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HomeMy WebLinkAboutSAFA_FULL PACKET_2014-06-03MINUTES OF THE SPECIAL MEETING OF THE SANTA ANA FINANCING AUTHORITY SANTA ANA, CALIFORNIA AUGUST 24, 2011 CALLED TO ORDER COUNCIL CHAMBER 22 CIVIC CENTER PLAZA SANTA ANA, CA 7:57 P.M. ATTENDANCE AUTHORITY MEMBERS Present: MIGUEL PULIDO, Chair CLAUDIA ALVAREZ, Chair Pro Tern P. DAVID BENAVIDES CARLOS BUSTAMANTE MICHELE MARTINEZ VINCENT F. SARMIENTO SAL TINAJERO PUBLIC COMMENTS - None AUTHORITY MEMBERS Absent: NONE STAFF Present: PAUL M. WALTERS, Interim City Manager JOSEPH STRAKA, Interim Authority Counsel MARIA D. HUIZAR, Authority Secretary CONSENT CALENDAR ITEMS MOTION: Approve staff recommendations on the following Consent Calendar items. MOTION: Benavides SECOND: Bustamante VOTE: AYES: Alvarez, Benavides, Bustamante, Martinez, Pulido, Sarmiento, Tinajero (7) NOES: None (0) ABSTAIN: None (0) ABSENT: None (0) SANTA ANA FINANCING AUTHORITY MINUTES 1 AUGUST 24, 2011 1 -1 MINUTES OF THE REGULAR MEETING HELD DECEMBER 6, 2010. MOTION: Approve Minutes. 2. MINUTES OF THE REGULAR MEETING HELD DECEMBER 20, 2010. MOTION: Approve Minutes. 3. EXCUSED ABSENCES MOTION: Excuse Santa Ana Financing Authority Members absent. " "END OF CONSENT CALENDAR" BUSINESS CALENDAR ITEMS JOINT SESSIONS OF THE CITY COUNCIL AND SANTA ANA FINANCING AUTHORITY (item considered earlier) 4. LEASE AGREEMENT WITH T- MOBILE FOR INSTALLATION OF TELECOMMUNICATIONS SITE AT CORPORATE YARD — Finance & Management Services MOTION: SANTA ANA FINANCING AUTHORITY ACTIONS: Authorize the Executive Directorto execute a Certification with consent to sublease. CITY COUNCIL ACTIONS: 1. Authorize the City Manager and the Clerk of the Council to execute a lease agreement. AGMT - With T- Mobile fora telecommunications cell site at the City's Corporate Yard, subject to non - substantive changes approved by the City Manager and City Attorney. SANTA ANA FINANCING AUTHORITY MINUTES 2 AUGUST 24, 2011 1 -2 2. Receive and file Categorical Exemption for Environmental Review No. 2009 -132 (City Yard). MOTION: Sarmiento VOTE: AYES: NOES: ABSTAIN: ABSENT: SECOND: Martinez Alvarez, Benavides, Bustamante, Martinez, Pulido, Sarmiento, Tinajero (7) None (0) None (0) None (0) COMMENTS 5. SANTA ANA FINANCING AUTHORITY MEMBER COMMENTS — None ADJOURNED — 7:57 P.M. Maria Huizar, Authority Secretary SANTA ANA FINANCING AUTHORITY MINUTES 3 AUGUST 24, 2011 1 -3 1 -4 REQUEST FOR SANTA ANA FINANCING AUTHORITY ACTION CITY COUNCIL MEETING DATE: JUNE 3, 2014 TITLE: RESOLUTION ESTABLISHING A SCHEDULE OF REGULAR MEETINGS FOR THE SANTA ANA FINANCING AUTHORITY ZIP CITY MANA R RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s` Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution establishing a schedule of regular meetings for the Santa Ana Financing Authority. DISCUSSION The Santa Ana Financing Authority (Authority) is a public agency pursuant to the Joint Exercise of Powers Agreement (JPA) dated August 1, 1993, between the City of City of Santa Ana and the Community Redevelopment Agency of the City of Santa Ana. The Authority is governed by the board of directors comprised of the seven members of the City Council who are authorized under the JPA to issue bonds and provide financial assistance to the City for the acquisition and construction of public capital improvements. To provide the Authority with the flexibility to adopt resolutions for the issuance and/or refinancing of debt, it is necessary to establish Authority meeting dates which coincide with regularly scheduled City Council meetings. As such, the Board of the Authority desires to establish a schedule of regular meetings in conjunction with the regular scheduled meetings of the City Council. FISCAL IMPACT There is no fiscal impact associated with this action. 3 -1 3 -2 RESOLUTION NO. 2014 -XXX A RESOLUTION OF THE GOVERNING BOARD OF THE SANTA ANA FINANCING AUTHORITY ESTABLISHING REGULAR MEETINGS OF THE AUTHORITY BE IT RESOLVED BY THE SANTA ANA FINANCING AUTHORITY AS FOLLOWS: Section 1. The Governing Board of the Santa Ana Financing Authority hereby finds, determines and declares as follows: A. The Santa Ana Financing Authority is a public agency duly organized and existing pursuant to a Joint Exercise of Powers Agreement (the "JPA Agreement'), dated August 1, 1993, by and between the City of Santa Ana (the "City ") and the Community Redevelopment Agency of the City of Santa Ana (the "Agency "); B. The Authority is statutorily authorized by Article 4 of Chapter 5 of Division 7 to Title 1 of the California Government Code (Government Code 6584, et seq.] and is empowered under the JPA agreement to issue its bonds to, among other things, provide financial assistance to the City for the acquisition and construction of public capital improvements; C. The Authority is governed by a board of directors comprised of the seven member City Council of the City; D. The Board of the Authority (the "Board ") wishes to establish a schedule of regular meetings of the Authority to coincide with the regularly scheduled meetings of the City Council; E. Section 4.C. of the Agreement states that at least one regular meeting shall be held each year and that regular meetings to be held more frequently shall be fixed by resolution; Section 2. Regular meetings of the Board may be held on the same dates and at the same location as regular meetings of the City Council meeting and shall be noticed in the same manner as City Council meetings; provided however, that if no agenda is posted for a regular meeting of the Authority, then such regular meeting shall be deemed cancelled. If any day so fixed for a regular meeting shall fall upon a legal holiday, then such regular meeting shall be held upon the next succeeding business day at the same hour. The Board shall meet at a regular meeting at least once each calendar year. Resolution No. 2014 -xxx Page 1 of 3 3 -3 Section 3. All actions heretofore taken by the officers and agents of the Authority with respect to the transactions set forth above are hereby approved, confirmed and ratified. Section 4. This Resolution shall take effect immediately upon its adoption by the Governing Board of the Authority, and the Secretary of the Authority shall attest to and certify the vote adopting this Resolution. ADOPTED this day of APPROVED AS TO FORM: Sonia A. Carvalho, City Attorney Jose Sandoval Chief Assistant City Attorney AYES: NOES: ABSTAIN: NOT PRESENT Councilmembers: Councilmembers: Councilmembers: Councilmembers: 2014. Miguel A. Pulido Chairman CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Secretary of the Authority, do hereby attest to and certify that Resolution No. SAFA 2014- to be the original resolutions adopted by the Santa Ana Financing Authority on May 20, 2014. Date: Resolution No. 2014 -xxx Page 2 of 3 Secretary, Financing Authority City of Santa Ana 3 -4 REQUEST FOR COUNCIL /SANTA ANA FINANCING AUTHORITY ACTION CITY COUNCIL MEETING DATE: JUNE 03, 2014 TITLE: RESOLUTIONS EXECUTING AGREEMENTS AND FINANCING DOCUMENTS RELATED TO DEFEASE, REFUND, AND AMENDING BOND SERIES 1994A, 2004A, 1998, AND 2007 LEASE AGREEMENT CITY MANAG R RECOMMENDED ACTION CITY COUNCIL ACTION CLERK OF COUNCIL USE ONLY: p••:• ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution authorizing the execution of certain lease financing documents in connection with the defeasance (retiring) of a portion of the Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A, and the defeasance and refunding of the outstanding City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project) and authorize the City Manager and Executive Director of Finance to execute all related documents and actions to complete the transaction as reference in Exhibit A. 2. Adopt a resolution approving an amendment of the City Hall Parking Structure Lease Agreement to reduce the interest rate to 3.60% SANTA ANA FINANCING AUTHORITY ACTION Adopt a resolution authorizing the execution of certain lease financing documents in connection with the defeasance of a portion of the Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A, and the defeasance and refunding of the outstanding City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project) and authorizing and directing certain actions to complete transactions. 2. Adopt a resolution approving an amendment of the City Hall Parking Structure Lease Agreement to reduce the interest rate to 3.60% 4 -1 Reso to Defease, Refund and Amend Bond Series 1994A, 2004A, 1998, & 2007 June 03, 2014 Page 2 DISCUSSION The City of Santa Ana Mayor and City Council unanimously adopted the City's 5 -year Strategic Plan which includes a goal to ensure financial stability. Under goal number four, two strategies are outlined; 2d) Conduct an assessment of the City's debt and refinancing options to achieve savings and 3c) Implement a plan to achieve a General Fund balance of 20% of expenditures. In an effort to implement these strategies, on January 21, 2014, the City Council approved the use of four firms to assist staff in reviewing existing debt and identify opportunities for potential savings. On April 1, 2014, two teams were selected. The first team is comprised of Fieldman, Rolapp, & Associates (financial advisor) and Quint & Thimmig (bond counsel), which were selected to review the 1994A and 2004A Police Administration Lease Revenue Bonds and other associated general fund debt. The second team is comprised of Urban Futures, Inc. (financial advisor) and Best, Best & Krieger LLP (bond counsel), which were selected to review the 2004 Water Revenue Bonds. With interest rates on US Treasury Bonds having decreased from 3.0% to 2.5 %, since the beginning of the year, the municipal bonds market has followed suit. This has correlated into increased attention in the municipal bond market by investors. In order to benefit from this opportunity, staff is recommending several actions. The items before the City Council relate specifically to General Fund debt and expands beyond the Police Administration Lease Revenue Bonds (1994A Bonds) to include the 1998 City Hall Expansion Project Certificates of Participation ( COP's), and a lease rate change on the City Hall Parking Structure Lease Agreement. The 1994A Bonds were issued in March of 1994 to finance the construction and equipping of a police administrative and holding facility. The 1994A Bonds were partially refunded in 2004. These bond series 2004A mature on July 1, 2014. The City will defease the 2004A bonds by depositing with the Bank of New York Mellon (trustee) the necessary amount that corresponds to the upcoming July 2014 debt service payment. The 1994A Bonds are currently outstanding in the par amount of $67.1 million, comprised of serial bonds maturing on July 1, of 2015 through 2019 and a term bond maturing on July 1, of 2024. As part of the bond covenants agreed to upon issuance of the original 1994A Bonds, a debt service reserve was established which is currently comprised of approximately $4.6 million of cash and $4.6 million of a reserve fund surety. Since 50% of the bonds are technically secured by a surety, the remaining 50% of the bonds relating to the cash reserve will be used to complete the refunding transaction. Defeasing all the bonds creates no annual savings and is not recommended. The 1998 COP's were delivered in January of 1998 to finance the expansion of City Hall (Ross Annex). The 1998 COP's are currently outstanding in the par amount of $8,015,000. All of the outstanding COP'S are being recommended for refunding. After evaluating different alternatives to increase efficiency and cost savings associated with the debt transactions, a private placement methodology was selected. A private placement is more in alignment with a direct bank loan, is more expeditious, allows the City to take immediate advantage of attractive interest rates, saves on issuance costs and eliminates the need on funding of a debt service reserve fund. Because of these attributes, the private placement, unlike a publicly sold bond issue, results in substantial savings for the City. 4 -2 Reso to Defease, Refund and Amend Bond Series 1994A, 2004A, 1998, & 2007 June 03, 2014 Page 3 Following the selection of a private placement strategy, a request for proposal to refund a portion of the 1994A Bonds and all of the 1998 COP's (together, the "Bonds ") was issued by Fieldman, Rolapp, & Associates (financial advisor). A joint proposal from Western Alliance, Compass Bank, Capital One and additional investors if warranted (together the "Private Placement Providers ") provided the best interest rate and terms for the 1994 component of the transaction. In addition, the proposal from Capital One included the best interest rate and terms for the refunding of the 1998 COP's. The Private Placement Providers have issued a commitment to provide the City with the funds to retire the outstanding Bonds and issue a new lease at an interest rate of 3.75% for the refunding of the 1998 COPs and 3.36% for the 1994A Bonds. The 3.75% is guaranteed or locked for 30 days through June 15, 2014, whereas the 3.36% rate reflects current market conditions as of May 21, 2014, and is subject to fluctuation until final Council approval is obtained and the rate is locked. In addition, by selecting Capital One as the provider for the 1998 COPS, Capital One has offered to reduce the interest rate for the current lease structure (City Hall Parking Structure Lease Agreement) from 4.78% to 3.6 %. As a private placement refinancing, the covenants to which the City agreed to upon the original financing are no longer in effect. Since the Private Placement Providers do not require a debt service reserve, the funds encumbered under the original reserve account in effect will be unencumbered and available to pay down the principal. Furthermore, the private placement offering has inherent lower issuance costs, since it does not require that the City obtain a rating or prepare and distribute an offering document. To "right- size" the leased properties with the par amount of the refunding, the City is proposing to secure the 2014 Lease with the City Hall and the Ross Annex buildings. The undefeased portion of the 1994A Bonds will continue to be secured by the Police Jail Facility. The remainder of the originally pledged assets (the Police Administration Building, the parking garage and the tunnel) will be released and no longer considered pledged assets. In addition, following the completion of this transaction, the Corporation Yard will also be released and no longer considered a pledged asset to the 1998 COP's. The substitution of leased properties does not impact the overall transaction, nor does it change in any way the ongoing operations of the City. However, the released or unpledged assets will now be available to use in the future for other lease financings. FISCAL IMPACT Total savings are estimated at over $2 million during the term of all three transactions. Savings will be used to accelerate reaching the established goal of a 20% General Fund reserve. Francisco Gutierrez Executive Director Finance and Management Services Agency Exhibit A — Listing of documents to be executed 4 -3 4 -4 Exhibit A DOCUMENTS TO BE EXECUTED EXHIBIT 1 SAFA RESOLUTION APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS IN CONNECTION POLICE ADMINISTRATION AND HOLDING FACILITY LEASE AND REFUNDING OF THE OUTSTANDING CITY OF SANTA ANA CERTIFICATES OF PARTICIPATION (1998 CITY HALL EXPANSION PROJECT) EXHIBIT 2 CITY RESOLUTION APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS IN CONNECTION WITH POLICE ADMINISTRATION AND HOLDING FACILITY LEASE AND THE DEFEASANCE AND REFUNDING OF THE OUTSTANDING CITY OF SANTA ANA CERTIFICATES OF PARTICIPATION (1998 CITY HALL EXPANSION PROJECT) EXHIBIT 3 LEASE TERMINATION AGREEMENT EXHIBIT 4 SITE AND FACILITY LEASE EXHIBIT 5 LEASE AGREEMENT EXHIBIT 6 MEMORANDUM OF LEASE AGREEMENT EXHIBIT 7 ASSIGNMENT AGREEMENTS EXHIBIT 8 LETTER AGREEMENT FOR PURCHASE EXHIBIT 9 1994 BONDS ESCROW AGREEMENT EXHIBIT 10 1998 CERTIFICATES REDEMPTION REQUEST EXHIBIT 11 1998 CERTIFICATES ESCROW AGREEMENT EXHIBIT 12 1998 CERTIFICATES TERMINATION AGREEMENT EXHIBIT 13 FORM OF OPINION OF SPECIAL COUNSEL EXHIBIT 14 3RD MODIFICATION TO 1994 GROUND LEASE EXHIBIT 15 3RD MODIFICATION TO 1994 LEASE AGREEMENT M EXHIBIT 16 CONSENT OF 1994 BOND INSURER EXHIBIT 17 SAFA RESOLUTION APPROVING AN AMENDMENT TO THE LEASE AGREEMENT RELATING TO THE FINANCING AND REFINANCING OF THE PARKING STRUCTURE ADJACENT TO THE STATE APPELLATE COURT BUILDING EXHIBIT 18 CITY RESOLUTION APPROVING AN AMENDMENT TO THE LEASE AGREEMENT RELATING TO THE FINANCING AND REFINANCING OF THE PARKING STRUCTURE ADJACENT TO THE STATE APPELLATE COURT BUILDING EV EXHIBIT 1 SAFA RESOLUTION APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS IN CONNECTION POLICE ADMINISTRATION AND HOLDING FACILITY LEASE AND REFUNDING OF THE OUTSTANDING CITY OF SANTA ANA CERTIFICATES OF PARTICIPATION (1998 CITY HALL EXPANSION PROJECT) 4 -7 Huge RESOLUTION NO. 2014 -XXX A RESOLUTION OF THE SANTA ANA FINANCING AUTHORITY APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS IN CONNECTION WITH THE DEFEASANCE OF A PORTION OF THE SANTA ANA FINANCING AUTHORITY POLICE ADMINISTRATION AND HOLDING FACILITY LEASE REVENUE BONDS, SERIES 1994A, AND THE DEFEASANCE AND REFUNDING OF THE OUTSTANDING CITY OF SANTA ANA CERTIFICATES OF PARTICIPATION (1998 CITY HALL EXPANSION PROJECT) AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO BE IT RESOLVED BY THE BOARD OF DIRECTORS (THE "BOARD ") OF THE SANTA ANA FINANCING AUTHORITY (THE "AUTHORITY "), AS FOLLOWS: WHEREAS, the Authority has heretofore issued its Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A (the "1994 Bonds "); WHEREAS, the proceeds of the 1994 Bonds were used to finance the costs of the construction and equipping of a police administration and holding facility (the "1994 Project "); WHEREAS, the payment of debt service on the 1994 Bonds is derived from lease payments made by the City of Santa Ana (the "City ") to the Authority under a lease agreement, subsequently amended in connection with certain refunding bonds issued in 2004, payable from the City's General Fund (the "1994 Lease Agreement "); WHEREAS, the 1994 Bonds are currently outstanding in the principal amount of $67,100,000; WHEREAS, the City has previously caused the execution and delivery of its Certificates of Participation (1998 City Hall Expansion Project) (the "1998 Certificates "); WHEREAS, the proceeds of the 1998 Certificates were used to finance the costs of the construction of an expansion to the City of Santa Ana City Hall (the "1998 Project "); WHEREAS, the payment of debt service on the 1998 Certificates is derived from lease payments made by the City to the Authority under a lease agreement payable from the City's General Fund (the "1998 Lease Agreement "); Resolution No. 2014 -XXX 4 -9 Page 1 of 4 WHEREAS, the 1998 Certificates are currently outstanding in the principal amount of $8,015,000; WHEREAS, the City has determined at this time, due to prevailing interest rates in the municipal bond market and for other reasons, to refinance its obligations under the 1994 Lease Agreement and with respect to the 1994 Bonds and to refinance its obligations under the 1998 Lease Agreement and with respect to the 1998 Certificates; WHEREAS, the City proposes to provide for the legal defeasance to maturity of $33,550,000 (50 %) of the 1994 Bonds (the "Defeased 1994 Bonds ") and to provide for the legal defeasance and redemption of the 1998 Certificates; WHEREAS, it is in the public interest and for the public benefit that the Authority authorize and direct execution of certain financing documents in connection therewith; and WHEREAS, the documents below specified have been filed with the Authority and the members of the Board, with the aid of its staff, have reviewed said documents; NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: Section 1. The below- enumerated documents, substantially in the forms on file with the Secretary, be and are hereby approved, and the Chair, the Executive Director or the Treasurer, or any designee thereof, is hereby authorized and directed to execute said documents, with such changes, insertions and omissions as may be approved by such official, the execution thereof to be conclusive evidence of such approval, and the Secretary is hereby authorized and directed to attest to such official's signature [A detailed list of documents to be executed is attached hereto as Exhibit A]. (a) a letter agreement for purchase among Western Alliance Public Finance ( "WAPF "), Compass Bank, an Alabama banking corporation ( "CB "), Capital One Public Funding, LLC ( "COPF ") and one or more additional investors to be selected (collectively, the "Purchasers "), the City and the Authority, whereby the Purchasers agree to acquire certain rights of the Authority, including but limited to the lease payments to be made by the City under the Lease Agreement (hereinafter defined) and the rights of the Authority under the Site and Facility Lease (hereinafter defined); (b) a site and facility lease, by and between the City, as lessor, and the Authority, as lessee (the "Site and Facility Lease "), pursuant to which the City will lease certain existing real property and the improvements thereon (the "Property ") to the Authority; (c) a lease agreement, by and between the Authority, as lessor, and the City, as lessee (the "Lease Agreement "), pursuant to which the Authority will lease the Property back to the City and pursuant to which the City will agree to make semi - annual lease payments (the "Lease Payments "); (d) an assignment agreement, by and between the Authority and WAPF, as assignee, pursuant to which the Authority will assign to WAPF certain of its rights under Resolution No. 2014 -XXX 4-10 Page 2 of 4 the Site and Facility Lease and the Lease Agreement, including its right to receive a portion of the Lease Payments thereunder; (e) an assignment agreement, by and between the Authority and CB, as assignee, pursuant to which the Authority will assign to CB certain of its rights under the Site and Facility Lease and the Lease Agreement, including its right to receive a portion of the Lease Payments thereunder; (f) an assignment agreement, by and between the Authority and COPF, as assignee, pursuant to which the Authority will assign to COPF certain of its rights under the Site and Facility Lease and the Lease Agreement, including its right to receive a portion of the Lease Payments thereunder; (g) an escrow deposit and trust agreement, by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as successor trustee for the 1994 Bonds and as escrow bank, providing for the defeasance of the Defeased 1994 Bonds; (h) a termination agreement, by and among the City, the Authority and The Bank of New York Mellon Trust Company, N.A., as successor trustee for the 1998 Certificates (the "1998 Trustee "), whereby the City, the Authority and the 1998 Trustee agree to terminate the documents relating to the 1998 Certificates; (i) a modification to the ground lease, by and between the City and the Authority, executed in connection with the 1994 Bonds, subsequently modified and amended, to provide for the substitution of the property that is the subject thereof; and (j) a modification to the 1994 Lease Agreement, by and between the Authority and the City, subsequently modified and amended, to provide for the substitution of the property that is the subject thereof. Section 2. The Chair, the Executive Director, the Treasurer, the Secretary and other officials of the Authority are hereby authorized and directed to execute such other agreements, documents and certificates and to take such other actions as may be necessary to effect the purposes of this resolution and the lease financing herein authorized. Section 3. This Resolution shall take effect upon its adoption by the Board. PASSED AND ADOPTED by the Board of Directors of the Santa Ana Financing Authority this 3rd day of June, 2014. SANTA ANA FINANCING AUTHORITY M Chair Resolution No. 2014 -XXX 4-11 Page 3 of 4 APPROVED AS TO FORM: Sonia R. Carvalho, General Counsel Bv: Jose Sandoval, Assistant General Counsel AYES: Boardmembers: NOES: Boardmembers: ABSTAIN: Boardmembers: NOT PRESENT: Boardmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Secretary to the Board, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the Santa Ana Financing Authority on Date: Maria D. Huizar, Secretary to the Board Resolution No. 2014 -XXX 4 -12 Page 4 of 4 EXHIBIT 2 CITY RESOLUTION APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS IN CONNECTION WITH POLICE ADMINISTRATION AND HOLDING FACILITY LEASE AND THE DEFEASANCE AND REFUNDING OF THE OUTSTANDING CITY OF SANTA ANA CERTIFICATES OF PARTICIPATION (1998 CITY HALL EXPANSION PROJECT) 4 -13 4 -14 RESOLUTION NO. 2014 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS IN CONNECTION WITH THE DEFEASANCE OF A PORTION OF THE SANTA ANA FINANCING AUTHORITY POLICE ADMINISTRATION AND HOLDING FACILITY LEASE REVENUE BONDS, SERIES 1994A, AND THE DEFEASANCE AND REFUNDING OF THE OUTSTANDING CITY OF SANTA ANA CERTIFICATES OF PARTICIPATION (1998 CITY HALL EXPANSION PROJECT) AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: WHEREAS, the Santa Ana Financing Authority (the "Authority ") has heretofore issued its Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A (the "1994 Bonds "); WHEREAS, the proceeds of the 1994 Bonds were used to finance the costs of the construction and equipping of a police administration and holding facility (the "1994 Project "); WHEREAS, the payment of debt service on the 1994 Bonds is derived from lease payments made by the City to the Authority under a lease agreement, subsequently amended in connection with certain refunding bonds issued in 2004, payable from the City's General Fund (the 1994 Lease Agreement "); WHEREAS, the 1994 Bonds are currently outstanding in the principal amount of $67,100,000; WHEREAS, the City has previously caused the execution and delivery of its Certificates of Participation (1998 City Hall Expansion Project) (the "1998 Certificates "); WHEREAS, the proceeds of the 1998 Certificates were used to finance the costs of the construction of an expansion to the City of Santa Ana City Hall (the "1998 Project "); Resolution No, 2014 -XXX Page 1 of 4 4 -15 WHEREAS, the payment of debt service on the 1998 Certificates is derived from lease payments made by the City to the Authority under a lease agreement payable from the City's General Fund (the 1998 Lease Agreement "); WHEREAS, the 1998 Certificates are currently outstanding in the principal amount of $8,015,000; WHEREAS, the City has determined at this time, due to prevailing interest rates in the municipal bond market and for other reasons, to refinance its obligations under the 1994 Lease Agreement and with respect to the 1994 Bonds and to refinance its obligations under the 1998 Lease Agreement and with respect to the 1998 Certificates; WHEREAS, the City proposes to provide for the legal defeasance to maturity of $33,550,000 (50 %) of the 1994 Bonds (the "Defeased 1994 Bonds ") and to provide for the legal defeasance and redemption of the 1998 Certificates, and; WHEREAS, it is in the public interest and for the public benefit that the Council authorize and direct execution of certain financing documents in connection therewith; and NOW, THEREFORE, it is hereby DECLARED and ORDERED, as follows: Section 1. The Council hereby approves the refinancing of the 1998 Lease Agreement and the refunding of the 1998 Bonds. Section 2. The below- enumerated documents be and are hereby approved, and the Mayor, the City Manager, the Executive Director of Finance, or any designee thereof, is hereby authorized and directed to execute said documents, with such changes, insertions and omissions as may be approved by such official, the execution thereof to be conclusive evidence of such approval, and the City Clerk is hereby authorized and directed to attest to such official's signature [A detailed list of documents to be executed is attached hereto as Exhibit A]. (a) a letter agreement for purchase among Western Alliance Public Finance, Compass Bank, an Alabama banking corporation, Capital One Public Funding, LLC and one or more additional investors to be selected (collectively, the "Purchasers "), the City and the Authority, whereby the Purchaser agrees to acquire certain rights of the Authority, including but limited to the lease payments to be made by the City under the Lease Agreement (hereinafter defined) and the rights of the Authority under the Site and Facility Lease (hereinafter defined); Resolution No. 2014 -XXX Page 2 of 4 4 -16 (b) a site and facility lease, by and between the City, as lessor, and the Authority, as lessee (the "Site and Facility Lease "), pursuant to which the City will lease certain existing real property and the improvements thereon (the `Property ") to the Authority; (c) a lease agreement, by and between the Authority, as lessor, and the City, as lessee (the "Lease Agreement "), pursuant to which the Authority will lease back to the City and pursuant to which the City will agree to make semi - annual lease payments (the "Lease Payments "); (d) an escrow deposit and trust agreement, by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as successor trustee for the 1994 Bonds and as escrow bank, providing for the defeasance of the Defeased 1994 Bonds; (e) an escrow deposit and trust agreement, by and between the City and The Bank of New York Mellon Trust Company, N.A., as successor trustee for the 1998 Certificates and as escrow bank (the "1998 Trustee "), providing for the defeasance of the 1998 Certificates; (f) a termination agreement, by and among the City, the Authority and the 1998 Trustee, whereby the City, the Authority and the 1998 Trustee agree to terminate the documents relating to the 1998 Certificates; (g) a modification to the ground lease, by and between the City and the Authority, executed in connection with the 1994 Bonds, subsequently modified and amended, to provide for the substitution of the property that is the subject thereof; and (h) a modification to the 1994 Lease Agreement, by and between the Authority and the City, subsequently modified and amended; to provide for the substitution of the property that is the subject thereof. Section 3. The Mayor, the City Manager, the Executive Director of Finance, the City Clerk, and all other appropriate officials of the City, are hereby authorized and directed to execute such other agreements, documents and certificates and to take such other actions as may be necessary to effect the purposes of this resolution and the financing herein authorized. Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. Resolution No. 2014 -XXX Page 3 of 4 4 -17 ADOPTED this day of June, 2014. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney Bv: Jose Sandoval, Chief Assistant City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: 4 -18 Maria D. Huizar, Clerk of the Council Resolution No. 2014 -XXX Page 4 of 4 EXHIBIT 3 LEASE TERMINATION AGREEMENT 4 -19 4 -20 Quint & Thimmig LLP AFTER RECORDATION RETURN TO: Quint & Thhurnig LLP 900 Larkspur Landing Circle, Suite 270 Larkspur, CA 94939 -1726 Attention: Brian D. Quint, Esq. 04/30/14 THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. TERMINATION AGREEMENT Dated as of June 1, 2014 by and among the SANTA ANA FINANCING AUTHORITY, the CITY OF SANTA ANA, CALIFORNIA and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Relating to the Refunding of the $12,450,000 City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project) 19014.10 4 -21 TERMINATION AGREEMENT This TERMINATION AGREEMENT is dated as of June 1, 2014, and is by and among the SANTA ANA FINANCING AUTHORITY (the "Authority'), the CITY OF SANTA ANA, CALIFORNIA (the "City "), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (as successor trustee to Harris Trust Company of California, N.A.), as trustee (the "1998 Trustee "). WITNESSETH: WHEREAS, the City and the Authority have heretofore entered into a Lease Agreement, dated as of January 1, 1998 (the "1998 Lease "), pursuant to which the Authority and the City entered into a transaction for the lease financing of certain facilities (the "1998 Project "), and the City agreed to make certain lease payments (the "1998 Lease Payments ") to the Authority; WHEREAS, pursuant to an Assignment Agreement, dated as of January 1, 1998 (the "1998 Assignment Agreement "), by and between the Authority and the 1998 Trustee, the Authority assigned to the 1998 Trustee, among other things, its rights to receive 1998 Lease Payments from the City under the 1998 Lease and the right to exercise such rights and remedies conferred on the Authority under the 1998 Lease to enforce payment of the 1998 Lease Payments; WHEREAS, pursuant to a Trust Agreement, dated as of January 1, 1998, by and among the City, the Authority and the 1998 Trustee, the 1998 Trustee agreed, among other matters, to execute and deliver certificates of participation (the "1998 Certificates ") representing undivided fractional interests of the owners thereof to receive 1998 Lease Payments made by the City; WHEREAS, the 1998 Lease Agreement provides that in the event that the City deposits, or causes the deposit on its behalf of moneys for the prepayment of the 1998 Lease Payments, then all of the obligations of the City under the 1998 Lease Agreement and all of the security provided by the City for such obligations, excepting only the obligation of the City to make the 1998 Lease Payments from said deposit, shall cease and terminate, and unencumbered title to the 1998 Project shall be vested in the City without further action by the City or the Authority; WHEREAS, the City has determined that, as a result of favorable financial market conditions and for other reasons, it is in the best interests of the City at this time to refinance the City's obligation to make the 1998 Lease Payments under the 1998 Lease Agreement and, as a result thereof, to provide for the redemption of the 1998 Certificates to and including 2014, and to that end and for other purposes, the Authority proposes to lease certain real property and improvements from the Authority pursuant to that certain Lease Agreement, dated as of June 1, 2014 (the "Lease Agreement "), a memorandum of which has been recorded concurrently herewith; WHEREAS, to obtain moneys to make such deposit, the Authority proposes to assign and transfer certain of its rights under the Lease Agreement to Western Alliance Public Finance, Compass Bank, an Alabama banking corporation and Capital One Public Funding, LLC (collectively, the "Assignees "), pursuant to those certain assignment agreements, each dated as of June 1, 2014, by and between the Authority and the Assignees, whereby the Assignees will make a payment of $ to or to the order of the City; WHEREAS, upon deposit of a portion of such amounts for prepayment of the 1998 Lease Payments, the 1998 Lease Agreement and the agreements related thereto need not be 4 -22 maintained (except as otherwise provided below), and the parties hereto now desire to provide for the termination of such documents as provided herein. NOW, THEREFORE, in consideration of the foregoing and for other consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree with respect to the document to which it is a party or an assignee: Section 1. Termination. (a) By virtue of the deposit of amounts for prepayment of the 1998 Lease Payments, all obligations of the City under the 1998 Lease Agreement shall cease and terminate, excepting only the obligation of the City to make, or cause to be made, all payments from such deposit and title to the 1998 Project shall vest in the City on the date of said deposit automatically and without further action by the City or the Authority. Said deposit and interest earnings thereon shall be deemed to be and shall constitute a special fund for the prepayment of the 1998 Lease Payments. (b) In accordance with the foregoing, the following agreements (including any option to purchase contained therein), are hereby terminated and are of no further force or effect (except that the hereinafter defined Site and facility Lease shall terminate 10 days after the termination date hereof): (i) Site and Facility Lease, dated as of January 1, 1998, by and between the City and the Authority, recorded on January 21, 1998, as Instrument No. 19980031193, Orange County Records (the "Site and Facility Lease "); (ii) 1998 Lease Agreement, recorded on January 21, 1998, as Instrument No. 19980031194, Orange County Records; and (iii) 1998 Assignment Agreement, recorded on January 21, 1998, as Instrument No. 19980031195, Orange County Records. (c) From and after the date hereof, none of the parties shall have any further rights or obligations thereunder. Section 2. Execution in Counterparts. This Termination Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. -2- 4 -23 IN WITNESS WHEREOF, the parties hereto have duly executed this Termination Agreement. Attest: Name Attest: Name Secretary City Clerk SANTA ANA FINANCING AUTHORITY By— Name Title CITY OF SANTA ANA By— Name Title THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Bank By— Name Title -3- 4-24 NOTARY ACKNOWLEDGMENTS TO BE INSERTED 4 -25 EXHIBIT A DESCRIPTION OF THE SITE All that certain real property situated in Orange County, State of California, described as follows PARCEL A: LOTS 41 TO 51 INCLUSIVE OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY. PARCEL B: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF LOT 50 OF SAID TRACT NO. 2752; THENCE NORTH 000 06'36" WEST ALONG THE WESTERLY LINES OF LOTS 50 AND 51 OF SAID TRACT, A DISTANCE OF 170.00 FEET; THENCE SOUTH 89° 53'24" WEST 225.769 FEET; THENCE SOUTH 00° 22' 06" EAST 171.016 FEET TO THE NORTHWEST CORNER OF LOT 46 OF SAID TRACT NO. 2752; THENCE NORTH 890 3754" EAST ALONG THE NORTHERLY LINES OF LOTS 46 AND 47 OF SAID TRACT, A DISTANCE OF 225.00 FEET TO THE POINT OF BEGINNING. PARCEL C: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF LOT 46 OF SAID TRACT NO. 2752; THENCE NORTH 000 22'06" WEST 171.016 FEET; THENCE SOUTH 89° 53' 24" WEST 223.244 FEET; THENCE SOUTH 000 13'03" WEST 172.032 FEET TO THE NORTHWEST CORNER OF LOT 44 OF SAID TRACT NO. 2752; THENCE NORTH 89° 37' 54" EAST ALONG THE NORTHERLY LINES OF LOTS 44 AND 45 OF SAID TRACT, A DISTANCE OF 225.00 FEET TO THE POINT OF BEGINNING. PARCEL D: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79 PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF LOT 44 OF SAID TRACT NO. 2752; THENCE NORTH 000 13' 03" EAST 172.032 FEET; THENCE SOUTH 89° 53' 24" WEST 299.99 FEET TO THE WESTERLY LINE OF SAID LOT 56; THENCE SOUTH 00'04'39" EAST ALONG THE WESTERLY LINE OF SAID LOT 56, A DISTANCE OF 173.377 FEET TO THE SOUTHWEST CORNER OF SAID LOT 56; THENCE NORTH 890 37'54" EAST ALONG THE SOUTHERLY LINE OF SAID LOT 56, A DISTANCE OF 299.11 FEET TO THE POINT OF BEGINNING. PARCEL E: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: Exhibit A Page 1 4 -26 BEGINNING AT A POINT ON THE WESTERLY LINE OF SAID LOT 56, DISTANT NORTH 00° 04,39" WEST 299.69 FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT 56; THENCE NORTH 890 29'24" EAST 300.00 FEET; THENCE SOUTH 000 04'39" EAST 128.403 FEET; THENCE SOUTH 890 53,24" WEST 299.99 FEET TO THE WESTERLY LINE OF SAID LOT 56; THENCE NORTH 00° 04' 39" WEST ALONG SAID WESTERLY LINE, A DISTANCE OF 126.31 FEET TO THE POINT OF BEGINNING. PARCEL F: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WESTERLY LINE OF SAID LOT 56, DISTANT NORTH 00° 04'39" WEST 299.69 FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT 56; THENCE NORTH 00° 04' 39" WEST ALONG SAID WESTERLY LINE 275.19 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 25.00 FEET; THENCE NORTHERLY AND EASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 890 34,03" A DISTANCE OF 39.08 FEET; THENCE TANGENT TO SAID CURVE AND ALONG THE NORTHERLY LINE OF SAID LOT 56, NORTH 890 29' 24" EAST 275.19 FEET; THENCE SOUTH 00° 04,39" EAST 300.00 FEET; THENCE SOUTH 89'29'24" WEST 300.00 FEET TO THE POINT OF BEGINNING. Exhibit A Page 2 4 -27 4 -28 EXHIBIT 4 SITE AND FACILITY LEASE 4 -29 4 -30 Quint & Thimmig LLP AFTER RECORDATION PLEASE RETURN TO: Quint & Thimmig LLP 900 Larkspur Landing Circle, Suite 270 Larkspur, CA 94939 -1726 Attention: Brian D. Quint, Esq. 04/30/14 05/28/14 THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. SITE AND FACILITY LEASE Dated as of June 1, 2014 by and between the CITY OF SANTA ANA, as Lessor, . and the SANTA ANA FINANCING AUTHORITY, as Lessee 1901.4.10 4 -31 SITE AND FACILITY LEASE THIS SITE AND FACILITY LEASE (this "Site and Facility Lease "), dated as of June 1, 2014, is by and between the CITY OF SANTA ANA, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the "City "), as lessor, and the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California (the "Authority "), as lessee; WITNESSETH: WHEREAS, pursuant to this Site and Facility Lease, the City proposes to lease those certain parcels of real property situated in Orange County, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (the "Site "), and those certain improvements thereon, more particularly described in Exhibit B hereto (the "Facility" and, with the Site, the "Property'), to the Authority, all for the purpose of assisting the City in undertaking (a) the defeasance of $33,550,000 (50 %) of the outstanding Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A, issued to finance the costs of the construction and equipping of a police administration building and holding facility, and (b) the current refunding of the outstanding City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project), delivered to finance the costs of the construction and equipping of an expansion of the Santa Ana City Hall; WHEREAS, the Authority proposes to lease the Property back to the City pursuant to that certain Lease Agreement, dated as of June 1, 2014, a memorandum of which is recorded concurrently herewith (the "Lease Agreement ") and to assign all of its rights, title and interest in, to and under this Site and Facility Lease and the Lease Agreement, including its right to receive lease payments under the Lease Agreement (the "Lease Payments "), its right to enforce payment of the Lease Payments and otherwise to enforce its interest and rights under the Lease Agreement in the event of a default thereunder by the City, to Western Alliance Public Finance (collectively, the "Assignees "), pursuant to those certain assignment agreements, each dated as of June 1, 2014, by and between the Authority and the AssigneeL(collectively. the "Assignment Agreements "), and recorded concurrently herewith; NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED, as follows: Section 1. Definitions. Capitalized terms used, but not otherwise defined, in this Site and Facility Lease shall have the meanings ascribed to them in the Lease Agreement. Section 2. Site and Facility Lease. The City hereby leases to the Authority and the Authority hereby leases from the City, on the terms and conditions hereinafter set forth, the Property. Section 3. Term. The term of this Site and Facility Lease shall commence on the date of recordation of this Site and Facility Lease in the Office of the County Recorder of the County of Orange, State of California, and shall end on July 1, 2028, unless such term is extended or sooner terminated as hereinafter provided. If, on July 1, 2028, the aggregate amount of Lease Payments (as defined in and as payable under the Lease Agreement) shall not have been paid by reason of abatement, default or otherwise, or provision shall not have been made for their payment in accordance with the Lease Agreement, then the term of this Site and Facility Lease shall be extended until such Lease Payments shall be fully paid or provision made for such payment, but in no event later than July 1, 2038. If, prior to July 1, 2028, all Lease Payments shall be fully 4 -32 paid or provision made for such payment in accordance with the Lease Agreement, the term of this Site and Facility Lease shall end. Section 4. Advance Rental Payment. The City agrees to lease the Property to the Authority in consideration of the payment by the Authority of an advance rental payment of $ . The City and the Authority agree that by reason of the assignment of the Lease Payments to the Assignees under and pursuant to the Assignment Agreements, the advance rental payment referenced in the preceding sentence shall be deemed to have been paid. Section 5. Purpose. The Authority shall use the Property solely for the purpose of leasing the Property to the City pursuant to the Lease Agreement and for such purposes as may be incidental thereto; provided, however, that in the event of default by the City under the Lease Agreement, the Authority and its assigns may exercise the remedies provided in the Lease Agreement. Section 6. City's Interest in the Property. The City covenants that it is the owner in fee of the Property. Section 7. Assignments and Subleases. Unless the City shall be in default under the Lease Agreement, the Authority may not assign its rights under this Site and Facility Lease or sublet the Property, except as provided in the Lease Agreement and the Assignment Agreements, without the written consent of the City and the Assignees. If the City is in default under the Lease Agreement, the Assignees (including their successors and assigns under the Lease Agreement) may fully and freely assign and sublease the Property or any portion thereof, subject to this Site and Facility Lease. Section 8. Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof. Section 9. Termination. The Authority agrees, upon the termination of this Site and Facility Lease, to quit and surrender the Property in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and agrees that any permanent improvements and structures existing upon the Site at the time of the termination of this Site and Facility Lease shall remain thereon and title thereto shall vest in the City. Section 10. Default. In the event the Authority shall be in default in the performance of any obligation on its part to be performed under the terms of this Site and Facility Lease, which default continues for thirty (30) days following notice and demand for correction thereof to the Authority, the City may exercise any and all remedies granted by law, except that no merger of this Site and Facility Lease and of the Lease Agreement shall be deemed to occur as a result thereof and the City shall have no right to terminate this Site and Facility Lease as a remedy for such default. Notwithstanding the foregoing, so long as the Lease Agreement remains in effect, the City will continue to pay the Lease Payments to the Assignees. In the event of the occurrence of an Event of Default under the Lease Agreement, the Authority and /or the Assignees may (i) exercise the remedies provided in the Lease Agreement, (ii) use the Property for any lawful purpose, subject to any applicable legal limitations or restrictions, and (iii) exercise all options provided herein. Section 11. Ouiet Enjoyment. The Authority, at all times during the term of this Site and Facility Lease, shall peaceably and quietly have, hold and enjoy all of the Property subject to the provisions of the Lease Agreement. -2- 4-33 Section 12. Waiver of Personal Liability. All liabilities under this Site and Facility Lease on the part of the Authority are solely liabilities of the Authority and the City hereby releases each and every Boardmember, director, officer, employee and agent of the Authority of and from any personal or individual liability under this Site and Facility Lease. No Boardmember, director, officer, employee or agent of the Authority shall at any time or under any circumstances be individually or personally liable under this Site and Facility Lease for anything done or omitted to be done by the Authority hereunder. Section 13. Taxes. All assessments of any kind or character and all taxes, including possessory interest taxes, levied or assessed upon the Property or the Authority's interest in the Property created by this Site and Facility Lease(including both land and improvements) will be paid by the City in accordance with the Lease Agreement. Section 14. Eminent Domain. In the event the whole or any part of the Property is taken by eminent domain proceedings, the interest of the Authority shall be recognized and is hereby determined to be the amount of the then unpaid principal component of the Lease Payments, any then unpaid interest component of the Lease Payments and any premium due with respect to the prepayment of Lease Payments to the date such amounts are remitted to the Authority or its assignee, and, subject to the provisions of the Lease Agreement, the balance of the award, if any, shall be paid to the City. The City hereby waives, to the extent permitted by law, any and all rights that it has or may hereafter have to acquire the interest of the Authority in and to the Property through the eminent domain powers of the City. However, the City hereby agrees, to the extent permitted by law, that the compensation to be paid in any condemnation proceedings brought by or on behalf of the City with respect to the Property shall be in an amount not less than the total unpaid principal component of Lease Payments, the interest component of Lease Payments accrued to the date of payment of all Lease Payments and any premium due with respect to the prepayment of Lease Payments under the Lease Agreement. Section 15. Use of the Proceeds. The City and the Authority hereby agree that the lease to the Authority of the City's right and interest in the Property pursuant to Section 2 serves the public purposes of the City. Section 16. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Site and Site Lease shall, to any extent, be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding, order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Site and Facility Lease shall be affected thereby, and each provision of this Site and Facility Lease shall be valid and enforceable to the fullest extent permitted by law. Section 17. Notices. All notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered personally or if mailed by United States registered mail, return receipt requested, postage prepaid, at the addresses set forth in the Lease Agreement, or to such other addresses as the respective parties may from time to time designate by notice in writing. Section 18. Binding Effect. This Site and Facility Lease shall inure to the benefit of and shall be binding upon the City and the Authority and their respective successors and assigns. The Assignees are hereby made a -third party beneficiaries hereunder with all rights of a third party beneficiary. Section 19. Amendment. This Site and Facility Lease may not be amended except as permitted under the Lease Agreement. -3- 4-34 Section 20. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Site and Facility Lease. Section 21. Applicable Law. This Site and Facility Lease shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in California. Section 22. No Merger. Neither this Site and Facility Lease, the Lease Agreement nor any provisions hereof or thereof shall be construed to effect a merger of the title of the City to the Property under this Site and Facility Lease and the City's leasehold interest therein under the Lease Agreement. Section 23. Execution in Counterparts. This Site and Facility Lease may be executed in any number of counterparts, each of which shall be deemed to be an original but all together shall constitute but one and the same instrument. -4- 4 -35 IN WITNESS WHEREOF, the City and the Authority have caused this Site and Facility Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. Attest: Name Attest: Name City Clerk Secretary -5- 4 -36 CITY OF SANTA ANA By Name Title SANTA ANA FINANCING AUTHORITY By Name Title [NOTARY ACKNOWLEDGMENTS TO BE ATTACHED] 4 -37 EXHIBIT A DESCRIPTION OF THE SITE All that certain real property situated in Orange County, State of California, described as follows: Exhibit A Page 1 4 -38 The Facility consists of EXHIBIT B DESCRIPTION OF THE FACILITY Exhibit B 4 -39 4 -40 EXHIBIT 5 LEASE AGREEMENT 4 -41 4 -42 Quint & Thimmig LLP 04/30/14 05/28/14 LEASE AGREEMENT Dated as of June 1, 2014 by and between the SANTA ANA FINANCING AUTHORITY, as Sublessor and the CITY OF SANTA ANA, as Sublessee 1901.4.10 4 -43 TABLE OF CONTENTS ARTICLE I DEFINITIONS; RULES OF INTERPRETATION Section1.1. Definitions .................................................................................................................. ..............................2 Section1.2. Interpretation ............................................................................................................. ..............................5 ARTICLE II COVENANTS, REPRESENTATIONS AND WARRANTIES Section 2.1. Covenants, Representations and Warranties of the City ..................................... ..............................6 Section 2.2. Covenants, Representations and Warranties of the Authority .......................... ..............................8 ARTICLE III DEPOSIT AND APPLICATION OF FUNDS Section 3.1. Deposit of and Application of Funds .................................................................... .............................10 ARTICLE IV LEASE OF PROPERTY; LEASE PAYMENTS Section 4.1. Sublease of Property by the Authority Back to the City ..................................... .............................11 Section4.2. Term ........................................................................................................................... .............................11 Section4.3. Lease Payments ........................................................................................................ .............................11 Section4.4. Quiet Enjoyment ....................................................................................................... .............................14 Section4.5. Title ............................................................................................................................. .............................14 Section 4.6. Release of Excess Property ...................................................................................... .............................14 Section 4.7. Substitution of Property .......................................................................................... .............................15 ARTICLE V MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS Section 5.1. Maintenance, Utilities, Taxes and Assessments .................................................. .............................16 Section 5.2. Modification of Property ......................................................................................... .............................16 Section 5.3. Public Liability Insurance ....................................................................................... .............................16 Section 5.4. Casualty Insurance ................................................................................................... .............................17 Section 5.5. Rental Interruption Insurance ................................................................................ .............................17 Section 5.6. Worker's Compensation Insurance ....................................................................... .............................17 Section 5.7. Recordation Hereof; Title Insurance ...................................................................... .............................17 Section 5.8. Insurance Net Proceeds; Form of Policies ............................................................ .............................18 Section 5.9. Installation of City's Personal Property ................................................................ .............................18 Section5.10. Liens ......................................................................................................................... .............................18 Section5.11. Advances ................................................................................................................. .............................18 Section 5.12. Environmental Covenants .................................................................................... .............................18 Section 5.13. City Consents to Assignment Agreements ......................................................... .............................19 ARTICLE VI EMINENT DOMAIN; USE OF NET PROCEEDS Section6.1. Eminent Domain ...................................................................................................... .............................20 Section 6.2. Application of Net Proceeds ................................................................................... .............................20 Section 6.3. Abatement of Lease Payments in the Event of Damage or Destruction .......... .............................21 ARTICLE VII OTHER COVENANTS OF THE CITY Section 7.1. Disclaimer of Warranties ......................................................................................... .............................23 Section 7.2. Access to the Property; Grant and Conveyance of Right of Entry .................... .............................23 -1- 4-44 Section 7.3. Release and Indemnification Covenants .............. Section 7.4. Assignment by the Authority . ............................... Section 7.5. Assignment and Subleasing by the City .............. Section 7.6. Amendment of Lease Agreement ......................... Section 7.7. Tax Covenants .......................... ............................... Section 7.8. Financial Statements; Budgets ............................... Section 7.9. Records and Accounts ............. ............................... Section 7.10. Observance or Laws and Regulations ................ Rartinn 7.11. Nn+irPs ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES Section 8.1. Events of Default Defined ....................................................................................... .............................27 Section8.2. Remedies on Default ................................................................................................ .............................27 Section 8.3. No Remedy Exclusive .............................................................................................. .............................29 Section 8.4. Agreement to Pay Attorneys' Fees and Expenses ............................................... .............................29 Section 8.5. No Additional Waiver Implied by One Waiver .................................................. .............................29 Section 8.6. Assignees to Exercise Rights ................................................................................... .............................29 ARTICLE IX PREPAYMENT OF LEASE PAYMENTS Section9.1. Security Deposit ....................................................................................................... .............................30 Section9.2. No Optional Prepayment ........................................................................................ .............................30 Section 9.3. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain .........................30 ARTICLE X MISCELLANEOUS Section10.1. Notices ................................................ ............................... Section 10.2. Binding Eff ect ..................................... ............................... Section 10.3. Severability ......................................... ............................... Section 10.4. Net - net -net Lease .............................. ............................... Section 10.5. Further Assurances and Corrective Instruments ........ Section 10.6. Execution in Counterparts ............... ............................... Section 10.7. Applicable Law .................................. ............................... Section10.8. Captions .............................................. ............................... EXHIBIT A DESCRIPTION OF THE SITE EXHIBIT B DESCRIPTION OF THE FACILITY EXHIBIT C SCHEDULE OF LEASE PAYMENTS -ii- LEASE AGREEMENT THIS LEASE AGREEMENT (this "Lease Agreement'), dated as of June 1, 2014, is by and between the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the State of California, as lessor (the "Authority "), and the CITY OF SANTA ANA, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California, as lessee (the "City "); WITNESSETH: WHEREAS, pursuant to that certain Site and Facility Lease, dated as of June 1, 2014 (the "Site and Facility Lease "), the City has leased those certain parcels of real property situated in Orange County, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (the "Site "), and those certain improvements thereon, more particularly described in Exhibit B hereto (the "Facility" and, with the Site, the "Property "), to the Authority, all for the purpose of enabling the City to undertake (a) the defeasance of $33,550,000 (50 %) of the outstanding Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A, issued to finance the costs of the construction and equipping of a police administration building and holding facility, and (b) the current refunding of the outstanding City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project), delivered to finance the costs of the construction and equipping of an expansion of the Santa Ana City Hall; WHEREAS, the Authority proposes to lease the Property back to the City pursuant to this Lease Agreement and to assign all of its rights, title and interest in, to and under this Lease Agreement, including its right to receive lease payments under this Lease Agreement (the "Lease Payments "), its right to enforce payment of the Lease Payments and otherwise to enforce its interest and rights under this Lease Agreement in the event of a default hereunder by the City and its rights under the Site and Facility Lease, to Western Alliance Public Finance Compass Bank an Alabama banking corporation and Capital One Public Funding LLC (collectively, the "Assignees "), pursuant to those certain assizment agreements, each dated as of June 1, 2014, by and between the Authority and the Assignees; and WHEREAS, the City and the Authority have agreed to enter into this Lease Agreement providing for Lease Payments with an aggregate principal component in the amount of $ for the purpose of implementing the financing transactions described above. AGREEMENT: NOW, THEREFORE, for and in consideration of the premises and the covenants hereinafter contained, the parties hereto hereby formally covenant, agree and bind themselves as follows: . R ARTICLE I DEFINITIONS; RULES OF INTERPRETATION Section 1.1. Definitions. All terms defined in this Section 1.1 have the meanings herein specified for all purposes of this Lease Agreement. "Additional Payments" means the amounts specified as such in Section 43(b) of this Lease Agreement. "Applicable Environmental Laws" means and shall include, but shall not be limited to, the Comprehensive Environmental Response, Compensation, and Liability Act ( "CERCLA "), 42 USC Sections 9601 et seq.; the Resource Conservation and Recovery Act ( "RCRA "), 42 USC Sections 6901 et seq.; the Federal Water Pollution Control Act, 33 USC Sections 1251 et seq.; the Clean Air Act, 42 USC Sections 7401 et seq.; the California Hazardous Waste Control Law ( "HWCL "), California Health & Safety Code Sections 25100 et seq.; the Hazardous Substance Account Act ( "HSAA "), California Health & Safety Code Sections 25300 et seq.; the Porter - Cologne Water Quality Control Act (the "Porter - Cologne Act "), California Water Code Sections 1300 et seq.; the Air Resources Act, California Health & Safety Code Sections 3900 et seq.; the Safe Drinking Water & Toxic Enforcement Act, California Health & Safety Code Sections 25249.5 et seq.; and the regulations under each thereof; and any other local, state, and /or federal laws or regulations, whether currently in existence or hereafter enacted, that govern: (a) the existence, cleanup, and /or remedy of contamination on property; (b) the protection of the environment from spilled, deposited, or otherwise emplaced contamination; (c) the control of hazardous wastes; or (d) the use, generation, transport, treatment, removal, or recovery of Hazardous Substances, including building materials. "Assignees" means (a) initially, WAPF. CB and COPF,_as assignees of all rights, title and interests of the Authority hereunder, and (b) any other entity to whom the rights of the Authority hereunder are assigned, including subsequent assignees of the Assignees. "Assignment Agreements" means, collectively, the WAPF Assignment Agreement the CB Assignment Agreement and the COPF Assignment Agreement "Authority" means Santa Ana Financing Authority, a joint exercise of powers authority, organized and existing under the laws of the State. "Authority Representative" means the Chair, the Executive Director or the Treasurer or the designee of any such official, or any other person authorized by resolution of the Authority delivered to the ssi pees to act on behalf of the Authority under or with respect to the Site and Facility Lease, the Lease Agreement and the Assignment Agreements. 'Bond Counsel' means (a) Quint & Thimmig LLP, or (b) any other attorney or firm of attorneys of nationally recognized expertise with respect to legal matters relating to obligations the interest on which is excludable from gross income under Section 103 of the Tax Code. "Business Day" means a day other than a Saturday, Sunday or legal holiday, on which banking institutions are not closed in the State. -2- 4 -47 "City" means the City of Santa Ana, a municipal corporation and chartered city organized and existing under the laws of the State. "City Representative" means the Mayor, the City Manager, the Executive Director of Finance, or the designee of any such official, or any other person authorized by resolution delivered to the Authority and the Assignees to act on behalf of the City under or with respect to the Site and Facility Lease and this Lease Agreement. "Closing Date" means the date this Lease Agreement or a memorandum thereof is recorded in the office of the County Recorder of the County of Orange. "Contract" means any indenture, trust agreement, contract, agreement (other than this Lease Agreement), other contractual restriction, lease, mortgage or instrument. "Escrozo Bank" means The Bank of New York Mellon Trust Company, N.A., as escrow bank under the Escrow Agreement. "Event of Default" means any of the events of default as defined in Section 8.1. "Facility" means those certain existing facilities more particularly described in Exhibit B to the Site and Facility Lease and in Exhibit B to the Lease Agreement. "Federal Securities" means any direct general non - callable obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations the timely payment of principal of and interest on which are directly guaranteed by the United States of America. "Fiscal Year" means each twelve -month period during the Term of this Lease Agreement commencing on July 1 in any calendar year and ending on June 30 in the next succeeding calendar year, or any other twelve -month period selected by the City as its fiscal year period. "Governmental Authority" means any governmental or quasi- governmental entity, including any court, department, commission, board, bureau, agency, administration, central bank, service, City or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government, or any arbitrator, mediator or other person with authority to bind a party at law. "Hazardous Substance" means any substance that shall, at any time, be listed as "hazardous" or "toxic" in any Applicable Environmental Law or that has been or shall be determined at any time by any agency or court to be a hazardous or toxic substance regulated under Applicable Environmental Laws; and also means, without limitation, raw materials, building components, the products of any manufacturing, or other activities on the Property, -3- 4-48 wastes, petroleum, and source, special nuclear, or by- product material as defined by the Atomic Energy Act of 1954, as amended (42 USC Sections 3011 et seq.). "Lease Agreement " means this Lease Agreement, dated as of June 1, 2014, between the Authority and the City. "Lease Payment Date" means January 1 and July 1 in each year, commencing January 1, 2015, and continuing to and including the date on which the Lease Payments are paid in full. "Lease Payments" means all payments required to be paid by the City under Section 4.3, including any prepayment thereof under Sections 9.2 or 9.3. "Material Adverse Effect" means an event or occurrence which adversely affects in a material manner (a) the assets, liabilities, condition (financial or otherwise), business, facilities or operations of the City, (b) the ability of the City to carry out its business in the manner conducted as of the date of this Lease Agreement or to meet or perform its obligations under this Lease Agreement on a timely basis, (c) the validity or enforceability of this Lease Agreement, or (d) the exclusion of the interest component of the Lease Payments from gross income for federal income tax purposes or the exemption of such interest for state income tax purposes. "Material Litigation" means any action, suit, proceeding, inquiry or investigation against the City in any court or before any arbitrator of any kind or before or by any Governmental Authority, (i) if determined adversely to the City, may have a Material Adverse Effect, (ii) seek to restrain or enjoin any of the transactions contemplated by this Lease Agreement, or (iii) may adversely affect (A) the exclusion of the interest component of the Lease Payments from gross income for federal income tax purposes or the exemption of such interest for state income tax purposes or (B) the ability of the City to perform its obligations under this Lease Agreement. "Net Proceeds" means any insurance or eminent domain award (including any proceeds of sale to a governmental entity under threat of the exercise of eminent domain powers), paid with respect to the Property, to the extent remaining after payment therefrom of all expenses incurred in the collection thereof. "1994 Bonds" means the Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A, outstanding in the principal amount of $67,100,000. "1994 Bonds Escrow Agreement" means that certain escrow deposit and trust agreement, dated June 12, 2014, by and between the City and the Escrow Bank, relating to the defeasance of a portion of the 1994 Bonds. "1994 Bonds Escrow Fund" means the escrow fund established by and held by the Escrow Bank under the 1994 Bonds Escrow Agreement. "1998 Certificates " means the City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project), outstanding in the principal amount of $8,015,000. "1998 Certificates Escrow Agreement" means that certain escrow deposit and trust agreement, dated June 12, 2014, by and between the City and the Escrow Bank, relating to the defeasance of the 1998 Certificates. "1998 Certificates Escrow Fund" means the escrow fund established by and held by the Escrow Bank under the 1998 Certificates Escrow Agreement. -4- 4-49 "Permitted Encumbrances" means, as of any time: (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may permit to remain unpaid under Article VI of this Lease Agreement; (b) the Site and Facility Lease, this Lease Agreement and the Assignment Agreements; (c) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (d) the exceptions disclosed in the title insurance policy issued with respect to the Property issued as of the Closing Date; and (e) any easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record and which the City certifies in writing will not materially impair the use of the Property for its intended purposes. "Property" means, collectively, the Site and the Facility. "Rental Period" means each period during the Term of the Lease commencing on and including July 2 in each year and extending to and including the next succeeding July 1. The first Rental Period begins on the Closing Date and ends on July 1, 2015. 1 "Site" means that certain real property more particularly described in Exhibit A to the Site and Facility Lease and in Exhibit A to the Lease Agreement. "Site and Facility Lease" means the Site and Facility Lease, dated as of June 1, 2014, by and between the City, as lessor, and the Authority, as lessee, together with any duly authorized and executed amendments thereto. "State" means the State of California. "Tax Code" means the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Tax Code. "Term of this Lease Agreement" or "Term" means the time during which this Lease Agreement is in effect, as provided in Section 4.2. Section 1.2. Interpretation. (a) Unless the context otherwise indicates, words expressed in the singular include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and include the neuter, masculine or feminine gender, as appropriate. (b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and do not affect the meaning, construction or effect hereof. (c) All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Lease Agreement; the words "herein," "hereof," "hereby," "hereunder" and other words of similar import refer to this Lease Agreement as a whole and not to any particular Article, Section or subdivision hereof. -5- 4-50 ARTICLE II COVENANTS, REPRESENTATIONS AND WARRANTIES Section 2.1. Covenants, Representations and Warranties of the Citv. The City makes the following covenants, representations and warranties to the Authority as of the date of the execution and delivery of this Lease Agreement: (a) Due Organization and Existence. The City is a municipal corporation and chartered city, organized and existing under and by virtue of the laws of the State, has full legal right, power and authority under the laws of the State to enter into the Escrow Agreement, the Site and Facility Lease and this Lease Agreement and to carry out and consummate all transactions on its part contemplated hereby and thereby, and by proper action the City has duly authorized the execution and delivery by the City of the Escrow Agreement, the Site and Facility Lease and this Lease Agreement. (b) Due Execution. The representative of the City executing the Escrow Agreement, the Site and Facility Lease and this Lease Agreement has been fully authorized to execute the same by a resolution duly adopted by the City Council of the City. (c) Valid, Binding and Enforceable Obligations. The Escrow Agreement, the Site and Facility Lease and this Lease Agreement have been duly authorized, executed and delivered by the City and constitute the legal, valid and binding agreements of the City enforceable against the City in accordance with their respective terms. (d) No Conflicts. The execution and delivery of the Escrow Agreement, the Site and Facility Lease and this Lease Agreement, the consummation of the transactions therein and herein contemplated and the fulfillment of or compliance with the terms and conditions thereof and hereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Escrow Agreement, the Site and Facility Lease or this Lease Agreement or the financial condition, assets, properties or operations of the City. (e) Consents and Approvals. No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any Governmental Authority is necessary in connection with the execution and delivery of the Escrow Agreement, the Site and Facility Lease and this Lease Agreement, or the consummation of any transaction therein and herein contemplated, except as have been obtained or made and as are in full force and effect. (f) No Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other Governmental Authority pending and notice of which has been served on the City or, to the knowledge of the City after reasonable investigation, threatened against or affecting the City or the assets, properties or operations of the City which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of the Escrow Agreement, the Site and Facility Lease and this Lease Agreement or upon the financial -6- 4-51 condition, assets, properties or operations of the City, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other Governmental Authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Lease Agreement, or the financial condition, assets, properties or operations of the City. (g) Sufficient Funds. The City reasonably believes that sufficient funds can be obtained to make all Lease Payments and all other amounts required to be paid pursuant to this Lease Agreement. (h) No Defaults. The City has never non - appropriated or defaulted under any of its payment or performance obligations or covenants, either under any financing lease of the same general nature as this Lease Agreement, or under any of its bonds, notes, or other debt obligations. (i) Fee Title. The City is the owner in fee of title to the Property. No lien or encumbrance on the Property materially impairs the City's use of the Property for the purposes for which it is, or may reasonably be expected to be, held. (j) Use of the Property. During the term of this Lease Agreement, the Property will be used by the City only for the purpose of performing one or more governmental or proprietary functions of the City consistent with the permissible scope of the City's authority. (k) Change in Financial Condition. The City has experienced no material change in its financial condition since June 30, 2013. (1) Hazardous Substances. The Property is free of all Hazardous Substances, and the City is in full compliance with all Applicable Environmental Laws. (m) Flooding Risk. The Property is not located in a Iffl-year flood zone and has never been subject to material damage from flooding. (n) Value of Property. The value of the Property (real property replacement cost) is not less than $ (o) Essential to City Operations. The Property is essential to the City's efficient and economic operations and the lease thereof for use by the City is in the best interest of the City. (p) Financial Statements. The statement of financial position of the City as of June 30, 2013, and the related statement of activities and statement of cash flows and changes in financial position for the year then ended and the auditors' reports with respect thereto, copies of which have heretofore been furnished to the Assignees, are complete and correct and fairly present the financial condition, changes in financial position and results of operations of the City at such date and for such period, and were prepared in accordance with generally accepted accounting principles. Since the period of such statements, there has been no (i) change which would have a Material Adverse Effect and (ii) no material increase in the indebtedness of the City. (q) No Material Adverse Change. Since the most current date of the information, financial or otherwise, supplied by the City to the Assignees: (i) There has been no change in the assets, liabilities, financial position or results of operations of the City which might reasonably be anticipated to cause a Material Adverse Effect. -7- 4-52 (ii) The City has not incurred any obligations or liabilities which might reasonably be anticipated to cause a Material Adverse Effect. (iii) The City has not (A) incurred any material indebtedness, other than the Lease Payments, and trade accounts payable arising in the ordinary course of the City's business and not past due, or (B) guaranteed the indebtedness of any other person. (r) Accuracy of Information. All information, reports and other papers and data furnished by the City to the Assignees were, at the time the same were so furnished, complete and accurate in all material respects and insofar as necessary to give the Assignees a true and accurate knowledge of the subject matter and were provided in expectation of the Assignees' reliance thereon in entering into the transactions contemplated by this Lease Agreement. No fact is known to the City which has had or, so far as the City can now reasonably foresee, may in the future have a Material Adverse Effect, which has not been set forth in the financial statements previously furnished to the Assignees or in other such information, reports, papers and data or otherwise disclosed in writing to the Assignees prior to the Closing Date. Any financial, budget and other projections furnished to the Assignees by the City or its or their agents were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair and reasonable in light of the conditions existing at the time of delivery of such financial, budget or other projections, and represented, and as of the date of this representation, represent the City's best estimate of its future financial performance. No document furnished nor any representation, warranty or other written statement made to the Assignees in connection with the negotiation, preparation or execution of this Lease Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state (as of the date made or furnished) any material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were or will be made, not misleading. Section 2.2. Covenants, Representations and Warranties of the Authority. The Authority makes the following covenants, representations and warranties to the City as of the date of the execution and delivery of this Lease Agreement: (a) Due Organization and Existence. The Authority is a joint exercise of powers authority, duly organized and existing under the laws of the State, has full legal right, power and authority to enter into the Site and Facility Lease, this Lease Agreement and the Assignment Agreements and to carry out and consummate all transactions on its part contemplated hereby and thereby, and by proper action the Authority has duly authorized the execution and delivery by the Authority of the Escrow Agreement, the Site and Facility Lease, this Lease Agreement and the Assignment Agreements. (b) Due Execution. The representative of the Authority executing the Escrow Agreement, the Site and Facility Lease, this Lease Agreement and the Assignment Agreements is fully authorized to execute the same under official action taken by the Board of Directors of the Authority. (c) Valid, Binding and Enforceable Obligations. The Escrow Agreement, the Site and Facility Lease, this Lease Agreement and the Assignment Agreements have been duly authorized, executed and delivered by the Authority and constitute the legal, valid and binding agreements of the Authority, enforceable against the Authority in accordance with their respective terms. (d) No Conflicts. The execution and delivery of the Escrow Agreement, the Site and Facility Lease, this Lease Agreement and the Assignment Agreements, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, do not and will not conflict with or constitute a -8- 4-53 violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the Authority is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Authority, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Escrow Agreement, the Site and Facility Lease, this Lease Agreement and the Assignment Agreements or the financial condition, assets, properties or operations of the Authority. (e) Consents and Approvals. No consent or approval of any trustee or holder of any indebtedness of the Authority, and no consent, permission, authorization, order or license of, or filing or registration with, any Governmental Authority is necessary in connection with the execution and delivery of the Escrow Agreement, the Site and Facility Lease, this Lease Agreement or the Assignment Agreements, or the consummation of any transaction herein or therein contemplated, except as have been obtained or made and as are in full force and effect. (f) No Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other Governmental Authority pending and notice of which has been served on the Authority or, to the knowledge of the Authority after reasonable investigation, threatened against or affecting the Authority or the assets, properties or operations of the Authority which, if determined adversely to the Authority or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of the Escrow Agreement, the Site and Facility Lease, this Lease Agreement or the Assignment Agreements, or upon the financial condition, assets, properties or operations of the Authority, and the Authority is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other Governmental Authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Escrow Agreement, the Site and Facility Lease, this Lease Agreement or the Assignment Agreements or the financial condition, assets, properties or operations of the Authority. 192 4 -54 ARTICLE III DEPOSIT AND APPLICATION OF FUNDS Section 3.1. Deposit of and Application of Funds. On the Closing Date, the Authority shall cause (a) the amount of $ to be transferred to the Escrow Bank for deposit in the 1994 Bonds Escrow Fund and applied to the defeasance of $33,550,000 (50 %) of the outstanding 1994 Bonds, and (b) the amount of $ to be transferred to the Escrow Bank for deposit in the 1998 Certificates Escrow Fund and applied to the defeasance of the outstanding 1998 Certificates. Such amounts shall be derived from amounts paid by the Assignees under the Assignment Agreements. In addition, a portion of the amounts paid by the Assignees under the Assignment Agreements (including amounts retained by the nees for its fees) shall be applied by the Assignees to pay financing costs of the transaction in the amount of $ -10- 4-55 ARTICLE IV LEASE OF PROPERTY; LEASE PAYMENTS Section 4.1. Sublease of Property by the Authority Back to the City. (a) The Authority hereby subleases the Property to the City, and the City hereby subleases the Property from the Authority, upon the terms and conditions set forth in this Lease Agreement. (b) The leasing of the Property by the City to the Authority pursuant to the Site and Facility Lease shall not affect or result in a merger of the City's subleasehold estate pursuant to this Lease Agreement and its fee estate as lessor under the Site and Facility Lease. Section 4.2. Term. The Term of this Lease Agreement commences on the date of recordation of this Lease Agreement or a memorandum hereof and ends on lanuary 1. 20281. 2028, or the date on which all of the Lease Payments have been paid in full pursuant to the terms of this Lease Agreement. If on Ianuary 1 2028, the Lease Payments payable hereunder shall have been abated at any time and for any reason and not otherwise paid from rental interruption insurance or other sources, or the City shall have defaulted in its payment of Lease Payments hereunder or any Event of Default has occurred and continues without cure by the City, then the term of this Lease Agreement shall be extended for the actual period of abatement or for so long as the default remains uncured, as necessary to accommodate the final payment of all Lease Payments due hereunder, not to exceed ten (10) years. The provisions of this Section 4.2 are subject to the provisions of Section 6.1 relating to the taking in eminent domain of the Property or any portion thereof. Section 4.3. Lease Payments. (a) Obligation to Pay. Subject to the provisions of Sections 6.1 and 6.3 and the provisions of Article IX, the City agrees to pay to the Authority, its successors and assigns, the Lease Payments (denominated into components of principal and interest) in the amounts specified in Exhibits C -1 C -2 and C -3 attached hereto (with the total of all Lease Payments shown in Exhibit C -4 attached hereto) (including any supplements thereto) and by this reference ncorporated herein, to be due and payable in immediately available funds on each of the respective Lease Payment Dates specified in Exhibits C -1, C -2 and C -3; provided, however, that if any Lease Payment Date is not a Business Day, such Lease Payment shall be due on the next succeeding Business Day and shall continue to accrue interest to the next succeeding Business Day. The Lease Payments payable in any Rental Period with respect to the Property shall be for the use of the Property during such Rental Period. The interest component of the portion of the Lease Payments specified in Exhibits C -1 and-C-2-has been calculated based on an interest rate of % per annum, on the basis of a 360 -day year of twelve 30 -day months. The interest months. The City understands that each Assignee will send an invoice to the City in advance of each Lease Payment Date. If, for any reason, the interest component of the Lease Payments becomes includable in the gross income of the for federal income tax purposes under the Code based upon a final determination thereof by the Internal Revenue Service, the City, at the option of the Assignees, shall pay to the Assignees within thirty days of such determination, the amount which, with respect to Lease Payments previously paid and taking into account all penalties, fines, interest and additions to tax (including all federal, state and local taxes imposed on the interest component of the Lease Payments due through the date of such determination) that are imposed on the Assignees as a result of the loss of the exclusion, will restore the Assignees to the same after -tax yield on the transaction evidenced by this Lease Agreement -11- 4-56 (assuming tax at the actual marginal corporate rate) that it would have realized had the tax exemption not been lost. Furthermore, the City agrees that upon the occurrence of such an event, it shall pay additional amounts to the Assignees on each succeeding Lease Payment Date as will maintain such after -tax yield to the Assignees. (b) Additional Payments. In addition to the Lease Payments set forth herein, the City agrees to pay as Additional Payments all of the following: (i) all taxes and assessments of any nature whatsoever, including but not limited to excise taxes, ad valorem taxes, ad valorem and specific lien special assessments and gross receipts taxes, if any, levied upon the Property or upon any interest of the Authority therein or in this Lease Agreement; provided, however, the City may, at the City's expense and in its name, in good faith contest any such taxes and assessments and, in the event of such contest, may permit such taxes and assessments to remain unpaid during the period of such contest and appeal therefrom unless the Authority shall notify the City that, in the opinion of Bond Counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any portion thereof, will be subject to loss or forfeiture, in which event the City shall promptly pay such taxes and assessments or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority; (ii) insurance premiums, if any, on all insurance required under the provisions of Article V hereof; (iii) any other reasonable fees, costs or expenses incurred by the Authority in connection with the execution, performance or enforcement of this Lease Agreement or any of the transactions contemplated hereby or related to the Property, including, without limitation, any amounts which may become due; provided, however, the City shall not be responsible for any costs incurred by the Authority associated with any assignment made by the Assignees; and (iv) any amounts required to be paid as rebate to the United States pursuant to the Tax Certificate. Amounts constituting Additional Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Authority to the City stating the amount of Additional Payments then due and payable and the purpose thereof. (c) Effect of Prepayment. If the City prepays all Lease Payments in full under Sections 9.2 or 9.3, the City's obligations under this Section will thereupon cease and terminate. If the City prepays the Lease Payments in part but not in whole under Section 9.3, the principal components of the remaining Lease Payments will be reduced on a pro rata basis; and the interest component of each remaining Lease Payment will be reduced on a pro rata basis. (d) Rate on Overdue Payments. If the City fails to make any of the payments required in this Section 4.3 for more than ten days after the due date for payment, the payment in default will continue as an obligation of the City until the amount in default has been fully paid, and the City agrees to pay a-rate equal to the rates specified in paragraph (a) above plus 5° from the date of default to the date of payment. -12- 4 -57 (e) Fair Rental Value. The Lease Payments coming due and payable during each Rental Period constitute the total rental for the Property for such Rental Period, and will be paid by the City in each Rental Period for and in consideration of the right of the use and occupancy of, and the continued quiet use and enjoyment of the Property during each Rental Period. The parties hereto have agreed and determined that the total Lease Payments due during each Rental Period are not in excess of the fair rental value of the Property during such Rental Periods. In making this determination, consideration has been given to the estimated fair market value of the Property, the estimated replacement cost of the Property, the uses and purposes which may be served by the Property and the benefits therefrom which will accrue to the City and the general public. (f) Source of Payments, Budget and Appropriation. The Lease Payments are payable from any source of legally available funds of the City, subject to the provisions of Sections 6.1, 6.3 and 9.1. The City covenants to take such action as may be necessary to include all Lease Payments in each of its annual budgets during the Term of this Lease Agreement and to make the necessary annual appropriations for all such Lease Payments. The covenants on the part of the City herein contained constitute duties imposed by law and it is the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City. (g) Allocation of Lease Payments. All Lease Payments received shall be applied first to the interest components of the Lease Payments due hereunder, then to the principal components of the Lease Payments due hereunder, but no such application of any payments that are less than the total rental due and owing shall be deemed a waiver of any default hereunder. (h) No Offsets. Notwithstanding any dispute between the Authority, or Agnees as the Authority's assignee, and the City, the City shall make all Lease Payments when due without deduction or offset of any kind and shall not withhold any Lease Payments pending the final resolution of such dispute. (i) Assignment Agreements. The City understands and agrees that all Lease Payments have been assigned by the Authority to the ssi es under the Assignment Agreements executed concurrently herewith, and the City hereby assents to such assignment. The Authority hereby directs the City, and the City hereby agrees, to pay to the Assignees (or to its assignees as directed pursuant to Section 7.4 hereof) all payments payable by the City under this Section 4.3 and all amounts payable by the City under Article IX. Lease Payments shall be paid to the Assignees as follows: Payments to WAPF by check (by overnight delivery only to this address): Payments to WAPF by wire: Payments to CB by check (by overnight delivery only toto this -13- 4 -58 Payments to CB bh wire: Payments to COPE by check (by overnight delivery only to this address ; Payments to COPF by wire• Section 4.4. Ouiet Enjoyment. Throughout the Term of this Lease Agreement, the Authority will provide the City with quiet use and enjoyment of the Property and the City will peaceably and quietly have and hold and enjoy the Property, without suit, trouble or hindrance from the Authority, except as expressly set forth in this Lease Agreement. The Authority will, at the request of the City and at the City's cost, join in any legal action in which the City asserts its right to such possession and enjoyment to the extent the Authority may lawfully do so. Notwithstanding the foregoing, the Authority and the ssi nees have the right to inspect the Property as provided in Sections 5.12(c) and 7.2. Section 4.5. Title. At all times during the Term of this Lease Agreement, the City shall hold title to the Property, including all additions which comprise fixtures, repairs, replacements or modifications thereto, subject to Permitted Encumbrances and subject to the provisions of Section 7.2. Upon the termination of this Lease Agreement (other than under Section 8.2(b) hereof), all right, title and interest of the Authority in and to the Property shall be transferred to and vested in the City. Upon the payment in full of all Lease Payments allocable to the Property, or upon the deposit by the City of security for such Lease Payments as provided in Section 9.1, all right, title and interest of the Authority in and to the Property shall be transferred to and vested in the City. The Authority agrees to take any and all steps and execute and record any and all documents reasonably required by the City to consummate any such transfer. Section 4.6. Release of Excess Property. The City may, at any time and from time to time, release any portion of the Property (the "Released Property') from the Lease, with the prior written consent of the Assignees, which consent shall be at the Asi I sole discretion, and upon satisfaction of all of the following requirements which are conditions precedent to such release: (a) The City shall certify to the Authority and the Assignees that no Event of Default has occurred and is continuing, and no event giving rise to an abatement of Lease Payments under Section 6.3 has occurred or is continuing with respect to the Property to be remaining following release of the Released Property; (b) The City shall file with the Authority and the ssi nees and cause to be recorded in the office of the Orange County Recorder, an amendment to this Lease Agreement which deletes the Released Property from the description of the Property; (c) The City shall file with the Authority and the Assigr�ee . a written certificate of the City stating the City's determination that the estimated value of the real property which will remain leased under this Lease Agreement following such release is at least equal to the original -14- 4-59 principal components of the Lease Payments and upon request of the Assignees, the City shall provide to the Assignees additional information and documents to evidence the value of the remaining portion of the Property; (d) The City shall file with the Authority and the Assignees a written certificate of the City stating the City's determination that the estimated fair rental value, for each remaining Rental Period and in the aggregate, of the Property remaining after release of the Released Property is at least equal to the remaining Lease Payments for each remaining Rental Period and in the aggregate; and (e) The City shall file with the Authority and the ssi ees such other information, documents and instruments as the Authority or the i nees shall reasonably request, including (if requested by the Assignees) evidence of the insurable value of the Property to be remaining following release of the Released Property, indicating that such value is in excess of the then unpaid principal component of the Lease Payments and such endorsements to the title policy delivered on the Closing Date. Upon the satisfaction of all such conditions precedent, the Term of this Lease Agreement will thereupon end as to the Released Property. The City is not entitled to any reduction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such release. The Authority and the City shall execute, deliver and cause to be recorded all documents required to discharge this Lease Agreement of record against the Released Property. Section 4.7. Substitution of Property. (a) In the event of damage or destruction of the Property due to earthquake or other uninsured casualty for which rental interruption insurance is not available or in the event that following the condemnation of all or a portion of the Property the fair rental value of the Property remaining after such condemnation is less than the remaining Lease Payments due under this Lease Agreement, the City shall substitute under the Site and Facility Lease and this Lease Agreement one or more parcels of unimpaired and unencumbered real property, the fair rental value of which, for each remaining Rental Period and in the aggregate, shall be at least equal to the remaining Lease Payments hereunder. (b) If for any reason the City is unable to so substitute real property for the Property with a fair rental value at least equal to the remaining Lease Payments hereunder, the City shall use its best efforts to obtain other financing in an amount necessary to prepay the principal component of the Lease Payments not supported by the fair rental value of the substituted property, if any. -15- 4 -60 ARTICLE V MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS Section 5.1. Maintenance, Utilities, Taxes and Assessments. Throughout the Term of this Lease Agreement, as part of the consideration for the rental of the Property, all improvement, repair and maintenance of the Property are the sole responsibility of the City, and the City will pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the Lease Payments herein provided, the Authority agrees to provide only the Property, as hereinbefore more specifically set forth. The City waives the benefits of subsections 1 and 2 of Section 1932, Section 1933(4) and Sections 1941 and 1942 of the California Civil Code, but such waiver does not limit any of the rights of the City under the terms of this Lease Agreement. The City will pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Authority or the City affecting the Property or the respective interests or estates therein; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City is obligated to pay only such installments as are required to be paid during the Term of this Lease Agreement as and when the same become due. The City may, at the City's expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City that, in its reasonable opinion, by nonpayment of any such items the interest of the Authority in the Property will be materially endangered or the Property or any part thereof will be subject to loss or forfeiture, in which event the City will promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority. The City shall promptly notify the Assignees of any tax, assessment, utility or other charge it elects to contest. Section 5.2. Modification of Property. The City has the right, at its own expense, to make additions, modifications and improvements to the Property or any portion thereof. All additions, modifications and improvements to the Property will thereafter comprise part of the Property and become subject to the provisions of this Lease Agreement. Such additions, modifications and improvements may not in any way damage the Property, or cause the Property to be used for purposes other than those authorized under the provisions of state and federal law; and the Property, upon completion of any additions, modifications and improvements made thereto under this Section, must be of a value which is not substantially less than the value thereof immediately prior to the making of such additions, modifications and improvements. Section 5.3. Public Liability Insurance. The City shall maintain or cause to be maintained throughout the Term of this Lease Agreement a standard comprehensive general liability insurance policy or policies in protection of the City, the Assignees and their respective members, officers, agents, employees and assigns. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Property. Such policy or policies must provide coverage with limits of at least $1,000,000 per occurrence, $3,000,000 in the aggregate, for bodily injury and property damage coverage, and -16- 4 -61 excess liability umbrella coverage of at least $5,000,000, and in all events in form and amount (including any deductibles) satisfactory to the Assignees. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, with ssi nees' prior written consent, a self insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the proceeds of such liability insurance toward extinguishment or satisfaction of the liability with respect to which such proceeds have been paid. Section 5.4. Casualty Insurance. The City will procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease Agreement, casualty insurance against loss or damage to all buildings situated on the Property and owned by the City, in an amount at least equal to the greater of the replacement value of the insured buildings and the aggregate principal amount of the Lease Payments outstanding, with a lender's loss payable endorsement. Such insurance must, as nearly as practicable, cover loss or damage by all "special form" perils. Such insurance shall be subject to a deductible of not to exceed $250,000. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, with the ees' prior written consent, a self insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the Net Proceeds of such insurance as provided in Section 6.2. Section 5.5. Rental Interruption Insurance. The City will procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease Agreement, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the Property and the improvements situated thereon as a result of any of the hazards covered in the insurance required by Section 5.4, in an amount at least equal to the maximum Lease Payments coming due and payable during any future 24 month period. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance; provided that such rental interruption insurance shall not be self- insured by the City. The City will apply the Net Proceeds of such insurance towards the payment of the Lease Payments allocable to the insured improvements as the same become due and payable. Section 5.6. Worker's Compensation Insurance. If required by applicable California law, the City shall carry worker's compensation insurance covering all employees on, in, near or about the Property and, upon request, shall furnish to the Authority certificates evidencing such coverage throughout the Term of this Lease Agreement. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including a self insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. Section 5.7. Recordation Hereof; Title Insurance. On or before the Closing Date, the City shall, at its expense, (a) cause this Lease Agreement, the Site and Facility Lease and the Assignment Agreements, or a memorandum hereof or thereof in form and substance approved by Bond Counsel, to be recorded in the office of the Orange County Recorder with respect to the Property, and (b) obtain a CLTA title insurance policy insuring the Assignees' interests in the leasehold estate established under the Site and Facility Lease and hereunder in the Property, subject only to Permitted Encumbrances, in an amount equal to the original principal components of the Lease Payments. The City will apply the Net Proceeds of such insurance as provided in Section 6.2. -17- 4-62 Section 5.5. Insurance Net Proceeds: Form of Policies. All insurance policies (or riders) required by this Article V and provided by third party insurance carriers shall be taken out and maintained with responsible insurance companies organized under the laws of one of the states of the United States and qualified to do business in the State, and shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to the insured parties at least ten days before the cancellation or revision becomes effective. Each insurance policy or rider required by Sections 5.3, 5.4 and 5.5 and provided by third party insurance carriers shall name the City and the i s as insured parties and the Assignees as loss payees and shall include a lender's loss payable endorsement for the benefit of the Assignees. In the case of coverage pursuant to Section 5.3, the Authority and the Assignees shall be added as an additional insureds. Prior to the Closing Date, the City will deposit with the Assignees policies (and riders and endorsements, if applicable) evidencing any such insurance procured by it, or a certificate or certificates of the respective insurers stating that such insurance is in full force and effect. Before the expiration of any such policy (or rider), the City will furnish to the Assignees evidence that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V unless such insurance is no longer obtainable, in which event the City shall notify the ssi nees of such fact. Section 5.9. Installation of City's Personal Property. The City may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed other items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the City, in which the Authority has no interest, and may be modified or removed by the City at any time. The City must repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items. Nothing in this Lease Agreement prevents the City from purchasing or leasing items to be installed under this Section under a lease or conditional sale agreement, or subject to a vendor's lien or security agreement, as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest may attach to any part of the Property. Section 5.10. Liens. The City will not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Property, other than as herein contemplated and except for such encumbrances as the City certifies in writing to the Assignees do not materially and adversely affect the leasehold estate in the Property hereunder and for which the Assignees provides its prior written approval, which approval shall be at Assignees' sole discretion. Except as expressly provided in this Article V, the City will promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim, for which it is responsible, if the same shall arise at any time. The City will reimburse the Assignees for any expense incurred by it in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim. Section 5.11. Advances. If the City fails to perform any of its obligations under this Article V, the Authority may take such action as may be necessary to cure such failure, including the advancement of money, and the City shall be obligated to repay all such advances as additional rental hereunder, with interest at the rate set forth in Section 43(c). Section 5.12. Environmental Covenants. (a) Compliance with Laws, No Hazardous Substances. The City will comply with all Applicable Environmental Laws with respect to the Property and will not use, store, generate, treat, transport, or dispose of any Hazardous Substance thereon or in a manner that would cause any Hazardous Substance to later flow, migrate, leak, leach, or otherwise come to rest on or in the Property. -18- 4-63 (b) Notification of Assignees, The City will transmit copies of all notices, orders, or statements received from any governmental entity concerning violations or asserted violations of Applicable Environmental Laws with respect to the Property and any operations conducted thereon or any conditions existing thereon to the , and the City will notify the ss' a in writing immediately of any release, discharge, spill, or deposit of any Hazardous Substance that has occurred or is occurring that in any way affects or threatens to affect the Property, or the people, structures, or other property thereon, provided that no such notification shall create any liability or obligation on the part of the s i ees. (c) Access for Inspection. The City will permit the Assignees, its agents, or any experts designated by the Assignees to have full access to the Property during reasonable business hours for purposes of such independent investigation of compliance with all Applicable Environmental Laws, provided that the ssi nees has no obligation to do so, or any liability for any failure to do so, or any liability should it do so. Section 5.13. City Consent to AsSignment Agreements. The Authority's rights under this Lease Agreement (excluding the right to receive notices, the right to reimbursement of costs and to indemnification), including the right to receive and enforce payment of the Lease Payments, and the Site and Facility Lease, are being assigned to the ss' ees pursuant to the Assignment Agreements. The City hereby consents to such assignment and to any additional assignment of such rights by the Assignees or its assignees. The City agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements, which may be reasonably requested by the ees or its assignees to protect their interests in the Property and in this Lease Agreement. -19- 4 -64 ARTICLE VI EMINENT DOMAIN; USE OF NET PROCEEDS Section 6.1. Eminent Domain. If all of the Property shall be taken permanently under the power of eminent domain or sold to a governmental entity threatening to exercise the power of eminent domain, the Term of this Lease Agreement shall cease as of the day possession shall be so taken. If less than all of the Property shall be taken permanently, or if all of the Property or any part thereof shall be taken temporarily under the power of eminent domain, (1) this Lease Agreement shall continue in full force and effect and shall not be terminated by virtue of such taking and the parties waive the benefit of any law to the contrary, and (2) there shall be a partial abatement of Lease Payments in an amount equal to the application of the Net Proceeds of any eminent domain award to the prepayment of the Lease Payments hereunder, in an amount to be agreed upon by the City and the ees such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portion of the Property. Section 6.2. Application of Net Proceeds (a) From Insurance Award. (i) Any Net Proceeds of insurance against damage to or destruction of any part of the Property collected by the City in the event of any such damage or destruction shall be deposited by the City promptly upon receipt thereof in a special fund with the Assignees designated as the "Insurance and Condemnation Fund." (ii) Within ninety (90) days following the date of such deposit, the City shall determine and notify the Authority and the Assignees in writing of its determination either (A) that the replacement, repair, restoration, modification or improvement of the Property is not economically feasible or in the best interest of the City and the Net Proceeds, together with other moneys available therefor, are sufficient to cause the prepayment of the principal components of all unpaid Lease Payments pursuant to Section 9.3 hereof, or (B) that all or a portion of such Net Proceeds are to be applied to the prompt replacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Property and the fair rental value of the Property following such repair, restoration, replacement, modification or improvement will at least equal the unpaid principal component of the Lease Payments. (iii) In the event the City's determination is as set forth in clause (A) of subparagraph (ii) above, such Net Proceeds shall be promptly applied to the prepayment of Lease Payments and other amounts pursuant to Section 9.3 of this Lease Agreement; provided, however, that in the event of damage or destruction of the Property in full, such Net Proceeds may be so applied only if sufficient, together with other moneys available therefor, to cause the prepayment of the principal components of all unpaid Lease Payments, all accrued and unpaid interest, Prepayment Premiums described in Section 9.2, and all other costs related to such prepayments pursuant to Section 9.3 of this Lease Agreement and otherwise such Net Proceeds shall be applied to the prompt replacement, repair, restoration, modification or improvement of the Property; provided further, however, that in the event of damage or destruction of the Property in part, such Net Proceeds may be applied to the prepayment of Lease Payments only if the resulting Lease Payments following such prepayment from Net Proceeds represent fair consideration for the remaining portions of the Property and otherwise such Net Proceeds shall be applied to the prompt replacement, repair, -20- 4 -65 restoration, modification or improvement of the Property, evidenced by a certificate signed by a City Representative. (iv) In the event the City's determination is as set forth in clause (B) of subparagraph (ii) above, such Net Proceeds shall be applied to the prompt replacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Property by the City, and until the Property has been restored to its prior condition, the City shall not place any lien or encumbrance on the Property that is senior to this Lease Agreement without the prior written consent of the ssi nee , at its sole discretion. (b) From Eminent Domain Azoard. If all or any part of the Property shall be taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain) the Net Proceeds therefrom shall be deposited by the City in the Insurance and Condemnation Fund and shall be applied and disbursed as follows: (i) If the City has given written notice to the Authority and the Assignees of its determination that (A) such eminent domain proceedings have not materially affected the operation of the Property or the ability of the City to meet any of its obligations with respect to the Property under this Lease Agreement, and (B) such proceeds are not needed for repair or rehabilitation of the Property, the City shall so certify to the Authority and the Assignees, and the City shall credit such proceeds towards the prepayment of the Lease Payments pursuant to Section 9.3 of this Lease Agreement. (ii) If the City has given written notice to the Authority and the Assignees of its determination that (A) such eminent domain proceedings have not materially affected the operation of the Property or the ability of the City to meet any of its obligations with respect to the Property under this Lease Agreement, and (B) such proceeds are needed for repair, rehabilitation or replacement of the Property, the City shall so certify to the Authority and the ssi nees, and the City shall apply such amounts for such repair or rehabilitation. (iii) If (A) less than all of the Property shall have been taken in such eminent domain proceedings or sold to a government threatening the use of eminent domain powers, and if the City has given written notice to the Authority and the Assignees of its determination that such eminent domain proceedings have materially affected the operation of the Property or the ability of the City to meet any of its obligations with respect to the Property under the Lease Agreement or (B) all of the Property shall have been taken in such eminent domain proceedings, then the City shall credit such proceeds towards the prepayment of the Lease Payments pursuant to Section 9.3 of this Lease Agreement. (iv) In making any determination under this Section 6.2(b), the City may, but shall not be required to, obtain at its expense, the report of an independent engineer or other independent professional consultant, a copy of which shall be filed with the Authority and the Assignees. Any such determination by the City shall be final. (c) From Title Insurance. The Net Proceeds from a title insurance award shall be deposited by the City in the Insurance and Condemnation Fund and credited towards the prepayment of Lease Payments required to be paid pursuant to Section 9.3 of this Lease Agreement. Section 6.3. Abatement of Lease Payments in the Event of Damage or Destruction. Lease Payments shall be abated during any period in which, by reason of damage or destruction, there is substantial interference with the use and occupancy by the City of the Property or any -21- 4-66 portion thereof to the extent to be agreed upon by the City and the Assignees. The parties agree that the amounts of the Lease Payments under such circumstances shall not be less than the amounts of the unpaid Lease Payments as are then set forth in Exhibit C, unless such unpaid amounts are determined to be greater than the fair rental value of the portions of the Property not damaged or destroyed, based upon an appropriate method of valuation, in which event the Lease Payments shall be abated such that they represent said fair rental value. Such abatement shall continue for the period commencing with such damage or destruction and ending with the substantial completion of the work of repair or reconstruction as evidenced by a Certificate of a City Representative to the Authority and the Assignees. In the event of any such damage or destruction, this Lease Agreement shall continue in full force and effect and the City waives any right to terminate this Lease Agreement by virtue of any such damage and destruction. Notwithstanding the foregoing, there shall be no abatement of Lease Payments under this Section 6.3 to the extent that (a) the proceeds of rental interruption insurance or (b) amounts in the Insurance and Condemnation Fund are available to pay Lease Payments which would otherwise be abated under this Section 6.3, it being hereby declared that such proceeds and amounts constitute special funds for the payment of the Lease Payments. _22_ 4 -67 ARTICLE VII OTHER COVENANTS OF THE CITY Section 7.1. Disclaimer of Warranties. THE AUTHORITY MAKES NO AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE CITY OF THE PROPERTY OR ANY PORTION THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROPERTY OR ANY PORTION THEREOF. THE CITY ACKNOWLEDGES THAT THE CITY LEASES THE PROPERTY AS -IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. In no event is the Authority liable for incidental, indirect, special or consequential damages, in connection with or arising out of this Lease Agreement for the existence, furnishing, functioning or use of the Property by the City. Section 7.2. Access to the Property; Grant and Conveyance of Right of Entry. The City agrees that the Authority, and the Authority's successors or assigns, has the right at all reasonable times, following at least 48 hours written notice provided to the City, to enter upon and to examine and inspect (to the extent permitted by law and public policy) the Property or any part thereof. The City further agrees that the Authority, and the Authority's successors or assigns shall have such rights of access to the Property or any component thereof, following at least 48 hours written notice provided to the City, as may be reasonably necessary to cause the proper maintenance of the Property if the City fails to perform its obligations hereunder. Neither the Authority nor any of its assigns has any obligation to cause such proper maintenance. The City further grants, conveys and confirms to the Authority, for the use, benefit and enjoyment of the Authority, its successors and assigns in interest to the Property, including the Assignees and its sublessees, and their respective employees, invitees, agents, independent contractors, patrons, customers, guests and members of the public visiting the Property, a right of entry which shall be irrevocable for the Term of this Lease Agreement over, across and under the property of the City adjacent to the Property to and from the Property for the purpose of: (a) ingress, egress, passage or access to and from the Property by pedestrian or vehicular traffic; (b) installation, maintenance and replacement of utility wires, cables, conduits and pipes; and (c) other purposes and uses necessary or desirable for access to and from and for operation and maintenance of the Property. Section 7.3. Release and Indemnification Covenants. The City hereby indemnifies the Authority, the Assignees and their respective directors, officers, agents, employees, successors and assigns against all claims, losses and damages, including legal fees and expenses, arising out of (a) the use, maintenance, condition or management of, or from any work or thing done on the Property by the City or the City's employees, agents, contractors, invitees or licensees, (b) any breach or default on the part of the City in the performance of any of its obligations under this Lease Agreement, (c) any negligence or willful misconduct of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Property, (d) any intentional misconduct or negligence of any sublessee of the City with respect to the Property, (e) the acquisition, construction, improvement and equipping of the Property, (f) the clean -up of any Hazardous Substances or toxic wastes from the Property, or (g) any claim alleging violation of any Applicable Environmental Laws, or the authorization of payment of the costs thereof. No indemnification is made under this Section 7.3 or elsewhere in this Lease Agreement for willful misconduct or gross negligence under this Lease Agreement by the Authority, the Assignees or their respective officers, agents, employees, successors or assigns. The indemnification hereunder shall continue in full force and effect notwithstanding the full payment of all -23- obligations under this Lease Agreement or the termination of the Term of this Lease Agreement for any reason. The City and the Authority each agree to promptly give notice to each other and the ssi nees of any claim or liability hereby indemnified against following learning thereof. Section 7.4. Assignment by the Authority. The Authority's rights, title and interests under this Lease Agreement, including the right to receive and enforce payment of the Lease Payments to be made by the City hereunder, have been assigned to the si ; provided that the Authority's rights to indemnification and payment or reimbursement for any costs or expenses hereunder have been retained by the Authority to the extent such rights accrue to the Authority and shall have been assigned to the i e s to the extent such rights accrue to the Assignees. The City hereby consents to such assignment. Whenever in this Lease Agreement any reference is made to the Authority, such reference shall be deemed to refer to the Assignees (including its assignees). The Assignees may make additional assignments of its rights, title and interests herein, but no such assignment will be effective as against the City unless and until the Assignees has filed with the City at least five (5) Business Days' prior written notice thereof and an executed copy of an investor's letter addressed to the City and the Authority substantially in the form of the letter delivered by the Assignees on the Closing Date. The City shall pay all Lease Payments hereunder to the ssi nees, as provided in Section 43(h) hereof, or under the written direction of the assignee named in the most recent assignment or notice of assignment filed with the City. During the Term of this Lease Agreement, the City will keep a complete and accurate record of all such notices of assignment. Section 7.5. Assignment and Subleasing by the City. This Lease Agreement may not be assigned, mortgaged, pledged or transferred by the City. The City may sublease the Property, or any portion thereof, with the prior written consent of the Assignees, at the Ajsi� nees' sole discretion, subject to all of the following conditions: (a) This Lease Agreement and the obligation of the City to make Lease Payments hereunder shall remain obligations of the City, and any sublease shall be subject and subordinate to this Lease Agreement. (b) The City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority and the Assignees a true and complete copy of such sublease. (c) No such sublease by the City may cause the Property to be used for a purpose other than as may be authorized under the provisions of the laws of the State. (d) The City shall furnish the Authority and the Assignees with a written opinion of Bond Counsel stating that such sublease does not cause the interest components of the Lease Payments to become includable in gross income for purposes of federal income taxation or to become subject to personal income taxation by the State. (e) Any such sublease shall be subject and subordinate in all respects to the Site and Facility Lease and this Lease Agreement. Notwithstanding the foregoing, in connection with any sublease entered into for financing purposes, the principal component of the then remaining Lease Payments plus the principal component of the sublease payments shall not exceed the fair market value of the Property. Section 7.6. Amendment of Lease Agreement. This Lease Agreement may be amended with the prior written consent of the Authority and the Assignees (at the Assignees' sole -24- 4-69 discretion) provided such amendment does not, in the Assignees' sole judgment, adversely affect the ssi nees. Section 7.7. Tax Covenants. (a) Generally. The City will not take any action or permit to be taken any action within its control which would cause or which, with the passage of time if not cured would cause, the interest components of the Lease Payments to become includable in gross income of the Assignees for federal income tax purposes. (b) Private Activity Bond Limitation. The City will ensure that the proceeds of the Lease Payments are not so used as to cause the City's obligations hereunder to satisfy the private business tests of Section 141(b) of the Tax Code or the private loan financing test of Section 141(c) of the Tax Code. (c) Federal Guarantee Prohibition. The City will not take any action or permit or suffer any action to be taken if the result of the same would be to cause the Lease Payments to be "federally guaranteed" within the meaning of Section 149(b) of the Tax Code. (d) No Arbitrage. The City will not take, or permit or suffer to be taken, any action with respect to the proceeds of the Lease Payments which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date would have caused the Lease Payments to be "arbitrage bonds" within the meaning of Section 148(a) of the Tax Code. (e) Arbitrage Rebate. The City will take any and all actions necessary to assure compliance with Section 148(f) of the Tax Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Lease Payments. Section 7.8. Financial Statements: Budgets. Within two hundred ten (210) days following the end of each Fiscal Year of the City during the Term of this Lease Agreement, the City will provide the Authority and the Assignees with a copy of its audited financial statements for such Fiscal Year. Such audited financial statements shall include the City's Comprehensive Annual Financial Report ( "CAFR "), including such information as is required by applicable Government Accounting Standards Board pronouncements and applicable State law. Within thirty (30) days of the end of each fiscal year, the City will provide the Assignees with a copy of its annual budget and any interim updates or modifications to such budget. The City hereby agrees to provide the Assignees with such other information as may be reasonably requested by the Assignees. Section 7.9. Records and Accounts. The City covenants and agrees that it shall keep proper books of record and accounts of its operations, in which complete and correct entries shall be made of all transactions relating to the City. Said books and records shall at all reasonable times be subject to the inspection of the Assignees upon 72 hours' prior notice. Section 7.10. Observance of Laws and Regulations. The City will well and truly keep, observe and perform or cause to be kept, observed and performed all valid and lawful . obligations or regulations now or hereafter imposed on it by contract, or prescribed by any law of the United States, or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of any and every right, privilege or franchise now owned or hereafter acquired and enjoyed by the City, including the City's right to exist and carry on business as a municipal corporation, to the end that such rights, privileges and franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired. -25- 4-70 Section 7.11. Notices. During the Term of this Lease Agreement, the City shall provide to the Assignees: (a) immediate notice by telephone, promptly confirmed in writing, of any event, action or failure to take any action which constitutes an Event of Default under this Lease Agreement, together with a detailed statement by a City Representative of the steps being taken by the City to cure the effect of such Event of Default. (b) prompt written notice of any Material Litigation, or any investigation, inquiry or similar proceeding by any Governmental Authority. (c) with reasonable promptness, such other information respecting the City, and the operations, affairs and financial condition of the City as the i nees may from time to time reasonably request. -26- 4 -71 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES Section 8.1. Events of Default Defined. Any one or more of the following events constitutes an Event of Default hereunder: (a) Failure by the City to pay any Lease Payment or other payment required to be paid hereunder at the time specified herein. (b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed hereunder, other than as referred to in the preceding clause (a) of this Section, for a period of 30 days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Assignees. However, if in the reasonable opinion of the City the failure stated in the notice can be corrected, but not within such 30 -day period, the Authority and the Assi nees shall not unreasonably withhold their consent to an extension of such time (for a period not to exceed 60 days) if corrective action is instituted by the City within such 30 -day period and diligently pursued until the default is corrected. (c) The filing by the City of a voluntary petition in bankruptcy, or failure by the City promptly to lift any execution, garnishment or attachment, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of the Federal Bankruptcy Code, as amended, or under any similar federal or State act now existing or which may hereafter be enacted. (d) Any statement, representation or warranty made by the City in or pursuant to this Lease Agreement or its execution, delivery or performance shall have been false, incorrect, misleading or breached in any material respect on the date when made. (e) Any default occurs under any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which the City is an obligor, if such default (i) arises under any other agreement for borrowing money, lease financing of property or provision of credit provided by the Assignees or any affiliate of the AAggnees or (ii) arises under any obligation under which there is outstanding, owing or committed an aggregated amount in excess of $500,000. (f) Any default by the City to observe any covenant, condition or agreement on its part to be observed or performed under the Site and Facility Lease. (g) Any court of competent jurisdiction shall find or rule that the Site and Facility Lease or this Lease Agreement is not valid or binding against the City. Section 8.2. Remedies on Default. Whenever any Event of Default has happened and is continuing, the Authority may exercise any and all remedies available under law or granted under this Lease Agreement; provided, however, that notwithstanding anything herein to the contrary, there shall be no right under any circumstances to accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable. Each and every covenant hereof to be kept and performed by the City is expressly made a condition and upon the breach thereof the Authority may exercise any and all rights granted hereunder; provided, that no termination of this Lease Agreement shall be effected either by operation of law or acts of the parties hereto, except only in the manner herein expressly _27_ 4 -72 provided. Upon the occurrence and during the continuance of any Event of Default, the Authority may exercise any one or more of the following remedies: (a) Enforcement of Payments Without Termination. If the Authority does not elect to terminate this Lease Agreement in the manner hereinafter provided for in subparagraph (b) hereof, the City agrees to and shall remain liable for the payment of all Lease Payments and the performance of all conditions herein contained and shall reimburse the Authority for any deficiency arising out of the re- leasing of the Property, or, if the Authority is unable to re -lease the Property, then for the full amount of all Lease Payments to the end of the Term of this Lease Agreement, but said Lease Payments and /or deficiency shall be payable only at the same time and in the same manner as hereinabove provided for the payment of Lease Payments hereunder, notwithstanding such entry or re -entry by the Authority or any suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re -entry or obtaining possession of the Property or the exercise of any other remedy by the Authority. The City hereby irrevocably appoints the Authority as the agent and attorney -in -fact of the City to enter upon and re -lease the Property upon the occurrence and continuation of an Event of Default and to remove all personal property whatsoever situated upon the Property, to place such property in storage or other suitable place in Orange County for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising or occasioned by any such entry upon and re- leasing of the Property and the removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to re -lease the Property in the event of such re -entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re- leasing shall constitute a surrender or termination of this Lease Agreement irrespective of the term for which such re- leasing is made or the terms and conditions of such re- leasing, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner hereinafter provided for in subparagraph (b) hereof. The City agrees to surrender and quit possession of the Property upon demand of the Authority for the purpose of enabling the Property to be re -let under this paragraph. Any rental obtained by the Authority in excess of the sum of Lease Payments plus costs and expenses incurred by the Authority for its services in re- leasing the Property shall be paid to the City. (b) Termination of Lease. If an Event of Default occurs and is continuing hereunder, the Authority at its option may terminate this Lease Agreement and re -lease all or any portion of the Property, subject to the Site and Facility Lease. If the Authority terminates this Lease Agreement at its option and in the manner hereinafter provided due to a default by the City (and notwithstanding any re -entry upon the Property by the Authority in any manner whatsoever or the re- leasing of the Property), the City nevertheless agrees to pay to the Authority all costs, loss or damages howsoever arising or occurring payable at the same time and in the same manner as is herein provided in the case of payment of Lease Payments and Additional Payments. Any surplus received by the Authority from such re- leasing shall be applied by the Authority to Lease Payments due under this Lease Agreement. Neither notice to pay rent or to deliver up possession of the premises given under law nor any proceeding in unlawful detainer taken by the Authority shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property, or of the remainder of the Term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Authority by such written notice. -2g- 4 -73 (c) Proceedings at Law or In Equity. If an Event of Default occurs and continues hereunder, the Authority may take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its rights hereunder. (d) Remedies under the Site and Facility Lease. If an Event of Default occurs and continues hereunder, the Authority may exercise its rights under the Site and Facility Lease. Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon the occurrence of any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article VIII it shall not be necessary to give any notice, other than such notice as may be required in this Article VIII or by law. Section 8.4. Agreement to Pay Attorneys' Fees and Expenses. If either party to this Lease Agreement defaults under any of the provisions hereof and the nondefaulting party should employ attorneys (including in -house legal counsel) or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party the reasonable fees of such attorneys (including allocable costs and expenses of in -house legal counsel, if any) and such other expenses so incurred by the nondefaulting party. Section 8.5. No Additional Waiver Implied by One Waiver. If any agreement contained in this Lease Agreement is breached by either party and thereafter waived by the other party, such waiver is limited to the particular breach so waived and will not be deemed to waive any other breach hereunder. Section 8.6. Assignees to Exercise R ghts. Such rights and remedies as are given to the Authority under this Article VIII have been assigned by the Authority to the Assignees, to which assignment the City hereby consents. Such rights and remedies shall be exercised solely by the Assignees. -29- 4-74 ARTICLE IX PREPAYMENT OF LEASE PAYMENTS Section 9.1. Security Deposit. Notwithstanding any other provision of this Lease Agreement, the City may on any date secure the payment of the Lease Payments in whole or in part by depositing with the Assignees or a fiduciary reasonably satisfactory to the Assignees, in trust, an amount of cash, which shall be held in a segregated trust or escrow fund under a trust or escrow agreement that is in form and content acceptable to the , which cash so held is either (a) sufficient to pay such Lease Payments, including the principal and interest components thereof, in accordance with the Lease Payment schedule set forth in Exhibit C, or (b) invested in whole in non - callable Federal Securities maturing not later than the dates such funds will be required to make Lease Payments or any prepayment in an amount which is sufficient, in the opinion of an independent certified public accountant (which opinion must be in form and substance, and with such an accountant, acceptable to the Assignees and addressed and delivered to the Assignees), together with interest to accrue thereon and without reinvestment and together with any cash which is so deposited, to pay such Lease Payments when due under Section 43(a) or when due on any optional prepayment date under Section 9.2, as the City instructs at the time of said deposit; provided, however, that at or prior to the date on which any such security deposit is established, the City shall deliver to the Assignees an opinion of Bond Counsel (in form and substance acceptable to the Assignees) to the effect that any such security deposit will not adversely affect the excludability of the interest component of Lease Payments from gross income of the ssi nees for federal income tax purposes. In the event of a security deposit under this Section with respect to all unpaid Lease Payments, (i) the Term of this Lease Agreement shall continue, (ii) all obligations of the City under this Lease Agreement, and all security provided by this Lease Agreement for said obligations, shall thereupon cease and terminate, excepting only (A) the obligation of the City to make, or cause to be made, all of the Lease Payments from such security deposit and, to the extent of any deficiency, as rent payable from other legally available funds of the City, and (B) the release and indemnification obligations of the City under subparagraphs (f) and (g) of Section 7.3, and (iii) under Section 4.5, the Authority's leasehold interest in the Property will vest in the City on the date of said deposit automatically and without further action by the City or the Authority. The City hereby grants a first priority security interest in and the lien on said security deposit and all proceeds thereof in favor of the Assignees. Said security deposit shall be deemed to be and shall constitute a special fund for the payment of Lease Payments in accordance with the provisions of this Lease Agreement and, notwithstanding anything to the contrary herein, Lease Payments therefrom shall not be subject to abatement under Section 6.3 hereof to the extent payable from the funds held by the Assignees or the fiduciary as described in the first sentence of this Section 9.1. Section 9.2. Optional Prepayment. Section 9.3. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain. The City shall be obligated to prepay the unpaid principal components of the Lease Payments in whole or in part in such order of prepayment as shall be selected by the City on -30- 4-75 any date, together with any accrued and unpaid interest, , if applicable7 :_ the _...__.° __,_..'_ ed :_ S...:e_ "2 and any other costs related to such prepayment, from and to the extent of any proceeds of insurance award or condemnation award with respect to the Property to be used for such purpose under Section 6.2. The City and the Authority hereby agree that such proceeds, to the extent remaining after payment of any delinquent Lease Payments, shall be credited towards the City's obligations under this Section 9.3. -31- 4 -76 ARTICLE X MISCELLANEOUS Section 10.1. Notices. Any notice, request, complaint, demand or other communication under this Lease Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by facsimile transmission or other form of telecommunication, at its number set forth below. Notice shall be effective either (a) upon transmission by facsimile transmission or other form of telecommunication, (b) 48 hours after deposit in the United States of America first class mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The Authority, the City and the Assignees may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder. If to the City: City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Attention: Executive Director, Finance and Management Services Phone: (714) 647-5295 If to the Authority: Santa Ana Financing Authority c/o City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Finance and Management Services Phone: (714) 647-5295 If toI) APF: Western Alliance Bancorporation One East Washington Street, 14`x' Floor Phoenix, AZ 85004 Attention: Senior Vice President Municipal Investment Manager Phone: (602) 797 -3634 Imo: Compass Bank, an Alabama banking corporation Attention: Phone: (_) — If to COPF: Capital One Public Funding, LLC 275 Broadhollow Road Melville, NY 11747 Attention: Phone: (_) _- Section 10.2. Binding Effect. This Lease Agreement inures to the benefit of and is binding upon the Authority, the City and their respective successors and assigns. Section 10.3. Severability. If any provision of this Lease Agreement is held invalid or unenforceable by any court of competent jurisdiction, such holding will not invalidate or render unenforceable any other provision hereof. Section 10.4. Net - net -net Lease. This Lease Agreement is a "net- net -net lease" and the City hereby agrees that the Lease Payments are an absolute net return to the Authority, free and clear of any expenses, charges or set -offs whatsoever. -32- 4-77 Section 10.5. Further Assurances and Corrective Instruments. The Authority and the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby leased or intended to be so or for carrying out the expressed intention of this Lease Agreement. Section 10.6. Execution in Counterparts. This Lease Agreement may be executed in several counterparts, each of which is an original and all of which constitutes one and the same instrument. Section 10.7. Applicable Law. This Lease Agreement is governed by and construed in accordance with the laws of the State. Section 10.8. Captions. The captions or headings in this Lease Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or section of this Lease Agreement. -33- 4 -78 IN WITNESS WHEREOF, the Authority and the City have caused this Lease Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written. Attest: Attest: Name SANTA ANA FINANCING AUTHORITY By— Name Title Secretary CITY OF SANTA ANA City Clerk By— Name Title -34- 4 -79 EXHIBIT A DESCRIPTION OF THE SITE All that certain real property situated in Orange County, State of California, described as follows: E; ibit A Page 1 4 -80 The Facility consists of EXHIBIT B DESCRIPTION OF THE FACILITY Exhibit B 4 -81 EXHIBIT C -1 SCHEDULE OF LEASE PAYMENTS (payable to Western Alliance Public Financel Lease Payment Principal Interest Date Component Component 1/1/15 7/1/15 1/1/16 7/1/16 1/1/17 7/1/17 1/1/18 7/1/18 1/1/19 7/1/19 1/1/20 7/1/20 1/1/21 7/1/21 1/1/22 7/1/22 1/1/23 7/1/23 1/1/24 7/1/24 TOTAL (1) Applicable interest rate is % per annum. Exhibit C -1 4 -82 Total Lease Payment EXHIBIT C -2 SCHEDULE OF LEASE PAYMENTS movable to Compass Bank, an Alabama banking cornorationl Lease Total 1'a gilt i a Interest Lease Date Com oo nent Component Lit 7115 1116 7 1 7 1 7 1118 7115 1 1 1 7 1 1/1/20 7/1/20 !L11-21 71 L21 1122 71 22 1123 71 23 1124 71 24 TOTAL (71 Auolicable interest rate is % per annum Exhibit C -2 mew EXHIBIT C -3 SCHEDULE OF LEASE PAYMENTS (payable to Capital One Public Funding LLC Lase .'Fatal Payment Principal Interest Lease Date Component Com on Went Sri 1/1/15 7 1 1 7116 1 1 17 7117 1/1/18 7/1/18 1 1 19 7119 1 1 2 7 1 2 121 7/1/21 L/- 7L 22 1123 71 23 1124 71 24 1125 71 25 1126 7 1 2 laz2Z 7/1/27 1128 T T L (II Ag7licable interest rate is 3 75% per anngm Exhibit C -3 Me EXHIBIT CA SCHEDULE OF TOTAL LEASE PAYMENTS Lease Total Pa men Princi latu-UA Lease Date ComizQnQnt. Com on nent Payment 1 1 15 1116 7116 1 17 1/17 IZIJ-1-8 7118 1 1 1 7 1 1 1 1 7/1/20 1/1/21 7 1 1122 7 1 22 1123 7 1 23 11 24 7 1 24 1 1 2 1 2 1 26 71 26 1127 71 27 1 1 2 TOTAL Exhibit C -4 MOP I O EXHIBIT 6 MEMORANDUM OF LEASE AGREEMENT 4 -87 Merge Quint & Thinurig LLP 04/30/14 AFTER RECORDATION RETURN TO: Quint & Thimmig LLP 900 Larkspur Landing Circle, Suite 270 Larkspur, CA 94939 -1726 Attention: Brian D. Quint, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11928 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. MEMORANDUM OF LEASE AGREEMENT This MEMORANDUM OF LEASE AGREEMENT (this "Memorandum of Lease Agreement "), is entered into as of June 1, 2014, by and between the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the State of California, as lessor (the "Authority'), and the CITY OF SANTA ANA, a municipal corporation and chartered city organized and existing under the laws of the State of California, as lessee (the "City "), who agree as follows: Section 1. The Lease. The City leases from the Authority and the Authority leases to the City, certain real property described in Section 2 hereof, and the improvements situated upon said real property, upon the terms and conditions, and for the term, more fully set forth in the Lease Agreement, dated as of June 1, 2014, by and between the Authority, as lessor, and the City, as lessee (the "Lease Agreement "), all of the provisions of which are hereby incorporated into this Memorandum of Lease Agreement by reference. Section 2. Leased Premises; Term. The Authority leases, lets and demises unto the City and the City leases, hires and takes from the Authority, those certain parcels of real property situated in Orange County, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (collectively, the "Site "), and those certain improvements on the Site, more particularly described in Exhibit B attached hereto and made a part hereof (the "Facility "). The Lease Agreement is for a term commencing on the date of recordation of this Memorandum of Lease Agreement and ending on July 1, 2028, or such earlier or later date on which the Lease Payments (as defined in the Lease Agreement) are paid in full or provision has been made for such payment in accordance with the Lease Agreement. Section 3. Assignment Agreement of Lessor's Rights Under Lease Agreement. Pursuant to separate assignment agreeellts, each dated as of June 1, 2014, by and between the Authority and Western Alliance Public Finance compass Bank an Alabama-bariking corporation and Capital One Public Funding lamas assignees (collectively, the "Assignees "), recorded concurrently herewith, the Authority has assigned, transferred and delivered to the Assignees, all of its rights, title and interest in, to and under the Site and Facility Lease (as defined in the Lease Agreement) and the Lease Agreement. Section 4. Provisions Binding on Successors and Assigns. Subject to the provisions of the Lease Agreement relating to assignment and subletting, the Lease Agreement shall inure to the 19014.10 benefit of and shall be binding upon the Authority and the City and their respective successors and assigns, including the Assignees. Section 5. Purpose of Memorandum. This Memorandum of Lease Agreement is prepared for the purpose of recordation, and it in no way modifies the provisions of the Lease Agreement. Section 6. Execution. This Memorandum of Lease Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. -2- 4 -90 IN WITNESS WHEREOF, the Authority has caused this Memorandum of Lease Agreement to be executed in its corporate name by its duly authorized officers; and the City has caused this Memorandum of Lease Agreement to be executed in its name by its duly authorized officers, as of the date first above written. Attest: Name Attest: Name Secretary City Clerk SANTA ANA FINANCING AUTHORITY By — Name Title CITY OF SANTA ANA By Name Title -3- 4 -91 [NOTARY ACKNOWLEDGMENTS TO BE ATTACHED] 4 -92 1WM0011131 _1 DESCRIPTION OF THE SITE All that certain real property situated in Orange County, State of California, described as follows: Exhibit A Page 1 4 -93 The Facility consists of EXHIBIT B DESCRIPTION OF THE FACILITY Exhibit B 4 -94 EXHIBIT 7 ASSIGNMENT AGREEMENTS 4 -95 I O Quint & Thimmig LLP AFTER RECORDATION RETURN TO: Quint & Thimmig LLP 900 Larkspur Landing Circle, Suite 270 Larkspur, CA 94939 -1726 Attention: Brian D. Quint, Esq. 05/28/14 THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11922 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. ASSIGNMENT AGREEMENT (Compass Bank, an Alabama banking corporation) For Value Received, the SANTA ANA FINANCING AUTHORITY (the "Authority ") without recourse does hereby sell, assign and transfer to COMPASS BANK, an Alabama banking corportion (the "Assignee "), and its successors and assigns, (i) a portion of its rights, title and interest in and to the Lease Agreement, dated as of June 1, 2014, in the amounts shown on Exhibit A attached hereto, a memorandum of which has been recorded concurrently herewith, by and between the Authority, as sublessor, and the City of Santa Ana (the "City "), as sublessee (said Lease Agreement and any supplements, amendments, annexations, extensions or renewals thereof arereferred to hereinafter as the "Lease Agreement "), as well as its rights to enforce payment of Lease Payments (as defined in the Lease Agreement) when due or otherwise to protect its interests and exercise all remedies in the event of a default or termination by the City under the Lease Agreement; provided that the Authority's rights to indemnification and payment or reimbursement for any costs or expenses thereunder have been retained by the Authority to the extent such rights accrue to the Authority and shall have been assigned to the Assignee to the extent such rights accrue to the Assignee, (ii) except for the Authority's obligation under Section 4 thereof, all of its rights, title and interest in and to the Site and Facility Lease, dated as of June 1, 2014, which has been recorded concurrently herewith, by and between the City, as lessor, and the Authority, as lessee (the "Site and Facility Lease "), and (iii) all moneys, sums and amounts now due or hereinafter to become due under the Lease Agreement. The Site and Facility Lease and the Lease Agreement delivered to the Assignee are duly executed duplicate originals that comprise the entire writing, obligation and agreement between the Authority and the City respecting the leases made thereunder and the lease payments made therefor. The Authority represents and warrants as follows: (1) it has made no prior sale or assignment of any interest in the Site and Facility Lease and the Lease Agreement; (2) that the Lease Agreement and the Site and Facility Lease are genuine and in all respects are what they purport to be; and 19014.10 4 -97 (3) that the Assignee is not liable for and does not assume responsibility for the performance of any of the covenants, agreements, duties or obligations specified in the Lease Agreement to be kept, paid or performed by the Authority, with exception of such covenants, agreements, duties and obligations (if any) which are expressly made the responsibility of the Assignee under the Lease Agreement. The Authority further represents and warrants that as of the date of this Assignment Agreement, the Lease Agreement and the Site and Facility Lease are in full force and effect and the City is not in default of any of the terms set forth therein. By its acceptance of this Assignment Agreement, the Assignee represents and warrants (i) the price it has paid in consideration for assignment of the Site and Facility Lease and the Lease Agreement is $ ; (ii) that it reasonably expects to hold the Lease Agreement for its own account and does not presently expect to sell, assign, or otherwise transfer the Lease Agreement, subject to the Assignee's right to dispose of or otherwise deal with its property (including the Lease Agreement) as it determines to be in its best interests from time to time; and (iii) that it will treat the Lease Agreement as an investment for federal income tax purposes. This Assignment Agreement shall be construed and governed in accordance with the laws of the State of California applicable to contracts made and performed in the State of California. Any provision of this Assignment Agreement found to be prohibited by law shall be ineffective only to the extent of such prohibition, and shall not invalidate the remainder of this Assignment Agreement. This Assignment Agreement binds and inures to the benefit of the parties and their respective successors and assigns. In the event of litigation between the Authority and the Assignee arising under this Assignment Agreement, the prevailing party shall be entitled to recover from the other party all costs and expenses, including attorneys' fees which may be those of in -house counsel, incurred by the prevailing party in exercising any of its rights or remedies hereunder or enforcing any of the terms, conditions or provisions of this Assignment Agreement. The descriptions of the Site and the Facility which are the subject of the Site and Facility Lease and the Lease Agreement are set forth in Exhibits A and B attached hereto and by this reference incorporated herein. -2- • . This Assignment Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Dated as of June 1, 2014 Attest: Name Secretary ACCEPTANCE OF ASSIGNMENT: COMPASS BANK, an Alabama banking corporation, as Assignee By— Name Title SANTA ANA FINANCING AUTHORITY By Name Title -3- 4 -99 EXHIBIT A LEASE PAYMENTS ASSIGNED TO THE ASSIGNEE Lease Total Payment Principal Interest Lease Date Component Component Payment 1/1/15 7/1/15 1/1/16 7/1/16 1/1/17 7/1/17 1/1/18 7/1/18 1/1/19 7/1/19 1/1/20 7/1/20 1/1/21 7/1/21 1/1/22 7/1/22 1/1/23 7/1/23 1/1/24 7/1/24 TOTAL (1) Applicable interest rate is % per annum. Exhibit A Page 4 -100 EXHIBIT B DESCRIPTION OF THE SITE All that certain real property situated in Orange County, State of California, described as follows: Exhibit B Page 1 4 -101 The Facility consists of MMU3.1ir DESCRIPTION OF THE FACILITY Exhibit C Page 1 4 -102 EXHIBIT 8 LETTER AGREEMENT FOR PURCHASE 4 -103 4 -104 Quint & Thimmig LLP LETTER AGREEMENT FOR PURCHASE November 6, 2013 City of Santa Ana 20 Civic Center Plaza Santa Ana, CA, 92701 Attention: City Manager Santa Ana Financing Authority 20 Civic Center Plaza Santa Ana, CA, 92701 Attention: Executive Director 04/30/14 05/28/14 Re: $ Lease Agreement, dated as of June 1, 2014, by and between the Santa Ana Financing Authority and the City of Santa Ana, assigned to Western Alliance Public F� LLC Ladies and Gentlemen: The undersigned, WAFT and CB. collectivelJhe "Purchasers'), offer, upon the following terms, to acquire (i) the rights, title and interest of Santa Ana Financing Authority (the "Authority ") under the Lease Agreement (hereinafter defined), including its rights to receive Lease Payments to be made by the City of Santa Ana (the "City ") under the Lease Agreement, dated as of June 1, 2014 (the "Lease Agreement "), by and between the City and the Authority; provided that the Authority's rights to indemnification and payment or reimbursement for any costs or expenses thereunder have been retained by the Authority to the extent such rights accrue to the Authority and shall have been assigned to the Purchasers to the extent such rights accrue to the Purchasers by entering into arrsenar� ate assignment agreements each dated as of June 1, 2014 (collectively, the "Assignment Agreements "), with the Authority, and (ii) except for the Authority's obligation under Section 4 thereof, the rights, title and interest of the Authority under the Site and Facility Lease, dated as of June 1, 2014 (the "Site and Facility Lease "), by and between the City and the Authority. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Lease Agreement. 1. Purchase and Purchase Price; Terms of Authority's Obligations. The City and the Authority agree to execute and deliver the Site and Facility Lease and the Lease Agreement, and the Purchasers aagr�ee to purchase the Authority's rights, title and interest under the Lease Agreement, as described more specifically above and in the Assignment Agreements, at an mgrs purchase price of $ . The Lease Payments under the Lease Agreement{ the a-wD lts alloc le to each of the Purchasers and the interest rates applicable thereto shall be as shown in Exhibits A-11,� 2 rid A -3 hereto (with the total of all Lease Payments shown in Exhibit A -4 hem{ . 19014.10 4 -105 2. Use of Funds. The purchase price paid by the Purchasers shall be used by the Authority to pay the City an advance rental of $ , pursuant to Section 4 of the Site and Facility Lease (of which $ shall be paid by WAPF, of which $ shall be paid by CB and of which $ shall be paid by COPF. The City shall use such advance rental payment received from the Authority to (a) defease to maturity $33,550,000 (50 %) of the outstanding 1994 Bonds, and (b) defease and refund the outstanding 1998 Certificates, and (ii) pay the costs related to the preparation, execution and delivery of the Lease Agreement, the Site and Facility Lease, the Assignment Agreements and documents related to the refunding of the Bonds. 3. Disposition of Proceeds. Upon the Closing Date, as defined below, the purchase price paid by the Purchasers shall be transferred by the Purchasers for themselves and on behalf of the Authority, as follows: (a) WATT shall transfer, via wire transfer, to The Bank of New York Mellon Trust Company, N.A., as escrow bank (the "Escrow Bank"), (i) the amount of $ to be deposited in the 1994 Bonds Escrow Fund and applied, with other moneys, to the defeasance to maturity of $33,550,000 (50 %) of the outstanding 1994 Bonds, and (ii) the amount of $ to be deposited in the 1998 Certificates Escrow Fund and applied, with other moneys, to the defeasance and redemption on , 2014, of the outstanding 1998 Certificates. Wire information will be provided prior to the Closing Date. (b) WAPFF shall transfer, via wire transfer, the following amounts to the following entities, in respect of the payment of the costs of the financing transaction: (i) to Quint & Thimmig LLP, as bond counsel, $ (invoice with wire information to be provided prior to the Closing Date); (iii) to Fieldman, Rolapp & Associates, Inc., as financial advisor, $ (invoice with wire information to be provided prior to the Closing Date); (iv) to Kutak Rock as counsel to the Purchasers, $ (invoice with wire information to be provided prior to the Closing Date); (vi) to The Bank of New York Mellon Trust Company, N.A., as escrow bank, $ (invoice with wire information to be provided prior to the Closing Date); and (vii) to Stewart Title Guaranty Company, $ (invoice with wire information to be provided prior to the Closing Date); and -2- 4 -106 (e) COP F shall transfer to the City, $ , to be applied to the City's costs of the transaction or applied to make the first Lease Payment. Wire instructions to be provided prior to the Closing Date. 4. Closing. At 8:00 a.m. California Time, on June 12, 2014, or at such other time or on such earlier or later date as the Purchasers the Authority and the City mutually agree upon (the "Closing Date'), the City will deliver (or cause to be delivered) the Site and Facility Lease and the Lease Agreement executed by the City and the Authority, and the Assignment Agreement] executed by the Authority and the Purchasers, and the Purchasers will pay the purchase price for the Authority's rights, title and interest in the Site and Facility Lease and the Lease Agreement as set forth in Section 1 hereof in federal or other immediately available funds. 5. Representations and Warranties of the City. The City represents and warrants to the Purchasers that: (a) The City is a municipal corporation organized and existing under the Constitution and the laws of the State of California (the "State "), and has all necessary power and authority to enter into and perform its duties under this Agreement and the Site and Facility Lease and the Lease Agreement (collectively, the "City Documents "). (b) To the best knowledge of the City, neither the execution and delivery of the City Documents, or the execution this Agreement, and compliance with the provisions on the City's part contained therein, nor the consummation of any other of the transactions herein and therein contemplated, nor the fulfillment of the terms hereof and thereof, materially conflicts with or constitutes a material breach of or default under nor materially contravenes any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, nor does any such execution, delivery, adoption or compliance result in the security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the City under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the City Documents. (c) The City Documents have been duly authorized by the City, and, assuming due authorization, execution and delivery by the other parties thereto, will constitute legal, valid and binding agreements of the City enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles if sought and by the limitations on legal remedies imposed on actions against cities in the State of California. (d) There is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory agency having jurisdiction over the City required for the execution and delivery of the City Documents or the consummation by the City of the other transactions contemplated by the City Documents. (e) To the best of the knowledge of the City, there is, and on the Closing Date (as hereinafter defined) there will be, no action, suit, proceeding or investigation at law or in equity before or by any court or governmental agency or body pending or threatened against the City to restrain or enjoin the payments to be made pursuant to the Lease Agreement, or in any way contesting or affecting the validity of the City Documents or the authority of the City to approve this Agreement, or enter into the City Documents or contesting the powers of the City to enter -3- 4 -107 into or perform its obligations under any of the foregoing or in any way contesting the powers of the City in connection with any action contemplated by this Agreement or to restrain or enjoin the payment of Lease Payments, nor is there any basis for any such action, suit, proceeding or investigation. (f) By official action of the City prior to or concurrently with the execution hereof, the City has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in the City Documents and the consummation by it of all other transactions contemplated by this Agreement. (g) The City is not in breach of or default under any material applicable law or administrative regulation of the State of California or the United States or any material applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject and in connection with which the City is obligated to make payments from its own funds, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument the consequence of which could be to materially and adversely affect the performance of the City under the City Documents. (h) The City will deliver all opinions, certificates, letters and other instruments and documents reasonably required by the Purchasers and this Agreement. (i) Any certificate of the City delivered to the Purchasers shall be deemed a representation and warranty by the City to the Purchasers as to the statements made therein. (j) As of the time of acceptance hereof and as of the Closing Date the City does not and will not have outstanding any indebtedness which is secured by a lien on the City's general fund except as disclosed to the Purchasers. (k) The financial statements of, and other financial information regarding the City delivered to the Purchasers fairly present the financial position and results of the operations of the City as of the dates and for the periods therein set forth and the audited financial statements have been prepared in accordance with generally accepted accounting principles consistently applied. (1) Between the date of this Agreement and the date of Closing Date, the City will not, without the prior written consent of the Purchasers, offer or issue any certificates, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent, secured by a lien on the City's general fund. 6. Conditions Precedent to the Closing. Other conditions precedent to the Closing are: (a) The delivery by the City of a certified copy of (i) the resolution of the City Council authorizing the execution and delivery by the City of the Site and Facility Lease and the Lease Agreement, together with an incumbency certificate of the City, and (ii) the resolution of the Board of Directors of the Authority authorizing the execution and delivery by the Authority of the Site and Facility Lease, the Lease Agreement and the Assignment Agreements, together with an incumbency certificate of the Authority; (b) The delivery by the City of the fully executed Site and Facility Lease, Lease Agreement and Assignment Agreements in form and substance acceptable to the Purchasers; -4- 4 -108 (c) The execution and delivery by the City of an Internal Revenue Service Form 8038 -G in a form acceptable to Special Counsel and the Purchasers (d) Delivery of a legal opinion addressed to the City, with a reliance letter to each of the and the Purchasers dated the Closing Date, of Quint & Thimmig LLP, as Special Counsel, with respect to (i) the validity and enforceability of the Lease Agreement, the Site and Facility Lease, and the Assignment Agreements by and against the City and the Authority (as applicable), (ii) the tax - exempt status of the interest component of the Lease Payments, and (iii) such other matters as may be requested by the Purchasers in form and substance acceptable to the Purchasers; (e) The delivery of a certificate dated the Closing Date and signed by the City Manager, or such other officer of the City as the City Council may approve, to the effect that: (i) to the best knowledge of the City, there are no actions or proceedings against the City pending and notice of which has been served on the City or threatened that materially adversely affect the City's ability to pay the Lease Payments or to perform its obligations under the Site and Facility Lease and Lease Agreement; (ii) the representations and warranties of the City contained in this agreement and the Lease Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; and (iii) the City acknowledges receipt from the Purchasers, on behalf of the Authority, of the advance rental payment specified in Section 4 of the Site and Facility Lease; (f) The delivery by the City of a title policy for the property that is the subject of the Site and Facility Lease and Lease Agreement in form acceptable to the Purchasers; (g) The execution and delivery by the City of a certificate as to arbitrage; and (h) The delivery by each of the Purchasers of an investor letter in form and substance as attached hereto as Exhibit B. (i) Such other documents as may be reasonably requested by the Purchasers. 7. Events Permitting the Purchasers to Terminate. The Purchasers may terminate ibeir obligation to purchase the Authority's rights, title and interest under the Site and Facility Lease and the Lease Agreement before the Closing Date if any of the following occurs: (a) any legislative, executive or regulatory action (including the introduction of legislation) or any court decision that, in the judgment of the Purchasers casts sufficient doubt on the legality of or the tax - exempt status of the interest component of obligations such as those represented by the Lease Agreement and the Lease Payments so as to materially impair the marketability or to materially reduce the market price of such obligations, in the reasonable opinion of the Purchasers (b) any action by the Securities and Exchange Commission or a court that would require registration of the Lease Agreement under the Securities Act of 1933, as amended; or (c) any event occurs or becomes known that has a material adverse effect on the financial condition of the City or on the ability of the City or the Authority to perform under the Site and Facility Lease, the Lease Agreement or the Assignment Agreements. -5- 4 -109 -6- 4 -110 IN WITNESS WHEREOF, the parties hereto have executed and entered into this Letter Agreement for Purchase by their officers thereunto duly authorized as of the day and year first above written. The foregoing is hereby agreed to and accepted as of the date first above written: CITY OF SANTA ANA By Name Title SANTA ANA FINANCING AUTHORITY By Name Title -7- WESTERN ALLIANCE PUBLIC FINANCE By— Name Title COMPASS BANK. an Alabama banking cor orp ation By Name Title lid_ Name Title 4 -111 EXHIBIT A -1 SCHEDULE OF LEASE PAYMENTS (payable to Western Alliance Public Financel Lease Total Payment Principal Interest Lease Date Component Component Payment 1/1/15 7/1/15 1/1/16 7/1/16 1/1/17 7/1/17 1/1/18 7/1/18 1/1/19 7/1/19 1/1/20 7/1/20 1/1/21 7/1/21 1/1/22 7/1/22 1/1/23 7/1/23 1/1/24 7/1/24 TOTAL (1) Applicable interest rate is % per annum. Exhibit A -1 4 -112 EXHIBIT A -2 CHEDULE OF LEASE PAYMENTS (payable to Compass Bank, an Alabama banking corporation) Lease Total Payment Pr n i a Iniffi5l Lmac Date ComDOnent Com ov nent Payment 1115 7/1/15 1 1 16 7116 1117 7/1/17 1/1/18 7118 1119 7119 1/1/20 7 1 1 1[22 7122 1123 7123 1124 7124 TOTAL (1) Applicable interest rate iG % per atmttm Exhibit A -2 4 -113 EXHIBIT A -3 SCHEDULE OF LEASE PAYMENTS (payable to Capital One Public Funding LLC LuaQ Total Payment Princi a InterestL � Date Component Com oro nent Payment 1/1/15 7115 7/1/16 1 1 17 7117 1 1 7/1/18 1119 7119 1120 7 1 2 1/1/2 1/2 1LI 7/1 LL 23 71 L23 1124 71 24 1125 71 25 1126 711126 1/1/27 7 1 1 Ll L28 TMAL (].l�uulicable interest rate is 3.75% per annum Exhibit A -3 4 -114 EXHIBIT A -4 SCHEDULE OF TOTAL LEASE PAYMENTS LQaae Total Payment Principal Interest Lease Date Component Component Uwlellt 7 1 1 1,1 1fi 7116 1 1 17 7117 1/1/18 7/1/18 1 1 19 7119 1120 7 1 2 1/1/22 71 22 1123 7123 1124 7124 1125 7125 1 1 2 7 1 2 1/1 /27 M 27 1128 TOTAL Exhibit A -4 4 -115 EXHIBIT B FORM OF INVESTOR LETTER City of Santa Ana 20 Civic Center Plaza Santa Ana, CA, 92701 Attention: City Manager Santa Ana Financing Authority 20 Civic Center Plaza Santa Ana, CA, 92701 Attention: Executive Director Re: $ Lease Agreement, dated as of June 1, 2014, by and between the Santa Ana Financing Authority and the City of Santa Ana, assigned to Western Alliance Public Ladies and Gentlemen The undersigned, (the "Purchaser'), has agreed to acquire (i) a portion of the rights, title and interest of Santa Ana Financing Authority (the "Authority ") under the Lease Agreement, dated as of June 1, 2014 (the "Lease Agreement "), by and between the City of Santa Ana (the "City ") and the Authority, including its rights to receive lease payments to be made by the City under the Lease Agreement. In connection with such purchase, the Purchaser hereby agrees and certifies to the Authority and the City that: (a) The Purchaser has sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal and other obligations of a nature similar to the Lease Agreement to be able to evaluate the risks and merits of the investment represented by the purchase of the rights, title and interest of the Authority under the Lease Agreement. (b) The Purchaser is acquiring the rights, title and interest of the Authority under the Lease Agreement for its own account and not with a view to, or for sale in connection with, any distribution thereof or any part thereof. The Purchaser has not offered to sell, solicited offers to buy, or agreed to sell the rights, title and interest of the Authority under the Lease Agreement or any part thereof, and the Purchaser has no current intention of reselling or otherwise disposing of such rights, title and interest under the Lease Agreement provided, however, such representation shall not preclude the Purchaser from transferring or selling of the rights, title and interest under the Lease Agreement in accordance with the Lease Agreement. The Purchaser is not acting in a broker - dealer capacity in connection with its purchase of the rights, title and interest of the Authority under the Lease Agreement. (c) As a sophisticated investor, the Purchaser has made its own credit inquiry and analysis with respect to the City and the Lease Agreement and has made an independent credit decision based upon such inquiry and analysis and in reliance on the truth, accuracy, and completeness of the representations and warranties of the City set forth in the Lease Agreement and in the information set forth in any materials submitted to the Purchaser by the City. The City has furnished to the Purchaser all the information which the Purchaser, as a reasonable investor, has requested of the City as a result of the Purchaser having attached significance Exhibit B Page 1 4 -116 thereto in making its investment decision with respect to the Lease Agreement, and the Purchaser has had the opportunity to ask questions of and receive answers from knowledgeable individuals concerning the City and the Lease Agreement. The Purchaser is able and willing to bear the economic risk of the purchase and ownership of the rights, title and interest of the Authority under the Lease Agreement. (d) The Purchaser understands that the Lease Agreement has not been registered under the United States Securities Act of 1933 or under any state securities laws. The Purchaser agrees that it will comply with any applicable state and federal securities laws then in effect with respect to any disposition of the Lease Agreement by it, and further acknowledges that any current exemption from registration of the Lease Agreement does not affect or diminish such requirements. (e) The Purchaser has authority to purchase the rights, title and interest of the Authority under the Lease Agreement and to execute any instruments and documents required to be executed by the Purchaser in connection with the purchase of the rights, title and interest of the Authority under the Lease Agreement. The undersigned is a duly appointed, qualified, and acting officer of the Purchaser and is authorized to cause the Purchaser to make the representations and warranties contained herein on behalf of the Purchaser. (f) The Purchaser acknowledges that rights, title and interest of the Authority under the Lease Agreement are transferable with certain requirements, as described in the Lease Agreement. (g) The Purchaser acknowledges that the Lease Agreement is exempt from the requirements of Rule 15c2 -12 of the Securities and Exchange Commission and that the City has not undertaken to provide any continuing disclosure with respect to the Lease Agreement but that the City has agreed to provide other ongoing information to the Purchaser. By— Name Title Exhibit B Page 2 4 -117 4 -118 EXHIBIT 9 1994 BONDS ESCROW AGREEMENT 4 -119 4 -120 Quint & Thimmig LLP ESCROW DEPOSIT AND TRUST AGREEMENT by and among the SANTA ANA FINANCING AUTHORITY the CITY OF SANTA ANA and 04/30/14 05/28/14 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Bank Dated June 12, 2014 Relating to the defeasance of a portion of the Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A 19014.10 4 -121 ESCROW DEPOSIT AND TRUST AGREEMENT This Escrow Deposit and Trust Agreement (this "Escrow Deposit and Trust Agreement "), dated June 12, 2014, is by and among the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California (the "Authority "), the CITY OF SANTA ANA, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the "City "), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as escrow bank (the "Escrow Bank "). WITNESSETH: WHEREAS, the Authority has heretofore issued its $107,399,438.50 Santa Ana Financing Authority Police Administration and Holding Facility, Series 1994A, of which $67,100,000 remains outstanding (the "1994 Bonds "), the proceeds of which were used to finance the costs of the construction and equipping of a police administration and holding facility (the "1994 Project'); WHEREAS, the 1994 Bonds were issued pursuant to the terms of an indenture, dated as of March 1, 1994, as amended (the "1994 Indenture "), by and between the Authority and Meridian Trust Company of California, since succeeded by the Escrow Bank, as trustee thereunder (the "1994 Trustee "); WHEREAS, in order to provide for the repayment of the 1994 Bonds, the Authority leased certain real property and improvements (the "1994 Property ") to the City pursuant to a lease agreement, dated as of March 1, 1994, as amended (the "1994 Lease Agreement'), under which the City agreed to make lease payments to the Authority (the "1994 Lease Payments ") from moneys in its General Fund and the City has budgeted and appropriated sufficient amounts in each year to pay the full amount of principal of and interest on the 1994 Bonds; WHEREAS, the City has determined that it is in the best interests of the City at this time to provide for the payment of 50% of the remaining 1994 Lease Payments (the "Defeased 1994 Lease Payments "), and to refinance certain other obligations, and, as a result thereof, to provide for the defeasance of $33,550,000 (50 %) of the outstanding 1994 Bonds (the "Defeased 1994 Bonds ") to maturity, and to that end, the City proposes to enter into a new lease agreement, dated as of June 1, 2014, by and between the Authority and the City (the "Lease Agreement'); WHEREAS, the Authority and the City propose to provide for the payments described above and to appoint the Escrow Bank as their agent for the purpose of applying said deposit to provide for the payment of the Defeased 1994 Lease Payments in accordance with the instructions provided by this Escrow Deposit and Trust Agreement and of applying said Defeased 1994 Lease Payments to the defeasance of the Defeased 1994 Bonds and the Escrow Bank desires to accept said appointment; WHEREAS, the Authority and the City wish to provide for the payment described above and to enter into this Escrow Deposit and Trust Agreement for the purpose of providing the terms and conditions for the deposit and application of amounts so deposited; WHEREAS, to obtain moneys to make such deposit and for other purposes, the Authority proposes to assign and transfer certain of its rights under the Lease Agreement to Western Alliance Public Finance, Com Rank,_an Alabama banking wx orafion and Capital 4 -122 One Public Funding LLC (collectively, the "Assignees "), pursuant to th see certain assignment agreements, each dated as of June 1, 2014, by and between the Authority and the Assignees (the "Assignment Agreements "), whereby the Assignees will make a payment of $ to or to the order of the City for such purpose; WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable escrow and trust created herein and to perform the duties and obligations to be undertaken pursuant to this Escrow Deposit and Trust Agreement. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein set forth, the parties hereto do hereby agree as follows: Section 1. Discharge of Defeased 1994 Bonds. The City hereby irrevocably elects to defease the Defeased 1994 Lease Agreement and the Defeased 1994 Bonds. A schedule of the Defeased 1994 Bonds and the 1994 Bonds that will not be defeased (the "Non - Defeased 1994 Bonds ") is set forth in Exhibit A attached hereto and by this reference incorporated herein. Section 2. Appointment of Escrow Bank. The Authority and the City hereby appoint the Escrow Bank as escrow bank for all purposes of this Escrow Deposit and Trust Agreement and in accordance with the terms and provisions of this Escrow Deposit and Trust Agreement, and the Escrow Bank hereby accepts such appointment. Section 3. Establishment of Escrow Fund. There is hereby created by the Authority and the City with, and to be held by, the Escrow Bank, as security for the payment of the Defeased 1994 Lease Payments and the Defeased 1994 Bonds as hereinafter set forth, an irrevocable escrow to be maintained in trust by the Escrow Bank on behalf of the Authority and the City and for the benefit of the owners of the Defeased 1994 Bonds, said escrow to be designated the "Escrow Fund." All moneys and securities deposited in the Escrow Fund shall be held as a special fund for the payment of the principal of and interest on the Defeased 1994 Bonds in accordance with the provisions of the 1994 Indenture. The City hereby irrevocably instructs the Escrow Bank, and the Escrow Bank hereby agrees, to use the moneys and securities on deposit in the Escrow Fund to pay the principal of and interest on the Defeased 1994 Bonds in accordance with the instructions set forth in Section 6 hereof. If at any time the Escrow Bank shall receive actual knowledge that the moneys in the Escrow Fund will not be sufficient to make any payment required by Section 6 hereof, the Escrow Bank shall notify the City of such fact and the City shall immediately cure such deficiency. The Escrow Bank shall have no liability for such deficiency. Section 4. Deposit into Escrow Fund. (a) The City shall cause to be transferred to the Escrow Bank for deposit into the Escrow Fund the amount of $ in immediately available funds, derived as follows: (i) $ from amounts paid by the Assignees pursuant to the Assignment Agreements and (ii) $ from the reserve account held by the 1994 Trustee with respect to the 1994 Bonds (the "1994 Reserve Account "). (b) The Escrow Bank shall invest $ of the moneys deposited into the Escrow Fund pursuant to the preceding paragraph in the U.S. Treasury Securities —State and Local Government Series (" L ") set forth in Exhibit B attached hereto and by this reference incorporated herein (the "Escrowed Federal Securities ") and shall hold the remaining $ in -2- 4 -123 cash, uninvested. The Escrowed Federal Securities shall be deposited with and held by the Escrow Bank in the Escrow Fund solely for the uses and purposes set forth herein. If the Escrow Bank learns that the Department of the Treasury or the Bureau of Public Debt will not, for any reason, accept a SLGS subscription, the Escrow Bank shall promptly request alternative written investment instructions from the City with respect to escrowed funds which were to be invested in the Escrowed Federal Securities. The Escrow Bank shall follow such instructions and, upon the maturity of any such alternative investment, the Escrow Bank shall hold funds uninvested and without liability for interest until receipt of further written instructions from the City. In the absence of investment instructions from the City the Escrow Bank shall not be responsible for the investment of such funds or interest thereon. The Escrow Bank may conclusively rely upon the City selection of an alternative investment as a determination of the alternative investment's legality and suitability and shall not be liable for any losses related to the alternative investments or for compliance with any yield restriction applicable thereto. (c) The Escrow Bank may rely upon the conclusion of , as contained in its r ran opinion and accompanying schedules (the "Report "), dated June 12, 2014, that the Escrowed Federal Securities mature and bear interest payable in such amounts and at such times as, together with cash on deposit in the Escrow Fund, will be sufficient to pay the principal of and interest on the Defeased 1994 Bonds to maturity. (d) The Escrow Bank shall not be liable or responsible for any loss resulting from its full compliance with the provisions of this Escrow Deposit and Trust Agreement. (e) Any money left on deposit in the Escrow Fund after the final maturity of the Defeased 1994 Bonds shall be transferred to the Trustee and applied to the payment of debt service on the Non - Defeased 1994 Bonds. Section 5. Application of 1994 Funds. On the date of deposit of amounts paid by the Assignees pursuant to the Assignment Agreements in the Escrow Fund pursuant to Section 4, the Escrow Bank, as 1994 Trustee, is hereby directed to transfer all moneys in the 1994 Reserve Account ($ ) to the Escrow Bank for deposit in the Escrow Fund. Section 6. Instructions as to Application of De!osit. The moneys deposited in the Escrow Fund pursuant to Section 4 shall be applied by the Escrow Bank for the sole purpose of paying the principal of and interest on the Defeased 1994 Bonds to maturity as set forth in Exhibit C attached hereto and by this reference incorporated herein. Section 7. Investment of Any Remaining Moneys. The Escrow Bank shall invest and reinvest the proceeds received from any of the Escrowed Federal Securities, and the cash originally deposited into the Escrow Fund, for a period ending not later than the next succeeding interest payment date relating to the Defeased 1994 Bonds, in Federal Securities pursuant to written directions of the City; provided, however, that (a) such written directions of the City shall be accompanied by (i) a certification of an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions that the Federal Securities then to be so deposited in the Escrow Fund, together with the cash then on deposit in the Escrow Fund, together with the interest to be derived therefrom, shall be in an amount at all times at least sufficient to make the payments specified in Section 6 hereof, and (ii) an opinion of nationally recognized bond counsel ( "Bond Counsel ") that investment in accordance with such directions will not affect, for Federal income tax purposes, the exclusion from gross income of interest due with respect to the Defeased 1994 Bonds, and (b) if the City directs such investment or reinvestment to be made in United States Treasury Securities -State and Local Government -3- 4 -124 Series, the City shall, at its cost, cause to be prepared all necessary subscription forms therefor in sufficient time to enable the Escrow Bank to acquire such securities. In the event that the City shall fail to file any such written directions with the Escrow Bank concerning the reinvestment of any such proceeds, such proceeds shall be held uninvested by the Escrow Bank. Any interest income resulting from investment or reinvestment of moneys pursuant to this Section 7 and not required for the purposes set forth in such verification, shall, promptly upon the receipt of such interest income by the Escrow Bank, be transferred to the Trustee and applied to the payment of debt service on the Non - Defeased 1994 Bonds. Section 8. Substitution or Withdrawal of Federal Securities. The City may, at any time, direct the Escrow Bank in writing to substitute Federal Securities for any or all of the Escrowed Federal Securities then deposited in the Escrow Fund, or to withdraw and transfer to the City any portion of the Federal Securities then deposited in the Escrow Fund, provided that any such direction and substitution or withdrawal shall be simultaneous and shall be accompanied by (a) a certification of an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions that the Federal Securities then to be so deposited in the Escrow Fund together with interest to be derived therefrom, or in the case of withdrawal, the Federal Securities to be remaining in the Escrow Fund following such withdrawal together with the interest to be derived therefrom, together with the cash then on deposit in the Escrow Fund, shall be in an amount at all times at least sufficient to make the payments specified in Section 6 hereof; and (b) an opinion of Bond Counsel that the substitution or withdrawal will not affect, for Federal income tax purposes, the exclusion from gross income of interest on the Defeased 1994 Bonds. In the event that, following any such substitution of Federal Securities pursuant to this Section 8, there is an amount of moneys or Federal Securities in excess of an amount sufficient to make the payments indicated by such verification, such excess shall be transferred to the Trustee and applied to the payment of debt service on the Non - Defeased 1994 Bonds. Section 9. Compensation to Escrow Bank. The City shall pay the Escrow Bank full compensation for its duties under this Escrow Deposit and Trust Agreement, including out -of- pocket costs such as publication costs, prepayment or redemption expenses, legal fees and other costs and expenses relating hereto. Under no circumstances shall amounts deposited in the Escrow Fund be deemed to be available for said purposes. Section 10. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no obligation to make any payment or disbursement of any type or incur any financial liability in the performance of its duties under this Escrow Deposit and Trust Agreement unless the City shall have deposited sufficient funds with the Escrow Bank. The Escrow Bank may rely and shall be protected in acting upon the written instructions of the City or its agents relating to any matter or action as Escrow Bank under this Escrow Deposit and Trust Agreement. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the acceptance of the moneys deposited therein, the sufficiency of the uninvested moneys held hereunder to accomplish the purposes set forth herein, or any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust Agreement or by reason of any non - negligent act, non - negligent omission or non - negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the "whereas' clauses herein shall be taken as the statement of the City, and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representations as to the sufficiency of the uninvested moneys to accomplish the purposes set forth herein or to the validity of this Escrow Deposit and Trust Agreement as to the City and, except as otherwise provided herein, the Escrow Bank -4- 4 -125 shall incur no liability in respect thereof. The Escrow Bank shall not be liable in connection with the performance of its duties under this Escrow Deposit and Trust Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Escrow Deposit and Trust Agreement. The Escrow Bank may consult with counsel, who may or may not be counsel to the City, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Deposit and Trust Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of counsel) may be deemed to be conclusively established by a written certification of the City. The Escrow Bank may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Anything in this Escrow Deposit and Trust Agreement to the contrary notwithstanding, in no event shall the Escrow Bank be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Bank has been advised of the likelihood of such loss or damage and regardless of the form of action. -5- 4 -126 The City hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated), to the extent permitted by law, to indemnify, protect, save and hold harmless the Escrow Bank and its respective successors, assigns, agents, servants, employees, directors and officers from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any time, the Escrow Bank (whether or not also indemnified against by any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the retention of the moneys therein and any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust Agreement, or as may arise by reason of any act, omission or error of the Escrow Bank made in good faith in the conduct of its duties; provided, however, that the City shall not be required to indemnify the Escrow Bank against its own negligence or willful misconduct. The indemnities contained in this Section 10 shall survive the termination of this Escrow Deposit and Trust Agreement or the resignation or removal of the Escrow Bank. The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The Escrow Bank will furnish the City monthly cash transaction statements which include detail for all investment transactions made by the Escrow Bank hereunder. No provision of this Escrow Deposit and Trust Agreement shall require the Escrow Bank to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers. The Escrow Bank may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed. The City may remove the Escrow Bank 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 doing business in the State of California, having a combined capital (exclusive of borrowed capital) and surplus of at least fifty million dollars ($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 this Section 10 the 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 Escrow Bank may at any time resign by giving 30 days written notice of resignation to the City. Upon receiving such notice of resignation, the City shall promptly appoint a successor and, upon the acceptance by the successor of such appointment, release the resigning Escrow Bank from its obligations hereunder by written instrument, a copy of which instrument shall be delivered to each of the City, the resigning Escrow Bank and the successor. If no successor shall have been so appointed and have accepted appointment within 30 days after the -6- 4 -127 giving of such notice of resignation, the resigning Escrow Bank may petition any court of competent jurisdiction for the appointment of a successor, Section 11. Amendment. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement which shall become effective when the written consents of the owners of one hundred percent (100 %) in aggregate principal amount of the Defeased 1994 Bonds shall have been filed with the Escrow Bank. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement, without the consent of any such owners, but only (1) to add to the covenants and agreements of any party, other covenants to be observed, or to surrender any right or power herein or therein reserved to the City, (2) to cure, correct or supplement any ambiguous or defective provision contained herein, or (3) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which, in the opinion of counsel, shall not materially adversely affect the interests of the owners of the Defeased 1994 Bonds or the Assignees and that such amendment will not cause interest on the 1994 Bonds or with respect to the Lease Agreement to become subject to federal income taxation. In connection with any contemplated amendment or revocation of this Escrow Deposit and Trust Agreement, prior written notice thereof and draft copies of the applicable legal documents shall be provided by the City to each rating agency then rating the 1994 Bonds. Section 12. Severability. If any section, paragraph, sentence, clause or provision of this Escrow Deposit and Trust Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, sentence clause or provision shall not affect any of the remaining provisions of this Escrow Deposit and Trust Agreement. Notice of any such invalidity or unenforceability shall be provided to each rating agency then rating the 1994 Bonds. Section 13. Notice of Escrow Bank and City. Any notice to or demand upon the Escrow Bank may be served and presented, and such demand may be made, at the principal corporate trust office of the Escrow Bank as specified by the 1994 Trustee in accordance with the provisions of the 1994 Indenture. Any notice to or demand upon the City shall be deemed to have been sufficiently given or served for all purposes by being mailed by first class mail, and deposited, postage prepaid, in a post office letter box, addressed to such party as provided in the 1994 Indenture(or such other address as may have been filed in writing by the City with the Escrow Bank). Section 14. Merger or Consolidation of Escrow Bank. Any company into which the Escrow Bank 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 Escrow Bank may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible to act as trustee under the 1994 Indenture, shall be the successor hereunder to the Escrow Bank without the execution or filing of any paper or any further act. Section. 15. Execution in Several. Counterparts. This Escrow Deposit and Trust Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same instrument. Section 16. Business Days. Whenever any act is required by this Escrow Deposit and Trust Agreement to be done on a specified day or date, and such day or date shall be a day other than a business day for the Escrow Bank, then such act may be done on the next succeeding business day. -7- 4 -128 Section 17. Governing Law. This Escrow Deposit and Trust Agreement shall be construed and governed in accordance with the laws of the State of California. IN WITNESS WHEREOF the parties hereto have caused this Escrow Agreement to be executed in their respective names by their respective duly authorized officers, all as of the day and year first above written. Attest: Name Secretary Attest: Name City Clerk SANTA ANA FINANCING AUTHORITY By— Name Title CITY OF SANTA ANA By Name Title THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Bank By Name Title -8- 4 -129 EXHIBIT A SCHEDULE OF DEFEASED 1994 BONDS AND NON - DEFEASED 1994 BONDS Maturity Date (July 1) 2015 2016 2017 2018 2019 2024 Defeased 1994 Bonds $2 15om 2.672.500 8 .2 19.300.000 Non - Defeased 1994 Bonds 672 2,840 3.017.500 ,2 9,3 Exhibit A 4 -130 Total $ 5,030,000 5,345,000 5,680,000 6,035,000 6,410,000 38,600,000 EXHIBIT B SCHEDULE OF ESCROWED FEDERAL SECURITIES Type Maturity Coupon Principal Price Cost Accrued SLGS 07/01/14 SLGS 01/01/15 SLGS 07/01/15 SLGS 01/01/16 SLGS 07/01/16 SLGS 01/01/17 SLGS 07/01/17 SLGS 01/01/18 SLGS 07/01/18 SLGS 01/01/19 SLGS 07/01/19 SLGS 01/01/20 SLGS 07/01/20 SLGS 01/01/21 SLGS 07/01/21 SLGS 01/01/22 SLGS 07/01/22 SLGS 01/01/23 SLGS 07/01/23 SLGS 01/01/24 SLGS 07/01/24 Exhibit A 4 -131 Total EXHIBIT C PAYMENT SCHEDULE Date Principal 01/01/15 07/01/15 01/01/16 07/01/16 01/01/17 07/01/17 01/01/18 07/01/18 01/01/19 07/01/19 01/01/20 07/01/20 01/01/21 07/01/21 01/01/22 07/01/22 01/01/23 07/01/23 01/01/24 07/01/24 Exhibit A Total Interest Payment 4 -132 4 -133 4 -134 EXHIBIT 10 1998 CERTIFICATES REDEMPTION REQUEST 4 -135 4 -136 Quint & Thimmig LLP REDEMPTION REQUEST June 4, 2014 The Bank of New York Mellon Trust Company, N.A. 100 Pine Street, Suite 3100 San Francisco, CA 94111 Attention: Ms. Sheila A. Bowman, Senior Associate Re Redemption Request Regarding: City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project) Ladies and Gentlemen: 04/30/14 05/28/14 As successor trustee (the "Trustee') with respect to the City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project), dated as of January 1, 1998 (the "1998 Certificates "), you are hereby notified of the election of the City of Santa Ana (the "City ") to redeem, on July 7, 2014, pursuant to that certain Trust Agreement, dated as of January 1, 1998, by and among the City, the Santa Ana Financing Authority (the "Authority ") and the Trustee, all outstanding 1998 Certificates at a price equal to 100% of the principal amount thereof, plus accrued interest to the date fixed for redemption. The City intends to fund the redemption of the 1998 Certificates from a portion of the proceeds of a lease financing to be sold to Western Alliance Public Finance. Comuass Bank. an Alabama banking cornoration to close on You are hereby instructed to provide, no later than June 7, 2014, conditional notice of redemption of the 1998 Certificates to occur on July 7, 2014, substantially in the form attached hereto as Exhibit A. Please note that the redemption of the 1998 Certificates is conditional upon the receipt of the proceeds of the 2014 Lease Financing. In connection with your acting on the instructions of the Authority and the City to provide a rescindable notice to redeem the 1998 Certificates, the City agrees to reimburse the Trustee for all out -of- pocket costs and expenses incurred by the Trustee related to or arising from any rescission of the notice of redemption and further agrees to indemnify and hold harmless the Trustee, its officers, directors, employees and agents from and against any claims, losses, damages, costs, liabilities, expenses or attorney's fees resulting from the fact that the notice of redemption of the 1998 Certificates states that the redemption date is conditional upon receipt of the proceeds of the 2014 Lease Financing, or the rescinding of the notice of redemption of the 1998 Certificates by the Trustee upon instruction from the City. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. By— Name Title CITY OF SANTA ANA By— Name Title 4 -137 19014.10 4 -138 EXHIBIT A CONDITIONAL NOTICE OF FULL /FINAL REDEMPTION OF City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project) Maturity Amount Redemption Interest CUSIP Date Called Premium Price (1) Rate Number 1/1/2017 $1,315,000 — $1,315,000 4.700% 80108N CM2 1/1/2019 $ 980,000 — $ 980,000 4.700% 80108N CP5 1/1/2028 $5,720,000 — $5,720,000 4.700% 80108N CY6 (1) Accrued interest to be added. CONDITIONAL NOTICE is hereby given that the City of Santa Ana (the "City ") has conditionally called for redemption on July 7, 2014 (the 'Redemption Date "), the outstanding City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project), as described above (the "Certificates "), at a price equal to 100% of the principal amount thereof, plus accrued interest to the date fixed for redemption (the 'Redemption Price "). The Certificates are being conditionally called for redemption on the Redemption Date subject to the provisions of the succeeding paragraph of this notice, and pursuant to the provisions of the governing documents of the Certificates. The Conditional Notice of Redemption, and the payment of the Redemption Price on the Redemption Date, is subject to the receipt of funds in an amount sufficient to pay in full the specified redemption price of all of the Certificates on or before the Redemption Date, resulting from a negotiated lease financing, expected to be funded on or about June 12, 2014. In the event such funds are not received by the Redemption Date, this notice shall be null and void and of no force and effect. The Certificates delivered for redemption shall be returned to the respective owners thereof, and said Certificates shall remain outstanding as though this notice of conditional redemption had not been given. Notice of a failure to receive funds, and cancellation of this redemption, shall be given by the Trustee by first class mail, postage prepaid, to the registered owners of the Certificates. On the Redemption Date, the Redemption Price will become due and payable upon each Certificate and interest with respect thereto shall cease to accrue from and after the Redemption Date. Payment of principal will be made upon presentation on and after July 7, 2014, at the following addresses: By First Class / Reeistered/ Certified Mail: The Bank of New York Mellon Global Corporate Trust P.O. Box 396 East Syracuse, NY 13057 Express Delivery Only: The Bank of New York Mellon Global Corporate Trust 111 Sanders Creek Parkway East Syracuse, NY 13057 By Hand Only: The Bank of New York Mellon Global Corporate Trust Corporate Trust Window 101 Barclay Street, l" Floor New York, NY 10286 Owners of Bonds presenting their certificates in person for the same day payment must surrender their certificate by 1:00 p.m. on the prepayment date and a check will be available for pickup after 2:00 p.m. Checks not picked up by 4:30 p.m. will be mailed to the Certificate holder by first class mail. If payment of the Redemption Price is to be made to the registered owner of the Certificate, you are not required to endorse the Certificate to collect the Redemption Price. 4 -139 Under the Economic Growth and Tax Relief Reconciliation Act of 2003, 28% of the Redemption Price will be withheld if tax identification number is not properly certified. The Form W -9 may be obtained from the Internal Revenue Service. Neither the City nor The Bank of New York Mellon Trust Company, N.A., as trustee, shall be held responsible for the selection or use of the CUSIP number, nor is any representation made as to its correctness as shown in the Redemption Notice. It is included solely for convenience of the Holders. Dated: June _, 2014 4 -140 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee 4 -141 4 -142 EXHIBIT 11 1998 CERTIFICATES ESCROW AGREEMENT 4 -143 4 -144 Quint & Thinunig LLP ESCROW DEPOSIT AND TRUST AGREEMENT by and between the CITY OF SANTA ANA and 04/30/14 05/28/14 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Agent Dated June 12, 2014 Current refunding the City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project) ].9014.10 4 -145 ESCROW DEPOSIT AND TRUST AGREEMENT This Escrow Deposit and Trust Agreement (this "Escrow Deposit and Trust Agreement'), dated June 12, 2014, is by and between the CITY OF SANTA ANA, a municipal corporation and chartered city organized and existing pursuant to the laws of the State of California (the "City "), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as escrow agent (the "Escrow Agent'). WITNESSETH: WHEREAS, the City has heretofore caused the execution and delivery of its $12,450,000 Certificates of Participation (1998 City Hall Expansion Project) (the "1998 Certificates ") evidencing and representing the fractional undivided interests of the owners thereof in lease payments (the "1998 Lease Payments ") to be made by the City as the rental for certain property pursuant to a lease agreement, dated as of January 1, 1998 (the "1998 Lease Agreement'), with the Santa Ana Financing Authority (the "Authority ") to finance the expansion of Santa Ana City Hall, currently outstanding in the principal amount of $8,015,000; WHEREAS, the 1998 Certificates were executed and delivered pursuant to the terms of a trust agreement, dated as January 1, 1998 (the "1998 Trust Agreement'), by and among the City, the Authority and Harris Trust Company of California, since succeeded by The Bank of New York Mellon Trust Company, N.A., as trustee thereunder (the "1998 Trustee "); WHEREAS, in order to provide for the repayment of the 1998 Certificates, the Authority leased certain property to the City pursuant to the 1998 Lease Agreement under which the City agreed to make the 1998 Lease Payments in sufficient amounts in each year to pay the full amount of principal and interest with respect to the 1998 Certificates; WHEREAS, the City has determined that, as a result of favorable financial market conditions and for other reasons, it is in the best interests of the City at this time to refinance the City's obligation to make the 1998 Lease Payments under the 1998 Lease Agreement, and to refinance certain other obligations, and, as a result thereof, to provide for the redemption of the 1998 Certificates and, to that end, the City proposes to lease certain real property and improvements (the "Property ") to the Authority and to lease -back the Property from the Authority pursuant to that certain Lease Agreement, dated as of June 1, 2014 (the "Lease Agreement'); WHEREAS, the City proposes to make the deposit of moneys and to appoint the Escrow Bank for the purpose of applying said deposit to provide for the prepayment of the 1998 Lease Payments in accordance with the instructions provided by this Escrow Deposit and Trust Agreement and of applying said 1998 Lease Payments to the redemption of the 1998 Certificates in accordance with the 1998 Trust Agreement and the Escrow Bank desires to accept said appointment; WHEREAS, to obtain moneys to make such deposit and for other purposes, the Authority proposes to assign and transfer certain of its rights under the Lease Agreement to Western Alliance Public Finance Compass Bank an Alabama banking corporation and_Cital One Public Fund ding LLC (collectively the "Assignees'), pursuant to those certain asgnment agrreements, each dated as of June 1, 2014, by and between the Corporation and the Assignees 4 -146 (collectively the "Assignment Agreements. "), whereby the Assignees will make a payment of $ to or to the order of the City; WHEREAS, the City wishes to make such a deposit with the Escrow Bank and to enter into this Escrow Deposit and Trust Agreement for the purpose of providing the terms and conditions for the deposit and application of amounts so deposited; and WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable escrow and trust created herein and to perform the duties and obligations to be undertaken pursuant to this Escrow Deposit and Trust Agreement. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein set forth, the parties hereto do hereby agree as follows: Section 1. Discharge of 1998 Certificates. The City hereby irrevocably elects to pay and discharge all indebtedness payable by the City under the 1998 Trust Agreement and the 1998 Lease Agreement. Section 2. Appointment of Escrow Bank The City hereby appoints the Escrow Bank as escrow bank for all purposes of this Escrow Deposit and Trust Agreement and in accordance with the terms and provisions of this Escrow Deposit and Trust Agreement, and the Escrow Bank hereby accepts such appointment. Section 3. Establishment of Escrow Fund. There is hereby created by the City with, and to be held by, the Escrow Bank, as security for the payment of the 1998 Lease Payments as hereinafter set forth, an irrevocable escrow to be maintained in trust by the Escrow Bank on behalf of the City and for the benefit of the owners of the 1998 Certificates, said escrow to be designated the "Escrow Fund." All moneys deposited in the Escrow Fund shall be held as a special fund for the redemption of the 1998 Certificates in accordance with the provisions of the 1998 Trust Agreement. The City hereby irrevocably instructs the Escrow Bank, and the Escrow Bank hereby agrees, to use the moneys on deposit in the Escrow Fund to pay the principal and interest with respect to the 1998 Certificates in accordance with the instructions set forth in Section 6 hereof. If at any time the Escrow Bank shall receive actual knowledge that the moneys in the Escrow Fund will not be sufficient to make any payment required by Section 6 hereof, the Escrow Bank shall immediately notify the City of such fact and the City shall immediately cure such deficiency. The Escrow Bank shall have no liability for such deficiency. Section 4. Deposit into Escrow Fund. (a) The City shall cause to be transferred to the Escrow Bank for deposit into the Escrow Fund the amount of $ in immediately available funds, derived as follows: (i) $ from amounts paid by the Assignees pursuant to the Assignment Agreements (ii) $ from the lease payment fund held by the 1998 Trustee with respect to the 1998 Certificates (the "1998 Lease Payment Fund "). (b) The Escrow Agent shall hold all amounts deposited in the Escrow Fund in cash, uninvested. The moneys held by the Escrow Agent in the Escrow Fund shall be used solely for the purposes set forth herein. (c) The Escrow Agent may rely upon the conclusion of , as contained in its opinion and accompanying schedules (the "Report ") dated June 12, 2014, that the cash on -2- 4 -147 deposit in the Escrow Fund, will be sufficient to redeem the outstanding 1998 Certificates in full on 2014, at 100% of the principal amount thereof, together with accrued interest to such date, without premium. (d) The Escrow Agent shall not be liable or responsible for any loss resulting from its full compliance with the provisions of this Escrow Deposit and Trust Agreement. (e) Any money left on deposit in the Escrow Fund after payment in full of the 1998 Certificates, and the payment of all amounts due to the Escrow Agent hereunder, shall be paid to the City. Section 5. Application of 1298 Funds. On the date of deposit of amounts paid by the Assignees pursuant to the Assignment Agreements in the Escrow Fund pursuant to Section 4, the Escrow Bank, as 1998 Trustee, is hereby directed to transfer all moneys in the 1998 Lease Payment Fund ($ ) to the Escrow Bank for deposit in the Escrow Fund. Section 6. Instructions as to Application of Deposit. The moneys deposited in the Escrow Fund pursuant to Section 4 shall be applied by the Escrow Agent for the sole purpose of redeeming the outstanding 1998 Certificates in full on. 2014, at 100% of the principal amount thereof, together with accrued interest to such date, without premium, as set forth in Exhibit A attached hereto and by this reference incorporated herein. The City has previously requested that the Escrow Bank, in its capacity as 1998 Trustee, and the Escrow Bank, as 1998 Trustee, has agreed, to give timely notice of the redemption of the 1998 Certificates on 2014. Section 7. Compensation to Escrow Bank. The City shall pay the Escrow Bank full compensation for its duties under this Escrow Deposit and Trust Agreement, including out -of- pocket costs such as publication costs, prepayment or redemption expenses, legal fees and other costs and expenses relating hereto. Under no circumstances shall amounts deposited in the Escrow Fund be deemed to be available for said purposes. Section 8. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no obligation to make any payment or disbursement of any type or incur any financial liability in the performance of its duties under this Escrow Deposit and Trust Agreement unless the City shall have deposited sufficient funds with the Escrow Bank. The Escrow Bank may rely and shall be protected in acting upon the written instructions of the City or its agents relating to any matter or action as Escrow Bank under this Escrow Deposit and Trust Agreement. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the acceptance of the moneys deposited therein, the sufficiency of the uninvested moneys held hereunder to accomplish the purposes set forth herein, or any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust Agreement or by reason of any non - negligent act, non - negligent omission or non - negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the "whereas' clauses herein shall be taken as the statement of the City, and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representations as to the sufficiency of the uninvested moneys to accomplish the purposes set forth herein or to the validity of this Escrow Deposit and Trust Agreement as to the City and, except as otherwise provided herein, the Escrow Bank shall incur no liability in respect thereof. The Escrow Bank shall not be liable in connection with the performance of its duties under this Escrow Deposit and Trust Agreement except for its -3- 4 -148 own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Escrow Deposit and Trust Agreement. The Escrow Bank may consult with counsel, who may or may not be counsel to the City, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Deposit and Trust Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of counsel) may be deemed to be conclusively established by a written certification of the City. The Escrow Bank may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Anything in this Escrow Deposit and Trust Agreement to the contrary notwithstanding, in no event shall the Escrow Bank be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Bank has been advised of the likelihood of such loss or damage and regardless of the form of action. The Escrow Bank agrees to accept and act upon instructions or directions pursuant to this Escrow Deposit and Trust Agreement sent by unsecured e -mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Escrow Bank shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the City elects to give the Escrow Bank e -mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Bank in its discretion elects to act upon such instructions, the Escrow Bank's understanding of such instructions shall be deemed controlling. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Bank's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The City agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties. The City hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated), to the extent permitted by law, to indemnify, protect, save and hold harmless the Escrow Bank and its respective successors, assigns, agents, servants, employees, directors and officers from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any time, the Escrow Bank (whether or not also indemnified against by any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the retention of the moneys therein and any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust Agreement, or as may arise by reason of any act, omission or error of the Escrow Bank made in good faith in the conduct of its duties; provided, however, that the City shall not be required to indemnify the Escrow Bank against its own negligence or misconduct. The indemnities contained in this Section 8 shall -4- 4 -149 survive the termination of this Escrow Deposit and Trust Agreement or the resignation or removal of the Escrow Bank. The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The Escrow Bank will furnish the City monthly cash transaction statements which include detail for all investment transactions made by the Escrow Bank hereunder. No provision of this Escrow Deposit and Trust Agreement shall require the Escrow Bank to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers. The Escrow Bank may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed. The City may remove the Escrow Bank 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 doing business in the State of California, having a combined capital (exclusive of borrowed capital) and surplus of at least fifty million dollars ($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 this Section 8 the 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 Escrow Bank may at any time resign by giving 30 days written notice of resignation to the City. Upon receiving such notice of resignation, the City shall promptly appoint a successor and, upon the acceptance by the successor of such appointment, release the resigning Escrow Bank from its obligations hereunder by written instrument, a copy of which instrument shall be delivered to each of the City, the resigning Escrow Bank and the successor. If no successor shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Escrow Bank may petition any court of competent jurisdiction for the appointment of a successor Section 9. Amendment. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement which shall become effective when the written consents of the owners of one hundred percent (100 %) in aggregate principal amount of the 1998 Certificates shall have been filed with the Escrow Bank. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement, without the consent of any such owners, but only (1) to add to the covenants and agreements of any party, other covenants to be observed, or to surrender any right or power herein or therein reserved to the City, (2) to cure, correct or supplement any ambiguous or defective provision contained herein, or (3) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which, in the opinion of counsel, shall not materially adversely affect the interests of the owners of the 1998 Certificates or the Assignees, and that such amendment will not cause interest on the 1998 Certificates or with respect to the Lease Agreement to become subject to federal income taxation. In connection with any contemplated amendment or revocation of this Escrow Deposit and Trust Agreement, prior written notice thereof and draft copies of the applicable legal documents shall be provided by the City to each rating agency then rating the 1998 Certificates. -5- 4 -150 Section 10. Severability. If any section, paragraph, sentence, clause or provision of this Escrow Deposit and Trust Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, sentence clause or provision shall not affect any of the remaining provisions of this Escrow Deposit and Trust Agreement. Notice of any such invalidity or unenforceability shall be provided to each rating agency then rating the 1998 Certificates. Section 11. Notice of Escrow Bank and City. Any notice to or demand upon the Escrow Bank may be served and presented, and such demand may be made, at the principal corporate trust office of the Escrow Bank as specified by the 1M Trustee in accordance with the provisions of the 1998 Trust Agreement. Any notice to or demand upon the City shall be deemed to have been sufficiently given or served for all purposes by being mailed by first class mail, and deposited, postage prepaid, in a post office letter box, addressed to such party as provided in the 1998 Trust Agreement(or such other address as may have been filed in writing by the City with the Escrow Bank). Section 12, Merger or Consolidation of Escrow Bank. Any company into which the Escrow Bank 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 Escrow Bank may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible to act as trustee under the 1998 Trust Agreement, shall be the successor hereunder to the Escrow Bank without the execution or filing of any paper or any further act. Section 13. Execution in Several Counterparts. This Escrow Deposit and Trust Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same instrument. Section 14. Business Days. Whenever any act is required by this Escrow Deposit and Trust Agreement to be done on a specified day or date, and such day or date shall be a day other than a business day for the Escrow Bank, then such act may be done on the next succeeding business day. Section 15. Governing Law. This Escrow Deposit and Trust Agreement shall be construed and governed in accordance with the laws of the State of California. -6- 4 -151 IN WITNESS WHEREOF the parties hereto have caused this Escrow Agreement to be executed in their respective names by their respective duly authorized officers, all as of the day and year first above written. CITY OF SANTA ANA By Name Title Attest: Name City Clerk THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Bank By Name Title -7- 4 -152 EXHIBIT A REDEMPTION SCHEDULE Maturing Called Date Principal Principal Interest 7/7/14 — $8,015,000 Exhibit A 4 -153 Redemption Total Premium Payment 4 -154 EXHIBIT 12 1998 CERTIFICATES TERMINATION AGREEMENT 4 -155 4 -156 Quint & Thimmig LLP AFTER RECORDATION RETURN TO: Quint & Thimmig LLP 900 Larkspur Landing Circle, Suite 270 Larkspur, CA 94939 -1726 Attention: Brian D. Quint, Esq. 04/30/14 THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. TERMINATION AGREEMENT Dated as of June 1, 2014 by and among the SANTA ANA FINANCING AUTHORITY the CITY OF SANTA ANA, CALIFORNIA and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Relating to the Refunding of the $12,450,000 City of Santa Ana Certificates of Participation (1998 City Hall Expansion Project) 19014.10 4 -157 TERMINATION AGREEMENT This TERMINATION AGREEMENT is dated as of June 1, 2014, and is by and among the SANTA ANA FINANCING AUTHORITY (the "Authorky=2 the CITY OF SANTA ANA, CALIFORNIA (the "City "), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (as successor trustee to Harris Trust Company of California, N.A.), as trustee (the "1998 Trustee "). WITNESSETH: WHEREAS, the City and the Authority " Authefity have heretofore entered into an Lease Agreement, dated as of January 1, 1998 (the "1998 Lease "), pursuant to which the Authority and the City entered into a transaction for the lease financing of certain facilities (the "1998 Project "), and the City agreed to make certain lease payments (the "1998 Lease Payments ") to the Authority; WHEREAS, pursuant to an Assignment Agreement, dated as of January 1, 1998 (the "1998 Assignment Agreement "), by and between the Authority and the 1998 Trustee, the Authority assigned to the 1998 Trustee, among other things, its rights to receive 1998 Lease Payments from the City under the 1998 Lease and the right to exercise such rights and remedies conferred on the Authority under the 1998 Lease to enforce payment of the 1998 Lease Payments; WHEREAS, pursuant to a Trust Agreement, dated as of January 1, 1998, by and among the City, the Authority and the 1998 Trustee, the 1998 Trustee agreed, among other matters, to execute and deliver certificates of participation (the "1998 Certificates ") representing undivided fractional interests of the owners thereof to receive 1998 Lease Payments made by the City; WHEREAS, the 1998 Lease Agreement provides that in the event that the City deposits, or causes the deposit on its behalf of moneys for the prepayment of the 1998 Lease Payments, then all of the obligations of the City under the 1998 Lease Agreement and all of the security provided by the City for such obligations, excepting only the obligation of the City to make the 1998 Lease Payments from said deposit, shall cease and terminate, and unencumbered title to the 1998 Project shall be vested in the City without further action by the City or the Authority; WHEREAS, the City has determined that, as a result of favorable financial market conditions and for other reasons, it is in the best interests of the City at this time to refinance the City's obligation to make the 1998 Lease Payments under the 1998 Lease Agreement and, as a result thereof, to provide for the redemption of the 1998 Certificates to and including 2014, and to that end and for other purposes, the Authority proposes to lease certain real property and improvements from the Authority pursuant to that certain Lease Agreement, dated as of Lune 1, 2014 (the "Lease Agreement "), a memorandum of which has been recorded concurrently herewith; WHEREAS, to obtain moneys to make such deposit, the Authority proposes to assign and transfer certain of its rights under the Lease Agreement to Western Alliance Public Finance. C txtRass .Bauk an Alabama bankin &� rRQmt4Qn and Capital One Public Funding,LLC (collectively, the "Assignees'), pursuant to thQs . Certain assignment agreements, each dated as of June 1, 2014, by and between the Authority and the Assignees, whereby the Assignees will make a payment of $ to or to the order of the City; WHEREAS, upon deposit of a portion of such amounts for prepayment of the 1998 Lease Payments, the 1998 Lease Agreement and the agreements related thereto need not be 4 -158 maintained (except as otherwise provided below), and the parties hereto now desire to provide for the termination of such documents as provided herein. NOW, THEREFORE, in consideration of the foregoing and for other consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree with respect to the document to which it is a party or an assignee: Section 1. Termination. (a) By virtue of the deposit of amounts for prepayment of the 1998 Lease Payments, all obligations of the City under the 1998 Lease Agreement shall cease and terminate, excepting only the obligation of the City to make, or cause to be made, all payments from such deposit and title to the 1998 Project shall vest in the City on the date of said deposit automatically and without further action by the City or the Authority. Said deposit and interest earnings thereon shall be deemed to be and shall constitute a special fund for the prepayment of the 1998 Lease Payments. (b) In accordance with the foregoing, the following agreements (including any option to 3e contained therein), are hereby terminated and are of no further force or effect date hereofl: (i) Site and Facility Lease, dated as of January 1, 1998, by and between the City and the Authority, recorded on January 21, 1998, as Instrument No. 19980031193, Orange County Records (the "Site and Facility Lease "); (ii) 1998 Lease Agreement, recorded on January 21, 1998, as Instrument No. 19980031194, Orange County Records; and (iii) 1998 Assignment Agreement, recorded on January 21, 1998, as Instrument No. 19980031195, Orange County Records. (c) From and after the date hereof, none of the parties shall have any further rights or obligations thereunder. Section 2. Execution in Counterparts. This Termination Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. -2- 4 -159 IN WITNESS WHEREOF, the parties hereto have duly executed this Termination Agreement. Attest. Name r r Attest: Name City Clerk ►��61 /_ \�I� % \�CNI�CIl�[� IIfO.I�]C��'1 By Name CITY OF SANTA ANA By— Name Title THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Escrow Bank By— Name Title -3- 4 -160 NOTARY ACKNOWLEDGMENTS TO BE INSERTED 4 -161 EXHIBIT A DESCRIPTION OF THE SITE All that certain real property situated in Orange County, State of California, described as follows PARCEL A: LOTS 41 TO 51 INCLUSIVE OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY. PARCELB: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF LOT 50 OF SAID TRACT NO. 2752; THENCE NORTH 000 06'36" WEST ALONG THE WESTERLY LINES OF LOTS 50 AND 51 OF SAID TRACT, A DISTANCE OF 170.00 FEET; THENCE SOUTH 89° 53'24" WEST 225.769 FEET; THENCE SOUTH 00° 22' 06" EAST 171.016 FEET TO THE NORTHWEST CORNER OF LOT 46 OF SAID TRACT NO. 2752; THENCE NORTH 890 3754" EAST ALONG THE NORTHERLY LINES OF LOTS 46 AND 47 OF SAID TRACT, A DISTANCE OF 225.00 FEET TO THE POINT OF BEGINNING. PARCEL C: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF LOT 46 OF SAID TRACT NO. 2752; THENCE NORTH 000 22'06" WEST 171.016 FEET; THENCE SOUTH 89° 53'24" WEST 223.244 FEET; THENCE SOUTH 000 13'03" WEST 172.032 FEET TO THE NORTHWEST CORNER OF LOT 44 OF SAID TRACT NO. 2752; THENCE NORTH 89° 37' 54" EAST ALONG THE NORTHERLY LINES OF LOTS 44 AND 45 OF SAID TRACT, A DISTANCE OF 225.00 FEET TO THE POINT OF BEGINNING. PARCEL D: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79 PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF LOT 44 OF SAID TRACT NO. 2752; THENCE NORTH 000 13' 03" EAST 172.032 FEET; THENCE SOUTH 89° 53' 24" WEST 299.99 FEET TO THE WESTERLY LINE OF SAID LOT 56; THENCE SOUTH 00° 04'39" EAST ALONG THE WESTERLY LINE OF SAID LOT 56, A DISTANCE OF 173.377 FEET TO THE SOUTHWEST CORNER OF SAID LOT 56; THENCE NORTH 890 3754" EAST ALONG THE SOUTHERLY LINE OF SAID LOT 56, A DISTANCE OF 299.11 FEET TO THE POINT OF BEGINNING. PARCEL E: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: Exhibit A Page 1 4 -162 BEGINNING AT A POINT ON THE WESTERLY LINE OF SAID LOT 56, DISTANT NORTH 00° 04'39" WEST 299.69 FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT 56; THENCE NORTH 89° 29'24" EAST 300.00 FEET; THENCE SOUTH 00° 04'39" EAST 128.403 FEET; THENCE SOUTH 89'53'24" WEST 299.99 FEET TO THE WESTERLY LINE OF SAID LOT 56; THENCE NORTH 00° 04' 39" WEST ALONG SAID WESTERLY LINE, A DISTANCE OF 126.31 FEET TO THE POINT OF BEGINNING. PARCEL F: THAT PORTION OF LOT 56 OF TRACT NO. 2752, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 79, PAGES 30 AND 31 OF MISCELLANEOUS MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WESTERLY LINE OF SAID LOT 56, DISTANT NORTH 00° 04' 39" WEST 299.69 FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT 56; THENCE NORTH 00° 04' 39" WEST ALONG SAID WESTERLY LINE 275.19 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 25.00 FEET; THENCE NORTHERLY AND EASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 890 34'03" A DISTANCE OF 39.08 FEET; THENCE TANGENT TO SAID CURVE AND ALONG THE NORTHERLY LINE OF SAID LOT 56, NORTH 89° 29'24" EAST 275.19 FEET; THENCE SOUTH 00° 04'39" EAST 300.00 FEET; THENCE SOUTH 89'29'24" WEST 300.00 FEET TO THE POINT OF BEGINNING. Exhibit A Page 2 4 -163 4 -164 EXHIBIT 13 FORM OF OPINION OF SPECIAL COUNSEL 4 -165 4 -166 Quint & Mimmig LLP FORM OF FINAL OPINION OF BOND COUNSEL [Letterhead of Quint & Thimmig LLP] June 12, 2014 04/30/14 City of Santa Ana 20 Civic Center Plaza Santa Ana, California, 92701 Re: $ Lease Agreement, dated as of June 1, 2014, by and between the Santa Ana Financing Authority and the City of Santa Ana, assigned to Western Alliance- Public Finance Compass Bank an Alabama banking corporation and Capital One Public Funding LLC Ladies and Gentlemen We have acted as special counsel to the City of Santa Ana (the "City') in connection with the execution and delivery of the $ Lease Agreement, dated as of June 1, 2014 (the 'Lease Agreement'), and the Site and Facility Lease, dated as of June 1, 2014 (the "Site and Facility Lease'), each by and between the City and the Santa Ana Financing Authority (the "Authority "). The Authority has assigned its rights under the Lease Agreement and the Site and Facility Lease to Western —Alliarbce Public Finance. Compass Bank. an Alabama banking corporation and apital Ome Public Funding. LLC (collectively, the "Assignees "), pursuant to separate assignment agreement, each dated as of June 1, 2014, by and between the Authority and the Assignees (collectively, the "Assignment Agreements "). Capitalized terms used herein and not otherwise defined have the• meanings ascribed thereto in the Lease Agreement. In connection with this opinion, we have examined such law and such certified proceedings, certifications, and papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Lease Agreement and the certified proceedings and other certifications of public officials and others furnished to us. In the course of our representation, nothing has come to our attention that caused us to believe that any of the factual representations upon which we have relied are untrue, but we have not undertaken to verify them by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, that: 1. The City has been duly created and is validly existing as a municipal corporation and chartered city under and by virtue of the laws of the State of California with the power to enter into the Site and Facility Lease and the Lease Agreement and to perform the agreements on its part contained therein. 2. The Site and Facility Lease and the Lease Agreement have been duly authorized, executed, and delivered by the City and the Authority and constitute the valid and binding obligations of the City and the Authority enforceable in accordance with their respective terms. 19014.10 4 -167 City of Santa Ana June 12, 2014 Page 2 3. The obligation of the City to make Lease Payments pursuant to the Lease Agreement does not constitute a debt of the City or of the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction and does not constitute an obligation for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. 4. The assignment of the Lease Payments and certain other rights by the Authority to the Assignees under the Assignment Agreements constitutes the valid and binding obligation of the Authority enforceable in accordance with its terms. 5. Subject to the City's compliance with certain covenants, the interest component of the Lease Payments is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the alternative minimum tax for individuals and corporations under the Internal Revenue Code of 1986, as amended (the "Code "), but is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. Failure to comply with certain of such covenants could cause the interest component of the Lease Payments to be includable in gross income for federal income tax purposes retroactively to the date of delivery of the Lease Agreement. 6. The interest component of the Lease Payments is exempt from personal income taxation imposed by the State of California. We express no opinion regarding any collateral tax consequences arising with respect to the Lease Agreement. The rights of the Assignees and the enforceability of the Site and Facility Lease, the Lease Agreement and the Assignment Agreements may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in accordance with principles of equity or otherwise in appropriate cases. Our opinion represents our legal judgment based upon such review of the law and the facts that we deem relevant to render our opinion and is not a guarantee of a result. This opinion is given as of the date hereof and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, 4 -168 4 -169 4 -170 EXHIBIT 14 3RD MODIFICATION TO 1994 GROUND LEASE 4 -171 4 -172 Quint & Thimmig LLP 04/30/14 05/28/14 AFTER RECORDATION PLEASE RETURN TO: Quint & Thimmig LLP 900 Larkspur Landing Circle, Suite 270 Larkspur, CA 94939 -1726 Attention: Brian D. Quint, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. THIRD MODIFICATION TO GROUND LEASE (Amending that certain Ground Lease, dated as of March 1, 1994, as amended, by and between the City of Santa Ana and the Santa Ana Financing Authority) Dated as of June 1, 2014 by and between the CITY OF SANTA ANA, as Lessor and the SANTA ANA FINANCING AUTHORITY, as Lessee Relating to Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A 19014.10 4 -173 THIRD MODIFICATION TO GROUND LEASE THIS THIRD MODIFICATION TO GROUND LEASE, dated as of June 1, 2014, is by and between the CITY OF SANTA ANA, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the "City'), and the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California, as lessee (the "Authority "), modifying that certain Ground Lease, dated as of March 1, 1994, by and between the City and the Authority, and recorded on March 22, 1994, as document number 94- 0201357, in the Official Records of Orange County, California, as modified by that certain Modification of Ground Lease, dated as of September 1, 1994, by and between the City and the Authority, and recorded on March 20, 1995, as document number 95- 0111187 in the Official Records of Orange County, California, as modified by that certain Second Modification of Ground Lease, dated as of July 28, 1997, by and between the City and the Authority, and recorded on August 5, 1997, as document number 19970373119 in the Official Records of Orange County, California, and as amended by that certain First Amendment to Ground Lease, dated as of February 1, 2004, by and between the City and the Authority, and recorded on February 25, 2004, as document number 2004000143852 in the Official Records of Orange County, California (the "Ground Lease "); WITNESSETH: WHEREAS, the City and the Authority have heretofore entered into the Ground Lease, pursuant to which the City leased certain real property, described in Exhibit A thereto, together with the improvements thereof (the "Property ") to the Authority and the Authority leased the Property from the City; WHEREAS, the Authority and the City have heretofore entered into that certain Lease, dated as of March 1, 1994, by and between the Authority and the City, and recorded on March 22, 1994, as document number 94- 94- 0201358, in the Official Records of Orange County, California, as modified by that certain Modification of Lease, dated as of September 1, 1994, by and between the Authority and the City, and recorded on March 20, 1995, as document number 95- 0111188 in the Official Records of Orange County, California, as modified by that certain Second Modification of Ground Lease, dated as of July 28, 1997, by and between the Authority and the City, and recorded on August 5, 1997, as document number 19970373120 in the Official Records of Orange County, California, as amended by that certain First Amendment to Lease, dated as of February 1, 2004, by and between the Authority and the City and tke A�tMaf'ty, and recorded on February 25, 2004, as document number 2004000143853 in the Official Records of Orange County, California, and as modified by that certain Third Modification thereto being recorded concurrently herewith (the "Lease Agreement'), pursuant to which the Authority leased the Property to the City and the City leased the Property from the Authority; WHEREAS, the City has determined that it is necessary to amend the description of the Property, as set forth in the Ground Lease and the Lease Agreement to release the existing Property and to substitute other real property and improvements therefor; WHEREAS, Section 2.06 of the Lease Agreement authorizes amendment of the Ground Lease and the Lease Agreement to substitute the Property, subject to certain conditions precedent set forth therein; and NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows: 4 -174 SECTION 1. Amendment of the Ground Lease. (a) The description of the Property contained in Exhibit A to the Ground Lease is hereby amended by releasing and terminating from the Ground Lease all property described in Exhibit A attached thereto. The resulting description of the Property shall be as described in Exhibit B attached hereto which shall modify and replace in its entirety Exhibit A attached to the Ground Lease. (b) By virtue of such substitution, the City hereby leases to the Authority and the Authority hereby leases from the City, the Property, as now described in Exhibit B attached hereto. SECTION 2. Ground Lease in Full Force and Effect. Except as amended by this Third Modification to Ground Lease, the Ground Lease remains in full force and effect. SECTION 3. Execution in Counterparts. This Third Modification to Ground Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 4. Applicable Law. This Third Modification to Ground Lease shall be governed by and construed in accordance with the laws of the State of California. -2- 4 -175 IN WITNESS WHEREOF, the City and the Authority have caused this Third Modification to Ground Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. Attest: Name Attest: Name City Clerk Secretary CITY OF SANTA ANA By — Name Title SANTA ANA FINANCING AUTHORITY By— Name Title -3- 4 -176 [NOTARY ACKNOWLEDGMENTS TO BE ATTACHED] 4 -177 MIT"I MM RELEASED PROPERTY All that certain real property situated in Santa Ana, State of California, described as follows: Exhibit A Page 1 4 -178 EXHIBIT B DESCRIPTION OF THE RESULTING PROPERTY All that certain real property situated in Santa Ana, State of California, described as follows: Exhibit D 4 -179 4 -180 EXHIBIT 15 3RD MODIFICATION TO 1994 LEASE AGREEMENT 4 -181 4 -182 Quint & Thinunig LLP 04/30/14 05/28/14 AFTER RECORDATION PLEASE RETURN TO: Quint & Thimmig LLP 900 Larkspur Landing Circle, Suite 270 Larkspur, CA 94939 -1726 Attention: Brian D. Quint, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. THIRD MODIFICATION TO LEASE AGREEMENT (Amending that certain Lease, dated as of March 1, 1994, as amended, by and between the Santa Ana Financing Authority and the City of Santa Ana and the) Dated as of June 1, 2014 by and between the SANTA ANA FINANCING AUTHORITY, as Lessor and the CITY OF SANTA ANA, as Lessee Relating to Santa Ana Financing Authority Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A 19014.10 4 -183 THIRD MODIFICATION TO LEASE AGREEMENT THIS THIRD MODIFICATION TO LEASE AGREEMENT, dated as of June 1, 2014, is by and between the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California, as lessor (the "Authority'), and the CITY OF SANTA ANA, a municipal corporation and chartered city organized and existing under and by virtue of the laws of the State of California (the "City "), modifying that certain Lease, dated as of March 1, 1994, by and between the Authority and the City, and recorded on March 22, 1994, as document number 94 -94- 0201358, in the Official Records of Orange County, California, as modified by that certain Modification of Lease, dated as of September 1, 1994; by and between the Authority and the City, and recorded on March 20, 1995, as document number 95- 0111188 in the Official Records of Orange County, California, as modified by that certain Second Modification of Ground Lease, dated as of July 28, 1997, by and between the Authority and the City, and recorded on August 5, 1997, as document number 19970373120 in the Official Records of Orange County, California, and as amended by that certain First Amendment to Lease, dated as of February 1, 2004, by and between the Authority and the City and- the - Authority, and recorded on February 25, 2004, as document number 2004000143853 in the Official Records of Orange County, California (the "Lease Agreement'); WITNESSETH: WHEREAS, the City and the Authority have heretofore entered into that certain Ground Lease, dated as of March 1, 1994, by and between the City and the Authority, and recorded on March 22, 1994, as document number 94- 0201357, in the Official Records of Orange County, California, as modified by that certain Modification of Ground Lease, dated as of September 1, 1994, by and between the City and the Authority, and recorded on March 20, 1995, as document number 95- 0111187 in the Official Records of Orange County, California, as modified by that certain Second Modification of Ground Lease, dated as of July 28, 1997, by and between the City and the Authority, and recorded on August 5, 1997, as document number 19970373119 in the Official Records of Orange County, California, as amended by that certain First Amendment to Ground Lease, dated as of February 1, 2004, by and between the City and the Authority, and recorded on February 25, 2004, as document number 2004000143852 in the Official Records of Orange County, California, and as modified by that certain Third Modification thereto being recorded concurrently herewith (the "Ground Lease "), pursuant to which the City leased certain real property, described in Exhibit A thereto (the "Property ") to the Authority and the Authority leased the Property from the City; WHEREAS, the Authority and the City have heretofore entered into the Lease Agreement, pursuant to which the Authority leased the Property to the City and the City leased the Property from the Authority; WHEREAS, the City has determined that it is necessary to amend the description of the Property, as set forth in the Ground Lease and the Lease Agreement to release the existing Property and to substitute other real property and improvements therefor; WHEREAS, Section 2.06 of the Lease Agreement authorizes amendment of the Ground Lease and the Lease Agreement to substitute the Property, subject to certain conditions precedent set forth therein; and WHEREAS, any such substitution of the Property requires that: (a) the City files with the Authority, the Trustee and the Bond Insurer (as defined in the Lease Agreement) an amended Exhibit A to the Lease Agreement which adds 4 -184 thereto a description of such substitute Property and deletes therefrom the description of the former Property; (b) the City certify in writing to the Authority, the Trustee and the Bond Insurer that the remaining useful life of such substitute Property meets or exceeds the remaining term of the Lease Agreement serves the purposes of the City, and constitutes property that is unencumbered; (c) the City certifies to the Authority, the Trustee and the Bond Insurer that the fair rental value of the Property following such substitution is at least equal to the Base Rental (as defined in the Lease Agreement) payments attributable to the Property prior to such substitution, as determined by an MAI appraisal of the Property after said substitution; (d) the City furnishes the Authority, the Trustee and the Bond Insurer with a written Opinion of Counsel (as defined in the Lease Agreement), that the amendments providing for the substitution have been duly authorized, executed and delivered and constitute the valid and binding obligations of the City and the Authority enforceable in accordance with their terms; (e) the City obtains a title insurance policy insuring the City's leasehold interest in the substituted Property; (f) the City furnishes the Authority, the Trustee and the Bond Insurer with a written opinion of the City Attorney of the City to the effect that the exceptions, if any, contained in the title insurance policy referred to above do not interfere with the beneficial use and occupancy of the substitute Property by the City for the purposes of leasing or using the substitute Property; (g) the City furnishes the Authority, the Trustee and the Bond Insurer with a written Opinion of Counsel (as defined in the Lease Agreement), stating that such substitution does not cause the interest components of the interest on the Bonds (as defined in the Lease Agreement) to become subject to federal income taxes; (h) the City furnishes the Authority, the Trustee and the Bond Insurer with evidence that the City has complied with the covenants contained in clauses (1) and (2) of Section 6.03 of the Lease Agreement (relating to insurance) with respect to the substitute Property; (i) the City furnishes the Authority, the Trustee and the Bond Insurer with evidence that the City has delivered to any rating agency then rating the Bonds copies of the Certificates and appraisal described in paragraphs (b) and (c) above; (j) the City certifies to the Authority, the Trustee and the Bond Insurer that the substitute Property is of the same or greater essentiality to the City as was the former Property; and (k) the City obtains the prior written consent to such substitution from the Bond Insurer; NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows: -2- 4 -185 SECTION 1. Amendment of the Lease Agreement (a) The description of the Property contained in Exhibit A to the Lease Agreement is hereby amended by releasing and terminating from the Lease Agreement all property described in Exhibit A attached thereto. The resulting description of the Property shall be as described in Exhibit B attached hereto which shall modify and replace in its entirety Exhibit A attached to the Lease Agreement. (d) By virtue of such substitutions, the Authority hereby leases to the City and the City hereby leases from the Authority, the Property, as now described in Exhibit B attached hereto. SECTION 2. Other Conditions Satisfied. The City hereby certifies that (a) the City has certified in writing to the Authority, the Trustee and the Bond Insurer that the remaining useful life of such substitute Property meets or exceeds the remaining term of the Lease Agreement, serves the purposes of the City, and constitutes property that is unencumbered, (b) the City has certified to the Authority, the Trustee and the Bond Insurer that the fair rental value of the Property following such substitution is at least equal to the Base Rental (as defined in the Lease Agreement) payments attributable to the Property prior to such substitution, as determined by an MAI appraisal of the Property after said substitution; (c) the City has furnished the Authority, the Trustee and the Bond Insurer with a written Opinion of Counsel (as defined in the Lease Agreement), that the amendments providing for the substitution have been duly authorized, executed and delivered and constitute the valid and binding obligations of the City and the Authority enforceable in accordance with their terms; (d) the City has obtained a title insurance policy insuring the City's leasehold interest in the substituted Property; (e) the City has furnished the Authority, the Trustee and the Bond Insurer with a written opinion the City Attorney of the City to the effect that the exceptions, if any, contained in the title insurance policy referred to above do not interfere with the beneficial use and occupancy of the substitute Property by the City for the purposes of leasing or using the substitute Property; (f) the City has furnished the Authority, the Trustee and the Bond Insurer with a written Opinion of Counsel (as defined in the Lease Agreement), stating that such substitution does not cause the interest components of the interest on the Bonds (as defined in the Lease Agreement) to become subject to federal income taxes; (g) the City has furnished the Authority, the Trustee and the Bond Insurer with evidence that the City has complied with the covenants contained in clauses (1) and (2) of Section 6.03 of the Lease Agreement (relating to insurance) with respect to the substitute Property; (h) the City has furnished the Authority, the Trustee and the Bond Insurer with evidence that the City has delivered to any rating agency then rating the Bonds copies of the Certificates and appraisal described in paragraphs (a) and (b) above; -3- 4 -186 (i) the City has certified to the Authority, the Trustee and the Bond Insurer that the substitute Property is of the same or greater essentiality to the City as was the former Property; and (j) the City has obtained the prior written consent to such substitution from the Bond Insurer. SECTION 3. Lease Agreement in Full Force and Effect. Except as amended by this Third Modification to Lease Agreement, the Lease Agreement remains in full force and effect. SECTION 4. Execution in Counterparts. This Third Modification to Lease Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 5. Applicable Law. This Third Modification to Lease Agreement shall be governed by and construed in accordance with the laws of the State of California. -4- 4 -187 IN WITNESS WHEREOF, the Authority and the City have caused this Third Modification to Lease Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. Attest: Name Attest: Name Secretary City Clerk SANTA ANA FINANCING AUTHORITY By Name Title CITY OF SANTA ANA By Name Title -5- 4 -188 [NOTARY ACKNOWLEDGMENTS TO BE ATTACHED] 4 -189 EXHIBIT A RELEASED PROPERTY All that certain real property situated in Orange County, State of California, described as follows: Exhibit A Page 1 4 -190 EXHIBIT B DESCRIPTION OF THE RESULTING PROPERTY All that certain real property situated in Orange County, State of California, described as follows: Exhibit D 4 -191 4 -192 EXHIBIT 16 CONSENT OF 1994 BOND INSURER 4 -193 4 -194 Quint & Thimmig LLP $107,399,438.50 SANTA ANA FINANCING AUTHORITY Police Administration and Holding Facility Lease Revenue Bonds, Series 1994A CONSENT OF INSURER The undersigned hereby states and certifies: 4/30/14 5/02/14 (i) that the undersigned is an authorized officer of National Public Finance Guarantee Corporation, as successor to MBIA Insurance Corporation, as financial guaranty insurer (the "Insurer "), for the captioned bonds (the 'Bonds "), and as such, is familiar with the facts herein and is authorized and qualified to execute and deliver this certificate on behalf of the Insurer; (ii) that on March 23, 1994, the Santa Ana Financing Authority (the "Authority ") issued its $107,399,438.50 Santa Ana Financing Authority Police Administration and Holding Facility, Lease Revenue Bonds, Series 1994A (the "1994 Bonds "), the proceeds of which were used to finance the costs of the construction and equipping of a police administration and holding facility (the "1994 Project'); (iii) that the 1994 Bonds were issued pursuant to the terms of an indenture, dated as of March 1, 1994 (the "1994 Indenture "), by and between the Authority and Meridian Trust Company of California, since succeeded by The Bank of New York Mellon Trust Company, N.A., as trustee thereunder (the "1994 Trustee "); (iv) that in order to provide for the repayment of the 1994 Bonds, the Authority leased certain real property and improvements (the "Original 1994 Property ") to the City of Santa Ana (the "City ") pursuant to a lease agreement, dated as of March 1, 1994, as amended (the "1994 Lease Agreement'), under which the City agreed to make lease payments to the Authority (the "1994 Lease Payments ") from moneys in the City's General Fund and the City has budgeted and appropriated sufficient amounts in each year to pay the full amount of principal of and interest on the 1994 Bonds; (v) that, in 1997, following the completion of the 1994 Project, the 1994 Lease Agreement was modified to provide that the 1994 Project and the site thereof would substitute for the Original 1994 Property (the "Final 1994 Property ") and all of the Original 1994 Property, other than the site of the 1994 Project, was released; (vi) that on February 26, 2004, the Authority issued its $38,845,000 Santa Ana Financing Authority Police Administration and Holding Facility, Lease Revenue Refunding Bonds, Series 2004, to provide for the defeasance of a portion of the 1994 Bonds (the "2004 Bonds "); (vii) that the 2004 Bonds were issued under the 1994 Indenture, amended by a supplement thereto, on a parity with the 1994 Bonds, and the 1994 Lease Agreement was amended to provide that the 2004 Bonds, as wells as the 1994 Bonds, would be secured by the 1994 Lease Payments; (viii) that on November 16, 2004, the Insurer issued its reserve fund surety bond in the amount of $4,613,906.25 (the "Surety Bond ") which funded 50% of the reserve hind requirement for the 1994 Bonds and the 2004 Bonds, releasing that amount of cash from the reserve fund for the 1994 Bonds and the 2004 Bonds for use by the City; 19014.10 4 -195 (ix) that provision has been made for the full payment of the 2004 Bonds and the 2004 Bonds are no longer outstanding; (x) that the 1994 Bonds are currently outstanding in the principal amount of $67,100,000; (xi) that the Authority and the City propose to defease to maturity $33,550,000 principal amount (50 %) of the 1994 Bonds (the "Defeased 1994 Bonds'); (xii) that in connection with such defeasance, and pursuant to Sections 5.03(c) and 8.01(c) of the 1994 Indenture, the Authority and the City have requested that the Insurer maintain the full amount of the Surety Bond with respect to the non - defeased 1994 Bonds, so that the Surety Bond will provide the full amount of the reserve requirement of the non - defeased 1994 Bonds, and agree not to reduce the full amount of the Surety Bond; (xiii) that, in consideration of the reduction of the outstanding principal amount of the 1994 Bonds and the Insurer's obligation to provide its insurance therefor, the Insurer hereby consents and agrees that following the defeasance of the Defeased 1994 Bonds, it will maintain the full amount of the Surety Bond with respect to the non - defeased 1994 Bonds, so that the Surety Bond will provide the full amount of the reserve requirement of the non - defeased 1994 Bonds, and agrees not to reduce the full amount of the Surety Bond; (xiv) that in connection with the defeasance of the Defeased 1994 Bonds, and pursuant to Section 2.06 of the 1994 Lease Agreement, the Authority and the City have proposed a further modification of the 1994 Lease Agreement to release of the police administration building, transfer tunnel and parking structure portions of the Final 1994 Property, leaving only the holding facility and the site thereof as the Property leased under the Lease Agreement; (xv) that, in consideration of the reduction of the outstanding principal amount of the 1994 Bonds and the Insurer's obligation to provide its insurance therefor, the Insurer hereby consents and agrees to the release of the police administration building, transfer tunnel and parking structure portions of the Final 1994 Property, leaving only the holding facility and the site thereof as the Property leased under the Lease Agreement, subject to the Insurer's receipt of the following: (a) certification by the City that the remaining useful life of the Property, as amended, meets or exceeds the remaining term of the Lease Agreement, serves the purposes of the City and is otherwise unencumbered, (b) certification by the City that the value of the Property, as amended, is at least equal to the remaining principal amount of the Lease Agreement, as determined by an appraisal of the amended Property, (c) a written Opinion of Counsel (as defined in the Lease Agreement), that the amendments have been duly authorized, executed and delivered and constitute the valid and binding obligations of the City and the Authority enforceable in accordance with their terms, and (d) the City furnishes the Authority, the Trustee and the Bond Insurer with evidence that the City has delivered to any rating agency then rating the Bonds copies of the Certificates and appraisal described in paragraphs (b) and (c) above; and 2 4 -196 (xvi) that capitalized terms used herein and not otherwise defined shall have the same meanings ascribed to them as in the 1994 Indenture, as amended, or the 1994 Lease Agreement, as amended. Dated: 2014 NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION, as successor to MBIA Insurance Corporation, as Insurer By Name Title 4 -197 4 -198 EXHIBIT 17 SAFA RESOLUTION APPROVING AN AMENDMENT TO THE LEASE AGREEMENT RELATING TO THE FINANCING AND REFINANCING OF THE PARKING STRUCTURE ADJACENT TO THE STATE APPELLATE COURT BUILDING 4 -199 4 -200 RESOLUTION NO. A RESOLUTION OF THE SANTA ANA FINANCING AUTHORITY APPROVING AN AMENDMENT TO THE LEASE AGREEMENT RELATING TO THE FINANCING AND REFINANCING OF THE PARKING STRUCTURE ADJACENT TO THE STATE APPELLATE COURT BUILDING IN SANTA ANA, CALIFORNIA, APPROVING FORM AND AUTHORIZING EXECUTION OF RELATED DOCUMENTS AND APPROVING OFFICIAL ACTIONS BE IT RESOLVED BY THE BOARD OF DIRECTORS (THE 'BOARD ") OF THE SANTA ANA FINANCING AUTHORITY (THE "AUTHORITY "), AS FOLLOWS: WHEREAS, the City of Santa Ana (the "City ") entered into transactions with the Authority in 2007 to finance and refinance the construction of a parking structure adjacent to the State Appellate Court Building in Santa Ana, California (the `Project'); WHEREAS, in connection with the financing of the Project, the City entered into the Lease Agreement, with the original principal amount of $8,470,000; WHEREAS, lease payments made by the City under the Lease Agreement were assigned by the Authority to All Points Public Funding, LLC, now known as Capital One Public Funding, LLC (the "Assignee "), as investor; and WHEREAS, the Assignee has agreed to reduce the interest component of lease payments made under the Lease Agreement to 3.60% from 4.78191203% and to remove the prepayment premium in the event of a prepayment of the principal component of lease payments by the City; NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: Section 1. Findings and Determinations. The Council hereby finds and determines that the foregoing recitals are true and correct. Section 2. Approval of First Amendment to Lease Agreement. The Council hereby approves a first amendment to the Lease Agreement, amending and supplementing the Lease Agreement, in the form on file with the Secretary (the "First Amendment'), together with such additions thereto and changes therein as the Chair, the Executive Director or the Treasurer, or any designee thereof (the "Designated Officers ") shall deem necessary, desirable or appropriate, the execution of which shall be conclusive evidence of the approval of any such additions and changes. The Designated Officers, each acting alone, are hereby authorized and directed to execute, and the Authority is hereby authorized and directed to attest to, the final form of the First Resolution No. 2014 -XXX Page 1 of 3 4 -201 Amendment for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of the First Amendment. Section 3. Official Actions. The Chair, the Executive Director, the Treasurer, and all other appropriate officials of the Authority, are hereby authorized and directed to execute such other agreements, documents and certificates and to take such other actions as may be necessary to effect the purposes of this resolution and the financing herein authorized. Section 4. Effective Date. This Resolution shall take effect upon its adoption by the Board. PASSED AND ADOPTED by the Board of Directors of the Santa Ana Financing Authority this 3rd day of June, 2014, by the following vote: APPROVED AS TO FORM: Sonia R. Carvalho, General Counsel Bv: Jose Sandoval, Assistant General Counsel SANTA ANA FINANCE AUTHORITY a 4 -202 Chair Resolution No. 2014 -XXX Page 2 of 3 AYES: Boardmembers: NOES: Boardmembers: ABSTAIN: Boardmembers: NOT PRESENT: Boardmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Secretary to the Board, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the Santa Ana Financing Authority on Date: 4 -203 Maria D. Huizar, Secretary to the Board Resolution No. 2014 -XXX Page 3 of 3 4 -204 EXHIBIT 18 CITY RESOLUTION APPROVING AN AMENDMENT TO THE LEASE AGREEMENT RELATING TO THE FINANCING AND REFINANCING OF THE PARKING STRUCTURE ADJACENT TO THE STATE APPELLATE COURT BUILDING 4 -205 4 -206 RESOLUTION NO. 2014 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING AN AMENDMENT TO THE LEASE AGREEMENT RELATING TO THE FINANCING AND REFINANCING OF THE PARKING STRUCTURE ADJACENT TO THE STATE APPELLATE COURT BUILDING IN SANTA ANA, CALIFORNIA, APPROVING FORM AND AUTHORIZING EXECUTION OF RELATED DOCUMENTS AND APPROVING OFFICIAL ACTIONS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: WHEREAS, the City entered into transactions with the Santa Ana Financing Authority (the "Authority ") in 2007 to finance and refinance the construction of a parking structure adjacent to the State Appellate Court Building in Santa Ana, California (the 'Project'); WHEREAS, in connection with the financing of the Project, the City entered into the Lease Agreement, with the original principal amount of $8,470,000; WHEREAS, lease payments made by the City under the Lease Agreement were assigned by the Authority to All Points Public Funding, LLC, now known as Capital One Public Funding, LLC (the "Assignee "), as investor; and WHEREAS, the Assignee has agreed to reduce the interest component of lease payments made under the Lease Agreement to 3.60% from 4.78191203% and to remove the prepayment premium in the event of a prepayment of the principal component of lease payments by the City; NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: Section 1. Findings and Determinations. The Council hereby finds and determines that the foregoing recitals are true and correct. Section 2. Approval of First Amendment to Lease Agreement. The Council hereby approves a first amendment to the Lease Agreement, amending and supplementing the Lease Agreement, in the form on file with the City Clerk (the "First Amendment'), together with such additions thereto and changes therein as the Mayor, the City Manager, the Executive Director of Finance, or any designee thereof (the "Designated Officers ") shall deem necessary, desirable or appropriate, the execution of which shall be conclusive evidence of the approval of any such additions and changes. The Designated Officers, each acting alone, are hereby authorized and directed to execute, and the City is hereby authorized and directed to attest to, the final form of the Resolution No. 2014 -XXX Page 1 of 3 4 -207 First Amendment for and in the name and on behalf of the City. The Council hereby authorizes the delivery and performance of the First Amendment. Section 3. Official Actions. The Mayor, the City Manager, the Executive Director of Finance, the City Clerk, and all other appropriate officials of the City, are hereby authorized and directed to execute such other agreements, documents and certificates and to take such other actions as may be necessary to effect the purposes of this resolution and the financing herein authorized. Section 4. Effective Date. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of June, 2014. APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney Bv: Jose Sandoval, Chief Assistant City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: 4 -208 Miguel A. Pulido Mayor Resolution No. 2014 -XXX Page 2 of 3 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: 4 -209 Maria D. Huizar, Clerk of the Council Resolution No, 2014 -XXX Page 3 of 3 4 -210