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HomeMy WebLinkAboutFile 3 of 4 - 2011 Lease Revenue Refunding Bonds - 2011 Seri $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County,California) Lease Revenue Refunding Bonds,2011 Series A (Capital Improvement Refinancing Project) Closing: September 28,2011 Bonds Documentation is in Four Folders in SIRE Document Imaging Software Program Folders 1, 2 and 3 are in electronic format only, no paper documents,but are contained on a CD Folder 4 has paper documents in City Clerk Vault and CD of Folders 1-3 Folder 1 of 4—System ID#26351-600.80—09-06-2011 Contains from Index of Transcript Documents: Base Legal Documents(Items 1 through 3) Folder 2 of 4—System ID#26352-600.80—09-06-2011 Contains from Index of Transcript Documents: Base Legal Documents(Items 4 through 9) Folder 3 of 4—System ID#26353-600.80—09-06-2011 Contains from Index of Transcript Documents: Authority Documents(items 10 through 19) Trustee and Escrow Bank Documents(Items 28 through 30) Underwriter Documents(Items 31 through 36) Refunding Documents(Items 37 through 43) Bond Counsel and Disclosure Counsel Opinions(Items 44 through 47) Miscellaneous(Items 48 through 49) Folder 4 of 4—System ID#25561-600.80—09-06-2011 Contains Original RCA dated September 6, 2011 COMPLETE FIVE-PAGE "INDEX OF TRANSCRIPT DOCUMENTS" FOLLOWS THIS PAGE $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds,2011 Series A (Capital Improvement Refinancing Project) Closing: September 28, 2011 INDEX OF TRANSCRIPT DOCUMENTS All documents are dated September 28, 2011 unless otherwise indicated. BASE LEGAL DOCUMENTS i 1. Acknowledgement of Receipt of Report of Proposed Debt Issuance from California Debt and Investment Advisory Commission ("CDIAC"), together with Report. 2. Preliminary Official Statement, dated September 7, 2011, together with 15c2-12 Certificates of the Huntington Beach Public Financing Authority (the "Authority") and the City of Huntington Beach (the "City"). 3. Bond Purchase Agreement, dated September 13, 2011 (the "Purchase Agreement"), by and among Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative (the "Representative") of E. J. De La Rosa & Co., Inc. (collectively, the "Underwriters"),the Authority and the City. 4. Official Statement, dated September 13, 2011. 5. Site Lease, dated as of September 1, 2011, by and between the City and the Authority. (recorded in Official Records, County of Orange) 6. Lease Agreement, dated as of September 1, 2011 (the "Lease Agreement"), by and between the City and the Authority, together with Memorandum of Lease Agreement and Assignment. (Memorandum of Lease Agreement and Assignment recorded in Official Records, County of Orange) 7. Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). 8. Continuing Disclosure Certificate, dated as of September 1, 2011, executed by the City and agreed and acknowledged by The Bank of New York Mellon Trust Company,N.A., as dissemination agent. 9. Certificate of Mailing Report of Final Sale to CDIAC, together with Final Report. AUTHORITY DOCUMENTS 10. Resolution No. 21 entitled, "Resolution of the Board of Directors of the Huntington Beach Public Financing Authority Authorizing the Execution and j Delivery by the Authority of a Site Lease, a Lease Agreement, an Indenture, a Bond Purchase Agreement and Escrow Agreements in Connection with the Issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, Approving the Issuance of such Bonds in an Aggregate Amount of not to Exceed $42,745,000, Authorizing the Distribution of an Official Statement in Connection Therewith and Authorizing the Execution of Necessary Documents and Certificates and Related Actions in Connection Therewith," adopted on September 6, 2011, certified by the Secretary of the Authority. 11. Joint Exercise of Powers Agreement, dated as of March 7, 1988, by and between the City and the Redevelopment Agency of the City of Huntington Beach (the "Agency"), as amended by the First Amendment to Joint Exercise of Powers Agreement, dated as of May 16, 1988, by and between the City and the Agency, certified by the Secretary of the Authority, pursuant to Section 8(e)(xxii) of the Purchase Agreement. 12. Initial Notice of Joint Powers Agreement and Statement of Facts Roster of Public Agencies Filing, as certified by the Secretary of State of the State of California, pursuant to Section 8(e)(xxii) of the Purchase Agreement. 13. Incumbency and Signature Certificate of the Authority. 14. Certificate of the Authority, pursuant to Section 8(e)(ix) of the Purchase Agreement. 15. Written Request to Trustee,pursuant to Section 2.03 of the Indenture. 16. Tax Certificate,pursuant to Section 8(e)(xix) of the Purchase Agreement. 17. Certificate of Mailing Information Return for Tax-Exempt Governmental Obligations, Form 8038-G, to the Internal Revenue Service, together with Form 8038-G. 18. Blanket Issuer Letter of Representations of the Authority — The Depository Trust Company,pursuant to Section 8(e)(xviii) of the Purchase Agreement. 19. Opinion of City Attorney of the City of Huntington Beach, as Authority Counsel, pursuant to Section 8(e)(xi) of the Purchase Agreement. 2 CITY DOCUMENTS 20. Proof of Publication of Notice of Public Hearing, published in the Huntington Beach Independent on August 18, 2011. 21. Resolution No. 2011-67 entitled, "Resolution of the City Council of the City of Huntington Beach Authorizing the Execution and Delivery by the City of a Site I' Lease, a Lease Agreement, an Indenture, a Bond Purchase Agreement and a f Continuing Disclosure Certificate in Connection with the Issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, Approving the Issuance of Such Bonds in an Aggregate Amount of not to Exceed $42,745,000, Authorizing the Distribution of an Official Statement in Connection Therewith and Authorizing the Execution of Necessary Documents and Certificates and Related Actions," adopted by the City Council of the City on September 6, 2011, as certified by the Clerk of the City Council of the City. 22. Incumbency and Signature Certificate of the City. 23. Certificate of the City,pursuant to Section 8(e)(x) of the Purchase Agreement. 24. Written Request No. 1 for Disbursements from Costs of Issuance, pursuant to Section 4.02 of the Indenture. 25. Evidence of Insurance, pursuant to Section 5.01 of the Lease Agreement and Section 8(e)(xxiv) of the Purchase Agreement. 26. Policies of title insurance issued by First American Title Insurance Company, pursuant to Section 5.04 of the Lease Agreement. 27. Opinion of City Attorney of the City of Huntington Beach, pursuant to Section 8(e)(xii) of the Purchase Agreement. TRUSTEE AND ESCROW BANK DOCUMENTS 28. Certificate of The Bank of New York Mellon Trust Company, N.A., pursuant to Section 8(e)(xvi) of the Purchase Agreement, together with incumbency certificate and general signing resolution of the Trustee and Escrow Bank, pursuant to Section 8(e)(xxiii) of the Purchase Agreement. 29. Trustee's Receipt of Proceeds. 30. Opinion of Davis Wright & Tremaine LLP, as Trustee's Counsel and Escrow Bank's Counsel,pursuant to Section 8(e)(xv) of the Purchase Agreement. 3 UNDERWRITER DOCUMENTS 31. Rating Letters of Moody's Investors Service and Standard & Poor's Ratings Services,pursuant to Section 8(e)(viii) of the Purchase Agreement. 32. Specimen Bonds. 33. Receipt for Bonds. 34. Underwriters' Closing Memorandum. 35. Preliminary Blue Sky Memorandum, dated September 7, 2011, and Final Blue Sky Memorandum, dated September 28, 2011. 36. Opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, as Underwriters' Counsel, pursuant to Section 8(e)(xiv) of the Purchase Agreement. REFUNDING DOCUMENTS 37. Escrow Agreement, dated as of September 1, 2011, by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow bank (the "Escrow Bank"), relating to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project) (the "Series 2001A Bonds"). 38. Escrow Agreement, dated as of September 1, 2011, by and between the Authority and the Escrow Bank, relating to the outstanding Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project) (the "Series 2001B Bonds" and together with the Series 2001A Bonds,the "Series 2001 Bonds"). 39. Verification Report relating to the Series 2001 Bonds. 40. Termination Agreement, dated as of September 1, 2011, by and among the City, the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the Series 2001A Bonds. (recorded in Official Records, County of Orange) 41. Termination Agreement,.dated as of September 1, 2011, by and among the City, the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the Series 2001B Bonds. (recorded in Official Records, County of Orange) 42. Defeasance Opinion of Orrick, Herrington & Sutcliffe LLP, relating to the Series 2001A Bonds,pursuant to Section 8(e)(vi) of the Purchase Agreement. 43. Defeasance Opinion of Orrick, Herrington & Sutcliffe LLP, relating to the Series 2001B Bonds,pursuant to Section 8(e)(vi) of the Purchase Agreement. 4 i I BOND COUNSEL AND DISCLOSURE COUNSEL OPINIONS 1 44. Final Opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, pursuant to Section 8(e)(iv) of the Purchase Agreement. 45. Supplemental Opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, pursuant to Sections 8(e)(iv) and 8(e)(v) of the Purchase Agreement. 46. Reliance Letter of Orrick, Herrington & Sutcliffe LLP regarding Final Opinion, addressed to the Trustee. 47. Disclosure Counsel Opinion of Orrick, Herrington & Sutcliffe LLP, pursuant to Section 8(e)(xiii) of the Purchase Agreement. MISCELLANEOUS 48. Recording Instructions addressed to the Title Company, dated September 26, 2011. i 49. Interested Parties List. 5 $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) CERTIFICATE OF THE SECRETARY OF THE AUTHORITY REGARDING RESOLUTION NO. 21 The undersigned hereby states and certifies: (a) the undersigned is the duly appointed, qualified and acting Secretary of the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the "Authority"), and, as such, is familiar with the facts herein certified and is authorized and qualified to certify the same; and (b) that the attached Resolution No. 21 entitled, "Resolution of the Board of Directors of the Huntington Beach Public Financing Authority Authorizing the Execution and Delivery by the Authority of a Site Lease, a Lease Agreement, an Indenture, a Bond Purchase Agreement and Escrow Agreements in Connection with the Issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, Approving the Issuance of such Bonds in an Aggregate Amount of not to Exceed $42,745,000, Authorizing the Distribution of an Official Statement in Connection Therewith and Authorizing the Execution of Necessary Documents and Certificates and Related Actions in Connection Therewith," adopted by the Board of Directors of the Authority on September 6, 2011, has not been amended, modified or rescinded since the date of its adoption and remains in full force and effect as of the date hereof. Dated: September 28, 2011 J Flynn, Secr ar the Huntington Beach Public Finaridng Authority OHS WEST261322575.2 RESOLUTION NO. 21 RESOLUTION OF THE BOARD OF DIRECTORS OF THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY AUTHORIZING THE EXECUTION AND DELIVERY BY THE AUTHORITY OF A SITE LEASE, A LEASE AGREEMENT, AN INDENTURE, A BOND PURCHASE AGREEMENT AND ESCROW AGREEMENTS IN CONNECTION WITH THE ISSUANCE OF HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BONDS, APPROVING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $42,745,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION THEREWITH AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS IN CONNECTION THEREWITH WHEREAS, in order to finance certain capital improvements, including the Huntington Central Park Sports Complex and certain beach improvements along Pacific Coast Highway from First Street and Pacific Coast Highway to Huntington Street and Pacific Coast Highway (the "2001 Project"), the Huntington Beach Public Financing Authority (the "Authority") issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project) (the "Prior 2001A Bonds"), payable from certain lease payments to be made by the City of Huntington Beach (the "City"); and WHEREAS, in order to refinance certain capital improvements, including certain improvements to the Civic Center, including the Police Administration Building (the "1993 Project" and together with the 2001 Project, the "Projects"), the Authority issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project) (the "Prior 2001B Bonds"and together with the Prior 2001 A Bonds, the "Prior Bonds"), payable from certain lease payments to be made by the City; and WHEREAS, in order to achieve certain savings, the City and the Authority desire to refinance all or a portion of the Projects by refunding all or a portion of the Prior Bonds; and WHEREAS, in order to refund all or a portion of the Prior Bonds, the City will lease certain real property owned by the City, including the improvements thereto, known as the Civic Center (the "Property"), to the Authority pursuant to a Site Lease (the "Site Lease"), and lease the Property back from the Authority pursuant to a Lease Agreement(the"Lease Agreement"); and WHEREAS, in order to provide the funds necessary to refund all or a portion of the Prior Bonds, the Authority and the City desire to provide for the issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 OHS WEST:261251165.4 PFA Resolution No. 21 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds"), in the aggregate principal amount of not to exceed $42,745,000, pursuant to an Indenture (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), payable from the base rental payments to be made by the City pursuant to the Lease Agreement and the other assets pledged therefor under the Indenture; and WHEREAS, all rights to receive such base rental payments will be assigned without recourse by the Authority to the Trustee pursuant to the Indenture; and WHEREAS, the Series 2011A Bonds will be issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985, constituting Section 6584 et seq. of the California Government Code (the "Act"); and WHEREAS, Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and on behalf of E. J. De La Rosa & Co., Inc. (collectively, the "Underwriters"), has submitted to the Authority and the City a proposal to purchase the Series 2011A Bonds in the form of a Bond Purchase Agreement (the "Bond Purchase Agreement"); and WHEREAS, the funds to pay the redemption price of the Prior 2001A Bonds to be refunded will be applied to such purpose pursuant to an Escrow Agreement (the "2001A Escrow Agreement") by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow bank(the "Escrow Bank"); and WHEREAS, the funds to pay the redemption price of the Prior 2001B Bonds to be refunded will be applied to such purpose pursuant to an Escrow Agreement (the "2001 B Escrow Agreement") by and between the Authority and the Escrow Bank; and WHEREAS, a form of the Preliminary Official Statement (the "Preliminary Official Statement") to be distributed in connection with the public offering of the Series 2011A Bonds has been prepared; and WHEREAS, the City is a member of the Authority and the Projects are located within the boundaries of the City; and WHEREAS, on the date hereof, the City Council of the City (the "City Council") held a public hearing on the refinancing of the Projects in accordance with Section 6586.5 of the Act; and WHEREAS, in accordance with Section 6586.5 of the Act, notice of such hearing was published once at least five days prior to the hearing in the Independent, a newspaper of general circulation in the City; and WHEREAS, the Board of Directors has been presented with the form of each document referred to herein relating to the actions contemplated hereby, and the Board of Directors has examined and approved each such document and desires to authorize and direct the execution of such documents and the consummation of such actions; and OHS WEST261251165.4 2 PFA Resolution No. 21 WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the actions authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Authority is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such actions for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE,BE IT RESOLVED by the Board of Directors of the Huntington Beach Public Financing Authority, as follows: Section 1. All of the recitals herein contained are true and correct and the Board of Directors so finds. Section 2. The form of the Site Lease, submitted to and on file with the Secretary of the Authority, is hereby approved, and the Chair of the Board of Directors of the Authority, and such other member of the Board of Directors as the Chair may designate, the Executive Director of the Authority and the Treasurer of the Authority, and such other officers of the Authority as the Executive Director of the Authority may designate (collectively, the "Authorized Officers"), are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Site Lease in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 3. The form of the Lease Agreement, submitted to and on file with the Secretary of the Authority, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Lease Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate amount of the principal portions of the base rental payments payable under the Lease Agreement shall not exceed $42,745,000, the term of the Lease Agreement shall not exceed 21 years (provided that such term may be extended as provided therein) and the true interest cost applicable to the interest portions of the base rental payments shall not exceed 5.00%per annum. Section 4. Subject to the provisions of Section 5 hereof, the issuance of the Series 2011A Bonds, in an aggregate principal amount of not to exceed $42,745,000, on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture, is hereby authorized and approved. The Series 2011 A Bonds shall be dated, shall bear interest at the rates, shall mature on the date or dates, shall be subject to call and redemption, shall be issued in the form and shall be as otherwise provided in the Indenture, as the same shall be completed as provided in this Resolution. Section 5. The form of the Indenture, submitted to and on file with the Secretary of the Authority, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with such changes therein as the Authorized Officer executing the OHS WEST:261251165.4 3 PFA Resolution No. 21 same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, provided, however, that (a) the aggregate principal amount of the Series 2011A Bonds shall not exceed $42,745,000, (b) the final maturity date of the Series 2011A Bonds shall be no later than the date which is 21 years from the date of the Series 2011A Bonds, (c) the true interest cost applicable to the Series 2011A Bonds shall not exceed 5.00% per annum, and (d) the present value of debt service savings shall not be less than 3.00% of the aggregate principal amount of the Prior Bonds to be refunded. Section 6. The form of the Bond Purchase Agreement, submitted to and on file with the Secretary of the Board of Directors, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Bond Purchase Agreements in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, provided, however, that the underwriters' discount for the sale of the Series 2011A Bonds shall not exceed 0.30% of the aggregate principal amount of the Series 2011A Bonds. Section 7. The form of the 2001A Escrow Agreement, submitted to and on file with the Secretary of the Board of Directors, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the 2001A Escrow Agreements in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 8. The form of the 2001 B Escrow Agreement, submitted to and on file with the Secretary of the Board of Directors, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the 2001B Escrow Agreements in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 9. The form of the Preliminary Official Statement, submitted to and on file with the Secretary of the Board of Directors, with such changes therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Series 2011A Bonds is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the Authority that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). Section 10. The preparation and delivery of an Official Statement, and its use by the Underwriters in connection with the offering and sale of the Series 2011 A Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in OHS WEST:26 1 25 1 1 65.4 4 PFA Resolution No. 21 the name of and on behalf of the Authority, to execute the final Official Statement and any amendment or supplement thereto and thereupon to cause the final Official Statement and any such amendment or supplement to be delivered to the Underwriters. Section 11. The Authorized Officers are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including, without limitation, entering into necessary lease termination agreements with respect to the defeasance of the Prior Bonds. Section 12. All actions heretofore taken by the officers and agents of the Authority with respect to the transactions set forth above are hereby approved, confirmed and ratified. Section 13. This Resolution shall take effect from and after its date of adoption. PASSED AND ADOPTED by the Board of Directors of the Huntington Beach Public Financing Authority at a regular meeting thereof held on the 6th day of September , 2011. hair REVIEWED AND APPROVED: INITIATED AND APPROVED: *ie tor Deputy Execu9p,Director APPROVED AS TO FORM: 1 Authority Attorney OHS WEST26 1 25 1 165.4 5 Res. No. 21 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH ) I, JOAN FLYNN, the duly elected, qualified Secretary of the Huntington Beach Public Financing Authority, do hereby certify that the whole number of members of the Board of Directors of the Huntington Beach Public Financing Authority is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said Board at a regular meeting thereof held on September 6, 2011 and that it was so adopted by the following vote: AYES: Directors: Shaw, Harper, Hansen, Carchio, Bohr, Dwyer, Boardman NOES: Directors: None ABSENT: Directors: None ABSTAIN: Directors: None Secr(tVof the Board of Di tors of the Huntington Beach Public Financing Authority $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) CERTIFICATE OF SECRETARY OF THE AUTHORITY REGARDING JOINT EXERCISE OF POWERS AGREEMENT The undersigned hereby states and certifies: (a) that the undersigned is the duly appointed, qualified and acting Secretary of the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California(the "Authority"), and, as such, is familiar with the facts herein certified and is authorized and qualified to certify the same; and (b) that attached hereto is a true, correct and complete copy of the Joint Exercise of Powers Agreement, dated March 7, 1988, by and between the City of Huntington Beach (the "City") and the Redevelopment Agency of the City of Huntington Beach (the "Agency"), as amended by the First Amendment to Joint Exercise of Powers Agreement, dated as of May 16, 1988, by and between the City and the Agency (as amended, the "Agreement'), and that said Agreement has not been amended, modified or rescinded, and the same is now in full force and effect. Dated: September 28, 2011 an lynn, Secretary of t untington ea h Public Financing thority OHS WEST:261322575.2 1802-"2 MffWCFA:d(s May b F8015 FIRST AMENDMENT TO JOINT EXERCISE OF POWERS AGREEMENT HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY THIS FIRST AMENDMENT TO JOINT EXERCISE OF POWERS AGREEMENT is dated as of May 16, 1988, by and between the City of Huntington Beach (the "City") and the Redevelopment Agency of the City of Huntington Beach (the "Agency"), each duly organized and existing under the laws of the State of California; WITNESSETH. WHEREAS, the City and the Agency have heretofore entered into that certain agreement entitled "Joint Exercise of Powers Agreement," dated as of March 7, 1988, (the "Joint Exercise of Powers Agreement") pursuant to Resolution No. 5854 adopted by the City Council of the City and pursuant to Resolution No. 149 adopted by the Agency; and WHEREAS, the City and the Agency wish to amend the Joint Exercise of Powers Agreement at this time with respect to the designation of the officers of the Authority; NOW, THEREFORE, in consideration of the above premises and of the mutual promises herein contained, the City and the Agency do hereby amend the Joint Exercise of Powers Agreement as follows: 1. Section 3.01 of the Joint Exercise of Powers Agreement is hereby amended in its entirety to read as follows: "Section 3.01. Chairman, Vice—Chairman and Secretary. The Mayor of the City shall act ex officio as the Chairman of the Authority, the Mayor pro tem of the City shall act ex officio as the Vice-Chairman of the Authority and the City Clerk of the City shall act ex officio as the Secretary of the Authority. The officers shall perform the duties normal to said offices. The Chairman shall sign all contracts on behalf of the Authority, and shall perform such other duties as may be imposed by the Board. The Vice-Chairman shall ,sign contracts and perform all of the Chairman's duties in the absence of the Chairman. The Secretary shall countersign all contracts. signed by the Chairman or Vice-Chairman on behalf of the Authority, perform such other duties as may be imposed by the Board and cause a copy of this Agreement to be filed with the Secretary of State pursuant to the Act." 2. Section 3.02 of the Joint Exercise of Powers Agreement is hereby amended by deleting the term "Finance Director" in the first sentence thereof and inserting in its place the term "City Treasurer". 3. Section 3.05 of the Joint Exercise of Powers Agreement is hereby amended in entirety to read as follows: "Section 3.05. Legal Advisor. The City Attorney of the City shall act as the legal advisor of the Authority." IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Joint Exercise of Powers Agreement to be executed and attested by their proper officers thereunto duly authorized and their official seals to be hereto affixed, on the day and year set opposite the name of each of the parties. CITY OF INGTON BEACH Dated: May_, 1988 , Mayor ATTEST: -74 City Clerk (SEAL) APPROVED AS TO FORM: S'- ity Attorney/Agency Counsel S-�_�►� REDEVELOPMENT AGENCY OF THE CITY OF HUN GT014 BEACH Dated: May 1988 , Chairman ATTEST: -rv"f Agency Clerk (SEAL) -2- 18025-02 JHHW:CYA:d1s Marc- ,88 F7833 JOINT EXERCISE OF POWERS AGREEMENT HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY THIS AGREEMENT (this "Joint Exercise of Powers Agreement") is dated as of March 7, 1988, by and between the City of Huntington Beach (the "City") and the Redevelopment Agency of the City of Huntington Beach (the "Agency"), each duly organized and existing under the laws of the State of California; WITNESSETH.• WHEREAS, the City_and the Agency from time to time undertake the financing of public capital improvements and working capital requirements, and the City and the Agency wish to form a joint powers authority under the Joint Exercise of Powers Law of the State of California (constituting Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California) for the purpose of establishing a vehicle which may reduce local borrowing costs and promote the greater use of existing and new financial instruments and mechanisms; . NOW, THEREFORE, in consideration of the above premises and of the mutual promises herein contained, the City and the Agency do hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. Unless the context otherwise requires, the words and terms defined in this Article shall, for the purpose hereof, have the meanings herein specified. "Act" means Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California. "Agreement"means this Joint Exercise of Powers Agreement. "Authority" means the Huntington Beach Public Financing Authority established pursuant to Section 2.02 of this Agreement. "Board" means the Board of Directors of the Huntington Beach Public Financing Authority referred to in Section 2.03, which shall be the governing body of the Authority. "Bond Law" means the Marks—Roos Local Bond Pooling Act of 1985, being Article 4 of the Act (commencing with Section 6584), as now or hereafter amended, or any other law hereafter legally available for use by the Authority in the authorization and issuance of bonds to finance the acquisition of Local Obligations and to provide financing to the City or the Agency for Public Capital Improvements and for Working Capital. "Bond Purchase Agreement" means an agreement between the Authority and the City or the Agency, pursuant to which the Authority agrees to purchase Local Obligations from the City or the Agency, as the case may be. "Bonds"means bonds of the Authority issued pursuant to the Act. "Directors" means the representatives of the City and the Agency appointed to the Board pursuant to Section 2.03. "Fiscal Year" means the period from and including July 1 to and including the following June 30. "Local Obligations" means "Bonds", as such term is defined in Section 6585(c) of the Bond Law, which are issued by the Agency or the City. "Public Capital Improvement" has the meaning given to such term in Section 6585(g) of the Bond Law. "Secretary" means the Secretary of the Authority appointed pursuant to Section 3.01. "Treasurer" means the Treasurer of the Authority appointed pursuant to Section 3.02. —2— "Working Capital" has the meaning given to the term in Section 6585(i) of the Bond Law. ARTICLE II GENERAL PROVISIONS Section 2.01. Purpose. This Agreement is made pursuant to the Act providing for the joint exercise of powers common to the City and the Agency. The purpose of this Agreement is to provide for the financing of Public Capital Improvements and Working Capital for the City and the Agency, the purchase by the Authority of Local Obligations pursuant to Bond Purchase Agreements, or the loan of funds to the City or the Agency, in those instances in which the,City or the Agency, as the case may be, determines that there are "significant public benefits" for taking such action, within the meaning of Section 6586 of the Bond Law. Section 2.02. Creation of Authority. Pursuant to the Act, there is hereby created a public entity to be known as the "Huntington Beach Public Financing Authority". The Authority shall be a public entity separate and apart from the City and the Agency, and shall administer this Agreement. Section 2.03. Board of Directors. The Authority shall be administered by a Board of Directors consisting of seven (7) Directors, unless and until such number is changed by amendment of this Agreement. The members of the City Council.of the City and the members of the governing body of the Agency ex 'offacio shall constitute the Directors of the Authority. The Board shall be called the "Board of Directors of the Huntington Beach Public Financing Authority". All voting power of the Authority shall reside in the Board. Section 2.04. Meetings of the Board. (a) Regular Meetings. The Board shall provide for its regular meetings; provided, however, that at least one regular meeting shall be held each year. The date, hour and place of the holding of regular meetings shall be fixed by resolution of the Board and a copy of such resolution shall be filed with each of the City and the Agency. (b) Special Meetings. Special meetings of the Board may be called in accordance with the provisions of Section 54956 of the Government Code of the State of California. (c) Call, Notice and Conduct of Meetings. All meetings of the Board, including without limitation, regular, adjourned regular and special meetings, shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act of the Government Code of the State of California. Section 2.05. Minutes. The Secretary shall cause to be kept minutes of the meetings of the Board and shall, as soon as possible after each meeting, cause a copy of the minutes to be forwarded to each Director and to the City and the Agency. Section 2.06. Voting. Each Director shall have one vote. -3- Section 2.07. Quorum; Required Votes; Approvals. Directors holding a majority of the votes shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time. The affirmative votes of at least four (4) of the Directors shall be required to take any action by the Board. Section 2.08. Bylaws. The Board may adopt, from time to time, such bylaws, rules and regulations for the conduct of its meetings as are necessary for the purposes hereof. ARTICLE III OFFICERS AND EMPLOYEES Section 3.01. Chairman, Vice—Chairman and Secretary. The Board shall elect a Chairman and Vice-Chairman from among the Directors, and shall appoint a Secretary who may, but need not, be a Director. The officers shall perform the duties normal to said offices. The Chairman shall sign all contracts on behalf of the Authority, and shall perform such other duties as may be imposed by the Board. The Vice- Chairman shall sign contracts and perform all of the Chairman's duties in the absence of the Chairman. The Secretary shall countersign all contracts signed by the Chairman or Vice-Chairman on behalf of the Authority, perform such other duties as may be imposed by the Board and cause a copy of this Agreement to be Sled with the Secretary of State pursuant to the Act. Section 3.02. Treasurer. Pursuant to Section 6505.6 of the Act, the person performing the function of Finance Director of the City of Huntington Beach is hereby designated as the Treasurer of the Authority. The Treasurer shall be the depositary, shall have custody of all of the accounts, funds and money of the Authority from. whatever source, shall have the duties and obligations set forth in Sections 6505 and 6505.5 of the Act and shall assure that there shall be strict accountability of all funds and reporting of all receipts and disbursements of the Authority. As provided in Section 6505 and Section 6505.6 of the Act, the Treasurer shall make arrangements with a certified public accountant or firm of certified public accountants for the annual audit of accounts and records of the Authority. Section 3.03. Officers in Charge of Records, Funds and Accounts. Pursuant to Section 6505.1 of the Act, the Treasurer shall have charge of, handle and have access to all accounts, funds and money 'of the Authority and all records of the Authority relating thereto; and the Secretary shall have charge of, handle and have access to all other records of the Authority. Section 3.04. Bonding Persons Having Access to Public Capital Improvements. From time to time, the Board may designate persons, in addition to the Secretary and the Treasurer, having charge of, handling or having access to any records, funds or accounts or any Public Capital Improvement of the Authority, and the respective -4- amounts of the official bonds of the Secretary and the Treasurer and such other persons pursuant to Section 6505.1 of the Act. Section 3.05. Legal Advisor. The Board shall have the power to appoint the legal advisor of the Authority who shall perform such duties as may be prescribed by the Board. Such legal advisor may be the City Attorney of the City. Section 3.06. Other Employees. The Board shall have the power by resolution to appoint and employ such other consultants and independent contractors as may be necessary for the purposes of this Agreement. All of the privileges and immunities from liability, exemption from laws, ordinances and rules, all, pension, relief, disability, workers' compensation and other benefits which apply to the activities of officers, agents, or employees of a public agency when performing their respective functions shall apply to the officers, agents or employees of the Authority to the same degree and extent while engaged in the performance of any of the functions and other duties of such officers, agents or employees under this Agreement. None of the officers, agents, or employees directly employed by the Board shall be deemed, by reason of their employment by the Board to be employed by the City or the Agency or, by reason of their employment by the Board, to be subject to any of the requirements of the City or the Agency. Section 3.07. Assistant Officers. The Board may by resolution appoint such assistants.to act in the place of the Secretary or other officers of the Authority (other than any Director), and may by resolution provide for the appointment of additional officers of the Authority who may or may not be Directors, as the Board shall from time to time deem appropriate. ARTICLE IV POWERS Section 4.01. General Powers. The Authority shall exercise in the manner herein provided the powers which are common to each of the City and the Agency and necessary to the accomplishment of the purposes of this Agreement, subject to the restrictions set forth in Section 4.04." As provided in the Act, the Authority shall be a public entity separate from the City and the Agency. The Authority shall have the power to acquire and to finance the acquisition of Public Capital Improvements necessary or convenient for the operation of the City or the Agency. Section 4.02. Power to Issue Revenue Bonds. The Authority shall have all of the powers provided in the Act, including the power to issue Bonds thereunder. —5— Section 4.03. Specific Powers. The Authority is hereby authorized, in its own name, to do all acts necessary for the exercise of the foregoing powers, including but not limited to, any or all of the following: (a) to make and enter into contracts; (b) to employ agents or employees; (c) to acquire, construct, manage, maintain or operate any Public Capital 'Improvement, including the common power of the City and the Agency to acquire any Public Capital Improvement by the power of eminent domain; (d) to sue and be sued in its own name; (e) to issue Bonds and otherwise to incur debts, liabilities or obligations, provided that no such Bond, debt, liability or obligation shall constitute a debt, liability or obligation of any of the City and the Agency; (f) to apply for, accept, receive and disburse grants, loans and other aids from any agency of the United States of America or of the State of California; (g) to invest any money in the treasury pursuant to Section 6505.5 of the Act which is not required for the immediate necessities of the Authority, as the Authority determines is advisable, in the same manner and upon the same conditions as local agencies, pursuant to Section 53601 of the Government Code of the State of California; (h) to carry out and enforce all the provisions of this Agreement; (i) to make and enter into Bond Purchase Agreements; Q) to make loans to the City or the Agency, to the extent the City or the Agency (as the case may be) is authorized by law to borrow moneys, to be used to pay for Public Capital Improvements or Working Capital, or to refinance indebtedness incurred by the. City or the Agency in connection with Public Capital Improvements undertaken and completed; and (k)- to exercise any and all other powers as may be provided in the Act or in the Bond Law. Section 4.04. Restrictions on Exercise of Powers. The powers of the Authority shall be exercised in the manner provided in the Act and in the Bond Law, and, except for those powers set forth in the Bond Law, shall be subject (in accordance with Section 6509 of the Act) to the restrictions upon the manner of exercising such powers that are imposed upon the City of Huntington Beach in the exercise of similar powers. -6- Section 4.05. Obligations of Authority. The debts, liabilities and obligations of the Authority shall not be the debts, liabilities and obligations of the City and the Agency. ARTICLE V METHODS OF PROCEDURE; CREDIT TO MEMBERS Section 5.01. Assumption of Responsibilities By the Authority. As soon as practicable after the date of execution of this Agreement, the Directors shall give notice (in the manner required by Section 2.04) of the organizational meeting of the Board. At said meeting the Board shall provide for its regular meetings as required by Section 2.04 and elect a Chairman and Vice-Chairman, and appoint the Secretary. Section 5.02. Delegation of Powers. The City and the Agency hereby delegate to the Authority the power and duty to acquire, by lease, lease-purchase, installment sale agreements, or otherwise, such Public Capital Improvements as may be necessary or convenient for the operation of the City or the Agency. Section 5.03. Credit to City and the Agency. All accounts or funds created and established pursuant to any instrument or agreement to which the Authority is a party, and any interest earned or accrued thereon, shall inure to the benefit of the City and the Agency in the respective proportions for which such funds or accounts were -� created. ARTICLE VI CONTRIBUTION: ACCOUNTS AND REPORTS; FUNDS Section 6.01. Contributions. The City and the Agency may in the appropriate circumstance when required hereunder: (a) make contributions from their treasuries for the purposes set forth herein, (b) make payments of public funds to defray the cost of such purposes, (c) make advances of public funds for such purposes, such advances to be repaid as provided herein, or (d) use its personnel, equipment or property in lieu of other .contributions or advances. The provisions of Government Code Section 6513 are hereby incorporated into this Agreement by reference. Section 6.02. Accounts and Reports. To the extent not covered by the duties assigned to a trustee chosen by the Authority, the Treasurer shall establish and maintain such funds and accounts as may be required by good accounting practice or by any provision of any trust agreement entered into with respect to the proceeds of any Bonds issued by the Authority. The books and records of the Authority in,the hands of a trustee or the Treasurer shall be open to inspection at all reasonable times by -7- representatives of the City and the Agency. The Treasurer, within 180 days after the close of each Fiscal Year, shall give a complete written report of all financial activities for such Fiscal Year to the City and the Agency to the extent such activities are not covered by the report of such trustee. The trustee appointed under any indenture or trust agreement shall establish suitable funds, furnish financial reports and provide suitable accounting procedures to carry out the provisions of said trust agreement. Said trustee may be given such duties in said indenture or trust agreement as may be desirable to carry out this Agreement. Section 6.03. Funds. Subject to the applicable provisions of any instrument or agreement which the Authority may enter into, which may provide for a trustee to receive, have custody of and disburse Authority funds, the Treasurer of the Authority shall receive, have custody of and disburse Authority funds as nearly as possible in accordance with generally- accepted accounting practices, and shall make the disbursements required by this Agreement or to carry out any of the provisions or purposes of this Agreement. ARTICLE VII TERM Section 7.01. Term. This Agreement shall become effective, and the Authority shall come into existence, on the date of execution hereof by the City and the Agency, and this Agreement and the Authority shall thereafter continue in full force and effect so long as either (a) any Bonds remaining outstanding or (b) the Authority shall own any interest in any Public Capital Improvements. Section 7.02. Disposition of Assets. Upon termination of this Agreement, all property of the Authority, both real and personal, shall be divided among the parties hereto in such manner as shall be agreed upon by the parties. ARTICLE VIII NUSCELLANEOUS PROVISIONS Section 8.01. Notices. Notices hereunder shall be in writing and shall be sufficient if delivered to: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: City Administrator —8— Redevelopment Agency of the City of Huntington Beach J 2000 Main Street Huntington Beach, California 92648 Attention: Executive Director Section 8.02. Section Headings. All section headings in this Agreement are for convenience of reference only and are not to be construed as modifying or governing the language in the section referred to or to define or limit the scope of any provision of this Agreement. Section 8.03. Consent.. Whenever in this Agreement any consent or approval is required, the same shall not be unreasonably withheld. Section 8.04. Law Governing. This Agreement is made in the State of California under the constitution and laws of the State of California, and is to be so construed. Section 8.05. Amendments. This Agreement may be amended at any time, or from time to time, except as limited by contract with the owners of Bonds issued by the Authority or by applicable regulations or laws of any jurisdiction having authority, by one or more supplemental agreements executed by both of the parties to this Agreement either as required in order to carry out any of the provisions of this Agreement or for any other purpose, including without limitation addition of new parties (including any legal entities or taxing areas heretofore or hereafter created) in pursuance of the.purposes of this Agreement. Section 8.06. Enforcement by Authority. The Authority is hereby authorized to take any or all legal or equitable actions, including but not limited to injunction and specific performance, necessary or permitted by law to enforce this Agreement. Section 8.07. Severability. Should any part, term or provision of this Agreement be decided by any court of competent jurisdiction to be illegal or in conflict with any law of the State of California, or otherwise be rendered unenforceable or ineffectual, the validity of the remaining portions or provisions shall not be affected thereby. Section 8.08. Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors of the City or thg Agency, respectively. Neither the City nor-the Agency may assign any right or obligation hereunder without the written consent of the other. -9- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and attested by their proper officers thereunto duly authorized and their official �..! seals to be hereto affixed, on the day and year set opposite the name of each of the parties. CITY OF HUNT GTOIJ BEACH Dated: Manti_, 1988 Mayor ATTEST: C/ City Clerk (SEAL) APPROVED AS TO FORM: City Att rney/Age oun 1 -3-►i'88 REDEVELOPMENT AGENCY OF THE 1 CITY OF HUNTINGTO BEACH Dated: Ajar&— , 1988 Chairman ATTEST: Agency Clerk (SEAL) _ wool —10— MANUAL SIGNATURE CERTIFICATION JUN 0 8 jo88 In accordance with the Uniform Facsimile Signature Public Officials Act, more particularly Section 5501 of the Government Code of the State of California, I hereby certify under oath my manual signature. MANUAL SIGNATURE Mcia .P.. Wentworth '"'(*Pe or Print Name Here) TITLE OF OFFICE Secretary NAME OF AGENCY Huntington Beach Publ is Financing Authority Subscribed and sworn to before me this - day of 10j- (Name) (Tile) J a'Kwr NO=FY FU5LIC-CAUFOPNA My =irm, wins OCT 10. 1989 \�V MANUAL SIGNATURE CERTIFICATION �U N Q 8.i988 In accordance with the Uniform Facsimile Signature Public Officials Act, more particularly Section 5501 of the Government Code of the State of California, I hereby certify under oath my manual signature. MANUAL SIGNATURE Jo n Ersk/' e (T or Print Nave Here) TITLE OF OFFICE Chairman NAME OF AGENCY Huntington Beach Public Firancinc Authority Subscribed and sworn to before me r� this ^ day of (Name) , (title) OFFICIAL SEAL Vy CONNIE A BROCKWAY m NOTARY PUBLIC-CALIFORNIA ORANGE COUNTY My Comm. spires OCT 10, 1989 (Office Use Only) ' JOINT POWERS AGREEMENT INITIAL NOTICE TO THE SECRETARY OF STATE FILE NO. AS TO A JOINT POWERS AGREEMENT— L w IiMo��11M+ Notice is hereby given to the Secretary of State MM pursuant to Sections 6SO3.5 or 6SO3.7 of the Mal 91989 Goverment Code as .o the existence of a joint powers agreement rroviding for the creation of an agency or amity rhich is separate from the parties to the agreement and is responsible for thedwin.OF� - administration of the agreements. The following information as to the agreement is set forth: (File Stamp) (a) The public agencies parties to the agreement are: u (1) City of Huntington Beach (2) Redevelopment Agency of the City of Huntington Beach (3) ry i (4) _ (If more space is needed. type "continued" in (4) and attach a separate sheet to this form). (b) The name of the agency or entity created under the agreement and responsible for the administration of the agreement is: Huntington Beach Public Financing Aujhnrity Mailing Address: 20000 Main Street. P.O. Box 190. Huntington Beach, CA 92648 (c) The date upon which the agreement became effective is: March 7, 1988 (d) A condensed statement as to the purpose of the agreement or the powers to be exercised is: to provide financing of public capi*,l improvements and working capital requirements for the parties to the Agreement FL N JP-1 ' :ej Amendments, if any, state brief description: First Amendment to Joint Exercise of Powers Agreement, effective May 16, 1988, to change designation of officers. a (f) The short title of the agreement, if any, is: Joint Exercise of Powers Agreement �F r (Signature) Charles F. Adams Special Counsel to the Authority, (Type name and title of signer) INSTRUCTIONS: 1. Mail this form to Secretary of State, 1230 J Street, Sacramento, California 95814. 2. Include a remittance payable to "Secretary of State" for filing fee of $5.00. 3. If additional copies of this form are sent with the original, the copies will be file-stamped and returned without additional charge. 4. Do not attach a copy of the Agreement and/or Amendments of the Agreement. 03 94,)d H*344! _ 9£ :01 K 6 i AVN 8961 I nereby certify tha e foregoing —/,r A transcript of _p age{s; �' � is a full true and correct copy of the c.,ninal reCC,,d h the CUSiocy Of t�R :f SI?;e's office. AUG 3 1 2011* Date: —� DEBRA BOWEN,Secretary of State pg 1 of 2 aE'�u of^T hF State of California .Z me Secretary of State CAI ICOMN� STATEMENT OF FACTS ROSTER OF PUBLIC AGENCIES FILING (Government Code section 53051) Instructions: FILED in the office of the Secretary of State 1. Complete and mail to: Secretary of State, of the State of California P.O. Box 942877, Sacramento, CA 94277-0001 (916) 653-3984 AUG 2 2 2011 2. A street address must be given as the official mailing address or as the address of the presiding officer. (Office Use Only) 3. Complete addresses as required. 4. If you need additional space, attach information on an 8'/"X 11" page, one sided and legible. New Filing r7 Update Q Legal name of Public Agency: Huntinqton Beach Public Finance Authority Nature of Update: New Officers County: Oranqe Official Mailing Address: 2000 Main Street, Huntinqton Beach, CA 92648 Name and Address of each member of the governing board: Chairman, President or other Presiding Officer(Indicate Title): Chair Name: Joe Carchio Address: 2000 Main Street,Huntington Beach,CA 92648 Secretary or Clerk(Indicate Title): Secretary Name: Joan Flynn Address: 2000 Main Street,Huntington Beach,CA 92648 Members: Name: Don Hansen Address: 2000 Main Street, Huntington Beach, CA 92648 Name: J. Devin Dwyer Address: 2000 Main Street,Huntington Beach,CA 92648 Name: Keith Bohr Address: 2000 Main Street,Huntington Beach,CA 92648 Name: Matthew Harper Address: 2000 Main Street,Huntington Beach,CA 92648 Name: Connie Boardman Address: 2000 Main Street,Huntington Beach,CA 92648 RETURN ACKNOWLEDGMENT TO: (Type or Print) August 8, 2011 NAME Joan L. Flynn,Agency Secretary i ADDRESS 2000 Main Street Si tune Huntington Beach,CA 92648 CITY/STATE/ZIP L Jo L. Flynn, Agency Secretary yped Name and Title SEC/STATE NP/SF 405 (REV.05/09) 8/22/11 pg 2 of L State of California Secretary of State Statement of Facts Roster of Public Agencies Filing Updated Filing Page 2 of 2 City of Huntington Beach Public Finance Authority Additional Members: Name: Joe Shaw Address: 2000 Main Street, Huntington Beach, CA 92648 /'77 I here"y ce lity that e rcregcing a tans-rift of� rrr o,the 0IF'Ce. AUG 3 1 2011MD Date: ,�� C "- nEBRA BOWEN,Secretary of State $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds,2011 Series A (Capital Improvement Refinancing Project) INCUMBENCY AND SIGNATURE CERTIFICATE OF AUTHORITY The undersigned hereby state and certify: (a) that they are the duly appointed or elected, qualified and acting Executive Director and Secretary, respectively, of the Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the "Authority"), and, as such, are familiar with the facts herein certified and are authorized and qualified to certify the same; (b) that the following are now, and have continuously been, since January 1, 2011, the duly elected or appointed, qualified and acting members of the Board of Directors of the Authority, and the dates of the ending of their respective current terms of office are hereunder correctly designated opposite their names: Ending Date of Board Member Office Current Term Joe Carchio Chair November 2014 Don Hansen Vice Chair November 2012 Connie Boardman Member November 2014 Keith Bohr Member November 2012 Devin Dwyer Member November 2012 Matthew Harper Member November 2014 Joe Shaw Member November 2014 (c) that the signatures set forth opposite the names and titles of the following persons are true and correct specimens, or are the genuine, signatures of such persons, each of whom holds the office designated below: Name Si re Joe Carchio, Chair of the Board of Directors Don Hansen, Vice Chair of the Board of Directors Fred Wilson, Executive Director 0 Joan L. Flynn, Secretary OHS WEST:261322575.2 % (d) that for and on behalf of the Authority, the within-named Chair of the Board of Directors, is authorized to execute, and has executed, the following documents: (i) Site Lease, dated as of September 1, 2011, by and between the City of Huntington Beach (the "City") and the Authority; (ii) Lease Agreement, dated as of September 1, 2011, by and between the City and the Authority; (iii) Indenture, dated as of September 1, 2011, by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee; and (iv) Bond Purchase Agreement, dated September 14, 2011, by and between Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative of E. J. De La Rosa & Co., Inc., as underwriters, the Authority and the City; (v) Escrow Agreement, dated as of September 1, 2011, by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow bank (the "Escrow Bank"), relating to the outstanding Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project); (vi) Escrow Agreement, dated as of September 1, 2011, by and between the Authority and the Escrow Bank, relating to the outstanding Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project); and (vii) Official Statement, dated September 14, 2011, relating to the $36,275,000 aggregate principal amount of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Bonds"); and OHS WEST:261322575.2 2 (e) that the Bonds, dated the date hereof, have been executed by the manual or facsimile signature of the within-named Chair of the Board of Directors and attested to by the manual or facsimile signature of the within-named Secretary of the Authority. Dated: September 28, 2011 d ilson, Executive Director of the untington Beach Public Financing Authority Joan VTFlynn, Secretary Klhe Huntington ach Public FinanchZ6 Authority OHS WEST:261322575.2 3 $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) CERTIFICATE OF THE AUTHORITY The Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the "Authority"), hereby states and certifies: (a) that Fred Wilson is the duly appointed, qualified and acting Executive Director of the Authority, and, as such, is familiar with the facts herein certified and is authorized and qualified to certify the same; (b) that the Authority has all necessary power and authority and has taken all official actions necessary to (i) issue $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Projects) (the "Bonds"), (ii) authorize and approve the delivery of the Official Statement, dated September 14, 2011 (the "Official Statement"), relating to the Bonds; and (iii) execute, deliver and perform its duties under each of the following agreements (collectively, the"Authority Documents"): (i) Site Lease, dated as of September 1, 2011, by and between the City of Huntington Beach (the"City") and the Authority; (ii) Lease Agreement, dated as of September 1, 2011, by and between the City and the Authority; (iii) Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the"Trustee"); (iv) Escrow Agreement, dated as of September 1, 2011, by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow bank(the "Escrow Bank"), relating to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project); (v) Escrow Agreement, dated as of September 1, 2011, by and between the Authority and the Escrow Bank, relating to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project); and (vi) Bond Purchase Agreement, dated September 14, 2011 (the "Purchase Agreement"), by and among Merrill Lynch, Pierce, Fenner & Smith Incorporated, on OHS WEST261322575.2 behalf of itself and as representative of E. J. De La Rosa & Co., Inc., as underwriters, the Authority and the City; (c) that the representations, warranties and covenants of the Authority contained in the Purchase Agreement are true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof by the Authority, and the Authority has complied with all of the terms and conditions of the Purchase Agreement required to be complied with by the Authority at or prior to the date hereof; (d) that to the best of the undersigned's knowledge, no event effecting the Authority has occurred since the date of the Official Statement, dated September 14, 2011 (the "Official Statement"), which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (e) that the information and statements contained in the Official Statement under the captions "INTRODUCTION — The Authority" and "THE AUTHORITY" did not as of its date and do not as of the date hereof contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; (f) that, to the best of the undersigned's knowledge after reasonable investigation, the Authority is not in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, which would have a material adverse impact on the Authority's ability to perform its obligations under the Authority Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default under any such instrument; and (g) that the Authority has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied pursuant to the Authority Documents at or prior to the date hereof. OHS WEST 2 6 13 22 57 5.2 2 Capitalized undefined terms used herein have the meanings ascribed thereto in the Purchase Agreement. Dated: September 28, 2011 HUNTINGTON BEACH PUBLIC FINANCI AU HORITY By: Fred Wilson, Executive Director OHS WEST:261322575.2 J $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County,California) Lease Revenue Refunding Bonds,2011 Series A (Capital Improvement Refinancing Project) WRITTEN REQUEST TO TRUSTEE The Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California (the "Authority"), hereby states and certifies: (a) that Fred Wilson is the duly appointed, qualified and acting Executive Director of the Authority, and, as such, is a duly designated "Authorized Authority Representative" of the Authority, as such term is defined in the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City of Huntington Beach and The Bank of New York Mellon Trust Company, N.A., as trustee (the"Trustee"); (b) that, pursuant to Section 2.03 of the Indenture, the Trustee is hereby requested to authenticate the $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds 2011 Series A (Capital Improvement Refinancing Project) (the"Bonds"), substantially in the form attached as Exhibit A to the Indenture; and (c) that the Trustee is further requested to deliver the authenticated the Bonds to or upon the order of Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative (the "Representative") of E. J. De La Rosa & Co., Inc., as underwriters, upon receipt by the Trustee from the Representative in immediately available funds of the purchase price for the Bonds, pursuant to the Bond Purchase Agreement, dated September 13, 2011, by and among the Representative, the Authority and the City. Dated: September 28, 2011 HUNTINGTON BEACH PUBLIC FINANCI A HORITY By: Fred Wilson, Executive Director OHS WEST:261322575.2 TAX CERTIFICATE This Tax Certificate (this "Tax Certificate") is executed and delivered by the Huntington Beach Public Financing Authority (the"Issuer") in connection with the issuance of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the"Bonds"), issued in the principal amount of$36,275,000. The Bonds are being issued pursuant to an Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Issuer, the City of Huntington Beach (the "City") and The Bank of New York Mellon Trust Company, N.A., as trustee (the"Trustee"). Pursuant to Section 5.11 of the Indenture, and in part pursuant to Treasury Regulations Section 1.148-2(b)(2), the Issuer certifies, covenants, warrants and represents as follows: I IN GENERAL Section 1.1 The Issuer and the City. The Issuer is a joint powers authority established by the City and the Redevelopment Agency of the City of Huntington Beach (the"Agency"). The members of the City Council of the City serve as the board of directors of the Issuer; the members of the City Council of the City also serve as the board of directors for the Agency. The Agency is a redevelopment agency duly established by the City and existing pursuant to the laws of the State of California (the"State"). Both the City and the Agency have the general authority to exercise the power of eminent domain in furtherance of its respective governmental purposes. The Issuer is executing and delivering the Bonds as a constituted authority on behalf of the City. In accordance, the Issuer hereby certifies, represents, covenants and warrants that (i) the Issuer has been created pursuant to the laws of the State; (ii) the Issuer was created for a public purpose; (iii) the Issuer is governed by a body ultimately controlled by the City; (iv) the Issuer is authorized to issue obligations, such as the Bonds, for the purposes for which the Issuer was created; (v) the earnings of the Issuer will not and cannot inure to the benefit of any private person; and (vi) upon dissolution of the Issuer, title to all of the Issuer's assets will revert to the City. Based on the control of the Issuer by the City as described herein, representations and covenants made herein by the Issuer, including those relating to the use of Bond proceeds and the facilities financed and refinanced with such proceeds, are made on behalf of the City. As set forth in Exhibit A attached hereto, the City has specifically reaffirmed all such representations and covenants. Section 1.2 Delivery of Bonds. On the date hereof, in exchange for receipt of good funds, the Issuer is delivering the Bonds to Merrill Lynch, Pierce Fenner &Smith Incorporated (the "Representative"), on behalf of itself and as representative of E. J. De La Rosa&Co., Inc., as underwriter of the Bonds (collectively, the"Underwriters"), for resale to the general public. Section 1.3 Purpose of Tax Certificate. The Issuer is delivering this Tax Certificate (including all exhibits hereto) to Orrick, Herrington&Sutcliffe LLP, as bond counsel ("Bond Counsel"), with the understanding and acknowledgment that Bond Counsel will rely in part upon OHS WEST 2 613 31 147.2 43640-2 this Tax Certificate in rendering its opinion that interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986. Section 1.4 Purpose of Financing. The Bonds are being issued to (i) refund, on a current basis, all outstanding maturities of the Issuer's Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project), which were originally issued on September 12, 2001 in the principal amount of$31,360,000 (the "2001A Bonds"), (ii)refund, on a current basis, all outstanding maturities of the Issuer's Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project), which were originally issued on December 5, 2001 in the principal amount of $31,095,000 (the "2001B Bonds" and, together with the 2001A Bonds, the "Prior Bonds"), (ii) fund a reserve fund for the Bonds, and (iii) pay the costs of issuing the Bonds. Proceeds of the 2001A Bonds were used to finance certain costs related to the Huntington Central Park Sport Complex, including related parking, and beach improvements that are part of the South Beach Improvement Master Plan Phase II, which includes landscape, hardscape improvements, new trails and facilities, parking entranceways, certain art elements and the lifeguard facility improvements (collectively, the "2001A Project"). The 2001B Bonds refunded, on a current basis, the (a)1993 Refunding Certificates of Participation (Civic Center Refinancing Project), which were dated as of January 1, 1993 and originally issued in the principal amount of$21,895,000 (the "1993 Civic Center Obligations"), and (b) 1993 Refunding Certificates of Participation (Police Administration Building Refinancing Project), which were dated as of January 1, 1993 and originally issued in the principal amount of $16,350,000 (the "1993 Police Obligations"). Proceeds of the 1993 Civic Center Obligations refunded certain obligations issued in 1986 (the "1986 Obligations"), which were used to finance certain costs related to the City's Civic Center(the "1986 Project"). Proceeds of the 1993 Police Obligations refunded certain obligations issued in 1989 (the "1989 Obligations"), which were used to finance certain costs related to the City's police administration building (the "1989 Project"). The 1986 Project, the 1989 Project and the 2001A Project are collectively referred to herein as the "Project." Section 1.5 Single Issue; Separate Issue. All the Bonds were sold to the Underwriters on September 13, 2011 (the "Sale Date")pursuant to the same plan of financing, and are expected to be paid out of substantially the same source of funds. No other governmental obligations which are expected to be paid out of substantially the same source of funds as the Bonds have been or will be sold within the 31-day period beginning 15 days before the Sale Date pursuant to the same plan of financing as the Bonds. All obligations of the 2001A Bonds were initially sold pursuant to the same plan of financing and were paid out of substantially the same source of funds. All obligations of the 2001B Bonds were initially sold pursuant to the same plan of financing and were paid out of substantially the same source of funds. No other governmental obligations which were expected to be paid out of substantially the same source of funds were sold within the 31-day period beginning 15 days before the date each group of the 2001A Bonds or the 2001B Bonds was sold pursuant to the same plan of financing. OHS WEST:261331147.2 2 43640-2 Section 1.6 Definitions. Capitalized terms used and not otherwise defined herein shall have the respective meanings set forth in the Indenture. Unless the context otherwise requires, the following capitalized terms have the following meanings for purposes of this Tax Certificate: "Adjusted Gross Proceeds" means generally all Gross Proceeds of the Bonds, adjusted as set forth in Treasury Regulations Section 1.148-7(c)(3). Thus, Adjusted Gross Proceeds generally means Gross Proceeds less the amount held in (i) the Bona Fide Debt Service Funds and (ii) the Reserve Fund, as described in Section 3.7 of this Tax Certificate (less any Restricted Amount). "Bona Fide Debt Service Funds" means those funds and accounts (or portions of those funds and accounts) identified in Section 3.4.2 of this Tax Certificate. "Bond Year" means the period beginning on the Closing Date and ending on September 1, 2012 (or another date selected by the Issuer in accordance with Treasury Regulations Section 1.148-1(b)) and each successive one-year period thereafter. The last Bond Year will end on the last day on which any Bond is outstanding for federal tax purposes. "Closing Date" means the date of this Tax Certificate. "Code" means the Internal Revenue Code of 1986 (including amendments thereto). "Escrow Bank" means The Bank of New York Mellon Trust Company, N.A. "Escrow Fund" means, collectively, that escrow fund established pursuant to the Escrow Agreement, dated as of September 1, 2011,by and between the Issuer and the Escrow Bank, relating to the refunding of the 2001A Bonds, and that escrow fund established pursuant to the Escrow Agreement, dated as of September 1, 2011,by and between the Issuer and the Escrow Bank,relating to the refunding of the 2001B Bonds. "Financial Advisor" means Public Financial Management, Inc., serving as the financial advisor to the Issuer and the City. "Governmental Unit" means any state, or political subdivision of a state,but excludes the United States and its agencies or instrumentalities. "Gross Proceeds" has the meaning used in Section 1.148-1(b) of the Treasury Regulations, and generally means all proceeds derived from or relating to the Bonds, including Sale Proceeds, Investment Proceeds, and other amounts expected to be used to pay debt service on the Bonds. "Investment Proceeds" means earnings received from investing and reinvesting Sale Proceeds and from investing and reinvesting such earnings. "Investment Property" means any security or obligation, any annuity contract, or any other investment-type property,but does not include any Tax-Exempt Bond unless such obligation is a "specified private activity bond" within the meaning of Section 57(a)(5)(C) of the Code. "Nongovernmental Person" means any person or entity other than a Governmental Unit. OHS WEST:261331147.2 3 43640-2 "Nonpurpose Investment" means any Investment Property in which Gross Proceeds are invested. "Opinion of Counsel" means a written opinion of nationally recognized bond counsel, delivered to the Trustee, to the effect that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected. "Rebate Requirement" means the amount of rebatable arbitrage computed as of the last day of any Bond Year pursuant to Section 1.148-3 of the Treasury Regulations. "Sale Proceeds" means $38,158,667.10, which is the principal amount of the Bonds, plus original issue premium thereon of 1,883,667.10. "Spendable Proceeds" means, with regard to each issue of the 2001A Bonds, the 1986 Obligations and the 1989 Obligations, separately, the proceeds received from the sale of each such issue, less any such amounts (i) invested as part of the "minor portion" for such issue under Section 148(e) of the Code or its predecessor, or (ii) used to fund a debt service reserve account for such issue. "Tax-Exempt Bond" means any obligation the interest on which is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Code or Section 103 of the Internal Revenue Code of 1954, as amended (the"1954 Code"), and Title XIII of the Tax Reform Act of 1986, as amended, as well as stock in a regulated investment company to the extent at least 95 percent of income to the stockholder is treated as interest that is excludable from gross income under Section 103 of the Code. "Yield" means that discount rate calculated as described in Section 4.1 of this Tax Certificate. Section 1.7 Reliance on Other Parties. The expectations of the Issuer concerning certain uses of the proceeds of the Bonds and certain other matters described herein are based, in whole or in part, upon representations of other parties set forth in this Tax Certificate or exhibits hereto, including the Certificate of the City, attached hereto as Exhibit A, the Certificate of the Underwriters, attached hereto as Exhibit B and the Certificate of the Financial Advisor, attached hereto as Exhibit C. The Issuer is not aware of any facts or circumstances that would cause it to question the accuracy or reasonableness of any representation made in this Tax Certificate or in the exhibits hereto. OHS WEST 2 613 31 147.2 4 43640-2 II GENERAL TAX LIMITATIONS Section 2.1 Application of Sale Proceeds and Other Amounts; Investment Proceeds. Sale Proceeds are expected to be used or deposited as follows: Escrow Fund $ 34,808,601.29 Reserve Fund 3,082,659.23 Costs of Issuance 185,916.24 Underwriters' Discount 81,490.34 TOTAL: $38,158,667.10 On the date hereof, certain proceeds remain that are allocable to the Prior Bonds. Such amounts, consisting of proceeds in the reserve funds established for the Prior Bonds, are used to refund a portion of the 2001A Bonds or 2001B Bonds, as applicable. See, the pricing numbers, attached as Exhibit D hereto. Except as provided herein, no other proceeds allocable to the Prior Bonds remain. Investment Proceeds on amounts in any fund (other than the Reserve Fund) established for the Bonds will remain in such fund. Investment Proceeds received in the Reserve Fund shall be transferred to the Interest Account. Section 2.2 Governmental Bond Status. The Issuer has not loaned more than 5% of the proceeds of the 2001A Bonds or the 2001B Bonds to one or more Nongovernmental Persons. Absent an Opinion of Counsel, the Issuer will not loan more than 5% of the Bond proceeds to one or more Nongovernmental Persons. The Issuer has not allowed more than 10% of the proceeds of the 2001A Bonds or the 2001B Bonds, or the Project, to be used privately directly or indirectly by any Nongovernmental Person in any trade or business, other than as a member of the general public. Absent an Opinion of Counsel, the Issuer does not expect to allow and will not allow more than 10% of Sale Proceeds and Investment Proceeds of the Bonds, or of the Project, to be used privately directly or indirectly by any Nongovernmental Person in any trade or business, other than as a member of the general public. For purposes of the preceding sentence, "10%" is reduced to "5%" for nongovernmental use of any facilities refinanced from proceeds of the Bonds which are disproportionate to or not related to the governmental purposes of the Bonds. Absent an Opinion of Counsel, for purposes of this Section, a Nongovernmental Person will be treated as privately"using"proceeds of the Bonds to the extent the Nongovernmental Person: (i) borrows proceeds of the Bonds, or (ii) uses the Project (e.g., as owner, lessee, service provider, operator or manager). OHS WEST 2 613 31 147.2 5 43640-2 The Issuer hereby affirms the improvements that comprise the Project to be as described in Section 1.4 herein, and confirms that there has been no change in use of the Project, since the respective issuance dates of the 2001A Bonds and the 2001B Bonds, as applicable, that would cause any of the limits set forth in this Section to be exceeded. Section 2.3 Change in Use. The Issuer reasonably expects to use all proceeds of the Bonds and all facilities that are refinanced from proceeds of the Bonds as set forth in Section 2.1 of this Tax Certificate for the entire stated term to maturity of the Bonds. Absent an Opinion of Counsel, the Issuer in fact will use all proceeds of the Bonds and each facility refinanced from proceeds of the Bonds as set forth in Section 2.1 of this Tax Certificate. Section 2.4 Registered Form. The Bonds are being issued in registered form. Section 2.5 No Federal Guarantee. The Issuer will not directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the Issuer or any related party or take or omit to take any action that would cause the Bonds to be obligations that are "federally guaranteed" within the meaning of Section 149(b) of the Code. In furtherance of this covenant, the Issuer will not allow the payment of principal or interest with respect to the Bonds to be guaranteed (directly or indirectly) in whole or in part by the United States or any agency or instrumentality thereof. Except as provided in the next sentence, the Issuer will not use 5% or more of the proceeds of the Bonds to make or finance loans the payment of principal or interest with respect to which is guaranteed in whole or in part by the United States or any agency or instrumentality thereof, nor will the Issuer invest 5% or more of the proceeds in federally insured deposits or accounts. The preceding sentence shall not apply to: (i) investments of proceeds in the Bona Fide Debt Service Funds and the Costs of Issuance Fund during their respective temporary periods; (ii) investments in the Reserve Fund, to the extent amounts therein qualify for unrestricted yield investments pursuant to Section 3.7 of this Tax Certificate; or (iii) investments in obligations issued by the United States Department of the Treasury (including the Escrow Fund). Section 2.6 Information Reporting. The Issuer shall file or cause to be filed a properly completed and executed IRS Form 8038-G with respect to the Bonds no later than November 15, 2011. Section 2.7 Current Refunding. The Bonds are being issued to redeem the Prior Bonds on October 17, 2011, which is less than 90 days from the Closing Date. No proceeds of the Bonds will be used to pay debt service on any governmental obligations except the Prior Bonds. Section 2.8 No Pooling. The Issuer will not use any proceeds of the Bonds directly or indirectly to make or finance loans to two or more ultimate borrowers. OHS WEST:261331147.2 6 43640-2 Section 2.9 No Hedge Bonds. On the respective date on which the 2001A Bonds, the 1986 Obligations or the 1989 Obligations were issued, the Issuer reasonably expected to spend at least 85% of the Spendable Proceeds of each such issue within three years. The Issuer did not invest more than 50% of the proceeds of each such issue in investment securities with a substantially guaranteed yield for four years or longer. Section 2.10 Retention of Records. The Issuer covenants to maintain all records relating to the requirements of the Code and the representations, certifications and covenants set forth in this Tax Certificate until the date three years after the last outstanding Bonds have been retired. If any of the Bonds are refunded by Tax-Exempt Bonds (the "Refunding Obligations"), the Issuer covenants to maintain all records required to be retained by this Section until the later of the date three years after the last outstanding Bonds have been retired or the date three years after the last Refunding Obligations have been retired. The records that must be retained include, but are not limited to: (i) Basic records and documents relating to the Bonds (including this Tax Certificate, the Indenture, the Form 8038-G and the opinion of Bond Counsel); (ii) Documentation evidencing the expenditure of Bond proceeds and the expenditure of the proceeds of the Prior Bonds; (iii) Documentation evidencing the use of the Project by public and private sources (i.e., copies of management contracts,research agreements, leases, etc.); (iv) Documentation evidencing all sources of payment or security for the Bonds; and (v) Documentation pertaining to any investment of Bond proceeds (including the purchase and sale of securities, SLGS subscriptions, yield calculations for each class of investments, actual investment income received from the investment of proceeds, guaranteed investment contracts, and rebate calculations). See also Section 5.2 hereof regarding records required to be kept for purposes of calculating the Rebate Requirement. Section 2.11 Prior Tax Covenants; Final Rebate. hi connection with the issuance of the Prior Bonds, the Issuer previously executed tax documents such as tax certificates and IRS Forms 8038-G, and other documents for each issue of the Prior Bonds representing certain facts and containing certain covenants relating to the use of the proceeds of the Prior Bonds and the facilities financed or refinanced with such proceeds. The Issuer hereby reaffirms that such representations continue to be true in all material respects and that it will continue to observe such covenants. hi addition, the Issuer certifies that it(and all related parties thereto) has complied with all covenants, certifications, warranties and representations set forth in the legal and closing documents for the Prior Bonds and relating to the exclusion of interest on the Prior Bonds from gross income for federal tax purposes. The Issuer has not taken or omitted to take any action reasonably within its control since the dates of execution and delivery of the Prior Bonds that would cause interest on the Prior Bonds to be included in gross income for purposes of federal income taxation. Final rebate on the Prior Bonds, if any, is due no later than 60 days after the last of the Prior Bonds is redeemed or retired (which is October 17, 2011). OHS WEST:261331147.2 7 43640-2 III ARBITRAGE - GENERAL Section 3.1 Reasonable Expectations. This Article III states the Issuer's reasonable expectations with respect to the amounts and uses of proceeds of the Bonds and certain other moneys. Section 3.2 Reoffering Price. The Issuer is delivering the Bonds to the Underwriters on the date hereof in exchange for payment of the Sale Proceeds, less the underwriter's discount thereon. Based upon advice of the Underwriters, the Bonds have been reoffered to the public (excluding any bond house, broker or other intermediary) at the prices set forth in the schedule attached to Exhibit A. Based upon advice of the Underwriters, the initial reoffering prices represent the fair market price of the Bonds as of the Sale Date. Section 3.3 Funds and Accounts. Pursuant to the Indenture, the Issuer may cause the following funds and accounts to be established and maintained: Redemption Fund Reserve Fund Costs of Issuance Fund Payment Fund Interest Account Principal Account Rebate Fund (see Section 3.6 herein) Additionally, Escrow Fund is established as described in Section 1.6 herein. The Issuer does not expect that either it or any other person benefiting from the issuance of the Bonds will use any moneys in any fund or account, other than the Bona Fide Debt Service Funds, directly or indirectly, to pay principal of or interest on the Bonds; nor is there any other fund or account, however established, other than the Reserve Fund, such that there is a reasonable assurance that amounts held in such other fund or account will be available if needed to pay debt service on the Bonds. Section 3.4 Bona Fide Debt Service Funds. 3.4.1 Revenues. All Lease Revenues are to be collected and deposited to the Payment Fund and applied pursuant to the terms of the Indenture. Payments of debt service on the Bonds generally are expected to be derived from current Lease Revenues in each year, and current Lease Revenues are expected to equal or exceed debt service on the Bonds during each payment period. Therefore, all amounts transferred to and from the Payment Fund in respect of the Bonds are expected to be derived from current revenues. 3.4.2 Match Between Revenues and Debt Service. The Payment Fund (including the Interest Account and the Principal Account) and the Redemption Fund (collectively, the"Bona Fide Debt Service Funds") will be used primarily to achieve a proper matching of revenues and debt service within each Bond Year. Such funds in the aggregate will be depleted at OHS WEST 2 613 31 147.2 g 43640-2 least once a year except for a carryover amount not to exceed the greater of the earnings on such funds for the immediately preceding Bond Year or 1/12 of the debt service in respect of the Bonds for the immediately preceding Bond Year. Amounts contributed to any such fund or account will be spent within thirteen months after the date of such contribution, and any amounts received from the investment or reinvestment of monies held in such funds or accounts will be expended within one year after the date of accumulation thereof in any such fund or account. Amounts in the Bona Fide Debt Service Funds shall be invested without regard to yield. Section 3.5 Escrow Fund. Sale Proceeds and other amounts being deposited in the Escrow Fund on the Closing Date will be used pay the principal amount and interest due, and any redemption premium, on the Prior Bonds. See Section 2.1 herein and Exhibit D attached hereto. The Prior Bonds will be redeemed in full on October 17, 2011. Due to the short period between the Closing Date and the redemption date and the minimal amount of net investment earnings, such amount will be held in cash and uninvested. Accordingly, the total amount deposited on the date hereof is sufficient to pay such total debt service (and redemption price) without reinvestment. Sale Proceeds in the Escrow Fund may be invested without regard to yield so long as such amounts are used within 90 days of the Closing Date. Section 3.6 Rebate Fund. The Issuer has covenanted not to use moneys on deposit in any fund or account in connection with the Bonds in a manner which would cause the Bonds to be arbitrage bonds within the meaning of Section 148 of the Code. Accordingly, a special fund designated as the"Rebate Fund" has been established pursuant to the Indenture. The Issuer is required to keep the Rebate Fund separate and apart from all other funds and moneys held by it. The amount required to be held in the Rebate Fund at any point in time is determined pursuant to the requirements of the Code, including particularly Section 148(f) of the Code and Treasury Regulations applicable thereto. Moneys in the Rebate Fund are neither pledged to nor expected to be used to pay debt service in respect of the Bonds. Sale Proceeds and Investment Proceeds held in the Rebate Fund shall be invested as set forth in Section 4.4 of this Tax Certificate. All other amounts in the Rebate Fund will be invested without regard to yield. Section 3.7 Reserve Fund. The Indenture establishes a Reserve Fund with respect to the Bonds. On the date hereof, the Reserve Fund is being funded with Sale Proceeds, as set forth in Section 2.1 herein. Amounts held in the Reserve Fund may be used solely for paying debt service on the Bonds. Except for periodic increases due to earnings, at no time will the amount in the Reserve Fund exceed the least of(i) 10 percent of the original aggregate face amount of the Bonds, (ii) maximum annual debt service on the Bonds, or (iii) 125 percent of average annual debt service on the Bonds. Amounts in the Reserve Fund that do not exceed the least of(i) through (iii) above will be invested without regard to yield. Absent an Opinion of Counsel, any amount in the Reserve Fund that exceeds the least of(i) through (iii) above (the"Restricted Amount") will be invested as set forth in Section 4.4 of this Tax Certificate. As represented by the Representative and the Financial Advisor in Exhibit B and Exhibit C, the amount of the Reserve Requirement for the Bonds is reasonably required in that it was a material factor in selling the Bonds at the lowest possible yield (given other characteristics of the Bonds) without regard to any benefit from positive net investment earnings on amounts held in the Reserve Fund, and the funding of the Reserve Fund to the extent of the Reserve Requirement for the Bonds is reasonable and customary in marketing similar issues of governmental obligations. OHS WEST 2 613 31 147.2 9 43640-2 Section 3.8 Costs of Issuance Fund. On the Closing Date, Sale Proceeds are being deposited in the Costs of Issuance Fund for the purpose of paying costs of issuing the Bonds, as described in Section 2.1 herein. Such amount, and Investment Proceeds thereon, may be invested without regard to yield for 13 months from the date hereof. Section 3.9 Transferred Proceeds. On the dates that Sale Proceeds and Investment Proceeds are used to pay principal of the Prior Bonds, unexpended proceeds from the sale of the Prior Bonds and investment earnings thereon, if any, will become transferred proceeds of the Bonds (the "Transferred Proceeds"). Transferred Proceeds are treated as proceeds of the Bonds and not as proceeds of the Prior Bonds. Transferred Proceeds of the Bonds may not be invested at a yield in excess of the yield on the Bonds. The Issuer does not expect any Transferred Proceeds. Section 3.10 No Other Replacement Proceeds. Neither the Issuer nor any related person will use any Gross Proceeds of the Bonds directly or indirectly to replace funds of the Issuer or any related person, which funds are or will be used directly or indirectly to acquire Investment Property reasonably expected to produce a yield that is materially higher than the yield on the Bonds. The weighted average maturity of the Bonds, 8.6116 years, as provided by the Representative, does not exceed 120% of the expected weighted average economic useful life of the Project. Section 3.11 No Overissuance. Taking into account anticipated investment earnings, proceeds from the sale of the Bonds do not exceed the amount necessary to refund the Prior Bonds, fund the Reserve Fund and pay costs of issuing the Bonds. Section 3.12 No Abusive Arbitrage Device. The Bonds are not and will not be part of a transaction or series of transactions that(a) enables the Issuer or any related person to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage, and (b) overburdens the market for tax-exempt obligations in any manner, including, without limitation, by selling bonds that would not otherwise be sold, or selling more bonds, or issuing bonds sooner, or allowing bonds to remain outstanding longer, than otherwise would be necessary. Section 3.13 No Expected Sale. It is not expected that the Project or any part thereof refinanced in whole or in part by the Bonds will be sold or otherwise disposed of before September 1, 2031, the last scheduled maturity date of the Bonds. IV ARBITRAGE - YIELD AND YIELD RESTRICTION Section 4.1 Yield. For purposes of this Tax Certificate, yield is calculated as set forth in Section 148(h) of the Code and Treasury Regulations Sections 1.148-4 and 1.148-5. Thus, yield on the Bonds or yield on Investment Property generally means that discount rate which, when used in computing the present value of all unconditionally payable payments representing principal, adjusted, as required, for any substantial discounts, interest and costs of qualified guarantees, produces an amount equal to the issue price of the Bonds or the purchase price of the Investment Property, as appropriate. The issue price of the Bonds is $38,158,667.10, which represents the price at which the Bonds were offered to the ultimate purchaser(s), as represented by the OHS WEST:261331147.2 10 43640-2 Underwriters in Exhibit A attached hereto. The yield on the Bonds has been calculated by the Representative to be at least 3.2777%. Section 4.2 No Qualified Guarantee. No qualified guarantee is being obtained in connection with the Bonds on the date hereof. Section 4.3 No Qualified Hedges. No contract has been and (absent an Opinion of Counsel) no contract will be entered into such that failure to take the contract into account would distort the yield on the Bonds or otherwise would fail clearly to reflect the economic substance of the transaction. Section 4.4 Yield Restriction. Absent an Opinion of Counsel, if the sum of(A) any amounts held in Bona Fide Debt Service Funds and remaining unexpended after 13 months from the date of accumulation in any such funds, plus (B) any Restricted Amount held in the Reserve Fund, plus (C) any Sale Proceeds and Investment Proceeds held to pay costs of issuing the Bonds after 13 months from the Closing Date, (D) any Sale Proceeds or Investment Proceeds held in the Rebate Fund, at any time in the aggregate exceeds $100,000, the excess will be invested either (i) in Investment Property with a yield not exceeding the yield on the Bonds, (ii) in assets that are not treated as Investment Property (e.g., Tax-Exempt Bonds), or (iii) in assets that satisfy the requirements for qualified yield reduction payments set forth in Treasury Regulations Section 1.148-5(c), subject to the limitation set forth in Section 1.148-10(b)(1)(ii). V REBATE Section 5.1 Undertakings. Pursuant to the Indenture, the Issuer has covenanted to comply with certain requirements of the Code. The Issuer acknowledges that the United States Department of the Treasury has issued regulations with respect to certain of these undertakings, including the proper method for computing whether any rebate amount is due the federal government under Section 148(f) of the Code. (Treas. Reg. Sections 1.148-1 through 1.148-11, 1.150-1 and 1.150-2.) The Issuer further acknowledges that the United States Department of the Treasury may yet issue additional regulations with respect to certain other of these undertakings. The Issuer covenants that it will undertake to determine what is required with respect to the rebate provisions contained in Section 148(f) of the Code and said regulations from time to time and will comply with any requirements that may apply to the Bonds. Except to the extent inconsistent with any requirements of the Code or future regulations, the Issuer will undertake the methodology described in this Tax Certificate. Section 5.2 Recordkeeping. The Issuer shall maintain or cause to be maintained detailed records with respect to each Nonpurpose Investment attributable to Gross Proceeds, including: (a) purchase date; (b) purchase price; (c) information establishing fair market value on the date such investment became a Nonpurpose Investment; (d) any accrued interest paid; (e) face amount; (f) coupon rate; (g) periodicity of interest payments; (h) disposition price; (i) any accrued interest received; and 0) disposition date. Such detailed recordkeeping is required to facilitate the calculation of the Rebate Requirement. OHS WEST 2 613 31 147.2 11 43640-2 Section 5.3 Rebate Requirement Calculation and Payment. (i) The Issuer will prepare or cause to be prepared an annual calculation of the Rebate Requirement consistent with the rules described in this Section 5.3. The Issuer will complete the annual calculation of the Rebate Requirement within 55 days after the close of each Bond Year and within 55 days after the first date on which there are no outstanding Bonds. (ii) For purposes of calculating the Rebate Requirement(i) the aggregate amount earned with respect to a Nonpurpose Investment shall be determined by assuming that the Nonpurpose Investment was acquired for an amount equal to its fair market value (determined as provided in Section 1.148-5(d)(6) of the Treasury Regulations, as applicable) at the time it becomes a Nonpurpose Investment, and (ii) the aggregate amount earned with respect to any Nonpurpose Investment shall include any unrealized gain or loss with respect to the Nonpurpose Investment(based on the assumed purchase price at fair market value and adjusted to take into account amounts received with respect to the Nonpurpose Investment and earned original issue discount or premium) on the first date when there are no outstanding Bonds or when the investment ceases to be a Nonpurpose Investment. (iii) The Issuer shall pay to the United States Department of the Treasury not later than 60 days after the end of the fifth Bond Year and each succeeding fifth Bond Year, an amount equal to 90% and, not later than 60 days after the first date when there are no outstanding Bonds, an amount equal to 100% of the Rebate Requirement(determined as of the end of the immediately preceding Bond Year), all as set forth in Section 1.148-3 of the Treasury Regulations. (iv) Each payment required to be made pursuant hereto shall be filed with the Internal Revenue Service Center, Ogden, Utah 84201, on or before the date such payment is due, and shall be accompanied by Form 8038-T. The Issuer shall retain records of the calculations required by this Section 5.3 until three years after the retirement of the last of the Bonds. Section 5.4 Exceptions from Rebate Requirement. (i) Bona Fide Debt Service Funds Exception. Bona Fide Debt Service Funds may be exempted from the Rebate Requirement to the extent amounts in such funds comply with the requirements set forth in Section 3.4.2 herein. (ii) Six-Month Rebate Exception. In general, no rebate calculations will be required with respect to Adjusted Gross Proceeds if all such Adjusted Gross Proceeds actually are spent within six months after the Closing Date. The Issuer expects to meet this exception. Section 5.5 Investments and Dispositions. (i) General Rule. No Investment Property may be acquired with Gross Proceeds for an amount(including transaction costs, except as otherwise provided in Section 1.148-5(e) of the Treasury Regulations) in excess of the fair market value of such Investment Property. No Investment Property may be sold or otherwise disposed of OHS WEST:261331147.2 12 43640-2 for an amount(including transaction costs, except as otherwise provided in Section 1.148-5(e) of the Treasury Regulations) less than the fair market value of the Investment Property. (ii) Fair Market Value. In general, the fair market value of any Investment Property is the price a willing buyer would pay to a willing seller to acquire the Investment Property, with no amount paid artificially to reduce or increase the yield on such Investment Property. This Section 5.5 describes various safe harbors for determining fair market value. With an Opinion of Counsel, other methods may be used to establish fair market value,provided,however, that such methods comply with the requirements of Section 1.148-5(d)(6) of the Treasury Regulations. (iii) Arm's-length Purchases and Sales. If Investment Property is acquired pursuant to an arm's length transaction without regard to any amount paid to reduce the yield on the Investment Property, the fair market value of the Investment Property shall be the amount paid for the Investment Property (without increase for transaction costs, except as otherwise provided in Section 1.148-5(e) of the Treasury Regulations). If Investment Property is sold or otherwise disposed of in an arm's length transaction without regard to any reduction in the disposition price to reduce the Rebate Requirement, the fair market value of the Investment Property shall be the amount realized from the sale or other disposition of the Investment Property (without reduction for transaction costs, except as otherwise provided in Section 1.148-5(e) of the Treasury Regulations). (iv) SLGS. If a United States Treasury obligation is acquired directly from or disposed of directly to the United States Department of the Treasury (as in the case of the United States Treasury Securities - State and Local Government Series), such acquisition or disposition shall be treated as establishing a market for the obligation and as establishing the fair market value of the obligation. (v) Investment Contracts. The purchase price of any Investment Property acquired pursuant to an investment contract(within the meaning of Section 1.148-1(b) of the Treasury Regulations) shall be determined as provided in Section 1.148-5 of the Treasury Regulations. No investment contract shall be acquired with Gross Proceeds unless the requirements of Section 1.148-5 of the Treasury Regulations are satisfied. With respect to any investment contract, the Issuer will obtain from any provider of the investment contract,broker thereof or other party, such information, certification or representation as will enable the Issuer to determine that these requirements are satisfied. Pursuant to Section 1.148-5 of the Treasury Regulations, the purchase price of an investment contract will be considered to be fair market value if: (a) the Issuer has made (or has had made on its behalf) a bona fide solicitation for the investment contract; the solicitation must have specified the material terms of the investment contract(i.e., all the terms that could directly or indirectly affect the yield or the cost of the investment including the collateral security requirements for the investment contract) and, unless the moneys invested pursuant to such investment contract will be held in a reasonably required reserve fund or the Bona Fide Debt Service Funds, the Issuer's reasonably expected drawdown schedule for the moneys to be invested; the solicitation has a legitimate business purpose (i.e., a purpose other than to increase the purchase price or reduce the yield) for every term of the bid specification; OHS WEST:261331147.2 13 43640-2 (b) all bidders have an equal opportunity to bid so that, for example, no bidder is given the opportunity to review other bids (a last look) before bidding; (c) the Issuer solicits bids from at least three (3) investment contract providers with established industry reputations as competitive providers of investment contracts; (d) the Issuer includes in the bid specifications a statement to potential bidders that by submitting a bid, the provider is making certain representations that the bid is bona fide, and specifically that 1) the bidder did not consult with any other potential provider about its bid, 2) the bid was determined without regard to any other formal or informal agreement that the potential provider had with the issuer or any other person, and 3) the bid was not submitted solely as a courtesy to the issuer or any other person for purposes of satisfying the requirements of Section 1.148-5 of the Treasury Regulations; (e) the Issuer receives at least three (3)bids from providers that do not have a material financial interest in the issue (the following investment contract providers are considered to have a material financial interest in the issue: 1) a lead underwriter in a negotiated underwriting,but only until 15 days after the issue date of the issue, 2) an entity acting as a financial advisor with respect to the purchase of the investment contract at the time the bid specifications were forwarded to potential providers; and 3) any related party to a provider that is disqualified for one of the two preceding reasons); (f) at least one (1) of the bids received by the Issuer that meets the requirements of the preceding paragraph is from an investment contract provider with an established industry reputation as a competitive provider of investment contracts; (g) if an agent for the Issuer conducts the bidding process, the agent does not bid; (h) the winning bid is the highest yielding bona fide bid (determined net of any broker's fee); and (i) the provider of the investment contract certifies as to all administrative costs to be paid on behalf of the Issuer, including any fees paid as broker commissions in connection with the investment contract. (vi) Deemed Acquisition or Sale. The fair market value of any Investment Property not directly purchased with Gross Proceeds for which there is an established securities market generally is the price at which a willing buyer would purchase Investment Property from a willing seller in a bona fide, arm's length transaction. (vii) Certificates of Deposit. The purchase price of a certificate of deposit issued by a commercial bank that has a fixed interest rate, a fixed principal payment schedule, a fixed maturity and a substantial penalty for early withdrawal, will be considered to be fair market value if: (a) the yield on the certificate of deposit is not less than the yield on reasonably comparable direct obligations of the United States; and OHS WEST:261331147.2 14 43640-2 (b) the yield on the certificate of deposit is not less than the highest published yield of the provider thereof which is currently available on comparable certificates of deposit offered to the public. (viii) Broker Compensation. For purposes of computing the Yield on any investment contract acquired through a broker, reasonable compensation received by such broker, whether payable by or on behalf of the obligor or obligee of such investment contract, may be taken into account in determining the cost of the investment contract (as provided in Section 1.148-5(e)(2)(iii) of the Treasury Regulations). For the calendar year 2011, compensation is deemed reasonable if it does not exceed the lesser of i) $36,000 or ii) 0.2% of the amount reasonably expected, as of the date of acquisition of the investment contract, to be invested under the investment contract over its term, or$4,000 (if 0.2% of such amount reasonably expected to be invested under the investment contract over its term is less than$4,000). In addition, the total fees received by the broker with respect to the investment of any proceeds of the Bonds that are taken into account with respect to all investment contracts, at any time, may not exceed $101,000. All amounts referenced are to be adjusted for inflation after the Closing Date. Section 5.6 Segregation of Proceeds. In order to perform the calculations required by the Code, it is necessary to track separately all of the Gross Proceeds. To that end, the Issuer shall cause to be established separate accounts or subaccounts, or shall cause the Trustee to take such other accounting measures as are necessary in order to account fully for all Gross Proceeds. Section 5.7 Filing Requirements. The Issuer will file or cause to be filed such reports or other documents with the Internal Revenue Service as are required by the Code. Section 5.8 Retention of Firm. The Issuer hereby undertakes to satisfy its obligation to perform the rebate calculations that may be required to be made from time to time with respect to the Bonds as follows: The Issuer initially has retained the firm of Bond Logistix LLC to perform rebate calculations that may be required to be made from time to time with respect to the Bonds. X The Issuer initially has retained the firm of Arbitrage Compliance Specialists, Inc. to perform rebate calculations that may be required to be made from time to time with respect to the Bonds. The of the Issuer has undertaken full responsibility for performing rebate calculations that may be required to be made from time to time with respect to the Bonds. The Issuer has decided not, at this time, to designate a party responsible for performing rebate calculations that may be required to be made from time to time with respect to the Bonds and as a result undertakes and assumes full responsibility for rebate compliance and acknowledges that bond counsel does not have any such responsibility (unless later engaged in writing for such purpose). The Issuer has determined that under no circumstances will it earn any arbitrage subject to rebate with respect to the Bonds. OHS WEST 2 613 31 147.2 15 43640-2 V1 OTHER MATTERS Section 6.1 Expectations. The undersigned is an authorized representative of the Issuer acting for and on behalf of the Issuer in executing this Tax Certificate. To the best of the knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that would materially change the expectations as set forth herein, and said expectations are reasonable. Section 6.2 Amendments. Notwithstanding any other provision of this Tax Certificate, the Issuer may amend this Tax Certificate and thereby alter any actions allowed or required by this Tax Certificate if such amendment is signed by an authorized officer and is supported by an opinion of counsel to the effect that such action (or inaction) will not adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation. OHS WEST:261331147.2 16 43640-2 Section 6.3 Survival of Defeasance. Notwithstanding any provision in this Tax Certificate or the Indenture to the contrary, the obligation to remit the Rebate Requirement, if any, to the United States Department of the Treasury and to comply with all other requirements contained in this Tax Certificate shall survive defeasance of the Bonds. Dated: September 28, 2011 HUNTINGTON BEACH PUBLIC FINANCI AUTHO By: J e Carchio, hair of e Board of Directors OHS WEST:261331147 43640-2 EXHIBIT A CERTIFICATE OF THE CITY The City of Huntington Beach (the "City")has entered into the Indenture, dated as of September 1, 2011, by and among the Huntington Beach Public Financing Authority (the "Issuer"), the City and The Bank of New York Mellon Trust Company, N.A., as trustee, in connection with the issuance of the Issuer's Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Bonds") in the principal amount of $36,275,000. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Tax Certificate to which this certificate is attached as an exhibit. On behalf of the City, the undersigned hereby certifies and represents the following with respect to the Bonds: 1. The City Council of the City serves as the board of directors of the Issuer. In the Issuer's execution of the Tax Certificate, the representations and covenants made by the Issuer therein are made on behalf of the City. The City has reviewed the Tax Certificate and is not aware of any facts or circumstances that would cause it to question the accuracy or reasonableness of any representation made by the Issuer in the Tax Certificate. 2. The Bonds are issued to refinance the Project and to pay other common costs of the financing. The Project will be owned and operated by the City. The City acknowledges that, in its capacity as the controlling body of the Issuer (which is the issuer of the Bonds), the Issuer is responsible for all tax compliance relating to the Project and all Bond proceeds. 3. The City hereby reaffirms all representations and covenants made by the Issuer in the Tax Certificate, including but not limited to, those set forth in Sections 1.4 (regarding description of the Project and the history of the Prior Bonds), 2.2 (governmental use), 2.3 (change in use), 2.10 (record retention), 2.11 (prior tax covenants and final rebate), 3.10 (no other replacement proceeds), 3.13 (no expected sale), 4.4 (yield restriction), and Article V (rebate). OHS WEST:261331147.2 A-1 43640-2 The City acknowledges that it is making representations and covenants in connection with the issuance of the Bonds by the Issuer on the date hereof, on which the Issuer and Orrick, Herrington & Sutcliffe LLP, as Bond Counsel, are relying. The undersigned is authorized to execute this certificate on behalf of the City,based on personal knowledge, inquiry deemed adequate by the undersigned, or institutional knowledge regarding the matters set forth herein. Dated: September 28, 2011 CITY OF HUNTINGTON BEACH By: �n ' Lori Ann Farrell, Director of Finance OHS WEST:261331147 A-21 43640-2 EXHIBIT B CERTIFICATE OF UNDERWRITERS Merill Lynch, Pierce, Fenner& Smith Incorporated, has servied as the representative on its own behalf and on behalf of E. J. De La Rosa & Co., Inc. (collectively, the "Underwriters") to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Bonds"). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Tax Certificate relating to the Bonds, to which this certificate is attached as an exhibit. On behalf of the Underwriters, the undersigned hereby certifies and represents the following: A. Issue Price 1. As of September 13, 2011 (the "Sale Date"), the Underwriters had offered or reasonably expected to offer all of the Bonds to the general public (excluding bondhouses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers) in a bona fide public offering at the prices set forth in the schedule attached hereto (the "Schedule"). 2. Such prices of the Bonds on the Schedule represent the fair market price of such Bonds as of the Sale Date. 3. As of the Sale Date, all of the Bonds were offered to the general public (excluding bond houses, brokers, or similar persons acting in the capacity of underwriters or wholesalers) at such prices, and, except for those Bonds described in paragraph 4 below, the first price at which at least 10% of each maturity of such Bonds was actually sold to the general public at such respective price on the attached Schedule. 4. For those Bonds maturing on September 1, 2012 and September 1, 2025, the Underwriter reasonably expected, at the time of sale, that the first price at which at least 10% of each of these two maturities would initially be sold to the general public would be at their respective initial offering price set forth on the attached Schedule. B. Arbitrage Yield Based on a semi-compounding convention, the arbitrage yield on the Bonds is at least 3.277716%. C. Weighted Average Maturity The weighted average maturity of the Bonds is no more than 8.6116 years. D. Reserve Fund The funding of the Reserve Fund relating to the Bonds with Bond proceeds is reasonably required in that it was a material factor in selling the Bonds at the lowest possible yield (given other characteristics of the Bonds) without regard to any benefit from positive net investment earnings on amounts held in the Reserve Fund, and it is reasonable and customary in marketing similar issues of governmental obligations. OHS WEST:261331147.2 B-1 43640-2 The undersigned is authorized to execute this certificate on behalf of the Underwriters, which is based on one or more of(i)personal knowledge, (ii) inquiry deemed adequate by the undersigned, and(iii) institutional knowledge regarding the matters set forth herein. Dated: September 28, 2011 MERRILL YNCH, PIERCE, FENNER& SMITH IN OWRATED By: Vfiorized Representative OHS WEST:261331147 B_2 43640-2 SCHEDULE TO EXHIBIT B (Attached) OHS WEST:261331147.2 B-3 43640-2 BOND PRICING Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Maturity Yield to Call Call Premium Bond Component Date Amount Rate Yield Price Maturity Date Price (-Discount) Takedown Serial Bonds: 09/01/2012 2,120,000 2.000% 0.350% 101.522 - - - 32,266.40 0.500 09/01/2013 2,960,000 2.500% 0.710% 103.416 - - - 101,113.60 1.250 09/01/2014 3,030,000 5.000% 0.860% 111.932 - - - 361,539.60 1.250 09/01/2015 3,180,000 5.000% 1.140% 114.774 - - - 469,813.20 1.250 09/01/2016 3,335,000 3.000% 1.620% 106.506 - - - 216,975.10 1.250 09/01/2017 1,915,000 3.000% 1.930% 105.962 - - - 114,172.30 1.500 09/01/2018 1,965,000 4.000% 2.220% 111.366 - - - 223,341.90 1.500 09/01/2019 2,045,000 5.000% 2.530% 117.634 - - - 360,615.30 1.500 09/01/2020 1,060,000 3.000% 2.800% 101.568 - - - 16,620.80 2.000 09/01/2021 1,095,000 5.000% 2.950% 117.524 - - - 191,887.80 2.000 09/01/2022 1,150,000 3.000% 3.200% 98.166 - - - -21,091.00 2.000 09/01/2023 1,185,000 3.375% 3.580% 98.022 - - - -23,439.30 2.000 09/01/2024 1,225,000 3.625% 3.820% 98.023 - - - -24,218.25 2.000 09/01/2025 1,265,000 4.000% 3.960% 100.323 C 3.969% 09/01/2021 100.000 4,085.95 2.000 09/01/2026 1,315,000 4.000% 4.090% 98.999 - - - -13,163.15 2.000 09/01/2027 1,370,000 4.000% 4.200% 97.691 - - - -31,633.30 2.000 09/01/2028 1,425,000 4.125% 4.300% 97.908 - - - -29,811.00 2.000 09/01/2029 1,480,000 4.250% 4.380% 98.394 - - - -23,768.80 2.000 09/01/2030 1,545,000 4.250% 4.440% 97.581 - - - -37,373.55 2.000 09/01/2031 1,610,000 4.500% 4.520% 99.735 - - - -4,266.50 2.000 36,275,000 1,883,667.10 Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 4 BOND PRICING Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Dated Date 09/28/2011 Delivery Date 09/28/2011 First Coupon 03/01/2012 Par Amount 36,275,000.00 Premium 1,883,667.10 Production 38,158,667.10 105.192742% Underwriter's Discount -81,490.34 -0.224646% Purchase Price 38,077,176.76 104.968096% Accrued Interest - Net Proceeds 38,077,176.76 Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 5 EXHIBIT C CERTIFICATE OF FINANCIAL ADVISOR Public Financial Management has served as a financial advisor (the "Financial Advisor") to the Huntington Beach Public Financing Authority and the City of Huntington Beach (the "City") in connection with the issuance on the date hereof of the Issuer's Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) in the principal amount of$36,275,000. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Tax Certificate relating to the Bonds, to which this certificate is attached as an exhibit. The Financial Advisor hereby certifies and represents the following with respect to the Bonds: The funding of the Reserve Fund relating to the Bonds with Bond proceeds is reasonably required in that it was a material factor in selling the Bonds at the lowest possible yield (given other characteristics of the Bonds) without regard to any benefit from positive net investment earnings on amounts held in the Reserve Fund, and it is reasonable and customary in marketing similar issues of governmental obligations. The undersigned is authorized to execute this certificate on behalf of the Financial Advisor, which is based on one or more of(i)personal knowledge, (ii) inquiry deemed adequate by the undersigned, and (iii) institutional knowledge regarding the matters set forth herein. Dated: September 28, 2011 PUBLIC FINANCIAL MANAGEMENT, INC. By: I_ Authorized Representative OHS WEST261331147 C_1 43640-2 EXHIBIT D PRICING NUMBERS (Attached) OHS WEST:261331147.2 D_1 43640-2 SOURCES AND USES OF FUNDS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Dated Date 09/28/2011 Delivery Date 09/28/2011 Sources: Bond Proceeds: Par Amount 36,275,000.00 Net Premium 1,883,667.10 38,158,667.10 Other Sources of Funds: Prior DSRF Transfer 2001A 1,988,156.26 Prior DSRF Transfer 2001B 2,620,437.50 4,608,593.76 42,767,260.86 Uses: Refunding Escrow Deposits: Cash Deposit 39,417,195.05 Other Fund Deposits: Debt Service Reserve Fund 3,082,659.23 Delivery Date Expenses: Cost of Issuance 184,780.90 Underwriter's Discount 81,490.34 266,271.24 Other Uses of Funds: Additional Proceeds 1,135.34 42,767,260.86 Notes: COI provided by PFM on 9/7/2011 Call date of 10/17/2011 assumes pricing on 9/13/2011 with 34 day notice Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 1 BOND SUMMARY STATISTICS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Dated Date 09/28/2011 Delivery Date 09/28/2011 First Coupon 03/01/2012 Last Maturity 09/01/2031 Arbitrage Yield 3.277716% True Interest Cost(TIC) 3.307607% Net Interest Cost(NIC) 3.451316% All-In TIC 3.375774% Average Coupon 4.013672% Average Life(years) 8.834 Duration of Issue(years) 7.265 Par Amount 36,275,000.00 Bond Proceeds 38,158,667.10 Total Interest 12,862,588.12 Net Interest 11,060,411.36 Total Debt Service 49,137,588.12 Maximum Annual Debt Service 4,306,093.76 Average Annual Debt Service 2,466,127.38 Underwriter's Fees(per$1000) Average Takedown 1.572123 Other Fee 0.674337 Total Underwriter's Discount 2.246460 Bid Price 104.968096 Par Average Average TV of 1 by Bond Component Value Price Coupon Life change Serial Bonds 36,275,000.00 105.193 4.014% 8.834 25,510.40 36,275,000.00 8.834 25,510.40 All-In Arbitrage TIC TIC Yield Par Value 36,275,000.00 36,275,000.00 36,275,000.00 +Accrued Interest - - - +Premium(Discount) 1,883,667.10 1,883,667.10 1,883,667.10 -Underwriter's Discount -81,490.34 -81,490.34 -Cost of Issuance Expense -184,780.90 -Other Amounts - - - Target Value 38,077,176.76 37,892,395.86 38,158,667.10 Target Date 09/28/2011 09/28/2011 09/28/2011 Yield 3.307607% 3.375774% 3.277716% Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 2 SUMMARY OF REFUNDING RESULTS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Dated Date 09/28/2011. Delivery Date 09/28/2011. Arbitrage yield 3.277716% Escrow yield - Bond Par Amount 36,275,000.00 True Interest Cost 3.307607% Net Interest Cost 3.451316% Average Coupon 4.013672% Average Life 8.834 Par amount of refunded bonds 38,860,000.00 Average coupon of refunded bonds 4.851343% Average life of refunded bonds 9.018 TV of prior debt to 09/28/2011 @ 3.277716% 43,456,062.93 Net TV Savings 3,772,596.64 Percentage savings of refunded bonds 9.708175% Percentage savings of refunding bonds 10.399991% Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 3 BOND PRICING Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Maturity Yield to Call Call Premium Bond Component Date Amount Rate Yield Price Maturity Date Price (-Discount) Takedown Serial Bonds: 09/01/2012 2,120,000 2.000% 0.350% 101.522 - - - 32,266.40 0.500 09/01/2013 2,960,000 2.500% 0.710% 103.416 - - - 101,113.60 1.250 09/01/2014 3,030,000 5.000% 0.860% 111.932 - - - 361,539.60 1.250 09/01/2015 3,180,000 5.000% 1.140% 114.774 - - - 469,813.20 1.250 09/01/2016 3,335,000 3.000% 1.620% 106.506 - - - 216,975.10 1.250 09/01/2017 1,915,000 3.000% 1.930% 105.962 - - - 114,172.30 1.500 09/01/2018 1,965,000 4.000% 2.220% 111.366 - - - 223,341.90 1.500 09/01/2019 2,045,000 5.000% 2.530% 117.634 - - - 360,615.30 1.500 09/01/2020 1,060,000 3.000% 2.800% 101.568 - - - 16,620.80 2.000 09/01/2021 1,095,000 5.000% 2.950% 117.524 - - - 191,887.80 2.000 09/01/2022 1,150,000 3.000% 3.200% 98.166 - - - -21,091.00 2.000 09/01/2023 1,185,000 3.375% 3.580% 98.022 - - - -23,439.30 2.000 09/01/2024 1,225,000 3.625% 3.820% 98.023 - - - -24,218.25 2.000 09/01/2025 1,265,000 4.000% 3.960% 100.323 C 3.969% 09/01/2021 100.000 4,085.95 2.000 09/01/2026 1,315,000 4.000% 4.090% 98.999 - - - -13,163.15 2.000 09/01/2027 1,370,000 4.000% 4.200% 97.691 - - - -31,633.30 2.000 09/01/2028 1,425,000 4.125% 4.300% 97.908 - - - -29,811.00 2.000 09/01/2029 1,480,000 4.250% 4.380% 98.394 - - - -23,768.80 2.000 09/01/2030 1,545,000 4.250% 4.440% 97.581 - - - -37,373.55 2.000 09/01/2031 1,610,000 4.500% 4.520% 99.735 - - - -4,266.50 2.000 36,275,000 1,883,667.10 Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 4 BOND PRICING Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Dated Date 09/28/2011 Delivery Date 09/28/2011 First Coupon 03/01/2012 Par Amount 36,275,000.00 Premium 1,883,667.10 Production 38,158,667.10 105.192742% Underwriter's Discount -81,490.34 -0.224646% Purchase Price 38,077,176.76 104.968096% Accrued Interest - Net Proceeds 38,077,176.76 Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 5 SUMMARY OF BONDS REFUNDED Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Maturity Interest Par Call Call Bond Date Rate Amount Date Price Lease Revenue Bonds,2001 Series A,20OIA: SERIAL 09/01/2012 4.125% 785,000.00 10/17/2011 100.000 09/01/2013 4.250% 815,000.00 10/17/2011 100.000 09/01/2014 4.375% 850,000.00 10/17/2011 100.000 09/01/2015 4.500% 885,000.00 10/17/2011 100.000 09/01/2016 4.500% 925,000.00 10/17/2011 100.000 09/01/2017 4.625% 970,000.00 10/17/2011 100.000 09/01/2018 4.750% 1,010,000.00 10/17/2011 100.000 09/01/2019 4.750% 1,060,000.00 10/17/2011 100.000 09/01/2020 4.750% 1,110,000.00 10/17/2011 100.000 09/01/2021 4.750% 1,165,000.00 10/17/2011 100.000 TERM2026 09/01/2026 5.000% 6,735,000.00 10/17/2011 100.000 TERM2031 09/01/2031 5.000% 8,590,000.00 10/17/2011 100.000 24,900,000.00 Lease Revenue Bonds,2001 Series B,2001B: SERIAL 08/01/2012 3.850% 2,030,000.00 10/17/2011 102.000 08/01/2013 4.000% 2,110,000.00 10/17/2011 102.000 08/01/2014 4.125% 2,190,000.00 10/17/2011 102.000 08/01/2015 4.250% 2,280,000.00 10/17/2011 102.000 08/01/2016 4.250% 2,375,000.00 10/17/2011 102.000 08/01/2017 4.375% 950,000.00 10/17/2011 102,000 08/01/2018 4.500% 990,000.00 10/17/2011 102.000 08/01/2019 5.000% 1,035,000.00 10/17/2011 102.000 13,960,000.00 38,860,000.00 Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 6 PRIOR BOND DEBT SERVICE Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Lease Revenue Bonds,2001 Series A(2001A) Period Annual Ending Principal Coupon Interest Debt Service Debt Service 03/01/2012 - - 601,578.13 601,578.13 - 09/01/2012 785,000 4.125% 601,578.13 1,386,578.13 - 09/30/2012 - - - - 1,988,156.26 03/01/2013 - - 585,387.50 585,387.50 - 09/01/2013 815,000 4.250% 585,387.50 1,400,387.50 - 09/30/2013 - - - - 1,985,775.00 03/01/2014 - - 568,068.75 568,068.75 - 09/01/2014 850,000 4.375% 568,068.75 1,418,068.75 - 09/30/2014 - - - - 1,986,137.50 03/01/2015 - - 549,475.00 549,475.00 - 09/01/2015 885,000 4.500% 549,475.00 1,434,475.00 - 09/30/2015 - - - - 1,983,950.00 03/01/2016 - - 529,562.50 529,562.50 - 09/01/2016 925,000 4.500% 529,562.50 1,454,562.50 - 09/30/2016 - - - - 1,984,125.00 03/01/2017 - - 508,750.00 508,750.00 - 09/01/2017 970,000 4.625% 508,750.00 1,478,750.00 - 09/30/2017 - - - - 1,987,500.00 03/01/2018 - - 486,318.75 486,318.75 - 09/01/2018 1,010,000 4.750% 486,318.75 1,496,318.75 - 09/30/2018 - - - - 1,982,637.50 03/01/2019 - - 462,331.25 462,331.25 - 09/01/2019 1,060,000 4.750% 462,331.25 1,522,331.25 - 09/30/2019 - - - - 1,984,662.50 03/01/2020 - - 437,156.25 437,156.25 - 09/01/2020 1,110,000 4.750% 437,156.25 1,547,156.25 - 09/30/2020 - - - - 1,984,312.50 03/01/2021 - - 410,793.75 410,793.75 - 09/01/2021 1,165,000 4.750% 410,793.75 1,575,793.75 - 09/30/2021 - - - - 1,986,587.50 03/01/2022 - - 383,125.00 383,125.00 - 09/01/2022 1,220,000 5.000% 383,125.00 1,603,125.00 - 09/30/2022 - - - - 1,986,250.00 03/01/2023 - - 352,625.00 352,625.00 - 09/01/2023 1,280,000 5.000% 352,625.00 1,632,625.00 - 09/30/2023 - - - - 1,985,250.00 03/01/2024 - - 320,625.00 320,625.00 - 09/01/2024 1,345,000 5.000% 320,625.00 1,665,625.00 - 09/30/2024 - - - - 1,986,250.00 03/01/2025 - - 287,000.00 287,000.00 - 09/01/2025 1,410,000 5.000% 287,000.00 1,697,000.00 - 09/30/2025 - - - - 1,984,000.00 03/01/2026 - - 251,750.00 251,750.00 - 09/01/2026 1,480,000 5.000% 251,750.00 1,731,750.00 - 09/30/2026 - - - - 1,983,500.00 03/01/2027 - - 214,750.00 214,750.00 - 09/01/2027 1,555,000 5.000% 214,750.00 1,769,750.00 - 09/30/2027 - - - - 1,984,500.00 03/01/2028 - - 175,875.00 175,875.00 - 09/01/2028 1,635,000 5.000% 175,875.00 1,810,875.00 - 09/30/2028 - - - - 1,986,750.00 Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REFOI) Page 7 PRIOR BOND DEBT SERVICE Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Lease Revenue Bonds,2001 Series A(2001A) Period Annual Ending Principal Coupon Interest Debt Service Debt Service 03/01/2029 - - 135,000.00 135,000.00 - 09/01/2029 1,710,000 5.000% 135,000.00 1,845,000.00 - 09/30/2029 - - - - 1,980,000.00 03/01/2030 - - 92,250.00 92,250.00 - 09/01/2030 1,800,000 5.000% 92,250.00 1,892,250.00 - 09/30/2030 - - - - 1,984,500.00 03/01/2031 - - 47,250.00 47,250.00 - 09/01/2031 1,890,000 5.000% 47,250.00 1,937,250.00 - 09/30/2031 - - - - 1,984,500.00 24,900,000 14,799,343.76 39,699,343.76 39,699,343.76 Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REFOI) Page 8 PRIOR BOND DEBT SERVICE Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Lease Revenue Bonds,2001 Series B(2001B) Period Annual Ending Principal Coupon Interest Debt Service Debt Service 02/01/2012 - - 294,296.25 294,296.25 - 08/01/2012 2,030,000 3.850% 294,296.25 2,324,296.25 - 09/30/2012 - - - - 2,618,592.50 02/01/2013 - - 255,218.75 255,218.75 - 08/01/2013 2,110,000 4.000% 255,218.75 2,365,218.75 - 09/30/2013 - - - - 2,620,437.50 02/01/2014 - - 213,018.75 213,018.75 - 08/01/2014 2,190,000 4.125% 213,018.75 2,403,018.75 - 09/30/2014 - - - - 2,616,037.50 02/01/2015 - - 167,850.00 167,850.00 - 08/01/2015 2,280,000 4.250% 167,850.00 2,447,850.00 - 09/30/2015 - - - - 2,615,700.00 02/01/2016 - - 119,400.00 119,400.00 - 08/01/2016 2,375,000 4.250% 119,400.00 2,494,400.00 - 09/30/2016 - - - - 2,613,800.00 02/01/2017 - - 68,931.25 68,931.25 - 08/01/2017 950,000 4.375% 68,931.25 1,018,931.25 - 09/30/2017 - - - - 1,087,862.50 02/01/2018 - - 48,150.00 48,150.00 - 08/01/2018 990,000 4.500% 48,150.00 1,038,150.00 - 09/30/2018 - - - - 1,086,300.00 02/01/2019 - - 25,875.00 25,875.00 - 08/01/2019 1,035,000 5.000% 25,875.00 1,060,875.00 - 09/30/2019 - - - - 1,086,750.00 13,960,000 2,385,480.00 16,345,480.00 16,345,480.00 Sep 13,2011 3:11 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REFOI) Page 9 BOND DEBT SERVICE Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Period Annual Ending Principal Coupon Interest Debt Service Debt Service 03/01/2012 - - 590,109.84 590,109.84 - 09/01/2012 2,120,000 2.000% 694,246.88 2,814,246.88 - 09/30/2012 - - - - 3,404,356.72 03/01/2013 - - 673,046.88 673,046.88 -. 09/01/2013 2,960,000 2.500% 673,046.88 3,633,046.88 - 09/30/2013 - - - - 4,306,093.76 03/01/2014 - - 636,046.88 636,046.88 - 09/01/2014 3,030,000 5.000% 636,046.88 3,666,046.88 - 09/30/2014 - - - - 4,302,093.76 03/01/2015 - - 560,296.88 560,296.88 - 09/01/2015 3,180,000 5.000% 560,296.88 3,740,296.88 - 09/30/2015 - - - - 4,300,593.76 03/01/2016 - - 480,796.88 480,796.88 - 09/01/2016 3,335,000 3.000% 480,796.88 3,815,796.88 - 09/30/2016 - - - - 4,296,593.76 03/01/2017 - - 430,771.88 430,771.88 - 09/01/2017 1,915,000 3.000% 430,771.88 2,345,771.88 - 09/30/2017 - - - - 2,776,543.76 03/01/2018 - - 402,046.88 402,046.88 -. 09/01/2018 1,965,000 4.000% 402,046.88 2,367,046.88 - 09/30/2018 - - - - 2,769,093.76 03/01/2019 - - 362,746.88 362,746.88 - 09/01/2019 2,045,000 5.000% 362,746.88 2,407,746.88 - 09/30/2019 - - - - 2,770,493.76 03/01/2020 - - 311,621.88 311,621.88 - 09/01/2020 1,060,000 3.000% 311,621.88 1,371,621.88 - 09/30/2020 - - - - 1,683,243.76 03/01/2021 - - 295,721.88 295,721.88 - 09/01/2021 1,095,000 5.000% 295,721.88 1,390,721.88 - 09/30/2021 - - - - 1,686,443.76 03/01/2022 - - 268,346.88 268,346.88 - 09/01/2022 1,150,000 3.000% 268,346.88 1,418,346.88 - 09/30/2022 - - - - 1,686,693.76 03/01/2023 - - 251,096.88 251,096.88 - 09/01/2023 1,185,000 3.375% 251,096.88 1,436,096.88 - 09/30/2023 - - - - 1,687,193.76 03/01/2024 - - 231,100.00 231,100.00 - 09/01/2024 1,225,000 3.625% 231,100.00 1,456,100.00 - 09/30/2024 - - - - 1,687,200.00 03/01/2025 - - 208,896.88 208,896.88 - 09/01/2025 1,265,000 4.000% 208,896.88 1,473,896.88 - 09/30/2025 - - - - 1,682,793.76 03/01/2026 - - 183,596.88 183,596.88 - 09/01/2026 1,315,000 4.000% 183,596.88 1,498,596.88 - 09/30/2026 - - - - 1,682,193.76 03/01/2027 - - 157,296.88 157,296.88 - 09/01/2027 1,370,000 4.000% 157,296.88 1,527,296.88 - 09/30/2027 - - - - 1,684,593.76 03/01/2028 - - 129,896.88 129,896.88 - 09/01/2028 1,425,000 4.125% 129,896.88 1,554,896.88 - 09/30/2028 - - - - 1,684,793.76 03/01/2029 - - 100,506.25 100,506.25 - 09/01/2029 1,480,000 4.250% 100,506.25 1,580,506.25 - 09/30/2029 - - - - 1,681,012.50 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REF0I,REFOI) Page 10 BOND DEBT SERVICE Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Period Annual Ending Principal Coupon Interest Debt Service Debt Service 03/01/2030 - - 69,056.25 69,056.25 - 09/01/2030 1,545,000 4.250% 69,056.25 1,614,056.25 - 09/30/2030 - - - - 1,683,112.50 03/01/2031 - - 36,225.00 36,225.00 -. 09/01/2031 1,610,000 4.500% 36,225.00 1,646,225.00 - 09/30/2031 - - - - 1,682,450.00 36,275,000 12,862,588.12 49,137,588.12 49,137,588.12 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REF0I,REF01) Page 11 SAVINGS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Present Value Prior Refunding Annual to 09/28/2011 Date Debt Service Debt Service Savings Savings @ 3.2777161% 02/01/2012 294,296.25 - 294,296.25 - 291,045.27 03/01/2012 601,578.13 590,109.84 11,468.29 - 11,310.92 08/01/2012 2,324,296.25 - 2,324,296.25 - 2,261,556.92 09/01/2012 1,386,578.13 2,814,246.88 -1,427,668.75 - -1,385,373.47 09/30/2012 - - - 1,202,392.04 - 02/01/2013 255,218.75 - 255,218.75 - 244,325.53 03/01/2013 585,387.50 673,046.88 -87,659.38 - -83,690.86 08/01/2013 2,365,218.75 - 2,365,218.75 - 2,227,756.92 09/01/2013 1,400,387.50 3,633,046.88 -2,232,659.38 - -2,097,211.98 09/30/2013 - - - 300,118.74 - 02/01/2014 213,018.75 - 213,018.75 - 197,403.36 03/01/2014 568,068.75 636,046.88 -67,978.13 - -62,824.54 08/01/2014 2,403,018.75 - 2,403,018.75 - 2,190,958.21 09/01/2014 1,418,068.75 3,666,046.88 -2,247,978.13 - -2,044,054.10 09/30/2014 - - - 300,081.24 - 02/01/2015 167,850.00 - 167,850.00 - 150,570.02 03/01/2015 549,475.00 560,296.88 -10,821.88 - -9,681.51 08/01/2015 2,447,850.00 - 2,447,850.00 - 2,160,439.86 09/01/2015 1,434,475.00 3,740,296.88 -2,305,821.88 - -2,029,581.55 09/30/2015 - - - 299,056.24 - 02/01/2016 119,400.00 - 119,400.00 - 103,681.66 03/01/2016 529,562.50 480,796.88 48,765.62 - 42,231.33 08/01/2016 2,494,400.00 - 2,494,400.00 - 2,131,100.47 09/01/2016 1,454,562.50 3,815,796.88 -2,361,234.38 - -2,011,871.76 09/30/2016 - - - 301,331.24 - 02/01/2017 68,931.25 - 68,931.25 - 57,942.10 03/01/2017 508,750.00 430,771.88 77,978.12 - 65,369.35 08/01/2017 1,018,931.25 - 1,018,931.25 - 842,680.91 09/01/2017 1,478,750.00 2,345,771.88 -867,021.88 - -715,108.11 09/30/2017 - - - 298,818.74 - 02/01/2018 48,150.00 - 48,150.00 - 39,179.13 03/01/2018 486,318.75 402,046.88 84,271.87 - 68,385.57 08/01/2018 1,038,150.00 - 1,038,150.00 - 831,110.61 09/01/2018 1,496,318.75 2,367,046.88 -870,728.13 - -695,191.84 09/30/2018 - - - 299,843.74 - 02/01/2019 25,875.00 - 25,875.00 - 20,380.71 03/01/2019 462,331.25 362,746.88 99,584.37 - 78,226.43 08/01/2019 1,060,875.00 - 1,060,875.00 - 822,135.46 09/01/2019 1,522,331.25 2,407,746.88 -885,415.63 - -684,305.01 09/30/2019 - - - 300,918.74 - 03/01/2020 437,156.25 311,621.88 125,534.37 - 95,456.48 09/01/2020 1,547,156.25 1,371,621.88 175,534.37 - 131,324.32 09/30/2020 - - - 301,068.74 - 03/01/2021 410,793.75 295,721.88 115,071.87 - 84,701.75 09/01/2021 1,575,793.75 1,390,721.88 185,071.87 - 134,030.56 09/30/2021 - - - 300,143.74 - 03/01/2022 383,125.00 268,346.88 114,778.12 - 81,782.95 09/01/2022 1,603,125.00 1,418,346.88 184,778.12 - 129,537.17 09/30/2022 - - - 299,556.24 - 03/01/2023 352,625.00 251,096.88 101,528.12 - 70,027.79 09/01/2023 1,632,625.00 1,436,096.88 196,528.12 - 133,367.20 09/30/2023 - - - 298,056.24 - 03/01/2024 320,625.00 231,100.00 89,525.00 - 59,773.53 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REFO 1) Page 12 SAVINGS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Present Value Prior Refunding Annual to 09/28/2011 Date Debt Service Debt Service Savings Savings @ 3.2777161% 09/01/2024 1,665,625.00 1,456,100.00 209,525.00 - 137,638.72 09/30/2024 - - - 299,050.00 - 03/01/2025 287,000.00 208,896.88 78,103.12 - 50,479.31 09/01/2025 1,697,000.00 1,473,896.88 223,103.12 - 141,870.09 09/30/2025 - - - 301,206.24 - 03/01/2026 251,750.00 183,596.88 68,153.12 - 42,639.41 09/01/2026 1,731,750.00 1,498,596.88 233,153.12 - 143,518.17 09/30/2026 - - - 301,306.24 - 03/01/2027 214,750.00 157,296.88 57,453.12 - 34,795.21 09/01/2027 1,769,750.00 1,527,296.88 242,453.12 - 144,468.74 09/30/2027 - - - 299,906.24 - 03/01/2028 175,875.00 129,896.88 45,978.12 - 26,954.89 09/01/2028 1,810,875.00 1,554,896.88 255,978.12 - 147,648.62 09/30/2028 - - - 301,956.24 - 03/01/2029 135,000.00 100,506.25 34,493.75 - 19,575.24 09/01/2029 1,845,000.00 1,580,506.25 264,493.75 - 147,680.25 09/30/2029 - - - 298,987.50 - 03/01/2030 92,250.00 69,056.25 23,193.75 - 12,741.43 09/01/2030 1,892,250.00 1,614,056.25 278,193.75 - 150,360.86 09/30/2030 - - - 301,387.50 - 03/01/2031 47,250.00 36,225.00 11,025.00 - 5,862.82 09/01/2031 1,937,250.00 1,646,225.00 291,025.00 - 152,264.33 09/30/2031 - - - 302,050.00 - 56,044,823.76 49,137,588.12 6,907,235.64 6,907,235.64 5,297,395.83 Savings Summary PV of savings from cash flow 5,297,395.83 Less:Prior funds on hand -4,608,593.76 Plus:Refunding funds on hand 3,083,794.57 NetPV Savings 3,772,596.64 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 13 ESCROW REQUIREMENTS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Lease Revenue Bonds,2001 Series A(2001A) Period Principal Ending Interest Redeemed Total 10/17/2011 153,736.63 24,900,000.00 25,053,736.63 153,736.63 24,900,000.00 25,053,736.63 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 14 ESCROW REQUIREMENTS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Lease Revenue Bonds,2001 Series B(2001B) Period Principal Redemption Ending Interest Redeemed Premium Total 10/17/2011 124,258.42 13,960,000.00 279,200.00 14,363,458.42 124,258.42 13,960,000.00 279,200.00 14,363,458.42 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REF0I,REF01) Page 15 ESCROW COST Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Purchase Cost of Cash Total Date Securities Deposit Escrow Cost 09/28/2011 - 39,417,195.05 39,417,195.05 0 39,417,195.05 39,417,195.05 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REF0I,REF01) Page 16 ESCROW SUFFICIENCY Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Escrow Net Escrow Excess Excess Date Requirement Receipts Receipts Balance 09/28/2011 - 39,417,195.05 39,417,195.05 39,417,195.05 10/17/2011 39,417,195.05 - -39,417,195.05 - 39,417,195.05 39,417,195.05 0.00 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 17 ESCROW STATISTICS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Modified Yield to Yield to Perfect Value of Total Duration Receipt Disbursement Escrow Negative Cost of Escrow Cost (years) Date Date Cost Arbitrage Dead Time Global Proceeds Escrow: 39,417,195.05 - - - 39,349,617.73 - 67,577.32 39,417,195.05 39,349,617.73 0.00 67,577.32 Delivery date 09/28/2011 Arbitrage yield 3.277716% Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REF0I,REF01) Page 18 COST OF ISSUANCE Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Cost of Issuance $/1000 Amount Bond Counsel 1.92970 70,000.00 Moody's 0.68918 25,000.00 S&P 0.52378 19,000.00 PFM 0.82702 30,000.00 Printer 0.02026 735.00 Verification Agent 0.03198 1,160.00 Trustee 0.08270 3,000.00 Newspaper Advertisement 0.21532 7,810.90 Title Insurance 0.63611 23,075.00 Contingency 0.13784 5,000.00 5.09389 184,780.90 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REFOI,REF01) Page 19 UNDERWRITER'S DISCOUNT Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Underwriter's Discount $/1000 Amount Average Takedown 1.57212 57,028.75 Underwriter's Counsel 0.41351 15,000.00 Out-of-Pocket 0.04135 1,500.00 CUSIP Fees 0.01505 546.00 Electronic Ordering(I-Deal) 0.07500 2,720.63 Wire Charges(DALCOMP) 0.00372 135.00 CDIAC 0.08270 3,000.00 DTC Charges 0.01378 500.00 Day Loan 0.02922 1,059.96 2.24646 81,490.34 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REF0I,REF01) Page 20 FORM 8038 STATISTICS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Dated Date 09/28/2011 Delivery Date 09/28/2011 Redemption Bond Component Date Principal Coupon Price Issue Price at Maturity Serial Bonds: 09/01/2012 2,120,000.00 2.000% 101.522 2,152,266.40 2,120,000.00 09/01/2013 2,960,000.00 2.500% 103.416 3,061,113.60 2,960,000.00 09/01/2014 3,030,000.00 5.000% 111.932 3,391,539.60 3,030,000.00 09/01/2015 3,180,000.00 5.000% 114.774 3,649,813.20 3,180,000.00 09/01/2016 3,335,000.00 3.000% 106.506 3,551,975.10 3,335,000.00 09/01/2017 1,915,000.00 3.000% 105.962 2,029,172.30 1,915,000.00 09/01/2018 1,965,000.00 4.000% 111.366 2,188,341.90 1,965,000.00 09/01/2019 2,045,000.00 5.000% 117.634 2,405,615.30 2,045,000.00 09/01/2020 1,060,000.00 3.000% 1O1.568 1,076,620.80 1,060,000.00 09/01/2021 1,095,000.00 5.000% 117.524 1,286,887.80 1,095,000.00 09/01/2022 1,150,000.00 3.000% 98.166 1,128,909.00 1,150,000.00 09/01/2023 1,185,000.00 3.375% 98.022 1,161,560.70 1,185,000.00 09/01/2024 1,225,000.00 3.625% 98.023 1,200,781.75 1,225,000.00 09/01/2025 1,265,000.00 4.000% 100.323 1,269,085.95 1,265,000.00 09/01/2026 1,315,000.00 4.000% 98.999 1,301,836.85 1,315,000.00 09/01/2027 1,370,000.00 4.000% 97.691 1,338,366.70 1,370,000.00 09/01/2028 1,425,000.00 4.125% 97.908 1,395,189.00 1,425,000.00 09/01/2029 1,480,000.00 4.250% 98.394 1,456,231.20 1,480,000.00 09/01/2030 1,545,000.00 4.250% 97.581 1,507,626.45 1,545,000.00 09/01/2031 1,610,000.00 4.500% 99.735 1,605,733.50 1,610,000.00 36,275,000.00 38,158,667.10 36,275,000.00 Stated Weighted Maturity Interest Issue Redemption Average Date Rate Price at Maturity Maturity Yield Final Maturity 09/01/2031 4.500% 1,605,733.50 1,610,000.00 - - Entire Issue - - 38,158,667.10 36,275,000.00 8.6116 3.2777% Proceeds used for accrued interest 0.00 Proceeds used for bond issuance costs(including underwriters'discount) 266,271.24 Proceeds used for credit enhancement 0.00 Proceeds allocated to reasonably required reserve or replacement fund 3,082,659.23 Proceeds used to currently refund prior issues 39,417,195.05 Proceeds used to advance refund prior issues 0.00 Remaining weighted average maturity of the bonds to be currently refunded 9.0276 Remaining weighted average maturity of the bonds to be advance refunded 0.0000 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REF0I,REF01) Page 21 FORM 8038 STATISTICS Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds,2011 Series A **Verified Final Numbers** Refunded Bonds Bond Component Date Principal Coupon Price Issue Price Lease Revenue Bonds,2001 Series A: SERIAL 09/01/2012 785,000.00 4.125% 99.780 783,273.00 SERIAL 09/01/2013 815,000.00 4.250% 99.349 809,694.35 SERIAL 09/01/2014 850,000.00 4.375% 99.460 845,410.00 SERIAL 09/01/2015 885,000.00 4.500% 99.690 882,256.50 SERIAL 09/01/2016 925,000.00 4.500% 98.605 912,096.25 SERIAL 09/01/2017 970,000.00 4.625% 98.830 958,651.00 SERIAL 09/01/2018 1,010,000.00 4.750% 99.193 1,001,849.30 SERIAL 09/01/2019 1,060,000.00 4.750% 98.572 1,044,863.20 SERIAL 09/01/2020 1,110,000.00 4.750% 97.917 1,086,878.70 SERIAL 09/01/2021 1,165,000.00 4.750% 97.479 1,135,630.35 TERM2026 09/01/2022 1,220,000.00 5.000% 100.231 1,222,818.20 TERM2026 09/01/2023 1,280,000.00 5.000% 100.231 1,282,956.80 TERM2026 09/01/2024 1,345,000.00 5.000% 100.231. 1,348,106.95 TERM2026 09/01/2025 1,410,000.00 5.000% 100.231. 1,413,257.10 TERM2026 09/01/2026 1,480,000.00 5.000% 100.231 1,483,418.80 TERM2031 09/01/2027 1,555,000.00 5.000% 100.000 1,555,000.00 TERM2031 09/01/2028 1,635,000.00 5.000% 100.000 1,635,000.00 TERM2031 09/01/2029 1,710,000.00 5.000% 100.000 1,710,000.00 TERM2031 09/01/2030 1,800,000.00 5.000% 100.000 1,800,000.00 TERM2031 09/01/2031 1,890,000.00 5.000% 100.000 1,890,000.00 24,900,000.00 24,801,160.56 Lease Revenue Bonds,2001 Series B: SERIAL 08/01/2012 2,030,000.00 3.850% 100.000 2,030,000.00 SERIAL 08/01/2013 2,110,000.00 4.000% 100.180 2,113,798.00 SERIAL 08/01/2014 2,190,000.00 4.125% 100.000 2,190,000.00 SERIAL 08/01/2015 2,280,000.00 4.250% 100.000 2,280,000.00 SERIAL 08/01/2016 2,375,000.00 4.250% 98.706 2,344,267.50 SERIAL 08/01/2017 950,000.00 4.375% 98.822 938,809.00 SERIAL 08/01/2018 990,000.00 4.500% 99.069 980,783.10 SERIAL 08/01/2019 1,035,000.00 5.000% 103.571 1,071,959.85 13,960,000.00 13,949,617.45 38,860,000.00 38,750,777.95 Remaining Last Weighted Call Issue Average Date Date Maturity Lease Revenue Bonds,2001 Series A 10/17/2011 09/12/2001 11.9871 Lease Revenue Bonds,2001 Series B 10/17/2011 12/05/2001 3.7660 All Refunded Issues 10/17/2011 - 9.0276 Sep 13,2011 3:1 1 pm Prepared by Bank of America Merrill Lynch (huntington_beach:HBPFA-REF0I,REF01) Page 22 $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) CERTIFICATE OF MAILING FORM 8038-G I, Laura A. Gao, Project Manager, of Orrick, Herrington & Sutcliffe LLP, hereby state and certify that for and on behalf of the Huntington Beach Public Financing Authority, on the date hereof, I caused to be mailed via first class certified mail, return-receipt requested, postage prepaid, an Information Return for Tax-Exempt Governmental Obligations, Form 8038-G, to the Department of Treasury, Internal Revenue Service Center, Ogden, Utah 84201, a true copy of which Information Return is hereto attached. Dated: September 29, 2011 La ra A. Gao, Proje Manager Orrick, Herrington & Sutcliffe LLP 011S WEST:261322575.? 8038�� Information Return for Tax-Exempt Governmental Obligations Form IN, Under Internal Revenue Code section 149(e) OMB No. 1545-0720 (Rev. May 2010) ► See separate instructions. Department of the Treasury Internal Revenue Service Caution:If the issue price is under$100,000, use Form 8038-GC. EMU Reporting Authority If Amended Return, check here ► ❑ 1 Issuer's name 2 Issuer's employer iderdificabon number(84 Huntington Beach Public Financing Authority 33 0517230 3 Number and street(or P.O.box if mail is not delivered to street address) Room/suite 4 Report number(For IRS Use Only) 2000 Main Street 131 5 City,town,or post office,state,and ZIP code 6 Date of issue Huntington Beach, California 92648 09/28/2011 7 Name of issue Huntington Beach Public Financing Authority Lease Revenue Refunding 6 CUSIP number Bonds 2011 Series A(Capital Improvement Refinancing Project 446216GE7 9 Name and title of officer of the issuer or other person whom the IRS may call for more information 10 Telephone number of officer or other person Lori Ann Farrell, Director of Finance ( 714 ) 536-5630 FUITM Type of Issue (enter the issue price) See instructions and attach schedule 11 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 12 Health and hospital . . . . . . . . . . . . . . . . . . . . . . . 12 13 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . 13 14 Public safety . . . . . . . . . . . . . . . . . . . . . . . . . 14 15 Environment (including sewage bonds). . . . . . . . . . . . . . . . . 15 16 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 17 Utilities . . . . . . . . . . . . . . . . . . . 17 18 Other. Describe ► various capital improvements 18 38,158,667 19 If obligations are TANS or RANs, check only box 19a ► ❑ If obligations are BANS, check only box 19b . . . . . . . . . . ► ❑ 20 If obligations are in the form of a lease or installment sale, check box . . . . . . . ► ❑ Description of Obligations. Complete for the entire issue for which this form is being filed. (a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted (a)Yield price at maturity average maturity 21 09/01/2031 $ 38,158,667 $ 36,275,000 8.6116 years 3.2777 % Uses of Proceeds of Bond Issue (including underwriters' discount 22 Proceeds used for accrued interest. . . . . . . . . . . . . . . . . . 22 0 23 Issue price of entire issue (enter amount from line 21, column (b)) . . . 23 38,158,667 24 Proceeds used for bond issuance costs(including underwriters' discount) . 24 267,407 25 Proceeds used for credit enhancement . . . . . . . . . . . 25 0 26 Proceeds allocated to reasonably required reserve or replacement fund . . 26 3,082,659 27 Proceeds used to currently refund prior issues . . . . . . . . . 27 34,808,601 28 Proceeds used to advance refund prior issues . . . . . . . . 28 0 29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . 29 38,158,667 30 Nonrefunding proceeds of the issue subtract line 29 from line 23 and enter amount here 30 0 Description of Refunded Bonds (Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . ► 11.9871;3.7660 years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . ► N/A years 33 Enter the last date on which the refunded bonds will be called (MM/DD/YY. . . . . . No. 10/17/2011 34 Enter the date(s) the refunded bonds were issued ►(MM/DD/YYYY) 09/12/2001; 12/05/2001 For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat.No.63773S Form 8038-G (Rev.5-2010) Form 8038-G(Rev.5-2010) Page 2 Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . 35 0 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC)(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a 0 b Enter the final maturity date of the GIC ► 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . . . 37a 0 b If this issue is a loan made from the proceeds of another tax-exempt issue, check box►❑ and enter the name of the issuer ► and the date of the issue ► 38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box . . . . ► ❑ 39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . ► ❑ 40 If the issuer has identified a hedge, check box . . . . . . . . . . . . . . . . . . . . . . . . ► ❑ Under penalti of perj ry,I declare that I have examined this return and accompanying schedules and statements,and to the best of my knowledge Signature and belief,t e tr ,correct,and complete.I further declare that I consent to the IRS's disclosure of the issuer's return information,as necessary and to process r to the person that I have authorized above. Consent ' 9/28/2011 ' Fred Wilson, Executive Director Sig tur of suer's authorized representative Date Type or print name and title Pre arer's f Date Preparer's SSN or PTIN Paid signature � � 9/28/2,01, Check if oyed❑ P01066306 Preparer's Use On l Firm's name(or O ick,Herrington&Sutcliffe LLP EIN 94 ; 2952627 y yours ii self-employed), address,and ZIP code 777 S.Figueroa St.,Suite 3200,Los Angeles,CA 90017 1 Phone no. ( 213 ) 629-2020 Form 8038-G (Rev.5-2010) SCHEDULE FOR FORM 8038-G HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY ISSUER FIN No.: 33-0517230 Date of Issue: September 28, 2011 Part II—Type of Issue Name and EIN of organization that are to use City of Huntington Beach; EIN: 95-6000723 proceeds of obligations if different from those of the Issuer: The Issuer is a constituted authority on behalf of the City of Huntington Beach. OHS WEST:261333914.1 43640-2 ORRICK,HERRINGTON&SUTCLIFFE LLP 0 777 SOUTH FIGUEROA STREET SUITE 3200 LOS ANGELES,CALIFORNIA 90017-5855 O R R I C K tel +1-213-629-2020 faX +1-213-612-2499 WWW.ORRICK.COM September 29, 2011 Laura A. Gao (213) 612-2131 lgao@orrick.com BY CERTIFIED MAIL ARTICLE NUMBER 7008 1300 0000 9708 3950 -RETURN RECEIPT REQUESTED Department of the Treasury Internal Revenue Service Center Ogden, UT 84201 Re: Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) Dear Sir or Madam: Enclosed please find for filing one (1) original of the executed Form 8038-G with respect to the above-referenced issue. If you have any questions, please do not hesitate to call me at (213) 612-2131. Thank you for your assistance. Respectfully submitted, Laura Project Manager COMPLETE THIS SECTION ON DELIVERY • ■ Complete items 1,2,and 3.Also complete A. Signature me M' a item 4 if Restricted Delivery is desired. ❑Agent p ., • ■ X El Print your name and address on the reverse Ln so that we can return the card to you. B. Received by(Printed Name) C. Date of Delivery o' ■ Attach this card to the back of the maiipiece, fn or on the front If space permits. � D. Is eil77X 11 ❑Yes 1. Article Addressed to: If�ESE I❑ No [� Postage $ (� v- Department of the Treasury o ' Certified Fee C3 Pt Internal Revenue Service Cent C3 Return Receipt Fee 0 (Endorsement Required) Ogden, UT 84201 O Restricted Delivery Fee a Q gN, tit (Endorsement Required) 3. S C3 ertified Mail ❑ Express Mail Trl Po a e ee $ 2—J ❑ Registered etum Receipt for Merchandise El Insured Mall ElC.O.D. e n t To CD _ Dcparuncnt of the'l'rcasurN 4. Restricted Delivery?(Extra Fee) El Yes C3 SFreeF Apt No.; Intcrnal RC%Cr7nC SCrricC Ccntcr O or PO Box No, UIT 84201 2. Article Number Ciry,Stete,ZIP+4 (Transfer from service label) 7008 13 0000 9708 3950 oe c...,,,'2Ai 1 9nnd Domestic Return Receipt 102595-02-M-1540 Blanket Issuer Letter of Representations [To be Completed by Issuer] Hungtington Beach Public Financing Authority [Name of Issuer] Deremher 1 7001 [Date] Underwriting Department—Eligibility The Depository Trust Company 55 Water Street 19th Floor New York,NY 10041-0099 Ladies and Gentlemen: This letter sets forth our understanding with respect to all issues (the "Securities") that Issuer shall request be made eligible for deposit by The Depository Trust Company("DTC"). To induce DTC to accept the Securities as eligible for deposit at DTC, and to act in accordance with DTC's Rules with respect to the Securities, Issuer represents to DTC that Issuer will comply with the requirements stated in DTC's Operational Arrangements, as they may be amended from time to time. Note. Very truly yours, Schedule A contains statements that DTC believes Huntington Beach Public accurately describe DTC,the method of effecting book- entry transfers of securities distributed through DTC,and Flnancln thority certain related matters. (Issuer) By. uthorized Officer's Signature) K k(2_ , I t A (Print Name) Received and—Accepted: 2000 Main Street (Street Address) THE ITORY TRUST y Huntington Beach, CA 92648 (Cih) (State) ("Lip Code) B : 14 ) 536.5273 y (Phone Number) m 0 18 CO N \ d I;II:EDI'I...I°E:1 (To Blanket Issuer Letter of Representations) SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE (Prepared by DTC—bracketed material may be applicable only to certain issues) 1., The Depository Trust Company("DTC"), New York, NY, will act as securities depository for the securities (the"Securities"). The Securities will be issued as fully registered securities registered in the name of Cede & Co. (DTCs partnership nominee) or such other name as may be requested by an authorized representative of'DTC. One fully registered Security certificate will be issued for[each issue of] the Securities, [each] in the aggregate principal amount of'such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of[any] issue exceeds $200 million, one certificate xvill be issued with respect to each $200 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2, DTC 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 securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges,in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange,Inc.,the American Stock Exchange,Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. :3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are 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 Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners.Beneficial Owners will not receive certificates representing their ownership interests in Securities,except in the event that use of the book-entry system for the Securities is discontinued. �_f.To facilitate subsequent transfers,all Securities deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited,which may or may not be the Beneficial Owners.The Participants will remain responsible for keeping account of their holdings on behalf of their customers. 19 n. 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 the Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners,or 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.] [6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to detennine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.] .Neither DTC nor Cede&Co. (nor such other DTC nominee)will consent or vote with respect to Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer 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 Securities are credited on the record date(identified in a listing attached to the Omnibus Proxy). S. Principal and interest payments on the Securities 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 Issuer or 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 (nor its nominee), Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede &Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to Beneficial Owners is the responsibility of Direct and Indirect Participants. [9.A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant,to[Tender/Remarketing]Agent,and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to [Tender/Reinarketing] Agent.The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered securities to[Tender/Remarketing]Agent's DTC account.] I DTC may discontinue providing its services as securities depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent.Under such circumstances,in the event that a successor securities depository is not obtained, Security certificates are required to be printed and delivered. 1.1. Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event,Security certificates will be printed and delivered. 12.The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. 20 OFFICE OF y��iiTIN6Tp� CITY ATTORNEY ot�,�w @eBF Paul D'Ales.4andro,Assistant ri Attorney City `'� ... .:= Scott Field,Assistant City Attorney P.O. Boa 190 Neal Moore,Sr.Deputy City Attorney 2000 Main Street John Fujii,Deputy City Attorney a�ouNn�pv Daniel K.Ohl,Deputy City Attorney =. Huntington Beach,California 92648 Telephone: (714)536-5555 Mike Vigliotta,Deputy City Attorney Jennifer McGrath Facsimile: (714)374-1590 City Attorney September 28, 2011 Merrill Lynch, Pierce, Fenner& Smith E. J. De La Rosa& Co., Inc. Incorporated 10866 Wilshire Boulevard, Suite 2650 333 South Hope Street, Suite 2310 Los Angeles, California 90024 Los Angeles, California 90071 Huntington Beach Public Financing City of Huntington Beach Authority 2000 Main Street 2000 Main Street Huntington Beach, California 92648 Huntington Beach, California 92648 Orrick, Herrington& Sutcliffe LLP 777 South Figueroa Street, Suite 3200 Los Angeles, California 90017 Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) Dear Ladies and Gentlemen: I am counsel for the Huntington Beach Public Financing Authority (the "Authority"), a joint exercise of powers agency organized and existing under the laws of the State of California (the "State"). This opinion is delivered in connection with the issuance by the Authority of$36,275,000 principal amount of Huntington Beach Public Financing Authority(Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A(Capital Improvement Refinancing Project)(the"Bonds"). The Bonds are being issued pursuant to the provisions of Article 4, Chapter 5, Division 7, Title 1 (commencing with Section 6584) of the California Government Code, Resolution No. 21 of the Authority (the "Authority Resolution") and the Indenture, dated as of September 1, 2011 (the"Indenture"), by and among the Authority, the City of Huntington Beach (the"City") and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). Capitalized terms not defined herein shall have the meanings assigned to them in the Page 1 Purchase Agreement, dated September 13, 2011 (the "Purchase Agreement"), by and among Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative of E. J. De La Rosa& Co., Inc. (the"Underwriters"), the Authority and the City. In such connection, I have reviewed the Authority Resolution, the Purchase Agreement, the Indenture, the Site Lease, dated as of September 1, 2011 (the "Site Lease"), by and between the City and the Authority, the Lease Agreement, dated as of September 1, 2011 (the"Lease Agreement"), by and between the City and the Authority, the Escrow Agreement, dated as of September 1, 2011 (the "Series 2001 A Escrow Agreement"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow bank (the "Escrow Bank"), relating to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project), the Escrow Agreement, dated as of September 1, 2011 (the "Series 2001B Escrow Agreement" and together with the 2001A Escrow Agreement, the "Escrow Agreements"), by and between the Authority and the Escrow Bank, relating to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project), the Official Statement, dated September 13, 2011 (the "Official Statement"), relating to the Bonds, certificates of the Authority, the City, the Trustee and others and such other documents and matters to the extent I deemed necessary to render the opinions set forth herein. I have assumed the genuineness of all documents and signatures presented to me, whether as originals or as copies, and the due and legal execution and delivery thereof by, and validity against, any parties other than the Authority. I have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents referred to in the second paragraph hereof. Furthermore, I have assumed compliance with all covenants and agreements contained in the Authority Documents (as herein defined). I call attention to the fact that the rights and obligations under the Authority Documents and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against joint exercise powers authorities in the State. I express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the foregoing documents. Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, I am of the following opinions: 1. The Authority is a public body, organized and existing under the Constitution and laws of the State, including the JPA Act and the JPA Agreement. Page 2 2. The Authority Resolution has been duly adopted at a regular meeting of the Authority, and is in full force and effect and has not been modified, amended, rescinded or repealed since the date of its adoption. 3. The Purchase Agreement, the Indenture, the Site Lease, the Lease Agreement and the Escrow Agreements (collectively, the "Authority Documents") have been duly authorized, executed and delivered by the Authority and constitute valid, legal and binding agreements of the Authority enforceable in accordance with their respective terms. 4. Except as otherwise disclosed in the Official Statement, and to the best of my knowledge after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending, with service of process having been accomplished, or threatened in writing against the Authority, challenging the creation, organization or existence of the Authority, or the validity of the Authority Documents or seeking to restrain or enjoin the collection of Base Rental Payments with respect to the Lease Agreement or the repayment of the Bonds or in any way contesting or affecting the validity of the Authority Documents or the Bonds or contesting the authority of the Authority to enter into or perform its obligations under any of the Authority Documents or the Bonds. 5. The execution and delivery of the Authority Documents and the issuance of the Bonds and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Authority is subject, which breach or default has or may have a material adverse effect on the ability of the Authority to perform its obligations under the Authority Documents. 6. No authorization, approval, consent, or other order of the State or any other governmental body within the State is required for the valid authorization, execution and delivery of the Authority Documents, the Bonds or the Official Statement by the Authority or the consummation by the Authority of the transactions on its part contemplated therein, except such as have been obtained and except such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters. Page 3 7. Based on the information made available to me in my role as counsel to the Authority, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement under the caption entitled"THE AUTHORITY," nothing has come to my attention which would lead me to believe that the statements contained under the above-referenced caption as of the date of the Official Statement and as of the date hereof contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Si erely, Jennifer McGrath City Attorney JM/slf Page 4 PROOF CIF PUBLICATION 0"NI MIMiHIMiAQ 4 f "ce of wk iq In acW&WA wtth auction t 5 of 0, CaMlwals nu STATE OF CALIFORNIA) ban&a (U*rasped t"nUe reach Pubk finanan cing A lotky (the'A�}. SS. ftoTa �►u:EOPot t°ciNE#I TMT. a►w�ani to COUNT( OF ORANGE ) SectiontM CRY tisl�.5 of aim CRT Oowrement d ty Huntington 4�ltK�*W).�Wrl, hMd a °ublk hasrina on ToaWay Saptanbar 2011, at thW P. at the K Council i��located �9E, ►+apaet of I am a citizen of the United States and a the proposed reH wwft of(a)Oils Munt on resident of the County of Los Angeles; 1 1 Central Para sports Coniecatewc et 1 [iolder+hr+ut Strati, Hun fteacfi. Califor- am over the age of eighteen years, and I •. tomi cC Mo a.fe knproeaeunts el Pacific Coast Hi�wry h+3rn leaf StreeR not a party to or interested in the notice an scHk coat N waq to Hweffngtan street and Pa mic Cant H conelatinS of land- published. I am a principal clerk of the 'gape end hw&cif" I "sate1 br, r"VO h ON skww kwo and kwoverr"ts HUNTINGTON BEACH to Ilfe�.ra taclllttae. the padaErgn tr&d and existing °ark lets mW waterwaim end INDEPENDENT, which was adjudged a (Cif'"" lend '"d fadu io` 4M of the ?D00 Mam Su� ngc aN14` rila newspaper of genera{ circulation on s2r�,which I Huntington a fk*adminiatr September 29, 1961, case A6214, and Wildhe>d aae�"two-dory °ow "` safety `rsfa8ns I� "W**W Mlt� Junta 11, 1963, case A24831, for the and a eonnecbd buNdin�g aenhk►Mg the City City of Huntington Beach, County of t;onr1m c bey l ""s ,,f Orange, and the State of California. Ow Hy on Itaacb PublN neoftAuthorRy (the 'Author) in a amount not to Attached to this Affidavit is a true and .xa d IV ' °i°' "'° slpdfieant pubpe bkn�lfb rA tf►a tYgr from the complete copy as was printed and � ���tMsmsaw al; published on the followingdates : of such e� a In rev+ � ) Intact r�casbr(M arxordala W"h sectio" 4W of the CaWorrlfa Governmaat co"). Any w4sraThursday, August 18, 2011 bowing� a `"n�.'r `r on't i me toWor Mt Joan Znl of HuntingGon Oseeh TBfly00 M& try M HuMbr;tal(`saeA W V02 I certify (or declare) under penalty ,,, ,. suntft-Wore of perjury that the foregoing is true and correct. Executed on September 6, 2011 at Los Angeles, California nature $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) CERTIFICATE OF CITY CLERK REGARDING RESOLUTION NO. 2011-67 The undersigned hereby states and certifies: (a) that the undersigned is the duly appointed, qualified and acting City Clerk of the City of Huntington Beach, a municipal corporation and chartered city organized and existing under the laws of the State of California (the "City"), and, as such, is familiar with the facts herein certified and is authorized and qualified to certify the same; and (b) that the attached Resolution No. 2011-67 entitled, "Resolution of the City Council of the City of Huntington Beach Authorizing the Execution and Delivery by the City of a Site Lease, a Lease Agreement, an Indenture, a Bond Purchase Agreement and a Continuing Disclosure Certificate in Connection with the Issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, Approving the Issuance of Such Bonds in an Aggregate Amount of not to Exceed $42,745,000, Authorizing the Distribution of an Official Statement in Connection Therewith and Authorizing the Execution of Necessary Documents and Certificates and Related Actions," adopted by the City Council of the City on September 6, 2011, has not been amended, modified or rescinded since the date of its adoption and remains in full force and effect as of the date hereof. Dated: September 28, 2011 0oan L. Flynn, City erk f t e City of Huntingt Beach OHS WEST:261322575.2 RESOLUTION NO. 2011-67 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A SITE LEASE, A LEASE AGREEMENT, AN INDENTURE, A BOND PURCHASE AGREEMENT AND A CONTINUING DISCLOSURE CERTIFICATE IN CONNECTION WITH THE ISSUANCE OF HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BONDS, APPROVING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $42,745,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION THEREWITH AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS WHEREAS, in order to finance certain capital improvements, including the Huntington Central Park Sports Complex and certain beach improvements along Pacific Coast Highway from First Street and Pacific Coast Highway to Huntington Street and Pacific Coast Highway (the "2001 Project"), the Huntington Beach Public Financing Authority (the "Authority") issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project) (the "Prior 2001A Bonds"), payable from certain lease payments to be made by the City of Huntington Beach (the "City"); and WHEREAS, in order to refinance certain capital improvements, including certain improvements to the Civic Center, including the Police Administration Building (the "1993 Project" and together with the 2001 Project, the "Projects"), the Authority issued its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project) (the "Prior 2001B Bonds" and together with the Prior 2001A Bonds, the "Prior Bonds"), payable from certain lease payments to be made by the City; and WHEREAS, in order to achieve certain savings, the City and the Authority desire to refinance all or a portion of the Projects by refunding all or a portion of the Prior Bonds; and WHEREAS, in order to refund all or a portion of the Prior Bonds, the City will lease certain real property owned by the City, including the improvements thereto, known as the Civic Center (the "Property"), to the Authority pursuant to a Site Lease (the "Site Lease"), and lease the Property back from the Authority pursuant to a Lease Agreement (the "Lease Agreement"); and WHEREAS, in order to provide the funds necessary to refund all or a portion of the Prior Bonds, the Authority and the City desire to provide for the issuance of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds"), in the OHS WEST:261251167.4 Resolution No. 2011-67 i aggregate principal amount of not to exceed $42,745,000, pursuant to an Indenture (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), payable from the base rental payments to be made by the City pursuant to the Lease Agreement and the other assets pledged therefor under the Indenture; and WHEREAS, all rights to receive such base rental payments will be assigned without recourse by the Authority to the Trustee pursuant to the Indenture; and WHEREAS, the Series 2011A Bonds will be issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985, constituting Section 6584 et seq. of the California Government Code (the "Act"); and WHEREAS, Merrill Lynch, Pierce, Fenner& Smith Incorporated, on behalf of itself and on behalf of E. J. De La Rosa& Co., Inc. (collectively, the "Underwriters"), has submitted to the Authority and the City a proposal to purchase the Series 2011A Bonds in the form of a Bond Purchase Agreement(the "Bond Purchase Agreement"); and WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12") requires that, in order to be able to purchase or sell the Series 2011A Bonds, the underwriters thereof must have reasonably determined that the City has undertaken in a written agreement or contract for the benefit of the holders of the Series 2011A Bonds to provide disclosure of certain financial information and certain enumerated events on an ongoing basis; and WHEREAS, in order to cause such requirement to be satisfied, the City desires to execute a Continuing Disclosure Certificate (the "Continuing Disclosure Certificate"); and WHEREAS, a form of the Preliminary Official Statement (the "Preliminary Official Statement") to be distributed in connection with the public offering of the Series 2011A Bonds has been prepared; and WHEREAS, the City is a member of the Authority and the Projects are located within the boundaries of the City; and WHEREAS, on the date hereof, the City Council of the City (the "City Council") held a public hearing on the refinancing of the Projects in accordance with Section 6586.5 of the Act; and WHEREAS, in accordance with Section 6586.5 of the Act, notice of such hearing was published once at least five days prior to the hearing in the Independent, a newspaper of general circulation in the City; and WHEREAS, the City Council has been presented with the form of each document referred to herein relating to the actions contemplated hereby, and the City Council has examined and approved each such document and desires to authorize and direct the execution of such documents and the consummation of such actions; and OHS WEST:261251167.4 2 Resolution No. 2011-67 WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California and the City Charter of the City to exist, to have happened and to have been performed precedent to and in connection with the consummation of the actions authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such actions for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, DOES HEREBY RESOLVE,DETERMINE AND ORDER AS FOLLOWS: Section 1. All of the recitals herein contained are true and correct and the City Council so finds. Section 2. The City Council, on behalf of the City, hereby finds that the use of the Act to assist the City in refinancing the Projects will result in significant public benefits to the citizens of the City because it is expected that such use will provide demonstrable savings in effective interest rate costs. Section 3. The form of the Site Lease, submitted to and on file with the City Clerk, is hereby approved, and the Mayor of the City, and such other member of the City Council as the Mayor may designate, the City Manager, the Deputy City Manager and the Director of Finance of the City, and such other officers of the City as the City Manager may designate (collectively, the "Authorized Officers"), are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Site Lease in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 4. The form of the Lease Agreement, submitted to and on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Lease Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate amount of the principal portions of the base rental payments payable under the Lease Agreement shall not exceed $42,745,000, the term of the Lease Agreement shall not exceed 21 years (provided that such term may be extended as provided therein) and the true interest cost applicable to the interest portions of the base rental payments shall not exceed 5.00%per annum. Section 5. The form of the Indenture, submitted to and on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Indenture in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, provided, however, that (a) the aggregate principal amount of the Series 2011A Bonds shall not exceed $42,745,000, (b) the final maturity date of the Series 2011A Bonds shall be no later than the date which is 21 years from the date of the Series 2011A Bonds, (c) the true interest cost OHS WEST:26 1 25 1 1 67.4 3 Resolution No. 2011-67 applicable to the Series 201 IA Bonds shall not exceed 5.00% per annum, and (d) the present value of debt service savings shall not be less than 3.00% of the aggregate principal amount of the Prior Bonds to be refunded. Section 6. The issuance of not to exceed $42,745,000 aggregate principal amount of Series 201 IA Bonds, in the principal amounts, bearing interest at the rates and maturing on the dates as specified in the Indenture as finally executed, is hereby approved. Section 7. The form of the Bond Purchase Agreement, submitted to and on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the underwriters' discount for the sale of the Series 201 IA Bonds shall not exceed 0.30% of the aggregate principal amount of the Series 2011A Bonds. Section 8. The form of the Continuing Disclosure Certificate, submitted to and on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City,to execute and deliver the Continuing Disclosure Certificate in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 9. The form of the Preliminary Official Statement, submitted to and on file with the City Clerk, with such changes therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Series 2011 A Bonds is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the City that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). Section 10. The preparation and delivery of an Official Statement, and its use by the Underwriters in connection with the offering and sale of the Series 201 IA Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto and thereupon to cause the final Official Statement and any such amendment or supplement to be delivered to the Underwriters. Section 11. The Authorized Officers are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including, without limitation, entering into necessary lease termination agreements with respect to the defeasance of the Prior Bonds, OHS WEST:261251167.4 4 Resolution No. 2011-67 obtaining title insurance with respect to the Property and entering into an agreement to indemnify and hold the insurance company providing the same harmless with respect to encumbrances recorded against the Property between the last title continuation as set forth in such agreement and the recording of the documents (or notice thereof) herein approved. Section 12. All actions heretofore taken by the officers, employees and agents of the City with respect to the transactions set forth above are hereby approved, confirmed and ratified. Section 13. This Resolution shall take effect from and after its date of adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 6th day of September , 2011 ayor REVIEW D AND APPROVED: INITIATED AND APPROVED: i Ci a ger Director of Fin ce APPROVED AS TO FORM: City Attorney OHS WEST 261251167 4 5 Res. No. 2011-67 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on September 6, 2011 by the following vote: AYES: Shaw, Harper, Hansen, Carchio, Bohr, Dwyer, Boardman NOES: None ABSENT: None ABSTAIN: None C Clerk and ex-offici Jerk of the City Council of the City of Huntington Beach, California $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) INCUMBENCY AND SIGNATURE CERTIFICATE OF THE CITY The undersigned hereby state and certify: (a) that they are the duly appointed or elected, qualified and acting Director of Finance and City Clerk, respectively, of the City of Huntington Beach, a municipal corporation and chartered city organized and existing under the laws of the State of California (the "City"), and, as such, are familiar with the facts herein certified and are authorized and qualified to certify the same; (b) that the following are now, and have continuously been, since January 1, 2011, the duly elected or appointed, qualified and acting members of the City Council of the City, and the dates of the ending of their respective current terms of office are hereunder correctly designated opposite their names: Ending Date of Board Member Office Current Term Joe Carchio Mayor November 2014 Don Hansen Mayor Pro Tern November 2012 Connie Boardman Member November 2014 Keith Bohr Member November 2012 Devin Dwyer Member November 2012 Matthew Harper Member November 2014 Joe Shaw Member November 2014 (c) that the signatures set forth opposite the names and titles of the following persons are true and correct specimens, or are the genuine, signatures of such persons, each of whom holds the office designated below: Name Si a Joe Carchio, Mayor Fred Wilson, City Manager Lori Ann Farrell, Director of Finance Joan L. Flynn, City Clerk OHS WEST:261322575.2 (d) that for and on behalf of the City, the within-named City Manager, is authorized to execute, and has executed, the Bond Purchase Agreement, dated September 13, 2011, by and among Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative of E. J. De La Rosa& Co., Inc., as underwriters, the Authority and the City; (e) that for and on behalf of the City, the within-named Director of Finance, is authorized to execute, and has executed, the following documents: (i) Site Lease, dated as of September 1, 2011, by and between the City and Huntington Beach Public Financing Authority(the "Authority"); (ii) Lease Agreement, dated as of September 1, 2011, by and between the City and the Authority; (iii) Indenture, dated as of September 1, 2011, by and among the Authority, the City and The Bank of New York Mellon Trust Company,N.A., as trustee; (iv) Continuing Disclosure Certificate, dated as of September 1, 2011, executed by the City and agreed and acknowledged by The Bank of New York Mellon Trust Company,N.A., as dissemination agent; and (v) Official Statement, dated September 13, 2011, relating to the $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project). Dated: September 28,2011 C Lori Ann Farrell, Director of Finance of the City of Huntington Beach -AeL,.,� ?Jo . Flynn, ity Clerk the City of Huntington e h OHS WEST:2613225752 2 $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) CERTIFICATE OF THE CITY The City of Huntington Beach, a municipal corporation and chartered city organized and existing under the laws of the State of California (the"City"), hereby states and certifies: (a) that Lori Ann Farrell is the duly appointed, qualified and acting Director of Finance of the City and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same; (b) that by all necessary action, the City has duly authorized and approved the delivery of the Official Statement, dated September 14, 2011 (the "Official Statement"), relating to the $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the `Bonds"), and the execution and delivery of, and the performance by the City of the obligations on its part contained in, the following documents (collectively, the "City Documents"), and has authorization to enter into such documents under the laws of the State of California: (i) Site Lease, dated as of September 1, 2011, by and between the City and the Authority; (ii) Lease Agreement, dated as of September 1, 2011, by and between the City and the Authority; (iii) Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Huntington Beach Public Financing Authority (the "Authority"), the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the"Trustee"); (iv) Continuing Disclosure Certificate, dated as of September 1, 2011, executed by the City, agreed and acknowledged by The Bank of New York Mellon Trust Company, N.A., as dissemination agent, relating to the Bonds; and (v) Bond Purchase Agreement, dated September 14, 2011 (the "Purchase Agreement"), by and among Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative of E. J. De La Rosa & Co., Inc., as underwriters, the Authority and the City; (c) that the representations, warranties and covenants of the City contained in the Purchase Agreement are true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof by the City, and the City has complied with all of OHS WEST261322575.2 the terms and conditions of the Purchase Agreement required to be complied with by the City at or prior to the date hereof; (d) that, to the best of the undersigned's knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (e) that the information and statements contained in the Official Statement (other than information relating to DTC and its book-entry system, information under the caption "UNDERWRITING," CUSIP numbers, prices and yields for the Bonds and any other information provided by the Underwriters) did not as of its date and do not as of the date hereof contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; (f) to the best of its knowledge after reasonable investigation, the City is not in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including but not limited to the Lease Agreement) or other instrument to which the City is a party or is otherwise subject, which would have a material adverse impact on the City's ability to perform its obligation under the City Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; and (g) the City has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied pursuant to the City Documents at or prior to the date hereof. OHS WEST 2 6 13 22 57 5.2 2 Capitalized undefined terms used herein have the meanings ascribed thereto in the Purchase Agreement. Dated: September 28, 2011 CITY OF HUNTINGTON BEACH By: Q^' Lori Ann Farrell, Director of Finance OHS WEST:261322575.2 3 $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) WRITTEN REQUEST NO. 1 FOR DISBURSEMENTS FROM COSTS OF ISSUANCE The City of Huntington Beach, a municipal corporation and chartered city organized and existing under the laws of the State of California (the"City"), hereby states and certifies: (a) that Lori Ann Farrell is the duly appointed, qualified and acting Director of Finance of the City, and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same; (b) that The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), is hereby requested to disburse from the Costs of Issuance Fund, established pursuant to the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Huntington Beach Public Financing Authority, the City and the Trustee, to the payees set forth on Exhibit A attached hereto and by this reference incorporated herein, the amount set forth on Exhibit A opposite each such payee, for payment of such costs identified on said Exhibit A; (c) that each item of cost identified on Exhibit A has been properly incurred and the amounts to be disbursed pursuant to this Written Request are for Costs of Issuance properly chargeable to the Costs of Issuance Fund, and no amounts to be disbursed pursuant to this Written Request have been the subject of a previous Written Request for disbursement from said account; and (d) that an invoice, for each item of cost identified on Exhibit A is attached hereto. Capitalized undefined terms used herein have the meanings ascribed thereto in the Indenture. Dated: September 28, 2011 CITY OF HUNTINGTON BEACH By: � n. ,,,,., rAu,,-�p Lori Ann Farrell, Director of Finance OHS WEST:261322575.2 EXHIBIT A COSTS OF ISSUANCE DISBURSEMENTS Payee Name and Address Purpose of Obligation Amount Orrick, Herrington &Sutcliffe Payment for services rendered as bond $72,500.00 LLP counsel and disclosure counsel and expenses related thereto Moody's Rating Services Rating Agency Fee 25,000.00 Standard &Poor's Ratings Rating Agency Fee 19,000.00 Services Public Financial Management, Payment for services rendered as 30,000.00 Inc. financial advisor and expenses related thereto Wold Printing Services, Ltd. Printing of Official Statement 1,270.70 The Arbitrage Group, Inc. Verification Agent Fee 1,160.00 The Bank of New York Mellon Trustee and Escrow Bank Fee's 2,650.00 Trust Company, N.A. Davis Wright &Tremaine LLP, Trustee's Counsel and Escrow Bank's 2,000.00 as Counsel Fee Reimbursement to City Newspaper Advertisement 7,810.90 First American Title Insurance Title Insurance 21,781.00 Company $183,172.60 OHS WEST:261322575.2 CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 RISK MANAGEMENT DIVISION September 28, 2011 The Bank of New York Mellon Trust Company, N.A. 700 South Flower Street, Suite 500 Los Angeles, California 90017 Re: Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Proj ect Ladies and Gentlemen: I act as Risk Manager for the City of Huntington Beach (the "City"), and, as such, am familiar with the City's insurance coverage for general liability and property damage insurance and workers' compensation insurance, covering the Property as defined and described in that certain Lease Agreement, dated as of September 1, 2011 (the "Lease Agreement"), by and between the Huntington Beach Public Financing Authority and the City, which, in addition to self-insurance, includes coverage with: A. General Liability—Wesco Insurance Co. and Starr Indemnity and Liability Co. B. Casualty Insurance—Lexington Insurance Co. C. Rental Interruption—Lexington Insurance Co. See attached certificates and schedule of insurers. I have reviewed and am familiar with the provisions of Sections 5.01, 5.02, and 5.03 of the Lease Agreement and have compared the coverage provided by the City's existing insurance policies (and existing self insurance coverage, if any), with the provisions of the Lease Agreement and certify that the insurance coverage carried by the City meets the requirements set forth in the Lease Agreement and such insurance provides the required protection to the owners of the captioned bonds. Sin erely, r , Patricia Williams, ARM Risk Manager CERTIFICATE OF PROPERTY INSURANCEF.AIE/ziizoiiY) THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND,EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. If this certificate is being prepared for a party who has an insurable Interest in the property,do not use this form. Use ACORD 27 or ACORD 28. PRODUCER CONTACT NAM Aon Risk Insurance Services west, Inc. PHONE (415) 486-7000 F'ix (415) 486-7029 •• San Francisco CA Office (A/C.No.Ext). (AX.Nc.l: 199 Fremont Street E-MAIL Suite 1500 PRODUCER San Francisco CA 94105 USA cusroMERIDtt: 10639232 1 INSURERS AFFORDING COVERAGE NAIC# INSURED INSURER A: Lexington Insurance Company 19437 City of Huntington Beach INSURER B: 2000 Main St. INSURER C: Tn Huntington Beach CA 926480000 USA INSURER D: INSURER E INSURER F: COVERAGES CERTIFICATE NUMBER: 570043793544 REVISION NUMBER: LOCATION OF PREMISES/DESCRIPTION OF PROPERTY(Attach ACORD 101,Additional Remarks Schedule,if more space is required) Re: Huntington Beach Public Financing Authority (orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital improvement Refinancing Project.) THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN,THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. m INSR POLICY EFFECTIVE POLICY EXPIRATION LTR TYPE OF INSURANCE POLICY NUMBER DATE(MMIDD/YYYY)DATE (MM/DDIYYYY) COVERED PROPERTY LIMITS rn V A X PROPERTY 07 Ol 2011 07/Ol 2012 BUILDING CD CAUSES OF LOSS DEDUCTIBLES PERSONALPROPERTY v1 B BUSINESS INCOME BASIC BUILDING w/o Extra Expense BROAD CONTENTS EXTRA EXPENSE ui X SPECIAL RENTAL VALUE it X EARTHQUAKE BLANKET BUILDING Z BLANKET PERS PROP Q WIND X FLOOD X BLANKET BLDG&PP $200,000,000 V LL Blkt B&PP Ded X Earthquake $25,000,000 X Flood $25,000,000 V INLAND MARINE TYPE OF POLICY CAUSES OF LOSS POLICY NUMBER NAMED PERILS CRIME TYPE OF POLICY BOILER&MACHINERY I EQUIPMENT BREAKDOWN SPECIAL CONDITIONS/OTHER COVERAGES(Attach ACORD 101,Additional Remarks Schedule,if more space is required) i The Bank of New York Mellon Trust Company, N.A. is included as Loss Payee ATIMA with respect to the above referenced project. Rental Interruption value: $8,612,187.52. a� CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. The Bank of New York Mellon Trust Company, N.A. 700 South Flower street, Suite 500 AUTHORIZED REPRESENTATIVE Los Angeles, CA 90017 USAkid ©1995-2009 ACORD CORPORATION.All rights reserved. ACORD 24(2009/09) The ACORD name and logo are registered marks of ACORD Attachment to ACORD Certificate for city of Huntington Beach The terms,conditions and provisions noted below are hereby attached to the captioned certificate as additional description of the coverage afforded by the insurer(s).This attachment does not contain all terms,conditions,coverages or exclusions contained in the policy. INSURED City of Huntington Beach INSURER(S)AFFORDING COVERAGE NAIC# 2000 Main St. Huntington Beach CA 926480000 USA INSURER INSURER INSURER INSURER If a policy below does not include limit information,refer to the corresponding policy on the ACORD ADDITIONAL POLICIES certificate form for policy limits. INSR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION COVERED PROPERTY LIMITS LTR DATE(MM/DD/YYYY)DATE(MM/DD/YYYY) PROPERTY A 020412870 07/01/2011 07/01/2012 Bus. Inc. & EE $10,000,000 Certificate Number : 570043793544 .......................................................\ ISSUE DATE: CERTIFICATE OF COVERAGE 09/29/11 ° PRODUCER: THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, Alliant Insurance Services, Inc. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE MEMORANDUM OR POLICY P.O. BOX 6450 BELOW: NEWPORT BEACH, CA 92658-6450 PH (949) 756 0271 / FAX(949) 756 2713 COMPANIES AFFORDING COVERAGE LICENSE NO. OC36861 COMPANY LETTER (A) BIG INDEPENDENT CITIES EXCESS POOL IBIG INDEPENDENT CITIES EXCESS POOL MEMBER: ; COMPANY LETTER (B) CITY OF HUNTINGTON BEACH COMPANY LETTER (C) ATTN: PATTI WILLIAMS, RISK MANAGER 2000 MAIN STREET COMPANY LETTER (D) ° HUNTINGTON BEACH,CA 92648 COMPANY LETTER (E) ° COMPANY LETTER (F) COVERAGES THIS IS TO CERTIFY THAT THE MEMORANDUM OF COVERAGE OR POLICY(IES)LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE j FOR THE POLICY OR MEMORANDUM PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE COVERAGES AFFORDED BY THE MEMORANDUM OR POLICY(IES) DESCRIBED HEREIN ARE SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDITIONS OF SUCH MEMORANDUM OR POLICY. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ................................................................................... .............. ......... ............................... ................................................................................. CO TYPES MEMORANDUM MEMORANDUM MEMORANDUM OF OR OR POLICY OR POLICY LIMIT LTR COVERAGES i POLICY NUMBER EFFECTIVE i EXPIRES i • EXCESS LIABILITY DIFFERENCE BETWEEN A OCCURRENCE FORM $10,000,000 POOL LIMIT BI&PD BO-01 07/01/2011 07/01/2012 AND COMBINED INCLUDING AUTOMOBILE $1,000,000 LIABILITY SELF-INSURED RETENTION DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL ITEMS: AS RESPECTS 2011 LEASE REVENUE REFUNDING BONDS-COVERING THE CIVIC CENTER COMPLEX LOCATED AT 2000 MAIN STREET IN HUNTINGTON BEACH, CA. CERTIFICATE HOLDER IS INCLUDED AS ADDITIONAL INSURED SOLELY WITH RESPECT TO BODILY INJURY AND PROPERTY DAMAGE ARISING OUT OF OPERATIONS AS DESCRIBED BY OR ON BEHALF OF THE NAMED INSURED PER ATTACHED ENDORSEMENT. THIS CANCELS AND REPLACES CERTIFICATE ISSUED 08/31/11 TO CHANGE DESCRIPTION. SUBJECT TO POLICY TERMS,CONDITIONS AND EXCLUSIONS. ........................................................... CERTIFICATE HOLDER :..................................................................................................................... SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE j THE EXPIRATION DATE THEREOF,THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED HEREIN BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR ATTN:CORPORATE TRUST SERVICES REPRESENTATIVES. 700 SOUTH FLOWER STREET,SUITE 500 """UTHOR.ZED REPRESENTATIVE ........... A SENTAT VE LOS ANGELES, CALIFORNIA 90017 Al THIS ENDORSEMENT CHANGES THE MEMORANDUM. PLEASE READ IT CAREFULLY. ADDITIONAL COVERED PARTY - COVERED INDEMNITY CONTRACT This endorsement modifies coverage provided under the following: BICEP MASTER MEMORANDUM OF LIABILITY COVERAGE The following is added to SECTION II, 6. COVERED PARTY 1. Any person(s), entity(ies), or organization(s) to whom the "Covered Party" is obligated by virtue of a "Covered Indemnity Contract" to provide coverage solely with respect to `Bodily Injury" and "Property Damage" arising out of: a. Premises leased, used or occupied by you; b. "Automobiles"leased or rented by you; c. Equipment owned, leased, rented, maintained or used by you; d. Mortgagees of the Covered Party; or e. Property Owners and property manager of property owned, leased, rented or occupied by you. However, this coverage under this endorsement does not apply to: i. An "Occurrence" which takes place prior to or after you cease to occupy the premise as stated in the "Covered Indemnity Contract;" ii. Any structural alteration, new construction or demolition operations performed by or on behalf of the "Additional Covered Party;" iii. Any "Public Entity Errors and Omissions" or "Employment Practices" 2. The Limits of Coverage afforded under this endorsement will be limited to the Limits of Coverage required within the terms of the "Covered Indemnity Contract" or the Limits of Coverage of this Memorandum, whichever is less, and will apply in excess of any underlying insurance or your"Self Insured Retention" shown in the Declarations. We will not be obligated for limits of coverage shown in the "Covered Indemnity Contract" that are greater than the Limits of Coverage of this Memorandum. A411►ant PUBLIC ENTITY GROUP ALLIANT INSURANCE SERVICES, INC. BIG INDEPENDENT CITIES EXCESS POOL (BICEP) JULY 1,2011 TO JULY 1,2012 NAMED INSURED MEMBER: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 NAMED INSURED: City of Huntington Beach including; Huntington Beach Redevelopment Agency; Huntington Beach Public Facilities Corporation; Huntington Beach Parking Authority; Huntington Beach Civic Improvement Corporation; Huntington Beach Public Financing Authority Page 1 of 1 .......................................................\ ISSUE DATE: CERTIFICATE OF COVERAGE 10/04/11 ° PRODUCER: THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, Alliant Insurance Services, Inc. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE MEMORANDUM OR POLICY P.O. BOX 6450 BELOW: NEWPORT BEACH, CA 92658-6450 PH (949) 756 0271 / FAX(949) 756 2713 COMPANIES AFFORDING COVERAGE LICENSE NO. OC36861 COMPANY LETTER (A) BIG INDEPENDENT CITIES EXCESS POOL IBIG INDEPENDENT CITIES EXCESS POOL MEMBER: ; COMPANY LETTER (B) CITY OF HUNTINGTON BEACH COMPANY LETTER (C) ATTN: PATTI WILLIAMS, RISK MANAGER 2000 MAIN STREET COMPANY LETTER (D) ° HUNTINGTON BEACH,CA 92648 COMPANY LETTER (E) ° COMPANY LETTER (F) COVERAGES THIS IS TO CERTIFY THAT THE MEMORANDUM OF COVERAGE OR POLICY(IES)LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE j FOR THE POLICY OR MEMORANDUM PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE COVERAGES AFFORDED BY THE MEMORANDUM OR POLICY(IES) DESCRIBED HEREIN ARE SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDITIONS OF SUCH MEMORANDUM OR POLICY. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ................................................................................... .............. ......... ............................... ................................................................................. CO TYPES MEMORANDUM MEMORANDUM MEMORANDUM OF OR OR POLICY OR POLICY LIMIT LTR COVERAGES i POLICY NUMBER EFFECTIVE i EXPIRES i • EXCESS LIABILITY DIFFERENCE BETWEEN A OCCURRENCE FORM $10,000,000 POOL LIMIT BI&PD BO-01 07/01/2011 07/01/2012 AND COMBINED INCLUDING AUTOMOBILE $1,000,000 LIABILITY SELF-INSURED RETENTION DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL ITEMS: AS RESPECTS$36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS,2011,SERIES A-CAPITAL IMPROVEMENT REFINANCING PROJECT. CERTIFICATE HOLDER IS INCLUDED AS ADDITIONAL INSURED SOLELY WITH RESPECT TO BODILY INJURY AND PROPERTY DAMAGE ARISING OUT OF OPERATIONS AS DESCRIBED BY OR ON BEHALF OF THE NAMED INSURED PER ATTACHED ENDORSEMENT. THIS CANCELS AND REPLACES CERTIFICATE ISSUED 09/29/11 TO CORRECT LEASE REVENUE BOND AMOUNT. SUBJECT TO POLICY TERMS,CONDITIONS AND EXCLUSIONS. ........................................................... CERTIFICATE HOLDER :..................................................................................................................... SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE j THE EXPIRATION DATE THEREOF,THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED HEREIN BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR ATTN:CORPORATE TRUST SERVICES REPRESENTATIVES. 700 SOUTH FLOWER STREET,SUITE 500 """UTHOR.ZED REPRESENTATIVE ........... A SENTAT VE LOS ANGELES, CALIFORNIA 90017 Al THIS ENDORSEMENT CHANGES THE MEMORANDUM. PLEASE READ IT CAREFULLY. ADDITIONAL COVERED PARTY - COVERED INDEMNITY CONTRACT This endorsement modifies coverage provided under the following: BICEP MASTER MEMORANDUM OF LIABILITY COVERAGE The following is added to SECTION II, 6. COVERED PARTY 1. Any person(s), entity(ies), or organization(s) to whom the "Covered Party" is obligated by virtue of a "Covered Indemnity Contract" to provide coverage solely with respect to `Bodily Injury" and "Property Damage" arising out of: a. Premises leased, used or occupied by you; b. "Automobiles"leased or rented by you; c. Equipment owned, leased, rented, maintained or used by you; d. Mortgagees of the Covered Party; or e. Property Owners and property manager of property owned, leased, rented or occupied by you. However, this coverage under this endorsement does not apply to: i. An "Occurrence" which takes place prior to or after you cease to occupy the premise as stated in the "Covered Indemnity Contract;" ii. Any structural alteration, new construction or demolition operations performed by or on behalf of the "Additional Covered Party;" iii. Any "Public Entity Errors and Omissions" or "Employment Practices" 2. The Limits of Coverage afforded under this endorsement will be limited to the Limits of Coverage required within the terms of the "Covered Indemnity Contract" or the Limits of Coverage of this Memorandum, whichever is less, and will apply in excess of any underlying insurance or your"Self Insured Retention" shown in the Declarations. We will not be obligated for limits of coverage shown in the "Covered Indemnity Contract" that are greater than the Limits of Coverage of this Memorandum. x iP 1. i'F h'-1 A h aF Form No. 1402.06 Policy Page 1 } ALTA Owner's Policy(6-17-06) Policy Number: 500967 ,1 1100302PO50600 I IA OWNER'S POLICY OF TITLE INSURANCE ISSUED BY First American Title Insurance Company ' , .. Any notice of claim and any other notice or statement in writing required to be given to the Company under this policy must be a .t given to the Company at the address shown in Section IS of the Conditions. f COVERED RISKS SUBIECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS police power not covered by Covered Risk 5 if a notice of the FROM COVERAGE CONTAINED IN SCHEDULE B AND THE enforcement actor, describing any part of the Land, is recorded CONDITIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a in the Public Records, but only to the extent of the enforcement ' California corporation (the "Company') insures, as of Date of Policy referred to in that notice. .� and, to the extent stated in Covered Risks 9 and 10, after Date of 7. The exercise of the rights of eminent domain if a notice of the , Policy, against loss or damage, not exceeding the Amount of exercise, describing any part of the Land, is recorded in the Insurance,sustained or incurred by the Insured by reason of: Public Records. 1. Title being vested other than as stated in Schedule A. B. Any taking by a governmental body that has occurred and is 2. Any defect in or lien or encumbrance on the Title. This Covered binding on the rights of a purchaser for value without Knowledge. Risk includes but is not limited to insurance against loss from 9. Title being vested other than as stated in Schedule A or being (a) A defect in the Title caused by defective (i) forgery, fraud, undue influence, duress, incompetency, (a) as a result of the avoidance in whole or in part, or from a incapacity,or impersonation; court order providing an alternative remedy, of a transfer of (ii) failure of any person or Entity to have authorized a all or any part of the title to or any interest in the Land transfer or conveyance; occurring prior to the transaction vesting Title as shown in (iii) a document affecting Title not properly created, Schedule A because that prior transfer constituted a - executed,witnessed,sealed,acknowledged,notarized,or fraudulent or preferentlal transfer under federal bankruptcy, delivered; state insolvency,or similar creditors'rights laws; or -I (iv) failure to perform those acts necessary to create a (b) because the instrument of transfer vesting Title as shown in document by electronic means authorized by law; Schedule A consttutes a preferentlal transfer under federal 'I j (v) a document executed under a falsified, expired, or bankruptcy, state insolvency, or similar creditors'rights laws } otherwise invalid power of attorney; by reason of the failure of its recording in the Public Records (vi) a document not properly filed, recorded, or indexed in (i) to be timely,or -p tl the Public Records including failure to perform those acts (ii) to impart notice of its existence to a purchaser for value by electronic means authorized by law; or or to a judgment or lien creditor. vii a defectve judicial or administrative proceeding. 10. Any defect in or lien or encumbrance on the Title or other matter (b) The lien of real estate taxes or assessments imposed on the included in Covered Risks 1 through 9 that has been created or t Title by a governmental authority due or payable,but unpaid. attached or has been filed or recorded in the Public Records (c) Any encroachment, encumbrance, violator, variation, or subsequent to Date of Policy and prior to the recording of the adverse circumstance affecting the Title that would be deed or other instrument of transfer in the Public Records that disclosed by an accurate and complete land survey of the vests Title as shown in Schedule A. Land. The term "encroachment" includes encroachments of r ? existng improvements located on the Land onto adjoining The Company will also pay the costs, attorneys' fees, and expenses 'N 'I land, and encroachments onto the Land of existing incurred in defense of any matter insured against by this policy, but x improvements located on adjoining land. only to the extent provided in the Condidons. 3. Unmarketable Title. 4. No right of access to and from the Land. Firmr Ame cm ]W.fiarurmrce compmy R 5. The violation or enforcement of any law, ordinance, permit, or governmental regulation (including those relatng to building and e. a--,— zoning)restrictlng,regulating,prohibiting,or relating to (a) the occupancy,use,or enjoyment of the Land; ems (b) the character, dimensions, or location of any improvement erected on the Land; ' (c) the subdivision of land; or z (d) environmental protection if a notice, describing any part of the Land, is recorded in the Public Records setting forth the violatlon or intention to enforce,but only to the extent of the violation or enforcement referred to in that notice. 6. An enforcement action based on the exercise of a governmental - ; : t = : Form No. 1402.06 Policy Page 2 ALTA Owner's Policy(6-17-06) Policy Number: 500967 EXCLUSIONS FROM COVERAGE (ii) With regard to (A), (B), (C), and (D) reserving, however, all rights The following matters are expressly excluded from the coverage of this policy,and and defenses as to any successor that the Company would have had the Company will not pay loss or damage,costs,attorneys'fees,or expenses that against any predecessor Insured. arise by reason of: (e) "Insured Claimant":An Insured claiming loss or damage. 1. (a) Any law, ordinance, permit, or governmental regulation (including those (f) "Knowledge" or "Known": Actual knowledge, not constructive knowledge relating to building and zoning) restricting, regulating, prohibiting, or or notice that may be imputed to an Insured by reason of the Public relating to Records or any other records that impart constructive notice of matters (i) the occupancy,use,or enjoyment of the Land; affecting the Title. (ii)the character,dimensions,or location of any improvement erected on (g) "Land": The land described in Schedule A,and affixed improvements that the Land; by law constitute real property. The term "Land" does not include any (iii) the subdivision of land;or property beyond the lines of the area described in Schedule A, nor any (iv) environmental protection; right, title, interest, estate, or easement in abutting streets, roads, or the effect of any violation of these laws, ordinances, or governmental avenues, alleys, lanes, ways, or waterways, but this does not modify or regulations.This Exclusion 1(a)does not modify or limit the coverage provided limit the extent that a right of access to and from the Land is insured by under Covered Risk 5. this policy. (b) Any governmental police power. This Exclusion 1(b) does not modify or (h) "Mortgage": Mortgage, deed of trust, trust deed, or other security limit the coverage provided under Covered Risk 6. instrument, including one evidenced by electronic means authorized by 2. Rights of eminent domain. This Exclusion does not modify or limit the law. coverage provided under Covered Risk 7 or 8. (i) "Public Records": Records established under state statutes at Date of 3. Defects,liens,encumbrances,adverse claims,or other matters Policy for the purpose of imparting constructive notice of matters relating (a) created,suffered,assumed,or agreed to by the Insured Claimant; to real property to purchasers for value and without Knowledge. With (b) not Known to the Company,not recorded in the Public Records at Date of respect to Covered Risk 5(d), "Public Records" shall also include Policy, but Known to the Insured Claimant and not disclosed in writing to environmental protection liens filed in the records of the clerk of the the Company by the Insured Claimant prior to the date the Insured United States District Court for the district where the Land is located. Claimant became an Insured under this policy; (j) "Title":The estate or interest described in Schedule A. (c) resulting in no loss or damage to the Insured Claimant; (k) "Unmarketable Title":Title affected by an alleged or apparent matter that (d) attaching or created subsequent to Date of Policy(however,this does not would permit a prospective purchaser or lessee of the Title or lender on modify or limit the coverage provided under Covered Risks 9 and 10);or the Title to be released from the obligation to purchase, lease, or lend if (e) resulting in loss or damage that would not have been sustained if the there is a contractual condition requiring the delivery of marketable title. Insured Claimant had paid value for the Title. 4. Any claim,by reason of the operation of federal bankruptcy,state insolvency, 2. CONTINUATION OF INSURANCE or similar creditors'rights laws,that the transaction vesting the Title as shown The coverage of this policy shall continue in force as of Date of Policy in favor in Schedule A,is of an Insured, but only so long as the Insured retains an estate or interest in the (a) a fraudulent conveyance or fraudulent transfer;or Land, or holds an obligation secured by a purchase money Mortgage given by a (b) a preferential transfer for any reason not stated in Covered Risk 9 of this purchaser from the Insured, or only so long as the Insured shall have liability by policy. reason of warranties in any transfer or conveyance of the Title.This policy shall not 5. Any lien on the Title for real estate taxes or assessments imposed by continue in force in favor of any purchaser from the Insured of either(i)an estate governmental authority and created or attaching between Date of Policy and or interest in the Land,or(ii)an obligation secured by a purchase money Mortgage the date of recording of the deed or other instrument of transfer in the Public given to the Insured. Records that vests Title as shown in Schedule A. 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT CONDITIONS The Insured shall notify the Company promptly in writing (i) in case of any 1. DEFINITION OF TERMS litigation as set forth in Section 5(a) of these Conditions, (ii) in case Knowledge The following terms when used in this policy mean: shall come to an Insured hereunder of any claim of title or interest that is adverse (a) "Amount of Insurance": The amount stated in Schedule A, as may be to the Title, as insured, and that might cause loss or damage for which the increased or decreased by endorsement to this policy, increased by Company may be liable by virtue of this policy, or (iii) if the Title, as insured, is Section 8(b),or decreased by Sections 10 and 11 of these Conditions. rejected as Unmarketable Title. If the Company is prejudiced by the failure of the (b) "Date of Policy":The date designated as"Date of Policy"in Schedule A. Insured Claimant to provide prompt notice,the Company's liability to the Insured (c) "Entity": A corporation, partnership, trust, limited liability company, or Claimant under the policy shall be reduced to the extent of the prejudice. other similar legal entity. (d) "Insured":The Insured named in Schedule A. 4. PROOF OF LOSS (i) The term"Insured"also includes In the event the Company is unable to determine the amount of loss or (A) successors to the Title of the Insured by operation of law as damage,the Company may, at its option, require as a condition of payment that distinguished from purchase,including heirs,devisees,survivors, the Insured Claimant furnish a signed proof of loss.The proof of loss must describe personal representatives,or next of kin; the defect, lien, encumbrance, or other matter insured against by this policy that (B) successors to an Insured by dissolution, merger, consolidation, constitutes the basis of loss or damage and shall state,to the extent possible,the distribution,or reorganization; basis of calculating the amount of the loss or damage. (C) successors to an Insured by its conversion to another kind of Entity; S. DEFENSE AND PROSECUTION OF ACTIONS (D) a grantee of an Insured under a deed delivered without (a) Upon written request by the Insured,and subject to the options contained payment of actual valuable consideration conveying the Title in Section 7 of these Conditions,the Company,at its own cost and without (1) if the stock,shares, memberships,or other equity interests unreasonable delay, shall provide for the defense of an Insured in of the grantee are wholly-owned by the named Insured, litigation in which any third party asserts a claim covered by this policy (2) if the grantee wholly owns the named Insured, adverse to the Insured. This obligation is limited to only those stated (3) if the grantee is wholly-owned by an affiliated Entity of the causes of action alleging matters insured against by this policy. The named Insured, provided the affiliated Entity and the Company shall have the right to select counsel of its choice(subject to the named Insured are both wholly-owned by the same person right of the Insured to object for reasonable cause) to represent the or Entity,or Insured as to those stated causes of action. It shall not be liable for and (4) if the grantee is a trustee or beneficiary of a trust created will not pay the fees of any other counsel.The Company will not pay any by a written instrument established by the Insured named fees, costs, or expenses incurred by the Insured in the defense of those in Schedule A for estate planning purposes. causes of action that allege matters not insured against by this policy. (b) The Company shall have the right,in addition to the options contained in First American Title Insurance Company Form No. 1402.06 Policy Page 3 ALTA Owner's Policy(6-17-06) Policy Number: 500967 Section 7 of these Conditions,at its own cost,to institute and prosecute attorneys'fees,and expenses incurred by the Insured Claimant that were any action or proceeding or to do any other act that in its opinion may be authorized by the Company up to the time of payment and that the necessary or desirable to establish the Title, as insured,or to prevent or Company is obligated to pay. reduce loss or damage to the Insured. The Company may take any Upon the exercise by the Company of either of the options provided for in appropriate action under the terms of this policy,whether or not it shall subsections (b)(i)or(ii),the Company's obligations to the Insured under this be liable to the Insured. The exercise of these rights shall not be an policy for the claimed loss or damage,other than the payments required to be admission of liability or waiver of any provision of this policy. If the made,shall terminate,including any liability or obligation to defend,prosecute, Company exercises its rights under this subsection, it must do so or continue any litigation. diligently. (c) Whenever the Company brings an action or asserts a defense as required 8. DETERMINATION AND EXTENT OF LIABILITY or permitted by this policy, the Company may pursue the litigation to a This policy is a contract of indemnity against actual monetary loss or damage final determination by a court of competent jurisdiction, and it expressly sustained or incurred by the Insured Claimant who has suffered loss or damage by reserves the right, in its sole discretion,to appeal any adverse judgment reason of matters insured against by this policy. or order. (a) The extent of liability of the Company for loss or damage under this policy shall not exceed the lesser of 6. DUTY OF INSURED CLAIMANT TO COOPERATE (i) the Amount of Insurance;or (a) In all cases where this policy permits or requires the Company to (ii) the difference between the value of the Title as insured and the value prosecute or provide for the defense of any action or proceeding and any of the Title subject to the risk insured against by this policy. appeals, the Insured shall secure to the Company the right to so (b) If the Company pursues its rights under Section 5 of these Conditions and prosecute or provide defense in the action or proceeding, including the is unsuccessful in establishing the Title,as insured, right to use, at its option, the name of the Insured for this purpose. (i) the Amount of Insurance shall be increased by 10%,and Whenever requested by the Company, the Insured, at the Company's (ii) the Insured Claimant shall have the right to have the loss or damage expense, shall give the Company all reasonable aid (i) in securing determined either as of the date the claim was made by the Insured evidence, obtaining witnesses, prosecuting or defending the action or Claimant or as of the date it is settled and paid. proceeding,or effecting settlement,and(ii)in any other lawful act that in (c) In addition to the extent of liability under (a) and (b), the Company will the opinion of the Company may be necessary or desirable to establish also pay those costs,attorneys'fees,and expenses incurred in accordance the Title or any other matter as insured.If the Company is prejudiced by with Sections 5 and 7 of these Conditions. the failure of the Insured to furnish the required cooperation, the Company's obligations to the Insured under the policy shall terminate, 9. LIMITATION OF LIABILITY including any liability or obligation to defend, prosecute,or continue any (a) If the Company establishes the Title, or removes the alleged defect, lien, litigation, with regard to the matter or matters requiring such or encumbrance, or cures the lack of a right of access to or from the cooperation. Land, or cures the claim of Unmarketable Title, all as insured, in a (b) The Company may reasonably require the Insured Claimant to submit to reasonably diligent manner by any method, including litigation and the examination under oath by any authorized representative of the Company completion of any appeals, it shall have fully performed its obligations and to produce for examination, inspection, and copying, at such with respect to that matter and shall not be liable for any loss or damage reasonable times and places as may be designated by the authorized caused to the Insured. representative of the Company, all records, in whatever medium (b) In the event of any litigation, including litigation by the Company or with maintained, including books, ledgers, checks, memoranda, the Company's consent, the Company shall have no liability for loss or correspondence, reports, e-mails, disks, tapes, and videos whether damage until there has been a final determination by a court of bearing a date before or after Date of Policy, that reasonably pertain to competent jurisdiction,and disposition of all appeals,adverse to the Title, the loss or damage. Further, if requested by any authorized as insured. representative of the Company, the Insured Claimant shall grant its (c) The Company shall not be liable for loss or damage to the Insured for permission, in writing,for any authorized representative of the Company liability voluntarily assumed by the Insured in settling any claim or suit to examine, inspect, and copy all of these records in the custody or without the prior written consent of the Company. control of a third party that reasonably pertain to the loss or damage.All information designated as confidential by the Insured Claimant provided 10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF to the Company pursuant to this Section shall not be disclosed to others LIABILITY unless,in the reasonable judgment of the Company,it is necessary in the All payments under this policy, except payments made for costs, attorneys' administration of the claim. Failure of the Insured Claimant to submit for fees, and expenses, shall reduce the Amount of Insurance by the amount of the examination under oath, produce any reasonably requested information, payment. or grant permission to secure reasonably necessary information from third parties as required in this subsection, unless prohibited by law or 11. LIABILITY NONCUMULATIVE governmental regulation, shall terminate any liability of the Company The Amount of Insurance shall be reduced by any amount the Company pays under this policy as to that claim. under any policy insuring a Mortgage to which exception is taken in Schedule B or to which the Insured has agreed, assumed,or taken subject,or which is executed 7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION by an Insured after Date of Policy and which is a charge or lien on the Title, and OF LIABILITY the amount so paid shall be deemed a payment to the Insured under this policy. In case of a claim under this policy, the Company shall have the following additional options: 12. PAYMENT OF LOSS (a) To Pay or Tender Payment of the Amount of Insurance. When liability and the extent of loss or damage have been definitely fixed in To pay or tender payment of the Amount of Insurance under this policy accordance with these Conditions,the payment shall be made within 30 days. together with any costs, attorneys' fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of 13. RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT payment or tender of payment and that the Company is obligated to pay. (a) Whenever the Company shall have settled and paid a claim under this Upon the exercise by the Company of this option, all liability and policy, it shall be subrogated and entitled to the rights of the Insured obligations of the Company to the Insured under this policy,other than to Claimant in the Title and all other rights and remedies in respect to the make the payment required in this subsection, shall terminate, including claim that the Insured Claimant has against any person or property,to the any liability or obligation to defend,prosecute,or continue any litigation. extent of the amount of any loss, costs, attorneys' fees, and expenses (b) To Pay or Otherwise Settle With Parties Other Than the Insured or With paid by the Company.If requested by the Company,the Insured Claimant the Insured Claimant. shall execute documents to evidence the transfer to the Company of these (i) To pay or otherwise settle with other parties for or in the name of an rights and remedies. The Insured Claimant shall permit the Company to Insured Claimant any claim insured against under this policy. In sue, compromise, or settle in the name of the Insured Claimant and to addition, the Company will pay any costs, attorneys' fees, and use the name of the Insured Claimant in any transaction or litigation expenses incurred by the Insured Claimant that were authorized by involving these rights and remedies. the Company up to the time of payment and that the Company is If a payment on account of a claim does not fully cover the loss of the obligated to pay;or Insured Claimant, the Company shall defer the exercise of its right to (ii) To pay or otherwise settle with the Insured Claimant the loss or recover until after the Insured Claimant shall have recovered its loss. damage provided for under this policy, together with any costs, First American Title Insurance Company Form No. 1402.06 Policy Page 4 ALTA Owner's Policy(6-17-06) Policy Number: 500967 (b) The Company's right of subrogation includes the rights of the Insured to (d) Each endorsement to this policy issued at any time is made a part of this indemnities, guaranties, other policies of insurance, or bonds, policy and is subject to all of its terms and provisions. Except as the notwithstanding any terms or conditions contained in those instruments endorsement expressly states,it does not(i)modify any of the terms and that address subrogation rights. provisions of the policy,(ii)modify any prior endorsement,(iii)extend the Date of Policy,or(iv)increase the Amount of Insurance. 14. ARBITRATION Either the Company or the Insured may demand that the claim or controversy 16. SEVERABILITY shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of In the event any provision of this policy,in whole or in part,is held invalid or the American Land Title Assotlation ("Rules"). Except as provided in the Rules, unenforceable under applicable law,the policy shall be deemed not to include that there shall be no joinder or consolidation with claims or controversies of other provision or such part held to be invalid,but all other provisions shall remain in full persons.Arbitrable matters may include,but are not limited to, any controversy or force and effect. claim between the Company and the Insured arising out of or relating to this policy, any service in connection with its issuance or the breach of a policy 17. CHOICE OF LAW;FORUM provision,or to any other controversy or claim arising out of the transaction giving (a) Choice of Law:The Insured acknowledges the Company has underwritten rise to this policy. All arbitrable matters when the Amount of Insurance is the risks covered by this policy and determined the premium charged $2,000,000 or less shall be arbitrated at the option of either the Company or the therefore in reliance upon the law affecting interests in real property and Insured. All arbitrable matters when the Amount of Insurance is in excess of applicable to the interpretation, rights, remedies, or enforcement of $2,000,000 shall be arbitrated only when agreed to by both the Company and the Polices of title insurance of the jurisdiction where the Land is located. Insured. Arbitration pursuant to this policy and under the Rules shall be binding Therefore,the court or an arbitrator shall apply the law of the jurisdiction upon the parties.Judgment upon the award rendered by the Arbitrator(s) may be where the Land is located to determine the validity of claims against the entered in any court of competent jurisdiction. Title that are adverse to the Insured and to interpret and enforce the terms of this policy. In neither case shall the court or arbitrator apply its 15. LIABILITY LIMITED TO THIS POLICY;POLICY ENTIRE CONTRACT conflicts of law principles to determine the applicable law. (a) This policy together with all endorsements, if any, attached to it by the (b) Choice of Forum: Any litigation or other proceeding brought by the Company is the entire policy and contract between the Insured and the Insured against the Company must be fled only in a state or federal court Company. In interpreting any provision of this policy,this policy shall be within the United States of America or its territories having appropriate construed as a whole. jurisdiction. (b) Any claim of loss or damage that arises out of the status of the Title or by any action asserting such claim shall be restricted to this policy. 18. NOTICES,WHERE SENT (c) Any amendment of or endorsement to this policy must be in writing and Any notice of claim and any other notice or statement in writing required to be authenticated by an authorized person, or expressly incorporated by given to the Company under this policy must be given to the Company at 1 First Schedule A of this policy. American Way,Santa Ana,CA 92707,Atm:Claims Department. POLICY OF TITLE INSURANCE 5 A M E R ! � C 4 � w : First American Title Insurance Company Form No. 1402.06 Policy Page 5 ALTA Owner's Policy(6-17-06) Policy Number: 500967 SCHEDULE A FirstAmencan Tide Insurance Company Name and Address of the issuing Title Insurance Company: First American Title Insurance Company 5 First American Way Santa Ana, CA 92707 File No.: NCS-500967-SAl Policy No.: 500967 Address Reference: 1900 Main Street, 1919 17th Street, Huntington Beach, CA Amount of Insurance: $36,275,000.00 Premium: $21,765.00 Date of Policy: September 28, 2011 at 12:12 pm 1. Name of Insured: City of Huntington Beach, a California municipal corporation, Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California and The Bank of New York Mellon Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, as trustee 2. The estate or interest in the Land that is insured by this policy is: ESTATE A: A Fee, subject to the terms, covenants, conditions and provisions of the Site Lease and Lease Agreement shown below in Estates B and C ESTATE B: A leasehold estate as created by that certain Site Lease dated September 1, 2011, executed by City of Huntington Beach, a municipal corporation as lessor and Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California as lessee, Site Lease recorded September 28, 2011 as Instrument No. 2011000479933 of Official Records. Certain rights of the lessee under the Site Lease have been assigned to The Bank of New York Mellon Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, as trustee pursuant to the Indenture dated September 1, 2011, as provided in the Lease Agreement and Assignment dated September 1, 2001 and disclosed by a Memorandum of Lease Agreement and Assignment recorded September 28, 2011 as Instrument No. 2011000479934 of Official Records. ESTATE C: A subleasehold estate as created by that certain unrecorded Lease Agreement and Assignment dated September 1, 2011, executed by Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the Sate of California as lessor and City of Huntington Beach, a municipal corporation as lessee and The Bank of New York Mellon Trust Company, N.A., a national banking association, as disclosed by a Memorandum of Lease Agreement and Assignment recorded September 28, 2011 as 2011000479934 of Official Records. Certain rights of the sublessor under Lease Agreement have been assigned to The Bank of New York Mellon Trust Company, N.A., a national banking association organized and existing under First American Title Insurance Company Form No. 1402.06 Policy Page 6 ALTA Owner's Policy(6-17-06) Policy Number: 500967 the laws of the United States of America, as trustee pursuant to the Indenture dated September 1, 2011, as provided in the Lease Agreement and Assignment dated September 1, 2001 and disclosed by a Memorandum of Lease Agreement and Assignment recorded September 28, 2011 as Instrument No. 2011000479934 of Official Records. 3. Title is vested in: City of Huntington Beach, a municipal corporation, as to ESTATES A and C, and Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the Sate of California, as to ESTATE B. 4. The Land referred to in this policy is described as follows: See Exhibit "A" attached hereto and made a part hereof First American Title Insurance Company Form No. 1402.06 Policy Page 7 ALTA Owner's Policy(6-17-06) Policy Number: 500967 SCHEDULE 6 File No.: NCS-500967-SAI Policy No.: 500967 EXCEPTIONS FROM COVERAGE This Policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees, or expenses that arise by reason of: 1. General and special taxes and assessments for the fiscal year 2011-2012, a lien not yet due or payable. 2. General and special taxes and assessments for the fiscal year 2010-2011 are exempt. If the exempt status is terminated an additional tax may be levied. Account No. 023-041-03, 023-041- 04, 023-041-06, 023-031-10 and 023-031-13 3. The lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code. Although the above supplemental taxes may be a lien, the installments thereof are not yet due or payable. 4. Rights of the public in and to that portion of the land lying within Utica Avenue. 5. The dedication to public use, all public highways, parks, courts, commons, and other ground shown on the map of said tract intended for public use, except the rights to the use of said streets, avenues and alleys for water pipes and conduits, railroads, telephone poles, wires and conduits, and incidental purposes, as indorsed on the Map of Tract No. 12, recorded in Book 9, Page 13 of Miscellaneous Maps. 6. The effect of an unrecorded natural gas contract, dated May 23, 1952, between Snyder& Hoff, as producers, and Fullerton Oil Company, insofar as it pertains to Lot 2 of Block 1903 of the herein described and other land, as disclosed in a Conveyance and Assignment dated November 30, 1954, from Fullerton Oil &Gas Corporation, a Delaware corporation, to Monterey Oil Company, a Delaware corporation, recorded December 3, 1954 in Book 2885, Page 102 of Official Records. 7. Terms and provisions of an unrecorded lease dated January 7, 1955, by and between Huntington Beach Company, a corporation as lessor and Southwest Exploration Company, a corporation as lessee, as disclosed by a Agreement recorded March 3, 1955 as Book 2982, Page 251 of Official Records. (Affects Lots 2 and 4 of Block 1903) Defects, liens, encumbrances or other matters affecting the leasehold estate, whether or not shown by the public records are not shown herein. First American Title Insurance Company Form No. 1402.06 Policy Page 8 ALTA Owner's Policy(6-17-06) Policy Number: 500967 8. An easement for the exclusive right from time to time to drill in, into and through the subsurface below five hundred (500) feet under the surface of said property without the right to use the surface and incidental purposes, recorded December 17, 1969 as Book 9166, Page 715 of Official Records. In Favor of: Huntington Beach Company, a corporation Affects: Portions of Parcels 1 and 2 The location of the easement cannot be determined from record information. 9. An easement for public utilities and incidental purposes, recorded February 2, 1972 as Book 9987, Page 626 of Official Records. In Favor of: Southern California Edison Company, a corporation Affects: Lots 8 and 10 in Block 2001 and Lot 21 in Block 2002 10. The fact that the land lies within the boundaries of the Yorktown-Lake Redevelopment Project Area, as disclosed by the document recorded October 5, 1982 as Instrument No. 82-350908 of Official Records. The fact that the land lies within the boundaries of the Amended/Merged Huntington Beach Redevelopment Project Area, as disclosed by the document recorded December 17, 1996 as Instrument No. 19960634645 of Official Records. 11. An easement for below a depth of five hundred (500) feet beneath the surface, grantee may slant drill and incidental purposes, recorded July 5, 1988 as Instrument No. 88-319698 of Official Records. In Favor of: Angus Petroleum Corporation, a Delaware corporation Affects: Portions of Parcels 1 and 2 The location of the easement cannot be determined from record information. 12. An easement for utility and incidental purposes, recorded March 16, 1989 as Instrument No. 89- 137620 of Official Records. In Favor of: City of Huntington Beach Affects: Parcel 2 13. An easement for public utilities and incidental purposes, recorded May 16, 1989 as Instrument No. 89-258686 of Official Records. In Favor of: Southern California Edison Company Affects: As described therein 14. An easement for water, sewer or gas pipes, telephone and electric lines and poles, railroads, conduits, or any other public utility and incidental purposes, recorded September 23, 1916 in Book 294 of Deeds, Page 390. In Favor of: Huntington Beach Company, a corporation Affects: Parcel The location of the easement cannot be determined from record information. 15. An easement for water, sewer, or gas pipes, telephone and electric lines and poles, railroads, conduits, or any other public utility and incidental purposes, recorded October 5, 1951 as Book 2238, Page 323 of Official Records. In Favor of: Huntington Beach Company, a corporation Affects: Parcel 3 First American Title Insurance Company Form No. 1402.06 Policy Page 9 ALTA Owner's Policy(6-17-06) Policy Number: 500967 The location of the easement cannot be determined from record information. 16. An easement shown or dedicated on the map filed or recorded February 2, 1990 as Tract No. 13569 in Book 652, Pages 28 through 33 of Miscellaneous Maps For: Street purposes, Park Street and Lake Street and incidental purposes. (Affects Parcel 3) 17. An easement shown or dedicated on the map filed or recorded February 2, 1990 as Tract No. 13569 in Book 652, Pages 28 through 33 of Miscellaneous Maps For: Domestic water system and appurtenances, and the sanitary sewer system and appurtenances and incidental purposes. (Affects Parcel 3) 18. An easement for public utilities and incidental purposes, recorded April 4, 1990 as Instrument No. 90-176640 of Official Records. In Favor of: GTE California Incorporated, a corporation Affects: Parcel 3 The location of the easement cannot be determined from record information. 19. Easements, liens or encumbrances, or claims thereof, which are not shown by the public records. 20. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 21. The effect of any failure to comply with the terms, covenants, conditions and provisions of the Site Lease and Lease Agreement described in Schedule A. 22. The terms and provisions contained in the unrecorded Indenture, dated September 11, 2011, by and among the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California, the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the"City"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as Trustee subject to all the terms, provisions and conditions therein contained, as disclosed by the Site Lease and the Lease Agreement described in Schedule A. First American Title Insurance Company Form No. 1402.06 Policy Page 10 ALTA Owner's Policy(6-17-06) Policy Number: 500967 EXHIBIT "A" File No.: NCS-500967-SAI Policy No.: 500967 Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: PARCEL I: THOSE PORTIONS OF BLOCKS 1901, 1903, 2001 AND 2002 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH PARK STREET, UNION AVENUE, AND THE ALLEYS IN SAID BLOCKS, AS SHOWN ON SAID MAP AND AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 6, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, AND TOGETHER WITH PORTIONS OF PINE STREET AND SEVENTEENTH STREET, AS SHOWN SAID MAP AND AS VACATED BY RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 001 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 451 19' 06" EAST 24.04 FEET; THENCE SOUTH 890 40' 54" EAST 166.03 FEET TO THE CENTERLINE OF SEVENTEENTH STREET, 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP; THENCE NORTH 410 38' 23" EAST 427.42 FEET ALONG SAID CENTERLINE OF SEVENTEENTH STREET; THENCE SOUTH 890 40' 54" EAST 137.05 FEET; THENCE NORTH 000 19' 06" EAST 155.89 FEET ALONG A LINE PARALLEL TO THE CENTERLINE OF SAID LAKE AVENUE, TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 410 38' 23" EAST 134.38 FEET ALONG SAID CENTERLINE OF SAID SEVENTEENTH STREET AND ITS NORTHEASTERLY PROLONGATION TO A POINT ON THE NORTHERLY LINE OF SAID TRACT NO. 12; THENCE NORTH 480 21' 17" WEST 474.37 FEET ALONG SAID NORTHERLY TRACT LINE OF TRACT NO. 12; THENCE NORTH 890 40' 01" WEST 535.29 FEET CONTINUING ALONG SAID NORTHERLY TRACT LINE TO THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE SOUTH 000 20' 13" WEST 1266.12 FEET ALONG SAID EASTERLY LINE TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 890 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 000 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 450 19' 06" EAST 24.04 FEET; THENCE SOUTH 890 40' 54" EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 000 20' 13" EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID TRACT NO. 12; THENCE NORTH 890 40' 01" WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 000 20' 13" WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 890 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. First American Title Insurance Company Form No. 1402.06 Policy Page 11 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 13569, AS SHOWN ON A MAP RECORDED IN BOOK 652, PAGES 28 THROUGH 33, OF SAID MISCELLANEOUS MAPS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED DULY 5, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-03, 023-041-04 AND A PORTION OF 023-031-14 PARCEL 2: THOSE PORTIONS OF BLOCKS 1902, 1903 AND 2002 INCLUDING A PORTION OF UTICA STREET, ALL OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF UNION AVENUE AND THE ALLEYS IN SAID BLOCKS AS SHOWN ON SAID MAP AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 6, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, TOGETHER WITH THAT PORTION OF SEVENTEENTH STREET AS VACATED BY RESOLUTION NO. 5989 OF SAID CITY COUNCIL, A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET 60.00 FEET IN WIDTH AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00 DEG. 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45 DEG. 19' 06" EAST 24.04 FEET; THENCE SOUTH 89 DEG. 40' 54" EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00 DEG. 20' 13" EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID MAP OF TRACT NO. 12; THENCE NORTH 89 DEG. 40' 01" WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00 DEG. 20' 13" WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89 DEG. 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. First American Title Insurance Company Form No. 1402.06 Policy Page 12 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED DULY 5, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-031-10, 023-031-13 AND A PORTION OF 023-031-14 PARCEL 3: THOSE PORTIONS OF LOTS 13 AND 14 OF BLOCK 1901 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF SEVENTEENTH STREET, AS SHOWN ON SAID MAP AND AS VACATED IN THAT CERTAIN RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, A CERTIFIED COPY OF WHICH RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF OFFICIAL RECORDS OF ORANGE COUNTY AND PORTIONS OF LAKE AVENUE AND PARK STREET, AS SHOWN ON THE MAP OF TRACT NO. 13569, RECORDED IN BOOK 652, PAGES 28 THROUGH 33 OF MISCELLANEOUS MAPS, RECORDS OF SAID ORANGE COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE CENTERLINE INTERSECTION OF LAKE AVENUE 90.00 FEET IN WIDTH, AND SEVENTEENTH STREET 70.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 13569; THENCE SOUTH 000 19' 06" WEST 207.32 FEET ALONG SAID CENTERLINE OF LAKE AVENUE TO THE CENTERLINE INTERSECTION OF PARK STREET, 52.00 FEET IN WIDTH, AS SHOWN ON THE MAP OF SAID TRACT NO. 13569; THENCE NORTH 890 40' 54" WEST 237.70 FEET ALONG SAID CENTERLINE OF PARK STREET; THENCE NORTH 000 19' 06" EAST 155.89 FEET TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 410 38' 23" EAST 68.48 FEET ALONG SAID CENTERLINE TO AN ANGLE POINT IN SAID SEVENTEENTH STREET; THENCE CONTINUING ALONG SAID CENTERLINE OF SEVENTEENTH STREET SOUTH 890 40' 54" EAST 192.48 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM ANY PORTION LYING WITHIN THE AFOREMENTIONED PARCEL 1. EXCEPTING THEREFROM SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED (500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED DULY 5, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-06 PARCEL 4: THOSE LANDS IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA BEING A PORTION OF SEVENTEENTH STREET AS SHOWN ON TRACT NO. 12, FILED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, TOGETHER WITH A PORTION OF MANSION AVENUE AS DESCRIBED IN THE DEEDS TO THE CITY OF HUNTINGTON BEACH RECORDED SEPTEMBER 23, 1916, IN BOOK 294, PAGE 390 OF DEEDS, AND THE DEED RECORDED DULY 21, 1950, IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS WHICH WERE VACATED, AS A PORTION OF PARCEL 1 BY CITY OF HUNTINGTON BEACH RESOLUTION NO. 5989, ON JANUARY 17, 1989 RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89- 137620 OF OFFICIAL RECORDS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST EASTERLY CORNER OF LOT 3, BLOCK 2001, AS SHOWN ON SAID TRACT NO. 12, THENCE NORTH 41019'00"EAST, 54.43 FEET, ALONG THE NORTHEAST PROLONGATION OF First American Title Insurance Company Form No. 1402.06 Policy Page 13 ALTA Owner's Policy(6-17-06) Policy Number: 500967 THE SOUTHEAST LINE OF SAID LOT 3, TO AN INTERSECTION WITH THE SOUTHWESTERLY LINE OF YORKTOWN AVENUE (FORMERLY MANSION AVENUE), SAID INTERSECTION BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 850.00 FEET, A RADIAL LINE TO SAID POINT OF CURVATURE BEARS SOUTH 27011'59"WEST; THENCE SOUTHEASTERLY 36.30 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 202648", TO THE INTERSECTION OF SAID CURVE AND THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET SAID INTERSECTION BEING THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION, A RADIAL LINE TO SAID TRUE POINT OF BEGINNING BEARS SOUTH 24045'11" WEST; THENCE CONTINUING SOUTHEASTERLY 44.96 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 3001'51", TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 32.00 FEET; THENCE SOUTHEASTERLY 38.13 FEET ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 68016'40", TO THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF LAKE STREET(FORMERLY LAKE AVENUE), 90.00 FEET IN WIDTH, AS SHOWN ON SAID TRACT NO. 12; THENCE SOUTH 00000'00"WEST, 49.93 FEET ALONG SAID PROLONGATION OF THE WESTERLY LINE OF LAKE STREET TO THE CENTERLINE OF SEVENTEENTH STREET(70.00 FEET IN WIDTH) AS SHOWN ON SAID TRACT NO. 12; THENCE WESTERLY ALONG THE CENTERLINE OF SAID SEVENTEENTH STREET, AS SHOWN ON SAID TRACT NO. 12, NORTH 90000'00"WEST, 147.08 FEET, TO AN ANGLE POINT IN SAID CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12; THENCE NORTHEASTERLY, LEAVING SAID CENTERLINE OF SEVENTEENTH STREET ALONG THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12, NORTH 41019'00"EAST, 129.68 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL MINERALS, PETROLEUM, ASPHALTUM, BREA, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON OR UNDER, OR THAT MAY BE PRODUCED FROM THE LAND, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM ADJACENT LANDS INTO AND THROUGH THE SUBSURFACE OF THE LAND; PROVIDED, HOWEVER, THAT GRANTORS SHALL NOT USE THE SURFACE OF THE LAND FOR THE EXPLORATTION, DEVELOPMENT, EXTRACTION OR REMOVAL OF SAID MINERALS OR SUBSTANCES, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION AND STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION IN A DEED RECORDED DULY 21, 1950 IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS. APN: 023-041-07 APN: 023-031-10, 023-041-03, 023-041-04, 023-031-13, 023-031-14, 023-041-06 and 023-041-07 First American Title Insurance Company Form No. 1402.06 Policy Page 14 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued by First American Tide Insurance Company The Company insures against loss or damage sustained by the Insured by reason of: 1. The existence, at Date of Policy, of any of the following unless expressly excepted in Schedule B: a. Present violations on the Land of any enforceable covenants, conditions, or restrictions, or any existing improvements on the Land that violate any building setback lines shown on a plat of subdivision recorded or filed in the Public Records. b. Any instrument referred to in Schedule B as containing covenants, conditions, or restrictions on the Land that, in addition, (i) establishes an easement on the Land, (ii) provides for an option to purchase, a right of first refusal, or the prior approval of a future purchaser or occupant, or (iii) provides a right of reentry, possibility of reverter, or right of forfeiture because of violations on the Land of any enforceable covenants, conditions, or restrictions. C. Any notices of violation of covenants, conditions, or restrictions relating to environmental protection recorded or filed in the Public Records. 2. Damage to existing buildings: a. Resulting from the future exercise of any right existing at Date of Policy to use the surface of the Land for the extraction or development of minerals excepted from the description of the Land or excepted in Schedule B. 3. Any final court order or judgment denying the right to maintain any existing building on the Land because of any violation of covenants, conditions, or restrictions, or building setback lines shown on a plat of subdivision recorded or filed in the Public Records. Wherever in this endorsement the words "covenants, conditions, or restrictions" appear,they shall not be deemed to refer to or include the terms, covenants, conditions, or limitations contained in an instrument creating a lease. As used in paragraphs 1.a. and 3, the words "covenants, conditions, or restrictions" do not include any covenants, conditions, or restrictions (a) relating to obligations of any type to perform maintenance, repair, or remediation on the Land, or (b) pertaining to environmental protection of any kind or nature, including hazardous or toxic matters, conditions, or substances, except to the extent that a notice of a violation or alleged violation affecting the Land has been recorded or filed in the Public Records at Date of Policy and is not excepted in Schedule B. First American Title Insurance Company Form No. 1402.06 Policy Page 15 ALTA Owner's Policy(6-17-06) Policy Number: 500967 This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 9.2-06(Restrictions,Encroachments,Minerals- Owner's Policy-Improved Land)MODIFIED Adopted 6/17/06 First American Title Insurance Company Form No. 1402.06 Policy Page 16 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued by First American Tide Insurance Company The Company insures against loss or damage sustained by the Insured by reason of: (1) damage to an existings building located on the Land, or (2) enforced removal or alteration of an existing building located on the Land, as a result of the exercise of the right of use or maintenance of the easement referred to in Exception 4 of Schedule B for the purpose for which it was granted or reserved. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 28-06(Easement-Damage or Enforced Removal) Adopted 10/16/08 First American Title Insurance Company Form No. 1402.06 Policy Page 17 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued by First American Tide Insurance Company The Company insures against loss or damage sustained by the Insured if, at Date of Policy (i) the Land does not abut and have both actual vehicular and pedestrian access to and from Park, Yorktown Avenue, Main Street and Utica Avenue (the "Street(s)"), (ii) the Street(s) is/are not physically open and publicly maintained, or (iii) the Insured has no right to use existing curb cuts or entries along that/those portion(s) of the Street(s) abutting the Land. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 17-06(Access and Entry) Adopted 6/17/06 First American Title Insurance Company Form No. 1402.06 Policy Page 18 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued by First American Tide Insurance Company The Company insures against loss or damage sustained by the Insured by reason of an environmental protection lien that, at Date of Policy, is recorded in the Public Records or filed in the records of the clerk of the United States district court for the district in which the Land is located, unless the environmental protection lien is set forth as an exception in Schedule B. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 8.2-06(Commercial Environmental Protection Lien) Adopted 10/16/08 First American Title Insurance Company Form No. 1402.06 Policy Page 19 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued by First American Tide Insurance Company The Company insures against loss or damage sustained by the Insured by reason of: 1. those portions of the Land identified below not being assessed for real estate taxes under the listed tax identification numbers or those tax identification numbers including any additional land: Parcel: Tax Identification Numbers: PARCEL 1 023-041-03 PARCEL 1 023-041-04 PARCEL 1 023-031-14 portion PARCEL 2 023-031-10 PARCEL 2 023-031-13 PARCEL 2 023-031-14 portion PARCEL 3 023-041-06 PARCEL 4 023-041-07 2. the easements, if any, described in Schedule A being cut off or disturbed by the nonpayment of real estate taxes assessed against the servient estate. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 18.1-06(Multiple Tax Parcel) Adopted 6/17/06 First American Title Insurance Company Form No. 1402.06 Policy Page 20 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued by First American Tide Insurance Company The Company insures against loss or damage sustained by the Insured by reason of: 1. the failure of PARCELS 1 AND 2 of the Land to be contiguous on their common boundaries ; 2. the failure of PARCEL 1 of the Land to be contiguous to PARCELS 3 AND 4 of the Land on their common boundaries; 3. the failure of PARCELS 3 AND 4 of the Land to be contiguous on their common boundaries; or 4. the presence of any gaps, strips, or gores separating any of the contiguous boundary lines described above. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 19-06(Condguity-Multiple Parcels) Adopted 6/17/06 First American Title Insurance Company Form No. 1402.06 Policy Page 21 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued By First American Time Insurance Company The Company insures against loss or damage sustained by the Insured by reason of damage to existing improvements, including lawns, shrubbery or trees, resulting from the exercise of any right to use the surface of the Land for the extraction or development of water excepted from the description of the Land or shown as a reservation in Schedule B. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. CLTA Form 103.5-06(03-09-07) ALTA-Owner or Lender First American Title Insurance Company Form No. 1402.06 Policy Page 22 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued by First American Title Insurance Company The Company hereby insures the Insured against loss or damage as a result of the entry of a judgment or decree of a court of competent jurisdiction constituting a final determination and adjudging the invalidity of the leasehold estate described in Estate B of Schedule A on the grounds that it is extinguished by a merger of the subleasehold interest described in Estate C of Schedule A with the fee simple title. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior First American Title Insurance Company Form No. 1402.06 Policy Page 23 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued by First American Tide Insurance Company The Company insures the Insured, that the Lease Agreement referred to in ESTATE C of Schedule A of this policy is valid at the Date of Policy as to the Land, and at the commencement of its term, will be binding as to the Land, subject to the effect of: Any failure to comply with the covenants, conditions and provisions of the Site Lease referred to in ESTATE B of Schedule A or of the Lease Agreement referred to in ESTATE C of Schedule C; Any acts of a party or parties to the Lease Agreement, or of its or their successors in interest, or any action in eminent domain, by which any rights or interests or obligations thereunder are released or impaired; and Any termination of the Lease Agreement under any of the provisions thereof. The Company hereby insures against loss which the Insured shall sustain in the event the insurance herein proves to be incorrect. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title Insurance Company Form No. 1402.06 Policy Page 24 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued By First American Title Insurance Company That upon the occurrence of a loss otherwise insured against under this policy which results or would result with the lapse of time, in the failure of City of Huntington Beach, a municipal corporation to promptly pay scheduled payments of rent in the amount sufficient to pay the scheduled principal and interest on the Bonds, as defined in the Indenture dated September 11, 2011 by and among the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California, the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as Trustee, when due, such loss shall include the amounts required to pay in full the redemption price (including accrued interest to the date of redemption) of the outstanding Bonds, as provided in the Indenture (the aggregate principal amount of such outstanding Bonds subject to redemption to be calculated as to the date of the occurrence of the loss). This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title Insurance Company Form No. 1402.06 Policy Page 25 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued By First American Title Insurance Company The policy is hereby amended in the following manner: Notwithstanding Paragraph 7 of the Conditions, the Company assures the Insured that, in the event a defect, lien or encumbrance or other matter insured against by this policy creates a loss, the Company shall not without the prior written consent of The Bank of New York Mellon Trust Company, N.A., as Trustee, purchase any Bonds in lieu of providing payment under the policy unless, upon purchase, such Bonds are cancelled, or settle any claim payable to the Insured with any person other than the trustee under the Indenture dated September 1, 2011 by and among the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California, the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as Trustee This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title Insurance Company Form No. 1402.06 Policy Page 26 ALTA Owner's Policy(6-17-06) Policy Number: 500967 ENDORSEMENT Attached to Policy No. 500967 Issued by First American Tide Insurance Company The Company insures against loss or damage sustained by the Insured by reason of damage to existing improvements, including lawns, shrubbery or trees resulting from the exercise of any right to use the surface of the Land for the extraction or development of the minerals leased under the oil and gas leases shown in paragraphs 6, 7, 8 and 11 of Schedule B. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. CLTA Form 100.23-06(03-09-07) ALTA-Lender First American Title Insurance Company OFFICE OF o,�pNS®NCIp,�BF9�, CITY ATTORNEY Paul D'Alessandro,Assistant City Attorney s Scott Field,Assistant City Attorney P.O.Box 190 Neal Moore,Sr.Deputy City Attomey yr'F�OUNTY 2000 Main Street John Fujii,Deputy City Aftomey Daniel l�Ohl,duty City Attorney Huntington Beach,California 92648 Telephone: (714)536-5555 Mike Vigliotta,Deputy City Attorney Jennifer McGrath Facsimile: (714)374-1590 City Attorney September 28, 2011 Merrill Lynch, Pierce, Fenner& Smith E. J. De La Rosa& Co., Inc. Incorporated 10866 Wilshire Boulevard, Suite 2650 333 South Hope Street, Suite 2310 Los Angeles, California 90024 Los Angeles, California 90071 Huntington Beach Public Financing City of Huntington Beach Authority 2000 Main Street 2000 Main Street Huntington Beach, California 92648 Huntington Beach, California 92648 Orrick,Herrington& Sutcliffe LLP 777 South Figueroa Street, Suite 3200 Los Angeles, California 90017 Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) Dear Ladies and Gentlemen: I am the City Attorney for the City of Huntington Beach(the "City"), a municipal corporation and chartered city duly organized and existing under and by virtue of the Constitution and the laws of the State of California (the "State"). This opinion is delivered in connection with the issuance by the Huntington Beach Public Financing Authority(the"Authority") of$36,275,000 principal amount of Huntington Beach Public Financing Authority(Orange County, California)Lease Revenue Refunding Bonds, 2011 Series A(Capital Improvement Refinancing Project)(the"Bonds"). The Bonds are being issued pursuant to the provisions of Article 4, Chapter 5,Division 7, Title 1 (commencing with Section 6584) of the California Government Code, Resolution No. 21 of the Authority and the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company,N.A., as trustee (the "Trustee"). Capitalized terms not defined herein shall have the meanings Page 1 assigned to them in the Purchase Agreement, dated September 13, 2011 (the "Purchase Agreement"), by and among Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative of E. J. De La Rosa & Co., Inc. (the "Underwriters"), the Authority and the City. In such connection, I have reviewed Resolution No. 2011-67 of the City (the "City Resolution"), the Purchase Agreement, the Indenture, the Site Lease, dated as of September 1, 2011 (the "Site Lease"), by and between the City and the Authority, the Lease Agreement, dated as of September 1, 2011 (the "Lease Agreement"), by and between the City and the Authority, the Continuing Disclosure Certificate, dated the date hereof (the "Continuing Disclosure Certificate"), executed by the City, the Official Statement, dated September 13, 2011 (the "Official Statement"), relating to the Bonds, certificates of the Authority, the City, the Trustee and others and such other documents and matters to the extent I deemed necessary to render the opinions set forth herein. I have assumed the genuineness of all documents and signatures presented to me, whether as originals or as copies, and the due and legal execution and delivery thereof by, and validity against, any parties other than the City. I have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents referred to in the second paragraph hereof. Furthermore, I have assumed compliance with all covenants and agreements contained in the City Documents (as herein defined). I call attention to the fact that the rights and obligations under the City Documents and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against chartered cities in the State. I express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the foregoing documents. Based on and subject to the foregoing, and in reliance thereon, as of the date hereof,I am of the following opinions: 1. The City is a chartered city and municipal corporation, duly organized and existing under and by virtue of the laws of the State. 2. The City Resolution has been duly adopted and is in full force and effect and has not been modified, amended, rescinded or repealed since the date of its adoption. 3. The Purchase Agreement, the Indenture, the Site Lease, the Lease Agreement and the Continuing Disclosure Certificate (collectively, the "City Documents") have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the other parties thereto, if applicable, constitute the valid, legal and binding agreements of the City enforceable in accordance with their respective terms. Page 2 4. Except as otherwise disclosed in the Official Statement, and to the best of my knowledge after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending, with service of process having been accomplished, or threatened in writing against the City, challenging the creation, organization or existence of the City, or the validity of the City Documents or seeking to restrain or enjoin the payment of the Base Rental Payments under the Lease Agreement or the repayment of the Bonds or in any way contesting or affecting the validity of the City Documents or contesting the authority of the City to enter into or perform its obligations under any of the City Documents, or which, in any manner, questions the right of the City to pay the Base Rental Payments under the Lease Agreement. 5. The execution and delivery of the City Documents and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject, which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the City Documents. 6. No authorization, approval, consent, or other order of the State or any other governmental body within the State is required for the valid authorization, execution and delivery of the City Documents or the consummation by the City of the transactions on its part contemplated therein, except such as have been obtained and except such as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters. 7. Based on the information made available to the City Attorney, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to my attention which would lead me to believe that the Official Statement as of its date and as of the date hereof (excluding therefrom financial statements and other statistical data, information regarding DTC and its book entry only system, information under the caption"UNDERWRITING," CUSIP numbers, prices and yields for the Bonds and any other information provided by the Underwriters, as to which no view is expressed herein) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Sincerely, Jennifer McGrath City Attorney JM/slf Page 3 $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) CERTIFICATE OF THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. The Bank of New York Mellon Trust Company, N.A. (`Bank of New York") hereby states and certifies: (a) that the undersigned is an authorized officer of Bank of New York, acting as (i) trustee under the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Huntington Beach Public Financing Authority (the "Authority"), the City of Huntington Beach (the "City") and Bank of New York, (ii) escrow bank under the Escrow Agreement, dated as of September 1, 2011 (the "Series 2001A Escrow Agreement'), by and between the Authority and Bank of New York, relating to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project), and (iii) escrow bank under the Escrow Agreement, dated as of September 1, 2011 (the "Series 2001B Escrow Agreement'), by and between the Authority and Bank of New York, relating to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project), and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same; (b) that Bank of New York is duly organized and existing as a national banking association organized and existing under the laws of the United States of America, having the full power and authority to enter into and perform its duties under the Indenture, the Series 2001A Escrow Agreement and the Series 2001B Escrow Agreement (collectively, the `Bank of New York Documents"), and to authenticate and deliver the $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Bonds") to Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative of E. J. De La Rosa&Co., Inc., as underwriters (collectively, the"Underwriters"), pursuant to the terms of the Indenture; (c) that Bank of New York is duly authorized to enter into the Bank of New York Documents and, when the Indenture is authorized, executed and delivered by the other parties thereto, to authenticate the Bonds and deliver the same to the Underwriters pursuant to the terms of the Indenture; (d) that the execution and delivery by Bank of New York of the Bank of New York Documents, and compliance with the terms thereof, will not conflict with, or result in violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which Bank of New York is a party or by which it is bound, or, to the best of its knowledge, any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over Bank of New York or any of its activities OHS WEST261322575.2 or properties (except that no representation, warranty or agreement is made by Bank of New York with respect to any federal or state securities or blue sky laws or regulations); (e) that no authorization, approval, consent or order of any governmental agency or any other person is required for the valid authorization, execution and delivery of the Bank of New York Documents by Bank of New York or the authentication of the Bonds by Bank of New York; (f) that there is no action, suit, proceeding or investigation, at law or in equity before or by any court, public board or body, that has been served on, or, to the best of Bank of New York's knowledge, threatened against or affecting the existence of Bank of New York or in any way contesting or affecting the validity or enforceability of the Bonds or the Bank of New York Documents, or contesting the powers of Bank of New York or its authority to enter into and perform its obligations under any of the foregoing, or wherein an unfavorable decision, ruling or finding would adversely affect Bank of New York or the transactions contemplated in connection with the delivery of the Bonds, or which, in any way, would adversely affect the validity of the Bonds or the Bank of New York Documents or any agreement or instrument to which Bank of New York is a party and which is used or contemplated for use in the Bank of New York Documents or the consummation of the transactions contemplated in connection with the issuance of the Bonds; and (g) that, subject to the provisions of the Indenture, Bank of New York will apply the proceeds from the Bonds to the purposes specified in the Indenture. Dated: September 28, 2011 THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A., as Trustee and Escrow Bank By: Authorized Officer OHS WEST:261322575.2 2 All. THE BANK OF NEW YORK MELLON THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. CERTIFICATE OF INCUMBENCY I do hereby certify that: (i) I am the duly elected Officer of The Bank of New York Mellon Trust Company, N.A. (the Association"); (ii) attached hereto is a true, correct copy of Signing Authorities extracts from by-laws of the Association adopted by action of the Board of Directors of the association and presently in effect: (iii) attached hereto is a list of the persons who, as of the date hereof, are certain duly elected officers of the Association, which lists sets forth the title of each officer next to his or her typed name, with which officers I am personally familiar; and IN WITNESS WHEREOF, I have hereunto executed this Certificate of the Association as of September 28, 2011. B : Valere Jones-Shaw ',,,-Associate I hereby certify that as of the date hereof that Valere Jones-Shaw is duly elected Officer of the Bank of New York Mellon Trust Company, N.A. and that the signature which appears above is the signature of Valere Jones-Shaw and that it is a signature with which I am personally familiar and do certify as to its authenticity. Dated: September 28, 2011 By: Gonzalo Urey Vice President THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A. I, the undersigned, Barbara J. Parrish, Assistant Secretary of The Bank of New York Mellon Trust Company, N.A., a national banking association organized under the laws of the United States (the "Association") and located in the State of California, DO HEREBY CERTIFY that the following individuals are duly appointed and qualified Officers of the Association: Officer Title Signing Authority LOS ANGELES, CA (700 S.Flower Street) Frank P.Sulzberger Managing Director Senior Karen Bayz Managing Director and Chief Financial Officer Senior Maria E.Allison Vice President and Assistant Secretary A, C1,J,N,Pi Eladia Burgos Vice President A,C2,J,P1 Maria Rose Bystrom Vice President&Assistant Secretary A,C1,J,N,PI Gregory Chenail Vice President A,C2,J,N,PI Patricia Cronin Vice President A,C5,J,P2 Delia V. Dailo Vice President A,C2,N,P8 Christopher Davy Vice President A, C6,J,P2 Teresa Fructuoso Vice President&Assistant Secretary A,C2,J,P1 Evelyn T.Furukawa Vice President&Assistant Secretary A,C1,J,PI Mark A. Golder Vice President&Assistant Secretary A,C2,J,P1 Cheryl Hardy Vice President A,C5,J,N,P8 Lisa Infusino Vice President A,C2,J,N,PI Rena Kajita Vice President A,C2,J,P2 Daniel F.Marroquin Vice President A,C5,J,N,P2 Aaron Masters Vice President A,C2,J,N,PI Jose M.Matamoros Vice President A Marina Meza Vice President A, C5,J,P2 Melinda Murrell Vice President A,C3,J,P2 Jacqueline Nowak Vice President A,C2,J,P1 Agnes Obando Vice President A,C2,J,N,PI Linda G.Ojeda Vice President&Assistant Secretary A,C1,J,P1 Jennifer O'Neill Vice President A Teresa Petta Vice President A,C2,J,P1 Aurora Quiazon Vice President A,C6,J,P2 Johanna Tokunaga Vice President&Assistant Secretary A, C2,J,N,PI Fe R. Tuzon Vice President A, C6,J,P2 Gonzalo Urey Vice President A,C6,J,P2 Deborah D.Young Vice President A, C2,J,P1 Melonee Young Vice President A, C2,J,PI Karen Yu Vice President A,C5,J, N, P2 John A. (Alex) Briffett Senior Associate A, C5,J, N,P2 Fanny Chen Senior Associate A,C5,J,N, P2 Cristina D. Garchitorena Senior Associate A,C5,J,P2 Christopher Johnson Senior Associate A, C5,J,N, P2 Kitty Kwong Senior Associate A,C5,J,N,P2 Matthew Moon Senior Associate A,C5,J,N,P2 Zenaida (Gabby) Rodriguez Senior Associate A,C6,J,N,P2 Raymond Torres Senior Associate A, C5,J,N,P2 Valere D.Jones-Shaw Associate A,C3,J,N Amy Kung Associate A,C3,J,N Teresita D.Sanchez Associate C3,P10 I further certify that as of this date they have been authorized to sign on behalf of the Association in discharging or performing their duties in accordance with the senior and limited signing powers provided under Article V, Sections 5.2 and 5.3 of the By-Laws of the Association and the paragraphs indicated above of the signing authority resolution of the Board of Directors of the Association. Attached hereto are true and correct copies of excerpts of the By-Laws of the Association and the signing authority resolutions, which have not been amended or revised since October 15, 2009 and are in full force and effect. IN WITNESS WHEREOF,I have hereunto set my hand and affixed the seal of The Bank of New York Mellon Trust Company,N.A.this 181h day of August 2011. Barbara J.Parrish,Vistant Secretary 2 Extracts from By-Laws of The Bank of New York Mellon Trust Company, N.A. As Amended through October 15,2009 ARTICLE V SIGNING AUTHORITIES Section 5.1 Real Property. Real property owned by the Association in its own right shall not be deeded,conveyed,mortgaged,assigned or transferred except when duly authorized by a resolution of the Board. The Board may from time-to-time authorize officers to deed, convey, mortgage, assign or transfer real property owned by the Association in its own right with such maximum values as the Board may fix in its authorizing resolution. Section 5.2. Senior Signing Powers. Subject to the exception provided in Section 5.1,the President and any Executive Vice President is authorized to accept, endorse, execute or sign any document, instrument or paper in the name of, or on behalf of,the Association in all transactions arising out of, or in connection with, the normal course of the Association's business or in any fiduciary, representative or agency capacity and, when required, to affix the seal of the Association thereto. In such instances as in the judgment of the President, or any Executive Vice President may be proper and desirable, any one of said officers may authorize in writing from time-to-time any other officer to have the powers set forth in this section applicable only to the performance or discharge of the duties of such officer within his or her particular division or function. Any officer of the Association authorized in or pursuant to Section 5.3 to have any of the powers set forth therein, other than the officer signing pursuant to this Section 5.2, is authorized to attest to the seal of the Association on any documents requiring such seal. Section 5.3. Limited Signing Powers. Subject to the exception provided in Section 5.1, in such instances as in the judgment of the President or any Executive Vice President, may be proper and desirable, any one of said officers may authorize in writing from time-to-time any other officer, employee or individual to have the limited signing powers or limited power to affix the seal of the Association to specified classes of documents set forth in a resolution of the Board applicable only to the performance or discharge of the duties of such officer, employee or individual within his or her division or function. Section 5.4. Powers of Attorney. All powers of attorney on behalf of the Association shall be executed by any officer of the Association jointly with the President, any Executive Vice President, or any Managing Director, provided that the execution by such Managing Director of said Power of Attorney shall be applicable only to the performance or discharge of the duties of said officer within his or her particular division or function. Any such power of attorney may, however, be executed by any officer or officers or person or persons who may be specifically authorized to execute the same by the Board of Directors. Section 5.5. Auditor. The Auditor or any officer designated by the Auditor is authorized to certify in the name of, or on behalf of the Association, in its own right or in a fiduciary or representative capacity,as to the accuracy and completeness of any account,schedule of assets, or other document, instrument or paper requiring such certification. SIGNING AUTHORITY RESOLUTION Pursuant to Article V, Section 5.3 of the By-Laws Adopted October 15,2009 RESOLVED that,pursuant to Section 5.3 of the By-Laws of the Association, authority be, and hereby is, granted to the President or any Executive Vice President, in such instances as in the judgment of any one of said officers may be proper and desirable, to authorize in writing from time-to- time any other officer, employee or individual to have the limited signing authority set forth in any one or more of the following paragraphs applicable only to the performance or discharge of the duties of such officer, employee or individual within his or her division or function: (A) All signing authority set forth in paragraphs (B) through (I) below except Level C which must be specifically designated. (B1) Individuals authorized to accept, endorse, execute or sign any bill receivable; certification; contract, document or other instrument evidencing, embodying a commitment with respect to, or reflecting the terms or conditions of, a loan or an extension of credit by the Association; note; and document, instrument or paper of any type, including stock and bond powers, required for purchasing, selling, transferring, exchanging or otherwise disposing of or dealing in foreign currency, derivatives or any form of securities, including options and futures thereon; in each case in transactions arising out of, or in connection with, the normal course of the Association's business. (112) Individuals authorized to endorse, execute or sign any certification; disclosure notice required by law; document, instrument or paper of any type required for judicial, regulatory or administrative proceedings or filings; and legal opinions. (Cl) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in excess of$500,000,000 with single authorization for all transactions. (C2) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in excess of$500,000,000*. (C3) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $500,000,000. (C4) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount in excess of$100,000,000 but not to exceed $500,000,000*. (C5) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money.transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $100,000,000. (C6) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $10,000,000. (C7) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $5,000,000. (C8) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; _draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $1,000,000. (C9) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; . certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to$250,000. (C10) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to$50,000. (C11) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, . certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to$5,000. *Dual authorization is required by any combination of senior officer and/or Sector Head approved designee for non-exempt transactions. Single authorization required for exempt transactions. (M) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $1,000,000. (D2) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $250,000. (W) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $50,000. (D4) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $5,000. (E) Authority to accept, endorse, execute or sign any guarantee of signature to assignments of stocks, bonds or other instruments; certification required for transfers and deliveries of stocks, bonds or other instruments; and document, instrument or paper of any type required in connection with any Individual Retirement Account or Keogh Plan or similar plan. (F) Authority to accept, endorse, execute or sign any certificate of authentication as bond, unit investment trust or debenture trustee and on behalf of the Association as registrar and transfer agent. (G) Authority to accept, endorse, execute or sign any bankers acceptance; letter of credit; and bill of lading. (H) Authority to accept, endorse, execute or sign any document, instrument or paper of any type required in connection with the ownership, management or transfer of real or personal property held by the Association in trust or in connection with any transaction with respect to which the Association is acting in any fiduciary, representative or agency capacity, including the acceptance of such fiduciary, representative or agency account. (I1) Authority to effect the external movement of free delivery of securities and internal transfers resulting in changes of beneficial ownership. (I2) Authority to effect the movement of securities versus payment at market or contract value. (J) Authority to either sign on behalf of the Association or to affix the seal of the Association to any of the following classes of documents: Trust Indentures, Escrow Agreements, Pooling and Servicing Agreements, Collateral Agency Agreements, Custody Agreements, Trustee's Deeds, Executor's Deeds, Personal Representative's Deeds, Other Real Estate Deeds for property not owned by the Association in its own right, Corporate Resolutions, Mortgage Satisfactions, Mortgage Assignments, Trust Agreements, Loan Agreements, Trust and Estate Accountings, Probate Petitions, responsive pleadings in litigated matters and Petitions in Probate Court with respect to Accountings, Contracts for providing customers with Association products or services. (1) Individuals authorized to accept, endorse, execute or sign internal transactions only, (i.e., general ledger tickets); does not include the authority to authorize external money movements, internal money movements or internal free deliveries that result in changes of beneficial ownership. (PI) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in excess of$10,000,000. (P2) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $10,000,000. (N) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to$5,000,000. (N) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $1,000,000. (P5) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $250,000. (P6) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $100,000. (P7) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to$50,000. (P8) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to$25,000. (P9) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $10,000. (P10) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to$5,000. (Pll) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $3,000. RESOLVED, that any signing authority granted pursuant to this resolution may be rescinded by the President or any Executive Vice President and such signing authority shall terminate without the necessity of any further action when the person having such authority leaves the employ of the Association. $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) TRUSTEE'S RECEIPT OF PROCEEDS The Bank of New York Mellon Trust Company, N.A. (`Bank of New York") hereby states and certifies: (a) that the undersigned is an authorized officer of Bank of New York, as trustee (the "Trustee") under the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Huntington Beach Public Financing Authority (the "Authority"), the City of Huntington Beach and the Trustee, and, as such, is familiar with the facts herein certified and is authorized to certify the same; (b) that on the date hereof the Trustee received from Merrill Lynch, Pierce, Fenner & Smith Incorporated on behalf of itself and as representative of E. J. De La Rosa & Co., Inc., as underwriters (collectively, the "Underwriters"), a wire transfer of federal funds in the amount of $38,077,176.76, representing the purchase price for the $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Projects) (the "Bonds"), and has deposited or transferred the following amounts this date as described below: $ 185,916.24 Deposited into the Costs of Issuance Fund 3,082,659.23 Deposited into the Reserve Fund Transferred to the Escrow Bank to be applied to the 23,065,580.37 payment and redemption of the Prior 2001A Bonds Transferred to the Escrow Bank to be applied to the 11,743,020.92 payment and redemption of the Prior 2001B Bonds TOTAL AMOUNT DEPOSITED OR $38.077.176.76 TRANSFERRED THIS DATE (c) that the purchase price of the Bonds was represented to the Trustee by the Underwriters to have been computed as follows: $36,275,000.00 Principal Amount of the Bonds 1,883,667.10 Net Premium (81,490.34) Less Underwriters' Discount $38.077.176.76 TOTAL PURCHASE PRICE RECEIVED OHS WEST261322575.2 Capitalized undefined terms used herein have the meanings ascribed thereto in the Indenture. Dated: September 28, 2011 THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A., as Trustee By: _ '�Av uthorized Officer OHS WEST:261322575.2 2 L"I Davis Wright 64 Oak Knoll Drive u Tremaine I_I_P San AnseEmo,California 94960 (415)459-4535 (415)459-4747(f) September 28,2011 City of Huntington Beach Huntington Beach,California Huntington Beach Public Financing Authority Huntington Beach,California Merrill Lynch, Pierce, Fenner& Smith Incorporated Los Angeles, California E.J. Dc La Rosa& Co., Inc. Los Angeles, California Re: $36,275,000 Huntington Beach Public Financing Authority (Orange Count),, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) Ladies and Gentlemen: We have acted as special counsel to The Bank of New York Mellon 'Trust Company, N.A. ("BNY") acting as (i) trustee under the Indenture of Trust, dated as of September 1, 2011 (the "Indenture"), by and among Huntington Beach Public Financing Authority (the "Authority'), the City of Huntington Beach (the "City") and BNY (ii) escrow bank under the Escrow Agreement, dated as of September I, 2011 (the "Series 2001 A Escrow Agreement"), by and between the Authority and BNY, relating to the Huntington Beach Public Financing Authority(Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project), (iii) escrow bank under the Escrow Agreement, dated as of September 1, 2011 (the "Series 2001 B Escrow Agreement"). by and between the Authority and BNY relating to the Huntington Beach Public Financing Authority (Orange County. California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project), and (iv)dissenination agent under the Continuing Disclosure Certificatc, dated as of September I, 2011 (the "Continuing Disclosure Certificate"), executed by the City and agreed and acknowledged by BNY, relating to the above-referenced bonds (the"Bonds"). Except as set forth herein,capitalized terms used in this opinion letter are defined as set forth in the Indenture. The Series 2001 A Escrow Agreement and the 200113 Escrow Agreement are hereinafter collectively referred to as the "Escrow Agreements." The Indenture, the Escrow Agreements and the Continuing Disclosure Certificate are hereinafter referred to as the""Trustee Documents." In our capacity as counsel to BNY, we have examined originals or copies identified to our satisfaction of. (i) the Articles of Association and lay-Laws of BNY, (d) the Indenture, (iii) the Escrow Anch wgec New Vnrk Scattlrr B.A-raw PortLtnrf Sh..tnr�l>:° w.vw.dwLrum L.n, San Francr co W.r.hmg1on,DC City of Huntington Beach Huntington Beach Public Financing Authority Merrill Lynch, Pierce. Fenner& Smith E.J. De La Rosa& Co. September 28, 2011 Page 2 Agreements, (v) the Continuing Disclosure Certificate and (v) such other records, certificates and documents as we have considered necessary or appropriate for the purpose of the opinion hereinafter rendered. In rendering this opinion, we have relied upon the facts and information obtained from the records of BNY, officers of BNY, and other sources believed by us to be reliable, and have not undertaken to independently verify the accuracy of the factual matters represented, warranted, or certified in such documents. We have assumed the genuineness of all signatures other than the BNY's, the authenticity, of documents, certificates and records submitted to us as originals, the conformity to the originals of all documents, certificates and records submitted to us as copies, the legal capacity of all natural persons executing documents other than BNY, and the completeness and accuracy as of the date of this opinion letter of the factual matters in such documents, certificates and records, which assumptions we have not independently verified. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions. Based upon and subject to the foregoing and subject to the qualifications set forth below, we are of the opinion that: (i) The 'Trustee is a national banking association duly organized and validly existing under the laws of the United States: (ii)The Trustee has duly authorized the execution and delivery of the Trustee Documents: (iii) The Trustee Documents have been duly entered into and delivered by the Trustee and assuming due, valid and binding authorization, execution and delivery by the other parties thereto, constitute the legal, valid and binding obligations of the Trustee enforceable against the Trustee in accordance with its respective terms, except as such enforcement thereof may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance, and other similar laws affecting the rights and remedies of creditors generally, and by the effect of general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, whether considered in a proceeding at law or in equity: (iv) Acceptance by the Trustee of the duties and obligations under the Trustee Documents and compliance %with provisions thereof will not conflict with or constitute a breach of or default under any law or administrative regulation to which the Trustee is subject; (v) All approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the performance by the Trustee City of Huntington Beach Huntington Beach Public Financing Authority Merrill Lynch, Pierce, Fenner & Smith E.J. De La Rosa & Co. September 28. 2011 Page 3 of its duties and obligations under the Trustee Documents have been obtained and are in full force and effect: and (vi)The Bonds have been validly authenticated and delivered by the Trustee. We express no opinion as to any matter other than as expressly set forth above, and, in conjunction therewith, we specifically express no opinion as to the status of the Bonds or the interest thereon under anv federal securities laws. including but not limited to the Securities Act of 1933. as amended, and the Trust Indenture Act of 1939. as amended, or any state securities or "Blue Sky" law, or anv federal. state or local tax law. This opinion is as of the date hereof. and we have undertaken no, and hereby disclaim any, obligation to advise you of any change in any matter set lorth herein even though the changes may affect a legal analysis or conclusion in this opinion letter. Further, this opinion neither implies, nor should it be viewed to imply, an approval or recommendation orally investment in any Bond. We express no opinion as to the effect orally law other than the law of California and the federal haws of the United States of America on the matters referred to herein, in each case as they exist on the date hereof. We express no opinion a ith respect to the laws, regulations, or ordinances of anv county, municipal or other local guy crnmental agency. This opinion is furnished by its solely for your benefit. This opinion letter may be relied upon by you only in connection with the transaction described in the initial paragraph of this opinion letter and may not be used or relied upon by you for any other purpose or by any other person for any purpose whatsoever Without, in each instance,our prior written consent. Very truly yours, Davis WrightTrenaine LLP One Front Street, Suite 1900 MOODY'S San Francisco,CA 94111 415.274.1700 ml INVESTORS SERVICE w .tnoodys.com August 31, 2011 Lori Farrell Finance Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Dear Ms. Farrell: We wish to inform you that on August 31 , 2011, Moody's Investors Service assigned a rating of Aa3 to Huntington Beach (City of) CA's Lease Revenue Refunding Bonds, 2011 Series A issued through Huntington Beach Public Financing Authority, CA. In order for us to maintain the currency of our ratings, we request that you provide ongoing disclosure of current financial and statistical information. Moody's will monitor this rating and reserves the right, at its sole discretion, to revise or withdraw this rating at any time in the future. The rating, as well as any revisions or withdrawals thereof, will be publicly disseminated by Moody's through normal print and electronic media and in response to verbal requests to Moody's Rating Desk. Should you have any questions regarding the above, please do not hesitate to contact me or the analyst assigned to this transaction, Michael Wertz at 415-274-1722, Sincerely, ILV� �/u4f Kenneth B. Kurtz Senior Vice President KBK:MW/cm cc: Mr. Craig Hoshijima Public Financial Management, Inc. 633 W. Fifth St. Suite 6700 Los Angeles, CA 90071 STANDARD One Market Steuart Tower,15th Floor San Francisco,CA 94105-1000 00 4 POOR S tel reference 15 no 11 (�(1 �7 reference no..1184225 September 6, 2011 City of Huntington Beach 2000 Main Street P.O. Box 190 Huntington Beach, CA 92648 Attention: Mr. Robert Sedlak, Accounting Manager Re: DS$35,I60,000 Huntington Beach, California, Refunding Lease Revenue, Series A, dated: Date of delivery, due: September 01,2021 Dear Mr. Sedlak: Pursuant to your request for a Standard & Poor's rating on the above-referenced issuer, we have reviewed the information submitted to us and, subject to the enclosed Terms and Conditions, have assigned a rating of "AA". Standard & Poor's views the outlook for this rating as stable. A copy of the rationale supporting the rating is enclosed. The rating is not investment, financial, or other advice and you should not and cannot rely upon the rating as such. The rating is based on information supplied to us by you or by your agents but does not represent an audit. We undertake no duty of due diligence or independent verification of any information. 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PF Ratings U.S. (05/17/11) No. R-1 ***$2,120,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2012 2.000% September 28, 2011 446216FK4 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: TWO MILLION ONE HUNDRED THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-2 ***$2,960,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2013 2.500% September 28, 2011 446216FL2 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: TWO MILLION NINE HUNDRED XT OUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-3 ***$3,030,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2014 5.000% September 28, 2011 446216FMO REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: THREE MILLION THIRTY THOU ND LLARS The Huntington Beach Public Financing Authority "Au ity"), for value received, hereby promises to pay to the Registered Owner ident' d ve o egistered assigns (the "Registered Owner"), on the Maturity Date identifie o the ncipal Amount identified above in lawful money of the United States of America; o terest thereon at the Interest Rate identified above in like lawful money from to r payable semiannually on March 1 and September 1 in each year, commencin 12 (the "Interest Payment Dates"), until payment of such Principal Amount i 11. is n is issued pursuant to the Indenture, dated as of September 1, 2011 (the " en ure"), and among the Authority, the City of Huntington Beach (the "City") and Th ank o New York Mellon Trust Company, N.A., as trustee. Capitalized undefined ter us her have the meanings ascribed thereto in the Indenture. This Bond shall be es the Interest Payment Date next preceding the date of authentication of this B (u ss thi Bond is authenticated on or before an Interest Payment Date and after the f endar day of the month preceding such Interest Payment Date, whether or not suc ay ' b . ess day, in which event it shall bear interest from such Interest Payment Date, or th Bond is authenticated on or prior to February 15, 2012, in which event it shall bear int om the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-4 ***$3,180,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2015 5.000% September 28, 2011 446216FNS REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: THREE MILLION ONE HUNDRE IG THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-5 ***$3,335,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2016 3.000% September 28, 2011 446216FP3 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: THREE MILLION THREE HUND T TY-FIVE THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of Ar 4W., ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shall i est in the Interest Payment Date next preceding the date of authentication of tI less this Bond is authenticated on or before an Interest Payment Date and after the fte c dar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-6 ***$1,915,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2017 3.000% September 28, 2011 446216FQ1 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION NINE HUNDRED TE THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-7 ***$1,965,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2018 4.000% September 28, 2011 446216FR9 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION NINE HUNDRED T VE THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-8 ***$2,045,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2019 5.000% September 28, 2011 446216FS7 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: TWO MILLION FORTY-FIVE TH SA DOLLARS The Huntington Beach Public Financing Authority "Au ity"), for value received, hereby promises to pay to the Registered Owner ident' d ve o egistered assigns (the "Registered Owner"), on the Maturity Date identifie o the ncipal Amount identified above in lawful money of the United States of America; o terest thereon at the Interest Rate identified above in like lawful money from to r payable semiannually on March 1 and September 1 in each year, commencin 12 (the "Interest Payment Dates"), until payment of such Principal Amount i 11. is n is issued pursuant to the Indenture, dated as of September 1, 2011 (the " en ure"), and among the Authority, the City of Huntington Beach (the "City") and Th ank o New York Mellon Trust Company, N.A., as trustee. Capitalized undefined ter us her have the meanings ascribed thereto in the Indenture. This Bond shall be es the Interest Payment Date next preceding the date of authentication of this B (u ss thi Bond is authenticated on or before an Interest Payment Date and after the f endar day of the month preceding such Interest Payment Date, whether or not suc ay ' b . ess day, in which event it shall bear interest from such Interest Payment Date, or th Bond is authenticated on or prior to February 15, 2012, in which event it shall bear int om the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-9 ***$1,060,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2020 3.000% September 28, 2011 446216FT5 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION SIXTY THOUSA DO RS The Huntington Beach Public Financing Authority "Au ity"), for value received, hereby promises to pay to the Registered Owner ident' d ve o egistered assigns (the "Registered Owner"), on the Maturity Date identifie o the ncipal Amount identified above in lawful money of the United States of America; o terest thereon at the Interest Rate identified above in like lawful money from to r payable semiannually on March 1 and September 1 in each year, commencin 12 (the "Interest Payment Dates"), until payment of such Principal Amount i 11. is n is issued pursuant to the Indenture, dated as of September 1, 2011 (the " en ure"), and among the Authority, the City of Huntington Beach (the "City") and Th ank o New York Mellon Trust Company, N.A., as trustee. Capitalized undefined ter us her have the meanings ascribed thereto in the Indenture. This Bond shall be es the Interest Payment Date next preceding the date of authentication of this B (u ss thi Bond is authenticated on or before an Interest Payment Date and after the f endar day of the month preceding such Interest Payment Date, whether or not suc ay ' b . ess day, in which event it shall bear interest from such Interest Payment Date, or th Bond is authenticated on or prior to February 15, 2012, in which event it shall bear int om the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-10 ***$1,095,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2021 5.000% September 28, 2011 446216FU2 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION NINETY-FIVE T SA DOLLARS The Huntington Beach Public Financing Authority "Au ity"), for value received, hereby promises to pay to the Registered Owner ident' d ve o egistered assigns (the "Registered Owner"), on the Maturity Date identifie o the ncipal Amount identified above in lawful money of the United States of America; o terest thereon at the Interest Rate identified above in like lawful money from to r payable semiannually on March 1 and September 1 in each year, commencin 12 (the "Interest Payment Dates"), until payment of such Principal Amount i 11. is n is issued pursuant to the Indenture, dated as of September 1, 2011 (the " en ure"), and among the Authority, the City of Huntington Beach (the "City") and Th ank o New York Mellon Trust Company, N.A., as trustee. Capitalized undefined ter us her have the meanings ascribed thereto in the Indenture. This Bond shall be es the Interest Payment Date next preceding the date of authentication of this B (u ss thi Bond is authenticated on or before an Interest Payment Date and after the f endar day of the month preceding such Interest Payment Date, whether or not suc ay ' b . ess day, in which event it shall bear interest from such Interest Payment Date, or th Bond is authenticated on or prior to February 15, 2012, in which event it shall bear int om the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-11 ***$1,150,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2022 3.000% September 28, 2011 446216FVO REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION ONE HUNDRED TY USAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-12 ***$1,185,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2023 3.375% September 28, 2011 446216FWS REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION ONE HUNDRED HT IVE THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-13 ***$1,225,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2024 3.625% September 28, 2011 446216FX6 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION TWO HUNDRED -FIVE THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of Ar 4W., ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shall i est in the Interest Payment Date next preceding the date of authentication of tI less this Bond is authenticated on or before an Interest Payment Date and after the fte c dar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-14 ***$1,265,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2025 4.000% September 28, 2011 446216FY4 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION TWO HUNDRED T - VI THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-15 ***$1,315,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2026 4.000% September 28, 2011 446216FZ1 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION THREE HUNDRE IF THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-16 ***$1,370,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2027 4.000% September 28, 2011 446216GA5 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION THREE HUNDRE EV Y THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-17 ***$1,425,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2028 4.125% September 28, 2011 446216GB3 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION FOUR HUNDRED E -FIVE THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of Ar 4W., ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shall i est in the Interest Payment Date next preceding the date of authentication of tI less this Bond is authenticated on or before an Interest Payment Date and after the fte c dar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-18 ***$1,480,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2029 4.250% September 28, 2011 446216GC1 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION FOUR HUNDRED GH THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-19 ***$1,545,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2030 4.250% September 28, 2011 446216GD9 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION FIVE HUNDRED RT VE THOUSAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 No. R-20 ***$1,610,000*** HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) LEASE REVENUE REFUNDING BOND, 2011 SERIES A (CAPITAL IMPROVEMENT REFINANCING PROJECT) MATURITY DATE INTEREST RATE DATED DATE CUSIP NO. September 1, 2031 4.500% September 28, 2011 446216GE7 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: ONE MILLION SIX HUNDRED TH SAND DOLLARS The Huntington Beach Public Financing Authorit e " tho "), for value received, hereby promises to pay to the Registered Owner id i ov r registered assigns (the "Registered Owner"), on the Maturity Date identified e, rincipal Amount identified above in lawful money of the United States of A ay interest thereon at the Interest Rate identified above in like lawful money fro th of, payable semiannually on March 1 and September 1 in each year, commen ' c 2012 (the "Interest Payment Dates"), until payment of such Principal Amoun ull. Bond is issued pursuant to the Indenture, dated as of September 1, 2011 (the " dentur by and among the Authority, the City of Huntington Beach (the "City") a he nk New York Mellon Trust Company, N.A., as trustee. Capitalized undefined His ed ein have the meanings ascribed thereto in the Indenture. This Bond shallR est m the Interest Payment Date next preceding the date of authentication of tIs this Bond is authenticated on or before an Interest Payment Date and after the ftedar day of the month preceding such Interest Payment Date, whether or not suc is usiness day, in which event it shall bear interest from such Interest Payment Date, or unl Bond is authenticated on or prior to February 15, 2012, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or duly provided for). The Principal Amount hereof is payable upon surrender hereof upon maturity at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee, or any successor trustee under the Indenture (the "Trustee"), in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing (the "Office of the Trustee"). Interest hereon is payable by check of the Trustee, mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date. OHS WEST261334162.1 This Bond is one of a series of a duly authorized issue of bonds designated "Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project)" (the "Series 2011A Bonds") in the aggregate principal amount of$36,275,000. The Series 2011A Bonds are issued pursuant to the Indenture, and this reference incorporates the Indenture herein. Pursuant to and as more particularly provided in the Indenture, Additional Bonds may be issued by the Authority payable from Lease Revenues as provided in the Indenture on a parity with the Series 2011A Bonds. The Series 2011A Bonds and any Additional Bonds are collectively referred to as the "Bonds." The Indenture is entered into, and this Bond is issued under, the Marks-Roos Local Bond Pooling Act of 1985, constituting Section 6584 et seq. of the California Government Code (the "Act") and the laws of the State of California. Reference is hereby made to the Indenture and to any and all amendments thereof and supplements thereto for a description of the agreements, conditio covenants and terms securing the Bonds, for the nature, extent and manner of en f me f such agreements, conditions, covenants and terms, for the rights, duties and i e Trustee, for the rights and remedies of the Owners of the Bonds with spe t reto and for the other agreements, conditions, covenants and terms upon which B s e ssued thereunder, to all of which provisions the Registered Owner by acceptan r as s and agrees. The Bonds are special obligations of t uth i payable solely from the Lease Revenues and the other assets pledged therefo enture. Neither the faith and credit nor the taxing power of the Authority, t Ci or State of California, or any political subdivision thereof, is pledged to the p ent of onds. The Lease Revenues consist of all Base Rental Payments payable by th City p uant to the Lease Agreement, dated as of September 1, 2011, by and betwe e a ssee, and the Authority, as lessor, (the "Lease Agreement"), including any pr ym s th of, any Net Proceeds and any amounts received by the Trustee as a result of i ne n with the Trustee's pursuit of remedies under the Lease Agreement upon a as e vent. Subject only to the provisions of the Indenture permitting the applicatio f for the purposes and on the terms and conditions set forth therein, all of the L e es and all amounts on deposit from time to time in the funds and accounts establish u t Indenture (other than the Rebate Fund) are pledged to the payment of the pr al and interest on the Bonds as provided therein, and the Lease Revenues shall not be for any other purpose while any of the Bonds remain Outstanding. Said pledge constitutes a first lien on such assets. In order to secure such pledge of the Lease Revenues, the Authority has sold assigned and transferred to the Trustee, irrevocably and absolutely, without recourse, for the benefit of the Owners, all of its right, title and interest in and to the Site Lease and the Lease Agreement, including, without limitation, the right to receive Base Rental Payments and the right to exercise any remedies provided in the Lease Agreement in the event of a default by the City thereunder; provided, however, that the Authority has retained the rights to indemnification and to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement. The Bonds are issuable as fully registered Bonds without coupons in Authorized Denominations ($5,000 or any integral multiple thereof). OHS WEST261334162.1 2 The Series 2011A Bonds are subject to extraordinary and optional redemption at the times, in the manner, at the redemption prices and upon notice as specified in the Indenture. Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series and maturity in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series and maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exc ge of any tax or other governmental charge required to be paid with respect to such exc e. To the extent and in the manner permitted by the ter f the enture, the provisions of the Indenture may be amended or supplemented by the par to. The Indenture contains provisions permi4ttngu to make provision for the payment of interest on, and the principal and pr of any of the Bond so that such Bonds shall no longer be deemed to be outstan\np terms of the Indenture. This Bond shall not be entitled t &nex tion or security under the Indenture or become valid or obligatory for til the certificate of authentication and registration hereon endorsed shall eted and dated by an authorized signatory of the Trustee. Unless this Bondi n b n authorized representative of The Depository Trust Company to the Trustee re trati of transfer, exchange or payment, and any Bond issued is registered in the e ede & Co. or such other name as requested by an authorized representative of T te) AM Trust Company and anypayment is made to Cede& Co., ANY TRANSFER, PLE ERUSE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON INGFUL since the registered owner hereof, Cede & Co., has an interest herein. It is hereby certified that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law. OHS WEST261334162.1 3 IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of the Chair of the Authority, attested by the manual or facsimile signature of the Secretary of the Authority, all as of the Dated Date identified above. HUNTINGTON BEACH PUBLIC FINANCING AUTH TY By: Chair ATTEST: Secretary (NHS WF.ST:261334162.1 4 CERTIFICATE OF AUTHENTICATION This is one of the Series 2011A Bonds described in the within-mentioned Indenture and registered on the Registration Books. Date: September 28, 2011 THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A.,AS TRUSTEE By: Authorized Signatory Ilk OHS vWST:2613341.62.1 5 ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto whose address and social security or other tax identifying number is , the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature guarantee shall be made by a guarantor Note: The si na 's Assignment must institution participating in the Securities Transfer correspond w' e n (s) as written on the face of the Agents Medallion Program or in such other guarantee within Bo m ry icular without alteration or program acceptable to the Trustee. enlarge me chan w atsoever. OHS WEST:261334162.1 6 $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) RECEIPT FOR BONDS The undersigned, on behalf of Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative (the "Representative") of E. J. De La Rosa & Co., Inc., as underwriters (collectively, the "Underwriters"), hereby states and certifies that the Underwriters received on the date hereof the $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority(Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Bonds"), dated September 28, 2011, all authenticated by The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee") under the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Huntington Beach Public Financing Authority (the "Authority"), the City of Huntington Beach(the "City")and the Trustee, in the form of fully registered book-entry-only bonds. The Representative hereby further states and certifies that all conditions to the obligations of the Underwriters under the Bond Purchase Agreement, dated September 14, 2011, by and among the Underwriters, the Authority and the City,have been satisfied or waived. Capitalized terms not defined herein shall have the meanings ascribed thereto in the Indenture. Dated: September 28, 2011 MERRILL LYNCH,PIERCE,FENNER & SMITH IN ORPORATED, as Representati of th�nderwriters By: thorized Representative OHS WEST:26]322575.2 Bank of America Merrill Lynch $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY LEASE REVENUE REFUNDING BONDS,2011 SERIES A FUND TRANSFER MEMORANDUM TO: Working Group FROM: Bank of America Merrill Lynch('BofAML") DATE: September 25,2011 RE: Fund Transfer Memorandum GENERAL INFORMATION: Sale Date: September 13,2011 Dated/ Delivery: September 28,2011 Pre-Closing: September 27,2011 Orrick,Herrington&Sutcliffe LLP Online deal room Closing: September 28,2011 at 8:00 AM PST/11:00 PM EST Closing Call: (866)637-2663,Code:345-958-3# DELIVERY OF BONDS: The Bonds will be issued as book-entry only through Depository Trust Company (DTC). The Bonds will close via FAST close. FUNDS DUE AT CLOSING: The total net bond proceeds from the Lease Revenue Refunding Bonds, 2011 Series A (the "2011 Series A Bonds") due at closing from BofAML to The Bank of New York Mellon Trust Company, N.A. as the Trustee for the Authority is calculated as follow: 2011 Series A Bonds Par Amount: $36,275,000.00 Plus Original Issue Premium: 1,883,667.10 Less Underwriter's Discount: 81490.34 Net Bond Proceeds Due from BofAML to the Trustee: $38,077,176.76 Page 1 Bank of America Merrill Lynch BofAML to transfer via Fed Funds wire bond proceeds to the Trustee: On the morning of September 28, 2011,BofAML will send a Fed Funds wire to the Trustee in the amount of$38,077,176.76,representing the net bond proceeds per the following wire instructions: Wire Instructions BNY Mellon ABA#021000018 GLA 111-565 TAS#153229 Attn:Fanny Chen 213-630-6407 Ref:Hunt Bch 2011 Bd proceeds The Trustee will further apply the prior 2001A debt service reserve fund ("DSRF") balance of $1,988,156.26 to the 2001A escrow account, and the prior 2001B DSRF balance of $2,620,437.50 to the 2001B escrow account. A portion of the 2011 Series A Bonds will fund the new DSRF in the amount of $3,082,659.23. Once the Trustee has confirmed receipt of the wire from BofAML and has transferred the funds to DTC, Bond Counsel, Trustee, Financial Advisor, and Underwriter will initiate the settlement call to DTC to release the 2011 Series A Bonds. CONTACT INFORMATION FOR CLOSING: ISSUER City of Huntington Beach 2000 Main Street P.O.Box 190 Huntington Beach,CA 92648 Lori Ann Farrell, Director of Finance (714)536-5630 loriann.farTell@surfcity-hb.org Dahle Bulosan,Acting Budget Manager (714)536-5648 dbulosan@surfcity-hb.org Sunny Han,CPA,CFE, Senior Accountant (714)536-5907 sunny.han@surfcity-hb.org BOND COUNSEL Orrick,Herrington &Sutcliffe LLP 4 Park Plaza,Suite 1600 Irvine,CA 92614 Fax: (213)612-2499 Don Field (949)-852-7727 dfield@orrick.com 777 South Figueroa Street,Suite 3200 Los Angeles,CA 90017 Fax: (213)612-2499 Kevin Hale (213)612-2356 khale@orrick.com Page 2 Bank of America Merrill Lynch Winne Tsien (213)612-2336 wtsien@orrick.com Gerald Kim (213)612-2354 gkim@orrick.com Laura Gao (213)612-2131 lgao@orrick.com TRUSTEE The Bank of New York Mellon Trust Company,N.A. 700 South Flower Street,Suite 500 Los Angeles,CA 90017 Fax: (213)630-6215 Valere Jones-Shaw (213)630-6247 Valere.jones-shaw@bnymellon.com Rosanne Romero (213)630-6140 rosanne.romero@bnymellon.com FINANCIAL ADVISOR Public Financial Management 601 South Figueroa,Suite 4500 Los Angeles,CA 90017 Fax: (213)489-4085 Craig Hoshijima (213)404-0079 hosNimac@pfm.com@pfm.com Lindsey Morgenthaler (213)489-4075 morgenthalerl@pfm.com SENIOR MANAGER Bank of America Merrill Lynch 333 South Hope St.,Suite 2310 Los Angeles,CA 90071 Fax: (213) 785-6526 Frank Lauterbur (213)345-9575 frank.lauterbur@bamLcom Cody Press (213)345-9587 cody.press@baml.com Bruce Huang (213)345-9577 bruce.huang@baml.com Geoffrey Sauers (213)345-9583 geoffrey.sauers@bamLcom Page 3 Bank of America Merrill Lynch Syndicate Settlement One Bryant Park New York,NY 10036 Bobby Mascatello (646) 743-1456 robert.mascatello@baml.com Frank Torrillo (646) 743-1474 frank.torrillo@baml.com Michael Cocchiola (646) 743-1438 michael.cocchiola@baml.com Page 4 STRADLING YOCCA CARLSON & RAUTH A PROFESSIONAL CORPORATION ORANGE COUNTY (949)725-4000 ATTORNEYS AT LAW SAN DIEGO 660 NEWPORT CENTER DRIVE,SUITE 1600 (858)720-2150 NEWPORT BEACH,CA 92660 6422 SAN FRANCISCO (415)283-2240 TELEPHONE(949)7254OW SANTA BARBARA FACSIMILE(949)9254100 (805)564-0065 SACRAMENTO (916)449 2350 $35,080,000` HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County,California) Lease Revenue Refunding Bonds,2011 Series A (Capital Improvement Refinancing Project) September 7, 2011 PRELIMINARY BLUE SKY SURVEY Merrill Lynch, Pierce, Fenner&Smith Incorporated, As Representative of the Underwriters Los Angeles, California Ladies and Gentlemen: In connection with the proposed offering of the above-captioned bonds (collectively, the "Bonds"), we submit herewith our survey which indicates the jurisdictions in which the Bonds may be sold by the Underwriters and by any other dealers or brokers in compliance with the "blue sky" or securities laws of such jurisdictions and the Capital Markets Efficiency Act of 1996. We have prepared this survey as attorneys admitted to practice in California and have not obtained opinions of local counsel in other jurisdictions. Our survey is based upon an examination of the statutes and regulations, if any, of the various jurisdictions as reported in standard compilations, upon interpretive advice obtained from representatives of certain securities commissions and upon the information contained in the current form of the preliminary official statement relating to the Bonds furnished by the City of Huntington Beach and the Huntington Beach Public Financing Authority. Our survey is subject to the broad discretionary powers of securities commissioners or other authorized officials to withdraw or deny the exempt status accorded by statute to particular classes of securities, to require additional information and to issue stop orders or to revoke or to suspend permits where they have been granted. Our survey does not purport to cover the requirements or restrictions, if any, with respect to advertising matter. In those jurisdictions where persons registered or licensed as dealers or brokers may sell the Bonds, it *Preliminary, subject to change. DOCSOC/1512832v 1/200313-0003 Merrill Lynch, Pierce, Fenner&Smith Incorporated As Representative of the Underwriters September 7, 2011 Page 2 is assumed that such persons have complied with applicable statutes and regulations concerning dealers or brokers and concerning the registration or licensing of salesmen. Under no circumstances is this Survey to be considered an offer to sell or the solicitation of an offer to buy the Bonds. Very truly yours, STRADLING YOCCA CARLSON& RAUTH DOCSOC/1512832v 1/200313-0003 BLUE SKY SURVEY MEMORANDUM September 7, 2011 (Attachment to letter dated September 7, 2011 of Stradling Yocca Carlson & Rauth) PART I: CALIFORNIA PROVISIONS Persons registered or licensed as brokers or dealers in the State of California may offer or sell the Bonds in the State of California to the public without the Bonds being registered or qualified or any filings being made under the Blue Sky or securities laws thereof. 1 DOCSOC/1512832v 1/200313-0003 PART II: STATES WHERE NO FEE OR NOTICE REQUIREMENTS MAY BE IMPOSED The Bonds may be offered or sold in the following additional jurisdictions to the public by persons registered or licensed as brokers or dealers therein without any fees being paid or notice filings being made under the Blue Sky or securities laws thereof: Alabama Louisiana Ohio(3) Alaska Maine Oklahoma Arizona Maryland Oregon Arkansas Massachusetts Pennsylvania Colorado Michigan Puerto Rico Connecticut Minnesota Rhode Island Delaware Mississippi South Carolina District of Columbia Missouri South Dakota Florida(l) Montana Tennessee Georgia Nebraska Texas Guam Nevada Utah Hawaii(2) New Hampshire Vermont Idaho New Jersey Virginia Illinois New Mexico Washington Indiana New York West Virginia Iowa North Carolina Wisconsin Kansas North Dakota Wyoming Kentucky PART III: STATES WHERE FEE OR NOTICE REQUIREMENTS MAY BE IMPOSED Filings or fees may be required in the following jurisdictions prior to the offering of the Bonds in those jurisdictions: None Notwithstanding the furnishing of this Memorandum or any other information, only persons registered or licensed as brokers or dealers may offer and sell the Bonds and it is the responsibility of such persons to comply with all applicable state and federal requirements with respect to the registration and licensing of brokers and dealers and the sale of the Bonds. Provided that,if there has been a default as to payment of principal or interest,since December 31, 1975,on any obligation of the issuer or a successor to the issuer or any guarantee by the guarantor or any successor to the guarantor of the Bonds,there has been and will be in any offering literature"full and fair disclosure,"as prescribed by the Florida Department of Banking and Finance,of such default or a statement that the disclosure is required and the reason it is not deemed appropriate and material. All offering materials must clearly indicate the name of the person circulating such offering materials and the fact that such person is circulating such offering materials. Provided that,at the time of first sale of the Bonds in this jurisdiction,there is no default in the payment of any of the interest or principal on the Bonds,nor are there any adjudications or pending suits adversely affecting the validity of the Bonds. 2 DOCSOC/1512832v 1/200313-0003 $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County,California) Lease Revenue Refunding Bonds,2011 Series A (Capital Improvement Refinancing Project) September 28, 2011 FINAL BLUE SKY SURVEY Merrill Lynch, Pierce, Fenner&Smith Incorporated, As Representative of the Underwriters Los Angeles, California This will advise you that sales of the above-captioned bonds (the "Bonds") may be made in accordance with our Preliminary Blue Sky Survey dated September 7, 2011. No action has been taken to qualify the Bonds in any state. Very truly yours, STRADLING YOCCA CARLSON& RAUTH DOCSOC/1516838v 1/200313-0003 STRADLING YOCCA CARLSON & RAUTH A PROFESSIONAL CORPORATION ORANGE COUNTY (949)725-4000 ATTORNEYS AT LAW SAN DIEGO 660 NEWPORT CENTER DRIVE,SUITE 1600 (858)926-3000 NEWPORT BEACH,CA 92660-6422 SAN FRANCISCO (415)283-2240 TELEPHONE(949)725-4000 SANTA BARBARA FACSIMILE(949)725-4100 (805)730-6800 SACRAMENTO (916)449-2350 September 28,2011 Merrill Lynch, Pierce, Fenner& Smith Incorporated, as Representative of the Underwriters Los Angeles, California Re: $36,275,000 Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) Ladies and Gentlemen: We have acted as legal counsel to you in connection with your purchase of the above-referenced bonds (the "Bonds") pursuant to the Bond Purchase Agreement dated September 13, 2011 (the "Purchase Agreement"), by and among the Huntington Beach Public Financing Authority (the "Authority"), the City of Huntington Beach (the "City"), and Merrill Lynch, Pierce, Fenner& Smith Incorporated, as representative of itself(the "Representative") and of E. J. De La Rosa& Co., Inc. (collectively,the "Underwriters"). The Bonds are being issued pursuant to an Indenture dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company,N.A., as Trustee. In rendering our opinion, we have examined originals or copies certified or otherwise identified to our satisfaction of (i) the Official Statement dated September 13, 2011 (the "Official Statement") with regard to the Bonds, (ii)the Indenture, (iii)the Lease Agreement dated as of September 1, 2011, by and between the City and the Authority, (iv)the Purchase Agreement, (v)the Continuing Disclosure Certificate dated September 28, 2011 (the "Continuing Disclosure Certificate") executed by the City, (vi) letters, certificates and opinions delivered to you pursuant to the provisions of Section 8(e) of the Purchase Agreement, and (vii) such other documents, certificates, instructions and records as we have considered necessary or appropriate as a basis for our opinion. We have assumed, but not independently verified, that the signatures on all documents, letters, opinions and certificates which we have examined are genuine, that all documents submitted to us are authentic and were duly and properly executed by the parties thereto and that all representations made in the documents that we have reviewed are true and accurate. Based upon and subject to the foregoing, we are of the opinion that: D O C S O C/1516 802v2/200313-0003 Merrill Lynch, Pierce, Fenner& Smith Incorporated, as Representative of the Underwriters September 28, 2011 Page Two G) the provisions of the Continuing Disclosure Certificate comply with the requirements of Rule 15c2-12 under the Securities Exchange Act of 1934; and (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. Although we have not undertaken to check the accuracy, completeness or fairness of, or verified the information contained in, the Official Statement, and are therefore unable to make any representation in that regard, we have participated in conferences prior to the date of the Official Statement with representatives of the Underwriters and representatives of the Authority and the City, including Bond Counsel, Disclosure Counsel and the City Attorney, during which conferences the contents of the Official Statement and related matters were discussed. Based upon the information made available to us in the course of our participation in such conferences, our review of the documents referred to above, our reliance on the documents, certificates, instructions and records and the opinions of counsel described above and our understanding of applicable law, we advise you as a matter of fact but not opinion that no information has come to the attention of the attorneys in the firm representing the Underwriters which caused us to believe that the Official Statement as of its date contained, or as of the date hereof contains, any untrue statement of a material fact, or as of its date omitted, or as of the date hereof omits, to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that we express no view with respect to information related to any financial, statistical, engineering, economic or demographic data or forecasts, numbers, charts, tables, estimates, projections, assessed valuations or any information about CUSIP numbers, the book-entiy only system or The Depository Trust Company contained in the Official Statement, including any of the appendices thereto). Finally, other than reviewing the various certificates and opinions required by the Purchase Agreement regarding the Official Statement, we have not taken any steps since the date of the Official Statement to verify the accuracy of the statements contained in the Official Statement as of the date hereof. This opinion is being rendered to you solely for your benefit in connection with your purchase of the Bonds and is not to be used, circulated, quoted or otherwise referred to for any other purpose without our prior written consent. This letter may not be relied upon by owners of the Bonds. This letter is limited to matters governed by the laws of the State of California and federal securities laws, and we assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction. No opinion is expressed herein with respect to the validity of the Bonds or the compliance with, or applicability of, any "blue sky" laws of any state as they relate to the offer or sale of the Bonds. DOCSOC/1516802v2/200313-0003 Merrill Lynch,Pierce, Fenner& Smith Incorporated, as Representative of the Underwriters September 28, 2011 Page Three Our engagement by you with respect to the Bonds terminates as of the date hereof, and we have not undertaken any duty, and expressly disclaim any responsibility, to advise you as to events occurring after the date hereof with respect to the Bonds or other matters discussed in the Official Statement. Respectfully submitted, KO DOCSOC/1516802v2/2003 1 3-0003 ESCROW AGREEMENT by and between the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Dated as of September 1, 2011 Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project) OHS WEST261252149.6 ESCROW AGREEMENT THIS ESCROW AGREEMENT (this "Escrow Agreement'), executed and entered into as of September 1, 2011, is by and between the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the"Authority"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as escrow bank(the"Escrow Bank") and as the Trustee (as defined herein). RECITALS WHEREAS, there are currently outstanding Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project) (the "Prior Bonds"), in the aggregate principal amount of $24,900,000; and WHEREAS, the Prior Bonds were issued pursuant to the Indenture of Trust, dated as of September 1, 2001 (the "Prior Indenture"), by and between the Authority and BNY Western Trust Company, predecessor to The Bank of New York Mellon Trust Company, N.A., as trustee (the"Prior Trustee"); and WHEREAS, the Prior Bonds are payable from certain lease payments to be made by the City of Huntington Beach (the "City") under the Lease Agreement, dated as of September 1, 2001, by and between the City and the Authority (the"Lease Agreement'), pursuant to which the Authority leased certain real property and the improvements thereto to the City; and WHEREAS, the Escrow Bank is the trustee under the Prior Indenture; and WHEREAS, the Authority and the City have determined that savings will be realized by providing the funds necessary to redeem the Prior Bonds on October 17, 2011 (the "Redemption Date") at a redemption price (the "Redemption Price") equal to 100% of the principal of the Prior Bonds plus the accrued but unpaid interest on the Prior Bonds to the Redemption Date; and WHEREAS, in order to provide the funds necessary to redeem the Prior Bonds, the Authority has issued $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds") pursuant to the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the"Trustee"); and WHEREAS, the Prior Bonds are subject to redemption on the Redemption Date and the City has determined to provide for the call for redemption on the Redemption Date of the Prior Bonds outstanding on the Redemption Date; NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Authority and the Escrow Bank agree as follows: Section 1. Definitions. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Prior Indenture. OHS WEST261252149.6 A-1 Section 2. The Escrow Fund. (a) There is hereby established a fund (the "Escrow Fund") to be held as an irrevocably pledged escrow by the Escrow Bank, which the Escrow Bank shall keep separate and apart from all other funds of the Authority and the Escrow Bank and to be applied solely as provided in this Escrow Agreement. Pending application as provided in this Escrow Agreement, amounts on deposit in the Escrow Fund are hereby pledged and assigned solely to the payment of (i) the principal and interest evidenced by the Prior Bonds coming due on and prior to the Redemption Date, and (ii) the Redemption Price on the Redemption Date, which amounts shall be held in trust by the Escrow Bank for the Owners of the Prior Bonds. (b) Upon the execution and delivery of the Series 2011A Bonds, there shall be deposited in the Escrow Fund $23,065,580.37 received from the proceeds of the sale of the Series 2011A Bonds as provided in Section 2.03 of the Indenture. The Escrow Bank, as Trustee, has informed the City that, as of the date hereof, there is no less than $1,988,156.26 on deposit in the funds and accounts established under the Prior Indenture. On the date hereof, the Escrow Bank shall deposit such moneys in the Escrow Fund. (c) Upon the deposit of moneys pursuant to Section 2(b), the moneys on deposit in the Escrow Fund will be at least equal to an amount sufficient to make the payments required by Section 4 hereof. Section 3. Use of Moneys. (a) The Escrow Bank hereby acknowledges deposit of the moneys described in Section 2(b) and agrees to hold such moneys uninvested and to make all payments required by Section 4 hereof. (b) No moneys deposited with the Escrow Bank pursuant to this Escrow Agreement shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the Prior Bonds as provided by Section 4 hereof. (c) The Owners of the Prior Bonds shall have a first and exclusive lien on the moneys in the Escrow Fund until such moneys are used and applied as provided in this Escrow Agreement. Section 4. Payment of Prior Bonds. From the uninvested money held in the Escrow Fund, the Escrow Bank shall, on the Redemption Date, shall pay the Redemption Price in accordance with the terms of the Prior Indenture. To the extent that the amount on deposit in the Escrow Fund on the Redemption Date is in excess of the amount necessary to make the required payments with respect to the Prior Bonds, as shown in the then applicable escrow verification of the nationally recognized firm of independent certified public accountants, such excess shall be transferred to the Trustee for deposit in the Interest Account of the Payment Fund established under the Indenture. Section 5. Irrevocable Instructions to Mail Notices. The Authority hereby irrevocably designates the Prior Bonds for prior redemption on the Redemption Date as indicated in Section OHS WEST261252149.6 2 4 hereof and hereby irrevocably instructs the Escrow Bank to give, in accordance with Section 4.03 of the Prior Indenture, notice of redemption of the Prior Bonds. Section 6. Performance of Duties. The Escrow Bank agrees to perform the duties set forth herein and agrees that the irrevocable instructions to the Escrow Bank herein provided are in a form satisfactory to it. Section 7. No Authority to Make Investments. The Escrow Bank shall have no power or duty to invest any funds held under this Escrow Agreement. The Escrow Bank shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided in this Escrow Agreement. Section 8. Indemnity. To the extent permitted by law, the Authority hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Bank and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees, expenses and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time (whether or not also indemnified against the same by the Authority or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds deposited therein, and any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Agreement; provided, however, that the Authority shall not be required to indemnify the Escrow Bank against the Escrow Bank's own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Bank's respective successors, assigns, agents and employees or the material breach by the Escrow Bank of the terms of this Escrow Agreement. In no event shall the Authority or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement. Section 9. Responsibilities of Escrow Bank. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Agreement, the establishment of the Escrow Funds, the acceptance of the moneys deposited therein, the sufficiency of the uninvested moneys held hereunder to accomplish the redemption of the Prior Bonds, or any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the "Whereas" clauses herein shall be taken as the statements of the Authority, and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the uninvested moneys to accomplish the redemption of the Prior Bonds pursuant to the Prior Indenture or to the validity of this Escrow Agreement as to the Authority and, except as otherwise provided herein, the Escrow Bank shall incur no liability in respect thereof. The OHS wEST:261252149.6 3 Escrow Bank shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Escrow Agreement. The Escrow Bank may consult with counsel, who may or may not be counsel to the Authority, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter may be deemed to be conclusively established by a written certification of the Authority. Whenever the Escrow Bank shall deem it necessary or desirable that a matter specifically requiring an opinion of counsel of recognized standing in the field of law relating to municipal bonds be proved or established prior to taking, suffering, or omitting any such action, such matter may be established only by such opinion of counsel of recognized standing in the field of law relating to municipal bonds. No provision of this Escrow Agreement shall require the Escrow Bank to risk or advance its own funds. The Escrow Bank shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Bank may execute any of its powers or duties hereunder through attorneys, agents or receivers and shall not be answerable for the actions of such attorneys, agents or receivers if selected by it with reasonable care. The Escrow Bank agrees to accept and act upon instructions or directions pursuant to this Escrow Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Escrow Bank shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority elects to give the Escrow Bank e-mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Bank in its discretion elects to act upon such instructions, the Escrow Bank's understanding of such instructions shall be deemed controlling. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Bank's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties. Section 10. Amendments. The Authority and the Escrow Bank may (but only with the consent of the Owners of all of the Prior Bonds and the Insurer) amend this Escrow Agreement or enter into agreements supplemental to this Escrow Agreement. Section 11. Term. This Escrow Agreement shall commence upon its execution and delivery and shall terminate on the date upon which the Prior Bonds have been paid in accordance with this Escrow Agreement. OHS WEST:261252149.6 4 Section 12. Compensation. The Authority shall from time to time pay or cause to be paid to the Escrow Bank the agreed upon compensation for its services to be rendered hereunder, and reimburse the Escrow Bank for all of its reasonable advances in the exercise and performance of its duties hereunder; provided, however, that under no circumstances shall the Escrow Bank be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Bank under this Escrow Agreement or otherwise. Section 13. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Authority or the Escrow Bank to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. Section 14. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. Section 15. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California. THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A., as Escrow Bank and Trustee By: VA,,---- 0thorized Officer HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: Joe Carchio, Chair of the Board of Directors (NHS WES'I':261252149.6 5 Section 12. Compensation. The Authority shall from time to time pay or cause to be paid to the Escrow Bank the agreed upon compensation for its services to be rendered hereunder, and reimburse the Escrow Bank for all of its reasonable advances in the exercise and performance of its duties hereunder; provided, however, that under no circumstances shall the Escrow Bank be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Bank under this Escrow Agreement or otherwise. Section 13. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Authority or the Escrow Bank to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. Section 14. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. Section 15. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California. THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A., as Escrow Bank and Trustee By: Authorized Officer HUNT GTON BE CH PUBLIC FINA LING A ORITY By: Joe Carchio, 'Chair f the Board of Directors OHS WEST:261252149.6 5 ESCROW AGREEMENT by and between the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Dated as of September 1, 2011 Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project) OHS WEST261259515.6 ESCROW AGREEMENT THIS ESCROW AGREEMENT (this "Escrow Agreement'), executed and entered into as of September 1, 2011, is by and between the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the"Authority"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as escrow bank(the"Escrow Bank") and as the Trustee (as defined herein). RECITALS WHEREAS, there are currently outstanding Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project) (the "Prior Bonds"), in the aggregate principal amount of $13,960,000; and WHEREAS, the Prior Bonds were issued pursuant to the Indenture of Trust, dated as of December 1, 2001 (the "Prior Indenture"), by and between the Authority and BNY Western Trust Company, predecessor to The Bank of New York Mellon Trust Company, N.A., as trustee (the"Prior Trustee"); and WHEREAS, the Prior Bonds are payable from certain lease payments to be made by the City of Huntington Beach (the "City") under the Lease Agreement, dated as of December 1, 2001, by and between the City and the Authority (the"Lease Agreement'), pursuant to which the Authority leased certain real property and the improvements thereto to the City; and WHEREAS, the Escrow Bank is the trustee under the Prior Indenture; and WHEREAS, the Authority and the City have determined that savings will be realized by providing the funds necessary to redeem the Prior Bonds on October 17, 2011 (the "Redemption Date") at a redemption price (the "Redemption Price") equal to 102% of the principal of the Prior Bonds plus the accrued but unpaid interest on the Prior Bonds to the Redemption Date; and WHEREAS, in order to provide the funds necessary to redeem the Prior Bonds, the Authority has issued $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds") pursuant to the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the"Trustee"); and WHEREAS, the Prior Bonds are subject to redemption on the Redemption Date and the City has determined to provide for the call for redemption on the Redemption Date of the Prior Bonds outstanding on the Redemption Date; NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Authority and the Escrow Bank agree as follows: Section 1. Definitions. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Prior Indenture. OHS WEST261259515.6 A-1 Section 2. The Escrow Fund. (a) There is hereby established a fund (the "Escrow Fund") to be held as an irrevocably pledged escrow by the Escrow Bank, which the Escrow Bank shall keep separate and apart from all other funds of the Authority and the Escrow Bank and to be applied solely as provided in this Escrow Agreement. Pending application as provided in this Escrow Agreement, amounts on deposit in the Escrow Fund are hereby pledged and assigned solely to the payment of (i) the principal and interest evidenced by the Prior Bonds coming due on and prior to the Redemption Date, and (ii) the Redemption Price on the Redemption Date, which amounts shall be held in trust by the Escrow Bank for the Owners of the Prior Bonds. (b) Upon the execution and delivery of the Series 2011A Bonds, there shall be deposited in the Escrow Fund $11,743,020.92 received from the proceeds of the sale of the Series 2011A Bonds as provided in Section 2.03 of the Indenture. The Escrow Bank, as Trustee, has informed the City that, as of the date hereof, there is no less than $2,620,437.50 on deposit in the funds and accounts established under the Prior Indenture. On the date hereof, the Escrow Bank shall deposit such moneys in the Escrow Fund. (c) Upon the deposit of moneys pursuant to Section 2(b), the moneys on deposit in the Escrow Fund will be at least equal to an amount sufficient to make the payments required by Section 4 hereof. Section 3. Use of Moneys. (a) The Escrow Bank hereby acknowledges deposit of the moneys described in Section 2(b) and agrees to hold such moneys uninvested and to make all payments required by Section 4 hereof. (b) No moneys deposited with the Escrow Bank pursuant to this Escrow Agreement shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the Prior Bonds as provided by Section 4 hereof. (c) The Owners of the Prior Bonds shall have a first and exclusive lien on the moneys in the Escrow Fund until such moneys are used and applied as provided in this Escrow Agreement. Section 4. Payment of Prior Bonds. From the uninvested money held in the Escrow Fund, the Escrow Bank shall, on the Redemption Date, shall pay the Redemption Price in accordance with the terms of the Prior Indenture. To the extent that the amount on deposit in the Escrow Fund on the Redemption Date is in excess of the amount necessary to make the required payments with respect to the Prior Bonds, as shown in the then applicable escrow verification of the nationally recognized firm of independent certified public accountants, such excess shall be transferred to the Trustee for deposit in the Interest Account of the Payment Fund established under the Indenture. Section 5. Irrevocable Instructions to Mail Notices. The Authority hereby irrevocably designates the Prior Bonds for prior redemption on the Redemption Date as indicated in Section OHS WEST261259515.6 2 4 hereof and hereby irrevocably instructs the Escrow Bank to give, in accordance with Section 4.03 of the Prior Indenture, notice of redemption of the Prior Bonds. Section 6. Performance of Duties. The Escrow Bank agrees to perform the duties set forth herein and agrees that the irrevocable instructions to the Escrow Bank herein provided are in a form satisfactory to it. Section 7. No Authority to Make Investments. The Escrow Bank shall have no power or duty to invest any funds held under this Escrow Agreement. The Escrow Bank shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided in this Escrow Agreement. Section 8. Indemnity. To the extent permitted by law, the Authority hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Bank and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees, expenses and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time (whether or not also indemnified against the same by the Authority or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds deposited therein, and any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Agreement; provided, however, that the Authority shall not be required to indemnify the Escrow Bank against the Escrow Bank's own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Bank's respective successors, assigns, agents and employees or the material breach by the Escrow Bank of the terms of this Escrow Agreement. In no event shall the Authority or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement. Section 9. Responsibilities of Escrow Bank. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Agreement, the establishment of the Escrow Funds, the acceptance of the moneys deposited therein, the sufficiency of the uninvested moneys held hereunder to accomplish the redemption of the Prior Bonds, or any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the "Whereas" clauses herein shall be taken as the statements of the Authority, and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the uninvested moneys to accomplish the redemption of the Prior Bonds pursuant to the Prior Indenture or to the validity of this Escrow Agreement as to the Authority and, except as otherwise provided herein, the Escrow Bank shall incur no liability in respect thereof. The OHS wEST:261259sls.6 3 Escrow Bank shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Escrow Agreement. The Escrow Bank may consult with counsel, who may or may not be counsel to the Authority, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter may be deemed to be conclusively established by a written certification of the Authority. Whenever the Escrow Bank shall deem it necessary or desirable that a matter specifically requiring an opinion of counsel of recognized standing in the field of law relating to municipal bonds be proved or established prior to taking, suffering, or omitting any such action, such matter may be established only by such opinion of counsel of recognized standing in the field of law relating to municipal bonds. No provision of this Escrow Agreement shall require the Escrow Bank to risk or advance its own funds. The Escrow Bank shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Bank may execute any of its powers or duties hereunder through attorneys, agents or receivers and shall not be answerable for the actions of such attorneys, agents or receivers if selected by it with reasonable care. The Escrow Bank agrees to accept and act upon instructions or directions pursuant to this Escrow Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Escrow Bank shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority elects to give the Escrow Bank e-mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Bank in its discretion elects to act upon such instructions, the Escrow Bank's understanding of such instructions shall be deemed controlling. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Bank's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties. Section 10. Amendments. The Authority and the Escrow Bank may (but only with the consent of the Owners of all of the Prior Bonds and the Insurer) amend this Escrow Agreement or enter into agreements supplemental to this Escrow Agreement. Section 11. Term. This Escrow Agreement shall commence upon its execution and delivery and shall terminate on the date upon which the Prior Bonds have been paid in accordance with this Escrow Agreement. OHS WEST:261259sls.6 4 Section 12. Compensation. The Authority shall from time to time pay or cause to be paid to the Escrow Bank the agreed upon compensation for its services to be rendered hereunder, and reimburse the Escrow Bank for all of its reasonable advances in the exercise and performance of its duties hereunder; provided, however, that under no circumstances shall the Escrow Bank be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Bank under this Escrow Agreement or otherwise. Section 13. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Authority or the Escrow Bank to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. Section 14. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. Section 15. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Bank and Trustee By: �J uthorized Officer HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: Joe Carchio, Chair of the Board of Directors OHS WES"1:261259515.6 5 Section 12. Compensation. The Authority shall from time to time pay or cause to be paid to the Escrow Bank the agreed upon compensation for its services to be rendered hereunder, and reimburse the Escrow Bank for all of its reasonable advances in the exercise and performance of its duties hereunder; provided, however, that under no circumstances shall the Escrow Bank be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Bank under this Escrow Agreement or otherwise. Section 13. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Authority or the Escrow Bank to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. Section 14. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. Section 15. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California. THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A., as Escrow Bank and Trustee By: Authorized Officer HUNTINGTON BEACH PUBLIC FINAN NG A ORITY By: Joe Carchio, Chair f the Board of Directors OHS WEST:261259515.6 5 The Arbitrage Group, Inc. $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) No The Arbitrage Group, Inc. 3401 Louisiana Street Telephone 713 522 8527 www.thearbitragegroup.com Suite 238 Facsimile 713 522 8471 Houston,Texas 77002 September 28, 2011 Huntington Beach Public Financing Authority Public Financial Management, Inc. Huntington Beach, California Los Angeles, California Orrick, Herrington&Sutcliffe LLP The Bank of New York Mellon Trust Company, N.A. Huntington Beach, California Los Angeles, California Merrill Lynch,Pierce, Fenner&Smith Incorporated, as Representative of the Underwriters Los Angeles, California $36,275,000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) The Huntington Beach Public Financing Authority(the"Authority")proposes to issue the above ref- erenced bonds(the 'Bonds")which are dated September 28, 2011 and will be issued on September 28, 2011. A portion of the proceeds of the Bonds will be placed in an irrevocable trust as an initial cash deposit to be used solely to refund that portion of the Authority's Lease Revenue Bonds, 2001 Series A(Capi- tal Improvement Financing Project) (the"2001 Series A Refunded Bonds") described below: Maturities and Maturities and Sinking Fund Optional Original Amount Sinking Fund Dates to be Redemption Amount to be Dates to be Optionally Date and Series Issued Dated Date Refunded Refunded Redeemed Price 2001 A $31,360,000 09-12-2001 $24,900,000 09-01-2012- 09-01-2012- 10-17-2011 09-01-2031, 09-01-2031, @ 100% Inclusive Inclusive ■■The Arbitrage Group, Inc. Huntington Beach Public Financing Authority September 28, 2011 Page 2 A portion of the proceeds of the Bonds will be placed in an irrevocable trust as an initial cash deposit to be used solely to refund that portion of the Authority's Lease Revenue Bonds, 2001 Series B (Capi- tal Improvement Refinancing Project)(the "2001 Series B Refunded Bonds" and together with the 2001 Series A Refunded Bonds, the"Refunded Bonds") described below: Maturities and Maturities and Sinking Fund Optional Original Amount Sinking Fund Dates to be Redemption Amount to be Dates to be Optionally Date and Series Issued Dated Date Refunded Refunded Redeemed Price 2001 B $31,095,000 12-05-2001 $13,960,000 08-01-2012- 08-01-2012- 10-17-2011 08-01-2019, 08-01-2019, @ 102% Inclusive Inclusive At your request, we have independently verified the arithmetical accuracy of the computations provid- ed to us by Merrill Lynch,Pierce, Fenner&Smith Incorporated which indicate: (1) the sufficiency of the initial cash deposit to pay to and at early redemption the principal, interest and early redemption premium on the 2001 Series A Refunded Bonds; and, (2)the sufficiency of the initial cash deposit to pay to and at early redemption the principal, interest and early redemption premium on the 2001 Se- ries B Refunded Bonds. The original computations, along with certain assumptions and information, were furnished to us by Merrill Lynch,Pierce, Fenner&Smith Incorporated on behalf of the Authority. We have relied solely on the assumptions and information provided to us and have not made any study or evaluation of them, except as noted below. We express no opinion on the reasonableness of the assumptions, or the likelihood that the debt service requirements of the Refunded Bonds will be paid as described in the accompanying Exhibits. In the course of our engagement, we were furnished by Public Financial Management,Inc. and Mer- rill Lynch,Pierce,Fenner&Smith Incorporated with excerpts from the Official Statements for the Refunded Bonds and the Official Statement for the Bonds. We compared the information contained in the schedules provided by Merrill Lynch,Pierce,Fenner&Smith Incorporated with certain infor- mation set forth in such documents with respect to prices,principal payment dates and amounts, inter- est payment dates and rates,yields, and redemption dates and prices. We found that the information contained in such schedules provided to us by Merrill Lynch,Pierce,Fenner&Smith Incorporated was in agreement with the above-mentioned information set forth in such documents. ■■The Arbitrage Group, Inc. Huntington Beach Public Financing Authority September 28, 2011 Page 3 In our opinion,based on the assumptions and information provided by Merrill Lynch,Pierce, Fenner &Smith Incorporated on behalf of the Authority, the computations in the schedules provided to us are arithmetically accurate. The computations in the accompanying Exhibits prepared by us and the com- parable schedules provided to us indicate that: (1) an initial cash deposit of$25,053,736.63 will be sufficient to pay to and at early redemption the principal, interest and early redemption premium on the 2001 Series A Refunded Bonds; and, (2) an initial cash deposit of$14,363,458.42 will be sufficient to pay to and at early redemption the principal, interest and early redemption premium on the 2001 Series B Refunded Bonds. The terms of our engagement are such that we have no obligation to update this report or to verify any revised computation because of events and transactions occurring subsequent to the date of this re- port. This report is issued solely for your information and assistance in connection with the issuance of the Bonds. This report is not to be quoted or referred to without our prior written consent. Very truly yours, flu OAk O-Lf �hc. Exhibits A-1. 2001 Series A Escrow Cash Flow A-2. 2001 Series B Escrow Cash Flow B-1. Debt Service Requirements of the 2001 Series A Refunded Bonds to Maturity B-2. Debt Service Requirements of the 2001 Series A Refunded Bonds to Early Redemption B-3. Debt Service Requirements of the 2001 Series B Refunded Bonds to Maturity B-4. Debt Service Requirements of the 2001 Series B Refunded Bonds to Early Redemption Exhibit A-I 2001 Series A Escrow Cash Flow Huntington Beach Public Financing Authority (Orange County, California) Debt Service Requirements Beginning of the 2001 Series A Ending Cash Refunded Bonds Cash Date Balance to Early Redemption Balance 09/28/11 $25,053,736.63 $25,053,736.63 10/17/11 $25,053,736.63 $25,053,736.63 $0.00 $25,053,736.63 Exhibit A-2 2001 Series B Escrow Cash Flow Huntington Beach Public Financing Authority (Orange County, California) Debt Service Requirements Beginning of the 2001 Series B Ending Cash Refunded Bonds Cash Date Balance to Early Redemption Balance 09/28/11 $14,363,458.42 $14,363,458.42 10/17/11 $14,363,458.42 $14,363,458.42 $0.00 $14,363,458.42 Exhibit B-I Debt Service Requirements of the 2001 Series A Refunded Bonds to Maturity Huntington Beach Public Financing Authority (Orange County, California) Debt Service Requirements of the 2001 Series A Coupon Refunded Bonds Date Principal Rate Interest to Maturity 03/01/12 $601,578.13 $601,578.13 09/01/12 $785,000.00 4.125% 601,578.13 1,386,578.13 03/01/13 585,387.50 585,387.50 09/01/13 815,000.00 4.250% 585,387.50 1,400,387.50 03/01/14 568,068.75 568,068.75 09/01/14 850,000.00 4.375% 568,068.75 1,418,068.75 03/01/15 549,475.00 549,475.00 09/01/15 885,000.00 4.500% 549,475.00 1,434,475.00 03/01/16 529,562.50 529,562.50 09/01/16 925,000.00 4.500% 529,562.50 1,454,562.50 03/01/17 508,750.00 508,750.00 09/01/17 970,000.00 4.625% 508,750.00 1,478,750.00 03/01/18 486,318.75 486,318.75 09/01/18 1,010,000.00 4.750% 486,318.75 1,496,318.75 03/01/19 462,331.25 462,331.25 09/01/19 1,060,000.00 4.750% 462,331.25 1,522,331.25 03/01/20 437,156.25 437,156.25 09/01/20 1,110,000.00 4.750% 437,156.25 1,547,156.25 03/01/21 410,793.75 410,793.75 09/01/21 1,165,000.00 4.750% 410,793.75 1,575,793.75 03/01/22 383,125.00 383,125.00 09/01/22 1,220,000.00 5.000% 383,125.00 1,603,125.00 03/01/23 352,625.00 352,625.00 09/01/23 1,280,000.00 5.000% 352,625.00 1,632,625.00 03/01/24 320,625.00 320,625.00 09/01/24 1,345,000.00 5.000% 320,625.00 1,665,625.00 03/01/25 287,000.00 287,000.00 09/01/25 1,410,000.00 5.000% 287,000.00 1,697,000.00 03/01/26 251,750.00 251,750.00 09/01/26 1,480,000.00 5.000% 251,750.00 1,731,750.00 03/01/27 214,750.00 214,750.00 09/01/27 1,555,000.00 5.000% 214,750.00 1,769,750.00 Exhibit B-I Debt Service Requirements of the 2001 Series A Refunded Bonds to Maturity Huntington Beach Public Financing Authority (Orange County, California) Debt Service Requirements of the 2001 Series A Coupon Refunded Bonds Date Principal Rate Interest to Maturity 03/01/28 175,875.00 175,875.00 09/01/28 1,635,000.00 5.000% 175,875.00 1,810,875.00 03/01/29 135,000.00 135,000.00 09/01/29 1,710,000.00 5.000% 135,000.00 1,845,000.00 03/01/30 92,250.00 92,250.00 09/01/30 1,800,000.00 5.000% 92,250.00 1,892,250.00 03/01/31 47,250.00 47,250.00 09/01/31 1,890,000.00 5.000% 47,250.00 1,937,250.00 $24,900,000.00 $14,799,343.76 $39,699,343.76 Exhibit B-2 Debt Service Requirements of the 2001 Series A Refunded Bonds to Early Redemption Huntington Beach Public Financing Authority (Orange County, California) Debt Service Requirements of the 2001 Series A Coupon Refunded Bonds Date Principal Rate Interest to Early Redemption 10/17/11 $24,900,000.00 * $153,736.63 $25,053,736.63 * Coupon rates are as shown in the Debt Service Requirements of the 2001 Series A Refunded Bonds to Maturity. Exhibit B-3 Debt Service Requirements of the 2001 Series B Refunded Bonds to Maturity Huntington Beach Public Financing Authority (Orange County, California) Debt Service Requirements Early of the 2001 Series B Coupon Redemption Refunded Bonds Date Principal Rate Premium Interest to Maturity 02/01/12 $294,296.25 $294,296.25 08/01/12 $2,030,000.00 3.850% 2.000% 294,296.25 2,324,296.25 02/O1/13 255,218.75 255,218.75 08/O1/13 2,110,000.00 4.000% 2.000% 255,218.75 2,365,218.75 02/O1/14 213,018.75 213,018.75 08/O1/14 2,190,000.00 4.125% 2.000% 213,018.75 2,403,018.75 02/0 1/15 167,850.00 167,850.00 08/O1/15 2,280,000.00 4.250% 2.000% 167,850.00 2,447,850.00 02/O1/16 119,400.00 119,400.00 08/O1/16 2,375,000.00 4.250% 2.000% 119,400.00 2,494,400.00 02/O1/17 68,931.25 68,931.25 08/O1/17 950,000.00 4.375% 2.000% 68,931.25 1,018,931.25 02/O1/18 48,150.00 48,150.00 08/O1/18 990,000.00 4.500% 2.000% 48,150.00 1,038,150.00 02/O1/19 25,875.00 25,875.00 08/O1/19 1,035,000.00 5.000% 2.000% 25,875.00 1,060,875.00 $13,960,000.00 $2,385,480.00 $16,345,480.00 Exhibit B-4 Debt Service Requirements of the 2001 Series B Refunded Bonds to Early Redemption Huntington Beach Public Financing Authority (Orange County, California) Debt Service Requirements Early of the 2001 Series B Coupon Redemption Refunded Bonds Date Principal Rate Premium Interest to Early Redemption 10/17/11 $13,960,000.00 * $279,200.00 $124,258.42 $14,363,458.42 * Coupon rates are as shown in the Debt Service Requirements of the 2001 Series B Refunded Bonds to Maturity. This Document was electronically recorded by RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY First American National Commercial NATIONAUCOMMERCIAL SERVICES COMMERCIAUINDUSTRIAL DIVISION Recorded in Official Records,Orange County Tom Daly, Clerk-Recorder TO BE RECORDED AND WHEN RECORDED (IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 21.00 RETURN TO: 2011000479930 12:12pm 09/28/11 Orrick,Herrington&Sutcliffe LLP 66 406 S15 R01 2 2050 Main Street,Suite 1100 0.00 0.00 0.00 0.00 3.00 0.00 0.00 0.00 Irvine,CA 92614-2558 Attention: Donald S.Field,Esq. THIS TRANSACTION IS- EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. TERMINATION AGREEMENT by and among CITY OF HUNTINGTON BEACH, HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Dated as of September 1, 2011 relating to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project) OHS WEST:261293279.4 TERMINATION AGREEMENT THIS TERMINATION AGREEMENT (this "Termination Agreement") executed and entered into as of September 1, 2011, is by and among the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the "City"), the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California(the "Authority") and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.. (successor to BNY Western Trust Company), a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee (the"Trustee"). RECITALS WHEREAS, the City and the Authority previously entered into a Site and Facility Lease, dated as of September 1, 2001 (the "Site and Facility Lease"), pursuant to which the City leased to the Authority certain real property, and improvements thereon, described in Exhibit A hereto (the "Property"); WHEREAS,the Site and Facility Lease was recorded on September 12, 2001, as Document No. 20010643938,in the Official Records of the County of Orange; WHEREAS, the City and the Authority previously entered into a Lease Agreement, dated as of September 1, 2001 (the "Lease"), pursuant to which the Authority leased the Property to the City; WHEREAS, the Memorandum of Lease Agreement, dated as of September 1, 2001 (the "Memorandum of Lease"), by and between the City and the Authority, evidencing the Lease Agreement, was recorded on September 12, 2001, as Document No. 20010643939, in the Official Records of the County of Orange; WHEREAS,pursuant to the Indenture, dated as of September 1, 2001 (the"Indenture"),by and between the Authority and the Trustee, the Authority assigned to the Trustee substantially all of its right,title and interest in and to the Lease; WHEREAS, the Memorandum of Assignment, dated as of September 1, 2001 (the "Memorandum of Assignment"), by and between the Authority and the Trustee, evidencing the assignment of the Lease, was recorded on September 12, 2001, as Document No. 20010643940, in the Official Records of the County of Orange; WHEREAS, subject to the provisions hereof,the City, the Authority and the Trustee desire to terminate the terms of the Site and Facility Lease, the Lease and the Memorandum of Assignment as they relate to the Property, and the Authority and the Trustee desire to quitclaim to the City any right,title or interest that either may have in the Property; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this OHS WEST:261293279.4 i I Termination Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Termination Agreement; NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the parties hereto agree as follows: ARTICLE I TERMINATION The City has paid all of the Lease Payments pursuant to, and in accordance with the terms of, the Lease and, therefore, the Site and Facility Lease, the Lease and the Memorandum of Assignment are terminated and all of all obligations of the City, the Authority and the Trustee thereunder have ceased. ARTICLE II REVERSION All right, title and interest of the Authority and the Trustee in the Property under the Site and Facility Lease, the Lease, Memorandum of Assignment and the Indenture shall hereupon revert to the City free and clear of any interest of the Authority and the Trustee. ARTICLE III MISCELLANEOUS Section 3.01. Bindinst Effect. This Termination Agreement shall inure to the benefit of and shall be binding upon the City, the Authority and the Trustee and their respective successors and assigns. Section 3.02. Severability. In the event any provision of this Termination Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 3.03. Execution in Counterparts. This Termination Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 3.04. Applicable Law. This Termination Agreement shall be governed by and construed in accordance with the laws of the State of California. OHS WEST:261293279.4 2 IN WITNESS WHEREOF, the parties hereto have caused this Termination Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF HUNTINGTON BEACH By: (i/�-• Lon Ann Farrell, Director of Finance HUNT GTON B H PUBLIC FINAN ING A HORITY By. Joe Carchio, Chair the Board of Directors 1 TH OF NEW YORK MELLON TRUST COMPANY,N.A., as Trustee By. Authorized Officer i I i i i I i i OHS WEST:261293279.4 3 I: i i i STATE OF CALIFORNIA ) ss i COUNTY OF ORANGE ) On before me, f�-� - CSC' Notary Public, personally appeared Lori Ann Farrell, who proved to me on the basis of satisfactory evidence to be the persono whose name is subscribed to the within instrument and acknowledged to me that s e y executed the same in-his er it authorized capacity(jes), and that by -h} er it signatures on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. P L. ESP Commission# 1857021 [ Z;`m Notary Public-California z Z Orange County D M Comm.Ex ires Au 4,2013 Signature [SEAL] I� i t- i STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On /� before me, - �°�9YC�1� Notary Public, personally appeared Joe Carchio, who proved to me on the basis of satisfactory evidence to be the personn4 whose name subscribed to the within instrument and acknowledged to me that Cfia�� executed the same in is weir authorized capacity(ie/s), and that by s signature( on the instrument the person(, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. P L. ESPARZA Commission# 1857021 z Notary Public -California Z z Z Orange County D Nly Comm.Expires Au .2013 t I Signature [SEAL] 1 i I i I i IN WITNESS WHEREOF, the parties hereto have caused this Termination Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF HUNTINGTON BEACH By: Lori Ann Farrell, Director of Finance HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY By: Joe Carchio, Chair of the Board of Directors THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A., as Trustee i By: uthorized Officer i i i I OHS WEST:261293279A 3 i STATE OF CALIFORNIA ) ss COUNTY OF LOS ANGELES ) On 9 0� well before of Public ary personally appe ed y who proved to e on the basis of satisfactory evidence to be the person whose nameedke are subscribed 'to the within instrument and acknowledged to me that h s�hey execu same in hi ;heir authorized capacity and that by hi er heirsign re on the instrument the pers , or the entity upon behAlf of which the perso acted, execut�the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. - - -4 WITNESS my hand and official seal. CRt8TMU D.GARCHfTORENA Commission#F 1912985 Notary Public-Csftrnie Los Angeles County My Comm.Expires Nov 12,2014 Signatur � �� [SEAL] EXHIBIT A LEGAL DESCRIPTION All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: PARCEL 1: THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER AND THE SOUTH TWO THIRDS OF THE WEST HALF OF THE NORTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 21, TOWNSHIP 5 SOUTH, RANGE it WEST, IN THE RANCHO LA BOLSA CHICA, AS PER MAP RECORDED IN BOOK 51,PAGE 13 OF MISCELLANEOUS MAPS,IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBONS AND MINERALS LYING BELOW A DEPTH OF 500 FEET FROM THE SURFACE THEREOF, WITHOUT HOWEVER, THE RIGHT TO ENTER THE SURFACE OF SAID LAND OR THE SUBSURFACE THEREOF LYING ABOVE A DEPTH OF 500 FEET BELOW THE SURFACE TO EXPLORE,MINE OR DEVELOP THE SAME., PARCEL 2: THE EAST HALF OF THE NORTHWEST QUARTER OF THE SOUTHEAST QUARTER AND THE WEST HALF OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 21, TOWNSHIP.5 SOUTH, RANGE 11 WEST, IN THE RANCHO LA BOLSA CHICA, AS PER MAP RECORDED IN BOOK 51,PAGE 13 OF MISCELLANEOUS MAPS,IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THE NORTH 447.30 FEET OF THE EAST 427.00 FEET OF SAID HALF. ALSO EXCEP73NG THEREFROM ALL OIL, GAS, HYDROCARBONS AND MINERALS LYING BELOW A DEPTH OF 500 FEET FROM THE SURFACE THEREOF, WITHOUT HOWEVER TI-f RIGHT TO ENTER THE SURFACE OF SAID LAND OR THE SUBSURFACE THEREOF LYING ABOVE A DEPTH OF 500 FEET BELOW THE SURFACE TO EXPLORE,MINE OR DEVELOP THE SAME. PARCEL 3: THE NORTHWEST QUARTER OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 21.TOWNSHIP 5 SOUTH,RANGE I WEST, IN THE RANCHO LA BOLSA CHICA, AS PER MAP RECORDED IN BOOK 51,PAGE 13 OF MISCELLANEOUS MAPS,IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBONS AND MINERALS LYING BELOW A DEPTH OF 500 FEET FROM THE SURFACE THEREOF, WITHOUT, HOWEVER, THE RIGHT TO ENTER THE SURFACE OF SAID LAND OR THE SUBSURFACE THEREOF LYING ABOVE A DEPTH OF 500 FEET BELOW THE SURFACE TO EXPLORE,MINE OR DEVELOP THE SAME. OHS WEST:261293279.4 A-1 This Document was electronically recorded by RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY First American National Commercial NATIONAUCOMMERCIAL SERVICES COMMERCIAL/INDUSTRIAL DIVISION Recorded in Official Records,Orange County Tom Daly,Clerk-Recorder TO BE RECORDED AND WHEN RECORDED RETURN TO: IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII NO FEE 2011000479932 12:12pm 09/28/11 Orrick,Herrington&Sutcliffe LLP 66 406 T01 10 2050 Main Street,Suite 1100 0.00 0.00 0.00 0.00 27.00 0.00 0.00 0.00 Irvine,CA 92614-2558 Attention: Donald S.Field,Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY ' TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. TERMINATION AGREEMENT by and among CITY OF HUNTINGTON BEACH, HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Dated as of September 1, 2011 relating to the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project) OHS WEST:261293339.4 TERMINATION AGREEMENT THIS TERMINATION AGREEMENT (this "Termination Agreement") executed and entered into as of September 1, 2011, is by and among the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the "City"), the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California(the "Authority") and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (successor to BNY Western Trust Company), a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee (the "Trustee"). RECITALS WHEREAS, the City and the Authority previously entered into a Site and Facility Lease, dated as of December 1, 2001 (the "Site and Facility Lease"), pursuant to which the City leased to the Authority certain real property, and improvements thereon, described in Exhibit A hereto (the 'Property"); WHEREAS, the Site and Facility Lease was recorded on December 4, 2001, as Document No. 20010873003,in the Official Records of the County of Orange; WHEREAS, the City and the Authority previously entered into a Lease Agreement, dated as of December 1, 2001 (the "Lease"), pursuant to which the Authority leased the Property to the City; WHEREAS, the Memorandum of Lease Agreement, dated as of December 1, 2001 (the "Memorandum of Lease"), by and between the City and the Authority, evidencing the Lease Agreement, was recorded on December 4, 2001, as Document No. 20010873004, in the Official Records of the County of Orange; WHEREAS,pursuant to the Indenture, dated as of December 1, 2001 (the"Indenture"),by and between the Authority and the Trustee, the Authority assigned to the Trustee substantially all of its right,title and interest in and to the Lease; WHEREAS, the Memorandum of Assignment, dated as of December 1, 2001 (the "Memorandum of Assignment"), by and between the Authority and the Trustee, evidencing the assignment of the Lease, was recorded on December 4, 2001, as Document No. 20010873005, in the Official Records of the County of Orange; WHEREAS, subject to the provisions hereof,the City, the Authority and the Trustee desire to terminate the terms of the Site and Facility Lease,the Lease and the Memorandum of Assignment as they relate to the Property, and the Authority and the Trustee desire to quitclaim to the City any right,title or interest that either may have in the Property; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this OHS WEST:261293339.4 Termination Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Termination Agreement; NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the parties hereto agree as follows: ARTICLE I TERMINATION The City has paid all of the Lease Payments pursuant to, and in accordance with the terms of, the Lease and, therefore, the Site and Facility Lease, the Lease and the Memorandum of Assignment are terminated and all of all obligations of the City, the Authority and the Trustee thereunder have ceased. ARTICLE II REVERSION All right, title and interest of the Authority and the Trustee in the Property under the Site and Facility Lease, the Lease, Memorandum of Assignment and the Indenture shall hereupon revert to the City free and clear of any interest of the Authority and the Trustee. ARTICLE III MISCELLANEOUS Section 3.01. Binding Effect. This Termination Agreement shall inure to the benefit of and shall be binding upon the City, the Authority and the Trustee and their respective successors and assigns. Section 3.02. Severability. In the event any provision of this Termination Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof Section 3.03. Execution in Counterparts. This Termination Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 3.04. Applicable Law. This Termination Agreement shall be governed by and construed in accordance with the laws of the State of California. OHS WEST:261293339.4 2 IN WITNESS WHEREOF, the parties hereto have caused this Termination Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF HUNTINGTON BEACH By: Q/1� Lori Ann Farrell, Director of Finance HUNTI GTON BE H PUBLIC FINAN ING AU ORITY B Joe Carchio, Chair f the Board of Directors THE B F NEW YORK MELLON TRUST MPANY,N.A., as Trustee By: Authorized Officer OHS WEST:261293339.4 3 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On ZQY/ before me, Notary Public, personally appeared Lori Ann Farrell, who proved to me on the basis of satisfactory evidence to be the person whose name �ubscribed to the within instrument and acknowledged to me that 1-4 y executed the same in er/�h it authorized capacity(, and that by er r signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P. L. ESPARZA WITNESS my hand and official seal. commission 1a5�o21 Z Notary Public-California z i %_ Orange County MX Comm.Ex Tres Aug4,2013 J Signature [SEAL] STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On / / 2WI before me, Notary Public , personally appeared Joe Carchio, who proved to me on the basis of satisfactory evidence to be the persono whose name(4C subscribed to the within instrument and acknowledged to me thate�y executed the same in is 'r authorized capacity(i�), and that by 1s r signature on the instrument the personK,, or the entity upon behalf of which the person(g) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P. L. ESPARZA WITNESS my hand and official seal. Commission# 1857021 Notary Public-California i Orange County MY Comm.Ex ires Aug4,2013 Signature [SEAL] i i I l i i i i IN WITNESS WHEREOF, the parties hereto have caused this Termination Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF HUNTINGTON BEACH By: Lori Ann Farrell, Director of Finance HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY i By: Joe Carchio, Chair of the Board of Directors THE BANK OF NEW YORK MELLON TRUST COMPANY,N.A., as Trustee By: Authorized Officer / es - S hcl W OHS WEST:261293339.4 3 STATE OF CALIFORNIA ) ss COUNTY OF LOS ANGELES ) On G'l befor m "� / y'o� Gl� � e, Notary Public, personally appea ed �ho proved torrxon the basis of satisfactory evidence to be the person hose name is e subscribed tb the within instrument and acknowledged to-me that h she hey executed e same in hi er heir authorized capacityQ ), and that by hiQertheir signa e on the instrument the pers� or the entit u on behafif of Y pwhich the per acted, execut6dthe instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. C�RISnNA pVE7 GARCHit RENII Conwhal f!#f 19129M NOWY PUMW-Ct"M t k4'�� / M Comm Ex2ireS tbv 1 Signature [SEAL] 2.2014 l I I: i Ii I i i i EXHIBIT A LEGAL DESCRIPTION All that real property situated in the County of Orange, State of California, described as follows, and any improvements thereto: PAID: I: °i`HC6E :FORTIONs Of'BLOCkS, 1901, 1903.=1 AND. OF TRACT NO_ Imo, AS SHORN ON Aa MAP, REcin_RtjED IN BOOK 5P, DACE 13 OF MISCEtLANEOUS MAP5, RECOIL OF LA CE COIJN 'T,CALIF RNIA,TOGETHER WITH PARK STREET, UNION Av INS AND THE ALLE119 IN SAID BtOCK5, AS SHOWN ON AID i IAP AND� :3 VACATED BY R:ESOLUTION No, 3415 OF THE CM COUNCIL C THE CrTY OF 1-I.LNTINGTON BEACH A C-EIITUTIED CLVY OF WHICH WAS .REWROED JANUA.tiy b.. 1972 IN BOOK 9--M PAS OFFICIAL L IIECORD5 OF _qA I'D ORANGE COUVfy, N `I�U ff H PORTIONS S OF KNE !jTREE7 AND 5EVENTEENTH STREEF� AS SHOWN SAID MAC' AND AS VACATED BY RESOLUTION NO, 5M OF THE CITY COUNCIL OF THE CM OF HUN IN I'ON BEACK A f`'EHTIOED ODFY OF WW'MCH WAS RECORDED MARCH %, 1989 AS INSTRUMENT ISO. 99-137 OF 9AID OFFICIAL RECORDS, DESCRWID .AS FOLLOWS, BEGMKIN w AT THE INTERSECTION OF THE CIEN7'ERLINE OF UTICA TCEuT� 64..Do FEE['.IN WIDTH, AND A 1,13E PARALLEL WrM AND 80.00 Er W EMR1.Y OF THE CENTERLINE O LADE AVEN ICE, FEEr E 'WIEYTK BOTH AS SHCAVIN ON SAID MAP OF TRACT CT NO, 12; TH NC NORTH DIP I.9' " .� 8,00 FEE'ALONG SAID PARALL L, LIB: THENCE NORTH 4 ' 19 W EAV 24-04 FEET,THENCE SOUTH 87 ' 54" &AS'F 16 FEET TO THE C NTERLJNE OF SEVE ITFtNTH STREEI� 7G,00 FEET ICE WIDTH, AS 11OW ON i SAID MAP,THENCE NORTH 4111V. 23" EAST 4VA2 FEE7 ALONG SAID CENTERLINE OF SEVENTEENTH STREET; THENCE SO S * EAST 137.05 FEET, TffENa NORTH OOP 15P W EAST 1 5. FEET ALONG At LINE PARALLEL LEL TO THE CENTERLINE:OF SAID LADE AVENUE TO THE CEN.rSRLINE OF SAID EVENTEENTH STMT THENCZE NORTH 410 3 ' 23r EA$` I . ET ALONG 5AtD CENTERLINE CENTERLItNE OF SAID SEVENTEENTH STREET AND .LTS NORTHEr SI MLY PROLONOAT10 A,MNT ON TM NORTHERLY DNE OF SAID TRAaL:1'.I'`atO:, 1 ; TH N�_E NORTH 4V 21' I r WEST 474,37 FM ALONG SAID NORTHERLY TRACT LIRE Of°I"I>ACY NaIZ-THENCE NOI1 M ' 4& 01" WET 53-5. '1 FM CONTtt DING ALONG SAID NORTHERLY TRACT LINE TO THE `ERLY RIGI=T OF WAY LINE OF MAIN 5IRBET, 1,20,00 FEE-r IN WIDTH, AS SHOWN ON SAID NJAP OF TRACT NO, 12; Ttje4CB SOUTH OV 2tY IT WEST IZW12 Mr .ALONG SAID v 'T RLY LIME TO TILTS CENTERLINE OF SAID DTI STREE'r;THENCE SOUTH '' EAST 2.00.89 FEE'ALONG SAID CENTERLINE TO THE POINT OF DRGINNING. EXCEFFINC.'MEREFRONITHAT PORTION DESCRIBED LOWS: .EOINN:ING AT Tim' INTERSECTION OF'THE CENT ERLI E OF UTICA Sr=, 60,W FEET IN WIDTFL AND A LINE PARALLEL WITH AND MOO FM WESTERLY OF THE CENTERLINE OF LAKR A NTJ IEET IN WIDTI-L BOTH AS, $MOWNN 1ON SAPID NLNP OF TRACT NO. 12; THENCE NORTH W 19 " EA :358.00 FELT ALONG SAID PA}IALLEL,ELITE; `I`CIENCE NORTH 4 19' " .&ST Z4.04 FRET,THENCE SO W 41Y 54- , T X1"FEET TO A LINE PARALLEL W MA AND 245.00 FEET EASTERLY OF THE EASTERLY RIC HT OF WAY LINE OF MAIN STREET, 120.00 FEET'IN W-VIOTI­L AS SHOWN ON SAID MAP OF TRACT NO, 1 ;ViENCE NORTH 4�C_T�' 2 ' 1�' EAST .I ,WLOl�1 S,WI L. T I 1TI$ s`�E T"A �SLT I. LIME 7O A IaIN I� Ft LEL WITH AND 208,00 FEET 5 UTIMLY OT-"[CIE.NORTHERLY LINE OF BLOCK S AID TRACT OHS WEST:261293339.4 A-1 i I i I N. IZ MENCE NORTH W 4W q 01- WHER�'�p�24 . �FEET ' ALONG SAD BLAST MENTIONED PARALLEL P TO SAID L�' RI TT' WAY SINE Of IKAI�3 STREI di :SOUTH Ir W -PT Iffi&12 FEET ALONG SAID .EASTERLY LINE OP MAIN 51MEE " TO TIA:R f C"MRLINE t� SAID UTICA STREET, THENCE SOUTH W �W w EAST 20049 FEEr ALONG SAID CENTEIRLM TO THE POINT OF MINNINC IS :6XCEFTMG TI-JEREFROM THAT PORTION rN :Lt ED WTTHIN TL ; C`I'' N 1 AS j. SHOWN ON A MAP RECORDED IN BOOK PACES Z8 TO n INCLUSIVE, OF SAID MISCELLANEOUS MAPS, ALSO EXCEPTING, THEREFROK ALL 014 C.AS, ASYHAL.° ,AND ASPHALTUM, AND OTHER HYDROCARBONS AND ALL OTHER MI AM WHETHER SIMILAR OR DIWMILAR TO f THOSE 5KCMM, LYING BELOW 500 FEET UNDER TEE SURFACE'OF SUCH: REAL FA Imo° WITHIN 09 THAT MAY E PRODUCED .FROM. SAID PROPERTY, SHOUT, I MEVER, ANY RICHT TO USE THE SURFACE Orr SAID PROPERTY OR,%O FEET UNDER THE S`RFA. E'T`H:EREOF FORANY PURPOSE WHATSOEVEK AS EKCErMD AND 'RESERVED IN VARIOU9 DEEDS OF RECORD. i. i i PARCEL 2= 1. THOSE PORTIONS OF BLCCKS 1902, 1"3 AND 2ftU INC�gI.L�I3.IN As�PORTIONOFLMC.A STRM, O ALL F TRACT NO,, 1Z AS SHOWN N' AXTAC� Ra-)DR,I.�ED IN BOOK 9, PACE 13 O MLWELLANEOUS MAPS, RECORDS CT ORANGE COUNTY,Y, CALT-OR` TA, TOGETHER. WITH THOSE FORITONS OF UNION AVENUE AND THE ALLEYS IN SATD BLOCKS AS SHQIVN ON SAID . IAP AS VACATUD BY RESOLUTION NO-MIS E THE CITE COUNCIL OV THE CITY OF HUNT I N BEA CK ACE TIFIED COP' OF WHICH, WAS RKORDED JANUARY 6,. 1W. 2 IN BOOK 5�w PACE 849 OF OFFICIAL RDDORDS OF SAID ORANGE COUNT` TOLE H R WITH THAT POIKTION OF SEVENTEENTH ST"ET VACATED BY RESOLUTION NO. 5w OF SAID CITY COUNCIL, A CERTInED COPY OF WIFICCH. IV AS RECORDED NIARCH 14 1 AS I M13NT NO. — —V620 OF SAID OFFICIAL REC)OPM NfOREPAWn LARLY` I E5CR1 ED A FOLL ' ; BEGINNING AT THE INTEFSECrION OF 'IHE CENMLINE OF UrICA STREET Ef, I WIDTH AND A UNE PARALLEL WITH A ND.SaOO FEET WESTERLY OF THE CENTERUNE OF LAKE AVENUE 90bB FEET 1N WIDTH, BOTH AS SHOWN ON SAID MAD?' OF TRACT : - 1 ., THENCENORTH CO I)EG- 1X 06' RASYMS&DO FRETALONGSAID PARALLEL, LINE, THENC NORTH 45,DBGI IV W' EAS.T 24,04,FM; THENCE SCUTH ` 5C RAS7 `7.21`1 FEET TO .Al LINE PARALLEL WITH AND 24,100FEET EASTERLY OFTHE EASTERLY R1111C-1`C'OF WAY LINE OF MAIN STRUZ 120,II0 FEET IN WIDTH A BOWN' ON SAID 'MAP OF 7 Cr:N0- 1,-' "TIAENCE NORTH 00 DEC,X 13"EAqr$013 FEE'ALONGSAID LAST MENnONED :PARALLEL LINE To.A LINE PARALLEL WrM AND FEE' SOUTHERLY OF THE NORTHERLY LINE OF BLOCK ` ZM OF SAID F TRACT NO, TH: CI�N DEC. 49 01" WM 2kq,00 FEET TONG SAID L.A ST ENT NED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY Y LINE OF MAIN STREET; THENCE SOLrTH 00 DE . 20' 1=1" WEST I0%12 FEET,LONG SAID EASTERLY UNE OF I 'MAIN STREET TO THE CENTERLINE Cf SAff> UTICAI STREET, VENCE SOUTH 89 DEG 39F' X3" � EAST .59 FEET.ALONG&-kID CENTERLINE TO THE POINq OF BEGINNING . i' i OHS WEST:261293339.4 A-2 I ORRICK,HERRINGTON&SUTCLIFFE LLP 2050 MAIN STREET SUITE 1100 0 IRVINE,CALIFORNIA 92614-8255 O R R I C K tel +1-949-567-6700 fax +1-949-567-6710 WWW.ORRICK.COM September 28, 2011 The Bank of New York Mellon Trust Company,N.A. Los Angeles, California Merrill Lynch,Pierce, Fenner& Smith Incorporated Los Angeles, California E.J. De La Rosa&Co., Inc. Los Angeles, California Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project) (Defeasance Opinion) Ladies and Gentlemen: We have acted as bond counsel to the Huntington Beach Public Financing Authority (the "Authority") in connection with the issuance by the Authority of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds"). A portion of the proceeds of the Series 2011A Bonds will be applied to refund the outstanding Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series A (Capital Improvement Financing Project) (the "Refunded Bonds"). The Refunded Bonds were issued pursuant to the Indenture of Trust, dated as of September 1, 2001 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the "Trustee"). The Refunded Bonds are secured by Revenues, including certain lease payments to be made by the City pursuant to the Lease Agreement, dated as of September 1, 2011 (the "Lease Agreement"), by and between the Authority and the City. This opinion is being provided in connection with the defeasance of the Refunded Bonds pursuant to Article X of the Indenture. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture. In such connection, we have reviewed portions of the Indenture, the Lease Agreement, the Escrow Agreement, dated as of September 1, 2011 (the "Escrow Agreement"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow bank and as Trustee (the "Escrow Bank"), relating to the Refunded Bonds, a report by The OHS WEST:261329505.1 O ORRICK The Bank of New York Mellon Trust Company, N.A. Merrill Lynch, Pierce, Fenner& Smith Incorporated E. J. De La Rosa& Co., Inc. September 28, 2011 Page 2 Arbitrage Group, Inc., verifying the accuracy of certain computations relating to the refunding escrow and the Refunded Bonds (the "Verification Report"), and such other documents and matters to the extent we deemed necessary to render the opinion set forth herein. The opinion expressed herein is based on an analysis of existing laws, regulations, rulings and court decisions and covers certain matters not directly addressed by such authorities. Such opinion may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. We express no opinion as to the effect of any bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium or other laws relating to or affecting creditors' rights. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Authority. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents referred to in the second paragraph hereof. We have further assumed compliance by all parties with all instructions, covenants and agreements contained in such documents. In rendering the following opinion, we have made no independent calculations or verifications concerning the actual deposit of the amounts specified in the Escrow Agreement, the outstanding principal amount of the Refunded Bonds, the principal or redemption price and interest requirements of the Refunded Bonds, the adequacy of the amounts deposited pursuant to the Escrow Agreement to pay such principal or redemption price and interest requirements when due, or the accuracy of any of the numbers, computations, assumptions or conclusions contained in the Verification Report, but with respect to all such matters have relied solely upon, and assumed, the accuracy of the Verification Report and the representations in the Escrow Agreement and related certificates. We have also assumed (a) that the deposits required to be made to the Escrow Fund established pursuant to the Escrow Agreement (the "Escrow Fund") have been made, (b) that all other instructions set forth in the Indenture and the Escrow Agreement have been complied with, (c)that provision satisfactory to the Trustee has been made for the giving of notice of the redemption prior to maturity of the Refunded Bonds as provided in Article IV of the Indenture, (d) that the Escrow Bank has been irrevocably instructed to apply amounts specified in the Escrow Agreement to the payment of such principal or redemption price and interest requirements, (e) that the Verification Report is in form and substance acceptable to the Trustee, the Authority and the City, and (f) that no principal and/or interest due with respect OHS WEST:261329505.1 0 O RRICK The Bank of New York Mellon Trust Company,N.A. Merrill Lynch, Pierce, Fenner& Smith Incorporated E. J. De La Rosa& Co., Inc. September 28, 2011 Page 3 to the Refunded Bonds has been paid by Ambac Assurance pursuant to the Financial Guaranty Insurance Policy. Certain actions may be taken under the circumstances and subject to the terms and conditions set forth in the Escrow Agreement. No opinion is expressed herein if any such change occurs or action is taken or omitted other than with our advice and approval. Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the opinion that all liability of the Authority in respect of the Refunded Bonds has ceased, terminated and been completely discharged, pursuant to the terms of the Indenture, and the Owners of the Refunded Bonds are entitled only to payment of the principal or redemption price of and interest on the Refunded Bonds only out of the money deposited with the Escrow Bank for the payment of the Refunded Bonds (subject to the provisions of Section 10.04 of the Indenture). This letter is furnished by us as bond counsel to the Authority. No attorney-client relationship has existed or exists between our firm and the addressees of this letter by virtue of this letter. Our engagement with respect to this matter has terminated as of the date hereof, and we disclaim any obligation to update this letter. This letter is delivered to the addressees hereof solely for their benefit in connection with the defeasance of the Refunded Bonds and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person. This letter is not intended to, and may not, be relied upon by owners of the Series 2011A Bonds or by owners of the Refunded Bonds or by any other party to whom it is not specifically addressed. nnVery truly yours, ORRICK, HERRINGTON & SUTCLIFFE LLP OHS WEST:261329505.1 ORRICK,HERRINGTON&SUTCLIFFE LLP 2050 MAIN STREET SUITE 1100 0 IRVINE,CALIFORNIA 92614-8255 O R R I C K tel +1-949-567-6700 fax +1-949-567-6710 WWW.ORRICK.COM September 28, 2011 The Bank of New York Mellon Trust Company, N.A. Los Angeles, California Merrill Lynch, Pierce, Fenner& Smith Incorporated Los Angeles, California E. J. De La Rosa& Co., Inc. Los Angeles, California Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project) (Defeasance Opinion) Ladies and Gentlemen: We have acted as bond counsel to the Huntington Beach Public Financing Authority (the "Authority") in connection with the issuance by the Authority of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds"). A portion of the proceeds of the Series 2011A Bonds will be applied to refund the outstanding Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Bonds, 2001 Series B (Capital Improvement Refinancing Project) (the "Refunded Bonds"). The Refunded Bonds were issued pursuant to the Indenture of Trust, dated as of December 1, 2001 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the "Trustee"). The Refunded Bonds are secured by Revenues, including certain lease payments to be made by the City pursuant to the Lease Agreement, dated as of December 1, 2011 (the "Lease Agreement"), by and between the Authority and the City. This opinion is being provided in connection with the defeasance of the Refunded Bonds pursuant to Article X of the Indenture. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture. In such connection, we have reviewed portions of the Indenture, the Lease Agreement, the Escrow Agreement, dated as of September 1, 2011 (the "Escrow Agreement"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow bank and as Trustee (the "Escrow Bank"), relating to the Refunded Bonds, a report by The OHS WEST:261329540.1 O ORRICK The Bank of New York Mellon Trust Company,N.A. Merrill Lynch, Pierce, Fenner& Smith Incorporated E. J. De La Rosa& Co., Inc. September 28, 2011 Page 2 Arbitrage Group, Inc., verifying the accuracy of certain computations relating to the refunding escrow and the Refunded Bonds (the "Verification Report"), and such other documents and matters to the extent we deemed necessary to render the opinion set forth herein. The opinion expressed herein is based on an analysis of existing laws, regulations, rulings and court decisions and covers certain matters not directly addressed by such authorities. Such opinion may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. We express no opinion as to the effect of any bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium or other laws relating to or affecting creditors' rights. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Authority. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents referred to in the second paragraph hereof. We have further assumed compliance by all parties with all instructions, covenants and agreements contained in such documents. In rendering the following opinion, we have made no independent calculations or verifications concerning the actual deposit of the amounts specified in the Escrow Agreement, the outstanding principal amount of the Refunded Bonds, the principal or redemption price and interest requirements of the Refunded Bonds, the adequacy of the amounts deposited pursuant to the Escrow Agreement to pay such principal or redemption price and interest requirements when due, or the accuracy of any of the numbers, computations, assumptions or conclusions contained in the Verification Report, but with respect to all such matters have relied solely upon, and assumed, the accuracy of the Verification Report and the representations in the Escrow Agreement and related certificates. We have also assumed (a) that the deposits required to be made to the Escrow Fund established pursuant to the Escrow Agreement (the "Escrow Fund") have been made, (b) that all other instructions set forth in the Indenture and the Escrow Agreement have been complied with, (c)that provision satisfactory to the Trustee has been made for the giving of notice of the redemption prior to maturity of the Refunded Bonds as provided in Article IV of the Indenture, (d) that the Escrow Bank has been irrevocably instructed to apply amounts specified in the Escrow Agreement to the payment of such principal or redemption price and interest requirements, (e) that the Verification Report is in form and substance acceptable to the Trustee, the Authority and the City, and (f) that no principal and/or interest due with respect OHS WEST:261329540.1 O ORRICK The Bank of New York Mellon Trust Company,N.A. Merrill Lynch, Pierce, Fenner& Smith Incorporated E. J. De La Rosa& Co., Inc. September 28, 2011 Page 3 to the Refunded Bonds has been paid by Ambac Assurance pursuant to the Financial Guaranty Insurance Policy. Certain actions may be taken under the circumstances and subject to the terms and conditions set forth in the Escrow Agreement. No opinion is expressed herein if any such change occurs or action is taken or omitted other than with our advice and approval. Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the opinion that all liability of the Authority in respect of the Refunded Bonds has ceased, terminated and been completely discharged, pursuant to the terms of the Indenture, and the Owners of the Refunded Bonds are entitled only to payment of the principal or redemption price of and interest on the Refunded Bonds only out of the money deposited with the Escrow Bank for the payment of the Refunded Bonds (subject to the provisions of Section 10.04 of the Indenture). This letter is furnished by us as bond counsel to the Authority. No attorney-client relationship has existed or exists between our firm and the addressees of this letter by virtue of this letter. Our engagement with respect to this matter has terminated as of the date hereof, and we disclaim any obligation to update this letter. This letter is delivered to the addressees hereof solely for their benefit in connection with the defeasance of the Refunded Bonds and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person. This letter is not intended to, and may not, be relied upon by owners of the Series 2011A Bonds or by owners of the Refunded Bonds or by any other party to whom it is not specifically addressed. Very truly yours, 0"�� V"'� 1) r ORRICK, HERRINGTON & SUTCLIFFE LLP OHS WEST:2613295401 ORRI O 2050 M,NE STREET 8 SUTCLIFFE LLP 2050 MAIN STREET SUITE 1100 IRVINE,CALIFORNIA 92614-8255 O R R I C K tel +2-949-567-6700 fox +2-949-567-6710 W W W.ORRICK.COM September 28, 2011 Huntington Beach Public Financing Authority Huntington Beach, California Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (Final Opinion) Ladies and Gentlemen: We have acted as bond counsel to the Huntington Beach Public Financing Authority (the "Authority") in connection with the issuance of its Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds"), in the aggregate principal amount of$36,275,000. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture. In such connection, we have reviewed the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City of Huntington Beach (the "City") and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), the Site Lease, dated as of September 1, 2011 (the "Site Lease"), by and between the City and the Authority, the Lease Agreement, dated as of September 1, 2011 (the "Lease Agreement'), by and between the City and the Authority, the Tax Certificate of the Authority, dated the date hereof (the "Tax Certificate"), opinions of counsel to the Authority, the City, the Trustee and others, certificates of the Authority,the City, the Trustee and others and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. Accordingly, this opinion speaks only as of its date and is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Our engagement with respect to the Series 2011A Bonds has concluded with their issuance, and we disclaim any OHS WEST:261329402.1 0 O R R I C K Huntington Beach Public Financing Authority September 28,2011 Page 2 obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Authority and the City. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Indenture, the Site Lease, the Lease Agreement and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Series 2011A Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Series 2011A Bonds, the Indenture, the Site Lease, the Lease Agreement and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the limitations on legal remedies against joint powers authorities and cities in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the foregoing documents nor do we express any opinion with respect to the state or quality of title to or interest in any of the real or personal property described in the Site Lease or the Lease Agreement or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such property. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Series 2011A Bonds and express no opinion with respect thereto. Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions: 1. The Series 2011A Bonds constitute the valid and binding special obligations of the Authority, payable solely from the Lease Revenues and the other assets pledged therefor under the Indenture. 2. The Indenture has been duly executed and delivered by, and constitutes a valid and binding obligation of, the Authority. 3. The Indenture, the Site Lease and the Lease Agreement have been duly executed and delivered by, and constitute valid and binding obligations of, the City. OHS WEST:261329402.1 0 O R R I C K Huntington Beach Public Financing Authority September 28, 2011 Page 3 4. Interest on the Series 2011A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. Interest on the Series 2011A Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although we observe that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. We express no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Series 2011 A Bonds. Faithfully yours, ORRICK, HERRINGTON & SUTCLIFFE LLP per /r jQ C� OHS WEST:261329402.1 ORRI O 2050 M,NE STREET &SUTCLIFFE LlV 2050 MAIN STREET SUITE 1100 IRVINE,CALIFORNIA 92614-9255 O R R I C K tel +1-949-567-67oo fax +1-949-567-6710 W W W.ORRICK.COM September 28, 2011 Merrill Lynch, Pierce, Fenner& Smith Incorporated Los Angeles, California E. J. De La Rosa& Co., Inc. Los Angeles, California Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (Supplemental Opinion) Ladies and Gentlemen: This letter is addressed to you, as Underwriters, pursuant to Section 9(e)(v) of the Bond Purchase Agreement, dated September 13, 2011 (the "Purchase Agreement"), among you, the Huntington Beach Public Financing Authority (the "Authority") and the City of Huntington Beach (the "City"), providing for the purchase of the Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds"), in the aggregate principal amount of $36,275,000. The Series 2011A Bonds are being issued pursuant to the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture or, if not defined in the Indenture, in the Purchase Agreement. We have delivered our final legal opinion (the "Bond Opinion") as bond counsel to the Authority concerning the validity of the Series 2011A Bonds and certain other matters, dated the date hereof and addressed to the Authority. You may rely on the Bond Opinion as though the same were addressed to you. In connection with our role as bond counsel to the Authority, we have reviewed the Purchase Agreement, the Indenture, the Site Lease, the Lease Agreement, the Continuing Disclosure Certificate, certain portions of the Official Statement, dated September 13, 2011, relating to the Series 2011A Bonds (the "Official Statement"), certificates of the Authority, the City, the Trustee and others, opinions of counsel to the Authority, the City and the Trustee, and OHS WEST 261329455.1 0 ORRICK Merrill Lynch, Pierce, Fenner& Smith Incorporated E. J. De La Rosa& Co., Inc. September 28, 2011 Page 2 such other documents, opinions and matters to the extent we deemed necessary to provide the opinions or conclusions set forth herein. The opinions and conclusions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions or conclusions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Authority and the City. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents referred to in the third paragraph hereof. We have further assumed compliance with all covenants and agreements contained in such documents. In addition, we call attention to the fact that the rights and obligations under the Purchase Agreement and the Continuing Disclosure Certificate, and their enforceability, may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the limitations on legal remedies against joint powers authorities and counties in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the foregoing documents nor do we express any opinion with respect to the state or quality of title to or interest in any of the real or personal property described in the Site Lease or the Lease Agreement or the accuracy or sufficiency of the description of any such property contained therein. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Series 2011A Bonds and express no opinion or conclusion relating thereto except as expressly set forth in numbered paragraph 4 below. Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions and conclusions: 1. The Series 2011A Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended. 2. The Purchase Agreement has been duly executed and delivered by the Authority and constitutes the valid and binding obligation of the Authority. OHS WEST:261329455.1 0 ORRICK Merrill Lynch, Pierce, Fenner& Smith Incorporated E. J. De La Rosa& Co., Inc. September 28, 2011 Page 3 3. The Purchase Agreement and the Continuing Disclosure Certificate have been duly executed and delivered by the City and constitute valid and binding obligations of the City. No opinion regarding the adequacy of the Continuing Disclosure Certificate for purposes of Securities and Exchange Commission Rule 15c2-12 may be inferred from this opinion. 4. The statements contained in the Official Statement under the captions "INTRODUCTION," "THE BONDS," "SECURITY FOR THE BONDS" and "TAX MATTERS," and in APPENDIX D — "SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS," excluding any material that may be treated as included under such captions by cross-reference, insofar as such statements expressly summarize certain provisions of the Indenture, the Lease Agreement, the Site Lease, and the form and content of our Bond Opinion, are accurate in all material respects. This letter is furnished by us as bond counsel to the Authority. No attorney-client relationship has existed or exists between our firm and you in connection with the Series 2011A Bonds or by virtue of this letter. Our engagement with respect to the Series 2011A Bonds has terminated as of the date hereof, and we disclaim any obligation to update this letter. This letter is delivered to you as Underwriters of the Series 2011A Bonds, is solely for your benefit as such Underwriters and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person. This letter is not intended to, and may not, be relied upon by holders of the Series 2011A Bonds or by any other party to whom it is not specifically addressed. Very truly yours, RRICK, RRINGTON& SUTCLIFFE LLP OHS WEST:261329455.1 ORRICK, OTO N&SUTCLIFFE LLP 2050 MAIN STREET SUITE 11000 IRVINE,CALIFORNIA 92614-8255 O R R I C K tel +1-949-567-6700 fax +1.949-567-6710 W W W.ORRICK.COM September 28, 2011 The Bank of New York Mellon Trust Company, N.A., as Trustee Los Angeles, California Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) Ladies and Gentlemen: In connection with the delivery of the $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds"), we have delivered our final legal opinion concerning the validity of the Series 2011A Bonds and certain other matters, dated the date hereof and addressed to the Huntington Beach Public Financing Authority. You may rely on said opinion as though the same were addressed to you, as trustee, but solely for the benefit of, and as if you were one of, the holders of the Series 2011A Bonds. No attorney-client relationship has existed or exists between you and our firm in connection with the Series 2011A Bonds or by virtue of this letter. Very truly yours, � HE GTO CK, ��N & SUTCLIFFE LLPLP OHS WEST:261329543.1 ORRICK, OTO N&SUTCLIFFE LLP 2050 MAIN STREET SUITE 11000 IRVINE,CALIFORNIA 9 2614-82 5 5 O R R I C K tel +1-949-567-67oo lox +1-949-567-6710 W W W.ORRICK.COM September 28, 2011 Huntington Beach Public Financing Authority Merrill Lynch Pierce Fenner& Smith Huntington Beach, California Incorporated Los Angeles, California City of Huntington Beach E. J. De La Rosa& Co.Inc. Huntington Beach, California Los Angeles, California Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Proiect) (Disclosure Counsel Opinion) Ladies and Gentlemen: We have acted as disclosure counsel to the Huntington Beach Public Financing Authority (the "Authority") and the City of Huntington Beach (the "City"), in connection with the issuance by the Authority of its $36,275,000 aggregate principal amount of Huntington Beach Public Financing Authority (Orange County, California) Lease Revenue Refunding Bonds, 2011 Series A (Capital Improvement Refinancing Project) (the "Series 2011A Bonds"). The Series 2011A Bonds are issued under and pursuant to the Indenture, dated as of September 1, 2011 (the "Indenture"), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture. In that connection, we have reviewed a printed copy of the Official Statement, dated September 13, 2011, relating to the Series 2011A Bonds (the "Official Statement"), the Bond Purchase Agreement, dated September 13, 2011 (the "Purchase Agreement"), by and among Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of itself and as representative of E. J. De La Rosa & Co., Inc. (collectively, the "Underwriters"), the Authority and the City, the Indenture, certificates of the Authority, the City, the Underwriter and others, and we have made such investigations of law as we have deemed appropriate as a basis for the conclusion hereinafter expressed. We do not assume any responsibility for any electronic version of the Official Statement, and assume that any such version is identical in all respects to the printed version. OHS WEST:261329479.1 0 ORRICK Huntington Beach Public Financing Authority City of Huntington Beach Merrill Lynch, Pierce, Fenner& Smith Incorporated E. J. De La Rosa& Co.,Inc. September 28, 2011 Page 2 In arriving at the conclusion hereinafter expressed, we are not expressing any opinion or view on, and with your permission are assuming and relying on, the validity, accuracy and sufficiency of the records, documents and certificates referred to above, including the accuracy of all factual matters represented therein. We have assumed that all records, documents and certificates that we have reviewed, and the signatures thereto, are genuine. We are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Official Statement and make no representation that we have independently verified the accuracy, completeness or fairness of any such statements. In our capacity as disclosure counsel to the Authority and the City,to assist them in part of their responsibility with respect to the Official Statement, we participated in conferences with representatives of the Authority, the City, the Underwriters, their counsel, the Trustee, Public Financial Management, Inc., as financial advisor to the Authority and the City, and others, during which the contents of the Official Statement and related matters were discussed. Based on our participation in the above-mentioned conferences (which did not extend beyond the date of the Official Statement), and in reliance thereon and on the records, documents, certificates, opinions and matters mentioned above, we advise you as a matter of fact and not opinion that, during the course of our role as disclosure counsel with respect to the Series 2011A Bonds, no facts came to the attention of the attorneys in our firm rendering legal services in connection with such role which caused us to believe that the Official Statement as of its date and as of the date hereof (except for any CUSIP numbers, financial, accounting, statistical, economic or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, any information about real estate or environmental matters, any information about The Depository Trust Company or its book-entry system, litigation, ratings, rating agencies, the Underwriters or underwriting, and Appendices A, B, C and G included or referred to therein, which we expressly exclude from the scope of this paragraph and as to which we express no opinion or view) contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. No responsibility is undertaken or opinion rendered with respect to any other disclosure document, materials or activity, or as to any information from another document or source referred to by or incorporated by reference in the Official Statement. By acceptance of this letter you recognize and acknowledge that (a) the preceding paragraph is not an opinion but in the nature of negative observations based on certain limited OHS WEST:261329479.1 0 O R R I C K Huntington Beach Public Financing Authority City of Huntington Beach Merrill Lynch, Pierce, Fenner& Smith Incorporated E. J. De La Rosa&Co., Inc. September 28, 2011 Page 3 activities performed by specific lawyers in our firm in our role as disclosure counsel, and is provided to the Underwriters as part (subsidiary to the part performed by the Underwriters and their counsel) of their responsibilities under certain securities laws, (b) the scope of those activities performed by us were inherently limited and do not purport to encompass all activities that the Authority, the City or the Underwriters may be responsible to undertake, (c) those activities performed by us rely on third party representations, warranties, certifications and opinions, including and primarily, representations, warranties and certifications made by the Authority and the City, and are otherwise subject to the conditions set forth herein, and (d) this letter may not be sufficient for or appropriate to your purposes. This letter is furnished by us as disclosure counsel to the Authority and the City. No attorney-client relationship has existed or exists between our firm and the Underwriters in connection with the Series 2011A Bonds or by virtue of this letter. Our engagement with respect to this matter has terminated as of the date hereof, and we disclaim any obligation to update this letter. This letter is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person. This letter is not intended to, and may not, be relied upon by holders of Series 2011A Bonds or by any other party to whom it is not specifically addressed. Very truly yours, BRICK, HERRINGTON& SUTCLIFFE LLP OHS WEST:261329479.1 j ORRICK,HERRINGTON&SUTCLIFFE LLP O 777 SOUTH FIGUEROA STREET SUITE 3200 LOS ANGELES,CALIFORNIA 90017-5855 O R R I C K tel +1-213-629-2020 faX +1-223-612-2499 WWW.ORRICK.COM September 26,2011 Randolph Perry,Esq. (213)612-2447 rperry@orrick.com VIA OVERNIGHT DELIVERY First American Title Insurance Company National Commercial Services 5 First American Way Santa Ana,CA 92707 j Attention: Ms. Kristen A. Hueter Re: File No. NCS-500967-SA1; 2011 Lease Revenue Refunding Bonds Dear Kristen: This firm is counsel to the City of Huntington Beach,a California municipal corporation (the "City") in the above-referenced financing. This letter sets forth the City's document recording instructions and title insurance policy requirements. In connection with the closing, enclosed herewith please find one original, fully executed and acknowledged original,of each of the following documents (other than the Reconveyance,which you will receive under separate cover) (collectively, the "Recordable Documents"): 1. Substitution of Trustee and Full Reconveyance,dated as of September 1,2011,by Pacific Coast Homes,a California corporation (the "Reconveyance"); 2. Termination Agreement (Series A), dated as of September 1,2011,by and among the City, Huntington Beach Public Financing Authority,a joint powers authority organized and existing under the laws of the State of California (the "Authority"), and The Bank of New York Mellon Trust Company,N.A., as trustee (the "Trustee"); 3. Termination Agreement (Series B), dated as of September 1,2011,by and among the City, the Authority,and the Trustee; 4. Site Lease, dated as of September 1, 2011,by and between the City and the Authority; and 5. Memorandum of Lease Agreement and Assignment, dated as of September 1,2011, by and among the City, the Authority and the Trustee. ;f OHS WEST:261342630.1 0 O R R I C K First American Title Company September 26, 2011 Page 2 Additionally,enclosed herewith please find one (1) original, fully executed counterpart of each of the following documents (collectively, the "Other Documents"): 6. Gap Indemnity, dated of September 1, 2011,by the City. Please cause the Recordable Documents to be recorded in the order set forth above,in the official records of the County of Orange,State of California (the "Official Records") on September 28, 2011. Concurrently with the recordation of the Recordable Documents,you are to obtain conformed copies of each of the Recordable Documents shoving the respective recording information thereon (collectively, the"Conformed Documents"). Please confirm by signing this letter in the space provided below, that upon (i) the execution of the Receipt and Acceptance attached to this letter and (ii) your receipt of verbal instructions from Donald S. Field,Esq. at (213) 612-2287,Laura Gao at (213) 612-2131,or the undersigned of this firm that the Title Policy (as defined and described below) be issued, First American Title Insurance Company ("First American Title") is irrevocably committed to issue the Title Policy with an effective date of September 28,2011 (the "Closing Date"). Tide Policy The title insurance policy for the subject financing shall be in the form of the proforma policy of title insurance attached hereto as Exhibit A (but with all blanks in respect of recording information properly completed) together with the endorsements attached thereto,as the same are modified by any handwritten notations appearing thereon (the "Title Policy'). Deliveries Within five (5) business days after the Closing Date,you shall deliver (a) one (1) original of the Title Policy and (b) a copy of the Conformed Documents to the undersigned at the address listed above. The Title Policy shall be issued by you at the sole cost and expense of the City. The base premium for the Title Policy and the endorsements thereto shall be $21,765. A copy of the invoice for the Title Policy premium shall be sent to the undersigned at Orrick, Herrington& Sutcliffe LLP, 777 South Figueroa Street, Suite 3200,Los!-Angeles,California 90017-5832. Other!Matters Immediately upon your receipt of the Conformed Documents,you shall call the undersigned at (213) 612-2447 and fax a copy of the first page of each of the Conformed Documents to the undersigned at (213) 612-2499. If am- of the instructions of this letter cannot be follrnved for am_- rcason whatsocvcr, please call the undersigned immediatch at the ahux-c tcicpho>ne number. OHS WEST:261342630.1 i 0 O R R I C K First American Title Company September 26,2011 Page 3 Please acknowledge receipt and acceptance of the Documents and First American Title's agreement to comply with the instructions herein (including the obligation to issue the Title Policy as required hereby) in the space hereinbelow provided. Recordation of any of the Recordable Documents shall constitute the irrevocable agreement of First American Tide to comply with aU provisions hereof and issue the Title Policy as required hereby. 3 Sincerely, n Randolph Perry,esq. Enclosures cc: Donald S. Field, Esq. Ms. Laura Gao (iia e-mail wl o enclr.) i i i i i•: I' i I OHS WEST:261342630.1 o O R R f C K First American Title Company September 26,2011 Page 4 RECEIPT AND ACCEPTANCE of the above-referenced Recordable Documents and Other Documents and agreement to comply with each section herein (including the obligation to be irrevocably committed to issue the Title Policy as described herein)is hereby acknowledged. Dated: Septembe��2011 FIRST AMERICAN TITLE INSURANCE COMPANY .I i Bv: Name: . Its: j. 1 OHS VkEST:261342630.1 i EXHIBIT A [Proforma Title Police] Of IS WEST:261342630.1 1, T ffiffi R ♦♦..q JE 3s`. •Srp..v,�y�p•..'/�v��Q.K..= ..s j �•�rtf, J�4,3¢.C1 y:.. +ii�C AL .. AC� e�l�fJ►'f,Ft'4 Form No. 1402.06 ��Tll S V 1 !!! Policy Page 1 ALTA Owner's Policy(6-17-06) Policy Number: 1100302POS0600 t OWNER'S POLICY OF TITLE INSURANCE h ISSUED BY rr First American Title Insurance Company ,r �-{ Any notice of claim and any other notice or statement in writing required to be given to the Company under this policy must be M y given to the Company at the address shown in Section 18 of the Conditions. a COVERED RISKS 1 g�� SUBJECT TO THE EXCLUSIONS FROM COVERAGE,THE EXCEPTIONS police power not covered by Covered Risk 5 if a notice of the r } �• FROM COVERAGE CONTAINED IN SCHEDULE B AND THE enforcement action,describing any part of the Land,is recorded { CONDITIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a in the Public Records,but only to the extent of the enforcement { California corporation (the"Company l insures, as of Date of Policy referred to in that notice. and, to the extent stated in Covered Risks 9 and 10, after Date of 7. The exercise of the rights of eminent domain if a notice of the S ; Policy, against loss or damage, not exceeding the Amount of exercise, describing any part of the Land, is recorded in the 4 Insurance,sustained or incurred by the Insured by reason of: Public Records. y I 1. Title being vested other than as stated in Schedule A. 8. Any taking by a governmental body that has occurred and is 1 2. Any defect in or lien or encumbrance on the Title.This Covered binding on the rights of a purchaser for value without Knowledge. dY i Risk includes but is not limited to insurance against loss from 9. TMe being vested other than as stated in Schedule A or being ! +i (a) A defect in the Title caused by defective t (i) forgery, fraud, undue influence, duress, incompetency, (a) as a result of the avoidance in whole or in part, or from a 1 incapacity,or impersonation; court order providing an alternative remedy,of a transfer of I ii failure of an person or Entity to have authorized a all or an `- i (") y pe ty y part of the title to or any interest in the Land 5 •.i transfer or conveyance; occurring prior to the transaction vesting Title as shown in ri+r4 r I} (iii) a document affecting Title not properly created, Schedule A because that prior transfer constituted a !! 1 executed,witnessed,sealed,acknowledged,notarized,or fraudulent or preferential transfer under federal bankruptcy, i I, - { delivered; state insolvency,or similar creditors'rights laws;or ► I` (iv) failure to perform those acts necessary to create a (b) because the instrument of transfer vesting Title as shown in I +� document by electronic means authorized by law; Schedule A constitutes a preferential transfer under federal L 'i j { (v) a document executed under a falsified, expired, or bankruptcy,state insolvency, or similar creditors'rights laws otherwise invalid power of attorney; by reason of the failure of its recording in the Public Records 4 " (vi)a document not properly filed, recorded, or indexed in (i) to be timely,or rltlr the Public Records including failure to perform those acts (ii) to impart notice of its existence to a purchaser for value ( ! by electronic means authorized by law;or or to a judgment or lien creditor. ) (vii)a defective judicial or administrative proceeding. 10. Any defect in or lien or encumbrance on the Title or other matter it i f (b) The lien of real estate taxes or assessments imposed on the included in Covered Risks 1 through 9 that has been created or ( Title by a governmental authority due or payable,but unpaid. attached or has been filed or recorded in the Public Records (c) Any encroachment, encumbrance, violation, variation, or subsequent to Date of Policy and prior to the recording of the adverse circumstance affecting the Title that would be deed or other instrument of transfer in the Public Records that ; disclosed by an accurate and complete land survey of the vests Title as shown in Schedule A. Land. The term "encroachment"includes encroachments of existing improvements located on the Land onto adjoining The Company will also pay the costs, attorneys' fees, and expenses �►{ land, and encroachments onto the Land of existing incurred in defense of any matter insured against by this policy, but ►-�y«r�e ,) improvements located on adjoining land. only to the extent provided in the Conditions. 3. Unmarketable Title. ' 4. No right of access to and from the Land. First American Title Insurance Company ti 5. The violation or enforcement of any law, ordinance, permit, or / •`I governmental regulation(including those relating to building and ,4— zoning)restricting,regulating,prohibiting,or relating to U y (a) the occupancy,use,or enjoyment of the Land; K (b) the character, dimensions, or location of any improvement .l erected on the Land; ' t (c) the subdivision of land;or I +f (d) environmental protection Nj ( if a notice, describing any part of the Land, is recorded in the { { Public Records setting forth the violation or intention to i enforce,but only to the extent of the violation or enforcement referred to in that notice. Ir �� 6. An enforcement action based on the exercise of a governmental - ��1►'I"i�"��"ti1r"ll`f"��"��'rti�'t �f"111"ri"�i't "��� � ,y't '� -',• . �4 .7-2 Form No.1402.06 Policy Page 2 ALTA Owner's Policy(6-17-06) Policy Number: EXCLUSIONS FROM COVERAGE (ii) With regard to (A), (B), (C),and(D) reserving, however, all rights The following matters are expressly excluded from the coverage of this policy,and and defenses as to any successor that the Company would have had the Company will not pay loss or damage,costs,attorneys'fees,or expenses that against any predecessor Insured. arise by reason of: (e) "Insured Claimant":An Insured claiming loss or damage. 1. (a) Any law,ordinance,permit,or governmental regulation(including those (F) "Knowledge"or"Known":Actual knowledge,not constructive knowledge relating to building and zoning) restricting, regulating, prohibiting, or or notice that may be imputed to an Insured by reason of the Public relating to Records or any other records that impart constructive notice of matters (i) the occupancy,use,or enjoyment of the Land; affecting the Title. (ii)the character,dimensions,or location of any improvement erected on (g) "Land":The land described in Schedule A,and affixed improvements that the Land; by law constitute real property. The term "Land"does not include any (III) the subdivision of land;or property beyond the lines of the area described in Schedule A, nor any (iv) environmental protection; right, title, interest, estate, or easement in abutting streets, roads, or the effect of any violation of these laws, ordinances, or governmental avenues,alleys,lanes,ways, or waterways,but this does not modify or regulations.This Exclusion 1(a)does not modify or limit the coverage provided limit the extent that a right of access to and from the Land is insured by under Covered Risk 5. this policy. (b) Any governmental police power.This Exclusion 1(b) does not modify or (h) "Mortgage": Mortgage, deed of trust, trust deed, or other security limit the coverage provided under Covered Risk 6. instrument, Including one evidenced by electronic means authorized by 2. Rights of eminent domain. This Exclusion does not modify or limit the law. coverage provided under Covered Risk 7 or 8. (1) "Public Records": Records established under state statutes at Date of 3. Defects,liens,encumbrances,adverse claims,or other matters Policy for the purpose of imparting constructive notice of matters relating (a) created,suffered,assumed,or agreed to by the Insured Claimant; to real property to purchasers for value and without Knowledge. With (b) not Known to the Company,not recorded in the Public Records at Date of respect to Covered Risk 5(d), "Public Records" shall also include Policy,but Known to the Insured Claimant and not disclosed in writing to environmental protection liens filed in the records of the clerk of the the Company by the Insured Claimant prior to the date the Insured United States District Court for the district where the Land is located. Claimant became an Insured under this policy; 0) "Title":The estate or interest described in Schedule A. (c) resulting In no loss or damage to the Insured Claimant; (k) "Unmarketable Title":Title affected by an alleged or apparent matter that (d) attaching or created subsequent to Date of Policy(however,this does not would permit a prospective purchaser or lessee of the Title or lender on modify or limit the coverage provided under Covered Risks 9 and 10);or the Title to be released from the obligation to purchase,lease,or lend if (e) resulting in loss or damage that would not have been sustained if the there is a contractual condition requiring the delivery of marketable title. Insured Claimant had paid value for the Title. 4. Any claim,by reason of the operation of federal bankruptcy,state insolvency, 2. CONTINUATION OF INSURANCE or similar creditors'rights laws,that the transaction vesting the Title as shown The coverage of this policy shall continue in force as of Date of Policy in favor in Schedule A,is of an Insured,but only so long as the Insured retains an estate or interest in the (a) a fraudulent conveyance or fraudulent transfer;or Land, or holds an obligation secured by a purchase money Mortgage given by a (b) a preferential transfer for any reason not stated in Covered Risk 9 of this purchaser from the Insured,or only so long as the Insured shall have liability by policy. reason of warranties in any transfer or conveyance of the Title.This policy shall not 5. Any lien on the Title for real estate taxes or assessments imposed by continue in force in favor of any purchaser from the Insured of either(i)an estate governmental authority and created or attaching between Date of Policy and or interest In the Land,or(ii)an obligation secured by a purchase money Mortgage the date of recording of the deed or other instrument of transfer in the Public given to the Insured. Records that vests Title as shown in Schedule A. 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT CONDITIONS The Insured shall notify the Company promptly in writing(i)In case of any 1. DEFINITION OF TERMS litigation as set forth in Section 5(a)of these Conditions, (ii)In case Knowledge The following terms when used in this policy mean: shall come to an Insured hereunder of any claim of title or interest that is adverse (a) "Amount of Insurance": The amount stated in Schedule A, as may be to the Title, as insured, and that might cause loss or damage for which the increased or decreased by endorsement to this policy, increased by Company may be liable by virtue of this policy, or(III) if the Title, as insured,is Section 8(b),or decreased by Sections 10 and 11 of these Conditions. rejected as Unmarketable Title. If the Company is prejudiced by the failure of the (b) "Date of Policy":The date designated as"Date of Policy"in Schedule A. Insured Claimant to provide prompt notice,the Company's liability to the Insured (c) "Entity": A corporation, partnership, trust, limited liability company, or Claimant under the policy shall be reduced to the extent of the prejudice. other similar legal entity. (d) "Insured":The Insured named in Schedule A. 4. PROOF OF LOSS (i) The term"Insured"also includes In the event the Company is unable to determine the amount of loss or (A) successors to the Title Of the Insured by operation of law as damage,the Company may,at its option,require as a condition of payment that distinguished from purchase,including heirs,devisees,survivors, the Insured Claimant furnish a signed proof of loss.The proof of loss must describe personal representatives,or next of kin; the defect, lien,encumbrance,or other matter insured against by this policy that (B) successors to an Insured by dissolution,merger, consolidation, constitutes the basis of loss or damage and shall state,to the extent possible,the distribution,or reorganization; basis of calculating the amount of the loss or damage. (C) successors to an Insured by its conversion to another kind of Entity; S. DEFENSE AND PROSECUTION OF ACTIONS (D) a grantee of an Insured under a deed delivered without (a) Upon written request by the Insured,and subject to the options contained payment of actual valuable consideration conveying the Title in Section 7 of these Conditions,the Company,at its own cost and without (1) if the stock,shares,memberships,or other equity interests unreasonable delay, shall provide for the defense of an Insured in of the grantee are wholly-owned by the named Insured, litigation in which any third party asserts a claim covered by this policy (2) if the grantee wholly owns the named Insured, adverse to the Insured. This obligation is limited to only those stated (3) if the grantee is wholly-owned by an affiliated Entity of the causes of action alleging matters insured against by this policy. The named Insured, provided the affiliated Entity and the Company shall have the right to select counsel of its choice(subject to the named Insured are both wholly-owned by the same person right of the Insured to object for reasonable cause) to represent the or Entity,or Insured as to those stated causes of action.It shall not be liable for and (4) if the grantee is a trustee or beneficiary of a trust created will not pay the fees of any other counsel.The Company will not pay any by a written instrument established by the Insured named fees,costs,or expenses incurred by the Insured in the defense of those in Schedule A for estate planning purposes. causes of action that allege matters not insured against by this policy. (b) The Company shall have the right,in addition to the options contained in First American Title Insurance Company Form No.1402.06 Policy Page 3 ALTA Owner's Policy(6-17-06) Policy Number: Section 7 of these Conditions,at its own cost,to institute and prosecute attorneys'fees,and expenses incurred by the Insured Claimant that were any action or proceeding or to do any other act that in its opinion may be authorized by the Company up to the time of payment and that the necessary or desirable to establish the Title,as insured,or to prevent or Company is obligated to pay. reduce loss or damage to the Insured. The Company may take any Upon the exercise by the Company of either of the options provided for in appropriate action under the terms of this policy,whether or not it shall subsections(b)(i)or(ii),the Company's obligations to the Insured under this be liable to the Insured. The exercise of these rights shall not be an policy for the claimed loss or damage,other than the payments required to be admission of liability or waiver of any provision of this policy. If the made,shall terminate,including any liability or obligation to defend,prosecute, Company exercises its rights under this subsection, it must do so or continue any litigation. diligently. (c) Whenever the Company brings an action or asserts a defense as required S. DETERMINATION AND EXTENT OF LIABILITY or permitted by this policy, the Company may pursue the litigation to a This policy is a contract of Indemnity against actual monetary loss or damage final determination by a court of competent jurisdiction,and it expressly sustained or incurred by the Insured Claimant who has suffered loss or damage by reserves the right,in its sole discretion,to appeal any adverse judgment reason of matters insured against by this policy. or order. (a) The extent of liability of the Company for loss or damage under this policy shall not exceed the lesser of 6. DUTY OF INSURED CLAIMANT TO COOPERATE (i) the Amount of Insurance;or (a) In all cases where this policy permits or requires the Company to (ii) the difference between the value of the Title as insured and the value prosecute or provide for the defense of any action or proceeding and any of the Title subject to the risk insured against by this policy. appeals, the Insured shall secure to the Company the right to so (b) If the Company pursues its rights under Section 5 of these Conditions and prosecute or provide defense in the action or proceeding, Including the is unsuccessful in establishing the Title,as insured, right to use, at its option, the name of the Insured for this purpose. (i) the Amount of Insurance shall be increased by 10%,and Whenever requested by the Company, the Insured, at the Company's (ii) the Insured Claimant shall have the right to have the loss or damage expense, shall give the Company all reasonable aid (i) in securing determined either as of the date the claim was made by the Insured evidence, obtaining witnesses, prosecuting or defending the action or Claimant or as of the date it is settled and paid. proceeding,or effecting settlement,and(ii)in any other lawful act that in (c) In addition to the extent of liability under(a)and(b),the Company will the opinion of the Company may be necessary or desirable to establish also pay those costs,attorneys'fees,and expenses incurred in accordance the Title or any other matter as Insured.If the Company is prejudiced by with Sections 5 and 7 of these Conditions. the failure of the Insured to furnish the required cooperation, the Company's obligations to the Insured under the policy shall terminate, 9. LIMITATION OF LIABILITY including any liability or obligation to defend,prosecute,or continue any (a) If the Company establishes the Title,or removes the alleged defect,lien, litigation, with regard to the matter or matters requiring such or encumbrance, or cures the lack of a right of access to or from the cooperation. Land, or cures the claim of Unmarketable Title, all as insured, in a (b) The Company may reasonably require the Insured Claimant to submit to reasonably diligent manner by any method, including litigation and the examination under oath by any authorized representative of the Company completion of any appeals, it shall have fully performed its obligations and to produce for examination, Inspection, and copying, at such with respect to that matter and shall not be liable for any loss or damage reasonable times and places as may be designated by the authorized caused to the Insured. representative of the Company, all records, in whatever medium (b) In the event of any litigation,including litigation by the Company or with maintained, Including books, ledgers, checks, memoranda, the Company's consent, the Company shall have no liability for loss or correspondence, reports, e-mails, disks, tapes, and videos whether damage until there has been a final determination by a court of bearing a date before or after Date of Policy,that reasonably pertain to competent jurisdiction,and disposition of all appeals,adverse to the Title, the loss or damage. Further, if requested by any authorized as Insured. representative of the Company, the Insured Claimant shall grant its (c) The Company shall not be liable for loss or damage to the Insured for permission,in writing,for any authorized representative of the Company liability voluntarily assumed by the Insured in settling any claim or suit to examine, inspect, and copy all of these records in the custody or without the prior written consent of the Company. control of a third party that reasonably pertain to the loss or damage.All information designated as confidential by the Insured Claimant provided 10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF to the Company pursuant to this Section shall not be disclosed to others LIABILITY unless,in the reasonable judgment of the Company,it is necessary in the All payments under this except payments made for costs, attorneys' 1 9ry P Y Policy, P P Y Y administration of the claim. Failure of the Insured Claimant to submit for fees,and expenses, shall reduce the Amount of Insurance by the amount of the examination under oath, produce any reasonably requested information, payment. or grant permission to secure reasonably necessary information from third parties as required in this subsection, unless prohibited by law or 11. LIABILITY NONCUMULATIVE governmental regulation, shall terminate any liability of the Company The Amount of Insurance shall be reduced by any amount the Company pays under this policy as to that claim. under any policy insuring a Mortgage to which exception is taken in Schedule B or to which the Insured has agreed,assumed,or taken subject,or which is executed 7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION by an Insured after Date of Policy and which is a charge or lien on the Title,and OF LIABILITY the amount so paid shall be deemed a payment to the Insured under this policy. In case of a claim under this policy, the Company shall have the following additional options: 12. PAYMENT OF LOSS (a) To Pay or Tender Payment of the Amount of Insurance. When liability and the extent of loss or damage have been definitely fixed in To pay or tender payment of the Amount of Insurance under this policy accordance with these Conditions,the payment shall be made within 30 days. together with any costs, attorneys' fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of 13. RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT payment or tender of payment and that the Company is obligated to pay. (a) Whenever the Company shall have settled and paid a claim under this Upon the exercise by the Company of this option, all liability and policy, it shall be subrogated and entitled to the rights of the Insured obligations of the Company to the Insured under this policy,other than to Claimant in the Title and all other rights and remedies in respect to the make the payment required in this subsection,shall terminate, including claim that the Insured Claimant has against any person or property,to the any liability or obligation to defend,prosecute,or continue any litigation. extent of the amount of any loss, costs, attorneys' fees, and expenses (b) To Pay or Otherwise Settle With Parties Other Than the Insured or With paid by the Company.If requested by the Company,the Insured Claimant the Insured Claimant. shall execute documents to evidence the transfer to the Company of these (i) To pay or otherwise settle with other parties for or in the name of an rights and remedies. The Insured Claimant shall permit the Company to Insured Claimant any claim insured against under this policy. In sue, compromise, or settle in the name of the Insured Claimant and to addition, the Company will pay any costs, attorneys' fees, and use the name of the Insured Claimant in any transaction or litigation expenses incurred by the Insured Claimant that were authorized by involving these rights and remedies. the Company up to the time of payment and that the Company is If a payment on account of a claim does not fully cover the loss of the obligated to pay;or Insured Claimant, the Company shall defer the exercise of its right to (6) To pay or otherwise settle with the Insured Claimant the loss or recover until after the Insured Claimant shall have recovered its loss, damage provided for under this policy, together with any costs. First American Title Insurance Company Form No.1402.06 Policy Page 4 ALTA Owner's Policy(6-17-06) Policy Number: (b) The Company's right of subrogation includes the rights of the Insured to (d) Each endorsement to this policy Issued at any time is made a part of this indemnities, guaranties, other policies of Insurance, or bonds, policy and is subject to all of its terms and provisions. Except as the notwithstanding any terms or conditions contained in those instruments endorsement expressly states,it does not(1)modify any of the terms and that address subrogation rights. provisions of the policy,(11)modify any prior endorsement,(Ili)extend the Date of Policy,or(iv)Increase the Amount of Insurance. 14. ARBITRATION Either the Company or the Insured may demand that the claim or controversy 16.SEVERABILITY shall be submitted to arbitration pursuant to the Tile Insurance Arbitration Rules of In the event any provision of this policy,in whole or in part,Is held invalid or the American Land Title Association ("Rules'l. Except as provided in the Rules, unenforceable under applicable law,the policy shall be deemed not to include that there shall be no joinder or consolidation with claims or controversies of other provision or such part heid to be invalid,but all other provisions shall remain in full persons.Arbitrable matters may include,but are not limited to,any controversy or force and effect. claim between the Company and the Insured arising out of or relating to this policy, any service in connection with its issuance or the breach of a policy 17. CHOICE OF LAW;FORUM provision,or to any other controversy or claim arising out of the transaction giving (a) Choice of Law:The Insured acknowledges the Company has underwritten rise to this policy. All arbitrable matters when the Amount of Insurance is the risks covered by this policy and determined the premium charged $2,000,000 or less shall be arbitrated at the option of either the Company or the therefore In reliance upon the law affecting Interests in real property and Insured. All arbitrable matters when the Amount of Insurance Is In excess of applicable to the interpretation, rights, remedies, or enforcement of $2,000,000 shall be arbitrated only when agreed to by both the Company and the policies of title Insurance of the jurisdiction where the Land Is located. Insured.Arbitration pursuant to this policy and under the Rules shall be binding Therefore,the court or an arbitrator shall apply the law of the jurisdiction upon the parties.Judgment upon the award rendered by the Arbitrator(s)may be where the Land is located to determine the validity of claims against the entered in any court of competent jurisdiction. Title that are adverse to the Insured and to Interpret and enforce the terms of this policy.In neither case shall the court or arbitrator apply Its 15. LIABILITY LIMITED TO THIS POLICY;POLICY ENTIRE CONTRACT conflicts of law principles to determine the applicable law. (a) This policy together with all endorsements,if any,attached to it by the (b) Choice of Forum: Any litigation or other proceeding brought by the Company is the entire policy and contract between the Insured and the Insured against the Company must be filed only In a state or federal court Company.In Interpreting any provision of this policy,this policy shall be within the United States of America or its territories having appropriate construed as a whole. jurisdiction. (b) Any claim of loss or damage that arises out of the status of the Title or by any action asserting such claim shall be restricted to this policy. 18. NOTICES,WHERE SENT (c) Any amendment of or endorsement to this policy must be In writing and Any notice of claim and any other notice or statement in writing required to be authenticated by an authorized person, or expressly Incorporated by given to the Company under this policy must be given to the Company at 1 First i Schedule A of this policy. American Way,Santa Ana,CA 92707,Attn:Claims Department. POLICY OF TITLE INSURANCE ti A M E R , C gM t i First American Title Insurance Company I Form No.1402.06 Policy Page 5 ALTA Owner's Policy(6-17-06) Policy Number: SCHEDULE A First American Title Insurance Company Name and Address of the issuing Title Insurance Company: First American Title Insurance Company 5 First American Way Santa Ana, CA 92707 File No.: NCS-500967-SAl Policy NO.: Address Reference: 1900 Main Street, 1919 17th Street, Huntington Beach, CA Amount of Insurance: $36,275,000.00 Premium: $ Date of Policy: at / 1. Name of Insured: 9�e City of Huntington Beach,a California municipal corporation, Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California and The Bank of New York Mellon Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, as trustee i 2. The estate or interest in the Land that is insured by this policy is: ESTATE A: A Fee,subject to the terms, covenants, conditions and provisions of the Site Lease and Lease Agreement shown below in Estates B and C ESTATE B: A leasehold estate as created by that certain Site Lease dated September 1, 2011, executed by City of Huntington Beach, a municipal corporation as lessor and Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the State of California as lessee, Site Lease(memo or full lease) recorded as of Official Records. �U Certain rights of the lessee under the Site Lease have been assigned to The Bank of New York ,sw Mellon Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, as trustee pursuant to the Indenture dated September 1, 2011,as provided in the Lease Agreement and Assignment dated September 1, 2001 and disclosed by a Memorandum of Lease Agreement and Assignment recorded as Instrument No. of Official Records. ESTATE C: A subleasehold estate as created by that certain unrecorded Lease Agreement-and Assignment dated September 1, 2011, executed by Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the Sate of California as lessor and City of Huntington Beach, a municipal corporation as lessee and The Bank of New York , Mellon Trust Company, N.A., a national banking association, as disclosed by a Memorandum of Lease Agreement and Assignment recorded as—__ of Official Records. First American Title Insurance Company Form No.1402.06 Policy Page 6 ALTA Owner's Policy(6-17-06) Policy Number: Certain rights of the sublessor under Lease Agreement have been assigned to The Bank of New York Mellon Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, as trustee pursuant to the Indenture dated September 1, 2011,as provided in the Lease Agreement and Assignment dated September 1, 2001 and o disclosed by a Memorandum of Lease Agreement and Assignment recorded as � � Instrument No. of Official Records. i 3. Title is vested in: City of Huntington Beach, a municipal corporation,as to ESTATES A and C, and Huntington Beach Public Financing Authority, a joint powers authority organized and existing under the laws of the Sate of California, as to ESTATE B. I 4. The Land referred to in this policy is described as follows: See Exhibit"A"attached hereto and made a part hereof 1 i i i �I. i kY. Ii First American Tide Insurance Company i Form No. 1402.06 Policy Page 7 ALTA Owner's Policy(6-17-06) Policy Number: SCHEDULE B File No.: NCS-500967-SA1 Policy No.: EXCEPTIONS FROM COVERAGE This Policy does not insure against loss or damage, and the Company will not pay costs, attorneys` fees, or expenses that arise by reason of: 1. General and special taxes and assessments for the fiscal year 2011-2012, a lien not yet due or payable. 2. General and special taxes and assessments for the fiscal year 2010-2011 are exempt. If the exempt status is terminated an additional tax may be levied. Account No. 023-041-03, 023-041- 04, 023-041-06, 023-031-10 and 023-031-13 3. The lien of supplemental taxes, if any,assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code. Although the above supplemental taxes may be a lien, the installments thereof are not yet due or payable. 4. Rights of the public in and to that portion of the land lying within Utica Avenue. 5. The dedication to public use, all public highways, parks, courts, commons, and other ground shown on the map of said tract intended for public use, except the rights to the use of said streets, avenues and alleys for water pipes and conduits, railroads, telephone poles, wires and conduits, and incidental purposes, as indorsed on the Map of Tract No. 12, recorded in Book 9, Page 13 of Miscellaneous Maps. 6. The effect of an unrecorded natural gas contract, dated May 23, 1952, between Snyder& Hoff, as producers, and Fullerton Oil Company, insofar as it pertains to Lot 2 of Block 1903 of the herein described and other land, as disclosed in a Conveyance and Assignment dated November 30, 1954, from Fullerton Oil &Gas Corporation, a Delaware corporation, to Monterey Oil Company, a Delaware corporation, recorded December 3, 1954 in Book 2885, Page 102 of Official Records. 7. Terms and provisions of an unrecorded lease dated January 7, 1955, by and between Huntington Beach Company, a corporation as lessor and Southwest Exploration Company, a corporation as lessee, as disclosed by a Agreement recorded March 3, 1955 as Book 2982, Page 251 of Official Records. (Affects Lots 2 and 4 of Block 1903) Defects, liens, encumbrances or other matters affecting the leasehold estate, whether or not shown by the public records are not shown herein. i I First American Title Insurance Company Form No. 1402.06 Policy Page 8 ALTA Owner's Policy(6-17-06) Policy Number: 8. An easement for the exclusive right from time to time to drill in, into and through the subsurface below five hundred (500) feet under the surface of said property without the right to use the surface and incidental purposes, recorded December 17, 1969 as Book 9166, Page 715 of Official Records. In Favor of: Huntington Beach Company, a corporation Affects: Portions of Parcels 1 and 2 The location of the easement cannot be determined from record information. 9. An easement for public utilities and incidental purposes, recorded February 2, 1972 as Book 9987, Page 626 of Official Records. In Favor of: Southern California Edison Company, a corporation Affects: Lots 8 and 10 in Block 2001 and Lot 21 in Block 2002 10. The fact that the land lies within the boundaries of the Yorktown-Lake Redevelopment Project Area, as disclosed by the document recorded October 5, 1982 as Instrument No. 82-350908 of Official Records. The fad that the land lies within the boundaries of the Amended/Merged Huntington Beach Redevelopment Project Area, as disclosed by the document recorded December 17, 1996 as Instrument No. 19960634645 of Official Records. 11. An easement for below a depth of five hundred (500)feet beneath the surface, grantee may slant drill and incidental purposes, recorded July 5, 1988 as Instrument No. 88-319698 of Official Records. In Favor of: Angus Petroleum Corporation, a Delaware corporation Affects: Portions of Parcels 1 and 2 The location of the easement cannot be determined from record information. 12. An easement for utility and incidental purposes, recorded March 16, 1989 as Instrument No. 89- 137620 of Official Records. In Favor of: City of Huntington Beach Affects: Parcel 2 13. An easement for public utilities and incidental purposes, recorded May 16, 1989 as Instrument No. 89-258686 of Official Records. In Favor of: Southern California Edison Company Affects: As described therein 14. An easement for water, sewer or gas pipes, telephone and electric lines and poles, railroads, conduits, or any other public utility and incidental purposes, recorded September 23, 1916 in Book 294 of Deeds, Page 390. In Favor of: Huntington Beach Company, a corporation Affects: Parcel The location of the easement cannot be determined from record information. 15. An easement for water, sewer, or gas pipes, telephone and electric lines and poles, railroads, conduits, or any other public utility and incidental purposes, recorded October 5, 1951 as Book 2238, Page 323 of Official Records. In Favor of: Huntington Beach Company, a corporation Affects: Parcel 3 First American Title Insurance Company Form No. 1402.06 Policy Page 9 ALTA Owner's Policy(6-17-06) Policy Number: The location of the easement cannot be determined from record information. 16. An easement shown or dedicated on the map filed or recorded February 2, 1990 as Tract No. 13569 in Book 652, Pages 28 through 33 of Miscellaneous Maps For: Street purposes, Park Street and Lake Street and incidental purposes. (Affects Parcel 3) 17. An easement shown or dedicated on the map filed or recorded February 2, 1990 as Tract No. 13569 in Book 652, Pages 28 through 33 of Miscellaneous Maps For: Domestic water system and appurtenances,and the sanitary sewer system and appurtenances and incidental purposes. (Affects Parcel 3) 18. An easement for public utilities and incidental purposes, recorded April 4, 1990 as Instrument No. 90-176640 of Official Records. In Favor of: GTE California Incorporated, a corporation Affects: Parcel 3 The location of the easement cannot be determined from record information. 19. Easements, liens or encumbrances, or claims thereof, which are not shown by the public records. 20. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 21. The effect of any failure to comply with the terms, covenants, conditions and provisions of the Site Lease and Lease Agreement described in Schedule A. 22. The terms and provisions contained in the unrecorded Indenture, dated September 11, 2011, by and among the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California, the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the"City', and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as Trustee subject to all the terms, provisions and conditions therein contained,as disclosed by the Site Lease and the Lease Agreement described in Schedule A. First American Title Insurance Company Form No.1402.06 Policy Page 10 ALTA Owner's Policy(6-17-06) Policy Number: EXHIBIT"A" File No.: NCS-500967-SA1 Policy No.: Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: PARCEL is THOSE PORTIONS OF BLOCKS 1901, 1903, 2001 AND 2002 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH PARK STREET, UNION AVENUE,AND THE ALLEYS IN SAID BLOCKS,AS SHOWN ON SAID MAP AND AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH,A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 6, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY,AND TOGETHER WITH PORTIONS OF PINE STREET AND SEVENTEENTH STREET,AS SHOWN SAID MAP AND AS VACATED BY RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH,A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET,60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00° 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 451 19' 06" EAST 24.04 FEET; THENCE SOUTH 890 40' 54" EAST 166.03 FEET TO THE CENTERLINE OF SEVENTEENTH STREET, 70.00 FEET IN WIDTH,AS SHOWN ON SAID MAP; THENCE NORTH 411 38' 23" EAST 427.42 FEET ALONG SAID CENTERLINE OF SEVENTEENTH STREET; THENCE SOUTH 89° 40' 54" EAST 137.05 FEET; THENCE NORTH 000 19' 06" EAST 155.89 FEET ALONG A LINE PARALLEL TO THE CENTERLINE OF SAID LAKE AVENUE,TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 411 38' 23" EAST 134.38 FEET ALONG SAID CENTERLINE OF SAID SEVENTEENTH STREET AND ITS NORTHEASTERLY PROLONGATION TO A POINT ON THE NORTHERLY LINE OF SAID TRACT NO. 12; THENCE NORTH 480 21' 17"WEST 474.37 FEET ALONG SAID NORTHERLY TRACT LINE OF TRACT NO. 12; THENCE NORTH 890 40'01" WEST 535.29 FEET CONTINUING ALONG SAID NORTHERLY TRACT LINE TO THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH, AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE SOUTH 00' 20' 13"WEST 1266.12 FEET ALONG SAID EASTERLY LINE TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 891 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET, 60.00 FEET IN WIDTH, AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE, 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 000 19' 06" EAST 358.00 FEET ALONG SAID PARALLEL LINE;THENCE NORTH 451 19' 06" EAST 24.04 FEET; THENCE SOUTH 890 40' 54" EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH,AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00' 20' 13" EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID TRACT NO. 12; THENCE NORTH 890 40' 01" WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 000 20' 13" WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 891 39' 33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. First American Title Insurance Company i Form No. 1402.06 Policy Page 11 ALTA Owner's Policy(6-17-06) Policy Number: ALSO EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN TRACT NO. 13569,AS SHOWN ON A MAP RECORDED IN BOOK 652, PAGES 28 THROUGH 33, OF SAID MISCELLANEOUS MAPS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS,ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS,AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED(500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER,THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED(500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER,AS RESERVED BY HUNTINGTON BEACH COMPANY,A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED(500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR i THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED(500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER,AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 5, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-03,023-041-04 AND A PORTION OF 023-031-14 PARCEL 2: THOSE PORTIONS OF BLOCKS 1902, 1903 AND 2002 INCLUDING A PORTION OF UTICA STREET,ALL OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA,TOGETHER WITH THOSE PORTIONS OF UNION AVENUE AND THE ALLEYS IN SAID BLOCKS AS SHOWN ON SAID MAP AS VACATED BY RESOLUTION NO. 3415 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH,A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 6, 1972 IN BOOK 9956, PAGE 849 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, TOGETHER WITH THAT PORTION OF SEVENTEENTH STREET AS VACATED BY RESOLUTION NO. 5989 OF SAID CITY COUNCIL,A CERTIFIED COPY OF WHICH WAS RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89-137620 OF SAID OFFICIAL RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF UTICA STREET 60.00 FEET IN WIDTH AND A LINE PARALLEL WITH AND 840.00 FEET WESTERLY OF THE CENTERLINE OF LAKE AVENUE 90.00 FEET IN WIDTH, BOTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00 DEG, 19'06" EAST 358.00 FEET ALONG SAID PARALLEL LINE; THENCE NORTH 45 DEG. 19' 06" EAST 24.04 FEET; THENCE SOUTH 89 DEG. 40' 54" EAST 27.23 FEET TO A LINE PARALLEL WITH AND 245.00 FEET EASTERLY OF THE EASTERLY RIGHT OF WAY LINE OF MAIN STREET, 120.00 FEET IN WIDTH AS SHOWN ON SAID MAP OF TRACT NO. 12; THENCE NORTH 00 DEG. 20' 13" EAST 683.13 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO A LINE PARALLEL WITH AND 208.00 FEET SOUTHERLY OF THE NORTHERLY LINE OF BLOCK 2002 OF SAID MAP OF TRACT NO. 12; THENCE NORTH 89 DEG. 40' 01"WEST 245.00 FEET ALONG SAID LAST MENTIONED PARALLEL LINE TO SAID EASTERLY RIGHT OF WAY LINE OF MAIN STREET; THENCE SOUTH 00 DEG. 20' 13"WEST 1058.12 FEET ALONG SAID EASTERLY LINE OF MAIN STREET TO THE CENTERLINE OF SAID UTICA STREET; THENCE SOUTH 89 DEG. 39'33" EAST 200.89 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OIL, GAS, ASPHALT AND ASPHALTUM AND OTHER HYDROCARBONS, AND ALL OTHER MINERALS, WHETHER SIMILAR OR DISSIMILAR TO THOSE HEREIN SPECIFIED, LYING BELOW FIVE HUNDRED (500) FEET UNDER THE SURFACE OF SUCH REAL PROPERTY WITHIN OR THAT MAY BE PRODUCED FROM SAID PROPERTY, PROVIDED, HOWEVER, THAT THERE SHALL NOT BE THE RIGHT TO USE THE SURFACE OF SAID PROPERTY OR FIVE HUNDRED (500) FEET UNDER THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION IN A DEED RECORDED DECEMBER 17, 1969 IN BOOK 9166, PAGE 715 OF OFFICIAL RECORDS. First American Title Insurance Company i Form No.1402.06 Policy Page 12 ALTA Owner's Policy(6-17-06) Policy Number: ALSO EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED(500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED(500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 5, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-031-10, 023-031-13 AND A PORTION OF 023-031-14 PARCEL 3: THOSE PORTIONS OF LOTS 13 AND 14 OF BLOCK 1901 OF TRACT NO. 12, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA,AS SHOWN ON THE MAP RECORDED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA, TOGETHER WITH THOSE PORTIONS OF SEVENTEENTH STREET,AS SHOWN ON SAID MAP AND AS VACATED IN THAT CERTAIN RESOLUTION NO. 5989 OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH,A CERTIFIED COPY OF WHICH RECORDED MARCH 16, 1989 AS INSTRUMENT NO, 89-137620 OF OFFICIAL RECORDS OF ORANGE COUNTY AND PORTIONS OF LAKE AVENUE AND PARK STREET,AS SHOWN ON THE MAP OF TRACT NO. 13569, RECORDED IN BOOK 652, PAGES 28 THROUGH 33 OF MISCELLANEOUS MAPS, RECORDS OF SAID i ORANGE COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE CENTERLINE INTERSECTION OF LAKE AVENUE 90.00 FEET IN WIDTH,AND SEVENTEENTH STREET 70.00 FEET IN WIDTH,AS SHOWN ON SAID MAP OF TRACT NO. 13569; THENCE SOUTH 000 19'06" WEST 207.32 FEET ALONG SAID CENTERLINE OF LAKE AVENUE TO THE CENTERLINE INTERSECTION OF PARK STREET, 52.00 FEET IN WIDTH,AS SHOWN ON THE MAP OF SAID TRACT NO. 13569; THENCE NORTH 891 40' 54"WEST 237.70 FEET ALONG SAID CENTERLINE OF PARK STREET; THENCE NORTH 001 19' 06" EAST 155.89 FEET TO THE CENTERLINE OF SAID SEVENTEENTH STREET; THENCE NORTH 411 38' 23" EAST 68.48 FEET ALONG SAID CENTERLINE TO AN ANGLE POINT IN SAID SEVENTEENTH STREET; THENCE CONTINUING ALONG SAID CENTERLINE OF SEVENTEENTH STREET SOUTH 890 40' 54" EAST 192.48 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM ANY PORTION LYING WITHIN THE AFOREMENTIONED PARCEL 1. EXCEPTING THEREFROM SAID LAND ALL OF THE OIL, GAS AND OTHER MINERALS IN AND UNDER AND THAT MAY BE PRODUCED BELOW A DEPTH OF FIVE HUNDRED (500) FEET BENEATH THE SURFACE OF SAID LAND, EXCEPT THE USE OF THE SURFACE OF THE LAND OR THAT PORTION OF SAID LAND FROM THE SURFACE TO FIVE HUNDRED(500) FEET BELOW THE SURFACE FOR ANY PURPOSE WHATSOEVER, AS GRANTED TO ANGUS PETROLEUM CORPORATION, A DELAWARE CORPORATION IN A DEED RECORDED JULY 5, 1988 AS INSTRUMENT NO. 88-319698 OF OFFICIAL RECORDS. APN: 023-041-06 PARCEL 4: THOSE LANDS IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA BEING A PORTION OF SEVENTEENTH STREET AS SHOWN ON TRACT NO. 12, FILED IN BOOK 9, PAGE 13 OF MISCELLANEOUS MAPS,TOGETHER WITH A PORTION OF MANSION AVENUE AS DESCRIBED IN THE DEEDS TO THE CITY OF HUNTINGTON BEACH RECORDED SEPTEMBER 23, 1916, IN BOOK 294, PAGE 390 OF DEEDS, AND THE DEED RECORDED JULY 21, 1950, IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS WHICH WERE VACATED,AS A PORTION OF PARCEL 1 BY CITY OF HUNTINGTON BEACH RESOLUTION NO. 5989, ON JANUARY 17, 1989 RECORDED MARCH 16, 1989 AS INSTRUMENT NO. 89- 137620 OF OFFICIAL RECORDS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST EASTERLY CORNER OF LOT 3, BLOCK 2001, AS SHOWN ON SAID TRACT NO. 12,THENCE NORTH 41019'00"EAST, 54.43 FEET, ALONG THE NORTHEAST PROLONGATION OF First American Title Insurance Company Form No. 1402.06 Policy Page 13 ALTA Owner's Policy(6-17-06) Policy Number: THE SOUTHEAST LINE OF SAID LOT 3,TO AN INTERSECTION WITH THE SOUTHWESTERLY LINE OF YORKTOWN AVENUE(FORMERLY MANSION AVENUE), SAID INTERSECTION BEING THE BEGINNING OF A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 850.00 FEET,A RADIAL LINE TO SAID POINT OF CURVATURE BEARS SOUTH 27011'59"WEST; THENCE SOUTHEASTERLY 36.30 FEET,ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 2026'48"1 TO THE INTERSECTION OF SAID CURVE AND THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET SAID INTERSECTION BEING THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION,A RADIAL LINE TO SAID TRUE POINT OF BEGINNING BEARS SOUTH 24045'11" W EST; THENCE CONTINUING SOUTHEASTERLY 44.96 FEET, ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 3001'51",TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 32.00 FEET; THENCE SOUTHEASTERLY 38.13 FEET ALONG SAID CURVE,THROUGH A CENTRAL ANGLE OF 68016'40", TO THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF LAKE STREET(FORMERLY LAKE AVENUE), 90.00 FEET IN WIDTH,AS SHOWN ON SAID TRACT NO. 12; THENCE SOUTH 00000'00"WEST, 49.93 FEET ALONG SAID PROLONGATION OF THE WESTERLY LINE OF LAKE STREET TO THE CENTERLINE OF SEVENTEENTH STREET(70.00 FEET IN WIDTH)AS SHOWN ON SAID TRACT NO. 12; i THENCE WESTERLY ALONG THE CENTERLINE OF SAID SEVENTEENTH STREET,AS SHOWN ON SAID TRACT NO. 12, NORTH 90000'00"WEST, 147.08 FEET,TO AN ANGLE POINT IN SAID CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO. 12; THENCE NORTHEASTERLY, LEAVING SAID CENTERLINE OF SEVENTEENTH STREET ALONG THE NORTHEASTERLY PROLONGATION OF THE CENTERLINE OF SEVENTEENTH STREET AS SHOWN ON SAID TRACT NO, 12, NORTH 41019'00"EAST, 129.68 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION. EXCEPTING THEREFROM OVER A PORTION OF SAID LAND ALL MINERALS, PETROLEUM,ASPHALTUM, BREA,OIL,GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON OR UNDER, OR THAT MAY BE PRODUCED FROM THE LAND,TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM ADJACENT LANDS INTO AND THROUGH THE SUBSURFACE OF THE LAND; PROVIDED, HOWEVER,THAT GRANTORS SHALL NOT USE THE SURFACE OF THE LAND FOR THE EXPLORATTION, DEVELOPMENT, EXTRACTION OR REMOVAL OF SAID MINERALS OR SUBSTANCES, AS RESERVED BY HUNTINGTON BEACH COMPANY, A CORPORATION AND STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION IN A DEED RECORDED JULY 21, 1950 IN BOOK 2045, PAGE 79 OF OFFICIAL RECORDS. APN: 023-041-07 APN: 023-031-10, 023-041-03, 023-041-04, 023-031-13, 023-031-14, 023-041-06 and 023-041-07 First American Title Insurance Company Form No.1402.06 Policy Page 14 ALTA Owner's Polity(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No.500967 Issued by First American Title Insurance Company The Company insures against loss or damage sustained by the Insured by reason of: 1. The existence,at Date of Policy, of any of the following unless expressly excepted in Schedule B: a. Present violations on the Land of any enforceable covenants, conditions, or restrictions, or any existing improvements on the Land that violate any building setback lines shown on a plat of subdivision recorded or filed in the Public Records. b. Any instrument referred to in Schedule B as containing covenants,conditions, or restrictions on the Land that, in addition, (i)establishes an easement on the Land, (ii) provides for an option to purchase, a right of first refusal,or the prior approval of a future purchaser or occupant, or(iii) provides a right of reentry, possibility of reverter, or right of forfeiture because of violations on the Land of any enforceable covenants, conditions, or restrictions. C. Any notices of violation of covenants, conditions, or restrictions relating to environmental protection recorded or filed in the Public Records. 2. Damage to existing buildings: a. Resulting from the future exercise of any right existing at Date of Policy to use the surface of the Land for the extraction or development of minerals excepted from the description of the Land or excepted in Schedule B. 3. Any final court order or judgment denying the right to maintain any existing building on the Land because of any violation of covenants, conditions, or restrictions,or building setback lines shown on a plat of subdivision recorded or filed in the Public Records. Wherever in this endorsement the words "covenants, conditions, or restrictions"appear, they shall not be deemed to refer to or include the terms, covenants, conditions, or limitations contained in an instrument creating a lease. i As used in paragraphs 1.a. and 3, the words "covenants, conditions, or restrictions"do not include any i covenants, conditions, or restrictions(a) relating to obligations of any type to perform maintenance, repair, or remediation on the Land, or(b) pertaining to environmental protection of any kind or nature, including hazardous or toxic matters, conditions, or substances,except to the extent that a notice of a violation or alleged violation affecting the Land has been recorded or filed in the Public Records at Date of Policy and is not excepted in Schedule B. I i i i I First American Title Insurance Company i Form No.1402.06 Policy Page 15 ALTA Owner's Policy(6-17-06) Policy Number: This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii)modify any prior endorsements, (iii) extend the Date of Policy, or(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous i endorsement is inconsistent with an express provision of this endorsement,this endorsement controls. Otherwise,this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. i American Land Title Association Endorsement 9.2-06(Restrictions,Encroachments,Minerals- Owners Policy-Improved Land)MODIFIED Adopted 6/17J06 i i i I I` E' f i (4' 1 I' I i I f i I I i j First American Tide Insurance Company Form No.1402.06 Policy Page 16 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. Issued by First American Title Insurance Company The Company insures against loss or damage sustained by the Insured by reason of: (1) damage to an existings building located on the Land, or (2) enforced removal or alteration of an existing building located on the Land, as a result of the exercise of the right of use or maintenance of the easement referred to in Exception 4 of Schedule B for the purpose for which it was granted or reserved. This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 28-06(Easement-Damage or Enforced Removal) Adopted 10/16/08 First American Title Insurance Company Form No.1,402.06 Policy Page 17 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. Issued by First American Title Insurance Company The Company insures against loss or damage sustained by the Insured if, at Date of Policy(i)the Land does not abut and have both actual vehicular and pedestrian access to and from Park,Yorktown Avenue, Main Street and Utica Avenue(the "Street(s)"), (ii)the Street(s) is/are not physically open and publicly maintained, or(iii)the Insured has no right to use existing curb cuts or entries along that/those portion(s)of the Street(s)abutting the Land. This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii)modify any prior endorsements, (iii)extend the Date of Policy, or(iv)increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Tide Association Endorsement 17-06(Access and Entry) Adopted 6/17/06 First American Tide Insurance Company Form No.1402.06 Policy Page 18 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. Issued by First American Title Insurance Company The Company insures against loss or damage sustained by the Insured by reason of an environmental protection lien that, at Date of Policy, is recorded in the Public Records or filed in the records of the clerk of the United States district court for the district in which the Land is located, unless the environmental protection lien is set forth as an exception in Schedule B. This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 8.2-06(Commercial Environmental Protection Lien) Adopted 10/16/08 First American Title Insurance Company Form No.1402.06 Policy Page 19 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. Issued by First American Title Insurance Company The Company insures against loss or damage sustained by the Insured by reason of: 1. those portions of the Land identified below not being assessed for real estate taxes under the listed tax identification numbers or those tax identification numbers including any additional land: Parcel: Tax Identification Numbers: PARCELI 023-041-03 PARCEL 1 023-041-04 PARCEL 1 023-031-14 portion PARCEL 2 023-031-10 PARCEL 2 023-031-13 PARCEL 2 023-031-14 portion PARCEL 3 023-041-06 PARCEL 4 023-041-07 2. the easements, if any, described in Schedule A being cut off or disturbed by the nonpayment of real estate taxes assessed against the servient estate. This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 18.1-06(Multiple Tax Parcel) Adopted 6/17/06 First American Title Insurance Company Form No.1402.06 Policy Page 20 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. Issued by First American Title Insurance Company The Company insures against loss or damage sustained by the Insured by reason of: 1. the failure of PARCELS 1 AND 2 of the Land to be contiguous on their common boundaries; 2. the failure of PARCEL 1 of the Land to be contiguous to PARCELS 3 AND 4 of the Land on their common boundaries; 3. the failure of PARCELS 3 AND 4 of the Land to be contiguous on their common boundaries;or 4. the presence of any gaps, strips,or gores separating any of the contiguous boundary lines described above. This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or(iv)increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise,this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. American Land Title Association Endorsement 19-06(Contiguity-Multiple Parcels) Adopted 6/17/06 First American Title Insurance Company t Form No. 1402.06 Policy Page 21 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. Issued By First American Title Insurance Company The Company insures against loss or damage sustained by the Insured by reason of damage to existing improvements, including lawns, shrubbery or trees, resulting from the exercise of any right to use the surface of the Land for the extraction or development of water excepted from the description of the Land or shown as a reservation in Schedule B. This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii)extend the Date of Policy, or(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. 1 I I. CLTA Form 103.5-06(03-09-07) ALTA-Owner or Lender i I First American Title Insurance Company Form No.1402.06 Policy Page 22 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT i Attached to Policy No. Issued by First American Title Insurance Company The Company hereby insures the Insured against loss or damage as a result of the entry of a judgment or decree of a court of competent jurisdiction constituting a final determination and adjudging the invalidity of the leasehold estate described in Estate 6 of Schedule A on the grounds that it is extinguished by a merger of the subleasehold interest described in Estate C of Schedule A with the fee simple title. i This endorsement is issued as part of the policy. Except as it expressly states,it does not(i) modify any of the terms and provisions of the policy, (ii)modify any prior endorsements, (iii)extend the Date of Policy, or(iv)increase the Amount of Insurance.To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior f 'i First American Title Insurance Company I Form No.1402.06 Policy Page 23 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. Issued by First American Title Insurance Company The Company insures the Insured,that the Lease Agreement referred to in ESTATE C of Schedule A of this policy is valid at the Date of Policy as to the Land, and at the commencement of its term, will be binding as to the Land, subject to the effect of: Any failure to comply with the covenants, conditions and provisions of the Site Lease referred to in ESTATE., B of Schedule A or of the Lease Agreement referred to in ESTATE C of Schedule A Any acts of a party or parties to the Lease Agreement, or of its or their successors in interest, or any action in eminent domain, by which any rights or interests or obligations thereunder are released or impaired;and Any termination of the Lease Agreement under any of the provisions thereof. The Company hereby insures against loss which the Insured shall sustain in the event the insurance herein proves to be incorrect.This endorsement is issued as part of the policy. Except as it expressly states, it does not(i)modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii)extend the Date of Policy,or(iv) increase the Amount of Insurance.To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement,this endorsement controls.Otherwise,this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. is i i i i i i First American Title Insurance Company i Form No.1402.06 Policy Page 24 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. 500967 Issued By First American Title Insurance Company That upon the occurrence of a loss otherwise insured against under this policy which results or would result with the lapse of time, in the failure of City of Huntington Beach,a municipal corporation to promptly pay scheduled payments of rent in the amount sufficient to pay the scheduled principal and interest on the Bonds, as defined in the Indenture dated September 11, 2011 by and among the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California, the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as Trustee, when due,such loss shall include the amounts required to pay in full the redemption price(including accrued interest to the date of redemption)of the outstanding Bonds, as provided in the Indenture(the aggregate principal amount of such outstanding Bonds subject to redempti to be calculated as to the date of the occurrence of the loss). This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii)extend the Date of Policy, or(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. r. First American Title Insurance Company i Form No.1402.06 Policy Page 25 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. Issued By First American Title Insurance Company The policy is hereby amended in the following manner: Notwithstanding Paragraph 7 of the Conditions, the Company assures the Insured that, in the event a defect, lien or encumbrance or other matter insured against by this policy creates a loss, the Company shall not without the prior written consent of The Bank of New York Mellon Trust Company, N.A., as Trustee, purchase any Bonds in lieu of providing payment under the policy unless, upon purchase,such Bonds are cancelled, or settle any claim payable to the Insured with any person other than the trustee under the Indenture dated September 1, 2011 by and among the HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California,the CITY OF HUNTINGTON BEACH, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California,and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as Trustee This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title Insurance Company Form No. 1402.06 Policy Page 26 ALTA Owner's Policy(6-17-06) Policy Number: ENDORSEMENT Attached to Policy No. Issued by First American Title Insurance Company The Company insures against loss or damage sustained by the Insured by reason of damage to existing improvements, including lawns, shrubbery or trees resulting from the exercise of any right to use the surface of the Land for the extraction or development of the minerals leased under the oil and gas leases shown in paragraphs 6, 7, 8 and 11 of Schedule B. This endorsement is issued as part of the policy. Except as it expressly states, it does not(i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or(iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement,this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. CLTA Form 100.23-06(03-09-07) ALTA-Lender First American Title Insurance Company CITY OF HUNTINGTON BEACH LEASE REVENUE REFUNDING BONDS,2011 SERIES A DISTRIBUTION LIST September 22,2011 ISSUER City of Huntington Beach 2000 Main Street P.O.Box 190 Huntington Beach,CA 92648 Lori Ann Farrell, Director of Finance (714) 536-5630 Loriann.farrell@surfcity-hb.org Fax: (714) 374-5365 Dahle Bulosan,Acting Budget Manager (714) 536-5648 dbu lo s an6a!s,,rfcity-hb.org Fax: (714) 374-1571 Sunny Han, CPA, CFE, Senior Accountant (714) 536-5907 Sunny.han@surfcity-hb.org Fax: (714) 374-1675 CITY ATTORNEY City of Huntington Beach 2000 Main Street P.O.Box 190 Huntington Beach,CA 92648 Jennifer McGrath, City Attorney (714) 536-5555 @cgrath@surfcity-hb.org Fax: (714) 374-1590 Paul D'Alessandro,Assistant City Attorney (714) 536-5615 pdalessandro@surfcity-hb.org Fax: (714) 374-1590 CITY TREASURER City of Huntington Beach 2000 Main Street P.O.Box 190 Huntington Beach,CA 92648 Joyce Zacks, Deputy City Treasurer (714) 536-5990 jzacks@surfcity-hb.org Fax: (714) 374-1603 BOND COUNSEL Orrick, Herrington&Sutcliffe LLP 2050 Main Street, Suite 1100 Irvine,CA 92614 Don Field (949)-852-7727 dfield@orrick.com Fax: (213) 612-2499 777 South Figueroa Street,Suite 3200 Los Angeles, CA 90017 CITY OF HUNTINGTON BEACH LEASE REVENUE REFUNDING BONDS,2011 SERIES A DISTRIBUTION LIST September 22,2011 Kevin Hale,Esq. (213) 612-2356 khale@orrick.com Fax: (213) 612-2499 Winne Tsien,Esq., Tax Counsel (213) 612-2336 wtsien@orrick.com Fax: (213) 612-2499 Gerald Kim,Esq. (213) 612-2354 gkim@orrick.com Fax: (213) 612-2499 Laura Gao,Project Manager (213) 612-2131 lgao@orrick.com Fax: (213) 612-2499 FINANCIAL ADVISOR Public Financial Management,Inc. 601 South Figueroa, Suite 4500 Los Angeles, CA 90017 Craig Hoshi@a (213) 404-0079 hoshi@ac@pfm.com Fax: (213) 489-4085 Lindsey Morgenthaler (213) 489-4075 morgenthalerl@pfm.com Fax: (213) 289-4085 UNDERWRITER Bank of American Merrill Lynch 333 S. Hope Street, Suite 2310 Los Angeles, CA 90071 Frank Lauterbur,Managing Director (213) 345-9575 Frank.lauterbur@baml.com Fax: (213) 985-0842 Cody Press, Director (213) 345-9587 Cody.press@baml.com Fax: (213) 985-0842 Bruce Huang, Vice President (213) 345-9577 Bruce.huang@baml.com Fax: (213) 985-0842 Geoffrey Sauers,Analyst (213) 345-9583 Geoffrey.sauers@baml.com Fax: (213) 985-0842 De La Rosa&Co. 10866 Wilshire Boulevard,Suite 1650 Los Angeles, CA 90024 Raul Amezcua,Prin@al, Head gl1mestment Banking (310) 207-1975 ramezcua@ejdelarosa.com Fax: (310) 207-1995 2 CITY OF HUNTINGTON BEACH LEASE REVENUE REFUNDING BONDS,2011 SERIES A DISTRIBUTION LIST September 22, 2011 Laic Seriven,Senior Vice President (415) 495-8863 escriven@ejdelarosa.com Las: (310) 208-1995 UNDERWRITER'S COUNSEL Stradling Yocca Carlson&Rauth 660 Newport Center Drive,Suite 1600 Newport Beach,CA 92260 Brian Lorbath (949) 725-4193 bforbath 61 sper.com Las: (949) 725-5193 RATING AGENCIES Standard&Poor's Ratings Services One Market St,Stcuart Tower,Suite 1500 San Lrancisco,CA 94118 jen Hansen (415)371-5035 j en_hansen@standardandpoors.com Moodv's Investors Service One Lront Street,Suite 1900 San Lrancisco,CA 94111 Michael Wertz,Analyst (415) 274-1722 Michacl.wcrtz(a'imoodv s.com TRUSTEE The Bank of New York Mellon Trust Company,N.A. 700 South Llower Street,Suite 500 Los Angeles, CA 90017 Lannv Chen (213) 630-6407 Lannv.chcn c(�i bnvmcllon.com Las: (213) 630-6215 Rosanne Romero (213) 630-6140 Rosanneromero@bnvmellon.com (213) 630-6215 TRUSTEE'S COUNSEL Davis,Wright'Iremainc 64 Oak Knoll Drive San Ansclmo, CA 94960 Sam Waldman, Esq. (415) 459-4535 Waldmansl3 c'i comcastnet Las: (415) 459-4747 3 CITY OF HUNTINGTON BEACH LEASE REVENUE REFUNDING BONDS,2011 SERIES A DISTRIBUTION LIST September 22,2011 VERIFICATION AGENT The Arbitrage Group,Inc. 14040 Red Elephant Lane Buhl,AL 35446 Russell Moore (205) 330-8211 rmoore@thearbitragegroup.com Fax: (205) 534-0463 PRINTER Wold Financial Printing 26639 W. Commerce Drive, Suite 402 Volo,IL 60073 Pamela Bruno (917) 642-1225 pamelabnmo@onlinemunis.com Fax: (847) 546-3110 4