof, or (upon reasonable written notice from the Underwriter) within sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, the County shall cause a final printed form of the Limited Offering Memorandum to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and the County so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and with Rules G-12, G-15, G-32 and G-36 of the MSRB. (p) Except as otherwise disclosed in the Limited Offering Memorandum, the County has not failed to comply in any material respect with its previous undertakings pursuant to Rule 15c2-12 within the last five years. 4. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the County contained herein, as of the date hereof and as of the Closing Date,to the accuracy in all material respects of the statements of the officers and other officials of the County and the Landowner, made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the County of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions: (a) At the Closing Date, the Formation Documents, the County Documents and the Landowner Continuing Disclosure Agreement(as defined herein) shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Bond Purchase Agreement,all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate; (b) The information contained in the Limited Offering Memorandum will, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant to Section 3(h) hereof, be true, correct and complete in all material respects and will not, as of the Closing Date or as of the date of any supplement or amendment thereto pursuant to Section 3(h) hereof, contain any 9 4857-1370-8327v4/200356-0417 untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in Exhibit A hereto or the ability of the Underwriter to enforce contracts for the sales of the Bonds shall not have been materially adversely affected, in the reasonable judgment of the Underwriter (evidenced by a written notice to the County terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following: (1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest that would be received by the holders of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; (2) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporaryor proposed), press release or other form of notice issued or made by or on behalf of the SEC, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended (the "1933 Act"), or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended (the "1939 Act"), or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Limited Offering Memorandum is or would be in violation of the federal securities laws, rules or regulations as amended and then in effect; (3) any amendment to the federal or State Constitution or action by any federal or State court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the County, its property, income, securities (or interest thereon), the validity or enforceability of the Special Tax or the ability of the County to construct or acquire the improvements as contemplated by the Formation Documents, the County Documents or the Limited Offering Memorandum or the right of any owner of the property within the County to develop such property in the manner described in the Limited Offering Memorandum; (4) any event occurring, or information becoming known, which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum, or results in the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum 10 4857-1370-8327v4/200356-0417 containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (x)the County refuses to permit the Limited Offering Memorandum to be supplemented to supply such statement or information or (y)the effect of any such supplement would be to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; (5) a declaration of war or an escalation of, or engagement in, military hostilities by the United States or the occurrence of any other national or international emergency or calamity relating to the effective operation of the government of, or the financial community in, the United States; (6) the declaration of a general banking moratorium by federal, State of New York or State of Hawaii authorities, or the general suspension of trading on any national securities exchange or the fixing and maintaining in force of minimum or maximum prices for trading, or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange or other national securities exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; (7) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; (8) there shall have been any material adverse change in the affairs of the County; (9) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a change to the net capital requirements of, underwriters established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States,or by Executive Order; and/or (10) a stop order, release, regulation, or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made to the effect that the issuance, offering, or sale of the Bonds, including all the underlying obligations as contemplated hereby or by the Limited Offering Memorandum, or any document relating to the issuance, offering or sale of the Bonds is or would be in violation of any provision of federal securities laws at the Closing Date; (d) On the Closing Date, the Underwriter shall have received counterpart originals or certified copies of the following documents, in each case reasonably satisfactory in form and substance to the Underwriter: (1) The Formation Documents and the County Documents, together with a certificate dated as of the Closing Date of the Clerk of the County Council to the effect that each such document is a true,correct and complete copy of the one duly adopted by the County Council; (2) The Limited Offering Memorandum, duly executed by the County; 11 4857-1370-8327v4/200356-0417 (3) An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the County, of Bond Counsel in the form attached to the Preliminary Limited Offering Memorandum as Appendix F, and a reliance letter from such firm, dated the Closing Date and addressed to the Underwriter, to the effect that such approving opinion addressed to the County may be relied upon by the Underwriter to the same extent as if such opinion was addressed to them; (4) A supplemental opinion, dated the Closing Date and addressed to the Underwriter, of Bond Counsel to the effect that (i)this Bond Purchase Agreement has been duly authorized, executed and delivered by the County, and, assuming such agreement constitutes the valid and binding obligation of the other parties thereto, constitutes the legally valid and binding agreement of the County enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditor's rights or remedies and is subject to general principles of equity and by limitations on remedies against counties within the State; (ii)the Bonds are not subject to the registration requirements of the 1933 Act, and the Indenture is exempt from qualification pursuant to the 1939 Act; and (iii)the statements on the cover and contained in the Limited Offering Memorandum under the captions "THE 2022 BONDS" (excluding the information relating to The Depository Trust Company and its book-entry only system), "SECURITY FOR THE 2022 BONDS," "CERTAIN RISK FACTORS" and "CONCLUDING INFORMATION — Certain Tax Matters" and Appendices C and F, insofar as such statements expressly summarize certain provisions of the Bonds, the Indenture, the Formation Documents, State CFD Law, Chapter 19 of the County Code and the opinion of such firm concerning the exclusion from gross income for federal income tax purposes and exemption from State personal income taxes of interest on the Bonds,are accurate in all material respects; (5) A letter, dated the Closing Date and addressed to the Underwriter, of Stradling Yocca Carlson & Rauth as counsel to the Underwriter ("Underwriter's Counsel"), substantially to the effect that, without having undertaken to determine independently the accuracy or completeness of the statements contained in the Limited Offering Memorandum, but on the basis of their participation in conferences with representatives of the County, the Landowner, Bond Counsel, the Underwriter, the Appraiser (as defined herein), Goodwin Consulting Group, Inc. (the "Special Tax Consultant"), the Municipal Advisor and others, and their examination of certain documents, nothing has come to their attention which has led them to believe that the Limited Offering Memorandum contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial, statistical or engineering data or forecasts, numbers, charts, estimates, projections, assumptions, or expressions of opinion, any information about valuation, appraisals or environmental matters, or the Appendices, or any information about The Depository Trust Company or the book- entry system); (6) A certificate, dated the Closing Date and signed by an authorized representative of the County, ratifying the use and distribution by the Underwriter of the Preliminary Limited OfferingOffering Memorandum and the Limited Memorandum in connection with the offering and sale of the Bonds and certifying that(i)the representations and warranties of the County contained in Section 3 hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date except that all references therein to the Preliminary Limited Offering Memorandum shall be deemed to be references to the Limited Offering Memorandum; and (ii)the County has complied with all the agreements and satisfied all the 12 4857-1370-8327v4/200356-0417 conditions on its part to be performed or satisfied under the Formation Documents, the County Documents and the Limited Offering Memorandum at or prior to the Closing Date; (7) An opinion, dated the Closing Date and addressed to the Underwriter, of Corporation Counsel, to the effect that (i)to the best of such counsel's knowledge and except as disclosed in the Limited Offering Memorandum, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending or threatened against the County which would materially adversely affect the ability of the County to perform its obligations under the Formation Documents, the County Documents or the Bonds, or seeking to restrain or to enjoin the development of property within the District, the issuance, sale, delivery or exclusion from gross income for federal income tax purposes or State personal income taxes of interest, on the Bonds, or the application of the proceeds thereof in accordance with the Indenture and the Acquisition Agreement, or the collection or application of the Special Tax, or in any way contesting or affecting the validity or enforceability of the Formation Documents, the County Documents or the Bonds or the accuracy of the Limited Offering Memorandum, or any action of the County contemplated by any of said documents; (ii)the County is duly organized and validly existing under the Constitution and laws of the State, (iii)the District is duly organized and validly existing as a community facilities district under the laws of the State, (iv)the County has the full legal right, power and authority to issue the Bonds and to perform all of its obligations under the Formation Documents and the County Documents; (v)the County has obtained all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which constitute a condition precedent to the levy of the Special Tax, the issuance of the Bonds or the performance by the County of its obligations thereunder or under the Indenture, or the Acquisition Agreement, except that no opinion need be expressed regarding compliance with "blue sky" or other securities laws or regulations; (vi)the County Council has duly and validly adopted the Formation Documents and the resolution authorizing the issuance of the Bonds at meetings of the County Council which were called, held and conducted pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Formation Documents are now in full force and effect and have not been amended since the date of recordation of the Notice of Special Tax Lien; and (vii)the County has duly authorized, executed and delivered the County Documents and the Bonds and has duly authorized the preparation and delivery of the Limited Offering Memorandum, and the County Documents and the Bonds constitute legal, valid and binding agreements of the County, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against counties in the State of Hawai`i. (8) A certificate of the Landowner, dated the Closing Date, to the effect that certifications, representations and warranties set forth in Exhibit C is true and correct as of the Closing Date, provided that all references to the Preliminary Limited Offering Memorandum shall be changed to the Limited Offering Memorandum; (9) The Continuing Disclosure Agreement, dated as of , 2022 (the "Landowner Continuing Disclosure Agreement"), by and between the Landowner and , as Dissemination Agent, in the form attached as Appendix E to the Limited Offering Memorandum; and 13 4857-1370-8327v4/200356-0417 (10) An opinion of Dentons US LLP, as counsel to the Landowner, dated the Closing Date and addressed to the County and the Underwriter, in form and substance acceptable to the Underwriter, to the effect that: (i) RCFC Kaloko Heights, LLC, Kaloko Heights B 1 A Holdings, LLC and Kaloko Heights Investors, LLC are each a limited liability company validly existing and in good standing under the laws of the State of Delaware and qualified to do business in the State of Hawai'i, with full power and authority to enter into the Landowner Continuing Disclosure Agreement; (ii) the Landowner has duly and validly executed and delivered the Acquisition Agreement and the Landowner Continuing Disclosure Agreement, and the Acquisition Agreement and the Landowner Continuing Disclosure Agreement constitute the legal, valid and binding obligations of the Landowner, enforceable against the Landowner in accordance with their respective terms; (iii) except as set forth in the Limited Offering Memorandum, there is no litigation pending against the Landowner or overtly threatened against the Landowner which would materially and adversely affect the validity or enforceability of the Acquisition Agreement or the Landowner Continuing Disclosure Agreement, the Landowner's ability to complete the development of its property as proposed in the Limited Offering Memorandum or to pay the Special Tax; and (iv) without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum under the captions "INTRODUCTION" (as to the eighth through eleventh paragraphs), "PROPERTY OWNERSHIP AND THE DEVELOPMENT," "CERTAIN RISK FACTORS—Failure to Develop Property," "—Vacation Home Development," "—Bankruptcy and Foreclosure," "—Geologic, Topographic and Climatic Conditions," "—Hazardous Substances," and "—Endangered Species," and "CONCLUDING INFORMATION—Continuing Disclosure," (except that no opinion or belief need to be expressed as to any information relating to The Depository Trust Company, or any information relating to CUSIP numbers, or with respect to any financial, statistical or engineering information, data or forecasts, numbers, charts, estimates, projections, assumptions or expressions of opinion, assessed valuations or appraised values, or to any information which is attributable to a source other than the Landowner, contained in the Limited Offering Memorandum), no facts came to such counsel's attention during the course of their representation of the Landowner that would lead them to believe that the information under said captions of the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum relating to the Landowner and the Landowner's organizations, activities, properties and financial condition, and its proposed development of the property within the District, contained or contains any untrue statement of a material fact or omitted or omits any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (11) A certificate dated the Closing Date of the Special Tax Consultant to the effect that (i) the Special Taxes within Tax Zone 1, if collected in the maximum amounts permitted pursuant to the Rate and Method of Apportionment, would generate at least 110% of annual debt service on the Bonds (after payment of the Administrative Expense Budget Amount) in each year, (ii)all Fiscal Year 2022-23 parcel information, including land use and special tax amounts, supplied by the Special Tax Consultant to the Appraiser, is true and correct as of the date of the Limited Offering Memorandum and as of the Closing Date, based on such assumptions as may have been supplied by it, (iii)the information contained in the Appraisal with respect to taxes and tax rates applicable, and projected to be applicable, to the property in the District is consistent with such information provided by the Special Tax Consultant to the Appraiser, which information so provided was based on information obtained by the Special Tax Consultant from the County and the Landowner; and (iv)the statements concerning the Rate and Method of Apportionment and all statistical and financial data set forth in the tables and discussion in the Limited Offering Memorandum which was derived from information supplied by the Special Tax Consultant for use in 14 4857-1370-8327v4/200356-0417 the Limited Offering Memorandum are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and no events or occurrences have been ascertained by the Special Tax Consultant or have come to its attention that would substantially change such information set forth in the Limited Offering Memorandum; (12) A letter from Integra Realty Resources (the "Appraiser"), dated the Closing Date and addressed to the Underwriter and the County to the effect that it has prepared the appraisal report attached to the Preliminary Limited Offering Memorandum as Appendix B (the "Appraisal"), and that: (a)the Appraisal was included in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum with its permission, (b)neither the Appraisal nor the information in the Limited Offering Memorandum referring to the Appraisal contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (c) no events or occurrences have been ascertained by the Appraiser or have come to the Appraiser's attention that would materially change the opinion set forth in the Appraisal; (13) A certificate of the County dated the Closing Date, in a form acceptable to Bond Counsel, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended; (14) A certificate of the Trustee dated the Closing Date in form and substance reasonably acceptable to the Underwriter; (15) An opinion, dated the Closing Date and addressed to the Underwriter and the County,of counsel to the Trustee in form and substance acceptable to the Underwriter; (16) An Investor Letter, in the form attached to the Limited Offering Memorandum as Appendix H, from each of the initial purchasers of the Bonds from the Underwriter; and (17) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum, of the County's representations and warranties contained herein, and of the representations and warranties of the Landowner, set forth in Exhibit C hereto and the due performance or satisfaction by the County at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the County in connection with the transactions contemplated hereby and by the Limited Offering Memorandum. If the County shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter nor the County shall be under any further obligation hereunder, except that the respective obligations of the County and the Underwriter set forth in Section 6 and Section 7 hereof shall continue in full force and effect. 15 4857-1370-8327v4/200356-0417 5. Conditions of the County's Obligations. The County's obligations hereunder are subject to the Underwriter's performance of its obligations hereunder, and are also subject to the following conditions: (a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the duly authorized officer of the County executing the certificate referred to in Section 4(c)(6) hereof, threatened,to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Formation Documents, the County Documents or the existence or powers of the County;and (b) As of the Closing Date, the County shall receive the approving opinion of Bond Counsel referred to in Section 4(d)(3) hereof, dated as of the Closing Date, addressed to the County. 6. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein: (a) The Underwriter shall be under no obligation to pay, and the County shall pay or cause to be paid (out of any legally available funds of the County) all expenses incident to the performance of the County's obligations hereunder, including, but not limited to, the cost of printing, engraving and delivering the Bonds to DTC, the cost of preparing, printing, distributing and delivering the Indenture, the Preliminary Limited Offering Memorandum, the Limited Offering Memorandum and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter; and the fees and disbursements of the Trustee, Bond Counsel and any financial advisors, special tax consultants, appraisers, accountants, engineers or any other experts or consultants the County may have retained in connection with the Bonds; and (b) The County shall be under no obligation to pay, and the Underwriter shall pay, the cost of preparation of any "blue sky" or legal investment memoranda and this Bond Purchase Agreement; expenses to qualify the Bonds for sale under any "blue sky" or other state securities laws; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses. 7. Notices. Any notice or other communication to be given to the County under this Bond Purchase Agreement may be given by delivering the same in writing to County of Hawai`i, 25 Aupuni Street, Hilo, Hawai`i 96720„ Attention: Director of Finance and any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, 2121 Avenue of the Stars, Suite 2150, Los Angeles, California, 94104, Attention: Sara Brown. 8. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the County and the Underwriter (including their successors or assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. 9. Survival of Representations and Warranties. The representations and warranties of the County set forth in or made pursuant to this Bond Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of 16 4857-1370-8327v4/200356-0417 this Bond Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the County and regardless of delivery of and payment for the Bonds. 10. Effective. This Bond Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the County and shall be valid and enforceable as of the time of such acceptance. 11. No Prior Agreements. This Bond Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the County. 12. Governing Law. This Bond Purchase Agreement shall be governed by the laws of the State. [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY] 17 4857-1370-8327v4/200356-0417 13. Counterparts. This Bond Purchase Agreement may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. Very truly yours, STIFEL,NICOLAUS &COMPANY, INCORPORATED By: 1 Managing Director ACCEPTED: at a.m. local time in Hawai`i COUNTY OF HAWAII By: Director of Finance S-1 4857-1370-8327v4/200356-0417 EXHIBIT A MATURITY SCHEDULE Hold the Maturity Date Principal Interest 10% Test Offering (May 15) Amount Rate Yield Price Used Price Used c Priced to the optional redemption date of ,20_at T Indicates Term Bond. PURCHASE PRICE The purchase price of the Bonds shall be $ , which is the $ aggregate principal amount thereof less Underwriter's discount of$ and plus a net original issue premium of$ REDEMPTION PROVISIONS Optional Redemption. The Series 2022 Bonds maturing on or after May 15, 20 may be redeemed, at the option of the County from any source of funds, other than Prepayments, on any Interest Payment Date on or after May 15, 20_, in whole, or in part in the order of maturity selected by the County and by lot within a maturity, at a redemption price equal to 100% of the principal amount to be redeemed,together with accrued interest to the date of redemption. Mandatory Sinking Fund Redemption. The Series 2022 Bonds maturing on May 15 of the years 20 and 20_ (herein referred to as the "Series 2022 Term Bonds") shall be called for mandatory redemption prior to maturity, and shall be redeemed,as follows: (i) The Series 2022 Term Bonds maturing on May 15, 20_ shall be subject to mandatory redemption, from the Sinking Fund Payments deposited into the Principal Account, on and as of the redemption dates set forth below. The Series 2022 Term Bonds of such maturity shall be selected for redemption by lot by the Trustee and shall be redeemed at a redemption price equal A-1 4857-1370-8327v4/200356-0417 to the principal amount thereof to be redeemed, without premium, plus accrued interest to the redemption date, as follows: Redemption Dates (May 15) Principal Amount (ii) The Series 2022 Term Bonds maturing on May 15, 20_ shall be subject to mandatory redemption, from the Sinking Fund Payments deposited into the Principal Account, on and as of the redemption dates set forth below. The Series 2022 Term Bonds of such maturity shall be selected for redemption by lot by the Trustee and shall be redeemed at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the redemption date,as follows: Redemption Dates (May 15) Principal Amount Special Mandatory Redemption From Prepayments. The Series 2022 Bonds are subject to special mandatory redemption on any Interest Payment Date from amounts on deposit in the Prepayment Account, in integral multiples of$5,000, in whole or in part as hereinafter provided, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed,together with accrued interest to the date of redemption: Redemption Dates Redemption Prices Any Interest Payment Date Through November 15, 20_ 103% May 15, 20_and November 15, 20_ 102 May 15, 20_and November 15, 20_ 101 May 15,20_and thereafter 100 A-2 4857-1370-8327v4/200356-0417 EXHIBIT B FORM OF ISSUE PRICE CERTIFICATE COUNTY OF HAWAII COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) SPECIAL TAX REVENUE BONDS, SERIES 2022 The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated ("Stifel") hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the "Bonds"). 1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A. 2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Stifel offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the"Initial Offering Prices")on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Bond Purchase Agreement, dated , 2022, by and between Stifel and the Issuer, 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 retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, 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. 3. Defined Terms. (a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the"General Rule Maturities." (b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the"Hold-the-Offering-Price Maturities." (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of(i)the close of the fifth business day after the Sale Date ( , 2022), or(ii)the date on which Stifel has sold at least 10% of such Hold- B-1 4857-1370-8327v4/200356-0417 the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity. (d) Issuer means the County of Hawai`i. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is ,2022. (h) Underwriter means (i)any person that agrees pursuant to a written contract with the Issuer(or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii)any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by McCorriston Miller Mukai MacKinnon 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: Name: By: Name: Dated: , 2022 B-2 4857-1370-8327v4/200356-0417 SCHEDULE A SALE PRICES OF THE GENERAL RULE MATURITIES (Attached) B-3 4857-1370-8327v4/200356-0417 SCHEDULE B PRICING WIRE OR EQUIVALENT COMMUNICATION (Attached) B-4 4857-1370-8327v4/200356-0417 EXHIBIT C COUNTY OF HAWAII COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT) SPECIAL TAX REVENUE BONDS, SERIES 2022 CERTIFICATE OF LANDOWNER Dated: , 2022 In connection with the issuance and sale of the above-captioned bonds (the "Bonds"), and pursuant to the Bond Purchase Agreement(the"Bond Purchase Agreement")to be executed by and between County of Hawaii (the "County") and Stifel, Nicolaus & Company, Incorporated, the undersigned hereby certifies, represents, warrants and covenants, on behalf of RCFC Kaloko Heights, LLC, a Delaware limited liability company, Kaloko Heights BIA Holdings, LLC, a Delaware limited liability company, and Kaloko Heights Investors, LLC, a Delaware limited liability company (collectively,the"Landowner"),that: 1. While the Bonds or any refunding obligations related thereto are outstanding, the Landowner will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overturn the formation of the County of Hawaii Community Facilities District No. 1-2021 (Kaloko Heights Project) (the "District"), to challenge the adoption of the Formation Ordinance or the Bond Ordinance,to invalidate the District or any of the Bonds or any refunding obligations,or to invalidate the special tax liens imposed pursuant to the County CFD Ordinance and the Formation Ordinance. The foregoing covenant shall not prevent the Landowner in any way from bringing any other action, suit, proceeding, inquiry, or investigation at law or in equity relating to the following: (i)that the Special Tax has not been levied in accordance with the methodologies contained in the Rate and Method of Apportionment, (ii)the application or use of the Special Taxes levied and collected, or (iii)the enforcement of the obligations of the County under any agreement between the Landowner and the County or for which the Landowner is a party or beneficiary. 2. All information submitted by the Landowner to (i)the Underwriter, its counsel, the Special Tax Consultant and the County in connection with the preparation of the Preliminary Limited Offering Memorandum, dated , 2022 (the "Preliminary Limited Offering Memorandum") and (ii) Integra Realty Resources in connection with the preparation of the appraisal report including any updates thereto made prior to the date hereof, was, when given, true and correct in all material respects and, except for any such information that was modified or supplemented by subsequent information submitted by or on behalf of the Landowner or the information that is otherwise contained in the Preliminary Limited Offering Memorandum, no material change has occurred with respect to such information as of the date hereof. 3. As of the date hereof, the information contained in the Preliminary Limited Offering Memorandum with respect to the Landowner, its Affiliates (as defined herein), the property owned by the Landowner and its Affiliates in the District (the "Property"), the Landowner's development and financing plan and the Landowner's contractual arrangements under the captions "INTRODUCTION" (as to the eighth through eleventh paragraphs), "PROPERTY OWNERSHIP AND THE DEVELOPMENT," "CERTAIN RISK FACTORS—Failure to Develop Property," "— C-1 4857-1370-8327v4/200356-0417 Vacation Home Development," "—Bankruptcy and Foreclosure," "—Geologic, Topographic and Climatic Conditions," "—Hazardous Substances," and "—Endangered Species," and "CONCLUDING INFORMATION—Continuing Disclosure," is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 4. Except as disclosed in the Preliminary Limited Offering Memorandum, neither the Landowner nor any of its Affiliates has been adjudicated as bankrupt or discharged from any or all of its debts or obligations or granted an extension of time to pay its debts or a reorganization or readjustment of its debts. Except as disclosed in the Preliminary Limited Offering Memorandum, neither the Landowner nor any of its Affiliates has any proceedings pending (with service of process having been accomplished) or, to the actual knowledge of the undersigned, threatened in which the Landowner or any of its Affiliates may be adjudicated as bankrupt, become the debtor in a bankruptcy proceeding, be discharged from any or all of its debts or obligations, be granted an extension of time to pay its debts or obligations, or be granted a reorganization or readjustment of its debts or obligations. 5. Except as disclosed in the Preliminary Limited Offering Memorandum, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending, or to the actual knowledge of the undersigned, overtly threatened (a) in any way seeking to restrain or enjoin the development of the Property, or(b) in any way seeking to invalidate or set aside any final or vesting tentative maps on the Property. 6. Except as disclosed in the Preliminary Limited Offering Memorandum, there are no events of monetary default or events which with the passage of time would constitute a monetary default under any loan or similar credit arrangement to which the Landowner is a party the result of which could have a material adverse effect on the development of the Property or the Landowner's ability to pay Special Taxes prior to delinquency. 7. Except as disclosed in the Preliminary Limited Offering Memorandum, the Landowner has not been delinquent in the payment of any ad valorem property tax, special assessment or special taxes with respect to the property within the District, which was not cured within the fiscal year in which the tax or assessment was levied,within the past five years. 8. As used in this Certificate, the term "Affiliate" of the Landowner means any person directly (or indirectly through one or more intermediaries) under managerial control of the Landowner, and about whom information could be material to potential investors in their investment decision regarding the Bonds (including without limitation information relevant to the proposed development of the Property, or to the Landowner's ability to pay the special taxes levied on the Property prior to delinquency). 9. Until the date which is twenty-five days after the "end of the underwriting period" (as defined in Section 3(h)of the aforesaid Bond Purchase Agreement), if any event shall occur of which the Landowner becomes aware, as a result of which it may be necessary to supplement the Limited Offering Memorandum in order to make the statements in the Limited Offering Memorandum regarding the Landowner, its Affiliates, the Property owned by the Landowner or its Affiliates, or the development of the Property, true and correct in all material respects and in light of the circumstances existing at such time, not misleading, the Landowner shall forthwith give written C-2 4857-1370-8327v4/200356-0417 notice thereof to the County and the Underwriter and shall cooperate fully with them in furnishing any information available to the Landowner for any supplement to the Limited Offering Memorandum necessary so that the statements in the Limited Offering Memorandum referenced above, as so supplemented, are true and correct in all material respects and will not be misleading in light of the circumstances existing at such time. 11. All capitalized terms not otherwise defined herein shall have the meaning set forth in the Bond Purchase Agreement. RCFC KALOKO HEIGHTS, LLC By: Name: AARON A. GIOVARA Its: Authorized Signatory KALOKO HEIGHTS B1A HOLDINGS, LLC By: Name: AARON A. GIOVARA Its: Authorized Signatory KALOKO HEIGHTS INVESTORS,LLC By: Name: AARON A. GIOVARA Its: Authorized Signatory C-3 4857-1370-8327v4/200356-0417 COUNTY CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement, dated as of , 2022 (the "Disclosure Agreement"), is entered into by and between the County of Hawai'i (the "Issuer"), and U.S. Bank Trust Company, National Association, as dissemination agent(the"Dissemination Agent"), in connection with the issuance by the Issuer of its$ Hawai'i County Community Facilities District No. 1-2021 (Kaloko Heights Project)Special Tax Revenue Bonds,Series 2022(the"Bonds"). The Bonds are being issued pursuant to a Trust Indenture dated as of , 2022 (the "Indenture"), by and between the Issuer and U.S. Bank Trust Company, National Association,as Trustee(the"Trustee"). The Issuer and the Dissemination Agent hereby covenant and agree as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Issuer for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule. Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: Annual Report. The term"Annual Report"means any Annual Report provided by the Issuer pursuant to,and as described in, Sections 3 and 4 of this Disclosure Agreement. Beneficial Owner. The term"Beneficial Owner"means any person which: (a)has the power,directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries); or (b)is treated as the owner of any Bonds for federal income tax purposes. Disclosure Representative. The term"Disclosure Representative"means the Director of Finance of the Issuer, or his or her designee, or such other officer or employee as the Issuer shall designate in writing to the Dissemination Agent from time to time. Dissemination Agent. "Dissemination Agent" means, initially, U.S. Bank Trust Company, National Association, or any successor Dissemination Agent designated in writing by the Issuer which has filed with the then-current Dissemination Agent a written acceptance of such designation. District. The term"District"means Hawai`i County Community Facilities District No. 1-2021 (Kaloko Heights Project). EMMA. The term"EMMA"means the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System for municipal securities disclosures,maintained on the Internet at http://emma.msrb.org/. Financial Obligation. The term "Financial Obligation" means a: (i)debt obligation; (ii)derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or(iii)guarantee of an instrument described in clause(i)or(ii), but the term shall not include municipal securities as to which a final Limited Offering Memorandum has been provided to the Municipal Securities Rulemaking Board consistent with the Rule. Fiscal Year. The term "Fiscal Year"means the one-year period ending on the last day of June of each year. Listed Events. The term "Listed Events"means any of the events listed in Sections 5(a) or(b) of this Disclosure Agreement. 4881-3522-0797v2/200356-0417 Limited Offering Memorandum. The term "Limited Offering Memorandum" means the final Limited Offering Memorandum,dated ,2022,relating to the Bonds. Participating Underwriter. The term"Participating Underwriter"means the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds. Rule. The term"Rule"means Rule 15c2-I2(b)(5)adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934,as the same may be amended from time to time. Section 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent by written direction to such Dissemination Agent to, not later than nine months after the end of the Issuer's Fiscal Year(commencing with the Fiscal Year ending June 30, 2022), provide to EMMA an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Notwithstanding the foregoing, the Issuer's audited financial statements for the Fiscal Year ended June 30, 2022 shall be provided to EMMA within nine months after the end of such Fiscal Year. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided, however, that the audited financial statements of the Issuer, if any are prepared, may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report. An Annual Report shall be provided at least annually notwithstanding any Fiscal Year longer than 12 calendar months. The Issuer's Fiscal Year is currently effective from July 1 to the immediately succeeding June 30 of the following year. The Issuer will promptly notify EMMA, the Dissemination Agent and the Participating Underwriter of a change in the Issuer's Fiscal Year dates. (b) So long as the Dissemination Agent is an entity other than the Issuer, then the provisions of this Section 3(b)shall apply. Not later than fifteen(15) Business Days prior to the date specified in subsection(a)for providing the Annual Report to EMMA and the Participating Underwriter,the Issuer shall provide the Annual Report to the Dissemination Agent. If by fifteen(15)Business Days prior to such date the Dissemination Agent has not received a copy of the Annual Report,the Dissemination Agent shall contact the Issuer to determine if the Issuer will be filing the Annual Report in compliance with subsection(a). The Issuer shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. If the Dissemination Agent is an entity other than the Issuer, it may conclusively rely upon such certification of the Issuer and shall have no duty or obligation to review such Annual Report. (c) If the Issuer is the Dissemination Agent and the Issuer is unable to provide to EMMA and the Participating Underwriter an Annual Report by the date required in subsection(a),the Issuer shall, in a timely manner, send a notice to EMMA, the Participating Underwriter and the Dissemination Agent in the manner prescribed by the Municipal Securities Rulemaking Board. If the Dissemination Agent is other than the Issuer and if the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA and the Participating Underwriter by the date required in subsection (a), the Dissemination Agent shall, in a timely manner, send a notice to EMMA and the Participating Underwriter, in the form prescribed by the Municipal Securities Rulemaking Board. (d) The Dissemination Agent, if other than the Issuer, shall promptly after receipt of the Annual Report,file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Agreement and stating the date it was provided. 2 4881-3522-0797v2/200356-0417 Section 4. Content of Annual Reports. The Annual Report shall contain or include by reference the following: (a) Financial Statements. The audited financial statements of the Issuer, if any have been prepared, for the most recent Fiscal Year of the Issuer then ended. If the audited financial statements are being prepared and are not available by the time that the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain any unaudited financial statements in a format similar to the audited financial statements contained in the final Limited Offering Memorandum, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. Audited financial statements, if any, of the Issuer shall be audited by such auditor as shall then be required or permitted by State law or the Indenture. Audited financial statements,if prepared by the Issuer,shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the Issuer may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the Issuer shall modify the basis upon which its financial statements are prepared,the Issuer shall provide a notice of such modification to EMMA, including a reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis. (b) Financial and Operating Data. (i) the principal amount of Bonds outstanding; (ii) the balance in each fund under the Indenture and the Bonds Reserve Requirement as of June 30; (iii) a table showing for each of the five most recent fiscal years the assessed value of the property within the District; (iv) the number of delinquent parcels in the District and the identity of any person owning property upon which Special Taxes have been levied in the preceding fiscal year that total more than ten percent(10%)of the Special Taxes levied within the District for such fiscal year who is delinquent in the payment of Special Taxes as of the October 30 immediately preceding the date of the Annual Report (as ownership is shown on the certified assessor's roll as finalized as of March 31 of the most recently completed fiscal year); (v) a table showing for each of the five most recent fiscal years in which Special Taxes were levied the amount of the Special Tax actually levied and the amount thereof actually collected in such fiscal year and the assessed value of the taxable property within the District;and (vi) a discussion of the status of any foreclosure proceedings commenced by the District with respect to delinquent special taxes in the District. Any or all of the items listed above may be included by specific reference to other documents,including Limited Offering Memorandums of debt issues of the Issuer or related public entities,which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final Limited Offering Memorandum,it must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5,the Issuer shall give,or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than ten(10)Business Days after the event: 3 4881-3522-0797v2/200356-0417 1. principal and interest payment delinquencies; 2. unscheduled draws on debt service reserves reflecting financial difficulties; 3. unscheduled draws on credit enhancements reflecting financial difficulties; 4. substitution of credit or liquidity providers,or their failure to perform; 5. adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability or Notices of Proposed Issue(IRS Form 5701 TEB); 6. tender offers; 7. defeasances; 8. ratings changes; 9. bankruptcy, insolvency,receivership or similar proceedings;and 10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Issuer, any of which reflect financial difficulties. Note: For the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S.Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person,or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (b) Pursuant to the provisions of this Section 5,the Issuer shall give,or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: 1. unless described in Section 5(a)(5), adverse tax opinions or other material notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; 2. the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer,other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions,other than pursuant to its terms; 3. the appointment of a successor or additional trustee or the change of name of a trustee; 4. non-payment related defaults; 5. modifications to the rights of Bond holders; 6. notices of redemption; 7. release,substitution or sale of property securing repayment of the Bonds;and 8. incurrence of a Financial Obligation of the Issuer,or agreement to covenants, events of default,remedies,priority rights,or other similar terms of a Financial Obligation of the Issuer, any of which affect Bond holders. 4 4881-3522-0797v2/200356-0417 (c) If the Issuer determines that knowledge of the occurrence of a Listed Event under subsection (b) would be material under applicable federal securities laws, and, if the Dissemination Agent is other than the Issuer, the Issuer shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to file a notice of such occurrence with EMMA in a timely manner not more than ten(10)Business Days after the event. (d) If the Issuer determines that the Listed Event under subsection (b) would not be material under applicable federal securities laws and, if the Dissemination Agent is other than the Issuer, the Issuer shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence. (e) The Issuer hereby agrees that the undertaking set forth in this Disclosure Agreement is the responsibility of the Issuer and, if the Dissemination Agent is other than the Issuer, the Dissemination Agent shall not be responsible for determining whether the Issuer's instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule. Section 6. Termination of Reporting Obligation. The obligations of the Issuer and the Dissemination Agent under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds,the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5 hereof. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent appointed by the Issuer may resign by providing thirty (30) days written notice to the Issuer,and upon appointment of a new Dissemination Agent hereunder. In the event a new Dissemination Agent is not designated within thirty(30)Business Days of such written notice of resignation,the Dissemination Agent shall have the right to petition any court of competent jurisdiction for an order appointing a replacement Dissemination Agent. Section 8. Amendment. (a) This Disclosure Agreement may be amended, by written agreement of the parties, without the consent of the Owners if all of the following conditions are satisfied: (1)such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law, or a change in the identity, nature or status of the Issuer,the District or the type of business conducted thereby; (2)this Disclosure Agreement as so amended would have complied with the requirements of the Rule as of the date of this Disclosure Agreement,after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; (3)the Issuer shall have delivered to the Dissemination Agent an opinion of a nationally recognized bond counsel or counsel expert in federal securities laws,addressed to the Issuer,to the same effect as set forth in clause(2)above;(4)the Issuer shall have delivered to the Dissemination Agent an opinion of nationally recognized bond counsel or counsel expert in federal securities laws,addressed to the Issuer,to the effect that the amendment does not materially impair the interests of the Owners or Beneficial Owners; and (5)the Issuer shall have delivered copies of such opinion and amendment to the Participating Underwriter. (b) This Disclosure Agreement also may be amended by written agreement of the parties upon obtaining consent of the Owners in the same manner as provided in the Indenture for amendments to the Indenture with the consent of the Owners of the Bonds;provided that the conditions set forth in Section 8(a)(1), (2),(3)and(5)have been satisfied. 5 4881-3522-0797v2/200356-0417 (c) To the extent that any amendment to this Disclosure Agreement results in a change in the type of financial information or operating data provided pursuant to this Disclosure Agreement, the first Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided. (d) If an amendment is made to the basis on which financial statements are prepared,the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and,to the extent reasonably feasible, qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information. Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication,or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement,the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer or the Dissemination Agent to comply with any provision of this Disclosure Agreement, any Owner or Beneficial Owner of the Bonds or the Trustee on behalf of the Owners and Beneficial Owners may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order,to cause the Issuer and/or the Dissemination Agent to comply with their respective obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture,and the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties,Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Dissemination Agent's obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Dissemination Agent as required by this Disclosure Agreement. The Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof and shall have not duty or obligation to review or verify any information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, Owner, or Beneficial Owners of the Bonds or any other party. The Dissemination Agent shall have no responsibility for the Issuer's failure to report to the Dissemination Agent a Listed Event or a duty to determine the materiality thereof. The Dissemination Agent shall have no duty to determine, or liability for failing to determine,whether the Issuer has complied with this Disclosure Agreement. The Dissemination Agent may conclusively rely upon certifications of the Issuer at all times. Nothing herein contained shall be deemed to limit any rights of the Dissemination Agent with respect to claims for losses,expenses and liabilities incurred in the performance of its duties hereunder. Any Dissemination Agent other than the Issuer shall be paid: (i)compensation by the Issuer for its services provided hereunder and extraordinary fees, costs and expenses incurred with respect thereto in accordance with a schedule of fees to be mutually agreed to;and(ii)all expenses,legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and defeasance,redemption or payment of the Bonds. 6 4881-3522-0797v2/200356-0417 The Disclosure Representative and the Dissemination Agent may,from time to time,consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement of controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and neither of them shall incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds,and shall create no rights in any other person or entity. Section 13. Notices. Notices with respect to this Disclosure Agreement should be sent in writing to: If to the Issuer: County of Hawai'i 25 Aupuni Street Hilo, Hawai`i 96720 Attention: Director of Finance If to the Dissemination Agent: U.S. Bank Trust Company,National Association If to the Participating Underwriter: Stifel,Nicolaus&Company, Incorporated One Montgomery Street,35th Floor San Francisco,California 94104 SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF,the parties have caused their duly authorized officer to execute and deliver this Disclosure Agreement on the date first written above. COUNTY OF HAWAI'I By: Name: Title: U.S. BANK TRUST COMPANY,NATIONAL ASSOCIATION,as Dissemination Agent By: Name: Title: 7 4881-3522-0797v21200356-0417 1 PROPERTY OWNER CONTINUING DISCLOSURE AGREEMENT This Property Owner Continuing Disclosure Agreement dated as of , 2022 (this "Disclosure Agreement"), is executed and delivered by RCFC Kaloko Heights, LLC,a Delaware limited liability company, Kaloko Heights B 1 A Holdings,LLC,a Delaware limited liability company,and Kaloko Heights Investors,LLC, a Delaware limited liability company (collectively, the "Property Owner") for and on behalf of itself and its Affiliates, as defined below, U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), and ,as dissemination agent(the"Dissemination Agent"),in connection with the execution and delivery by the County of Hawai'i(the"County")of$ aggregate principal amount of its County of Hawai'i Community Facilities District No. 1-2021 (Kaloko Heights Project) Special Tax Revenue Bonds, Series 2022 (the"Bonds"). The Bonds are being executed and delivered pursuant to a Trust Indenture dated as of 1, 2022(the"Indenture"),by and between the County and the Trustee. SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Property Owner in order to help inform Bondowners and potential purchasers of the Bonds concerning the status of the development of property within the District. Pursuant to this Disclosure Agreement, the Property Owner agrees to provide the information required to be provided by the Property Owner hereunder at the time and in the manner required hereunder. SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement not otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Affiliate" shall mean any Person which subsequently owns Property in the District which either controls the Property Owner or in which the Property Owner has a beneficial ownership interest; provided, however, that in no case shall the County be deemed to be an Affiliate of the Property Owner for purposes of this Agreement. For the purpose of this definition, "control"of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities,by contract or otherwise. "Annual Report" shall mean any Annual Report provided by the Property Owner on or prior to June 1 of each year pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. Information contained in the Annual Report shall be as of March 31 of the prior calendar year. "Beneficial Owner"shall mean any person which has or shares the power,directly or indirectly,to make investment decisions concerning ownership of the Bonds(including persons holding Bonds through nominees, depositories or other intermediaries). "Development Plan" shall mean, with respect to the Property Owner or an Affiliate, the specific improvements such Person intends to make, or cause to be made,to the portion of the Property owned by such Person in order for such portion of the Property to reach final buildout as planned by the Property Owner or Affiliate, the time frame in which such improvements are intended to be made and the estimated costs of such improvements. As of the date hereof,the development plan for the Property owned by the Property Owner and its Affiliates is described in the Limited Offering Memorandum under the caption"PROPERTY OWNERSHIP AND THE DEVELOPMENT." "Disclosure Representative" shall mean , the of the Property Owner, or his designee acting on behalf of the Property Owner,or such other officer or employee as the Property Owner shall designate in writing to the Dissemination Agent from time to time. 4881-5271-8909v3/200356-0417 "Dissemination Agent" shall mean . acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Property Owner and which has filed with the Property Owner and the County a written acceptance of such designation. "District" shall mean County of Hawai'i Community Facilities District No. 1-2021 (Kaloko Heights Project)established by the County. "EMMA" shall mean the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System for municipal securities disclosures,maintained on the Internet at http://emma.msrb.org/. "Financing Plan"shall mean, with respect to the Property Owner or an Affiliate,the method by which such Person intends to finance its Development Plan,including specific sources of funding for such Development Plan. As of the date hereof, the Financing Plan for the Property Owner and its Affiliates is described in the Limited Offering Memorandum under the caption"PROPERTY OWNERSHIP AND THE DEVELOPMENT." "Fiscal Year"shall mean the period beginning on July 1 of each year and ending on the next succeeding June 30. "Government Authority" shall mean any national, state or local government, any political subdivision thereof, any department, agency, authority or bureau of any of the foregoing, or any other Person exercising executive, legislative,judicial,regulatory or administrative functions of or pertaining to government. "Listed Event"shall mean any of the events listed in Section 5(a)of this Disclosure Agreement. "Limited Offering Memorandum" shall mean the Limited Offering Memorandum,dated , 2022, relating to the Bonds. "Participating Underwriter"shall mean the original Underwriter of the Bonds. "Person" shall mean any natural person, corporation, partnership, firm, association, Government Authority or any other Person whether acting in an individual fiduciary,or other capacity. "Property"shall mean the parcels within the boundaries of the District subject to Special Taxes. "Semiannual Report" shall mean any report to be provided by the Property Owner on or prior to December 1 of each year pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. Information contained in the Semiannual Report shall be as of September 30 of the same calendar year. "State"shall mean the State of Hawaii. "Successor" shall mean any Person, other than the Property Owner or an Affiliate, who becomes the owner of Property within the District and is responsible for the payment of more than twenty percent(20%)of the Special Taxes levied on all of the Property in the District in the Fiscal Year following the transfer of the Property to such Successor. SECTION 3. Provision of Annual Reports. (a) The Property Owner shall (or upon its receipt of the Annual Report the Dissemination Agent shall), not later than June 1 of each year, commencing June 1, 2023, provide to EMMA, the Participating Underwriter and the County an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document or as separate documents comprising a package,and may include by reference other information as provided in Section 4 of this Disclosure Agreement provided that the audited financial statements, if any, of the Property Owner may be submitted 2 4881-5271-8909v3/200356-0417 separately from the balance of the Annual Report and later than the date required for the filing of the Annual Report if they are not available by that date. In addition, the Property Owner shall (or upon its receipt of the Semiannual Report the Dissemination Agent shall), not later than December 1 of each year, commencing December 1,2023,provide to EMMA,the Participating Underwriter and the County a Semiannual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. (b) Not later than fifteen (15) Business Days prior to the dates specified in subsection (a) for providing the Annual Report and Semiannual Report to EMMA, the Property Owner shall provide the Annual Report or the Semiannual Report, as applicable,to the Dissemination Agent or shall provide notification to the Dissemination Agent that the Property Owner is preparing, or causing to be prepared,the Annual Report or the Semiannual Report,as applicable,and the date which the Annual Report or the Semiannual Report,as applicable, is expected to be available. The Property Owner shall provide a written certification with each Annual Report furnished to the Dissemination Agent and the Trustee to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. If by such date, the Dissemination Agent has not received a copy of the Annual Report or the Semiannual Report,as applicable,or notification as described in the preceding sentence, the Dissemination Agent shall contact the Property Owner to determine if the Property Owner is in compliance with the requirements of this subsection(b). (c) If the Dissemination Agent is unable to provide an Annual Report or Semiannual Report to EMMA by the date required in subsection(a)or to verify that an Annual Report or Semiannual Report has been provided to EMMA by the date required in subsection (a), the Dissemination Agent shall, in a timely manner, send a notice to EMMA in the form prescribed by the Municipal Securities Rulemaking Board. (d) The Dissemination Agent shall file a report with the Property Owner and the County certifying that the Annual Report or the Semiannual Report, as applicable, has been provided to EMMA pursuant to this Disclosure Agreement,and stating the date it was provided. SECTION 4. Content of Annual Report and Semiannual Report. (a) The Property Owner's Annual Report and Semiannual Report shall contain or include by reference the information which is available as of the date of the filing of the Annual Report or the Semiannual Report, as applicable,relating to the following: (i) If information regarding such Person has not previously been included in an Annual Report, a Semiannual Report or the Limited Offering Memorandum, the Development Plan of such Person; or, if information regarding such Person has previously been included in an Annual Report, a Semiannual Report or the Limited Offering Memorandum, a description of the progress made in the implementation of the Development Plan of such Person since the date of such information and a description of any significant changes in such Development Plan and the causes or rationale for such changes. (ii) If information regarding such Person has not previously been included in an Annual Report,a Semiannual Report or the Limited Offering Memorandum,the Financing Plan of such Person; or, if information regarding such Person has previously been included in an Annual Report, a Semiannual Report or the Limited Offering Memorandum,an update and a description of any significant changes in the Financing Plan of such Person and the causes or rationale for such changes. For the Property Owner, such update shall include the status of securing conventional bank financing, a joint venture partner(s)and equity contributions. (iii) A description of any sales of all or any portion of such Person's Property, including but not limited to sales to homebuilders,developers, individual homeowners or other third parties. 3 4881-5271-8909v3/200356-0417 (iv) With respect to any portion of the Property owned by such Person and any of its Affiliates,a statement as to whether any special taxes or property taxes applicable to such portion of the Property are delinquent. (v) A description of any change in the ownership structure of such Person and/or the financial condition of such Person or anyof its Affiliates if such change in ownershipstructure and/or financial condition could materially interfere with such Person's ability to complete its Development Plan. (vi) An update on the status of the Property Owner's application to the State Land Use Commission for a time extension for satisfying the conditions of entitlement for property within Zone 2(as described in the Limited Offering Memorandum). (vii) Any amendments to land use entitlements for any portion of the Property owned by such Person that could have a material adverse effect on such Person's most recently disclosed Financing Plan or Development Plan or on the ability of such Person, or any Affiliate of such Person, to pay installments of Special Taxes when due. (viii) Any precondition to commencement or continuation of development on any portion of the Property owned by such Person imposed by a governmental entity after the date of issuance of the Bonds which has not been previously disclosed and which could have a material adverse effect,or any change in the status of any such precondition that was previously disclosed in the Limited Offering Memorandum, an Annual Report or a Semiannual Report, which could have a material adverse effect on such Person's most recently disclosed Financing Plan or Development Plan or on the ability of such Person,or any Affiliate of such Person,to pay installments of Special Taxes when due. (ix) Any previously undisclosed legislative, administrative or judicial challenges to development on any portion of the Property owned by such Person,or any material change in the status of any such challenge that was previously disclosed in the Limited Offering Memorandum, an Annual Report or a Semiannual Report,that could have a material adverse effect on such Person's most recently disclosed Financing Plan or Development Plan or on the ability of such Person,or any Affiliate of such Person,to pay installments of Special Taxes when due. (x) A statement as to the status of construction of the Sewer Line(as defined in the Limited Offering Memorandum); provided, however, the requirement described in this subsection (ix) shall terminate once the Property Owner has disclosed in an Annual Report or a Semiannual Report that the construction of the Sewer Line has been completed and the Sewer Line has been accepted by the County. (xi) An update on the status of construction of any onsite infrastructure necessary for full development of Zone 1,as defined in the Limited Offering Memorandum. (xii) An update on the number of residential building permits issued(if any)since the most recent Annual Report or Semiannual Report. (xiii) An update of the status of any previously reported Listed Event described in Section 5. (b) Any and all of the items listed above may be included by specific reference to other documents, including Limited Offering Memorandums of debt issues which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final Limited Offering Memorandum, it must be available from EMMA. The Property Owner shall clearly identify each such other document so included by reference. 4 4881-5271-8909v3/200356-0417 SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5,the Property Owner shall give,or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material under paragraphs (b)and(c)with respect to the Bonds: (i) failure to pay any real property taxes, special taxes or assessments levied within the District on a parcel owned by the Property Owner or any Affiliate; (ii) damage to or destruction of any of the infrastructure improvements constructed by the Property Owner or any Affiliate which has a material adverse effect on the value of the parcels owned by the Property Owner or any Affiliate; (iii) material default by the Property Owner or any Affiliate on any loan secured by property within the District owned by the Property Owner or any Affiliate; (iv) payment default by the Property Owner or any Affiliate located in the United States on any loan of the Property Owner or any Affiliate (whether or not such loan is secured by property within the District)which is beyond any applicable cure period in such loan and which may materially and adversely affect the Property Owner's development within the District; (v) the filing of any proceedings with respect to the Property Owner or any Affiliate, in which the Property Owner or any Affiliate, may be adjudicated as bankrupt or discharged from any or all of their respective debts or obligations or granted an extension of time to pay debts or a reorganization or readjustment of debts;and (vi) the filing of any lawsuit against the Property Owner or any of its Affiliates located in the United States which, in the reasonable judgment of the Property Owner, will adversely affect the completion of the development of parcels owned by the Property Owner or its Affiliates within the District, or litigation which if decided against the Property Owner, or any of its Affiliates, in the reasonable judgment of the Property Owner,would materially adversely affect the financial condition of the Property Owner or its Affiliates. (vii) the assumption of any obligation by a Successor pursuant to Section 12 hereof. (b) Whenever the Property Owner obtains knowledge of the occurrence of a Listed Event, the Property Owner shall as soon as possible determine if such event would be material under applicable federal securities laws. (c) If the Property Owner determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Property Owner shall promptly file a notice of such occurrence with the Dissemination Agent which shall then distribute such notice to the EMMA, with a copy to the County. (d) The Property Owner shall also give notice immediately upon the occurrence of any of the following events (to the extent the Property Owner has actual knowledge thereof) in accordance with the procedures set forth in(c)above: (i)a sale or transfer of all or substantially all of the Property Owner's assets, and(ii)a change in the identity of the managing member of the Property Owner. SECTION 6. Termination of Reporting Obligation. The Property Owner's obligations hereunder shall terminate upon the earliest to occur of the following events: (a) the legal defeasance,prior redemption or payment in full of all the Bonds; or 5 4881-5271-8909v3/200356-0417 (b) if as of the date of filing the Annual Report or the Semiannual Report the Property Owner and its Affiliates own Property within the District which is responsible for less than twenty percent (20%) of the Special Taxes levied in the Fiscal Year for which the Annual Report or Semiannual Report is being prepared; provided that, notwithstanding the foregoing, if the Property Owner or its Affiliates has transferred Property in the District to a Successor that would be responsible for twenty percent (20%) or more of the Special Taxes levied in the Fiscal Year for which the Annual Report or Semiannual Report is prepared,the Property Owner's obligations hereunder shall not terminate until the earlier to occur of(i)the date on which the Property Owner's obligations hereunder have been assumed under an assumption agreement; or(ii)if as of the date of filing the Annual Report or the Semiannual Report the Successor (or any affiliate thereof) is no longer responsible for greater than twenty percent(20%)of the Special Taxes levied on the Property in the Fiscal Year for which the Annual Report or the Semiannual Report is prepared. Upon the occurrence of any such termination prior to the final maturity of the Bonds,the Property Owner shall cause the Dissemination Agent to give notice of such termination in the same manner as for a Listed Event under Section 5(c). Notwithstanding the foregoing,the Property Owner shall have no obligation to provide Semiannual Reports pursuant to Section 3 subsequent to the date on which it provides an Annual Report or a Semiannual Report which indicates that the then-applicable Development Plan for each portion of the Property has been fully implemented. Any subsequent Annual Report shall be limited to the items listed under Section 4(iii), (iv), (v) and(ix)hereof. SECTION 7. Dissemination Agent. The Property Owner may from time to time,appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. If the Dissemination Agent is not the Property Owner,the Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Property Owner pursuant to this Disclosure Agreement. The Dissemination Agent may resign (i)by providing thirty days written notice to the Property Owner, the County,the Participating Underwriter and the Trustee(if the Trustee is other than the Dissemination Agent)and (ii)upon appointment of a new Dissemination Agent hereunder. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Property Owner may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived,provided that the following conditions are satisfied: (a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) the amendment or waiver either (i)is approved by the Bondowners in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Bondowners, or(ii)does not, in the opinion of nationally recognized bond counsel addressed to the County and the Trustee, materially impair the interests of the Bondowners or Beneficial Owners of the Bonds;and (c) the Property Owner,or the Dissemination Agent,shall have delivered copies of the amendment and any opinions delivered under(b). In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Property Owner shall describe such amendment in the next Annual Report or Semiannual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type(or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Property Owner. In addition,if the amendment relates to the accounting principles to be followed in preparing financial statements,(i)notice of such change shall be given to EMMA,and(ii)the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if 6 4881-5271-8909v3/200356-0417 feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison of financial data described in clause(ii)of the preceding sentence shall be provided at the time financial statements, if any, are filed under Section 3(a)hereof. SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Property Owner from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication,or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Property Owner chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Property Owner shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. The Property Owner acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to the Property Owner, and that under some circumstances, compliance with this Disclosure Agreement,without additional disclosures or other action,may not fully discharge all duties and obligations of the Property Owner under such laws. SECTION 10. Default. In the event of a failure of the Property Owner to comply with any provision of this Disclosure Agreement, any Participating Underwriter or any Bondowner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Property Owner or the Dissemination Agent to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Property Owner to comply with this Disclosure Agreement shall be an action to compel performance. SECTION 11. Duties,Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement and the Property Owner agrees to indemnify, defend and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of theirs powers and duties hereunder, including the costs and expenses(including attorneys fees) of defending against any claim of liability,but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the Property Owner,the Participating Underwriter, Bondowners or Beneficial Owners or any other party. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon a direction from the Property Owner or an opinion of nationally recognized bond counsel. The obligations of the Property Owner under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. No person shall have any right to commence any action against the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Agreement. Any company succeeding to all or substantially all of the Dissemination Agent's corporate trust business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any paper or any further act. The Dissemination Agent will not, without the Property Owner's prior written consent, settle, compromise or consent to the entry of any judgment in any pending or threatened claim,action or proceeding in respect of which indemnification may be sought hereunder unless such settlement, compromise or consent includes an unconditional release of the Property Owner and its controlling persons from all liability arising out of such claim,action or proceedings. If a claim,action or proceeding is settled with the consent of the Property Owner or if there is a final judgment(other than a stipulated final judgment without the approval of the Property Owner) for the plaintiff in any such claim, action or proceeding, with or without the consent of the Property 7 4881-5271-8909v3/200356-0417 Owner, the Property Owner agrees to indemnify and hold harmless the Dissemination Agent to the extent described herein. SECTION 12. Reporting Obligation of Successors. The Property Owner shall, in connection with any sale or transfer of ownership of Property within the District to a Successor, cause such Successor to enter into a disclosure agreement with terms substantially similar to this Disclosure Agreement, whereby such Successor agrees to be bound by the obligations of the Property Owner under this Disclosure Agreement as an additional obligated party with respect to the Property so transferred. Notwithstanding the foregoing, the Property Owner may elect to provide the Annual Reports and Semiannual Reports on behalf of the Successor, provided that such reports would contain the information required by this Disclosure Agreement, as if the Successor were a party to this Disclosure Agreement. SECTION 13. Property Owner as Independent Contractor. In performing under this Disclosure Agreement,it is understood that the Property Owner is an independent contractor and not an agent of the County. SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 8 4881-5271-8909v3/200356-0417 SECTION 15. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Property Owner, the County, the Dissemination Agent, the Participating Underwriter and Bondowners and Beneficial Owners from time to time of the Bonds,and shall create no rights in any other person or entity. DEVELOPER: RCFC KALOKO HEIGHTS,LLC By: Name: AARON A. GIOVARA Its: Authorized Signatory KALOKO HEIGHTS B1A HOLDINGS,LLC By: Name: AARON A. GIOVARA Its: Authorized Signatory KALOKO HEIGHTS INVESTORS,LLC By: Name: AARON A. GIOVARA Its: Authorized Signatory , as Dissemination Agent By: Name: Title: 9 4881-5271-8909v3/200356-0417 ` -011.4 !• ;..' AARON S.Y.CHUNG MATT KANEALI I-KLEINFELDER • 0.- se-� -N ./. o MAILE MEDEIROS DAVID ��I.,,•• HOLEKA GORO INABA Chairperson / �y- * "4:i001.1*1 ASHLEY L.KIERKIEWICZ HEATHER L.KIMBALL ` '__`'_ ' SUSAN L.K.LEE LOY Vice Chair sT:. „mo , o:•: _:, HERBERT M."TIM"RICHARDS, III REBECCA VILLEGAS HAWAII COUNTY COUNCIL County of Hawai`i Hawaii County Building 25 Aupuni Street Hilo,Hawaii 96720 November 7, 2022 Maile Medeiros David, Council Chair Hawai`i County Council 25 Aupuni Street Hilo, Hawaii 96720 RE: RESOLUTION NO. : A RESOLUTION APPROVING THE ISSUANCE OF UP TO$14,425,000 AGGREGATE PRINCIPAL AMOUNT OF SPECIAL TAX REVENUE BONDS OF THE COUNTY OF HAWAII FOR THE COUNTY'S COMMUNITY FACILITIES DISTRICT NO. 1-2021 (KALOKO HEIGHTS PROJECT);AUTHORIZING THE APPLICATION OF THE PROCEEDS OF THE BONDS,TOGETHER WITH CERTAIN OTHER AVAILABLE FUNDS,TO FUND THE COSTS OF CERTAIN FACILITIES RELATING TO SUCH DISTRICT; APPROVING THE FORMS OF THE INDENTURE,PRELIMINARY OFFICIAL STATEMENT, BOND PURCHASE AGREEMENT AND CONTINUING DISCLOSURE AGREEMENTS RELATING TO THE BONDS;AND AUTHORIZING THE TAKING OF FURTHER ACTIONS RELATING TO THE BONDS AND THE DISTRICT. Pursuant to Section 2(g) of Rule 4 of the Rules of Procedure of the Council of the County of Hawai`i,this written request is submitted with my approval that the above-referenced matter be waived from the Committee on Finance to the full Council for immediate action. In reviewing this matter,timely approval is crucial. It is therefore advantageous that approval is granted and the matter be placed onto the next Council agenda for review. However, in the event this request is denied, for whatever reason, I understand the matter shall be referred to the Committee on Finance for placement on its future agenda. Sincerely, Matt Kaneali`i-Kleinfelder, Chairperson Committee on Finance A I•rove•i 0 ate/Wa' - . Council: Disapproved/Date/Refer to FC: • 'If' W4411441.631 __ Maile Medeiros 0 77 o cil Chair Maile Medeiros David, Council Chair Hawai`i County Council NOV - 7 2022 Hawaii County Council MKK/lk Hawai`i County is an Equal Opportunity Provider and Employer