BOOK-ENTRY-ONLY Ratings: Moody's: P-1

S&P: A-1+ Fitch: Fl+

In the opinion of Orrick Herrington & Sutcliffe LLP, Bond Counsel to the State, delivered on August 22, 2018, interest on the Tax-Exempt Notes, when issued from time to time in accordance with the Resolutions, the Issuing and Paying Agent Agreement and the Tax Certificate, will be excluded from gross income for federal income tax

purposes under Section 103 of the Internal Revenue Code of 1986. The amount treated as interest on the Tax-Exempt Notes and excluded from gross income will depend upon the taxpayer's election under Internal Revenue Service Notice 94-84. Bond Counsel also opined that interest on the Tax-Exempt Notes, when issued from time to time

in accordance with the Resolutions, the Issuing and Paying Agent Agreement and the Tax Certificate, will not constitute a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel further opined that interest on the Notes when issued from time to time in accordance with the Resolutions and the Issuing

and Paying Agent Agreement will be exempt from State of California personal income taxes. Bond Counsel expressed no opinion regarding other tax consequences related

to the ownership or disposition of or the amount, accrual or receipt of interest on, the Notes. Bond Counsel has not taken and does not intend to take any action to update

such opinion or to determine if interest on the Tax-Exempt Notes is presently excluded from gross income/or federal income tax purposes. See "Tax Matters" herein.

$500,000,000

STATE OF CALIFORNIA

GENERAL OBLIGATION

TAX-EXEMPT

COMMERCIAL PAPER NOTES

SERIES A-2

TAXABLE

COMMERCIAL PAPER NOTES

SERIES B-2

This offering memorandum ( "Offering Memorandum") contains certain information regarding (i) the State of California General Obligation Tax-Exempt Commercial Paper Notes, Series A-2 (the "Tax-Exempt Notes") and (ii) the State of California General Obligation Taxable Commercial Paper Notes, Series B-2 (the "Taxable Notes," and together with the Tax-Exempt Notes, referred to herein as the "Notes"), to be issued by the State of California (the "State") pursuant to California Government Code Section 16720 et seq. (the "Legislation"), certain Resolutions and Bond Acts described herein and an Amended and Restated Commercial Paper Issuing and Paying Agent Agreement (as amended from time to time in accordance with its terms, the "Issuing and Paying Agent Agreement"), all as described herein. The State currently has authorization for an aggregate principal amount of general obligation commercial paper notes not to exceed $2,225,000,000 outstanding at any one time. The Notes described in this Offering Memorandum constitute a portion of the State's currently authorized general obligation commercial paper notes.

Barclays Capital Inc. ("Barclays"), Citigroup Global Markets Inc. ("Citigroup"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), REC Capital Markets, LLC ("RBCCM LLC") and Wells Fargo Bank, N.A. ("Wells Fargo", and together with Barclays, Citigroup, Merrill Lynch and RBCCM LLC, referred to herein as the "Dealers", and each a "Dealer") are the non-exclusive dealers for the State with respect to the Notes. This Offering Memorandum contains certain information regarding the Notes and portions of the information contained herein and in the Appendices have been provided by the respective parties. All references to the documents and other materials are qualified in their entirety by reference to the complete provisions of such documents and other materials. Although this information is believed to be accurate, the Dealers do not represent that such information is accurate and complete, and such information should not be relied upon as such. The information and expressions of opinion in this Offering Memorandum are subject to change without notice after the date on the cover page of this Offering Memorandum, and future use of this Offering Memorandum shall not otherwise create any implication that there has been no change in the matters referred to in this Offering Memorandum since the date on the cover page of this Offering Memorandum.

Each Note will be dated the date of authentication and issuance thereof. The Notes of each series are to be issued in denominations of $100,000 and integral multiples of $1,000 in excess thereof and, as initially issued, are to be book-entry-only obligations evidenced by a master note (the "Master Note") registered in the name of Cede & Co., as nominee of The Depository Trust Company ( "DTC"). DTC will initially serve as the securities depository for the Notes. One fully-registered Note certificate has been issued for the Notes of each series and was originally deposited with U.S. Bank National Association as the issuing and paying agent under the Issuing and Paying Agent Agreement. Principal of and interest payments on the Notes are to be made to DTC, and DTC's current practice is to credit Direct Participants' accounts on a payment date in accordance with their respective holdings shown on DTC's records. See "APPENDIX C-BOOK-ENTRY-ONLY SYSTEM" attached hereto.

Each Note will bear interest (computed on the basis of actual days elapsed and on the basis of a 365 or 366-day year, as appropriate) from its date of authentication and issuance, at the rate per annum determined on such date, which may not exceed 11 % per annum, payable on its maturity date. No Note may mature later than ninety (90) days after its date of issuance. The Notes are not subject to redemption prior to maturity.

Payments of the principal of and interest on the Notes are supported by an Irrevocable Letter of Credit (as amended from time to time in accordance with its terms, the "Letter of Credit") originally issued by Royal Bank of Canada (the "Bank"), acting through its branch located at 200 Vesey Street, New York, New York 10281, on December 21, 2011, as further described herein, pursuant to a Reimbursement Agreement dated as of December 1, 2011, as amended and restated, including, without limitation, by the Third Amended and Restated Reimbursement Agreement dated as of January 1, 2019 (as amended from time to time in accordance with its terms, the "Agreement"), each between the State, acting by and through the Treasurer of the State (the "Treasurer"), and the Bank. The maximum aggregate principal amount of Notes supported by the Letter of Credit is $500,000,000, plus accrued and unpaid interest up to 90 days at 11 % per annum. The Letter of Credit will expire on January 13, 2023, unless terminated earlier pursuant to its terms or extended by the Bank.

Royal Bank of Canad.a The Letter of Credit is not a "direct pay" letter of credit, in that payment of the principal of maturing Notes will be paid in the first instance from the

proceeds of general obligation commercial paper notes and/or bonds subsequently issued by the State or other available amounts in the Note Payment Account (as

defined in the Issuing and Paying Agent Agreement) with respect to the Notes, and interest on maturing Notes will be paid in the first instance by the State. However, if

such amounts are insufficient to pay the principal of or interest on Notes when due, then timely payment of principal of and/or interest on such Notes, as applicable,

will be made from proceeds of Drawings (as defined in the Letter of Credit) under the Letter of Credit. If for any reason the Bank fails to honor a Drawing under the

Letter of Credit, the State cannot provide any assurance that it will have sufficient funds on hand and available to make such payment of principal of and/or interest on

the related Notes when due.

The Notes are general obligations of the State to which the full faith and credit of the State are pledged.

BARCLAYS BoFA MERRILL LYNCH CITIGROUP RBC CAPITAL MARKETS WELLS FARGO BANK, N .A.

February 6, 2019

TABLE OF CONTENTS

SECTION HEADING PAGE

GENERAL ...................................................................................................................... 1

DESCRIPTION OF THE NOTES ............................................................................................................. 3

SECURITY FOR THE NOTES ................................................................................................................ 5

USE OF PROCEEDS ...................................................................................................................... 6

THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT .................................................... 7

THE ISSUING AND PAYING AGENT AGREEMENT ............................................................................. 10

THE ISSUING AND PAYING AGENT .................................................................................................. 10

FINANCIAL STATEMENTS ................................................................................................................ 11

RATINGS .................................................................................................................... 11

TAX MATTERS .................................................................................................................... 12

CERTAIN RELATIONSHIPS ............................................................................................................... 12

No CONTINUING DISCLOSURE UNDERTAKING ................................................................................ 13

MISCELLANEOUS

APPENDICES

Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F

.................................................................................................................... 13

Bond Acts Opinion of Bond Counsel Book-Entry-Only System Description of the Reimbursement Agreement Form of Letter of Credit Certain Information Concerning the Bank

$500,000,000 STATE OF CALIFORNIA

GENERAL OBLIGATION

TAX-EXEMPT TAXABLE

COMMERCIAL PAPER NOTES

SERIESA-2

COMMERCIAL PAPER NOTES

SERIES B-2

GENERAL

This offering memorandum ( "Offering Memorandum") describes (i) the State of California General Obligation Tax-Exempt Commercial Paper Notes, Series A-2 (the "Tax­

Exempt Notes") and (ii) the State of California General Obligation Taxable Commercial Paper Notes, Series B-2 (the "Taxable Notes," and together with the Tax-Exempt Notes, referred to herein as the "Notes"), to be issued by the State of California ( the "State") pursuant to California Government Code Section 16720 et seq. (the "Legislation"), the Resolutions and the Bond Acts, each as described herein, and an Amended and Restated Commercial Paper Issuing and Paying Agent Agreement dated as of December 1, 2009, as amended (as amended from time to time in accordance with its terms, the "Issuing and Paying Agent Agreement"). The State currently has authorization for an aggregate principal amount of general obligation commercial paper notes not to exceed $2,225,000,000 outstanding at any one time. Pursuant to the Resolutions in effect on the date hereof, the State must maintain commercial paper note purchase agreements, credit enhancement or liquidity support in effect for the principal of and interest on its general obligation commercial paper notes, thereby limiting the total amount of general obligation commercial paper notes outstanding at any one time to the lesser of (x) the amount authorized by the Resolutions and (y) the amount supported by note purchase agreements, credit enhancement or liquidity support. The Notes described in this Offering Memorandum constitute a portion of the State's currently authorized general obligation commercial paper notes.

The Notes will be registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Notes. Beneficial interests in the Notes of each series may be purchased in book-entry-only form only, in denominations of $100,000 and integral multiples of $1,000 in excess thereof. See "APPENDIX c - BOOK-ENTRY-ONLY SYSTEM" attached hereto.

Pursuant to the Legislation, voter-approved general obligation indebtedness may be issued either as long-term bonds or, for some but not all bond issues, as commercial paper notes. Commercial paper notes may be refunded by the issuance of other commercial paper notes or long-term bonds. The State utilizes commercial paper notes as a source of interim funding for voter-approved projects. The State issues long-term general obligation bonds from time to time to retire its general obligation commercial paper notes. The State may also issue commercial paper notes to current refund outstanding general obligation bonds as an interim timing measure, pending later issuance of long-term general obligation bonds to repay such commercial paper notes.

The Notes are issued pursuant to resolutions (the "Resolutions") adopted from time to time by finance committees under the general obligation bond statutes listed in APPENDIX A

hereto (the "Bond Acts"), each authorizing the issuance of General Obligation Commercial Paper Notes of the State under the respective Bond Act. Upon Notice by the Treasurer to the Bank, additional Bond Acts may be added, whereupon they shall form a part of APPENDIX A, upon filing by the State with the Bank of a Notice as provided by the terms of the Reimbursement Agreement (defined below).

The Notes are general obligations of the State to which the full faith and credit of the State are pledged. See "SECURITY FOR THE NOTES" herein. The principal of and interest on all State general obligation bonds and notes, including the Notes, are payable from monies in the General Fund of the State Treasury (the "General Fund"), subject under State law only to the prior application of monies in the General Fund to the support of the public school system and public institutions of higher education.

Payments of the principal of and interest on the Notes are supported by an Irrevocable Letter of Credit (as amended from time to time in accordance with its terms, the "Letter of

Credit") originally issued by Royal Bank of Canada (the "Bank"), acting through its branch located at 200 Vesey Street, New York, New York 10281, on December 1, 2011, pursuant to a Reimbursement Agreement dated as of December 1, 2011, as amended and restated, including, without limitation, by the Third Amended and Restated Reimbursement Agreement dated as of January 1, 2019 (as amended from time to time in accordance with its terms, the "Reimbursement Agreement"), each between the State, acting by and through the Treasurer, and the Bank.

The Letter of Credit is not a "direct pay'' letter of credit, in that payment of the

principal of maturing Notes will be paid in the first instance from the proceeds of general

obligation commercial paper notes and/or bonds subsequently issued by the State or other

available amounts in the Note Payment Account (as defined in the Issuing and Paying Agent

Agreement) with respect to the Notes, and interest on maturing Notes will be paid in the first

instance by the State. However, if such amounts are insufficient to pay the principal of or

interest on Notes when due, then timely payment of principal of and/or interest on such Notes,

as applicable, will be made from proceeds of Drawings (as defined in the Letter of Credit)

under the Letter of Credit. If for any reason the Bank fails to honor a Drawing under the

Letter of Credit, the State cannot provide any assurance that it will have sufficient funds on

hand and available to make such payment of principal of and/or interest on the related Notes

when due.

Barclays Capital Inc. ( "Barclays" as a "Dealer"), Citigroup Global Markets Inc. ("Citigroup" as a "Dealer"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill

Lynch" as a "Dealer"), RBC Capital Markets, LLC ( "RBCCM LLC" as a "Dealer") and Wells Fargo Bank, N.A. ("Wells Fargo" as a "Dealer"), will each serve as a non-exclusive dealer for the offering and sale of the Notes pursuant to a related Dealer Agreement (as amended and supplemented from time to time in accordance with its terms, each a "Dealer Agreement" and collectively, the "Dealer Agreements") between the State and the respective Dealer.

The information in this Offering Memorandum has been obtained from the State, the Dealers, the Bank and other sources believed to be reliable. The references herein to the Notes,

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the Resolutions, the Issuing and Paying Agent Agreement, the Letter of Credit, the Reimbursement Agreement, and the Dealer Agreements do not purport to be complete or definitive and are qualified in their entirety by reference to the complete provisions of such documents, each of which is available from each Dealer.

Each Dealer has reviewed the information in this Offering Memorandum 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 such Dealer does not guarantee the accuracy or completeness of such information.

The information and expressions of opinion in this Offering Memorandum are subject to change without notice after the date hereof and future use of this Offering Memorandum shall not create any implication that there has been no change in the matters referred to in this Offering Memorandum since the date hereof.

This Offering Memorandum is not to be construed as a contract between the State or any Dealer and the purchasers of the Notes. Prospective purchasers of the Notes are expected to conduct their own review and analysis before making an investment decision.

DESCRIPTION OF THE N OTES

DESCRIPTION OF THE NOTES

The Notes may be outstanding in an aggregate principal amount which does not exceed the amount then available to be drawn under the Letter of Credit with respect to principal of the Notes.

Each Note will be dated the date of its authentication and issuance and will bear interest from the date of its authentication and issuance, payable on its maturity date. Notes will be issued in denominations of $100,000 and in integral multiples of $1,000 in excess thereof in book-entry-only form. See "Book-Entry-Only System" below. The Notes will bear interest at the interest rate stated thereon, which shall not exceed 11 % per annum, computed on the basis of a year consisting of 365/366 days and actual number of days elapsed, payable on their respective maturity dates. The Notes will be issued from time to time to mature on a Business Day not later

than (i) ninety (90) days from their respective dates of issuance and (ii)five (5) days prior to the

expiration date of the Letter of Credit as such date may be extended from time to time pursuant

to the terms of the Letter of Credit ( or any replacement therefor provided in accordance with the

provisions of the Resolutions and the Issuing and Paying Agent Agreement). The Notes are not

subject to redemption or acceleration prior to maturity.

LETTER OF CREDIT

The principal amount of Notes outstanding at any one time may be adjusted by the State during the term of the Letter of Credit, provided, however, the combined aggregate principal amount of the Notes outstanding from time to time shall not exceed the Principal Component of

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the then current Stated Amount of the Letter of Credit. Pursuant to the various Resolutions, the State has covenanted not to issue any Note, if after its issuance, the outstanding principal amount of all Notes as well as interest to accrue on such Notes would exceed the then current Stated Amount of the Letter of Credit.

Pursuant to the Resolutions, the State has covenanted that it will not terminate the Letter of Credit unless no Notes supported by the Letter of Credit will be outstanding on the termination date of the Letter of Credit or all of the Holders of the Notes that will be Outstanding on such termination date have been or will be notified of the possibility of such termination prior to their purchase of Notes. In addition, pursuant to the Resolutions, the State has covenanted for the benefit of all Holders of Notes to give notice to DTC, with a request for DTC to communicate such notice to Holders of Notes 15 days prior to the termination of the Letter of Credit. In each of these Resolutions the State has further covenanted that it will not modify or terminate the Letter of Credit in a manner that would adversely affect the credit rating of any outstanding Notes.

No-ISSUANCE NOTICES

Notes may be issued from time to time prior to the Termination Date (as defined in the Letter of Credit) in accordance with the Reimbursement Agreement and with the Issuing and Paying Agent Agreement so long as U.S. Bank National Association (successor to Deutsche Bank Trust Company Americas) as the issuing and paying agent (the "Issuing and Paying

Agent") under the Issuing and Paying Agent Agreement is not in receipt of instructions then in effect given and not rescinded by the Bank not to issue such Notes (a "No-Issuance Notice").

The Bank may deliver a No-Issuance Notice at any time when (i) an Event of Default under the Reimbursement Agreement shall have occurred and be continuing, (ii) the representations and warranties of the State set forth in Article Three of the Reimbursement Agreement are no longer true and correct in any material respect or (iii) the State fails to obtain the appropriations necessary to authorize the State to pay to the Bank or any other Person the Additional Amount (as defined in the Reimbursement Agreement) and the Additional Amount is not otherwise paid in accordance with the terms of the Reimbursement Agreement within thirty (30) days after any such amount has become due and payable. In connection with the delivery of a No-Issuance Notice, the Bank may reduce the Stated Amount of the Letter of Credit to equal the principal amount of the Notes then outstanding plus interest to accrue thereon, at the assumed rate specified in the Letter of Credit, to the respective maturity dates of Notes outstanding prior to the date on which the No-Issuance Notice was issued and the Stated Amount shall reduce in the amount of each Drawing thereafter until all such Notes outstanding issued prior to the date on which the No-Issuance Notice was issued by the Bank to the Issuing and Paying Agent have matured and on such date the Letter of Credit shall terminate; provided, that the issuance of a No-Issuance Notice shall have no effect on the amount available to be drawn on the Letter of Credit with respect to Notes issued prior to the date of such No-Issuance Notice; provided,

further, that if such No-Issuance Notice is rescinded by the Bank, the Stated Amount shall be reinstated in accordance with the reinstatement provisions set forth in the Letter of Credit.

A No-Issuance Notice shall be effective when received by the Issuing and Paying Agent; provided, however, that a No-Issuance Notice received by the Issuing and Paying Agent after

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11:00 a.m. New York time, on any day on which Notes are being issued shall be effective on the next succeeding day.

BOOK-ENTRY-ONLY SYSTEM

The Depository Trust Company, New York, New York ( "DTC") will act as securities depository for the Notes. The Notes, when issued, will be registered in the name of Cede & Co., as registered owner and nominee of DTC, and individual purchases of the Notes will be made in book-entry-only form. So long as Cede & Co. is the registered owner of the Notes, principal of and interest on the Notes will be payable by wire transfer of same day funds by the Issuing and Paying Agent to Cede & Co., as nominee for DTC. See APPENDIX C - "BOOK-ENTRY-ONLY SYSTEM."

SECURITY FOR THE NOTES

The Notes are general obligations of the State, payable in accordance with the Bond Acts out of the General Fund, subject under State law only to the prior application of money in the General Fund to the support of the public school system and public institutions of higher education. The Bond Acts provide that the State will collect annually in the same manner and at the same time as it collects other State revenue, an amount sufficient to pay the principal of and interest on the Notes in that year. The Bond Acts also contain a continuing appropriation from the General Fund of the sum annually necessary to pay the principal of and interest on the Notes as they become due and payable. No further appropriation by the Legislature is required to pay the principal of and interest on the Notes. Under the State Constitution, the appropriation to pay the principal of and interest on the Notes as set forth in the Bond Acts cannot be repealed until the principal of and interest on the related Notes are paid and discharged.

Each Bond Act provides that the Notes issued thereunder "shall be and constitute a valid and binding obligation of the State of California, and the full faith and credit of the State is hereby pledged for the punctual payment of the principal of, and interest on, the bonds as the principal and interest become due and payable." The pledge of the full faith and credit of the State alone does not create a lien on any particular monies in the General Fund or any other assets of the State, but is an undertaking by the State to be irrevocably obligated in good faith to use its taxing powers as may be required for the full and prompt payment of the principal of and interest on all general obligation bonds and notes, including the Notes, as they become due. The only provision of the State Constitution that creates a higher priority for any State fiscal obligation is a provision directing that from all State revenues there will first be set apart the monies to be applied by the State for the support of the public school system and public institutions of higher education. In the past when cash resources in the General Fund have been constrained, State officials have worked within their powers granted by State law to manage cash resources to ensure that payments to schools and universities and for general obligation debt service would be made. On any debt service payment date, all general obligation bonds and notes have an equal claim on monies in the General Fund on that date for payment of debt service.

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It is an event of default under the Resolutions of the State to fail to pay or to fail to cause to be paid the principal of or interest on the Notes when due or to declare a moratorium on the payment of, or to repudiate any Note.

Each Resolution states that in the case that one or more events of default occurs, then, and in every such case, the registered Noteholder is entitled to proceed to protect and enforce such registered Noteholder's rights by such appropriate judicial proceeding as such registered Noteholder deems most effectual to protect and enforce any such right, whether by mandamus or other suit or proceeding at law or in equity, for the specific performance of any covenant or agreement contained in the one or more Resolutions authorizing the affected Notes, as more specifically set forth in each Resolution authorizing the Notes pursuant to the respective Bond Acts. Beneficial owners of the Notes (the "Beneficial Owners") cannot protect and enforce such rights except through the registered Noteholder. See APPENDIX C - "BOOK-ENTRY-ONLY SYSTEM."

Since the State has never failed to make a debt service payment on any general obligation bonds or notes when due, the exact steps which would be taken, or the remedies available to Noteholders, have never been tested. There are no cross-default provisions among general obligation indebtedness, so any default with respect to any particular issue of bonds or notes would not provide any remedy to holders of other bonds or notes which are not affected. The State is not eligible to file for protection under the federal bankruptcy laws.

Payments of the principal of and interest on the Notes are supported by the Letter of Credit. The Letter of Credit is not a "direct pay" letter of credit, in that payment of the principal of maturing Notes will be paid in the first instance from the proceeds of general obligation commercial paper notes and/or bonds subsequently issued by the State or other available amounts in the Note Payment Account (as defined in the Issuing and Paying Agent Agreement) with respect to the Notes and interest on maturing Notes will be paid in the first instance by the State. However, if such amounts are insufficient to pay the principal of or interest on Notes when due, then timely payment of principal of and/or interest on such Notes, as applicable, will be made from proceeds of Drawings under the Letter of Credit. If for any reason the Bank fails to honor a Drawing under the Letter of Credit, the State cannot provide any assurance that it will have sufficient funds on hand and available to make such payment of principal of and/or interest on the related Notes when due.

USE OF PROCEEDS

The State utilizes commercial paper notes as a source of interim funding for voter-approved projects. The State issues long-term general obligation bonds from time to time to retire its general obligation commercial paper notes. The State may also issue commercial paper notes to current refund outstanding general obligation bonds as an interim timing measure, pending later issuance of long-term general obligation bonds to repay such commercial paper notes.

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THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT

INTRODUCTION

The following summary of certain prov1s1ons of the Letter of Credit and the Reimbursement Agreement does not purport to be complete or definitive, does not constitute a complete summary of either the Letter of Credit or the Reimbursement Agreement, and is qualified in its entirety by reference to the complete provisions of the Letter of Credit and Reimbursement Agreement, each of which is available from each Dealer. Investors should obtain and review a copy of the Letter of Credit and the Reimbursement Agreement in order to understand all of the terms of each document.

All capitalized terms used but not otherwise defined in the summary of the Letter of Credit and Reimbursement Agreement set forth below shall have the meanings ascribed to such terms in the Letter of Credit or if not defined therein shall have the meanings ascribed to such terms in the Reimbursement Agreement or the Resolutions, as applicable.

THE LETTER OF CREDIT

Payments of the principal of and interest on the Notes are supported by the Letter of Credit. The maximum Stated Amount authorized to be drawn under the Letter of Credit is $513,561,644, which is equal to the sum of (i) the maximum principal amount of the Notes supported by the Letter of Credit ($500,000,000) (the "Principal Component") and (ii) interest on such maximum principal amount calculated at the rate of eleven percent (11 %) per annum for a period of ninety (90) days and on the basis of a year of 365 days ($13,561,644) (the "Interest

Component"), which Stated Amount may be reduced and/or reinstated as provided for in the Letter of Credit and the Reimbursement Agreement; provided, however, that in no event shall the Stated Amount of the Letter of Credit at any time exceed $513,561,644, and, provided further,

the Stated Amount may not be less than the sum of the principal amount of all outstanding Notes plus interest thereon at the rate of eleven percent (11 % ) per annum for a period of ninety (90) days calculated on the basis of a year of 365 days. Unless extended or earlier terminated (as described below), the Letter of Credit will expire on January 13, 2023. The form of the Letter of Credit is set forth in APPENDIX E herein.

The Principal Component of the Letter of Credit may be drawn upon from time to time for the payment of the purchase price of Bank Notes (as hereinafter defined), which payment will be used to pay the principal amount of the related maturing Notes (each such Drawing is referred to herein as a "Purchase Drawing"). The Interest Component of the Letter of Credit may be drawn upon from time to time for the payment of accrued and unpaid interest on maturing Notes (each such Drawing is referred to herein as an "Interest Drawing"). "Bank Note" means each Note issued by the Issuing and Paying Agent on behalf of the State and purchased by the Bank with the proceeds of a Purchase Drawing.

Since the Letter of Credit is irrevocable, the obligation of the Bank to support outstanding Notes authenticated prior to the Issuing and Paying Agent's receipt of a No-Issuance Notice

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cannot be terminated regardless of the existence of any Event of Default under the Reimbursement Agreement.

The Letter of Credit is not a "direct pay" letter of credit, in that payment of the principal amount of maturing Notes will continue to be paid in the first instance from the proceeds of general obligation commercial paper notes and/or bonds subsequently issued by the State or other available amounts in the Note Payment Account (as defined in the Issuing and Paying Agent Agreement) with respect to the Notes and interest on maturing Notes will continue to be paid in the first instance by the State. However, the Issuing and Paying Agent is required pursuant to the Issuing and Paying Agent Agreement to draw on the Letter of Credit in accordance with its terms to pay principal of and interest on maturing Notes when due if the sources described in the preceding sentence will be insufficient to make such payment. See "THE ISSUING AND p A YING AGENT AGREEMENT" below.

The Issuing and Paying Agent may draw on the Letter of Credit on any day of the year other than (i) a Saturday, a Sunday or a State legal holiday, (ii) a day on which banks located in New York, New York or Los Angeles, California are required or authorized to close, (iii) a day on which the New York Stock Exchange is closed, and (iv) a day on which banking institutions are required or authorized to close in the city in which the principal office of the Issuing and Paying Agent is located.

Demands for payment under the Letter of Credit honored by the Bank shall not at the time of any Drawing exceed the Stated Amount thereof, as the Stated Amount may have been reduced or reinstated in accordance with the terms of the Letter of Credit. Subject to the preceding sentence, each Drawing honored by the Bank pursuant to the terms of the Letter of Credit shall pro tanto reduce, by the amount of such Drawing, the Stated Amount and the amount available to be drawn under the Letter of Credit by the Issuing and Paying Agent pursuant to any subsequent Drawing, except to the extent the Stated Amount has been reinstated. Except in the case of a Drawing after the date on which the Bank issues a Na-Issuance Notice, including, without limitation, following an Event of Default under the Reimbursement Agreement, the Stated Amount will be increased when and to the extent and in the amount, but only when and to the extent that (i) with respect to the Principal Component, of the Bank's receipt of payment of the principal amount of such Drawing and, with respect to the Interest Component, of the Bank's receipt of payment of the interest amount of such Drawing (as defined in the Reimbursement Agreement) and (ii) the Issuing and Paying Agent has not received a No-Issuance Notice from the Bank; provided, however, that if such notice has been rescinded by the Bank, the Stated Amount will be reinstated on the effective date of such rescission to the extent of payments received by the Bank as previously described.

The Letter of Credit will expire at 5:00 p.m. New York time on the date (the "Termination Date") which is the earliest to occur of: (i) January 13, 2023 (as such date may be extended pursuant to the terms of the Letter of Credit and the Reimbursement Agreement, the "Stated Expiration Date"), (ii) the later of (a) the date on which the Bank receives written notice from the Issuing and Paying Agent that a substitute letter of credit has been substituted for the Letter of Credit in accordance with the Resolutions and the Issuing and Paying Agent Agreement

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and (b) the effective date of any such substitute letter of credit (after the Bank honors any properly presented and strictly conforming drawing on such date), (iii) the date on which the Bank receives written notice from the Issuing and Paying Agent that there are no longer any Notes outstanding within the meaning of the Resolutions and the Issuing and Paying Agent Agreement and that the Issuing and Paying Agent elects to terminate the Letter of Credit and (iv) the date on which the final drawing under the Letter of Credit is honored by the Bank to fund (A) the payment of the purchase price of Bank Notes, which payment will be used to pay the principal amount of all maturing Notes issued prior to the date on which the Bank issued the No­Issuance Notice, and/or (B) the payment of the accrued and unpaid interest on maturing Notes issued prior to the date on which the Bank issued the No-Issuance Notice, and, in the case of either clause (iv)(A) or (iv)(B), resulting from the delivery of a No-Issuance Notice that has not been rescinded.

The Stated Amount of the Letter of Credit will be reduced upon the Issuing and Paying Agent giving the Bank notice that the Stated Amount of the Letter of Credit is to be reduced (any such date referred to herein as a "Decrease Date").

THE BANK - ROY AL BANK OF CANADA

Information concerning the Bank is set forth in APPENDIX F to this Offering Memorandum. Such information contained in APPENDIX F has not been independently verified by any Dealer or the State. No representation is made herein as to the accuracy or adequacy of such information or as to the absence of material changes in such information subsequent to the date of this Offering Memorandum, or that the information contained in APPENDIX F by reference is correct.

The Bank has no responsibility for the form and content of this Offering Memorandum, other than solely with respect to the information set forth in APPENDIX F to this Offering Memorandum, and has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Offering Memorandum or any information or disclosure contained herein, other than solely with respect to the information set forth in APPENDIX F to this Offering Memorandum, or omitted herefrom.

THE REIMBURSEMENT AGREEMENT

The Reimbursement Agreement contains representations, warranties and covenants of the State, and sets forth various events which will constitute Events of Default thereunder. See "APPENDIX D - DESCRIPTION OF THE REIMBURSEMENT AGREEMENT" attached hereto. No default by the State under the Reimbursement Agreement shall relieve the Bank from its obligation to honor a properly presented and conforming Drawing under the Letter of Credit, pursuant to its terms. Upon the occurrence of certain events which constitute an Event of Default under the Reimbursement Agreement, the Bank has the right to direct the State to cease issuance of new Notes, but the Bank remains obligated under the Letter of Credit to provide funds to repay outstanding, maturing Notes. The Bank may also seek other remedies, including the right to

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pursue any action available at law or in equity. See "DESCRIPTION OF THE NOTES-No Issuance Notices" above.

Under the Reimbursement Agreement, the State is required to repay, with interest, the Bank Notes and Rollover Notes purchased by the Bank and any Loan for Interest extended by the Bank under provisions set forth in the Reimbursement Agreement. Interest, fees, charges, and costs are also payable by the State to the Bank under the Reimbursement Agreement.

THE ISSUING AND PAYING AGENT AGREEMENT

The following is a summary of certain provisions of the Issuing and Paying Agent Agreement that describe when the Issuing and Paying Agent is to draw on the Letter of Credit and in what amount to support payments of the principal of and accrued and unpaid interest on the Notes when due. The following summary does not purport to be complete or definitive, does not constitute a complete summary of the Issuing and Paying Agent Agreement, and is qualified in its entirety by reference to the complete provisions of the Issuing and Paying Agent Agreement, which is available from each Dealer. Investors should obtain and review a copy of the Issuing and Paying Agent Agreement in order to understand all of the terms of such document.

If at 12:00 p.m. New York City time on any date on which any Notes mature the amounts on deposit in the account for the applicable series of Notes within the State's Note Payment Account with the Issuing and Paying Agent, together with (A) the amount the Issuing and Paying Agent has been informed by the State that has been wired to the Issuing and Paying Agent through the Federal Reserve Wire Network System by no later than 12:00 noon New York City time on such date and (B) the aggregate amount the dealer(s) of the State's general obligation commercial paper notes have notified the Issuing and Paying Agent is on hand to purchase general obligation commercial paper notes to be issued by the State on such date, which amount will be deposited in the account for such series of Notes within the State's Note Payment Account, are not sufficient to pay in full the principal of and interest on such maturing Notes of a series (other than Notes held in the name of or for the benefit of the Bank, the State or any agency or department of the State), the Issuing and Paying Agent shall, by 12:30 p.m. New York City time, draw on the Bank pursuant to the Letter of Credit in an amount sufficient to pay the principal of and accrued and unpaid interest on such maturing series of Notes in full on such date.

THE ISSUING AND PAYING AGENT

As of August 23, 2013, U.S. Bank National Association ( "U.S. Bank") succeeded Deutsche Bank Trust Company Americas ( "Deutsche Bank Americas") as the Issuing and Paying Agent under the Issuing and Paying Agent Agreement. U.S. Bank is currently the Issuing and Paying Agent referred to in the Letter of Credit. U.S. Bank previously purchased all or substantially all of the United States municipal bond trust business of Deutsche Bank National Trust Company and Deutsche Bank Americas ( consisting of direct obligations issued by state and local governments or public instrumentalities thereof, but excluding municipal leases,

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municipal derivatives and certain qualified private activity bonds) pursuant to a Purchase Agreement dated as of March 14, 2013 (the "Purchase Agreement"), by and among Deutsche Bank National Trust Company, Deutsche Bank Americas, Deutsche Bank AG and U.S. Bank. Pursuant to the Purchase Agreement, Deutsche Bank Americas agreed to assign to U.S. Bank, and U.S. Bank agreed to assume, all property, rights, powers, duties, trusts, immunities and obligations of Deutsche Bank Americas as Issuing and Paying Agent under the Issuing and Paying Agent Agreement.

FINANCIAL STATEMENTS

The Audited Basic Financial Statements of the State (the "Financial Statements") for the Fiscal Year ended June 30, 2017, are incorporated by reference into this Offering Memorandum. The Financial Statements have been examined by the State Auditor to the extent indicated in her report. Such Financial Statements have been filed with the Municipal Securities Rulemaking Board (the "MSRB") through its Electronic Municipal Market Access ("EMMA") system for municipal securities disclosure, as part of the final Remarketing Memorandum of the State relating to $100,000,000 State of California General Obligation Bonds, Series 2013E (Index Floating Rate Bonds), dated October 23, 2018. Information provided by the State and any annual financial and operating information and notices of certain material events regarding the State, and any other information on the MSRB' s website is not incorporated by reference into this Offering Memorandum. The State makes no representation as to the accuracy or completeness of any such information.

A wide variety of other information concerning the State, including financial information, is available from State agencies, State agency publications and State agency websites. Such information includes websites operated by the State Department of Finance, the State Controller's Office and the State Treasurer's Office. In addition, the State currently attaches its most recent Financial Statements as an exhibit to its general obligation bond offering documents, each of which are expected to be filed on EMMA. No such information is part of or incorporated into this Offering Memorandum.

RATINGS

In connection with the Letter of Credit, the Notes have received the ratings of "P-1" by Moody's Investors Service, Inc. ("Moody 's"), "A-1+" by Standard & Poor's Rating Services (''S&P"), and "Fl+" by Fitch Ratings, Inc. ("Fitch"). An explanation of the significance and status of such credit ratings may be obtained from the rating agencies furnishing the same. There is no assurance that such ratings will continue for any given period of time or that they will not be revised or withdrawn entirely by any such rating agencies if, in their respective judgments, circumstances so warrant. Any revision or withdrawal of a credit rating could have an effect on the market prices and marketability of the Notes.

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TAX MATTERS

In the op1mon of Orrick Herrington & Sutcliffe LLP, Bond Counsel to the State, delivered on August 22, 2018, interest on the Tax-Exempt Notes, when issued from time to time in accordance with the Resolutions, the Issuing and Paying Agent Agreement and the Tax Certificate, will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code"). The amount treated as interest on the Tax-Exempt Notes and excluded from gross income will depend upon the taxpayer's election under Internal Revenue Service Notice 94-84. Bond Counsel also opined that interest on the Tax-Exempt Notes when issued from time to time in accordance with the Resolutions, the Issuing and Paying Agent Agreement and the Tax Certificate, will not constitute a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel further opined that interest on the Notes when issued from time to time in accordance with the Resolutions and the Issuing and Paying Agent Agreement will be exempt from State of California personal income taxes. Bond Counsel expressed no opinion regarding other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Notes. A complete copy of the opinion delivered by Bond Counsel on August 22, 2018, is set forth in Appendix B hereto. Bond Counsel has not taken and does not intend to take any action to update such opinion or to determine if interest on the Tax-Exempt Notes is presently excluded from gross income for federal income tax purposes.

BOND COUNSEL HAS NOT RENDERED AN OPINION WITH REGARD TO FEDERAL INCOME TAX

CONSEQUENCES WITH RESPECT TO THE TAXABLE NOTES. EACH OWNER OF THE TAXABLE NOTES

SHOULD SEEK ADVICE BASED ON SUCH OWNER' S PARTICULAR CIRCUMSTANCES FROM AN

INDEPENDENT TAX ADVISOR.

Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Tax-Exempt Notes to be subject, directly or indirectly, in whole or in part, to federal income taxation or may cause interest on the Notes to be subject to or exempted from state income taxation, or otherwise prevent owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Notes. Prospective purchasers of the Notes should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expressed no opinion.

CERTAIN RELATIONSHIPS

Each Dealer and its respective affiliates comprise full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Each Dealer and its respective affiliates may have, from time to time, performed and may in the future perform, various investment and/or commercial banking services for the State for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, each Dealer and its respective affiliates may

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make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities and financial instruments which may include bank loans and/or credit default swaps) for their own accounts and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment securities activities may involve securities and instruments of the State.

No Dealer is acting as a financial advisor or a municipal advisor (as such term is defined in Section 975(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act) to the State in connection with the issuance, offering or sale of the Notes.

Royal Bank of Canada, the provider of the Letter of Credit supporting the Notes, is the parent company of RBC Capital Markets, LLC, one of the Dealers for the Notes.

No CONTINUING DISCLOSURE UNDERTAKING

The Notes are exempt from Rule 15c2-12 of the Securities and Exchange Commission relating to continuing disclosure of annual financial information and certain material events.

MISCELLANEOUS

The foregoing and attached summaries do not purport to be complete and are expressly made subject to the exact provisions of the applicable documents. For details of all terms and conditions, reference is made to the Notes, the Resolutions, the Issuing and Paying Agent Agreement, the Letter of Credit, the Reimbursement Agreement, and the Dealer Agreements, copies of which may be obtained from each Dealer. Information concerning the Bank is contained in APPENDIX F to this Offering Memorandum.

The attached Appendices are an integral part of this Offering Memorandum and must be read together with all of the balance of this Offering Memorandum.

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APPENDIX A

BOND ACTS

California Clean Water, Clean Air, Safe Neighborhood Parks, and Coastal Protection Act of 2002

California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2000

California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access for All Act of 2018

California Stem Cell Research and Cures Bond Act of 2004

Children' s Hospital Bond Act of 2004 Children' s Hospital Bond Act of 2008 Class Size Reduction Kindergarten-

U ni versi ty Public Education Facilities Bond Act of 1998

Disaster Preparedness and Flood Prevention Bond Act of 2006

Earthquake Safety and Public Buildings Rehabilitation Bond Act of 1990

Higher Education Facilities Bond Act of June 1990

Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006

Housing and Emergency Shelter Trust Fund Act of 2002

Housing and Emergency Shelter Trust Fund Act of 2006

Kindergarten Through Community College Public Education Facilities Bond Act of 2016

Kindergarten-University Public Education Facilities Bond Act of 2002

Kindergarten-University Public Education Facilities Bond Act of 2004

Kindergarten-University Public Education Facilities Bond Act of 2006

New Prison Construction Bond Act of 1988 New Prison Construction Bond Act of 1990 Public Education Facilities Bond Act of

1996 Safe, Clean, Reliable Water Supply Act Safe Drinking Water, Clean Water,

Watershed Protection and Flood Protection Bond Act

Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006

Safe Neighborhood Parks, Clean Water, Clean Air and Coastal Protection Bond Act of 2000 (the Villaraigosa-Keeley Act)

Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century

School Facilities Bond Act of 1992 Veterans Home Bond Act of 2000 Veterans Housing and Homeless Prevention

Bond Act of 2014 Voting Modernization Bond Act of 2002

(Shelley-Hertzberg Act) Water Conservation Bond Law of 1988 Water Quality, Supply and Infrastructure

Improvement Act of 2014 Water Security, Clean Drinking Water,

Coastal and Beach Protection Act of 2002

APPENDIX B

OPINION OF BOND COUNSEL

APPENDIX C

BOOK-ENTRY-ONLY SYSTEM

The information in this Appendix concerning The Depository Trust Company, New York,

New York ("DTC") and DTC 's book-entry-only system has been obtained from sources that the

Dealers believe to be reliable, but none of the Dealers, the Bank nor the State take responsibility

for the accuracy thereof.

DTC will act as securities depository for the Notes. The Notes will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. Unless otherwise required by Cede & Co., the initial registered owner of the Notes, the Notes of each series shall be evidenced by a single Master Note and will be deposited with DTC.

DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry-only transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( "DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Notes on DTC's records. The ownership interest of each actual purchaser of each Note ( "Beneficial Owner") is in tum to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive

written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Notes, except in the event that use of the book-entry-only system for the Notes is discontinued.

To facilitate subsequent transfers, all Notes deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Notes with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Notes; DTC's records reflect only the identity of the Direct Participants to whose accounts such Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Notes may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Notes, such as redemptions, tenders, defaults, and proposed amendments to the Note documents. For example, Beneficial Owners of Notes may wish to ascertain that the nominee holding the Notes for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Notes unless authorized by a Direct Participant in accordance with DTC' s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the State as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on the Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC' s practice is to credit Direct Participants' accounts upon DTC' s receipt of funds and corresponding detail information from the State or the Issuing and Paying Agent on payable date in accordance with their respective holdings shown on DTC' s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, its nominee, the Issuing and Paying Agent or the State, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal or interest proceeds to Cede & Co. ( or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the State or the

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Issuing and Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Notes at any time by giving reasonable notice to the State or the Registrar and Issuing and Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Note certificates are required to be printed and delivered.

The State may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Note certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC' s book-entry-only system has been obtained from sources that the Dealers believe to be reliable, but none of the State, the Dealers or the Bank takes any responsibility for the accuracy thereof.

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APPENDIX D

DESCRIPTION OF THE REIMBURSEMENT AGREEMENT

The following summary of certain provisions of the Reimbursement Agreement does not purport to be complete or definitive, does not constitute a complete summary of the Reimbursement Agreement, and is qualified in its entirety by reference to the complete provisions of the Reimbursement Agreement, which is available from each Dealer. Investors should obtain and review a copy of the Reimbursement Agreement in order to understand all of the terms of such document.

All capitalized terms used but not otherwise defined in the summary of the Reimbursement Agreement set forth below shall, unless otherwise specified, have the meanings ascribed to such terms in the Reimbursement Agreement.

EVENTS OF DEFAULT

If any of the following events shall occur and be continuing, each such event shall be an "Event of Default" under the Reimbursement Agreement:

(a) The State (i) shall fail to pay, or cause to be paid, when due, any payment of principal or interest due on any Reimbursement Obligation (i.e. the principal or interest on any Bank Note or Rollover Note or any principal of any Loan for Interest) or any interest on any Loan for Interest, or (ii) shall have declared a moratorium on the payment of or repudiated its obligation to pay, such amounts when due under the Reimbursement Agreement or under the Fee Agreement; or

(b) The State (i) shall fail to pay or cause to be paid any Payment Obligation (other than any payment referred to in subparagraph (a) above), within ten (10) calendar days after the later to occur of (A) its due date and (B) the date on which the State receives an invoice from the Bank reflecting such amount, or (ii) shall have declared a moratorium on the payment of, or repudiated its obligation to pay, any such amount when due under the Reimbursement Agreement; or

(c) (i) A court of competent jurisdiction shall enter a final, nonappealable order or judgment that (A) any Commercial Paper Note or any provision of any other Document is illegal, invalid or unenforceable or (B) the State does not have the authority or the power to perform any of its obligations under the Commercial Paper Notes or any other Document or as contemplated thereby, or (ii) the issuance of any Commercial Paper Notes shall result in a violation by the State of any material law, rule or regulation, or any order of any court, governmental agency or regulatory body, or any indenture or loan or credit agreement (including the Reimbursement Agreement) applicable to the State; or

(d) A breach of the provisions of, or an event of default shall occur and be continuing under, any other Document and the expiration of any applicable grace period shall have occurred; or

( e) The State shall default in the performance of any of the certain specified covenants set forth in the Reimbursement Agreement; or

(f) The State shall default in the performance of any other covenant or agreement contained in the Reimbursement Agreement and such default shall continue for thirty (30) days after written notice of such default shall have been given to the State by the Bank; or

(g) Any representation or warranty on the part of the State contained in any Document shall prove to have been untrue in any material respect when made or when reaffirmed, as the case may be; or

(h) (i) Any provision of the Reimbursement Agreement, the Fee Agreement, the Commercial Paper Notes, the Issuing and Paying Agent Agreement or any Resolution relating to or otherwise affecting the State's obligation to pay the principal of or interest on any Commercial Paper Note or any amount owing or to become owing under the Reimbursement Agreement or the Fee Agreement shall be declared to be illegal, unenforceable or null and void by any court of competent jurisdiction in a final and nonappealable judgment or (ii) the State, in writing and pursuant to proper authorization, (A) repudiates or otherwise denies in a judicial or administrative proceeding that it has any further liability or obligation under the Reimbursement Agreement, under the Fee Agreement or with respect to the Commercial Paper Notes, (B) shall have taken or permitted to be taken any action, or has duly enacted any statute, that would materially adversely affect the enforceability of the Commercial Paper Notes or its obligations under the Reimbursement Agreement or the Fee Agreement or (C) contests in a judicial or administrative proceeding the validity or enforceability of any material provision of the Reimbursement Agreement, the Fee Agreement, the Commercial Paper Notes or any Resolution relating to or otherwise affecting the State's obligation to pay the principal of or interest on any Commercial Paper Note or any amount owing or to become owing under the Reimbursement Agreement or the Fee Agreement; or

(i) (i) The State shall fail to make any payment in respect of any Debt when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue after any applicable grace period; or (ii) any other default or event shall occur or condition shall exist and shall continue after any applicable grace period, if the effect of such default or event or condition is to accelerate the maturity of any Debt (other than Supplementally Secured Debt) or permit the acceleration of the maturity of any Debt (other than Supplementally Secured Debt); or any Debt (other than Supplementally Secured Debt) shall be declared to be due and payable, or required to be prepaid ( other than due to an optional call by the State or by a regularly scheduled required prepayment), prior to the stated maturity thereof; or (iii) if (A) any other default or event shall occur or condition shall exist and shall continue after

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any applicable grace period and (B) the effect of such default or event or condition is to accelerate the maturity of any Supplementally Secured Debt or any Supplementally Secured Debt shall be declared to be due and payable, or required to be prepaid ( other than due to an optional call by the State or by a regularly scheduled required prepayment), prior to the stated maturity thereof, then it shall also constitute an Event of Default under this clause (iii) of this paragraph (i) if $500,000,000 or more of the moneys in the General Fund is or will be required to be applied to the payment of such Supplementally Secured Debt prior to the stated maturity thereof; or

U) The State shall declare a moratorium on or repudiate its obligation to pay any Debt (other than Supplementally Secured Debt) or default on any Debt (other than Supplementally Secured Debt); or

(k) (i) Any Rated Long-Term General Obligation Debt is rated (by any Rating Agency then rating such Rated Long-Term General Obligation Debt) below "Baa3" (or its equivalent), in the case of Moody's, or "BBB-" (or its equivalent), in the case of S&P or Fitch, or (ii) Moody's, Fitch or S&P shall withdraw or suspend its rating with respect to Rated Long-Term General Obligation Debt, provided that it shall not be an Event of Default if any Rated Long-Term General Obligation Debt shall have its rating suspended or withdrawn by a Rating Agency due to (1) the maturity, redemption or defeasance of such Rated Long-Term General Obligation Debt, or (2) the State's failure to apply for ratings or to provide information to any Rating Agency (so long as the State maintains ratings on such Rated Long-Term General Obligation Debt from at least two Rating Agencies); or

(1) Interest on any of the Series A-2 Notes shall be declared to be includable in the gross income of the holders thereof for federal income tax purposes by a non-appealable, final determination by the Internal Revenue Service or a court of competent jurisdiction, in which proceedings the State has had the opportunity to participate.

No default by the State under the Reimbursement Agreement shall relieve the Bank from its obligation to honor a properly presented and conforming Drawing.

REMEDIES

Upon the occurrence of an Event of Default under the Reimbursement Agreement, the Bank may exercise any one or more of the following rights and remedies in addition to any other remedies herein or by law provided:

(a) Issue a No-Issuance Notice (the effect of which shall be as provided in the Reimbursement Agreement), reduce the Stated Amount to equal the principal amount of the Supported Commercial Paper Notes then outstanding plus interest to accrue thereon, at the assumed rate specified in the Letter of Credit, to the respective maturity dates of such Supported Commercial Paper Notes and cause the Stated Amount to reduce in the amount of each Drawing until all such Commercial Paper Notes have matured and on

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such date the Letter of Credit shall terminate; provided, however, that if such No­Issuance Notice has been rescinded by the Bank, the Stated Amount shall be reinstated in accordance with the reinstatement provisions set forth in the fourth paragraph of the Letter of Credit; or

(b) By written notice to the State declare the principal of and any accrued interest in respect of all Payment Obligations including, without limitation, Bank Notes, Rollover Notes and Loans for Interest, and all other obligations owing under the Reimbursement Agreement and under the Fee Agreement to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the State; provided, however, that with respect to the acceleration of Bank Notes and Rollover Notes, Bank Notes and Rollover Notes shall be due and payable on the second (2nd) Business Day following the date on which the Bank directs such acceleration and such Bank Notes and Rollover Notes shall be tendered by the Bank against delivery by wire transfer of the principal amount thereof in accordance with the Reimbursement Agreement; or

( c) So long as such Event of Default shall not have been remedied to the sole satisfaction of the Bank, proceed to enforce all remedies available under the Documents (other than the Reimbursement Agreement) and under applicable law and in equity, including, but not limited to, the right to seek mandamus.

Neither the exercise of the foregoing remedies nor any other prov1s1on in the Reimbursement Agreement shall permit the Bank to terminate the Letter of Credit as a result of an Event of Default under the Reimbursement Agreement prior to the Termination Date.

DEFINITIONS

"Commercial Paper Notes" has the meaning assigned to the term "Notes" herein.

"Debt" means all general obligation debt of the State backed by the full faith and credit of the State, and all revenue anticipation notes and registered, reimbursement or refunding warrants of the State. "Debt" does not mean any obligations under any reimbursement agreement, standby purchase agreement, forward warrant purchase agreement or similar credit agreement other than payment obligations thereunder that are backed by the full faith and credit of the State.

"Documents" means, collectively, the Reimbursement Agreement, the Fee Agreement, the Commercial Paper Notes, the Letter of Credit, the Resolutions, the Dealer Agreements, and the Issuing and Paying Agent Agreement.

"Drawing" means any drawing made or permitted to be made pursuant to the terms of the Letter of Credit.

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"Fee Agreement" means the Third Amended and Restated Fee Agreement dated January 17, 2019, between the State, acting by and through the Treasurer, and the Bank, as amended, restated, supplemented or otherwise modified from time to time.

"Liquidity Tranche" means a Bank Note purchased by the Bank in connection with a Drawing under the Principal Component of the Letter of Credit, any Rollover Note issued to repay such maturing Bank Note, and any subsequent related Rollover Note issued to repay any maturing Rollover Note related to such Drawing under the Principal Component.

"Payment Obligations" means all obligations of the State to pay or reimburse the Bank contained in or evidenced by the Reimbursement Agreement or any other Document, including, without limitation, the Reimbursement Obligations and accrued interest thereon, and the obligations of the State contained in the Fee Agreement and in the Reimbursement Agreement.

"Purchase Drawing" means a Drawing made to pay the purchase price of Bank Notes the proceeds of which shall be used to pay the principal of maturing Notes in accordance with the terms of the Issuing and Paying Agent Agreement.

"Rated Long-Term General Obligation Debt" means rated long-term debt that is general obligation debt of the State, backed by the full faith and credit of the State, but excluding Supplementally Secured Debt and any bonds whose rating is based upon a bond insurance policy or other third-party credit support.

"Reimbursement Obligations" means any and all obligations of the State to reimburse the Bank for Drawings under the Letter of Credit, if any, including, without limitation, each Loan for Interest made by the Bank and the payment of the principal of and interest on the related Bank Note and/or Rollover Notes of a Liquidity Tranche.

"Rollover Notes" means Commercial Paper Notes issued by the Issuing and Paying Agent and acquired by the Bank to fund the payment of the principal of a Bank Note or other Rollover Note as and when due.

"Supplementally Secured Debt" means Debt that is, by its terms, payable first from a specified State fund or account other than the General Fund.

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APPENDIX E

FORM OF LETTER OF CREDIT

IRREVOCABLE LETTER OF CREDIT No. ____ _

Deutsche Bank Trust Company Americas, as Issuing and Paying Agent

Attention: ________ _

Ladies and Gentlemen:

December 21, 2011 U.S. $513,561,644

No. ____ _

Royal Bank of Canada, acting through its WFC, New York, Branch, (the "Bank") hereby establishes, at the request and for the account of the State of California ( the "State"), in your favor, as Issuing and Paying Agent (the "Issuing and Paying Agent") with respect to the State of California Commercial Paper Notes, Series 201 lA-2 and Series 201 lB-2 (the "Commercial

Paper Notes"), issued pursuant to the Amended and Restated Commercial Paper Issuing and Paying Agent Agreement, dated as of December 1, 2009, as amended to date, between the State and the Issuing and Paying Agent (the "Issuing and Paying Agent Agreement") and certain resolutions of finance committees under general obligation bond statutes adopted from time to time (the "Resolutions"), our Irrevocable Letter of Credit No. (the "Letter of

Credit") in the maximum available amount of Five Hundred Thirteen Million, Five Hundred Sixty-One Thousand, Six Hundred Forty-Four Dollars ($513,561,644) (the "Stated Amount).

The initial Stated Amount of this Letter of Credit is comprised of and equals the sum of (i) the maximum principal amount of the Supported Commercial Paper Notes (as defined in the hereinafter defined Reimbursement Agreement) ($500,000,000) (the "Principal Component")

and (ii) interest on such maximum principal amount calculated at the rate of eleven percent (11 % ) per annum for a period of ninety (90) days and on the basis of a year of 365 days ($13,561,644) (the "Interest Component"). The Principal Component of this Letter of Credit may be drawn upon from time to time for the payment of the purchase price of Bank Notes (as hereinafter defined), which payment will be used to pay the principal amount of the related maturing Supported Commercial Paper Notes (each such drawing is referred to herein as a "Purchase Drawing"). The Interest Component of this Letter of Credit may be drawn upon from time to time for the payment of accrued and unpaid interest on maturing Supported Commercial Paper Notes (each such drawing is referred to herein as an "Interest Drawing"). This Letter of Credit is effective on the date hereof and expires on the Stated Expiration Date (as hereinafter defined) or earlier as hereinafter provided; provided, however, that if such date is not a Business

Day, the Stated Expiration Date shall be the immediately preceding Business Day. The Stated Amount is subject to reductions and reinstatements as provided herein. All Drawings (as hereinafter defined) under this Letter of Credit will be paid in immediately available funds with our own funds and will not be paid directly or indirectly from funds or collateral on deposit with or for the account of, or pledged with or for the account of, us by the State. This Letter of Credit is being issued pursuant to the Reimbursement Agreement, dated as of December 1, 2011 (as it may be amended, supplemented or otherwise modified from time to time, the "Reimbursement

Agreement"), between the State and the Bank.

For purposes of this Letter of Credit, "Bank Note" means each Commercial Paper Note issued by the Issuing and Paying Agent on behalf of the State and purchased by the Bank with the proceeds of a Purchase Drawing.

We hereby irrevocably authorize you to draw on us in an aggregate amount not to exceed the Stated Amount of this Letter of Credit set forth above and in accordance with the terms and conditions and subject to the reductions and reinstatements in amount as hereinafter set forth, in one or more Drawings, payable as set forth herein, on any day of the year other than (i) a Saturday, a Sunday or a State legal holiday, (ii) a day on which banks located in New York, New York or Los Angeles, California are required or authorized to close, (iii) a day on which the New York Stock Exchange is closed, and (iv) a day on which banking institutions are required or authorized to close in the city in which the principal office of the Issuing and Paying Agent is located (a "Business Day"), by presentation of your written and completed certificate signed by you in the form of (i) Annex A-1 attached hereto (in connection with a Purchase Drawing under the Principal Component to pay the purchase price of Bank Notes the proceeds of which shall be used solely to pay the principal of maturing Supported Commercial Paper Notes issued in accordance with the Issuing and Paying Agent Agreement and the Resolutions) in an amount not exceeding the Principal Component, or (ii) Annex A-2 attached hereto (in connection with an Interest Drawing under the Interest Component for payment of accrued and unpaid interest on Supported Commercial Paper Notes issued in accordance with the Issuing and Paying Agent Agreement and the Resolutions, in an amount not exceeding the Interest Component (the presentation of any such certificate being a "Drawing"), and, in any event, in an aggregate amount not exceeding the Stated Amount of this Letter of Credit.

Upon our honoring any Drawing, the Stated Amount and the amount available to be drawn hereunder by you pursuant to any subsequent Drawing shall be automatically decreased by an amount equal to the amount of such Drawing (with the Principal Component being automatically decreased by the amount set forth in the certificate presented in connection with any Purchase Drawing and the Interest Component being automatically decreased by the amount set forth in the certificate presented in connection with any Interest Drawing). In connection therewith (except in the case of a Drawing after the date on which the Bank issues a No-Issuance Notice pursuant to Section 7.3(a) of the Reimbursement Agreement which has not been rescinded by the Bank), the Stated Amount (and applicable corresponding amounts of the Principal Component and Interest Component) shall be increased when and to the extent and in the amount, but only when and to the extent that (i) with respect to the Principal Component, of our receipt of payment of the principal amount of maturing Bank Notes or Rollover Notes (as defined in the Reimbursement Agreement) and, with respect to the Interest Component, of our

E-2

receipt of payment of the principal amount of any Loan for Interest (as defined in the Reimbursement Agreement) and (ii) you have not received from us a No-Issuance Notice in the form attached hereto as Annex G; provided, however, that if such notice has been rescinded by the Bank, the Stated Amount shall be reinstated on the effective date of such rescission to the extent of payments received by the Bank in accordance with this sentence.

The Stated Amount of this Letter of Credit will be reduced to the amount set forth in a notice in the form of Annex E attached hereto from time to time delivered by you to the Bank (any date on which the Bank receives such a notice pursuant to this sentence shall be referred to herein as a "Decrease Date"). As of the applicable Decrease Date and upon such reduction, the Stated Amount shall not be less than the sum of the principal amount of all outstanding Supported Commercial Paper Notes plus interest thereon at the rate of eleven percent (11 % ) per annum for a period of ninety (90) days calculated on the basis of a year of 365 days.

Each Drawing shall be dated the date of its presentation and shall be presented during our business hours on a Business Day on or prior to the Stated Expiration Date at our office at

____ , Attn: , Facsimile: , or at such other address and/or facsimile number as we may specify to you in writing from time to time, without further need of documentation (including the original of this Letter of Credit), it being understood that each Drawing so submitted is to be the sole operative instrument of drawing. If we receive any Drawing, in strict conformity with the terms and conditions of this Letter of Credit, not later than 12:30 P.M., New York time, on a Business Day prior to the termination hereof, we will honor the same by 2:30 P.M., New York time, on the same day in accordance with your payment instructions. If we receive any Drawing, in strict conformity with the terms and conditions of this Letter of Credit, after 12:30 P.M., New York time, on a Business Day prior to the termination hereof, we will honor the same by 2:30 P.M., New York time, on the next succeeding Business Day in accordance with your payment instructions.

Payment under this Letter of Credit shall be made by the Bank by wire transfer of immediately available funds to the Issuing and Paying Agent in accordance with the instructions specified by the Issuing and Paying Agent in the related Drawing.

This Letter of Credit shall expire at 5:00 P.M., New York time, on the date (the "Termination Date") which is the earliest to occur of (i) December 19, 2014 (as extended from time to time the "Stated Expiration Date"), (ii) the later of (a) the date on which we receive written notice from you in the form of Annex C attached hereto that a substitute letter of credit has been substituted for this Letter of Credit in accordance with the Resolutions and the Issuing and Paying Agent Agreement and (b) the effective date of any such substitute letter of credit as specified in such Annex C (after we honor any properly presented and strictly conforming Drawing on such date), (iii) the date on which we receive written notice from you in the form of Annex D attached hereto that there are no longer any Supported Commercial Paper Notes outstanding within the meaning of the Resolutions and the Issuing and Paying Agent Agreement and that you elect to terminate the Letter of Credit and (iv) the date on which the final Drawing under the Letter of Credit is honored by the Bank to fund (A) the payment of the purchase price of Bank Notes, which payment will be used to pay the principal amount of all maturing Supported Commercial Paper Notes issued prior to the date on which the Bank issued the No-

E-3

Issuance Notice, and/or (B) the payment of the accrued and unpaid interest on maturing Supported Commercial Paper Notes issued prior to the date on which the Bank issued the No­Issuance notice, and, in the case of either clause (iv)(A) or (iv)(B), resulting from the delivery of a No-Issuance Notice that has not been rescinded.

Prior to the Termination Date, we may extend the Stated Expiration Date from time to time at the request of the State by delivering to you a notice in the form of Annex F hereto designating the date to which the Stated Expiration Date is being extended. All references in this Letter of Credit to the Stated Expiration Date shall be deemed to be references to the date designated as such in such notice. Any date to which the Stated Expiration Date has been extended as herein provided may be extended in a like manner.

This Letter of Credit is transferable in its entirety to any transferee which you have certified to us has succeeded you as Issuing and Paying Agent under the Issuing and Paying Agent Agreement and may be successively transferred. Transfer of the available balance under this Letter of Credit to such transferee (each a "Transfer") shall be effected by presenting to us a notice in the form of Annex B attached hereto signed by the transferor and the transferee together with the original Letter of Credit and amendments, if any. Transfers to designated foreign nationals and/or specially designated nationals are not permitted as being contrary to the U.S. Treasury Department or Office of Foreign Assets Control Regulations. Upon our endorsement of such transfer, the transferee instead of the transferor shall, without necessity of further action, be entitled to all the benefits of and rights under this Letter of Credit in the transferor's place.

This Letter of Credit sets forth in full our undertaking (but not any of our rights, whether under applicable law or otherwise), and such undertaking (but not any of our rights, whether under applicable law or otherwise) shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Commercial Paper Notes), except only the Drawings referred to herein and ISP98 (as hereinafter defined); and any such reference shall not be deemed to incorporate herein by reference any such document, instrument or agreement.

If a Drawing does not conform to the terms and conditions of this Letter of Credit, we will use reasonable efforts to give telephonic notice thereof to the Issuing and Paying Agent within the time set forth above for honor of such Drawing; such notice, if given, to be confirmed in writing to the Issuing and Paying Agent within one Business Day after such notice; provided,

however, that the absence of such confirmation shall not affect the conclusiveness or binding effect of such notice, and we shall hold all documents at your disposal or, at your option, return the same to you.

Communications with respect to this Letter of Credit shall be addressed to us at Royal Bank of Canada, or such other address as we shall specify to you in writing, specifically referring thereon to this Irrevocable Letter of Credit No. ������������������

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Communications with respect to this Letter of Credit shall be addressed to you at the above address, or at such other address as is provided in writing to us by you, specifically referring to the number of this Letter of Credit.

Except as expressly stated herein, this Letter of Credit is governed by, and shall be construed in accordance with, the terms of the International Standby Practices 1998, International Chamber of Commerce Publication No. 590 (the "ISP98"). As to matters not governed by ISP98, this Letter of Credit shall be governed by and construed in accordance with the internal law of the State of New York (including, without limitation, Article 5 of the Uniform Commercial Code as in effect in the State of New York).

[SIGNATURE PAGE TO FOLLOW]

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Very truly yours,

ROY AL BANK OF CANADA

By: ������������� Name: Title:

[Signature Page to Letter of Credit]

ANNEX A-1

TO

ROYAL BANK OF CANADA

IRREVOCABLE LETTER OF CREDIT No. ____ _

CERTIFICATE FOR PURCHASE DRAWING

Royal Bank of Canada

Attn: ---------

Facsimile Number:

The undersigned, a duly authorized officer of (the "Issuing

and Paying Agent"), hereby certifies to Royal Bank of Canada (the "Bank"), with reference to Irrevocable Letter of Credit No. (the "Letter of Credit"; the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Issuing and Paying Agent, as follows:

1. is the Issuing and Paying Agent under the Issuing and Paying Agent Agreement and is acting as the agent for the holders of the Supported Commercial Paper Notes.

2. The Issuing and Paying Agent is making a Purchase Drawing under the Letter of Credit to pay the purchase price of a Bank Note the proceeds of which shall be used solely in respect of the payment of the principal of maturing Supported Commercial Paper Notes, which payment is due on , 20_.

3. The amount of this Drawing is $ , and such amount is being drawn under the Principal Component of the Letter of Credit to pay the purchase price of a Bank Note the proceeds of which shall be used solely in respect of the payment of the principal of maturing Supported Commercial Paper Notes. Such amount was computed in compliance with the terms and conditions of the Supported Commercial Paper Notes and the Issuing and Paying Agent Agreement. The amount of this Drawing does not exceed the Principal Component, and the amount of this Drawing together with the amount of any Interest Drawing presented in connection herewith does not exceed the Stated Amount of the Letter of Credit.

4. The Supported Commercial Paper Notes were authenticated and delivered by us (or a predecessor Issuing and Paying Agent) pursuant to authority under the Resolutions and the Issuing and Paying Agent Agreement.

Annex A-1 to Royal Bank of Canada

Irrevocable Letter of Credit No. _____ _ (continued)

5. On the date the Issuing and Paying Agent receives payment of this Drawing under the Letter of Credit, the Issuing and Paying Agent will (a) issue on behalf of the State, to or for the benefit of the Bank, a Bank Note purchased by the Bank in connection with this Drawing in an amount equal to the amount drawn on the Principal Component of the Letter of Credit and (b) deposit the proceeds of the sale of such Bank Note directly into the account within the Note Payment Account (as defined in the Issuing and Paying Agent Agreement) maintained by the Issuing and Paying Agent with respect to the Supported Commercial Paper Notes pursuant to the Issuing and Paying Agent Agreement and apply the same directly to the payment when due of the principal amount of the maturing Supported Commercial Paper Notes pursuant to the Issuing and Paying Agent Agreement. No portion of said amount shall be applied by the Issuing and Paying Agent for any other purpose. No portion of said amount shall be commingled with other funds held by the Issuing and Paying Agent, except for other funds drawn under the Letter of Credit and funds of the State held in the account within the Note Payment Account maintained by the Issuing and Paying Agent with respect to the Supported Commercial Paper Notes. When such Supported Commercial Paper Notes have been presented for payment and paid by the Issuing and Paying Agent, the Issuing and Paying Agent will cancel such matured Supported Commercial Paper Notes.

6. Payment by the Bank pursuant to this Drawing shall be made to �-----

' ABA Number , Account Number , Attention

______ . ]

IN WITNESS WHEREOF, the Issuing and Paying Agent has executed and delivered this Certificate as of the day of , __ .

_______ , as Issuing and Paying Agent

By ________________ _ Name: Title:

A-1-2

ANNEX A-2

TO

ROYAL BANK OF CANADA

IRREVOCABLE LETTER OF CREDIT No. ____ _

CERTIFICATE FOR INTEREST DRAWING

IRREVOCABLE LETTER OF CREDIT No. ____ _

Royal Bank of Canada

Attn: _______ _ Facsimile Number:

The undersigned, a duly authorized officer of (the "Issuing and Paying Agent"), hereby certifies to Royal Bank of Canada (the "Bank"), with reference to Irrevocable Letter of Credit No. (the "Letter of Credit"; the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Issuing and Paying Agent, as follows:

1. is the Issuing and Paying Agent under the Issuing and Paying Agent Agreement and is acting as the agent for the holders of the Supported Commercial Paper Notes.

2. The Issuing and Paying Agent is making an Interest Drawing under the Letter of Credit with respect to the payment of accrued and unpaid interest on maturing Supported Commercial Paper Notes, which payment is due on __ , 20_.

3. The amount of this Drawing is $ , which amount is being drawn under the Interest Component of the Letter of Credit, representing accrued and unpaid interest on maturing Supported Commercial Paper Notes. Such amount was computed in compliance with the terms and conditions of the Supported Commercial Paper Notes and the Issuing and Paying Agent Agreement. The amount of this Drawing does not exceed the Interest Component, and the amount of this Drawing together with any Purchase Drawing presented in connection herewith does not exceed the Stated Amount of the Letter of Credit.

4. The Supported Commercial Paper Notes were authenticated and delivered by us (or a predecessor Issuing and Paying Agent) pursuant to authority under the Resolutions and the Issuing and Paying Agent Agreement.

5. On the date the Issuing and Paying Agent receives payment of this Drawing under the Letter of Credit, the Issuing and Paying Agent will deposit the amount

Annex A-2 to Royal Bank of Canada

Irrevocable Letter of Credit No. ____ _ (continued)

drawn hereunder directly into the account within the Note Payment Account (as defined in the Issuing and Paying Agent Agreement) maintained by the Issuing and Paying Agent with respect to the Supported Commercial Paper Notes pursuant to the Issuing and Paying Agent Agreement and apply the same directly to the payment when due of the amount of accrued and unpaid interest owing on account of the Supported Commercial Paper Notes pursuant to the Issuing and Paying Agent Agreement. No portion of said amount shall be commingled with other funds held by the Issuing and Paying Agent, except for other funds drawn under the Letter of Credit and funds of the State held in the account within the Note Payment Account maintained by the Issuing and Paying Agent with respect to the Supported Commercial Paper Notes.

6. The Issuing and Paying Agent hereby acknowledges and agrees that the Bank shall be subrogated to the rights of the holders of the Supported Commercial Paper Notes with respect to the accrued and unpaid interest on such Supported Commercial Paper Notes paid from this Drawing.

7. Payment by the Bank pursuant to this Drawing shall be made to �-----

' ABA Number , Account Number , Attention

______ . ]

IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the day of , __ .

_______ , as Issuing and Paying Agent

By ________________ � Name: Title:

A-2-2

ANNEX B

TO

ROYAL BANK OF CANADA

IRREVOCABLE LETTER OF CREDIT No. ____ _

TRANSFER

Date:

Royal Bank of Canada

Attn: _______ _ Facsimile Number:

Re: Royal Bank of Canada Irrevocable Letter of Credit No. ____ _

dated -----

We, the undersigned "Transferor", hereby irrevocably transfer all of our rights to draw under the above referenced Letter of Credit (the "Letter of Credit") in its entirety to:

NAME OF TRANSFEREE

(Print Name and complete address of the Transferee) "Transferee"

ADDRESS OF TRANSFEREE

CITY, STATE/COUNTRY ZIP

We certify that the Transferee has succeeded us as Issuing and Paying Agent under the Issuing and Paying Agent Agreement referred to in the Letter of Credit.

In accordance with ISP98, Rule 6, regarding transfer of drawing rights, all rights of the undersigned Transferor in such Credit are transferred to the Transferee, which shall have the sole rights as beneficiary thereof, including sole rights relating to any amendments whether increases or extensions or other amendments and whether now existing or hereafter made. All amendments are to be advised directly to the Transferee without necessity of any consent of or notice to the undersigned Transferor.

The original Letter of Credit, including amendments to this date, is attached, and the undersigned Transferor requests that you endorse an acknowledgment of this transfer on the reverse thereof or

Annex B to Royal Bank of Canada

Irrevocable Letter of Credit No. ____ _ (continued)

issue a new letter of credit in favor of the Transferee. The undersigned Transferor requests that you notify the Transferee, in such form and manner as you deem appropriate, of the terms and conditions of the Letter of Credit as transferred. The undersigned Transferor acknowledges that you incur no obligation hereunder and that the transfer shall not be effective until you have expressly consented to effect the transfer by notice to the Transferee.

If you agree to these instructions, please advise the Transferee of the terms and conditions of the transferred credit and these instructions.

Transferor represents and warrants to you that (i) our execution, delivery, and performance of this request to transfer (a) are within our powers, (b) have been duly authorized, (c) constitute our legal, valid, binding and enforceable obligation, ( d) do not contravene any charter provision, by-law, resolution, contract, or other undertaking binding on or affecting us or any of our properties and (e) do not require any notice, filing or other action to, with, or by any governmental authority, (ii) the enclosed Credit is original and complete, (iii) there is no outstanding demand or request for payment or transfer under the Credit affecting the rights to be transferred, and (iv) the Transferee's name and address are correct and complete and the Transferee's use of the Credit as transferred and the transactions underlying the Credit and the requested transfer do not violate any applicable United States or other law, rule or regulation.

The Effective Date of this transfer shall be the date hereafter on which you effect such transfer by giving notice thereof to Transferee.

WE WAIVE ANY RIGHT TO TRIAL BY JURY THAT WE MAY HAVE IN ANY ACTION OR PROCEEDING RELATING TO OR ARISING OUT OF THIS TRANSFER.

This transfer is made subject to ISP98 and is subject to and shall be governed by the internal law of the State of New York to the extent not inconsistent with the ISP.

(Signature Page Follows)

B-2

Sincerely yours,

(Print Name of Transferor)

(Transferor' s Authorized Signature)

(Print Authorized Signers Name and Title)

(Telephone Number/Fax Number)

Acknowledged:

(Print Name of Transferee)

(Transferee' s Authorized Signature)

(Print Authorized Signers Name and Title)

(Telephone Number/Fax Number)

Acknowledged as of _____ , 20_;

ROY AL BANK OF CANADA

By:

Name:

Title:

B-3

Annex B to

Royal Bank of Canada

Irrevocable Letter of Credit No. ____ _

(continued)

SIGNATURE GUARANTEED

Signature(s) with title(s) conform(s) with that/those on file with us for this individual, entity or company and signer(s) is/are authorized to execute this agreement.

(Print Name of Bank)

(Address of Bank)

(City, State, Zip Code)

(Print Name and Title of Authorized Signer)

(Authorized Signature)

(Telephone Number)

SIGNATURE GUARANTEED

Signature(s) with title(s) conform(s) with that/those on file with us for this individual, entity or company and signer(s) is/are authorized to execute this agreement.

(Print Name of Bank)

(Address of Bank)

(City, State, Zip Code)

(Print Name and Title of Authorized Signer)

(Authorized Signature)

(Telephone Number)

(Date)

ANNEX C

TO

ROYAL BANK OF CANADA

IRREVOCABLE LETTER OF CREDIT No. ____ _

CERTIFICATE RE: ALTERNATE LETTER OF CREDIT

IRREVOCABLE LETTER OF CREDIT No. ____ _

Royal Bank of Canada

Attn: _______ _ Facsimile Number:

The undersigned, a duly authorized officer of (the "Issuing and Paying Agent"), hereby certifies to Royal Bank of Canada (the "Bank"), with reference to Irrevocable Letter of Credit No. (the "Letter of Credit"; the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Issuing and Paying Agent, as follows:

1. is the Issuing and Paying Agent under the Issuing and Paying Agent Agreement and is acting as the agent for the holders of the Supported Commercial Paper Notes.

2. The conditions precedent to the acceptance of a substitute letter of credit set forth in the Issuing and Paying Agent Agreement and the Resolutions have been satisfied.

3. A substitute letter of credit in full and complete substitution for the Letter of Credit has been accepted by the Issuing and Paying Agent and is or will be in effect as of , 20_.

4. There will be no further Drawings presented to the Bank under the Letter of Credit.

5. Upon receipt by the Bank of this Certificate the Letter of Credit shall terminate with respect to all outstanding Supported Commercial Paper Notes, and the Letter of Credit (and amendments, if any) is returned to you herewith for cancellation.

6. No payment is demanded of you in connection with this Certificate.

Annex C to Royal Bank of Canada

Irrevocable Letter of Credit No. ____ _ (continued)

IN WITNESS WHEREOF, the Issuing and Paying Agent has executed and delivered this Certificate as of the day of , __ .

_______ , as Issuing and Paying Agent

By: Name: Title:

C-2

ANNEX D

TO

ROYAL BANK OF CANADA

IRREVOCABLE LETTER OF CREDIT No. ____ _

CERTIFICATE RE: No OUTSTANDING NOTES

IRREVOCABLE LETTER OF CREDIT No. ___ _

Royal Bank of Canada

Attn: �--------

Facsimile Number:

The undersigned, a duly authorized officer of (the "Issuing and Paying Agent"), hereby certifies to Royal Bank of Canada (the "Bank"), with reference to Irrevocable Letter of Credit No. (the "Letter of Credit"; the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Issuing and Paying Agent, as follows:

1. is the Issuing and Paying Agent under the Issuing and Paying Agent Agreement and is acting as the agent for the holders of the Supported Commercial Paper Notes.

2. Either (i) no Supported Commercial Paper Notes (other than Supported Commercial Paper Notes with respect to which a substitute letter of credit is in effect) remain outstanding under the Issuing and Paying Agent Agreement and the Resolutions, or (ii) no Supported Commercial Paper Notes remain outstanding and the State does not intend to issue any additional Supported Commercial Paper Notes under the Issuing and Paying Agent Agreement.

3. There will be no further Drawings presented to the Bank under the Letter of Credit, and we hereby elect to terminate the Letter of Credit and return such Letter of Credit (and amendments, if any) to you herewith for cancellation.

4. No payment is demanded of you in connection with this Certificate.

IN WITNESS WHEREOF, the Issuing and Paying Agent has executed and delivered this Certificate as of the day of , __ .

_______ , as Issuing and Paying Agent

Name: Title:

ANNEX E

TO

ROYAL BANK OF CANADA

IRREVOCABLE LETTER OF CREDIT No. ____ _

REDUCTION OF STATED AMOUNT OF LETTER OF CREDIT

IRREVOCABLE LETTER OF CREDIT No. ____ _

[Date]

Royal Bank of Canada

Attn: _______ _ Facsimile Number:

Re: Reduction of Stated Amount of Letter of Credit

The undersigned, a duly authorized representative of (the "Issuing

and Paying Agent"), hereby certifies to Royal Bank of Canada (the "Bank"), with reference to Irrevocable Letter of Credit No. (the "Letter of Credit"; the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Issuing and Paying Agent, as follows:

1. is the Issuing and Paying Agent under the Issuing and Paying Agent Agreement and is acting as the agent for the holders of the Supported Commercial Paper Notes.

2. The Issuing and Paying Agent hereby notifies you that on or prior to the date hereof the State has determined that the Stated Amount of the Letter of Credit shall be reduced to $ --------

3. The Issuing and Paying Agent hereby confirms that the Stated Amount of the Letter of Credit shall not be less than the sum of the principal amount of all outstanding Supported Commercial Paper Notes plus interest thereon at the rate of eleven percent (11 % ) per annum for a period of ninety (90) days calculated on the basis of a year of 365 days.

4. The State has informed us that it will not issue additional Supported Commercial Paper Notes unless after the issuance of such additional Supported Commercial Paper Notes the aggregate principal amount of Supported Commercial Paper Notes outstanding, together with the aggregate interest payable thereon, shall be no

Annex E to Royal Bank of Canada

Irrevocable Letter of Credit No. ____ _ (continued)

greater than the Stated Amount of the Letter of Credit, as so reduced pursuant to this certificate.

5. The Stated Amount of the Letter of Credit is reduced to $ -----

the Principal Component is reduced to $ and the Interest Component is reduced to $ upon receipt by the Bank of this certificate.

6. The undersigned represents that he/she is a duly authorized representative of the Issuing and Paying Agent.

IN WITNESS WHEREOF, the Issuing and Paying Agent has executed and delivered this certificate as of the day of , __ .

_____________ , as Issuing and Paying Agent

By_ Name: Title:

E-2

Attention:

ANNEX F

TO

ROYAL BANK OF CANADA

IRREVOCABLE LETTER OF CREDIT No. ____ _

NOTICE OF EXTENSION OF STATED EXPIRATION DATE

IRREVOCABLE LETTER OF CREDIT No. ____ _

The undersigned, a duly authorized representative of Royal Bank of Canada (the "Bank"), hereby notifies (the "Issuing and Paying Agent"), with reference to Irrevocable Letter of Credit No. (the "Letter of Credit"; the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Issuing and Paying Agent, as follows:

thereof.

1. The Stated Expiration Date of the Letter of Credit has been extended to

2. This Notice shall be attached to the Letter of Credit and made a part

IN WITNESS WHEREOF, the Bank has executed and delivered this Notice as of

ROY AL BANK OF CANADA, as the Bank

BY�������������� Name: Title:

Attention:

ANNEX G

TO

ROYAL BANK OF CANADA

IRREVOCABLE LETTER OF CREDIT No. ____ _

No-ISSUANCE NOTICE

IRREVOCABLE LETTER OF CREDIT No. ___ _

The undersigned, a duly authorized representative of Royal Bank of Canada (the "Bank"), hereby notifies (the "Issuing and Paying Agent"), with reference to Irrevocable Letter of Credit No. (the "Letter of Credit"; the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Issuing and Paying Agent, as follows:

1. In accordance with the terms of the Reimbursement Agreement, an Event of Default (as defined in the Reimbursement Agreement) has occurred and is continuing.

2. Subject to the following sentence, you shall cease authenticating Supported Commercial Paper Notes, as provided in Section 7 of the Issuing and Paying Agent Agreement, unless and until we rescind this No-Issuance Notice. If you receive this No-Issuance Notice after 11:00 A.M., New York time, on a Business Day, you shall cease authenticating Supported Commercial Paper Notes on the next Business Day.

3. This No-Issuance Notice shall not affect our obligation to honor Purchase Drawings and Interest Drawings with respect to Supported Commercial Paper Notes which have been authenticated prior to your receipt of this No-Issuance Notice (or, subject to paragraph 2 above, on the same Business Day that you receive this No-Issuance Notice), and you shall continue to have the right to draw under the Letter of Credit (x) Purchase Drawings under the Principal Component and (y) Interest Drawings under the Interest Component with respect to Supported Commercial Paper Notes authenticated prior to your receipt of this No-Issuance Notice (or, subject to paragraph 2 above, authenticated on the same Business Day that you receive this No-Issuance Notice).

Annex G to Royal Bank of Canada

Irrevocable Letter of Credit No. ___ _ (continued)

IN WITNESS WHEREOF, the undersigned has executed and delivered this No-Issuance Notice as of the day of , __ .

ROY AL BANK OF CANADA, as the Bank

Name: Title:

G-2

APPENDIX F

CERTAIN INFORMATION CONCERNING THE BANK

Royal Bank of Canada (referred to in this section as "Royal Bank") is a Schedule I bank under the Bank Act (Canada), which constitutes its charter and governs its operations. Royal Bank' s corporate headquarters are located at Royal Bank Plaza, 200 Bay Street, Toronto, Ontario MSJ 215, Canada, and its head office is located at 1 Place Ville Marie, Montreal, Quebec H3C 3A9, Canada. Royal Bank is the parent company of RBC Capital Markets, LLC, one of the Dealers for the Notes.

Royal Bank is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 84,000+ employees who bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada' s biggest bank, and one of the largest in the world based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our 16 million clients in Canada, the U.S. and 34 other countries.

Royal Bank had, on a consolidated basis, as at October 3 1 , 2018, total assets of C$1 ,334.7 billion (approximately US$1 ,014.5 billion*), equity attributable to shareholders of C$79.9 billion (approximately US$60.7 billion*) and total deposits of C$837.0 billion (approximately US$636.2 billion*). The foregoing figures were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and have been extracted and derived from, and are qualified by reference to, Royal Bank' s audited Consolidated Financial Statements included in Royal Bank' s Annual Report for the fiscal year ended October 3 1 , 2018.

The legacy senior long-term unsecured debtl of Royal Bank has been assigned ratings of AA- (stable) by S&P Global Ratings, Aa2 (stable) by Moody' s Investors Service and AA (stable) by Fitch Ratings. The senior long-term unsecured debt2 has been assigned ratings of A (stable) by S&P Global Ratings, A2 (stable) by Moody' s Investors Service and AA (stable) by Fitch Ratings. Royal Bank' s common shares are listed on the Toronto Stock Exchange, the New York Stock Exchange and the Swiss Exchange under the trading symbol "RY." Its preferred shares are listed on the Toronto Stock Exchange.

On written request, and without charge, Royal Bank will provide a copy of its most recent publicly filed Annual Report on Form 40-F, which includes audited Consolidated Financial Statements, to any person to whom this Offering Memorandum is delivered. Requests

1 Includes senior long-term debt issued prior to September 23, 2018 and senior long-term debt issued on or after September 23, 2018 which is excluded from Canada's bank recapitalization regime (Bail-in Regime).

2 Includes senior long-term debt issued on or after September 23, 2018 which is subject to conversion under the Bail-in Regime.

for such copies should be directed to Investor Relations, Royal Bank of Canada, by writing to 155 Wellington Street West, Toronto, Ontario, MSW 3K7, Canada, or by calling (416) 955-7802, or by visiting rbc.com/investorrelations**.

The delivery of this Offering Memorandum does not imply that there has been no change in the affairs of Royal Bank since the date hereof or that the information contained or referred to herein is correct as at any time subsequent to its date.

*As at October 31, 2018: C$1.00 = US$0.760052. ** This website URL is an inactive textual reference only, and none of the information on the website is incorporated in this Offering Memorandum.

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