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O RRICK,HERRINGTON & SUTCLIFFE Santa Ana Financing Authority March 23, 1994 Page 2 We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Indenture and the Tax Certificate, including(without limitation)covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds and the Indenture are subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles and to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against political subdivisions in the State of California. We express no opinion with respect to any indemnification, contribution or choice of law provisions contained in the documents referred to herein. Finally,we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Bonds and express no opinion relating thereto. Further, neither the faith and credit nor the taxing power of the City or the State of California or any political subdivision thereof is pledged to the payment of the principal of or interest on the Bonds. The Bonds are not a debt of the City or the State of California, and neither said State, nor the City is liable for the payment thereof. Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions: 1. The Bonds constitute the valid and binding limited obligations of the Issuer. 2. The Indenture has been duly authorized, executed and delivered by, and constitutes the valid and binding obligation of, the Issuer. The Indenture creates a valid pledge,to secure the payment of the principal of and interest on the Bonds, of the Revenues and any other amounts (including proceeds of the sale of the Bonds) held by the Trustee in any fund or account established pursuant to the Indenture (except the Rebate Fund), subject to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture. 3. The Bonds are not a lien or charge upon the funds or property of the Issuer except to the extent of the aforementioned pledge. 4. Interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, and is exempt from State of California personal income taxes. Interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alterative minimum taxes, although we observe that it is included in adjusted LA168714.1