Descripción del Proceso

Representatives of Woodside have provided the information in this section regarding Woodside and the development in Improvement Area A. Neither the Underwriter nor the Community Facilities District has independently confirmed or verified the information in this section of the Official Statement nor does any such party make any representation as to accuracy or adequacy of this information. Further, there may be material adverse changes in this information after the date of this Official Statement.

The information in this section of the Official Statement regarding ownership of certain taxable property in Improvement Area A has been included because it is considered relevant to an informed evaluation of the 2016 Bonds. The inclusion in this Official Statement of information related to Woodside should not be construed to suggest that the 2016 Bonds, or the Special Taxes that will be used to pay the 2016 Bonds, are recourse obligations of Woodside or any other property owner in Improvement Area A. A property owner may sell or otherwise dispose of land within the Improvement Area A or a development or any interest therein at any time.

The 2016 Bonds and the Special Taxes are not personal obligations of Woodside or any other current or subsequent property owners and, in the event that Woodside or any other current or subsequent property owner defaults in the payment of the Special Taxes, the Community Facilities District may proceed with judicial foreclosure but has no direct recourse to the assets of Woodside or any other current or subsequent property owner. As a result, other than as provided in the Official Statement, no financial statements or information are, or will be, provided about Woodside or any other current or subsequent property owner. The 2016 Bonds are secured solely by the Special Taxes and other amounts pledged under the Indenture. See “SECURITY FOR THE 2016 BONDS” and “SPECIAL RISK FACTORS.”

Development Plan

General. Improvement Area A is located in the unincorporated area of the County on the east side of Briggs Road and south of McLaughlin Road. Improvement Area A contains approximately 42 gross acres with a planned total of 189 single family detached homes at buildout. As of May 1, 2015, 105 of the 189 planned dwelling units within Improvement Area A have been completed and conveyed to individual homeowners.

All of the property within Improvement Area A is within final Tract Map Nos. 28801-1 and 28801-2. Between 2004 and 2006, Heller developed and conveyed 66 homes to individual homeowners. In 2011, Strata acquired the remaining undeveloped land within Improvement Area A and seven completed homes (consisting of five model homes and two production homes) from Heller. Strata conveyed the seven completed homes to individual homeowners. Between May 2014 and May 2015, Strata conveyed to Woodside in three phases, the remaining undeveloped property within Improvement Area A, consisting of a total of 116 finished lots to Woodside.

Woodside Development Plan. All remaining development of the 116 homes by Woodside within Improvement Area A is expected to occur in a neighborhood being marketed as “Mountain Gate.” As of May 1, 2016, Woodside had completed and conveyed 32 homes to individual

homeowners. As of such date, Woodside owned one completed home (which is in escrow to be sold) and 23 homes under construction, 17 of which were in escrow to be sold to individual homeowners upon completion. Additionally, as of such date, there were four model homes owned by Woodside and 56 parcels in a finished lot condition. Between May 1, 2016 and July 1, 2016, Woodside obtained building permits for __ additional lots [TO BE UPDATED PRIOR TO POSTING].

Woodside’s development in Improvement Area A as of May 1, 2016 includes four plans ranging from approximately 1,732 square feet to approximately 2,472 square feet. The following table summarizes Woodside’s product mix within Improvement Area A and the estimated base sales price of such homes:

Plan No. Square Feet Number of Units Base Sales Price (1) 1 1,732 22 $299,990 2 2,023 20 309,990 3 2,200 39 319,990 4 2,472 35 330,990 Total 116

(1) _{As of May 1, 2016. Base sales prices are subject to change and exclude upgrades, options, and premiums, as well as} incentives.

Source: Woodside.

Woodside expects to convey the homes currently under construction, the four model homes, and the remaining homes to be built within Improvement Area A to individual homeowners by January 2018.

Woodside

As previously defined in this Official Statement, “Woodside” refers to Woodside 05S, LP, a California limited partnership, which is wholly owned by Woodside Group, LLC, a Nevada limited liability company (“Woodside Group”), directly or through its wholly owned subsidiaries. Woodside is owned 99% directly by Woodside Group, as a limited partner. The remaining 1% interest is owned by WDS GP, Inc., a California corporation, as its general partner, which is wholly owned by Woodside Homes of California, Inc., a California corporation, which in turn is wholly owned by Woodside Group. The parent of Woodside Group is Woodside Homes Company, LLC, a Delaware limited liability company.

Woodside Group and its subsidiaries were reorganized effective December 31, 2009, under Chapter 11 of the U.S. Bankruptcy Code, following the bankruptcy petitions that were filed on or about August 20, 2008, in the United States Bankruptcy Court for the Central District of California (Riverside Division). The bankruptcy cases for the reorganized Woodside Group entities were closed in August 2011. As of that date, pre-bankruptcy liability related to these entities had all been resolved, settled, or discharged in the bankruptcy process.

Woodside Group’s subsidiaries engage in the design, construction and sale of single-family homes in Arizona, California, Nevada, Texas and Utah under the brand name of “Woodside Homes.” Upon emergence from bankruptcy on December 31, 2009, the parent of Woodside Group became PH

Holding, LLC, a Delaware limited liability company, which later changed its name to Woodside Homes Company, LLC.

Financing Plan

The full development of Woodside’s property in Improvement Area A will require the expenditure of substantial amounts of additional money by Woodside. As of May 1, 2016, Woodside had expended approximately $7,166,800 in acquiring its land in Improvement Area A and approximately $1,260,000 in land improvements, home construction costs and other development, marketing and sales costs. Woodside expects the remaining land improvements, home construction costs and other development, marketing and sales costs in Improvement Area A to be approximately $8,000,000.

To date, Woodside has financed its land acquisition and various site development and home construction costs related to its property in Improvement Area A with cash generated from its home building operations and a revolving credit facility. Woodside expects to finance its remaining site development and home construction costs in Improvement Area A with cash generated from its home building operations and its revolving credit facility. Woodside expects to have sufficient moneys to complete its planned development within Improvement Area A.

Loan Defaults; Litigation; Bankruptcy

Woodside has represented to the Community Facilities District in a letter of representations (the “Letter of Representations”) the following:

1. Except as disclosed in this Official Statement, (a) Woodside is not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the “Material Agreements”) to which Woodside is a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect Woodside’s ability to pay the Special Taxes due with respect to its property within Improvement Area A (the “Property”) and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default.

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

For purposes of the above representations, the phrase “Actual Knowledge of the Undersigned” shall mean the knowledge of the undersigned as of the date hereof obtained from interviews with such current officers and responsible employees of Woodside as the undersigned has determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth herein. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of Woodside’s current business and operations.

3. There are no affiliates of Woodside the financial viability of which could have a materially adverse impact on the ability of Woodside or to pay the Special Tax or ad valorem tax obligations on its property within Improvement Area A when due.