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Appreciation Bonds, $10,600,000 aggregate principal amount shall be issued as Auction
<br /> Rate Securities ("ARS") and $10,600,000 aggregate principal amount shall be issued as
<br /> Inverse Rate Securities ("IRS"), all of like tenor and date (except for such variations, if
<br /> any, as may be required to designate varying numbers, maturities and interest rates), and is
<br /> issued under and pursuant to the provisions of an indenture, dated as of March 1, 1994 (the
<br /> "Indenture"), between the Authority and the Trustee (copies of which are on file at the
<br /> office of the Secretary of the Authority and at the Corporate Trust Office of the Trustee).
<br /> The Bonds are issuable only as fully registered bonds without coupons, in the
<br /> denomination of $50,000 and integral multiples thereof.
<br /> The Bonds are issued to provide funds to finance the cost of acquiring, constructing
<br /> and installing certain public capital improvements (the "Project") in the City of Santa Ana
<br /> (the "City"). The Bonds are limited obligations of the Authority and are payable, as to
<br /> interest thereon and principal thereof, solely from the revenues derived from base rental
<br /> payments paid by the City pursuant to a lease, dated as of March 1, 1994 (the "Lease"),
<br /> between the Authority, as lessor, and the City, as lessee, for the use and possession of the
<br /> Leased Property (as defined in the Lease) as long as the City has such use and possession
<br /> of the Leased Property, which includes the Project, as well as from all other benefits,
<br /> charges, income, proceeds, profits, receipts, rents and revenues derived by the Authority,
<br /> as assignee of the Agency's rights under the Lease, from operation or use of the Leased
<br /> Property (the "Revenues"). All the Bonds are equally and ratably secured in accordance
<br /> with the terms and conditions of the Indenture by a pledge of the Revenues, which
<br /> Revenues shall be held in trust for the security and payment of the interest on, principal of
<br /> and redemption premiums, if any, on the Bonds as provided in the Indenture.
<br /> The Bonds shall be limited obligations of the Authority and shall be payable solely
<br /> from the Revenues and amounts on deposit in the funds and accounts established under the
<br /> Indenture (other than amounts on deposit in the Rebate Fund). The Bonds do not constitute
<br /> a debt or liability of the City, the State of California, or any of its political subdivisions,
<br /> and neither the faith and credit of the City, the State of California, nor any of its political
<br /> subdivisions are pledged to the payment of the principal of or interest on the Bonds.
<br /> Reference is hereby made to the Indenture and any and all amendments thereof and
<br /> supplements thereto for a description of the terms under which the Bonds are issued, the
<br /> provisions with regard to the nature and extent of the Revenues, and the rights of the
<br /> registered owners of the Bonds. All of the terms of the Indenture are hereby incorporated
<br /> herein and constitute a contract between the Authority and the registered owner of this
<br /> Bond, to all the provisions of which the registered owner of this Bond, by acceptance
<br /> hereof, agrees and consents. Each registered owner hereof shall have recourse to all of the
<br /> provisions of the Indenture and shall be bound by all of the terms and conditions thereof.
<br /> The Authority has agreed and covenanted that, for the payment of the interest on, the
<br /> principal of and redemption premium, if any, on this Bond and all other Bonds of this issue
<br /> authorized by the Indenture when due, there has been created and will be maintained by the
<br /> A-4-3
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