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File 3 of 3 - City of Huntington Beach Community Facilites D
Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNT INGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A INCUMBENCY AND SIGNATURE CERTIFICATE-CITY The undersigned hereby state and certify: (i) that the undersigned are the duly elected or appointed, qualified and acting Director of Administrative Services and City Clerk, respectively, of the City of Huntington Beach, a chartered city and municipal corporation duly 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 to certify the same on behalf of the City; (ii) that the following are now, and have continuously been since the dates of beginning of their respective current terms of office set forth below, the duly elected or appointed, qualified and acting members of the City Council of the City, and the dates of the beginning and ending of their respective current terms of office are hereunder correctly designated opposite their names: Beginning Date Ending Date Council Members of Current Term of Current Term Debbie Cook,Mayor December, 2000 November,2004 Ralph Bauer December, 1998 November,2002 Pam Houchen December, 2000 November,2004 Connie Boardman December, 2000 November,2004 Shirley Dettloff December, 1998 November,2002 Grace Winchell February, 2002 November,2002 Peter Green December, 1998 November,2002 (iii) that the signatures set forth opposite the names of the following persons are the true and correct specimens of, or are, the genuine signatures of such persons, each of whom holds the office designated: Name and Title Signature Debbie Cook,Mayor Ray Silver,City Administrator C as , Shari Freidenrich,City Treasurer Name and Title Signature Clay Martin,Director of Administrative Services Connie Brockway,CMC, City Clerk (iv) that the bonds issued by the City designated "Improvement Area A of the C97of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the 'Bonds"), in the aggregate principal amount of $4,900,000,and dated the date hereof,have been executed by the manual or facsimile signature of the within-named Mayor and attested to by the manual or facsimile signature of the within- named City Clerk,and that the seal of the City is impressed hereon and on the Bonds; (v) that for and on behalf of the City, the within-named Mayor has executed and the within-named City Clerk has attested to the following: (a) Purchase Contract, dated June 27, 2002, between the City and Stone & Youngberg LLC,as underwriter, (b) Fiscal Agent Agreement,dated as of June 1, 2002, by and between the City and BNY Western Trust Company, as fiscal agent, (c) Acquisition Agreement, dated as of June 1, 2002, by and between the City and Boeing Realty Corporation, as developer, and (d) Continuing Disclosure Certificate - Issuer, dated as of June 1, 2002, by the City, and as acknowledged by BNY Western Trust Company, as dissemination agent; (vi) and, that for and on behalf of the City, the within-named City Administrator has executed the Official Statement, dated June 27,2002,relating to the Bonds. Dated: July 17, 2002 CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK By Clay Martin, Dir ctor of Administrative Services [S E A L] By Y�,Ze) — Connie Brockway, C, City Clerk -2- Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS, SERIES 2002-A CERTIFICATE AS TO ARBITRAGE I, the undersigned Director of Administrative Services of the City of Huntington Beach, California (the "City"),being one of the officers of the City duly charged (by resolution of the City Council of the City), with others, with the responsibility of issuing the City's $4,900,000 principal amount of Improvement Area A of the City of Huntington Beach Community Facilities District No: 2002-1 (McDonnell Centre Business Park) Special Tax Bonds,Series 2002- A(the"Bonds"),dated the date hereof,and being issued this date,hereby certify as follows: (1) Purpose of Bonds. The Bonds are being issued pursuant to a Fiscal Agent Agreement,dated as of June 1,2002 (the "Fiscal Agent Agreement"),between the City and BNY Western Trust Company,as fiscal agent(the"Fiscal Agent"),for the purpose of providing funds for the acquisition and construction of certain public facilities (the "Project"), which Project is more particularly described in the Certificate Regarding Use of Proceeds, dated the date hereof and included elsewhere in the transcript for the Bonds. (2) Statement of Expectations. On the basis of the facts and estimates in existence on the date hereof, I reasonably expect the following with respect to the amount and use of gross proceeds of the Bonds: (a) Amount Received from Sale of Bonds; No Aggregated Issues. The Bonds were sold to Stone & Youngberg LLC (the "Underwriter"), at their face amount ($4,900,000), less Underwriter's discount of $94,137.70 for a total amount of $4,805,862.30. Of said amount, $150,000.00 will be deposited in the Costs of Issuance Fund; $490,000.00 will be deposited in the Reserve Fund; $4,059,569.34 will be deposited in the Improvement Fund; $36,292.96 will be deposited into the Capitalized Interest Account of the Bond Fund, and the remaining $70,000.00 will be deposited in the Administrative Expense Fund. All of such Accounts and Funds are held by the Fiscal Agent.No tax-exempt debt has been sold within fifteen(15) days before or after the date the Bonds were sold that will be paid from substantially the same source of funds as the Bonds(excluding guarantees from unrelated parties). (b) Costs of Issuance Fund. Proceeds of the Bonds deposited in the Costs of Issuance Fund will be used for payment of legal fees, printing costs and other costs of issuance of the Bonds and will be fully expended promptly upon receipt of invoices. Amounts deposited in the Costs of Issuance Fund, if invested,will be invested without yield restrictions. Interest earnings and gains resulting from said investment will be retained in the Costs of Issuance Fund and used for the purposes thereof. Amounts, if any, remaining in the Costs of Issuance Fund 90 days from the date hereof, the Fiscal Agent will close such fund and shall transfer any moneys remaining therein, including any investment earnings thereon,to the Administrative Expense Fund. (c) Use of Improvement Fund; Reimbursement. The proceeds of the Bonds deposited in the Improvement Fund will be used for the payment of costs of acquisition and construction of the Project. No portion of the proceeds of the Bonds will be used for reimbursement of expenditures paid by the City prior to the date hereof except for (i) expenditures paid for costs of issuance of the Bonds, (ii) preliminary capital expenditures incurred before commencement of acquisition or construction of the Project that do not exceed twenty percent (20%) of the issue price of the Bonds (see subparagraph (n) below), and (iii) capital expenditures that (A) were paid no earlier than sixty (60) days before the date of the adoption by the City of a declaration of intent to reimburse such expenditures from the proceeds of obligations,and (B) are reimbursed no later than eighteen (18)months after the later of the date the expenditure was paid or the date the Project is placed in service (but no later than three (3) years after the expenditure is paid).Proceeds (if any) used for reimbursement of expenditures will be deposited in the general funds of the City and will not be used to replace funds of the City to be used to refund debt of the City, to create a sinking or pledged fund for such debt or the Bonds or otherwise to create replacement proceeds for such debt or for the Bonds. (d) Completion of Project; Investment of Improvement Fund; Capital Expenditures. The City has entered into a contract for the acquisition of the Project, which contract constitutes a substantial binding obligation of the City to a third party and is in excess of five percent (5%) of the "Net Sale Proceeds" of the Bonds (namely, an amount of proceeds of the Bonds equal to the issue price of the Bonds, as referenced in subparagraph (n)below,less the proceeds deposited in the Reserve Fund, as referenced in subparagraph (e) below). The City will proceed with due diligence to complete the Project and to spend the proceeds of the Bonds. Completion is expected by June 1,2003. All expenditures from the Improvement Fund will be capital expenditures.Not less than eighty-five percent (85%) of the Net Sale Proceeds will be spent within three (3) years of the date hereof. Amounts deposited in the Improvement Fund will be invested without yield restrictions for the period from the date hereof to the date that is three (3) years after the date hereof unless earlier expended (the "3-year Temporary Period"). Interest earnings and gains resulting from investment of the amounts held in the Improvement Fund will be retained in the Improvement Fund and used for the payment of costs of the Project. Proceeds of the Bonds and interest earnings and gains on investment thereof, if any,remaining in the Improvement Fund following the 3-year Temporary Period will be invested at a yield not in excess of the yield of the Bonds (see subparagraph (n)below) or yield reduction payments will be made to the federal government with respect to such investment after the end of the 3-year Temporary Period. Amounts, if any, remaining in the Improvement Fund upon completion of the Project will be transferred to the Bond Fund and will be used for payment of debt service on the Bonds. (e) Reserve Fund. The proceeds of the Bonds ($490,000.00) deposited in the Reserve Fund is equal to the initial "Reserve Requirement," being an amount equal to the least of maximum annual debt service on the Bonds, one hundred and twenty-five percent (125%) of average annual debt service on the Bonds and ten percent(10%)of the principal amount of the Bonds. The Underwriter has represented that the establishment of the Reserve Fund in the amount of the Reserve Requirement was vital to the marketing of the Bonds and reasonably required to assure the payment of debt service on the Bonds. Amounts deposited in the Reserve Fund will be invested without yield restrictions. Interest earnings and gains resulting from investment of amounts deposited in the.Reserve Fund will be retained in the Reserve Fund in the event that the amount on deposit in such Fund is less than the Reserve Requirement then applicable and otherwise will be transferred to the Bond Fund and used for payment of interest on the -2- Bonds on the next Interest Payment Date following that transfer. Amounts in the Reserve Fund may also be used to pay any rebate liability with respect to the Bonds,and to pay a portion of the redemption price of Bonds to be redeemed with the proceeds of Special Tax prepayments. (f) Pledgee of Tax Revenues: Bond Fund and Special Tax Fund. The City has pledged certain revenues from special taxes imposed on certain property in the District (the "Tax Revenues") to the payment of debt service on the Bonds. As soon as practicable following receipt,the Tax Revenues(other than prepayments of special taxes which will be deposited to the Special Tax Prepayments Account of the Bond Fund)will be deposited in the Special Tax Fund held by the City. No later than the Business Day prior to each Interest Payment Date on the Bonds, amounts in the Special Tax Fund will be transferred from said Fund (i)to the Bond Fund held by the Fiscal Agent to the extent necessary to pay debt service due on the Bonds on the next Interest Payment Date on the Bonds, and (ii) to the Reserve Fund if necessary to increase the amount on deposit therein to the amount of the then Reserve Requirement (see subparagraph (e) above). Amounts will be transferred from time to time from the Special Tax Fund to the Administrative Expense Fund and used for the purposes thereof.Prepayments of special taxes will be deposited in the Special Tax Prepayments Account of the Bond Fund to be used for redemption of the Bonds on the next Interest Payment Date for which notice of redemption can timely be given. The Special Tax Fund and the Bond Fund (including the Special Tax Prepayment Account) have been established primarily to achieve a proper matching of revenues (consisting primarily of Tax Revenues and certain interest earnings) and debt service due on the Bonds during each year that the Bonds are outstanding. Amounts deposited in the Special Tax Fund, the Bond Fund and the Special Tax Prepayments Account will be spent within thirteen (13) months of the date of deposit, and said Funds and Account will be depleted at least once a year except for a reasonable carryover amount not in excess of the greater of earnings on said Funds and Account during the preceding bond year for the Bonds (see subparagraph (1) below) or one-twelfth(1/12th) of debt service on the Bonds during the preceding bond year for the Bonds. Amounts in the Special Tax Fund, the Bond Fund and the Special Tax Prepayments Account will be invested without yield restrictions. Interest earnings and gains resulting from investment will be retained in the Fund or Account in which investment was made and used for the purposes thereof. (g) Administrative Expense Fund. Bond proceeds deposited, and amounts transferred from time to time from the Special Tax Fund, to the Administrative Expense Fund will be used for the purposes of such fund, with Bond proceeds and any investment earnings thereon used for purposes of such fund prior to the use of any other amounts on deposit therein. Amounts deposited in the Administrative Expense Fund will be used for the payment of costs of administering the special tax program represented by the Tax Revenues and of carrying the Bonds. Amounts in the Administrative Expense Fund are not available for payment of debt service on the Bonds and, if invested, will be invested without yield restrictions. Interest earnings and gains resulting from that investment will be deposited in the Administrative Expense Fund and used for the purposes thereof. (h) No Other Pledged Amounts or Investment-Type Property. Except as described herein, no amounts have been pledged to, or are reasonably expected to be used directly or indirectly to pay, principal or interest on the Bonds, nor are there any amounts that have been reserved or otherwise set aside such that there is a reasonable assurance that such amounts will be available to pay principal or interest on the Bonds. In addition,the City has not entered into, and does not reasonably expect to enter into,a -3- hedge contract primarily for the purpose of reducing the City's risk of interest rate changes with respect to the Bonds. (i) No Negative Pledges. There are no amounts held under any agreement requiring the maintenance of amounts at a particular level for the direct or indirect benefit of the owners of the Bonds or any guarantor of the Bonds, excluding for this purpose amounts in which the City may grant rights that are superior to the rights of the owners of the Bonds or any guarantor of the Bonds and amounts that do not exceed reasonable needs for which they are maintained and as to which the required level is tested less often than every six(6)months and that may be spent without any substantial restriction other than a requirement to replenish the amount by the next testing date. (j) No Replacement Proceeds. There are no amounts that have a sufficiently direct nexus to the Bonds or to the Project to conclude that the amounts would have been used for the Project or for debt service on the Bonds if the proceeds of the Bonds were not being used for those purposes; and the term of the Bonds is not longer than reasonably necessary for the Project in that the weighted average maturity of the Bonds does not exceed one hundred twenty percent (120%) of the average reasonably expected economic life of the Project. (k) No Improper Financial Advantage. The transaction contemplated herein does not represent an exploitation of the difference between tax-exempt and taxable interest rates to obtain a material financial advantage and does not overburden the tax- exempt bond market in that the City is not issuing more bonds,issuing bonds earlier, or allowing bonds to remain outstanding longer than is otherwise reasonably necessary to accomplish the governmental purposes of the bonds. (1) Bond Year for the Bonds. The City will select a bond year for the Bonds consistent with the requirements of the Internal Revenue Code of 1986, as amended (the "Code"). (m) - —Rebate Requirement. The City has covenanted in the Fiscal Agent Agreement to comply with requirements for rebate of excess investment earnings to the federal government to the extent applicable and acknowledges that the first payment of excess investment earnings, if any, is required to be rebated to the federal government no later than sixty (60) days after the end of the fifth (5th) bond year for the Bonds. No portion of the Bonds will constitute a private activity bond within the meaning of section 141(a) of the Code, the average maturity of the Bonds is greater than five (5) years and none of the interest rates on the Bonds vary during the term of the Bonds. As a consequence of the foregoing, investment earnings on the Bond Fund will be excluded for the purposes of computation of the amount required to be rebated to the federal government as referenced in this subparagraph without regard to the total amount of said earnings. (n) Yield of the Bonds. The yield of the Bonds is 6.091452%, determined on the basis of regularly scheduled principal and interest payments on the Bonds discounted to the issue price of the Bonds (being the face amount of the Bonds plus original issue premium). The Underwriter has represented that (i) based upon reasonable expectations and actual facts which existed on June 27, 2002,being the date upon which the City sold the Bonds to the Underwriter, the initial offering price of each maturity of the Bonds to the public (excluding bondhouses,brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which a substantial amount of each maturity of the Bonds was to be sold to the public on the date hereof is set forth in the schedules elsewhere in the transcript for the Bonds; and (ii) -4- the Bonds of each maturity were actually offered to the general public in a bona fide public offering for the prices set forth in the schedules elsewhere in the transcript for the Bonds. There is no expectation by the City that there will be prepayments of Tax Revenues. (o) No Hedge Bonds. The Bonds do not constitute "hedge bonds" in that at least eighty-five percent (85%) of the Net Sale Proceeds will be used to carry out the governmental purposes of the Bonds within three (3) years of the date hereof, and not more than fifty percent (50%) of the proceeds of the Bonds, if any, are invested in investments having a substantially guaranteed yield for four(4) or more years. (3) No Notice of Certificates. The City has not received notice that its Certificate as to Arbitrage may not be relied upon with respect to its own issues nor has it been advised that any adverse action by the Commissioner of the Internal Revenue Service is contemplated. -5- On the basis of the foregoing, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of section 148 of the Code and applicable regulations. To the best of my knowledge, information and belief, the expectations herein expressed are reasonable and there are no facts or estimates, other than those expressed herein, that would materially affect the expectations herein expressed. IN WITNESS WHEREOF,I have hereunto set my hand as of the 17 Ih day of July,2002. 7 By q7G Clay Mdritin, Director of Admi istrative Services -6- Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A OFFICER'S CERTIFICATE OF THE CITY The undersigned hereby states and certifies: (i) that he is the duly appointed, qualified and acting City Administrator of the City of Huntington Beach, a chartered city and municipal corporation, duly organized and existing under the Constitution and laws of the State of California (the "City"), the City Council of which is the legislative body for the Improvement Area A of the City of Huntington Beach Community Facilities District No,2002-1 (McDonnell Centre Business Park) (the "Improvement Area"), a community facilities district duly organized and existing under the laws of the State of California, and as such,is familiar with the facts herein certified and is authorized to certify the same on behalf of the City; (ii) that he is an "Authorized Officer" of the City, as such term is defined in that certain Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust Company,as fiscal agent; (iii) that the City Council of the City duly adopted the following resolutions (collectively, the "Resolutions") and ordinance (the "Ordinance"), which Resolutions and Ordinance have not been amended,modified, supplemented, rescinded or repealed and remain in full force and effect as of the date hereof, said date being the delivery date of the "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002- 1 Special Tax Bonds, Series 2002-A," in the aggregate principal amount of $4,900,000 and dated the date hereof(the 'Bonds"): (a) Resolution No. 2002-27,entitled "A"Resolution of the City Council of the City of Huntington Beach Declaring Its Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes Therein," adopted April 1, 2002, (b) Resolution No.2002-28,entitled "A Resolution of the City Council of the City of Huntington Beach Declaring Its Intention to Incur Bonded Indebtedness of the Proposed City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted April 1, 2002, (c) Resolution No. 2002-38,entitled "A Resolution of the City Council of the City of Huntington Beach of Formation of Improvement Area A and Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted June 3, 2002, (d) Resolution No. 2002-39,entitled "A Resolution of the City Council of the City of Huntington Beach Determining the Necessity to Incur Bonded Indebtedness Within Improvement Area A, and Within Improvement Area B, of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted June 3, 2002, (e) Resolution No. 2002-40,entitled "A Resolution of the City Council of the City of Huntington Beach Calling Special Election Within Improvement Area A and Within Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted June 3, 2002, (f) Resolution No. 2002-41,entitled "A Resolution of the City Council of the City of Huntington Beach Declaring Results of Special Election and Directing Recording of Notice of Special Tax Lien," adopted June 3, 2002, (g) Ordinance No. 3557, entitled "An Ordinance of the City of Huntington Beach Levying Special Taxes Within Improvement Area A and Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted June 17, 2002, and (h) Resolution No. 2002-63,entitled "A Resolution of the City Council of the City of Huntington Beach Authorizing the Issuance of Special Tax Bonds of the City of Huntington Beach for Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park), and Approving Other Related Documents and Actions," adopted June 17,2002; (iv) that, by all necessary action, the City has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in, the Official Statement, dated June 27, 2002 (the "Official Statement"), relating to the Bonds and in the following agreements(collectively referred to herein as the"Agreements"): (a) Purchase Contract, dated June 27, 2002 (the "Purchase Contract"), between the City and Stone&Youngberg LLC,as underwriter, (b) Fiscal Agent Agreement, (c) Acquisition Agreement, dated as of June 1, 2002, by and between the City and Boeing Realty Corporation,as developer,and (d) Continuing Disclosure Certificate - Issuer, dated as of June 1, 2002, by the City, and as acknowledged by BNY Western Trust Company,as dissemination agent; (v) that the representations, warranties and covenants of the City and the Improvement Area contained in Section 4 of the Purchase Contract are true and correct and in all material respects as of the date hereof as if made on the date hereof; (vi) that the representations, warranties and covenants of the City and the Improvement Area contained in the Agreements are true and correct and in all material respects on and as of the date hereof as if made on the date hereof; (vii) that the Agreements and the Bonds have been duly executed and delivered by the City,for and on behalf of the Improvement Area,and when executed and delivered by the other respective parties thereto,will constitute the valid and binding obligations of the City, for and on behalf of the Improvement Area, enforceable in accordance with their respective terms and such documents conform to the descriptions thereof in the Official Statement; (viii) that the City and the Improvement Area have complied with all agreements, covenants and conditions to be complied with by the City and the.Improvement Area under the Agreements on or prior to the date hereof; -2- (ix) that to the best knowledge of the undersigned, no event affecting the City or the Improvement Area has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the date hereof the statements or information with respect to the City and the Improvement Area contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make such statements and information therein not misleading in any material respect; (x) that the City's employer identification number for federal tax purposes is 95- 6000723; and (xi) that for calendar year 2002, and including the Information Return for Tax- Exempt Governmental Obligations,Form 8038-G,filed with the Internal Revenue Service for the Bonds, the City has filed one (1) Information Return, Form 8038-G, with the Internal Revenue Service, Ogden, Utah 84201. Dated: July 17, 2002 CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) ByC// RIK-silver, City Administrator Attest: By: City Clerk Reviewed and Approved as to Form: C By: /IF /y a-LCity Attorney Quint&Thimmig LLP 7/17/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A CERTIFICATE OF CITY CLERK The undersigned hereby states and certifies: (i) that she is the duly appointed, qualified and acting City Clerk of the City of Huntington Beach, a chartered city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the City;and (ii) that the City Council of the City duly adopted the following resolutions (collectively, the "Resolutions") and ordinance (the "Ordinance"), which Resolutions and Ordinance have not been amended,modified, supplemented, rescinded or repealed and remain in full force and effect as of the date hereof: (a) Resolution No. 2002-26, entitled "A Resolution of the City Council of the City of Huntington Beach Declaring Its Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes Therein," adopted April 1, 2002, (b) Resolution No. 2002-27, entitled "A Resolution of the City Council of the City of Huntington Beach Declaring Its Intention to Incur Bonded Indebtedness of the Proposed City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted April 1, 2002, (c) Resolution No. 2002-38,entitled "A Resolution of the City Council of the City of Huntington Beach of Formation of Improvement Area A and Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted June 3, 2002, (d) Resolution No. 2002-39, entitled "A Resolution of the City Council of the City of Huntington Beach Determining the Necessity to Incur Bonded Indebtedness Within Improvement Area A, and Within Improvement Area B, of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted June 3, 2002, (e) Resolution No. 2002-40, entitled "A Resolution of the City Council of the City of Huntington Beach Calling Special Election Within Improvement Area A and Within Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted June 3, 2002, (f) Resolution No.2002-41,entitled "A Resolution of the City Council of the City of Huntington Beach Declaring Results of Special Election and Directing Recording of Notice of Special Tax Lien," adopted June 3, 2002, (g) Ordinance No. 3557, entitled "An Ordinance of the City of Huntington Beach Levying Special Taxes Within Improvement Area A and Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted June 17,2002, and (h) Resolution No.2002-63,entitled "A Resolution of the City Council of the City of Huntington Beach Authorizing the Issuance of Special Tax Bonds of the City of Huntington Beach for Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park), and Approving Other.Related Documents and Actions," adopted June 17, 2002. Dated: July 17, 2002 CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) By k�Le-e a Connie Brockway,CIVIC, City Clerk -2- Quint&Thimmig LLP 7/11/02 $4,900,000* IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A CERTIFICATE REGARDING PRELIMINARY OFFICIAL STATEMENT The undersigned hereby states and certifies: (i) that he is the duly appointed, qualified and acting Director of Administrative Services of the City of Huntington Beach, a chartered city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the City; (ii) that there has been delivered to Stone & Youngberg LLC, as underwriter (the "Underwriter") of the captioned bonds (the 'Bonds"), a Preliminary Official Statement, dated June 18, 2002, relating to the Bonds (including the cover page and all appendices thereto, the "Preliminary Official Statement"), which the City deems final for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12"), except for information permitted to be omitted therefrom by Rule 15c2-12;and (iii) that the City hereby approves of the use and distribution by the Underwriter of the Preliminary Official Statement. Dated: June 18, 2002 CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) By- Cl Martin, Director Administrative Services *Preliminary subject to change. Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A REQUEST OF THE CITY TO THE FISCAL AGENT The undersigned hereby states and certifies: (i) that he is the duly appointed, qualified and acting Director of Administrative Services of the City of Huntington Beach, a chartered city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the "City"), and as such,is familiar with the facts herein certified and is authorized to certify the same; (ii) that he is an "Authorized Officer" of the City, as such term is defined in that certain Fiscal Agent Agreement, dated as of June 1, 2002, by and between the City and BNY Western Trust Company, as fiscal agent (the "Fiscal Agent"); and (iii) that the Fiscal Agent is hereby requested and directed to authenticate the bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A," issued in the aggregate principal amount of $4,900,000 and dated the date hereof (the "Bonds"), and to deliver the Bonds to or upon the order of Stone & Youngberg LLC, as underwriter, upon receipt by the Fiscal Agent of the purchase price thereof (being $4,805,862.30,which purchase price has been calculated as follows: $4,900,000.00 _Principal Amount of Bonds (94,137.70) Less Underwriter's Discount $4,805,862.30 TOTAL PURCHASE PRICE Dated: July 17, 2002 CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) By C artin, Director of Administrative Services Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A CERTIFICATE REGARDING USE OF PROCEEDS The undersigned hereby states and certifies: (i) that he is the duly appointed, qualified and acting Director of Administrative Services of the City of Huntington Beach, a chartered city and municipal corporation duly .organized and existing under the Constitution and laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the City; (ii) that, pursuant to the Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust Company, as fiscal agent (the "Fiscal Agent"),the City is issuing on the date hereof bonds for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the 'Bonds"), in the aggregate principal amount of $4,900,000, and dated the date hereof; (iii) that,of the proceeds of the Bonds received by the Fiscal Agent on the date hereof, the Fiscal Agent will, pursuant to the Fiscal Agent Agreement, deposit $4,059,569.34 in the Improvement Fund(the"Improvement Fund"); -- (iv) that the proceeds of the Bonds deposited in the Improvement Fund will be used to finance certain land and improvements.(the "Project'), as more particularly described in Part I of Exhibit A hereto attached and by this reference herein incorporated; (v) that Part H of Exhibit A hereto attached describes (a) each use to be made by any person of the Project,other than use by the City and other non-federal governmental units and other than use by members of the public generally, and (b) payments (if any) in respect of such use which are to be received after the date hereof; (vi) that no portion of the proceeds of the Bonds will be used, directly or indirectly, to make or finance a loan to any person(other than a State or local government unit) or to acquire property which will be sold to any person(other than a State or local governmental unit) on an installment sale basis except as referenced in Part 11 of Exhibit A; (vii) that the above statements are made on the basis of the facts, estimates and circumstances in existence on the date hereof and that the undersigned has exercised due diligence to assure that all material facts, estimates and circumstances relating to the above statements were made available to the undersigned and reviewed by the undersigned; (viii) that to the best knowledge of the undersigned the above statements are reasonable and there are no other facts, estimates or circumstances, other than those set forth herein, that would materially affect the statements made herein;and (ix) that the undersigned is aware that Quint & Thimmig LLP is rendering an opinion on the date hereof substantially to the effect that the interest on the Bonds is excluded from gross income for federal income tax purposes and in rendering such opinion is relying upon the statements made herein and in Exhibit A hereto attached. IN WITNESS WHEREOF,I have hereunto set my hand as of the 17th day of July,2002. CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) By y Martin, Director Administrative Services -2- EXHIBIT A DESCRWnON OF PROJECT I. Describe Project: 1. The construction of sewer lines in existing Skylab Road, new Delta Lane and new Astronautics Lane. 2. The construction of streets, curbs,and gutters from the extension of Skylab Road from its current terminus at Astronautics Lane west to approximately 400 feet west of new Delta Lane. 3. The construction of streets, curbs, and gutters from the new Delta Lane between Skylab Road north to new Astronautics Lane. 4. The construction of streets, curbs, and gutters for the new Astronautics Lane from its current terminus west to Rancho Road. 5. The construction of street, curbs, and gutters for the new Skylab Lane from new Astronautics Lane south approximately 200 feet. 6. The construction of the waterline in Rancho Road connecting its current terminus east of Bolsa Chica Road to the existing waterline north of the Navy Railroad. 7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane and new Astronautics Lane. 8. The construction of conduit and fixtures for new street lighting in extended Skylab Road, new Delta Lane,and new Astronautics Lane. 9. The construction of street,curbs,and gutters for the new Delta Lane from Bolsa Avenue north to Skylab Road. 10. The construction of a waterline in new Delta Lane from Bolsa Avenue to Skylab Road. 11. The construction of storm drains in new Skylab Road, new Delta Lane new Astronautics Lane and new Skylab Lane. 12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane including modifications to the existing traffic signal. 13. Roadway improvements at the intersection of Rancho Road and Astronautics Lane including construction of the new traffic signal. 14. Roadway improvements to Rancho Road consisting of installation of new sidewalk. The improvements to be financed include the costs of the acquisition of right-of-way, as well as costs of design, engineering and planning,a'nd other related costs. H. Description of Use of Project A. Use by any person other than governmental units or members of public generally. None expected. B. Payments to be made after date hereof in respect of above use. None expected. Exhibit A-1 Quint&Thimmig LLP 7/16/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A OFFICER'S CERTIFICATE NO. REQUESTING DISBURSEMENT FROM THE IMPROVEMENT FUND The undersigned hereby states and certifies: (i) that she is the duly elected or appointed, qualified and acting City Treasurer of the City of Huntington Beach, a chartered city and municipal corporation duly organized and existing under-the Constitution and laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that the undersigned is an "Authorized Officer" of the City, as such term is defined in that certain Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust Company, as fiscal agent (the "Fiscal Agent"); (iii) that pursuant to Section 4.02(B) of the Fiscal Agent Agreement, the undersigned hereby requests the Fiscal Agent to disburse from the Improvement Fund established under the Fiscal Agent Agreement to each payee designated on Exhibit A attached hereto and by this reference incorporated herein, the amount opposite such payee, for payment or reimbursement of Project (as defined in the Fiscal Agent Agreement) costs as described on attached Exhibit A; and (iv) that the disbursements described on the attached Exhibit A constitute costs of the Project,and are proper expenditures from the Improvement Fund, and have not been the basis of any previous disbursements pursuant to Section 4.02(B) of the Fiscal Agent Agreement. Dated: CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) By Shari Freidenrich, City Treasurer EXHIBIT A OFFICER'S CERTIFICATE NO. IMPROVEMENT FUND DISBURSEMENTS Payee Name and Address Purpose of Obligation Amount Exhibit A-1 Quint&Thimmig LLP 7/17/2002 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS, SERIES 2002-A OFFICER'S CERTIFICATE NO.1 REQUESTING DISBURSEMENT FROM COSTS OF ISSUANCE FUND The undersigned hereby states and certifies: (i) that she is the duly elected or appointed, qualified and acting City Treasurer of the City of Huntington Beach, a chartered city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that the undersigned is an "Authorized Officer" of the City, as such term is defined in that certain Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust Company, as fiscal agent (the "Fiscal Agent"); (iii) that pursuant to Section 4.03(B) of the Fiscal Agent Agreement, the undersigned hereby requests the Fiscal Agent to disburse from the Costs of Issuance Fund established under the Fiscal Agent Agreement to each payee designated on Exhibit A attached hereto and by this reference incorporated herein, an amount not to exceed the amount set forth opposite such payee,for payment or reimbursement of previous payment of Costs of Issuance as described on- attached Exhibit A, upon receipt by the Fiscal Agent of an invoice from such payee which requests payment in an amount which is less than or equal to the amounts set forth on said Exhibit A; and (iv) that the disbursements described on the attached Exhibit A constitute Costs of Issuance and are properly chargeable to the Costs of Issuance Fund. Dated: July 17,2002 CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) By S ari Freidenrich, Cihj Treasurer EXHIBIT A OFFICER'S CERTIFICATE NO.1 COSTS OF ISSUANCE DISBURSEMENTS Payee Name and Address Purpose of Obligation Amount City of Huntington Beach Costs Relating to Administration $ 5,000.00 2000 Main Street, PO Box 190 and Issuance of Bonds Huntington Beach,CA 92648 Attention: Dir. of Economic Development Comerica Bank-California Bond Counsel and Disclosure $ 67,293.84 ABA No. 121137522 Counsel Fees and Reimbursable 275 Battery Street, Suite 1100 Expenses San Francisco, CA 94111-3305 For Credit: Quint&Thimmig LLP A/C No. 1891531061 Ref: Huntington Beach BNY Western Trust Company - Annual Fiscal Agent Fee, $ 2,900.00 700 South Flower Street, Suite 500 Reimbursable Expenses and Los Angeles, CA 90017 Counsel Fee Pacific Financial Printing Official Statement Printing Fee $ 8,417.57 P.O. Box 829 - Alamo, CA 94507 Reference: Invoice#13626 Boeing Realty Corporation Reimbursement of Developer $ 41,165.00 3760 Kilroy Airport Way, Suite 500 Deposit that was used to pay Long Beach, CA 90806 appraiser, special tax consultant Attn Accounting Department and City costs and expenses Reference: City of Huntington Beach CFD No. 2002-1 (McDonnell Centre Bus.Park) Exhibit A-1 JUL-16-2002 11:21 CITY OF HB 714 375 5087 P.02i02 J� City of Huntington Beach 2000 MAIN STREET. CALIFORNIA 92649 DEPARTMENT OF ECONOMIC DEVELOPMENT Director 714/536-5582 Redevelopment 7141536-5582 FAX 7141375-5097 Housing 714/536-5542 July 17,2002 BNY WESTERN TRUST COMPANY 700 South Flower Street, Suite 500 Los Angeles,CA 90017 Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds,Series 2002-A INVOICE For Costs Relating to Administration and Issuance of Bonds $5,000.00 Please remit to: City of Huntington Beach 2000 Main Street,PO Box 190 Huntington Beach, CA. 92648 Attention: Director of Economic Development Thank you for your attention to this matter, and please feel free to call me if you have any questions or require additional information. James C. Lamb, Business Development Mgr., 714.375.5186 TOTAL P.02 One Embarcadero Center,Suite 2420 Quint & Thimmigo San Francisco, CA 94111-3737 Telephone: 415/765-1550 Attorneys at Law Telecopier: 415/765-1555 July 17, 2002 City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 1 Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park)Special Tax Bonds,Series 2002-A INVOICE For Legal Services Rendered as Bond Counsel and Disclosure Counsel Legal Fee $65,000.00 Out-of Pocket Expenses Photocopies $ 170.06 _ Delivery and Messenger 144.88 Transcript Binders 974.45 1,004.45 Total Expenses 1,289.39 Total Legal Fee and Expenses $67,293.84 Please remit to: By mail: Quint &Thimmig LLP One Embarcadero Center,Suite 2420 San Francisco,CA 94111-3737 By wire: Comerica Bank—California ABA No. 121137522 275 Battery Street, Suite 1100 San Francisco,CA 94111-3305 For Credit: Quint&Thimmig LLP Acct No. 1891531061 Our Tax I.D.Number is 94-3263256 INVOICE BNY WESTERN TRUST COMPANY A Subsidiary of The Bank of New York Company,Inc. DEBT OPERATIONS BILLING DEPARTMENT 700 South Flower Street Swfe 200� "` Los Angeles CA 90017 _(213).630-6247 ,, Dated July 17,2002 City of Huntington Beach Community Issue: Facilities District No.2002-1 Improvement Area A Special Tax Bonds, Series 2002-A(McDonnell Centre Business Park) Shari Freidenrich City Treasurer Bondmaster Receivable: TO BE DETERMINED City of Huntington.Beach 2000 Main Street Huntington, Beach,CA USA Database: FIB: CID#: 998787-028-9 Please make payable to:BNY Western Trust Company rpe of Services Rendered: Fiscal Agent and Paying Agent eriod Covering: 7/1/02 to 6/30/03 Initial Acceptance: $ 1,250.00 (One Time Charge) (includes Trustee outside counsel fee) Annual Trustee Administration Fee $ 1,650.00 Additional Charges: Dissemination Agent: No charge at this time Total: $ 2,900.00 YOUR PAYMENT IS DUE AT THIS TIME. A LATE FEE WILL BE IMPOSED ON PAYMENTS NOT RECEIVED WITHIN 30 DAYS. '$ 550 328 3737 PFP MAIN- 1 07/16/02 10 : 41 CJ002 P.0 Box 829 PTYASE RETURN DUPLIC:A -C Alarno.CA 94507 INVOICE WITH PAYMENT TO PACIFIC.FINANCIAL PRINTING n: 650.328-1 S00 P.O.BOX$29 650.329-3737 ALAM6,CA 94S07 s=` ` TERMS NET 10 DAYS LOVF.R.DUE A(('OUN'Iti 1•IJ2 PER MONTH AC Solt)To: Stone&Youngberg Date: 7/3/02 15260 Ventura Blvd., Suite 1520 Invoice#: 13626 Sherman Oaks,CA, 91403 Job No.: 15662, 15618 Order No.: Altzi: Sara Oberlcis Salcs Person : 'T• Johnson PT.T'ASF PAY BY rNVOICL-;NO STAI MFNI'WILL BF RLNDF.RLll $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNl'.flNGTON BEACH Community N acilities District No. 2062-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A 611R/02 Massage cover to XyVISiOn 6/1 R/02 Prcp for printing,2-sided. I-sided,page layout and proof 6/18/02 AA's to various pages and update everything. 6/1R/C12 Scan and Post to Lmuni web site. 150 Preliminary Official Statement, 182 pages,plus rover and perfect bind. 6121/02 Re-orient map to p i-atrait layout and add title to top of may 7/1/02 Prep for printing.2-sided, I-sided,page layout and proof. 7/2/02 Scan and Post to Lmuni tvcb site. 210 Final Official Statement, 180 pages,plus cover and perfect bind. Cent of production: S 7,444.50 *Sales•Tax 8.25% $ 393.07 Delivery: $ 580.00 TOTAL: $8,41.7.57 64% D JUL, 15'02 94:06ve0E Ei P.1/1 r i7b� on 378 por 00 Long Beach, CA 80808 B"AeZA "• (662)027-4900•Fax(662)627.4907 pAciI N0. INVOICE NO. A"LY70 INVOICE Dag CM NO. • ' 1. 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I, Jr O'1335 LLr .arts'�t{,\.1=a•\aaaG.•••t!f)')• •?t nl.,•1•••!1 •. .Jt.• • :•• .. .,PLUM �NND�Y.r,l r ..TNIB � UNlt. + Quint do Mffunig LLP 7/16/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A OFFICER'S CERTIFICATE NO. REQUESTING DISBURSEMENT FROM ADMINISTRATIVE EXPENSE FUND The undersigned hereby states and certifies: (i) that she is the duly elected or appointed, qualified and acting City Treasurer of the City of Huntington Beach, a chartered city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that the undersigned is an "Authorized Officer" of the City, as such term is defined in that certain Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust Company, as fiscal agent (the "Fiscal Agent"); (iii) that pursuant to Section 4.07(B) of the Fiscal Agent Agreement, the undersigned hereby requests the Fiscal Agent to disburse from the Administrative Expense Fund established under the Fiscal Agent Agreement to each payee designated on Exhibit A attached hereto and by this reference incorporated herein,the amount set forth opposite such payee, for payment or reimbursement of an Administrative Expense or Costs of Issuance as described on attached Exhibit A; and (iv) that the disbursements described on the attached Exhibit A constitute an Administrative Expense or a Cost of Issuance and are properly chargeable to the Administrative Expense Fund. Dated: CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) By Shari Freidenrich, City Treasurer EXHIBITA OFFICER'S CERTIFICATE NO. ADMINISTRATIVE EXPENSE DISBURSEMENTS Payee Name and Address Purpose of Obligation Amount Exhibit A-1 Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A OFFICER'S CERTIFICATE REGARDING INVESTMENTS The undersigned hereby states and certifies: (i) that she is the duly elected or appointed, qualified and acting City Treasurer of the City of Huntington Beach, a chartered city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that she is an "Authorized Officer of the City, as such term is defined in that certain Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust Company, as fiscal agent(the "Fiscal Agent"); (iii) that she has read Sections 5.11 through 5.16 and 6.01 of the Fiscal Agent Agreement and the definitions contained in the Fiscal Agent Agreement of the capitalized terms used in said Sections; (iv) that on behalf of the City, the undersigned hereby authorizes and directs the Fiscal Agent to invest, on the date hereof, the amounts deposited into the funds and accounts established pursuant to the Fiscal Agent Agreement in the investments set forth on Exhibit A. attached hereto and by this reference incorporated herein and hereby requests that such investments be acquired at Fair Market Value;and (v) that the undersigned.acknowledges that the investments set forth on said Exhibit A are Permitted Investments. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Fiscal Agent Agreement. Dated: July 17, 2002 CITY OF HUNTINGTON BEACH,for itself and on behalf of IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) By S ari Freidenrich, City Treasurer EXHIBIT A Principal Deposit Description Interest Purchase Account Amount Amount by Name Maturi Rate Price Costs of Issuance Fund $ 150,000.00 $ 82,706.16* AIM Treasury Money Market Daily Variable 100% (9999022) Reserve Fund $ 490,000.00 $ 490,000.00 LAIF Daily Variable 100% Improvement Fund $4,059,569.34 $4,059,569.34 AIM Treasury Money Market Daily Variable 100% (9999022) Capitalized Interest Account of the Bond Fund $ 36,292.96 $ 36,000.00 LAIF Daily Variable 100% $ 292.96 AIM Treasury Money Market Daily Variable 100% (9999022) Administrative Expense Fund $ 70,000.00 $ 70,000.00 AIM Treasury Money Market Daily Variable 100% (9999097) * This amount is"equal to the initial deposit into the Costs of Issuance Fund ($156;u60.00), less disbursements made on the date hereof in the amount of $67,293.84. The undersigned hereby acknowledges that the foregoing investment instructions have been complied with. Dated: July 17,2002 BNY WESTERN TRUST COMPANY, as Fiscal Agent By Authorized Signatory Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A CERTIFICATE OF MAILING FORM 8038-G I, C. Blythe Fleet, hereby state and certify, that for and on behalf of the City of Huntington Beach, on the date hereof, I caused to be mailed an Information Return for Tax- Exempt Governmental Obligations, Form 8038-G, relating to the captioned financing, postage prepaid, by certified mail, return-receipt requested, to the Internal Revenue Service Center, Ogden,Utah 84201, a true copy of which Information Return is hereto attached. Dated: July 17, 2002 By C.Blythe Fleet, Closing Department, Quint & Thimmig LLP Form 8038-G Information Return for Tax-Exempt Governmental Obligations (Rev.November 2000) 10,Under Internal Revenue Code section 149(e) OMB No.1545-0720 Department of the Treasury Do- See separate Instructions internal Revenue Service Caution:if the issue price is under$100,000,use Form 8038-GC. Reporting Authority If Amended Return,check here ► ❑ Issuer's name 2 Issuers employer identification number CITY OF HUNTINGTON BEACH 95-6000723 3 Number and street(or P.O.Box B mail is not delivered to street address) Room/suite 4 Report number 2000 Main Street 3 01 5 Ciry,town,or post office,state,and ZIP code 6 Date of issue Huntington Beach, CA 92648 July 17,2002 7 Name of Issue 8 CUSIP number Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre 446188 CQ5 Business Park)Special Tax Bonds 2002 9 Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representative Shari Freidenrich,City Treasurer ` 714/536-5225 �Type of Issue check applicable box es and enter the issue rice 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E17 17 ❑ Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 ® Other. Describe ► streets, water lines, sewers, other capital improvements 4,900,000.00 19 If obligations are TANS or RANs,check box ► ❑ If obligations are BANS,check box ► ❑ 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 (e)Yield price at maturity average maturity 21 9%1/2032 $ 4,900,000.00 $ 4,900,000.00 22.957 years 6.091452% Uses of Proceeds of Bond Issue (including underwriters' discount) Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 0.00 23 Issue price of entire issue(enter amount from line 21,column(b)) . • • . . . . . . . . . . . . . . . . . . . . . . 23 4,900,000.00 24 Proceeds used for bond issuance costs(including underwriters'discount) . . . . . . • 24 244,137.70 ` 25 Proceeds used for credit enhancement . . . . . . . . . . . . . . . . . . . . . . . 25 0.00 26 Proceeds allocated to reasonably required reserve or replacement fund . . . _ , , , _ 26 490,000.00 27 Proceeds used to currently refund prior issues. . . . . . . . . . . . . . . . . . . . 27 0.00 28 Proceeds used to advance refund prior issues . . . . . . . . . . . . . . . . . . . . .1281 0.00 29 Total(add fines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 734 137.70 30 Nonrefunding proceeds of the issue subtract line 29 from line 23 and enter amount here 30 4,165,862.30 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 . . . . . . . . . . . . . . . ► years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . . . . . . . . . . . . ► years 33 Enter the last date on which the refunded bonds will be called . . . . . . . . . . . . . . . . . . . . . . . . . ► 34 Enter the date(s)the refunded bonds were issued ► Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) , , , , , , , , , , , , , 35 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract(see instructions) 363 b Enter the final maturity date of the guaranteed investment contract ► 37 Pooled financings:a Proceeds of this issue that are to be used to make loans to other governmental units 37a 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)(111)(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 penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Sign Here Shari Freidenrich ' 7/17/02 'City Treasurer S re iss r uthorized representative Date Type or print name and title For Paperwork Reduction Ac otice, see page 2 of the Instructions. Cat.No.63773S Form 8038-G (Rev. 11-2000) �a.1.'.t.6,°�sf OFFICE OF CITY ATTORNEY �sf�all�TV P.O. Box 190 2000 Main Street Telephone Gail Hutton Huntington Beach, California 92648 (714) 536-5555 City Auomey Fax (714) 374-1590 July 17, 2002 Stone &Youngberg LLC 15260 Ventura Boulevard, Suite 1520 Sherman Oaks, California 91403 Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A Ladies and Gentlemen: I am City Attorney for the City of Huntington Beach (the "City") and have acted as such in connection with the issuance by the City, for and on behalf of the Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) ("Improvement Area A"), of its "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A," in the aggregate principal amount of $4,900,000 and dated the date hereof (the "Bonds"). The Bonds are being issued pursuant to that certain Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust Company, as fiscal agent, and Resolution No. 2002-63, adopted by the City Council of the City on June 17, 2002 (the "Resolution"). Capitalized terms used herein and not otherwise identified shall have the same meanings as assigned to them in that certain Purchase Contract, dated June 27, 2002 (the "Purchase Contract"), by and between Stone & Youngberg LLC, as underwriter, and the City. In rendering the opinion set forth herein, I have made no search, inquiry, investigation or other examination concerning the records or files of any court, public board or body, or other public records, other than the City; and my opinion as expressed herein does not extend to any matter which might be disclosed as a result of any further search, inquiry, investigation or other examination. Whenever a statement herein is qualified "to the best of my knowledge," it is intended to indicate that, during the course of my representation of the City in connection with this transaction, no information that would give me actual knowledge of the inaccuracy of such statement has come to my attention. I have not undertaken any independent investigation to determine the accuracy of such statements, and any limited inquiry undertaken by me during the preparation of this opinion letter should not be regarded as such investigation. No inference as to my knowledge of any matters bearing on the accuracy of any such statements should be drawn from the fact of my representation of the City. GAM ulvihi]WcDonnell Douglas CFD\CityAttyOpinion.doc July 17, 2002 Stone &Youngberg LLC Page 2 My opinion set forth herein does not extend to, and I express no opinion herein with respect to,.(a) any laws of any jurisdictions.(including any federal law), other than the laws of the State of California, and (b) any matters covered by the securities, usury or tax . laws, decisions, rules or regulations of any jurisdiction. Based upon such examination, I am of the opinion, under existing law, that: (A) the City is a municipal corporation and chartered city duly organized and validly existing as a public body corporate and politic under and by virtue of the Constitution and laws of the State, with full legal right, power and authority to adopt the Resolutions; (B) the Resolutions and the Ordinance have been duly adopted at meetings of the City Council of the City which were called and held pursuant to law and with all public notices required by law at which a quorum was present and acting throughout, is in full force and effect and constitutes the legal, valid and binding action of the City; (C) to the best of my knowledge,,the adoption of the City Resolutions and the execution and delivery of the Community Facilities-District Documents, and compliance with the provisions thereof, do not conflict with or constitute on the part of the City a breach or violation of or default under any judgment, decree, order, license, permit or agreement to which the City is subject or by which the City is bound, that would have a material adverse effect upon the transactions contemplated by the Community Facilities District Documents. (D) Other than as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, by or before any court, governmental agency, public board or body pending or, to the best of my knowledge, threatened against the City(a) to restrain or enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, the levy.and collection or application of the Special Tax to pay the principal of, and interest on, the Bonds, or(b) in any way contesting or affecting the legality of the Bonds, the Community Facilities District Documents, the proceedings of the City taken with respect thereto, the existence or powers of the City or the titles of any of the officers of the City or their respective positions, or(c) in any contesting or challenging the completeness or accuracy of the Official Statement relating to the Bonds (the "Official Statement") or the powers of the City or its authority, with respect to the Bonds, or (d) which challenges the exemption of interest paid on the Bonds from federal income taxation or State of California personal income taxation. Very truly yours, Gail Hutton City Attorney GAMulvihill\McDonnell Douglas CFD\CityAttyOpinion.doc BNY WESTERN TRUST COMPANY SECRETARY'S CERTIFICATE I do hereby certify that: (i) I am the duly elected Assistant Secretary of BNY Western Trust Company, a California banking corporation(the"Company"); (ii) attached hereto as Exhibit "A" is a true, correct copy of Signing Authorities extracts from by-laws of the Company adopted by action of the Board of Directors of the Company and presently in effect; (iii) attached hereto as Exhibit `B" is a list of the persons who, as of the date hereof, are certain duly elected officers of the Company, which lists sets forth the title of each such 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 as Assistant Secretary of the Company and affixed the seal of the Company this 17th day of July , 2002. David A. Oeser, Assistant Secretary BNY Western Trust Company (Corporate Seal) O:\WINWORD\OTHER\THD\BNYWTC SECRETARY'S CERTIFICATE I hereby certify that as of the date hereof that Vicki L. Herrick is the duly elected Assistant Vice President of BNY Western Trust Company, and that the signature which appears on the foregoing pages is the signature of and that it is a signature with which I am personally familiar and do certify as to its authenticity: Vicki L. Herrick Dated: July 17, 2002 By: David A. Oeser Title: Assistant Secretary O:\WINWORD\OTHER\THD\BNYWTC SECRETARY'S CERTIFICATE Extracts from By-Laws of BNY NVESTERN TRUST COMPAIN Amended May 1. 1997 ARTICLE ``II •SiQninz Authorities SECTION 1. Real Properry. Real prot:e--�v owned by the Cor-cr-�iiori is ii_ o'••- rr hi stall not be deeded. conveyed_ rnongaced_ assicned or trans e: e^_ exce'ot w eri &iy by a resoiution of the Board. The Board may from time-to-time authorize or__ ce:_ to aeec. convey, monRage assign or transfer real.prope:iZ owned by the Comoration in lt_ C��T -_ . ���... suer max-Hnum values as the Board may fix in its authorl resolution. SECTION 2. Senior Si-irg Powers. SL,clec: to fire exception Crov:"ec 1:: Se=:cr- !. . Chai-:nan. tine President_ any Vice Chairman of ^e Board:. any Senior Exec'rive Vice a:: Executive Vice President Or anv Senior VICe President is auinoE.7eC io " - -= CC _icn �:y COC'.1."iie:lC_ 1::_utLT'..... OC Ca:... l:i t::e na.^2 Oi. or O^ ....._._ �.. ..._ Co:ccra:ion Ln a!1 it-:sac:ions a_nsin_c oui OL OC in, Connection v,it:. L`:e ::o::_--a: Cor'CCC_:Ori S bLsi es_ Or In anv I1Cu'ci Cr acerb' c CaC: a:-.d. iC x ::e sea! Oi is e Corporation Lie:et0. I:: sue, as !i Lne_li'Cc"-n o: L:.. P:esiC.e.^ anv Vice Cria!rma_n of t• .. a::'• Se::.1CC E:<:-C'_'i:�'e-` :cz r xec__. ••ice Presider_ rrav be proper �:c ces :_cie. a:: ore of said o�:Ce._ ..- --=• -- �'7.. �CCn ti e :O-.ime c :�' Odder OI 1Ce. iQ ia`:'e C- to =- perfo::_. :Ce or d Ch` _ or i c ci * C o�::Ce. ___. . _ a: .__. ---:C_-- Ci on C: ;-Inc-:on. oniCe. of Lhe Cc:_oraaCn a or:zed in or our-dani is _ have airy of die power_ se: for-.h the-e;n. ocne: Lha_n the otiIc!. sicnnnc purse i i0 CC.r -- ;s a'.ir_�Or_-__ to aaesi to t~�- seal of the Comora.!on on a_.V docl-I lent_ Ceau...'c c;_C_ :. SEC- l 10N =. Li?rirea Sizn n_z Po'.ve.r_. SL'biec: to :e exce-tio:i SzzC::C" 1- .- _ C= li• : ces as 1' the Judgment of die Cha':"- an ire President_ ar!%' Vice Cna_':=nn 01. =oar[. a:: Senior Executive �/ice Presider[_ or a::y Executiye V C� esi rna e =-C . 1 Pi�_iCerC :_ G tit t: desirable. any one of said officers may au&.oIIze In w%tunc from time CO-lime an-y oLne: ezr plovee or individual to have the limited signing powers or limited power to al:'-_Ex i:_e seai or :e Corporation to speciIled classes of documents se: foren in a resolution Or brie Boa a ccci_Cac!e oniy to Lhe performance or discharge of the duties of such officer, e.Tiployet or individual wit�. Ids or her division or fuletion. SECTION 4. Powers of Attorney. All powers of attorney on behalf of the Cor_ornt:on s::all be executed by any officer of the Corporation jointly with Lhe Chairman of the Board. tie President_ any Vice Chairman, any Se for Executive Vice President, any Executive Vice President or any Senior Vice President. A.ny such power of attorney may, however, be executed by any off icer or officers or person or persons who may be specifically authorized to execune the same by the Board of Directors. ' SECTION 5. Auditor. The Auditor or anv officer designated by the Auditor is authorized to certify in the name of, or on behalf of the Corporation_ in its own rizhi or in a fiduciary or representative capacity, as to the accuracy and completeness of anv account_ schedule of assets. or other document, instrument or paper requiring such certification. SIGNING AUTHORITY RESOLUTION Pursuant to Article VII,Section 3 of the By-laws RESOLVED, that, pursuant to Article VII, Section 3 of the By-laws BNY Western Trust Company, authority be, and he-ebv is, granted to the Chairman, the President, any Vice Chairman of the Board, any Senior Executive Vice 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 office-, employee or individual to have the limited si-_ning 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 he-division or function: (A) All signing authority set forth in parag-*aphs(B)through(I)below. (B) Authbriry to accept, endorse, execute or sign any biil receivabie; certification; contract, document or other insmimenr evidencing, ernbodving a commitment with resuecr to,'or reflecting the terms or conditions of. a loan or an ex:erasion of credit by the Bank; disclosure notice required by law; document, instrument or pane-of anv rape required for judicial, re_ulaiory or administrative proceedings or filings; legai opinion; note: and document. instrument or paper of any type, including stock:-and bond powers, required for purchasing, selling, cansfe-ring. exchanges or otherwise cilsposmg of or dealing in foreign currency or any form of securities, includir,2 occions and. futures thereon; in e_,cn else in transactions arisina Out or, Or in Connection wi[h, the normai Course oI Ene Corporation's business. (CI) Author;';: to accept, endorse, execute or sign or e:fecz the issuance or any Cashiers, C_rii:e^ Or OEhdr official c�-eck: draft; order for payment of money; creek ce:rificarion: receipt; Cer:if care of deposit; and money: transfer wire: in each case, in an unlimited dollar amount. (0) Authority to acceci. endorse. execute or sign Or er:ec: the issL,ance of any Cas'-iiers. Ce e0 Or otle- ofticial check, draft. order for payment of money; check ce.nalcanon; receipt; cerificate of ceposit: anc money transfer«ire: in each case, in an amount up to S 1,000,000. (C3) Authority to accepr, endorse, execute or sign or effect the issuance of ariv Cashiers. Ce-tiiiea Or orl e- odic:ai check: draft; order for payment of money' check certiIicari0n; receipt; Ce':iiCare Ot de osit: and money earisfe-w• .-; in each case, in an amount up to S250.000. (C4) Authority to accept, endorse, execute or sign or e ec: the issuance of anv cashiers, ce:;tide or od-le- official check- draft; order for pavme it of money; check ce^iricadon; receipt, ce-:ideate of deposit; and money: transfer wire; in each case, in an amount up to S50,000. (CS) Authority to accept, endorse, execute or sign or effect the issuance of anv cashiers. certified or other official check: draft; order for payment of money; check certification; receipt; certificate of deposit; and money.' transfer wire; in each case, in an amount up to S5,000. (D1) Authority to accept,endorse, execute or sign anv contract obligating the Corporation for the payment of money or the provision of services in an amount up to S 1,000,000. (D2) Authority to accept,endorse, execute or sign any contract obligating the Corporation for the payment of money or the provision of services in an amount up to$250,000. (D3) Authority to accept, endorse, execute or sign any contract obligating the Corporation 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 Corporation for the payment of money or the provision of services in an amount up to S5,000. (E) Authoriry to accept, endorse, execute or sign any guarantee of signature to assignments of stocks, bonds or other instruments; certification required for transfers and de!iveries 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 sian any certificate of authentication as bond, unit investment trust or debenture trustee and on behalf of the Corporation as registrar and transfer agent. (G) Authority to accept, endorse, execute or sign anv bankers acceptance; letter of credit; and bill of ladine. (H) Authority to accept, endorse, execute or sign any document, insmument or paper of any rvpe required in connection with the ownership. management or transfer of real or personal property held by the Corporation in trust or in connection with any transaction with respect to which the Corporation is acting in any fiduciary, representative or agency capacity, including the acceptance of such fiduciary, representative or agency account. (n Authority to effect the movement of securities outside the Corporation. (.]) Authority to either sign on behalf of the Corporation or to affix the seal of the Corporation to, anv of the followirg classes of documents: Trust Indentures, Escrow Agreements. Pooling and Se^icing Agree:.ie-t:. Collateral Agency A_sreements, Custodv Azeernents. Trustee's Deers. Executor': Deeds. Personal Re=resenracive's Deeds, Other Real Estate Deeds for proce.T,- not owned by t;'ie Corportior, 'in its w-vn right, Cor:orate Resoiucior.s. !viorcgage Satisfac:ions. Mort_aa_ge Assismm�encs. Trust Agreements. Loan. A_gretme:irs. Trus; and Est::e Accountings. Probate Petitions. Responsive pleadings in litigated rnane-s and Pe::ti0ns in Probate Cour:with resvec: to Accounrngs. RESOLVED, that any signing au&,oricy 2=.ced pursuahc to tliis rezoiutior. may be resc::nde- by E-.. Cnairnan, the President, any Vice Chairman of the Board. any Senior Executive Vice President, or any Executive Vice President and such srgnuig authoriCV shall ter-urinate without the necessir_: of anv fur',lier action when the person having such authorir., leaves the e nplov of the Corporation. bur%vcsbl.subsid.'%lu•.v Exhibit B BNY WESTERN TRUST COMPANY CORPORATE TRUST OFFICIAL SIGNING POWER AUTHORITIES Pursuant to Article VII, Sections 2 and 3 of the By-Laws of BNY Western Trust Company as amended May 1, 1997, I hereby convey the signing authorities noted next to the individuals, as follows: Signing Power Authority Name Title (per Sections) Nicholas S. Signoretta Vice President 2, 3 N1. K. Klugman Senior Vice President 2, 3 Todd H.Duncan Vice President&Assistant Secretary 13 Carl W. Becker Assistant Vice President 2, 3 Huah L. Black Assistant Vice President 2. 3 Eladia Burgos Vice President 2. 3 Rose C. Bystrom Vice President& Assistant Secretary 2, 3 Niilly P. Canessa Assistant Vice President 2, 3 Sandy Chan Assistant Vice President 2, 3 Gregory B. Chenail Assistant Treasurer 2. 3 Priscilla R. Dedoro Assistant Vice President 2, 3 Armando F. Diaz Acencv Administrator 2, 3 Daren Nf. Di Nicola Vice President 2. 3 Teresa R. Fructuoso Assistant Vice President 2, 3 INi. D. Gibbons Vice President 2. 3 Mark A. Golder Assistant Vice President 2. 3 Vicki L. Herrick Assistant Vice President 2. 3 Inga Keldsen Vice President& Assistant Secretary 2, 3 Julianne Kovatz Assistant Vice President 2. 3 Marina Nieza Agency Administrator 2, 3 Helen B. McNulty Assistant Treasurer 2. 3 Jacqueline M. Nowak Assistant Vice President 2, 3 David A. Oeser Assistant Vice President&Assistant Secretary 2, 3 Tomas S. Orlina, Jr. Assistant Vice President 2, 3 Sandee' Parks Vice President 2, 3 Karen Peterson Assistant Treasurer 2, 3 Teresa Petta Assistant Vice President 2, 3 Aurora Y. Quiazon Assistant Treasurer 2, 3 , Rosalinda Ronquillo Assistant Treasurer&Assistant Secretary 2, 3 Rose M. Ruelos Vice President&Assistant Secretary 2, 3 Garrett P. Smith Vice President 2, 3 Allen D. Taylor Assistant Vice President 2, 3 Fe Tuzon Agency Administrator 2, 3 Deborah Young Vice President 2, 3 Elena Zaretsky Assistant Treasurer 2, 3 4eith N. Kuhn, Chairman BNY Western Trust Company G:'.WINY/GG�7 40THEMTHCS:GNINGATH OEV212002 Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A CERTIFICATE OF FISCAL AGENT The undersigned hereby states and certifies: (i) that the undersigned is an authorized officer of BNY Western Trust Company, as fiscal agent (the "Fiscal Agent")under that certain Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City of Huntington Beach (the "City") and the Fiscal Agent, and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the Fiscal Agent; (ii) that the Fiscal Agent is duly organized and existing as a banking corporation in good standing under the laws of the State of California and has all necessary power and authority to enter into and perform its duties under the Fiscal Agent Agreement, the Continuing Disclosure Certificate - Issuer, dated as of June 1, 2002, by the City, and as acknowledged by BNY Western Trust Company, as dissemination agent (the "Dissemination Agent") and the Continuing Disclosure Certificate-Landowner,dated as of June 1,2002,by McDonnell Douglas Corporation,as landowner,and as acknowledged by the Dissemination Agent (collectively, the "Fiscal Agent Documents"); (iii) that the Fiscal Agent is duly authorized to accept the obligations created by the Fiscal Agent Documents and to authenticate the above-captioned bonds (the "Bonds") pursuant to the terms of the Fiscal Agent Agreement; (iv) that the Bonds have been duly authenticated and delivered by the Fiscal Agent in accordance with the Fiscal Agent Agreement, and the Fiscal Agent has duly authorized, executed and delivered the Fiscal Agent Documents, and by all proper corporate action has authorized the acceptance of the duties and obligations of the Fiscal Agent under the Fiscal Agent Documents; (v) that assuming due authorization, execution and delivery by the other parties thereto,the Fiscal Agent Documents are valid,legal and binding of the Fiscal Agent, enforceable in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, agreements insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights in general and by general equitable principles (regardless of whether such enforcement is considered in a proceeding in equity or at law); no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Fiscal Agent that has not been obtained is or will be required for the authentication of the Bonds or the consummation by the Fiscal Agent of the other transactions contemplated to be performed by the Fiscal Agent in connection with the authentication of the Bonds and the acceptance and performance of the obligations created by the Fiscal Agent Documents; (vi) that to the best of my knowledge, compliance with the terms of the Fiscal Agent Documents will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or s,- instrument to which the Fiscal Agent is a party or by which it is bound, or any law or any rule, regulation,order or decree of any court or governmental agency or body having jurisdiction over the Fiscal Agent or any of its activities or properties;.and (vii) that to the best of my knowledge, there is no litigation pending or threatened against or affecting the Fiscal Agent to restrain or enjoin the Fiscal Agent's participation in,or in any way contesting the powers of the Fiscal Agent with respect to the transactions contemplated by the Bonds and the Fiscal Agent Documents. Dated: July 17, 2002 BNY WESTERN TRUST COMPANY, as Fiscal Agent By- Authorized Officer -2- Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A FISCAL AGENT'S RECEIPT OF PROCEEDS The undersigned hereby states and certifies: (i) that the undersigned is an authorized officer of BNY Western Trust Company, as fiscal agent (the "Fiscal Agent")under that certain Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City of Huntington Beach (the "City") and the Fiscal Agent, and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the Fiscal Agent; (ii) that on the date hereof the Fiscal Agent received from the Stone&Youngberg LLC, as underwriter (the "Underwriter"), the amount of $4,805,862.30, which represents the purchase price for the bonds designated"Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A;' in the aggregate principal amount of$4,900,000 and dated the date hereof (the "Bonds"), and the Fiscal Agent has deposited such amount this date, pursuant to Section 4.01 of the Fiscal Agent Agreement,as follows: $ 150,000.00 Deposited into the Costs of Issuance Fund 490,000.00 Deposited into the Reserve Fund 4,059,569.34 Deposited into the Improvement Fund 36,292.96 Deposited into the Capitalized Interest Account of the Bond Fund 70,000.00 Deposited into the Administrative Expense Fund $4,805,862.30 TOTAL AMOUNT DEPOSITED THIS DATE (iii) that said purchase price has been calculated by the.Underwriter and represented to the Fiscal Agent to be as follows: $4,900,000.00 Principal Amount of Bonds (94,137.70) Less Underwriter's Discount $4,805,862.30 TOTAL PURCHASE PRICE RECEIVED THIS DATE (iv) and, that capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Fiscal Agent Agreement. Dated: July 17, 2002 BNY WESTERN TRUST COMPANY, as Fiscal Agent By Authorized Officer -2- Brobeck ATTORNEYS AT LAW July 17, 2002 Brobeck,Phleger&Harrison LLP One Market Spear Street Tower San Francisco,California 94105 DIRECT 415.442.0900 FAx 415.442.1010 www.brobeck.com Stone&Youngberg LLC 15260 Ventura Boulevard, Suite 1520 Sherman Oaks, CA 91403 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) 2000 Main Street Huntington Beach CA 92648 Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A Ladies and Gentlemen: This opinion letter is furnished to you pursuant to Section 8(c)(xvi) of that certain Purchase Contract dated June 27, 2002 (the `Purchase Contract")between Stone &Youngberg LLC, as underwriter(the"Underwriter"), and the City of Huntington Beach, California("the City")related to the sale of Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A(the"Bonds"). We have acted as special counsel to BNY Western Trust Company, a banking corporation organized under the laws of the State of California(`BNY"), in connection with(i) that certain Fiscal Agent Agreement dated as of June 1, 2002 (the "Fiscal Agent Agreement")by and between BNY as fiscal agent (the"Fiscal Agent"), and the City relating to the Bonds, (ii) that certain Continuing Disclosure Certificate-Issuer dated as of June 1, 2002 (the"CFD Disclosure Certificate") executed by the City in connection with the Bonds, and (iii) the Continuing Disclosure Certificate-Landowner dated as of June 1, 2002 (the"Landowner Disclosure Agreement") executed by McDonnell Douglas Corporation (the"Landowner")in connection with the Bonds (collectively, the "Fiscal Agent Documents"). In connection with this opinion, we have examined copies of the Fiscal Agent Documents and originals or copies satisfactory to us of such other corporate documents and records as we have deemed relevant and necessary as a basis for the opinions expressed herein. In such examination,we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity with the original documents of all documents submitted to us as copies. As to all factual matters material to the opinions expressed herein,we have (with your permission and without any investigation or independent Stone&Youngberg LLC July 17, 2002 Improvement Area A of the City of Huntington Beach Page 2 verification)relied solely upon, and assumed the accuracy and completeness of a certificate of officers of the Trustee delivered to us, a copy of which is attached as Exhibit A. Based solely on the foregoing and subject to the comments, qualifications and other matters set forth herein, we are of the opinion that: 1. The Fiscal Agent is duly organized, validly existing and in good standing as a banking corporation under the laws of the State of California having full corporate power to undertake its obligations under the Fiscal Agent Documents and to authenticate and deliver the Bonds. 2. The Bonds have been duly authenticated and delivered by the Fiscal Agent in accordance with the Fiscal Agent Agreement and the Fiscal Agent has duly authorized, executed and delivered the Fiscal Agent Documents, and by all proper corporate action has authorized the acceptance of the duties and obligations of the Fiscal Agent under the Fiscal Agent Documents. 3. Assuming due authorization, execution and delivery thereof by the other respective parties thereto, the Fiscal Agent Documents are legal, valid and binding obligations of the Fiscal Agent enforceable in accordance with their respective terms. 4, No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Fiscal Agent is or will be required for the execution and delivery by the Fiscal Agent of the Fiscal Agent Documents or the execution and delivery of the Bonds. The foregoing opinions are limited by, subject to and based upon the following comments and qualifications: (a) We express no opinion as to any documents other than the Bonds, the Fiscal Agent Agreement, the CFD Disclosure Certificate and the Landowner Disclosure Certificate. (b) The validity,binding nature and enforceability of the Fiscal Agent's obligations under the Fiscal Agent Documents may be subject to or limited by(i)bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent transfer and other similar laws affecting the rights or creditors generally; and (ii) general principles of equity(whether relief is sought in a proceeding at law or in equity), including,without limitation, concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of any court of competent jurisdiction in awarding specific performance or injunctive relief and other equitable remedies. (c) We express no opinion as to the enforceability of any choice of law provision contained in the Fiscal Agent Agreement. For the purpose of this opinion and with your consent, we have assumed that the substantive laws of the State of California will govern the Fiscal Agent Agreement and the validity, binding effect and enforceability thereof. Stone &Youngberg LLC July 17, 2002 Improvement Area A of the City of Huntington Beach Page 3 (d) The opinions expressed herein are limited to the laws of the State of California. The opinions expressed herein are rendered as of the date hereof. We do not undertake to advise you of matters that may come to our attention subsequent to the date hereof and that may affect the opinions expressed herein, including without limitation, future changes in applicable law. We are furnishing this opinion to you solely for your benefit and no other person is entitled to rely hereon. This opinion is not to be used, circulated, quoted or otherwise referred to for any other purpose, with the exception of the complete transcript of the legal proceedings related to the Bonds,without the prior written consent of this firm. Very truly yours, L L',-"� �"-L� .� A,-�� BROBECK, PHLEGER&HARRISON LLP JUL. -15' 02 (MON) 16: 52 BNY WESTERN TRUST COMPANY TEL: 213 620 6216 P. 002 EXHIBIT A OFFICER CERTIFICATE This Certificate is executed and delivered to Brobeck,Phleger&Harrison LLP ("Brobeck") in connection with that (irm's opinion(the"Opinion") dated as of Julyl7,2002, to Stone &Youngberg LLC (the"Underwriter") and improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) (the"District") (together, the"Recipients")relating to the Fiscal Agent Documents as defined in the Opinion. Brobeck may rely on this Certificate in the preparation and delivery of the Opinion, and copies of this Certificate may be delivered to the Recipients and their counsel. The undersigned hereby certifies as follows in connection with(i) that certain Fiscal Agent Agreement dated as of June 1, 2002 (the"Fiscal Agent Agreement") by and among BNY Western Trust Company as -fiscal agent(the "Fiscal Agent") and the City relating to the sale of Improvement Area A of the City of Huntington Beach Community Facilities District No, 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A(the"Bonds"), and (1i) that certain Continuing Disclosure Certificate-Issuer dated as of June 1, 2002 (the "CFD -Disclosure Certificate") executed by the City in connection with the Bonds, and (iii) the Continuing Disclosure Certificate-Landowner dated as of June 1, 2002 (the "Landowner Disclosure Agreement") executed by McDonnell Douglas Corporation in connection with the Bonds (collectively, the"Fiscal Agent Documents"): 11 i am the duly elected, qualified and acting Assistant Vice President of BNY Western Trust Company. I am the proper person to execute and deliver this Certificate and I am familiar.with the facts certified berein. 2. The transactions contemplated by the Fiscal Agent Documents are entered into by the Fiscal Agent in the ordinary course of the Fiscal Agent's business. 3.; The Fiscal Agent has followed, or will follow, its standard internal procedures for authorizing the transactions contemplated by the Fiscal Agent Documents and for the execution of the Fiscal Agent Documents, which procedures do not require approval by the Fiscal Agent's directors.; 4. Schedule A attached hereto lists the name, office and personal signature for those officers who have been duly authorized by the Fiscal Agent to execute the Fiscal Agent Doeumen.ts, Each officer continues to be authorized to execute any and all instruments, documents or amendments which such officer may deem necessary or appropriate in connection with the fiscal Agent Documents. 5. The factual representations made by the Fiscal Agent in that certain certificate of Fiscal Agent, in confection with the Fiscal Agent Documents,delivered July 17, 2002 are true and complete in all respects to the best knowledge of the Fiscal Agent and Brobeck may rely on the Mutual represnitations in that certificate as if incorporated herein in the preparation and delivery of the Opinion. 4 &R aL1 R l�1\v IM�M1 t a u xw.of JUL. -15' O2 (MON) 16:52 BNY WESTERN TRUST COMPANY TEL: 213 620 6216 P. 003 The undersigned h4s executed this Certificate as of the 17th day of July, 2002. Vicki L.Herrick, Assistant Vice President 5 srRL1BIUWM15"94.Q3 JUL. -15' 02 (MON) 16: 54 BNY WESTERN TRUST .COMPANY TEL: 213 620 6216 P. O11 13NY 'WESTERN TRUST COMPANY schedule A CORPORATE TRUST Or,FICIAL SIGNING PO\VER AUTHORITIES Pursuant to Article VII, Sections 2 and 3 of the By-Laws of BNY Western Trust Company as amended May 1, 1997, T hereby convey.the sig-ning, authorities noted next to the individuals, as follows: Signing Power Authority Name Title (per Seciionsl Nicholas S. Sienoretta Vice President 2, 3 M. K.Klugman Senior Vice President 2, 3 Todd H.Duncan Vice President& Assistant Secretary 2.3 Carl W.Becker Assistant Vice President 2, 3 Hueh L.Black Assistant Vice President 2, 3 Eladia Burgos Vice President 2, 3 Rose C. Bystrom Vice President& Assistant Secretary 2, 3 IM111y P. Canessa Assistant Vice President 2, 3 Sandy 2han Assistant Vice President 2, 3 Greaciry B. Chenail Assistant Treasurer 2. 3 Priscilla R. Dedoro :assistant Vice President 2. 3 Armando F. Diaz Agency Administrator 2. 3 Duren M. Di Nicola Vice President 2. 3 Teresa R.Fructuoso Assistant Vice President 2, 3 NI. D. Gibbons Vice Presidcnt 2. 3 I'viark A. Golder Assistant Vice President 2, 3 Vicki L. Herrick Assistant Vice President 2, 3 Inga Keldsen Vice President& Assistant Secretary 2. 3 Julianne-l o,,atz Assistant Vice President )'3 Marina Meza Agency Administrator 2, 3. Helen B. McNulry Assistant Treasurer 2,3 Jacqueline M.Nowak Assistant Vice President '), 3 David A. Oeser Assistant Vice Presidcnt&Assistant Secretary 2,3 Tomas S. Orlina, Jr. Assistant Vice President 2, 3 Sandee' Parks Vice President 2,3 Karen Feterson Assistant Treasurer 2, 3 Teresa Pc tta Assistant Vice President 2, 3 Aurora Y. Quiazon Assistant Treasurer 2, 3 , Rosalinda Ronquillo Assistant Treasurer.&Assistant Secretary 2, 3 Rose M.°Ruelos Vice President&Assistant Secretary 2, 3 Garrett P. Smith Vice Presidcnt 2, 3 Allen D.°Taylor Assistant Vice President 2.3 Fe Tuzon. Agency Administrator 2, 3 Deborah Young Vice President 2, 3 Elena Zaretsky Assistant Treasurer 2,3 �1 (, 2 1 bL eith N. Kuhn, Chairman BNY Wcstem Trust Company M Isom G•winrica V[iNEF1tNPs.GU1C.aTN $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS, SERIES 2002-A CERTIFICATE OF UNDERWRITER The undersigned hereby states and certifies: (i) that he is an authorized representative of Stone&Youngberg LLC, as underwriter (the "Underwriter') of the above-captioned bonds (the 'Bonds"), and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same on behalf of the Underwriter; (ii) that based upon reasonable expectations and actual facts which existed on June 27, 2002, being the date upon which the City of Huntington Beach sold the Bonds to the Underwriter, the initial offering prices of the Bonds to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriter or wholesalers) at which a substantial amount of each maturity of the Bonds was to be sold to the public on the date hereof was the par amount thereof; (iii) that the Bonds of each maturity were actually offered to the general public in a bona fide public offering for the prices set forth above;and (iv) that the establishment of the Reserve Fund in the amount of the Reserve Requirement (as identified in the Fiscal Agent Agreement authorizing issuance of the Bonds) was vital to the marketing of the Bonds and reasonably required to assure the payment of debt service on the Bonds. Dated: July 17,2002 STONE&YOUNGBERG LLC, as Underwriter By Authorized Representative i Quint&nimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A RECEIPT FOR BONDS The undersigned hereby states and certifies that he is an authorized representative of Stone &Youngberg LLC, as underwriter (the "Underwriter") and hereby acknowledges receipt this date of the following described bonds issued by the City of Huntington Beach, for and on behalf of the Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park): "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A," issued in the aggregate principal amount of $4,900,000 and dated the date hereof, issued as fully registered bonds, without coupons, and duly authenticated by BNY Western Trust Company,as fiscal agent. Dated: July 17, 2002 STONE &YOUNGBERG LLC, as Underwriter By C Authorized Representative R-1 ***$5,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 4.00% September 1,2005 July 17,2002 4461E BW3 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: FIVE THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above,or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above, until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t .s in 1 United upon entation and surrender this n . t the ri -pal fi (as defi ed th eem efe d to el f B Western Trust Company ( cal ). t this Bond 11 id eck Pis I nt ailed on each interest pay en t o the re ter er hereof of e o usi ss th 15t a of the month preceding e m h which t inte es � meiq d oc rs e " cor ate" a such tered owner's address as i ear a re ooks ai Fi cal I t nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered . owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-2 ***$10,00()*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 4.25% September 1,2006 July 17,2002 446188 BXl REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: TEN THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above,or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided,the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable toSem PhE n 1 United upon entation and surrenderffi= (as def' ed _ th reem efe d to el f BN Western Trust Company this Bond 11 id eck Q Fis 1 nt ailed on each interest pa er hereof of e = o usi ss th 15t a of the month precedinghes men d oc rs e " cor _ ate" a such tered owner's address asooks ai Fi cal t nds a in book-entry- only form,or(ii)otherwise.upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the 'Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2062(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein,and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-3 ***$15,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY'DATE BOND DATE CUSIP 4.50% September 1,2007 July 17,2002 446188 BY9 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: FIFTEEN THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in I United - upon entation and surrender this nd t the ri pal ffi. (as def' ed -th eem efe d to el f BN Western Trust Company ( cal ). t this Bond ll 'd eck Fis 1 nt ailed on each interest paymen t .o the re ter er hereof of e o usi ss th 15t a of the month es • men d oc rs e " cor a te, a such tered owner's preceding e m h which t inte address as i ear a re ooks ai Fi cal nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the "Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein,and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-4 ***$25,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 4.70% September 1,2008 July 17,2002 446188 BZ6 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: TWENTY-FIVE THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park)("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in 1 United upon entation and surrender this nd t the ri pal ffi (as def' ed th eem efe d to el f BN Western Trust Company ( cal ). t this Bond Il d eck Fis I nt ailed on each interest paymen t o the re : ter er hereof of e - o usi ss th 15t a of the month preceding e m h which t inte es men d oc rs e " cor ate" a such tered owner's address as i - ear a reg ooks ai Fi cal t rids a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of .$13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-5 ***$30,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 4.80% September 1,2009 July17,2002 446188 CAO REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: THIRTY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for,semiannually on March 1 and September 1, commencing March 1,2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t_ s in 1 United upon entation and surrender this nd t the ri pal ffi (as def' ed th reem efe d to el f BN Western Trust Company ( ' cal ). t this Bond 11 id eck Fis I nt ailed on each interest paymen t o the re ter er hereof of e o: usi ss th 15t a of the month preceding e m h which t inte es ent d t oc rs e " cor ate" a such tered owner's address as i ea a re ooks _ 1 ai Fi cal I nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the 'Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the'Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement') and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-6 ***$40,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 4.90% September 1,2010 July 17,2002 446188 C138 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: FORTY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above,or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided,the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in 1 United - upon entation and surrender this nd t the ri pal f ' (as defi ed th eem efe d to el f BN Western Trust Company 4 cal ` ). g t this Bond 11 'd eck Fis 1 nt ailed on each interest paymen t o the re ter er hereof of e - o usi ss th 15t a of the month preceding e m h which t inte es - en d oc. rs e " cor ate" a such tered owner's address as i ear a re ooks ai Fi cal I t nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code (collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the -Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-7 ***$50,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE =CUSIP 5.00% September 1,2011 July 17,2002 446188 CC6 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: FIFTY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park)("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1,2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in I United upon entation and surrender this nd t the pal ffi (as defi ed th reem efe d to el f BN Western Trust Company ( cal _ ). t this Bond 11 'd eck Fis I nt ailed on each interest paymen t o the re t ter er hereof of e - o usi ss th 15t . a of the month preceding e m h which t inte es men d oc rs f e " cor ate" a such tered owner's address as 1 11ear a re ooks - ai Fi cal I nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 v R-8 ***$55,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 5.15% September 1,2012 July 17,2002 446188 CD4 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: FIFTY-FIVE THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable toSem in 1 United Nnds entation and surrender 'Ph t the ri -pal ff' (as def' ed th reem efe d to estern Trust Company al ). t _ this Bond 11 'd eck Filed on each interest pt o there ter er hereof of e = o usi ss f the month precedingh which t inte es en d t oc rs e " cor ate" ered owner's address as a reg ooks a' Fi cal tn book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-9 ***$65,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 5.30% September 1,2013 July 17,2002 446188 CE2 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: SIXTY-FIVE THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable tot s in 1 Nthreem N entation and surrender this nd t the" ri pal ffi as defi ed JecEk estern Trust Company ( cal ). t this Bond iled on each interest paymen t o the re ter er hereof f the month preceding e m h which t inte es men d ered owner's address as I ear a re ooks ain book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-10 ***$80,000*** UNITED STATES OF AMERICA. STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 5.40% September 1,2014 July 17,2002 446188 CF9 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: EIGHTY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park)("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided,the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t P,, in 1 United upon entation and surrender this ri pal ffi (as def' ed th reem efe ' d to el f B Western Trust Company ( . t this Bond 11 id eck Fis 1 nt ailed on each interest paymen re ter er hereof of e o x usi ss th 15t a of the month preceding e m t inte es - men d # oc rs e " cor ate" a such tered owner's address as i ear ooks ai Fi cal g t nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of fBonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-11 ***$90,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 5.50% September 1,2015 July 17,2002 446188 CG7 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: NINETY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park)("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided,the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in I United upon entation and surrender this n t the- pal ff-- (as de ' ed' th eem efe d to el f B Western Trust Company ( . cal I t this Bond 11 id eck Fis I nt ailed on each interest paymen t o the re - ter er hereof of e o .h usi ss_ _th 15t a of the month preceding e m h which t inte es ment d t oc rs t e " ' cor ate" a such tered owner's address as ear a re ooks a' Fi cal t nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1,-2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement.is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-12 ***$100,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 5.60% September 1,2016 July 17,2002 446188 CH5 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: ONE HUNDRED THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special.Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in 1 United upon entation and surrender this nd t the pal ff'• (as def' ed, th eem efe : d to el . f B Western Trust Company ( cal ). t this Bonds 11 'd - eck Fis 1 nt ailed on each interest paymen t o the re ter er hereof of e o usi ss th 15t a -of-the month preceding e m h which t inte es men d oc rs e " cor ate" a such tered owner's address as ear a re ooks ai Fi cal t nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000;000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated"Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein,and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000.secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-13 ***$115,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 5.70% September 1,2017 July 17,2002 446188 C 1 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: ONE HUNDRED FIFTEEN THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1,2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in I United upon entation and surrender this nd t the pal ffi (as defi ed` th reem efe d to el . f B Western Trust Company ( cal ). t this Bond 11 id eck Fis 1 nt ailed on each interest paymen t o the re ter er hereof of e - o usi ss th 15t a of the month preceding e m h which t inte es enL d oc rs e " cor ate" a such tered owner's address as i ear a re ooks a' Fi cal I nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982, as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project'),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the 'Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement') and this reference incorporates the Resolution and the Agreement herein,and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-14 ***$130,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 5.80% September 1,2018 July 17,2002 446188 CK8 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: ONE HUNDRED THIRTY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above,or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1,2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in 1 United _ upon entation and surrender this nd t the ri pal ffi_ (as def ed th eem efe d to el f B Western Trust Company ( cal ). t this Bond 11 'd eck Fis 1 nt ailed on each interest paymen t o the re a ter er hereof of e o o usi ss th 15t a of the month preceding e in h which t inte es ment d ' oc rs e " cor ate" a such tered owner's address as i ear a re ooks ai Fi cal g I nds ar in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by-wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-15 ***$145,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSII' 5.90% September 1,2019 July 17,2002 446188 CL6 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: ONE HUNDRED FORTY-FIVE THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park)("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1,2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in 1 United Nnds entation and surrender this nd t the pal ffi (as de ed th eem efe d to estern Trust Company ( cal ). t this Bond 11 id _ eck Filed on each interest paymen t o the re ter er hereof of e o usi ss of the month preceding e m h which t inte es _ men d oc rs e " cor ate" ered owner's address as i ear a re g ooks ai Fi cal tn book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-16 ***$160,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE J IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 6.00% September 1,2020 July 17,2002 446188 CM4 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: ONE HUNDRED SIXTY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity.date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1,2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in 1 United Cn upon entation and surrender this nd t the ri pal ffi (as clef' ed ' th reem efe ' d to el • f B Western Trust Company ( ' cal ). t this Bond 11 d eck Fis 1 nt ailed on each interest paymen t o the re : ter er hereof of e o usi ss th 15t a of the month preceding e m h which t inte es men d t oc rs e " cor ate" a such tered owner's address as i ear a re ooks a' Fi cal I nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-17 ***$180,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 6.10% September 1,2021 July 17,2002 446188 CN2 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: ONE HUNDRED EIGHTY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided,the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1,commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable toSem .in 1 United _ Nnds entation and surrenderd t the ri pal ffi- (as def ed th reem efe d to estern Trust Company al ' ). t this Bond 11 d eck - Filed on each interest pt o the re - ter er hereof of e o usi ss f the month precedingh which t inte es men d . oc rs e " cor ate" ered owner's address as a reg ooks ai Fi cal tn book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June.17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-18 ***$200,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 6.15% September 1,2022 July 17,2002 446188 CP7 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: TWO HUNDRED THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in 1 United - upon entation and surrender this n t the. ri pal ffi (as def' ed ` th eem efe d to el f B Western Trust Company ( cal ). t this Bond 11 id eck A Fis 1 nt ailed on each interest paymen t o the re , ter er hereof of e o usi ss th 15t a of the month preceding e m h which t inte es menj d t oc rs A: e " cor ate" a such tered owner's address as i ear a re ooks ai Fi cal t nds a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the 'Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein,and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-19 ***$220,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 6.20% September 1,2023 July 17,2002 446188 CR3 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: TWO HUNDRED TWENTY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in 1 United - Nnds entation and surrender this nd t the ri pal ffi (as defi ed th eem efe d to estern Trust Company ( cal ). t this Bonds 11 d eck Filed on each interest paymen t o the re ter er hereof of e - o usi ss of the month preceding e m h which t inte es W • men d . oc . rs e " cor ate" ered owner's address as i ear a re ooks ai Fi cal tn book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the'Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein,and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-20 ***$1,115,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 6.25% September 1,2027 July17,2002 446188 CSl REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: ONE MILLION ONE HUNDRED FIFTEEN THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above,or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to t s in 1 United Nndsnaa entation and surrender this n t the ri pal ff' (as de ' ed th reem efe d to estern Trust Company ( cal ). t this Bond 11 d eck Filed on each interest paymen t o the re = ter er hereof of e o usi ss f the month preceding e m h which t inte es en d oc rs e " cor ate" ered owner's address as i ar a re ooks ai Fi cal tn book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal:amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 1 of 5 R-21 ***$2,070,000*** UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bond, Series 2002-A INTEREST RATE MATURITY DATE BOND DATE CUSIP 6.30% September 1,2032 July 17,2002 446188 CQ5 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: TWO MILLION SEVENTY THOUSAND DOLLARS The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from the Special Tax(as hereinafter defined)to be collected in Improvement Area A or amounts in the funds and accounts held under the Agreement(as hereinafter defined),to the registered owner named above,or registered assigns, on the maturity date set forth above,unless redeemed prior thereto as hereinafter provided,the principal amount set forth above,and to pay interest on such principal amount from the Bond Date set forth above,or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March.1, 2003, at the interest rate set forth above,until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable toSem in I United upon entation and surrenderd t the ri pal ff' (as def' ed th reem efe d to el f B Western Trust Company al ). t this Bond 11 d eck o Fis 1 nt ailed on each interest pat ,o the-re .t ter er hereof of a o, usi ss th 15t a of the month precedingh which t inte es men d . oc - rs e " cor ate" a such tered owner's address as a re g ooks ai 6B Fi cal rids a in book-entry- only form,or(ii)otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least$1,000,000 in aggregate principal amount of Bonds,by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request,respectively. This Bond is one of the first series of a duly authorized issue of bonds in the aggregate principal amount of $13,000,000 approved by the qualified electors of Improvement Area A pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Law of 1982,as amended,Sections 53311,et seq.,of the California Government Code(collectively,the"Law")for the purpose of financing certain public facilities within and in the vicinity of Improvement Area A(the"Project"),and is one of the series of Bonds designated "Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A" (the "Bonds") in the aggregate principal amount of $4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for by resolution adopted by the City Council of the City on June 17,2002(the"Resolution"),and the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein,and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the City from time to time not to exceed the aggregate principal amount of$8,100,000 secured by a lien on a parity with the lien securing the Bonds("Parity Bonds"). The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with,the laws of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A, Page 1 of 5 Pursuant to the Law, the Agreement and the Resolution, the principal of and interest on this Bond are payable solely from the annual special tax authorized under the Law to be collected within Improvement Area A(the "Special Tax")and certain funds held under the Agreement. Interest on this Bond shall be payable from the interest payment date next preceding the date of authentication hereof,unless(i)it is authenticated on an interest payment date,in which event it shall bear interest from such date of authentication, or (ii) it is authenticated prior to an interest payment date and after the close of business on the Record Date preceding such interest payment date, in which event it shall bear interest from such interest payment date,or(iii)it is authenticated prior to the Record Date preceding the first interest payment date,in which event it shall bear interest from the Bond Date set forth above; provided, however, that if at the time of authentication of this Bond,interest is in default hereon,this Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment hereon. Any tax for the payment hereof shall be limited to the Special Tax, except to the extent that provision for payment has been made by the City,as may be permitted by law. The Bonds do not constitute obligations of the City for which the City is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described hereinabove. The Bonds are subject to redemption prior to their stated maturity on any interest payment date,as a whole or in part among maturities as provided in the Agreement, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed),as set forth below,together with accrued interest thereon to the date fixed for redemption: Redemption Dates Redemption Prices Any interest payment date from March 1,2003 to and including March 1,2010 103% September 1,2010 and March 1,2011 102 September 1,2011 and March 1,2012 101 September 1,2012 and any interest payment date thereafter .100 The Bonds maturing on September 1,2027,are subject to mandatory sinking payment redemption in part on September 1, 2024, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium,from sinking payments as follows: AV I ti t 1etD1 ink' m is 202 2 ,i 000 If. 20 2000 a , i 20 kw'ow 2027(maturity) 320,000 The Bonds maturing on September 1,2032,are subject to mandatory sinking payment redemption in part on September 1, 2028, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption,without premium,from sinking payments as follows: Redemption Date (September 1) Sinking Payments 2028 $345,000 2029 380,000 2030 410,000 2031 450,000 2032(maturity) 485,000 The Bonds are also subject to redemption on any interest payment date from the-proceeds of Special Tax Prepayments and any corresponding transfers from the Reserve Fund pursuant to the Agreement among maturities so as to maintain substantially the same debt service profile as in effect on the Closing Date and by lot within a maturity,at a redemption price(expressed as a percentage at the principal amount of the Bonds to be redeemed),as set forth below,together with accrued interest to the date fixed for redemption: IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 2 of 5 Redemption Dates Redemption Prices Any interest payment date from March 1,2003 to and including March 1,2010 103% September 1,2010 and March 1,2011 102 September 1,2011 and March 1,2012 101 September 1,2012 and any interest payment date thereafter 100 In the event of a redemption of less than all of the Bonds, the Bonds shall be redeemed by lot within a maturity,and among maturities in the manner specified in the Agreement. Notice of redemption with respect to the Bonds to be redeemed shall be given to the registered owners thereof,in the manner,to the extent and subject to the provisions of the Agreement. This Bond shall be registered in the name of the owner hereof,as to both principal and interest. Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon. No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such owner's order. The Fiscal Agent shall require the registered owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be made (i)fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption,(ii)with respect to a Bond after such Bond has been selected for redemption,or(iii)between a Record Date and the succeeding interest payment date. Exchanges may only be made for Bonds in authorized denominations,as provided in the Agreement. The Agreement and the rights and obligations of the City thereunder may be modified or amended as set forth therein. The Bonds are not general obligations of the City, but are limited obligations payable solely from the revenues and funds pledged therefor under the Agreement. Neither the faith and credit of the City or the State of California Sor itical subdivision thereof is led ed to the a ment of the Bonds. Tsh not ec e v iCdated ry r a urpo ntil e c tiN ntication and registration a e si ed Fi a ` gen- U B d is pre ze a sen ive Th impany to the Fiscal Agestration of transfer,exchange or payment,and any Bond issued is regname of Cede &Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. IT IS HEREBY CERTIFIED,RECITED AND DECLARED that all acts,conditions and things required by law to exist,happen and be performed precedent to and in the issuance of this Bond have existed,happened and been performed in due time,form and manner as required by law,and that the amount of this Bond does not exceed any debt limit prescribed by the laws or Constitution of the State of California. IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 3 of 5 IN WITNESS WHEREOF, City of Huntington Beach has caused this Bond to be dated the Bond Date set forth above,to be signed by the facsimile signature of its Mayor and countersigned by the facsimile signature of its City Clerk. CITY OF HUNTINGTON BEACH [SEAL] Mayor ATTEST City Clerk FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the Resolution and in the Agreement which has been authenticated on BNY WESTERN TRUST COMPANY,as Fiscal Agent By: Authorized Signatory IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 4 of 5 ASSIGNMENT For value received the undersigned hereby sells,assigns and transfers unto (Name,Address and Tax Identification or Social Security Number of Assignee) the within-registered Bond and hereby irrevocably constitute(s)and appoints(s) attorney, to transfer the same on the registration books of the Fiscal Agent with full power of substitution in the premises. Dated: Signature Guaranteed: Signature: Note: Signature(s) must be guaranteed by an eligible Note: The signature(s) on this Assignment must guarantor. correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. V PE , lMt. N IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH Community Facilities District No.2002-1 (McDonnell Centre Business Park) Special Tax Bond,Series 2002-A Page 5 of 5 Quint&Thinunig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A CERTIFICATE OF APPRAISER John S.Adams& Associates, Inc. (the "Appraiser"), has prepared an Appraisal of the real property and improvements located in Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) ("Improvement Area A"),in connection with the issuance by the City of Huntington Beach of its Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park), Special Tax Bonds, Series 2002-A (the 'Bonds"). The Appraiser hereby consents to the use of the Appraisal, dated April 1, 2002, as "APPENDIX C" to the Official Statement relating to the Bonds, dated June 27, 2002 (the "Official Statement"), and as "APPENDIX C" to the Preliminary Official Statement relating to the Bonds, dated June 18,2002 (the "Preliminary Official Statement"), and to the references to the Appraiser and the Appraisal in the Official Statement and in the Preliminary Official Statement. Dated: July 17, 2002 JOHN S. ADAMS & ASSOCIATES, INC., as Appraiser By �--- Its Quint&Thimmig LLP 7/11/02 $4,900,000 IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK) SPECIAL TAX BONDS,SERIES 2002-A CERTIFICATE OF SPECIAL TAX CONSULTANT Michael Swan Consulting (the "Special Tax Consultant"), has assisted in the formulation of the Special Tax (the "Special Tax") described in the Official Statement dated June 27,2002 (the "Official Statement") prepared in connection with the issuance by the City of Huntington Beach of its Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A," (the 'Bonds"). The Special Tax Consultant hereby certifies that: (i) the descriptions in that certain Preliminary Official Statement, dated June 18, 2002, relating to the Bonds and in the Official Statement of the Rate and Method of Apportionment of Special Taxes for Improvement Area A (the "Rate and Method"), and as set forth in Appendix D to the Official Statement, are fair and accurate; and (ii) the Special Tax,if collected in the maximum amounts permitted pursuant to the Rate and Method as in effect on the date hereof, would generate at least 110% of the gross annual debt service payable on the Bonds. Dated: July 17, 2002 MICHAEL SWAN CONSULTING, as Spe ial Tax Cons t nt By Authorized Representative APPRAISAL REPORT COMMUNITY FACILITIES DISTRICT NO. 2002-1 IMPROVEMENT AREA A THE McDONNELL CENTRE BUSINESS PARK HUNTINGTON BEACH, CALIFORNIA n213 JOHN S. ADAMS & ASSOCIATES, INC. 5100 BIRCH STREET, NEWPORT BEACH. CALIFORNIA 92660 (9493 B33-1972 FAX (9493 851-2055 April 1, 2002 Mr. David C. Biggs Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Re: Community Facilities District No. 2002-1 Improvement Area A The McDonnell Centre Business Park Huntington Beach, California Dear Mr. Biggs: In accordance with your request and authorization, we have examined the above referenced real property for the purpose of estimating its market'value as of March 29, 2002. As a result of this investigation and analysis of matters pertinent to the property's value, we have concluded that the market value, of the fee simple interest, subject to the limiting conditions and assumptions set forth in the report, as of said date was as follows: Total of Individual Retail Lot Values $19,349,000 Bulk Sale Value $14,750,000 The above values assume the assumption of CID No. 2002-1 Special Tax Bonds. On the following pages will be found our complete, self-contained appraisal report setting forth some of the matters and data upon which the opinions of market value have been predicated. Respectfully submitted, JOHN S. ADAMS & ASSOCIATES, INC. ,4n S. Adams, MAI California Certification No. AGO01754 0213 TABLE OF CONTENTS Page LETTER OF TRANSMITTAL...................................................................................................... i TABLEOF CONTENTS ............................................................................................................... ii LIMITING CONDITIONS GENERAL INFORMATION PURPOSEOF APPRAISAL.............................................................................................. 1 SCOPE OF APPRAISAL................................................................................................... 1 INTENDED USE OF APPRAISAL................................................................................... 2 DATEOF VALUE............................................................................................................. 2 DEFINITION OF MARKET VALUE................................................................................ 2 DEFINITION OF RETAIL VALUE.................................................................................. 3 DEFINITION OF BULK SALE VALUE........................................................................... 3 PROPERTY RIGHTS APPRAISED.................................................................................. 3 DEFINITION OF A FEE SIMPLE INTEREST ................................................................ 3 VALUATION ASSUMPTIONS AND CONDITIONS....................................................... 4 LEGALDESCRIPTION.................................................................................................... 4 LOCATION....................................................................................................................... 4 AREA INFORMATION COUNTY OF ORANGE.................................................................................................... 6 CITY OF HUNTINGTON BEACH................................................................................... 8 INDUSTRIAL MARKET OVERVIEW............................................................................. 12 IMMEDIATE SURROUNDINGS...................................................................................... 15 SUBJECT PROPERTY DESCRIPTION PROJECT DESCRIPTION CFD NO. 2002-1 .................................................................... 16 SITE DESCRIPTION AREA A......................................................................................... 19 CFD 2002-1 PROPOSED IMPROVEMENTS...................................:............................... 25 SUBJECT PROPERTY HISTORY.................................................................................... 27 ASSESSED VALUATION AND REAL PROPERTY TAXES .......................................... 27 HIGHESTAND BEST USE.............................................................................................. 28 SALES COMPARISON APPROACH—SUM TOTAL OF INDIVIDUAL RETAIL PARCEL VALUES..................................................................................................... 29 COMPARABLE LAND SALES ....................................................................................... 29 DISCOUNT FOR CFD NO. 2002-1 SPECIAL TAX BONDS ........................................... 35 DISCOUNTED VALUE IN BULK OF INDIVIDUAL RETAIL PARCELS................................... 36 CASH FLOW ASSUMPTIONS......................................................................................... 36 VALUATION................................................................................................................................. 40 EXPOSURE/MARKETING TIME................................................................................................. 41 CERTIFICATION.......................................................................................................................... 42 ADDENDA AERIAL PHOTOGRAPH CFD MAPS CASH FLOW ANALYSIS APPRAISERS' QUALIFICATIONS JOHN S.ADAMS&ASSOCIATES,INC. 0213 Ii LIMITING CONDITIONS This appraisal report has been based upon the following premises and limiting conditions: 1. The date of value to which the conclusions and opinions expressed in this report apply, is set forth in the report. Further, the dollar amount of any value opinion rendered in this report is based upon the purchasing power of the American dollar existing on that date. 2. The appraiser assumes no responsibility for economic or physical factors which.may affect the opinions in this report which occur after the date of value. 3. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 4. The appraiser reserves the right to make such adjustments to the analyses, opinions and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available. 5. No opinion as to title is rendered. Data related to ownership and legal description is considered reliable. Title is assumed to be marketable and free and clear of all liens, encumbrances, easements and restrictions except those specifically discussed in the report. The property is appraised assuming it to be under responsible ownership and competent management, and available for its highest and best use. 6. The appraiser assumes no responsibility for hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for arranging for engineering studies that may be required to discover them. 7. The property is appraised assuming it to be in full compliance with all applicable federal, state, and local environmental regulations and laws, unless otherwise stated. 8. The property is appraised assuming that all applicable zoning and use regulations and restrictions have been complied with, unless otherwise stated. 9. The property is appraised assuming that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based, unless otherwise stated. 10. No engineering survey has been made by the appraiser. Except as specifically stated, data relative to size and area was taken from sources considered reliable and no encroachment of real property improvements is considered to exist. 11. No opinion is expressed as to the value of subsurface oil, gas or mineral rights or whether the property is subject to surface entry for the exploration or removal of such materials except as is expressly stated. 12. No soil reports concerning the subject property were available to this appraiser. The valuation assumes that soil conditions are adequate to support standard construction consistent with highest and best use. 13. Maps, plats, and exhibits included in this report are for illustration only as an aid in visualizing matters discussed within the report. They should not be considered as surveys or relied upon for any other purpose. JOHN S.ADAMS&ASSOCIATES,INC. 0213 iii 14. No opinion is intended to be expressed for matters which require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. 15. The appraiser, by reason of this appraisal, shall not be required to give testimony or to be in attendance in court or any governmental or other hearing with reference to the subject property, without prior arrangements having been made with the appraiser relative to such additional employment. 16. Neither all nor any part of the contents of this report shall be conveyed to any person or entity, other than the appraiser's or firm's client, through advertising, solicitation materials, public relations, news, sales, or other media without the written consent and approval of the authors, particularly as to valuation conclusions, the identity of the appraiser or firm with which the appraiser is connected, or any reference to the Appraisal Institute or the MAI designation. Further, the appraiser or firm assumes no obligation, liability, or accountability to any third party. If this report is placed in the hands of anyone but the client, client shall make such party aware of all the assumptions and limiting conditions of the assignment. 17. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. 18. The appraiser has not been provided any information regarding the presence of any material or substance on or in any portion of the subject property or improvements thereon, which material or substance possesses or may possess -toxic, hazardous and/or other harmful and/or dangerous characteristics. These materials or substances include, but are not limited to, asbestos, polychlorinated biphenyl, petroleum leakage, ureaformaldehyde, foam insulation or agricultural chemicals. Unless otherwise stated in the report, the appraiser did not become aware of the presence of any such material or substance during the appraiser's inspection of the subject property. However, the appraiser is not qualified to investigate or test for the presence of such materials or substances. The presence of such materials or substances may adversely affect the value of the subject property. The value estimated in this report-is-predicated on the assumption that no such material or substance is present on or in the subject property, or in such proximity thereto that it would cause a loss-in value. The appraiser assumes no responsibility for the presence of any such substance or material on or in the subject property, nor for any expertise or engineering knowledge required to discover the presence of such substance or material. Unless otherwise stated, this report assumes the subject property is in compliance with all federal, state and local environmental laws, regulations and rules. 19. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We have not made a specific compliance survey and analysis of this property to determine whether or not the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since we have no direct evidence relating to this issue, we did not consider possible non-compliance with the requirements of ADA in estimating the value of the property. JOHN S.ADAMS&ASSOCIATES,INC. 0213 iv PURPOSE OF APPRAISAL The purpose of this appraisal is to estimate market value with respect to those taxable properties located within the boundaries of Community Facilities District No. 2002-1 Improvement Area A. The analysis assumes the properties are encumbered by the proposed Special Tax Bonds. Our opinion of Market Value is reported under two scenarios. The first (retail value) considered the undiscounted sum total of individual parcel values for the developed properties and the second considered (bulk value) the value in bulk to a single purchaser. SCOPE OF APPRAISAL The scope of this appraisal encompasses the necessary research and analysis to prepare a written appraisal report in conformance with the Standards of Professional Practice of the Appraisal Institute, the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation and Appraisal Standards for Land-Secured Financings by the California Debt Advisory Commission. The analysis of the subject property included the following steps. 1. A physical inspection of the property and review of relevant property information provided by the client, property manager or owner. 2. County, city and area data were obtained from the County of Orange, City of Huntington Beach, Chamber of Commerce and a physical inspection of the neighborhood. 3. Land sale data was obtained from various sources including: County assessor's records, Comps, Inc., First American Real Estate Solutions, Data Quick, our files and interviews with brokers, owners and active participants in the market. .4. After collection, verification and analysis of the most pertinent data obtained, a final estimate of market value was completed. JOHN S.ADAMS&ASSOCIATES,INC. 0213 1 INTENDED USE OF APPRAISAL This appraisal is prepared for the exclusive use of the City of Huntington Beach and Stone & Youngberg for the issuance of Community Facilities District No. 2002-1 Improvement Area A Special Tax Bonds. Consent is given to the use of this Appraisal Report and/or summary in the Official Statement. DATE OF VALUE The value opinion expressed herein is stated as of March 29, 2002, the date of our last inspection of the subject property. The date of the report is April 1, 2002, the date of our completion of the analysis and report. DEFINITION OF MARKET VALUE The term "market value" as used in this report is defined as being: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised, and each acting in what they consider their own best interests; 3. A reasonable time is allowed for exposure in the open market. 4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; S. The price represents a normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. JOHN S.ADAMS&ASSOCIATES,INC. 0213 2 DEFINITION OF RETAIL VALUE Retail value is an estimate of what an end user would pay for a finished property under the conditions requisite to a fair sale. Aggregate retail value is the sum total of the retail values estimated for each parcel. DEFINITION OF BULK SALE VALUE The most probable price, in a sale of all parcels within a tract or development project, to a single purchaser or sales to multiple buyers, over a reasonable absorption period discounted to present value, as of a specified date, in cash, or in terms equivalent to cash, for which the property rights should sell after reasonable exposure, in a competitive market under all conditions requisite to a fair sale, with buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue stress. Bulk sales value is derived by discounting retail values to present value by an appropriate discount rate, through a procedure called Discounted Cash Flow Analysis. PROPERTY RIGHTS APPRAISED The property rights appraised are a fee simple interest subject to Special Tax Bonds. s DEFINITION OF A FEE SIMPLE INTEREST A fee simple interest is defined as "absolute ownership unencumbered by any other interest or estate; subject only to the limitations of eminent domain, escheat, police power, and taxation." A fee simple interest in real property includes all interests, benefits and rights inherent in the ownership of physical real estate. JOHN S.ADAMS&ASSOCIATES,INC. 0213 3 VALUATION ASSUMPTIONS AND CONDITIONS The market value estimate contained herein is based upon the following assumptions and conditions: 1. Improvements funded by the first series of bonds under. Community Facilities District No. 2002-1 Improvement Area are completed. 2. The parcels were valued assuming they are not negatively impacted by toxic or hazardous materials. 3. Market Value is reported under two scenarios. It was first reported as the sum total of individual retail parcel land values. This estimate is reflective of retail valuation since no discounts for absorption were applied. Secondly, we reported Market Value as the discounted value in bulk to a single purchaser which reflects estimated absorption. 4. The analysis was predicated upon the assumption that individual parcels are subject to the CFD 2002-1 Improvement Area A Special Tax Bonds which total $4,900,000,with maximum annual debt service of$11,200 per acre. LEGAL DESCRIPTION A complete legal description has not been provided. Improvement Area A, which is the subject of this appraisal, is currently described as Parcels 4 through 11 inclusive, of Tentative Parcel Map No. 2001-122. LOCATION The McDonnell Centre Business Park, of which the subject land will be a part, is located within the Northeast quadrant of the intersection of Bolsa Avenue and Bolsa Chica Street in the City of Huntington Beach. JOHN S.ADAMS&ASSOCIATES,INC. 0213 4 SYLMAR t°•e„ ANGELES B ', °'c p . .aNN„. . SAN •.-. rF NAND >. ILrr� •° GABRIEL ., L__ .sRII :' — _ I - San Ant[w: + r 6 SUN T Es n - ��(('� WILDERNESS I _ _ � m m. A IOIMA SHADOW — w- 1 O. m. 3 xts t 4 Emaa B TUIUNGA-- NAT! 'I H.4EE..ONA _. �\ - '::• -- -UN! I ..N NATIONAL uLS fwr rwr .... [ uvo LACRESCENTA - °aWlwIT - _ a AM ANORAMAo SUN sro auw saN�car, d Y CITY N, c VALLE vERDutO CITY LLA CANADA d N„r va.r n ,w ♦ x. u, 1. FLINTRIDGE - ° mes a�d MONTROSE L FOREST s �' VKT°n a ,AeN,. 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TON PARK MAYw000 PICO T HEIGHTS € [r RA fwr 5' s n.'a "' n.In n.s« ROWLAND� 3 �� s RRwE MA4ISA FLORENCE BELL RIVER '° rI,. � R�DIAMOND HILLS xu R bZ 1 s +~ INGLEWOOD = • I°9 hE BAR WHITTIER HEIGHTS 4S \ Da R WISTCxEST[K WALNUT PARK CUOA Y GARDENS P n«s dT �c OEL REY • •vR ^ .y NIETOS • %''. HEIGHTSS •° R,,. a `«mw�Mr"u1 sY a„ Cds WATTS SDl1TH _ H.I» _ I.OS ANGELES (:nL�\T1'I xAoiio�w Bran Nuol A"�` }rY o LENNOK xa.SK n n N „ �' SANTA FE r nw ()H.\\(:E C�()U 1 "• -� e.E.x:s WIiLOWBROn. GATE AA / ` S SPRINGS +� 19 1�IIX�O EmAs - A.k 0' N.i» N8 �: n.so, ow li%GwE Jr f -t 9 EL SEGUNDO a AWTHORNE55 6 I:fN,1,4r •vt�. N H»+ I LA HABRA ' -sr�' °% LYN OO�D '� '• ��Noimismn.u ' i riiui_. s « . 41 NORWALK LA BRE —l_= — 9.Q 1 TAN', LAWNDALE o e.,r Is, x n.« MIRADA f,COMPTO .,.R '4, l; O :L_ 'rI ` n. e' RAMO NT 9 —nI NHATTAN BEACH' � rI YORBA LINDAC, GARDENA GAR°[NA rvn 'ARTESIA 51, ) rv, n n E- FULLERTON Z PLACENTIA �C�{ BELLFLOWER ALL BUE PAR $ AtwooD HFAMOSA BEACH m 5 0` : ARTESIA CARS ON NORTH 6 AIV[RS/Of ~ N„ , Y LONG BEACH CERRITO' . n.., TORRANCE a DOMIXRU V I'PALM a"'tw' O •NE + 3 p REDONDO BEACH „ sr _ °INK G.,°N :* ,9 E°x ANANEIY HILLS ATAIi �.'�•wo, moron E AwAIMN C PRESS In �., DIEco. , „� N.fO t.RDExs [f.,e ANAHEIM x / VILLA PARR°—"'Xm a g q4 nw N i s I LOS R R•s n.IN o°NrnA,ro 1 IIfNS PALOS ROE "`� D: M L0 TA ' `Y41O1y s, I 11 AMITOS AEnna„ STANTON f • s.,nuw fY` g ESTATES J ROIIIN a ,,,,N. 4S 3 I� SIGNA fwr / eNtu roR r'as '�� ORANGNILE ' ESTATES el E HILL I Rrs-vf ;I �s EL YODENA S25 a HARBOR IT\'(�a WILMINGTON 4 ' 4s crN-LA 4 G �aarl„ra •°I.V.,d«It.' w btSN 1fa,/,,,, A'.,a 3 IIDSSMDDA 6 E CHARYAN M, avE ,irun•..i. RoiLUIs a ,"aA rT + r cA4[uN eyu- n..Io xlas e t rsF` q„.BCLNONT 7� rr 1 uoV 13 4 . A przZ�' RANCHO 9 N7 �UU,� eI. sHORSNORE` E,, .US.NAV AYr r rf.I„ laaN PALDS VERGES •[t�,Pp°eiNtD a « [^^T �LONU \��/ �'��'O� 9 WEST INSTE '+,� ruSTI � NEs = lA Pt.%r—fe Nr.rA �•ti 111 f r i �,m sr O 5 PEDRO "°�° BEACH SYAno mwTT 9c V FL1R0San Pedro Ba� SEAL I L 4 SANTA �♦ .ORAL PA— / BE M A N A fTATI RGUI f/larenr�l ".1. �a.F..L, wA9xE9 * AV! ry SUNSET BEA. - xUxtiNGtON IO I / HARBOUR S Fvm•:n I / ROWIXIU .� a L p% �. � � P .°a.� 'Q>,,� Q I / RrATR ARAOI n.:s, �' 13 n I / FOUNTAIN C !' eI / fI.N ma's 3 VALLEY �, :waN I VINE I d 0 31 i HUNTINGTON BEACH\ COSTA py A ( of ico fw` ODn[fE1 F I �. MESA �rVE t f° elI j C H"Nrt"cT°"G� ..� 4 LAKE ° 1. «.T.s FOREST l n. wooDs ELroro r I e 1 NEWPORT BEACH :r I a� I / O BALM CORONA DEL MAR AG I A 6 t If If C -1°NA uu rAR - CRYSTAL, NIL S RS RATA AND�rT RGfJ,L LrObc 1/ QQQ �1 , VICINITY MAP JOHN S. ADAMS&ASSOCIATES,INC. 0213 5 COUNTY OF ORANGE Orange County's early history as an agricultural county south of Los Angeles changed abruptly in the 1950's. Since the 1950's Orange County has experienced rapid population growth as it transformed from an agricultural county to a diverse, suburban metropolis. The following is a summary of Orange County's historical population statistics. Average Year Population Annual Change 1950 216,224. - 1960 603,925 10.8% 1970 1,420,386 8.9% 1980 1,932,921 3.1% 1990 2,410,668 2.2% 1995 2,597,151 1.5% 1996 2,632,297 1.4% 1997 2,677,530 1.7% 1998 2,734;533 2.1% 1999 2,788,767 2.0% 2000 2,867,741 2.8% 2001 2,925,741 3.4% Orange County's housing has experienced stable growth over the past two decades. Housing statistics since 1980 for Orange County are as follows. Average Year Housing Units Annual Change 1980 721,570 - 1990 875,072 1.9% 1995 915,867 0.9% 1996 925,512 1.1% 1997 935,097 1.0% 1998 945,034 1.1% 1999 954,882 1.0% 2000 967,112 1.3% 2001 976,699 1.0% Based on historical growth patterns, Orange County should continue to experience gradual population growth and slow stable housing growth in the future. JOHN S.ADAMS&ASSOCIATES,INC. 0213 6 Data published by the State of California Employment Department contain the following employment statistics for Orange County. 1995 1996 1997 1998 1999 2000 2001 212002 Civilian Labor Force 1,331,000 1,340,200 1,385,000 1,435,100 1,471,700 1,511,000 1,537,100 1,563,800 Employment 1,263,300 1,285,200 1,339,900 1,393,700 1,432,700 1,472,700 1,490,800 1,506,800 Unemployment 67,700 55,000 45,200 41,400 39,000 38,300 46,300 57,000 Unemployment Rate(%) 5.1% 4.1% 3.2% 2.9% 2.6% 2.5% 3.0% 3.6% Orange County's February 2002 unemployment rate was 3.6%. For February 2002, California's unemployment rate was 6.4%. Employment throughout the County has increased every year since 1992. Orange County's economy is dynamic and resilient. It has demonstrated the capacity to recover from economic down-cycles. The diversified economic base and the desirable living environment continue to make Orange County an important population and employment center. Near term weaknesses lie in the recent closures of the El Toro and Tustin military bases. Long term weaknesses in the economy lie in the growing congestion, deteriorating transportation infrastructures, and the high cost of living. These factors, however, are being addressed with new transportation corridors and freeway widening projects. These issues are of paramount importance, but given the diversity of the economic base and a highly educated population, we believe the Orange County Metropolitan Area will continue to grow, albeit at a lower rate. The County,of Orange filed Chapter 9 Bankruptcy on December 6, 1994 due to the failure of high-risk investments. The County emerged from bankruptcy in 1996. The impact on the County and real estate within the County was minimal. In conclusion, the County benefits from its location between Los Angeles and San Diego counties and its strong economic base. Potential future weaknesses are being addressed. through new and improved transportation infrastructure and planned redevelopment of former military bases. JOHN S.ADAMS&c ASSOCIATES,INC. 0213 7 CITY OF HUNTINGTON BEACH Location Huntington Beach is located in the southwestern coastal region of Orange County. The city is located approximately 35 miles southeast of Los Angeles and 95 miles northwest of San Diego. The city encompasses approximately 28 square miles. Huntington Beach is bounded by the Cities of Westminster and Fountain Valley on the north, the Pacific Ocean on the south and west, the Cities of Costa Mesa and Newport Beach on the east, and the City of Seal Beach on the west. Primary access to the city is provided by the San Diego Freeway (Interstate 405) which runs diagonally north-south across the northern portion of the city and the Pacific Coast Highway which runs along the city's coastline. The John Wayne/Orange County Airport is located approximately ten miles southeast of the city. Population The following is a summary of population statistics for the City of Huntington Beach. Average Year Population Annual Increase 1960 11,492 - 1970 115,960 26.0% 1980 170,505 3.9% 1990 181,519 0.6% 1995 186,587 0.6% 2000* 190,342 0.4% 2001 193,740 1.8% * Reflects 2000 census. Huntington Beach is the third largest city in Orange County. Population is expected to continue to grow at a slow rate in the near future. JOHN S.ADAMS&ASSOCIATES,INC. 0213 8 Housin The following is a summary of housing unit growth in the city. Average Year Housing Units Annual Increase 1970 35,971 - 1980 63,365 5.8% 1990 72,736 1.4% 1995 74,156 0.4% 2000 75,524 0.4% 2001 76,061 0.7% A continued slow increase in housing units is anticipated in the future with most of the new construction activity taking place in the Huntington Seacliff area and the potential Bolsa Chica development. Employment Approximately 50,485 people are employed in the city by approximately 2,628 businesses. Major private employers in the city are as follows: Approximate Name of Company Employment Product The Boeing Company 7,000 Aerospace Quicksilver 900 Clothing Cambro Manufacturing 800 Plastics C&D Plastics 569 Airplane Interiors E-Trade Mortgage 431 Finance Dynamic Cooking Systems 400 Kitchen Appliances Huntington Beach Hospital and Medical Center 375 Health Care GTE California 352 Communications JOHN S.ADAMS&ASSOCIATES,INC. 0213 9 Development Land use within the city is distributed as follows: Use Acres Residential 11,640 Commercial 1,286 Industrial 1,516 Open Space 1,746 Mixed Use 155 Other 1,385 Total 17,728 The major industrial areas of Huntington Beach are located in the northwest corner of the city and in the central portion of the city along Gothard Street. Approximately 5% of the industrial zoned land in the city is vacant. The major commercial and office district in the city is centered around the Huntington Beach Mall regional shopping center located at the intersection of the San Diego Freeway and Beach Boulevard with numerous other commercial centers located throughout the city. The Huntington Beach Mall is in the process of redevelopment. Tenants including Mervyn's, Burlington Coat Factory, Circuit City, Barnes & Nobel, Staples and a proposed Great Indoors store. Trend The trend within Huntington Beach is for continued economic expansion, but at a slower pace than experienced during the past. The city would be considered a desirable location for commercial and industrial development. JOHN S.ADAMS&ASSOCIATES,INC. 0213 10 � it° �� �fd}Ir��y�o'�T 1� /"w "�1 I. - - - I --------- d I - °•sr !\_, A�flll.T t �`�ri r � "I I I �ao+�i ■ S �'�• � .. 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I__J�.PI`9.77� fnN 3 fll � .Gi� �� ....-.. $ a .. ... ........ 7 .. ... ___... . E Nw• - C 1 INDUSTRIAL MARKET OVERVIEW The McDonnell Centre Business Park is located within the West County submarket of Orange County. The following is a summary of industrial vacancy information for Orange County, the West County submarket and Huntington Beach, according to a Fourth Quarter 2001 study prepared by CB Richard Ellis. The West County submarket includes the cities of Huntington Beach, Garden Grove, Cypress, La Palma, Los Alamitos, Seal Beach, Stanton and Westminster. The study includes buildings 10,000 square feet and larger. The following is a summary of current inventory, availability and vacancy. CURRENT INVENTORY AND VACANCY Area Total S4.Ft. Availability Rate* Vacancy Rate* Orange County 242,359,560 7.5% 3.9% West County 37,133,804 6.5% 4.4% Huntington Beach 11,836,922 5.4% 3.5% *Vacancy rate includes only space that is physically vacant.The availability statistics represent available space that is either physically vacant or occupied. The following is a summary of historical availability rates for Orange County, the West -County Area submarket and Huntington Beach. AVAILABILITY HISTORY Orange West Huntington Year-Quarter Countv Countv Beach 2001-4th 7.5% 6.5% 5.4% 2001 -3rd 7.1% 6.3% 6.6% 2001 -2nd 6.1% 6.1% 6.4% 2001 - 1st 5.8% 5.9% 6.5% 2000-4th 4.8% 5.2% 1.4% 2000-3rd 5.6% 5.7% 5.5% 2000-2nd 6.0% 7.2% 6.10/6 2000- 1st 6.5% 7.8% 6.2% 1999 -4th 6.9% 7.6% 3.9% 1998-4th 8.1% 6.6% 5.1% 1997-4th 7.4% 6.1% 4.3% 1996-4th 7.1% 9.4% 9.6% 1995-4th 8.6% 9.2% 12.2% 1994-4th 9.3% 9.5% 13.8% 1993 -4th 12.5% 11.7% 16.8% 1992-4th 13.3% 12.9% 15.3% JOHN S.ADAMS&ASSOCIATES,INC. 0213 12 Availability rates in Orange County, the West County submarket and Huntington Beach declined in 2000 from the highs of the early 1990's. In 2001 vacancy levels have increased slightly due to increasing economic concerns, the dot-com fallout and energy issues. The following is a summary of historical asking rates for industrial space in the West County submarket according to CB Richard Ellis. HISTORICAL ASKING RATES—WEST COUNTY Asking Rent Per Sq. Ft.'s Year-Quarter Manufacturing R&D 2001-4t' $0.56 $0.72 2001-3`d $0.54 $0.70 2001-2°d $0.55 $0.77 2001-0 $0.56 $0.72 2000-4'h $0.55 $0.67 1999-4d' $0.51 $0.73 1998-4d' $0.55 $0.68 19974°i $0.48 $0.62 1996-4°i $0.41 $0.60 *Rents are on a net basis. As vacancy rates decreased throughout the 1990's, rental rates increased. During 1999 and 2000, as newer projects with higher asking rents were being absorbed, older product with lower rents were increasing in availability. This caused the appearance of declining rents during this time period. In reality, during 1999 and 2000 rates in the market were on the rise. In 2001, rental rates appear to have leveled off as concerns over the economy increase. Historical gross activity and net absorption for industrial space in Orange County based on the CB Richard Ellis study are summarized in the following chart. Industrial space is divided into research and development space and manufacturing space. JOHN S. ADAMS&ASSOCIATES,INC. 0213 13 HISTORICAL ABSORPTION—ORANGE COUNTY R&D R&D Manufacturing Manufacturing Total Total Gross Activity Net Absorption Gross Activity Net Absorption Gross Activity Net Absorption Year Square Feet Square Feet Square Feet Square Feet Square Feet Square Feet 1993 2,299,872 938,518 8,137,977 429,295 10,437,849 1,367,813 1994 3,899,482 1,586,235 14,254,800 5,751,377 18,144,282 7,337,612 1995 3,930,603 969,260 10,693,564 1,311,737 14,614,167 2,144,601 1996 4,672,947 519,038 13,564,250 4,469,482 18,237,197 4,988,520 1997 4,131,968 1,097,515 . 14,883,090 1,481,283 19,015,058 2,578,798 1998 3,333,228 244,442 13,654,501 1,750,944 17,006,726 2,012,206 1999 4,022,436 899,105 16,405.260 4,316,561 20,427,696 5,215,666 2000 4,122,845 970,170 15,000,774 3,989,994 19,123,619 4,960,164 2001 1,907,170 (1,107,237) 9,640,331 (3,874,909) 11,547,501 (4,982,146) The following is a summary of limited historical gross activity and net absorption statistics for all industrial space for the Huntington Beach submarket. HISTORICAL ABSORPTION—HUNTINGTON BEACH R&D R&D Manufacturing Manufacturing Total Total Gross Activity Net Absorption Gross Activity Net Absorption Gross Activity Net Absorption Year Square Feet Square Feet Square Feet Square Feet Square Feet Square Feet 1996 47,841 N/A 859,923 N/A 907,764 N/A 1997 99,049 (41,344) 1,450,761 583,781 1,549,810 542,437 1998 64,500 54,897 883,560 (12,522) 948,060 42,357 1999 N/A N/A N/A N/A 805,685 N/A 2000 75,325 N/A 685,276 N/A 760,601 N/A 2001 46,279 (92,564) 666,376 (28,208) 712,655 (121,132) After nearly five years of weak market conditions and an overbuilt industrial market with excess vacancies and inventory, the market returned to more stabilized conditions in 1996. This was the result of limited new construction, positive industrial absorption and improving economic conditions. As a result of improved market conditions and increased demand, significant new industrial construction has come into the marketplace since 1996. Most of this new construction took place in the South Orange County submarket with some new development in the West County including development in Cypress, Garden Grove, and Huntington Beach. As the previous summaries indicate, gross activity in Orange County and the Huntington Beach submarket has decreased in 2001 from the relatively stable activity over the previous years. In Orange County, absorption has turned negative in 2001, after positive but inconsistent absorption over the previous several years. In the Huntington Beach area, absorption was also negative in 2001. JOHN S.ADAMS&ASSOCIATES,INC. 0213 14 rMMEDIATE SURROUNDINGS The McDonnell Centre Business Park is located in the northwestern portion of Huntington Beach. The area surrounding the property is developed as follows: North of the subject on the opposite side of Rancho Road and a U.S. Navy Railroad fight- of-way is residential development within the cities of Huntington Beach and Westminster. This residential development extends north to the San Diego (405)Freeway. South of the subject in the opposite side of Bolsa Avenue is industrial and office development within the Huntington Beach Industrial Park and residential development along portions of Bolsa Chica Street. Farther south beyond McFadden Avenue is additional industrial development, residential development and Marina High School. East of the subject beyond Springdale Street is residential development and some commercial uses extending east to Edwards Street. Beyond Edwards Street is the Westminster Mall with Sears, J.C. Penney, Robinsons/May as anchors. Farther east is the San Diego (405) Freeway. West of the subject on the opposite side of Bolsa Chica Street is the United States Naval Weapons Station within the City of Seal Beach. Primary access to the area is provided by Bolsa Avenue and Westminster Avenue which connect to the San Diego (405) Freeway about 1-1/2 miles east and Bolsa Chica Street and Springdale Street which connect to the San Diego (405)Freeway about 1-1/2 to 2 miles north. The immediate area benefits from good freeway proximity and its location near the Orange County, Los Angeles County border. The immediate area is the primary industrial district for Huntington Beach and would be considered a good industrial and corporate location. JOHN S.ADAMS&ASSOCIATES,INC. 0213 15 PROJECT DESCRIPTION CFD NO. 2002-1 The subject property is a portion of the McDonnell Centre Business Park. The McDonnell Centre Business Park contains approximately 307 gross acres and is bounded as follows. NORTH: Rancho Road and the U.S. Navy railroad right of way. SOUTH: Bolsa Avenue EAST: Springdale Street WEST: Bolsa Chica Street The primary uses within the business park are the existing Boeing (McDonnell Douglas) aerospace facility which encompasses approximately 2,800,000 square feet of office, research, and industrial related facilities. The easterly portion of the property, which is known as Phase I and totals 87 acres, has been developed over the past seven years with new industrial and corporate facilities including the following. Building Tenant Sauare Feet Sharp Electronics 535,000 Dynamic Cooking Systems 320,000 Cambro Manufacturing 215,000 Konica 280,000 Dix Metals 101,000 C &D Aerospace 150,000 Air Tech 120,000 Pacific Shoe 54,000— Morgan Metals 46,000 Extended Stay America 104 room hotel These buildings and improvements are not a part of CFD No. 2002-1 Improvement Area A. The CFD boundary encompasses 188.482 gross acres which are allocated as follows. Area Gross Acres A 40.339 B 48.803 Exempt 99.340 Total 188.482 JOHN S.ADAMS&ASSOCIATES,INC. 0213 16 Included in the gross area listed on the previous page are street dedication areas as follows. Area Gross Acres Street Dedication-Phase I 8.787 Street Dedication-Future 3.012 Improvement Area A, which totals 40.339 gross acres and 33.286 net acres, is the subject of this appraisal. This property is to be subdivided into eight parcels and will be the taxable security for the proposed CFD 2002-1 Improvement Area A Special Tax Bonds. JOHN S.ADAMS&ASSOCIATES,INC. 0213 17 SHEET 2 OF 3 PROPOSED BOUNDARIES OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (McDONNELL CENTRE BUSINESS PARK) COUNTY OF ORANGE, STATE OF CALIFORNIA. LEGEND: ❑ CFD NO. 2002-1 BOUNDARY ® EXEMPT LAND IMPROVEMENT AREA -A" ❑ IMPROVEMENT AREA "Ef' ''-m JOO Tar,m a Sm A7v GRAPHIC SCALE' I'-JW CURVE TABLE CURVE DELTA I RADIUS I LfWW I 8942'22' 2300 39.11 6 09,49,13' 47800 $am 7 89'4071' 27m .216 8 1323.76' .7000 126.32 9 16'32•i4' 831.49 24..83 10 90'02C38' 27M A2.7 LINE TABLE LINE LENGTH BEARING LI 21].83 lor32.091C L2 1276 NW27'310V �• \ �y L3 131.33 MO'M2 -E q U 291-29 NW23'36-V L3 127.43 N39'29.3.'V L6 A. N30'90.06'E �S L7 20807 N89-.rY-" - �\ �0 L9 171 89'28'.70 N .1'V 17. 9O.Q v cl O w -- t yaer a b a �2JV a . UHera•ai• Seals i •,o« ntnviwlo a � � •Id�'d� ® � O �yy A.n.m N01 ' , I p U I Aes7ra• O � S,_ Y , 4 8�p 3f 7[ " AYE u7e• •arazrE Sear at. 337sr 33e.er .«.7.• I Sw..3•a »m ��, "-CL BOLSA AVENUE PRELIMINARY X ao-uw CFD PROJECT AREA MAP JOHN S.ADAMS&ASSOCIATES,INC. 0213 18 SITE DESCRIPTION The subject of this appraisal is Improvement Area A of CFD No. 2002-1. The following description is for this portion of the property. Shane and Area The property is irregular in shape and contains 40.339 gross acres and 33.286 net acres according to Adams Steeter, the District Engineer. Parcel areas are calculated as follows: Area Acres Square Feet Gross 40.339 1,757,167 Well Site .272 11,848 Streets 6.781 295,380 Net 33.286 1,449,939 The 33.286 net acres will be subdivided into eight individual parcels with areas as follows based on Tentative Parcel Map No. 2001-122 and proposed Final Parcel Map No. 2001-226. Tentative Map Final Map Parcel Area Parcel Number Parcel Number Acres Square Feet 4 1 5.235 228,037 5 2 5.099 222,112 6 3 4.364 190,096 7 4 4.359 189,878 8 5 4.241 184,738 9 6 3.027 131,856 10 7 4.597 -200,246 11 8 2.364 102,976 Totals 33.286 1,449,939 JOHN S.ADAMS&ASSOCIATES,INC. 0213 19 Zoning The General Plan Designation for the subject is industrial with a floor ratio of 0.75. The subject property is within Planning Area 4 under Specific Plan Number 11 — McDonnell Centre Business Park. This planning area encompasses approximately 79.5 gross acres and is improved with 1,070,710 square feet of existing aerospace facilities. The following land use summary is designated for this planning area. Industrial Use Office Use Commercial Use Total Building Land Building Land Building Land Building Land Sq. Ft. Acres Sq. Ft. Acres Sq. Ft. Acres Sq. Ft. Acres 1,688,223 62.2 562,740 17.3 ---- --- 2,250,963 79.5 A total of 2,250,963 square feet of allowed development is a 0.65 floor area ratio. Planning Area 4 is divided into three subareas, Subareas G, H and I. Under these subareas the following uses are permitted. Industrial: Existing aerospace facilities, as well as manufacturing, warehousing, light industrial and research and development uses. Commercial: Communication facilities, eating and drinking establishments, maintenance and repair services and warehouse and sales outlets. Office: Business and professional, research and development services, and laboratories. Public and Semi Public: Conference facilities, day care, general governmental facilities, heliports maintenance and service facilities and public utilities and facilities. JOHN S.ADAMS&ASSOCIATES,INC. 0213 20 Development regulations within Planning Area 4 - Subareas G,H&I include the following. Planning Area 4 Subareas _G H I Maximum Intensity (F.A.R.) 0.65 0.65 0.65 Minimum Lot Size (AC)2 1.0 2.5 2.5 Minimum Lot Frontage 250' 250' 250' Maximum Bldg. Height 40' 40' 50' Maximum Lot Coverage 60% 60% 60% Minimum Setback Front 25' 25' 25' Interior Side 10, 15' 15' Exterior Side 15' 25' 25' Rear 10, 15' 15' Minimum Landscape 10% 10% 10% Minimum Perimeter Landscape Front 10, 15' 15, Interior Side 5' 5' 5' Exterior Side 10, 10, 10, Interior Rear 51• 5' 5' Exterior Side 10, -10' 10, Adjacent to 24' NA NA Arterial Hwy Parking Standards The following parking standards are required within the McDonnell Center Business Park Specific Plan. Parking Standards Use Required Parking Office,Administrative, 1 space/250 square feet Research and Development Industrial and Manufacturing 1 space/500 square feet Warehouse and Distribution 1 space/500 square feet (for the first 20,000 square feet) 1 space/5,000 square feet (for over 20,000 square feet) Hotel/MoteI .75 space/room plus 2 space/Manager Restaurant 1 space/l00 square feet Retail 1 space/200 square feet JOHN S.ADAMS&ASSOCIATES,INC. 0213 21 Topography and Drainage Upon completion of construction, the subject parcels will be basically level and slightly above the grade of adjacent streets. Surface runoff is directed to adjacent streets and the existing storm drainage system. Utilities All necessary public utilities will be available to the subject property upon.completion of development. Utilities will be provided by the following: Water: City of Huntington Beach Sewer: City of Huntington Beach and Orange County Sanitation District. Storm Drainage: City of Huntington Beach and Orange County Flood Control District Electricity: Southern California Edison Gas: Southern California Gas Telephone: Pacific BelWerizon Soils No soils reports concerning the subject were available. The valuation herein assumes that soil conditions are adequate to support industrial, research and development, corporate and related uses without corrective work being required and that the site is free of hazardous or toxic materials. JOHN S.ADAMS&ASSOCIATES,INC. 0213 22 Streets The following streets will be completed with development of Improvement Area A of the McDonnell Centre Business Park. These streets will provide access to the subject parcels. Street Name RiEht of Way Astronautics Lane 60-80 Feet Delta Lane 60 Feet Skylab Road 80 Feet Upon completion of development, these streets will be fully dedicated and improved. Street improvements will consist of asphalt paving concrete curbs, gutters and sidewalks and street lights. Access Primary access to the subject is provided by Bolsa Avenue, Bolsa Chica Street, Springdale Street, and Rancho Road. Interior streets within the McDonnell Centre Business Park that will serve the subject parcels are Astronautics Lane, Delta Lane and Skylab Road. Flood/Earthquake Hazard According to FEMA Map Number 0650340027F, dated January 3, 1999, the .subject property is within Flood Zone X500. This is an area inundated by 500 year flooding. According to the City of Huntington Beach the subject is not in an identified earthquake hazard area, although earthquakes are common occurrence in the region. JOHN S.ADAMS&ASSOCIATES,INC. osi3 23 SITE TIMAL Sa eECTIONnu.ms to mpa.d�131 ; CEL� 11:;�FOAD-InaSTM .840 rMAL W TO 7V BECTEN EABEM31r NOIES Z.. LarTAB"YM PARCEL 2 AC). 3- 933 01P (i.447 Ad §37 TMAL W SECTION =Vz` (5.635 (1.9050 C to J C. T04CAL W W-C11ON N:- . ... ... P ARC 4 (2.VF5,7 AC) I > A c-h (4 AC �AR ....... PARML,IS CEL 16 BOLBA AYBAR F 1 986-AQ U B N (4.430,(G) L. .,,.."'PARCEL 20', N PARC a15 PARCEL 0,7!VX 4 E. -7-7 I I �.j LMAL DBKM91X# PARaEL--"/6 J ;FARCE C 6 A� (4.35- Irm. I!, -WE- C 7 u jaw p"T -V :k - '34) N r f (15.532. C) C I AN� P.ARd 0 L- jPARCWAL)1. (;i.95SEA) m C) J EC, .A ''fl / ii'` jr=�.i— DAIV PNFAFID . mu.043 .. ......... 7 AIX . ..... Tentative Parcel P. F;rL I X� P ;11A -.. .:" 1:-'J-4 PARCE- PARCEL 4 - (a. ACY Map — 122 OMJ97-!so- Pm 97-?ARCE-90 Y2 No. 2001 PMB,�299/1-2 PMB 299/3-4 CFD 2002-1 PROPOSED IMPROVEMENTS Community Facilities District 2002-1 encompasses the subject property. The following is a general description of the improvements to be completed for Area A, future improvements proposed and an estimate of costs. 1. The construction of sewer lines in existing Skylab Road, new Delta Lane and new Astronautics Lane. 2. The construction of streets, curbs, and gutters for the extension of Skylab Road from its current terminus at Astronautics Lane west to new Delta Lane. 2A. The construction of streets, curbs and gutters for Skylab Road from its terminus at Delta (Future) Lane west for approximately 400 feet. 3. The construction of streets, curbs, and gutters for the new Delta Lane from Skylab Road north to new Astronautics Lane. 4. The construction of streets, curbs, and gutters for the new Astronautics Lane from its current terminus west to Rancho Road. 5. The construction of streets, curbs, and gutters for the new Skybolt Lane from new Astronautics Lane south approximately 200 feet. 6. The construction of the waterline in Rancho Road connecting its current terminus east of Bolsa Chica Street to the existing waterline north of the Navy Railroad. 7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane and new Astronautics Lane. 8. The construction of conduit and fixtures for new street lighting in extended Skylab Road, new Delta Lane, and new Astronautics Lane. 9. The construction of street, curbs, and gutters for the new Delta Lane from Bolsa Avenue (Future) north to Skylab Road. 10. The construction of a waterline in new Delta Lane from Bolsa Avenue to Skylab Road. (Future) 11. The construction of storm drains in new Skylab Road, new Delta Lane new Astronautics Lane and new Skylab Lane. 12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane including (Future) modifications to the existing traffic signal. 13. Roadway improvements at the intersection of Rancho Road and Astronautics Lane including construction of the new traffic signal. 14. Roadway improvements to Rancho Road including installation of new sidewalk. Items 2A, 9, 10 and 12 are future improvements not required for Area A development. The Improvements to be financed shall include the costs of acquisition of the right-of-way that is intended to be dedicated by the recording of a final map, the costs of design, engineering and planning, the costs of any environmental or traffic studies, surveys or other reports, costs related to landscaping and irrigation, soils testing, permits, plan check and inspection fees, insurance, legal and related overhead costs, coordination and supervision and any other costs or appurtenances related to any of the foregoing. JOHN S.ADAMS&ASSOCIATES,INC. 0213 25 Some of the improvements listed above will also benefit .Improvement Area B of Community Facilities District No. 2002-1 which is not a part of this valuation. The following is the estimated cost of the proposed improvements. DETAILED COST BREAKDOWN COSTS ITEM NO. DESCRIPTION AREA A FUTURE TOTAL 1 On-Site Sewer Lines $ 311,275 $ $ 311,275 2,3,4,5 Streets,Curbs,&Gutters for Skylab Road,Delta 848,972 848,972 Lane,Astronautics Lane and Skybolt. 2A Streets,Curbs&Gutters for Skylab Road 400'West 177,276 177,276 (Future) of Delta Lane 6 Rancho Road Waterline 313,471 - 313,471 7 Skylab Rd,Delta Lane and Astronautics Waterlines 553,310 - 553,310 8 Streetlight Trenching 156,810 - 156,810 8 Skylab Rd,Delta Lane and Astronautics Street Lights 175,000 - 175,000 9 Streets,Curbs&Gutters for Delta Lane - 323,347 323,347 (Future) - 10 Delta Lane Waterline - 144,400 144,400 (Future) 11 Storm Drains in Skylab Road,Delta Lane,Astro- nautics Lane and Skylab Lane 567,800 - 567,800 12 Bolsa/Delta Intersection&Signal Improvements - 120,000 120,000 (Future) 13 Rancho/Astronautics Intersection Imps&New Signal 186,000 - 196,000 14 Roadway and Sidewalk for Rancho Road 40,954 - 40,954 Subtotal Construction $3,153,592 $ 765,023 $ 3,918,615 Street Right-of-Way 4,470,657 1,532,448 6,003,105 Subtotal Right-of-Way and Construction $7,624,249 $2,297,471 $ 9,921,720 Civil Engineering/Surveying 200,000 50,000 250,000 Geotech Inspection 30,000 10,000 40,000 City Plan Check Fees/Inspection 100,000 25,000 125,000 Construction Management 200,000 50.000 250,000 Grand Total Project Costs $8,154,249 S2,432,471 S10,586,720 Note: Phase 1 Right-of-Way is the acreage to be dedicated as a part of the Recordation of Final Parcel Map No. 2001-226 (8.787 acres) and Future Right-of-Way is the remainder necessary to complete development of Improvement Area B (3.012 acres). Right-of-Way valued at$11.68 per Square Foot. Item Nos. 2A, 9, 10 and 12 are future improvements not required for Area A development. Excluding right-of-way costs total development costs are equal to $3.16 per square foot of net land area in Improvement Area A. JOHN S.ADAMS&ASSOCIATES,INC. 0213 26 SUBJECT PROPERTY HISTORY The current owner of the property, McDonnell Douglas Corporation (Boeing), has owned the subject and adjacent land for more than 10 years. A portion of the property is improved with Boeing Company facilities. A portion of the existing improvements are being demolished for development of the subject land parcels. The parcels to be developed within Improvement Area A are currently listed for sale with CB Richard Ellis. The asking prices range from $18.50 to $19.00 per square foot. We are not aware of any other sales or listings for the subject property over the past three years. ASSESSED VALUATION AND REAL PROPERTY TAXES Assessor's Parcel Numbers: 195-111-24 and 31 and portions of 29 and 34 Assessed Valuation 2001-2002: The subject parcels are not individually assessed on the current tax roll. The current assessment covers portions of the subject property and adjacent property that is not a part of this appraisal. Tax Code Area: 04-019 Tax Rate 2001-2002: 1.00770% of assessed value Estimated Real Property Taxes: Not available Upon completion of infrastructure and when sold real estate taxes can be adjusted to approximately 1.01% of sale price or the assessor's estimate of market value; otherwise, tax escalations are limited to 2% per year. The parcels will also be subject to special assessments for vector control, MWD water standby charge and OCSD sewer user fee. In addition to basic real estate taxes, the taxable parcels within CFD No. 2002-1 Improvement Area A will be subject to Special Tax Bonds as follows. The Maximum Special Tax for each Parcel of Taxable Property is $11,200 per Acre commencing in Fiscal Year 2002-2003 and such Maximum Special Tax shall increase in every Fiscal Year thereafter by two percent (2%) of the Maximum Special Tax for the prior Fiscal Year. JOHN S. ADAMS&ASSOCIATES,INC. 0213 27 HIGHEST AND BEST USE According to the third edition of The Dictionary of Real Estate Appraisal (Appraisal Institute, 1993), highest and best use is defined as follows: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported,financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. HIGHEST AND BEST USE AS THOUGH VACANT The site is zoned for industrial, research and related uses. Industrial or research use is the maximally productive use of the subject site. There is demand for these uses in the subject's market. The highest and best use of the site as though vacant is development of industrial, research and related uses in accordance with Specific Plan 11 —McDonnell Centre Business Park. JOHN S.ADAMS&ASSOCIATES,INC. 0213 28 SALES COMPARISON APPROACH SUM TOTAL OF INDIVIDUAL RETAIL PARCEL LAND VALUES The Sales Comparison Approach is based upon the principle of substitution which assumes a prudent purchaser would pay no more for a particular property than the cost of acquiring an, equally desirable substitute property. The reliability of this technique is dependent upon two factors: identifying a sufficient number of competitive properties, and verifying information pertaining to the sale price, financing terms and descriptive characteristics. A search was made within Huntington Beach and surrounding communities for the purpose of obtaining sale transaction data for vacant land purchased for corporate, industrial, research and related uses. The following is a summary of the most pertinent land sale transactions obtained. HUNTINGTON BEACH Data Number Sale Parcel Size Sale Price and Location Date Acres Sq.Ft. Total Per Sq.Ft. No. l Escrow 1.029 44,822 $825,000 $18.41 W.side Metzler Ln 3-02 S.of Slater Ave. Huntington Beach No.2 10-99 0.540 23,520 $423,500 $18.01 N.side Commercial Dr. E.of Chemical Ln. Huntington Beach No. 3 10-99 3.980 173,369 $2,463,500 $14.21 NEC Graham St. &McFadden Ave. Huntington Beach No.4 6-98 0.592 25,780 $438,500 $17.01 SWC Machine Dr. &Electric Ln. Huntington Beach No.5 6-98 0.541 23,564 $409,000 $17.36 E.side Connector Ln. N.of Machine Dr. Huntington Beach JOHN S.ADAMS.&ASSOCIATES,INC. 0213 29 ADJACENT COMMUNITIES Data Number Sale Parcel Size Sale Price and Location Date Acres Sa.Ft. Total Per Sq.Ft. No.6 Escrow 5.270 229,561 $3,788,000 $16.50 SEC Knott St. 3-02 &Patterson Dr. Garden Grove No.7 5-01 3.700 161,172 $2,982,000 $18.50 N.side Katella Ave. W.of Walker St. Cypress No.8 10-00 8.090 352.400 $6,167,000 $17.50 E.Side Walker St. N.of Katella Ave. Cypress No.9 11-99 17.952 791,999 $12,908,000 $16.51 NWC Walker St. +1,051,000 +1.34 &Katella Ave. bonds bonds Cypress $13,959,000 $17.85 No. 10 1-00 7.588 330,533 $6,326,000 $19.14 SEC Harbor Blvd. &MacArthur Bl. Costa Mesa No. 11 6-00 .0.975 42,474 $531,000 $12.50 S.side Blades Ave. W.of Monarch St. Garden Grove No. 12 6-00 11.859 516,578 $5,682,000 $11.00 E.side Hoover St. N.of Bolsa Ave. Westminster In addition to the above sales, the following is a historical summary of land sales within the McDonnell Centre Business Park. HISTORICAL SALES—MCDONNELL CENTRE BUSINESS PARK Data Number Sale Parcel Size Sale Price and Location Date Acres Sq.Ft. Total Per Sq.Ft. No. 13 12-93 11.884 517,667 $4,270,000 $8.25 NEC Skylab Rd. &Able Ln. Huntington Beach No. 14 12-95 23.439 1,021,003 $10,210,000 $10.00 NEC Bolsa Ave. &Springdale St. Huntington Beach JOHN S.ADAMS&ASSOCIATES,INC. 0213 30 HISTORICAL SALES—MCDONNELL CENTRE BUSINESS PARK Data Number Sale Parcel Size Sale Price and Location Date Acres Sq.Ft. Total Per Sq.Ft. No. 15 3-97 7.55 329,979 $3,395,000 $10 29 SEC Skylab Rd. &Able Ln. Huntington Beach No. 16 3-97 555 241,758 $2,525,000 $10.44 SWC Skylab Rd. &Able Ln. Huntington Beach No. 17 . 12-97 2.212 96,355 $1,490,000 $15.46 SEC Skylab Rd. &Bolsa Chica Rd. Huntington Beach No. 18 12-97 5.10 222,156 $2,521,500 $11.35 W.side Able Ln. N.of Bolsa Ave. Huntington Beach No. 19 12-97 6.41 279,220 $3,937,000 $14.10 NWC Bolsa Ave. &Able Ln. Huntington Beach No.20 6-98 6.834 297,689 $3,990,000 $13.40 SWC Skylab Rd. &Springdale St. Huntington Beach No.21 6-98 13.069 569,286 $7,903,000 $13.88 NWC Skylab Rd. - &Able Ln. Huntington Beach No.22 12-99 5.50 239,580 $3,234,000 $13.50 NWC Skylab Rd. &Springdale St. Huntington Beach Land Sale Data Analysis Data Numbers 1 through 5 represent sales within the Huntington Beach Industrial Park. These are the most recent land sale transactions in the area besides the sales within McDonnell Centre Business Park, which are included as Data Numbers 13 to 22. Data Number 1 is the pending sale of a smaller parcel in an inferior Huntington Beach location. The purchase includes plans for a 19,989 square foot industrial building. The plans add JOHN S.ADAMS&ASSOCIATES,INC. 0213 31 approximately $2.00 per square foot to the price. This results in a net price of$16.41 per square foot for the land only. Data Number 2 is a smaller lot. Although this is an older sale, the smaller size results in a higher per square foot price. A lower price range is indicated for the subject parcels. Data Number 3 is the largest recent parcel sale in the Huntington Beach area. Due to the older date of this sale, a higher price would be indicated for the subject parcel. Data Numbers 4 and 5 are the older sales of smaller parcels. The smaller size influenced the price, although the sale date is old. A similar to slightly lower per square foot price is indicated for the subject parcels. Data Numbers 6 through 12 represent land sales from surrounding industrial districts. Data Number 6 is a pending sale of a parcel located in the Garden Grove Industrial Complex. The zoning allows a wider range of uses than the subject, however the location is inferior. A similar to slightly higher price is indicated for the subject. Data Number 7 is the sale of a parcel similar in size to the subject parcels. The location is in Cypress near the Los Alamitos Racetrack. The site was purchased for construction of a Marriott Residence Inn. Location along Katella Avenue is superior. A lower per square foot price is suggested for the subject. Data Number 8 is the sale of a larger site located in a good Cypress location. The site was purchased by a user for development of a corporate-industrial building. Location is considered slightly superior. A similar to slightly lower price is indicated for the subject. Data Number 9 is the sale of a larger parcel in Cypress. The site sold to a church who planned to build a church facility. The proposed church was not approved by the city. Location on the Katella-Walker corner is superior. This site was subject to assessment bonds. A similar to slightly lower price is indicated for the subject. JOHN S.ADAMS&ASSOCIATES,INC. 0213 32 Data Number 10 is a site located in Costa Mesa. Location at the corner of a major intersection is superior. The site sold to a user for medical office use. A lower price is indicated for the subject. Data Number 11 is the sale of a smaller parcel in Garden Grove. The location is inferior. Even though smaller in size than the subject parcels a higher per square foot price is indicated for the subject. Data Number 12 is the sale of a larger sized parcel located in Westminster. The location is inferior based on its inferior location and larger size. A higher per square foot price is indicated for the subject. Data Numbers 13 to 22 represent the previous sales within the McDonnell Centre Business Park. The most recent sales indicate prices in the $13.40 to $13.88 per square foot range. These sales took place during 1998 and an upward adjustment is required for the older sale date. The sale data also show the significant upward trend in prices. Initial prices were $8.25 per square foot in 1993 escalating to the $10.00 to $11.00 per square foot range in 1997 and to $13.40 to $13.88 per square foot in 1998. Higher per square foot prices are indicated for the subject lots. Based on the sale data discussed, a price above the $13.40 to $13.88 per square foot range of older sales within the subject development and below the $17.50 to $18.50 per square foot range for the sales in a slightly superior Cypress location would be indicated for the subject. In our final conclusion of value, we have also considered the limited availability of vacant land in Huntington Beach and surrounding areas. Some future competition may come from the Boeing Seal Beach facility. This project is in the governmental approval stage. The development will encompass about 42 acres for industrial-corporate development. These lots are not expected to be available for approximately two years. There is some land available for build-to-suit only in Fountain Valley. The price for this land is in the $15.00 to $16.00 per square foot range. The most JOHN S.ADAMS&ASSOCIATES,INC. 0213 33 active land sale program is Irvine Spectrum south of the subject, Land prices in Irvine Spectrum are $20.00 to $25.00 per square foot. The subject will sell at lower prices. The following is our estimate of the retail market value of the individual lots. Tentative May Final Map Parcel Area Estimated Market Value Parcel Number Parcel Number Acres Square Feet Per Sq. Ft. Total 4 1 5.235 228,037 $16.50 $3,763,000 5 2 5.099 222,112 16.50 3,665,000 6 3 4.364 190,096 16.50 3,137,000 7 4 4.359 189,878 16.50 3,133,000 8 5 4.241 184,738 16.50 3,048,000 9 6 3.027 131,956 16.00 2,110,000 10 7 4.597 200,246 16.00 3,204,000 11 8 2.364 102,976 16.50 1,699,000 Totals 33.286 1,449,939 $16.38 $23,759,000 Avg MARKET VALUE CONCLUSION—SUM TOTAL OF INDIVIDUAL RETAIL LOT VALUES TWENTY THREE MILLION SEVEN HUNDRED FIFTY NINE THOUSAND DOLLARS $23,759,000 The above estimate represents the individual retail lot values prior to any adjustment for the proposed Community Facilities District Special Tax Bonds. The following analysis considers the impact of Special Tax Bonds. JOHN S.ADAMS&ASSOCIATES,INC. 0213 34 DISCOUNT FOR CFD NO. 2002-1 SPECIAL TAX BONDS The only other industrial land developed in the area that is selling lots subject to assessment of special tax liens is Irvine Spectrum — Phase 5. This development is offering individual lots for sale subject to an assessment district lien equal to approximately $4.00 per square foot of land area. If the buyer of a lot elects to assume the assessment district lien the price is reduced by 100% of the principal balance of the lien. As the subject appraisal assumes the Community Facilities District No. 2002-1 lien will be assumed by buyers, our analysis will reflect a full discount from the retail price to reflect the bond assumption. This calculation is as follows. Total of Individual Retail Lot Values $23,759,000 Less CFD 2002-1 Special Tax Bonds ($4,900,000 less Reserve Fund of$490,000) $ 4,410,000 Indicated Market Value Subject to CFD 2002-1 Improvement Area A Lien $19,349,000 This is equal to $13.34 per square foot of net land area in Improvement Area A. JOHN S.ADAMS&ASSOCIATES,INC. 0213 35 VALUATION ANALYSIS DISCOUNTED VALUE IN BULK OF INDIVIDUAL RETAIL PARCELS Proper application of appraisal theory requires the sum total of individual retail parcel values be discounted to reflect their value to a single purchaser (i.e. bulk value). The Discounted Cash Flow methodology was used to accq"mplish this objective by forecasting the periodic revenue and expenses anticipated during the marketing term in addition to levels of profit commensurate with the undertaking. The periodic net revenue is then converted into an indication of net present value which is reflective of the property's current"as is" value to a single purchaser. The following are the assumptions utilized for the Discounted Cash Flow Analysis. Gross Sale Revenue The prior section of this report addressed the revenue potential of the subject land inventory assuming it was marketed on a retail basis. Referring to the preceding page, we estimated the retail potential of the eight parcels to be $23,759,000 or an average of$16.38 per square foot of net land area. Appreciation Rate The marketing of the inventory is likely to occur over an extended period of time-and for this reason it is necessary to consider the potential for revenue growth due to appreciation. However, one must also consider the competing levels of inventory and recent trends in pricing. The subject project represents one of the few business parks in the area with a significant inventory of land available. Current competition is limited to scattered infill parcels within the adjoining communities. The only other business park expected to offer direct competition in the future is Boeing Realty Corporation Pacific Gateway Business Center in Seal Beach. This development will total approximately 43 acres. This development may be two years away. JOHN S.ADAMS&ASSOCIATES,INC. 0213 36 Price appreciation within the subject development averaged 13.6% per year between the initial sale of$8.25 per square foot in December 1993 and the last sale at $13.88 per square foot in December 1998, a period of 5 years. Price appreciation averaged 13% per year between December 1995 and December 1998. Price appreciation in Irvine Spectrum over the past year has been in the 3% to 5% range for land in the $20.00 to $25.00 per square foot range. As the level of per square foot price increases the extent of appreciation tends to decline. Based on the limited extent of vacant land available for development in the general market area and the lack of projected competition over the next two years, we have estimated land appreciation at 5% per year. Absorption Due to the built-up nature of the subject's immediate market area and relative lack of competing business parks from which absorption statistics could be acquired the estimate of absorption velocity for the. lots is based on the McDonnell Centre Business Park's historical performance and limited market information from other areas. The subject's prior history of sales indicated the following historical absorption. Year Acres Sold 1993 11.88 1995 23.44 1997 26.82 1998 25.40 During the period of 1995 and 1997-98 when land was available the subject development absorbed on average about 25 acres per year. Land sales within Irvine Spectrum 5 totaled approximately 16 acres in 2000 and 29 acres in 2001, an average of 22.5 acres per year. JOHN S. ADAMS&ASSOCIATES,INC. 0213 37 Economic conditions have weakened over the past year and absorption of existing industrial space has also declined. Based on this information we have projected a 24 month period to sell the subject lots. This is equal to 16.64 acres per year. Land Development Costs The subject lots were valued as if in "finished" condition and do not require any additional construction or development expenditures to facilitate a transaction. The value assumes all infrastructure and improvements contemplated by CFD 2002-1 Improvement Area A have been installed and are completed. These items and estimated costs are delineated.on Pages 25 and 26 of this report under Area A improvements. CFD No. 2002-1 Improvement Area A Costs It is anticipated that the CFD No. 2002-1 Special Tax Bonds will total $4,900,000. This is equal to $3.38 per square foot of net land area within Improvement Area A. As the value analysis is subject to assumption of bonds our cash flow analysis will consider a total bond amount of $4,410,000. This is $4,900,000 less debt service reserve of$490,000. Sale and Marketing Expenses This expense category includes sale commissions, advertising, escrow fees, legal fees, recording fees and other items related to the closing of land sale transactions. Our experience with business park communities has suggested most developers rely upon professional brokers. Sale commissions were estimated at 5% of gross sales with an additional 1% charge for marketing and closing costs. JOHN S.ADAMS&ASSOCIATES,INC. 0213 38 Canying Costs During Marketing Term During the marketing term, the property owner is expected to incur expenses associated with real estate taxes, general administration/overhead and incidental items. We have estimated these costs at 1.5% of gross sales. Entrepreneurial Profit And Discount Rate The Korpacz Real Estate Investment Survey for the Fourth Quarter 2001 indicated the following discount rates including developer profit were required by investors for land development projects. Fourth Quarter 2001 Second Ouarter 2001 Discount Rate Free& Clear Range 11.0%to 3 5.0% 11.0% to 3 5.0% Average 19.96% 20.0% Subject to Financing Range 12.0%to 30.0% 12.0%to 35.0% Average 20.20% 22.14% Our discussions with developers indicates a 15% to 20% target internal rate of return including profit for land development projects. Based on the above information and considering the size, scope of development and duration of the development we have utilized a 15% to 17.5% discount range for our analysis. Value Indication Utilizing the cash flow assumptions discussed above, the bulk land value indication for the subject was $14,534,000 to $14,935,000. We have concluded at a value of$14,750,000. The conclusion equates to an average value of$10.17 per square foot of net land area. A copy of the Discounted Cash Flow Analysis is included in the Addenda of this report. JOHN S.ADAMS&ASSOCIATES,INC. 0213 39 VALUATION Based upon the personal examination and analysis made, it is our judgment that as of March 29, 2002, the market value of the fee simple interest in the subject property, subject to the CFD 2002-1 Improvement Area A Special Tax Bonds, was as follows: TOTAL OF INDIVIDUAL RETAIL LOT VALUES NINETEEN MILLION THREE HUNDRED FORTY-NINE THOUSAND DOLLARS $19,349,000 BULK SALE VALUE FOURTEEN MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS $14,750,000 JOHN S.ADAMS&ASSOCIATES,INC. 0213 40 EXPOSURE/MARKETING TIME Exposure time is the estimated length of time the property interest would have been offered in the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective opinion based upon an analysis of past events assuming a competitive and open market. We have estimated that an exposure time of 6 months would have been required to sell the subject property in bulk as of the date of value and an exposure time of 24 months would be required to sell the individual lots as of the date of value. Marketing time is an opinion of the amount of time it might take to sell a real property interest at the concluded market value level during the period immediately after the effective date of appraisal. Based upon present market conditions and discussions with commercial brokers we have estimated a marketing time of 24 months to sell the individual lots from the date of value and a marketing time of six months to sell the parcels in bulk as of the date of value. JOHN S.ADAMS&ASSOCIATES,INC. 0213 41 CERTIFICATION The undersigned do hereby certify that, to the best of our knowledge and belief, • The statements of fact contained in this report are true and correct. • The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions. • We have no present or prospective interest in the property that is the subject of this report, and we have no personal interest with respect to the parties involved. • We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. • Our engagement in this assignment was not contingent upon developing or reporting predetermined results. • Our compensation is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. • Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. • As of the date of this report, John S. Adams has completed the requirements under the continuing education program of the Appraisal Institute. • We have made a personal inspection of the property that is the subject of this report. • No one provided significant professional assistance to the persons signing this report. • We meet the requirements of the Competency Provision of the Uniform Standards of Professional Practice. Respectfully submitted, JOHN S. ADAMS & ASSOCIATES, INC. lJZhnn S. Adams, MAI California Certification No. AGO01754 JOHN S.ADAMS&ASSOCIATES,INC. 0213 42 NORTH • : ;,< <-.._._ . .-, t • �,��%,`���� '��,r"3`f� �f. i� ,,ems a. GS` t:`3"c 54+�-�'t..r<,y"y�4'y��'p„' _ r; �.�.,?. r�•fJ-»r�'`d� :.��av 4) c CITY OF HUNTINGTON BEACH CFD No. 2002-1 McDONNELL CENTRE BUSINESS PARK AREA SUMMARY (ACRES) PARCEL NUMBER ON PARCEL NUMBER ON TENTATIVE PARCEL MAP FINAL PARCEL MAP PARCEL SIZE 4 1 5.235 5 2 5-099 6 3 4.364 7 4 4.359 8 5 4.241 9 6 3.027 10 7 4.597 11 8 2.364 SUBTOTAL - NET ACRES 33.286 Final Map Street Riqht-of-Way Dedication within Area A 6.781 City Well Site _ - 0.272 ITOTAL -AREA A GROSS ACRES 40.339 PARCEL NUMBER ON PARCEL NUMBER ON TENTATIVE PARCEL MAP FINAL PARCEL MAP PARCEL SIZE 12 9 2.443 15 11 2.228 13 - 2.841 17 - 5.647 18 - 4.424 19 - 4.067 20 - 4.039 1 - 6.338 2 - 5.938 3 - 5.820 SUBTOTAL - NET ACRES 43.785 Street Riqht-of-Way 3.012 Final Map Street Riqht-of-Way Dedication within Area B 2.006 TOTAL -AREA B GROSS ACRES 48.803 4H. -,NA-11%Ok' PARCEL NUMBER ON PARCEL NUMBER ON TENTATIVE PARCEL MAP FINAL PARCEL MAP PARCEL SIZE 14 10 1.050 16 12 2-031 OUTSIDE OUTSIDE 96.259 ITOTAL - EXEMPT AREA GROSS ACRES 99.340 ITOTAL -CFD BOUNDARY GROSS ACRES 188.482 Parcel size acreages are from Final Map for parcels with a parcel number in that column. All others are from Tentative Map except the area "outside" both SHEET 1 OF 3 PROPOSED BOUNDARIES OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (McDONNELL CENTRE BUSINESS PARK), COUNTY OF ORANGE, STATE OF CALIFORNIA. RECORDING REQUESTED I COY OF HUNTINGTON BEACH_ JL I L FILED THIS-DAY OF ,2002.AT THE HOUR OF_O'CLOCK_.M..IN BOOK OF YIPS OF ASSESSMENT AND COMMUNITY FACILITIES DISTRICTS AT PAGE-IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF ORANGE. M STATE OF CALIFORNIA. y / <CFD NO.2002-1 y� BY. RENEE RAMIRE2.ACTING COUNTY RECORDER OF COUNTY OF ORANGE I HEREBY CERTIFY THAT THE WITHIN MAP SHOWING PROPOSED BOUNDARIES OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1(MIAONNELL CFMRE BUSINESS PARK).COUNTY OF ORANGE.STATE Of CALIFORNIA WAS APPROVED BY THE CITY COUNCIL BEACH THE CITY OF HUNTINGTON B AT A REGULAR MEETING THEREOF HELD ON TIME DAY OF 20D2,BY ITS RESOLUTION M K ! THE - Fq.ED IN THE OFFICE OF THE CITY CLERK Di THE CITY OF HUNTINGTON BFlC11, THIS DAY OF 2002. VICINITY MAP +mmwA BY: CONNIE BROCKWAY,THE CITY CLERK OF THE Cm OF HUNTINGTON BEACH BASIS OF BEARNCS: THE BEARING SHOMIN HEREON ARE BASED UPON THE CENTERLINE OF BOLSA AVENUE,BEARING 3AN AOMIS R.C.E.21687 EKP 9-30-2005 NB9.25'20Y/,PER PARCEL MAP NO.97-190 FILED IN BOOK 299.PACES 3 AND♦OF PARCEL MAPS,RECORDS OF ORANGE COUNTY.CAL60RNYl NOTE FOR LEGAL DESCRIPTION OF CFD-2002-1 / BOUNDARY,SEE SHEET 3. �AbL55�,- / a Ili 2NST ASSESSORS PARCEL NU®ERS ��QQ / • pP.}Lp.OS 195-111-03 ,p Rom/ 'P U} CIYM1 195-I11-2A 195-ttt-29 WY 195-ttt-31 195-tt1-3t �' / / / 1 I � I I I SKYLAB ROAD I NAP. NAP. oll q TOP N NJLP. �I NAP. iYxl:I'-wC L -- - - - - - - - ----- —•— - l d aas�AMCNUE ------- ----— SHEET INDEX MAP PRELIMINARY 4.H.00-I340 l SHEET 2 OF 3 PROPOSED BOUNDARIES OF THE CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (McDONNELL CENTRE BUSINESS PARK) COUNTY OF ORANGE, STATE OF CALIFORNIA. LEGEND: CFD NO. 2002-1 BOUNDARY ® EXEMPT LAND a IMPROVEMENT AREA "A" IMPROVEMENT AREA "B" w�c r-J0D m Im,ae o m eov CURVE TABLE A IO GRAPC SCALL I'--W CURVE DELTA RA081S LENfi,T i 89'�22Y 25L0 79.1� 6 09V915- 47800 80.56 7 89'�091• 27A0 J2.26 - 8 ls'23'S6' �70A0 12632 9 16'52'I4' 1 831.49 1 244.83 10 90'02'5B' 1 27.00 1 1243 LINE TABLE ELINELENGTH BEARING zls.es NDr32'09'E c IZ76 NB9.27.51'V 131.53N00'32'09E 2BL29 N8923'36•V 127.IJ N39.29'71•V 2BI.s3 Ns0.3ov6T. 20p07 N89.23V9•V . . � 130.78 M3929'SJ'V 171-711 N8928'4I'V \ i_0py91' �-3Ta4Y 7 ww b - "� y $. . . . . . . . . $ $ TH�r . . . . . . •-ee.mr U, --"_-_ U I y„y ♦ NAl. 11M. ' � iltTXL a I L-t1�6 U I eBNxr.r. Q IW. ; . o NW32WE]]]r „ ,m—,rL wa«• ]97SP �-" 378.47" - JtJJJ•: i� JRL.u•c, JCL BOLSA AVENUE PRELIMINARY JY OD-1310 PROPOSED BOUNDARIES OF SHEET 3 OF 3 THE CITY .OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1 (McDONNELL CENTRE BUSINESS PARK) COUNTY OF ORANGE, STATE OF CALIFORNIA. LINE TABLE LINE I LENGTH I BEARING LMNL DESRV/gM OF C.F.D.NO.2002-1 BOUIOARF: LI 1 370.50 1 N00.35'05'E L2 1 13300 IN09.24.55-W PARCEL 1: L3 133.00 14189'2455'9 L4 120.42 N00.35'05'E PARCEL 6 AND PARCEL 3 AS SHOWN ON THE MAP FILED 04 BOOK I. L5 14L75 N89.24.55•V PAGES 3 THROUGH 5 OF PARCEL MPS.IN THE OFFICE OF THE L6 141-75 N8924'55'V COUNTY RECORDER OF ORANGE COUNTY.CALIFORNN. L7 120.42 N00.35'O5'E EXCEPTING THEREFROM THE LAND INCLUDED'WITHIN THE DISTINCTIVE LB 129.66 N00.35'05•E BORDER OF PARCEL MAP NO.87-424,AS SHOWN ON THE MAP FILED L9 64.07 N99.2/'S5v N 900X 237.PAGES 4.5.AND a OF SAID PARCEL MAPS. LNG 18.66 N00"35.051E L11 23EL04 1,18924'55`V ALSO EXCEPTING THEREFROM THE LAND INCLUDED WITHIN THE L12 4.75 N00.35'05•E OISTNCTNE BORDER OF PARCEL MAP NO.97-198.AS SHOWN ON Ll3 11.95 N8924.55'V THE NAP FULD IN BOOK 299.PAGES 8 AND 9 OF SAID PARCEL MAPS. L14 1 11.95 N89.24'55v LIS 1 5.59 1N00'35'05'E ALSO EXCEPTING THEREFROM THE LAND INCLUDED WITH THE L16 1 1517 N9924.55-V OISIINLTNE BORDER OF PARCEL MAP NO.97-189.AS SHOWN ON L17 2.58 N00.35'05'E THE MAP FILED N BOO(299.PAGES I AND 2 OF SAID PARCEL MAPS. LIB 9.83 N89'24•55"V u9 E58 NOO.35'05'E ALSO EXCEPTING THEREFROM THE LAND INCLUDED WITHIN THE L20 240.16 N89.2455•V DISTINCTIVE BORDER OF PARCEL MAP NO.97-190.AS SHOWN ON L21 259 N00.75V5'E MAP FILED N BOOK 299.PAGES 3 AND 4 OF SAID PARCEL MAPS. L22 9.83 N8924'55•V ALSO EXCEPTING THEREFROM PARCEL 4 OF PARCEL MAP NO.95-186 L23 L58 IKN3 33'05'E AS SHOWN ON THE MAP FILED IN BOOK 296.PAGES 3 AND 4 OF L24 15.17 M092455v SAID PARCEL MAPS. L25 558 N00.35'054E L26 11.95 N89.2455'V PARCEL 2: L27 2M58 UM-35TS-E PARCEL'A OF PARCEL MAP 97-190.N THE CITY OF HUNTINGTON L28 5551 N00.35105'E BEACH.COUNTY OF ORANGE,STATE OF CALIFORNOA AS SHOWN ON L29 0.38 N89.24'550V THE MAP FILED IN BOOK 299.PAGES 3 AND 4 OF PARCELS MAPS.IN L30 9.03 N00.35'05'E THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. L31 0.38 N89.24S5v L32 156.33 N00.35'05'E PARCEL L33 W.." N00.35'05'E THAT PORTION OF SKY AB ROAD.N THE CITY OF HUNTINGTON BEACH. L34 21304 N89.24.55v COUNTY OF ORANGE.STATE OF CALUFORNOA,AS SHOWN ON PARCEL L35 "a N00"35T5'E MAP NO.95-186.FILED IN 800K 296.PAGES 3 AND 4 FO PARCEL L36 9.83 NB9.24'55'V MAPS,N THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. L37 2.58 400.35'05'E LYNO WESTERLY OF THE FOLLOWING DESCRIBED LINE: L38 M17 N892455'V L39 S58 NOO.35'05'E SHOWN AT THE WESTERLY LEST 502 OF THAT CERTAIN COURSE L40 11.95 N89.2455v SHOWN AS"NORTH ID MA T"WEST SO2.81 FEET I N DI ECT LINE OF PARCEL 4 OF SAID MAP;OFTHENCETHAT NORTHERLY N A DIRECT LIVE L41 11.93 X8924'S5'V TO THE WESTERLY TERMINUS OF THAT CERTAIN COHSE SHOWN AS 742 158 N00.35'O5'E 'NORTH 8724.21'WEST 592.38 FEED ON THE SOUTH ME OF L43 265.16 N8924'55v PARCEL I OF PARCEL MAP NO.97-190,FILED N BOOK 299.PAGES L44 2.58 NOO.35.O5'E 3 AND 4 OF PARCEL MPS,N SAID OFFICE OF THE COUNTY RECORDFN. LIS 9.83 N892f'S5•V L46 2.58 IAO.35.05•E L47 M17 NB9•Y/'S3'V L45 L48 S38 N00.3305•E L49 L49 11.95 N89.2V55•V L0e L4 L43 41 L50 206.33 N00.35MS-E LSF 422 N89'N55v L52 9.93 NOO.35'05'E L33 4.22 N89.2455v L54 19.42 N00'35'05'E ® © L55 64A7 N89.24'S5'V L56 Z22.50 WO.35TS-C L57 210.00 N00'35T5'E N.A.P. L58 3UIO0 N992455'V N.A.P. L4 L59 I.. NOO.35'051 L51 L60 I0637 N89.24055'V L6 l5] L34 L61 156.40 N00.35'O5'E L55 l L62 203A3 N89.2455v L63 160.00 NB9.2455v �� 'J �-... LW 405A0 NN00'35'OS'E L63 160.00 N892455'V L66 40500 1N00'33'OS'E L2 L65 L13 L9 LIT L8 7 u L1 O N.A.P. L5 L14 N.A.P. L2 16 � 18 L22 L20 L3 L83 PRELIMINARY J.N.00-1340 4111/02-3:35 PM Page 1 of 1 McDonnell Centre Business Park -Community Facilities District No. 2002-1 Land Development Analysis-8 Quarters Prepared By., John S.Adams&Associates air 1 Otr 2 Otr 3 Otr 4 Otr 5 Otr 6 Otr 7 Otr 8 Land price grows by 1.25%per quarter beginning quarter three Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sec-03 Dec-03 Mar-04 Totals Check Gross Sales Sq.Ft. $PSF Anaunt Sales Group 1 181,242 $16.38 2,968.748 2,968,748 - - - - 2,968,748 Sales Group 2 181,242 $16.38 2,968,748 - 2,968,748 - - - - - 2,968,748 Sales Group 3 181,242 $16.58 3,005,858 - - 3,005,858 - - - - 3,005,858 Sales Group 4 181.242 $16.79 3,043.431 - - 3,043,431 - - - 3,043,431 Sales Group 5 181,242 $17.00 3,081,474 - - - - 3.081,474 - - - 3,081,474 Sales Group 6 181,242 $17.21 3,119,992 - - - - - 3,119,992 - - 3,119,992 Sales Group 7 181,242 $17.43 3,158,992 - - - - - - 3,158,992 - 3,158,992 Sales Group 8 181,242 $17.65 3,198,480 - - - - - - - 3,198,480 3,198,480 Total Gross Sales 1,449,938 $16.93 24,545,723 2,968,748 2.968,748 3,005,858 3,043,431 3,081,474 3,119,992 3,158,992 3,198,480 24,545,723 Development Costs Armunt CFD No.2002-1 4,410,000 1,470,000 1,470,000 1,470,000 - - - - - 4,410,000 Total Development Costs 4,416,0 00 1,470,000 1,470,000 1,470,000 - - 4,410,000 Sales Costs Units Factor Amount Sales(%of gross sales) 5.00% 1,227,286 148,437 148,437 150,293 162,172 154,074 156,000 157,950 159,924 1,227,286 Marketing&Closing(%of gross sales) 1.00% 245,457 29,687 29,687 30,059 30,434 30,815 31,200 31,590 31,985 245,457 Taxes/Admin/OH(%of gross sales) 1.50% 368.186 44,531 44,531 45,088 45,651 46,222 46,800 47,385 47,977 368,186 CFD Special Tax(see notes below) 419,404 93,201 81,551 69,901 58,251 46,600 34,950 23,300 11,650 419,404 Total Sales Costs 2,260,333-: 315,857 304,207 295,340 286,508 277,711 268,950 260,225 251,536 2,260,333 Net Cash Flow $Amount Total Gross Sales 24,545,723 2,968,748 2,968,748 3,005,858 3,043,431 3,081,474 3,119,992 3,158,992 3,198,480 24,545,723 Total Development Costs (4,410,000) (1,470,000) (1,470,000) (1,470,000) - - - - - (4,410,000) Total Sales Costs (2,260.333) (315,857) (304,207) (295,340) (286,508) (277,711) (268,950) (260,225) (251,536) (2,260,333) Total Net Cash Flow 17,875,390 : 1,162,891 1,194,542 1,240.518 2,756,923 2.803,763 2,851,043 2,898,768 2,946,944 17,875,390 CFD Speclal Tax Tax Rate Per Acre Per Year $11,200 Acres in this CFD 33.286 Total Annual Special CFD Tax $372,803 Total Quarterly Special CFD Tax $93,201 Number of Quarters of this Analysis 8 4/11102-3:35 PM McDonnell Centre Business Park - Community Facilities District No. 2002-1 Land Development Analysis - 8 Quarters Prepared By: John S.Adams&Associates Net Present Value of Development Cash Flow- Annual Quarterly Net Present Discount Rate Discount Rate Value of CF $PSF 15.00% 3.56% 14,934,894 10.3^u 15.50% 3.67% 14,853,088 10.24 16.00% 3.78% 14,772,157 10.19 16.50% 3.86% 14,692,089 10.13 17.00% 4.00% 14,612,869 10.08 17.50% 4.11% 14,534,486 10.02 18.00% 4,22% 14,456,927 9.97 18.50% 4.33% 14,380,179 9.92 19.00% 4.44% 14,304,230 9.87 19.50% 4.55% 14,229,068 9.81 20.00% 4.66%' 14,154,682 9.76 20.50% 4.77% 14,081,060 9.71 21.00% 4.88% 14,008,191 9.66 21,50% 4.99% 13,936,064 9.61 22.00% 5.10% 13,864,668 9.56 22.50% 5.20% 13,793,993 9.51 23.00% 5.31% 13,724,028 9.47 23.50% 5.42% 13,654,763 9.42 24.00% 5.53% 13,5$6,187 9.37 24.50% 5.63% 13,518,293 9.32 25.00% 5.74% 13,451,068 9.28 APPRAISER'S QUALIFICATIONS s QUALIFICATIONS OF JOHN S.ADAMS,MAI,CRE PROFESSIONAL EXPERIENCE ` Real Estate Appraiser and Consultant with offices located at: 5100 Birch Street, Second Floor Newport Beach, California 92660 Telephone(949) 833-1972 Facsimile(949) 851-2055 Actively engaged in real estate since 1963. Principal, John S. Adams & Associates, Inc. since 1972; Formerly Assistant Vice President and Chief Appraiser ALCAL Financial Corporation; Assistant Vice President and Senior Appraiser Financial Appraisals, Inc.; Staff Appraiser Equitable Savings and Loan Association and Coachella Valley Savings and Loan Association. PROFESSIONAL AFFILIATIONS Member, Appraisal Institute(MAI) Member,American Society of Real Estate Counselors(CRE) LICENSES State of California-Certified General Real Estate Appraiser OREA Appraiser Identification Number AGO01754 EDUCATION University of California,Los Angeles Certificate in Real Estate Appraisal Institute Specialized Appraisal Courses and Seminars CLIENTS(Partial List) Corporations Aluminum Company of America Ford Motor Company General Dynamics Hyundai Motor America International Paper Company Kaiser Permanente Kawasaki Motors Corporation,Inc. Mazda North America Mercedes Benz Credit Corporation Pacific Bell Pfizer,Inc. Southern California Edison Company Toshiba America,Inc. Developers/Investors Aldrich,Eastman&Waltch,L.P. Arnel Development Company Birtcher Carson Estate Company Catellus Development Corporation C.J. Segerstrom& Sons Focus Real Estate Hunsaker Development Company The Irvine Company The Koll Company Layton-Belling Associates Mark IV Capital,Inc. Shaw Investment Company Trico Realty Inc. Turner Development Corporation Financial Institutions Allstate Life Insurance Company The Bank of Hemet Chinatrust Bank(U.S.A.) Cigna Investments,Inc. Citibank First Bank&Trust GMAC Commercial Mortgage General American Life Insurance Company Independent Order of Foresters Manulife Financial Mellon First Business Bank Metropolitan Life Insurance Company Northwestern Mutual Life Insurance Company Omaha Woodman Life Insurance Society Pacific Mercantile Bank Pacific Mutual Life Insurance Prudential Mortgage Capital Safeco Insurance Companies State Farm Life Insurance Company Transamerica Life Insurance and Annuity Company Union Bank U.S.Bank National Association Wells Fargo Bank Western Financial Bank Weyerhaeuser Realty Investors CERTIFICATE OF DEVELOPER This Certificate of Developer is made and effective as of July 17, 2002, by Boeing Realty Corporation, a California corporation(the "Developer"), for reliance upon by Stone & Youngberg LL•C (the "Underwriter") and the City of Huntington Beach, California(the "City") in connection with the issuance of$4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A (the "Bonds"). All capitalized terms used in this Certificate that are not defined herein shall have the meaning given them in the Purchase Contract, dated June 27, 2002, between the Underwriter and the City (the "Purchase Contract"). Pursuant to the Purchase Contract, the Developer hereby certifies to the Underwriter and the City for their reliance, the truth, accuracy, and completeness of the following matters: (A) To the best of the Developer's knowledge, nothing has come to the Developer's attention which would contradict the information set forth in the Official Statement under the headings "Improvement Area A—Location" and"Improvement Area A—Public Facilities." (B) Any and all written information submitted by or on behalf of the Developer to the Underwriter or Disclosure Counsel in connection with the preparation of the Preliminary Official Statement and the Official Statement or to the Appraiser in connection with the preparation of its appraisal report was, at the time submitted, and, to the best knowledge of the undersigned is, true and correct. (C) The statements relating to the Developer and the Development (as defined in the Official Statement) contained in the_Preliminary Official Statement and the Official Statement do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they are made, not misleading. (D) No proceedings are pending or threatened in which the Developer may be adjudicated as bankrupt or discharged from all or substantially all of its debts or obligations or granted an extension of time to pay its debts or a reorganization or readjustment of its debts. (E) No action, suit proceedings, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending or, to the best knowledge of the undersigned, threatened in any way, seeking to restrain or enjoin the development of the real property in Improvement Area A. (F) The Developer covenants that, while the Bonds are outstanding, it will not bring any action, suit, proceeding, inquiry or investigation at law or in equity,before any court, regulatory agency, public board or body which in any way seeks to challenge or overturn the District's formation or existence,the levy or collection of the Special Tax (provided that such levy and collection are in accordance with the terms of the Rate and Method) or the validity of the Bonds or the proceedings taken for their issuance. 20384058v2 (G) The Developer is not in any material respect in violation of, breach of, or default under any applicable constitutional provision or law of any state or of the United States or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Developer of any of its activities, properties or assets, or any indenture, mortgage, deed of trust, resolution, note agreement or other agreement or instrument to which the Developer is a party which violation or breach of or default would have a material adverse effect upon the transactions on the part of the Developer contemplated by the Acquisition Agreement or otherwise described in the Official Statement, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both would constitute such a default or event of default under any such instruments; and the execution and delivery by the Developer of the Acquisition Agreement, and compliance with the provisions on the Developer's part contained in the Acquisition Agreement, do not and will not in any material respect conflict with or constitute on the part of the Developer a violation or breach of or default under any constitutional provision or law of any state or of the United States or any order,rule or regulation of any court or governmental agency or body having jurisdiction over the Developer or any of its activities, properties or assets, or any indenture, mortgage, deed of trust, resolution, note agreement, or other agreement or instrument to which the Developer is a party or by which the Developer or any of its property or assets is bound which breach or default would have a material adverse affect upon the transactions on the part of the Developer contemplated by the Acquisition Agreement or otherwise described in the Official Statement. [Remainder of page intentionally left blank.] 2 20384058v2 (H) There are no legal or governmental actions, proceedings, inquiries or investigations pending or, to the best knowledge of the undersigned, threatened by governmental authorities or to which the Developer is a party or of which any property of the Developer is subject, which (1) seek to restrain or to enjoin the continuation and/or completion of the proposed development of the land in Improvement Area A as described in the Official Statement, or(2) if determined adversely to the Developer,would materially and adversely affect the transactions contemplated by the Official Statement to be engaged by the Developer or the ability of the Developer to perform its obligations under the Acquisition Agreement. IN WITNESS WHEREOF, the Developer has executed this Certificate of Developer effective as of the date set forth above. DEVELOPER: Boeing Realty Corporation, a California corporatio By: A4 6 Step en J. Barker Dire or of Business Operations 3 20384058v2 CERTIFICATE OF LANDOWNER This Certificate of Landowner is made and effective as of July 17, 2002,by McDonnell Douglas Corporation, a Maryland corporation (the "Landowner"), for reliance upon by Stone & Youngberg LLC (the "Underwriter") and the City of Huntington Beach, California (the "City") in connection with the issuance of$4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A(the "Bonds"). All capitalized terms used in this Certificate that are not defined herein shall have the meaning given them in the Purchase Contract, dated June 27, 2002, between the Underwriter and the City (the "Purchase Contract"). Pursuant to the Purchase Contract, the Landowner hereby certifies to the Underwriter and the City for their reliance, the truth, accuracy, and completeness of the following matters: (A) To the best of the Landowner's knowledge, nothing has come to the Landowner's attention which would contradict the information set forth in the Official Statement under the headings "Improvement Area A—Location" and"Improvement Area A—Public Facilities." (B) Any and all written information submitted by or on behalf of the Landowner to the Underwriter or Disclosure Counsel in connection with the preparation of the Preliminary Official Statement and the Official Statement or to the Appraiser in connection with the preparation of its appraisal report was, at the time submitted, and, to the best knowledge of the undersigned is, true and correct. (C) The statements relating to the Landowner and the Development(as defined in the Official Statement) contained in the Preliminary Official Statement and the Official Statement do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they are made, not misleading. (D) No proceedings are pending or threatened in which the Landowner may be adjudicated as bankrupt or discharged from all or substantially all of its debts or obligations or granted an extension of time to pay its debts or a reorganization or readjustment of its debts. (E) No action, suit proceedings, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending or, to the best knowledge of the undersigned, threatened in any way, seeking to restrain or enjoin the development of the real property in Improvement Area A. (F) The Landowner covenants that,while the Bonds are outstanding, it will not bring any action, suit,proceeding, inquiry or investigation at law or in equity, before any court,regulatory agency, public board or body which in any way seeks to challenge or overturn the District's formation or existence, the levy or collection of the Special Tax (provided that such levy and collection are in accordance with the terms of the Rate and Method) or the validity of the Bonds or the proceedings taken for their issuance. 20384073v2 (G) The 2001/2002 property tax bill with respect to the property within Improvement Area A has been paid in full. (H) The Landowner is not in any material respect in violation of,breach of, or default under any applicable constitutional provision or law of any state or of the United States or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Landowner of any of its activities,properties or assets, or any indenture,mortgage, deed of trust, resolution, note agreement or other agreement or instrument to which the Landowner is a party which violation or breach of or default would have a material adverse effect upon the transactions on the part of the Landowner contemplated by the Landowner Disclosure Agreement or otherwise described in the Official Statement, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both would constitute such a default or event of default under any such instruments; and the execution and delivery by the Landowner of the Landowner Disclosure Agreement, and compliance with the provisions on the Landowner's part contained in the Landowner Disclosure Agreement, do not and will not in any material respect conflict with or constitute on the part of the Landowner a violation or breach of or default under any constitutional provision or law of any state or of the United States or any order,rule or regulation of any court or governmental agency or body having jurisdiction over the Landowner or any of its activities,properties or assets, or any indenture, mortgage, deed of trust, resolution, note agreement, or other agreement or instrument to which the Landowner is a party or by which the Landowner or any of its property or assets is bound which breach or default would have a material adverse affect upon the transactions on the part of the Landowner contemplated by the Landowner Disclosure Agreement or otherwise described in the Official Statement. [Remainder of page intentionally left blank.] 2 20384073v2 (I) There are no legal or governmental actions,proceedings, inquiries or investigations pending or, to the best knowledge of the undersigned, threatened by governmental authorities or to which the Landowner is a party or of which any property of the Landowner is subject, which(1) seek to restrain or to enjoin the continuation and/or completion of the proposed development of the land in Improvement Area A as described in the Official Statement, or(2) if determined adversely to the Landowner, would materially and adversely affect the transactions contemplated by the Official Statement to be engaged by the Landowner or the ability of the Landowner to perform its obligations under the Landowner Disclosure Agreement. IN WITNESS WHEREOF, the Landowner has executed this Certificate of Landowner effective as of the date set forth above. LANDOWNER: McDonnell Douglas Corpora ' , a Maryland corporation By: &_ Stephen J. Barker Authorized Signatory 3 20384073v2 CERTIFICATE OF COMPANY This Certificate of Company is made and effective as of July 17, 2002, by The Boeing Company, a Delaware corporation(the"Company"), for reliance upon by Stone & Youngberg LLC (the "Underwriter") and the City of Huntington Beach, California(the "City") in connection with the issuance of$4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A (the "Bonds"). All capitalized terms used in this Certificate that are not defined herein shall have the meaning given them in the Purchase Contract, dated June 27, 2002, between the Underwriter and the City (the "Purchase Contract"). Pursuant to the Purchase Contract, the Company hereby certifies to the Underwriter and the City for their reliance, the truth, accuracy, and completeness of the following matters: (A) Any and all written information submitted by or on behalf of the Company to the Underwriter or Disclosure Counsel in connection with the preparation of the Preliminary Official Statement and the Official Statement or to the Appraiser in connection with the preparation of its appraisal report was, at the time submitted, and, to the best knowledge of the undersigned is, true and correct. (B) The statements relating to the Company and the Development(as defined in the Official Statement) contained in the Preliminary Official Statement and the Official Statement do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they are made, not misleading. (C) No proceedings are pending or threatened in which the Company may be adjudicated as bankrupt or discharged from all or substantially all of its debts or obligations or granted an extension of time to pay its debts or a reorganization or readjustment of its debts. (D) No action, suit proceedings, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending or, to the best knowledge of the undersigned, threatened in any way, seeking to restrain or enjoin the development of the real property in Improvement Area A. (E) The Company covenants that, while the Bonds are outstanding, it will not bring any action, suit, proceeding, inquiry or investigation at law or in equity,before any court, regulatory agency, public board or body which in any way seeks to challenge or overturn the District's formation or existence, the levy or collection of the Special Tax (provided that such levy and collection are in accordance with the terms of the Rate and Method) or the validity of the Bonds or the proceedings taken for their issuance. (F) The Company is not in any material respect in violation of, breach of, or default under any applicable constitutional provision or law of any state or of the United States or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company of any of its activities, properties or assets, or any indenture, mortgage, deed of trust, resolution, note agreement or other agreement or instrument to which the Company is a party which violation or breach of or default would have a material adverse effect upon the 20384066v2 transactions on the part of the Company contemplated by the Guaranty or otherwise described in the Official Statement, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both would constitute such a default or event of default under any such instruments; and the execution and delivery by the Company of the Guaranty, and compliance with the provisions on the Company's part contained in the Guaranty, do not and will not in any material respect conflict with or constitute on the part of the Company a violation or breach of or default under any constitutional provision or law of any state or of the United States or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its activities,properties or assets, or any indenture, mortgage, deed of trust, resolution, note agreement, or other agreement or instrument to which the Company is a party or by which the Company or any of its property or assets is bound which breach or default would have a material adverse affect upon the transactions on the part of the Company contemplated by the Guaranty or otherwise described in the Official Statement. [Remainder of page intentionally left blank.] 2 20384066v2 (G) There are no legal or governmental actions,proceedings, inquiries or investigations pending or, to the best knowledge of the undersigned, threatened by governmental authorities or to which the Company is a party or of which any property of the Company is subject, which(1) seek to restrain or.to enjoin the continuation and/or completion of the proposed development of the land in Improvement Area A as described in the Official Statement, or(2) if determined adversely to the Company,would materially and adversely affect the transactions contemplated by the Official Statement to be engaged by the Company or the ability of the Company to perform its obligations under the Guaranty. IN WITNESS WHEREOF, the Company has executed this Certificate of Company effective as of the date set forth above. COMPANY: The Boeing Company, a Delaware corporation M By: -& Stephen J. Barker Authorized Signatory 3 20384066v2 r Boeing Realty Corporation 3760 Kilroy Airport Way,Suite 500 Long Beach,CA 90806 Telephone: 562-627-4900 FAX: 562-627-4906 r� July 17, 2002 Stone &Youngberg LLC BOE/NG g g San Francisco, California City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Huntington Beach, California Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A Ladies and Gentlemen: I am counsel to Boeing Realty Corporation, a California corporation (the "Developer"). The Developer has participated in the financing of public improvements related to the property within Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park), through the issuance of the above-referenced bonds (the "Bonds"). The Bonds are being sold to Stone &Youngberg LLC, as underwriter. In rendering the opinions hereinafter expressed, I have reviewed and examined, or caused to be reviewed and examined, the following documents: 1. the Acquisition Agreement, dated June 1, 2002, between the City of Huntington Beach, California(the "City") and the Developer(the "Acquisition Agreement"); 2. the final Official Statement relating to the Bonds (the "Official Statement"); 3. the Articles of Incorporation of the Developer, as amended; 4. the Bylaws of the Developer, as amended; and 5. such other documents as I have deemed relevant for the purposes of this opinion. S:\RAFFERTY\HUNTINGTON BEACH\FINANCING\BRC.doc Stone &Youngberg LLC City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) July 17, 2002 Page 2 In conducting my examination, I have assumed, without investigation: (i) the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as certified or photostatic copies, and the authenticity of the originals from which such copies were made; (ii) the legal capacity of all natural persons, (iii) as to documents executed by parties other than the Developer, such parties' power to enter into and perform the obligations under such documents, and that such documents have been duly authorized, executed and delivered by, and are binding upon and enforceable against, such parties, (iv) that there are no oral or written terms or conditions (other than as expressed in the Acquisition Agreement) agreed to by the City and the Developer, or by the City and any other party, which would expand or modify the respective rights and obligations of the Developer set forth in the Acquisition Agreement or which would have an effect on the opinions rendered herein; and(v) that the City is not subject to any statute, rule or regulation, or to any impediment to which contracting parties are generally not subject,which requires any of them to obtain the consent of, or to make a declaration or filing with, any governmental authority in connection with the execution and delivery of the Acquisition Agreement. In examining the Acquisition Agreement, I have assumed with your permission, and without investigation, that, upon execution by the City, the Acquisition Agreement will be the legally valid and binding agreement of the City, enforceable against the City in accordance with its terms, and that the City will seek to enforce its rights under the Acquisition Agreement only in good faith, in commercially reasonable circumstances and in a commercially reasonable manner. I have made such examination of California law and the law of the United States of America as I deem relevant for the purposes of this opinion. I have not considered the effect, if any, of the laws of any other jurisdiction upon the matters covered by this opinion. Based on the foregoing and subject to the assumptions and qualifications set forth in this letter, it is my opinion that: 1. The Developer is a corporation validly existing under the laws of the State of California, and the Developer is authorized to enter into and perform its obligations under the Acquisition Agreement. SARAFFERMHUNTINGTON BEACH\FINANCING\BRC.doc r Stone &Youngberg LLC City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) July 17, 2002 Page 3 2. The Acquisition Agreement has been duly authorized, executed and delivered by the Developer, and the Acquisition Agreement constitutes the valid and binding legal obligation of the Developer, enforceable in accordance with the Acquisition Agreement's terms, except as such enforceability may be limited by reorganization, insolvency, liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of the rights of creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation,readjustment or debt or other similar proceeding of or moratorium applicable to the Developer, and except that the availability of equitable remedies, including specific performance, to persons seeking to enforce the Acquisition Agreement against the Developer, is subject to the discretion of the court. 3. To the best of my knowledge and without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement, and based on the representations of the Developer, and in reliance thereon, and on certain documents reviewed, or caused to be reviewed, by me as set forth in such opinion, no information came to my attention during the course of my representation of the Developer which caused me to believe that the statements contained in the Official Statement under the caption"THE DEVELOPER, THE LANDOWNER AND THE DEVELOPMENT," contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need to be expressed as to any financial, statistical or engineering data or forecasts, numbers, charts, estimates,projections, assumptions, or expressions of opinion, or any information about valuation, appraisals or environmental matters contained therein). I express no opinion as to the exclusion from gross income for federal income tax purposes of the interest on the Bonds, or the exemption of the interest on the Bonds from State of California personal income taxes. I express no opinion as to the applicability or effect on the subject transaction of the securities laws of the State of California or of the United States of America, including but not limited to the Securities Act of 1933, as amended. SARAFFERMHUNTINGTON BEACH\FINANCING\BRC.doc Stone &Youngberg LLC City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) July 17, 2002 Page 4 I am licensed to practice law only in the State of California. Accordingly, the foregoing opinion applies only insofar as the laws of the State of California or the United States of America may be concerned, and I express no opinion with respect to the laws of any other jurisdiction. This opinion is rendered as of the date hereof and is furnished solely for your benefit in connection with the subject transaction, and may not be relied upon for any other purpose or furnished to, used, circulated, quoted or referred to by any other person without my prior written consent. Respectfully Submitted, Ga afferty, Esq. Counsel S:\RAFFERTY\HUNTQVGTON BEACH\FINANCING\BRC.doc MCOOMMELL 000CLAS July 17, 2002 Stone &Youngberg LLC San Francisco, California City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Huntington Beach, California Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A Ladies and Gentlemen: I am counsel to McDonnell Douglas Corporation, a Maryland corporation (the "Landowner"). The Landowner has participated in the financing of public improvements related to the property it owns within Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park), through the issuance of the above- referenced bonds (the "Bonds"). The Bonds are being sold to Stone & Youngberg LLC, as underwriter. In rendering the opinions hereinafter expressed, I have reviewed and examined, or caused to be reviewed and examined, the following documents: 1. the Landowner Disclosure Agreement, dated as of June 1, 2002, executed by the Landowner and agreed to by BNY Western Trust Company, as dissemination agent (the"Dissemination Agent") (the"Landowner Disclosure Agreement'); 2. the final Official Statement relating to the Bonds (the"Official Statement'); 3. the Articles of Incorporation of the Landowner, as amended; 4. the Bylaws of the Landowner, as amended; and 5. such other documents as I have deemed relevant for the purposes of this opinion. In conducting my examination, I have assumed, without investigation: (i) the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as certified or photostatic copies, and the S:\RAFFERTY\HUNTINGTOIfg-kfi dA MII?,, KOR1660516 (314)232-0232 TELEX 44-857 Stone&Youngberg LLC City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) July 17, 2002 Page 2 authenticity of the originals from which such copies were made; (ii) the legal capacity of all natural persons, (iii) as to documents executed by parties other than the Landowner, such parties' power to enter into and perform the obligations under such documents, and that such documents have been duly authorized, executed and delivered by, and are binding upon and enforceable against, such parties, (iv) that there are no oral or written terms or conditions (other than as expressed in the Landowner Disclosure Agreement) agreed to by any other parties, which would expand or modify the respective rights and obligations of the Landowner set forth in the Landowner Disclosure Agreement or which would have an effect on the opinions rendered herein; and (v) that the Dissemination Agent is not subject to any statute, rule or regulation, or to any impediment to which contracting parties are generally not subject,which requires any of them to obtain the consent of, or to make a declaration or filing with, any governmental authority in connection with the execution and delivery of the Landowner Disclosure Agreement. In examining the Landowner Disclosure Agreement, I have assumed with your permission, and without investigation, that, upon execution by the Dissemination Agent, the Landowner Disclosure Agreement will be the legally valid and binding agreement of the Dissemination Agent, enforceable against the Dissemination Agent in accordance with its terms, and that the Dissemination Agent will seek to enforce its rights under the Landowner Disclosure Agreement only in good faith, in commercially reasonable circumstances and in a commercially reasonable manner. I have made such examination of California law and the law of the United States of America as I deem relevant for the purposes of this opinion. I have not considered the effect, if any, of the laws of any other jurisdiction upon the matters covered by this opinion. Based on the foregoing and subject to the assumptions and qualifications set forth in this letter, it is my opinion that: 1. The Landowner is a corporation validly existing under the laws of the State of Maryland, and the Landowner is authorized to enter into and perform its obligations under the Landowner Disclosure Agreement. 2. The Landowner Disclosure Agreement has been duly authorized, executed and delivered by the Landowner, and the Landowner Disclosure Agreement constitutes the valid and binding legal obligation of the Landowner, enforceable in accordance with the Landowner Disclosure Agreement's terms, except as such enforceability may be limited by reorganization, insolvency, liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of the rights of creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation, readjustment or debt or other similar proceeding of or moratorium applicable to the Landowner, and except that the availability of equitable remedies, including specific performance, to persons S:\RAFFERTY\HCJNTINGTON BEACH\FINANCINGWDC.doc Stone &Youngberg LLC City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) July 17, 2002 Page 3 seeking to enforce the Landowner Disclosure Agreement against the Landowner, is subject to the discretion of the court. 3. To the best of my knowledge and without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement, and based on the representations of the Landowner, and in reliance thereon, and on certain documents reviewed, or caused to be reviewed, by me as set forth in such opinion, no information came to my attention during the course of my representation of the Landowner which caused me to believe that the statements contained in the Official Statement under the caption"THE DEVELOPER, THE LANDOWNER AND THE DEVELOPMENT," contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need to be expressed as to any financial, statistical or engineering data or forecasts, numbers, charts, estimates, projections, assumptions, or expressions of opinion, or any information about valuation, appraisals or environmental matters contained therein). I express no opinion as to the exclusion from gross income for federal income tax purposes of the interest on the Bonds, or the exemption of the interest on the Bonds from State of California personal income taxes. I express no opinion as to the applicability or effect on the subject transaction of the securities laws of the State of California or of the United States of America, including but not limited to the Securities Act of 1933, as amended. I am licensed to practice law only in the State of California. Accordingly, the foregoing opinion applies only insofar as the laws of the State of California or the United States of America may be concerned, and I express no opinion with respect to the laws of any other jurisdiction. This opinion is rendered as of the date hereof and is furnished solely for your benefit in connection with the subject transaction, and may not be relied upon for any other purpose or furnished to, used, circulated, quoted or referred to by any other person without my prior written consent. Respectfully Submitted, G L. R fferty, Es . Counsel SARAFFERMHUNTINGTON BEACHTINANCINGNDC.doc July 17, 2002 Stone &Youngberg LLC BOE/NG San Francisco, California City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Huntington Beach, California Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A Ladies and Gentlemen: I am counsel to The Boeing Company, a Delaware corporation (the "Company"). The Company has participated in the financing of public improvements related to the property within Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park), through the issuance of the above-referenced bonds (the "Bonds"). The Bonds are being sold to Stone &Youngberg LLC, as underwriter. In rendering the opinions hereinafter expressed, I have reviewed and examined; or caused to be reviewed and examined, the following documents: 1. the Guaranty, dated as of July 17, 2002, between the City of Huntington Beach, California(the"City") and the Company(the "Guaranty"); 2. the final Official Statement relating to the Bonds (the "Official Statement"); 3. the Articles of Incorporation of the Company, as amended; 4. the Bylaws of the Company, as amended; and 5. such other documents as I have deemed relevant for the purposes of this opinion. SARAFFERMHUNTINGTON BEACH\FINANCING\TBC.doc Stone &Youngberg LLC City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) July 17, 2002 Page 2 In conducting my examination, I have assumed, without investigation: (i) the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as certified or photostatic copies, and the authenticity of the originals from which such copies were made; (ii)the legal capacity of all natural persons, (iii) as to documents executed by parties other than the Company, such parties' power to enter into and perform the obligations under such documents, and that such documents have been duly authorized, executed and delivered by, and are binding upon and enforceable against, such parties, (iv) that there are no oral or written terms or conditions (other than as expressed in the Guaranty) agreed to by the City and the Company, or by the City and any other party, which would expand or modify the respective rights and obligations of the Company set forth in the Guaranty or which would have an effect on the opinions rendered herein; and(v) that the City is not subject to any statute,rule or regulation, or to any impediment to which contracting parties are generally not subject, which requires any of them to obtain the consent of, or to make a declaration or filing with, any governmental authority in connection with the execution and delivery of the Guaranty. In examining the Guaranty, I have assumed with your permission, and without investigation, that, upon execution by the City, the Guaranty will be the legally valid and binding agreement of the City, enforceable against the City in accordance with its terms, and that the City will seek to enforce its rights under the Guaranty only in good faith, in commercially reasonable circumstances and in a commercially reasonable manner. In rendering my opinion below that the Guaranty is valid and legally binding obligation of the Company, enforceable in accordance with the Guaranty's terms, notwithstanding the choice of New York law provided for in the Guaranty, I have assumed, with your permission, that the Guaranty will be governed by the laws of the State of California. I have made such examination of California law and the law of the United States of America as I deem relevant for the purposes of this opinion. I have not considered the effect, if any, of the laws of any other jurisdiction upon the matters covered by this opinion. Based on the foregoing and subject to the assumptions and qualifications set forth in this letter, it is my opinion that: SARAFFERTYUiUNTINGTON BEACHWINANCINGUBC.doc Stone &Youngberg LLC City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) July 17, 2002 Page 3 1. The Company is a corporation validly existing under the laws of the State of Delaware, and the Company is authorized to enter into and perform its obligations under the Guaranty. 2. The Guaranty has been duly authorized, executed and delivered by the Company, and the Guaranty constitutes the valid and binding legal obligation of the Company, enforceable in accordance with the Guaranty's terms, except as such enforceability may be limited by reorganization, insolvency, liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of the rights of creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation, readjustment or debt or other similar proceeding of or moratorium applicable to the Company, and except that the availability of equitable remedies, including specific performance, to persons seeking to enforce the Guaranty against the Company, is subject to the discretion of the court. 3. To the best of my knowledge and without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement, and based on the representations of the Company, and in reliance thereon, and on certain documents reviewed, or cause to be reviewed,by me as set forth in such opinion,no information came to my attention during the course of my representation of the Company which caused me to believe that the statements contained in the Official Statement under the caption"THE DEVELOPER, THE LANDOWNER AND THE DEVELOPMENT," contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light'of the circumstances under which they were made, not misleading(except that no opinion or belief need to be expressed as to any financial, statistical or engineering data or forecasts, numbers, charts, estimates, projections, assumptions, or expressions of opinion, or any information about valuation, appraisals or environmental matters contained therein). I express no opinion as to the exclusion from gross income for federal income tax purposes of the interest on the Bonds, or the exemption of the interest on the Bonds from State of California personal income taxes. SARAFFERMHUNTINGTON BEACH\FINANCING\TBC.doc Stone &Youngberg LLC City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) July 17, 2002 Page 4 I express no opinion as to the applicability or effect on the subject transaction of the securities laws of the State of California or of the United States of America, including but not limited to the Securities Act of 1933, as amended. I am licensed to practice law only in the State of California. Accordingly, the foregoing opinion applies only insofar as the laws of the State of California or the United States of America may be concerned, and I express no opinion with respect to the laws of any other jurisdiction. This opinion is rendered as of the date hereof and is furnished solely for your benefit in connection with the subject transaction, and may not be relied upon for any other purpose or furnished to, used, circulated, quoted or referred to by any other person without my prior written consent. Respectfully Submitted, Gar fferty, Es . Counsel SARAFFERMHUNTINGTON BEACH\FINANCQJG\TBC.doc rip One Embarcadero Center,Suite 2420 Dint & ThimmigLLr San Francisco,CA 94111 Telephone: 415/765-1550 Attorneys at Law Telecopier: 415/765-1555 July 17, 2002 City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds Series 2002-A Members of the City Council: We have acted as bond counsel in connection with the issuance by the City of Huntington Beach (the "City") of its $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A (the 'Bonds") pursuant to Chapter 3.56 of the Municipal Code of the City of Huntington Beach (the "Code") and, as applicable under the Code, the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq., of the California Government Code) (collectively, the "Law"), a Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City for and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park), and BNY Western Trust Company, as fiscal agent, and Resolution No. 2002-63 adopted by the City Council of the City on June 17, 2002 (the "Resolution"). We have examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the City contained in the Resolution and in the certified proceedings and certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing,we are of the opinion,under existing law, as follows: 1. The City is a charter city and municipal corporation, duly organized and validly existing under the laws of the State of California,with the power to adopt the Resolution, enter into the Fiscal Agent Agreement and perform the agreements on its part contained therein and issue the Bonds. 2. The Fiscal Agent Agreement has been duly entered into by the City and constitutes a valid and binding obligation of the City enforceable upon the City. 3. Pursuant to the Law, the Fiscal Agent Agreement creates a valid lien on the funds pledged by the Fiscal Agent Agreement for the security of the Bonds. 08003.07:J6160 City of Huntington Beach July 17, 2002 Page 2 4. The Bonds have been duly authorized, executed and delivered by the City and are valid and binding limited obligations of the City, payable solely from the sources provided therefor in the Fiscal Agent Agreement. 5. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The opinions set forth in the preceding sentence are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 6. The interest on the Bonds is exempt from personal income taxation imposed by the State of California. The rights of the owners of the Bonds and the enforceability of the Bonds, the Resolution and the Fiscal Agent Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and also may be subject to the•exercise of judicial discretion in appropriate cases. Respectfully submitted, i j Lr n One Embarcadero Center,Suite 2420 Quid & ThiMMigL San Francisco,CA 94111 Telephone:415/765-1550 Attorneys at Law Tele opier:415/765-1555 July 17,2002 Stone&Youngberg LLC 15260 Ventura Boulevard,Suite 1520 Sherman Oaks,California 91403 SUPPLEMENTAL OPINION: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds,Series 2002-A Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance by the City of Huntington Beach (the "City") of its $4,900,000 aggregate principal amount of Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park), (the "Improvement Area") Special Tax Bonds, Series 2002-A (the "Bonds"), pursuant to the City of Huntington Beach Special Tax Financing Improvement Code (constituting Chapter 3.56 of the City's Municipal Code), and, where applicable, the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq., of the California Government Code) (collectively, the "Law"), a Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust Company, as Fiscal Agent, and Resolution No. 2002-63, adopted by the City Council of the City of Huntington Beach (the "City"), acting as the legislative body of the Improvement Area, on June 17,2002. In that connection, we have examined the executed Fiscal Agent Agreement; the Purchase Contract, dated June 27, 2002 (the "Bond Purchase Agreement"), by and between you, as underwriter, and the City; the Official Statement, dated June 27, 2002, relating to the Bonds (the "Official Statement"); the Acquisition Agreement, dated as of June 1, 2002 (the "Acquisition Agreement"), between the City and Boeing Realty Corporation; the Continuing Disclosure Certificate - Issuer (the "Disclosure Certificate") of the City; the law and such other certified proceedings and other papers as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the City contained in the Fiscal Agent Agreement and in the certified proceedings and other certifications of representatives of the City furnished to us, without undertaking to verify such facts by independent investigation. Based upon our examination,we are of the opinion,under existing law,as follows: 1. The Bond Purchase Agreement, the Acquisition .Agreement and the Disclosure Certificate have been duly authorized, executed and delivered by, and, assuming due authorization, execution and delivery by the other parties thereto, constitute legal, valid and binding agreements of the City, enforceable in accordance with their respective terms, subject to Stone &Youngberg LLC July 17,2002 Page 2 bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights in general and to the application of equitable principles if equitable remedies are sought. 2. The Bonds are not subject to registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended. 3. The information contained in the Official Statement under the captions "INTRODUCTION," "THE FINANCING PLAN," "THE SERIES 2002-A BONDS," "SECURITY FOR THE SERIES 2002-A BONDS," "CONCLUDING INFORMATION — Tax Matters," "APPENDIX A — Summary of the Fiscal Agent Agreement," and "APPENDIX B — Proposed Form of Opinion of Bond Counsel," is accurate insofar as it purports to summarize certain provisions of the Bonds, the Fiscal Agent Agreement, the Law, federal tax law, and our final legal opinion with respect to the Bonds delivered on the date of this opinion. Respectfully submitted, QSanuint & Thimmi LLC One Embarcadero Center,Suite 2420 Francisco, CA 94111 Telephone: 415/765-1550 Attorneys at Law Telecopier: 415/765-1555 July 17, 2002 Stone&Youngberg LLC 15260 Ventura Boulevard, Suite 1520 Sherman Oaks, CA 91403 RELIANCE LETTER Regarding Final Approving Legal Opinion: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A Ladies and Gentlemen: We have this day released to the City of Huntington Beach our final approving legal opinion with respect to the captioned financing. The foregoing opinion may be relied upon by Stone& Youngberg LLC, as underwriter, to the same extent as if such opinion were addressed to it. Respectfully submitted, UIUt & ThimmiQgLLr One Embarcadero Center,Suite 2420 San Francisco, CA 94111 Telephone: 415/765-1550 Attorneys at Law Telecopier: 415/765-1555 July 17, 2002 BNY Western Trust Company 700 South Flower Street, Suite 500 Los Angeles, California 90017 RELIANCE LETTER Regarding Final Approving Legal Opinion: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A Ladies and Gentlemen: We have this day released to the City of Huntington Beach our final approving legal opinion with respect to the captioned financing. The foregoing opinion may be relied upon by BNY Western Trust Company, as fiscal agent, to the same extent as if such opinion were addressed to it. Respectfully submitted, uint & ThimmiQgLLr One Embarcadero Center,Suite 2420 San Francisco,CA 94111 Telephone:415/765-1550 Attorneys at Law Telecopier:415/765-1555 July 17,2002 City of Huntington Beach 2900 Main Street Huntington Beach,California 92648 Stone &Youngberg LLC 15260 Ventura Boulevard,Suite 1520 Sherman Oaks,CA 91403 Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds,Series 2002-A Dear Ladies and Gentlemen: We have acted as Disclosure Counsel in connection with the Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park), (the "Improvement Area") Special Tax Bonds, Series 2002-A, in the aggregate principal amount of $4,900,000 (the "Bonds"), sold by the City pursuant to the Purchase Contract dated June 27, 2002 (the "Purchase Contract") between the City of Huntington Beach (the "City") and Stone & Youngberg LLC. The Bonds are issued pursuant to the Fiscal Agent Agreement, dated as June 1, 2002 (the "Fiscal Agent Agreement") between the City and BNY Western Trust Company, as fiscal agent (the "Fiscal Agent"). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Contract. In that connection, we have reviewed the Fiscal Agent Agreement, we have reviewed and have participated in the drafting of the Official Statement of the City, dated June 27, 2002 with respect to the Bonds (the "Official Statement"), and the Purchase Contract, and we have reviewed certificates of the City, the Fiscal Agent, the Developer and others, the opinions referred to in Section 8 of the Purchase Contract and such other records, opinions and documents, and we have made such investigations of law, as we have deemed appropriate as a basis for the conclusions hereinafter expressed. In arriving at the conclusions 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, certificates and opinions referred to above (including the accuracy of all factual matters represented and legal conclusions contained therein, including (without limitation) representations and legal conclusions regarding the due authorization, issuance, delivery, validity and enforceability of the Bonds and the exclusion of interest thereon from gross income for federal income tax purposes). We have assumed that all records, documents, certificates and opinions that we have reviewed, and the signatures thereto, are genuine. 08003.07:16299 City of Huntington Beach Stone &Youngberg LLC July 17,2002 Page 2 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. However, in our capacity as Disclosure Counsel, we met in conferences with representatives of the City, the City's special tax consultant, the Developer, the Underwriter and others, during which conferences the contents of the Official Statement and related matters were discussed. Based on our participation in the above-mentioned conferences, and in reliance thereon and on the records, documents, certificates and opinions herein mentioned (as set forth above), we advise you that, during the course of our assistance in the preparation of the Official Statement for this matter, no information came to the attention of the attorney in our firm rendering legal services in connection with such representation which caused us to believe that the Official Statement as of its date and as of the date of this opinion (except for any financial, statistical or engineering data or forecasts, numbers, charts, estimates, projections, assumptions, or expressions of opinion, any information about valuation, appraisals or environmental matters, or the Appendices, or any information about book-entry or DTC included therein, 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 required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made,not misleading. We are furnishing this letter to you pursuant to Section 8(c)(iii) of the Purchase Contract solely for your benefit. 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 owners of Bonds. Very truly yours,