NEW ISSUE – BOOK-ENTRY ONLY NOT RATED

In the opinion of Best Best & Krieger LLP, Riverside, California, Bond Counsel, subject to certain qualifications described herein, under existing statutes, regulations, rules and court decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, 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, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See “LEGAL MATTERS - Tax Exemption.” $3,170,000 COMMUNITY FACILITIES DISTRICT NO. 4 OF THE JURUPA UNIFIED SCHOOL DISTRICT COUNTY OF RIVERSIDE, STATE OF CALIFORNIA 2005 SPECIAL TAX BONDS (ZONE 2) Dated: Date of Delivery Due: September 1, as shown on inside cover Authority for Issuance. The bonds captioned above (the “Bonds”) are being issued under the Mello-Roos Community Facilities Act of 1982 (the “Act”) and a Fiscal Agent Agreement, dated as of December 1, 2005, by and between the Jurupa Unified School District (the “School District”), for and on behalf of Community Facilities District No. 4 of the Jurupa Unified School District, County of Riverside, State of California (the “Community Facilities District”), and U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”). The Board of Education (the “Board”) of the School District, acting as legislative body of the Community Facilities District, and the eligible landowner voters in the Community Facilities District, have authorized the issuance of bonds in an aggregate principal amount not to exceed $6,250,000. See “THE BONDS – Authority for Issuance.” Security and Sources of Payment. The Bonds are payable from Net Special Tax Revenue (as defined herein) levied on property within the Community Facilities District according to the rate and method of apportionment of special tax approved by the Board and the eligible landowner voters in the Community Facilities District. The Bonds are secured by a first pledge of all revenues derived from the Net Special Tax Revenue and the moneys deposited in certain funds held by the Fiscal Agent under the Fiscal Agent Agreement. See “SECURITY FOR THE BONDS.” Additional Bonds. The Bonds are the first series of bonds to be issued under the voter-approved bond authorization for the Community Facilities District; the Fiscal Agent Agreement authorizes the issuance of additional bonds on a parity with the Bonds, subject to certain conditions. See “THE BONDS –Issuance of Parity Bonds.” Use of Proceeds. The Bonds are being issued to (i) finance the acquisition and construction of certain school facilities and improvements to be owned and operated by the School District of benefit to the property in the Community Facilities District, (ii) finance recreation and park improvements with respect to the property in the Community Facilities District to be used by Jurupa Area Recreation and Park District, (iii) fund a reserve fund for the Bonds, (iv) fund capitalized interest on the Bonds through September 1, 2006, (v) pay certain administrative expenses of the Community Facilities District, and (vi) pay the costs of issuing the Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” and “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE BONDS.” Bond Terms. Interest on the Bonds is payable on March 1, 2006 and semiannually thereafter on each March 1 and September 1. The Bonds will be issued in denominations of $5,000 or integral multiples of $5,000. The Bonds, when delivered, will be initially registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Bonds. See “THE BONDS – General Bond Terms” and “APPENDIX E – DTC and the Book-Entry Only System.” Redemption. The Bonds are subject to optional redemption, mandatory redemption from Special Tax prepayments, and mandatory sinking fund redemption before maturity. See “THE BONDS – Redemption.” THE BONDS, THE INTEREST THEREON, AND ANY PREMIUMS PAYABLE ON THE REDEMPTION OF ANY OF THE BONDS, ARE NOT AN INDEBTEDNESS OF THE SCHOOL DISTRICT, THE STATE OF CALIFORNIA (THE “STATE”) OR ANY OF ITS POLITICAL SUBDIVISIONS, AND NEITHER THE SCHOOL DISTRICT, (EXCEPT TO THE LIMITED EXTENT DESCRIBED IN THIS OFFICIAL STATEMENT), THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS IS LIABLE ON THE BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE SCHOOL DISTRICT (EXCEPT TO THE LIMITED EXTENT DESCRIBED IN THIS OFFICIAL STATEMENT) OR THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. OTHER THAN THE SPECIAL TAXES, NO TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT A GENERAL OBLIGATION OF THE SCHOOL DISTRICT, BUT ARE LIMITED OBLIGATIONS OF THE SCHOOL DISTRICT PAYABLE SOLELY FROM THE SPECIAL TAXES AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT. MATURITY SCHEDULE (see inside cover) This cover page contains certain information for quick reference only. It is not a summary of the issue. Potential investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Investment in the Bonds involves risks which may not be appropriate for some investors. See “BONDOWNERS' RISKS” for a discussion of special risk factors that should be considered in evaluating the investment quality of the Bonds. The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Best Best & Krieger LLP, Riverside, California, Bond Counsel, and subject to certain other conditions. Jones Hall, A Professional Law Corporation, San Francisco, California is acting as counsel to the Underwriter. Certain legal matters will be passed on for the School District and the Community Facilities District by Best Best & Krieger LLP, special counsel. It is anticipated that the Bonds, in book-entry form, will be available for delivery on or about December 21, 2005.

The date of this Official Statement is: December 13, 2005 MATURITY SCHEDULE

$1,080,000 Serial Bonds (Base CUSIP†: 482128)

Maturity Principal Interest (September 1) Amount Rate Yield Price CUSIP† 2007 $ 50,000 3.600% 3.600% 100.000% BN 4 2008 55,000 3.850 3.850 100.000 BP 9 2009 55,000 4.050 4.050 100.000 BQ 7 2010 60,000 4.250 4.250 100.000 BR 5 2011 60,000 4.450 4.450 100.000 BS 3 2012 65,000 4.600 4.600 100.000 BT 1 2013 65,000 4.750 4.750 100.000 BU 8 2014 70,000 4.850 4.850 100.000 BV 6 2015 75,000 4.950 4.950 100.000 BW 4 2016 75,000 5.050 5.050 100.000 BX 2 2017 80,000 5.100 5.100 100.000 BY 0 2018 85,000 5.150 5.150 100.000 BZ 7 2019 90,000 5.200 5.200 100.000 CA 1 2020 95,000 5.250 5.250 100.000 CB 9 2021 100,000 5.300 5.300 100.000 CC 7

$450,000 5.350% Term Bond due September 1, 2025, Price: 100.000% CUSIP† No. CD 5

$1,640,000 5.450% Term Bond due September 1, 2035, Price: 100.000% CUSIP† No. CE 3

† Copyright 2005, American Bankers Association. CUSIP data herein are provided by Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc., and are provided for convenience of reference only. Neither the Community Facilities District, the School District nor the Underwriter assumes any responsibility for the accuracy of these CUSIP data. GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT

No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized.

No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the School District, the Community Facilities District, any other parties described in this Official Statement, or in the condition of property within the Community Facilities District since the date of this Official Statement.

Use of this Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the Bonds.

Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.

The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

Document References and Summaries. All references to and summaries of the Fiscal Agent Agreement or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents.

Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter.

Bonds are Exempt from Securities Laws Registration. The issuance and sale of the Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.

Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD- LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMMUNITY FACILITIES DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR. JURUPA UNIFIED SCHOOL DISTRICT

BOARD OF EDUCATION

Carl Harris, President Michael Rodriguez, Clerk John Chavez, Member Sam Knight, Member Mary Burns, Member

SCHOOL DISTRICT STAFF

Elliott Duchon, Superintendent Pam Lauzon, Business Manager

BOND COUNSEL/DISTRICT SPECIAL COUNSEL

Best Best & Krieger LLP Riverside, California

APPRAISER

Bruce W. Hull & Associates, Inc. Ventura, California

SPECIAL TAX CONSULTANT and CFD ADMINISTRATOR

David Taussig & Associates, Inc. Newport Beach, California

FISCAL AGENT

U.S. Bank National Association Los Angeles, California Jurupa Unified School District {Riverside County, California)

REGIONAL LOCATION MAP

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Bruce W. Hull & Associates, Inc. Aerial Photo – Air Views – 10/25/05 TABLE OF CONTENTS

Page Page INTRODUCTION 1 Estimated Tax Burden on Single Family Home 35 ESTIMATED SOURCES AND USES PROPERTY OWNERSHIP AND PROPOSED OF FUNDS 5 DEVELOPMENT 36 FACILITIES TO BE FINANCED WITH The Developer and Griffin 36 PROCEEDS OF THE BONDS 6 CRV Jurupa (Zone 1) 37 Facilities 6 Environmental Conditions 38 Zone 2 Mitigation Agreement 6 Proposed Development of Zone 2 39 Park District JCFA 7 BOND OWNERS' RISKS 42 THE BONDS 8 Limited Obligation Of the Community Facilities General Bond Terms 8 District to Pay Debt Service 42 Authority for Issuance 8 Levy and Collection of the Special Tax 42 Debt Service Schedule 10 Payment of Special Tax is not a Personal Redemption 11 Obligation of the Property Owner 43 Issuance of Parity Bonds 12 Appraised Values 43 Registration, Transfer and Exchange 14 Property Values and Property Development 44 SECURITY FOR THE BONDS 15 Concentration of Property Ownership 46 Pledge of Revenues and Funds 15 Other Possible Claims Upon the Value of Special Taxes 15 Taxable Property 46 Rate and Method 16 Exempt Properties 47 Covenant to Foreclose 20 Depletion of Reserve Fund 47 Special Tax Fund 22 Bankruptcy and Foreclosure Delays 48 Bond Fund 23 Disclosure to Future Purchasers 50 Reserve Fund 25 No Acceleration Provisions 51 THE SCHOOL DISTRICT 26 Loss of Tax Exemption 51 General Information 26 Voter Initiatives 51 Administration and Enrollment 26 LEGAL MATTERS 52 THE COMMUNITY FACILITIES DISTRICT 28 Legal Opinions 52 General 28 Tax Exemption 52 Estimated Maximum Special Tax Proceeds No Litigation 53 and Debt Service Coverage 29 CONTINUING DISCLOSURE 53 Appraised Value of Zone 2 Property 29 NO RATINGS 54 Appraised Value to Burden Ratio 31 UNDERWRITING 54 Direct and Overlapping Governmental PROFESSIONAL FEES 55 Obligations 32

APPENDIX A – General Information About the City of Riverside and Riverside County APPENDIX B – Rate and Method of Apportionment for Community Facilities District No. 4 of the Jurupa Unified School District APPENDIX C – Summary Appraisal Report APPENDIX D – Summary of Fiscal Agent Agreement APPENDIX E – DTC and the Book-Entry Only System APPENDIX F – Form of Issuer Continuing Disclosure Certificate APPENDIX G – Form of Property Owner Disclosure Certificate APPENDIX H – Form of Opinion of Bond Counsel APPENDIX I – Community Facilities District Boundary Map

(This Page Intentionally Left Blank) OFFICIAL STATEMENT

$3,170,000 COMMUNITY FACILITIES DISTRICT NO. 4 OF THE JURUPA UNIFIED SCHOOL DISTRICT COUNTY OF RIVERSIDE, STATE OF CALIFORNIA 2005 SPECIAL TAX BONDS (ZONE 2)

INTRODUCTION

This Official Statement, including the cover page and attached appendices, is provided to furnish information regarding the bonds captioned above (the “Bonds”) to be issued by the Jurupa Unified School District (the "School District"), for and on behalf of Community Facilities District No. 4 of the Jurupa Unified School District, County of Riverside, State of California (the “Community Facilities District”).

This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and attached appendices, and the documents summarized or described in this Official Statement. A full review should be made of the entire Official Statement. The offering of the Bonds to potential investors is made only by means of the entire Official Statement.

Capitalized terms used but not defined in this Official Statement have the definitions given in the Fiscal Agent Agreement (as defined below).

The School District. The School District is located in the western portion of Riverside County (“the County”), encompassing the unincorporated communities of Mira Loma, Sky Country, Glen Avon, Sunnyslope, Indian Hills, Jurupa Hills, Pedley and Rubidoux, and is in the vicinity of the City of Riverside. The School District currently has 21,028 students enrolled for Fiscal Year 2005-06. See "THE SCHOOL DISTRICT.”

Property Ownership. The current owners of the taxable property within the Community Facilities District are the following (collectively, the “Property Owners”):

• Jurupa Hills 80, LP, a California limited partnership (the “Developer”), which is a single-asset entity whose general partner is Griffin Communities, a California corporation (“Griffin”). The Developer owns and is developing the property within Zone 2 of the Community Facilities District, as further described below.

• CRV Jurupa 50 L.P., a California limited partnership (“CRV Jurupa.”) CRV Jurupa owns the property within Zone 1 of the Community Facilities District, which is currently undeveloped, as further described below.

The Developer is in the process of developing the property in Zone 2 of the Community Facilities District as 80 detached single-family homes. For detailed information about the Property Owners, and the Developer’s proposed development plans for the property in Zone 2 of the Community Facilities District, see “PROPERTY OWNERSHIP AND PROPOSED DEVELOPMENT.”

1 Zone 2 and Zone 1. The Community Facilities District is made up of two non- contiguous zones, Zone 2 (which is being developed as 80 single-family homes by the Developer) and Zone 1, which is owned by CRV Jurupa and is currently vacant land and not subject to active development. See “THE COMMUNITY FACILITIES DISTRICT.”

Although the Special Taxes constitute a lien on both Zone 1 and Zone 2, the Bonds will be sized based on the levy of the Assigned Annual Special Tax and the Maximum Special Tax on the Zone 2 property only. Until it is reclassified under the Rate and Method, the Zone 1 property will be subject to the levy of Special Taxes as Undeveloped Property under “Step 2” of the method of apportionment set forth in the Rate and Method. See “SECURITY FOR THE BONDS – Rate and Method.”

Potential investors in the Bonds should assume that Special Taxes will not be levied on the Zone 1 property, and that the debt service on the Bonds will be paid entirely from the Special Taxes levied on the Zone 2 property. The Rate and Method is structured to produce Net Special Tax Revenues from the Assigned Annual Special Tax and the Maximum Special Tax levied on Zone 2 which, when applied to the projected debt service on the Bonds, is anticipated to result in a debt service coverage ratio of 115% for the life of the Bonds. See “THE COMMUNITY FACILITIES DISTRICT.”

The Community Facilities District. The Community Facilities District was formed and established by the School District under the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), following a public hearing conducted by the Board of Education of the School District (the “Board”), as legislative body of the Community Facilities District, and a landowner election at which the qualified electors of the Community Facilities District authorized the Community Facilities District to incur bonded indebtedness and approved the levy of special taxes.

The Community Facilities District was also formed pursuant to the following agreements:

• a School Facilities Mitigation Agreement with respect to the Zone 2 property dated as of March 7, 2005, by and between the School District and the Developer (the “Zone 2 Mitigation Agreement”), and

• a School Facilities Mitigation Agreement with respect to the Zone 1 property dated as of March 7, 2005, by and between the School District and CRV Jurupa (the “Zone 1 Mitigation Agreement”), and

• a Joint Community Facilities Agreement dated as of April 1, 2005 (the “JCFA”), by and among the School District, Jurupa Area Recreation and Park District (the “Park District”), and the Property Owners.

See “FACILITIES TO BE FINANCED WITH THE PROCEEDS OF THE BONDS.”

Authority for Issuance of the Bonds. The Bonds are issued under the Act, certain resolutions adopted by the Board and a Fiscal Agent Agreement, dated as of December 1, 2005 (the “Fiscal Agent Agreement”), by and between the Community Facilities District and U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”). See “THE BONDS – Authority for Issuance.”

2 Purpose of the Bonds. Proceeds of the Bonds will be used primarily to (i) finance the acquisition and construction of certain school facilities and improvements to be owned and operated by the School District in satisfaction of the obligation of the Property Owner to pay school facilities fees under the Mitigation Agreement, and (ii) finance recreation and park improvements with respect to the property in the Community Facilities District to be used by the Park District.

Bond proceeds will also fund a reserve fund for the Bonds, fund capitalized interest on the Bonds through September 1, 2006, pay certain administrative expenses of the Community Facilities District, and pay the costs of issuing the Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” and “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE BONDS.”

Security and Sources of Payment for the Bonds. The Bonds are secured by and payable from a first pledge of the net proceeds of the special taxes levied on the property in the Community Facilities District (the “Net Special Tax Revenue”) in accordance with the Rate and Method of Apportionment for Community Facilities District No. 4 of the Jurupa Unified School District (the “Rate and Method”). The Bonds will be additionally secured by all moneys deposited in the Bond Fund, in the Reserve Fund and in the Special Tax Fund. See “SECURITY FOR THE BONDS.”

The School District has covenanted in the Fiscal Agent Agreement to cause foreclosure proceedings to be commenced and prosecuted against parcels with delinquent installments of the Special Tax under certain circumstances. For a more detailed description of the foreclosure covenant see “SECURITY FOR THE BONDS - Covenant to Foreclose.”

Appraisal. An appraisal of the property within Zone 2 of the Community Facilities District dated October 31, 2005 (the “Appraisal”), was prepared by Bruce W. Hull & Associates, Inc. of Ventura, California (the “Appraiser”), in connection with issuance of the Bonds. The purpose of the appraisal was to ascertain the market value of the fee simple estate for the taxable property in the Community Facilities District as of a October 15, 2005, date of value. Subject to the assumptions contained in the Appraisal, the Appraiser estimated that the fee simple interest in the property within Zone 2 of the Community Facilities District, subject to the lien of the Special Taxes, had an estimated aggregate value of $19,110,000. See “THE COMMUNITY FACILITIES DISTRICT – Appraised Property Value” and “APPENDIX C – Summary Appraisal Report” for further information on the Appraisal.

Risk Factors Associated with Purchasing the Bonds. Investment in the Bonds involves risks that may not be appropriate for some investors. See “BOND OWNERS' RISKS” for a discussion of certain risk factors which should be considered, in addition to the other matters set forth in this Official Statement, in considering the investment quality of the Bonds.

Professionals Involved in the Offering. The following professionals are participating in this financing:

• U.S. Bank National Association, Los Angeles, California, will serve as the fiscal agent, paying agent, registrar, authentication and transfer agent for the Bonds and will perform the functions required of it under the Fiscal Agent Agreement.

• Best Best & Krieger LLP, Riverside, California, is serving as Bond Counsel to the Community Facilities District and as special counsel to the Community Facilities District and the School District.

3 • Jones Hall, A Professional Law Corporation, San Francisco, California, is acting as counsel to the Underwriter.

• The appraisal work was done by Bruce W. Hull & Associates, Inc. of Ventura, California.

• David Taussig & Associates, Inc., of Newport Beach, California, acted as special tax consultant to the Community Facilities District and will act as administrator to the Community Facilities District and dissemination agent for the Community Facilities District under the Issuer Continuing Disclosure Certificate described below.

4 ESTIMATED SOURCES AND USES OF FUNDS

The proceeds from the sale of the Bonds will be deposited into the following funds established by the Community Facilities District under the Fiscal Agent Agreement:

SOURCES Principal Amount of Bonds $3,170,000.00 Less: Underwriter's Discount (95,100.00) Total Sources $3,074,900.00

USES Deposit into Reserve Fund [1] $ 219,380.00 Deposit into Capitalized Interest Subaccount of Bond Fund [2] 114,734.38 Deposit into Costs of Issuance Fund [3] 124,338.00 Deposit into Improvement Fund School Facilities Account [4] 1,356,652.62 Non-School Facilities Account [5] 1,229,795.00 Deposit into Administrative Expense Fund 30,000.00 Total Uses $3,074,900.00

[1] Equal to the Reserve Requirement with respect to the Bonds as of their date of delivery. [2] Represents interest on the Bonds through September 1, 2006, to be deposited in the Capitalized Interest Subaccount. [3] Includes, among other things, printing costs, costs of reproducing and binding documents, including but not limited to the final official statement, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent including its first annual administration fee and the fees of its counsel, expenses incurred by the School District in connection with the issuance of the Bonds and the establishment of the Community Facilities District, legal fees and charges, including the fees of Bond Counsel, and Dissemination Agent fees and charges. [4] Will be used to pay the costs of School Facilities, as defined below. See “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE BONDS” below. [5] Will be used to pay the costs of Park Facilities, as defined below. See “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE BONDS” below.

5 FACILITIES TO BE FINANCED WITH PROCEEDS OF THE BONDS

Facilities

Under the Resolution of Intention adopted by the Community Facilities District on March 7, 2005, the Community Facilities District is authorized to finance School Facilities and Park Facilities, as defined and described below (collectively, the “Facilities”):

School Facilities. “School Facilities” include facilities needed by the School District to serve the student population to be generated as a result of development of the property within the Community Facilities District, together with the acquisition of land, rights-of-way and easement necessary for the School Facilities, and streets, public roadways, sidewalks, curbs, gutters and appurtenant facilities. The School Facilities will be owned and operated by the School District.

The School Facilities will be funded with a portion of the proceeds of the Bonds as payment of the Property Owner’s obligations to pay school fees under the Zone 2 Mitigation Agreement (described below). The Bonds are anticipated to provide $1,356,653 for School Facilities, representing all of the Property Owner’s required school mitigation fees under the Mitigation Agreement.

Any school fees previously paid by the Developer with respect to the property in Zone 2 of the Community Facilities District in order to obtain certificates of compliance necessary to pull building permits will be reimbursed using a portion of the proceeds of the Bonds.

Park Facilities. “Park Facilities” mean public park and recreation improvements included in the Park District’s recreation and park fee program. The costs of the Park Facilities are attributable to the proposed development of the property in the Community Facilities District and will be used to construct Park Facilities to be owned and maintained by the Park District.

The proceeds of the Bonds are anticipated to provide approximately $1,229,795 for Park Facilities, which is anticipated to represent all of the Property Owners’ obligations to pay Park Facilities costs. Each Property Owner will remain responsible to pay any Park Facilities costs not funded with the proceeds of the Bonds.

Any costs of Park Facilities previously paid by the Developer with respect to the property in Zone 2 of the Community Facilities District in order to obtain certificates of compliance necessary to pull building permits will be reimbursed using a portion of the proceeds of the Bonds.

Zone 2 Mitigation Agreement

General. The Zone 2 Mitigation Agreement sets forth mitigation obligations with respect to the property in Zone 2 of the Community Facilities District, and establishes a means for financing the Developer’s obligation to pay certain school impact fees that must be paid as a precondition to the development of the property in Zone 2 of the Community Facilities District. The landowner obligations under the Zone 2 Mitigation Agreement are binding on any successor owners of the real property in Zone 2.

6 Under the Zone 2 Mitigation Agreement, the Property Owner is required to advance funds to the School District to finance the costs relating to formation of the Community Facilities District. All property owner advances expended by the School District will be repaid from the proceeds of the Bonds (but only with the proceeds of the Bonds).

This section contains only a brief summary of the Zone 2 Mitigation Agreement. Potential purchasers of the Bonds are encouraged to review the entire Zone 2 Mitigation Agreement, which is available from the School District.

School Fee Requirement. Under the Zone 2 Mitigation Agreement the school impact fee amount (the “Agreed Amount”) is set at the greater of (a) $4.43 per square foot of assessable space, or (b) the statutory fees authorized to be collected by the School District under California Education Code Section 17620 et seq. and California Government Code Section 65995 et seq.

Full Mitigation. The Zone 2 Mitigation Agreement provides that the execution of the Zone 2 Mitigation Agreement and the levy of the Special Taxes and issuance of the Bonds will provide complete mitigation of the impacts of the proposed residential development within the Community Facilities District on School District facilities.

Under the Zone 2 Mitigation Agreement, the School District may not, without the Developer’s consent, impose (or request that the County impose) any fee, charge, tax, dedication or other form of requirement against the property in the Community Facilities District as a condition to the issuance of any certificate of compliance by the School District or for any other reason, provided that the Developer is fulfilling its obligations under the Zone 2 Mitigation Agreement.

Park District JCFA

The JCFA sets forth conditions and procedures for the payment of the costs of Park Facilities with a portion of the proceeds of the Bonds. The JCFA provides that the Property Owners will remain obligated to pay any Park Facilities costs not paid with the proceeds of the Bonds.

7 THE BONDS

General Bond Terms

Dated Date, Maturity and Authorized Denominations. The Bonds will be dated their date of delivery and will mature in the amounts and on the dates set forth on the cover page of this Official Statement. The Bonds will be issued in fully registered form in denominations of $5,000 each or any integral multiple of $5,000.

Interest. The Bonds will bear interest at the annual rates set forth on the inside cover page of this Official Statement, payable semiannually on each March 1 and September 1, commencing March 1, 2006 (each, an “Interest Payment Date”). Interest will be calculated on the basis of a 360-day year composed of twelve 30-day months.

DTC and Book-Entry Only System. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered initially in the name of Cede & Co. (DTC’s partnership nominee). Ultimate purchasers of Bonds will not receive physical certificates representing their interest in the Bonds. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, references in this Official Statement to the “owners” mean Cede & Co., and not the purchasers or Beneficial Owners of the Bonds. See “APPENDIX E – DTC and the Book-Entry Only System.”

Payments of Interest and Principal. For so long as DTC is used as depository for the Bonds, principal, premium, if any, and interest payments on the Bonds will be made solely to DTC or its nominee, Cede & Co., as registered owner of the Bonds, for distribution to the beneficial owners of the Bonds in accordance with the procedures adopted by DTC.

Interest on the Bonds is payable by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payment Date, to the registered Owner thereof at such registered Owner’s address as it appears on the registration books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date.

The principal of the Bonds and any premium on the Bonds are payable in lawful money of the United States of America by check of the Fiscal Agent upon surrender of such Bonds at the Principal Office of the Fiscal Agent.

However, at the written request of the Owner of at least $1,000,000 in aggregate principal amount of Outstanding Bonds filed with the Fiscal Agent prior to any Record Date, interest on such Bonds will be paid to such Owner on each succeeding Interest Payment Date by wire transfer of immediately available funds to an account in the United States of America designated in such written request.

Authority for Issuance

Community Facilities District Proceedings. The Bonds are issued pursuant to the Act and the Fiscal Agent Agreement. In addition, as required by the Act, the Board of the School District has taken the following actions with respect to establishing the Community Facilities District and authorizing issuance of the Bonds:

8 Resolutions of Intention: On March 7, 2005, the Board adopted Resolution No. 2005/29 stating its intention to establish the Community Facilities District and to authorize the levy of a special tax therein. On the same day the Board adopted Resolution No. 2005/30 stating its intention to incur bonded indebtedness in an amount not to exceed $6,250,000 in the aggregate within the Community Facilities District for the purpose of financing the Facilities. (See "FACILITIES TO BE FINANCED WITH PROCEEDS OF THE BONDS.")

Resolution Approving Joint Community Facilities Agreement: On April 18, 2005, the Board adopted Resolution No. 2005/40, which approved the JCFA.

Resolution of Formation: Immediately following a noticed public hearing on April 18, 2005, the Board adopted Resolution No. 2005/36 (the "Resolution of Formation"), which established the Community Facilities District and authorized the levy of a special tax within the Community Facilities District.

Resolution of Necessity: On April 18, 2005, the Board adopted Resolution No. 2005/37 declaring the necessity to incur bonded indebtedness in an aggregate amount not to exceed $6,250,000 within the Community Facilities District and submitting that proposition to the qualified electors of the Community Facilities District.

Resolution Calling Election: On April 18, 2005, the Board adopted Resolution No. 2005/38 calling an election by the landowners within the Community Facilities District for the same date on the issues of the levy of the Special Tax, the incurring of bonded indebtedness and the establishment of an appropriations limit.

Landowner Election and Declaration of Results: On April 18, 2005, an election was held within the Community Facilities District in which the qualified electors approved a ballot proposition authorizing the issuance of up to $6,250,000 in bonds to finance the acquisition and construction of the Facilities, the levy of a special tax and the establishment of an appropriations limit for the Community Facilities District. On May 2, 2005, the Board adopted Resolution No. 2005/39, under which the Board approved the canvass of the votes and declared the Community Facilities District to be fully formed with the authority to levy the Special Taxes, to incur the bonded indebtedness and to have the established appropriations limit.

Notice of Special Tax Lien: A Notice of Special Tax Lien was recorded in the real property records of Riverside County on May 12, 2005.

Ordinance Levying Special Taxes: On June 16, 2005, the Board adopted Ordinance No. 2005/01 levying the Special Tax within the Community Facilities District.

Resolution Authorizing Issuance of the Bonds: On December 5, 2005, the Board adopted a resolution approving issuance of the Bonds for the Community Facilities District in an amount not to exceed $3,750,000.

School District’s Goals and Policies. The School District adopted “Local Agency Goals and Policies for Community Facilities Districts” on March 4, 2002 (the “Goals and Policies”).

9 The Goals and Policies establish an order of priority for financing by community facilities districts and certain credit quality requirements for bonds issued by community facilities districts, namely a 3:1 property value to public debt ratio (public debt is defined as community facilities district bonds and other bonds secured by special taxes or special assessments). Property value may be based on an appraisal or on assessed values.

The School District has determined that issuance of the Bonds conforms with the School District’s Goals and Policies.

Debt Service Schedule

The following table presents the annual Debt Service on the Bonds (including sinking fund redemptions), assuming there are no optional redemptions.

Year Ending Total September 1 Principal Interest [1] Debt Service 2006 $114,734.38 $114,734.38 2007 $50,000 165,217.50 215,217.50 2008 55,000 163,417.50 218,417.50 2009 55,000 161,300.00 216,300.00 2010 60,000 159,072.50 219,072.50 2011 60,000 156,522.50 216,522.50 2012 65,000 153,852.50 218,852.50 2013 65,000 150,862.50 215,862.50 2014 70,000 147,775.00 217,775.00 2015 75,000 144,380.00 219,380.00 2016 75,000 140,667.50 215,667.50 2017 80,000 136,880.00 216,880.00 2018 85,000 132,800.00 217,800.00 2019 90,000 128,422.50 218,422.50 2020 95,000 123,742.50 218,742.50 2021 100,000 118,755.00 218,755.00 2022 105,000 113,455.00 218,455.00 2023 110,000 107,837.50 217,837.50 2024 115,000 101,952.50 216,952.50 2025 120,000 95,800.00 215,800.00 2026 130,000 89,380.00 219,380.00 2027 135,000 82,295.00 217,295.00 2028 140,000 74,937.50 214,937.50 2029 150,000 67,307.50 217,307.50 2030 160,000 59,132.50 219,132.50 2031 165,000 50,412.50 215,412.50 2032 175,000 41,420.00 216,420.00 2033 185,000 31,882.50 216,882.50 2034 195,000 21,800.00 216,800.00 2035 205,000 11,172.50 216,172.50 Total: $3,170,000 $3,247,186.88 $6,417,186.88

[1] The interest that will accrue through September 1, 2006, will be capitalized with the proceeds of the Bonds.

10 Redemption

Optional Redemption. The Bonds are subject to optional call and redemption prior to maturity, as a whole or in part, pro rata among maturities and by lot within a maturity, on any Interest Payment Date on or after September 1, 2006, from funds derived by the Community Facilities District from any source, including prepayment of the Special Tax deposited in the Special Tax Prepayments Subaccount (as defined in the Fiscal Agent 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 Redemption Date Price September 1, 2006 through March 1, 2015 102% September 1, 2015 and any Interest Payment Date thereafter 100%

Mandatory Sinking Payment Redemption. The Outstanding Bonds maturing on September 1, 2025 and September 1, 2035 , are subject to mandatory sinking fund redemption, in part, on the respective dates set forth below, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, and from sinking payments as follows:

2025 Term Bonds Sinking Fund Redemption Date (September 1) Sinking Payments 2022 $105,000 2023 110,000 2024 115,000 2025 (maturity) 120,000

2035 Term Bonds Sinking Fund Redemption Date (September 1) Sinking Payments 2026 $130,000 2027 135,000 2028 140,000 2029 150,000 2030 160,000 2031 165,000 2032 175,000 2033 185,000 2034 195,000 2035 (maturity) 205,000

The amounts set forth above will be reduced by the School District pro rata among redemption dates, in order to maintain substantially level Debt Service, as a result of any prior or partial redemption of the Bonds through optional redemption as described above.

11 Purchase In Lieu of Redemption. In lieu of payment at maturity or redemption under the Fiscal Agent Agreement, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer’s Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer’s Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase.

Notice of Redemption. The Fiscal Agent will cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days prior to the date fixed for redemption, to the Securities Depositories and to one or more Information Services selected by an Authorized Officer, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the registration books for the Bonds maintained by the Fiscal Agent at its Principal Office; but such mailing will not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, will not affect the validity of the proceedings for the redemption of the Bonds.

Selection of Bonds for Redemption. If less than all the Bonds Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed will be in the principal amount of $5,000 or a multiple thereof, and, in selecting portions of such Bonds for redemption, the Fiscal Agent will treat each such Bond as representing the number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Bond to be redeemed in part by $5,000.

Whenever provision is made in the Fiscal Agent Agreement for the redemption of less than all of the Bonds of a maturity or any given portion thereof, the Fiscal Agent will select the Bonds within a series of such maturity to be redeemed, from all Bonds of such maturity or such given portion thereof not previously called for redemption, by lot within a maturity in any manner that the Fiscal Agent in its sole discretion deems appropriate.

Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption are deposited in the Bond Fund, such Bonds will cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and interest will cease to accrue on the Bonds to be redeemed on the redemption date specified in the notice of redemption.

Issuance of Parity Bonds

General. The School District may at any time after the issuance and delivery of the Bonds issue Parity Bonds in one or more series payable from Net Special Tax Revenue and other amounts deposited in the funds and accounts created under the Fiscal Agent Agreement (other than in the Project Fund, the Rebate Fund and the Administrative Expense Fund) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds previously issued under the Fiscal Agent Agreement or under any Supplemental Indenture.

However, Parity Bonds may only be used for the purpose of financing facilities authorized under the Resolution of Formation or refunding a portion of the Bonds or any Parity Bonds then outstanding.

12 Conditions for Issuance of Parity Bonds. Parity Bonds may be issued subject to the specific conditions set forth in the Fiscal Agent Agreement, which are conditions precedent to the issuance of any such Parity Bonds, and which include (among others) the following:

• The aggregate principal amount of the Bonds and all Parity Bonds issued may not exceed $6,250,000; provided, however, that Parity Bonds may be issued at any time to refund Outstanding Bonds where the issuance of such Parity Bonds results in a reduction of Annual Debt Service on all Outstanding Bonds.

• The payment of Special Taxes levied on all properties within the District and which are then owned by the Property Owners must be current.

• The School District must receive the following:

A. A certificate from one or more Special Tax Consultants which, when taken together, certify that

(i) the amount of the maximum Special Taxes that may be levied pursuant to the Rate and Method under the Act and the Fiscal Agent Agreement and ordinances of the School District in each remaining Bond Year based only on the existing taxable property existing as of the date of such certificate is at least 1.15 times Annual Debt Service for each remaining Bond Year on all then Outstanding Bonds and the Parity Bonds proposed to be issued, provided, however, there will be excluded from such calculation the Special Taxes on any parcel then delinquent in the payment of Special Taxes;

(ii) the maximum Special Tax that may be collected from Developed Property (as such term is defined in the Rate and Method) based on the expected final buildout within the Community Facilities District is expected to be at least 1.15 times Annual Debt Service for each remaining Bond Year; provided, however, that, for purposes of making these certifications, the Special Tax Consultant may rely on reports or certificates of such other persons as may be acceptable to the District, Bond Counsel and the underwriter of the proposed Parity Bonds;

B. Except in the case of the issuance of Parity Bonds to refund Outstanding Bonds, an Appraisal indicating that:

(i) the aggregate appraised value of all property within the District subject to the levy of the Special Tax is not less than 6 times the aggregate amount of

(a) the principal amount of all Outstanding Bonds and the Parity Bonds proposed to be issued and

(b) the principal amount of all other bonds secured by special taxes or fixed lien assessments levied on all property within the District subject to the levy of the Special Tax, and

(ii) the aggregate appraised value of all property within Zone 1 subject to the levy of Special Tax is not less than 3 times the aggregate amount of

13 (a) the principal amount of all Outstanding Bonds and the Parity Bonds proposed to be issued, and

(b) the principal amount of all other bonds secured by special taxes or fixed lien assessments levied on all property within Zone 1 subject to the levy of the Special Tax.

Registration, Transfer and Exchange

The following provisions regarding the exchange and transfer of the Bonds apply only during any period in which the Bonds are not subject to DTC’s book-entry system. While the Bonds are subject to DTC’s book-entry system, their exchange and transfer will be effected through DTC and the Participants and will be subject to the procedures, rules and requirements established by DTC. See “APPENDIX E – DTC and the Book-Entry Only System.”

Registration. The Fiscal Agent will keep, or cause to be kept, at its Principal Office sufficient books for the registration and transfer of the Bonds which books will show the series, number, CUSIP identification number, date of issuance, amount, rate of interest and Owner of each Bond and will at all times be open to inspection by the School District during regular business hours upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent will, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as provided in the Fiscal Agent Agreement.

Transfers of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept under the Fiscal Agent Agreement, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Principal Office of the Fiscal Agent, accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer will be paid by the School District. The Fiscal Agent will collect from the Owner requesting transfer of a Bond any tax or other governmental charge required to be paid with respect to such transfer.

Whenever any Bonds are surrendered for transfer, the School District will execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of like aggregate principal amount.

No transfers of Bonds will be required to be made (i) during the 15 days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption.

Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent only for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity and interest rate. The cost for any services rendered or any expense incurred by the Fiscal Agent in connection with any such exchange will be paid by the School District. The Fiscal Agent will collect from the Owner requesting exchange of a Bond any tax or other governmental charge required to be paid with respect to such exchange.

14 No exchanges of Bonds will be required to be made (i) during the 15 days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption.

SECURITY FOR THE BONDS

Pledge of Revenues and Funds

The Bonds will be secured by a pledge of and lien upon (which will be effected in the manner and to the extent provided in the Fiscal Agent Agreement) all of the Net Special Tax Revenue and all moneys deposited in the Bond Fund, Reserve Fund and Special Tax Fund.

The Bonds will be equally secured by a pledge of and lien upon the Net Special Tax Revenue and such moneys without priority for number, date of Bond, date of execution or date of delivery. The Net Special Tax Revenue and all moneys deposited into such accounts will be dedicated in their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided in the Fiscal Agent Agreement and in the Act, until all of the Bonds have been paid and retired or until moneys or Defeasance Securities have been set aside irrevocably for that purpose in accordance with the Fiscal Agent Agreement.

“Net Special Tax Revenue” is defined in the Fiscal Agent Agreement as the proceeds of the Net Special Taxes received by the School District, including any scheduled payments and prepayments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of processing of the lien of the Net Special Taxes in the amount of that lien and interest and penalties thereon.

“Net Special Taxes” are defined in the Fiscal Agent Agreement as the “Special Taxes” (the special taxes levied by the Board on parcels of taxable property within the Community Facilities District) less “Administrative Expenses” (as defined in the Fiscal Agent Agreement).

Special Taxes

Collection of Special Taxes. The School District will covenant in the Fiscal Agent Agreement to comply with all requirements of the Act, including the enactment of necessary Ordinances, so as to assure the timely collection of Special Taxes, including without limitation, the enforcement of the payment or collection of delinquent Special Taxes.

The School District will effect the levy of the Special Taxes each Fiscal Year in accordance with the Act by August 1 of each year (or such later date as may be authorized by the Act or any amendment thereof) that the Bonds are Outstanding, such that the computation of the levy and transmission of the amounts to the Auditor is complete before the final date on which the Auditor will accept the transmission of the Special Tax amounts for the parcels within the Community Facilities District.

However, the Board may elect, as permitted by the Act, to collect the Special Taxes to be levied for any Fiscal Year directly from the owners or lessees of the parcels of taxable property upon which the Special Taxes are levied rather than by transmitting the Special Taxes to the Auditor for collection on the tax roll; if such an election is made, the School District will otherwise comply with the provisions of Fiscal Agent Agreement regarding the collection of Special Taxes.

15 An Authorized Officer of the School District will fix and levy the amount of Special Taxes within the Community Facilities District required for the following:

• the payment of principal and of interest on any outstanding Bonds of the Community Facilities District becoming due and payable on the next Interest Payment Date,

• any necessary replenishment or expenditure of the Reserve Fund, and

• an amount estimated to be sufficient to pay the Administrative Expenses (including amounts necessary to discharge any obligation in connection with the federal tax covenants set forth in the Fiscal Agent Agreement) during such year, in each case taking into account the balances in such accounts, any transfer or expected transfer from the Reserve Fund to the Bond Fund under the Fiscal Agent Agreement, and any balance or expected balance in the Special Tax Fund available for such purpose. The Special Taxes so levied may not exceed the authorized amounts as provided in the proceedings under which the Community Facilities District was formed.

Manner of Collection. The Fiscal Agent Agreement provides that the Special Taxes will have the same priority and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on interests in real property.

Because the Special Tax levy is limited to the Maximum Special Tax rates set forth in the Rate and Method, no assurance can be given that, in the event of Special Tax delinquencies, the receipts of Special Taxes will, in fact, be collected in sufficient amounts in any given year to pay Debt Service on the Bonds.

Rate and Method

General. The Special Tax is levied and collected according to the Rate and Method, which provides the means by which the Board may annually levy the Special Taxes within the Community Facilities District, up to the Maximum Special Tax, and to determine the amount of the Special Tax that will need to be collected each Fiscal Year from the “Taxable Property” within the Community Facilities District.

The following is a synopsis of the provisions of the Rate and Method, which should be read in conjunction with the complete text of the Rate and Method, including its attachments, which is attached as APPENDIX B. The meaning of the defined terms used in this section are as set forth in APPENDIX B. This section provides only a summary of the Rate and Method, and is qualified by more complete and detailed information contained in the entire Rate and Method attached as APPENDIX B.

Minimum Annual Special Tax Requirement. Annually, at the time of levying the Special Tax for the Community Facilities District, the Board will determine the minimum amount of money to be levied on Taxable Property in the Community Facilities District (the “Minimum Annual Special Tax Requirement”), which will be the amount required in any Fiscal Year to pay the following:

• the debt service or the periodic costs on all outstanding Bonds,

16 • Administrative Expenses of the Community Facilities District (as further described in the Rate and Method),

• the costs associated with the release of funds from an escrow account, if any, and

• any amount required to establish or replenish any reserve funds established in association with the Bonds, less any amount available to pay debt service or other periodic costs on the Bonds under any applicable bond indenture, fiscal agent agreement or trust agreement.

Developed and Undeveloped Property; Exempt Property. All Assessor’s Parcels within the Community Facilities District will be (i) assigned to a zone (Zone 1 or Zone 2) in accordance with the Zone Map attached to the Rate and Method, (ii) classified for each Fiscal Year as Taxable Property or Exempt Property, and (iii) each Assessor’s Parcel of Taxable Property will be further classified as Developed Property or Undeveloped Property, all as defined below. In addition, Developed Property will be further classified based on the Building Square Footage of the applicable Unit.

“Developed Property” means all Assessor’s Parcels of Taxable Property for which Building Permits were issued on or before May 1 of the prior Fiscal Year, provided that such Assessor's Parcels were created on or before January 1 of the prior Fiscal Year and that each such Assessor's Parcel is associated with a Lot, as determined reasonably by the Board.

“Undeveloped Property” means all Assessors Parcels of Taxable Property that are not classified as Developed Property.

"Taxable Property" means all Assessor's Parcels that are not Exempt Property (as defined below).

“Exempt Property” is defined to include the following:

(i) Assessor’s Parcels owned by the State of California, Federal or other local governments,

(ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization,

(iii) Assessor’s Parcels used exclusively by a homeowners' association,

(iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement,

(v) Assessor’s Parcels developed or expected to be developed exclusively for non-residential use, including any use directly servicing any non- residential property, such as parking, as reasonably determined by the Board, and

17 (vi) any other Assessor’s Parcels at the reasonable discretion of the Board.

However, property may not be classified as Exempt Property if that classification would reduce the sum of all Taxable Property a given Zone to less than “Minimum Taxable Acreage” (defined as 23.53 acres of Acreage for Zone 1 and 36.91 acres of Acreage for Zone 2). Assessor's Parcels that cannot be classified as Exempt Property because such classification would reduce the sum of all Taxable Property to less than Minimum Taxable Acreage in a given Zone will continue to be classified as Developed Property or Undeveloped Property, as applicable, and will continue to be subject to Special Taxes accordingly.

Maximum Special Tax, Assigned Annual Special Tax and Backup Annual Special Tax. The Maximum Special Tax is defined in the Rate and Method as follows:

Developed Property. For each Zone, the Maximum Special Tax is the greater of (i) the applicable Assigned Annual Special Tax for that Zone, or (ii) the applicable Backup Annual Special Tax for that Zone.

• Zone 1 Assigned Annual Special Tax. The Assigned Annual Special Tax for each Assessor’s Parcel of Developed Property in Zone 1 is determined by reference to Table 1 in the Rate and Method, and varies from $2,550.50 per Unit to $2,800.93 per Unit, based on the number of Building Square Feet per Unit.

• Zone 2 Assigned Annual Special Tax. The Assigned Annual Special Tax for each Assessor’s Parcel of Developed Property in Zone 2 is determined by reference to Table 2 in the Rate and Method, and varies from $3,252.25 per Unit to $3,734.06 per Unit, based on the number of Building Square Feet per Unit.

• Zone 1 Backup Annual Special Tax. The Backup Annual Special Tax for a Lot within a Final Map in Zone 1 is determined by multiplying the Acreage of Taxable Property in the Final Map by $5,851.11, and dividing the result by the number of Lots in the Final Map.

The Zone 1 Backup Annual Special Tax is subject to adjustment if all or any portion of a Final Map is changed or modified, as set forth in the Rate and Method.

• Zone 2 Backup Annual Special Tax. The Backup Annual Special Tax for a Lot within a Final Map in Zone 2 is determined by multiplying the Acreage of Taxable Property in the Final Map by $7,670.53, and dividing the result by the number of Lots in the Final Map.

The Zone 2 Backup Annual Special Tax is subject to adjustment if all or any portion of a Final Map is changed or modified, as set forth in the Rate and Method.

18 Undeveloped Property. The Maximum Special Tax is the applicable Assigned Annual Special Tax, which is (a) $5,851.11 per acre for Zone 1 and (b) $7,670.53 per acre for Zone 2.

Method of Apportionment. Under the Rate and Method, the Board will levy Annual Special Taxes each Fiscal Year as follows:

Step One: The Board will levy an Annual Special Tax on each Assessor’s Parcel of Developed Property in an amount equal to the Assigned Annual Special Tax applicable to that Assessor’s Parcel.

Step Two: If the sum of the amounts collected in step one is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Board will Proportionately levy an Annual Special Tax on each Assessor’s Parcel of Undeveloped Property in an amount up to the Assigned Annual Special Tax applicable to each Assessor’s Parcel of Undeveloped Property to satisfy the Minimum Annual Special Tax Requirement.

Step Three: If the sum of the amounts collected in steps one and two is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Board will Proportionately levy an Annual Special Tax on each Assessor’s Parcel of Developed Property up to the Maximum Special Tax applicable to each Assessor’s Parcel of Developed Property, to satisfy the Minimum Annual Special Tax Requirement.

Full Prepayment of Annual Special Taxes. The Annual Special Tax obligation of an Assessor’s Parcel of Developed Property may be prepaid in full, and the Annual Special Tax obligation of an Assessor’s Parcel of Undeveloped Property for which a Building Permit has been issued may be prepaid in full, provided that the terms set forth under the Rate and Method are satisfied, including (among others) the following conditions:

• There are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to the Assessor's Parcel (if any) on which prepayment is being made.

• No prepayment will be allowed unless the amount of Annual Special Taxes that may be levied on Taxable Property, net of Administrative Expenses, is at least 1.1 times the regularly scheduled annual interest and principal payments on all currently outstanding Bonds in each future Fiscal Year, and that such prepayment will not impair the security of all currently outstanding Bonds, as reasonably determined by the Board. These determinations will include identifying all Assessor’s Parcels that are expected to become Exempt Property.

The Prepayment Amount is generally calculated as the present value of the current and future Special Taxes applicable to the parcel being prepaid (defined generally as the present value of any Special Tax for the current Fiscal Year not yet received by the Community Facilities District, plus the expected Annual Special Tax applicable to such Assessor's Parcel in each remaining Fiscal Year until the termination date specified in the Rate and Method, using as the discount rate (i) the arbitrage yield on the Bonds or (ii) the most recently published Bond Index prior to the issuance of the Bonds), less a credit for the corresponding reduction in the Reserve Requirement for the Bonds, plus the fees and expenses of the Community Facilities District associated with the prepayment, all as set forth in further detail in APPENDIX B.

19 Partial Prepayment of Annual Special Taxes. The Annual Special Tax obligation of an Assessor's Parcel may be partially prepaid, provided that the terms set forth under the Rate and Method are satisfied, including (among others) the following conditions:

• There are no delinquent Special Taxes, penalties or interest charges outstanding with respect to the Assessor's Parcel at the time the Annual Special Tax obligation would be prepaid.

• Partial prepayment must occur prior to the conveyance of the first production Unit on a Lot within a Final Map, and the partial prepayment of each Annual Special Tax obligation must be collected for all Assessor’s Parcels prior to the conveyance of the first production Unit on a Lot within a Final Map.

• No partial prepayment will be allowed unless the amount of Annual Special Taxes that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, is at least 1.1 times the regularly scheduled annual interest and principal payments on all currently outstanding Bonds in each future Fiscal Year.

The Partial Prepayment Amount is calculated as the Prepayment Amount determined for full prepayment of Special Taxes, as set forth above, multiplied by the percent by which the owner of the Assessor’s Parcel is partially prepaying the Annual Special Tax obligation, all as set forth in further detail in APPENDIX B.

Appeals. Any property owner claiming that the amount or application of the Special Tax is not correct may file a written notice of appeal with the Board not later than 12 months after having paid the first installment of the Special Tax that is disputed. A representative(s) of the Community Facilities District is required to promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the representative’s decision requires that the Special Tax for an Assessor's Parcel be modified or changed in favor of the property owner, a cash refund will not be made (except for the last year of levy), but an adjustment will be made to the Annual Special Tax on that Assessor's Parcel in the subsequent Fiscal Year(s).

Duration of Special Tax Levy. The Rate and Method stipulates that Annual Special Taxes will be levied for a period of 33 Fiscal Years after the Bonds have been issued, provided that Annual Special Taxes may not be levied after Fiscal Year 2040-41.

Covenant to Foreclose

Sale of Property for Nonpayment of Taxes. The Fiscal Agent Agreement provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described below and in the Act, is to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is subject to sale by the County.

Foreclosure Under the Mello-Roos Law. Under Section 53356.1 of the Act, if any delinquency occurs in the payment of the Special Tax, the Community Facilities District may order the institution of a Superior Court action to foreclose the lien therefor within specified time

20 limits. In such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale.

Such judicial foreclosure action is not mandatory. However, the Community Facilities District will covenant in the Fiscal Agent Agreement that, it will order, and cause to be commenced as provided in the Fiscal Agent Agreement, and thereafter diligently prosecute to judgment (unless other delinquency is brought current), an action in the superior court to foreclose the lien of any Special Tax or installment thereof not paid when due as described below. An Authorized Officer will notify the counsel to the School District of any such delinquency of which it is aware, and the counsel to the School District will commence, or cause to be commenced, such proceedings.

On March 1 and July 1 of each year, beginning on March 1, 2006, the Business Manager or her designee will compare the amount of Special Taxes levied in the Community Facilities District to the amount of Special Tax Revenues theretofore received by the School District, and if

(i) the amount collected is less than 95% of the amount of the Special Taxes so levied, and

(ii) the aggregate amount of delinquencies in the payment of Special Taxes exceeds $10,000 for any single property owner, the School District will undertake and diligently prosecute foreclosure proceedings not later than 30 days after each Interest Payment Date in the manner prescribed in the Act to collect the amount of any delinquent Special Tax.

Sufficiency of Foreclosure Sale Proceeds; Foreclosure Limitations and Delays. No assurances can be given that the real property subject to a judicial foreclosure sale will be sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent Special Tax installment. The Mello-Roos Law does not require the Community Facilities District to purchase or otherwise acquire any lot or parcel of property foreclosed upon if there is no other purchaser at such sale.

Section 53356.6 of the Mello-Roos Law requires that property sold pursuant to foreclosure under the Mello-Roos Law be sold for not less than the amount of judgment in the foreclosure action, plus post-judgment interest and authorized costs, unless the consent of the owners of 75% of the outstanding Bonds is obtained. However, under Section 53356.6 of the Mello-Roos Law, the Community Facilities District, as judgment creditor, is entitled to purchase any property sold at foreclosure using a “credit bid,” where the Community Facilities District could submit a bid crediting all or part of the amount required to satisfy the judgment for the delinquent amount of the Special Tax. If the Community Facilities District becomes the purchaser under a credit bid, the Community Facilities District must pay the amount of its credit bid into the redemption fund established for the Bonds, but this payment may be made up to 24 months after the date of the foreclosure sale.

Foreclosure by court action is subject to normal litigation delays, the nature and extent of which are largely dependent on the nature of the defense, if any, put forth by the debtor and the Superior Court calendar. In addition, the ability of the Community Facilities District to foreclose the lien of delinquent unpaid Special Taxes may be limited in certain instances and may require prior consent of the property owner if the property is owned by or in receivership of the Federal

21 Deposit Insurance Corporation (the “FDIC”). See “BOND OWNERS' RISKS - Bankruptcy and Foreclosure Delays.”

No Teeter Plan. Because the Community Facilities District does not participate in the “Teeter Plan” (which is the County's Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code), collections of Special Taxes will reflect actual delinquencies.

Special Tax Fund

Deposits. Under the Fiscal Agent Agreement, the School District will remit to the Fiscal Agent, not later than 5 Business Days after receipt, all Special Tax Revenues received by the School District, and the Fiscal Agent will deposit such amounts to the Special Tax Fund.

Moneys in the Special Tax Fund will be held in trust by the Fiscal Agent for the benefit of the School District and the Owners of the Bonds, will be disbursed as provided in the Fiscal Agent Agreement, and, pending disbursement, will be subject to a lien in favor of the Owners of the Bonds.

However, any amounts received by the School District that constitute Special Tax Prepayments will be transferred by the School District immediately upon receipt to the Fiscal Agent for deposit by the Fiscal Agent in the Special Tax Prepayments Account established under the Fiscal Agent Agreement.

Disbursements. From time to time as needed to pay the obligations of the School District, but no later than the Business Day before each Interest Payment Date, the Fiscal Agent will withdraw from the Special Tax Fund and transfer the following amounts in the following order of priority

(i) to the Administrative Expense Fund in an amount not to exceed $30,000 per Fiscal Year;

(ii) to the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund and any expected transfers from the Reserve Fund and the Special Tax Prepayments Account to the Bond Fund, such that the amount in the Bond Fund equals the principal (including any sinking payment), premium, if any, and interest due on the Bonds on the next Interest Payment Date, and

(iii) to the Reserve Fund an amount, taking into account amounts then on deposit in the Reserve Fund, such that the amount in the Reserve Fund is equal to the Reserve Requirement.

Amounts then in the Special Tax Fund will also be transferred from time to time by the Fiscal Agent, at the written direction of the School District, to the Administrative Expense Fund, to pay additional Administrative Expenses in excess of the amount deposited in clause (i) above, provided that the School District agrees that any such transfers may not exceed, in any Fiscal Year, the amount included in the Special Tax levy for such Fiscal Year for Administrative Expenses.

At any time following the deposit of Special Taxes in an amount sufficient to make payment of all of the foregoing deposits for the current Bond Year, any amounts in excess of

22 such amounts remaining in the Special Tax Fund will, upon the written direction of an Authorized Officer, be transferred by the Fiscal Agent to the District to be used for any lawful purpose under the Act. In the absence of such written direction, all amounts remaining in the Special Tax Fund on the first day of the succeeding Bond Year will be retained in the Special Tax Fund and applied to the succeeding Bond Year’s Annual Debt Service.

Bond Fund

Establishment. The Fiscal Agent Agreement establishes the Bond Fund as a separate account to be held by the Fiscal Agent. Moneys in the Bond Fund will be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds, will be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as described below, and, pending such disbursement, will be subject to a lien in favor of the Owners of the Bonds.

Disbursements. On or before each Interest Payment Date, the Fiscal Agent will transfer from the Special Tax Fund and deposit into the following respective accounts in the Bond Fund, the following amounts in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Net Special Tax Revenue sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:

Interest Account. On or before each Interest Payment Date, the Fiscal Agent will deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest becoming due and payable on the Bonds on that date (taking into account any expected transfers from the Reserve Fund and the Capitalized Interest Sub-account for any such date). No deposit need be made into the Interest Account on any Interest Payment Date if the amount on deposit therein is at least equal to the interest becoming due and payable on the Bonds on that date.

All moneys in the Interest Account will be used and withdrawn by the Fiscal Agent solely for the purpose of paying the interest on the Bonds as it becomes due and payable (including accrued interest on any Bonds redeemed prior to maturity).

All amounts on deposit in the Interest Account on the first day of any Bond Year, to the extent not required to pay any interest then having become due and payable on the Outstanding Bonds, will be withdrawn by the Fiscal Agent and transferred to the Special Tax Fund.

Capitalized Interest Sub-account. On or before the Interest Payment Dates occurring between the Closing Date and September 1, 2006, the Fiscal Agent will withdraw from the Capitalized Interest Sub-account and transfer to the Interest Account the amount necessary to cause the amount on deposit in the Interest Account to be equal to the amount of interest which is due and payable on the Outstanding 2005 Bonds on such Interest Payment Date. The amount, if any, on deposit in the Capitalized Interest Sub-account on September 2, 2006, will be withdrawn by the Fiscal Agent and transferred to the Special Tax Fund and the Capitalized Interest Sub-account will be closed.

Principal Account. On or before each Interest Payment Date, the Fiscal Agent will deposit in the Principal Account an amount required to cause the aggregate amount

23 on deposit in the Principal Account to equal the principal amount of the Bonds becoming due and payable on that date, or the redemption price of the Bonds (consisting of the principal amount thereof and any applicable redemption premium) required to be redeemed on such date under the Fiscal Agent Agreement.

All moneys in the Principal Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of (i) paying the principal of the Bonds at the maturity thereof, or (ii) paying the principal of and premium (if any) on any Bonds upon the redemption thereof under the Fiscal Agent Agreement.

All amounts on deposit in the Principal Account on the first day of any Bond Year, to the extent not required to pay the principal of any Outstanding Bonds then having become due and payable, will be withdrawn therefrom and transferred to the Special Tax Fund.

On the first Business Day following each Interest Payment Date, the Fiscal Agent shall transfer any moneys remaining on deposit in the Bond Fund, including the Interest Accounts (but not including the Capitalized Interest Sub-account) and the Principal Account, to the Special Tax Fund.

Priority of Payments in Case of Shortfall. If moneys on deposit in the Special Tax Fund will be insufficient on any Interest Payment Date for the Fiscal Agent to deposit the required amounts in the Interest Account and the Principal Account of the Bond Fund as described above, the Fiscal Agent will deposit the available funds as follows:

• first to the Interest Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount of interest becoming due and payable on the Bonds on the Interest Payment Date, and

• then deposit the remaining available funds in the Special Tax Fund to the Principal Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount, if any, of principal becoming due and payable on the Bonds on the Interest Payment Date.

If, after making such deposits to the Interest Account and the Principal Account, and after transferring moneys from the Reserve Fund to such accounts, the amount on deposit in the Principal Account is insufficient to pay the full amount of the principal of each of the Bonds which is to be redeemed on the Interest Payment Date, the Fiscal Agent will make a prorated payment of the principal of each of such Bonds as specified in an Officer’s Certificate provided to the Fiscal Agent.

Special Tax Prepayments Account Deposits and Disbursements. Within 5 Business Days after receiving a Special Tax Prepayment, the School District will deliver the amount thereof to the Fiscal Agent, together with an Officer’s Certificate notifying the Fiscal Agent that the amount being delivered is a Special Tax Prepayment which is to be deposited in the Special Tax Prepayments Account.

Upon receiving a Special Tax Prepayment from the School District and such an Officer’s Certificate, the Fiscal Agent will deposit the amount of the Special Tax Prepayment in the Special Tax Prepayments Account.

24 Moneys on deposit in the Special Tax Prepayments Account will be transferred by the Fiscal Agent to the Principal Account on the next date for which notice of the redemption of the Bonds can timely be given under the Fiscal Agent Agreement and will be used to redeem the Bonds on the redemption date selected in accordance with the optional redemption provisions of the Fiscal Agent Agreement.

Pending such transfer, the moneys on deposit in the Special Tax Prepayments Account will be invested by the Fiscal Agent as directed pursuant to an Officer’s Certificate in Defeasance Obligations at such yield as Bond Counsel may determine is necessary to preserve the exclusion of interest on the Bonds from gross income for purposes of federal income taxation.

Reserve Fund

Establishment. In order to further secure the payment of principal of and interest on the Bonds, certain proceeds of the Bonds will be deposited into the Reserve Fund in an amount equal to the Reserve Requirement (see “ESTIMATED SOURCES AND USES OF FUNDS”). Moneys in the Reserve Fund will be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest and any premium on the Bonds and will be subject to a lien in favor of the Owners of the Bonds.

Reserve Requirement. The Reserve Requirement is defined in the Fiscal Agent Agreement to mean, as of any date of calculation, an amount equal to the least of the following, as determined by the School District:

(i) 10% of the outstanding principal amount of the Bonds,

(ii) Maximum Annual Debt Service on the Outstanding Bonds, or

(iii) 125% of average Annual Debt Service on the Outstanding Bonds.

Use of Reserve Fund. Except as otherwise provided in the Fiscal Agent Agreement, all amounts on deposit in the Reserve Fund will be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Interest Account and the Principal Account of the Bond Fund in the event of any deficiency at any time in either of such accounts of the amount then required for payment of the principal of and interest and any premium on the Bonds or for the purpose of redeeming Bonds.

See “APPENDIX D – Summary of Fiscal Agent Agreement” for a further description of the timing, purpose and manner of disbursements from the Reserve Fund.

25 THE SCHOOL DISTRICT

The following information relating to the School District is included only for the purpose of supplying general information regarding the School District. Neither the faith and credit nor the taxing power of the School District has been pledged to payment of the Bonds, and the Bonds will not be payable from any of the School District’s revenues or assets.

General Information

The School District is located in the western portion of the County, encompassing the unincorporated communities of Mira Loma, Sky Country, Glen Avon, Sunnyslope, Indian Hills, Jurupa Hills, Pedley and Rubidoux, and is in the vicinity of the City of Riverside. The administration headquarters of the School District are located at 4850 Pedley Road, Riverside, California. See “APPENDIX A - General Information About the City of Riverside and Riverside County.”

The School District currently operates 16 elementary schools, three middle schools, two high schools, two continuation high schools and one learning center. The School District currently has 21,028 students enrolled for Fiscal Year 2005-06.

Administration and Enrollment

The School District is governed by the Board, whose names and terms are set forth below.

Name Office Term Expires Carl Harris President November 2008 Michael Rodriguez Clerk November 2006 John Chavez Member November 2008 Sam Knight Member November 2006 Mary Burns Member November 2006

26 The table below sets forth official enrollment figures for Fiscal Year 1995-96 through 2005-06, as well as projections for Fiscal Years 2006-07 through 2008-09, all as reported to the State of California Department of Education.

Jurupa Unified School District Student Enrollment

Fiscal Year Student Enrollment Percentage Increase Historical [1] 1995-96 17,305 N/A 1996-97 17,686 2.20% 1997-98 17,929 1.37 1998-99 18,393 2.59 1999-00 19,048 3.56 2000-01 19,839 4.15 2001-02 20,017 0.90 2002-03 20,469 2.26 2003-04 20,924 2.22 2004-05 21,222 1.42 2005-06 21,028 (0.91)

Projected [2] 2006-07 21,118 0.43 2007-08 21,288 0.81 2008-09 21,888 2.82

[1] Represent CBEDS (California Basic Educational Data System) calculations. [2] Projections based on CBEDS (California Basic Educational Data System) calculations. Source: California Department of Education and the School District.

27 THE COMMUNITY FACILITIES DISTRICT

General

Zone 2 and Zone 1. The Community Facilities District is made up of two non- contiguous zones, Zone 2 (which is being developed as 80 single-family homes by the Developer) and Zone 1, which is owned by CRV Jurupa and is currently vacant land and not subject to active development. See “APPENDIX I – COMMUNITY FACILITIES DISTRICT BOUNDARY MAP.”

Although the Special Taxes constitute a lien on both Zone 1 and Zone 2, the Bonds will be sized based on the levy of the Assigned Annual Special Tax and the Maximum Special Tax on the Zone 2 property only. Until it is reclassified under the Rate and Method, the Zone 1 property will be subject to the levy of Special Taxes as Undeveloped Property under the “Step 2” of the method of apportionment set forth in the Rate and Method. See “SECURITY FOR THE BONDS – Rate and Method.” Accordingly, no information regarding the Zone 1 property is included in this Official Statement.

Potential investors in the Bonds should assume that Special Taxes will not be levied on the Zone 1 property, and that the debt service on the Bonds will be paid entirely from the Special Taxes levied on the Zone 2 property.

Description and Location of Zone 2. Zone 2 of the Community Facilities District is located in the western portion of the County, in an unincorporated area of the County known as Pedley, approximately 3 miles northwest of the City of Riverside’s downtown area.

Zone 2 of the Community Facilities District is located to the northeast of the intersection of Camino Real and Red Mountain Drive, adjacent to Camino Real along its western border, and south of Jurupa Road adjacent to the Riverside Canal Lateral No. 2. Surrounding land uses include older existing rural housing to the north, existing housing to the west, a new residential project to the south, and older, rural housing to the east.

All of the taxable property in Zone 2 of the Community Facilities District is being developed for residential use as single-family detached homes.

See “APPENDIX A - General Information About the City of Riverside and Riverside County” for certain demographic information on the County. The boundary map of the Community Facilities District is attached as APPENDIX I.

Gross and Anticipated Net Taxable Acres. The property in Zone 2 of the Community Facilities District currently contains approximately 57.42 gross acres, of which approximately 41.01 net acres are proposed for development as Taxable Property. Gross acreage includes property that is expected to be separately parcelized, developed and conveyed to the County, public agencies or homeowner associations as public roads, open space parcels, drainage and stormwater detention areas, and other exempt uses. Before this property is conveyed, it will be taxable as Undeveloped Property pursuant to the Rate and Method (to the extent not classified as Exempt Property under the Rate and Method). This property will become exempt from the Special Taxes as of the January 1 following the date that such property has been conveyed to the County, a public agency or a homeowner association, which is expected to occur after final tract maps are recorded for each development.

28 Estimated Maximum Special Tax Proceeds and Debt Service Coverage

The Rate and Method is structured to produce Special Tax revenues from the Assigned Annual Special Tax and the Maximum Special Tax levied on Zone 2 which, when applied to the projected debt service on the Bonds, is anticipated to result in a debt service coverage ratio of 115% for the life of the Bonds.

The Bonds have been sized based on the anticipated receipt of Special Tax revenues from the Assigned Annual Special Tax and the Maximum Special Tax to be levied on the Zone 2 property only. Under the Fiscal Agent Agreement the School District may issue an additional future series of bonds, on a parity with the Bonds, which would be sized to include Special Tax revenues from the Assigned Annual Special Tax and the Maximum Special Tax applicable to the Zone 1 property. See “THE BONDS – Issuance of Parity Bonds.”

Appraised Value of Zone 2 Property

The Appraisal. The Appraisal was prepared by Bruce W. Hull & Associates, Inc. of Ventura, California (the “Appraiser”) to ascertain the market value of the fee simple estate of the 80 single family detached homes and lots in Zone 2 of the Community Facilities District as of a October 15, 2005 date of value. The Appraisal was intended to comply with the reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report, and with the appraisal standard proposed by the California Debt and Investment Advisory Commission.

Basis for Appraisal and Assumptions. The property rights appraised were of a fee simple interest subject to easements of record, and the lien of the Special Taxes.

The Appraisal was based on certain assumptions and limiting conditions set forth in APPENDIX C, including the assumption that all of the improvements and benefits to the property to be funded by the Bonds are completed and have accrued to the Zone 2 property. In this case, the Appraiser assumed that the proceeds of the Bonds would fund $1,321,818 for School Facilities benefiting Zone 2 and $1,229,795 for Non-School Facilities benefiting Zone 2. (See “FACILITIES TO BE FINANCED WITH PROCEEDS OF THE BONDS” for the Community Facilities District’s current estimate of the amount of Bond proceeds to be used for these purposes.)

The Appraiser also assumed that the cost information it received from the Developer is accurate and complete.

As of the October 15, 2005 date of value, the property in Zone 2 of the Community Facilities District was under development, with three lots containing completed model homes, 18 lots containing production homes under construction, and the remaining 59 lots under development and in partially “finished lot” condition.

29 Value Estimate. The Appraiser estimated that, as of the October 15, 2005 date of value, the fee simple interest in the property within Zone 2 of the Community Facilities District (subject easements of record and to the lien of the Special Taxes) had a the following market values:

Development Number Appraised Status of Homes Value Completed Models 3 $1,770,000 Lots 77 17,340,000 Total: 80 $19,110,000

Valuation Methods. The Appraiser estimated the value of the property in Zone 2 of the Community Facilities District based on the sales comparison approach, in which market value is estimated by comparing properties similar to the subject property that have recently been sold, are listed for sale, or are under contract. The estimate of value for the property was achieved using the sales prices of comparable finished lots in the area that were listed or had sold within the prior 13 months.

In addition, the Appraiser applied a discounted cash flow analysis to the three completed model homes, taking into account the marketing and carrying costs associated with the selling- off of the homes, a profit due to the Developer, and a discount rate reflecting both the risk associated with selling off the homes and the time value of money during the absorption period, which the Appraiser estimated to be one month.

The School District and the Community Facilities District make no representation as to the accuracy or completeness of the Appraisal. See APPENDIX C for the Summary Appraisal Report.

30 Appraised Value to Burden Ratio

The table below shows the projected value to burden ratio for the property in Zone 2 of the Community Facilities District based on the appraised values set forth in the Appraisal, and the lien represented by the principal amount of the Bonds.

No assurance can be given that the amounts shown in this table will conform to those ultimately realized in the event of a foreclosure action following delinquency in the payment of the Special Taxes.

Table 1 Zone 2 Appraised Values and Value to Burden Ratio

Total Principal Development Number Appraised Amount of Value to Status of Homes Value [1] Bonds [2] Lien [3] Completed Models 3 $1,770,000 $118,875 14.89:1 Lots 77 17,340,000 3,051,125 5.68:1 Total: 80 $19,110,000 $3,170,000 6.03:1

[1] Market value of the Zone 2 property estimated by the Appraiser as of October 15, 2005. [2] Debt has been allocated equally to each lot; under the Rate and Method, actual allocation of debt will vary depending on Unit size. [3] Average value to lien per lot; actual value to lien per lot may vary. Source: David Taussig & Associates, Inc., and the Appraiser.

31 Direct and Overlapping Governmental Obligations

Contained within the boundaries of Zone 2 of the Community Facilities District are certain overlapping local agencies providing public services and assessing property taxes, assessments, special taxes and other charges on the property in the Community Facilities District. Many of these local agencies have outstanding debt.

The direct and overlapping obligations affecting the property in Zone 2 of the Community Facilities District as of November 5, 2005, are shown in the following table. The table was prepared by National Tax Data, Inc., and is included for general information purposes only. The School District has not reviewed this report for completeness or accuracy and makes no representation in connection therewith.

Table 2 Direct and Overlapping Governmental Obligations

JURUPA UNIFIED SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 4, ZONE 2 Assessed Value 2005-06 Secured Roll Assessed Value $2,645,419

Secured Property Taxes Description on Tax Bill Type Total Parcels Total Levy % Applicable Parcels Levy Amount Basic Levy PROP13 786,893 $1,518,149,874.46 0.00146% 4 $22,236.00 Voter Approved Debt AVALL 18,304 $67,440,869.88 0.05102% 2 $34,406.02 County of Riverside Flood Control (Santa Ana) FLOOD 287,143 $1,982,917.48 0.00067% 2 $13.24 Jurupa Parks and Recreation Maintenance District PARK 21,690 $394,551.30 0.00760% 2 $30.00 Jurupa Unified School District Debt Service GOB 596,927 $53,830,737.39 0.00248% 4 $1,334.16 Landscape Maintenance District No. 2001-1 Zone Q LMD 6 $135.12 100.00000% 6 $135.12 Metropolitan Water District of Southern California Debt Service GOB 430,514 $5,247,279.21 0.00220% 4 $115.60 Metropolitan Water District of Southern California Standby Charge STANDBY 226,354 $3,401,915.48 0.01543% 6 $524.76 Northwest Mosquito Abatement District ABATE 137,076 $420,171.00 0.00079% 6 $3.32 Riverside Community College District Debt Service GOB 513,330 $19,151,876.66 0.00209% 4 $400.24 2005-06 TOTAL PROPERTY TAX LIABILITY $59,198.46 TOTAL PROPERTY TAX LIABILITY AS A PERCENTAGE OF 2005-06 ASSESSED VALUATION 2.24% Land Secured Bond Indebtedness Outstanding Direct and Overlapping Bonded Debt Type Issued Outstanding % Applicable Parcels Amount Jurupa Unified School District CFD No. 4, Zone 2 CFD TBD(1) TBD(1) 100.00% 6 TBD(1) TOTAL OUTSTANDING LAND SECURED BOND INDEBTEDNESS (1) (2) $0 General Obligation Bond Indebtedness Outstanding Direct and Overlapping Bonded Debt Type Issued Outstanding % Applicable Parcels Amount Jurupa Unified School District Debt Service 2001 Election GO $57,997,972 $56,122,972 0.04568% 6 $25,637 Metropolitan Water District of Southern California Debt Service GO $850,000,000 $419,000,000 0.00016% 6 $670 Riverside Community College District Debt Service GO $65,000,000 $63,461,109 0.00450% 6 $2,856 TOTAL OUTSTANDING GENERAL OBLIGATION BOND INDEBTEDNESS (2) $29,163 TOTAL OF ALL OUTSTANDING AND OVERLAPPING BONDED DEBT (2) $29,163 (1) Excludes Mello-Roos bonds to be sold. (2) Additional bonded indebtedness or available bond authorization may exist but are not shown because a tax was not levied for the referenced fiscal year. Source: National Tax Data, Inc.

32 A further discussion of certain direct and overlapping governmental assessments affecting various portions of Zone 2 of the Community Facilities District is set forth below.

Riverside County Flood Control and Water Conservation District (the “Flood Control District”). The Flood Control District imposes a pay-as-you-go assessment used to offset the Flood Control District’s program and administration costs associated with the development, implementation and management of identified stormwater management activities required by the federally mandated National Pollutant Discharge Elimination System Permit Program. The assessment is fixed unless there is a vote to increase the assessment. The assessment rate is calculated by multiplying the Benefit Assessment Unit ("BAU") rate of $3.75 per BAU by the BAU for that land use category. The BAU is computed based upon the parcel's size (acreage) and its land use classification. One BAU is 1/6 of an acre. A single-family residence on a 7,200 square foot lot is defined as one BAU as well. The BAUs for other types of land use are calculated in proportion to the amount of runoff generated by a single family residence on a 7,200 square foot lot. The rates for Fiscal Year 2006-07 are listed below.

Assessment BAU/Acre Land Use Category @ $3.75/BAU Single Family Residential (SFR) 6* $22.50/acre Apartments/Mobile Homes, Churches, Schools 9 $33.75/acre Commercial/Industrial 12 $45.00/acre Golf Courses 0.10 $0.38/acre Undeveloped Portions of Parcels 0.05 $0.19/acre Agricultural/Vacant Undeveloped Exempt $0.00/acre

* 1 BAU per single-family residence, assuming six equally sized residential parcels per acre

Jurupa Community Services District LMD 2001-1 Zone Q. This annual pay-as-you- go assessment is $22.52 per single-family residence and is used to pay the streetlight energy charges imposed by Southern California Edison. This assessment escalates by 2% each year but can increase to match an increase in the energy charges if over 2%.

Northwest Mosquito and Vector Control District. This annual pay-as-you-go assessment is $1.47 per single family home and $0.11 per vacant parcel for Fiscal Year 2005- 06, and provides funding to maintain mosquito control and vector-transmitted disease control services. Any increase in this assessment is subject to Proposition 218's mailed ballot proceedings for the increase of property related fees and assessments, which require a majority approval of the assessment ballots cast in such proceeding; ballots are weighted in proportion to the amount of each property's assessment.

Jurupa Park and Recreation Maintenance District. This annual pay-as-you-go assessment is used to maintain the parks and recreational areas in the Jurupa Park and Recreation Maintenance District. The annual charge is $15.00 per dwelling unit, and cannot be increased without a vote of the registered voters in the Jurupa Park and Recreation Maintenance District.

Jurupa Area Recreation and Park District CFD No. 2005-2 (“CFD 2005-2”). This special tax is levied for the purpose of providing for the cost of maintaining landscaping surrounding the development, including horse trail, fencing, and landscaping, the maintaining of

33 parks, parkways, open space facilities, landscaping, and storm drain systems within CFD 2005- 2. Residential property is subject to a maximum special tax of $655 per parcel and non- residential property is subject to a maximum special tax of $1,387 per acre. The maximum special tax will be increased each Fiscal Year beginning in Fiscal year 2006-07 by a factor equal to the annual percentage change in the Los-Angeles-Anaheim-Riverside Metropolitan Area All Urban Consumer Price Index (all items).

Metropolitan Water District Standby West. This annual charge is $9.23 per acre or $9.23 per parcel for parcels under one acre. This charge is used for capital improvements to the water distribution system and the construction and maintenance of reservoirs.

34 Estimated Tax Burden on Single Family Home

The following table sets forth the estimated total tax burden on a single family home of 3,071 building square feet (a home size selected as a conservative representative of the proposed homes to be constructed in Zone 2 of the Community Facilities District), based on estimated tax rates for Fiscal Year 2005-06.

Table 3 Estimated Fiscal Year 2005-06 Tax Rates (Single Family Residences of 3,071 square feet)

Percent of Projected ASSESSED VALUATION AND PROPERTY TAXES Total AV Amount Estimated Sales Price [1] $576,000 Homeowner’s Exemption (7,000) Assessed Value [2] $569,000

AD VALOREM PROPERTY TAXES General Purpose 1.00000% $5,690.00 Ad Valorem Tax Overrides Jurupa Unified School District GO Bonds 0.06000 341.38 Riverside City Community College 0.01800 102.41 Metropolitan Water District West 0.00520 29.59 Total Ad Valorem Property Taxes and Overrides 1.08320% $6,163.38

ASSESSMENTS, SPECIAL TAXES AND PARCEL CHARGES [3] Jurupa Unified School District CFD No. 4 $3,252.25 Jurupa CSD LMD 2001-1 Zone Q 22.52 N.W. Mosquito and Vector Control 1.47 Jurupa Park and Recreation Maintenance 15.00 MWD Standby West 9.23 Riverside County Flood Control and Water Conservation District 3.75 Jurupa Area Recreation and Park District CFD 2005-2 655.00 Total Assessments and Parcel Charges $3,959.22

PROJECTED TOTAL PROPERTY TAXES $10,122.60

Projected Total Effective Tax Rate (as % of Sales Price) 1.76% [1] Estimated sales price for an average single-family detached unit containing 3,071 building square feet. [2] Assessed value reflects estimated total assessed value net of homeowner’s exemption. [3] All charges and special assessments are based on a lot size of less than 1 acre. Source: David Taussig & Associates, Inc.

35 PROPERTY OWNERSHIP AND PROPOSED DEVELOPMENT

The information about the Property Owners contained in this Official Statement has been provided by representatives of the Property Owners and has not been independently confirmed or verified by the Underwriter, the School District or the Community Facilities District. Neither the Underwriter, the School District nor the Community Facilities District make any representation as to the accuracy or adequacy of this information. There may be material adverse changes in this information after the date of this Official Statement.

The Developer and Griffin

Ownership Structure. The Developer is Jurupa Hills 80, LP, a California limited partnership, formed in September 2003 for the purpose of developing and constructing homes on the property in Zone 2 of the Community Facilities District.

The Developer’s general partner is Griffin Communities, a California corporation (“Griffin”), and whose limited partner is Albor Properties V, L.P., a California limited partnership.

Griffin is a privately held real estate development company incorporated in 1991 and headquartered in Corona, California, whose sole owner and president is Dale E. Griffin. Griffin was originally formed in 1977 under the name the “Dale E. Griffin Company.” Mr. Griffin has twenty-eight years of experience in the areas of new home development and construction in the building industry, and has been involved in the construction and sale of more than 7,000 single family homes, condominiums and apartment complexes.

The Internet site for Griffin is www.griffincommunities.com. This Internet address is included for reference only, and the information on this Internet site is not a part of this Official Statement or incorporated by reference into this Official Statement.

Development Experience. Griffin and its affiliates concentrate land development operations in Riverside County and San Bernardino County. During the prior fiscal year, Griffin and its affiliates completed and sold approximately 122 homes, and Griffin anticipates that it and its affiliates will complete approximately 145 homes during the current fiscal year.

Some of the other development projects recently completed or currently under development by Griffin and its affiliates in southern California include the following:

Number of Development Location Dwelling Units Country Lane Riverside 61 Country Lane II Riverside 30 Park Meadows San Jacinto 170 Mountain View Menifee 89 Shadow Ridge Menifee 80 Shadow Ridge II Menifee 99 Casa Diamonte Temecula 100 Winchester Ranch Menifee 202 Mojave/Cobalt Victorville 276

36 History of Property Tax Payments; Loan Defaults; Bankruptcy. An officer of the Developer will certify to his or her actual knowledge to the following representations at the Closing:

• Neither the Developer, Griffin nor any of its affiliates over which it exercises managerial control or which exercise managerial control over it has ever defaulted to any material extent in the payment of special taxes or assessments in connection with the Community Facilities District or any other community facilities districts or assessment districts in California within the past five years.

• Neither the Developer, Griffin nor any of its affiliates over which it exercises managerial control or which exercise managerial control over it is currently in default on any loans, lines of credit or other obligation, the result of which could materially adversely affect the development of the property in the Community Facilities District.

• The Developer and Griffin are solvent and no proceedings are pending (based upon service of process received by the Property Owner or Griffin) or, to the actual knowledge of the Developer, threatened in which the Developer or Griffin may be adjudicated as bankrupt or become the debtor in a bankruptcy proceeding, or discharged from all of its respective debts or obligations, or granted an extension of time to pay its respective debts or a reorganization or readjustment of its respective debts.

• There is no litigation or administrative proceeding of any nature pending (in which the Developer or Griffin has been served), or threatened against the Developer or Griffin which, if successful, would materially adversely affect the ability of the Developer to complete the development and sale of its property within the Community Facilities District, or to pay the Special Taxes or ordinary ad valorem property tax obligations when due on its property within the Community Facilities District, or which challenges or questions the validity or enforceability of the Bonds, the Resolution of Issuance, the Fiscal Agent Agreement, the Property Owner Continuing Disclosure Certificate or the Bond Purchase Contract.

• The Developer is not aware of any material failures by Griffin or its affiliates to comply with previous continuing disclosure undertakings to provide periodic continuing disclosure reports or notices of material events within the past five years.

CRV Jurupa (Zone 1)

CRV Jurupa is CRV Jurupa 50 L.P., a California limited partnership whose general partner is CRV Wildomar-Jurupa LLC, a Delaware limited liability company, which is an affiliated entity with Capstone Realty Advisors, LLC, a Delaware limited liability company (“Capstone”). CRV Jurupa was formed in January 2001 for the purpose of acquiring the property in Zone 1 of the Community Facilities District.

Capstone is a full service real estate finance, investment, development and management company headquartered in San Diego, California. The sole member of Capstone is Mr. Alex Zikakis, who also serves as its president and CEO.

The Internet site for Capstone is www.capstoneadvisors.com. This Internet address is included for reference only, and the information on this Internet site is not a part of this Official Statement or incorporated by reference into this Official Statement.

37 Environmental Conditions

The following paragraphs describe environmental conditions of the Zone 2 property (being developed by the Developer) only. CRV Jurupa provided no information regarding the environmental condition of the Zone 1 property for inclusion in this Official Statement.

CEQA Review. In April 2003 the County approved a Negative Declaration under the California Environmental Quality Act (“CEQA”) in connection with the approval of Tentative Tract Map No. 30822, a general plan amendment, a change in zone, and other entitlements for the property in Zone 2 of the Community Facilities District. No additional discretionary approvals are required for the proposed development in Zone 2 of the Community Facilities District that would require additional environmental review under CEQA.

Hazardous Substances. Giles Engineering Associates, Inc., of Anaheim, California, prepared a Phase I Environmental Site Assessment dated August 17, 2001, for the Zone 2 property in the Community Facilities District (Tract 30288, being developed by the Developer). The report was prepared for a predecessor-in-interest to the Developer. The assessment revealed evidence of certain “recognized environmental conditions” in connection with the property, which included the following: (a) the potential for soil or groundwater to have been impacted with hazardous substances as a result of two historic underground storage tanks, containing diesel and gasoline, that were reportedly removed from the property approximately 10 years earlier, (b) the potential for hazardous substances to be buried beneath the surface of a debris dump located in a shallow ravine on the property, and (c) the potential that a partially buried cart-mounted sprayer tank (which reportedly contained herbicide) could have leaked its contents into the soil beneath the tank. The assessment recommended that additional environmental responses or investigation be considered.

Giles Engineering Associates, Inc., of Anaheim, California, prepared a Limited Phase II Environmental Site Assessment Report dated August 30, 2001, for the Zone 2 property in the Community Facilities District (Tract 30288, being developed by the Developer). The assessment was performed to evaluate soil and groundwater for the presence of petroleum hydrocarbons as a result of a former gasoline underground storage tank and former diesel underground storage tank on the property. In carrying out the assessment, Giles Engineering Associates collected soil and groundwater samples from test pits and soil borings, which were subjected to laboratory testing. The tests revealed that certain soil samples contained varying concentrations of total petroleum hydrocarbons and/or benzene, toluene, ethylbenzene or xylenes, and certain groundwater samples contained levels of benzene exceeding maximum State regulatory levels. Giles Engineering Associates recommended that, due to the presence of hydrocarbon-affected soil and groundwater beneath the site, the report be submitted to the County Environmental Health Department for review, and that groundwater monitoring wells be installed in the site to determine accurate levels of contamination and groundwater flow direction.

The California Regional Water Quality Control Board, Santa Ana Region, issued a closure letter dated November 25, 2003, confirming the completion of the site investigation, remedial action and groundwater monitoring that were required to mitigate the releases associated with the underground storage tanks formerly on the property and described above. The letter stated that no further action related to the underground storage tank release on the site is required.

38 Seismic Conditions. John R. Byerly Incorporated of Bloomington, California, prepared a Soils Investigation dated August 10, 2001, for the Zone 2 property in the Community Facilities District (Tract 30288, being developed by the Developer). The report noted that the closest known active fault was the San Bernardino Valley segment of the San Jacinto Fault, located approximately 9.3 miles to the northeast. The report concluded that, based on plans to over- excavate compressible soils and replace them with engineered fill, the site will not be subject to seismically-induced liquefaction.

In addition, Gary S. Rasmussen & Associates, Inc., of San Bernardino, California, prepared a Subsurface Engineering Geology Investigation of Slope Stability Soils dated October 31, 2002, for the Zone 2 property in the Community Facilities District (Tract 30288, being developed by the Developer). The report also noted that the nearest active fault was the San Jacinto Fault zone, and also noted that evidence for northeast and northwest-trending faulting was observed in the southern portion of the site. However, no evidence of active faulting was observed, and a restricted use zone for human occupancy structures was not recommended.

Proposed Development of Zone 2

No assurances can be made that the Developer will have the resources, willingness and ability to successfully complete development activities on its property within Zone 2 of the Community Facilities District as currently planned. No representation is made as to the ability (financial or otherwise) of the Developer to complete its property development as currently planned.

The property in Zone 1 is currently vacant land and not subject to active development. Although the Special Taxes constitute a lien on both Zone 1 and Zone 2, the Bonds will be sized based on the levy of the Assigned Annual Special Tax and the Maximum Special Tax on the Zone 2 property only. Accordingly, no information regarding the Zone 1 property is included in this Official Statement.

General. All of the taxable property in Zone 2 of the Community Facilities District is currently in the process of being developed as 80 detached single-family homes in a residential neighborhood to be known as “Sunset Ridge Estates.”

The Developer acquired the property in Zone 2 of the Community Facilities District in December 2003.

Entitlement Status. The project is being developed in accordance with Tract Map 30288, as set forth below:

No. of Tentative Map Final Map Tract No. Lots Approval Approval 30288 80 April 2003 Feb. 2005

39 Utilities. It is expected that utility services for the property in Zone 2 of the Community Facilities District will be provided by the following:

• Water: Jurupa Community Services District • Sanitary sewer: Jurupa Community Services District • Stormwater drainage: Riverside County Flood Control • Electricity: Southern California Edison

Infrastructure Development. Site work on the property in Zone 2 of the Community Facilities District is underway, with grading and all off-site infrastructure improvements complete.

As of October 15, 2005, the Appraiser estimated that the total cost to complete the property in Zone 2 of the Community Facilities District to “finished lot” condition was as follows:

Total Finished Lot Costs: $11,318,458 Less Costs Spent as of October 15, 2005: (5,474,858) Less Estimated Costs to be Funded with Bond Proceeds: (2,182,898) Remaining Costs to Complete: $3,660,702

Home Development. The Developer’s anticipated construction schedule and unit mix for its property in Zone 2 of the Community Facilities District are set forth below. Three model homes are completed, and construction on 18 production homes is currently underway. No assurance can be given that home construction and sales will be carried out on the schedule and according to the plans outlined below, or that the Developer’s home construction and sale plans or base prices will not change after the date of this Official Statement.

Proposed Construction and Sales Schedule

First Home Number Begin Home Open Model Sale Last Home Tract of Units Construction Homes Closings Sale Closings 30288 80 Sep. 2005 July 2005 April 2006 Dec. 2006

Proposed Unit Mix

Number No. of Model Approx. Anticipated Tract of Units Types Square Footage Base Prices 30288 80 3 3,071 to 4,115 $576,000 to $726,000

40 Site Development and Home Construction Financing Plan. The Developer has financed the cost of land acquisition, infrastructure improvements and home construction costs through the following commercial loans, all of which are secured by the property in Zone 2 of Community Facilities District.

Amount Original Owed as of Maturity Lender Financing Purpose Loan Amount Oct. 11, 2005 Date PFF Bank & Trust Acquisition and Development $5,990,000 $2,550,000 Jan. 31, 2006 PFF Bank & Trust Model Home Construction 1,584,000 1,325,000 Dec. 1, 2005 PFF Bank & Trust Phase 1 Home Construction 8,134,500 4,025,000 Mar. 1, 2006 PFF Bank & Trust Phase 2 Home Construction 9,000,000 2,910,000 July 1, 2006 Total: $24,708,500 $10,810,000

The Developer intends to use the commercial loans shown above, and home sale proceeds, to finance all carrying costs for the property (including property taxes and the Special Taxes) until full sell-out of the single-family homes within Zone 2 of the Community Facilities District. However, if these sources of financing are insufficient, the property in Zone 2 of the Community Facilities District may not be developed as planned, if at all. While lenders have made loan advances in the past, there can be no assurance that the Developer will qualify for future loans or future draws under existing loan arrangements. There is no legal obligation to Bond holders to draw on such existing loans or to obtain additional loans.

41 BOND OWNERS' RISKS

The purchase of the Bonds described in this Official Statement involves a degree of risk that may not be appropriate for some investors. The following includes a discussion of some of the risks which should be considered before making an investment decision.

Limited Obligation Of the Community Facilities District to Pay Debt Service

The Community Facilities District has no obligation to pay principal of and interest on the Bonds if Special Tax collections are delinquent, other than from amounts, if any, on deposit in the Reserve Fund or funds derived from the tax sale or foreclosure and sale of parcels for Special Tax delinquencies. The Community Facilities District is not obligated to advance funds to pay debt service on the Bonds.

Levy and Collection of the Special Tax

The principal source of payment of principal of and interest on the Bonds is the proceeds of the annual levy and collection of the Special Tax against property within the Community Facilities District. The annual levy of the Special Tax is subject to the Maximum Annual Special Tax rate authorized in the Rate and Method. The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax, together with other available funds, will not be sufficient to pay debt service on the Bonds.

Because the Special Tax formula set forth in the Rate and Method is not based on property value, the levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of particular parcels of Taxable Property and the amount of the levy of the Special Tax against those parcels. Thus, there will rarely, if ever, be a uniform relationship between the value of the parcels of Taxable Property and their proportionate share of debt service on the Bonds, and certainly not a direct relationship.

The following are some of the factors that might cause the levy of the Special Tax on any particular parcel of Taxable Property to vary from the Special Tax that might otherwise be expected:

• Reduction in the number of parcels of Taxable Property for such reasons as acquisition of Taxable Property by a governmental entity and failure of the government to pay the Special Tax based upon a claim of exemption or, in the case of the federal government or an agency thereof, immunity from taxation, thereby resulting in an increased tax burden on the remaining taxed parcels.

• Failure of the owners of Taxable Property to pay the Special Tax and delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels, thereby resulting in an increased tax burden on the remaining parcels.

• Development of a parcel of Taxable Property more rapidly than development of other parcels of Taxable Property, thereby resulting in the application of development factors in the Special Tax formula to the parcel and resulting in an increased tax burden on the parcel of Taxable Property.

42 • Development of other parcels of Taxable Property less rapidly than expected, thereby resulting in delay in application of development factors in the Special Tax formula to the other parcels of Taxable Property and resulting in an increased tax burden on the parcel of Taxable Property.

Except as set forth above under “SECURITY FOR THE BONDS – Special Taxes” and “– Rate and Method,” the Fiscal Agent Agreement provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described in “SECURITY FOR THE BONDS – Covenant to Foreclose” and in the Act, is subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ordinary ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the County.

If sales or foreclosures of property are necessary, there could be a delay in payments to owners of the Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the Community Facilities District of the proceeds of sale if the Reserve Fund is depleted. See “SECURITY FOR THE BONDS – Covenant to Foreclose.”

Payment of Special Tax is not a Personal Obligation of the Property Owner

An owner of Taxable Property is not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation only against the parcels of Taxable Property. If, after a default in the payment of the Special Tax and a foreclosure sale by the Community Facilities District, the resulting proceeds are insufficient, taking into account other obligations also constituting a lien against the parcels of Taxable Property, the Community Facilities District has no recourse against the owner.

Appraised Values

The Appraisal summarized in APPENDIX C estimates the market value of the taxable property within Zone 2 of the Community Facilities District. This market value is merely the present opinion of the Appraiser, and is subject to the assumptions and limiting conditions stated in the Appraisal. The Community Facilities District has not sought the present opinion of any other appraiser of the value of the taxed parcels. A different present opinion of value might be rendered by a different appraiser.

The opinion of value relates to sale by a willing seller to a willing buyer, each having similar information and neither being forced by other circumstances to sell or to buy. Consequently, the opinion is of limited use in predicting the selling price at a foreclosure sale, because the sale is forced and the buyer may not have the benefit of full information.

In addition, the opinion is a present opinion, based upon present facts and circumstances. Differing facts and circumstances may lead to differing opinions of value. The appraised value is not evidence of future value because future facts and circumstances may differ significantly from the present.

No assurance can be given that any of the Taxable Property in Zone 2 of the Community Facilities District could be sold for the estimated market value contained in the Appraisal if that property should become delinquent in the payment of Special Taxes and be foreclosed upon.

43 Property Values and Property Development

The value of Taxable Property within the Community Facilities District is a critical factor in determining the investment quality of the Bonds. If a property owner defaults in the payment of the Special Tax, the Community Facilities District’s only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Tax. Land development and land values could be adversely affected by economic and other factors beyond the Community Facilities District’s control, such as a general economic downturn, adverse judgments in future litigation that could affect the scope, timing or viability of development, relocation of employers out of the area, stricter land use regulations, shortages of water, electricity, natural gas or other utilities, destruction of property caused by earthquake, flood or other natural disasters, environmental pollution or contamination, or unfavorable economic conditions.

Neither the Community Facilities District nor the School District has evaluated development risks. Since these are largely business risks of the type that the property owner customarily evaluates individually, and inasmuch as changes in land ownership may well mean changes in the evaluation with respect to any particular parcel, the Community Facilities District is issuing the Bonds without regard to any such evaluation. Thus, the creation of the Community Facilities District and the issuance of the Bonds in no way implies that the Community Facilities District or the School District has evaluated these risks or the reasonableness of these risks. On the contrary, the Board has made no such evaluation and is undertaking acquisition and construction of the Facilities even though these risks may be serious and may ultimately halt or slow the progress of land development and forestall the realization of Taxable Property values in the event of delinquency and foreclosure.

The following is a discussion of specific risk factors that could affect the timing or scope of property development in the Community Facilities District or the value of property in the Community Facilities District.

Land Development. Land values are influenced by the level of development in the area in many respects.

First, undeveloped or partially developed land is generally less valuable than developed land and provides less security to the owners of the Bonds should it be necessary for the Community Facilities District to foreclose on undeveloped or partially developed property due to the nonpayment of Special Taxes.

Second, failure to complete development on a timely basis could adversely affect the land values of those parcels that have been completed. Lower land values would result in less security for the payment of principal of and interest on the Bonds and lower proceeds from any foreclosure sale necessitated by delinquencies in the payment of the Special Tax. See “THE COMMUNITY FACILITIES DISTRICT – Appraised Value to Burden Ratios.” No assurance can be given that the proposed development within the Community Facilities District will be completed, and in assessing the investment quality of the Bonds, prospective purchasers should evaluate the risks of noncompletion.

Risks of Real Estate Investment Generally. Continuing development of land within the Community Facilities District may be adversely affected by changes in general or local economic conditions, fluctuations in or a deterioration of the real estate market, increased construction costs, development, financing and marketing capabilities of the individual property

44 owner, water or electricity shortages, and other similar factors. Development in the Community Facilities District may also be affected by development in surrounding areas, which may compete with the Community Facilities District. In addition, land development operations are subject to comprehensive federal, state and local regulations, including environmental, land use, zoning and building requirements. There can be no assurance that proposed land development operations within the Community Facilities District will not be adversely affected by future government policies, including, but not limited to, governmental policies to restrict or control development, or future growth control initiatives. There can be no assurance that land development operations within the Community Facilities District will not be adversely affected by these risks.

Natural Disasters. The value of the Taxable Property in the future can be adversely affected by a variety of natural occurrences, particularly those that may affect infrastructure and other public improvements and private improvements on the Taxable Property and the continued habitability and enjoyment of such private improvements. The areas in and surrounding the Community Facilities District, like those in much of California, may be subject to unpredictable seismic activity. See “PROPERTY OWNERSHIP AND PROPOSED DEVELOPMENT – Environmental Conditions.”

Other natural disasters could include, without limitation, landslides, floods, droughts or tornadoes. One or more natural disasters could occur and could result in damage to improvements of varying seriousness. The damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost, or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances there could be significant delinquencies in the payment of Special Taxes, and the value of the Taxable Property may well depreciate or disappear.

Legal Requirements. Other events that may affect the value of Taxable Property include changes in the law or application of the law. Such changes may include, without limitation, local growth control initiatives, local utility connection moratoriums and local application of statewide tax and governmental spending limitation measures.

Hazardous Substances. One of the most serious risks in terms of the potential reduction in the value of Taxable Property is a claim with regard to a hazardous substance. In general, the owners and operators of Taxable Property may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the Taxable Property be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.

The appraised values set forth in this Official Statement do not take into account the possible reduction in marketability and value of any of the Taxable Property by reason of the possible liability of the owner or operator for the remedy of a hazardous substance condition of the parcel. Although the Community Facilities District is not aware that the owner or operator of

45 any of the Taxable Property has such a current liability with respect to any of the Taxable Property, it is possible that such liabilities do currently exist and that the Community Facilities District is not aware of them.

Further, it is possible that liabilities may arise in the future with respect to any of the Taxable Property resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but that has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but that may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of Taxable Property that is realizable upon a delinquency. See “PROPERTY OWNERSHIP AND PROPOSED DEVELOPMENT – Environmental Conditions.”

Endangered and Threatened Species. It is illegal to harm or disturb any plants or animals in their habitat that have been listed as endangered species by the United States Fish & Wildlife Service under the Federal Endangered Species Act or by the California Fish & Game Commission under the California Endangered Species Act without a permit. Although the property owners believe that no federally listed endangered or threatened species would be affected by the proposed development within the Community Facilities District, the discovery of an endangered plant or animal could delay development of vacant property in the Community Facilities District or reduce the value of undeveloped property. See “PROPERTY OWNERSHIP AND PROPOSED DEVELOPMENT – Environmental Conditions.”

Concentration of Property Ownership

As of the date of issuance of the Bonds, a limited number of property owners are the sole owners of Taxable Property in the Community Facilities District, whose property is currently responsible for payment of all of the Special Taxes. See “PROPERTY OWNERSHIP AND PROPOSED DEVELOPMENT.”

Failure of any owner of property in the Community Facilities District to pay installments of the Special Tax when due could result in the depletion of the Reserve Fund prior to reimbursement from the resale of foreclosed property or payment of the delinquent Special Tax and, consequently, an insufficiency of Special Tax proceeds to meet obligations under the Fiscal Agent Agreement. In that event, there could be a delay or failure in payments of the principal of and interest on the Bonds.

Other Possible Claims Upon the Value of Taxable Property

While the Special Taxes are secured by the Taxable Property, the security only extends to the value of such Taxable Property that is not subject to priority and parity liens and similar claims.

The table in the section entitled “THE COMMUNITY FACILITIES DISTRICT – Direct and Overlapping Governmental Obligations” shows the presently outstanding amount of governmental obligations (with stated exclusions), the tax or assessment for which is or may become an obligation of one or more of the parcels of Taxable Property. The table also states the additional amount of general obligation bonds the tax for which, if and when issued, may become an obligation of one or more of the parcels of Taxable Property. The table does not

46 specifically identify which of the governmental obligations are secured by liens on one or more of the parcels of Taxable Property.

In addition, other governmental obligations may be authorized and undertaken or issued in the future, the tax, assessment or charge for which may become an obligation of one or more of the parcels of Taxable Property and may be secured by a lien on a parity with the lien of the Special Tax securing the Bonds.

In general, the Special Tax and all other taxes, assessments and charges also collected on the tax roll are on a parity, that is, are of equal priority. Questions of priority become significant when collection of one or more of the taxes, assessments or charges is sought by some other procedure, such as foreclosure and sale. In the event of proceedings to foreclose for delinquency of Special Taxes securing the Bonds, the Special Tax will be subordinate only to existing prior governmental liens, if any. Otherwise, in the event of such foreclosure proceedings, the Special Taxes will generally be on a parity with the other taxes, assessments and charges, and will share the proceeds of such foreclosure proceedings on a pro-rata basis. Although the Special Taxes will generally have priority over non-governmental liens on a parcel of Taxable Property, regardless of whether the non-governmental liens were in existence at the time of the levy of the Special Tax or not, this result may not apply in the case of bankruptcy. See “– Bankruptcy and Foreclosure Delays” below.

Exempt Properties

Certain properties are exempt from the Special Tax in accordance with the Rate and Method and the Act, which provides that properties or entities of the state, federal or local government are exempt from the Special Tax; provided, however, that property within the Community Facilities District acquired by a public entity through a negotiated transaction or by gift or devise, which is not otherwise exempt from the Special Tax, will continue to be subject to the Special Tax. See “SECURITY FOR THE BONDS – Rate and Method.” In addition, although the Act provides that if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment, the constitutionality and operation of these provisions of the Act have not been tested, meaning that such property could become exempt from the Special Tax.

The Act further provides that no other properties or entities are exempt from the Special Tax unless the properties or entities are expressly exempted in a resolution of consideration to levy a new special tax or to alter the rate or method of apportionment of an existing special tax.

Depletion of Reserve Fund

The Reserve Fund is to be maintained at an amount equal to the Reserve Requirement. See “SECURITY FOR THE BONDS – Reserve Fund.” Funds in the Reserve Fund may be used to pay principal of and interest on the Bonds if insufficient funds are available from the proceeds of the levy and collection of the Special Tax against property within the Community Facilities District. If funds in the Reserve Fund for the Bonds are depleted, the funds can be replenished from the proceeds of the levy and collection of the Special Tax that are in excess of the amount required to pay all amounts to be paid to the Bond holders pursuant to the Fiscal Agent Agreement. However, no replenishment from the proceeds of a Special Tax levy can occur as long as the proceeds that are collected from the levy of the Special Tax against property within the Community Facilities District at the maximum Special Tax rates, together

47 with other available funds, remains insufficient to pay all such amounts. Thus it is possible that the Reserve Fund will be depleted and not be replenished by the levy of the Special Tax.

Bankruptcy and Foreclosure Delays

Bankruptcy. The payment of the Special Tax and the ability of the Community Facilities District to foreclose the lien of a delinquent unpaid tax, as discussed in “SECURITY FOR THE BONDS,” may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State of California relating to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases.

Although bankruptcy proceedings would not cause the Special Taxes to become extinguished, bankruptcy of a property owner or any other person claiming an interest in the property could result in a delay in superior court foreclosure proceedings and could result in the possibility of Special Tax installments not being paid in part or in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds. To the extent that property in the Community Facilities District continues to be owned by a limited number of property owners, the chances are increased that the Reserve Fund established for the Bonds could be fully depleted during any such delay in obtaining payment of delinquent Special Taxes. As a result, sufficient moneys would not be available in the Reserve Fund for transfer to the Bond Fund to make up shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the Bonds on a timely basis.

Glasply Marine Industries. On July 30, 1992 the United States Court of Appeals for the Ninth Circuit issued an opinion in a bankruptcy case entitled In re Glasply Marine Industries, holding that ad valorem property taxes levied by a county in the State of Washington after the date that the property owner filed a petition for bankruptcy would not be entitled to priority over the claims of a secured creditor with a prior lien on the property. Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed subsequent to the filing of the bankruptcy petition were declared to be “administrative expenses” of the bankruptcy estate, payable after the claims of all secured creditors. As a result, the secured creditor was able to foreclose on the subject property and retain all the proceeds from the sale thereof except the amount of the pre-petition taxes. Pursuant to this holding, post- petition taxes would be paid only as administrative expenses and only if a bankruptcy estate has sufficient assets to do so. In certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise) it would be subject only to current ad valorem taxes (i.e., not those accruing during the bankruptcy proceeding).

The Glasply decision is controlling precedent in bankruptcy court in the State of California. If Glasply were held to be applicable to Special Taxes, a bankruptcy petition filing would prevent the lien for Special Taxes levied in subsequent fiscal years from attaching so long as the property was part of the estate in bankruptcy, which could reduce the amount of Special Taxes available to pay debt service on the Bonds. However, Glasply speaks as to ad valorem property taxes, and not special taxes, and no case law exists with respect to how a bankruptcy court would treat the lien for special taxes levied after the filing of a petition in bankruptcy.

48 It should also be noted that on April 20, 2005, Congress amended 11 U.S.C. § 362(b)(18) to expand the existing exception to the automatic stay for ad valorem property taxes. As amended, this section of the Bankruptcy Code provides that the following liens are not subject to the automatic stay: the creation or perfection of a statutory lien for an ad valorem property tax, or a special tax or special assessment on real property whether or not ad valorem, imposed by a governmental unit, if such tax or assessment comes due after the date of the filing of the petition in bankruptcy.

Property Owned by FDIC. In addition, the ability of the Community Facilities District to foreclose upon the lien on property for delinquent Special Taxes may be limited for properties in which the Federal Deposit Insurance Corporation (the “FDIC”) has an interest. On November 26, 1996, the FDIC adopted a Statement of Policy Regarding the Payment of State and Local Property Taxes (the “Policy Statement”) (which superseded a prior statement issued by the FDIC and the Resolution Trust Corporation in 1991). The Policy Statement applies to the FDIC when it is liquidating assets in its corporate and receivership capacities. The Policy Statement provides, in part, that real property of the FDIC is subject to state and local real property taxes if those taxes are assessed according to the property's value, and that the FDIC is immune from ad valorem real property taxes assessed on other bases. The Policy Statement also provides that the FDIC will pay its proper tax obligations when they become due and will pay claims for delinquencies as promptly as is consistent with sound business practice and the orderly administration of the institution's affairs, unless abandonment of the FDIC interest in the property is appropriate. It further provides that the FDIC will pay claims for interest on delinquent property taxes owned at the rate provided under state law, but only to the extent the interest payment obligation is secured by a valid lien. The FDIC will not pay for any fines or penalties and will not pay nor recognize liens for such amounts. The Policy Statement also provides that if any property taxes (including interest) on FDIC-owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. No property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent. In addition, a lien for taxes and interest may attach, but the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC's consent.

With respect to challenges to assessments, the Policy Statement provides: “The [FDIC] is only liable for state and local taxes which are based on the value of the property during the period for which the tax is imposed, notwithstanding the failure of any person, including prior record owners, to challenge an assessment under the procedures available under state law. In the exercise of its business judgment, the [FDIC] may challenge assessments which do not conform with the statutory provisions, and during the challenge may pay tax claims based on the assessment level deemed appropriate, provided such payment will not prejudice the challenge. The [FDIC] will generally limit challenges to the current and immediately preceding taxable year and to the pursuit of previously filed tax protests. However, the [FDIC] may, in the exercise of its business judgment, challenge any prior taxes and assessments provided that (1) the [FDIC's] records (including appraisals, offers or bids received for the purchase of the property, etc.) indicate that the assessed value is clearly excessive, (2) a successful challenge will result in a substantial savings to the [FDIC], (3) the challenge will not unduly delay the sale of the property, and (4) there is a reasonable likelihood of a successful challenge.”

The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on property in which it has a fee simple interest unless the amount of tax is fixed at the time the FDIC acquires its fee simple interest in the property, nor will the FDIC recognize the validity of any lien to the extent it purports to secure the payment of

49 any such amounts. Because the Special Taxes are neither ad valorem taxes nor special assessments, and because they are levied under a special tax formula under which the amount of the Special Tax is determined each year, the Special Taxes appear to fall within the category of taxes the FDIC generally will not pay under the Policy Statement.

Following the County of Orange bankruptcy proceedings filed in December 1994, the FDIC filed claims against the County of Orange in the U.S. Bankruptcy Court and the Federal District Court which challenged special taxes that Orange County had levied on FDIC-owned property (and which the FDIC had paid) under the Act. The FDIC took a position similar to that outlined in the Policy Statement, to the effect that the FDIC, as a governmental entity, is exempt from special taxes under the Act. The Bankruptcy Court agreed, finding that the FDIC was not liable for post-receivership Mello-Roos taxes, and the Bankruptcy Appellate Panel affirmed. On appeal, the U.S. Court of Appeals for the Ninth Circuit, while not specifically asked to decide on the issue, stated in its decision filed on August 28, 2001, that “the FDIC, as a federal agency, is exempt from the Mello-Roos tax,” and quoted Section 53340(c) of the Act in stating that “’properties or entities’ of the federal government are exempt from the tax.”

The Community Facilities District is unable to predict what effect the application of the Policy Statement, or the ultimate outcome of the County of Orange case, would have in case of a Special Tax delinquency on a parcel in which the FDIC has an interest. However, prohibiting the judicial foreclosure sale of a FDIC-owned parcel would likely reduce the number of or eliminate the persons willing to purchase a parcel at a foreclosure sale. Owners of the Bonds should assume that the Community Facilities District will be unable to foreclose on parcels of land in the Community Facilities District owned by the FDIC. Such an outcome would cause a draw on the Reserve Fund and perhaps, ultimately, a default in payment of the Bonds.

Disclosure to Future Purchasers

The Community Facilities District has recorded a notice of the Special Tax lien in the Office of the Riverside County Recorder. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such special tax obligation in the purchase of a parcel of land or a home in the Community Facilities District or the lending of money secured by property in the Community Facilities District. The Act and the Goals and Policies require the subdivider of a subdivision (or its agent or representative) to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section 1102.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with these requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due.

50 No Acceleration Provisions

The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Fiscal Agent Agreement. Under the Fiscal Agent Agreement, a Bond holder is given the right for the equal benefit and protection of all Bond holders similarly situated to pursue certain remedies. See “APPENDIX D – Summary of the Fiscal Agent Agreement.” So long as the Bonds are in book- entry form, DTC will be the sole Bond holder and will be entitled to exercise all rights and remedies of Bond holders.

Loss of Tax Exemption

As discussed under the caption “LEGAL MATTERS – Tax Exemption,” interest on the Bonds might become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were issued as a result of future acts or omissions of the Community Facilities District in violation of its covenants in the Fiscal Agent Agreement. The Fiscal Agent Agreement does not contain a special redemption feature triggered by the occurrence of an event of taxability. As a result, if interest on the Bonds were to be includable in gross income for purposes of federal income taxation, the Bonds would continue to remain outstanding until maturity unless earlier redeemed pursuant to optional or mandatory redemption or redemption upon prepayment of the Special Tax. See “THE BONDS – Redemption.”

Voter Initiatives

Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. Since 1978, the voters have exercised this power through the adoption of Proposition 13 and similar measures, including Proposition 218, which was approved in the general election held on November 5, 1996.

Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the Community Facilities District. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter- approved initiatives, possibly to the extent of creating cash-flow problems in the payment of outstanding obligations such as the Bonds.

Proposition 218—Voter Approval for Local Government Taxes—Limitation on Fees, Assessments, and Charges—Initiative Constitutional Amendment, added Articles XIIIC and XIIID to the California Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property-related fees and charges.

The Special Taxes and each series of the Bonds were each authorized by not less than a two-thirds vote of the landowners within the Community Facilities District who constituted the qualified electors at the time of such voted authorization. The Community Facilities District believes, therefore, that issuance of the Bonds does not require the conduct of further proceedings under the Act or Proposition 218.

Like its antecedents, Proposition 218 is likely to undergo both judicial and legislative scrutiny before its impact on the Community Facilities District and its obligations can be determined. Certain provisions of Proposition 218 may be examined by the courts for their

51 constitutionality under both State and federal constitutional law, the outcome of which cannot by predicted.

LEGAL MATTERS

Legal Opinions

The legal opinion of Best Best & Krieger LLP, Riverside, California, Bond Counsel, approving the validity of the Bonds will be delivered concurrently with the delivery of the Bonds and is attached as APPENDIX H. Bond Counsel’s legal opinion will be qualified as to enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally and by equitable remedies and proceedings generally.

Jones Hall, A Professional Law Corporation, San Francisco, California is serving as counsel to the Underwriter and will pass upon certain legal matters for the Underwriter. Best Best & Krieger LLP will also pass upon certain legal matters for the School District and the Community Facilities District as special counsel to these entities.

Tax Exemption

In the opinion of Best Best & Krieger LLP, Riverside, California, Bond Counsel, under existing statutes, regulations, rules and court decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, the interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from personal income taxation imposed by the State of California.

Bond Counsel is further of the opinion that interest on the Bonds is not a specific preference item for purposes of the alternative minimum tax provisions of the Internal Revenue Code of 1986, as amended (the “Code”). However, with respect to the Bonds owned by corporations (as defined for federal income tax purposes), interest on the Bonds may be included in adjusted current earnings, a portion of which may increase the alternative minimum taxable income of such corporations. In addition, although interest on the Bonds is excluded from gross income for federal income tax purposes, the accrual or receipt of interest on the Bonds and the ownership of the Bonds may otherwise affect the federal income tax liability of certain persons or entities. Bond Counsel expresses no opinion regarding any such consequences.

The Code sets forth certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest paid with respect thereto to be and remain exempt from federal income taxation. Noncompliance with such requirements might cause the interest paid on the Bonds to be subject to federal income taxation retroactive to the date of issue and the Bonds. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Bonds and other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. Pursuant to the Fiscal Agent Agreement, the School District has covenanted to comply with all such requirements.

In rendering such opinions, Bond Counsel is assuming that the School District will comply with its covenants in the Fiscal Agent Agreement to comply with the requirements of the

52 Code. Noncompliance with the Code might cause the interest on the Bonds to be subject to federal income taxation retroactive to the date of issuance and delivery of the Bonds.

The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar bonds).

No Litigation

At the time of delivery of the Bonds, the School District and the Community Facilities District will certify that there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending with respect to which the Community Facilities District has been served with process or threatened, which:

• in any way questions the powers of the Board or the Community Facilities District, or

• in any way questions the validity of any proceeding taken by the Board in connection with the issuance of the Bonds, or

• wherein an unfavorable decision, ruling or finding could materially adversely affect the transactions contemplated by the Bond Purchase Contract, or

• which, in any way, could adversely affect the validity or enforceability of the Resolutions, the Bonds, the Fiscal Agent Agreement, the Issuer Continuing Disclosure Certificate or the Bond Purchase Contract, or

• to the knowledge of the Community Facilities District, which in any way questions the exclusion from gross income of the recipients thereof of the interest on the Bonds for federal income tax purposes, or

• in any other way questions the status of the Bonds under State tax laws or regulations.

CONTINUING DISCLOSURE

The Community Facilities District. The Community Facilities District has covenanted in a continuing disclosure certificate, the form of which is set forth in “APPENDIX F – Form of Issuer Continuing Disclosure Certificate” (the “Issuer Continuing Disclosure Certificate”), for the benefit of holders and beneficial owners of the Bonds, to provide certain financial information and operating data relating to the Community Facilities District and the Bonds by not later than nine months after the end of the Community Facilities District’s fiscal year, or March 31 of each year, beginning on March 31, 2006. The Issuer Continuing Disclosure Certificate also requires the Community Facilities District to provide notices of the occurrence of certain enumerated events, if material. The initial Dissemination Agent under the Issuer Continuing Disclosure Certificate will be David Taussig & Associates, Inc.

The covenants of the Community Facilities District in the Issuer Continuing Disclosure Certificate will be made in order to assist the Underwriter in complying with Securities and

53 Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). A default under the Issuer Continuing Disclosure Certificate will not, in itself, constitute an Event of Default under the Fiscal Agent Agreement, and the sole remedy under the Issuer Continuing Disclosure Certificate in the event of any failure of the Community Facilities District or the Dissemination Agent to comply will be an action to compel specific performance.

Neither the School District nor the Community Facilities District has ever failed to comply, in any material respect, with an undertaking under the Rule.

The Developer. The Developer will covenant in a continuing disclosure certificate, the form of which is set forth in “APPENDIX G – Form of Property Owner Disclosure Certificate” (the “Property Owner Continuing Disclosure Certificate”), for the benefit of holders and beneficial owners of the Bonds, to provide certain information relating to the Developer and the parcels it owns within Zone 2 of the Community Facilities District on a semi-annual basis, and to provide notices of the occurrence of certain enumerated events. The initial Dissemination Agent under the Property Owner Continuing Disclosure Certificate will be U.S. Bank National Association.

The Developer’s obligations under its Property Owner Continuing Disclosure Certificate will terminate on the earlier of (i) legal defeasance, prior redemption or payment in full of all the Bonds, (ii) the date on which the Developer’s property in Zone 2 of the Community Facilities District is no longer responsible for 10% or more of the Special Taxes, or (iii) the date on which the Developer prepays in full all of the Special Taxes attributable to its property in Zone 2 of the Community Facilities District.

A default under the Property Owner Continuing Disclosure Certificate will not, in itself, constitute an Event of Default under the Fiscal Agent Agreement, and the sole remedy under the Property Owner Continuing Disclosure Certificate in the event of any failure of the Developer or the Dissemination Agent to comply will be an action to compel specific performance.

NO RATINGS

The Bonds have not been rated by any securities rating agency.

UNDERWRITING

The Bonds are being purchased by the Stone & Youngberg LLC at a purchase price of $3,074,900.00 (which represents the aggregate principal amount of the Bonds ($3,170,000.00) less an underwriter's discount of $95,100.00).

The purchase agreement relating to the Bonds provides that the Underwriter will purchase all of the Bonds, if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in such purchase agreement.

The Underwriter may offer and sell Bonds to certain dealers and others at prices lower than the offering price stated on the cover page hereof. The offering prices may be changed from time to time by the Underwriter.

54 PROFESSIONAL FEES

In connection with the issuance of the Bonds, fees payable to certain professionals are contingent upon the issuance and delivery of the Bonds. Those professionals include:

• the Underwriter;

• Jones Hall, A Professional Law Corporation, as Underwriter’s counsel;

• Best Best & Krieger LLP, as Bond Counsel;

• a portion of the fees of David Taussig & Associates, Inc., as special tax consultant; and

• U.S. Bank National Association, as Fiscal Agent for the Bonds.

EXECUTION

The execution and delivery of the Official Statement by the Community Facilities District has been duly authorized by the Jurupa Unified School District on behalf of the Community Facilities District.

COMMUNITY FACILITIES DISTRICT NO. 4 OF THE JURUPA UNIFIED SCHOOL DISTRICT

By: /s/ Pam Lauzon, Business Manager Pam Lauzon, Business Manager, Jurupa Unified School District, on behalf of Community Facilities District No. 4 of the Jurupa Unified School District

55

(This Page Intentionally Left Blank) APPENDIX A

GENERAL INFORMATION ABOUT THE CITY OF RIVERSIDE AND RIVERSIDE COUNTY

The following information is included only for the purpose of supplying general information regarding the City of Riverside (the “City”) and Riverside County (the “County”). This information is provided only for general informational purposes, and provides prospective investors limited information about the City, the County and their economic base. The Bonds are not a debt of the City, County, the State or any of its political subdivisions, and neither the City, the County, the State nor any of its political subdivisions is liable therefor.

General

Set forth below is certain demographic information about the City of Riverside and Riverside County that could affect the economic environment in and around the Community Facilities District.

History and Location of Riverside County

Riverside County, which encompasses 7,177 square miles, was organized in 1893 from territory in San Bernardino and San Diego Counties. Located in the southeastern portion of California, Riverside County is bordered on the north by San Bernardino County, on the east by the State of Arizona, on the South by San Diego and Imperial Counties and on the west by Orange and Los Angeles Counties. There are 24 incorporated cities in Riverside County.

Riverside County's varying topology includes desert, valley and mountain areas as well as gently rolling terrain. Three distinct geographical areas characterize Riverside County: the western valley area, the higher elevations of the mountains, and the deserts. The western valley, the San Jacinto mountains and the Cleveland National Forest experience the mild climate typical of Southern California. The eastern desert areas experience warmer and dryer weather conditions. Riverside County is the site for famous resorts, such as Palm Springs, as well as a leading area for inland water recreation. Nearly 20 lakes in Riverside County are open to the public. The dry summers and moderate to cool winters make it possible to enjoy these and other recreational and cultural facilities on a year-round basis.

Riverside County Population

According to the State Department of Finance, Demographic Research Unit, Riverside County’s population was estimated at 1,877,000 as of January 1, 2005. The largest cities in Riverside County are the cities of Riverside, Moreno Valley, Corona, Hemet, Indio, Palm Springs, Murrieta, Temecula and Cathedral City. The areas of most rapid population growth continue to be those more populated and industrialized cities in the western and central regions of Riverside County and the southwestern unincorporated region of Riverside County between Sun City and Temecula.

The following table sets forth annual population figures, as of January 1, for cities located within Riverside County for each of the years listed:

A-1 COUNTY OF RIVERSIDE Population Estimates

1980 (1) 1990 (1) 2000 2001 2002 2003 2004 2005 Banning 14,020 20,570 23,500 23,850 24,650 25,600 27,200 27,954 Beaumont 6,818 9,685 11,350 11,500 12,200 13,900 16,350 18,982 Blythe 6,805 8,428 20,050 20,800 21,250 21,300 21,950 22,005 Calimesa -- -- 7,075 7,175 7,275 7,400 7,350 7,434 Canyon Lake -- -- 9,925 10,100 10,350 10,600 10,650 10,912 Cathedral City -- 30,085 42,300 43,900 45,450 47,700 48,600 50,632 Coachella 9,129 16,896 22,150 23,250 24,300 27,000 27,650 30,764 Corona 37,791 76,095 123,700 129,200 134,000 138,200 141,800 144,070 Desert Hot Springs 5,941 11,668 16,550 16,700 16,900 17,300 17,700 19,386 Hemet 22,454 36,094 58,500 59,800 61,500 62,700 63,800 66,455 Indian Wells 1,394 2,647 3,670 4,130 4,350 4,430 4,430 4,781 Indio 21,611 36,793 48,650 50,200 52,200 54,900 59,100 66,118 Lake Elsinore 5,982 18,285 28,700 29,900 31,100 33,300 35,350 38,045 La Quinta -- 11,215 23,050 26,000 28,750 30,700 32,500 36,145 Moreno Valley -- 118,779 142,000 143,800 146,500 151,200 155,100 165,328 Murrieta -- -- 43,850 46,250 51,700 68,200 77,700 85,102 Norco 19,732 23,302 24,100 24,400 24,900 25,400 25,500 26,703 Palm Desert 11,081 23,252 41,000 41,900 42,900 44,300 44,800 49,280 Palm Springs 32,359 40,181 42,700 43,250 43,750 44,350 44,250 45,731 Perris 6,827 21,460 35,900 36,750 37,550 38,500 41,300 44,594 Rancho Mirage 6,281 9,778 13,150 13800 14,350 15,100 15,500 16,416 Riverside 170,591 226,505 253,800 261,200 269,600 276,300 277,000 285,537 San Jacinto 7,098 16,210 23,400 24,500 25,300 26,250 26,700 28,437 Temecula -- 27,099 56,600 61,500 72,800 75,700 77,500 81,397 Unincorporated 248,009 385,386 418,000 429,600 441,800 465,600 477,000 1,372,208 County Total 633,923 1,170,413 1,115,700 1,583,600 1,645,500 1,719,000 1,776,700 1,877,000

(1) From U.S. Census. Source: State Department of Finance estimates (as of January 1).

A-2 Riverside County Employment

Riverside County and San Bernardino County comprise the Riverside-San Bernardino Metropolitan Statistical Area. The following table summarizes the civilian labor force, employment and unemployment in the Riverside-San Bernardino Metropolitan Statistical Area for the calendar years 2000 through 2004.

RIVERSIDE-SAN BERNARDINO Metropolitan Statistical Area Civilian Labor Force, Employment and Unemployment, Employment by Industry (Annual Averages)

2000 2001 2002 2003 2004 Civilian Labor Force (1) 1,510,200 1,575,100 1,638,800 1,687,400 1,650,500 Employment 1,433,000 1,496,100 1,542,500 1,587,800 1,556,100 Unemployment 77,200 79,000 96,300 99,600 94,400 Unemployment Rate 5.1% 5.0% 5.9% 5.9% 5.7% Wage and Salary Employment (2) Agriculture 21,700 20,900 20,300 20,400 18,800 Natural Resources and Mining 1,300 1,200 1,200 1,300 1,200 Construction 80,100 88,400 90,900 97,500 110,800 Manufacturing 120,100 118,600 115,400 113,500 120,000 Wholesale Trade 38,300 41,600 41,900 43,800 44,400 Retail Trade 127,400 132,200 137,500 141,700 151,800 Trans., Warehousing and Utilities 46,400 45,600 46,000 47,500 54,300 Information 12,900 14,600 14,100 13,800 13,800 Finance and Insurance 20,600 22,900 23,500 25,300 27,800 Real Estate and Rental and Leasing 14,200 15,300 15,900 16,800 17,500 Professional and Business Services 97,000 101,700 106,800 113,100 125,200 Educational and Health Services 102,200 106,000 112,400 115,300 117,700 Leisure and Hospitality 100,800 104,400 107,200 108,300 115,200 Other Services 35,000 37,100 38,100 38,400 38,800 Federal Government 18,200 16,900 16,900 17,000 17,100 State Government 24,600 25,800 26,600 26,600 26,600 Local Government 149,300 157,600 169,300 167,800 167,800 Total, All Industries 1,010,100 1,050,700 1,084,000 1,108,100 1,168,500

(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. Source: State of California Employment Development Department.

A-3 Largest Employers in Riverside County

The following table lists the largest employers within the County:

COUNTY OF RIVERSIDE Major Employers (As of January 1, 2005)

EMPLOYER NAME LOCATION INDUSTRY C A State Transportation Lake Elsinore Government Offices-State Casino Morongo Cabazon Casinos Chase Manhattan Mortgage Corp Moreno Valley Real Estate Loans Desert Regional Medical Ctr Palm Springs Hospitals Eisenhower Medical Ctr Rancho Mirage Clinics Guidant Corp Temecula Physicians & Surgeons Equip & Supls-Mfrs Handsome Rewards Perris Mail Order & Catalog Shopping JW Marriott Desert Springs Rst Palm Desert Hotels & Motels La Quinta Resort & Club La Quinta Hotels & Motels Labtechniques Rancho Mirage Laboratories-Medical National RV Holdings Inc Perris Motor Homes-Manufacturers Oasis Distributing Thermal Fruits & Vegetables-Growers & Shippers Parkview Community Hospital Riverside Hospitals Parts Depot Beaumont Motorcycles & Motor Scooters-Supplies Pechanga Resort & Casino Temecula Casinos Riverside Community College Riverside Schools-Universities & Colleges Academic Riverside Community Hospital Riverside Hospitals Riverside County Regional Med Moreno Valley Hospitals Signatures Perris Mail Order & Catalog Shopping Spa Resort Casino Palm Springs Casinos Starcrest Perris Mail Order & Catalog Shopping Starcrest Products of CA Perris Mail Order & Catalog Shopping University of California Riverside Schools-Universities & Colleges Academic Valley Health System Hemet Hospitals Watson Pharmaceuticals Inc Corona Drug Millers

Source: State of California Employment Development Department.

A-4 Riverside County Effective Buying Income

"Effective Buying Income" is defined as personal income less personal tax and nontax payments, a number often referred to as "disposable" or "after-tax" income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor's income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as "disposable personal income."

COUNTY OF RIVERSIDE Effective Buying Income For Calendar Years 2000 through 2004

Median Total Effective Household Buying Income Effective Buying Year Area (000's Omitted) Income

2000 City of Riverside $ 3,735,911 $37,395 Riverside County 25,144,120 39,293 California 652,190,282 44,464 United States 5,230824,904 39,129

2001 City of Riverside $ 3,636,701 $37,231 Riverside County 23,617,301 37,480 California 650,521,407 43,532 United States 5,303,481,498 38,365

2002 City of Riverside $ 3,874,905 $37,406 Riverside County 25,180,040 38,691 California 647,879,427 42,484 United States 5,340,682,818 38,035

2003 City of Riverside $ 4,135,550 $37,794 Riverside County 27,623,743 39,321 California 674,721,020 42,924 United States 5,466,880,008 38,201

2004 City of Riverside $ 4,303,175 $38,787 Riverside County 29,468,208 40,275 California 705,108,410 43,915 United States 5,692,909,567 39,324

Source: Sales & Marketing Management Survey of Buying Power.

A-5 Construction Trends

Provided below are the building permits and valuations for the City for calendar years 2000 through 2004.

CITY OF RIVERSIDE Total Building Permit Valuations (valuations in thousands)

2000 2001 2002 2003 2004 Permit Valuation New Single-family $189,150.9 $254,494.2 $218,696.1 $140,055.6 $205,436.7 New Multi-family 54,910.9 2,719.0 0.0 93,711.0 23,610.9 Res. Alterations/Additions 10,607.8 11,064.2 12,584.7 19,772.5 22,225.7 Total Residential 254,669.5 268,277.3 231,280.8 253,539.1 251,273.3

New Commercial 12,404.0 41,602.5 53,790.8 62,900.5 161,598.7 New Industrial 3,191.9 13,086.4 6,190.8 14,973.6 14,593.8 New Other 5,697.9 9,977.0 17,948.3 18,816.8 32,324.4 Com. Alterations/Additions 21,943.5 31,886.2 32,820.6 45,913.7 40,374.2 Total Nonresidential 43,237.3 96,552.0 110,750.4 142,604.6 248,891.2

New Dwelling Units Single Family 1,017 1,237 1,113 689 820 Multiple Family 790 40 0 1,377 282 TOTAL 1,807 1,277 1,113 2,066 1,102

Source: Construction Industry Research Board, Building Permit Summary.

Provided below are the building permits and valuations for the County for calendar years 2000 through 2004.

COUNTY OF RIVERSIDE Total Building Permit Valuations (valuations in thousands)

2000 2001 2002 2003 2004 Permit Valuation New Single-family $2,519,841.4 $3,051,190.4 $3,670,371.4 $4,665,675.0 $4,997,513.2 New Multi-family 125,296.2 174,628.0 165,413.0 406,483.0 404,615.9 Res. Alterations/Additions 67,303.7 70,849.7 87,842.9 106,855.8 135,176.6 Total Residential 2,712,441.3 3,296,668.1 3,923,627.4 5,179,014.5 6,537,305.6

New Commercial 393,509.9 287,068.6 297,963.6 360,707.4 580,057.8 New Industrial 98,621.8 74,766.3 80,881.6 112,706.6 203,311.9 New Other 119,978.4 152,854.0 187,510.6 261,793.6 334,001.0 Com. Alterations/Additions 157,802.1 143,351.7 174,785.7 173,165.5 222,495.5 Total Nonresidential 769,912.2 658,040.6 741,141.5 908,373.1 1,339,866.1

New Dwelling Units Single Family 13,630 16,556 20,591 25,137 29,478 Multiple Family 1,780 2,458 2,073 5,224 4,748 TOTAL 15,410 19,014 22,664 30,361 34,226

Source: Construction Industry Research Board, Building Permit Summary.

A-6 Riverside County Commercial Activity

Commercial activity is an important factor in Riverside County’s economy. Much of Riverside County’s commercial activity is concentrated in central business districts or small neighborhood commercial centers in cities. There are eight regional shopping malls in Riverside County: Riverside Plaza, Galleria at Tyler (Riverside), Palm Springs Mall, Desert Fashion Mall, Indio Fashion Mall, Hemet Valley Mall, Palm Desert Town Center and Moreno Valley Mall at Towngate. There are also two factory outlet malls (Desert Hills Factory Stores and Lake Elsinore Outlet Center) and over 200 area centers in Riverside County.

During the first three quarters of calendar year 2004, total retail sales reported in the City were approximately $3,346,326,000, a 15.8% increase over the total retail sales of $2,890,882,000 reported in the City during the first three quarters of calendar year 2003. The table below shows the number of establishments selling merchandise subject to sales tax and the valuation of taxable transactions within the City for the last five years for which data is available. Annual figures are not yet available for 2004.

CITY OF RIVERSIDE Taxable Transactions (figures in thousands)

1999 2000 2001 2002 2003 Retail Stores: Apparel Stores $ 78,605 $ 92,241 $ 98,859 $ 105,476 $ 124,223 General Merchandise Stores 438,137 465,490 485,571 510,038 536,795 Specialty Stores 125,986 133,363 134,502 136,076 145,308 Food Stores Group 209,049 223,253 239,811 257,711 276,757 Eating and Drinking Group 74,817 77,552 75,754 81,844 93,977 Household Group 275,433 290,734 326,627 346,277 395,175 Building Materials Group 580,804 698,147 780,641 864,486 987,372 Automotive Group 151,413 200,155 199,159 192,914 222,575 Other Retail Stores 313,917 341,252 351,055 396,808 427,978 Retail Store Totals 2,248,161 2,522,187 2,691,979 2,891,630 3,210,160 All Other Outlets 661,371 697,707 715,273 769,277 764,423 TOTAL ALL OUTLETS $2,909,532 $3,219,894 $3,407,252 $3,660,907 $3,974,583

Source: State Department of Equalization

A-7 During the first three quarters of calendar year 2004, total retail sales reported in the County were approximately $18,353,086,000, a 16.4% increase over the total retail sales of $15,763,369,000 reported in the County during the first three quarters of calendar year 2003. The table below shows the number of establishments selling merchandise subject to sales tax and the valuation of taxable transactions within the County for the last five years for which data is available. Annual figures are not yet available for 2004.

COUNTY OF RIVERSIDE Taxable Transactions (figures in thousands)

1999 2000 2001 2002 2003 Retail Stores: Apparel Stores $ 495,945 $ 538,578 $ 565,295 $ 610,388 $ 746,015 General Merchandise Stores 1,845,651 2,062,738 2,275,736 2,459,046 2,671,971 Specialty Stores 1,186,231 1,277,359 1,379,979 1,501,106 1,649,224 Food Stores Group 828,641 889,894 930,232 967,171 1,028,392 Eating and Drinking Group 1,233,274 1,364,808 1,465,467 1,559,215 1,713,632 Household Group 447,594 517,578 526,083 594,049 691,051 Building Materials Group 1,017,564 1,210,838 1,339,020 1,427,831 1,678,347 Automotive Group 3,145,417 3,812,690 4,148,261 4,563,779 5,198,391 Other Retail Stores 485,407 515,991 543,208 568,148 653,929 Retail Store Totals 10,685,724 12,190,474 13,173,281 14,250,733 16,030,952 Business and Personnel Services 794,847 851,744 832,562 881,524 944,658 All Other Outlets 3,596,374 3,937,231 4,225,712 4,366,737 4,733,525 TOTAL ALL OUTLETS $15,076,945 $16,979,449 $18,231,555 $19,498,994 $21,709,135

Source: State Department of Equalization

A-8 Riverside County Agriculture

Agriculture remains a leading source of income in Riverside County. Principal agricultural products are milk, eggs, table grapes, grapefruit, nursery, alfalfa, dates, lemons and avocados. Four areas in Riverside County account for the major portion of agricultural activity: the Riverside/Corona and San Jacinto/Temecula Valley Districts in the western portion of Riverside County, the Coachella Valley in the central portion and the Palo Verde Valley near Riverside County’s eastern border.

Riverside County Transportation

Easy access to job opportunities in Riverside County and nearby Los Angeles, Orange and San Diego Counties is important to Riverside County’s employment picture. Several major freeways and highways provide access between Riverside County and all parts of Southern California. The Riverside Freeway (State Route 91) extends southwest through Corona and connects with the Orange County freeway network in Fullerton. Interstate 10 traverses the width of Riverside County, the western-most portion of which links up with major cities and freeways in the eastern part of Los Angeles County and the southern part of San Bernardino County. Interstate 15 and 215 extend north and then east to Las Vegas, and south to San Diego. The Moreno Valley Freeway (U.S. 60) provides an alternate (to Interstate 10) east-west link to Los Angeles County.

Currently, Metrolink provides commuter rail service to Los Angeles and Orange Counties from several stations in Riverside County. Transcontinental passenger rail service is provided by Amtrak with a stop in Indio. Freight service to major west coast and national markets is provided by two transcontinental railroads – Burlington Northern/Santa Fe and Union Pacific. Truck service is provided by several common carriers, making available overnight delivery service to major California cities.

Transcontinental bus service is provided by Greyhound Lines. Intercounty, intercity and local bus service is provided by the Riverside Transit Agency to western County cities and communities. The SunLine Transit Agency provides local bus service throughout the Coachella Valley, including the cities of Palm Springs and Indio. The City of Banning also operates a local bus system.

Riverside County seat, located in the City of Riverside, is within 20 miles of the Ontario International Airport in neighboring San Bernardino County. This airport is operated by the Los Angeles Department of Airports. Four major airlines schedule commercial flight service at Palm Springs Regional Airport. County-operated general aviation airports include those in Thermal, Hemet, Blythe and French Valley. The cities of Riverside, Corona and Banning also operate general aviation airports. There is a military base at March Air Force Base, which converted from an active duty base to a reserve-only base on April 1, 1996. Plans for joint military and civilian use of the base thereafter are presently being formulated by the March AFB Joint Powers Authority, comprised of Riverside County and the Cities of Riverside, Moreno Valley and Perris.

A-9 Riverside County Environmental Control Services

Water Supply. Riverside County obtains a large part of its water supply from groundwater sources, with certain areas of Riverside County, such as the City of Riverside, relying almost entirely on groundwater. As in most areas of Southern California, this groundwater source is not sufficient to meet countywide demand and Riverside County’s water supply is supplemented by imported water. At the present time imported water is provided by the Colorado River Aqueduct and the State Water Project.

At the regional and local level, there are several water districts that were formed for the primary purpose of supplying supplemental water to the cities and agencies within their areas. The Rancho California Water District, the Coachella Valley Water District, the Western Municipal Water District and the Eastern Municipal Water District are the largest of these water districts in terms of area served. Riverside County is also served by the San Gorgonio Pass Water Agency, Desert Water Agency and Palo Verde Irrigation District.

Flood Control. Primary responsibility for planning and construction of flood control and drainage systems within Riverside County is provided by the Riverside County Flood Control and Water Conservation District and the Coachella Valley Storm Water Unit.

Sewage. There are 18 wastewater treatment agencies in Riverside County’s Santa Ana River region and nine in Riverside County’s Colorado River Basin region. Most residents in the rural unsewered areas of Riverside County rely upon septic tanks and leach fields as an environmentally acceptable method of sewage disposal.

Riverside County Education

There are four elementary school districts, one high school district, eighteen unified (K- 12) school districts and four community college districts in Riverside County. Ninety-five percent of all K-12 students attend schools in the unified school districts. The three largest unified districts are Riverside Unified School District, Moreno Valley Unified School District and Corona-Norco Unified School District.

There are seven two-year community college campuses located in the communities of Riverside, Moreno Valley, Norco, San Jacinto, Menifee, Coachella Valley and Palo Verde Valley. There are also two universities and a four-year college located in the City of Riverside – the University of California, Riverside, La Sierra University and California Baptist College.

A-10 APPENDIX B

RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 4 OF THE JURUPA UNIFIED SCHOOL DISTRICT

(This Page Intentionally Left Blank) RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 4 OF THE JURUPA UNIFIED SCHOOL DISTRICT

The following sets forth the Rate and Method of Apportionment for the levy and collection of Special Taxes by Community Facilities District No. 4 ("CFD No. 4") of Jurupa Unified School District ("School District"). A Special Tax shall be levied on and collected from Taxable Property (as defined below) in CFD No. 4 each Fiscal Year (as defined below) in an amount determined through the application of the Rate and Method of Apportionment described below. All of the real property in CFD No. 4, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.

SECTION A DEFINITIONS

The terms hereinafter set forth have the following meanings:

"Acreage" means the number of acres of land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the Board may rely on the land area shown on the applicable Final Map.

"Act" means the Mello-Roos Communities Facilities Act of 1982 as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California.

"Administrative Expenses" means any ordinary and necessary expense incurred by the School District on behalf of CFD No. 4 related to the determination of the amount of the levy of Special Taxes, the collection of Special Taxes including the expenses of collecting delinquencies, the administration of Bonds, the proportional payment of salaries and benefits of any School District employee to the extent duties are directly related to the administration of CFD No. 4, and costs otherwise incurred in order to carry out the authorized purposes of CFD No. 4. The costs associated with the administration of Bonds shall include, but not be limited to (i) costs of complying with disclosure obligations required by the state of California, Federal or other governmental agencies, (ii) costs of complying with arbitrage rebate requirements, (iii) costs associated with releasing funds from escrow, if any, and (v) fees charged by the authorization trustee.

"Annual Special Tax" means the Special Tax actually levied in any Fiscal Year on any Assessor’s Parcel.

"Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number within the boundaries of CFD No. 4.

"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.

"Assessor’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.

"Assigned Annual Special Tax" means the Special Tax of that name described in Section D.

"Backup Annual Special Tax" means the Special Tax of that name described in Section E.

RMA Final Page 1 of 12 February 15, 2005

"Board" means the Board of Education of Jurupa Unified School District or its designee as the legislative body of CFD No. 4.

"Bond Index" means the national Bond Buyer Revenue Bond Index, commonly referenced as the 25-Bond Revenue Index. In the event the Bond Index ceases to be published, the index used shall be based on a comparable index for revenue bonds maturing in 30 years with an average rating equivalent to Moody's A1 and S&P's A-plus, as reasonably determined by the Board.

"Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, which obligation may be incurred by CFD No. 4 or the School District.

"Bond Yield" means the yield on the last series of Bonds issued by or on behalf of CFD No. 4, as calculated at the time such Bonds are issued pursuant of Section 148 of the Internal Revenue Code of 1986, as amended for purpose of the Non-Arbitrage (Tax) Certificate or other similar bond issuance document.

"Building Permit" means a permit for the construction of one or more Units issued by the County, or another public agency in the event the County no longer issues permits for the construction of Units within CFD No. 4. For purposes of this definition, "Building Permit" shall not include permits for construction or installation of commercial/industrial structures, parking structures, retaining walls, utility improvements, or other such improvements not intended for human habitation.

"Building Square Footage" or "BSF" means the square footage of assessable internal living space of a Unit, exclusive of any carports, walkways, garages, overhangs, patios, enclosed patios, detached accessory structure, or other structures not used as living space, as determined by reference to the Building Permit for such Unit.

"Calendar Year" means the period commencing January 1 of any year and ending the following December 31.

"County" means the County of Riverside, State of California.

"Developed Property" means all Assessor’s Parcels of Taxable Property for which Building Permits were issued on or before May 1 of the prior Fiscal Year, provided that such Assessor's Parcels were created on or before January 1 of the prior Fiscal Year and that each such Assessor's Parcel is associated with a Lot, as determined reasonably by the Board.

"Exempt Property" means all Assessor’s Parcels designated as being exempt from Special Taxes in Section J.

"Final Map" means a final tract map, condominium map, parcel map, lot line adjustment, or functionally equivalent map or instrument that creates building sites, recorded in the County Office of the Recorder.

"Fiscal Year" means the period commencing on July 1 of any year and ending the following June 30.

RMA Final Page 2 of 12 February 15, 2005

“Homeowner” means any owner of a completed unit constructed and sold within CFD No. 4.

"Lot" means an individual legal lot created by a Final Map for which a Building Permit could be issued.

"Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section C, that can be levied by CFD No. 4 in any Fiscal Year on any Assessor’s Parcel.

"Minimum Annual Special Tax Requirement" means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds, (ii) Administrative Expenses of CFD No. 4, (iii) the costs associated with the release of funds from an escrow account, and (iv) any amount required to establish or replenish any reserve funds established in association with the Bonds, less (v) any amount available to pay debt service or other periodic costs on the Bonds pursuant to any applicable bond indenture, fiscal agent agreement, or trust agreement. In arriving at the Minimum Annual Special Tax Requirement the Board shall take into account the reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes in the previous Fiscal Year.

"Minimum Taxable Acreage" means, for each Zone, the applicable Acreage listed in Table 4 in Section J.

"Partial Prepayment Amount" means the amount required to prepay a portion of the Annual Special Tax obligation for an Assessor's Parcel as described in Section I.

"Prepayment Amount" means the amount required to prepay the Annual Special Tax obligation in full for an Assessor’s Parcel as described in Section H.

"Present Value of Taxes" means the present value of any Special Tax applicable to such Assessor's Parcel in the current Fiscal Year not yet received by the School District for CFD No. 4, plus the expected Annual Special Tax applicable to such Assessor's Parcel in each remaining Fiscal Year until the termination date specified in Section G, using as the discount rate (i) the Bond Yield after Bond issuance or (ii) the most recently published Bond Index prior to Bond issuance.

"Proportionately" means that the ratio of the actual Annual Special Tax levy to the applicable Assigned Annual Special Tax is equal for all applicable Assessor's Parcels.

"Reserve Fund Credit" means, for each owner of an Assessor's Parcel wishing to prepay the Annual Special Tax obligation of such Assessor's Parcel, an amount equal to the reduction in the reserve requirement for the outstanding Bonds resulting from the redemption of Bonds with the applicable prepaid Special Taxes. In the event that a surety bond or other credit instrument satisfies the reserve requirement or the reserve requirement is under funded at the time of the prepayment, no Reserve Credit shall be given.

"Special Tax" means any of the special taxes authorized to be levied by CFD No. 4 pursuant to the Act.

"Taxable Property" means all Assessor’s Parcels which are not Exempt Property.

"Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not

RMA Final Page 3 of 12 February 15, 2005 Developed Property.

"Unit" means each separate residential dwelling unit which comprises an independent facility capable of conveyance separate from adjacent residential dwelling units.

"Zone" means the areas identified as a Zone in Exhibit A to this Rate and Method of Apportionment.

"Zone 1" means all property located within the area identified as Zone 1 in Exhibit A to this Rate and Method of Apportionment, subject to interpretation by the Board as described in Section B.

"Zone 2" means all property located within the area identified as Zone 2 in Exhibit A to this Rate and Method of Apportionment, subject to interpretation by the Board as described in Section B.

SECTION B CLASSIFICATION OF ASSESSOR’S PARCELS

Each Fiscal Year, beginning with Fiscal Year 2005-06, (i) each Assessor’s Parcel within CFD No. 4 shall be shall be assigned to a Zone in accordance with Exhibit A at the reasonable discretion of the Board; (ii) each Assessor’s Parcel within a Zone of CFD No. 4 shall be classified as Taxable Property or Exempt Property; and (iii) each Assessor's Parcel of Taxable Property shall be classified as Developed Property or Undeveloped Property. Developed Property shall be further classified based on the Building Square Footage of the Unit. The classification of Exempt Property assigned to a Zone shall take into consideration the Minimum Taxable Acreage of such Zone.

SECTION C MAXIMUM SPECIAL TAXES

1. Developed Property

The Maximum Special Tax for each Assessor’s Parcel classified as Developed Property in a given Zone for any Fiscal Year shall be the amount determined by the greater of (i) the application of the Assigned Annual Special Tax for such zone or (ii) the application of the Backup Annual Special Tax for such Zone.

2. Undeveloped Property

The Maximum Special Tax for each Assessor’s Parcel classified as Undeveloped Property in a given Zone for any Fiscal Year shall be the amount determined by the application of the Assigned Annual Special Tax for such Zone.

RMA Final Page 4 of 12 February 15, 2005

SECTION D ASSIGNED ANNUAL SPECIAL TAXES

1. Developed Property

The Assigned Annual Special Tax in any Fiscal Year for each Assessor's Parcel of Developed Property shall be determined by reference to Tables 1 and 2 according to the Zone in which the Assessor's Parcel is located and the Building Square Footage of the Unit.

TABLE 1

ASSIGNED ANNUAL SPECIAL TAX FOR DEVELOPED PROPERTY IN ZONE 1 Building Assigned Annual Square Footage Special Tax <= 3,700 $2,550.50 per Unit 3,701 – 3,900 $2,672.93 per Unit 3,901 – 4,100 $2,736.93 per Unit > 4,100 $2,800.93 per Unit

TABLE 2

ASSIGNED ANNUAL SPECIAL TAX FOR DEVELOPED PROPERTY IN ZONE 2 Building Assigned Annual Square Footage Special Tax <= 3,100 $3,252.25 per Unit 3,101 – 3,400 $3,312.48 per Unit 3,401 – 3,700 $3,417.87 per Unit 3,701 – 4,100 $3,523.27 per Unit > 4,100 $3,734.06 per Unit

2. Undeveloped Property

The Assigned Annual Special Tax rate in any Fiscal Year per acre of Acreage for an Assessor’s Parcel classified as Undeveloped Property shall be determined by reference to Table 3 according to the Zone within which the Assessor's Parcel is located.

RMA Final Page 5 of 12 February 15, 2005 TABLE 3

ASSIGNED ANNUAL SPECIAL TAX FOR UNDEVELOPED PROPERTY Assigned Annual Location Special Tax Zone 1 $5,851.11 per acre Zone 2 $7,670.53 per acre

SECTION E BACKUP ANNUAL SPECIAL TAXES

Each Fiscal Year, each Assessor’s Parcel of Developed Property in a given Zone shall be subject to a Backup Annual Special Tax. In each Fiscal Year, the Backup Annual Special Tax rate for Developed Property, within a Final Map, shall be the rate per Lot calculated according to the following formula in the Fiscal Year in which such Final Map is created:

B = (Z x A) L

The terms above have the following meanings:

B = Backup Annual Special Tax per Lot in each Fiscal Year Z = Assigned Annual Special Tax per acre of Acreage of Undeveloped Property for the applicable Zone A = Acreage of Taxable Property in such Final Map at the time of calculation, as determined by the Board pursuant to Section K L = Lots in the Final Map, at the time of calculation

Notwithstanding the foregoing, if all or any portion of the Final Map(s) described in the preceding paragraph is subsequently changed or modified, then the Backup Annual Special Tax for each Assessor’s Parcel of Developed Property in such Final Map area that is changed or modified shall be a rate per square foot of Acreage calculated as follows:

1. Determine the total Backup Annual Special Taxes anticipated to apply to the changed or modified Final Map area prior to the change or modification.

2. The result of paragraph 1 above shall be divided by the Acreage of Taxable Property which is ultimately expected to exist in such changed or modified Final Map area, as reasonably determined by the Board.

3. The result of paragraph 2 above shall be divided by 43,560. The result is the Backup Annual Special Tax per square foot of Acreage which shall be applicable to Assessor's Parcels of Developed Property in such changed or modified Final Map area for all remaining Fiscal Years in which the Special Tax may be levied.

RMA Final Page 6 of 12 February 15, 2005 SECTION F METHOD OF APPORTIONMENT OF THE ANNUAL SPECIAL TAX

Commencing Fiscal Year 2005-06 and for each subsequent Fiscal Year, the Board shall levy Annual Special Taxes as follows:

Step One: The Board shall levy an Annual Special Tax on each Assessor’s Parcel of Developed Property in an amount equal to the Assigned Annual Special Tax applicable to each such Assessor’s Parcel.

Step Two: If the sum of the amounts collected in step one is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Board shall Proportionately levy an Annual Special Tax on each Assessor’s Parcel of Undeveloped Property in an amount up to the Assigned Annual Special Tax applicable to each such Assessor’s Parcel to satisfy the Minimum Annual Special Tax Requirement.

Step Three: If the sum of the amounts collected in steps one and two is insufficient to satisfy the Minimum Annual Special Tax Requirement, then the Board shall Proportionately levy an Annual Special Tax on each Assessor’s Parcel of Developed Property up to the Maximum Special Tax applicable to each such Assessor’s Parcel, to satisfy the Minimum Annual Special Tax Requirement.

SECTION G TERMINATION OF SPECIAL TAX

Annual Special Taxes shall be levied for a period of thirty-three (33) Fiscal Years after Bonds have been issued, provided that Annual Special Taxes shall not be levied after Fiscal Year 2040-41.

RMA Final Page 7 of 12 February 15, 2005 SECTION H PREPAYMENT OF ANNUAL SPECIAL TAXES

The Annual Special Tax obligation of an Assessor's Parcel of Developed Property or an Assessor's Parcel of Undeveloped Property for which a Building Permit has been issued may be prepaid in full, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor’s Parcel at the time the Annual Special Tax obligation would be prepaid. The Prepayment Amount for an Assessor’s Parcel eligible for prepayment shall be determined as described below.

An owner of an Assessor's Parcel intending to prepay the Annual Special Tax obligation shall provide CFD No. 4 with written notice of intent to prepay. Within thirty (30) days of receipt of such written notice, the Board shall reasonably determine the prepayment amount of such Assessor's Parcel and shall notify such owner of such Prepayment Amount. The Prepayment Amount shall be calculated according to the following formula:

P = PVT – RFC + PAF

The terms above have the following meanings:

P = Prepayment Amount PVT = Present Value of Taxes RFC = Reserve Fund Credit PAF = Prepayment Administrative Fees

Notwithstanding the foregoing, no prepayment will be allowed unless the amount of Annual Special Taxes that may be levied on Taxable Property, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently outstanding Bonds in each future Fiscal Year and such prepayment will not impair the security of all currently outstanding Bonds, as reasonably determined by the Board. Such determination shall include identifying all Assessor's Parcels that are expected to become Exempt Property.

RMA Final Page 8 of 12 February 15, 2005 SECTION I PARTIAL PREPAYMENT OF ANNUAL SPECIAL TAXES

The Annual Special Tax obligation of an Assessor's Parcel may be partially prepaid at the times and under the conditions set forth in this section, provided that there are no delinquent Special Taxes, penalties, or interest charges outstanding with respect to such Assessor’s Parcel at the time the Annual Special Tax obligation would be prepaid.

1. Partial Prepayment Times and Conditions

Prior to the conveyance of the first production Unit on a Lot within a Final Map, the owner of no less than all the Taxable Property within such Final Map may elect in writing to the Board to prepay a portion of the Annual Special Tax obligations for all the Assessor’s Parcels within such Final Map, as calculated in Section I.2. below. The partial prepayment of each Annual Special Tax obligation shall be collected for all Assessor's Parcels prior to the conveyance of the first production Unit on a lot within such Final Map.

2. Partial Prepayment Amount

The Partial Prepayment Amount shall be calculated according to the following formula:

PP = PG x F

The terms above have the following meanings:

PP = the Partial Prepayment Amount PG = the Prepayment Amount calculated according to Section H F = the percent by which the owner of the Assessor’s Parcel is partially prepaying the Annual Special Tax obligation

3. Partial Prepayment Procedures and Limitations

With respect to any Assessor’s Parcel that is partially prepaid, the Board shall indicate in the records of CFD No. 4 that there has been a partial prepayment of the Annual Special Tax obligation and shall cause a suitable notice to be recorded in compliance with the Act to indicate the partial prepayment of the Annual Special Tax obligation and the partial release of the Annual Special Tax lien on such Assessor’s Parcel, and the obligation of such Assessor’s Parcel to pay such prepaid portion of the Annual Special Tax shall cease. Additionally, the notice shall indicate that the Assigned Annual Special Tax and the Backup Annual Special Tax for the Assessor's Parcel has been reduced by an amount equal to the percentage which was partially prepaid.

Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of Annual Special Taxes that may be levied on Taxable Property after such partial prepayment, net of Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all currently outstanding Bonds in each future Fiscal Year and such partial prepayment will not impair the security of all currently outstanding Bonds, as reasonably determined by the Board. Such determination shall include identifying all Assessor's Parcels that are expected to become Exempt Property.

RMA Final Page 9 of 12 February 15, 2005

SECTION J EXEMPTIONS

The Board shall classify as Exempt Property (i) Assessor’s Parcels owned by the State of California, Federal or other local governments, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels used exclusively by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels developed or expected to be developed exclusively for non-residential use, including any use directly servicing any non-residential property, such as parking, as reasonably determined by the Board, and (vi) any other Assessor’s Parcels at the reasonable discretion of the Board, provided that no such classification would reduce the sum of all Taxable Property in a given Zone to less than the Minimum Taxable Acreage as shown in Table 4. Notwithstanding the above, the Board shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property in a given Zone to less than the Minimum Taxable Acreage. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than the Minimum Taxable Acreage in a given Zone will continue to be classified as Developed Property or Undeveloped Property, as applicable, and will continue to be subject to Special Taxes accordingly.

TABLE 4

Minimum Taxable Zone Acreage Zone 1 23.53 acres of Acreage Zone 2 36.91 acres of Acreage

SECTION K APPEALS

Any property owner claiming that the amount or application of the Special Tax is not correct may file a written notice of appeal with the Board not later than twelve months after having paid the first installment of the Special Tax that is disputed. In order to be considered sufficient, any claim of appeal must: (i) specifically identify the property by address and Assessor's Parcel Number; (ii) state the amount in dispute and whether it is the whole amount or any a portion of the Special Tax; (iii) state all grounds on which the property owner is disputing the amount or application of the Special Tax, including a reasonably detailed explanation as to why the amount or application of such Special Tax is incorrect; (iv) include all documentation, if any, in support of the claim; and (v) be verified under penalty of perjury by the person who paid the Special Tax or his or her guardian, executor or administrator. A representative(s) of CFD No. 4 ("Representative") shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the Representative's decision requires that the Special Tax for an Assessor’s Parcel be modified or changed in favor of the property owner, a cash refund shall not be made (except for the last year of levy), but an adjustment shall be made to the Annual Special Tax on that Assessor’s Parcel in the subsequent Fiscal Year(s) as the representative's decisions shall indicate.

RMA Final Page 10 of 12 February 15, 2005

SECTION L EXCESS ASSIGNED ANNUAL SPECIAL TAXES In any Fiscal Year which the Annual Special Taxes collected from Developed Property, pursuant to Step 1 of Section F, exceeds the Minimum Annual Special Tax requirement, the School District shall use such amount for acquisition, construction or financing of school facilities in accordance with the Act, CFD No. 4 proceedings and other applicable law as determined by the Board.

SECTION M MANNER OF COLLECTION The Annual Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 4 may collect Annual Special Taxes at a different time or in a different manner if necessary to meet its financial obligations.

J:\CLIENTS\JURUPA.USD\Mello\Griffin-CRV Jurupa\RMA_final 021505.doc

RMA Final Page 11 of 12 February 15, 2005

EXHIBIT A

Zone Map of CFD No. 4 of the Jurupa Unified School District

RMA Final Page 12 of 12 February 15, 2005 i .------, SHEET 1 OF 1 EXHIBIT A MAP OF ZONES JURUPA UNIFIED SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 4

LEGEND

Boundaries of Community Focnities District No. 4 W////ai Zone 1 I I Zone 2

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RED MOUNTAIN DRIVE

PREPARED BY DAVID TAUSSIG & ASSOCIATES, INC. L

(This Page Intentionally Left Blank) APPENDIX C

SUMMARY APPRAISAL REPORT

(This Page Intentionally Left Blank) SUMMARY APPRAISAL REPORT - COMPLETE APPRAISAL

COMMUNITY FACILITIES DISTRICT NO. 4 (ZONE 2) JURUPA UNIFIED SCHOOL DISTRICT Sunset Ridge Estates by Griffin Communities EIS Camino Real; S/0 Jurupa Road Unincorporated Riverside County, California (Appraiser's File No. 2005-210)

Prepared For Jurupa Unified School District 4850 Pedley Road Riverside, California 92509

Prepared By Bruce W. Hull & Associates, Inc.

1056 E. Meta Street, Suite 202 115 E. Second Street, Suite 100 Ventura, California 93001 Tustin, California 92780 (805) 641-3275 (714) 544-9978 (805) 641-3278 [Fax] (714) 544-9985 [Fax] BRUCE W. HULL & ASSOCIATES, INC.

REAL ESTATE APPRAISERS & CONSULTANTS October 31, 2005

Mr. Elliott Duchon, Superintendent Jurupa Unified School District 4850 Pedley Road Riverside, California 92509

Reference: Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Sunset Ridge Estates by Griffin Communities EIS Camino Real; S/0 Jurupa Road Riverside County, California

Dear Mr. Duchon:

At your request and authorization, we have prepared an appraisal of the property within Jurupa Unified School District Community Facilities District No. 4 ("CFD No. 4") Zone 2. CFD No. 4 consists of 84 acres divided into Zone 1 and Zone 2. This appraisal is for Zone 2 only. CFD No. 4 Zone 2 consists of a proposed residential project consisting of 80 lots and encompassing approximately 56 acres located in unincorporated Riverside County. The property is being developed as a neighborhood known as Sunset Ridge Estates by Jurupa Hills 80 L.P., a related entity to Griffin Communities. The property is currently under development with the Sunset Ridge Estate models complete and production homes under construction.

We have valued the fee simple estate for the property subject to the CFD No. 4 special tax lien. This report is written with the special assumption that the subject property is enhanced by the improvements and/or fee credits to be funded by the bonds issued by CFD No. 4. We have estimated the total value for the subject property to be:

NINETEEN MILLION ONE HUNDRED TEN THOUSAND DOLLARS ($19,110,000)

This estimate of value is stated subject to the Assumptions and Limiting Conditions and the Appraiser's Certification as of October 15, 2005.

1056 E. Meta Street, Suite 202, Ventura, California 93001 - (805) 641-3275 - Facsimile (805) 641-3278 115 E. Second Street, Suite 100, Tustin, California 92780 - (714) 544-9978 - Facsimile (714) 544-9985 Mr. Elliott Duchon Jurupa Unified School District October 31, 2005 Page Two

This report is defined as a Summary Appraisal Report - Complete Appraisal, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice (USPAP), effective January 1, 2005, for a Summary Appraisal Report. As such, it presents only summary discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value.

Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The depth of discussion contained in this report is specific to the needs of the client. The appraiser is not responsible for unauthorized uses of this report.

The following narrative Summary Appraisal Report sets forth the data and analyses upon which our opinion of value is, in part, predicated.

Respectfully submitted, BRUC~& ASSOCIATES,. INC. !(S~ ~W. Hull, MAI Kitty S. Siino, MAI State Certified General State Certified General Real Estate Appraiser (AG004964) Real Estate Appraiser (AG004793)

BWH:KSS:dh Attachment

(This Page Intentionally Left Blank) TABLE OF CONTENTS

Assumptions and Limiting Conditions ...... i Purpose of Appraisal...... 1 The Subject Property ...... I Intended Use of Report ...... 1 Definitions ...... 2 Property Rights Appraised ...... 2 Effective Date of Value ...... 3 Date of Report ...... 3 Appraisal Development and Reporting Process ...... 3 County of Riverside Area Description ...... 6 City of Riverside ...... 12 Immediate Surroundings ...... 15 Riverside County Housing Market ...... 16 Community Facilities District No. 4 ...... 21 Subject Property Description (Zone 2) ...... 23 Highest and Best Use Analysis ...... 27 Valuation Analysis and Conclusions ...... 31 Marketing and Exposure Time ...... 40 Appraisal Report Summary ...... 41 Appraiser's Certification ...... 42

ADDENDA Tract No. 30288 Improved Residential Sales Summary Chart Appraisers' Qualifications

(This Page Intentionally Left Blank) ASSUMPTIONS AND LIMITING CONDITIONS

1. This Summary Appraisal Report is intended to comply with the reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report. As such, it might not include full discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report. This Summary Appraisal Report is also intended to comply with the appraisal standards promulgated by the California Debt and Investment Advisory Commission.

2. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated in this report.

3. The property is appraised subject to the easements of record and the special tax lien of CFD No. 4, and it is assumed to be free and clear of any other liens or encumbrances.

4. Responsible ownership and competent property management are assumed unless otherwise stated in this report.

5. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy.

6. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property.

7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them.

8. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in this report.

9. It is assumed that there is full compliance with all applicable zoning and use regulations and restrictions, unless non-conformity has been stated, defined, and considered in this appraisal report.

10. It is assumed that all required licenses, certificates of occupancy, and other legislative or administrative authority from any local, state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurnpa Unified School District Bruce W. Hull & Associates, Inc. Pagei 11. Any sketch contained in this report may show approximate dimensions and is included only to assist the reader in visualizing the property. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report.

12. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described, and that no encroachment or trespass exists unless otherwise stated in this report.

13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraiser that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert relating to asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials, which may affect the value of the property. The appraiser's value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover such conditions. The appraiser's descriptions and comments are the result of routine observations made during the appraisal process.

14. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications.

15. 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 buildings must not be used in conjunction with any other appraisal, and such allocations are invalid if so used.

16. If this report is placed in the hands of anyone but the client, the client shall make such party aware of all the assumptions and limiting conditions of the assignment.

17. The Americans with Disabilities Act ("ADA") became effective on January 26, 1992. The appraiser has made no specific compliance survey and analysis of this property to determine whether it is in conformance with the various detailed requirements of the ADA. Nor is the appraiser a qualified expert regarding the requirements of the ADA. It is possible that a compliance survey of 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 ADA. If so, this fact could have a negative effect upon the value of the property. Since the appraiser has no direct evidence relating to this issue, possible noncompliance with the requirements of ADA in estimating the value of the property has not been considered.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page ii 18. All the improvements and benefits to the subject property, which are to be funded by the proceeds of the CFD No. 4 2005 Special Tax Series A (Zone 2) Bonds, are assumed to be either completed and in place or accrued to the subject property.

19. It is assumed that there are no environmental concerns that would slow or thwart development of the subject property, and the soils are adequate to support the highest use conclusion.

20. This appraisal may not be conveyed to any person other than the client without the written consent of the appraiser. Permission is given for this appraisal to be published as a part of the Official Statement or similar document for the CFD No. 4 2005 Special Tax Series A (Zone 2) Bonds.

21. It is assumed that the cost information received from the developer is accurate and complete.

Summary Appraisal Report~ Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page iii

/ Community Facilities District No. 4 Jurupa Unified School District County of Riverside, California

Bruce W. Hull & Associates, Inc. Aerial Photo - Air Views - 10/25/05 PURPOSE OF THE APPRAISAL

The purpose of this Summary Appraisal Report is to provide the appraiser's best estimate of market value of the fee simple estate subject to the CFD No. 4 Zone 2 special tax lien for the subject property located in an unincorporated area of Riverside County, State of California. In the case at hand, the market value of the subject property will be estimated in its "as is" condition taking into consideration the benefits of the CFD No. 4 2005 Special Tax Series A (Zone 2) Bonds.

THE SUBJECT PROPERTY

The subject property encompasses 80 proposed single-family detached residential lots located in an unincorporated area of Riverside County, known as Indian Hills, and owned by Jurupa Hills 80, L.P, a related entity to Griffin Communities. The property is being developed into a neighborhood known as Sunset Ridge Estates. Sunset Ridge is proposed for 80 single-family homes. Currently there are three completed model homes, 18 production homes under construction with the remaining lots in a partially finished condition. We will value the homes under construction (under 95 percent complete) on the basis of a finished lot rather than attribute value to a partially complete improvement.

INTENDED USE OF THE REPORT

It is the appraiser's understanding that this Summary Appraisal Report is intended to assist the client, Jurupa Unified School District, in determining the feasibility of issuing special tax bonds secured by CFD No. 4 2005 Special Tax Series A (Zone 2) Bonds. It is the appraiser's understanding that there are no other intended uses of this report with the exception of publishing in the official statement or other similar document for the subject bond offering.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Pagel DEFINITIONS

Market Value

The term "market value" as used in this report is defined as:

"The most probable price that a specified interest in real property is likely to bring under all the following conditions:

1. Consummation of a sale occurs as ofa specified date. 2. An open and competitive market exists for the property interest appraised. 3. The buyer and seller are each acting prudently and knowledgeably. 4. The price is not affected by undue stimulus. 5. The buyer and seller are typically motivated. 6. The buyer and seller are acting in what they consider their own best interest. 7. Marketing efforts were adequate and a reasonable time was allowed for exposure in the open market. 8. Payment was made in cash in U.S. dollars or in terms offinancial arrangements comparable thereto. 9. The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. "1

Finished Lot

The term "finished lot" is defined as:

"A parcel which has legal entitlements created by a recorded subdivision map, whose physical characteristics are a fine graded level pad with an infrastructure contiguous to each individual lot, asphalt paved roads, and the necessary utilities. This term assumes the payment ofall applicable development fees with the exception ofbuilding permit and plan check fees."

PROPERTY RIGHTS APPRAISED

The property rights being appraised are the fee simple interest subject to easements of record and the special tax lien of CFD No. 4 Zone 2. The term "fee simple estate" is defined on the following page.

1The Appraisal of Real Estate, 11th Edition ( definition adopted by the Appraisal Institute in 1993). Summary Appraisal Report- Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page 2 "Possession of a title in fee establishing the interest in property known as the fee simple estate - i.e., absolute ownership unencumbered by any other interest of estate, subject to the limitation imposed by the governmental powers of taxation, eminent domain, police power, and escheat. "2

EFFECTIVE DATE OF V ALOE

The subject property is valued as of October 15, 2005.

DATE OF REPORT

The date of this report is October 31, 2005.

APPRAISAL DEVELOPMENT AND REPORTING PROCESS

As previously stated, the purpose of this appraisal is to report the appraisers' best estimate of the market value for the subject properties. This appraisal will be presented in the following format:

• County of Riverside Area Description • Riverside County Housing Market • Description of Community Facilities District No. 4 • Highest and Best Use Analysis • Property Description • Valuation Analysis, Discussion and Value Conclusion • Appraisal Report Summary

In valuing the subject property, the value estimate will be based on its highest and best use conclusion using the Sales Comparison Approach. The Sales Comparison Approach to value is defined as:

... an appraisal procedure in which the market value estimate is predicated upon prices paid in actual market transactions and current listings, the former fixing the

2 Appraisal of Real Estate, 11th Edition Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page3 lower limit of value in a static or advancing market (price wise), and fixing the higher limit in a declining market; and the latter fixing the higher limit in any market. It is a process of analyzing sales of similar, recently sold properties in order to derive an indication ofthe most probable sales price ofthe property being appraised. "3

In the Sales Comparison Approach, market value is estimated by comparing properties similar to the subject properties that have recently been sold, are listed for sale, or are under contract. In addition, a Discounted Cash Flow Analysis ("DCF") was considered for the completed homes owned by the merchant builder. The DCF is defined as:

"The procedure for valuing undeveloped property that involves discounting the cost of development and the probable proceeds from the sale ofdeveloped sites ,,4

In valuing the single-family lots, first, a unit of value needs to be determined. In the subject marketplace, sales prices of single-family lots are determined based on a finished lot price. In the case at hand the lots are under construction. Therefore, the remaining costs to complete the lots to a finished lot condition will be considered in the valuation process. In the case of the completed builder-owned homes (all models), the homes will be valued using the Sales Comparison Approach to value followed by a DCF. The DCF will take into account the fair market value of the completed homes (utilizing the Sales Comparison Approach), the marketing and carrying costs associated with selling off the homes, a profit due to the developer of the homes, and a discount rate reflecting both the risk associated with selling off the homes and the time value of money during the estimated absorption period.

A land development DCF will not be considered. Due to the subject project having a total of 80 lots which are being developed into one neighborhood (typical project size), a DCF is not needed in this analysis.

The due diligence of the appraisal assignment included having done the following:

1. Compiled demographic information and relating that data to the subject property to determine a feasibility/demand analysis.

3 Real Estate Appraisal Terminology, Revised Edition, 1998 4 The Dictionary of Real Estate Appraisal, AREA, 1989 Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page4 2. Gathered and analyzed information on the subject marketplace, including reviewing several real estate brokerage publications on historical and projected growth in the subject market, and researching the micro and macro economics within Riverside County.

3. Inspected the subject property.

4. Interviewed representatives from Griffin Communities to obtain available information on the subject property.

5. Reviewed the Conditions of Approval for Tract Map No. 30288.

6. Reviewed a Geotechnical Review of Tentative Tract Map 30288 prepared by John R. Byerly, Inc. of Bloomington, California and dated November 13, 2002.

7. Reviewed a Limited Phase II Environmental Site Assessment Report for the property prepared by Giles Engineering Associates, Inc. of Temecula, California dated August 30, 2001.

8. Reviewed development costs provided by Griffin Communities in regards to the land development for the subject property along with reviewing the costs spent to date.

9. Searched the area for relevant comparable land transactions, including sales and offerings, and interviewed the appropriate parties to ascertain pertinent information relating to each transaction.

10. Interviewed sales representatives from Sunset Ridge Estates regarding marketing of the project.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page5 COUNTY OF RIVERSIDE AREA DESCRIPTION

Location The subject property is located in the northern portion of Riverside County (the "County") in an unincorporated area of Riverside County northwest of the City of Riverside which houses the County seat. The County encompasses approximately 7 ,300 square miles, which includes large expanses of undeveloped deserts, valleys, canyons, and mountains. The County is the major recipient of outward urban pressure from Orange and Los Angeles Counties, as well as northerly growth from San Diego County. Although located at the periphery of most urban activity in · Southern California, the County, in particular the westerly region is clearly perceived by most observers as a major growth area well into the foreseeable future. Because of mountain ranges limiting road access into Los Angeles and Orange Counties, Riverside and San Bernardino Counties are considered to belong to the same Metropolitan Statistical Area ("MSA"). This MSA is also known as the Inland Empire. Affordable family housing has been one of the principal assets of this MSA.

Transportation The subject property is located south of the 60 Freeway between the 91 Freeway and Interstate 15. Four major freeways bisect the County. Interstate 15 travels in a northerly/southerly direction with access to Barstow and Nevada to the north and to San Diego to the south where it approaches the international border with Mexico. The 91 Freeway travels in an easterly/westerly direction and provides access to Orange and Los Angeles Counties to the west and connects with the 60 Freeway and Interstate 215 to the north in San Bernardino County. The 60 Freeway provides access to the west to Los Angeles and to the east where it combines with Interstate 10, providing access to Arizona. Interstate 215 travels in a northerly/southerly direction in the County providing access that generally parallels Interstate 15 to the east.

The County is well served by Amtrak and Metrolink as well as several rail freight lines. The Ontario International Airport provides air service. The airport is located approximately 25 miles north west of the subject in San Bernardino County. In addition to car and plane travel, the

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page6 County has one of the most extensive trucking corridors with the interstate and state freeways bisecting the County.

Population The County has experienced an increasing growth pattern for several decades, with the population more than doubling between 1960 and 1980. Between 1980 and 1990, there was an increase in population of over 65 percent, with the largest numerical gains in the incorporated areas of Moreno Valley, Corona, and Riverside. The largest population percentage gains have been seen in the southwestern portion of the County. This area includes all of the greater Temecula Valley, such as the communities of Anza, Aguanga, Wildomar, Murrieta, Murrieta Hot Springs, and the Rancho California/Temecula area.

Per the California Department of Finance, the population of the County as of January 1, 2005 was 1,877,000. This represents an increase of 3.8 percent over the past year and an average annual percentage of approximately 3.6 percent over the prior 5 years.

Economy The Riverside, San Bernardino, and Ontario MSA had a strong employment record over the past ten years. The most significant gains were seen in the areas of construction, finance, insurance, real estate, services and retail trade. The least amount of growth during this time was seen in agriculture and the wholesale trade.

The unemployment rate for the MSA is estimated ,at 5.4 percent (August 2005, Employment Development Department), which is an improvement from February 2005 when the unemployment rate was 6.4 and a significant improvement from August 1995 when the unemployment rate was 10 percent. Individually, the County has a 5.6 percent unemployment rate while San Bernardino County has a 5.1 percent unemployment rate. The current unemployment rate for Riverside/San Bernardino MSA of 5.4 percent compares slightly inferior to the current California unemployment rate of 5.1 percent and to the current U.S. unemployment rate of 4.9 percent. The following table depicts the County in relationship to unemployment rates of the surrounding counties.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 7 Jurisdiction Asof Unemployment Rate Los Angeles County 8/05 5.0% Riverside County 8/05 5.6% San Bernardino County 8/05 5.1% Orange County 8/05 3.8% San Diego County 8/05 4.3%

Source: State of California E.D.D.

Although the County's unemployment rate is higher than those of Orange and San Diego Counties, it is only slightly higher than Los Angeles County, the State of California and the nation.

The tragedy of September 11, 2001 and further terrorist activities have affected the economy within the United States. A recession, which began in mid-2001, was described as "mild", and economists state that we are in an economic recovery mode, albeit a mild one. As the Iraq conflict erupted, the economy seemed to stay sluggish. Since the initial portion of the conflict ended, the economy has been on a slight upturn; however, more recently the economy has leveled off with the nation's attention on the recent hurricane disasters. On a more micro level, within Southern California new home projects are enjoying continued good to excellent sales rates, mostly due to the historically low interest rates throughout 2002, 2003 and 2004 along with the emergence of non-conventional financing alternatives. Through the first half of 2005 sales have still been strong, however it should be noted that the Federal Reserve has increased Federal Reserve rates for the eleventh time in the past fifteen months. Thus far, these increases have not appeared to slow new home sales; however, the most recent sales statistics do not account for the most recent rate hikes.

Home prices rose steadily between 2001 and mid-2004 in the County. Per The Meyers Group, a residential consulting group, the average new home price for a detached home in the County as of the end of the second quarter 2005 was $454,938. This represents an 8.2 percent increase over the same per.iod one-year prior, when the average new home price was $420,284 and a 40.8

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page8 percent increase from December 2004 when the average new home price was $323,036. The past year's 8.2 percent appreciation depicts a more healthy market than the previous years' double-digit appreciation. Per The Meyers Group, the majority of new-home buyers in the County are move-up buyers. The double-digit appreciation over the past couple years priced first time homebuyers out of the detached home market, allowing for move-up buyers and causing a resurgence of attached homes in the area. According to an article in the LA Times Business Section on February 7, 2005 the Riverside County housing market is showing definite signs of slowing; however, the rate of appreciation over the past 18 months (40.8 percent by Meyers Group above) is not sustainable on an annual basis in any real estate market. John Husing, an economist and industry consultant in Riverside, has stated that even with the slow down, housing prices will rise in double digits this year, however, closer to 10 percent. This is being evidenced by the past year's appreciation in the 8.2 percent range.

The increasing home prices appear to have reached a leveling off period. Sales of new homes are still occurring, however at a slower rate than in the past three or four years. The cooling off of the real estate market has created diverse opinions among economists. According to an article in the Riverside Press Enterprise (Real Estate Prices to Stay Up, Experts Say - December 9, 2004 ), panelists at an economic development summit insist that the inland empire housing market is not on a "bubble". They agree that home prices will still go up, just not exponentially as they have in the past two years. In opposing viewpoint, the Anderson School of Business at UCLA says that the Inland region's economy is vulnerable if the nation's economy sours. Overall UCLA's quarterly economic forecast called for a 1.6 percent increase in jobs statewide in 2005 and a healthy 4.8 percent jump in taxable sales predicted for 2004. However lingering problems include the state's finances, a possible decline in real estate prices and the high cost of doing business in the state, along with a strong increase in energy costs.

Government/ Environmental The County is home to the Stephens Kangaroo Rat ("SKR"), which is listed on the endangered species list by the Federal Government. For the past ten years the County has had a Habitat Preserve Agency (the "Agency") in order to counter the extinction of this protected animal. In 1995 the Agency was designated a success with enough habitat lands protected and thus, a

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page9 reduction was made in the Agency. In order to obtain this degree of success the Agency required SKR acreage fees from developers in order to purchase conservation habitat acreage. Due to the success of the Agency, the degree of urgency is considerably less than in previous years. Recently (December 2003) the State of California acquired 9, 117 acres between the Cities of Beaumont and San Jacinto for preservation. Reportedly these lands have the "world's highest concentration" of SKR and other endangered species according to the Endangered Habitat League.

New possible endangered species that are affecting the County include the Coastal Sagebrush, which is the habitat for the California Gnatcatcher. Due to the County's success with the SKR conservation, it is anticipated that, if needed, the County will perform the same function for similar endangered species.

The County has recently initiated a Multi-Species Habitat Conservation Plan. The County Board of Supervisors has approved a fee increase from $859 to $1,651 per residential unit and up to $5,620 per acre for commercial property.

The Pacific Legal Foundation ("PLF") has filed two lawsuits charging the government with flawed critical habitat designations for 42 California species. According to a press release by PLF on March 30, 2005, the "critical habitat" designations for more than 40 California species fail to meet the scientific and legal standards required under the federal Endangered Species Act. According to PLF, the two statewide challenges seek to compel the United States Fish and Wildlife Service ("FWS") to bring 42 critical habitat designations into compliance with the clear standards mandated by recent federal court decisions. PLF's first legal challenge would require FWS to fix the critical habitat designations for 27 species (of which 21 are plants); the second suit would require the agency to correct habitat areas for 15 vernal pool species (11 plants and 4 species of "fairy shrimp"). The Inland Empire Area received approximately 12 million dollars in federal grants in 2003 to buy habitat land for endangered species, including some sites the PLF lawsuit is targeting. The County has slowed approval of grading permits on some properties in the County which may be affected by these lawsuits. The subject property has been graded and will not be affected by this issue.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page JO Education The subject area is served by the Jurupa Unified School District (the "District"). It serves the communities of Glen Avon, Sunnyslope, Mira Loma, Sky Country, Indian Hills (subject area), Pedley, Rubidoux and Jurupa Hills all located in Riverside County. The district operates sixteen elementary schools, three middle schools and three high schools.

Higher education is available within an hour's drive, at University of California campus at Riverside and California State University campuses in San Bernardino, San Marcos, Fullerton, and Pomona.

Summary Residential growth in the County during the late 1980s was explosive. The influence for this growth pattern was primarily commuters from Los Angeles, Orange, and San Diego Counties who were drawn to the area by its affordable housing and quiet country setting. As job growth declined during the recession of the early 1990s, fewer commuters came to the area, creating a significant downward pressure on real estate sales and prices. However, the growing economy since the latter half of the 1990s achieved and surpassed the previous real estate values in the County. Although current national economic conditions have been volatile in the last year (i.e., stock market, Iraq conflict, increasing oil prices), the subject area's economy is considered good, with the new housing market in the area still considered strong. Although there are some signs pointing to a slowdown in the residential market, other factors still appear strong. Low interest rates and non-conventional financing, along with continued demand have made residential housing a bright spot in the economy over the past year. The Southern California housing market appears to have withstood the uncertain economy thus far and is expected to continue to grow due to the continuation of moderate interest rates, economic diversification and a lack of available land for new development.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 11 CITY OF RIVERSIDE

The subject property is located in an unincorporated area of Riverside County with the closest incorporated City being Riverside, thus we will describe the city. The City of Riverside (the "City") was incorporated on October 11, 1883 and is located 50 miles east of Los Angeles and 420 miles south of San Francisco. Riverside is the largest city in Riverside County with a present land area of approximately 80 square miles. Originally an agricultural (citrus) center, Riverside has evolved into a commercial and governmental center as the city is the county seat. The subject property is located near the downtown area of Riverside, the county seat. The City is surrounded by Norco and Corona to the west, the unincorporated area of Riverside County to the north, the City of Moreno Valley and unincorporated areas of Riverside County to the east and south.

Population The City has an estimated population of 285,53 7 per the California Department of Finance as of January 1, 2005. The following chart depicts population growth in the City.

Avg. Annual Year Population % Increase 1960 84,332 --- 1970 140,089 5.2% 1980 170,876 2.0% 1990 209,700 2.1% 2000 262,744 2.3% 2005 285,537 1.6%

Although the past four years growth is lower than previous years, this is due to essential build­ out rather than a slow down. The past five years of growth at 1.6 percent in the City compares to the County average annual growth of 3.6 percent. The higher County rate is due to the availability ofland for development outside of the city limits.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 12 Housing Residential housing costs within the City were among the lowest in Southern California. Riverside formerly had abundant land, which created a lower housing cost in relationship to more intensely populated areas in Southern California especially when compared to the neighboring counties of Orange, Los Angeles and San Diego. However, the City has now essentially been built-out leaving little land for development.

Economy/Commercial Land Uses The economy and labor force for the City have changed with growth. Historically hailed as the citrus capital of the world, the City has evolved into the business and industrial center of the Inland Empire. There are 157 manufacturing firms in the community. Leading group classes or products are aerospace and electronic components; mobile home and RVs; printing, and publishing products. In addition, the City offers an impressive choice of industrial sites and buildings. Active industrial areas include Hunter Park (a State Enterprise Zone); the Airport Industrial area, the Sycamore Canyon Industrial Park, and the Central Riverside Industrial Area along with industrial parks at the southern end of the City.

The labor force is divided generally between the manufacturing, retail, services, and construction trades. There are abundant skilled, semi-skilled workers in the local labor pool with a scattering of skills. The commercial building trades in the area are almost completely unionized; however, the residential building trades are just the opposite.

Transportation The City is well served by the California freeway system, being bisected by the 91 and 60 Freeways and by Interstates 10 and 15. The 91 Freeway connects Riverside to Orange County on the southwest and to San Bernardino County on the northeast. The Riverside Freeway (91) is one of the area's busiest freeways with a substantial amount of congestion in the westbound direction during the morning hours and in the eastbound direction during the evening hours. This is due to the number of commuters living in Riverside County and employed in Orange and Los Angeles Counties. Two toll roads (the 91 express lane and 241) opened during the latter half of the 1990s that help alleviate the traffic congestion. Interstate 15 connects Riverside to San

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 13 Diego County to the south and San Bernardino County to the north. Interstate 10 connects Riverside to Los Angeles County to the west.

The Burlington-Santa Fe and Union Pacific Railroads along with over 20 daily truck carriers serve Riverside. Ontario International Airport is 18 miles to the northwest and is served by most major airlines. The Riverside Municipal Airport is available for general aviation use.

Summary In summary, the future growth of the City should parallel that of the County, albeit at a lower rate due to the limited availability of land for development within the city limits. The location, along with being the county seat, has established Riverside as a continuing and prospering city. The subject property's location, near the City will benefit from this.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 14 IMMEDIATE SURROUNDINGS

The subject property is located in an unincorporated area of Riverside County known as Indian Hills. The area north of the subject is made up of older existing rural housing. South of the subject is the residential development known as Indian Hills which surrounds the Indian Hills Country Club and Golf Course. The subject lots have an average lot size of 20,000 square feet and the majority has good to excellent views creating a move-up, luxury or exe~utive type housing. The property is located along the east side of Camino Real, south of Jurupa Road adjacent to the Riverside Canal Lateral No. 2 and a detention basin in an unincorporated area of the County known as Pedley. The lands are approximately three miles northwest of downtown Riverside, the County seat for Riverside County.

The subject property is bounded to the north by the Riverside Canal Lateral No. 2, Camino Real beyond which is existing housing to the west; a new residential project known as Terrazzo by Empire Homes ( currently selling last phase of construction) to the south, beyond which is the Indian Hills Country Club and older, rural housing to the east.

Access to downtown Riverside is considered to be good via Camino Real north to Jurupa Road, east to Mission Boulevard and east to downtown. The Santa Ana River divides the subject area from the City of Riverside.

Neighborhood commercial areas from the subject property are considered to be good via Camino Real south to Limonite Avenue with a Stater Brothers and K Mart anchored center at Limonite Avenue and Camino Real. In addition there is a new Albertson's market shopping center west on Limonite A venue at Clay Street with a large Edwards movie complex.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 15 RIVERSIDE COUNTY HOUSING MARKET

In reviewing the County's housing market, a study of population and economic growth needs to be conducted.

Per the County of Riverside Economic Development Department, the January 2005 population of the County is 1,877,000. An influx of residents from Orange and Los Angeles Counties seeking more affordable housing was instrumental in population increases within the County. The County is one of the fastest growing regions in the United States. The City is essentially built-out and remaining land for development is in demand. The location is considered prime for businesses, with relatively inexpensive land costs and a quality labor pool. This is evidenced by the explosive growth of industrial development in the County over the past 10 to 15 years. The recession of the early 1990s impacted the County; however, the recovery that occurred was slower in some areas than others.

Economic growth in the Riverside-San Bernardino area has been strong, with over 51,400 new jobs added in 1999 and over 35,000 new jobs added in both the years 2000 and 2001 and 28,000 new jobs in 2002. Between January 2003 and 2004 over 18,000 new jobs were added depicting a 1.8 percent growth rate. Between July 2004 and July 2005, there were 19,100 new jobs added, a growth rate of 1. 7 percent per the State of California Economic Development Department. In contrast to the balance of Southern California, the Inland Empire has experienced over 18 years of employment growth despite the early 1990s recession and the job losses in the rest of the Southern California region. While job growth slowed to a low of 0.6 percent in 1993, it still showed a positive gain. In the latter part of the 1990s, the Inland Empire experienced several major economic events that facilitated job growth, including the construction of the Ontario Mills Mall, Ontario Airport expansion, Ontario Convention Center, California Speedway, Diamond Valley Lake, Temecula Mall, Corona Crossroads, and a major expansion at the University of California, Riverside. More recent economic events include the opening of the Victoria Gardens, a very successful new regional mall. Unemployment has dropped slightly over the past year while Riverside's rate is higher than some surrounding counties (Orange County at 3.9 percent and San Diego at 4.4 percent) the current rate of 5.6 percent in the

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page 16 Riverside/San Bernardino area is significantly lower than the area's 1995 high of 10.0 percent and compares favorably to the state and similar to that of the nation.

The City of Riverside is within the Northwest Riverside sub-market. Per The Meyers Group Second Quarter 2005 reports, the Northwest Riverside sub-market is responsible for over nineteen percent of the new home sales activity in all of Riverside County during the past twelve months. This percentage is a decrease from 30 percent throughout the 1990s due to the essential build-out of South Corona, however up from the early 2000s due to the sales within the Eastvale area. The majority of the current activity relates to areas outside of Corona such as the Eastva~e/Jurupa area and south along I-15 where land is still available. The Northwest sub­ rnarket has the highest new, detached, average home base price of $593,737 compared to an overall Riverside County average base price of $454,938.

Horne prices rose steadily between 2001 and rnid-2004 in the County. Per The Meyers Group Second Quarter 2005 New Horne Executive Summary Report for the Inland Empire, the Northwest sub-market had an average price of $593,737 for new, detached homes, which is an increase of 10.4 percent from 12 months previously when the median price was $537,892. Within the overall County the current average price of $454,938 is up 8.2 percent from the prior year, however a decrease from three months earlier when the average base price was $455,610. The June 2004 to June 2005 annual increase of 10 percent within the subject sub-market is a healthier growth rate than the June 2003 to June 2004 increase of over 3 7 percent. It appears that the huge appreciation of the early 2000s is slowing to a more normal growth rate. The increasing home prices appear to have reached a leveling off period. Sales of new homes are still occurring, however at a slower rate than in the past three or four years. The cooling off of the real estate market has created diverse opinions among economists. As previously discussed, some economists insist that the inland empire housing market is not on a "bubble" while others suggest that the region's economy is vulnerable if the nation's economy sours. Lingering problems include the state's finances, a possible decline in real estate prices and the high cost of doing business in the state along with strong increases in energy costs.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 17 Sales of new, detached homes within Riverside County declined slightly from one year ago; however, per Meyers Group, this is due more to a limited availability of product than an actual slowdown. During the first half of 2005 there were 13,396 sales of new detached homes in Riverside County while during the first half of 2004 there were 13,693 sales suggesting a 2.2 percent decline. Within the subject sub-market however, sales increased from 2,475 detached new homes sales during the first half of 2004 to 2,676 sales in the first half 2005. There still appears to be good demand for new, detached homes within the subject market.

Supply of new homes in Riverside County rose slightly during the first half of 2005. There was an inventory of 21 detached homes (standing and under construction with completion within 30 days) as of the second quarter of 2005 in the subject northwest market, per The Meyers Group, as compared to an inventory of 8 detached homes as of the second quarter 2004. At the second quarter 2005, speculative inventory (standing and under construction) for overall Riverside County was at 865 units, while sales in overall Riverside County for the quarter were 7,370. Within the Northwest sub-market speculative inventory totaled 43 units while sales for the quarter were 1,219. These numbers suggest there is less than a two-week inventory based on overall Riverside County and less than a one-week inventory within the subject sub-market. Both of these inventories are considered to be low.

Per The Meyers Group, the sales price increases in the Northwest Riverside sub-market have been partially caused by the price increases in neighboring Orange and Los Angeles Counties and partially due to pent-up demand for move-up housing. This has been evidenced by both larger homes and higher sales prices over the past six to seven years. Another factor that fueled this sub-market area was the opening (in 1998) of the new transportation corridor connecting the 91 Freeway to Irvine. This toll road made commuting from Northwest Riverside County to Orange County much easier. Although South Corona was the area contributing to the major sales in the Northwest market sub-area in 1998, 1999 and 2000, the year 2001 saw the emergence of the Eastvale/Jurupa area as the top sales area due to the build-out of the South Corona area. The majority of the northwest sub-market is now made up of both the Eastvale/Jurupa area and the 1-15 corridor/Temescal Valley which are currently both strong

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 18 markets. The lessening of sales within the South Corona area is due to essential build-out of the area.

Attached housing sales decreased substantially in the 1990s as attached condominium litigation rose and the detached condominium market appeared. Detached condominiums are detached homes on condominium mapped lots. This product put the attached market at a disadvantage during the 1990s, however as developable land in the area has dwindled, the attached market is once again viable. While 2,676 detached new home sales occurred in the Northwest Riverside sub-market during the first half of 2005, there were 512 attached product sales during this period. There are an additional 338 attached units noted in The Meyers Group report for future construction. This suggests that prices of the larger homes being built in Riverside have priced the first time buyers out of the market, requiring attached product to be an alternative. While in the previous years the detached market in Riverside was extremely price sensitive, the late 1990s demand was for larger homes. The past years of appreciation have allowed previous homebuyers to become "move-up" buyers. These families are growing and need expanding space within their homes. Thus, the larger homes are seeing a sharp increase in both demand and supply within the subject area at this time. However, first time buyers need an entry-level house that attached-units appear to supply.

During 2001 through 2003 the stock market fluctuated dramatically while the past year and a half has seen a generally stagnant stock market. During 2001, 2002 and 2003 the Federal Reserve reduced the interest rate several times attempting to stimulate the economy, however within the past 15 months, there have been 11 Federal Funds Rate increases which the economy appears to have shouldered quite well although the latest increase is too recent to see results at this time. While sales appear to be cooling from the aggressive sales and appreciation rate of the early 2000s, there is still demand for new homes in the subject area. Current interest rates are still near a 30-year low. Land that is entitled and partially finished (i.e., blue-top which is mass graded with streets cut) or finished lots are in demand. The dwindling supply of entitled land in the area is limiting the new development in the subject market area. Although Riverside is essentially built out, there are some in-fill lots and some more difficult terrain to develop that are

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 19 now being developed. The subject is located in the newly developing area of Mission Ranch which is one of the major remaining areas of developable land in the northwest sub-market.

In summary, although there was a slight decline in sales numbers in overall Riverside County, a strong increase in sales prices in the first half of 2004 gave way to a leveling off in appreciation during the latter part of the year. Thus far in 2005 a slowdown in appreciation has suggested the torrid increase in prices has abated to a healthier rate of appreciation with a possible correction being seen in the past three months. The year 2000 saw less appreciation but a significant increase in sales numbers due to lack of supply. The year 2001 saw an increase in price and a significant increase in sales while both the years 2002 and 2003 continued with strong price increases and increases in sales numbers. However, price still appears to be a major factor in attracting buyers to the Riverside County marketplace. The attached product has reappeared in the subject marketplace to accommodate first-time buyers with new attached units selling well. The economic and population growth in the area suggest that demand for housing is still good even with other indicators indicating uncertainty (i.e. stagnant stock market, terrorist activities, oil prices, increasing interest rates). In conclusion, the subject area's growth is anticipated to create the need for new housing projects in the area.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page20 SHEET 1 Of' 2 BOUNDARIES OF JURUPA UNIFIED SCHOOL DISTRICT LEGEND COMMUNITY FACILITIES DISTRICT NO. 4 Boundaries af Community Fadities District No. 4 COUNTY OF RIVERSIDE

Assessor's Parcel Boundories STATE OF CALIFORNIA Reference is hereby mode to the Assessor mops of the nnn-nnn-nnn Assessor's Poree! Number County of Riverside for on exoct description of the E,ct,ibit A lines ond dimensions of eoch lot and porcel.

183-080-019

(1) Fed in lhe olfice ol lhe

Clerk o1 111e Boord o1 Eoocotioo -CD "'I CD N N (2) f herelrt certify lhal the wilhin mop showing the ~ 0 bourld<,ies of Corrmunily f dies District No. 4 ol .b'upo "'I I N 0 N 0 lhTied School Oislricl, Riverside County, Slole ol 0 (II CD I Cc{ifOOlio, 1115 WoWlf by the Bocrd ol [cb:olioo of - 0 I 0 .bupo Unified School Dislricl ol o rec.,,kr meeli1g n "' .... > ~ !hereof, held on lhe ____ day of ------· E 0 z I 2005, by is Resdulioo No. ----· 0 0 "' ~ ~ aet o1 the Boord o1 Eoocolioo

(l) Fed lhis ____ cloy ol -----· 20___ , ol the boor of ____ o'clock _m, in Bed ____ _ ol llops of '6sessmenl and Coniroonily fociilies Oislricls ol poge ___ ood os klslrumenl No. ------· in RED MOUNTAIN DRIVE the office ol lhe Coli>ly Recorder of lhe County of lwerside, Slole of Colilomio.

Counly Rec«der ol lhe Cwi~ ol Riverside PREPARED BY DAVID TAUSSIG & ASSOCIATES, INC. L J COMMUNITY FACILITIES DISTRICT NO. 4

CFD No. 4 consists of approximately 84 acres divided into two non-contiguous properties which are designated as Zone 1 and Zone 2. Zone 1 refers to approximately 28 acres proposed for 51 single family detached homes located along Cachina Drive and Golf Street in unincorporated Riverside County. Zone 2 pertains to approximately 56 acres proposed for 80 single family detached homes located along the east side of Camino Real, south of Jurupa Road in unincorporated Riverside County. This appraisal is for the property within Zone 2 only and does not include the lands within Zone 1.

CFD No. 4 was formed pursuant to the School Facilities Mitigation Agreements ("Agreements") entered into by and between (i) the Jurupa Unified School District ("School District") and Jurupa Hills 80, LP with respect to Zone 2, and (ii) the School District and CRV Jurupa 50 LP with respect to Zone 2, and Jurupa Hill 80 LP is the owner of the subject property. CFD No. 4 will finance the acquisition/construction of school facilities that will directly or indirectly serve students generated from units constructed within CFD No. 4. In addition, CFD No. 4 is being formed subject to a Joint Community Facilities Agreement ("JCF A") between the School District and Jurupa Area Recreation and Park District ("JARPD"). The JCF A establishes the terms by which CFD No. 4 will finance recreation and park facilities associated with the anticipated development within CFD No. 4.

The proceeds of the Bonds from CFD No. 4 ("Bonds") will be used primarily for (i) school facilities; (ii) acquisition of land, rights-of-way and easements necessary for the school facilities; (iii) street, public roadways, sidewalks, curbs, gutters and appurtenant facilities; and, (iv) park and recreation facilities and fees.

CFD No. 4 is expected to issue two series of Bonds, one for each zone. The amounts per the latest Sources & Uses of Funds (November 23, 2005 prepared by Stone & Youngberg, LLC) are as shown on the following page. The bold numbers represent the bond amounts for the subject property (Zone 2).

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 21 Zone School Facilities Non-School Facilities Total 1 $894,417 $167,076 $1,061,493 2 $1,321,818 $1,229,795 $2,551,613 Totals $2,215,235 $1,029,156 $3,244,391

These amounts are estimates and subject to change, depending on the projected number of units to be constructed, interest rates of the Bonds, the costs of issuance of the Bonds, and other factors to be determined at the time the Bonds are issued. The total costs associated with the issuance of the Zone 2 Bonds are not expected to exceed $660,000. The maximum authorized bonded indebtedness for the entire CFD No. 4 has been specified as an amount not to exceed $6,250,000.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 22 SUBJECT PROPERTY DESCRIPTION (ZONE 2)

Location: East side of Camino Real, south of Jurupa Street, Riverside County, California

Thomas Guide: 684 Hl/2

Legal Description: Lots 1 thru 80 of Tract 30288, Unincorporated Riverside County, state of California.

Owner of Record: Jurupa Hills 80, L.P., a California limited partnership.

Three-Year Sales History: Jurupa Hills, 80, L.P. purchased the subject property from Jurupa Hills, LLC on December 17, 2003 for $5,500,000. Assessor Parcel Nos.: 183-080-019, 183-210-31, 183-210-051, 183-220-002, 183-220-004 and 183-220-005

Property Taxes: Per the Chicago Title Company the 2004/05 property taxes for the above referenced APNs total $14,340.09 and the taxes are not delinquent.

Size and Shape: The subject property is irregular in shape and contains 57.42 gross acres per Tract Map 30288.

Zoning: The subject property is zoned RA (residential agriculture) allowing for 20,000 square foot minimum lots.

Entitlements: Tract Map 30288 covers the subject property dividing it into 80 single­ family detached residential lots with a minimum lot size of 20,000 square feet. Tract Map 30288 recorded February 25, 2005.

Topography: The subject property is hilly providing for some good to excellent views. The entire property has been mass graded with lots terraced and streets cut in with the majority of the lots having utilities stubbed to each. Some of the internal streets are paved. Drainage is being installed per an engineered street drainage system.

Soils Condition: We have reviewed a Response to Review Comments from the County of Riverside Transportation and Land Management Agency prepared by John R. Byerly, Inc. of Bloomington, California dated November 13, 2002 that refers to: Soils Investigation by John R. Byerly, Inc. dated August 10, 2001; Liquefaction Analysis prepared by John R. Byerly, Inc., dated October 22, 2001; TTM 30288 prepared by David Jeffers Consulting and dated August 23, 2002; and Review Comments for Tract Map 30288

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 23 prepared by County of Riverside Transportation and Land Management Agency, Planning Department dated October 2, 2002. In addition the report contained a Subsurface Engineering Geology Investigation of Slope Stability for TTM 30288 prepared by Gary S. Rasmussen & Associates, Inc. and dated October 31, 2002. The Byerly report addresses all concerns by the County in regards to the geotechnical development of the subject property. The Rasmussen report stated there was evidence of northeast trending faulting in the southern portion of the site. However, no evidence for active faulting was observed and thus, a restricted use zone from this faulting was not recommended. It is an assumption of this report that all recommendations contained in the aforementioned reports are implemented during design and construction.

Environmental Concerns: The appraiser has reviewed a Limited Phase II Environmental Site Assessment Report on the subject property prepared by Giles Engineering Associates, Inc. and dated August 30, 2001. The purpose of the Limited Phase II Environmental Site assessment was to evaluate the soil and groundwater for the presence of petroleum hydrocarbons as a result of a former gasoline underground storage tank (UST) and a former diesel UST on the subject property. The report recommended that, due to the hydrocarbon-affected soil and groundwater identified beneath the subject property, they recommend that the report be submitted to the Riverside County Environmental Health Department - Hazardous Materials Management Division for review. The report also states that the owners of the property should immediately notify the Environmental Health Department of the petroleum hydrocarbon release that has occurred. We have reviewed a Closure of Underground Storage Tank letter from the California Regional Water Quality Control Board in regards to this issue confirming the completion of the site investigation, remedial action and groundwater monitoring which were required.

It is an assumption of this report that the subject property has no environmental issues that would slow or thwart development of the subject property.

Flood Zone: The subject property is located within Flood Zone C per FEMA map numbers 0602450045A and 0602450040A. Flood Zone C is areas of minimal flooding and does not require flood insurance. Seismic Information: The subject property is not located within an Earthquake Study Zone. The nearest known active regional fault is the San Jacinto fault zone, located 9.25 miles northeast of the site per the Gary S. Rasmussen Associates, Inc. report.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 24 Easements/ Encumbrances: The appraiser has reviewed a preliminary title report prepared by Chicago Title Company as Report No. 42010141 K07 dated January 18, 2005 covering the subject property. The exceptions are as follows.

Item Nos. 1 and 2 pertain to property taxes and assessments. Item No. 3 refers to an easement for any public roads. Item No. 4 pertains to mutual rights of way for ditches recorded originally in 1898. Item No. 5 refers to an easement for road purposes. Item No. 6 states the land is within a redevelopment project area. Item No. 7 refers to an easement for utility purposes. Item Nos. 8 and 9 refer to deeds of trust on the property. Item No. 10 is in regards to a financing statement for the current owner. Item No. 11 pertains to a cooperative agreement between the current owners and Riverside County Flood Control and Water Conservation District. Item No. 12 is in regards to a mechanic's lien for Robertson's for $7,389.93. Item No. 13 is in regards to any other mechanics' liens that may be recorded by reason of a work of improvement that is disclosed by the mechanic's lien shown under No. 12.

This appraisal assumes that the subject property is free and clear of any liens and/or encumbrances with the exception of the lien of CFD No. 4 (subject CFD).

Utilities: All normal utilities will be made available to serve the subject site by the following companies:

Electrical: Southern California Edison Company Natural Gas: The Gas Company Water: Jurupa Community Services District Sewer: Jurupa Community Services District School District: Jurupa Unified School District

Streets/Access: The subject property has access from the 60 Freeway to Pedley Road, south to Jurupa Road, east to Camino Real and south to the subject property. Additional access if Interstate 15 to Limonite, east to Camino Real and north to the subject property.

The 60 Freeway is a major east/west freeway providing access from the west in Los Angeles throughout San Bernardino and Riverside Counties where the 60 Freeway merges with Interstate 10.

Jurupa Road is an east/west arterial through the subject area beginning at Bellgrave A venue to the west and terminating at Mission Boulevard to the east.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 25 Camino Real is a north/south arterial beginning north of Jurupa Road, providing access through the subject neighborhood and terminating south of Limonite Avenue.

Current Condition: The subject property has been graded with lots terraced, streets cut in and utilities installed to each lot. Some of the internal streets have been paved. There are three completed model homes and 18 production homes beginning construction. Costs of Development: The appraiser has reviewed a Project Cost Report provided by Griffin Communities, which shows the latest development budget along with costs that have been spent to date. The total costs estimated as of October 6, 2005 (latest accounting run) are as follows:

Engineering/Consultants $ 602,332 Fees and Bonds 3,685,656 Hard Costs 7,030,470 Total Land Development Costs $11,318,458 Less: Spent to Date5 ( 5,474,858) CFD Funded Improvements6 ( 2,007,203) Remaining Costs of Development $ 3,836,397 Improvement Description: Griffin Communities is developing Sunset Ridge Estates on the subject property. Sunset Ridge Estates is proposed for 80 homes. There are three completed model homes and eighteen production homes under construction. Sunset Ridge Estates has released eighteen homes and has sold or taken reservations for all eighteen. The homes are of Early California, American Traditional and Craftsman architecture with three and four car garages, concrete tile roofs, roll-up garage doors and front­ yard landscaping. Gourmet kitchens include granite tile countertops, under-cabinet lighting and walk-in pantries. Master bedroom suites have soaking tubs, dual sinks and walk-in closets. The plans are detailed below.

Room Floors/ Bldr. Plan Count Parking Sq. Ft. Owned 1 4/3 1/3 3,071 0 2 4/3 2/4 3,789 1 3 5/3.5 2/4 4,115 1 4 4/3.5 1 I 3 3,154 1

All of the completed homes are models. Plan 1 is not modeled.

5 Amount does not reflect $40,042 paid in school fees that will be reimbursed by CFD No. 4. 6 CFD proceeds estimated at $2,551,613 less $544,410 (trail land value not included in above costs). Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page26 HIGHEST AND BEST USE ANALYSIS

The highest and best use is a basic concept in real estate valuation due to the fact that it represents the underlying premise (i.e., land use) upon which the estimate of value is based. In this report, the highest and best use is defined as:

"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. "7

Proper application of this analysis requires the subject property to first be considered As Vacant in order to identify the "ideal" improvements in terms of use, size, and timing of development. The existing improvements (if any) are then compared to the "ideal" improvements to determine if the use should be continued, altered, or demolished preparatory to redevelopment of the site with a more productive or ideal use.

As Vacant In the following analysis, we have considered the site's probable use, or those uses which are physically possible; the legality of use, or those uses which are allowed by zoning or deed restrictions; the financially feasible use, or those uses which generate a positive return on investment; and the maximally productive use, or those probable permissible uses which combine to give the owner of the land the highest net return on value in the foreseeable future.

Physically Possible Uses The subject property consists of an irregular shaped parcel consisting of 57+ acres. The original topography of the site was considered hilly. The property has been mass graded into 80 single­ family detached lots with a minimum size of 20,000 square feet. Approximately 25 of the lots are in a finished condition while the remaining 55 are in nearly finished condition with utilities stubbed to the majority of the lots and streets ready to be paved. The appraiser has reviewed a

7 1 The Appraisal of Real Estate, 11 h Edition

Summary Appraisal Report- Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page 27 soils report on the property. The report concluded that the proposed development of the site appears feasible if the recommendations in the report are adhered to. In addition, the appraiser has reviewed a Phase II Environment Site Assessment which found no evidence supporting cause for concern within the subject property's boundaries. Access to the property is considered good. Surrounding uses include residential use, rural residential use and vacant lands. Drainage is proposed into an engineered system.

It is an assumption of this Summary Appraisal Report that the soils are adequate to support the highest and best use conclusion and that all geotechnical recommendations have been adhered to in the development of the property. It is also assumed that no environmental issues exist, which would slow or thwart development of the sites.

The size, access, and topography of the subject property make it physically suited for numerous types of development; however, the grading and development that has occurred on the property suggests single-family residential use. In addition, the surrounding uses of residential development appear to make the subject property more suitable for residential use.

Legality of Use The subject property is located within the County of Riverside, the entity responsible for regulating land use through the implementation of general plans and zoning ordinances. Per the County the subject property is zoned RA which allows is for minimum 20,000 square foot lots. In addition recorded Tract Map 30288 encompasses the property allowing for 80 single-family detached lots with a 20,000 square foot minimum lot size. Tract Map 30288 recorded February 25, 2005.

Based on the legality of use analysis, the types of development for which the subject property can be utilized are narrowed to residential use per the zoning designations and the approved mapping on the property. Residential use is consistent with the findings of the physically possible uses.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page28 Feasibility of Development The third and fourth considerations in the highest and best use analysis are economic in nature, i.e., the use that can be expected to be most profitable. The late 1980s were characterized by rapidly escalating prices, good pre-sale activity, and a strong resale market drawing move-up buyers. The early 1990s brought a recession with home sale prices falling from their previous levels and sales volume dropping dramatically while the later half of the 1990s saw prices beginning to rise. The years 1999 through 2003 saw significant appreciation in the subject marketplace. Although the nation's economy saw a mild short-term recession in 2001, the housing market in the subject area was not affected. The Federal Reserve reduced interest rates several times throughout 2001 to 2004, which favorably impacted housing sales, however, have increased them eleven times since June 2004. Prices, which rose in double digits during 1999 and 2000, grew at a slower rate in 2001 and then increased double-digit rates again in 2002, 2003 and the first half of 2004. The latter half of 2004 and the first half of 2005 saw a cooling off of price inflation with appreciation still occurring, however at a lesser rate than the previous three years. Sunset Ridge Estates, the subject project, has released 18 homes and has sold or taken reservations for all 18.

Maximum Productivity The subject property is proposed for an 80-lot subdivision. Current market conditions (based on historical sales, current inventory and proposed product in the area) indicate that residential development in the subject area is in demand. The subject has been well received in the marketplace. In light of the recent sales activity in the subject marketplace, it is our opinion that the subject property is feasible for the proposed developments with an adequate profit level to entice experienced builders.

Highest and Best Use Conclusion As Vacant The final determinant of highest and best use is the interaction of the previously discussed factors (i.e., physical uses, legal uses, financial feasibility, and maximum productivity considerations). Based upon the foregoing analysis, it is the appraiser's opinion that the highest and best use for the subject property, as vacant, is residential development, as proposed.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page29 Highest and Best Use-As Improved Griffin Communities is developing Sunset Ridge Estates consisting of 80 proposed homes including a three home model complex. There are four plans within Sunset Ridge Estates ranging in size from 3,071 to 4,115 square feet. Sunset Ridge Estates has released 18 homes and has sold or taken reservations for all 18. Escrows are estimated to begin closing in spring to summer 2006. All homes are of good design and appear to be of good quality workmanship. Based on the sales rates for the subject project, it is our conclusion that the highest and best use for the subject property is for the continued use, as improved.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page30 VALUATION ANALYSIS AND CONCLUSIONS

The subject property consists of 80 single-family detached lots that are currently under development.

The Sales Comparison Approach will be used to value the subject property. This approach compares similar properties that have recently sold or are in escrow. In determining the value for the subject property, a unit of comparison needs to be addressed. For single-family detached lots, the lots are typically sold on a finished lot basis. That is, the sales price is determined by a finished lot value and then the remaining costs to develop the property to a finished lot condition are taken into account in the sales price. Therefore, in determining a current market value for the land, the current condition of the lots will be taken into consideration. The three completed, builder owned homes will be valued using the Sales Comparison Approach to value followed by a Discounted Cash Flow ("DCF") Analysis due to the single ownership. All of the value conclusions will take into consideration improvements to be funded by the 2005 Special Tax Series A Zone 2 ofCFD No. 4 and the lien ofCFD No. 4.

In the Sales Comparison Approach, market value is estimated by comparing properties similar to the subject property, which have recently been sold, are listed for sale, or are under contract (i.e., for which purchase offers and a deposit have been recently submitted). In addition, due to the single ownership of the three completed model homes, a DCF will be considered. The DCF will take into account the fair market value of the completed homes (utilizing the Sales Comparison Approach), the marketing and carrying costs associated with selling off the homes, a profit due to the developer of the homes, and a discount rate reflecting both the risk associated with selling off the homes and the time value of money during the estimated absorption period.

The valuation will be presented as follows. First a discussion of the single-family detached lot market data will be given. Each of the comparable market data ( finished lot basis) will be detailed along with a comparison discussion of their relationship to the subject property. This analysis will be followed by a lot-value conclusion. Next, the merchant builder owned homes

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 31 RESIDENTIAL DETACHED LOT SALES SUMMARY CHART

Data Sales # of Lot Size Finished No. Location Buyer Seller Date Lots {SF) Price/Lot Comments 1 PA 8, Colelge Park Specific Confidential Sun Cal Escrow 31 20,000 $300,000 18.8 acre site to be transferred in Plan, Chino mass graded condition. Within proposed CFD. 2 N/S Krameria W/0 Dauchy Confidential Centex Current 116 7,000 $250,000* Re-sale of TTM 29596 Data No. 2. Avenue, Riverside Escrow Centex purchased based on $201K/FL neg. in 1/05. Within proposed CFD. *Asking price was $250K /FL. Escrow lS "near" asking price. 3 Overlook Parkway W/0 Purchased with mapping in raw Alessandro, Riverside Pulte Quo 6/05 22 Y, Acre $378,000 condition. Within CFD. Exe. Views 4 Overlook Parkway W/0 Purchased with mapping in place in Alessandro, Riverside Pulte Cagney 3/05 104 YzAcre $311,000 raw condition. Within CFD. Excellent views. 5 Overlook Parkway W/0 Pulte Kunney 3/05 149 Y, Acre $307,346 Purchased with mapping in place in Alessandro, Riverside raw condition. Within CFD. Excellent views. 6 Barton Road near Krameria, Sold in blue topped condition with Riverside Richmond Centex 2/05 84 10,500 $247,000 mapping in place within CFD. American Centex purchased from Sheffield Homes in 11/03 based on $160K FIL. 7 E/S Corona Avenue, E/0 1-15, Logan Homes I.C. Corona 12/04 21 14,000 $229,224 Purchased with mapping in place City of Corona and m unimproved condition. Within CFD. Rocky topography. 8 E/0 Reche Canyon Road at Trinity Admar 10/04 92 20,000 $240,000 Site located on bluff providing for Fernlane, Colton, San Pepper Mgmt. good views for San Bernardino Bernardino Tree, LLC Corp. Mountains. No CFD. will be valued, followed by a final value conclusion for the lots in their "as is" condition. A summary of the final value conclusions for the builder owned property will then be given.

Market Data Discussion - Detached Residential Lots The market data search within the area resulted in eight transactions ( summarized on the facing page) to be comparable to the subject property.

Market Data No. 1 refers to a current escrow in the City of Chino between SunCal and a confidential buyer for a transaction within the SunCal College Park Specific Plan. The property includes 31 lots with a minimum lot size of 20,000 square feet. The property is in escrow on the basis of a $300,000 finished lot. The 18.8 acre site is to be transferred in a mass graded condition. The property is located within a proposed CFD. In comparison to the subject property this site is considered to be slightly superior due to the inclusion of a master planned community, location, and the fact it is not yet a closed sale, while it is considered to be inferior due to the views of the subject property.

Market Data No. 2 refers to a current escrow between Centex Homes and a confidential buyer in Riverside County. Centex Homes was asking $250,000 based on a finished lot for the 116 lots with a minimum lot size of 7,000 square feet (average lot size over 8,000 square feet). Per Centex Homes the property is in escrow "very near" to the asking price. Centex Homes purchased the lots from Sheffield Homes in January 2005 based on a finished lot price of $201,000. This depicts the appreciation that is still occurring in the subject marketplace. The lots are located in the community of Mission Ranch, approximately 8 miles east of the subject property. Mission Ranch is located within a CFD. In comparison to the subject lots this market data is considered to be superior due to location and inferior due to lot size and no view potential.

Data Nos. 3, 4 and 5 refer to three sales of Yi acre minimum lots located on Overlook Parkway, west of Alessandro Boulevard approximately 8.5 miles northeast of the subject property. Pulte Homes purchased all of the tracts. Data No. 3 consisted of 22 lots which closed in June 2005 on the basis of a $378,000 finished lot. Data No. 4 consisted of 104 lots which closed in March

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 32 2005, however, were negotiated in mid-2004 on the basis of a $311,000 finished lot. Data No. 5 consisted of 149 lots which also closed in March 2005 on the basis of a $307,346 finished lot. All properties are within a proposed CPD and were purchased in a raw land condition with mapping in place. All properties also have good to excellent views. In comparison to the subject property, these sales are considered superior in location.

Data No. 6 refers to the sale of 84 lots with a minimum lot size of 10,500 square feet located along Barton Road near Krameria, also located in Mission Ranch. These lots were sold in March 2005 in a blue topped condition within a CPD on the basis of a $247,000 finished lot. This transaction was negotiated in January 2005. Richmond American was the buyer and is now marketing its new neighborhood known as Windsong. In comparison to the subject property, this transaction is considered to be slightly superior due to location and inferior due to date of negotiation and lot size.

Data No. 7 pertains to the sale of 21 lots with a minimum lot size of 14,000 square feet located in the northern portion of the City of Corona. Logan Homes purchased the lots in December 2004 based on a finished lot price of $229,224. At time of sale there were some unknowns on grading due to the rocky soils. The property was purchased with mapping in place and in an unimproved condition with grading permit ready to pull. The site is located within a CPD. This property is located adjacent to Interstate 15. In comparison to the subject property this location is considered to be slightly superior; however, the views and date of sale make the transaction inferior to the subject.

Data No. 8 refers to the sale of 92 lots located at Reche Canyon and Pernlane in Colton, five miles northeast of the subject in San Bernardino County. This site is located on a bluff allowing for some good views. This property is not located within a CPD. The 92 lots were purchased on the basis of a $240,000 finished lot. This property closed escrow in October 2004. In comparison to the subject property this transaction is considered to be similar in location and views, however, inferior due to date of sale.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 33 The market data is summarized below.

Data Date of Finished No. Lot Size (SF) Sale Lot Price Comparison to Subiect 1 20,000 Escrow $300,000 Inferior - views Superior - location, not yet closed 2 7,000 Escrow $250,000 Inferior - lot size Superior - asking price only, location 3 Yi Acre 6/05 $378,000 Superior - location 4 Yi Acre 3/05 $311,000 Superior - location 5 Yi Acre 3/05 $307,346 Superior - location 6 10,500 3/05 $247,000 Inferior - lot size, date of negotiation Superior - location 7 14,000 12/04 $229,224 Inferior - views, date of sale, rocks Superior - location 8 20,000 10/04 $240,000 Inferior - date of sale

The market data has an overall range of $229,224 to $378,000 per finished lot. Data No. 1 does not have views; however, the location is considered superior to the subject's location. In addition, the transaction is an escrow only, not yet a closed sale which suggests this transaction is at the top of the value range. Data No. 2 is also not a closed sale which suggests it is superior; however, this transaction is considered to be inferior in lot size to the subject's 20,000 square foot lots. Data Nos. 3, 4 and 5 are considered to have a superior location in comparison to the subject property. Data No. 6 has smaller sized lots when compared to the subject property. Data Nos. 6, 7 and 8 are all considered to be inferior due to the date of sale or negotiation. Data No. 6 was negotiated in January 2005 while Data Nos. 7 and 8 closed in late 2004, all prior to a substantial amount of appreciation in the subject marketplace. In addition, Data No. 7 is considered to be inferior due to the rocky soils that left substantial risk in the development of the project. The subject lots have a minimum lot size of 20,000 square feet and have good views. The property has been developed to either finished or partially finished residential lots. Based on the market data it has been concluded that the subject lots have a finished lot value of $275,000.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 34 BUILDER-OWNED HOMES VALUATION Sunset Ridge Estates consists of 80 proposed single-family detached homes. There are three model homes which are completed and owned by the builder. In addition, there are eighteen production homes which have begun construction. The production homes under construction will be valued on the basis of a finished lot rather than attribute value to a partially complete improvement. According to the sales office, 18 homes have been released and are all either in escrow or under reservation with a deposit. First a valuation for the builder owned homes will be concluded. Next the final valuation for the lots will be determined followed by a value summary.

Existing Inventory (Retail Value) Due to the current single ownership of the 3 model homes, a DCF is needed in order to arrive at a bulk value which takes into account the retail value of the homes, absorption time to sell the homes, administrative expenses, and a discount rate. Below is a summary of the floor plans. The retail value will first be addressed. A listing of comparable properties is located in the Addenda of this report.

Room Floors/ Bldr. Plan Count Parkin2 Sq. Ft. Owned 1 4/3 1/3 3,071 0 2 4/3 2/4 3,789 1 3 5/3.5 2/4 4,115 1 4 4/3.5 1/3 3,154 1

Plan 1 has no completed homes.

The most appropriate data for Plan 2 are:

Data Model Rm. Ct. Flrs/Pk2. Sq. Ft. Price/SF Subj. 2 4/3 2/4 3,789 -- 1 3 5/3.5 2/4 4,115 $164.57 2 2 4/2.5 2/3 3,051 $175.78 2 3 4/3 2/3 3,584 $158.01 6 2 4/3 2/3 3,789 $175.24

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page35 Due to the limited comparables in the immediate area, the market data search was expanded to surrounding areas. All are of similar quality, design and appeal. Data No. 6 pertains to another project by Griffin Communities located in Riverside with the same floor plans. Adjustments were considered (when applicable) for location, lot size, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space, and other amenities. The subject has a current base price of $171.90 per square foot. It has been concluded that the subject has a value of $170.00 per square foot. This calculates as follows:

3,789 sfx $170.00 = $644,130

The most appropriate data for Plan 3 are:

Data Model Rm.Ct. Flrs/Pk2. Sq. Ft. Price/SF Subj. 3 5/3.5 2/4 4,115 -- 1 2 4/3 2/4 3,789 $171.90 2 2 4/2.5 2/3 3,051 $175.78 2 3 4/3 2/3 3,584 $158.01 6 3 5/3.5 2/4 4,115 $173.40

Due to the limited comparables in the immediate area, the market data search was expanded to surrounding areas. All are of similar quality, design and appeal. Data No. 6 pertains to another project by Griffin Communities located in Riverside with the same floor plans. Adjustments were considered (when applicable) for location, lot size, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space, and other amenities. The subject has a current base price of $164.57 per square foot. It has been concluded that the subject has a value of $165.00 per square foot. This calculates as follows:

4,115 sfx $165.00 = $678,975

The most appropriate data for Plan 4 are:

Data Model Rm. Ct. Flrs/Pk2. Sq. Ft. Price/SF Subj. 4 4/3.5 1/ 3 3,154 -- 1 1 4/3 1/3 3,071 $195.69 2 2 4/2.5 2/3 3,051 $175.78 4 1 4/2.5 1/3 3,298 $216.49

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page36 5 1 4/3.5 1/3 2,899 $237.63 6 1 4/3 1/3 3,071 $195.70

Due to the limited comparables in the immediate area, we have expanded our search to surrounding areas. All are of similar quality, design and appeal. Data No. 6 pertains to another project by Griffin Communities located in Riverside with the same floor plans. All are of similar quality, design and appeal. Adjustments were considered (when applicable) for location, lot size, sales concessions, CFD taxes, common area benefits, total square footage, room count, garage space, and other amenities. The subject has a current base price of $208.94 per square foot. It has been concluded that the subject has a value of$200.00 per square foot. This calculates as follows:

3,154 sfx $200.00 = $630,800

Retail Value Conclusion All three builder owned homes are models. Per interviews with builders, upgrades and landscape/hardscape of up to $100,000 are installed in the model homes. However, the builders generally consider this a marketing cost and do not anticipate recovering this investment on a dollar for dollar basis. A consideration of a $40,000 premium has been considered on each of the model homes. The total gross revenue is as follows:

The total gross revenue is calculated as follows:

Plan 2 (1 Home x $644,130) $ 644,130 Plan 3 (1 Home x $678,975) 678,975 Plan 4 (1 Home x $630,800) 630,800 Model Upgrades 120,000

Total Retail Value $ 2,073,905

Absorption Period In order to arrive at an absorption period for the subject homes, the absorption rates for the active projects used for market data have been reviewed. The subject project has released 18 homes and has either sold or taken reservations for all 18. The Sunset Ridge Estates models opened for sale in

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 37 ~ I

Sunset Ridge Estates

MONTH MONTH 1 TOTAL

INCOME: Retail Sales $2,073,905 $2,073,905

TOTAL INCOME $2,073,905 $2,073,905

EXPENSES: Marketing & Carrying Expenses ($124,434) ($124,434) Profit ($165,912) ($165,912)

TOTAL EXPENSES ($290,347) ($290,347)

NET CASH FLOW $1,783,558 $1,783,558 Discount Factor 0.9934

DISCOUNTED CASH FLOW $1,771,747 $1,771,747

CUMULATIVE DISCOUNTED 11,771,747 11,771,747 CASH FLOW July 2005 suggesting a sales rate of 6 homes per month. For purposes of this analysis, it has been concluded that the three builder-owned homes (all models) will be absorbed within a one-month period as of the date of the appraisal.

Expenses In determining an expense rate several builders in the subject area have been interviewed as to their expenses on selling existing inventory. Expenses include marketing and general administrative costs. These costs typically range from 6 to 10 percent depending on varying factors such as absorption period, intensity of marketing, etc. Four percent has been estimated for marketing expenses and 2 percent for general and administrative costs for a total of 6 percent in expenses.

Profit Several interviews with merchant builders in the area were conducted in order to determine an appropriate profit percentage for the subject property. In the past developers typically attempted to achieve a 10 to 12 percent profit based on gross sales proceeds. During the early 1990s recession this range was lowered considerably to 6 to 10 percent with some builders drastically lowering their profit potential in order to maintain their work force. As the market improved, so did the profits. Several economic indicators are suggesting another downturn in the economy although the subject housing market still remains strong. An 8 percent profit is considered in the analysis for this project.

Discount Rate In selecting a discount rate, the following was completed.

1. Interviews with merchant builders in the Riverside area. 2. Review of current market conditions including current market rates as well as yields reflected in other markets (i.e., GNMA, corporate bonds, etc.). 3. The quality, construction, historical sales and product on the subject property.

An 8 percent discount rate has been utilized in our analysis for the subject property.

Discounted Cash Flow Summary The discounted revenue (see facing chart) for the subject existing inventory is $ 1,771,747 (say) $1, 770,000.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 38 Finished Lot Valuation The builder owns 77 remaining lots within the Tract 30288 which are in either a finished or partially finished condition. Eighteen of these lots have homes under construction. Homes under construction (less than 95 percent complete) will be valued on the basis of a finished lot rather than attribute value to a partially complete improvement. It has been concluded that the subject lots have a value of $275,000 for the lots in a finished condition. As discussed under the property description section earlier within this report there is an estimated $3,836,397 in costs to complete the property to finished lots. Taking these costs into consideration, the "as is" value for the 77 lots is calculated as follows.

77 Lots x $275,000 $21,175,000 Less: Costs to Complete to Finished Lots ( 3.836,397) Total Lot Value $17,338,603 (say) $17,340,000

Total Value - Sunset Ridge Estates

Existing Inventory (3 builder-owned homes) $ 1,770,000 Remaining Lots (77 lots) 17,340,000 Total Value- Sunset Ridge Estates $ 19,110,000

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page39 MARKETING AND EXPOSURE TIME

It is our estimation that both the exposure time and the marketing time for the subject property, if on the market today are at our concluded value, are less than 12 months.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page 40 APPRAISAL REPORT SUMMARY

This appraisal assignment was to value the subject lands within CFD No. 4 Zone 2 of the Jurupa Unified School District. The subject property consists of a residential project consisting of 80 lots within an unincorporated area of Riverside County known as Indian Hills. The project is being developed into Sunset Ridge Estates by Griffin Communities. Sunset Ridge Estates has three completed model homes and 18 production homes under construction. A home under construction (less than 95 percent complete) was valued as a finished lot rather than attribute value to a partially complete improvement. The remaining lots are in either a finished condition or partially finished condition.

The subject property was valued utilizing the Sales Comparison Approach to value and, in the case of the builder-owned homes, a Discounted Cash Flow Analysis. The valuation took into account the improvements/benefits to be funded by CFD No. 4 Zone 2 along with the CFD No. 4 special tax lien. The concluded value estimates for the subject property, subject to the special tax lien, are:

NINETEEN MILLION ONE HUNDRED TEN THOUSAND DOLLARS ($19,110,000)

The above value is stated subject to the Assumptions and Limiting Conditions and the Appraiser's Certification as of said date of value.

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W. Hull & Associates, Inc. Page41 APPRAISER'S CERTIFICATION

We certify that to the best of our knowledge and belief:

1. The statements of fact contained in this report are true and correct.

2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is our personal, unbiased, professional analyses, opinions, and conclusions.

3. We have no present or prospective interest in the property that is the subject of this report, and we have no personal interest or bias with respect to the parties involved.

4. Our compensation is not contingent upon the 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.

5. This appraisal was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.

6. Our analyses, opinions, and conclusions were developed, and this report was prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

7. We have made a personal inspection of the property that is the subject of this report.

8. No one provided significant professional assistance to the persons signing this report.

9. The reported analyses, opinions, and conclusions were developed, and this report was prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute.

10. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

11. As of the date of this report, Bruce W. Hull and Kitty S. Siino have completed the ~nts oft e continuing education program ?.i:nstitute.

Bruce W. Hull, MAI Kitty S. Siino, MAI California State Certified General California State Certified General Real Estate Appraiser (AG004964) Real Estate Appraiser (AG004793)

Summary Appraisal Report - Complete Appraisal Community Facilities District No. 4 (Zone 2) Jurupa Unified School District Bruce W Hull & Associates, Inc. Page 42

(This Page Intentionally Left Blank) ADDENDA TRACT NO. 30288 1,; l SHf£T 2 OF 4 SHEETS "X FD. J/4'),P IMTH LS J2~ TAG, NO REF". ON. 1.0: ACCE)DTa, AS B£I/IIG ON 1HESOl.lrHUNCOF P£DL£Y L,CT. OF 'TJIE NORTH flMRSIDC • JURUPA ClW4L. ~ SHOWH ON Jt.JRtJPA. 86/N • STORU DlWN ltlGHrOF~YDtM..NO. 1-.JH lfECOIIOS OF lt.C.F.C. A: W.C.D., I/SEO l'ORLINCONI.Y. .

ENVIRONMENTAL CONSTRAINT· NOTE:

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WRCHED FD. NOrH/NG, RE-ESTABLJSHED SCCrtON CORNFR P£R l.lli 2.'Jl/4S­ NOTHING S£r. 7 -=--589·2a'o4-W- ,~0~9· IJNO L~T STAJJPED RC£ Jt541 PQl 118 2Jt/4g-52 FL. IN CON(;. (IJ,.Oj"tJ7'42- L-152.88J ll:•OJ 0,1':J1· L•152.81' 200 400 600 800 DETAIL "A" NOr ro SCALE: Scale 1'" = 200' 12. (l{ 1lJ INDICAT£5 RECORD lMTA PER RECORD OF SU~ ~-&& R.S. 75/19-20, UNLESS O™ERW1SC NOTED 1.J. f / /NDICAT£5 R£CORO lMTA PER .JURtJP.4 84SIN AND STORU ORAJN RIGHT OF WAY. "4P, DH'G. NO. 1-JM, IJNl£SS OTHERWISE NOTm. 14.. If I/ INDICATES RfCORD lMTA PER TIMCT 1147P- I, 11.8. 2J1/49-52. VNL£SS OTH£RWISF: NOTED.

'"· ALL IJONUNEHTS SHOWN AS ~ SHALL K srr IN MXORDANCF: WITH 'TH( MON_UlrlENTA710N AGR£EMENT FOR THIS UAP, UNLESS OrHERWrSE NOrrD. r.,_ AU IIONUl,l£NTS SHOWN AS "SEr SH4LL. BC srr IN ACCOR:&WiC£ WITH RIVERSIDF: CQUNT'r" C.'ROINANC£ 461.9. .

16. ~L.L. fNDICA~ RESTRJCTCD ACCESS. IMPROVED RESIDENTIAL SALES SUMMARY CHART IMPROVED RESIDENTIAL SALES SUMMARY CHART

Data Project Name Room Floors/ No. Location/Developer Plan Count Size (SF) Parking Lot Size Sales Price Price/SF 1 Sunset Ridge Estates 1 4/3 3,071 1/3 20,000 sf $600.990 $195.69 Indian Hills area of 2 4/3 3,789 2/4 $651,340 $171.90 unincorporated. Riverside 3 5/3.5 4,115 2/4 $677,190 $164.57 County 4 4/3.5 3,154 1/3 $658,990 $208.94 Griffin Communities 2 Terrazza 1 4/2.5 2,715 2/3 10,000 sf $516,700 $190.31 Camino Real in the 2 4/2.5 3,051 2/3 $536,300 $175.78 unincorporated Riverside 3 4/3 3,584 2/3 $566,300 $158.01 County Empire Communities 3 Norco Ridge Estates 1 4/2.5 2,747 1/3 20,000 sf $782,900 $285.00 Norco 2 5/3 3,381 2/3 $872,900 $258.18 Standard Pacific 3 5/3 3,500 2/3 $853,900 $243.97 4 6/4.5 3,738 2/4 $853,900 $228.44 5 6/4.5 4,313 2/4 $985,900 $228.58 4 Bridgeport 1 5/2.5 3,298 1/3 15,000 sf $713,990 $216.49 La Sierra Avenue 2 4/2.5 3,575 1/3 $756,990 $211.75 Riverside 3 5/2.5 3,740 2/3 $778,990 $208.29 KB Home 4 6/2.5 4,312 2/3 $800,990 $185.76 5 Bridle Creek 1 4/3.5 2,899 1/3 1-ac $688,900 $237.63 Mockingbird Canyon, 2 5/3.5 3,266 1/3 $739,900 $226.54 Riverside 3 5/3.5 3,512 2/3 $699,900 $199.28 William Lyon 4 5/3.5 3,385 1/3 $795,900 $235.12 5 5/3.5 3,701 1/3 $799,900 $216.13 6 6/4.5 4,023 2/3 $845,900 $210.26 7 5/4 3,512 2/3 $749,900 $213.53 6 Country Lane 1 4/3 3,071 1/3 20,000 sf $600,990 $195.70 La Sierra Ave. Riverside 2 4/3 3,789 2/4 $663,990 $175.24 Griffin 3 5/3.5 4,115 2/4 $713,559 $173.40 7 Ardenwood 1 3/2 3,242 2/3 8,500 sf $553,990 $170.88 Mission Ranch, 2 5/3 3,258 2/3 $555,990 $170.65 Riverside 3 5/4.5 3,568 2/3 $565,990 $158.63 Centex Homes 4 5/4 3,808 2/3 $605,990 $159.14 5 6/4 3,931 2/3 $615,990 $156.70 APPRAISERS' QUALIFICATIONS QUALIFICATIONS OF BRUCE W. HULL, MAI

Business Locations: 1056 E. Meta Street, Suite 202 Ventura, California 93001 (805) 641-3275 * Facsimile (805) 641-3278 E-Mail Address - [email protected] Direct Correspondence to Ventura Location

115 E. Second Street, Suite 100 Tustin, California 92780 (949) 581-2194 * Facsimile (949) 581-2198

Bruce W Hull & Associates, Inc. is an appraisal firm that provides a wide variety of appraisal assignments for public agencies, developers and financial institutions.

The principal, Bruce W. Hull, MAI, has been in the appraisal field since graduation in 1969 from Westmont College, Santa Barbara. After being employed by the Ventura County Assessor's Office for five years, he established an appraisal company in Orange County in 1974. In August of 1995 he established an office in Ventura while maintaining an Orange County location. While most of the appraisal assignments are in Southern California, assignments have been completed in areas from San Francisco/Bay Area and Lake Tahoe to San Diego.

The appraisal assignments completed have been diverse in nature, including such property types as large masterplanned developments, shopping centers, large retail uses, and mitigation land. A brief summary of the more challenging assignments is given on the following pages.

MASTERPLANNED DEVELOPMENT

These are typically more than 1,000 acres in size and have a wide variety of residential product, often ranging from condominiums to large estate type of properties. In addition, there is often a commercial use within the development. I have been involved in the following projects.

Lake Sherwood, Hidden Valley Wood Ranch, Simi Valley Rancho San Clemente, San Clemente Towne Center, Rancho Santa Margarita Rancho Trabuco North and South, Rancho Santa Margarita Hunters Ridge, Fontana The Corona Ranch, Corona Mountain Cove, Temescal Mountain Gate, South Corona The Foothill Ranch, Corona Orangecrest, City of Riverside Aliso Viejo, County of Orange Talega Valley, City of San Clemente/County of Orange Otay Ranch, City of Chula Vista

RETAIL USE

Consultant to City of Long Beach regarding a 30 acre site (Long Beach Naval Hospital) which the City was acquiring from the US Navy for inclusion in a 100 acre shopping center site.

Towne Center, Rancho Santa Margarita, is a masterplanned project which GOntains two shopping centers (Towne Center, 160,000 SF plus a Target Store, 122,000 SF; Plaza Antonio, 165,000 SF).

Mission Grove, City of Riverside, is a 395,362 SF center which included a K­ Mart Department Store among the major tenants.

Victoria Gardens Masterplan was a proposed mixed use project consisting of 3,065 acres of land which included a mixture of residential (2, 150 acres); commercial (335 acres of which 91.9 acres was a regional center site); schools; parks; and open space for the remainder of the lands.

Menifee Village, Riverside County, is a 1977 acre masterplanned development which had approvals for 5,256 units. The assignment included the valuation of Planning Area 2-7 which was a commercial site that had been developed with a Target Store, Ralph's Market, and in-line stores (190,000 SF with eventually being a 257 ,000 SF center).

MITIGATION LANDS

These assignments involved valuing lands that are considered mitigation lands which are often acquired by public agencies or nonprofit organizations.

Balsa Chica, Huntington Beach, a 42-acre site which was part of a larger wetlands conservation program. This particular acreage was unique since it was subject to "tidal flushing" and had both fresh and saltwater impacting the lands. This assignment was completed for Metropolitan Water District.

San Joaquin Marsh, City of Irvine, consisted of approximately 289 acres of wetlands which were acquired for use as a "buffer" zone by the Irvine Ranch Water District.

-2- Eagle Valley, a 1072-acre parcel near Lake Matthews in Riverside County, was acquired by Metropolitan Water District for use as a water treatment plant and buffer zone.

Poormans Reservoir, Moreno Valley, a 38-acre site acquired by the City of Moreno Valley for preservation/open space use.

ASSESSMENT DISTRICTS/BOND ISSUES

Have been involved in the appraisals of the following Bond Issues regarding Community Facilities Districts and/or Assessment Districts. (This represents a partial list of assignments completed from 1990 thru Present.)

CFO No. 9 (Orangecrest - lmpr. Areas 1, 3 & 5); City of Riverside CFO No. 2000-1 (Crosby Estate@ Rancho Santa Fe); Solana Beach CFO No. 2001-01 (Murrieta Valley U.S.D.);Murrieta CFO No. 90-1 (Lusk-Highlander); City of Riverside Otay Ranch SPA I - CFO No. 99-2; City of Chula Vista CFO No. 7 (Victoria Grove); County of Riverside CFO No. 10 (Fairfield Ranch); City of Chino Hills CFO No. 2000-1; Tejon Industrial Complex; Lebec CFO No. 99-1; Santa Margarita Water District CFD No. 97-3; City of Chula Vista CFO No. 2 (Riverside Unified School District); City of Riverside CFO No. 89-1; City of Corona Lake Sherwood AD. Refunding; County of Ventura CFO No. 9; City of Chino Hills CFO NO. 88-12; City of Temecula CFO No. 90-1 (Refunding); City of Corona AD. No. 97-1-R; City of Oxnard AD. No. 96-1; Valley Center Municipal Water District; San Diego County AD. No. 96-1; City of Oxnard CFO No. 88-1 (Saddleback Valley Unified School Dist.); Rancho Santa Margarita CFO No. 89-2 (Saddleback Valley Unified School Dist.); Rancho Santa Margarita CFO No. 89-3 (Saddleback Valley Unified School Dist); Rancho Santa Margarita Centex AD. No. 95-1; City of Corona Coyote Hills AD. No. 95-1; City of Fullerton Sycamore Creek AD. No. 95-1; City of Orange Prop. CFD No. 2 (Riverside Unified School District); City of Riverside CFO No. 91-1; City of Rancho Cucamonga Prop. CFD No. 2; City of Chino CFO No. 9; County of San Bernardino A.D. No. 89-1; City of Corona CFO No. 87-1 (Series 8); City of Moreno Valley CFO No. 90-1; City of Corona

-3- CFO No. 89-1; (Saddleback Valley Unified School District); Orange County A.O. No. 96-1; City of Oxnard A.O. Nos. 86-3, 87-1 and 89-1 (Refunding); City of Oxnard CFO No. 90-1; City of Corona CFO No. 1 (Refunding); City of Jurupa CFO No. 88-12; City of Temecula

PARTIAL LIST OF CLIENTS

Have completed appraisal assignments for a wide variety of clients. A partial list of these includes the following.

Anaheim City Unified School District Bank of America NT & SA Bank of Montreal Bear, Stearns & Co., Inc. Best Best & Krieger LLP (Law Firm) Carpinteria Valley Unified School District Chino Unified School District Citicorp, N.A. City of Brea City of Chino City of Chino Hills City of Chula Vista City of Colton City of Corona City of Fullerton City of Huntington Beach City of Jurupa City of Mission Viejo City of Moreno Valley City of Orange City of Oxnard City of Rancho Cucamonga City of Riverside City of San Bernardino City of San Marcos City of Temecula Coast Federal Bank Colton Joint Unified School District County of Los Angeles County of Orange County of Riverside County of San Bernardino County of Ventura

-4- Downey Savings and Loan Federal National Mortgage Association (FNMA) Federal Deposit Insurance Corporation (FDIC) Fieldman, Rolapp & Associates (Financial Consultants) Irvine Ranch Water District Irvine Unified School District Jurupa Community Services District Metrobank Metropolitan Water District Meserve, Mumper & Hughes (Law Firm) Munger, Tolles & Olson LLP (Law Firm) Murrieta Valley Unified School District Rialto Unified School District Riverside Unified School District Saddleback Valley Unified School District Santa Margarita Water District Sidley & Austin (Law Firm) Solana Beach Unified School District Southern California Edison Company Stone & Youngberg LLC (Bond Underwriters) Talmantz Aviation The Irvine Company Wells Fargo Bank Wells Fargo Mortgage Company Weyerhaeuser Mortgage Company

COURT EXPERIENCE

Qualified Expert Witness in the following courts:

United States District Court/Central District of California, Los Angeles Los Angeles County Superior Court Orange County Superior Court Riverside County Superior Court Ventura County Superior Court

ORGANIZATIONS

Member -Appraisal Institute (No. 6894)

-5- LICENSES

Certified General Real Estate Appraiser (AG004964) State of California; Expires April 15, 2004 Licensed Real Estate Broker (00821209) State of California; Expires August 15, 2004

GUEST SPEAKER (for)

UCLA Symposium on Mello Roos Districts - 1988

"Exploring the Rumors & Realities of Land Secured Debt in California" - Conference sponsored by Stone & Youngberg, LLC, bond underwriters, held in Los Angeles on January 15, 1992

"Appraisals for Land Secured Financing" presentation for Stone &Youngberg, LLC, bond underwriters, held at San Francisco Headquarters on March 5, 1998

UCLA Symposium on Mello-Roos Districts - 2001

MISCELLANEOUS

Member Advisory Panel to California Debt Advisory Commission regarding Appraisal Standards for Land Secured Financing (May 1994 and March 2003)

-6- QUALIFICATIONS OF KAREN S. SIINO, MAI

EDUCATION

Bachelor of Arts in Business Administration, Financial ,,, Investments, California State University, Long Beach, California (1980)

Post-graduate Study, Real Estate Development, University of California, Irvine, California

Appraisal Institute Classes: Uniform Standards of Profes­ sional Appraisal Practice, A & B; Appraisal Principles; Appraisal Procedures; Basic Income Capitalization; Advanced Income Capitalization; Narrative Report Writing; Advanced Applications, Case Studies. Successfully completed all classes in addition to successfully completing the writing of a Demonstration Report and passing the Comprehensive Exam for the Appraisal Institute. Became a Member of the Appraisal Institute in December, 1996.

EMPLOYMENT

1985 - Present Associate Appraiser for various MAI's. Duties Include the appraisal of various types of properties such as commercial, retail, industrial and vacant land. Specialty properties include easements, right­ of-ways and special assessment districts. From 1985 to 1988 worked part-time; from 2/88 full-time.

1986 - 1988 Project Manager of Development for Ferguson Partners, Irvine, California. Duties included finding land; review of fee appraisals and valuations; analysis of proposed development; planning and design; management of development, construction and lease-up. The types of properties developed were commercial and indus­ trial. Duties ranged from raw, vacant site develop­ ment through property management of recently devel­ oped projects.

1981 - 1986 Manager of Finance, Construction for Community Development Division, The Irvine Company, Irvine, California. Duties included originating and managing a newly formed division of finance to bridge between the accounting functions and project management functions. Worked with analysis and budgets for Community Development Division. Coordinated with cities in forming new Assessment Districts to finance major infrastructure improvements. Types of proper­ ties were apartments and single family residential lots on a for sale basis to apartment and home builders.

1980 - 1981 Investment Counselor, Newport Equity Funds, Newport Beach, California. Duties included obtaining private financing for residential properties and working with appraisals of properties and analyzing the invest­ ments.

LICENSES

Real Estate Sales Person, State of California, 1980 Certified General Appraiser, State of California (#AG004793)

ORGANIZATIONS

MAI #11145 - Appraisal Institute APPENDIX D - SUMMARY OF FISCAL AGENT AGREEMENT

The following is a summary of certain provisions of the Fiscal Agent Agreement not otherwise described in the text of this Official Statement. This summary is not intended to be definitive, and reference is made to the text of the Fiscal Agent Agreement for the complete provisions thereof.

DEFINITIONS

The following are some of the terms which are defined in the Fiscal Agent Agreement (the “Agreement”). Except as defined below, the terms previously defined in this Official Statement have the meanings previously given.

“2005 Bonds” means, unless otherwise expressly provided, the Community Facilities District No. 4 of the Jurupa Unified School District 2005 Special Tax Bonds (Zone 2), authorized by and at any time Outstanding pursuant to the Act and the Agreement.

“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code.

“Administrative Expenses” means any or all of the following: the fees and expenses of the Fiscal Agent (including any fees or expenses of its counsel), the expenses of the School District in carrying out its duties under the Agreement (including, but not limited to, the levying and collection of the Special Taxes) including the fees and expenses of its counsel, an allocable share of the salaries of School District staff directly related thereto and a proportionate amount of School District general administrative overhead related thereto, any amounts paid by the School District from its general funds pursuant to the Agreement, and all other costs and expenses of the School District or the Fiscal Agent incurred in connection with the discharge of their respective duties under the Agreement and, in the case of the School District, in any way related to the administration of the Community Facilities District.

“Administrative Expense Fund” means the fund by that name established pursuant to the Agreement.

“Agreement” means the Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement adopted pursuant to the provisions of the Agreement.

“Annual Debt Service” means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled, and (ii) the principal amount of the Outstanding Bonds scheduled to be paid.

“Auditor” means the Auditor-Controller of the County of Riverside.

“Authorized Officer” means any officer or employee of the School District authorized by the Board of Education or by an Authorized Officer to undertake the action referenced in the Agreement as required to be undertaken by an Authorized Officer.

D-1 “Board of Education” means the Board of Education of the Jurupa Unified School District.

“Bond Counsel” means Best Best & Krieger LLP, or any attorney or firm of attorneys acceptable to the School District and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities.

“Bond Fund” means the fund by that name established pursuant to the Agreement.

“Bond Year” means the period beginning on the Closing Date and ending on September 1, 2006 and thereafter the period beginning on each September 2 and ending on the following September 1.

“Bonds” means the 2005 Bonds and any Parity Bonds authorized by and at any time Outstanding pursuant to the Agreement and any Supplemental Agreement.

“Business Day” means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the State of California or in any state in which the Fiscal Agent has its Principal Office are authorized or obligated by law or executive order to be closed.

“Capitalized Interest Sub-account” means the sub-account by that name established in the Interest Account in the Bond Fund pursuant to the Agreement.

“Closing Date” means the date upon which there is an exchange of the Bonds for the proceeds representing payment of the purchase price of the Bonds by the Original Purchaser.

“Code” means the Internal Revenue Code of 1986, as amended.

“Community Facilities District” or “District” means the Community Facilities District No. 4 of the Jurupa Unified School District, County of Riverside, State of California.

“Continuing Disclosure Agreement” means the Continuing Disclosure Certificate - Issuer between the School District and David Taussig & Associates, Inc., as Dissemination Agent under the Agreement, dated as of the Closing Date, as originally executed and as it may be amended from time to time in accordance with the terms thereof.

“Costs of Issuance” means items of expense payable or reimbursable directly or indirectly by the School District and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be limited to, printing costs, costs of reproducing and binding documents, including but not limited to the preliminary official statement and official statement regarding such Bonds, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent for the applicable series of the Bonds including its first annual administration fee and the fees of its counsel, expenses incurred by the School District in connection with the issuance of such series of the Bonds and the establishment of the District, Bond (underwriter’s) discount, legal fees and charges, including the fees of Bond Counsel, Disclosure Counsel and counsel to the Underwriter, Dissemination Agent fees and charges, charges for authentication, transportation and safekeeping of such series of the Bonds and other

D-2 costs, charges and fees in connection with the foregoing, and any advances reimbursed directly to the Zone 2 Developer related to the formation of the District and issuance of the Bonds.

“Costs of Issuance Fund” means the fund by that name established pursuant to the Agreement.

“Debt Service” means the amount of interest and principal payable on the Bonds scheduled to be paid during the period of computation, excluding amounts payable during such period which relate to principal of the Bonds which are scheduled to be retired and paid before the beginning of such period.

“Defeasance Securities” means, for purposes of the Agreement, the following:

(i) United States Treasury Certificates, Notes and Bonds (including State and Local Government Series - “SLGs”);

(ii) Direct obligations of the United States Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities;

(iii) Resolution Funding Corporation (REFCORP) obligations; provided that only the interest component of REFCORP strips which have been stripped by request of the Federal Reserve Bank of New York in book-entry form are acceptable;

(iv) Pre-refunded municipal bonds rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s; provided, however, that if the issue is only rated by Standard & Poor’s (i.e., there is no Moody’s rating), then the pre-refunded bonds must have been pre-refunded with cash, direct United States or United States guaranteed obligations, or “AAA” rated pre-refunded municipal bonds; and

(v) Obligations issued by the following agencies which are backed by the full faith and credit of the United States of America:

(a) U.S. Export-Import Bank Direct obligations or fully guaranteed certificates of beneficial ownership

(b) Farmers Home Administration Certificates of beneficial ownership

(c) Federal Financing Bank

(d) General Services Administration Participation certificates

(e) United States Maritime Administration Guaranteed Title XI financing

(f) United States Department of Housing and Urban Development

D-3 Project notes Local Authority Bonds New Communities Debentures - United States government guaranteed debentures United States Public Housing Notes and Bonds - United States government guaranteed public housing notes and bonds.

“Developers” means collectively the Zone 1 Developer and Zone 2 Developer.

“Dissemination Agent” means David Taussig & Associates Inc. or any successor thereto appointed by the School District.

“Federal Securities” means any of the following which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein:

(i) Cash; and

(ii) Direct general obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America and CATS and TIGRS), or obligations, the payment of principal of and interest on which is unconditionally guaranteed by, the United States of America.

“Fiscal Agent” means U.S. Bank National Association, the Fiscal Agent appointed by the School District, acting as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in the Agreement.

“Fiscal Year” means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive.

“Improvement Fund” means the fund by that name established pursuant to the Agreement.

“Independent Financial Consultant” means a firm of certified public accountants, a financial consulting firm, a consulting engineering firm or engineer or the Original Purchaser, which is not an employee of, or otherwise controlled by, the School District.

“Information Services” means Financial Information, Inc.’s “Daily Called Bond Service,” 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services’ “Called Bond Service,” 65 Broadway, 16th Floor, New York, New York 10006; Moody’s Investors Service, Inc.’s “Municipal and Government,” 99 Church Street, 8th Floor, New York, New York 10007, Attention: Municipal News Reports; Standard & Poor’s Corporation’s “Called Bond Record,” 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds as the School District may designate in an Officer’s Certificate delivered to the Fiscal Agent.

D-4 “Interest Payment Dates” means March 1 and September 1 of each year, commencing March 1, 2006 as to the 2005 Bonds, until the maturity or redemption of all Outstanding Bonds.

“Investment Earnings” means all interest earned and any gains and losses on the investment of moneys in any fund or account created by the Agreement excluding interest earned and gains and losses on the investment of moneys in the Rebate Fund.

“Joint Community Facilities Agreement” means the Joint Community Facilities Agreement by and among the School District, Park District, Jurupa Hills 80, L.P. and CRV Jurupa 50, L.P. dated April 1, 2005.

“Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds.

“Mitigation Agreement” means collectively the Zone 1 Mitigation Agreement and Zone 2 Mitigation Agreement.

“Moody’s” means Moody’s Investors Service, Inc., a national rating service with offices in New York, New York.

“Net Special Tax Revenue” means the proceeds of the Net Special Taxes received by the School District, including any scheduled payments and prepayments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of processing of the lien of the Net Special Taxes in the amount of said lien and interest and penalties thereon.

“Net Special Taxes” means the Special Taxes less Administrative Expenses.

“Non-School Facilities Account” mean the account by that name established under the Agreement.

“Officer’s Certificate” means a written certificate of the School District signed by an Authorized Officer of the School District.

“Ordinance” means any ordinance of the School District or resolution of the Board of Education levying the Special Taxes.

“Original Purchaser” means the first purchaser of the Bonds from the School District.

“Outstanding,” when used as of any particular time with reference to the 2005 Bonds and Parity Bonds, as applicable, means (subject to the provisions of the Agreement) all Bonds except:

(i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation;

D-5 (ii) Bonds called for redemption which, for the reasons specified in the Agreement, are no longer entitled to any benefit under the Agreement other than the right to receive payment of the redemption price therefor;

(iii) Bonds paid or deemed to have been paid within the meaning of the Agreement; and

(iv) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the School District and authenticated by the Fiscal Agent pursuant to the Agreement or any Supplemental Agreement.

“Owner” means any person who shall be the registered owner of any Outstanding Bond.

“Parity Bonds” means Bonds hereafter issued which are secured by and payable from an irrevocable first lien on the Special Tax Revenues and on the monies in the funds and accounts (with the exception of the Project Fund, the Rebate Fund and the Administrative Expense Fund) established for such Bonds in this Indenture and in any applicable Supplemental Agreement (including the investment earnings thereon) which lien is on a parity with the lien securing the 2005 Bonds.

“Park District” means the Jurupa Area Recreation and Park District.

“Park District Certificate” means a certificate signed by the General Manager of the Park District requesting the disbursement of funds from the Non-School Facilities Fund.

“Permitted Investments” means:

(i) Federal Securities;

(ii) Bonds, debentures, notes or other evidence issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself):

(a) U.S. Export-Import Bank Direct obligations or fully guaranteed certificates of beneficial ownership

(b) Farmers Home Administration Certificates of beneficial ownership

(c) Federal Financing Bank

(d) Federal Housing Administration Debentures

(e) General Services Administration Participation certificates

D-6 (f) Government National Mortgage Association (GNMA) GNMA - guaranteed mortgage-backed bonds GNMA - guaranteed pass-through obligations

(g) U.S. Maritime Administration Guaranteed Title XI financing

(h) U.S. Department of Housing and Urban Development Project Notes Local Authority Bonds New Communities Debentures - United States government guaranteed debentures U.S. Public Housing Notes and Bonds - United States government guaranteed public housing notes and bonds;

(iii) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit United States government agencies (stripped securities are only permitted if they have been stripped by the agency itself):

(a) Federal Home Loan Bank System Senior debt obligations

(b) Federal Home Loan Mortgage Corporation Participation Certificates Senior debt obligations

(c) Federal National Mortgage Association Mortgage-backed securities and senior debt obligations

(d) Student Loan Marketing Association Senior debt obligations

(e) Resolution Funding Corporation (REFCORP) obligations

(f) Farm Credit System Consolidated systemwide bonds and notes;

(iv) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by Standard & Poor’s of AAAm-G, AAA-m or AA-m and, if rated by Moody’s, rated Aaa, Aa1 or Aa2 by Moody’s with a minimum of $500 million in assets under management including funds for which the Fiscal Agent or its affiliates provide investment or other advisory services.

(v) Certificates of deposit secured at all times by collateral described in clauses (i) and/or (ii) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks of which the short-term obligations are rated A-1 or better and P1 or better by Moody’s or Standard & Poor’s. The collateral must be held by a third party

D-7 and the Fiscal Agent on behalf of the Owners of the Bonds must have a perfected first security interest in the collateral;

(vi) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC, including BIF and SAIF;

(vii) Investment agreements with domestic or foreign banks, insurance companies other than a life or property casualty insurance company, or corporations the long-term debt or claims paying ability of which or, in the case of a guaranteed corporation, the long-term debt of the guarantor, or, in the case of a monoline financial guaranty insurance company, claims paying ability or financial strength, of the guarantor is rated in at least the double A category by Standard & Poor’s and Moody’s; provided that, by the terms of the investment agreement:

(a) interest payments are to be made to the Fiscal Agent at times and in amounts as necessary to pay debt service on the Bonds (if the funds invested pursuant to the investment agreement are from the Reserve Fund);

(b) the invested funds are available for withdrawal without penalty or premium, upon not more than seven (7) days’ prior notice;

(c) the investment agreement shall provide that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof;

(d) the School District and the Fiscal Agent receive the opinion of domestic counsel (which opinion shall be addressed to the School District) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the School District;

(e) the investment agreement shall provide that if during its term

(1) the provider’s rating by either Standard & Poor’s or Moody’s falls below “AA-” or “Aa3”, respectively, the provider shall, at its option, within ten (10) business days after the provider’s receipt of a written request from the Fiscal Agent to satisfy the foregoing, either (i) collateralize the investment agreement by delivering or transferring in accordance with the applicable state and federal laws (other than by means of entries on the provider’s books) to the School District, the Fiscal Agent or a third party acting solely as agent therefor (the “Holder of the Collateral”) collateral free and clear of any third-party liens or claims, the market value of which collateral is maintained at one hundred five percent (105%) of securities identified in clauses (i) and (ii) of this definition; or (ii) assign the investment agreement and all of its obligations thereunder to, or enter into a repurchase agreement or such other agreement with, a financial institution mutually acceptable to the provider and the School District which is rated either in the first or second highest category by Standard & Poor’s and Moody’s; and

D-8 (2) the provider’s rating by either Standard & Poor’s or Moody’s is withdrawn or suspended or falls below “A-” or “A3”, respectively, the provider must, at the direction of the School District or the Fiscal Agent, within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the invested funds, in either case with no penalty or premium to the School District or the Fiscal Agent; and

(f) the investment agreement shall provide and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this shall mean the Holder of the Collateral is in possession of such collateral); and

(g) the investment agreement shall provide that if during its term

(1) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the School District or the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the School District or the Fiscal Agent, as appropriate; and

(2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the School District or the Fiscal Agent, as appropriate;

(viii) Commercial paper rated, at the time of purchase, “Prime - 1” by Moody’s and “A- 1” or better by Standard & Poor’s having original maturity of not more than 180 days issued by a domestic corporation having assets in excess of $500 million.

(ix) Bonds or notes issued by any state or municipality which are rated by Moody’s and Standard & Poor’s in one of the two highest rating categories assigned by them;

(x) Federal funds or bankers acceptances with a maximum term of 270 days of any bank which has an unsecured, uninsured and unguaranteed obligation rating of “Prime - 1” or “A3” or better by Moody’s and “A-1” or better by Standard & Poor’s;

(xi) Repurchase agreements which satisfy the following criteria:

(a) Repurchase agreements must be between the School District or the Fiscal Agent and a dealer bank or securities firm which is:

(1) A primary dealer on the Federal Reserve reporting dealer list which is rated “A” or better by two of the following Standard & Poor’s, Moody’s, or Fitch; or

D-9 (2) A domestic bank or a domestic branch of a foreign bank rated “A” or above by two of the following: Standard & Poor’s, Moody’s or Fitch; or

(3) Corporations the long-term debt or claims paying ability of which, or in the case of a guaranteed corporation, the long-term debt of the guarantor, or, in the case of a monoline financial guaranty insurance company, claims paying ability or financial strength, is rated in at least the double A category by Standard & Poor’s and Moody’s.

(b) The written agreement must include the following:

(1) Securities which are acceptable for transfer are:

(A) direct obligations of the United States government, or

(B) obligations of federal agencies backed by the full faith and credit of the United States of America (or the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC)),

(2) The collateral must be delivered to the Fiscal Agent (if the Fiscal Agent is not supplying the collateral) or a third party acting as agent for the Fiscal Agent (if the Fiscal Agent is supplying the collateral) before or simultaneous with payment (perfection by possession of certificated securities),

(3) (A) The securities must be valued weekly, marked-to-market at current market price plus accrued interest, and

(B) The value of the collateral must be at least equal to one hundred five percent (105%) of the amount of money transferred by the Fiscal Agent to the dealer, bank or security firm under the agreement plus accrued interest. If the value of the securities held as collateral is reduced below one hundred five percent (105%) of the value of the amount of money transferred by the Fiscal Agent, then additional acceptable securities and/or cash must be provided as collateral to bring the value of the collateral to one hundred five percent (105%); provided, however, that if the securities used as collateral are those of FNMA or FHLMC, then the value of the collateral must be at least equal to one hundred five percent (105%) of the amount of money transferred by the Fiscal Agent; and

(c) A legal opinion must be delivered to the School District and the Fiscal Agent that the repurchase agreement meets the requirements of California law with respect to the investment of public funds; and

(d) Should the provider’s rating by either Standard & Poor’s or Moody’s be withdrawn or suspended or fall below “A-” or “A3”, respectively, the provider must, at the direction of the School District or the Fiscal Agent, within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the invested

D-10 funds, in either case with no penalty or premium to the School District or the Fiscal Agent.

(xii) the Local Agency Investment Fund in the State Treasury of the State of California as permitted by the State Treasurer pursuant to Section 16429.1 of the California Government Code.

(xiii) forward delivery agreements or forward purchase and sale agreements with a domestic or foreign bank or corporation the long-term debt or claims paying ability of which, or in the case of a guaranteed corporation, the long-term debt of the guarantor, or, in the case of a monoline financial guaranty insurance company, claims paying ability or financial strength, of the guarantor is rated at least in the single A category by Standard & Poor’s and Moody’s; provided that, by the terms of the agreement; the underlying investment property consists of those investments which are listed in (i), (ii), (iii) and (viii) above.

“Principal Office” means the principal corporate trust office of the Fiscal Agent in Los Angeles, California or such other addresses may be specified in writing by the Fiscal Agent.

“Proceeds,” when used with reference to the Bonds, means the aggregate principal amount of the Bonds, interest and premium, if any, less original issue discount, if any.

“Project” means the school and park facilities which are to be financed with the proceeds of the sale of the Bonds as described in the Resolution of Formation.

“Rate and Method” means the Rate and Method of Apportionment for the District dated February 15, 2005.

“Rebate Certificate” means the certificate delivered by the School District upon the delivery of the Bonds relating to Section 148 of the Code, or any functionally similar replacement certificate.

“Rebate Fund” means the fund by that name established pursuant to the Agreement.

“Record Date” means the fifteenth (15th) day of the month next preceding the applicable Interest Payment Date whether or not such day is a Business Day.

“Regulations” means the temporary and permanent regulations of the United States Department of the Treasury promulgated under the Code.

“Representation Letter” means the representation letter which the School District has delivered to The Depository Trust Company (“DTC”) with respect to the utilization of the book- entry system maintained by DTC for the issuance and registration of bonds.

“Reserve Fund” means the fund by that name established by pursuant to the Agreement.

“Reserve Requirement” means, as of any date of calculation, the lesser of (i) ten percent (10%) of the outstanding principal amount of the Bonds, (ii) Maximum Annual Debt Service on the Outstanding Bonds or (iii) 125 percent of average Annual Debt Service on the Outstanding

D-11 Bonds, as determined by the School District. The initial Reserve Requirement shall, as of the Closing Date, be $______for the 2005 Bonds.

“Resolution” means Resolution No. 2005/_____, adopted by the Board of Education on December 5, 2005.

“Resolution of Formation” means Resolution No. 2005/36 adopted by the Board of Education on April 18, 2005.

“School District” means Jurupa Unified School District, a school district organized and existing under the laws of the State.

“School Facilities Account” means the account by that name established pursuant to the Agreement.

“Securities Depositories” means The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax (516) 227-4039 or -4190; Midwest Securities Trust Company, Capital Structures - Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax (312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Tel- (215) 496-5058; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the School District may designate in an Officer’s Certificate delivered to the Fiscal Agent.

“Special Taxes” or “Special Tax” means the special taxes levied by the Board of Education on parcels of taxable property within the District pursuant to the Act, the Ordinance and the Agreement.

“Special Tax Fund” means the fund by that name established pursuant to the Agreement.

“Special Tax Prepayments” means amounts received by the School District as prepayments of all of the Special Tax obligation of a parcel of property in the District.

“Special Tax Prepayments Account” means the account by that name established by the Fiscal Agent in the Bond Fund pursuant to the Agreement.

“Special Tax Revenues” means the proceeds of the Special Taxes received by the School District, including any scheduled payments and any prepayments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon.

“Standard & Poor’s” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., a national rating service with offices in New York, New York.

“Zone 1” means the tax zone defined by the same name in the Rate and Method.

“Zone 1 Developer” means CRV Jurupa 50, LP and its successors and assigns, other than individual homeowners.

D-12 “Zone 1 Mitigation Agreement” means the School Facilities Mitigation Agreement dated March 7, 2005 between the School District and Zone 1 Developer.

“Zone 2” means the tax zone defined by the same name in the Rate and Method.

“Zone 2 Developer” means Jurupa Hills 80, LP and its successors and assigns, other than individual homeowners.

“Zone 2 Mitigation Agreement” means the School Facilities Mitigation Agreement dated March 7, 2005 between the School District and the Zone 2 Developer.

“Supplemental Agreement” means any indenture then in full force and effect which has been duly approved by Resolution of the Board of Education under and pursuant to the Act at a meeting of the Board of Education duly convened and held, at which a quorum was present and acted thereon, amendatory thereof or supplemental thereto; but only if and to the extent that such Supplemental Agreement is specifically authorized under the Agreement.

IMPROVEMENT FUND; SPECIAL TAX FUND; ADMINISTRATIVE EXPENSE FUND; COST OF ISSUANCE FUND

Improvement Fund

(A) Establishment of Improvement Fund. The Agreement establishes, as a separate account to be held by the Fiscal Agent, the “Community Facilities District No. 4 of Jurupa Unified School District 2005 Special Tax Bonds, Series A, Improvement Fund.” The Agreement also establishes as separate accounts in the Improvement Fund, to be held by the Fiscal Agent, the “School Facilities Account” and the “Non-School Facilities Account” to the credit of which deposits shall be made as required by the Agreement. Moneys in the Improvement Fund, and all accounts therein, shall be held by the Fiscal Agent for the benefit of the School District and Park District, as provided below, and shall be disbursed, except as otherwise provided in the Agreement, for the payment or reimbursement of the costs of the design, acquisition and construction of the Project.

(B) Procedure for Disbursement.

(1) School Facilities Account. Disbursements from the School Facilities Account shall be made by the Fiscal Agent upon receipt of an Officer’s Certificate which shall:

(a) be identified as a payment requisition and be sequentially numbered, i.e., “Requisition No. ___,” except that no numbering shall be required if the Officer’s Certificate is a requisition for the full amount on deposit in the School Facilities Account;

(b) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made and the person to which the disbursement is to be paid; and

D-13 (c) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer’s Certificate previously filed with the Fiscal Agent requesting disbursement, and that the amount being requested is an appropriate disbursement from the School Facilities Account.

(2) Non-School Facilities Account. Disbursements from the Non- School Facilities Account shall be made by the Fiscal Agent upon receipt of a Park District Certificate or an Officer’s Certificate which shall:

(a) be identified as a payment requisition and be sequentially numbered, i.e., “Requisition No. ____,” except that no numbering shall be required if the Park District Certificate is a requisition for the full amount on deposit in the Non-School Facilities Account;

(b) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made and the person to which the disbursement is to be paid;

(c) certify that the amount required to be disbursed is for payment of costs related to the construction and acquisition of the Park District Facilities as described in the Joint Community Facilities Agreement; and

(d) certify that no portion of the amount then being requested to be disbursed was set forth in any Park District Certificate or Officer’s Certificate previously filed with the Fiscal Agent requesting disbursement, and that the amount being requested is an appropriate disbursement from the Non-School Facilities Account.

If any amount on deposit in the Non-School Facilities Account will not be disbursed for payment of the costs of the construction and acquisition of the Park District Facilities, the Fiscal Agent shall, upon receipt of a Park District Certificate (upon which the Fiscal Agent may conclusively rely) transfer such amount or a portion thereof to the School Facilities Account.

(C) Investment. Moneys in the Improvement Fund shall be invested and deposited in accordance with the Agreement. Investment Earnings shall be retained by the Fiscal Agent in the Improvement Fund to be used for the purposes of such fund.

(D) Closing of Fund. Upon the filing of an Officer’s Certificate and a Park District Certificate, as applicable, stating that the construction and acquisition of the Project has been completed and that all costs of the Project have been paid or are not required to be paid from the School Facilities Account and Non-School Facilities Account of the Improvement Fund, and further stating that moneys on deposit in such accounts are not needed to complete the Project or reimburse the cost thereof, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund to the Interest Account of the Bond Fund to be used to pay the interest on the Bonds.

D-14 Special Tax Fund

(A) Establishment of Special Tax Fund. The Agreement establishes, as a separate account to be held by the Fiscal Agent, the “Community Facilities District No. 4 of Jurupa Unified School District 2005 Special Tax Bonds, Series A, Special Tax Fund.” The School District shall remit to the Fiscal Agent, not later than five (5) Business Days after receipt, all Special Tax Revenues received by the School District, and the Fiscal Agent shall deposit such amounts to the Special Tax Fund. Moneys in the Special Tax Fund shall be held in trust by the Fiscal Agent for the benefit of the School District and the Owners of the 2005 Bonds, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds.

Notwithstanding the foregoing, any amounts received by the School District which constitute Special Tax Prepayments shall be transferred by the School District immediately upon receipt to the Fiscal Agent for deposit by the Fiscal Agent in the Special Tax Prepayments Account established pursuant to the Agreement.

(B) Disbursements. From time to time as needed to pay the obligations of the District, but no later than the Business Day before each Interest Payment Date, the Fiscal Agent shall withdraw from the Special Tax Fund and transfer the following amounts in the following order of priority (i) to the Administrative Expense Fund in an amount not to exceed $30,000.00 per Fiscal Year; (ii) to the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund and any expected transfers from the Reserve Fund and the Special Tax Prepayments Account to the Bond Fund pursuant to the Agreement, such that the amount in the Bond Fund equals the principal (including any sinking payment), premium, if any, and interest due on the Bonds on the next Interest Payment Date, and (iii) to the Reserve Fund an amount, taking into account amounts then on deposit in the Reserve Fund, such that the amount in the Reserve Fund is equal to the Reserve Requirement. Amounts then in the Special Tax Fund shall also be transferred from time to time by the Fiscal Agent, at the written direction of the School District, to the Administrative Expense Fund, to pay additional Administrative Expenses in excess of the amount deposited in clause (i) above, provided that the School District agrees that any such transfers shall not exceed, in any Fiscal Year, the amount included in the Special Tax levy for such Fiscal Year for Administrative Expenses.

At any time following the deposit of Special Taxes in an amount sufficient to make payment of all of the foregoing deposits for the current Bond Year, any amounts in excess of such amounts remaining in the Special Tax Fund shall, upon the written direction of an Authorized Officer, be transferred by the Fiscal Agent to the District to be used for any lawful purpose under the Act. In the absence of such written direction, all amounts remaining in the Special Tax Fund on the first day of the succeeding Bond Year shall be retained in the Special Tax Fund and applied to the succeeding Bond Year’s Annual Debt Service.

(C) Investment. Moneys in the Special Tax Fund shall be invested and deposited in accordance with the Agreement. Investment Earnings shall be retained in the Special Tax Fund to be used for the purposes of such fund.

D-15 Administrative Expense Fund

(A) Establishment of Administrative Expense Fund. The Agreement establishes, as a separate account to be held by the Fiscal Agent, the “Community Facilities District No. 4 of Jurupa Unified School District 2005 Special Tax Bonds, Series A, Administrative Expense Fund” to the credit of which deposits shall be made as required by the Agreement. Moneys in the Administrative Expense Fund shall be held in trust by the Fiscal Agent for the benefit of the School District, and shall be disbursed as provided below.

(B) Disbursement. Amounts in the Administrative Expense Fund shall be withdrawn by the Fiscal Agent and paid to the School District or its order upon receipt by the Fiscal Agent of an Officer’s Certificate stating the amount to be withdrawn, that such amount is to be used to pay an Administrative Expense (or a Cost of Issuance) and the nature of such Administrative Expense (or Cost of Issuance).

(C) Investment. Moneys in the Administrative Expense Fund shall be invested and deposited in accordance with the Agreement. Investment Earnings shall be retained by the Fiscal Agent in the Administrative Expense Fund to be used for the purposes of such fund.

Costs of Issuance Fund

(A) Establishment of Costs of Issuance Fund. The Agreement establishes, as a separate account to be held by the Fiscal Agent, the “Community Facilities District No. 4, of Jurupa Unified School District 2005 Special Tax Bonds Costs of Issuance Fund” to the credit of which a deposit shall be made as required by the Agreement. Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in the Agreement for the payment or reimbursement of Costs of Issuance.

(B) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed to pay Costs of Issuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent concurrently with the delivery of the 2005 Bonds. The Fiscal Agent shall pay all Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such requisition, or upon receipt of an Officer’s Certificate requesting payment of a Cost of Issuance not listed on the initial requisition delivered to the Fiscal Agent on the Closing Date. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of ninety (90) days from the Closing Date and shall then transfer and deposit any moneys remaining therein, including any Investment Earnings thereon, to the Improvement Fund for the purposes of such fund.

(C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with the Agreement. Investment Earnings shall be retained by the Fiscal Agent in the Costs of Issuance Fund to be used for the purposes of such fund.

D-16 SPECIAL TAX REVENUES; BOND FUND; RESERVE FUND

Pledge of Special Tax Revenues

The Bonds shall be secured by a pledge of and lien upon (which shall be effected in the manner and to the extent herein provided) all of the Net Special Tax Revenues and all moneys deposited in the Bond Fund, Reserve Fund and Special Tax Fund. The Bonds shall be equally secured by a pledge of and lien upon the Net Special Tax Revenues and such moneys without priority for number, date of Bond, date of execution or date of delivery. The Net Special Tax Revenues and all moneys deposited into such accounts are dedicated, pursuant to the Agreement, in their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided herein and in the Act, until all of the Bonds have been paid and retired or until moneys or Defeasance Securities have been set aside irrevocably for that purpose in accordance with the Agreement.

Bond Fund

(A) Establishment of Bond Fund. The Agreement establishes, as a separate account to be held by the Fiscal Agent, the “Community Facilities District No. 4 of Jurupa Unified School District 2005 Special Tax Bonds, Series A, Bond Fund” to the credit of which deposits shall be made as required by Section the Agreement and any other provision of the Agreement or the Act. The Agreement also establishes in the Bond Fund, as separate accounts to be held by the Fiscal Agent, the “Interest Account,” the “Principal Account” and the “Special Tax Prepayments Account” to the credit of which deposits shall be made as required by the Agreement. The Agreement further establishes in the Interest Account, as a separate sub- account to be held by the Fiscal Agent, the “Capitalized Interest Sub-account” to the credit of which a deposit shall be made as required by the Agreement. Moneys in the Bond Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the 2005 Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the 2005 Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the 2005 Bonds.

(B) Deposits. On or before each Interest Payment Date, the Fiscal Agent shall transfer from the Special Tax Fund and deposit into the following respective accounts in the Bond Fund, the following amounts in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Net Special Tax Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:

(1) Interest Account. On or before each Interest Payment Date, the Fiscal Agent shall deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest becoming due and payable on the 2005 Bonds on such date (taking into account any expected transfers from the Reserve Fund and the Capitalized Interest Sub- account for any such date). No deposit need be made into the Interest Account on any Interest Payment Date if the amount on deposit therein is at least equal to the interest becoming due and payable on the 2005 Bonds on such date. All moneys in the Interest Account shall be used and withdrawn by the Fiscal Agent solely for the

D-17 purpose of paying the interest on the 2005 Bonds as it shall become due and payable (including accrued interest on any 2005 Bonds redeemed prior to maturity). All amounts on deposit in the Interest Account on the first day of any Bond Year, to the extent not required to pay any interest then having become due and payable on the Outstanding 2005 Bonds, shall be withdrawn therefrom by the Fiscal Agent and transferred to the Special Tax Fund.

(a) Capitalized Interest Sub-account. On or before the Interest Payment Dates which occur between the Closing Date and September 1, 2006, the Fiscal Agent shall withdraw from the Capitalized Interest Sub-account and transfer to the Interest Account the amount which is necessary to cause the amount on deposit in the Interest Account to be equal to the amount of interest which is due and payable on the Outstanding 2005 Bonds on such Interest Payment Date. The amount, if any, on deposit in the Capitalized Interest Sub- account on September 2, 2006 shall be withdrawn by the Fiscal Agent and transferred to the Special Tax Fund and the Capitalized Interest Sub-account shall be closed.

(2) Principal Account. On or before each Interest Payment Date, the Fiscal Agent shall deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds becoming due and payable on such date pursuant to the Agreement, or the redemption price of the Bonds (consisting of the principal amount thereof and any applicable redemption premium) required to be redeemed on such date pursuant to any of the provisions of the Agreement. All moneys in the Principal Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of (i) paying the principal of the 2005 Bonds at the maturity thereof, or (ii) paying the principal of and premium (if any) on any 2005 Bonds upon the redemption thereof pursuant to the Agreement. All amounts on deposit in the Principal Account on the first day of any Bond Year, to the extent not required to pay the principal of any Outstanding 2005 Bonds then having become due and payable, shall be withdrawn therefrom and transferred to the Special Tax Fund.

On the first Business Day following each Interest Payment Date, the Fiscal Agent shall transfer any moneys remaining on deposit in the Bond Fund, including the Interest Account s(but not including the Capitalized Interest Sub-account) and the Principal Account, to the Special Tax Fund.

In the event that moneys on deposit in the Special Tax Fund will be insufficient on any Interest Payment Date for the Fiscal Agent to deposit the required amounts in the Interest Account and the Principal Account of the Bond Fund as provided above, the Fiscal Agent shall deposit the available funds first to the Interest Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount of interest becoming due and payable on the Bonds on the Interest Payment Date, and shall then deposit the remaining available funds in the Special Tax Fund to the Principal Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount, if any, of principal becoming due and payable on the Bonds on the Interest Payment Date. If, after making such deposits to the Interest Account and the Principal Account, and after transferring moneys from the Reserve Fund to such accounts, as provided in the Agreement, the amount on deposit in the Principal Account is insufficient to pay the full amount of the principal of each of the Bonds

D-18 which is to be redeemed on the Interest Payment Date, the Fiscal Agent shall make a prorated payment of the principal of each of such Bonds as specified in an Officer’s Certificate provided to the Fiscal Agent.

(C) Special Tax Prepayments Account Deposits and Disbursements. Within five (5) Business Days after receiving a Special Tax Prepayment the School District shall deliver the amount thereof to the Fiscal Agent, together with an Officer’s Certificate notifying the Fiscal Agent that the amount being delivered is a Special Tax Prepayment which is to be deposited in the Special Tax Prepayments Account. Upon receiving a Special Tax Prepayment from the School District and such an Officer’s Certificate, the Fiscal Agent shall deposit the amount of the Special Tax Prepayment in the Special Tax Prepayments Account. Such an Officer’s Certificate may be combined with the Officer’s Certificate which the School District is required to deliver to the Fiscal Agent pursuant to the Agreement. Moneys on deposit in the Special Tax Prepayments Account shall be transferred by the Fiscal Agent to the Principal Account on the next date for which notice of the redemption of the 2005 Bonds can timely be given under the Agreement and shall be used to redeem the 2005 Bonds on the redemption date selected in accordance with the Agreement. Pending such transfer, the moneys on deposit in the Special Tax Prepayments Account shall be invested by the Fiscal Agent as directed pursuant to an Officer’s Certificate in Defeasance Obligations at such yield as Bond Counsel may determine is necessary to preserve the exclusion of interest on the 2005 Bonds from gross income for purposes of federal income taxation.

(D) Investment. Moneys in the Bond Fund, including all accounts therein, shall be invested and deposited in accordance with the Agreement. Investment Earnings shall be retained in the Bond Fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate Fund in accordance with the Agreement.

Reserve Fund

(A) Establishment of Reserve Fund. The Agreement establishes, as a separate account to be held by the Fiscal Agent, the “Community Facilities District No. 4 of Jurupa Unified School District 2005 Special Tax Bonds, Series A, Reserve Fund” to the credit of which a deposit shall be made as required by paragraph (A) of the Agreement, which deposit is equal to the Reserve Requirement and to which deposits shall be made as provided in the Agreement. Moneys in the Reserve Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the 2005 Bonds as a reserve for the payment of the principal of and interest and any premium on the 2005 Bonds and shall be subject to a lien in favor of the Owners of the 2005 Bonds.

(B) Use of Fund. Except as otherwise provided in this Section and in the Agreement, all amounts on deposit in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Interest Account and the Principal Account of the Bond Fund in the event of any deficiency at any time in either of such accounts of the amount then required for payment of the principal of and interest and any premium on the 2005 Bonds or, in accordance with the provisions of the Agreement, for the purpose of redeeming 2005 Bonds.

D-19 (C) Transfer Due to Deficiency in Interest and Principal Accounts. Whenever transfer is made from the Reserve Fund to the Interest Account or the Principal Account due to a deficiency in either such account, the Fiscal Agent shall provide written notice thereof to the School District.

(D) Transfer of Excess of Reserve Requirement. Whenever, on any September 2, the amount in the Reserve Fund, less Investment Earnings resulting from the investment of the funds therein which pursuant to the Agreement must be rebated to the United States, exceeds the Reserve Requirement, the Fiscal Agent shall provide written notice to the School District of the amount of the excess. The Fiscal Agent shall, subject to the requirements of the Agreement, transfer an amount from the Reserve Fund which will reduce the amount on deposit therein to an amount equal to the Reserve Requirement to the Interest Account and the Principal Account, in the priority specified in the Agreement, to be used for the payment of the interest on and principal of the 2005 Bonds on the next succeeding Interest Payment Date in accordance with the Agreement. Notwithstanding the preceding provisions of this subsection (D), prior to the closing of the Improvement Fund, as provided in the Agreement, the Fiscal Agent shall on the Business Day after each Interest Payment Date, transfer any such excess amount in the Reserve Fund which constitutes Investment Earnings which are not then required to be rebated to the United States (as provided in the Agreement) to the Interest Account of the Bond Fund.

(E) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding 2005 Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer, transfer the amount in the Reserve Fund to the Interest Account and the Principal Account, in the priority specified in the Agreement, to be applied, on the next succeeding Interest Payment Date, to the payment and redemption, in accordance with the Agreement of all of the Outstanding 2005 Bonds. In the event that the amount available to be so transferred from the Reserve Fund to the Interest Account and the Principal Account exceeds the amount required to pay and redeem the Outstanding 2005 Bonds, the excess shall be transferred to the School District to be used for any lawful purpose of the School District.

(F) Transfer Upon Special Tax Prepayment. Whenever Special Taxes are prepaid and 2005 Bonds are to be redeemed with the proceeds of such prepayment pursuant to the Agreement, a proportionate amount in the Reserve Fund as specified in an Officer’s Certificate provided to the Fiscal Agent (determined on the basis of principal amount of 2005 Bonds which will remain outstanding) shall be transferred on the Business Day prior to the redemption date by the Fiscal Agent to the Principal Account of the Bond Fund to be applied to the redemption of the 2005 Bonds pursuant to the Agreement

(G) Investment. Moneys on deposit in the Reserve Fund shall be invested in Permitted Investments which do not have maturities extending beyond five (5) years; provided, however, if the Reserve Fund is invested in an investment agreement (as defined in clause (vii) of the definition of Permitted Investments in the Agreement) or a repurchase agreement (as defined in clause (xi) of such definition) such agreement may have a maturity longer than five (5) years if the Fiscal Agent is authorized by the provisions of such agreement to draw the full

D-20 amount thereof, without penalty, if required for the purposes of the Reserve Fund. The School District shall cause the Permitted Investments, other than such investment agreements, in which moneys on deposit in the Reserve Fund are invested to be valued at fair market value and marked-to-market at least once in each Fiscal Year.

OTHER COVENANTS OF THE SCHOOL DISTRICT

Punctual Payment

The School District will punctually pay or cause to be paid the principal of and interest and any premium on the Bonds when and as due in strict conformity with the terms of the Agreement and any Supplemental Agreement to the extent that the Net Special Tax Revenues are available therefor, and it will faithfully observe and perform all of the conditions, covenants and requirements of the Agreement and all Supplemental Agreements and of the Bonds.

Special Obligation

The Bonds are special obligations of the School District and the Community Facilities District and are payable solely from and secured solely by the Net Special Tax Revenues and the amounts in the Bond Fund, the Reserve Fund and the Special Tax Fund.

Extension of Time for Payment

In order to prevent any accumulation of claims for interest after maturity, the School District shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the School District, such claim for interest so extended or funded shall not be entitled, in case of default under the Agreement, to the benefits of the Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded.

Against Encumbrances

The School District shall not encumber, pledge or place any charge or lien upon any of the Net Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by the Agreement.

Books and Accounts

The School District shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the School District in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Administrative Expense Fund. Such books of record and accounts shall at all times during business hours, upon reasonable notice, be subject to the inspection of the Owners of not less

D-21 than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.

Protection of Security and Rights of Owners

The School District will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the delivery of any of the Bonds by the School District, the Bonds shall be incontestable by the School District.

Collection of Special Tax Revenues

The School District shall comply with all requirements of the Act, including the enactment of necessary Ordinances, so as to assure the timely collection of Special Tax Revenues, including without limitation, the enforcement of the payment or collection of delinquent Special Taxes.

Not less than twenty (20) Business Days prior to each Interest Payment Date the Fiscal Agent shall provide an Authorized Officer with a notice stating the amount then on deposit in the Bond Fund and the Reserve Fund, and informing the School District of the amount of Special Taxes that needs to be levied pursuant to the Ordinance as necessary to provide for Annual Debt Service and Administrative Expenses and replenishment (if necessary) of the Reserve Fund so that the balance therein is equal to the Reserve Requirement. The receipt of or failure to receive such notice by the Authorized Officer shall in no way affect the obligations of the Business Manager under the following two paragraphs, and the Fiscal Agent shall not be responsible for any inability or failure to provide such notice.

The School District shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Act by August 1 of each year (or such later date as may be authorized by the Act or any amendment thereof) that the Bonds are Outstanding, such that the computation of the levy and transmission of the amounts to the Auditor is complete before the final date on which the Auditor will accept the transmission of the Special Tax amounts for the parcels within the Community Facilities District. Notwithstanding the preceding provisions of this paragraph, the Board of Education may elect, as permitted by the Act, to collect the Special Taxes to be levied for any Fiscal Year directly from the owners or lessees of the parcels of taxable property, upon which the Special Taxes are levied rather than by transmitting the Special Taxes to the Auditor for collection on the tax roll; provided that, in such event, the School District shall otherwise comply with the provisions of the Agreement.

An Authorized Officer of the School District shall fix and levy the amount of Special Taxes within the Community Facilities District required for the payment of principal and of interest on any outstanding Bonds of the Community Facilities District becoming due and payable on the next Interest Payment Date, including any necessary replenishment or expenditure of the Reserve Fund and an amount estimated to be sufficient to pay the Administrative Expenses (including amounts necessary to discharge any obligation under the Agreement) during such year, taking into account the balances in such accounts, any transfer or expected transfer from the Reserve Fund to the Bond Fund pursuant to the Agreement, and any

D-22 balance or expected balance in the Special Tax Fund available for such purpose. The Special Taxes so levied shall not exceed the authorized amounts as provided in the proceedings pursuant to the Resolution of Formation.

The Special Taxes shall have the same priority and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on interests in real property.

The School District will not, in collecting the Special Taxes or in processing any such judicial foreclosure proceedings, exercise any authority which it has pursuant to Sections 53340, 53344.1, 53344.2, 53356.1 and 53356.5 of the California Government Code in any manner which would materially and adversely affect the interests of the Bondowners and, in particular, will not permit the tender of Bonds in full or partial payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant that to accept such tender will not result in the School District having insufficient Special Tax Revenues to pay the principal of and interest on the Bonds Outstanding following such tender.

Levy of Special Taxes

Beginning in Fiscal Year 2006-07, and so long as any Outstanding 2005 Bonds, the School District covenants that, to the extent that it is legally permitted to do so, it will levy Special Tax in an amount sufficient, together with other amounts on deposit in the Special Tax Fund and available for such purpose, to pay (1) the principal of and interest on the Bonds when due, (2) the Administrative Expenses, and (3) any amounts required to fund the Reserve Fund.

The School District further covenants that in the event an ordinance is adopted by initiative pursuant to Section 3 of Article XIII C of the California Constitution, which purports to reduce or otherwise alter the Maximum Rates, it will commence and pursue legal action seeking to preserve its ability to comply with its covenant contained in the preceding paragraph.

Further Assurances

The School District will adopt, make, execute and deliver any and all such further ordinances, resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Agreement, and for better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in the Agreement.

Tax Covenants

The School District covenants that:

(A) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of the initial issuance and delivery of the Bonds, would have caused any of the Bonds to be “arbitrage bonds” within the meaning of Section 103(b) and Section 148 of the Code;

(B) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would

D-23 result in loss of exclusion from gross income for purposes of federal income taxation under Section 103(a) of the Code of interest paid with respect to the Bonds;

(C) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would have caused any of the Bonds to be “private activity bonds” within the meaning of Section 141 of the Code;

(D) It will comply with the Rebate Certificate as a source of guidance for achieving compliance with the Code; and

(E) In order to maintain the exclusion from gross income for purposes of federal income taxation of interest paid with respect to the Bonds, it will comply with each applicable requirement of Section 103 and Sections 141 through 150 of the Code.

Covenant to Foreclose

Pursuant to Section 53356.1 of the Act, the School District covenants with and for the benefit of the owners of the Bonds that it will order, and cause to be commenced as hereinafter provided, and thereafter diligently prosecute to judgment (unless other delinquency is brought current), an action in the superior court to foreclose the lien of any Special Tax or installment thereof not paid when due as provided in the following paragraph. An Authorized Officer shall notify the counsel to the School District of any such delinquency of which it is aware, and the Counsel to the School District shall commence, or cause to be commenced, such proceedings.

On March 1 and July 1 of each year, beginning on March 1, 2006, the Business Manager or her designee shall compare the amount of Special Taxes levied in the Community Facilities District to the amount of Special Tax Revenues theretofore received by the School District, and if (i) the amount collected is less than 95% of the amount of the Special Taxes so levied and (ii) the aggregate amount of delinquencies in the payment of Special Taxes exceeds $10,000 for any single property owner, the School District will undertake and diligently prosecute foreclosure proceedings not later than thirty (30) days after each Interest Payment Date in the manner prescribed in the Act to collect the amount of any delinquent Special Tax.

Prepayment of Special Taxes

The School District shall cause all applications of owners of property in the Community Facilities District to prepay and satisfy the Special Tax obligation for their property to be reviewed by an Independent Financial Consultant and shall not accept any such prepayment unless such consultant certifies in writing that following the acceptance of the proposed prepayment by the School District and the redemption of Bonds with such prepayment, the ratio of (i) the maximum amount of the Special Taxes that may be levied in the Community Facilities District following such prepayment to (ii) Maximum Annual Debt Service on the Bonds which will remain Outstanding following such redemption (e.g., 1.15 to 1.0) will not be less than such ratio as it existed prior to such prepayment.

D-24 Calculation of Prepayments

The School District will not include in any calculation of the amount necessary to prepay and permanently satisfy the Special Tax obligation of any parcel of taxable property in the Community Facilities District a proportionate amount of the amount then on deposit in the Reserve Fund, if at the time of such calculation the amount on deposit in the Reserve Fund is less than the Reserve Requirement; provided, however, that in such event the School District may pay to the owner of any such property who prepays and permanently satisfies the Special Tax obligation for his or her property, under such circumstances, such a proportionate amount if the amount on deposit in the Reserve Fund is thereafter increased to the Reserve Requirement.

Continuing Disclosure and Filing of Reports

The School District covenants and agrees that they will comply with and carry out all of the provisions of the Continuing Disclosure Agreement which are specifically applicable to each of them. The School District further agrees to comply with and file those reports required under Sections 50075.1, 50075.3, 53359.5(b), 53410(d), and 53411 of the California Government Code not later than November 30 of each year commencing November 30, 2006.

INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS

Deposit and Investment of Moneys in Funds

Subject in all respects to the provisions of the Agreement, moneys in any fund or account created or established by the Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer’s Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. In the absence of any such Officer’s Certificate, the Fiscal Agent shall invest any such moneys in Permitted Investments described in clause (iv) of the definition of Permitted Investments in the Agreement. The Fiscal Agent shall not have any responsibility for determining the legality of any Permitted Investments. The Fiscal Agent shall have no obligation to pay additional interest or maximize investment income on any funds held by it. Neither the School District nor the Owners of the Bonds shall have any claim of any kind against the Fiscal Agent in connection with investments properly made pursuant to the Agreement. Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account, subject, however, to the requirements of the Agreement for transfer of Investment Earnings in funds and accounts.

The Fiscal Agent and its affiliates may act as sponsor, advisor, depository, principal or agent in the holding, acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to the Agreement. For purposes of determining the amount on deposit in any fund or account held under the Agreement, all Permitted Investments or investments credited to such fund or account shall be valued at the cost thereof (excluding accrued interest and brokerage commissions, if any).

Subject in all respects to the provisions of the Agreement, investments in any and all funds and accounts may be commingled in a single fund for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the

D-25 credit of particular funds or accounts of amounts received or held by the Fiscal Agent under the Agreement, provided that the Fiscal Agent shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in the Agreement.

The Fiscal Agent shall sell at the highest price reasonably obtainable (provided that the highest of any three bids received by the Fiscal Agent shall be deemed the highest price reasonably obtainable), or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited, and the Fiscal Agent shall not be liable or responsible for any loss resulting from the acquisition or disposition of any such investment security in accordance herewith.

The School District acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the School District or the Community Facilities District the right to receive brokerage confirmations of securities transactions as they occur, the School District for itself and the Community Facilities District specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent shall furnish the School District periodic cash transaction statements which include detail for all investment transactions made by the Fiscal Agent under the Agreement.

Moneys credited to any fund or account under the Agreement which are uninvested pending disbursement or receipt of proper investment directions or as directed herein, may be deposited to and held in a non-interest bearing demand deposit account established with the commercial banking department of the Fiscal Agent or any bank affiliated with the Fiscal Agent.

The Fiscal Agent may make any investments under the Agreement through its own bond or investment department or trust investment department, or those of its parent or any affiliate.

Rebate Fund; Rebate to the United States

The Agreement establishes, to be held by the Fiscal Agent, as a separate account distinct from all other funds and accounts held by the Fiscal Agent under the Agreement, the Rebate Fund. The Fiscal Agent shall, in accordance with written directions received from an Authorized Officer, deposit into the Rebate Fund moneys transferred by the School District to the Fiscal Agent pursuant to the Rebate Certificate or moneys transferred by the Fiscal Agent from the Reserve Fund pursuant to the Agreement. The Rebate Fund shall be held either uninvested or invested only in Federal Securities at the written direction of the School District. Moneys on deposit in the Rebate Fund shall be applied only to payments made to the United States, to the extent such payments are required by the Rebate Certificate. The Fiscal Agent shall, upon written request and direction of the School District, make such payments to the United States.

The Fiscal Agent’s sole responsibilities under the Agreement are to follow the written instructions of the School District pertaining hereto. The School District shall be responsible for any fees and expenses incurred by the Fiscal Agent pursuant the Agreement.

The Fiscal Agent shall, upon written request and direction from the School District, transfer to or upon the order of the School District any moneys on deposit in the Rebate Fund in

D-26 excess of the amount, if any, required to be maintained or held therein in accordance with the Rebate Certificate.

THE FISCAL AGENT

Appointment of Fiscal Agent

U.S. Bank National Association is appointed as Fiscal Agent pursuant to the Agreement, registrar and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in the Agreement, and no implied covenants or obligations shall be read into the Agreement against the Fiscal Agent.

Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of the Agreement, shall be the successor to the Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

The School District may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000, and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of the Agreement, combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

The Fiscal Agent may at any time resign by giving written notice to the School District and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the School District shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent.

If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of the Agreement within forty-five (45) days after the Fiscal Agent shall have given to the School District written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent, at the expense of the School District, or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent.

Liability of Fiscal Agent

The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the School District and the Community

D-27 Facilities District, and the Fiscal Agent assumes no responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of the Agreement or of the Bonds, nor shall the Fiscal Agent incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties under the Agreement, except for its own negligence or wilful misconduct. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds.

In the absence of bad faith, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of the Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of the Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of the Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument.

The Fiscal Agent shall not be liable for any error of judgment made in good faith by the Fiscal Agent unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts.

No provision of the Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties under the Agreement, or in the exercise of any of its rights or powers.

The Fiscal Agent shall not be responsible for accounting for, or paying to, any party to the Agreement, including, but not limited to the School District and the Owners, any returns on or benefit from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of the same shall affect, or result in any offset against, fees due to the Fiscal Agent under the Agreement.

The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by the Agreement at the request or direction of any of the Owners pursuant to the Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

The Fiscal Agent may become the owner of the Bonds with the same rights it would have if it were not the Fiscal Agent.

All indemnification and releases from liability granted herein to the Fiscal Agent shall extend to the directors, officers and employees of the Fiscal Agent.

D-28 MODIFICATION OR AMENDMENT OF THE AGREEMENT

Amendments Permitted

The Agreement and the rights and obligations of the Community Facilities District and the School District and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of the Owners, or with the written consent, without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in the Agreement. No such modification or amendment shall (i) extend the maturity of any Bond or the time for paying interest thereon, or otherwise alter or impair the obligation of the School District on behalf of the Community Facilities District to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation of any pledge of or lien upon the Special Tax Revenues, or the moneys on deposit in the Bond Fund, the Reserve Fund, or the Special Tax Fund, superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or the Agreement), (iii) reduce the percentage of Bonds required for the amendment pursuant to the Agreement, or (iv) reduce the principal amount of or redemption premium on any Bond or reduce the interest rate thereon. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. The Fiscal Agent shall be furnished an opinion of counsel that any such Supplemental Agreement entered into by the School District and the Fiscal Agent complies with the provisions of this Section 8.01 and the Fiscal Agent may conclusively rely on such opinion.

The Agreement and the rights and obligations of the Community Facilities District and the School District and the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes:

(1) to add to the covenants and agreements of the School District in the Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the School District;

(2) to make modifications not adversely affecting any Outstanding series of Bonds of the Community Facilities District in any material respect;

(3) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions of the Agreement, or in regard to questions arising under the Agreement, as the School District and the Fiscal Agent may deem necessary or desirable and not inconsistent with the Agreement, and which shall not adversely affect the rights of the Owners; or

(4) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Code relating to required rebate of moneys to the United States or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest on the Bonds or to conform with the Regulations.

D-29 Owners’ Meetings

The School District may at any time call a meeting of the Owners. In such event, the School District is authorized to fix the time and place of any such meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of the meeting.

Procedure for Amendment with Written Consent of Owners

The School District and the Fiscal Agent may at any time enter into a Supplemental Agreement amending the provisions of the Bonds or of the Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by the Agreement, to take effect when and as provided in the Agreement. A copy of the Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, postage prepaid, by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of the Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided.

Such a Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in the Agreement) and a notice shall have been mailed as in the Agreement. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by the Agreement. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter required is mailed..

After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the School District shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the documents required by this Section to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article VIII) upon the School District, the Community Facilities District and the Owners of all Bonds then Outstanding at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty (60)-day period.

D-30 Disqualified Bonds

Bonds owned or held for the account of the School District, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or participate in any action provided for in this Article VIII.

Effect of Supplemental Agreement

From and after the time any Supplemental Agreement becomes effective pursuant to this Article VIII, the Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under the Agreement of the School District and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced under the Agreement subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of the Agreement for any and all purposes.

ISSUANCE OF PARITY BONDS

Conditions for the Issuance of Parity Bonds

The District may at any time after the issuance and delivery of the 2005 Bonds issue Parity Bonds in one or more series payable from Net Special Tax Revenues and other amounts deposited in the funds and accounts created under the Indenture (other than in the Project Fund, the Rebate Fund and the Administrative Expense Fund) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued under the Indenture or under any Supplemental Agreement; provided, however, that Parity Bonds may only be used for the purpose of financing facilities authorized under the Resolution of Formation or refunding a portion of the Bonds or any Parity Bonds then outstanding. Parity Bonds may be issued subject to the following additional specific conditions, which are conditions precedent to the issuance of any such Parity Bonds:

(A) The aggregate principal amount of the 2005 Bonds and all Parity Bonds issued may not exceed $6,250,000; provided, however, that, notwithstanding the foregoing, Parity Bonds may be issued at any time to refund Outstanding Bonds where the issuance of such Parity Bonds results in a reduction of Annual Debt Service on all Outstanding Bonds.

(B) The District shall be in compliance with all covenants set forth in the Indenture and any Supplemental Agreement then in effect and a certificate of the District to that effect shall have been filed with the Fiscal Agent; provided, however, that Parity Bonds may be issued notwithstanding that the District is not in compliance with all such covenants so long as immediately following the issuance of such Parity Bonds the District will be in compliance with all such covenants.

(C) The payment of Special Taxes levied on all properties within the District and which are then owned by the Developers must be current.

D-31 (D) The issuance of such Parity Bonds shall have been duly authorized pursuant to the Act and all applicable laws, and the Issuance of such Parity Bonds shall have been provided for by a Supplemental Agreement duly adopted by the District which shall specify the following:

(1) The purpose for which such Parity Bonds are to be issued and the fund or funds into which the proceeds thereof are to be deposited, including a provision requiring the proceeds of such Parity Bonds to be applied solely for the purpose of financing facilities authorized under the Resolution of Formation or refunding any Outstanding Bonds or Parity Bonds, including payment of all costs incidental to or connected with such refunding;

(2) The authorized principal amount of such Parity Bonds;

(3) The date and the maturity date or dates of such Parity Bonds; provided that (i) each maturity date shall fall on a September 1, (ii) all such Parity Bonds of like maturity shall be identical in all respects, except as to number, and (iii) fixed serial maturities or mandatory sinking fund payments, or any combination thereof, shall be established to provide for the retirement of all such Parity Bonds on or before their respective maturity dates;

(4) The description of the Parity Bonds, the place of payment thereof and the procedure for execution and authentication;

(5) The denominations and method of numbering of such Parity Bonds;

(6) The amount and due date of each mandatory sinking fund payment, if any, for such Parity Bonds;

(7) The amount, if any, to be deposited from the proceeds of such Parity Bonds in the Reserve Fund to increase the amount therein to the Reserve Requirement;

(8) The form of such Parity Bonds; and

(9) Such other provisions as are necessary or appropriate and not inconsistent with the Indenture.

(E) There shall have been received by the Fiscal Agent the following documents or money or securities, all of such documents dated or certified, as the case may be, as of the date of delivery of such Parity Bonds by the Fiscal Agent (unless the Fiscal Agent shall accept any of such documents bearing a prior date):

(1) A certified copy of the Supplemental Agreement authorizing the issuance of such Parity Bonds;

(2) A written request of the District as to the delivery of such Parity Bonds;

D-32 (3) An opinion of Bond Counsel or the School District’s Attorney to the effect that (a) the District has the right and power under the Act to adopt the Supplemental Agreements relating to such Parity Bonds, and the Indenture and all such Supplemental Agreements have been duly and lawfully adopted by the District, are in full force and effect and are valid and binding upon the District and enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights); (b) the Indenture creates the valid pledge which it purports to create of the Special Tax Revenues and other amounts as provided in the Indenture, subject to the application thereof to the purposes and on the conditions permitted by the Indenture; and (c) such Parity Bonds are valid and binding limited obligations of the District, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights) and the terms of the Indenture and all Supplemental Agreements thereto and entitled to the benefits of the Indenture and all such Supplemental Agreements, and such Parity Bonds have been duly and validly authorized and issued in accordance with the Act (or other applicable laws) and the Indenture and all such Supplemental Agreements; and a further opinion of Bond Counsel to the effect that, assuming compliance by the District with certain tax covenants, the issuance of the Parity Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds theretofore issued on a tax-exempt basis, or the exemption from State of California personal income taxation of interest on the Bonds and Parity Bonds theretofore issued;

(4) A certificate of an Authorized Representative containing such statements as may be reasonably necessary to show compliance with the requirements of the Indenture;

(5) A certificate of an Authorized Representative certifying that the District has received:

A. A certificate from one or more Special Tax Consultants which, when taken together, certify that (i) the amount of the maximum Special Taxes that may be levied pursuant to the Rate and Method pursuant to the Act and the Indenture and ordinances of the District in each remaining Bond Year based only on the existing taxable property existing as of the date of such certificate is at least 1.15 times Annual Debt Service for each remaining Bond Year on all then Outstanding Bonds and the Parity Bonds proposed to be issued, provided, however, there shall be excluded from such calculation the Special Taxes on any parcel then delinquent in the payment of Special Taxes; (ii) the maximum Special Tax that may be collected from Developed Property (as such term is defined in the Rate and Method) based on the expected final buildout within the District is expected to be at least 1.15 times Annual Debt Service for each remaining Bond Year; provided, however, that, for purposes of making the certifications required by this paragraph (A), the Special Tax Consultant may rely on reports or certificates

D-33 of such other persons as may be acceptable to the District, Bond Counsel and the underwriter of the proposed Parity Bonds;

B. Except in the case of the issuance of Parity Bonds to refund Outstanding Bonds, an Appraisal indicating that (i) the aggregate appraised value of all property within the District subject to the levy of the Special Tax is not less than six (6) times the aggregate amount of (a) the principal amount of all Outstanding Bonds and the Parity Bonds proposed to be issued and (b) the principal amount of all other bonds secured by special taxes or fixed lien assessments levied on such properties and (ii) that the aggregate appraised value of all property within Zone 1 subject to the levy of Special Tax is not less than three (3) times the aggregate amount of (a) the principal amount of all Outstanding Bonds and Parity Bonds proposed to be issued, and (b) the principal amount of all other bonds secured by special taxes or fixed lien assessments levied on the property in Zone 1 subject to the levy of Special Taxes.

Such further documents, money and securities as are required by the provisions of the Indenture and the Supplemental Agreement providing for the issuance of such Parity Bonds.

DISCHARGE OF AGREEMENT

If the School District shall pay and discharge the entire indebtedness on all Outstanding Bonds in any one or more of the following ways:

(F) by well and truly paying or causing to be paid the principal of and interest and any premium on all such Bonds, as and when the same become due and payable;

(G) by depositing with the Fiscal Agent, in trust, at or before maturity, an amount of money which, together with the amounts then on deposit in the Bond Fund, the Special Tax Fund and the Reserve Fund, is fully sufficient to pay all such Bonds, including all principal, interest and redemption premiums, if any; or

(H) by irrevocably depositing with the Fiscal Agent, in trust, cash or non- callable Defeasance Securities in such amount as the School District shall determine, as confirmed by an Independent Financial Consultant, will, together with the interest to accrue thereon and amounts then on deposit in the Bond Fund, Special Tax Fund and the Reserve Fund, be fully sufficient to pay and discharge the indebtedness on all such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in the Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the School District, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Special Tax Revenues and other funds provided for in the Agreement and all other obligations of the School District and the Community Facilities District under the Agreement with respect to such Bonds shall cease and terminate, except the obligation of the School District

D-34 to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon, the obligation of the School District to pay all amounts owing to the Fiscal Agent pursuant to the Agreement, and the obligations of the School District pursuant to the covenants contained in the Agreement; and thereafter Special Taxes shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent. The satisfaction and discharge of the Agreement shall be without prejudice to the rights of the Fiscal Agent to charge and be reimbursed by the School District for the expenses which it shall thereafter incur in connection herewith.

Any funds held by the Fiscal Agent to pay and discharge the indebtedness on such Bonds, upon payment of all fees and expenses of the Fiscal Agent, which are not required for such payments and discharge, shall be paid over to the School District.

D-35

(This Page Intentionally Left Blank) APPENDIX E

DTC AND THE BOOK-ENTRY ONLY SYSTEM

The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC.

DTC and its Participants. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered security certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC’s participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly- owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (respectively, "NSCC", "GSCC", "MBSCC", and "EMCC", also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers

E-1 and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Book-Entry Only System. Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

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

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

Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

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

E-2 Payments of principal of, premium, if any, and interest evidenced by the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the School District or the Fiscal Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC (nor its nominee), the Fiscal Agent, or the School District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal of, premium, if any, and interest evidenced by the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the School District or the Fiscal Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the School District or the Fiscal Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

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

Discontinuance of DTC Services. If (a) DTC determines not to continue to act as securities depository for the Bonds, or (b) the Community Facilities District determines that DTC will no longer so act and delivers a written certificate to the Fiscal Agent to that effect, then the Community Facilities District will discontinue the Book-Entry Only System with DTC for the Bonds. If the Community Facilities District determines to replace DTC with another qualified securities depository, the Community Facilities District will prepare or direct the preparation of a new single separate, fully registered Bond for each maturity of the Bonds registered in the name of such successor or substitute securities depository as are not inconsistent with the terms of the Fiscal Agent Agreement. If the Community Facilities District fails to identify another qualified securities depository to replace the incumbent securities depository for the Bonds, then the Bonds will no longer be restricted to being registered in the Bond registration books in the name of the incumbent securities depository or its nominee, but will be registered in whatever name or names the incumbent securities depository or its nominee transferring or exchanging the Bonds designates.

If the Book-Entry Only System is discontinued, the following provisions would also apply: (i) the Bonds will be made available in physical form, (ii) principal of, and redemption premiums, if any, on, the Bonds will be payable upon surrender thereof at the corporate trust office of the Fiscal Agent in Los Angeles, California, (iii) interest on the Bonds will be payable by check mailed by first-class mail or, upon the written request of any Owner of $1,000,000 or more in aggregate principal amount of Bonds received by the Fiscal Agent on or prior to the 15th day of the calendar month immediately preceding the interest payment date, by wire transfer in immediately available funds to an account with a financial institution within the continental United States of America designated by such Owner, and (iv) the Bonds will be transferable and exchangeable as provided in the Fiscal Agent Agreement.

E-3

(This Page Intentionally Left Blank) APPENDIX F

FORM OF ISSUER CONTINUING DISCLOSURE CERTIFICATE

CONTINUING DISCLOSURE CERTIFICATE (Community Facilities District)

$3,170,000 COMMUNITY FACILITIES DISTRICT NO. 4 OF THE JURUPA UNIFIED SCHOOL DISTRICT COUNTY OF RIVERSIDE, STATE OF CALIFORNIA 2005 SPECIAL TAX BONDS (ZONE 2)

This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the Jurupa Unified School District (the “School District”), on behalf of Community Facilities District No. 4 of the Jurupa Unified School District (the “District”) in connection with the issuance of the bonds captioned above (the “Bonds”). The Bonds are being issued pursuant to a Fiscal Agent Agreement dated as of December 1, 2005 (the “Fiscal Agent Agreement”), by and between the District and U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”). The School District hereby covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the School District for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).

Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

“Annual Report” means any Annual Report provided by the School District pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.

“Annual Report Date” means the date that is nine months after the end of the School District's fiscal year (currently March 31 based on the District’s fiscal year end of June 30).

“Central Post Office” means DisclosureUSA (information regarding which is currently located at www.DisclosureUSA.org), the Internet-based filing system approved by the Securities and Exchange Commission to receive and submit filings to the National Repositories, or any similar filing system approved by the Securities and Exchange Commission.

“Dissemination Agent” means David Taussig & Associates, Inc., or any successor Dissemination Agent designated in writing by the School District and which has filed with the School District a written acceptance of such designation.

“District” means Community Facilities District No. 4 of the Jurupa Unified School District.

“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.

F-1 “National Repository” means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. Information on the National Repositories as of a particular date is available on the Securities and Exchange Commission’s Internet site at www.sec.gov.

“Official Statement” means the final official statement executed by the School District in connection with the issuance of the Bonds.

“Participating Underwriter” means Stone & Youngberg LLC, the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.

“Repository” means each National Repository and each State Repository, if any.

“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

“State Repository” means any public or private repository or entity designated by the State of California as a state repository for the purpose of the Rule and recognized as such by the Securities and Exchange Commission. As of the date of this Disclosure Certificate, there is no State Repository.

Section 3. Provision of Annual Reports.

(a) The School District shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 2006, with the report for the 2004-05 fiscal year, provide to the Participating Underwriter and to each Repository an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate; provided, however, that the first Annual Report due on March 31, 2006, shall consist solely of a copy of the Official Statement. In lieu of filing the Annual Report with each Repository, the School District or the Dissemination Agent may file the Annual Report with the Central Post Office, with a copy to the Participating Underwriter. Not later than 15 Business Days prior to the Annual Report Date, the School District shall provide the Annual Report to the Dissemination Agent (if other than the School District). The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the School District may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if not available by that date. The audited financial statements of the School District may be included within or constitute a portion of the audited financial statements of the School District. If the School District's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c).

(b) If the School District does not provide, or cause the Dissemination Agent to provide, an Annual Report to the Repositories by the Annual Report Date as required in subsection (a) above, the Dissemination Agent shall send a notice to (i) each National Repository or the Municipal Securities Rulemaking Board, and (ii) the appropriate State Repository, if any, in substantially the form attached hereto as Exhibit A, with a copy to the Fiscal Agent (if different than the Dissemination Agent) and the Participating Underwriter. In lieu of filing the notice with each Repository, the School District or the Dissemination Agent may file the notice with the Central Post Office, with a copy to the Fiscal Agent (if different than the Dissemination Agent) and the Participating Underwriter.

F-2 (c) With respect to each Annual Report, the Dissemination Agent shall:

(i) determine each year prior to the Annual Report Date the name and address of each National Repository and each State Repository, if any; and

(ii) if the Dissemination Agent is other than the School District, file a report with the School District and the Participating Underwriter certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the Repositories to which it was provided.

Section 4. Content of Annual Reports. The School District's Annual Report shall contain or incorporate by reference the following documents and information:

(a) The School District's audited financial statements for the most recently completed fiscal year, prepared in accordance with Generally Accepted Accounting Principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board, together with the following statement:

THE SCHOOL DISTRICT'S ANNUAL FINANCIAL STATEMENT IS PROVIDED SOLELY TO COMPLY WITH THE SECURITIES EXCHANGE COMMISSION STAFF’S INTERPRETATION OF RULE 15C2-12. NO FUNDS OR ASSETS OF THE SCHOOL DISTRICT ARE REQUIRED TO BE USED TO PAY DEBT SERVICE ON THE BONDS, AND THE SCHOOL DISTRICT IS NOT OBLIGATED TO ADVANCE AVAILABLE FUNDS TO COVER ANY DELINQUENCIES. INVESTORS SHOULD NOT RELY ON THE FINANCIAL CONDITION OF THE SCHOOL DISTRICT IN EVALUATING WHETHER TO BUY, HOLD OR SELL THE BONDS.

(b) Total assessed value (per the Riverside County Assessor’s records) of all parcels currently subject to the Special Tax within the District, showing the total assessed valuation for all land and the total assessed valuation for all improvements within the District and distinguishing between the assessed value of improved and unimproved parcels. Parcels are considered improved if there is an assessed value for the improvements in the Assessor's records.

(c) The total dollar amount of delinquencies in the District as of August 1 of any year and, in the event that the total delinquencies within the District as of August 1 in any year exceed 5% of the Special Tax for the previous year, delinquency information for each parcel responsible for more than $5,000 in the payment of Special Tax, amounts of delinquencies, length of delinquency and status of any foreclosure of each such parcel.

(d) The amount of prepayments of the Special Tax with respect to the District for the prior Fiscal Year.

(e) A land ownership summary listing the property owner responsible for more than 5% of the annual Special Tax levy, as shown on the Riverside County Assessor's last equalized tax roll prior to the September next preceding the Annual Report Date.

(f) The principal amount of the Bonds outstanding and the balance in the Reserve Fund (along with a statement of the Reserve Requirement) as of the September 30 next preceding the Annual Report Date.

F-3 (g) An updated table in substantially the form of the table in the Official Statement entitled “Appraised Values and Value to Burden Ratios” based upon the most recent information available, provided that assessed values shown on the Riverside County assessor’s most recent equalized tax roll prior to the September next preceding the Annual Report Date may be substituted for appraised values.

(h) An updated table in substantially the form of the table in the Official Statement entitled “Direct and Overlapping Governmental Obligations” as of the School District’s most recently completed fiscal year, but only until all of the property in the District is classified as “Developed Property” under the Rate and Method of Apportionment for the District.

(i) Any changes to the Rate and Method of Apportionment for the District set forth in Appendix B to the Official Statement.

(j) A copy of the annual information required to be filed by the School District with the California Debt and Investment Advisory Commission pursuant to the Act and relating generally to outstanding District bond amounts, fund balances, assessed values, special tax delinquencies and foreclosure information.

(k) In addition to any of the information expressly required to be provided under paragraphs (a) through (j) of this Section, the School District shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the School District or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The School District shall clearly identify each such other document so included by reference.

Each Annual Report shall include the form of cover sheet attached as Exhibit B, completed with the appropriate information relating to the Bonds.

Section 5. Reporting of Significant Events.

(a) The School District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material:

(1) Principal and interest payment delinquencies.

(2) Non-payment related defaults.

(3) Unscheduled draws on debt service reserves reflecting financial difficulties.

(4) Unscheduled draws on credit enhancements reflecting financial difficulties.

(5) Substitution of credit or liquidity providers, or their failure to perform.

(6) Adverse tax opinions or events affecting the tax-exempt status of the security.

F-4 (7) Modifications to rights of security holders.

(8) Contingent or unscheduled bond calls.

(9) Defeasances.

(10) Release, substitution, or sale of property securing repayment of the securities.

(11) Rating changes.

(b) Whenever the School District obtains knowledge of the occurrence of a Listed Event, the School District shall as soon as possible determine if such event would be material under applicable Federal securities law.

(c) If the School District determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the School District shall, or shall cause the Dissemination Agent to, promptly file a notice of such occurrence with (i) each National Repository or the Municipal Securities Rulemaking Board, and (ii) each appropriate State Repository, if any, with a copy to the Fiscal Agent (if different than the Dissemination Agent) and the Participating Underwriter. Each notice of the occurrence of a Listed Event shall include the form of cover sheet attached as Exhibit B, completed with the appropriate information relating to the Bonds. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds pursuant to the Fiscal Agent Agreement.

(d) In lieu of filing the notice of the occurrence of a Listed Event with each Repository, the School District or the Dissemination Agent may file the notice of the occurrence of a Listed Event with the Central Post Office, with a copy to the Fiscal Agent (if different than the Dissemination Agent) and the Participating Underwriter.

Section 6. Termination of Reporting Obligation. The School District's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the School District shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).

Section 7. Dissemination Agent. The School District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent will be David Taussig & Associates, Inc.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the School District may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:

(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted;

F-5 (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of holders, or (ii) does not, in the opinion of the Fiscal Agent or nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the School District to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be sent to the Repositories in the same manner as for a Listed Event under Section 5(c).

Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the School District from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the School District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the School District shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 10. Default. In the event of a failure of the School District to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the School District to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the School District to comply with this Disclosure Certificate shall be an action to compel performance.

Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure

F-6 Certificate, and the School District agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the School District, the Property Owner, the Fiscal Agent, the Bond owners or any other party. The obligations of the School District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

Section 12. Notices. Any notice or communications to be among any of the parties to this Disclosure Certificate may be given as follows:

To the Issuer: Jurupa Unified School District 4850 Pedley Road Riverside, CA 92509 Attention: Business Manager Fax: (951) 360-4112

To the Fiscal Agent: U.S. Bank National Association 633 West 5th Street, 24th Floor Los Angeles, California 90071 Attention: Corporate Trust Services Fax: (213) 615-6199

To the Dissemination Agent: David Taussig & Associates, Inc. 1301 Dove Street, Suite 600 Newport Beach, California 92660 Fax: (949) 955-1590

To the Participating Underwriter: Stone & Youngberg LLC One Ferry Building San Francisco, California 94111 Attention: Municipal Research Department Fax: (415) 445-2395

Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent.

Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the School District, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.

F-7 Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

Date: December 21, 2005

COMMUNITY FACILITIES DISTRICT NO.4 OF THE JURUPA UNIFIED SCHOOL DISTRICT

By: Pam Lauzon, Business Manager, Jurupa Unified School District on behalf of Community Facilities District No. 4 of the Jurupa Unified School District

AGREED AND ACCEPTED: David Taussig & Associates, Inc., as Dissemination Agent

By:

Name:

Title:

F-8 EXHIBIT A

NOTICE OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Jurupa Unified School District (the “School District”)

Name of Bond Issue: Community Facilities District No. 4 of the Jurupa Unified School District 2005 Special Tax Bonds (Zone 2) Date of Issuance: December 21, 2005

NOTICE IS HEREBY GIVEN that the School District has not provided an Annual Report with respect to the above-named Bonds as required by the Fiscal Agent Agreement dated as of December 1, 2005, between the School District and U.S. Bank National Association. The School District anticipates that the Annual Report will be filed by ______.

Dated:

DISSEMINATION AGENT:

David Taussig & Associates, Inc.

By: Its:

F-9 EXHIBIT B

Municipal Secondary Market Disclosure Information Cover Sheet

This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board, Nationally Recognized Municipal Securities Information Repositories, and any applicable State Information Depository, whether the filing is voluntary or made pursuant to Securities and Exchange Commission rule 15c2-12 or any analogous state statute.

See www.sec.gov/info/municipal/nrmsir.htm for list of current NRMSIRs and SIDs

IF THIS FILING RELATES TO A SINGLE BOND ISSUE: Provide name of bond issue exactly as it appears on the cover of the Official Statement (please include name of state where issuer is located):

Provide nine-digit CUSIP* numbers if available, to which the information relates:

IF THIS FILING RELATES TO ALL SECURITIES ISSUED BY THE ISSUER OR ALL SECURITIES OF A SPECIFIC CREDIT OR ISSUED UNDER A SINGLE INDENTURE: Issuer’s Name (please include name of state where Issuer is located): ______Other Obligated Person’s Name (if any): ______(Exactly as it appears on the Official Statement Cover) Provide six-digit CUSIP* number(s), if available, of Issuer: ______

*(Contact CUSIP’s Municipal Disclosure Assistance Line at 212.438.6518 for assistance with obtaining the proper CUSIP numbers.)

TYPE OF FILING:  Electronic (number of pages attached)______ Paper (number of pages attached) ______

If information is also available on the Internet, give URL: ______

F-10 WHAT TYPE OF INFORMATION ARE YOU PROVIDING? (Check all that apply) A. Financial Information and Operating Data pursuant to Rule 15c2-12 (Financial information and operating data should not be filed with the MSRB.)  Annual  Semi-annual  Quarterly

Fiscal Period Covered:______

B.  Audited Financial Statements or CAFR pursuant to Rule 15c2-12 Fiscal Period Covered:______

C.  Notice of a Material Event pursuant to Rule 15c2-12 (Check as appropriate)

1.  Principal and interest payment delinquencies 6.  Adverse tax opinions or events affecting the tax- exempt status of the security 2.  Non-payment related defaults 7.  Modifications to the rights of security holders 3.  Unscheduled draws on debt service reserves reflecting financial difficulties 8.  Bond calls 4.  Unscheduled draws on credit enhancements reflecting 9.  Defeasances financial difficulties 10.  Release, substitution, or sale of property securing 5.  Substitution of credit or liquidity providers, or their repayment of the securities failure to perform 11.  Rating changes

D.  Notice of Failure to Provide Annual Financial Information as Required

E.  Other Secondary Market Information (Specify):______

I hereby represent that I am authorized by the issuer or obligor or its agent to distribute this information publicly:

Issuer/Filer Contact: Name ______Title ______

Employer ______

Address ______City______State ______Zip Code ______

Telephone ______Fax ______

Email Address ______Issuer Web Site Address ______

F-11 Dissemination Agent Contact, if any: Name ______Title ______

Employer ______

Address ______City______State ______Zip Code ______

Telephone ______Fax ______

Email Address ______Relationship to Issuer ______

Obligor Contact, if any: Name ______Title ______

Employer ______

Address ______City______State ______Zip Code ______

Telephone ______Fax ______

Email Address ______Obligor Web site Address______

Investor Relations Contact, if any:

Name ______Title ______

Telephone ______Email Address ______

F-12 APPENDIX G

FORM OF PROPERTY OWNER DISCLOSURE CERTIFICATE

CONTINUING DISCLOSURE CERTIFICATE (Property Owner)

$3,170,000 COMMUNITY FACILITIES DISTRICT NO. 4 OF THE JURUPA UNIFIED SCHOOL DISTRICT COUNTY OF RIVERSIDE, STATE OF CALIFORNIA 2005 SPECIAL TAX BONDS (ZONE 2)

This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by Jurupa Hills 80, LP, a California limited partnership (the “Property Owner”), in connection with the issuance by Jurupa Unified School District (the “School District”), on behalf of Community Facilities District No. 4 of the Jurupa Unified School District (the “District”), of the bonds captioned above (the “Bonds”). The Bonds are being issued pursuant to a Fiscal Agent Agreement dated as of December 1, 2005 (the “Fiscal Agent Agreement”), by and between the School District and U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”). The Property Owner covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Property Owner for the benefit of the holders and beneficial owners of the Bonds.

Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

“Affiliate” of another Person means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of such other Person, (b) any Person, 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by, or under common control with, such other Person. For purposes hereof, control means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person.

“Assumption Agreement” means an undertaking of a Major Owner, or an Affiliate thereof, for the benefit of the holders and beneficial owners of the Bonds containing terms substantially similar to this Disclosure Certificate (as modified for such Major Owner’s development and financing plans with respect to the District), whereby such Major Owner or Affiliate agrees to provide Semi-Annual Reports and notices of significant events, setting forth the information described in sections 4 and 5 hereof, respectively, with respect to the portion of the property in Zone 2 of the District owned by such Major Owner and its Affiliates and, at the option of the Property Owner or such Major Owner, agrees to indemnify the Dissemination Agent pursuant to a provision substantially in the form of Section 11 hereof.

G-1 “Central Post Office” means DisclosureUSA (information regarding which is currently located at www.DisclosureUSA.org), the Internet-based filing system approved by the Securities and Exchange Commission to receive and submit filings to the National Repositories, or any similar filing system approved by the Securities and Exchange Commission.

“Dissemination Agent” means U.S. Bank National Association, or any successor Dissemination Agent designated in writing by the Property Owner, with the written consent of the School District, and which has filed with the Property Owner, the School District and the Fiscal Agent a written acceptance of such designation, and which is experienced in providing dissemination agent services such as those required under this Disclosure Certificate.

“District” means Community Facilities District No. 4 of the Jurupa Unified School District.

“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.

“Major Owner” means, as of any Report Date, an owner of land in Zone 2 of the District responsible in the aggregate for 10% or more of the Special Taxes in Zone 2 of the District actually levied at any time during the then-current fiscal year.

“National Repository” means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. Information on the National Repositories as of a particular date is available on the Securities and Exchange Commission’s Internet site at www.sec.gov.

“Official Statement” means the final official statement executed by the School District in connection with the issuance of the Bonds.

“Participating Underwriter” means Stone & Youngberg LLC, the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.

“Property” means the property owned by the Property Owner in Zone 2 of the District.

“Report Date” means (a) September 30 each year, and (b) March 31 each year.

“Repository” means each National Repository and each State Repository, if any.

“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

“Semi-Annual Report” means any Semi-Annual Report provided by the Property Owner pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.

“Special Taxes” means the special taxes levied on taxable property within Zone 2 of the District.

“State Repository” means any public or private repository or entity designated by the State of California as a state repository for the purpose of the Rule and recognized as such by

G-2 the Securities and Exchange Commission. As of the date of this Disclosure Certificate, there is no State Repository.

“Zone 2 of the District” has the meaning set forth in the Official Statement.

Section 3. Provision of Semi-Annual Reports.

(a) The Property Owner shall, or upon written direction shall cause the Dissemination Agent to, not later than the Report Date, commencing March 31, 2006, provide to each Repository a Semi-Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate with a copy to the Fiscal Agent (if different from the Dissemination Agent), the Participating Underwriter and the School District. In lieu of filing the Semi-Annual Report with each Repository, the Property Owner or the Dissemination Agent may file the Semi-Annual Report with the Central Post Office, with a copy to the Fiscal Agent (if different from the Dissemination Agent), the Participating Underwriter and the School District. Not later than 15 calendar days prior to the Report Date, the Property Owner shall provide the Semi-Annual Report to the Dissemination Agent. The Property Owner shall provide a written certification with (or included as a part of) each Semi-Annual Report furnished to the Dissemination Agent, the Fiscal Agent (if different from the Dissemination Agent), the Participating Underwriter and the School District to the effect that such Semi-Annual Report constitutes the Semi-Annual Report required to be furnished by it under this Disclosure Certificate. The Dissemination Agent, the Fiscal Agent, the Participating Underwriter and the School District may conclusively rely upon such certification of the Property Owner and shall have no duty or obligation to review the Semi-Annual Report. The Semi-Annual Report may be submitted as a single document or as separate documents comprising a package, and may incorporate by reference other information as provided in Section 4 of this Disclosure Certificate.

(b) If the Dissemination Agent does not receive a Semi-Annual Report 15 calendar days prior to the Report Date, the Dissemination Agent shall send a reminder notice to the Property Owner that the Semi-Annual Report has not been provided as required under Section 3(a) above. The reminder notice shall instruct the Property Owner to determine whether its obligations under this Disclosure Certificate have terminated (pursuant to Section 6 below) and, if so, to provide the Dissemination Agent with a notice of such termination in the same manner as for a Listed Event (pursuant to Section 5 below). If the Property Owner does not provide, or cause the Dissemination Agent to provide, a Semi-Annual Report to the Repositories by the Report Date as required in subsection (a) above, the Dissemination Agent shall send a notice to (i) each National Repository or the Municipal Securities Rulemaking Board, and (ii) each appropriate State Repository, if any, in substantially the form attached hereto as Exhibit A, with a copy to the Fiscal Agent (if other than the Dissemination Agent), the School District and the Participating Underwriter. In lieu of filing the notice with each Repository, the Property Owner or the Dissemination Agent may file the notice with the Central Post Office, with a copy to the Fiscal Agent (if other than the Dissemination Agent), the School District and the Participating Underwriter.

(c) With respect to each Semi-Annual Report, the Dissemination Agent shall:

(i) determine prior to each Report Date the name and address of each National Repository and each State Repository, if any;

G-3 (ii) to the extent the Semi-Annual Report has been furnished to it, file the Semi-Annual Report with the Repositories and file a report with the Property Owner (if the Dissemination Agent is other than the Property Owner), the School District and the Participating Underwriter certifying that the Semi-Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the Repositories to which it was provided.

Section 4. Content of Semi-Annual Reports. The Property Owner’s Semi-Annual Report shall contain or incorporate by reference the information set forth in Exhibit B, any or all of which may be included by specific reference to other documents, including official statements of debt issues of the Property Owner or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Property Owner shall clearly identify each such other document so included by reference.

In addition to any of the information expressly required to be provided in Exhibit B, the Property Owner’s Semi-Annual Report shall include such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

The Dissemination Agent shall include the form of cover sheet attached as Exhibit C, completed with the appropriate information relating to the Bonds, to each Semi-Annual Report.

Section 5. Reporting of Significant Events.

(a) The Property Owner shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds, if material:

(i) bankruptcy or insolvency proceedings commenced by or against the Property Owner and, if known, any bankruptcy or insolvency proceedings commenced by or against any Affiliate of the Property Owner which could have a significant impact on the Property Owner’s ability to pay Special Taxes or to sell or develop the Property;

(ii) failure to pay any taxes, special taxes (including the Special Taxes) or assessments due with respect to the Property prior to the delinquency date;

(iii) filing of a lawsuit against the Property Owner or, if known, an Affiliate of the Property Owner, seeking damages which could have a significant impact on the Property Owner’s ability to pay Special Taxes or to sell or develop the Property;

(iv) material damage to or destruction of any of the improvements on the Property;

(v) any payment default or other material default by the Property Owner on any loan with respect to the construction of improvements on the Property.

G-4 (b) Whenever the Property Owner obtains knowledge of the occurrence of a Listed Event, the Property Owner shall as soon as possible determine if such event would be material under applicable Federal securities law.

(c) If the Property Owner determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Property Owner shall, or shall cause the Dissemination Agent to, promptly file a notice of such occurrence with (i) each National Repository or the Municipal Securities Rulemaking Board, and (ii) each appropriate State Repository, if any, with a copy to the Fiscal Agent, the School District and the Participating Underwriter. Each notice of the occurrence of a Listed Event shall include the form of cover sheet attached as Exhibit C, completed with the appropriate information relating to the Bonds.

(d) In lieu of filing the notice of the occurrence of a Listed Event with each Repository, the Property Owner or the Dissemination Agent may file the notice of the occurrence of a Listed Event with the Central Post Office.

Section 6. Duration of Reporting Obligation.

(a) All of the Property Owner’s obligations hereunder shall commence on the date hereof and shall terminate (except as provided in Section 11) on the earliest to occur of the following:

(i) upon the legal defeasance, prior redemption or payment in full of all the Bonds, or

(ii) at such time as Property owned by the Property Owner is no longer responsible for payment of 10% or more of the Special Taxes, or

(iii) the date on which the Property Owner prepays in full all of the Special Taxes attributable to the Property.

If the Property Owner’s obligations under this Disclosure Certificate terminate, the Property Owner shall, or shall cause the Dissemination Agent to, promptly file a notice of such termination with the Municipal Securities Rulemaking Board and each State Repository, if any, with a copy to the Fiscal Agent, the School District and the Participating Underwriter. The notice of termination shall include the form of cover sheet attached as Exhibit C, completed with the appropriate information relating to the Bonds.

(b) If all or a portion of the Property in Zone 2 of the District owned by the Property Owner, or any other Affiliate of the Property Owner, is conveyed to a Person that, upon such conveyance, will be a Major Owner, the obligations of the Property Owner hereunder with respect to the property in Zone 2 of the District owned by such Major Owner and its Affiliates may be assumed by such Major Owner or by an Affiliate thereof and the Property Owner’s obligations hereunder will be terminated. In order to effect such assumption, such Major Owner or Affiliate shall enter into an Assumption Agreement in form and substance satisfactory to the School District and the Participating Underwriter, and with notice to the Dissemination Agent.

G-5 Section 7. Dissemination Agent. The Property Owner may, from time to time, with the written consent of the School District, appoint or engage a Dissemination Agent to assist the Property Owner in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent with the written consent of the School District, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be U.S. Bank National Association. The Dissemination Agent may resign by providing thirty days’ written notice to the School District, the Property Owner and the Fiscal Agent.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Property Owner may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied (provided, however, that the Dissemination Agent shall not be obligated under any such amendment that modifies or increases its duties or obligations hereunder without its written consent thereto):

(a) if the amendment or waiver relates to the provisions of sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted;

(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Fiscal Agent Agreement with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Property Owner from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Semi-Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Property Owner chooses to include any information in any Semi-Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Property Owner shall have no obligation under this Agreement to update such information or include it in any future Semi-Annual Report or notice of occurrence of a Listed Event.

Section 10. Default. In the event of a failure of the Property Owner to comply with any provision of this Disclosure Certificate, the Fiscal Agent shall (upon written direction and only to the extent indemnified to its satisfaction from any liability, cost or expense, including fees and expenses of its attorneys), and the Participating Underwriter and any holder or beneficial owner of the Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Property Owner to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the Property Owner to comply with this Disclosure Certificate shall be an action to compel performance.

G-6 Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Property Owner agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder during the time that the Property Owner is a Major Owner obligated to comply with the Disclosure Certificate, including the reasonable costs and expenses (including attorneys’ fees) of defending against any such claim of liability, but excluding liabilities, costs and expenses due to the Dissemination Agent’s negligence or willful misconduct or failure to perform its duties hereunder. The Dissemination Agent shall be paid compensation for its services provided hereunder from the Administrative Expense Fund established under the Fiscal Agent Agreement in accordance with the Dissemination Agent’s schedule of fees as amended from time to time, which schedule, as amended, shall be reasonably acceptable, and all reasonable expenses, reasonable legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the School District, the Property Owner, the Fiscal Agent, the Bond owners, or any other party. The obligations of the Property Owner under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

Section 12. Notices. Any notice or communications to be among any of the parties to this Disclosure Certificate may be given as follows:

To the Issuer: Jurupa Unified School District 4850 Pedley Road Riverside, CA 92509 Attention: Business Manager Fax: (951) 360-4112

To the Dissemination Agent: U.S. Bank National Association 633 West 5th Street, 24th Floor Los Angeles, California 90071 Attention: Corporate Trust Services Fax: (213) 615-6199

To the Participating Underwriter: Stone & Youngberg LLC One Ferry Building San Francisco, California 94111 Attention: Municipal Research Department Fax: (415) 445-2395

To the Property Owner: Jurupa Hills 80, LP c/o Griffin Communities 110 No. Lincoln Ave., 2nd Floor Corona, CA 92882 Fax: (951) 739-6145

Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent.

G-7 Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the School District, the Property Owner (its successors and assigns), the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. All obligations of the Property Owner hereunder shall be assumed by any legal successor to the obligations of the Property Owner as a result of a sale, merger, consolidation or other reorganization.

Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

Date: December 21, 2005 JURUPA HILLS 80, LP, a California limited partnership

By: Griffin Communities, A California Corporation, Its General Partner

By;

Its:

AGREED AND ACCEPTED: U.S. Bank National Association as Dissemination Agent

By: Title:

G-8 EXHIBIT A

NOTICE OF FAILURE TO FILE SEMI-ANNUAL REPORT

Name of Issuer: Jurupa Unified School District (the “School District”)

Name of Bond Issue: Community Facilities District No. 4 of the Jurupa Unified School District 2005 Special Tax Bonds (Zone 2) Date of Issuance: December 21, 2005

NOTICE IS HEREBY GIVEN that ______(the “Major Owner”) has not provided a Semi-Annual Report with respect to the above-named bonds as required by that certain Continuing Disclosure Certificate (Property Owner), dated December 21, 2005. The Major Owner anticipates that the Semi-Annual Report will be filed by ______.

Dated:

DISSEMINATION AGENT: U.S. Bank National Association

By: ______Its: ______

G-9 EXHIBIT B

SEMI-ANNUAL REPORT

COMMUNITY FACILITIES DISTRICT NO. 4 OF THE JURUPA UNIFIED SCHOOL DISTRICT COUNTY OF RIVERSIDE, STATE OF CALIFORNIA 2005 SPECIAL TAX BONDS (ZONE 2)

This Semi-Annual Report is hereby submitted under Section 4 of the Continuing Disclosure Certificate (the “Disclosure Certificate”) dated as of December 21, 2005 executed by the undersigned (the “Property Owner”) in connection with the issuance of the above-captioned bonds by the Jurupa Unified School District, on behalf of Community Facilities District No. 4 of the Jurupa Unified School District (the “District”).

Capitalized terms used in this Semi-Annual Report but not otherwise defined have the meanings given to them in the Disclosure Certificate.

I. Property Ownership and Development

The information in this section is provided as of ______(this date must be not more than 60 days before the date of this Semi-Annual Report).

A. Property currently owned by the Property Owner in Zone 2 of the District (the “Property”):

Development Name(s) ______

Total Lots and Homes Completed Since Property Sold Since the Property Sold Since Homes the Date of Issuance of the Date of Issuance of the the Last Semi-Annual in the Development Bonds (Dec. 21, 2005) Bonds (Dec. 21, 2005) Report

Acres* ____ Acres* ____ Lots ____ Lots ____ Lots ____ Homes ____ Homes ____ Homes ____ Homes ____

* For bulk land sales only (excluding sales of finished lots or completed homes).

B. Status of land development or home construction activities on the Property:

______

______

C. Status of building permits and any significant amendments to land use or development entitlements with respect to the Property:

______

______

G-10 D. Status of any land purchase contracts with regard to the Property, whether acquisition of land in Zone 2 of the District by the Property Owner or sales of land to other property owners (other than individual homeowners). ______

______

II. Legal and Financial Status of Property Owner

Unless such information has previously been included or incorporated by reference in a Semi-Annual Report, describe any change in the legal structure of the Property Owner or the financial condition and financing plan of the Property Owner that would materially and adversely interfere with its ability to complete its development plan described in the Official Statement.

______

______

III. Change in Development or Financing Plans

Unless such information has previously been included or incorporated by reference in a Semi-Annual Report, describe any development plans or financing plans relating to the Property that are materially different from the proposed development and financing plan described in the Official Statement. ______

______

IV. Official Statement Updates

Unless such information has previously been included or incorporated by reference in a Semi-Annual Report, describe any other significant changes in the information relating to the Property Owner or the Property contained in the Official Statement under the heading “PROPERTY OWNERSHIP AND PROPOSED DEVELOPMENT” that would materially and adversely interfere with the Property Owner’s ability to develop and sell the Property as described in the Official Statement.

______

______

V. Other Material Information

In addition to any of the information expressly required above, provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

______

______

G-11 Certification

The undersigned Property Owner hereby certifies that this Semi-Annual Report constitutes the Semi-Annual Report required to be furnished by the Property Owner under the Disclosure Certificate.

Dated:

JURUPA HILLS 80, LP, a California limited partnership

By: Griffin Communities, A California Corporation, Its General Partner

By;

Its:

G-12 EXHIBIT C

Municipal Secondary Market Disclosure Information Cover Sheet

This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board, Nationally Recognized Municipal Securities Information Repositories, and any applicable State Information Depository, whether the filing is voluntary or made pursuant to Securities and Exchange Commission rule 15c2-12 or any analogous state statute.

See www.sec.gov/info/municipal/nrmsir.htm for list of current NRMSIRs and SIDs

IF THIS FILING RELATES TO ALL SECURITIES ISSUED BY THE ISSUER OR ALL SECURITIES OF A SPECIFIC CREDIT OR ISSUED UNDER A SINGLE INDENTURE: Issuer’s Name (please include name of state where Issuer is located): ______Other Obligated Person’s Name (if any): ______(Exactly as it appears on the Official Statement Cover) Provide six-digit CUSIP* number(s), if available, of Issuer: ______

*(Contact CUSIP’s Municipal Disclosure Assistance Line at 212.438.6518 for assistance with obtaining the proper CUSIP numbers.)

TYPE OF FILING:  Electronic (number of pages attached)______ Paper (number of pages attached) ______

If information is also available on the Internet, give URL: ______

G-13 WHAT TYPE OF INFORMATION ARE YOU PROVIDING? (Check all that apply) A. Financial Information and Operating Data pursuant to Rule 15c2-12 (Financial information and operating data should not be filed with the MSRB.)  Annual  Semi-annual  Quarterly

Fiscal Period Covered:______

B.  Audited Financial Statements or CAFR pursuant to Rule 15c2-12 Fiscal Period Covered:______

C.  Notice of a Material Event pursuant to Rule 15c2-12 (Check as appropriate)

1.  Principal and interest payment delinquencies 6.  Adverse tax opinions or events affecting the tax- exempt status of the security 2.  Non-payment related defaults 7.  Modifications to the rights of security holders 3.  Unscheduled draws on debt service reserves reflecting financial difficulties 8.  Bond calls 4.  Unscheduled draws on credit enhancements reflecting 9.  Defeasances financial difficulties 10.  Release, substitution, or sale of property securing 5.  Substitution of credit or liquidity providers, or their repayment of the securities failure to perform 11.  Rating changes

D.  Notice of Failure to Provide Annual Financial Information as Required

E.  Other Secondary Market Information (Specify):______

I hereby represent that I am authorized by the issuer or obligor or its agent to distribute this information publicly:

Issuer/Filer Contact: Name ______Title ______

Employer ______

Address ______City______State ______Zip Code ______

Telephone ______Fax ______

Email Address ______Issuer Web Site Address ______

G-14 Dissemination Agent Contact, if any: Name ______Title ______

Employer ______

Address ______City______State ______Zip Code ______

Telephone ______Fax ______

Email Address ______Relationship to Issuer ______

Obligor Contact, if any: Name ______Title ______

Employer ______

Address ______City______State ______Zip Code ______

Telephone ______Fax ______

Email Address ______Obligor Web site Address______

Investor Relations Contact, if any:

Name ______Title ______

Telephone ______Email Address ______

G-15

(This Page Intentionally Left Blank) APPENDIX H – FORM OF BOND COUNSEL OPINION

Jurupa Unified School District 4850 Pedley Road Riverside, CA 92509

Re: $3,170,000 Community Facilities District No. 4 of Jurupa Unified School District County of Riverside, State of California, 2005 Special Tax Bonds (Zone 2)

Ladies and Gentlemen:

We have acted as bond counsel in connection with the issuance by Jurupa Unified School District (the “School District”), for and on behalf of Community Facilities District No. 4 of the Jurupa Unified School District (the “District”), of the above referenced bonds (the “Bonds”). The Bonds are issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”), a resolution adopted by the Jurupa Unified School District on December 5, 2005 (the “Resolution”), and a Fiscal Agent Agreement, dated as of December 1, 2005 (the “Agreement”) between the Jurupa Unified School District and U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”).

We have examined the Act, the Resolution, the Agreement and certified copies of the proceedings taken for the issuance and sale of the Bonds. As to questions of fact which are material to our opinions, we have relied upon the representations of the School District contained in the Agreement and in certificates of its authorized officers which have been delivered to us for the purpose of supplying such facts, without having undertaken to verify the accuracy of any such representations by independent investigation.

Based upon such examination, we are of the opinion, as of the date hereof, that the proceedings referred to above have been taken in accordance with the laws and the Constitution of the State of California, and that the Bonds, having been issued in duly authorized form and executed by the proper officials and delivered to and paid for by the purchaser thereof, constitute the legally valid and binding obligations of the School District enforceable in accordance with their terms subject to the qualifications specified below and, except where funds are otherwise available, as may be permitted by law, are payable, as to both principal and interest, solely from certain special taxes to be levied and collected within the District and other funds available therefor held under the Agreement.

The Internal Revenue Code of 1986, as amended (the “Code”), sets forth certain investment, rebate and related requirements which must be met subsequent to the issuance and delivery of the Bonds for the interest on the Bonds to be and remain exempt from federal income taxation. Noncompliance with such requirements could cause the interest on the Bonds to be subject to federal income taxation retroactive to the date of issuance of the Bonds. Pursuant to the Agreement, the School District has covenanted to comply with the requirements of the Code and applicable regulations promulgated thereunder.

We are of the opinion that, under existing statutes, regulations, rulings and court decisions, and assuming compliance by the School District with the aforementioned covenants, the interest on the Bonds is excluded from gross income for purposes of federal income taxation and is exempt from personal income taxation imposed by the State of California.

We are further of the opinion that interest on the Bonds is not a specific preference item for purposes of the alternative minimum tax provisions of the Code. However, interest on the Bonds received by corporations will be included in corporate adjusted current earnings, a portion of which may increase the alternative minimum taxable income of such corporations.

Although interest on the Bonds is excluded from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these tax consequences will depend on the recipient’s particular tax status or other items of income or deduction. We express no opinion regarding any such consequences.

The rights of the owners of the Bonds and the enforceability of the Bonds and the Agreement may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted, and their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity.

Respectfully submitted, APPENDIX I

COMMUNITY FACILITIES DISTRICT BOUNDARY MAP

(This Page Intentionally Left Blank) i .------, SHEET 1 Of" 2 BOUNDARIES OF JURUPA UNIFIED SCHOOL DISTRICT LEGEND COMMUNITY FACILITIES DISTRICT NO. 4 Boundaries of Community Focnities District No. 4 COUNTY OF RIVERSIDE

Assessor's Parcel Boundaries STATE OF CALIFORNIA Reference is hereby made to the Assessor mops of the nnn-nnn-nnn Assessor's Parcel Number County of Riverside for on exact description of the fW////lli Exhbit A lines and dimensions of each lot and parcel.

183-080-019

(1) Flid ii U,, ollice ol U,, Cln of lhe llml of [IIJ:alian of .b\!111 lhlied Schod llslrict llis -- day ol -----· 200 __. Cln ol lhe llml ol [d ..licJI .. I "'N (1) I henbr cerbly Iha! lhe •lijn ""' DI! Ule pKllOO!d -g: I l:l bauldcn!s ol Comrully Focilies llsln:I th 4 of .b\!111 N I N 0 0 lllfed Schod ffil, R"M,r.;ide ea..rty, Slole of 0 u, CcaoniJ, "" optlMI by lhe 11,oni of E11J:a1ian al .. I .b\!111 UoTed SdllOi llslJi:I ol a meeli,g I 8 ~a "'!::! I ... hell "' Illy 0 llllnol, Ule --- ol ------· I 1005, by ils ResolAion No. ---- 0 II ~ ~ Cln of U,, llml ol Ed ..1 ..

(3) Flid lhis --- day of -----· 10 ___ ~ al U,, hcu of ___ o'clx:k __m, in Boci ___ _ of 1611" of .lsselmenl and Ccm"'oly fDOllies llsin:ls al page ____ cnl m nl11J11111I No. ____, in u,, a1ro:e of u,, ea..rty Reorder a1 u,, tc,ny a1 Rimde. Slole of Mriio. ------ea..rty Reorder ol °" Cc,riy of R"M,r.;ide PREPARED BY DAVID TAUSSIG & ASSOCIATES, INC. L Sheet 2 of 2 EXHIBIT "A" ASSESSOR'S PARCELS JURUPA UNIFIED SCHOOL DISTRICT COMMUNITY FACILITIES DISTRICT NO. 4

166-560-001 166-550-030 166-560-002 166-550-031 166-560-003 166-550-032 166-560-004 166-550-033 166-560-005 166-550-034 166-560-006 166-550-035 166-560-007 166-550-036 166-560-008 166-550-037 166-560-009 166-540-001 166-560-010 166-540-002 166-560-011 166-540-003 166-560-012 166-540-004 166-560-013 166-540-005 166-560-014 166-540-006 166-560-015 166-540-007 166-560-016 166-540-008 166-560-017 166-540-009 166-550-001 166-540-010 166-550-002 166-540-011 166-550-003 166-540-012 166-550-004 166-540-013 166-550-005 166-540-014 166-550-006 166-540-015 166-550-007 166-540-016 166-550-008 166-540-017 166-550-009 166-540-018 166-550-010 166-540-019 166-550-011 166-540-020 166-550-012 166-540-021 166-550-013 166-540-022 166-550-014 166-540-023 166-550-015 166-540-024 166-550-016 166-540-025 166-550-017 166-540-026 166-550-018 166-540-027 166-550-019 166-550-020 166-550-021 166-550-022 166-550-023 166-550-024 166-550-025 166-550-026 166-550-027 166-550-028 166-550-029