$98,550,000 ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS Insured Senior Living Revenue Bonds (Odd Fellows Home of California) 2012 Series A

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1 NEW ISSUE BOOK ENTRY ONLY Rating: Standard & Poor s: A- (See RATING herein) In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended, and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal individual and corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Bonds. See Tax Matters. $98,550,000 ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS Insured Senior Living Revenue Bonds (Odd Fellows Home of California) 2012 Series A Dated: Date of Delivery Due: April 1, as shown below The 2012 Series A Bonds (the Bonds ) are issuable in fully registered form only in denominations of $5,000 or any integral multiple thereof and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). Beneficial owners of Bonds will not receive physical certificates representing the Bonds purchased but will receive a credit balance on the books of the nominees of such purchasers. So long as Cede & Co. is the registered owner of the Bonds, principal of and premium, if any, and interest on the Bonds will be paid by U.S. Bank National Association, as bond trustee (the Bond Trustee ), to DTC, which, in turn, will remit such principal, premium, if any, and interest to its participants for subsequent disbursement to the beneficial owners of the Bonds, as described herein. Interest on the Bonds is payable on April 1 and October 1 of each year, commencing April 1, The Bonds are limited obligations of ABAG Finance Authority for Nonprofit Corporations (the Authority ) issued pursuant to and secured by an Indenture (the Indenture ) between the Authority and the Bond Trustee, and the principal thereof and the premium, if any, and interest thereon will be payable from Loan Repayments made by Odd Fellows Home of California, a California nonprofit public benefit corporation (the Borrower ), under a Loan Agreement between the Authority and the Borrower and from certain other funds held under the Indenture. The Bonds are subject to optional, mandatory and extraordinary optional redemption prior to maturity as described herein. THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM AND SECURED BY THE PLEDGE OF REVENUES PURSUANT TO THE INDENTURE. NONE OF THE AUTHORITY, THE ASSOCIATION OF BAY AREA GOVERNMENTS ( ABAG ), THE MEMBERS OF THE AUTHORITY OR ABAG OR PROGRAM PARTICIPANTS OF THE AUTHORITY OR ABAG SHALL BE DIRECTLY OR INDIRECTLY OR CONTINGENTLY OR MORALLY OBLIGATED TO USE ANY OTHER MONEYS OR ASSETS OF THE AUTHORITY, ABAG OR ANY OF THEIR MEMBERS TO PAY ALL OR ANY PORTION OF DEBT SERVICE DUE ON THE BONDS. THE BONDS AND THE OBLIGATION TO PAY PRINCIPAL THEREOF AND INTEREST THEREON AND ANY REDEMPTION PREMIUM WITH RESPECT THERETO DO NOT CONSTITUTE AN INDEBTEDNESS OR AN OBLIGATION OF THE AUTHORITY OR ABAG, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION, OR A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF ANY OF THEM, BUT SHALL BE PAYABLE SOLELY FROM THE REVENUES DESCRIBED HEREIN (EXCEPT TO THE EXTENT EXPRESSLY PROVIDED THROUGH THE INSURANCE PROGRAM DESCRIBED HEREIN). NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER OF THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF TO PAY ANY PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS (EXCEPT TO THE EXTENT EXPRESSLY PROVIDED THROUGH THE INSURANCE PROGRAM DESCRIBED HEREIN). NEITHER THE AUTHORITY NOR ABAG HAS ANY TAXING POWER. Pursuant to the California Constitution Article XVI, Section 4, and California Health and Safety Code, Division 107, Part 6, Chapter 1, payment of the principal of and interest on the Bonds will be insured by the Office of Statewide Health Planning and Development of the State of California, and all debentures issued in payment of any claims under such insurance will be fully and unconditionally guaranteed by the State of California, all as more fully described herein. See CALIFORNIA HEALTH FACILITY CONSTRUCTION LOAN INSURANCE PROGRAM herein. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. MATURITY SCHEDULE Maturity (April 1) Principal Amount $1,150,000 2,695,000 2,770,000 2,880,000 3,000,000 3,150,000 3,305,000 3,475,000 3,645,000 3,825,000 4,020,000 4,220,000 Interest Rate 3.000% 3.000% 4.000% 4.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% Yield 0.600% 0.840% 1.000% 1.200% 1.500% 1.850% 2.180% 2.450% 2.750% 2.900% 3.050% 3.150% CUSIP 00037G AM G AN G AP G AQ G AR G AS G AT G AU G AV G AW G AX G AY7 $42,295, % Term Bonds due April 1, 2032 Priced at % to Yield 3.630% $13,120, % Term Bonds due April 1, 2042 Priced at % to Yield 4.050% $5,000, % Term Bonds due April 1, 2042 Priced at % to Yield 4.184% The Bonds are offered when, as and if issued and received by the Underwriter, subject to prior sale, withdrawal or modification of the offer without notice and to approval of the legality of the Bonds and certain other legal matters by Orrick, Herrington & Sutcliffe, Portland, Oregon, Bond Counsel to the Authority. Certain legal matters will be passed upon for the Authority by its special counsel, Jones Hall, A Professional Law Corporation, San Francisco, California; for the Borrower by its counsel, Hanson Bridgett LLP, San Francisco, California; for the Office by its staff counsel; and for the Underwriter by its counsel, Foley & Lardner LLP, San Francisco, California. It is expected that the Bonds in definitive form will be available for delivery through the facilities of DTC on or about October 25, Dated: September 26, CUSIP is a registered trademark of the American Bankers Association.

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3 GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT This Official Statement does not constitute an offer to sell the Bonds or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any state or other jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale in such state or jurisdiction. No dealer, broker, salesperson or any other person has been authorized to give any information or to make any representation other than those contained herein in connection with the offering of the Bonds, and, if given or made, such information or representation must not be relied upon. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with and as part of its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information relating to the Authority set forth herein under the captions THE AUTHORITY and ABSENCE OF MATERIAL LITIGATION The Authority has been furnished by the Authority; the information set forth herein under the caption CALIFORNIA HEALTH FACILITY CONSTRUCTION LOAN INSURANCE PROGRAM has been furnished by the Office of Statewide Health Planning and Development of the State of California (the Office ); and the information relating to DTC and the book-entry system set forth in APPENDIX H hereto has been furnished by DTC. Such information is believed to be reliable but is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Borrower or the Underwriter. All other information set forth herein has been obtained from the Borrower and other sources (other than the Authority) that are believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Authority or the Underwriter. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the Bonds made hereunder shall create under any circumstances any indication that there has been no change in the affairs of the Authority, the Borrower, the Office or DTC since the date hereof. This Official Statement is being provided to prospective investors in connection with the issuance of securities referred to herein and may not be used, in whole or in part, for any other purpose. CUSIP data are provided by Standard & Poor s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc., are provided in this Official Statement for convenience of reference only and are subject to change after the issuance of the Bonds. The Authority, the Borrower and the Underwriter do not assume any responsibility for the accuracy of the CUSIP data. U.S. Bank National Association, as Bond Trustee, has not reviewed or participated in the preparation of this Official Statement and assumes no responsibility for the nature, contents, accuracy or completeness of the information set forth in this Official Statement or for the recitals contained in the Indenture or the Bonds, or for the validity, sufficiency, or legal effect of any of such documents. The Bond Trustee has no oversight responsibility and is not accountable for the use or application by the Authority of any of the Bonds authenticated or delivered pursuant to the Indenture or for the use or application of the proceeds of such Bonds. The Bond Trustee has not evaluated the risks, benefits, or propriety of any investment in the Bonds and makes no representation, and has reached no conclusions, regarding the value or condition of any assets pledged or assigned as security for the Bonds, the technical or financial feasibility of the projects to be financed with proceeds from the sale of the Bonds, or the investment quality of the Bonds, about all of which the Bond Trustee expresses no opinion and expressly disclaims the expertise to evaluate. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS OFFERED HEREBY AT LEVELS ABOVE THAT WHICH OTHERWISE MIGHT PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. i

4 CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included or incorporated by reference in this Official Statement constitute forward-looking statements. Such statements generally are identifiable by the terminology used, such as plan, expect, estimate, budget or other similar words. Such forward-looking statements include but are not limited to certain statements contained in the information under the captions PLAN OF FINANCE and BONDHOLDERS RISKS in the forepart of this Official Statement and the statements contained under the caption MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL PERFORMANCE in APPENDIX A INFORMATION CONCERNING ODD FELLOWS HOME OF CALIFORNIA. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Borrower does not plan to issue any updates or revisions to those forward-looking statements if or when changes to its expectations or events, conditions or circumstances on which such statements are based occur.

5 TABLE OF CONTENTS INTRODUCTION... 1 Purpose of this Official Statement... 1 The Borrower... 1 Insurance of the Bonds by the Office... 1 Security for the Bonds... 2 Plan of Finance... 3 Additional Indebtedness; Parity Debt... 3 Bondholders Risks... 3 THE AUTHORITY... 4 PLAN OF FINANCE... 4 Prepayment of the 1993 Certificates and the 1999 Certificates and Refunding of the 2003 Bonds... 4 The Project... 5 ESTIMATED SOURCES AND USES OF FUNDS... 6 THE BONDS... 6 General... 6 Redemption... 7 SECURITY AND SOURCE OF PAYMENT FOR THE BONDS... 9 General... 9 Pledge of Revenues; Security Interest in Gross Revenues Insurance No Financial Covenants in Loan Agreement Bond Reserve Account Rate Covenant, Current Ratio Covenant and Days Cash on Hand Covenant Parity Debt; Other Indebtedness Deeds of Trust The Office s Control of Remedies Limited Liability of the Authority CALIFORNIA HEALTH FACILITY CONSTRUCTION LOAN INSURANCE PROGRAM Description of the Insurance Policy The Office, the Program and the Insurance Fund CERTAIN FINANCIAL INFORMATION REGARDING THE STATE ANNUAL DEBT SERVICE REQUIREMENTS THE BOND TRUSTEE BONDHOLDERS RISKS State Bond Insurance Uncertainty of Revenues Page i

6 Impact of Recent Economic Recession and Disruption of Credit Markets Health Care Reform Feasibility Study Project Construction Risks Construction Loan Insurance Program and State Fiscal Condition Occupancy and Turnover in the Borrower s Facilities Nature of Income and Assets of the Elderly Competition Investments Licensing, Surveys, Investigations and Audits State Regulation of Continuing Care Retirement Communities and other Senior Housing Facilities Regulation of Health Information Maintained by Health Care Organizations Environmental and Health and Safety Laws and Regulations Professional and General Liability Claims Nonprofit Health Care Organizations Tax-Exempt Status of the Borrower State and Local Tax Exemption Limitations on Enforceability of Financing Documents Limitations on Remedies under the Deeds of Trust Limitations on Enforceability of Security Interest in Gross Revenues Bankruptcy Tax-Exempt Status of Interest on the Bonds Marketability of the Bonds Bond Rating Other Factors Limited Security ABSENCE OF MATERIAL LITIGATION The Authority The Borrower TAX MATTERS LEGALITY RATING UNDERWRITING FINANCIAL STATEMENTS FEASIBILITY STUDY CONTINUING DISCLOSURE MISCELLANEOUS ii

7 APPENDIX A INFORMATION CONCERNING ODD FELLOWS HOME OF CALIFORNIA APPENDIX B AUDITED FINANCIAL STATEMENTS OF ODD FELLOWS HOME OF CALIFORNIA APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS APPENDIX D FORM OF APPROVING OPINION OF BOND COUNSEL APPENDIX E FEASIBILITY STUDY APPENDIX F FORM OF CONTINUING DISCLOSURE AGREEMENT APPENDIX G FORM OF CONTRACT OF INSURANCE APPENDIX H DTC AND THE BOOK-ENTRY SYSTEM iii

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9 OFFICIAL STATEMENT $98,550,000 ABAG FINANCE AUTHORITY FOR NONPROFIT CORPORATIONS Insured Senior Living Revenue Bonds (Odd Fellows Home of California) 2012 Series A INTRODUCTION The following introductory statement is subject in all respects to the more complete information set forth in this Official Statement. The descriptions and summaries of various documents hereinafter set forth do not purport to be comprehensive or definitive and are qualified in their entirety by reference to each document. All capitalized terms used in this Official Statement and not otherwise defined herein or in APPENDIX C have the same meaning as in the Regulatory Agreement or the Indenture (each as defined below). See APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Definitions of Certain Terms. Purpose of this Official Statement This Official Statement, including the cover page and the appendices hereto, is provided to furnish information in connection with the offering by the ABAG Finance Authority for Nonprofit Corporations (the Authority ) of its $98,550,000 aggregate principal amount of Insured Senior Living Revenue Bonds (Odd Fellows Home of California), 2012 Series A (the Bonds ). The Bonds are being issued under and will be secured by an Indenture dated as of October 1, 2012 (the Indenture ), between the Authority and U.S. Bank National Association, as bond trustee (the Bond Trustee ). The Authority will lend the proceeds of the Bonds to Odd Fellows Home of California, a California nonprofit public benefit corporation (the Borrower ), pursuant to a Loan Agreement dated as of October 1, 2012 (the Loan Agreement ), between the Authority and the Borrower. The Borrower The Borrower is exempt from federal income taxation under Section 501(a) of the Internal Revenue Code of 1986, as amended (the Code ), as an organization described in Section 501(c)(3) of the Code. The Borrower has operated a retirement community in its present location in Saratoga, California, since 1912, doing business as Saratoga Retirement Community. The retirement community currently consists of 143 residential units, 100 assisted living units, 12 memory and special care units and 94 skilled nursing beds (the Saratoga Facility ). Following a merger in July 2002 of the California Odd Fellows Housing of Napa, Incorporated, a California nonprofit public benefit corporation, into the Borrower, the Borrower now also operates a retirement community in Napa, California, currently consisting of 171 residential living units, 63 assisted living units, 20 memory and special care units and a 69-bed skilled nursing facility, doing business under the name The Meadows of Napa Valley (the Napa Facility, and together with the Saratoga Facility, the Facilities ). See APPENDIX A INFORMATION CONCERNING ODD FELLOWS HOME OF CALIFORNIA for additional information about the Borrower. Insurance of the Bonds by the Office In accordance with the California Health Facility Construction Loan Insurance Law, Chapter 1 of Part 6 of Division 107 of the California Health and Safety Code (the Insurance Law ), the Authority and 1

10 the Office of Statewide Health Planning and Development of the State of California (the Office ) will enter into a Contract of Insurance, dated as of October 1, 2012, with the Borrower (the Contract of Insurance ) pursuant to which the Office will insure the payment of principal of and interest on the Bonds in the event that amounts received by the Trustee pursuant to the Loan Agreement are not sufficient to pay in full, when due, principal of and interest on the Bonds. If monies are not available to pay principal of and interest on the Bonds, the Office will be obligated to continue to make payments on the Bonds or will instruct the Trustee to declare the principal of all Bonds then outstanding and interest accrued thereon to be due and payable immediately and make payment of such principal and interests and, upon the occurrence of certain events, shall notify the Treasurer ( Treasurer ) of the State of California (the State ) and the Treasurer will issue debentures to the holders of the Bonds, fully and unconditionally guaranteed by the State, in an amount equal to the principal of and the accrued interest on the Bonds. In connection with the Contract of Insurance, the Borrower will enter into a Regulatory Agreement, dated as of October 1, 2012 (the Regulatory Agreement ), with the Authority and the Office. For a more detailed description of the obligation of the Office to insure the payment of the principal of and interest on the Bonds, the procedures with respect to an insurance default, the obligations of the Borrower pursuant to the Regulatory Agreement and the financial condition of the Office s insurance program and the State of California, see CALIFORNIA HEALTH FACILITY CONSTRUCTION LOAN INSURANCE PROGRAM, CERTAIN FINANCIAL INFORMATION REGARDING THE STATE, BONDHOLDER S RISKS State Bond Insurance, RATING, APPENDIX C - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS REGULATORY AGREEMENT, and APPENDIX G FORM OF CONTRACT OF INSURANCE. Security for the Bonds The Bonds are limited obligations of the Authority, secured by the Indenture, and will be payable from payments (the Loan Repayments ) made by the Borrower under the Loan Agreement and from certain funds held under the Indenture. Pursuant to the Loan Agreement, the Borrower is required to make payments in amounts sufficient to pay in full, when due, the principal of, premium, if any, and interest on the Bonds when due. In addition to the insurance under the Contract of Insurance, the Borrower s obligations under the Loan Agreement and the Regulatory Agreement are secured by the grant of a security interest (to the extent permitted by law) to the Bond Trustee (as assignee of the Authority) in the Gross Revenue Fund and all of the Gross Revenues (as such terms are defined in the Indenture) of the Borrower, as provided in the Loan Agreement. Further, by its execution and delivery of Deeds of Trust (described herein), the Borrower will grant for the benefit of the Office and the Bond Trustee, as trustee for the holders of the Bonds and the holders of any other Parity Debt (as such term is defined in the Indenture), a lien on and security interest in the Facilities, including all real property, all buildings and structures thereon and fixtures and improvements thereto and certain other tangible personal property, all as described in the Deeds of Trust, subject to Permitted Encumbrances and subject to the right of the Borrower (with the prior consent of the Office) to remove property from the lien of the Deeds of Trust. For as long as the Office is obligated under the Contract of Insurance, all rights under the Deeds of Trust shall be exercised solely by the Office. With the consent of the Office, the Deeds of Trust may be amended, changed, modified or terminated at any time without the necessity of obtaining the consent of the Bond Trustee, the Authority, the holders of the Bonds or the holders of any other Parity Debt. A title insurance policy on the Facilities in an amount not less than the aggregate principal amount of the Bonds will be delivered at the time of issuance of the Bonds. The Deeds of Trust consist of a Deed of Trust on the Saratoga Facilities and a Deed of Trust on the Napa Facilities, both dated October 1, See SECURITY AND SOURCE OF PAYMENT FOR THE BONDS. 2

11 THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM AND SECURED BY THE PLEDGE OF REVENUES PURSUANT TO THE INDENTURE. NONE OF THE AUTHORITY, THE ASSOCIATION OF BAY AREA GOVERNMENTS ( ABAG ) OR THE MEMBERS OF THE AUTHORITY OR ABAG OR PROGRAM PARTICIPANTS OF THE AUTHORITY OR ABAG SHALL BE DIRECTLY OR INDIRECTLY OR CONTINGENTLY OR MORALLY OBLIGATED TO USE ANY OTHER MONEYS OR ASSETS OF THE AUTHORITY, ABAG OR ANY OF THEIR MEMBERS TO PAY ALL OR ANY PORTION OF DEBT SERVICE DUE ON THE BONDS. THE BONDS AND THE OBLIGATION TO PAY PRINCIPAL THEREOF AND INTEREST THEREON AND ANY REDEMPTION PREMIUM WITH RESPECT THERETO DO NOT CONSTITUTE AN INDEBTEDNESS OR AN OBLIGATION OF THE AUTHORITY OR ABAG, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION, OR A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF ANY OF THEM, BUT SHALL BE PAYABLE SOLELY FROM THE REVENUES DESCRIBED HEREIN, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED THROUGH THE PROGRAM DESCRIBED HEREIN. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER OF THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF TO PAY ANY PRINCIPAL OF, OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED THROUGH THE PROGRAM DESCRIBED HEREIN. NEITHER THE AUTHORITY NOR ABAG HAS ANY TAXING POWER. Plan of Finance The Borrower will use the proceeds of the Bonds, together with other available funds, to: (i) prepay all the outstanding California Statewide Communities Development Authority Insured Certificates of Participation (California Odd Fellow Housing of Napa, Incorporated), Series 1993 (the 1993 Certificates ); (ii) prepay all of the Authority s outstanding Insured Revenue Certificates of Participation (Odd Fellows Home of California), Series 1999 (the 1999 Certificates ); (iii) refund all of the Authority s outstanding Insured Revenue Bonds (Odd Fellows Home of California), 2003 Series A (the 2003 Bonds ); (iv) finance certain capital projects for the Borrower at it Facilities (the Project ); (v) fund a bond reserve account (the Bond Reserve Account ) established under the Indenture as additional security for the Bonds; (vi) pay the bond insurance premium; and (vii) pay certain expenses incurred in connection with the issuance of the Bonds. See PLAN OF FINANCE and ESTIMATED SOURCES AND USES OF FUNDS. Additional Indebtedness; Parity Debt Subject to the satisfaction of the terms and conditions of the Regulatory Agreement, the Borrower may incur additional Long-Term Indebtedness, including Parity Debt which would be secured equally and ratably with the obligations of the Borrower under the Loan Agreement. See APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS THE REGULATORY AGREEMENT Limitation on Indebtedness. Bondholders Risks For a discussion of certain risk factors involved in the purchase of any Bonds, see BONDHOLDERS RISKS. 3

12 THE AUTHORITY The Authority is a joint powers authority duly organized and existing under the provisions of Chapter 5 of Division 7 (commencing with Section 6500) of the Government Code of the State of California and a Joint Powers Agreement, dated as of April 1, 1990, as amended as of September 18, 1990 and June 9, 1992, in order to assist nonprofit corporations and other entities to obtain financing for projects located within the several jurisdictions of Authority members with purposes serving the public interest and is authorized to issue revenue bonds to finance construction, expansion, rehabilitation, remodeling, renovation, furnishing, equipping and acquisition of facilities operated by nonprofit corporations and certain other entities The Authority has not reviewed any appraisal for the Project or the other property secured by the Deeds of Trust or any feasibility study or other financial analysis of the Project or the other property secured by the Deeds of Trust, and has not undertaken to review or approve expenditures for the Project, to supervise the construction of the Project, or to obtain any financial statements of the Borrower. The Authority has not reviewed this Official Statement and is not responsible for any information contained herein, except for the information in this section and under the caption ABSENCE OF MATERIAL LITIGATION the Authority, as such information applies to the Authority PLAN OF FINANCE The Borrower intends to use the proceeds of the Bonds, together with other available funds, to: (i) prepay all the outstanding California Statewide Communities Development Authority Insured Certificates of Participation (California Odd Fellow Housing of Napa, Incorporated), Series 1993 (the 1993 Certificates ); (ii) prepay all of the Authority s outstanding Insured Revenue Certificates of Participation (Odd Fellows Home of California), Series 1999 (the 1999 Certificates ); (iii) refund all of the Authority s outstanding Insured Revenue Bonds (Odd Fellows Home of California), 2003 Series A (the 2003 Bonds ); (iv) finance certain capital projects for the Borrower at it Facilities (the Project ); (v) fund a bond reserve account (the Bond Reserve Account ) established under the Indenture as additional security for the Bonds; (vi) pay the bond insurance premium; and (vii) pay certain expenses incurred in connection with the issuance of the Bonds. Prepayment of the 1993 Certificates and the 1999 Certificates and Refunding of the 2003 Bonds The 1993 Certificates have been previously executed and delivered in the original aggregate principal amount of $18,995,000, of which approximately $10,955,000 in aggregate principal amount is presently outstanding. The 1999 Certificates have been previously executed and delivered in the original aggregate principal amount of $34,450,000, of which approximately $23,355,000 in aggregate principal amount is presently outstanding. The 2003 Bonds were issued in the original aggregate principal amount of $80,000,000, of which approximately $70,220,000 in aggregate principal amount is presently outstanding. The 1993 Certificates were issued to finance the costs of various improvements to the Borrower s Napa Facilities. The 1999 Certificates and 2003 Bonds were both issued to finance the costs of various improvements to the Borrower s Saratoga Facilities. In order to entirely prepay the outstanding 1993 Certificates and the 1999 Certificates and entirely refund the outstanding 2003 Bonds, a portion of the proceeds of the Bonds, together with other available monies, will be deposited with U.S. Bank National Association as trustee for the Bonds and as escrow agent with respect to the 1993 Certificates, the 1999 Certificates and the 2003 Bonds. Such funds will be in an amount sufficient, together with the interest earnings thereon, to pay the principal component of and interest component on the 1993 Certificates and the 1999 Certificates on the prepayment date established therefor, at a prepayment price equal to the aggregate principal amount thereof, and to entirely refund the outstanding 4

13 principal of and interest on the 2003 Bonds on the redemption date established therefore, at a redemption price equal to the outstanding principal amount thereof. The Project The Project consists of the following additions/improvements to the Napa Facilities: Upgrading 12 stairwells / exits needed to obtain a final Certificate of Authority to operate a licensed continuing care retirement community within the Napa Facilities; Landscaping approximately 20 acres pursuant to a previous agreement with the City of Napa in order to reduce water use, improve drainage and enhance overall appearance of the Napa Facilities. Currently, land to be improved is covered by lawn, and will be transitioned into walking trails, additional parking and drought resistant landscaping; Renovation of nine residential living units to be suitable for use as part of the contemplated continuing care retirement community. The renovations include the installation of granite countertops, new kitchen and bathroom cabinets, flooring, lighting, and closet systems; and Completion of several minor miscellaneous projects and equipment purchases. Estimated costs of the above projects is approximately $4,625,000. The Borrower has obtained the necessary building permits and approvals to complete these items and has started construction. The projects are expected to be completed within approximately 18 months. See APPENDIX A INFORMATION CONCERNING ODD FELLOWS HOME OF CALIFORNIA FACILITIES AND SERVICES The Meadows of Napa Valley for additional information regarding the Project. 5

14 ESTIMATED SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of proceeds of the Bonds and certain other available funds. General Source of Funds Principal Amount of Bonds $98,550, Net Original Issue Premium 11,332, Funds held for 1993 Certificates 1,414, Funds held for 1999 Certificates 3,502, Funds held for 2003 Bonds 8,961, Total Sources of Funds $123,762, Uses of Funds Prepayment of 1993 Certificates $11,046, Prepayment of 1999 Certificates 23,744, Refunding of 2003 Bonds 72,068, Deposit to Project Fund 4,794, Deposit to Bond Reserve Account 7,098, Costs of Issuance (*) 1,350, Premium and fees for Contract of Insurance 3,658, Total Uses of Funds $123,762, (*) Includes underwriter s discount, legal costs, accounting costs, third-party consultant costs, printing costs, rating agency fees, Bond Trustee fees, Authority fees, and other miscellaneous costs of issuance of the Bonds. THE BONDS The Bonds will be issued as fully-registered bonds without coupons and will be dated the date of initial delivery. The Bonds will initially be made available to beneficial owners in book-entry form only, in denominations of $5,000 or any integral multiple in excess thereof ( Authorized Denominations ). Interest on the Bonds will be payable on each April 1 and October 1 (each April 1 or October 1 while the Bonds are outstanding an Interest Payment Date ), commencing April 1, Interest on the Bonds shall be computed upon the basis of a 360-day year consisting of twelve 30-day months. The Bonds will be subject to redemption prior to maturity, as more fully described herein. Beneficial owners of the Bonds will not receive certificates representing their interests in the Bonds, except as described below. So long as Cede & Co., as nominee of The Depository Trust Company ( DTC ), is the registered owner of the Bonds, the principal thereof and the interest thereon are payable by the Bond Trustee to DTC, which, in turn, will remit such amounts to DTC s participants for subsequent disbursement to the beneficial owners. Purchasers of such interests will not receive certificates representing their interests in the Bonds except in the event that use of the book-entry system for the Bonds is discontinued as described below. For a description of the method of payment of principal of, premium, if any, and interest on the Bonds or the redemption price of any Bonds and matters pertaining to transfers and exchanges while in the book-entry system, see the information in APPENDIX H DTC AND THE BOOK-ENTRY SYSTEM. In the event the book-entry system is discontinued, or DTC resigns or is removed and no substitute depository is obtained, the following provisions would apply. The principal or redemption 6

15 price of the Bonds shall be payable in lawful money of the United States of America at the Principal Corporate Trust Office of the Bond Trustee to the registered owner or owners of the Bonds. Payment of the interest on any Bond shall be made on each Interest Payment Date to the person whose name appears on the bond registration book of the Bond Trustee as of the close of business on the Record Date for each such Interest Payment Date by check mailed by first-class mail on each Interest Payment Date to such registered owner at his address as it appears on the registration books maintained by the Bond Trustee or, upon the written request of any registered owner of at least $1,000,000 in principal amount of Bonds, submitted to the Bond Trustee prior to the Record Date, by wire transfer in immediately available funds to an account within the United States. Redemption Optional Redemption of Bonds Maturing on and after April 1, The Bonds maturing on and after April 1, 2024, are subject to redemption prior to their stated maturity, at the option of the Authority (which option shall be exercised as directed by the Borrower), in whole, or in part by lot (in such amounts and of such maturities as may be specified by the Borrower, or if the Borrower fails to designate such maturities, in inverse order of maturity) on any date on or after April 1, 2023, upon 30 days prior written notice to the Bond Trustee from the Borrower (which notice period may be waived in writing by the Bond Trustee), from any source of available moneys, at the principal amount thereof, without premium, plus interest accrued thereon to the date fixed for redemption. Mandatory Sinking Account Redemption. The Bonds maturing on April 1, 2032, are subject to mandatory redemption prior to their stated maturity in part by lot from Mandatory Sinking Account Payments on April 1 of the years and in the amounts set forth below, at a redemption price equal to the principal amount thereof, together with interest accrued thereon to the date fixed for redemption, without premium: Mandatory Sinking Account Payment Date (April 1) Mandatory Sinking Account Payment $ 4,430,000 4,650, ,880, ,125,000 5,385, ,655, ,935, ,235,000 Final Maturity. 7

16 The 5.000% Bonds maturing on April 1, 2042, are subject to mandatory redemption prior to their stated maturity in part by lot from Mandatory Sinking Account Payments on April 1 of the years and in the amounts set forth below, at a redemption price equal to the principal amount thereof, together with interest accrued thereon to the date fixed for redemption, without premium: Mandatory Sinking Account Payment Date (April 1) Mandatory Sinking Account Payment 2033 $1,040, ,090,000 1,140, ,200, ,275,000 1,335, ,390, ,470,000 1,545, ,635,000 Final Maturity. The 4.125% Bonds maturing on April 1, 2042, are subject to mandatory redemption prior to their stated maturity in part by lot from Mandatory Sinking Account Payments on April 1 of the years and in the amounts set forth below, at a redemption price equal to the principal amount thereof, together with interest accrued thereon to the date fixed for redemption, without premium: Mandatory Sinking Account Payment Date (April 1) Mandatory Sinking Account Payment 2033 $415, , , , , , , , , ,000 Final Maturity. Special Redemption. The Bonds are subject to redemption prior to their respective stated maturities at the option of the Authority (which option shall be exercised as directed by the Borrower) in whole or in part on any date (in such amounts and of such maturities as may be specified by the Borrower, or if the Borrower fails to designate such maturities, in inverse order of maturity, and by lot within a maturity), upon 30 days prior written notice to the Bond Trustee from the Borrower, from certain proceeds of insurance, title insurance or condemnation awards required by Section 6.4 of the Loan Agreement to be deposited in the Special Redemption Account, at a redemption price equal to the principal amount thereof together with interest accrued thereon to the date fixed for redemption, without premium. General Redemption Provisions. Notice of redemption shall be mailed by first class mail by the Bond Trustee to the Bondholders of any Bonds designated for redemption at their addresses appearing on 8

17 the registration books of the Bond Trustee and to the Authority, not less than 20 days nor more than 60 days prior to the redemption date. Failure of the Bond Trustee to give notice to a Bondholder or any defect in such notice shall not affect the validity of the redemption of such Bonds. Each notice of redemption shall state the redemption date, the place or places of redemption, the maturities, the date of issue of the Bonds, the CUSIP number (if any) of the maturity or maturities and, if less than all of any such maturity, the distinctive numbers (or inclusive ranges of distinctive numbers) of the Bonds of such maturity, to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on said date there will become due and payable on each of said Bonds the redemption price thereof or of said specified portion of the principal amount thereof in the case of a fully registered Bond to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered. Neither the Authority nor the Bond Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Bond or in any redemption notice with respect thereto, and any such redemption notice may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Authority nor the Bond Trustee shall be liable for any inaccuracy in such numbers. The Borrower may instruct the Trustee to provide conditional notice of redemption, which may be conditioned upon the receipt of moneys or any other event. The Bond Trustee shall rescind any redemption notice as soon as practicable by notice of rescission if directed to do so by the Borrower prior to the date of redemption. The Bond Trustee shall mail notice of such rescission of redemption in the same manner and to the same recipients as the original notice of redemption was sent. The redemption shall be deemed canceled once the Bond Trustee has given notice of rescission. Neither a rescission nor a failure of funds being made available in part or in whole on or before a redemption date shall constitute an Event of Default. From and after the redemption date, the Bonds so called for redemption shall cease to accrue interest or be entitled to any benefit or security under the Indenture, and the holders of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price plus accrued interest to the redemption date. So long as the book-entry system is in effect with respect to the Bonds, all notices of redemption will be mailed to DTC (or its nominee), as the holder of the Bonds. See APPENDIX H DTC AND THE BOOK-ENTRY SYSTEM. General SECURITY AND SOURCE OF PAYMENT FOR THE BONDS The Bonds are limited obligations of the Authority and, except to the extent payable from Bond proceeds, investment earnings or proceeds of insurance or condemnation awards, are payable solely from Loan Repayments required to be paid by the Borrower to the Bond Trustee under the Loan Agreement and from certain other funds held under the Indenture. In the Loan Agreement, the Borrower agrees to make payments to the Bond Trustee, which payments, in the aggregate, are required to be in amounts sufficient for the payment in full of all amounts payable with respect to all Bonds, including the total interest payable on the Bonds to their respective stated maturities, the principal amount of the Bonds, any redemption premiums and certain other fees and expenses (consisting generally of any taxes and assessments, reasonable fees and charges of the Bond Trustee, fees and expenses of accountants, consultants, attorneys and other experts engaged by the Authority or the Bond Trustee and fees and 9

18 expenses of the Authority associated with the issuance of the Bonds) (the Additional Payments ), less any amounts available for such payment, as provided in the Indenture. The Authority and the Borrower will enter into the Contract of Insurance with the Office, pursuant to which the Office will insure the payment of the principal of and interest on the Bonds. See CALIFORNIA HEALTH FACILITY CONSTRUCTION LOAN INSURANCE PROGRAM below. Under the Indenture, the Authority has assigned to the Bond Trustee for the benefit of the holders of the Bonds (a) all of the right, title and interest of the Authority in the Loan Agreement (except for the right to receive any Additional Payments or certain fees, costs and charges payable to third parties to the extent payable by the Authority, any rights of indemnification and the right to receive certain certificates) and the Contract of Insurance, and its rights under the Regulatory Agreement and the Deeds of Trust, and (b) all of the Revenues and any other amounts held in any fund or account established pursuant to the Indenture, other than the Rebate Fund. Moneys on deposit in the funds and accounts held under the Indenture do not secure any Parity Debt (all as described below). Pledge of Revenues; Security Interest in Gross Revenues Under the Indenture, and subject to and for the purposes and on the terms and conditions set forth in the Indenture, all of the Revenues and any other amounts (including proceeds of the sale of the Bonds) held in any fund or account established pursuant to the Indenture (except the Rebate Fund) are pledged to secure the payment of the principal of, and interest on, the Bonds. Revenues is defined in the Indenture as all amounts received by the Authority or the Bond Trustee pursuant or with respect to the Loan Agreement, including, without limiting the generality of the foregoing, Loan Repayments (including both timely and delinquent payments and any late charges, and regardless of source), prepayments, insurance proceeds, payments received pursuant to the Insurance Law, condemnation proceeds, and all interest, profits or other income derived from the investment of amounts in any fund or account established pursuant to the Indenture, but not including any amounts paid to the Authority or the Bond Trustee pursuant to rights of indemnification or any Additional Payments made under the Loan Agreement. The Authority assigns to the Bond Trustee, for the benefit of the holders of the Bonds, all of the right, title and interest of the Authority in the Loan Agreement, the Deeds of Trust, the Contract of Insurance and the Regulatory Agreement except for the right to receive and retain certain administrative fees and expenses, rights to indemnification and similar amounts. The Bond Trustee shall be entitled to and, subject to the provisions of the Indenture, shall be required to take all steps, actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority under the Loan Agreement and all of the obligations of the Borrower under the Loan Agreement, the Deeds of Trust, the Contract of Insurance and the Regulatory Agreement. Subject to the terms of the Loan Agreement and the Regulatory Agreement, the Gross Revenues of the Borrower are pledged to the payment of Loan Repayments and to secure the payments of the principal of and interest on the Bonds and Parity Debt. Gross Revenues is defined in the Regulatory Agreement as all revenues, income, receipts and money received in any period by the Borrower (other than donor-restricted gifts, grants, bequests, donations, contributions and tax revenues), including, but without limiting the generality of the foregoing, the following: (a) gross revenues derived from its operation and possession of and pertaining to its properties, (b) proceeds with respect to, arising from, or relating to its properties and derived from (1) insurance (including business interruption insurance) or condemnation proceeds, except to the extent such proceeds are required by the terms of the Regulatory Agreement (or other agreements with respect to the Indebtedness which the Borrower is permitted to 10

19 incur pursuant to the terms of the Regulatory Agreement) to be used for purposes inconsistent with their use for the payment of Loan Repayments, Additional Payments or similar payments with respect to Parity Debt, (2) accounts, including but not limited to, accounts receivable, (3) securities and other investments, (4) inventory and intangible property, (5) payment/reimbursement programs and agreements, and (6)contract rights, accounts, instruments, claims for the payment of moneys and other rights and assets now or hereafter owned, held or possessed by or on behalf of the Borrower, and (c) rentals received from the lease of the Borrower s properties or space in the Facilities. The Borrower agrees that, so long as any Loan Repayments remain unpaid under the Loan Agreement, all of the Gross Revenues shall be deposited as soon as practicable upon receipt in a fund designated as the Gross Revenue Fund which the Borrower shall establish and maintain pursuant to the provisions of the Loan Agreement at such banking or financial institution or institutions as the Borrower shall designate for such purpose (the Depository Bank(s) ). Subject only to the provisions of the Loan Agreement and the Regulatory Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein, the Borrower pledges and, to the extent permitted by law, grants a security interest to the Bond Trustee and the Office in the Gross Revenue Fund and all other Gross Revenues of the Borrower to secure the payment of Loan Repayments and the performance by the Borrower of its obligations with respect to Parity Debt. Insurance The principal of and interest on the Bonds will be insured by the Office. If moneys are not available to pay the principal of or interest on the Bonds, the Office will be obligated to continue to make payments on the Bonds or shall instruct the Trustee to declare the principal of all Bonds then Outstanding and interest accrued thereon to be due and payable immediately and make payment of such principal and interest. Upon the occurrence of certain events, the Office shall notify the Treasurer, and the Treasurer shall issue debentures to the Holders of the Bonds fully and unconditionally guaranteed by the State in an amount equal to the principal of and accrued interest on the Bonds. See CALIFORNIA HEALTH FACILITY CONSTRUCTION LOAN INSURANCE PROGRAM herein. No Financial Covenants in Loan Agreement Due to the insurance of the Bonds by the Office, the Loan Agreement does not contain financial or operational covenants relating to the operations of the Borrower, such as limitations on the ability of the Borrower to incur indebtedness, to dispose of property or to create liens on property. Additionally, the Loan Agreement does not require the Borrower to maintain revenues at levels sufficient to provide coverage of debt service on the Bonds or any other indebtedness. Such covenants are contained in the Regulatory Agreement, but may be waived or amended by the Office without the necessity of obtaining the consent of the holders of the Bonds, the Authority or any other party See APPENDIX C - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS THE LOAN AGREEMENT AND THE REGULATORY AGREEMENT. Bond Reserve Account A Bond Reserve Account will be established and funded under the terms of the Indenture. Amounts on deposit in the Bond Reserve Account shall be used and withdrawn by the Bond Trustee solely for the purpose of making up any deficiency in the Interest Account or Principal Account (but, in each case, only with the consent of the Office) or (together with any other moneys available therefor) for the payment or redemption of all Bonds then outstanding. 11