MUNICIPAL LEASING ASSOCIATES. INC.

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CUSTODIAL AND AGENCY AGREEMENT #96-112-AF This Custodial and Agency Agreement ("Agreement") is made between Municipal Leasing Associates, Inc. ("Corporation") and City of Santa Ana ("Lessee") to facilitate the deposit and investment of moneys upon the issuance of that certain Lease with Option to Purchase #96-112-AF dated July 1, 1996 (."Lease") by and between Corporation and Lessee. WHEREAS, Corporation is providing moneys pursuant to the Lease in the principal amount of $1,325,580.00 ("Financing Amount") for the purpose of financing the costs of certain property described therein (the "Property"); and WHEREAS, Lessee has requested that Corporation serve as custodian for the Financing Amount and to temporarily hold and dispose of the Financing Amount and interest earnings thereon ("Lease Proceeds")as set forth herein. NOW, THEREFORE, the parties hereby agree as follows: Lessee hereby appoints Corporation as perform its custodian and agent to the following functions related to the Lease and the Lease Proceeds: 1) Upon Lease issuance, direct the deposit of the Financing Amount to a demand deposit account (the "Acquisition Account") to be opened in the name of Municipal Leasing Associates, Inc., Custodian/FBO City of Santa Ana and held at City National Bank, 400 North Roxbury Drive, Beverly Hills, CA 902-0 (the "Bank"). 2) Direct the disbursement of Lease Proceeds from the Acquisition Account to acceptable third party depositories upon prior written authorization issued by the Lessee's authorized agent received by either mail or FAX. 3) Provide for safekeeping of deposit certificates and other investment confirmation documents. Corporation shall accept the appointment of custodian and agent herewith without compensation and subject to the following terms and conditions: a) Moneys held in the Acquisition Account shall not exceed $100,000.00 on an ,interday basis. b) Investments outside of the Acquisition Account shall comply with the provisions of Government Code Sections 53601 and 53635. c) Lease Proceeds shall be deposited or redeposited to the Acquisition Account solely i) for disbursement to the Supplier ii) for disbursement to the Lessee iii) and, in the case of excess Lease Proceeds, for application towards the principal component of Rental Payments to be made following the Lessee's acceptance of the Property.