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HomeMy WebLinkAboutRule 15c2-12 Certificates of Ashby USA, LLC and the Merchant Builders, respectively, together with closing certificates TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS 15c2-12 CERTIFICATE -ASHBY USA, LLC March 27, 2006 Stone & Youngberg LLC 515 South Figueroa Street, Suite 1060 Los Angeles, California 90071 Re: Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds Ladies and Gentlemen: In connection with the proposed sale to you of Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District"") 2006 Special Tax Bonds (the "2006 Bonds""), the District has delivered to you a Preliminary Official Statement, dated March 27, 2006, relating to the 2006 Bonds (the "Preliminary Official Statement"")-Ashby USA, LLC, a California limited liability company ("Ashby USA, LLC"), for purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, deems final as of its date the statements contained in the Preliminary Official Statement relating to Ashby USA, LLC, the property owned by Ashby USA, LLC (the ""Property""), the proposed development of the Property, ownership of the Property, Ashby USA, LLC's development plan, Ashby USA, LLC's financing plan, Ashby USA, LLC's lenders, if any, and the contractual arrangements of Ashby USA, LLC (but excluding, in all cases, information on Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC, Traditions at Roripaugh, LLC, KB Home Coastal Inc. and their respective development and financing plans), and under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "CONTINUING DISCLOSURE -Ashby USA, LLC," "THE COMMUNITY FACILITIES DISTRICT," "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions "-Continental Residential, Inc.," "-Davidson Roripaugh Ranch 122, LLC," "-The Tanamera/Roripaugh Entities,"" """"KB Home Coastal Inc.,"" '"Direct and Overlapping Debt,"" " -Estimated Value-to-Lien Ratios," " -Overlapping Assessment and Community Facilities Districts," " -Estimated Assessed Value-to-Lien Ratios," "-Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value"" for which no certification is made) except for the omission of no more than the following information: the offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, dates of mandatory sinking fund payments, delivery dates and any other terms of the 2006 Bonds relating to such matters. All capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006, delivered on behalf of Ashby USA, LLC in connection with the delivery of the Preliminary Official Statement. Very truly yours, ASHBY USA, LLC, a California limited liability company By: Ashby Development Company, Inc., a California corporation, its Managing Member _.«-•"•""""""' r""~^~. By: USA Investment Partnersg,r LLC.,, /7 a Nevada Jjrnited liability company//its Member/' * ' //' x ,/sephTD. Milanowski, Marager TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CLOSING CERTIFICATE OF ASHBY USA, LLC April 27,2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Community Facilities District No. 03-02 (Roripaugh Ranch) of the Temecula Public Financing Authority 2006 Special Tax Bonds and to the Bond Purchase Agreement dated April 13, 2006 (the "Bond Purchase Agreement") entered into in connection therewith. This certificate is delivered pursuant to the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006 delivered on behalf of Ashby USA, LLC, a California limited liability company ("Ashby USA, LLC"), which is attached hereto as Exhibit A. The undersigned certify that they are familiar with the facts herein herein certified, have authority and are qualified to certify the same as officers of the members of Ashby USA, LLC, and the undersigned, on behalf of Ashby USA, LLC, further certify as follows: 1. Each statement made in the Certificate is affirmed and restated as if made on the date hereof. 2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which has adversely affected or will materially and adversely affect the business, properties, operations, prospects or financial condition of Ashby USA, LLC or its Affiliates, which would materially and adversely affect the development of the Property or their ability to pay Special Taxes for which they are obligated to pay. 3. Ashby USA, LLC has received the Official Statement relating to the 2006 Bonds, and each statement made in the Certificate referring to the Preliminary Official Statement is affirmed as if it relates to the Official Statement. 4. Each statement made in the Certificate referring to the proposed Developer Continuing Disclosure Agreement is affirmed as if it relates to the Developer Continuing Disclosure Agreement as executed and delivered. 5. Ashby USA, LLC has duly executed and delivered the Developer Continuing Disclosure Agreement, has the authority to perform the obligation on its part to be performed thereunder, and the Developer Continuing Disclosure Agreement constitutes the legal, valid and binding obligations of Ashby US A, LLC. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; EXECUTION PAGE FOLLOWS] Very truly yours, ASHBY USA, LLC, a California limited liability company By: Ashby Development Company, Inc., a California corporation, its Managine Member Justin K. Ashby, President By: USA Investment Partners, LLC-,'"' a Nevada limited liability cciinpany its Membtr TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CERTIFICATE OF ASHBY USA, LLC March 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds and to the Bond Purchase Agreement to be entered into in connection therewith (the "Bond Purchase Agreement"). This certificate is delivered pursuant to and in satisfaction of Section 3(d)(16) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement. The undersigned certify that they are familiar with the facts herein certified, have authority and are qualified to certify the same as officers of the members of Ashby USA, LLC, a California limited liability company ("Ashby USA, LLC"), and the undersigned, on behalf of Ashby USA, LLC further certify as follows: 1. Ashby USA, LLC is duly organized and validly existing as a limited liability company under the laws of the State of California, is in good standing in the State of California and has the limited liability company power and authority (i) to execute and deliver this Certificate, to execute and deliver at Closing (as defined in the Bond Purchase Agreement) the Developer Continuing Disclosure Agreement (the "Developer Continuing Disclosure Agreement") dated as of March 1, 2006, by and between Ashby USA, LLC and U.S. Bank National Association, as Dissemination Agent and Fiscal Agent; (ii) to execute and deliver (a) the Acquisition Agreement, dated as of March 1, 2006, executed by and between the Authority and Ashby USA, LLC, (b) a Joint Community Facilities Agreement (Street Improvements) among the Authority, the County and Ashby USA, LLC, (c) a Joint Community Facilities Agreement Agreement (Flood Control Improvements) among the Riverside County Flood Control and Water Conservation District, the County, the City, the Authority and Ashby USA, LLC: and (d) a Joint Community Facilities Agreement among the Authority, Eastern Municipal Water District and Ashby USA, LLC (collectively, the "Developer Agreements"); and (iii) to undertake all of the transactions on its part described in the Preliminary Official Statement and contemplated by the Developer Continuing Disclosure Agreement and the Developer Agreements. 2. As set forth in the Preliminary Official Statement, certain property within the District is owned by Ashby USA, LLC, and Ashby USA, LLC will develop such property for sale to merchant builders. The property owned by Ashby USA, LLC as of the date hereof is referred to herein as the "Property." Ashby USA, LLC's current expectation is that Ashby USA, LLC shall remain the party responsible for land use planning and backbone infrastructure of the property within the District. Ashby USA, LLC has not entered into an agreement for development or management of the Property by any entity other than as described in the Preliminary Official Statement. 3. Ashby USA, LLC has the authority to execute and deliver at Closing the Developer Continuing Disclosure Agreement and has the authority to perform the obligations on its part to be performed thereunder. Except as described in the Preliminary Official Statement with regard to previous undertakings relating to Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, to the Actual Knowledge of the Undersigned , neither Ashby USA, LLC nor its Affiliates have materially failed within the past five years to provide periodic continuing disclosure reports or notices of material events with respect to community facilities districts or assessment districts in California. "Affiliate" of another Person (as defined below) means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 15% or more of the outstanding voting securities of such other Person, (b) any Person 15% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by or under common control with such other Person; for purposes hereof, "control" means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person. "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. Notwithstanding the foregoing and for purposes of this certificate, none of the following entities shall be considered an Affiliate of Ashby USA, LLC: Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC, Traditions at Roripaugh, LLC or KB Home Coastal Inc. 4. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned (a) Ashby USA, LLC and its Affiliates are not in breach of or in default under any applicable law or administrative regulation of the State of California or the United States of America, or any agency or instrumentality of either, which breach or default would in any way materially and adversely affect the proposed Developer Continuing Disclosure Agreement, the Developer Agreements or the ability of Ashby USA, LLC to pay special taxes levied on the Property (the "Special Taxes"), and (b) to the Actual Knowledge of the Undersigned, no event has occurred and is continuing which with the passage of time or giving of notice, or both, would constitute such a breach or default; and to the Actual Knowledge of the Undersigned, the execution and delivery at Closing by Ashby USA, LLC of the Developer Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any law or administrative regulation applicable to Ashby USA, LLC. 5. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned, Ashby USA, LLC and its Affiliates are 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, note, resolution, agreement or other instrument to which Ashby USA, LLC or its Affiliates are, or will upon issuance of the 2006 Bonds be, a party or otherwise subject, which breach or default would in any way materially and adversely affect the Developer Continuing Disclosure Agreement, the Developer Agreements or Ashby USA, LLC's ability to develop the Property or to pay the Special Taxes, and (b) to the As used in this certificate, the phrase "Actual Knowledge of the Undersigned" shall mean the knowledge that the undersigned currently have or have obtained from interviews with such officers and responsible employees of Ashby USA, LLC and members of Ashby USA, LLC as the undersigned have determined are are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, with your permission, the undersigned have not conducted any additional inspection or inquiry. Actual Knowledge of the Undersigned, 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; and the execution and delivery at Closing by Ashby USA, LLC of the Developer Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or, constitute a breach of or default under any judgment, decree, loan agreement, indenture, fiscal agent agreement, bond, note, resolution, agreement or other instrument to which Ashby USA, LLC or its Affiliates is a party or otherwise subject which breach or default would in any way materially and adversely affect the Developer Continuing Disclosure Agreement or Ashby USA, LLC's ability to develop the Property or its ability to pay the Special Taxes. 6. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaid and no material lines of credit of Ashby USA, LLC or its Affiliates that are secured by an interest in the Property. 7. Except as set forth in the Preliminary Official Statement, no claim, dispute, suit, action, contingent liability or litigation is pending (with service of process to Ashby USA, LLC or any Member of Ashby USA, LLC, having been accomplished) or, to the Actual Knowledge of the Undersigned, pending with service of process to any parent entity of any Member having been accomplished, or to the Actual Knowledge of the Undersigned threatened (a) to restrain or enjoin collection of Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the 2006 Bonds, (b) to restrain or enjoin the execution of and performance of Ashby USA, LLC's obligations under the proposed Developer Continuing Disclosure Agreement or the performance of Ashby USA, LLC's obligations under the Developer Agreements, (c) to restrain or enjoin development of the property within the District, (d) in any way contesting or affecting the validity of the Special Taxes, the Developer Continuing Disclosure Agreement, the Developer Agreements or any other document, license, permit or approval necessary to the performance on Ashby USA, LLC's part under the proposed Developer Continuing Disclosure Agreement or the Developer Agreements or (e) which would in any way materially and adversely affect Ashby USA, LLC's ability to develop the Property or to pay Special Taxes. 8. Except as set forth in the Preliminary Official Statement, no litigation is pending with service of process to Ashby USA, LLC having been accomplished, to the Actual Knowledge of the Undersigned, no litigation is pending with service of process to any Affiliate having been accomplished, and, to the Actual Knowledge of the Undersigned, no litigation is threatened against Ashby USA, LLC or any Affiliate involving Ashby USA, LLC or any Affiliate, or any of the property or assets under the control of Ashby USA, LLC or any Affiliate that involves the possibility of any judgment or uninsured liability which may result in any material adverse change in the assets or funds held by Ashby USA, LLC or any Affiliate that would materially and adversely affect Ashby USA, LLC's ability to develop the Property or to pay Special Taxes. 9. As of the date thereof, but solely with respect to information relating to Ashby USA, LLC, the Property, the proposed development of the Property, ownership of the Property, Ashby USA, LLC's development plan, Ashby USA, LLC's financing plan, Ashby USA, LLC's lenders, if any, and the contractual arrangements of Ashby USA, LLC (but excluding, in all cases, information on Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC, Traditions at Roripaugh, KB Home Coastal Inc. and their respective development and financing plans) and subject to the exclusions set forth below, the information contained in the Preliminary Official Statement under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "CONTINUING DISCLOSURE -Ashby USA, LLC," "THE COMMUNITY FACILITIES DISTRICT," and "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions "-Continental Residential, Inc.," " -Davidson Roripaugh Ranch 122, LLC," " -The Tanamera/Roripaugh Entities," " -KB Home Coastal Inc.," " -Direct and Overlapping Debt," " -Estimated Value-to-Lien Ratios," " -Overlapping Assessment and Community Facilities Districts," " -Estimated Assessed Value-to-Lien Ratios," " — Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value" for which no certification is made) is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 10. Ashby USA, LLC has full limited liability company power and authority to develop the Property, to own any portion of the Property it acquires and to carry on on its business as presently conducted and as described in the Preliminary Official Statement. 11. Ashby USA, LLC covenants that, while the 2006 Bonds or any refunding obligations related thereto are outstanding, Ashby USA, LLC 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 District, to challenge the levy of the Special Taxes within the District, to invalidate the District or any of the 2006 Bonds, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent Ashby USA, LLC in any way from bringing any other action, suit or proceeding including, without limitation, an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the District's Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, an action or suit with respect to the application or use of the Special Taxes levied and collected, or an action or suit to enforce the obligations of the Authority under the Resolution of Issuance, the Fiscal Agent Agreement, the Developer Agreements or any agreements with the Authority, the City and/or the District or any other party for which Ashby USA, LLC is a party or beneficiary. 12. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, no other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized and no assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 13. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, Ashby USA, LLC and its Affiliates have not in the last five years defaulted in payment of, and are not currently delinquent on, any ad valorem, assessment or special tax obligations in California in any material amount. 14. Ashby USA, LLC consents to the issuance of the 2006 Bonds. Ashby USA, LLC acknowledges and agrees that the proceeds of the 2006 Bonds will be used as described in the Official Statement, provided that nothing in this statement modifies any right or obligation of the parties under the Developer Agreements, or any other agreement. 15. Ashby USA, LLC intends to comply with the provision of Government Code Section 53341.5 relating to the Notice of Special Tax in connection with the sale of the Property, or portions thereof, that it takes title to. 16. Ashby USA, LLC acknowledges that interest on the 2006 Bonds is estimated to be capitalized through September 1, 2006 and that the Special Tax levies on Developed Property and Undeveloped Property will commence in Fiscal Year 2006-07 (commencing with the November 1, 2006 tax installment) in order to pay for principal and interest on the 2006 Bonds and to pay a portion of the administrative expenses relating to the District. 17. Ashby USA, LLC is solvent and no proceedings are pending or, to the Actual Knowledge of the Undersigned, threatened in which Ashby USA, LLC 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 a reorganization or readjustment of its debts. 18. To the Actual Knowledge of the Undersigned, the Members of Ashby USA, LLC and the parent entities of such Members of Ashby USA, LLC are solvent and no proceedings are pending, or to the Actual Knowledge of the Undersigned, threatened in which the Members of Ashby USA, LLC and the parent entities of such Members of Ashby USA, LLC 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 their respective debts or obligations, or be allowed to reorganize or readjust their respective debts or obligations. 19. To the Actual Knowledge of the Undersigned, Ashby USA, LLC has not filed for, nor are there current proceedings for the reassessment of, the assessed value of the Property. 20. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities among Ashby USA, LLC, its Affiliates or any contractors working on the development of the Property which may materially and adversely affect the development of the Property or the payment of the Special Taxes on the Property. 21. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, to the Actual Knowledge of the Undersigned, Ashby USA, LLC anticipates that it will have sufficient funds to carry on its business as presently conducted and as described in the Preliminary Official Statement and to pay Special Taxes assessed against the Property. However, none of the members of Ashby USA, LLC or its Affiliates are obligated to make any additional capital contribution or loan to Ashby USA, LLC at any time and Ashby USA, LLC reserves the right to change its plan at any time without notice. 22. All information submitted in writing by Ashby USA, LLC or its agents to the Authority, the District, the Special Tax Consultant, the Market Absorption Consultant, the Appraiser, Disclosure Counsel or the Underwriter in connection with the issuance of the 2006 Bonds, was, at the time of submission, to the Actual Knowledge of the Undersigned, true and correct. 23. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there are no endangered species, hazardous substances or archaeological resources relating to the Property which could have a significant impact on Ashby USA, LLC's ability to pay Special Taxes or to sell or develop all or any portion of the Property. 24. As to information indicated in Section 9 hereof relating to Ashby USA, LLC, the Property, the proposed development of the Property, ownership of the Property, Ashby USA, LLC's development plan, Ashby USA, LLC's financing plan, Ashby USA, LLC's lenders, if any, and the contractual arrangements of Ashby USA, LLC (but excluding, in all cases, information on Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC, Traditions at Roripaugh, LLC, KB Home Coastal Inc. and their respective development and financing plans), and subject to the limitations and exclusions set forth in Section 9, Ashby USA, LLC agrees to indemnify and hold harmless, to the extent permitted by law, the Authority, the District, and their officials and employees, and each person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended against any and all losses, claims, damages or liabilities, joint or several, to which such indemnified party may become subject under any statute or at law or in equity or otherwise, and shall reimburse any such indemnified party for any reasonable legal or other expense incurred by it, in each case in connection with investigating any claims against it and defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of, or are based upon, any untrue statement of a material fact or the omission to state a material fact, in the final Official Statement, as of its date or in any continuing disclosure statement, as of its date, provided or authorized by Ashby USA, LLC, a material fact necessary to make the statement therein, in light of the circumstances under which it was made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which Ashby USA, LLC may otherwise have to any indemnified party, provided that in no event shall Ashby USA, LLC be obligated for double indemnification nor for the negligence or wilful misconduct of another. 25. Ashby USA, LLC has agreed to execute the Developer Continuing Disclosure Agreement in the form included in Appendix G to the Preliminary Official Statement. 26. If between the date hereof and the date of the Closing, to the Actual Knowledge of the Undersigned, any event relating to or affecting Ashby USA, LLC, its Affiliates or the development of the Property shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, Ashby USA, LLC shall notify the Authority, the District and the Underwriter and if in the opinion of counsel to the Authority or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, Ashby USA, LLC shall reasonably cooperate with the Authority in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to counsel to the Authority and to the Underwriter. 27. For the "underwriting period," as defined in the Bond Purchase Agreement, if any event relating to or affecting Ashby USA, LLC, its Affiliates or the development of the Property shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the Authority, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, Ashby USA, LLC shall reasonably cooperate with the Authority and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to the Underwriter and counsel to the Authority which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 28. Ashby USA, LLC agrees to deliver a Certificate dated the date of issuance of the 2006 Bonds at the time of issuance of the 2006 Bonds in substantially the form attached as Exhibit A, provided, that, if any event relating to or affecting Ashby USA, LLC or its Affiliates or the development of the Property shall occur as a result of which it is necessary to modify the Certificate, Ashby USA, LLC agrees to deliver the Certificate revised to reflect such event. 29. On behalf of Ashby USA, LLC, we have reviewed the contents of this Certificate and have met with counsel to Ashby USA, LLC, for the purpose of discussing the meaning of its contents. Very truly yours, ASHBY USA, LLC, a California limited liability company By: Ashby Development Company, Inc., a California corporation, its Managing Member By:. Justin K. Ashby, President By: USA Investment Partners, LLC, a Nevada limited liability company its Member //..xT*" I/ TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS 15c2-12 CERTIFICATE -CONTINENTAL RESIDENTIAL, INC. March 27, 2006 Stone & Youngberg LLC 515 South Figueroa Street, Suite 1060 Los Angeles, California 90071 Re: Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds Ladies and Gentlemen: In connection with the proposed sale to you of Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds (the "2006 Bonds"), the District has delivered to you a Preliminary Official Statement, dated March 27,2006, relating to the 2006 Bonds (the "Preliminary Official Statement"). Continental Residential, Inc., a California corporation ("Continental Residential, Inc."), for purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, deems final as of its date the statements contained in the Preliminary Official Statement under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "THE COMMUNITY FACILITIES DISTRICT," "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions " -Ashby USA, LLC," " -Davidson Roripaugh Ranch 122, LLC," " -The Tanamera/Roripaugh Entities," "KB Home Coastal Inc.," "Direct and Overlapping Debt," " -Estimated Value-to-Lien Ratios," " -Overlapping Assessment and Community Facilities Districts," "—Estimated Assessed Value-to-Lien Ratios," " -Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value" for which no certification is made) relating to Continental Residential, Inc., the property owned or to be owned by Continental Residential, Inc. (the "Property"), the proposed development of the Property, ownership of the Property, Continental Residential, Inc.'Inc.'s development plan, Continental Residential, Inc.'s financing plan, Continental Residential, Inc.'s lenders, if any, and the contractual arrangements of Continental Residential, Inc. (but excluding, in all cases, information on Ashby USA, LLC, Davidson Roripaugh Ranch 122, LLC, Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC, Traditions at Roripaugh, KB Home Coastal Inc. and their respective development and financing plans), except for the omission of no more than the following information: the offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, dates of mandatory sinking fund payments, delivery dates and any other terms of the 2006 Bonds relating to such matters. All capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006, delivered on behalf of Continental Residential, Inc. in connection with the delivery of the Preliminary Official Statement. Statement.Very truly yours, CONTINENTAL RESIDENTIAL, INC., a California corporation Name: ^ i c j. Rub3 Title: vice President TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CERTIFICATE OF CONTINENTAL RESIDENTIAL, INC. March 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds and to the Bond Purchase Agreement to be entered into in connection therewith (the "Bond Purchase Agreement"). This certificate is delivered pursuant to and in satisfaction of Section 3(d)(16) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement. The undersigned certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer of Continental Continental Residential, Inc., a California corporation ("Continental Residential, Inc."), and the undersigned, on behalf of Continental Residential, Inc. further certifies as follows: 1. Continental Residential, Inc. is duly organized and validly existing under the laws of the State of California, is in good standing in the State of California and has the corporate power and authority to execute and deliver this certificate and to undertake all of the transactions on its part described in the Preliminary Official Statement. 2. As set forth in the Preliminary Official Statement, certain property within the District is owned by or is to be owned by Continental Residential, Inc., and Continental Residential, Inc. will develop such property. The property owned or to be owned by Continental Residential, Inc. is referred to herein as the "Property." Continental Residential, Inc.'s current expectation is that Ashby USA, LLC shall remain the party responsible for land use planning and backbone infrastructure of the Property. Continental Residential, Inc. has not entered into an agreement for development or management of the Properly by any entity other than as described in the Preliminary Official Statement. 3. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned1, Continental Residential, Inc. and its Affiliates are not in breach of or in default under any applicable law or administrative regulation of the State of California or the United States of America, or any agency or instrumentality of either, which breach or default would 1 As used in this certificate, the phrase "Actual Knowledge of the Undersigned" shall mean the knowledge that the undersigned currently has or has obtained from an interview with such officers and responsible employees of Continental Residential, Inc. as the undersigned has determined are likely, in the ordinary course of its respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, with your permission, the undersigned has not conducted any additional inspection or inquiry. in any way materially and adversely affect the ability of Continental Residential, Inc. to pay its Special Taxes, and (b) to the Actual Knowledge of the Undersigned,, 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. "Affiliate" of another Person (as defined below) means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 15% or more of the outstanding voting securities of such other Person, (b) any Person 15% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with powerto vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by or under common control with such other Person; for purposes hereof, "control" means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person. "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. 4. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned, Continental Residential, Inc. and its Affiliates are 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, note, resolution, agreement or other instrument to which Continental Residential, Inc. or its Affiliates are, or will upon issuance of the 2006 Bonds be, a party or otherwise subject, which breach or default would in any way materially and adversely affect Continental Residential, Inc.'s ability to develop the Property or to pay the Special Taxes, and (b) to the Actual Knowledge of the Undersigned, no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such breach or default. 5. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaid and no material lines of credit of Continental Residential, Inc. or its Affiliates that are secured by an interest in the Property. 6. Except as set forth in the Preliminary Official Statement, no claim, dispute, suit, action, contingent liability or litigation is pending (with service of process to Continental Residential, Inc. having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened (a) to restrain or enjoin collection of Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the 2006 Bonds, (b) to restrain or enjoin development of the Property, (c) in any way contesting or affecting the validity of the Special Taxes, or (d) which would in any way materially and adversely affect Continental Residential, Inc.'s ability to develop the Property or to pay Special Taxes. 7. Except as set forth in the Preliminary Official Statement, no litigation is pending with service of process to Continental Residential, Inc., to the Actual Knowledge of the Undersigned, no litigation is pending with service of process to any Affiliate having been accomplished, and, to the Actual Knowledge of the Undersigned, no litigation is threatened against Continental Residential, Inc. or any Affiliate involving Continental Residential, Inc. or any Affiliate, or any of the property or assets under the control of Continental Residential, Inc. or any Affiliate that involves the possibility of any judgment or uninsured liability which may result in any material adverse change in the assets or funds held by Continental Residential, Inc. or any Affiliate that wouldmaterially and adversely affect Continental Residential, Inc.'s ability to develop the Property or to pay Special Taxes. 8. As of the date thereof, but solely with respect to information relating to Continental Residential, Inc., the Property, the proposed development of the Property, ownership of the Property. Continental Residential, Inc.'s development plan, Continental Residential, Inc.'s financing plan, Continental Residential, Inc.'s lenders, if any, and the contractual arrangements involving Continental Residential, Inc. (but excluding, in all cases, information on Ashby USA, LLC, Davidson Roripaugh Ranch 122, LLC, Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC, Traditions at Roripaugh, KB Home Coastal Inc. and their respective development and financing plans) and subject to the exclusions set forth below, the information contained in the Preliminary Official Statement under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "THE COMMUNITY FACILITIES DISTRICT," and "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions " -Ashby USA, LLC," " -Davidson Roripaugh Ranch 122, LLC;" " -The Tanamera/Roripaugh Entities," " -KB Home Coastal Inc.," " -Direct and Overlapping Debt," " --Estimated Value-to-Lien Ratios," "-Overlapping Assessment and Community Facilities Districts," " -Estimated Assessed Value-to-Lien Ratios," "-Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value" for which no certification is made) is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 9. Continental Residential, Inc. has full corporate power and authority to develop the Property, to own any portion of the Property it acquires and to carry on its business as presently conducted and as described in the Preliminary Official Statement. 10. Continental Residential, Inc. covenants that, while the 2006 Bonds or any refunding obligations related thereto are outstanding, Continental Residential, Inc. 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 anyway seeks to challenge or overturn the formation of the District, to challenge the adoption of Ordinance No. 2003-02 of the Authority levying Special Taxes within the District, to invalidate the District or any of the 2006 Bonds, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and HighwaysCode based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent Continental Residential, Inc. in any way from bringing any other action, suit or proceeding including, without limitation, an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the District's Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, an action or suit with respect to the application or use of the Special Taxes levied and collected, or an action or suit to enforce the obligations of the Authority under the Resolution of Issuance, the Fiscal Agent Agreement or any agreements with the Authority, the City and/or the District for which Continental Residential, Inc. is a party or beneficiary. 11. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, no other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized and no assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 12. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, Continental Residential, Inc. and its Affiliates have not in the last five years defaulted in payment of, and are not currently delinquent on, any ad valorem, assessment or special tax obligations in California in any material amount. 13. Continental Residential, Inc. consents to the issuance of the 2006 Bonds. Continental Residential, Inc. acknowledges and agrees that the proceeds of the 2006 Bonds will be used as described in the Official Statement, provided that nothing in this statement modifies any right or obligation of the parties under any other agreement. 14. Continental Residential, Inc. intends to comply with the provision of Government Code Section 53341.5 relating to the Notice of Special Tax in connection with the sale of the Property, or portions thereof, that it takes title to or develops. 15. Continental Residential, Inc. acknowledges that interest on the 2006 Bonds is estimated to be capitalized through September 1,2006 and thatthe Special Tax levies on Developed Property and Undeveloped Property will commence in Fiscal Year 2006-07 (commencing with the November 1, 2006 tax installment) in order to pay for principal and interest on the 2006 Bonds and to pay a portion of the administrative expenses relating to the District. 16. Continental Residential, Inc. is solvent and no proceedings are pending or, to the Actual Knowledge of the Undersigned, threatened in which Continental Residential, Inc. 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 a reorganization or readjustment of its debts. 17. To the Actual Knowledge of the Undersigned, Continental Residential, Inc. has not filed for, nor are there current proceedings for the reassessment of, the assessed value of the Property.18. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities among Continental Residential, Inc., its Affiliates or any contractors working on the development of the Property which may materially and adversely affect the development of the Property or the payment of the Special Taxes on the Property. 19. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real properly, to the Actual Knowledge of the Undersigned, Continental Residential, Inc. will have sufficient funds to carry on its business as presently conducted and as described in the Preliminary Official Statement and to pay Special Taxes assessed against the Property and neither the Authority nor the District will be required to resort to a draw on the Reserve Fund for payment of principal of or interest on the 2006 Bonds due to Continental Residential, Inc.'s nonpayment of Special Taxes. However, none of Continental Residential, Inc. or its Affiliates are obligated to make any additional capital contribution or loan to Continental Residential, Inc. at any time and Continental Residential, Inc. reserves the right to change its plan at any time without notice. 20. All information submitted in writing by, or on behalf of, Continental Residential, Inc. or its agents to the Authority, the District, the Special Tax Consultant, the Appraiser, the Market Absorption Consultant, Disclosure Counsel or the Underwriter in connection with the issuance of the 2006 Bonds, was, at the time of submission, to the Actual Knowledge of the Undersigned, true and correct. 21. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there are no endangered species, hazardous substances or archaeological resources relating to the Property which could have a significant impact on Continental Residential, Inc.'s ability to pay Special Taxes or to sell or develop all or any portion of Continual Residential, Inc.'s Property. 22. As to information indicated in Section 8 hereof relating to Continental Residential, Lie., the Property, the proposed development of the Property, ownership of the Property, Continental Residential, Inc.'s development plan, Continental Residential, Inc.'s financing plan, Continental Residential, Inc.'s lenders, if any, and the contractual arrangements of Continental Residential, Inc. (but excluding, in all cases, information on Ashby USA, LLC, Davidson Roripaugh Ranch 122, LLC, Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC, Traditions at Roripaugh, KB Home Coastallnc. andtheirrespective development and financing plans), and subjectto the limitations and exclusions set forth in Section 8, Continental Residential, Inc. agrees to indemnify and hold harmless, to the extent permitted by law, the Authority, the District, and their officials and employees, and each person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended against any and all losses, claims, damages or liabilities, j oint or several, to which such indemnified party may become subj ect under any statute or at law or in equity or otherwise, and shall reimburse any such indemnified party for any reasonable legal or other expense incurred by it in connection with investigating any claims against it and defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of, or are based upon, any untrue statement of a material fact or the omission to state a material fact, in the final Official Statement, as of its date or in any continuing disclosure statement, as of its date, provided by or on behalf of Continental Residential, Inc., a material fact necessary to make the statement therein, in light of the circumstances under which it was made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which Continental Residential, Inc. may otherwise have to any indemnified party, provided that in no event shall Continental Residential, Inc. be obligated for double indemnification nor for the negligence or wilful misconduct of another. 23. If between the date hereof and the date of the Closing, to the Actual Knowledge of the Undersigned, any event relatingto or affecting Continental Residential, Inc., its Affiliates or the development of the Property shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light ofthe circumstances underwhich they were made, notmisleading, Continental Residential, Inc. shall notify the Authority, the District and the Underwriter and if in the opinion of counsel to the Authority or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, Continental Residential, Inc. shall cooperate with the Authority in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to counsel to the Authority and to the Underwriter. 24. For the "underwriting period," as defined in the Bond Purchase Agreement, if any event relating to or affecting Continental Residential, Inc., its Affiliates or the development ofthe Property shall occur as a result of which it is necessary, in the opinion ofthe Underwriter or counsel to the Authority, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light ofthe circumstances existing at the time it is delivered to a purchaser, Continental Residential, Inc. shall cooperate with the Authority and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to the Underwriter and counsel to the Authority which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light ofthe circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 25. Continental Residential,Inc. agreesto deliver acertificate dated the date of issuance of the 2006 Bonds at the time of issuance of the 2006 Bonds in substantially the form attached as Exhibit A, provided, that, if any event relating to or affecting Continental Residential, Inc. or its Affiliates or the development of the Property shall occur as a result of which it is necessary to modify the certificate, Continental Residential, Inc. agrees to deliver the certificate revised to reflect such event. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; EXECUTION PAGE FOLLOWS] 26. On behalf of Continental Residential, Inc., I have reviewed the contents of this certificate and have met with counsel to Continental Residential, Inc., for the purpose of discussing the meaning of its contents. CONTINENTAL RESIDENTIAL, INC., a California corporation Name: Eric J p Ruby Title: vice President TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CLOSING CERTIFICATE OF CONTINENTAL RESIDENTIAL, INC. April 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Community Facilities District No. 03-02 (Roripaugh Ranch) of the Temecula Public Financing Authority 2006 Special Tax Bonds and to the Bond Purchase Agreement dated April 13, 2006 (the "Bond Purchase Agreement") entered into in connection therewith. This certificate is delivered pursuant to the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006 delivered on behalf of Continental Residential, Inc., a California corporation ("Continental Residential, Inc."), which is attached hereto as Exhibit A. The undersigned certifies that he is is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer of Continental Residential, Inc., and the undersigned, on behalf of Continental Residential, Inc., further certifies as follows: 1. Each statement made in the Certificate is affirmed and restated as if made on the date hereof. 2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which has adversely affected or will materially and adversely affect the business, properties, operations, prospects or financial condition of Continental Residential, Inc. or its Affiliates, which would materially and adversely affect the development of the Property or their ability to pay Special Taxes for which they are obligated to pay. 3. Continental Residential, Inc. has received the Official Statement relating to the 2006 Bonds, and each statement made in the Certificate referring to the Preliminary Official Statement is affirmed as if it relates to the Official Statement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; EXECUTION PAGE FOLLOWS] Very truly yours, CONTINENTAL RESIDENTIAL, INC., a California corporation f Name: E ! c J . R < b y Title: Vice President TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CERTIFICATE OF DAVIDSON RORIPAUGH RANCH 122 LLC March 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds and to the Bond Purchase Agreement to be entered into in connection therewith (the "Bond Purchase Agreement"). This certificate is delivered pursuant to and in satisfaction of Section 3(d)( 16) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement. The undersigned certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer of Davidson Roripaugh Ranch 122 LLC, a California limited liability company ("Davidson Roripaugh Ranch 122 LLC"), and the undersigned, on behalf of Davidson Roripaugh Ranch 122 LLC further certifies as follows: 1. Davidson Roripaugh Ranch 122 LLC is duly organized and validly existing under the laws of the State of California, is in good standing in the State of California and has the corporate power and authority to execute and deliver this certificate and to undertake all of the transactions on its part described in the Preliminary Official Statement. 2. As set forth in the Preliminary Official Statement, certain property within the District is owned by Davidson Roripaugh Ranch 122 LLC, and Davidson Roripaugh Ranch 122 LLC plans to develop such property. The property owned by Davidson Roripaugh Ranch 122 LLC is referred to herein as the "Property." Davidson Roripaugh Ranch 122 LLC's current expectation is that Ashby USA, LLC shall remain the party responsible for land use planning and backbone infrastructure of the Property. Davidson Roripaugh Ranch 122 LLC has not entered into an agreement for development or management of the Property by any entity other than as described in the Preliminary Official Statement. 3. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned1, Davidson Roripaugh Ranch 122 LLC and its Affiliates are not in breach of or in default under any applicable law or administrative regulation of the State of California or the United States of America, or any agency or instrumentality of either, which breach 1 As used in this certificate, the phrase "Actual Knowledge of the Undersigned" shall mean the knowledge that the undersigned currently has or has obtained from an interview with such officers and responsible employees of Davidson Roripaugh Ranch 122 LLC and Members of Roripaugh Ranch 122 LLC as the undersigned has determined are likely, in the ordinary course of its respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, with your permission, the undersigned has not conducted any additional inspection or inquiry. or default would in anyway materially and adversely affect the ability of Davidson Roripaugh Ranch 122, LLC to pay its Special Taxes, and (b) to the Actual Knowledge of the Undersigned, 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. "Affiliate" of another Person (as defined below) means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 15% or more of the outstanding voting securities of such other Person, (b) any Person 15% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by or under common control with such other Person; for purposes hereof, "control" means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person. "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. 4. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned, Davidson Roripaugh Ranch 122, LLC and its Affiliates are 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, note, resolution, agreement or other instrument to which Davidson Roripaugh Ranch 122, LLC or its Affiliates are, or will upon issuance of the 2006 Bonds be, a party or otherwise subject, which breach or default would in any way materially and adversely affect Davidson Roripaugh Ranch 122, LLC's ability to develop the Property or to pay the Special Taxes, and (b) to the Actual Knowledge of the Undersigned, no event has occurred and is continuing that with the passage of time or or giving of notice, or both, would constitute such breach or default. 5. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaidand no material linesof credit of Davidson Roripaugh Ranch 122, LLC or its Affiliates that are secured by an interest in the Property. 6. Except as set forth in the Preliminary Official Statement, no claim, dispute, suit, action, contingent liability or litigation is pending (with service of process to Davidson Roripaugh Ranch 122, LLC having been accomplished) or, to the Actual Knowledge of the Undersigned, pending with service of process to any parent entity of any Member having been accomplished, or to the Actual Knowledge of the Undersigned threatened (a) to restrain or enjoin collection of Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the 2006 Bonds, (b) to restrain or enjoin development of the Property, (c) in any way contesting or affecting the validity of the Special Taxes, Taxes, or (d) which would in any way materially and adversely affect Davidson Roripaugh Ranch 122, LLC's ability to develop the Property or to pay Special Taxes. 7. Except as set forth in the Preliminary Official Statement, no litigation is pending with service of process to Davidson Roripaugh Ranch 122, LLC, to the Actual Knowledge of the Undersigned, no litigation is pending with service of process to any Affiliate having been accomplished, and, to the Actual Knowledge of the Undersigned, no litigation is threatened against Davidson Roripaugh Ranch 122, LLC or any Affiliate involving Davidson Roripaugh Ranch 122, LLC or any Affiliate, or any of the property or assets under the control of Davidson Roripaugh Ranch 122, LLC or any Affiliate that involves the possibility of any judgment or uninsured liability which may result in any material adverse change in the assets or funds held by Davidson Roripaugh Ranch 122, LLC or any Affiliate that would materially and adversely affect Davidson Roripaugh Ranch 122, LLC's ability to develop the Property or to pay Special Taxes. 8. As of the date thereof, but solely with respect to information relating to Davidson Roripaugh Ranch 122, LLC, the Property, the proposed development of the Property, ownership of the Property, Davidson Roripaugh Ranch 122, LLC's development plan, Davidson Roripaugh Ranch 122, LLC's financing plan, Davidson Roripaugh Ranch 122, LLC's lenders, if any, and the contractual arrangements involving Davidson Roripaugh Ranch 122, LLC (but excluding, in all cases, information on Ashby USA, LLC, Continental Residential, Inc., Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC, Traditions at Roripaugh, KB Home Coastal Inc. and their respective development and financing plans) and subject to the exclusions set forth below, the information contained in the Preliminary Official Statement under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "THE COMMUNITY FACILITIES DISTRICT," and "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions " -Ashby USA, LLC," " -Continental Residential, Inc.," " -T he Tanamera/Roripaugh Entities," "-KB Home Coastal Inc.," " -Direct and Overlapping Debt," " -Estimated Value-to-Lien Ratios," "— Overlapping Assessment and Community Facilities Districts," " -Estimated Assessed Value-to-Lien Ratios," " -Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value" for which no certification is made) is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 9. Davidson Roripaugh Ranch 122, LLC has full limited liability company power and authority to develop the Property, to own any portion of the Property it acquires and to carry on its business as presently conducted and as described in the Preliminary Official Statement. 10. Davidson Roripaugh Ranch 122, LLC covenants that, while the 2006 Bonds or any re funding obligations related there to are outstanding, Davidson Roripaugh Ranch 122, LLC 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 District, to challenge the adoption of Ordinance No. 2003-02 of the Authority levying Special Taxes within the District, to invalidate the District or any of the 2006 Bonds, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent Davidson Roripaugh Ranch 122, LLC in any way from bringing any other action, suit or proceeding including, without limitation, an action or suit contending that the Special Special Tax has not been levied in accordance with the methodologies contained in the District's Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, an action or suit with respect to the application or use of the Special Taxes levied and collected, or an action or suit to enforce the obligations of the Authority under the Resolution of Issuance, the Fiscal Agent Agreement or any agreements with the Authority, the City and/or the District for which Davidson Roripaugh Ranch 122, LLC is a party or beneficiary. 11. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, no other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized and no assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 12. Exceptas disclosed in the PreliminaryOfficial Statement, to the Actual Knowledge of the Undersigned, Davidson Roripaugh Ranch 122, LLC and its Affiliates have not in the last five years defaulted in payment of, and are not currently delinquent on, any ad valorem, assessment or special tax obligations in California in any material amount. 13. Davidson Roripaugh Ranch 122, LLC consents to the issuanceof the 2006 Bonds. Davidson Roripaugh Ranch 122, LLC acknowledges and agrees that the proceeds of the 2006 Bonds will be used as described in the Official Statement, providedthat nothing in this statement modifies any right or obligation of the parties under any other agreement. 14. Davidson Roripaugh Ranch 122, LLC intends to comply with the provision of Government Code Section 53341.5 relating to the Notice of Special Tax in connection with the sale of the Property, or portions thereof, that it takes title to or develops. 15. DavidsonRoripaugh Ranch 122, LLC acknowledges that interest on the 2006 Bonds is estimated to be capitalized through September 1, 2006 and that the Special Tax levies on Developed Property and Undeveloped Property will commence in Fiscal Year 2006-07 (commencing with the November 1, 2006 tax installment) in order to pay for principal and interest on the 2006 Bonds and to pay a portion of the administrative expenses relating to the District. 16. Davidson Roripaugh Ranch 122, LLC is solvent and no proceedings are pending or, to the Actual Knowledge of the Undersigned, threatened in which Davidson Roripaugh Ranch 122, LLC 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 a reorganization or readjustment of its debts.17. Tothe Actual Knowledge of the Undersigned, the Members of Davidson Roripaugh Ranch 122, LLC and the parent entities of such Members of Davidson Roripaugh Ranch 122, LLC are solvent and no proceedings are pending, or to the Actual Knowledge of the Undersigned, threatened in which the Members of Davidson Roripaugh Ranch 122, LLC and the parent entities of such Members of Davidson -Roripaugh Ranch 122, LLC 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 their respective debts or obligations, or be allowed to reorganize or readjust their respective debts or obligations. 18. Tothe Actual Knowledge of the Undersigned, Davidson Roripaugh Ranch 122, LLC has not filed for, nor are there current proceedings for the reassessment of, the assessed value of the Property.19. Tothe Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities among Davidson Roripaugh Ranch 122, LLC, its Affiliates or any contractors working on the development of the Property which may materially and adversely affect the development of the Property or the payment of the Special Taxes on the Property. 20. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, to the Actual Knowledge of the Undersigned, DavidsonRoripaugh Ranch 122, LLC will have sufficient funds to carry on its business as presently conducted and as described in the Preliminary Official Statement and to pay Special Taxes assessed against the Property and neither the Authority nor the District will be required to resort to a draw on the Reserve Fund for payment of principal of or interest on the 2006 Bonds due to Davidson Roripaugh Ranch 122, LLC's nonpayment of Special Taxes. However, none ofthe Members of Davidson Roripaugh Ranch 122, LLC or its Affiliates are obligated to make any additional capital contribution or loan to Davidson Roripaugh Ranch 122, LLC at any time and Davidson Roripaugh Ranch 122, LLC reserves the right to change its plan at any time without notice. 21. All information submitted in writing by, or on behalf of, Davidson Roripaugh Ranch 122, LLC or its agents to the Authority, the District, the Special Tax Consultant, the Appraiser, the Market Absorption Consultant, Disclosure Counsel or the Underwriter in connection with the issuance of the 2006 Bonds, was, at the time of submission, to the Actual Knowledge of the Undersigned, true and correct. 22. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there are no endangered species, hazardous substances or archaeological resources relating to the Property which could have a significant impact on Davidson Roripaugh Ranch 122, LLC's ability to pay Special Taxes or to sell or develop all or any portion of Continual Residential, Inc.'s Property. 23. As to information indicated in Section 8 hereof relating to Davidson Roripaugh Ranch 122, LLC, the Property, the proposed development of the Property, ownership ofthe Property, Davidson Roripaugh Ranch 122, LLC's development plan, Davidson Roripaugh Ranch 122, LLC's financing plan, Davidson Roripaugh Ranch 122, LLC's lenders, if any, and the contractual arrangements of Davidson Roripaugh Ranch 122, LLC (but excluding, in all cases, information on AshbyUSA, LLC, Continental Residential, Inc.,Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC, Traditions at Roripaugh, KB Home Coastal Inc. and their respective development and financing plans), and subject to the limitations and exclusions set forth in Section 8, Davidson Roripaugh Ranch 122, LLC agrees to indemnify and hold harmless, to the extent permitted by law, the Authority, the District, and their officials and employees, and each person, if any, who controls any ofthe foregoing within the meaning of Section 15 ofthe Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended against any and all losses, claims, damages or liabilities, joint or several, to which such indemnified party may become subject under any statute or at law or in equity or otherwise, and shall reimburse any such indemnified party for any reasonable legal or other expense incurred by it in connection with investigating any claims against it and defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of, or are based upon, any untrue statement of a material fact or the omission to state a material fact, in the final Official Statement, as of its date or in any continuing disclosure statement, as of its date, provided by or on behalf of Davidson Roripaugh Ranch 122, LLC, a material fact necessary to make the statement therein, in light ofthe circumstances under which it was made not misleading. This indemnity provision shall not be construed as a limitation on any other liability whichDavidson Roripaugh Ranch 122, LLC may otherwisehave to any indemnified party,provided that in no event shall Davidson Roripaugh Ranch 122, LLC be obligated for double indemnification nor for the negligence or wilful misconduct of another. 24. If between the date hereof and the date of the Closing, to the Actual Knowledge of the Undersigned, any event relating to or affecting Davidson Roripaugh Ranch 122, LLC, its Affiliates or the development ofthe Property shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, Davidson Roripaugh Ranch 122, LLC shall notify the Authority, the District and the Underwriter and if in the opinion of counsel to the Authority or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, Davidson Roripaugh Ranch 122, LLC shall cooperate with the Authority in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to counsel to the Authority and to the Underwriter. 25. For the "underwriting period," as defined in the Bond Purchase Agreement, if any event relating to or affecting Davidson Roripaugh Ranch 122, LLC, its Affiliates or the development of the Property shall occur as a result of which it is necessary, in the opinion of the Underwriter or counse 1 to the Authority, to amend or supplement the Offi cial Statement in order to make the Offi cial Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, Davidson Roripaugh Ranch 122, LLC shall cooperate with the Authority and the Underwriterin the preparation of an amendment or supplement to the Official Statement inform and substance satisfactory to the Underwriter and counsel to the Authority which will amend or supplement the Official Statement so that it will not contain contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 26. Davidson Roripaugh Ranch 122, LLC agrees to deliver a certificate dated the date of issuance of the 2006 Bonds at the time of issuance of the 2006 Bonds in substantially the form attached as Exhibit A.,provided, that, if any eventrelating to or affecting Davidson Roripaugh Ranch 122, LLC or its Affiliates or the development of the Property shall occur as a result of which it is necessary to modify the certificate, Davidson Roripaugh Ranch 122, LLC agrees to deliver the certificate revised to reflect such event. 27. On behalf of Davidson Roripaugh Ranch 122, LLC, I have reviewed the contents of this certificate and have met with counsel to Davidson Roripaugh Ranch 122, LLC, for the purpose of discussing the meaning of its contents. DAVIDSON RORIPAUGH RANCH 122, LLC, a California limited liability company ^ — ^-~. . I *^ _ f~* . ,T — ~~£ _ t^l^-* /*" * ^--*— IV TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CLOSING CERTIFICATE OF DAVIDSON RORIPAUGH RANCH 122 LLC April 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Community Facilities District No. 03-02 (Roripaugh Ranch) of the Temecula Public Financing Authority 2006 Special Tax Bonds and to the Bond Purchase Agreement dated April 13, 2006 (the "Bond Purchase Agreement") entered into in connection therewith. This certificate is delivered pursuant to the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006 delivered on behalf of Davidson Roripaugh Ranch 122 LLC, a California limited liability company ("Davidson Roripaugh Ranch 122 LLC"), which is attached hereto as Exhibit A. The undersigned certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer of Davidson Roripaugh Ranch 122 LLC, and the undersigned, on behalf of Davidson Roripaugh Ranch 122 LLC, further certifies as follows: 1. Each statement made in the Certificate is affirmed and restated as if made on the date hereof. 2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which has adversely affected or will materially and adversely affect the business, properties, operations, prospects or financial condition of Davidson Roripaugh Ranch 122 LLC or its Affiliates, which would materially and adversely affect the development of the Property or their ability to pay Special Taxes for which they are obligated to pay. 3. Davidson Roripaugh Ranch 122 LLC has received the Official Statement relating to the 2006 Bonds, and each statement made in the Certificate referring to the Preliminary Official Official Statement is affirmed as if it relates to the Official Statement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; EXECUTION PAGE FOLLOWS] Very truly yours, DAVIDSON RORIPAUGH RANCH 122, LLC, a California limited liability company % y :i>^v/i 4^°° "cv^x-e^ S-c /j-n f^jrt. I l^-^aty— *-» L *•* f "">* j*-v .j«— ,-^x-^ 1 TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS 15c2-12 CERTIFICATE -TANAMERA/RORIPAUGH, LLC March 27, 2006 Stone & Youngberg LLC 515 South Figueroa Street, Suite 1060 Los Angeles, California 90071 Re: Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds Ladies and Gentlemen: In connection with the proposed sale to you of Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds (the "2006 Bonds"), the District has delivered to you a Preliminary Official Statement, dated March 27,2006, relating to the 2006 Bonds (the "Preliminary Official Statement"). Tanamera/Roripaugh, LLC, aCalifornia limited liability company ("Tanamera/Roripaugh,LLC"), for purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, deems final as of its date the statements contained in the the Preliminary Official Statement relating to Tanamera/Roripaugh, LLC, the property owned by Tanamera/Roripaugh, LLC (the "Property"), the proposed development of the Property, ownership of the Property, Tanamera/Roripaugh, LLC's development plan, Tanamera/Roripaugh, LLC's financing plan, Tanamera/Roripaugh, LLC's lenders, if any, andthe contractual arrangements of Tanamera/Roripaugh, LLC (but excluding, in all cases, information on Ashby USA, LLC, Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, KB Home Coastal Inc. and their respective development and financing plans), under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "CONTINUING DISCLOSURE -Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC and Traditions at Roripaugh, LLC" "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions " -Ashby USA, LLC," " -Continental Residential, Inc." " -Davidson Roripaugh Ranch 122, LLC," "KB Home Coastal Inc.," "Direct and Overlapping Debt," " -Estimated Value-to-Lien Ratios," " -Overlapping Assessment and Community Facilities Districts," " -Estimated Assessed Value-to-Lien Ratios," " -Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value" for which no certification is made) except for the omission of no more than the following information: the offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, dates of mandatory sinking fund payments, delivery dates and any other terms of the 2006 Bonds relating to such matters. All capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006, delivered on behalf of Tanamera/Roripaugh, LLC in connection with the delivery of the Preliminary Official Statement. Very truly yours, TANAMERA/RORIPAUGH, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: Kenneith V. Rose II Managing Member TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CERTIFICATE OF TANAMERA/RORIPAUGH, LLC March 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds and to the Bond Purchase Agreement to be entered into in connection therewith (the "Bond Purchase Agreement"). This certificate is delivered pursuant to and in satisfaction of Section3(d)(16) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement. The undersigned certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as the authorized signatory for Tanamera/Roripaugh, LLC, a California limited liability company ("Tanamera/Roripaugh, LLC"), and the undersigned, on behalf of Tanamera/Roripaugh, LLC further certifies as follows: 1. Tanamera/Roripaugh, LLC is duly organized and validly existing as a limited liability company under the laws of the State of California, is in good standing in the State of California and has the limited liability company power and authority (i) to execute and deliver this certificate, (ii) to execute and deliver at Closing (as defined in the Bond Purchase Agreement) the Developer Continuing Disclosure Agreement (the "Developer Continuing Disclosure Agreement") dated as of March 1,2006, by and between the Tanamera/Roripaugh Entities andU.S. BankNational Association, as Dissemination Agent and Fiscal Agent; and to (iii) undertake all of the transactions on its part described in the Preliminary Official Statement and contemplated by the Developer Continuing Disclosure Agreement. 2. As set forth in the Preliminary Official Statement, certain property within the District is owned by Tanamera/Roripaugh, LLC, and Tanamera/Roripaugh, LLC will develop such property. The properly owned by Tanamera/Roripaugh, LLC as of the date hereof is referred to herein as the "Property." Tanamera/Roripaugh, LLC's current expectation is that Ashby USA, LLC shall remain the party responsible for land use planning and backbone infrastructure of the Property. Tanamera/Roripaugh, LLC has not entered into an agreement for development or management of the Property by any entity other than as described in the Preliminary Official Statement. 3. Tanamera/Roripaugh, LLC has the authority to execute and deliver at Closing the Developer Continuing Disclosure Agreement and has the authority to perform the obligations on its part to be performed thereunder. Except as described in the Preliminary Official Statement with regard to previous undertakings relating to Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, to the Actual Knowledge of the Undersigned1, neither Tanamera/Roripaugh, LLC nor its Affiliates have materially failed within the past five years to provide periodic continuing disclosure reports or notices of material events with respectto community facilities districts or assessment districts in California. "Affiliate" of another Person (as defined below) means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 15% or more of the outstanding voting securities of such other Person, (b) any Person 15% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by or under common control with such other Person; for purposes hereof, "control" means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person. "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. Notwithstanding the foregoing and for purposes of this certificate, none of the following entities shall be considered an Affiliate of Tanamera/Roripaugh, LLC: Ashby USA, LLC; Continental Residential, Inc.; Davidson Roripaugh Ranch 122, LLC, or KB Home Coastal Inc. 4. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned, Tanamera/Roripaugh, LLC and its Affiliates are not in breach of or in default under any applicable law or administrative regulation of the State of California or the United States of America, or any agency or instrumentality of either, which breach or default would in any way materially and adversely affect the proposed Developer Continuing Disclosure Agreement or the ability of Tanamera/Roripaugh, LLC to pay special taxes levied on the Property (the "Special Taxes"), and (b) to the Actual Knowledge of the Undersigned, 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; and to the Actual Knowledge of the Undersigned, the execution and delivery at Closing by Tanamera/Roripaugh, LLC of the Developer Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or constitute a breach or default under any law of administrative regulation applicable to Tanamera/Roripaugh, LLC. 5. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned, Tanamera/Roripaugh, LLC and its Affiliates are 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, note, resolution, agreement or other instrument to which Tanamera/Roripaugh, LLC or its Affiliates are, or will upon issuance of the 2006 Bonds be, a party or otherwise subject, which breach or default would in any way materially and adversely affect the Developer Continuing Disclosure Agreement or Tanamera/Roripaugh, LLC's ability to develop the Property or to pay the Special Taxes, and (b)to the Actual Knowledge of the Undersigned, 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; and the execution and delivery at Closing by Tanamera/Roripaugh, LLC of the Developer Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or, constitute a breach of or default under any judgment, decree, loan agreement, indenture, fiscal agent agreement, bond, note, resolution, agreement or other instrument to which Tanamera/Roripaugh, LLC or its Affiliates is a As used in this certificate, the phrase "Actual Knowledge of the Undersigned" shall mean the knowledge that the undersigned currently has or has obtained from interviews with such officers and responsible employees of Tanamera/Roripaugh, LLC and members of Tanamera/Roripaugh, LLC as the undersigned has determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, with your permission, the undersigned has not conducted any additional inspection or inquiry. party or otherwise subject which beach or default would in any way materially and adversely affect the Developer Continuing Disclosure Agreement or Tanamera/Roripaugh, LLC's ability to develop the Property or its ability to pay the Special Taxes. 6. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaid and no material lines of credit of Tanamera/Roripaugh, LLC or its Affiliates that are secured by an interest in the Property. 7. Except as set forth in the Preliminary Official Statement, no claim, dispute, suit, action, contingent liability or litigation is pending (with service of process to Tanamera/Roripaugh, LLC having been accomplished) or, to the Actual Knowledge of the Undersigned, pending with service of process to any parent entity of any Member having been accomplished, or to the Actual Knowledge of the Undersigned threatened (a) to restrain or enjoin collection of Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the 2006 Bonds, (b) to restrain or enjoin the execution of and performance of Tanamera/Roripaugh, LLC's obligations under the proposed Developer Continuing Disclosure Agreement, (c) to restrain or enjoin development of the Property, (d) in any way contesting or affecting the validity of the Special Taxes, the Developer ContinuingDisclosure Agreement or any other document, license, permit or approval necessary to the performance on Tanamera/Roripaugh, LLC's part under the proposed Developer Continuing Disclosure Agreement, or (e) which would in any way materially and adversely affect Tanamera/Roripaugh, LLC's ability to develop the Property or to pay Special Taxes. 8. Except as set forth in the Preliminary Official Statement, no litigation is pending with service of process to Tanamera/Roripaugh, LLC having been accomplished, to the Actual Knowledge of the Undersigned, no litigation is pending with service of process to any Affiliate having been accomplished, and, to the Actual Knowledge of the Undersigned, no litigation is threatened against Tanamera/Roripaugh, LLC or any Affiliate involving Tanamera/Roripaugh, LLC or any Affiliate, or any of the property or assets under the control of Tanamera/Roripaugh, LLC or any Affiliate that involves the possibility of any judgment or uninsured liability which may result in any material adverse change in the assets or funds held by Tanamera/Roripaugh, LLC or any Affiliate that would materially and adversely affect Tanamera/Roripaugh, LLC's ability to develop the Property or to pay Special Taxes. 9. As of the date thereof, but solely with respect to information regarding Tanamera/Roripaugh, LLC, the Property, the proposed development of the Property, ownership of the Property, Tanamera/Roripaugh, LLC's development plan, Tanamera/Roripaugh, LLC's financing plan, Tanamera/Roripaugh, LLC's lenders, if any, and the contractual arrangements involving Tanamera/Roripaugh, LLC (but excluding, in all cases, information on Ashby USA, LLC, Continental Residential, Inc., Inc., Davidson Roripaugh Ranch 122, LLC, KB Home Coastal Inc. and their respective development and financing plans) and subject to the exclusions set forth below, the information contained in the Preliminary Official Statement under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "CONTINUING DISCLOSURE -Tanamera/Roripaugh, LLC, Tanamera/Roripuaghll, LLC and Traditions at Roripaugh, LLC" and "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions " -Ashby USA, LLC," " -Continental Residential, Inc.," " -Davidson Roripaugh Ranch 122, LLC," " -KB Home Coastal Inc.," " -Direct and Overlapping Debt," " -Estimated Value-to-Lien Ratios," " -Overlapping Assessment and Community Facilities Districts,"" -Estimated Assessed Value-to-Lien Ratios," " -Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," "— Market Absorption Study" and " -Appraised Property Value" for whichno certification is made) is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 10. Tanamera/Roripaugh, LLC has full limited liability company power and authority to develop the Property, to own any portion of the Property it acquires and to carry on its business as presently conducted and as described in the Preliminary Official Statement. 11. Tanamera/Roripaugh, LLC covenants that, while the 2006 Bonds or any refunding obligations related thereto are outstanding, Tanamera/Roripaugh, LLC 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 District, to challenge the levy of Special Taxes within the District, to invalidate the District or or any of the 2006 Bonds, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent Tanamera/Roripaugh, LLC in any way from bringing any other action, suit or proceeding including, without limitation, an action or suit contending thatthe Special Tax has not been levied in accordance with the methodologies contained in the District's Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, an action or suit with respect to the application or use of the Special Taxes levied and collected, or an action or suit to enforce the obligations of the Authority under the Resolution of Issuance, the Fiscal Agent Agreement or any agreements with the Authority, the City and/or the District or any other,party for which Tanamera/Roripaugh, LLC is a party or beneficiary. 12. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, no other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized and no assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 13. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, Tanamera/Roripaugh, LLC and its Affiliates have not in the last five years defaulted in payment of, and are not currently delinquent on, any ad valorem, assessment or special tax obligations in California in any material amount. 14. Tanamera/Roripaugh, LLC consents to the issuance of the 2006 Bonds. Tanamera/Roripaugh, LLC acknowledges and agrees that the proceeds of the 2006 Bonds will be used as described in the Official Statement, provided that nothing in this statement modifies any right or obligation of the parties under any other agreement. 15. Tanamera/Roripaugh, LLC intends to comply with the provision of Government Code Section 53341.5 relating to the Notice of Special Tax in connection with the sale of the Property, or portions thereof, that it takes title to or develops. 16. Tanamera/Roripaugh, LLC acknowledges that interest on the 2006 Bonds is estimated to be capitalized through September 1,2006 and thatthe Special Tax levies on Developed Property and Undeveloped Property will commence in Fiscal Year 2006-07 (commencing with the November 1, 2006 tax installment) in order to pay for principal and interest on the 2006 Bonds and to pay a portion of the administrative expenses relating to the District. 17. Tanamera/Roripaugh, LLC is solvent and no proceedings are pending or, to the Actual Knowledge of the Undersigned, threatened in which Tanamera/Roripaugh, LLC 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 a reorganization or readjustment of its debts. 18. To the Actual Knowledge of the Undersigned, the Members of Tanamera/Roripaugh, LLC and the parent entities of such Members of Tanamera/Roripaugh, LLC are solvent and no proceedings are pending, or to the Actual Knowledge of the Undersigned, threatened in which the Members of Tanamera/Roripaugh, LLC and the parent entities of such Members of Tanamera/Roripaugh, LLC 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 their respective debts or obligations, or be allowed to reorganize or readjust their respective debts or obligations. 19. To the Actual Knowledge of the Undersigned, Tanamera/Roripaugh, LLC has not filed for, nor are there current proceedings for the reassessment of, the assessed value of the Property. 20. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities among Tanamera/Roripaugh, LLC, its Affiliates or any contractors working on the development of the Property which may materially and adversely affect the development of the Property or the payment of the Special Taxes on the Property. 21. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, to the Actual Knowledge of the Undersigned, Tanamera/Roripaugh, LLC will have sufficient funds to carry on its business as presently conducted and as described in the Preliminary Official Statement and to pay Special Taxes assessed against the Property. However, none of the Members of Tanamera/Roripaugh, LLC or its Affiliates are obligated to make any additional capital contribution or loan to Tanamera/Roripaugh, LLC at any time and Tanamera/Roripaugh, LLC reserves the right to change its plan at any time without notice. 22. All information submitted in writing by Tanamera/Roripaugh, LLC or its agents to the Authority, the District, the Special Tax Consultant, the Market Absorption Consultant, the Appraiser, Disclosure Counsel or the Underwriter in connection with the issuance of the 2006 Bonds, was, at the time of submission, to the Actual Knowledge of the Undersigned, true and correct. 23. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there are no endangered species, hazardous substances or archaeological resources relating to the Property which could have a significant impact on Tanamera/Roripaugh, LLC's ability to pay Special Taxes or to sell or develop all or any portion of Tanamera/Roripaugh, LLC's Property. 24. As to information indicated in Section Section 9 hereof relating to Tanamera/Roripaugh, LLC, the Property, the proposed development of the Property, ownership of the Property, Tanamera/Roripaugh, LLC's development plan, Tanamera/Roripaugh, LLC's financing plan, Tanamera/Roripaugh, LLC's lenders, if any, and the contractual arrangements of Tanamera/Roripaugh, LLC (but excluding, in all cases, information on Ashby USA, LLC, Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, KB Home Coastal Inc. and their respective development and financing plans), and subject to the limitations and exclusions set forth in Section 9, Tanamera/Roripaugh, LLC agrees to indemnify and hold harmless, to the extent permitted by law, the Authority, the District, and their officials and employees, and each person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended, against any and all losses, claims, damages or liabilities, joint or several, to which such indemnified party may become subject under any statute or at law or in equity or otherwise, and shall reimburse any such indemnified party for any reasonable legal or other expense incurred by it, in each case in connection with investigating any claims against it and defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of, or are based upon, any untrue statement of a material fact or the omission to state a material fact, in the final Official Statement, as of its date or in any continuing disclosure statement, as of its date, provided or authorized by Tanamera/Roripaugh, LLC, a material fact necessary to make the statement therein, in light of the circumstances under which it was made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which Tanamera/Roripaugh, LLC may otherwise have to any indemnified party, providedthat in no event shall Tanamera/Roripaugh, LLC be obligated for double indemnification nor for the negligence or wilful misconduct of another. 25. Tanamera/Roripaugh, LLC has agreed to execute the Developer Continuing Disclosure Agreement in the form included in Appendix G to the Preliminary Official Statement. 26. If between the date hereof and the date of the Closing, to the Actual Knowledge of the Undersigned, any event relating to or affecting Tanamera/Roripaugh, LLC, its Affiliates or the development of the Property shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, Tanamera/Roripaugh, LLC shall notify the Authority, the District and the Underwriter and if in the opinion of counsel to the Authority or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, Tanamera/Roripaugh, LLC shall reasonably cooperate with the Authority in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to counsel to the Authority and to the Underwriter. 27. For the "underwriting period," as defined in the Bond Purchase Agreement, if any event relating to or affecting Tanamera/Roripaugh, LLC, its Affiliates or the development of the Property shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the Authority, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, Tanamera/Roripaugh, LLC shall reasonably cooperate with the Authority and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to the Underwriter and counsel to the Authority which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 28. Tanamera/Roripaugh, LLC agrees to deliver a certificate dated the date of issuance of the 2006 Bonds at the time of issuance of the 2006 Bonds in substantially the form attached as Exhibit A, provided, that, if any event relating to or affecting Tanamera/Roripaugh, LLC or its Affiliates or the development of the Property shall occur as a result of which it is necessary to modify the certificate, Tanamera/Roripaugh, LLC agrees to deliver the certificate revised to reflect such event. 29. On behalf of Tanamera/Roripaugh, LLC, I have reviewed the contents of this certificate and have met with counsel to Tanamera/Roripaugh, LLC, for the purpose of discussing the meaning of its contents, TANAMERA/RORIPAUGH, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: Kenneith V. Rose II Managing Member TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CLOSING CERTIFICATE OF TANAMERA/RORIPAUGH, LLC April 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Community Facilities District No. 03-02 (Roripaugh Ranch) of the Temecula Public Financing Authority 2006 Special Tax Bonds and to the Bond Purchase Agreement dated April 13, 2006 (the "Bond Purchase Agreement") entered into in connection therewith. This certificate is delivered pursuant to the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006 delivered on behalf of Tanamera/Roripaugh, LLC, a California limited liability company ("Tanamera/Roripaugh, LLC"), which is attached hereto as Exhibit A. The undersigned certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as the authorized signatory for Tanamera/Roripaugh, LLC, and the undersigned, on behalf of Tanamera/Roripaugh, LLC, further certifies as follows: 1. Each statement made in the Certificate is affirmed andrestated as if made on the date hereof. 2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which has adversely affected or will materially and adversely affect the business, properties, operations, prospects or financial condition of Tanamera/Roripaugh, LLC or its Affiliates, which would materially and adversely affect the development of the Property or their ability to pay Special Taxes for which they are obligated to pay. 3. Tanamera/Roripaugh, LLC has received the Official Statement relating to the 2006 Bonds, and each statement made in the Certificate referring to the Preliminary Official Statement is affirmed as if it relates to the Official Statement. 4. Each statement made in the Certificate referring to the proposed Developer Continuing Disclosure Agreement is affirmed as if it relates to the Developer Continuing Disclosure Agreement as executed and delivered. 5. Tanamera/Roripaugh, LLC has duly executed and delivered the Developer Continuing Disclosure Agreement, has the authority to perform the obligation on its part to be performed thereunder, and the Developer Continuing Disclosure Agreement constitutes the legal, valid and binding obligations of Tanamera/Roripaugh, LLC. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; EXECUTION PAGE FOLLOWS] Very truly yours, TANAMERA/RORIPAUGH, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: Kenneith V. Rose II Managing Member TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS 15c2-12 CERTIFICATE -TANAMERA/RORIPAUGH II, LLC March 27, 2006 Stone & Youngberg LLC 515 South Figueroa Street, Suite 1060 Los Angeles, California 90071 Re: Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds Ladies and Gentlemen: In connection with the proposed sale to you of Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds (the "2006 Bonds"), the District has delivered to you a Preliminary Official Statement, dated March 27, 2006, relating to the 2006 Bonds (the "Preliminary Official Statement"). Tanamera/Roripaugh II, LLC, a California limited liability company ("Tanamera/Roripaugh II, LLC"), for purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, deems final as of its date the statements contained in the Preliminary Official Statement relating to Tanamera/Roripaugh II, LLC, the property owned by Tanamera/Roripaugh II, LLC (the "Property"), the proposed development of the Property, ownership of the Property, Tanamera/Roripaugh II, LLC's development plan, Tanamera/Roripaugh II, LLC's financing plan, Tanamera/Roripaugh II, LLC's lenders, if any, and the contractual arrangements of Tanamera/Roripaugh II, LLC (but excluding, in all cases, information on Ashby USA, LLC, Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, KB Home Coastal Inc. and their respective development and financing plans), under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "CONTINUING DISCLOSURE -Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC and Traditions at Roripaugh, LLC," "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions " -Ashby USA, LLC," " -Continental Residential, Inc." " -Davidson Roripaugh Ranch 122, LLC," "KB Home Coastal Inc.," "Direct and Overlapping Debt," " -Estimated Value-to-Lien Ratios," " -OverlappingAssessment and Community Facilities Districts," "-Estimated Assessed Value-to-Lien Ratios," " -Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value" for which no certification is made) except for the omission of no more than the following information: the offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, dates of mandatory sinking fund payments, delivery dates and any other terms of the 2006 Bonds relating to such matters. All capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006, delivered on behalf of Tanamera/Roripaugh II, LLC in connection with the delivery of the Preliminary Official Statement. Very truly yours, TANAMERA/RORIPAUGH II, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By:. Kenneith V. Rose II Managing Member TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CERTIFICATE OF TANAMERA/RORIPAUGH II, LLC March 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds and to the Bond Purchase Agreement to be entered into in connection therewith (the "Bond Purchase Agreement"). This certificate is delivered pursuant to and in satisfaction of Section 3(d)( 16) of the Bond Purchase Agreement. Capitalixed terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement. The undersigned certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as the authorized signatory for Tanamera/Roripaugh II, LLC, a California limited liability company ("Tanamera/Roripaugh II, LLC"), and the undersigned, on behalf of Tanamera/Roripaugh II, LLC further certifies as follows: 1. Tanamera/Roripaugh II, LLC is duly organized and validly existing as a limited liability company under the laws of the State of California, is in good standing in the State of California and has the limited liability company power and authority (i) to execute and deliver this certificate, (ii) to execute and deliver at Closing (as defined in the Bond Purchase Agreement) the Developer ContinuingDisclosure Agreement (the "Developer Continuing Disclosure Agreement") dated as of March 1,2006, by and between the Tanamera/Roripaugh Entities andU.S. BankNational Association, as Dissemination Agent and Fiscal Agent; and to (iii) undertake all of the transactions on its part described in the Preliminary Official Statement and contemplated by the Developer Continuing Disclosure Agreement. 2. As set forth in the Preliminary Official Statement, certain property within the District is owned by Tanamera/Roripaugh II, LLC, and Tanamera/Roripaugh II, LLC will develop such property. The property owned by Tanamera/Roripaugh II, LLC as of the date hereof is referred to herein as the "Property." Tanamera/Roripaugh II, LLC's current expectation is that Ashby USA, LLC shall remain the party responsible for land use planning and backbone infrastructure of the Property. Tanamera/Roripaugh II, LLC has not entered into an agreement for development or management of the Property by any entity other than as described in the Preliminary Official Statement. 3. Tanamera/Roripaugh II, LLC has the authority to execute and deliver at Closing the Developer ContinuingDisclosure Agreement and has the authority to perform the obligations on its part to be performed thereunder. Except as described in the Preliminary Official Statement with regard to previous undertakings relatingto Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, to the Actual Knowledge of the Undersigned1, neither Tanamera/Roripaugh II, LLC nor its Affiliates have materially failed within the past five years to provide periodic continuing disclosure reports or notices of material events with respect to community facilities districts or assessment districts in California. "Affiliate" of another Person (as defined below) means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 15% or more of the outstanding voting securities of such other Person, (b) any Person 15% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with powerto vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by or under common control with such other Person; for purposes hereof, "control" means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person. "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. Notwithstanding the foregoing and for purposes of this certificate, none of the following entities shall be considered an Affiliate of Tanamera/Roripaugh II, LLC: Ashby USA, LLC; Continental Residential, Inc.; Davidson Roripaugh Ranch 122, LLC, or KB Home Coastal Inc. 4. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned, Tanamera/Roripaugh II, LLC and its Affiliates are not in breach of or in default under any applicable law or administrative regulation of the State of California or the United States of America, or any agency or instrumentality of either, which breach or default would in any way materially and adversely affect the proposed Developer Continuing Disclosure Agreement or the ability of Tanamera/Roripaugh II, LLC to pay special taxes levied on the Property (the "Special Taxes"), and (b) to the Actual Knowledge of the Undersigned, 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; and to the Actual Knowledge of the Undersigned, the execution and delivery at Closing by Tanamera/Roripaugh II, LLC of the Developer Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or constitute a breach or default under any law of administrative regulation applicable to Tanamera/Roripaugh II, LLC. 5. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned, Tanamera/Roripaugh II, LLC and its Affiliates are 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, note, resolution, agreement or other instrument to which Tanamera/Roripaugh II, LLC or its Affiliates are, or will upon issuance of the 2006 Bonds be, a party or otherwise subject, which breach or default would in any way materially and adversely affect the Developer Continuing Disclosure Agreement or Tanamera/Roripaugh II, LLC's ability to develop the Property or to pay the Special Taxes, and (b) to the Actual Knowledge of the Undersigned, 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; and the execution and delivery at Closing by Tanamera/Roripaugh II, LLC of the Developer Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or, constitute a breach of or default under any judgment, decree, loan agreement, indenture, fiscal agent agreement, bond, note, resolution, agreement or other instrument to which Tanamera/Roripaugh II, LLC or its Affiliates is 1 As used in this certificate, the phrase "Actual Knowledge of the Undersigned" shall mean the knowledge that the undersigned currently has or has obtained from interviews with such officers and responsible employees of Tanamera/Roripaugh II, LLC and members of Tanamera/Roripaugh II, LLC as the undersigned has determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, with your permission, the undersigned has not conducted any additional inspection or inquiry. aparty or otherwise subj ect which beach or default would in any way materially and adversely affect the Developer Continuing Disclosure Agreement or Tanamera/Roripaugh II, LLC's ability to develop the Property or its ability to pay the Special Taxes. 6. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaid and no material lines of credit of Tanamera/Roripaugh II, LLC or its Affiliates that are secured by an interest in the Property. 7. Except as set forth in the Preliminary Official Statement, no claim, dispute, suit, action, contingent liability or litigation is pending (with service of process to Tanamera/Roripaugh II, LLC having been accomplished) or, to the Actual Knowledge of the Undersigned, pending with service of process to any parent entity of any Member having been accomplished, or to the Actual Knowledge of the Undersigned threatened (a) to restrain or enjoin collection of Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the 2006 Bonds, (b) to restrain or enjoin the execution of and performance of Tanamera/Roripaugh II, LLC's obligations under the proposed Developer Continuing Disclosure Agreement, (c) to restrain or enjoin development of the Property, (d) in any way contesting or affecting the validity of the Special Taxes, the Developer Continuing Disclosure Agreement or any other document, license, permit or approval necessary to the performance on Tanamera/Roripaugh II, LLC's part under the proposed Developer Continuing Disclosure Agreement, or (e) which would in any way materially and adversely affect Tanamera/Roripaugh II, LLC's ability to develop the Property or to pay Special Taxes. 8. Except as set forth in the Preliminary Official Statement, no litigation is pending with service of process to Tanamera/Roripaugh II, LLC having been accomplished, to the Actual Knowledge of the Undersigned, no litigation is pending with service of process to any Affiliate having been accomplished, and, to the Actual Knowledge of the Undersigned, no litigation is threatened against Tanamera/Roripaugh II, LLC or any Affiliate involving Tanamera/Roripaugh II, LLC or any Affiliate, or any of the property or assets under the control of Tanamera/Roripaugh II, LLC or any Affiliate that involves the possibility of any judgment or uninsured liability which may result in any material adverse change in the assets or funds held by Tanamera/Roripaugh II, LLC or any Affiliate that would materially and adversely affect Tanamera/Roripaugh II, LLC's ability to develop the Property or to pay Special Taxes. 9. As of the date thereof, but solely with respect to information relating to Tanamera/Roripaugh II, LLC, the Property, the proposed development of the Property, ownership of the Property, Tanamera/Roripaugh II, LLC's development plan, Tanamera/Roripaugh II, LLC's financing plan, Tanamera/Roripaugh II, LLC's lenders, if any, and the contractual arrangements involving Tanamera/Roripaugh II, LLC (but excluding, in all cases, information on Ashby USA, LLC, Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, KB Home Coastal Inc. and their respective development and financing plans) and subj ect to the exclusions set forth below, the information contained in the Preliminary Official Statement under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "CONTINUING DISCLOSURE -Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC and Traditions at Roripaugh, LLC" and "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions " -Ashby USA, LLC," " -Continental Residential, Inc.," " -Davidson Roripaugh Ranch 122, LLC," " -KB Home Coastal Inc.," " -Direct and Overlapping Debt," " -Estimated Value-to-Lien Ratios," " -Overlapping Assessment and Community Facilities Districts," "— EstimatedAssessed Value-to-Lien Ratios," " -Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value" for which no certification is made) is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 10. Tanamera/Roripaugh II, LLC has full limited liability company power and authority to develop the Property, to own any portion of the Property it acquires and to carry on its business as presently conducted and as described in the Preliminary Official Statement. 11. Tanamera/Roripaugh II, LLC covenants that, while the 2006 Bonds or any refunding obligations related thereto are outstanding, Tanamera/Roripaugh II, LLC 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 District, to challenge the levy of the Special Taxes within the District, to invalidate the District or any of the 2006 Bonds, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent Tanamera/Roripaugh II, LLC in any way from bringing any other action, suit or proceeding including, without limitation, an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the District's Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, an action or suit with respect to the application or use of the Special Taxes levied and collected, or an action or suit to enforce the obligations of the Authority under the Resolution of Issuance, the Fiscal Agent Agreement or any agreements with the Authority, the City and/or the District or any other party for which Tanamera/Roripaugh II, LLC is a party or beneficiary. 12. Exceptas disclosed inthe Preliminary Official Statement, to the Actual Knowledge of the Undersigned, no other public debt secured by a tax or assessment on the Property exists or is inthe process of being authorized and no assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 13. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, Tanamera/Roripaugh II, LLC and its Affiliates have not in the last five years defaulted in payment of, and are not currently delinquent on, any ad valorem, assessment or special tax obligations in California in any material amount. 14. Tanamera/Roripaugh II, LLC consents to the issuance of the 2006 Bonds. Tanamera/Roripaugh II, LLC acknowledges and agrees that the proceeds of the 2006 Bonds will be used as described in the Official Statement, provided that nothing in this statement modifies any right or obligation of the parties under any other agreement. 15. Tanamera/Roripaugh II, LLC intends to comply with the provision of Government Code Section 53341.5 relating to the Notice of Special Tax in connection with the sale of the Property, or portions thereof, that it takes title to or develops. 16. Tanamera/Roripaugh II, LLC acknowledges that interest on the 2006 Bonds is estimated to be capitalized through September 1, 2006 and thatthe Special Tax levies on Developed Property and Undeveloped Property will commence in Fiscal Year 2006-07 (commencing with the November 1, 2006 tax installment) in order to pay for principal and interest on the 2006 Bonds and to pay a portion of the administrative expenses relating to the District. 17. Tanamera/Roripaugh II, LLC is solvent and no proceedings are pending or, to the Actual Knowledge of the Undersigned, threatened in which Tanamera/Roripaugh II, LLC 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 a reorganization or readjustment of its debts. 18. Tothe Actual Knowledge of the Undersigned, the Members of Tanamera/Roripaugh II, LLC and the parent entities of such Members of Tanamera/Roripaugh II, LLC are solvent and no proceedings are pending, or to the Actual Knowledge of the Undersigned, threatened in which the Members of Tanamera/Roripaugh II, LLC and the parent entities of such Members of Tanamera/Roripaugh II, LLC 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 their respective debts or obligations, or be allowed to reorganize or readjust their respective debts or obligations. 19. To the Actual Knowledge ofthe Undersigned, Tanamera/Roripaugh II, LLC has not filed for, nor are there current proceedings for the reassessment of, the assessed value of the Property. 20. Tothe Actual Knowledge ofthe Undersigned, there are no claims, disputes, suits, actions or contingent liabilities among Tanamera/Roripaugh II, LLC, its Affiliates or any contractors working on the development of the Property which may materially and adversely affect the development ofthe Property or the payment ofthe Special Taxes on the Property. 21. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, to the Actual Knowledge of the Undersigned, Tanamera/Roripaugh II, LLC will have sufficient funds to carry on its business as presently conducted and as described in the Preliminary Official Statement and to pay Special Taxes assessed against the Property. However, none ofthe Members of Tanamera/Roripaugh II, LLC or its Affiliates are obligated to make any additional capital contribution or loan to Tanamera/Roripaugh II, LLC at any time and Tanamera/Roripaugh II, LLC reserves the right to change its plan at any time without notice. 22. All information submitted in writing by Tanamera/Roripaugh II, LLC or its agents to the Authority, the District, the Special Tax Consultant, the Market Absorption Consultant, the Appraiser, Disclosure Counsel or the Underwriter in connection with the issuance of the 2006 Bonds, was, at the time of submission, to the Actual Knowledge of the Undersigned, true and correct. 23. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there are no endangered species, hazardous substances or archaeological resources relating to the Property which could have a significant impact on Tanamera/Roripaugh II, LLC's ability to pay Special Taxes or to sell or develop all or any portion of Tanamera/Roripaugh II, LLC's Property. 24. As to information indicated in Section 9 hereof relating to Tanamera/Roripaugh II, LLC, the Property, the proposed development of the Property, ownership of the Property, Tanamera/Roripaugh II, LLC's development plan, Tanamera/Roripaugh II, LLC's financing plan, Tanamera/Roripaugh II, LLC's lenders, if any, and the contractual arrangements involving Tanamera/Roripaugh II, LLC (but excluding, in all cases, information on Ashby USA, LLC, Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, KB Home Coastal Inc. and their respective development and financing plans), and subject to the limitations and exclusions set forth in Section 9, Tanamera/Roripaugh II, LLC agrees to indemnify and hold harmless, to the extent permitted by law, the Authority, the District, and their officials and employees, and each person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended, against any and all losses, claims, damages or liabilities, joint or several, to which such indemnified party may become subject under any statute or at law or in equity or otherwise, and shall reimburse any such indemnified party for any reasonable legal or other expense incurred by it, in each case in connection with investigating any claims against it and defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of, or are based upon, any untrue statement of a material fact or the omission to state a material fact, in the final Official Statement, as of its date or in any continuing disclosure disclosure statement, as of its date, provided or authorized by Tanamera/Roripaugh II, LLC, a material fact necessary to make the statement therein, in light of the circumstances under which it was made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which Tanamera/Roripaugh II, LLC may otherwise have to any indemnified party, provided that in no event shall Tanamera/Roripaugh II, LLC be obligated for double indemnification nor for the negligence or wilful misconduct of another. 25. Tanamera/Roripaugh II, LLC has agreed to execute the Developer Continuing Disclosure Agreement in the form included in Appendix G to the Preliminary Official Statement. 26. If between the date hereof and the date of the Closing, to the Actual Knowledge of the Undersigned, any event relating to or affecting Tanamera/Roripaugh II, LLC, its Affiliates or the development of the Property shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, Tanamera/Roripaugh II, LLC shall notify the Authority, the District and the Underwriter and if in the opinion of counsel to the Authority or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, Tanamera/Roripaugh II, LLC shall reasonably cooperate with the Authority in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to counsel to the Authority and to the Underwriter. 27. Forthe "underwriting period," as defined in the Bond Purchase Agreement, if any event relating to or affecting Tanamera/Roripaugh II, LLC, its Affiliates or the development of the Property shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the Authority, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, Tanamera/Roripaugh II, LLC shall reasonably cooperate with the Authority and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to the Underwriter and counsel to the Authority which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 28. Tanamera/Roripaugh II, LLC agrees to deliver a certificate dated the date of issuance of the 2006 Bonds at the time of issuance of the 2006 Bonds in substantially the form attached as Exhibit A, provided, that, if any event relating to or affecting Tanamera/Roripaugh II, LLC or its Affiliates or the development of the Property shall occur as a result of which it is necessary to modify the certificate, Tanamera/Roripaugh II, LLC agrees to deliver the certificate revised to reflect such event. 29. On behalf of Tanamera/Roripaugh II, LLC, I have reviewed the contents of this certificate and have met with counsel to Tanamera/Roripaugh II, LLC, for the purpose of discussing the meaning of its contents. TANAMERA/RORIPAUGH II, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: Kenneith V. Rose II Managing Member TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CLOSING CERTIFICATE OF TANAMERA/RORIPAUGH II, LLC April 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Community Facilities District No. 03-02 (Roripaugh Ranch) of the Temecula Public Financing Authority 2006 Special Tax Bonds and to the Bond Purchase Agreement dated April 13, 2006 (the "Bond Purchase Agreement") entered into in connection therewith. This certificate is delivered pursuant to the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006 delivered on behalf of Tanamera/Roripaugh II, LLC, a California limited liability company ("Tanamera/Roripaug h II, LLC"), which is attached hereto as Exhibit A. The undersigned certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as the authorized signatory for Tanamera/Roripaugh II, LLC, and the undersigned, on behalf of Tanamera/Roripaugh II, LLC, further certifies as follows: 1. Each statement made in the Certificate is affirmed andrestated as if made on the date hereof. 2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which has adversely affected or will materially and adversely affect the business, properties, operations, prospects or financial condition of Tanamera/Roripaugh II, LLC or its Affiliates, which would materially and adversely affect the development of the Property or their ability to pay Special Taxes for which they are obligated to pay. 3. Tanamera/Roripaugh II, LLC has received the Official Statement relating to the 2006 Bonds, and each statement made in the Certificate referring to the Preliminary Official Statement is affirmed as if it relates relates to the Official Statement. 4. Each statement made in the Certificate referring to the proposed Developer Continuing Disclosure Agreement is affirmed as if it relates to the Developer Continuing Disclosure Agreement as executed and delivered. 5. Tanamera/Roripaugh II, LLC has duly executed and delivered the Developer Continuing Disclosure Agreement, has the authority to perform the obligation on its part to be performed thereunder, and the Developer Continuing Disclosure Agreement constitutes the legal, valid and binding obligations of Tanamera/Roripaugh II, LLC. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; EXECUTION PAGE FOLLOWS] Very truly yours, TANAMERA/RORIPAUGH II, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: Kenneith V. Rose II Managing Member TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS 15c2-12 CERTIFICATE -TRADITIONS AT RORIPAUGH, LLC March 27, 2006 Stone & Youngberg LLC 515 South Figueroa Street, Suite 1060 Los Angeles, California 90071 Re: Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds Ladies and Gentlemen: In connection with the proposed sale to you of Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds (the "2006 Bonds"), the District has delivered to you a Preliminary Official Statement, dated March27,2006, relating to the 2006Bonds(the "Preliminary Official Statement"). Traditions at Roripaugh, LLC, a California limited liability company ("Traditions at Roripaugh, LLC"), for purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, deems final as of its date the statements relating to Traditions at Roripaugh, LLC, the property owned by Traditions at Roripaugh, LLC (the "Property"), the proposed development of the Property, ownership of the Property, Traditions at Roripaugh, LLC's development plan, Traditions at Roripaugh, LLC's financing plan, Traditions at Roripaugh, LLC's lenders, ifany, and the contractual arrangements of Traditions at Roripaugh, LLC (but excluding, in allcases, information on Ashby USA, LLC, Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, KB Home Coastal Inc. and their respective development and financing plans), contained in the Preliminary Official Statement under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "CONTINUING DISCLOSURE -Tanamera/Roripaugh, LLC, Tanamera/Roripaughll, LLC andTraditions at Roripaugh, LLC," "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions "-Ashby USA, LLC," " -Continental Residential, Inc." " -Davidson Roripaugh Ranch 122, LLC," "KB Home Coastal Inc.," "Direct and Overlapping Debt," " -Estimated Value-to-Lien Ratios," " -Overlapping Assessment and Community Facilities Districts," " -Estimated Assessed Value-to-Lien Ratios," " -Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value" for which no certification is made) except for the omission of no more than the following information: the offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, dates of mandatory sinking fund payments, delivery dates and any other terms of the 2006 Bonds relating to such matters. All capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27,2006, delivered on behalf of Traditions at Roripaugh, LLC in connection with the delivery of the Preliminary Official Statement. Statement.Very truly yours, TRADITIONS AT RORIPAUGH, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: /C ~'Y Kenneith V. Rose II Managing Member TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CERTIFICATE OF TRADITIONS AT RORIPAUGH, LLC March 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Temecula Public Financing Authority (the "Authority") Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District") 2006 Special Tax Bonds and to the Bond Purchase Agreement to be entered into in connection therewith (the "Bond Purchase Agreement"). This certificate is delivered pursuant to and in satisfaction of Section 3(d)(l 6) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement. The undersigned certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as the authorized signatory for Traditions at Roripaugh, LLC, a California limited liability company ("Traditions at Roripaugh, LLC"), and the undersigned, on behalf of Traditions at Roripaugh, LLC further certifies as follows: 1. Traditions at Roripaugh, LLC is duly organized and validly existing as a limited liability company under the laws of the State of California, is in good standing in the State of California and has the limited liability company power and authority (i) to execute and deliver this certificate, (ii) to execute and deliver at Closing (as defined in the Bond Purchase Agreement) the Developer Continuing Disclosure Agreement (the "Developer Continuing Disclosure Agreement") dated as of March 1,2006, by and between the Tanamera/Roripaugh Entities andU.S. BankNational Association, as Dissemination Agent and Fiscal Agent; and to (iii) undertake all of the transactions on its part described in the Preliminary Official Statement and contemplated by the Developer Continuing Disclosure Agreement. 2. As set forth in the Preliminary Official Statement, certain property within the District is owned by Traditions at Roripaugh, LLC, and Traditions at Roripaugh, LLC will develop such property. The property owned by Traditions at Roripaugh, LLC as of the date hereof is referred to herein as the "Property." Traditions at Roripaugh, LLC's current expectation is that Ashby USA, LLC shall remain the party responsible for land use planning and backbone infrastructure of the Property. Traditions at Roripaugh, LLC has not entered into an agreement for development or management of the Property by any entity other than as described in the Preliminary Official Statement. 3. Traditions at Roripaugh, LLC has the authority to execute and deliver at Closing the Developer Continuing Disclosure Agreement and has the authority to perform the obligations on its part to be performed thereunder. Except as described in the Preliminary Official Statement with regard to previous undertakings relatingto Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, to the Actual Knowledge of the Undersigned1, neither Traditions at Roripaugh, LLC nor its Affiliates have materially failed within the past five years to provide periodic continuing disclosure reports or notices of material events with respect to community facilities districts or assessment districts in California. "Affiliate" of another Person (as defined below) means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 15% or more of the outstanding voting securities of such other Person, (b) any Person 15% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with powerto vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by or under common control with such other Person; for purposes hereof, "control" means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person. "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. Notwithstanding the foregoing and for purposes of this certificate, none of the following entities shall be considered an Affiliate of Traditions at Roripaugh, LLC: Ashby USA, LLC; Continental Residential, Inc.; Davidson Roripaugh Ranch 122, LLC, or KB Home Coastal Inc. 4. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned, Traditions at Roripaugh, LLC and its Affiliates are not in breach of or in default under any applicable law or administrative regulation of the State of California or the United States of America, or any agency or instrumentality of either, which breach or default would in any way materially and adversely affect the proposed Developer Continuing Disclosure Agreement or the ability of Traditions at Roripaugh, LLC to pay special taxes levied on the Property (the "Special Taxes"), and (b) to the Actual Knowledge of the Undersigned, 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; and to the Actual Knowledge of the Undersigned, the execution and delivery at Closing by Traditions at Roripaugh, LLC of the Developer Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or constitute a breach or default under any law of administrative regulation applicable to Traditions at Roripaugh, LLC. 5. Except as disclosed in the Preliminary Official Statement, (a) to the Actual Knowledge of the Undersigned, Traditions at Roripaugh, LLC and its Affiliates are 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, note, resolution, agreement or other instrument to which Traditions at Roripaugh, LLC or its Affiliates are, or will upon issuance of the 2006 Bonds be, a party or otherwise subject, which breach or default would in any way materially and adversely affect the Developer Continuing Disclosure Agreement or Traditions at Roripaugh, LLC's ability to develop the Property or to pay the Special Taxes, and (b) to the Actual Knowledge of the Undersigned, 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; and the execution and delivery at Closing by Traditions at Roripaugh, LLC of the Developer Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or, constitute a breach of or default under any judgment, decree, loan agreement, indenture, fiscal agent agreement, bond, note, resolution, agreement or other instrument to which Traditions at Roripaugh, LLC or its Affiliates As used in this certificate, the phrase "Actual Knowledge of the Undersigned" shall mean the knowledge that the undersigned currently has or has obtained from interviews with such officers and responsible employees of Traditions at Roripaugh, LLC and members of Traditions at Roripaugh, LLC as the undersigned has determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, with your permission, the undersigned has not conducted any additional inspection or inquiry. is a party or otherwise subject which beach or default would in any way materially and adversely affect the Developer Continuing Disclosure Agreement or Traditions at Roripaugh, LLC's ability to develop the Property or its ability to pay the Special Taxes. 6. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaid and no material lines of credit of Traditions at Roripaugh, LLC or its Affiliates that are secured by an interest in the Property. 7. Except as set forth in the Preliminary Official Statement, no claim, dispute, suit, action, contingent liability or litigation is pending (with service of process to Traditions at Roripaugh, LLC having been accomplished) or, to the Actual Knowledge of the Undersigned, pending with service of process to any parent entity of any Member having been accomplished, or to the Actual Knowledge of the Undersigned threatened (a)to restrain or enjoin collection of Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the 2006 Bonds, (b) to restrain or enjoin the execution of and performance of Traditions at Roripaugh, LLC's obligations under the proposed Developer Continuing Disclosure Agreement, (c) to restrain or enj oin development of the Property, (d) in any way contesting or affecting the validity of the Special Taxes, the Developer Continuing Disclosure Agreement or any other document, license, permit or approval necessary to the performance on Traditions at Roripaugh, LLC's part under the proposed Developer Continuing Disclosure Agreement, or (e) which would in any way materially and adversely affect Traditions at Roripaugh, LLC's ability to develop the Property or to pay Special Taxes. 8. Except as set forth in the Preliminary Official Statement, no litigation is pending with service of process to Traditions at Roripaugh, LLC having been accomplished, to the Actual Knowledge of the Undersigned, no litigation is pending with service of process to any Affiliate having been accomplished, and, to the Actual Knowledge of the Undersigned, no litigation is threatened against Traditions atRoripaugh, LLC or any Affiliate involving Traditions at Roripaugh, LLC or any Affiliate, or any of the property or assets under the control of Traditions at Roripaugh, LLC or any Affiliate that involves the possibility of any judgment or uninsured liability which may result in any material adverse change in the assets or funds held by Traditions at Roripaugh, LLC or any Affiliate that would materially and adversely affect Traditions at Roripaugh, LLC's ability to develop the Property or to pay Special Taxes. 9. As of the date thereof, but solely with respect to information relating to Traditions at Roripaugh, LLC, the Property, the proposed development of the Property, ownership of the Property, Traditions at Roripaugh, LLC's development plan, Traditions at Roripaugh, LLC's financing plan, Traditions at Roripaugh, LLC's lenders, if any, and the contractual arrangements involving Traditions at Roripaugh, LLC LLC (but excluding, in all cases, information on Ashby USA, LLC, Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, KB Home Coastal Inc. and their respective development and financing plans) and subject to the exclusions set forth below, the information contained in the Preliminary Official Statement under the captions "INTRODUCTION -The Community Facilities District" (excluding therefrom the first two paragraphs for which no certification is made), "CONTINUING DISCLOSURE -Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC"and Traditions atRoripaugh, LLC," and "PROPERTY OWNERSHIP AND DEVELOPMENT" (excluding therefrom information under the subcaptions " -Ashby USA, LLC," " -Continental Residential, Inc.," " -Davidson Roripaugh Ranch 122, LLC," " -KB Home Coastal Inc.," " -Direct and Overlapping Debt," " -Estimated Value-to-Lien Ratios," " -Overlapping Assessment and Community Facilities Districts," "-Estimated Assessed Value-to-Lien Ratios," " -Transportation Uniform Mitigation Fee; Multiple Species Habitat Conservation Plan," " -Market Absorption Study" and " -Appraised Property Value" for which no certification is made) is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 10. Traditions at Roripaugh, LLC has full limited liability company power and authority to develop the Property, to own any portion of the Property it acquires and to carry on its business as presently conducted and as described in the Preliminary Official Statement. 11. Traditions at Roripaugh, LLC covenants that, while the 2006 Bonds or any refunding obligations related thereto are outstanding, Traditions at Roripaugh, LLC 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 District, to challenge the levy of the Special Taxes within the District, to invalidate the District or any of the 2006 Bonds, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent Traditions at Roripaugh, LLC in any way from bringing any other action, suit or proceeding including, without limitation, an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the District's Rate andMethod of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, an action or suit with respect to the application or use of the Special Taxes levied and collected, or an action or suit to enforce the obligations of the Authority under the Resolution of Issuance, the Fiscal Agent Agreement or any agreements with the Authority, the City and/or the District or any other party for which Traditions at Roripaugh, LLC is a party or beneficiary. 12. Exceptas disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, no other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized and no assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property. 13. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, Traditions at Roripaugh, LLC and its Affiliates have not in the last five years defaulted in payment of, and are not currently delinquent on, any ad valorem, assessment or special tax obligations in California in any material amount. 14. Traditions at Roripaugh, LLC consents to the issuance of the 2006 Bonds. Traditions at Roripaugh, LLC acknowledges and agrees that the proceeds of the 2006 Bonds will be used as described in the Official Statement, provided that nothing in this statement modifies any right or obligation of the parties under any other agreement. 15. Traditions at Roripaugh, LLC intends to comply with the provision of Government Code Section 53341.5 relating to the Notice of Special Tax in connection with the sale of the Property, or portions thereof, that it takes title to or develops. 16. Traditions at Roripaugh, LLC acknowledges that interest on the 2006 Bonds is estimated to be capitalized through September 1, 2006 and that the Special Tax levies on Developed Property and Undeveloped Property will commence in Fiscal Year 2006-07 (commencing with the November 1, 2006 tax installment) in order to pay for principal and interest on the 2006 Bonds and to pay a portion of the administrative expenses relating to the District. 17. Traditions at Roripaugh, LLC is solvent and no proceedings are pending or, to the Actual Knowledge of the Undersigned, threatened in which Traditions at Roripaugh, LLC 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 a reorganization or readjustment of its debts. 18. To the Actual Knowledge of the Undersigned, the Members of Traditions at Roripaugh, LLC and the parent entities of such Members of Traditions at Roripaugh, LLC are solvent and no proceedings are pending, or to the Actual Knowledge of the Undersigned, threatened in which the Members of Traditions at Roripaugh, LLC and the parent entities of such Members of Traditions at Roripaugh, LLC 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 their respective debts or obligations, or be allowed to reorganize or readjust their respective debts or obligations. 19. To the Actual Knowledge of the Undersigned, Traditions at Roripaugh, LLC has not filed for, nor are there current proceedings for the reassessment of, the assessed value of the Property. 20. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities among Traditions at Roripaugh, LLC, its Affiliates or any contractors working on the development of the Property which may materially and adversely affect the development of the Property or the payment of the Special Taxes on the Property. 21. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, to the Actual Knowledge of the Undersigned, Traditions at Roripaugh, LLC will have sufficient funds to carry on its business as presently conducted and as described in the Preliminary Official Statement and to pay Special Taxes assessed against the Property. However, none of the Members of Traditions at Roripaugh, LLC or its Affiliates are obligated to make any additional capital contribution or loan to Traditions at Roripaugh, LLC at anytime and Traditions at Roripaugh, LLC reserves the right to change its plan at any time without notice. 22. All information submitted in writing by Traditions at Roripaugh, LLC or its agents to the Authority, the District, the Special Tax Consultant, the Market Absorption Consultant, the Appraiser, Disclosure Counsel or the Underwriter in connection with the issuance of the 2006 Bonds, was, at the time of submission, to the Actual Knowledge of the Undersigned, true and correct. 23. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there are no endangered species, hazardous substances or archaeological resources relating to the Property which could have a significant impact on Traditions at Roripaugh, LLC's ability to pay Special Taxes or to sell or develop all or any portion of Traditions at Roripaugh, LLC's Property. 24. As to information indicated in Section 9 hereof relating to Traditions at Roripaugh, LLC, the Property, the proposed development of the Property, ownership of the Property, Traditions at Roripaugh, LLC's development plan, Traditions at Roripaugh, LLC's financing plan, Traditions at Roripaugh, LLC's lenders, if any, and the contractual arrangements of Traditions at Roripaugh, LLC (but excluding, in all cases, information on Ashby USA, LLC, Continental Residential, Inc., Davidson Roripaugh Ranch 122, LLC, KB Home Coastal Inc. and their respective development and financing plans), and subject to the limitations and exclusions set forth in Section 9, Traditions at Roripaugh, LLC agrees to indemnify and hold harmless, to the extent permitted by law, the Authority, the District, and their officials and employees, and each person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended, against any and all losses, claims, damages or liabilities, joint or several, to which such indemnified party may become subject under any statute or at law or in equity or otherwise, and shall reimburse any such indemnified party for any reasonable legal or other expense incurred by it, in each case in connection with investigating any claims against it and defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of, or are based upon, any untrue statement of a material fact or the omission to state a material fact, in the final Official Statement, as of its date or in any continuing disclosure statement, as of its date, provided by or authorized by Traditions at Roripaugh, LLC, a material fact necessary to make the statement therein, in light of the circumstances under which it was made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which Traditions at Roripaugh, LLC may otherwise have to any indemnified party,provided that in no event shall Traditions at Roripaugh, LLC be obligated for double indemnification nor for the negligence or wilful misconduct of another. 25. Traditions at Roripaugh, LLC has agreed to execute the Developer Continuing Disclosure Agreement in the form included in Appendix G to the Preliminary Official Statement. 26. If between the date hereof and the date of the Closing, to the Actual Knowledge of the Undersigned, any event relating to or affecting Traditions at Roripaugh, LLC, its Affiliates or the development of the Property shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, Traditions at Roripaugh, LLC shall notify the Authority, the District and the Underwriter and if in the opinion of counsel to the Authority or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, Traditions at Roripaugh, LLC shall reasonably cooperate with the Authority in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to counsel to the Authority and to the Underwriter. 27. For the "underwriting period," as defined in the Bond Purchase Agreement, if any event relating to or affecting Traditions at Roripaugh, LLC, its Affiliates or the development of the Property shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the Authority, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, Traditions at Roripaugh, LLC shall reasonably cooperate with the Authority and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to the Underwriter and counsel to the Authority which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. 28. Traditions at Roripaugh, LLC agrees to deliver a certificate dated the date of issuance of the 2006 Bonds at the time of issuance of the 2006 Bonds in substantially the form attached as Exhibit A., provided, that, if any event relating to or affecting Traditions at Roripaugh, LLC or its Affiliates or the development of the Property shall occur as a result of which it is necessary to modify the certificate, Traditions at Roripaugh, LLC agrees to deliver the certificate revised to reflect such event. 29. On behalf of Traditions at Roripaugh, LLC, I have reviewed the contents of this certificate and have met with counsel to Traditions at Roripaugh, LLC, for the purpose of discussing the meaning of its contents. TRADITIONS AT RORIPAUGH, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: //Kenneith V. Rose II Managing Member TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS CLOSING CERTIFICATE OF TRADITIONS AT RORIPAUGH, LLC April 27, 2006 To: Temecula Public Financing Authority on behalf of Community Facilities District No. 03-02 (Roripaugh Ranch) Stone & Youngberg LLC Ladies and Gentlemen: Reference is made to Community Facilities District No. 03-02 (Roripaugh Ranch) of the Temecula Public Financing Authority 2006 Special Tax Bonds and to the Bond Purchase Agreement dated April 13, 2006 (the "Bond Purchase Agreement") entered into in connection therewith. This certificate is delivered pursuant to the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate (the "Certificate") dated March 27, 2006 delivered on behalf of Traditions at Roripaugh, LLC, a California limited liability company ("Traditions at Roripaugh, LLC"), which is attached hereto as Exhibit A. The undersigned certifies certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as the authorized signatory for Traditions at Roripaugh, LLC, and the undersigned, on behalf of Traditions at Roripaugh, LLC, further certifies as follows: 1. Each statement made in the Certificate is affirmed andrestatedas if made on the date hereof. 2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which has adversely affected or will materially and adversely affect the business, properties, operations, prospects or financial condition of Traditions at Roripaugh, LLC or its Affiliates, which would materially and adversely affect the development of the Property or their ability to pay Special Taxes for which they are obligated to pay. 3. Traditions at Roripaugh, LLC has received the Official Statement relating to the 2006 Bonds, and each statement made in the Certificate referring to the Preliminary Official Statement is affirmed as if it relates to the Official Statement. 4. Each statement made in the Certificate referring to the proposed Developer Continuing Disclosure Agreement is affirmed as if it relates to the Developer Continuing Disclosure Agreement as executed and delivered. 5. Traditions at Roripaugh, LLC has duly executed and delivered the Developer Continuing Disclosure Agreement, has the authority to perform the obligation on its part to be performed thereunder, and the Developer Continuing Disclosure Agreement constitutes the legal, valid and binding obligations of Traditions at Roripaugh, LLC. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; EXECUTION PAGE FOLLOWS] Very truly yours, TRADITIONS AT RORIPAUGH, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: Kenneith V. Rose II Managing Member