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HomeMy WebLinkAbout SA_FULL PACKET_2016-07-05MINUTES OF THE SPECIAL MEETING OF THE SUCCESSOR AGENCY OF THE CITY OF SANTA ANA, CALIFORNIA CALLED TO ORDER JUNE 21, 2016 COUNCIL CHAMBER 22 CIVIC CENTER PLAZA SANTA ANA, CA 9:12 P.M. ATTENDANCE AGENCY MEMBERS Present: MIGUEL A. PULIDO, Chair VINCENT F. SARMIENTO, Chair Pro Tern ANGELICA AMEZCUA P. DAVID BENAVIDES ROMAN A. REYNA SAL TINAJERO AGENCY MEMBER Absent: MICHELE MARTINEZ STAFF Present: DAVID CAVAZOS, Executive Director SONIA R. CARVALHO, Legal Counsel MARIA D. HUIZAR, Recording Secretary PUBLIC COMMENTS - None CONSENT CALENDAR ITEMS MOTION: Approve staff recommendations on Consent Calendar items 1 and 2. MOTION: Tinajero SECOND: Amezcua VOTE: AYES: Amezcua, Benavides, Pulido, Reyna, Sarmiento, Tinajero (6) NOES: None (0) ABSTAIN: None (0) ABSENT: Martinez (1) MINUTES FOR CITY OF SANTA ANA A _� JUNE 21, 2016 ACTING AS SUCCESSOR AGENCY 1 1. SPECIAL MEETING MINUTES OF FEBRUARY 16, 2016. MOTION: Approve Minutes. 2. QUARTERLY REPORT OF CONTRACTS ENTERED INTO BY THE CITY MANAGER (JANUARY 1, 2016 — MARCH 31, 2016) {STRATEGIC PLAN NO. 4, 1} MOTION: Receive and file. * *END OF CONSENT CALENDAR ** 3. CITY COUNCIL ACTING AS SUCCESSOR AGENCY COMMENTS - None ADJOURNED- 9:12 P.M. Maria D. Huizar, Recording Secretary MINUTES FOR CITY OF SANTA ANA 2 JUNE 21, 2016 ACTING AS SUCCESSOR AGENCY 1 -2 REQUEST •a SUCCESSOR 1 • �vr MEETING DATE: JULY 5, 2016 111Ir111i -4 RESOLUTION AUTHORIZING THE REFUNDING OF THE TAX ALLOCATION BONDS, SERIES 2003 A & B {STRATEGIC PLAN NO. 4, 2D) CITY MANAGER RECOMMENDED ACTION CLERK OF THE COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Implementing Resolution ❑ Other CONTINUED TO FILE NUMBER 1. Adopt a resolution authorizing the refunding of the former Community Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Bonds Series 2003A and 2003B and approval of related bond documents: Supplement to the Bond Indenture, Bond Purchase Agreement and the Continuing Disclosure Certificate. 2. Authorize the City Manager and Clerk of the Council to execute agreements with the following recommended firms through December 31, 2017 and confirm Urban Futures, Inc ( "UFI ") as the financial advisor for this transaction, based on the submitted fee proposals and evaluations in order to provide refinancing services related to the refunding of the former Community Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Bonds Series 2003A and 2003B, subject to non - substantive changes approved by the City Manager and the City Attorney for the following amounts: • Urban Futures, Inc. — Financial Advisor (not -to- exceed $49,500) • Stifel, Nicolaus & Company, Inc. — Underwriter (not -to- exceed $102,500) • Orrick, Herrington & Sutcliffe LLP — Bond Counsel (not -to- exceed $50,000) • Best Best & Krieger LLP — Disclosure Counsel (not -to- exceed $31,000) • Keyser Marston Associates, Inc. — Fiscal Consultant (not -to- exceed $37,500) 3. Approve a waiver of the conflict of interest created by Stradling Yocca Carlson & Rauth representing Stifel, Nicolaus & Company, Inc. as underwriter's counsel in connection with the refunding of the Community Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Bonds Series 2003A and 2003B. 4. Authorize the City Manager to execute the Consent Disclosure Form provided by Stradling Yocca Carlson & Rauth, and any other required documents, related to its representation of 3 -1 Resolution Authorizing the Refunding of 2003 Tax Allocation Bonds July 5, 2016 Page 2 Stifel, Nicolaus & Company, Inc. as underwriter's counsel with respect to this specific bond refunding. DISCUSSION In 2003, the Community Redevelopment Agency of the City of Santa Ana (the "former RDA ") issued its South Main Street Redevelopment Project, Tax Allocation Bonds, Series 2003A in the amount of $20,945,000 and Tax Allocation Refunding Bonds, Series 2003B, in the amount of $34,145,000 (the "2003 Bonds "). The Series 2003A bonds were issued to fund redevelopment activities of benefit to the South Main Street Redevelopment Project Area. The Series 20038 bonds were issued to refund the former RDA's bonds issued in 1993. Approximately $22 million of the 2003 Bonds are currently outstanding as of June 30, 2016. The 2003 Bonds consist of an interest rate ranging from 4.5% to 5% with the longest maturity (9/1/2031). Per Assembly Bill (AB) 26 and 27, the State of California ( "State ") dissolved existing redevelopment agencies, which led to the formation of the Successor Agency to the Santa Ana Community Redevelopment Agency (the "Successor Agency "). The Successor Agency inherited the responsibility for repayment of the former RDA debt service including the 2003 Bonds. The State introduced additional legislation, AB 1484, which allowed existing successor agencies to refund existing bonds, with approval of the Oversight Board and the State Department of Finance, for the purpose of generating a debt service savings. CURRENT MARKET ANALYSIS Interest rates are currently at historic lows and thus refinancing the 2003 Bonds and subsequent issuance of a refunding bond issue (the "2016 Bonds "), is expected to generate a total debt service savings of approximately $2.7 million, without extending the current maturity date of the bonds. The final savings amount will depend on the market interest rates in effect at the time the 2016 Bonds are priced, which is anticipated to be during the fourth week of September 2016. Based on the redevelopment dissolution laws, the estimated annual savings amount (approximately $300,000 per year through 2019 and $100,000 through 2020 to 2031) would be allocated towards enforceable obligations, administrative costs, or shared among taxing entities as residual revenues. Pursuant to Health & Safety Code Section 34177.5(f), the Oversight Board, on June 14, 2016, approved and authorized the Successor Agency to commence the refunding of the 2003 Bonds. The Oversight Board also authorized the Successor Agency to recover related costs in connection with the issuance of refunding bonds from proceeds of said bond, or from the Recognized Obligation Payment Schedule process. The State Department of Finance ( "DOF ") is allowed 60 days to review any actions of the Oversight Board including the approval of refunding bond issues. The DOF will have until approximately September of 2016 to review the action by the Oversight Board. Once the financing and legal documents for the 2016 Bonds are approved by the Successor Agency and the Oversight Board, the pertinent documents will be submitted to DOF for review and approval. 3 -2 Resolution Authorizing the Refunding of 2003 Tax Allocation Bonds July 5, 2016 Page 3 REQUEST FOR PROPOSALS Staff designated UFI as its financial advisor for this particular transaction. City staff directed UFI to conduct requests for proposals from underwriting and bond /disclosure firms wishing to provide services in connection with the proposed refunding of the 2003 Bonds. Proposals were received by UFI on Thursday, November 14, 2014from the following firms: Underwriters • Stifel Nicolaus • Mesirow Financial • Piper Jaffray Bond / Disclosure Counsel Firms • Stradling Yocca Carlson & Rauth • Best Best & Krieger • Norton Fulbright Rose • Orrick, Herrington & Sutcliffe • Aleshire & Wynder • Goodwin Proctor In developing a response, proposers were asked to provide experience with tax allocation bonds post AB 1484, staff to be assigned to this transaction and a fee proposal for services. Listed below is a summary of the proposals. UNDERWRITER PROPOSALS Proposal Firm Fee Proposal Post AB 1484 Deals Completed Mesirow Financial $72,692 1 Completed Transactions Stifel Nicolaus $95,898 47 Completed Transactions Piper Jaffray $132,884 12 Completed Transactions BOND /DISCLOSURE COUNSEL PROPOSALS Proposal Firm Bond Counsel Fee Disclosure Counsel Fee Post AB 1484 Deals Completed Orrick, Herrington & Sutcliffe $40,000 $30,000 21 Completed Transactions Best Best & Krieger $60,000 $30,000 13 Completed Transactions Norton Rose Fulbright $45,000 $37,500 12 Completed Transactions Stradling Yocca Carlson & Rauth $70,000 $45,000 48 Completed Transactions Aleshire & Wynder $80,000 5 Completed Transactions Goodwin Proctor $87,000 $67,000 2 Completed Transactions After reviewing the fee proposals and the evaluation of each proposed team, staff recommends the Successor Agency engage Stifel Nicolaus as underwriter, Orrick Herrington & Sutcliffe as bond counsel and Best Best & Kregier as disclosure counsel. While Stifel Nicolaus did not propose the lowest fee, the firm is considered an industry leader in the area of post AB 1484 tax allocation bond refunding transactions and has the best knowledge of the City via previous transactions. In addition, the recommended underwriter is also including underwriter's counsel (Stradling Yocca Carlson & Rauth), which will provide additional due diligence in reviewing the transaction. Both Orrick, Herrington & Sutcliffe, and Best Best & Krieger, represent the lowest 3 -3 Resolution Authorizing the Refunding of 2003 Tax Allocation Bonds July 5, 2016 Page 4 cost of the experienced firms available for bond and disclosure counsel services respectively. Keyser Marston and Associates is also recommended due to their knowledge of the data analysis regarding the applicable project areas obtained while providing fiscal consultant services since the issuance of the 2003 Bonds. As a result, staff is recommending the referenced firms to provide the necessary services for this transaction. On June 28, 2016, Stradling Yocca Carlson & Rauth (underwriter's counsel) informed the City, via issuance of correspondence, of a potential conflict of interest. Stradling Yocca Carlson & Rauth represents and have represented the Successor Agency as special counsel with respect to various matters from time to time as requested by the Successor Agency. As such, they are requesting the Successor Agency to authorize a waiver of the said potential conflict of interest. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal #4 — City Financial Stability, Objective #2 — (Provide a reliable five -year financial forecast that ensures financial stability in accordance with the strategic plan), Strategy D (Conduct an assessment of the City's debt and refinancing options to achieve savings). FISCAL IMPACT All costs associated with this transaction will be paid at closing with proceeds from the refunding 2016 Bonds. The proposed 2016 Bonds will generate an estimated total debt service savings of $2.7 million net of all costs of issuance equal to $300,000 annually through 2019 and $100,000 from 2020 through 2031. An estimated 15% of the savings will be obtained in the City's General Fund with the balance going to the local school district and Orange County. The term of the 2016 Bonds will not exceed the term of the 2003 Bonds being refunded. The source of repayment of the 2016 Bonds would be limited to tax revenues (in amounts equivalent to the former tax increment revenues) and deposited by the County into the Successor Agency's Redevelopment Property Tax Trust Fund, and the 2016 Bonds will not be designated as a debt of the City. Robert C. Cortez Special Assistant to the City Manager City Manager's Office APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director 6 6 Finance and Management Services Agency Exhibits: 1. Resolution 2. Supplement to the Bond Indenture 3. Bond Purchase Agreement 3 -4 Resolution Authorizing the Refunding of 2003 Tax Allocation Bonds July 5, 2016 Page 5 4. Continuing Disclosure Certificate 5. Finalized Agreement with Urban Futures, Inc. 6. Agreement with Stifel, Nicolaus & Company, Inc. 7. Agreement with Orrick, Herrington & Sutcliffe LLP 8. Agreement with Best Best & Krieger LLP 9. Agreement with Keyser Marston & Associates, Inc 10. Letter from Stradling Yocca Carlson & Rauth, P.C. 3 -5 3 -6 RESOLUTION NO. RESOLUTION OF THE SUCCESSOR AGENCY TO THE COMMUNITY__2EDEVELOPMENT - AGENCY CIF TH CII'Y�P SANTA ANA AUTHORIZING THE ISSUANCE OF ITS SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, TAX ALLOCATION REFUNDING BONDS (MERGED PROJECT AREA), SERIES 2016; APPROVING A FORM OF INDENTURE, A FORM OF BOND PURCHASE AGREEMENT AND A FORM OF CONTINUING DISCLOSURE CERTIFICATE; MAKING CERTAIN DETERMINATIONS RELATING THERETO; AND AUTHORIZING CERTAIN OTHER ACTION IN CONNECTION THEREWITH WHEREAS, pursuant to the Community Redevelopment Law (Part I of Division 24 of the Health and Safety Code of the State of California and referred to herein as the "Law "), the City Council of the City of Santa Ana (the "City ") created the former Community Redevelopment Agency of the City of Santa Ana (the "Former RDA "); WHEREAS, the Former RDA was a redevelopment agency, a public body, corporate and politic duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Law, and the powers of such agency included the power to issue bonds for any of its corporate purposes; WHEREAS, the Former RDA adopted six redevelopment project areas between 1973 and 1989, including the Central City Redevelopment Project Area, the Inter -City Commuter Station Redevelopment Project Area, the North Harbor Boulevard Redevelopment Project Area, the South Harbor Boulevard /Fairview Street Redevelopment Project Area, the South Main Street Redevelopment Project Area, and the Bristol Corridor Redevelopment Project Area (the "constituent Redevelopment Projects" or "Redevelopment Projects "), each of which was adopted and approved in accordance with the Law; WHEREAS, to allow tax increment revenues to be shared between Redevelopment Projects and thereby facilitate redevelopment of the Redevelopment Projects, the Redevelopment Projects were merged in 2004 in compliance with all requirements of the Law, creating the Merged Project Area; WHEREAS, the Merged Plan contemplated that the Former RDA would issue its bonds to finance and/or refinance a portion of the cost of such redevelopment; WHEREAS, California Assembly Bill No. 26 (First Extraordinary Session) ("ABX1 26 ") adopted on June 29, 2011, dissolved all redevelopment agencies and community development agencies in existence in the State of California, as of February 1, 2012, and designated "successor agencies" and "oversight boards" to satisfy "enforceable obligations" of EXHIBIT 1 3 -7 the former redevelopment agencies and administer dissolution and wind down of the former redevelopment agencies; -- _ " "--- ----------- WIIEREAS-, tha City agreed, o as%he successor agency efereed�o her as e "Successor Agency ") to the Former RDA commencing upon the dissolution of the Former RDA on February 1, 2012 pursuant to ABXI 26; WHEREAS, on June 27, 2012 as part of the Fiscal Year 2012 -2013 State of California budget bill, the Governor signed into law Assembly Bill 1484 ( "AB 1484 "), which modified or added to some of the provisions of ABXI 26, including provisions related to the refunding of outstanding redevelopment agency bonds and the expenditure of remaining bond proceeds derived from redevelopment agency bonds issued on or before December 31, 2010; WHEREAS, in 2003, the Former RDA issued and sold $20,945,000 aggregate principal amount of its Conununity Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Bonds, Series 2003A, of which $13,920,000 aggregate principal amount will be outstanding as of September 2, 2016 (the "Series 2003A Bonds "), and $34,145,000 aggregate principal amount of its Community Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Refunding Bonds, Series 2003B, of which $8,055,000 aggregate principal amount will be outstanding as of September 2, 2016 (the "Series 2003B Bonds" and, together with the Series 2003A Bonds, the "2003 Bonds "), pursuant to a First Supplement to Indenture with respect to the Series 2003A Bonds, dated is of April 1, 2003 (the "2003 First Supplement"), and a Second Supplement to Indenture with respect to the Series 2003B Bonds, dated as of May 1, 2003 (the "2003 Second Supplement "), each by and between the Former RDA and BNY Western Trust Company (now known as The Bank of New York Mellon Trust Company, N.A.), as successor trustee (the "2003 Trustee ") and each supplementing that Indenture dated as of August 1, 1993, by and between the Former RDA and Dai -Ichi Kangyo Bank of California (the "1993 Indenture" and, as supplemented and amended by the 2003 First Supplement and the 2003 Second Supplement, the "2003 Indenture "), secured by and payable from tax increment revenues allocated to the South Main Street Redevelopment Project, and which 2003 Bonds are subject to optional redemption at any time at a redemption price equal to the outstanding principal amount thereof, plus interest due thereon to the date fixed for redemption, without premium; WHEREAS, in 2011, the Former RDA issued and sold $66,790,000 aggregate principal amount of its Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area), 2011 Series A, of which $66,770,000 aggregate principal amount is currently outstanding and will be outstanding as of September 2, 2016 (the "Series 2011 Bonds "), pursuant to an Indenture of Trust, dated as of February 1, 2011 (the "2011 Bonds Indenture "), between the Former RDA and the Trustee, which Series 2011 Bonds are not subject to optional redemption at this time and are not being considered for refunding at this time; WHEREAS, Health & Safety Code Section 34177.5(a)(1) authorizes successor agencies to refund outstanding bonds provided that (i) the total interest cost to maturity on the refunding bonds or other indebtedness plus the principal amount of the refunding bonds or other indebtedness shall not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be refunded plus the remaining principal of the bonds or other indebtedness to be 2 3 -8 refunded, and (ii) the principal amount of the refunding bonds or other indebtedness shall not exceed the amount required to defease the refunded bonds or other indebtedness, to establish customary debt service reserves, and to pay related costs of issuance; WHEREAS, the Successor Agency has solicited a report of an independent financial advisor entitled Bond Refunding Financing Plan (a copy of which is presented at this meeting) and employed such advisor in developing financing proposals for consideration by the Successor Agency and it is understood that such report, as it may be further revised, may be made available to the Department of Finance at its request; WHEREAS, the Successor Agency has determined to issue not to exceed $25,000,000 aggregate principal amount of its Successor Agency to the Community Redevelopment Agency of the City of Santa Ana, Tax Allocation Refunding Bands (Merged Project Area), Series 2016 in one or more series, on a taxable basis or a tax-exempt basis, or both, and with such other name and series designation as is deemed appropriate (the "Refunding Bonds "), for the purpose of (i) refinancing certain redevelopment activities of the Former RDA through the refunding of the 2003 Bonds, (ii) paying the costs of issuing the Refunding Bonds, (iii) funding a Reserve Account as may be required for the Refunding Bonds and (iv) if advisable, paying for the cost of municipal bond insurance and/or a surety to fund the Reserve Account for the Refunding Bonds; WHEREAS, the Refunding Bonds will be issued, payable from amounts on deposit in the Redevelopment Property Tax Trust Fund of the Agency (the "RPTTF ") and allocated to the Agency's Redevelopment Obligation Retirement Fund, pursuant to an Indenture of Trust (the "Ind,enture "), by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee "); and WHERE AS, following approval of the Successor Agency's Oversight Board (the "Oversight Board ") of the issuance of the Refunding Bonds by the Successor Agency and upon approval by the Department of Finance of such approval by the Oversight Board, the Successor Agency will, with the assistance of bond counsel, disclosure counsel and its financial advisor, cause to be prepared a form of Official Statement describing the Refunding Bonds and containing material information relating to the Refunding Bonds, the preliminary form of which will be submitted to the Successor Agency for approval for distribution by Stifel, Nicolaus & Company, Incorporated (the "Underwriter ") to persons and institutions interested in purchasing the Refunding Bonds; and WHEREAS, there has been presented, at this meeting a form of Indenture, a form of Continuing Disclosure Certificate and a form of Purchase Contract, each to be executed in connection with the issuance of the Refunding Bonds; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA ANA ACTING AS SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA DOES HEREBY RESOLVE AS FOLLOWS: 1. Approval of Issuance of Refunding Bonds. The issuance of the Refunding Bonds, in order to refinance redevelopment activity pursuant to the Merged Plan, which is permitted by health and Safety Code Section 34177.5(a)(1), is hereby authorized and approved. 3 3 -9 The Refunding Bonds are authorized to be executed by the manual or facsimile signature of the Mayor of the City, acting for the Successor Agency, and attested by the manual or facsimile signature of the Cleric of the Council, acting for the Successor Agency. The Refunding Bonds, whcn so executed, are authorized to be delivered the Trustee for authentication. 2. Approval of Indenture, The form of Indenture presented at this meeting is hereby approved and the Mayor, the City Manager, the Executive Director - Finance & Management Services Agency and the Clerk of the Council (each an "Authorized Officer," acting for the Successor Agency) are each acting alone authorized and directed, for and in the name of and on behalf of the Successor Agency, to execute, acknowledge and deliver the Indenture in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof The date, maturity date or dates, interest rate or rates, interest payment dates, terms of redemption and other terms of the Refunding Bonds shall be as provided in the Indenture as finally executed. 3. Approval of Continuing Disclosure Certificate. The form of Continuing Disclosure Certificate to be executed and delivered, by the Successor Agency (the "Continuing Disclosure Certificate "), presented at this meeting is hereby approved and any Authorized Officer, acting alone, is authorized and directed, for and in the name of and on behalf of the Successor Agency, to execute, acknowledge and deliver the Continuing Disclosure Certificate in substantially the form presented at this meeting with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. 4. Approval of Purchase Contract. The form of Bond Purchase Agreement, between the Successor Agency and the Underwriter (the "Purchase Agreement "), presented at this meeting is hereby approved and any Authorized Officer acting alone is authorized and directed, for and in the name of and on behalf of the Successor Agency, to execute, acknowledge and deliver the Purchase Agreement in substantially the form presented at this meeting with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the true interest cost of the Refunding Bonds shall not exceed 4.00 %, the underwriters' discount (exclusive of original issue discount) shall not exceed 0.4 %, the maturity of the Refunding Bonds date shall not exceed the maximum permitted under the Law, and, as required by Health & Safety Code Section 34177.5, (i) the total interest cost to maturity on the Refunding Bonds plus the principal amount of the Refunding Bonds shall not exceed the total remaining interest cost to maturity on the bonds to be refunded plus the remaining principal of the bonds to be refunded, and (ii) the principal amount of the Refunding Bonds shall not exceed the amount required to defease and refund the refunded bonds, to establish customary debt service reserves, and to pay related costs of issuance. 5. Bond Insurance and Surety Bond. If an Authorized Officer determines that it will be advantageous to the Successor Agency to purchase municipal bond insurance or a debt service reserve fiend surety bond with respect to some or all of the Refunding Bonds, such officer is hereby authorized (a) to purchase such insurance or surety bond on behalf of the Successor Agency at market rates, and (b) to make such changes to the agreements and documents relating 4 3 -10 to the Refunding Bonds as may be needed to obtain such insurance or surety bond. In connection with any such surety bond, each Authorized Officer is hereby severally authorized and directed to execute and deliver an agreement on behalf of the Successor Agency, in such form as approved by such Authorized Officer, with the provider of such surety bond pursuant to which the Successor Agency would agree to reimburse such provider for any draws under such surety bond and to pay such provider any other fees and expenses related thereto as such Authorized Officer shall approve, such approval (and the approval by the Authorized Officer of the form of such agreement) to be conclusively evidenced by the execution and delivery of such agreement. 6. Recovery of Costs. The Successor Agency is hereby authorized to recover its costs of issuance with respect to the Refunding Bonds including the cost of reimbursing the City for staff time and costs spent with respect to the Refunding Bonds, 7. Other Acts. The officers and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, including refunding escrow instructions, which in consultation with Orrick, Herrington & Sutcliffe LLP, the Successor Agency's bond counsel, they may deem necessary or advisable in order to consummate the issuance, sale and delivery of the Refunding Bonds, or otherwise effectuate the purposes of this Resolution, and any and all such actions previously taken by such officers or staff members are hereby ratified and confirmed. S. Effective Date. This Resolution shall take effect upon adoption. ADOPTED this 5th day of July 2016. APPROU AS T� FORM: Sonia III arvPho City Attorney Miguel A. Pulido Mayor AYES: Councilmembers NOES: Councilmembers 3 -11 ABSTAIN: Councilmembers NOT PRESENT: Councilmembers 3 -12 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached i luSion No— —Io be�he original resol ion ado d b he Ciiy Council of -thee City—of------ Santa Ana on July 5, 2016. Date: 3 -13 Clerk of the Council City of Santa Ana 3 -14 INDENTURE OF TRUST by and between SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA and THE BANK OF NEW YORK{ MELLON TRUST COMPANY, N.A., as Trustee Dated as of [DATED DATE] relating to Successor Agency to the Community Revelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds $ Series 2016A (Tax - Exempt) including EXHIBIT 2 3 -15 Series 2016B (Federally Taxable) TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; EQUAL SECURITY ............................ ............................... 4 Section1.01 Definitions ............................................................ ............................... 4 Section 1.02 Equal Security ..................................................... ............................... 16 ARTICLE II THE BONDS; CERTAIN PROVISIONS OF THE BONDS ........................16 Section 2.01 General Authorization; Bonds .............................. .............................16 Section 2.02 Terms of Series 2016 Bonds ............................... ............................... 17 Section 2.03 Form of Series 2016 Bonds ................................... .............................18 Section 2.04 Redemption of Series 2016 Bonds ........................ .............................19 Section 2.05 Notice of Redemption ......................................... ............................... 19 Section 2.06 Selection of Bonds for Redemption .................... ............................... 19 Section 2.07 Payment of Redeemed Bonds ............................. ............................... 20 Section 2,08 Purchase in Lieu of Redemption ......................... ............................... 20 Section 2.09 Execution of Bonds ............................................. ............................... 20 Section 2.10 Transfer of Bonds ............................................... ............................... 21 Section 2.11 Exchange of Bonds ............................................. ............................... 21 Section 2.12 Use of Depository ............................................... ............................... 21 Section 2,13 Bond Registration Books .................................... ............................... 23 Section 2.14• Mutilated, Destroyed, Stolen or Lost Bonds ....... ............................... 23 Section 2.15 Validity of Bonds ................................................ ............................... 24 ARTICLE III APPLICATION OF PROCEEDS OF BONDS .............. ............................... 24 Section 3.01 Application of Proceeds of Sale of Series 2016 Bonds -- Allocation Among Funds and Accounts ............. ............................... 24 ARTICLE IV ISSUANCE OF ADDITIONAL BONDS ...................... ............................... 25 Section 4,01 Conditions for the Issuance of Additional Bonds .............................. 25 Section 4.02 Procedure for the Issuance of Additional Bonds ............................... 26 ARTICLE V TAX REVENUES; CREATION OF FUNDS .................. .............................27 Section 5.01 Pledge of Tax Revenues; Tax Increment Fund ... ............................... 27 Section 5.02 Receipt and Deposit of Tax Revenues ................ ............................... 30 Section 5.03 Establishment and Maintenance of Accounts for Use of Moneysin the Tax Increment Fund .................... ............................... 30 Section 5.04 Investment of Moneys in Funds and Accounts ... ............................... 32 Section 5.05 2016 Reserve Policy Payment and Reimbursement Provisions ........ 33 Section 5.06 Costs of Issuance Fund ....................................... ............................... 36 ARTICLE VI COVENANTS OF THE AGENCY ................................ ............................... 37 Section 6.01 Punctual Payment ................................................ ............................... 37 Section 6.02 Against Encumbrances ........................................ ............................... 37 Section 6.03 Extension or Funding of Claims for Interest ....... ............................... 37 Section 6.04 Payment of Claims .............................................. ............................... 37 3 -16 TABLE OF CONTENTS (continued) Page Section 6,05 Books and Accounts; Financial Statements ........ ............................... 37 Section 6,06 Protection of Security and Rights of Owners ..... ............................... 38 Section 6.07 Payment of Taxes and Other Charges ................. ............................... 38 Section 6.08 Amendment of Redevelopment Plan .................. ............................... 38 Section 6.09 Tax Revenues ...................................................... ............................... 38 Section6.10 Further Assurances .............................................. ............................... 38 Section 6.11 Tax Covenants; Rebate Fund .............................. ............................... 38 Section 6.12 Compliance with the Dissolution Act ................. ............................... 40 Section 6.13 Negative Pledge .................................................. ............................... 40 Section 6.14 Adverse Change in State Law ............................. ............................... 41 Section 6.15 Credits to Redevelopment Obligation Retirement Fund .................... 41 Section 6.16 Compliance Costs ............................................... ............................... 41 Section 6.17 Continuing Disclosure ........................................ ............................... 41 ARTICLE VII THE TRUSTEE .............................................................. ............................... 42 Section 7,01 Appointment and Acceptance of Duties ............. ............................... 42 Section 7.02 Duties, Immunities and Liability of Trustee ....... ............................... 42 Section 7.03 Merger or Consolidation ..................................... ............................... 45 Section 7.04 Compensation ....................................................... .............................45 Section 7.05 Liability of Trustee ............................................ ............................... 46 Section 7.06 Right to Rely on Documents ............................... ............................... 46 Section 7.07 Preservation and Inspection of Documents ......... ............................... 47 Section 7.08 Indemnity for Trustee ......................................... ............................... 47 ARTICLE VIII . EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF OF OWNERSHIP OF THE BONDS .................................... ............................... 47 Section 8.01 Execution of Instruments; Proof of Ownership .. 47 ARTICLE IX AMENDMENT OF THE INDENTURE ........................ ............................... 48 Section 9,01 Amendment by Consent of Owners .................... ............................... 48 Section 9,02 Disqualified Bonds .............................................. ............................... 49 Section 9.03 Endorsement or Replacement of Bonds After Amendment .............. 49 Section 9.04 Amendment by Mutual Consent.. . ..................................................... 49 Section 9.05 Opinion of Counsel ............................................. ............................... 50 Section 9.06 Notice to Rating Agencies ... ............................... 50 Section 9,07 Transcript of Proceedings to Bond Insurer ......... ............................... 50 ARTICLE X EVENTS OF DEFAULT AND REMEDIES OF OWNERS ........................ 50 Section 10.01 Events of Default and Acceleration of Maturities ............................. 50 Section 10.02 Application of Funds Upon Acceleration ........... ............................... 51 Section 10.03 Trustee to Represent Bondowners ...................... 52 Section 10.04 Bondowners' Direction of Proceedings .............. ............................... 52 Section 10.05 Limitation on Bondowners' Right to Sue ........... ............................... 52 Section 10.06 Non - Waiver ......................................................... ............................... 53 3 -17 TABLE OF CONTENTS (continued) Page Section 10.07 Remedies Not Exclusive ..................................... ............................... 53 ARTICLE XI DEFEASANCE ............................................................... ......................I........ 54 Section 11.01 Discharge of Indebtedness .................................. ............................... 54 Section 11.02 Bonds Deemed to Have Been Paid.. .................................................. 54 ARTICLE XII MISCELLANEOUS ....................................................... ............................... 56 Section 12.01 Liability of Agency Limited to Tax Revenues ... ............................... 56 Section 12.02 Parties Interested Herein ..................................... ............................... 56 Section12.03 Unclaimed Moneys ............................................. ............................... 56 Section 12.04 Moneys Held for Particular Bonds ..................... ............................... 57 Section 12.05 Successor Is Deemed Included in All References to Predecessor......................................................... ............................... 57 Section 12,06 Execution of Documents by Owners... .............................................. 57 Section 12.07 Waiver of Personal Liability ............................... ............................... 57 Section 12.08 Acquisition of Bonds by Agency ........................ ............................... 57 Section 12.09 Destruction of Cancelled Bonds ......................... ............................... 58 Section 12.10 Content of Certificates and Reports .................... ............................... 58 Section 12.11 Funds and Accounts .............................................. .............................58 Section 12.12 Article and Section Headings and References .... ............................... 58 Section 12.13 Partial Invalidity .................................................. ............................... 59 Section12.14 Notices ................................................................... .............................59 Section 12.15 2016 Bond Insurance Policy Payment and Reimbursement Provisions............................................................ ............................... 59 Section 12,16 Bond Insurer Notice Provisions .......................... ............................... 63 Section 12.17 Bond Insurer as Third Party Beneficiary ............ ............................... 64 Section 12.18 California Law ...................................................... .............................64 APPENDIXA FORM OF BOND .............................................................. ............................... A -1 APPENDIX B SCHEDULE OF SEMI - ANNUAL AND ANNUAL INTEREST AND PRINCIPAL PAYMENTS OF THE SERIES 2016 BONDS ...................... B -I iii 3 -18 THIS INDENTURE OF TRUST, dated as of [DATED DATE] (the "Indenture "), by and betweon the SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA (the "Agency"), a public body, corporate and politic, duly organized and existing pursuant to the Community Redevelopment Law of the State of California and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banlcing association organized and existing under the laws of the United States and authorized to accept and execute trusts of the character herein set out with a corporate trust office located in Los Angeles, California, as trustee (the "Trustee "), WITNESSETH: WHEREAS, pursuant to the Community Redevelopment Law (Fart 1 of Division 24 of the California Health and Safety Code and referred to herein as the "Law "), the City Council of the City of Santa Ana (the "City ") created the Community Redevelopment Agency of the City of Santa Ana (the "Former RDA "); and WHEREAS, the Former RDA was a redevelopment agency, a public body, corporate and politic duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Law, and the powers of such agency included the power to issue bonds for any of its corporate purposes; and WHEREAS, pursuant to California Health and Safety Code Section 34173(d), the Successor Agency to the Community Redevelopment Agency of the City of Santa Ana is the successor agency established following the dissolution of the Former RDA on February 1, 2012 pursuant to Assembly Bill XI 26 ( "AB 26 "); and WIIEREAS, as provided in California Health and Safety Code Section 34173(g), the Agency is a separate public entity from the City, which provides for its governance, and the two entities shall not merge; and WHEREAS, Assembly Bill No. 1484 ( "AB 1484 "), a follow on bill to AB X1 26, was enacted on June 27, 2012 and provides a mechanism to refund outstanding bonds or other indebtedness lender certain circumstances; and WHEREAS, Senate Bill No. 107 ( "AB 107 "), a follow on bill to AB 26 and AB 1484, was enacted on September 22, 2015 and provides additional terms and amendments for operations of a successor agency; and WHEREAS, California Health and Safety Code Section 34177.5(a) authorizes successor agencies to refund outstanding bonds or other indebtedness provided that (i) the total interest cost to maturity on the refunding bonds or other indebtedness plus the principal amount of the refunding bonds or other indebtedness shall not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be refunded plus the remaining principal of the bonds or other indebtedness to be refunded, and (ii) the principal amount of the refunding bonds or other indebtedness shall not exceed the amount required to defease the refunded bonds or other indebtedness, to establish customary debt service reserves, and to pay related costs of issuance; and 3 -19 WHEREAS, in 2003, the Former RDA issued and sold $20,945,000 aggregate principal amount of its Community Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Bonds, Series 2003A, of which $ aggregate principal amount is currently outstanding (the "Series 2003A Bonds "), and $34,145,000 aggregate principal amount of its Community Redevelopment Agency of the City of Santa Ana, South Main Street Redevelopment Project, Tax Allocation Refunding Bonds, Series 2003B, of which $ aggregate principal amount is currently outstanding (the "Series 2003B Bonds" and, together with the Series 2003A Bonds, the "Refunded Bonds "), pursuant to a First Supplement to Indenture with respect to the Series 2003A Bonds, dated as of April 1, 2003 (the "2003 First Supplement "), and a Second Supplement to Indenture with respect to the Series 2003B Bonds, dated as of May 1, 2003 (the "2003 Second Supplement'), each by and between the Former RDA and BNY Western Trust Company (now known as The Bank of New York Mellon Trust Company, N.A.), as successor trustee (the "2003 Trustee ") and each supplementing that Indenture dated as of August 1, 1993, by and between the Agency and Dai -Ichi Kangyo Bank of California (the "1993 Indenture" and, as supplemented and amended by the 2003 First Supplement and the 2003 Second Supplement, the "2003 Indenture "), secured by and payable from tax increment revenues allocated to the South Main Street Redevelopment Project, and which Refunded Bonds are subject to optional redemption at any time at a redemption price equal to the outstanding principal amount thereof, plus interest due thereon to the date fixed for redemption, without premium; and WHEREAS, in 2011, the Former RDA issued and sold $66,790,000 aggregate principal amount. of its Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area), 2011 Series A, of which $ aggregate principal amount is currently outstanding (the "Senior Bonds "), pursuant to an Indenture of Trust, dated as of February 1, 2011 (the "Senior Indenture "), between the Former RDA and the Trustee, which 2011 Bonds are not subject to optional redemption at this time and are not being considered for refunding at this time; and WHEREAS, the Agency has determhned to refund and defease the Refunded Bonds; and WHEREAS, the Agency has determined to issue its Successor Agency to the Community Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds (Merged Project Area), [Series 2016A (Tax Exempt) (the "Series 2016A Bonds ") and Tax Allocation Refunding Bonds, Series 2016B (Federally Taxable) (the "Series 2016B Bonds" and, together with the Series 2016A Bonds,] the "Series 2016 Bonds "), in order to refund the Refunded Bonds, purchasing a Qualified Reserve Account Credit Instrument for deposit to the reserve account for the Series 2016 Bonds and pay the costs of issuance of the Series 2016 Bonds; and WHEREAS, the Bonds will be secured by a pledge of, and lien on, and shall be repaid from Tax Revenues (as defined herein) and certain moneys deposited from time to time in the Redevelopment Property Tax Trust Fund established pursuant to subdivision (c) of Section 34172 of the California Health and Safety Code; and 3 -20 WHEREAS, the Bonds will be issued and payable on a basis subordinate to that portion of the pledge of Tax Revenues (as defined in the Senior Indenture) hereafter securing the payment of principal of and interest on the Senior Bonds; and WHEREAS, the Bonds will be issued and payable from amounts on deposit in the Redevelopment Property Tax Trust Fund; and WHEREAS, all conditions, things and acts required by law to exist, happen and be performed precedent to and in connection with the issuance of the Series 2016 Bonds exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Agency is now duly empowered to issue the Series 2016 Bonds; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, premium, if any, and the interest on all Bonds at any time issued and outstanding under the Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable considerations, the receipt of which is hereby acknowledged, the Agency does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows: ARTICLE I DEFINITIONS; EQUAL SECURITY Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes of the Indenture and of the Bonds and of any certificate, opinion, report, request or other document herein or therein mentioned have the meanings herein specified. "Additional Bonds" shall mean all tax allocation bonds of the Agency authorized and executed pursuant to the Indenture and 'issued and delivered in accordance with Article IV. "Agency" shall mean the Successor Agency to the Community Redevelopment Agency, as successor to the Former RDA in accordance with the Dissolution Act. "Annual Debt Service" shall mean, for each Bond Year, the sum of (a) the interest due on the Outstanding Bonds and any Parity Debt in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of mandatory sinking fund redemptions), and (b) the scheduled principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking fund redemptions due in such Bond Year). "Authorized Denomination" shall mean $5,000 principal amount of Bonds, or any integral multiple thereof. "Average Annual Debt Service" shall mean the average of the Annual Debt Service for all Bond Years, including the Bond Year in which the calculation is made. 3 -21 "Bond Counsel" shall mean counsel of recognized national standing in the field of law relating to municipal bonds. [ "Bond Insurance Policy" and "2016 Bond Insurance Policy" have the following meanings: "Bond Insurance Policy" shall mean, as the context suggests, each of the insurance policies or the applicable insurance policy including, without limitation, the 2016 Bond Insurance Policy, issued by the Bond Insurer guaranteeing the scheduled payment of principal of, and the interest when due on, the applicable Series of Bonds, "2016 Bond Insurance Policy" shall mean, respectively, the Municipal Bond Insurance Policy guaranteeing the scheduled payment of principal of, and the interest when due on, the Insured Series 2016A Bonds and the Insured Series 2016B Bonds, issued by the 2016 Bond Insurer and dated , 2016.] ["Bond Insurer" and 112016 Bond Insurer" have the following meanings: "Bond Insurer" shall mean the issuer or issuers of a policy or policies of municipal bond insurance obtained by the Agency to insure the payment of principal of and interest on a Series of Bonds issued under this Indenture, when due otherwise than by acceleration, and which, in fact, are at any time insuring such Series of Bonds. "2016 Bond Insurer" shall mean or any successor thereto or assignee thereof, as insurer of the Insured Series 2016 Bonds and issuer of the 2016 Reserve Policy.] "Bond Register" shall mean the registration books specified as such in Section 2.13 hereof. "Bond Year" shall mean (1) with respect to the initial Bond Year, the period from the date the Bonds are originally delivered to and including the first succeeding September 1, and (2) thereafter, each twelve -month period from September 2 in any calendar year to and including September 1 in the following calendar year. "Bonds" shall mean the Series 2016 Bonds and all Additional Bonds. "Business Day" shall mean a day of the year on which banks in Los Angeles, California, and any other place in which the Corporate Trust Office of the Trustee is located are not required or authorized to remain closed and on which the New York Stock Exchange is not closed. "City" shall mean the City of Santa Ana, California. "Code" shall mean the Internal Revenue Code of 1986, as amended and any regulations of the United States Department of the Treasury issued thereunder. "Compliance Costs" shall mean those costs incurred by the Agency or the Trustee in connection with their compliance with the Indenture and the Continuing Disclosure Agreement that are chargeable against the Redevelopment Property Tax Trust Fund as provided in Section 5,01 and 6.16, including legal fees and charges, fees and disbursements of consultants and professionals, rating agency fees, amounts to reimburse the Bond Insurer for draws on its Bond Insurance Policy (including any other amounts due to the 2016 Bond Insurer), and Qualified Reserve Account Credit Instruments, and all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code in accordance with Section 6.11 and the Tax Certificate. 3 -22 "Consultant's Report" shall mean a report signed by an Independent Financial Consultant or an Independent Redevelopment Consultant, as may be appropriate to the subject of the report, and including: (1) a statement that the person or firm malting or giving such report has read the pertinent provisions of the Indenture to which such report relates; (2) a brief statement as to the nature and scope of the examination or investigation upon which the report is based; and (3) a statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said Independent Financial Consultant or Independent Redevelopment Consultant to express an informed opinion with respect to the subject matter referred to in the report. "Continuing Disclosure Agreement" shall mean that Continuing Disclosure Agreement, by and between the Agency and Urban Futures, Inc. as dissemination agent, dated as of [DATED DATE], relating to the Series 2016 Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Corporate Trust Office" shall mean such corporate trust office of the Trustee as may be designated from time to time by written notice fmm the Trustee to the Agency, initially being such office located in Costa Mesa, California except that with respect to presentation of Bonds for registration, payment, redemption, transfer or exchange, such terms shall mean the office of the Trustee in Wilmington, Delaware, or such other office designated by the Trustee from time to time as its Corporate Trust Office. "Costs of Issuance Fund" shall mean the Fund by that name established pursuant to Section 5.06 hereof "Costs of Issuance" shall mean all items of expense directly or indirectly payable by or reimbursable to the Agency or the City and related to the authorization, issuance, sale and delivery of the Bonds and the refunding of the Refunded Bonds, including but not limited to publication and printing costs, costs of preparation and reproduction of documents, filing and recording fees, fees and charges of the Trustee and the Escrow Agent, legal fees and charges, fees and disbursements of consultants and professionals, rating agency fees, fees and charges for preparation, execution, transportation and safekeeping of the Bonds and any other cost, charge or fee in connection with the original issuance of the Bonds and the refunding of the Refunded Bonds as provided in a Costs of Issuance invoice transmitted by the Agency (which may include costs and expenses of the Agency and the City) to the Agency and the Trustee at the time of the original issuance of the Bonds to be paid from proceeds of the Bonds in accordance with Section 3.01 or as provided in a Supplemental Indenture. "County" shall mean the County of Orange, a political subdivision of the State of California. "County Auditor - Controller" shall mean the Auditor - Controller of the County of Orange, 3 -23 "Dissolution Act" shall mean Parts 1,8 (commencing with Section 34161) and 1.85 (commencing with Section 34170) of the Law. "DOF" shall mean the State of California Department of Finance, "Escrow Agent" shall mean The Bank of New York Mellon Trust Company, N.A„ as prior trustee and Escrow Agent under the Escrow Agreement. "Escrow Agreement" shall mean the Irrevocable Refunding Instructions and Agreement (Series 2003 Bonds). "Expense Account" shall mean the account established pursuant to Section 5.03 hereof. "Federal Securities" shall mean (a) non - callable direct obligations of the United States of America ("United States Treasury Obligations "), and (b) evidences of ownership of proportionate interests in future interest and principal payments on United States Treasury Obligations held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor acid the underlying United States Treasury Obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. "Fiscal Year" shall mean the period commencing on July 1 of each year after the date of the sale and delivery of the Bonds and terminating on the next succeeding June 30, or any other annual accounting period hereafter selected and designated by the Agency as its Fiscal Year in accordance with the Law and with notice to the Trustee. "Former RDA" shall mean the former Community Redevelopment Agency of the City of Santa Ana, created by the City Council of the City. "Indenture" shall mean this Indenture and all Supplemental Indentures. "Independent Certified Public Accountant" shall mean any certified public accountant or firm of such accountants duly licensed and entitled to practice and practicing as such under the laws of the State of California, appointed and paid by the Agency, and who, or each of whom, (1) is in fact independent and not under the domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as a member, officer or employee of the Agency, but who may be regularly retained to make annual or other audits of the books of or reports to the Agency. "Independent Financial Consultant" shall mean a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the Agency and who, or each of whom: (1) is in fact independent and not under the domination of the Agency; 3 -24 (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as a member, officer or employee of the Agency, but who may be regularly retained to make anmial or other reports to the Agency. "Independent Redevelopment Consultant" shall mean a consultant or firm of such consultants generally recognized to be well qualified in the field of consulting relating to tax allocation bond financing by California redevelopment agencies and their successor agencies, appointed and paid by the Agency and who, or each of whom: (1) is in fact independent and not under the domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as a member, officer or employee of the Agency, but who may be regularly retained to make annual or other reports to the Agency. [ "Insured Series 2016 Bonds" shall mean the Insured Series 2016A Bonds and the Insured Series 2016A Bonds. "Insured Series 2016A Bonds" shall mean each maturity of the Series 2016A Bonds. "Insured Series 2016B Bonds" shall mean each maturity of the Series 2016B Bonds.] "Interest Account" shall mean the account maintained within the Tax Increment Fund pursuant to Section 5.03 of the Indenture. "Interest Payment Date" shall mean any March 1 or September I on which interest on any Series of Bonds is scheduled to be paid, commencing March 1, 2017, with respect to the Series 2016 Bonds. "Investment Agreement" shall mean an investment agreement or guaranteed investment contract meeting the description and the requirements contained in clause (10) of the definition of Permitted Investments herein. "Investment Earnings" shall mean all interest earned and any realized gains and losses on the investment of moneys in any fund or account created by the Indenture or by any Supplemental Indenture. "Law" shall mean the Community Redevelopment Law of the State of California (being Part I of Division 24 of the California Health and Safety Code, as amended), and all laws amendatory thereof or supplemental thereto including, without limitation, the Dissolution Act. "Maximum Annual Debt Service" shall mean the largest Annual Debt Service for any Bond Year, including the Bond Year in which the calculation is made. "MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant 3 -25 to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http: / /etnma.msrb.org, "Officer's Certificate" shall mean a certificate signed by the Mayor, the City Manager or the Director of Finance, acting for and on behalf of the Agency, the Executive Director of the Agency, or the City Clerk acting for the Agency, "Outstanding" when used as of any particular time with reference to Bonds, shall mean (subject to the provisions of Section 9,02) all Bonds except: (1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds paid or deemed to have been paid within the meaning of Section 11.02; and (3) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Agency pursuant to the Indenture. "Oversight Board" shall mean the oversight board of the Agency duly constituted from time to time pursuant to Section 34179 of the Dissolution Act. "Owner" or "Bondowner" whenever employed herein shall mean the person in whose name such Bond shall be registered. "Parity Debt" shall mean any additional tax allocation bonds, notes, interim certificates, debentures or other obligations issued by the Agency as permitted by the Indenture payable out of Tax Revenues and ranking on a parity with the Bonds. "Pass- Through Agreements" shall mean each pass - through agreement and tax sharing agreement entered into by the Agency with respect to a Project Area. "Pass Through Obligations" shall mean (i) the statutory pass - through obligations of the Agency described under Section 33607.5 of the Law, and (ii) the Pass - Through Agreements, and shall include amounts elected to be allocated pursuant to subdivision (a) of Section 33676 and Section 33607.7 or of the California Health and Safety Code. "Permitted Investments" shall mean any of the following to the extent then permitted by the general laws of the State of California applicable to investments by counties: (1) (a) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ("United States Treasury Obligations "), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal 3 -26 payments on obligations described above held by a bank, trust company or bank holding company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated (collectively "United States Obligations"), These include, but are not necessarily limited to: U.S. Treasury obligations All direct or fully guaranteed obligations General Services Administration Participation certificates U.S. Maritime Administration Guaranteed Title XI financing - Small Business Administration Guaranteed participation certificates - Guaranteed pool certificates - Government National Mortgage Association (GNMA) GNMA - guaranteed mortgage- backed securities GNMA - guaranteed participation certificates - U.S. Department of Housing & Urban Development Local authority bonds (2) Obligations of instrumentalities or agencies of the United States of America limited to the. following: (a) the Federal Home Loan Bank Board ( "FHLB "); (b) the Federal ITome Loan Mortgage Corporation ( "FHLMC "); (c) the Federal National Mortgage Association (FNMA); (d) Federal Farm Credit Bank ( "FFCB "); (e) Government National Mortgage Association ( "GNMA "); and (f) guaranteed portions of Small Business Administration ( "SBA") notes. (3) Commercial paper having original maturities of not more than 270 days, payable in the United States of America and issued by corporations that are organized and operating in the United States with total assets in excess of $500 million and having "A" or better rating for the issuer's long -term debt as provided by S &P and "A -1" or better rating for the issuer's short- term debt as provided by S &P. (4) The Orange County Treasury Pool. (5) Bills of exchange or time drafts drawn on and accepted by a commercial bank., otherwise known as "bankers' acceptances," having original maturities of not more than 180 days. The institution must have a minimum short -term debt rating of "P -1" by S &P, and a long- term debt rating of no less than "A" by S &P, (6) Shares of beneficial interest issued by diversified management companies, known as money market funds, registered with the U.S. Securities and Exchange Commission under the 3 -27 Investment Company Act of 1940 (15 U.S.C. Sec. 80a -1 et seq.) and whose fund has received the highest possible rating from S &P and at least one other Rating Agency. (7) Certificates of deposit issued by a nationally- or state - chartered bank or a state or federal association (as defined by Section 5102 of the California Financial Code) or by a state - licensed branch of a foreign bank, in each case which has, or which is a subsidiary of a parent company which has, obligations outstanding having a rating in the "A" category or better from S &P, (8) Pre - refunded mumicipal obligations rated "AAA" by S &P meeting the following requirements: (a) the municipal obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; (b) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations; (c) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal o£, interest, and premium, if any, due and to become due on the municipal obligations ( "Verification "); (d) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations; (e) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and (f) the cash or United States Treasury Obligations.are not available to satisfy any other claims, including those by or against the trustee or escrow agent. (9) Repurchase agreements which have a maximum maturity of 30 days, or due on demand, and are fully secured at or greater than 102% of the market value plus accrued interest by obligations of the United States Government, its agencies and instrumentalities, in accordance with number (2) above. (10) Investment agreements and guaranteed investment contracts with issuers having a long -term debt rating of at least "AA -" by S &P. (11) Local Agency Investment Fund (established under Section 16429.1 of the California Government Code), provided that such investment is held in the name and to the 10 3 -28 credit of the Trustee, and provided further that the Trustee may restrict such investment if required to keep moneys available for the purposes of the Indenture. (12) Shares in a State of California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the California Government Code which invests exclusively in investments permitted by Section 53601 of Title 5, Division 2, Chapter h of the California Government Code, as it may be amended. "Principal Account" shall mean the account maintained within the Tax Increment Fund pursuant to Section 5,03 of the Indenture. "Principal Installment" shall mean, with respect to any Principal Payment Date, the principal amount of Outstanding Bonds (including mandatory sinking fund payments) due on such date, if any. "Principal Corporate Trust Office" shall mean the office of the Trustee in Costa Mesa, California, except that with respect to presentation of Bonds for payment, transfer or exchange, such term shall mean the corporate trust office of the Trustee in Wilmington, Delaware, or such other offices as it shall designate from time to time. "Principal Payment Date" shall mean any September 1 on which principal of any Series of Bonds is scheduled to be paid, commencing on September 1, 2017 with respect to the Series 2016 Bonds. "Project Area" shall mean collectively the territory comprising the following redevelopment projects of the Agency: (i) the Bristol Corridor Redevelopment Project, approved by Ordinance enacted by the City Council of the City on ; (ii) the Central City Redevelopment Project, approved by Ordinance No. enacted by the City Council of the City on (iii) the Inner -City Commuter Station Redevelopment Project, approved by Ordinance No. 528 enacted by the City Council of the City on ; the North Harbor Boulevard Redevelopment Project, approved by Ordinance enacted by the City Council of the City on ; the South Harbor Boulevard/Fairview Street Redevelopment Project, approved by Ordinance enacted by the City Council of the City on ; and the South Main Redevelopment Project, approved by Ordinance enacted by the City Council of the City on ;in each case together with any amendments duly authorized pursuant to the Redevelopment Law. "Qualified Reserve Account Credit Instrument" shall mean (i) the 2016 Reserve Policy or (ii) an irrevocable standby or direct -pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Trustee pursuant to Section 5.03(d) provided that all of the following requirements are met by the Agency at the time of delivery thereof to the Trustee: (a) S &P or Moody's has assigned a long -term credit rating to such bank or insurance company of "A" (without regard to modifier) or higher; (b) such letter of credit or surety bond has a term of at least twelve (12) months; (c) such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve Account Requirement with respect to which funds are proposed to be released pursuant. to Section 5.03(d); (d) the Trustee is authorized pursuant to the terms of such letter of credit or surety bond to draw therei ider an 3 -29 amount equal to any deficiencies which may exist from time to time in the Interest Account, the Principal Account or the Term Bonds Sinking Account for the purpose of making payments required pursuant to Section 5,03(d); and (e) prior written notice is given to the Trustee before the effective date of any such Qualified Reserve Account Credit Instrument. "Rebate Fund" shall mean the Rebate Fund established pursuant to Section 6.11 hereof "Rebate Instructions" shall mean those calculations and directions required to be delivered to the Trustee by the Agency pursuant to the Tax Certificate, "Rebate Requirement" shall mean the Rebate Requirement defined in the Tax Certificate. "Recognized Obligation Payment Schedule" or "BOPS" shall mean a Recognized Obligation Payment Schedule, setting forth the minimum payment amounts and due dates of payments required by enforceable obligations for each fiscal year as provided in subdivision (o) of Section 34177 of the Dissolution Act, each prepared and approved from time to time pursuant to the Dissolution Act. "Redevelopment Obligation Retirement Fund" shall mean the fund by that name established pursuant to Section 34170.5(a) of the Law and administered by the Agency. "Redevelopment Plan" shall mean the [Amended and Restated Redevelopment Plan for the Santa Ana Merged Redevelopment Project Area], together with any amendments to such redevelopment plan duly authorized pursuant to the Law. "Redevelopment Property Tax Trust Fund" shall mean the fund by that name established pursuant to Section 34170.5(b) of the Law and administered by the County Auditor - Controller. "Refunded Bonds" shall have the meaning set forth in the whereas clauses above, "Regulations" shall mean temporary and permanent regulations promulgated or applicable under Section 103 and all related provisions of the Code. "Related Documents" shall mean the Indenture and any other document executed by the Agency in connection with the issuance of the Series 2016 Bonds including, without limitation, the Series 2016 Bonds issued hereunder. "Reserve Account" shall mean the account maintained within the Tax Increment Fund pursuant to Section 5.03 of the Indenture. "Reserve Account Requirement" shall mean as of the date of any calculation, with respect to all Outstanding Bonds an amount equal to the lesser of (i) the Maximum Annual Debt Service attributable to the Outstanding Bonds or (ii) 125% of Average Annual Debt Service attributable to the Outstanding Bonds; provided however, that the Reserve Account Requirement when issuing a new Series of Bonds shall be the lesser of (i) or (ii) above, but limited to the 12 3 -30 addition to the Reserve Account of no more than 10% of the proceeds from the sale of such new Series of Bonds. "Responsible Officer" shall mean any Vice - President, Assistant Vice President, Trust Officer or other officer of the Trustee having regular responsibility for corporate trust matters. "ROPS Payment Period" shall mean a ROPS Period; provided, that if the Dissolution Act is hereafter amended such that each ROPS Period covers a fiscal period of a different length, then "ROPS Payment Period" shall mean the period during which moneys distributed on a RPTTF Distribution Date are permitted to be expended under the Dissolution Act, as amended. "ROPE Period" shall mean each annual period from July 1 to June 30, inclusive, as provided in subdivision (o) of Section 34177 of the Dissolution Act; provided, that if the Dissolution Act is hereafter amended such that each ROPS covers a fiscal period of a different length, then "ROPS Period" shall mean such other applicable period established under the Dissolution Act, as amended. " RPTTF" or "Redevelopment Property Tax Trust Fund" shall mean the fund by that name established pursuant to Health and Safety Code Section 34170.5(b) and administered by the County Auditor - Controller. LORPTTF Distribution Date" shall mean each January 2 and June 1, as specified in Section 34183 of the Dissolution Act, on which the County Auditor - Controller allocates and distributes to the Agency monies from the RPTTF for payment on enforceable obligations pursuant to an approved ROPS. "Securities Depository" shall mean, initially, The Depository Trust Company, New York, N.Y., or, in accordance with then - current guidelines of the Securities and Exchange Commission, such other securities depositories, or no such depositories, as designated by the Trustee. "Senior Bond Indenture" shall mean the Indenture, dated as of February 1, 2011, between the Former RDA and The Bank of New York Mellon Trust Company, N.A., as successor trustee. "Senior Bonds" shall mean the outstanding Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area), 2011 Series A. "Serial Bonds" shall mean Bonds for which no Sinking Account Installments are provided. "Series" shall mean each initial series of Series 2016 Bonds executed, authenticated and delivered and identified pursuant to the Indenture as the Series 2016A Bonds and the Series 2016B and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a separate series of Bonds. 13 3 -31 [ "Series 2016A Bonds" shall mean the Successor Agency to the Community Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds, Series 2016A (Tax Exempt). "Series 2016B [fonds" shall mean the Successor Agency to the Community Redevelopment Agency of the city of Santa Ana Tax Allocation Refunding Bonds, Series 2016B (Federally Taxable). "Series 2016 Bonds" shall mean, collectively, the Series 2016A Bonds and the Series 2016E Bonds.] "Sinking Account Installment" shall mean the amount of money required to be paid by the Agency on a Sinking Account Payment Date toward the retirement of any particular Term Bonds on or prior to their respective stated maturities, as set forth in the Indenture. "Sinking Account Payment Date" shall mean any September 1 on which Sinking Account Installments on Term Bonds are scheduled to be paid, as set forth in the Indenture. "S &P" shall mean Standard & Poor's Financial Services LLC and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then "S &P" shall be deemed to refer to any other nationally- recognized rating agency selected by the Agency. "Substitute Depository" shall mean the substitute depository as defined in Section 2.12. "Supplemental Indenture" shall mean any indenture amending or supplementing the Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. 112016 Reserve Policy" shall mean the Municipal Bond Debt Service Reserve Insurance Policy issued by the 2016 Bond Insurer and dated 2016. "Tax Certificate" shall mean that certificate and agreement, relating to various federal tax requirements, including the requirements of Section 148 of the Code, signed by the Agency on the date the Tax Exempt Bonds and the Series 2016A Bonds are issued, as the same may be amended or supplemented in accordance with its terms. "Tax Exempt" shall mean, with respect to interest on any obligations of a state or local government, that such interest is excluded from the gross income of the owners thereof for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including any alternative minimum tax or environmental tax under the Code. "Tax Increment Fund" shall mean the fund established pursuant to Section 5,01 hereof. "Tax Revenues" shall mean all taxes annually allocated and paid to the Agency pursuant to Article 6 of Chapter 6 (commencing with Section 33670) of the Law, Section 16 of Article XVI of the Constitution of the State and other applicable state laws and as provided in the 14 3 -32 Redevelopment Plan available for or deposited into the RPTTF, to the extent not payable to Senior Bonds, payable with respect to Pass Through Obligations, and subject to the equal and senior claims of indebtedness, if, any. If, and to the extent, that the provisions of Section 34172 or paragraph (2) of subdivision (a) of Section 34183 of the Dissolution Act are invalidated by a final judicial decision, then Tax Revenues will include all tax revenues allocated to the payment of indebtedness pursuant to California Health and Safety Code Section 33670 or such other section as may be in effect at the time providing for the allocation of tax increment revenues in accordance with Article XVI, Section 16 of the California Constitution, "Term Bonds" shall mean Bonds which are payable on or before their specified maturity dates from Sinking Account histallments established for that purpose. "Term Bonds Sinking Account" shall mean the account maintained within the Tax Increment Fund pursuant to Section 5.03 of the Indenture. "Trustee" shall mean The Bank of New York Mellon Trust Company, N.A., appointed by the Agency in Section 7.01 and acting with the duties and powers herein provided, and its successors and assigns, or any other corporation or association which may at any time be substituted in its place, as provided in Section 7.02. "Verification Report" shall mean a report of an independent firm of nationally recognized certified public accountants, or such other firm as shall be acceptable to the Bond Insurer, addressed to the Agency, the Trustee and the Bond Insurer, verifying the sufficiency of the escrow established to pay Bonds in full at maturity or on a redemption date. "Written Request of the Agency" shall mean an instrument in writing signed by the Mayor, the City Manager or Director of Finance, acting for and on behalf of the Agency, the Executive Director of the Agency, or the City Clerk acting for the Agency, or by any other officer of the Agency duly authorized by the Agency for that purpose. Section 1.02 Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, the Indenture shall be deemed to be and shall constitute a contract between the Agency and the Owners from time to time of all Bonds issued hereunder and then Outstanding to secure the full and final payment of the interest on and principal of and redemption premiums, if any, on all Bonds authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions herein contained; and the agreements and covenants herein set forth to be performed on behalf of the Agency shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any Bonds over any other Bonds. 15 3 -33 ARTICLE II THE BONDS; CERTAIN PROVISIONS OF THE BONDS Section 2.01 General Authorization; Bonds. The Series 2016 Bonds and Additional Bonds may be issued at any time under and subject to the terms of the hndenture. The Agency has reviewed all proceedings heretofore taken relative to the authorization of the Series 2016 Bonds told has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, happen or be performed precedent to and in connection with the issuance of the Series 2016 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Agency is now duly authorized, pursuant to each and every requirement of law, to issue the Series 2016 Bonds in the manner and form provided in the Indenture. Accordingly, the Agency hereby authorizes the issuance of the Series 2016 Bonds for the purposes set forth in the preamble of the Indenture. Section 2.02 Terms of Series 2016 Bonds. The Series 2016 Bonds authorized to be issued by the Agency under and subject to the terms of the Indenture and the Law shall be designated the "Successor Agency to the Community Redevelopment Agency Tax Allocation Refunding Bonds, Series 2016A (Tax Exempt)" and shall be in the aggregate principal amount of $XX,000,000 and the "Successor Agency to the Community Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds, Series 2016B (Federally Taxable)" and shall be in the aggregate principal amount of $YY,000,000. The Series 2016 Bonds shall be issued as fully registered bonds in denominations of $5,000, or any integral multiple thereof (not exceeding the principal amount of such Bonds maturing at any one time). The Bonds shall be registered initially in the name of "Cede & Co.," as nominee of the Securities Depository and shall be evidenced by one bond for each maturity of Bonds in the principal amount of the respective maturities of Bonds. Registered ownership of the Bands, or any portion thereof, may not thereafter be transferred except as set forth herein. Payment of interest on the Series 2016 Bonds shall be made to Cede & Co. as registered owner, or such other person whose name appears on the bond registration books of the Trustee as the registered owner of the Series 2016 Bonds, as of the close of business on the fifteenth (15th) day of the calendar month preceding the Interest Payment Date (the "Record Date), or if otherwise instructed, by check mailed to such registered owner at its address as it appears on such books or at such other address as it may have filed with the Trustee for that purpose prior to the Record Date. Each Series of Series 2016 Bonds shall be numbered in consecutive numerical order from RI upwards. Each Series of Series 2016 Bands shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless such date of authentication is an Interest Payment Date, in which event they shall bear interest from such Interest Payment Date, or,uiless such date of authentication is prior to the first interest Payment Date, in which event they shall bear interest from August 15, 2016, provided, however, that if, at the time of authentication of any Series 2016 Bond, interest is then in default on such Series of Series 2016 Bond, such Series of Series 2016 Bond shall bear interest from the Interest Payment Date to 16 3 -34 which interest previously has been paid or made available for payment. Interest on the Series 2016 Bonds shall be computed on the basis of a 360 -day year of twelve 30 -day months. The Series 2016A Bonds shall be dated their date of initial delivery and shall bear interest at the rates specified in the table below, such interest being payable on each Interest Payment Date, and shall mature on the Principal Payment Dates in the following years in the following principal amounts, namely: Maturity Date ( September 1) 2025 2026 2027" 2028" 2029' 2030 2031* * Insured Series 2016A Bonds. Principal Interest Amount Rate The Series 2016B Bonds shall be dated their date of initial delivery and shall bear interest at the rates specified in the table below, such interest being payable on each Interest Payment Date, and shall mature on the Principal Payment Dates in the following years in the following principal amounts, namely: Maturity Date (September 1) 2017 2018 2019% 2020" 2021. 2022` 2023` 2024" 2025 * Insured Series 2016B Bonds. Principal Interest Amount Rate Principal and redemption premiums, if any, on the Series 2016 Bonds shall be payable in immediately available funds. Principal and redemption premiums, if any, and interest on the Series 2016 Bends shall be paid in lawful money of the United States of America. Section 2.03 Form of Series 2016 Bonds. authentication and registration endorsement, and the substantially in the form attached hereto as Appendix A. 17 3 -35 The Series 2016 Bonds, the Trustee's assignment to appear thereon shall be Section 2.04 Redemption of Series 2016 Bonds. (a) Optional Redemption of Series 2016A Bonds. The Series 2016A Bonds maturing on or after September 1, 2027, are subject to optional redemption before maturity on or after September 1, 2026, at the option of the Agency, in whole or in part, on any date, at a redemption price equal to the principal amount of the Series 2016A Bonds to be redeemed, plus accrued but unpaid interest to the redemption date, (b) Optional Redemption of Series 2016B Bonds, The Series 2016B Bonds are not subject to optional redemption. Section 2.05 Notice of Redemption. In the case of any redemption of Bonds, the Trustee shall give notice, as hereinafter in this section provided, that Bonds, identified by serial numbers, Series and maturity date (and interest rate in the case of bifurcated maturities), have been called for redemption and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof that has been called for redemption (or if all the Outstanding Bonds are to be redeemed, so stating, in which event such serial numbers may be omitted), that they will be due and payable on the date fixed for redemption (specifying such date) upon surrender thereof at the Principal Corporate Trust Office, at the redemption price (specifying such price), together with any accrued interest to such date, and that all interest on the Bonds, the respective series of Bonds, or portions thereof, as applicable, so to be redeemed will cease to accrue on and after such date and that from and after such date such Bond or such portion shall no longer be entitled to any lien, benefit or security under the Indenture, and the Owner thereof shall have no rights in respect of such redeemed Bond or such portion except to receive payment from such moneys of such redemption price plus accrued interest to the date fixed for redemption. Such notice shall be mailed by first class mail, postage prepaid, at least twenty (20) but not more than sixty (60) days before the date fixed for redemption, to the Security Depository, the MSRB and the Owners of such Bonds, or portions thereof, so called for redemption, at their respective addresses as the same shall last appear on the Bond Register. No notice of redemption need be given to the Owner of a Bond to be called for redemption if such Owner waives notice thereof in writing, and such waiver is filed with the Trustee prior to the redemption date. Neither the failure of an Owner to receive notice of redemption of Bonds hereunder nor any error in such notice shall affect the validity of the proceedings for the redemption of Bonds. Any notice of redemption may be expressly conditional and may be rescinded by Written Request of the Agency given to the Trustee not later than the date fixed for redemption. Upon receipt of such Written Request of the Agency, the Trustee shall promptly mail notice of such rescission to the same parties that were mailed the original notice of redemption. Section 2,06 Selection of Bonds for Redemption, Whenever less than all the Outstanding Bonds of any one maturity are to be redeemed on any one date, the Trustee shall select the particular Bonds to be redeemed by lot (subject in the case of such redemption of Insured Series 2016 Bonds to the prior written approval of the Bond Insurer), and in selecting the Bonds for redemption the Trustee shall treat each Bond of a denomination of more than five thousand dollars ($5,000) as representing that number of Bonds of five thousand dollars ($5,000) denomination which is obtained by dividing the principal amount of such Bond by five thousand 1& 3 -36 dollars ($5,000), and the portion of any Bond of a denomination of more than five thousand dollars ($5,000) to be redeemed shall be redeemed in an Authorized Denomination. The Trustee shall promptly notify the Agency in writing of the numbers of the Bonds so selected for redemption in whole or in part on such date. Section 2.07 Payment of Redeemed Bonds. If notice of redemption has been given or waived as provided in Section 2.05, the Bonds or portions thereof called for redemption shall be due and payable on the date fixed for redemption at the redemption price thereof, together with accrued interest to the date fixed for redemption, upon presentation and surrender of the Bonds to be redeemed at the office specified in the notice of redemption. if there shall be called for redemption less than the full principal amount of a Bond, the Agency shall execute and deliver and the Trustee shall authenticate, upon surrender of such Bond, and without charge to the Owner thereof, Bonds of like interest rate and maturity in an aggregate principal amount equal to the unredeemed portion of the principal amount of the Bonds so surrendered in such authorized denominations as shall be specified by the Owner. If the Owner of the Bonds is registered to Cede & Co., payment of the redeemed Bonds shall be made without presentment. If any Bond or any portion thereof shall have been duly called for redemption and payment of the redemption price, together with unpaid interest accrued to the date fixed for redemption, shall have been made or provided for by the Agency, then interest on such Bond or such portion shall cease to accrue from such date, and from and after such date such Bond or such portion shall no longer be entitled to any lien, benefit or security under the Indenture, and the Owner thereof shall have no rights in respect of such Bond or such portion except to receive payment of such redemption price, and unpaid interest accrued to the date fixed for redemption. Section 2.08 Purchase in Lieu of Redemption. In lieu of redemption of any Band pursuant to the provisions'of subsection (a) of Section 2.04 or Section 5.02 hereof, amounts on deposit in the Tenn Bonds Sinking Account may also be used and withdrawn by the Trustee at any time prior to selection of Bonds for redemption having taken place with respect to such amounts, upon a Written Request of the Agency, for the .purchase of such Term Bonds at public or private sale as and when and at such prices (including brokerage and other charges) as the Agency may in its discretion determine, but not excess of par plus accrued interest. Any accrued interest payable upon the purchase of Bonds shall be paid from amounts held in the Tax Increment Fund for the payment of interest on the next following Interest Payment Date. Any Term Bonds so purchased shall be cancelled by the Trustee forthwith and shall not be reissued. The principal of any Term Bonds so purchased by the Trustee in any twelve -month period ending 60 days prior to any Sinking Account Payment Date in any year shall be credited towards and shall reduce the principal of such Term Bonds required to be redeemed on such Sinking Account Payment Date in such year. Section 2.09 Execution of Bonds. The Mayor, the City Manager, Director of Finance or the Debt Manager, acting for and on behalf of the Agency or the Executive Director of the Agency shall execute each of the Bonds on behalf of the Agency and the City Clerk shall attest each of the Bonds on behalf of the Agency. Any of the signatures of said Mayor, the City Manager, Director of Finance and the Debt Manager, acting for and on behalf of the Agency, the Executive Director of the Agency and the City Clerk may be by printed, lithographed or engraved facsimile reproduction. In case any officer whose signature appears on the Bonds shall 19 3 -37 cease to be such officer before the delivery of the Bonds to the purchaser thereof, such signature shall nevertheless be valid and sufficient for all purposes the same as though he had remained in office until such delivery of the Bonds. Any Bond may be signed and attested on behalf of the Agency by such persons as at the actual date of the execution of such Bond shall be the proper officers of the Agency although at the nominal date of such Bond any such person may not have been such officer of the Agency. Except as may be provided in a Supplemental Indenture, only such of the Bonds as shall bear thereon a certificate of authentication and registration in the form hereinbefore recited, executed and dated by the Trustee, upon the Written Request of the Agency, shall be entitled to any benefits under the Indenture or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evidence that the Bonds so registered have been duly issued and delivered hereunder and are entitled to the benefits of the Indenture. Section 2.10 Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.12, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond at the Corporate Trust Office for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Trustee, Whenever any Bond or Bonds shall be surrendered for transfer, the Agency shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds for a like aggregate principal amount of the same Series, interest rate and maturity date (and interest rate in the case of bifurcated maturities). The Trustee shall require the payment by the Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. The Trustee shall not be required to register the transfer of any Bonds during the fifteen (t5) days prior to the date of selection of the Bonds for redemption, or of any Bonds selected for redemption. Section 2.11 Exchanse of Bonds. The Bonds may be exchanged at the Corporate Trust Office for a like aggregate principal amount of Bonds of the same Series, interest rate and maturity date (and interest rate in the case of bifurcated maturities) in other authorized denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be required to exchange any Bonds during the fifteen (15) days prior to the date of selection of the Bonds for redemption, or of any Bonds selected for redemption. Section 2.12 Use of Depository. Notwithstanding any provision of the Indenture to the contrary: (a) The Bonds shall be initially issued as provided in Section 2.01. Registered ownership of the Bonds, or any portion thereof, may not thereafter be transferred except: (i) To any successor of the Securities Depository or its nominee, or to any substitute depository designated pursuant to clause (ii) of this subsection (a) ( "Substitute Depository"); P 3 -38 provided that any successor of the Securities Depository or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii) To any Substitute Depository designated by the Agency and not objected to by the Trustee, upon (1) the resignation of the Securities Depository or its successor (or any Substitute Depository or its successor) from its functions as depository or (2) a determination by the Agency that the Securities Depository or its successor (or any Substitute Depository or its successor) is no longer able to carry out its functions as depository; provided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) To any person as provided below, upon (1) the resignation of the Securities Depository or its successor (or Substitute Depository or its successor) from its functions as depository; provided that no Substitute Depository which is not objected to by the Trustee can be obtained or (2) a determination by the Agency that it is in the best interests of the Agency to remove the Securities Depository or its successor (or any Substitute Depository or its successor) from its functions as depository. (b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) hereof, upon receipt of the Outstanding Bonds by the Trustee, together with a Written Request of the Agency to the Trustee, a single new Bond shall be executed and delivered in the aggregate principal amount of the Bonds then Outstanding, registered in the name of such successor or such Substitute Depository, or their nominees, as the case may be, all as specified in such Written Request of the Agency. In the case of any transfer pursuant to clause (iii) of subsection (a) hereof, upon receipt of the Outstanding Bonds by the Trustee together with a Written Request of the Agency to die Trustee, new Bonds shall be executed and delivered in such denominations numbered in consecutive order and registered in the names of such persons as are requested in such a Written Request of the Agency, subject to the limitations of Section 2.02 hereof, provided the Trustee shall not be required to deliver such new Bonds within a. period less than sixty (60) days from the date of receipt of such a Written Request of the Agency. (c) In the case of partial redemption or an advance refunding of the Bonds evidencing all or a portion of the principal amount Outstanding, the Securities Depository shall make an appropriate notation on the Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee. (d) The Agency and the Trustee shall be entitled to treat the person in whose name any Bond is registered as the Owner thereof for all purposes of the Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the Agency; and the Agency and the Trustee shall have no responsibility for transmitting payments to, communication with, notifying, or otherwise dealing with any beneficial owners of the Bonds. Neither the Agency nor the Trustee will have any responsibility or obligations, legal or otherwise, to the beneficial owners or to any other party including the Securities Depository or its successor (or Substitute Depository or its successor), except for the Owner of any Bond. (e) So long as the outstanding Bonds are registered in the name of Cede & Co. or its registered assign, the Agency and the Trustee shall cooperate with Cede & Co., as sole registered 21 3 -39 Owner, and its registered assigns in effecting payment of the principal of and redemption premium, if any, and interest on the Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due. Section 2,13 Bond Registration Books. (a) The Trustee will keep or cause to be kept sufficient books for the registration and transfer of the Bonds, which shall at all times, upon reasonable notice, be open to inspection by any Bondowner or his agent duly authorized in writing or the Agency; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such books, Bonds as hereinbefore provided. (b) The person in whose name any Bond shall be registered shall be deemed the owner thereof for all purposes thereof, and payment of or on account of the principal of, and the interest on or redemption price of by such Bond shall be made only to or upon the order in writing of such Owner, which payment shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (c) Upon initial issuance of the Bonds, the ownership of all such Bonds shall be registered in the registration records maintained by the Trustee pursuant to Section 2.12 in the name of Cede & Co. Section 2.14 Mutilated, Destroyed, Stolen or Lost Bonds. in case any Bond shall become mutilated, or shall be believed by the Agency or the Trustee to have been destroyed, stolen or lost, upon proof of ownership satisfactory to the Trustee, and upon the surrender of such mutilated Bond at the Corporate Trust Office or upon the receipt of evidence satisfactory to the Trustee of such destruction, theft or loss, and upon receipt also of indemnity for the Trustee and the Agency satisfactory to the Trustee, and upon payment by the Owner of all expenses incurred by the Agency and the Trustee, the Agency shalt execute and the Trustee shall authenticate and deliver at said office a new Bond or Bonds of the same Series and maturity and for the same aggregate principal amount, of like tenor aid date, bearing the same number or numbers, with such notations as the Trustee shall determine, in exchange and substitution for and upon cancellation of the mutilated Bond, or in lieu of and in substitution for the Bond so destroyed, stolen or lost. If any such destroyed, stolen or lost Bond shall have matured or shall have been called for redemption, payment of the amount due thereon may be made by the Agency or the Trustee upon receipt of like proof, indemnity and payment of expenses. Any such replacement Bonds issued pursuant to this section shall be entitled to equal and proportionate benefits with all other Bonds issued hereunder. The Agency and the Trustee shall not be required to treat both the original Bond and any duplicate Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Band shall be treated as one and the same. 22 3 -40 Section 2.15 Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be affected in any way by any proceedings taken by the Agency for the financing or refinancing of any redevelopment project financed with proceeds of the Refunded Bonds, or by any contracts made by the Agency in connection therewith, and shall not be dependent upon the completion of the financing such redevelopment project or upon the performance by any person of his obligation with respect to such redevelopment project, and the recital contained in the Bonds that the same are issued pursuant to the Law shall be conclusive evidence of their validity and of the regularity of their issuance. ARTICLE III APPLICATION OF PROCEEDS OF BONDS Section 3.01 Application of Proceeds of Sale of Series 2016 Bonds -- Allocation Among Funds and Accounts. The proceeds of the sale of the Series 2016 Bonds shall be deposited with the Trustee and shall be held in trust and set aside or transferred by the Trustee as set forth below: The proceeds (net of an allocable portion of underwriter's discount [and premiums paid to the 2016 Bond Insurer for its 2016 Reserve Policy and 2016 Bond Insurance Policy)] of the sale of the Series 2016A Bonds shall be deposited with the Trustee and shall be held in trust and set aside or transferred by the Trustee as follows: (a) The Trustee shall deposit in the Reserve Account established pursuant to Section 5.03(d) hereof the 2016 Reserve Policy; (b) The Trustee shall transfer $ to the Escrow Agent for deposit into the trust account established in the "Revenue Fund," as provided in 'the Irrevocable Refunding Instructions and Agreements (Series 2003 Bond — Tax - Exempt); and (c) The Trustee shall transfer $ to the Costs of Issuance Fund for the payment of the Costs of Issuance allocable to the Series 2016A Bonds. The proceeds (net of an allocable portion of underwriter's discount and premiums paid to [the 2016 Bond Insurer for its 2016 Reserve Policy and 2016 Bond Insurance Policy)] of the sale of the Series 2016B Bonds shall be deposited with the Trustee and shall be hold in trust and set aside or transferred by the Trustee as follows: (a) The Trustee shall transfer $ to the Escrow Agent for deposit into the trust account established in the "Revenue Fund," as provided in the Irrevocable Refiunding Instructions and Agreements (2003 Authority Bonds— Taxable); and (b) The 'Trustee shall transfer $ to the Costs of Issuance Fund for the payment of the Costs of Issuance allocable to the Series 2016B Bonds. The Trustee may establish and use temporary funds or accounts in its records to facilitate and record such deposits and transfers. 23 3 -41 ARTICLE IV ISSUANCE OF ADDITIONAL BONDS Section 4.01 Conditions for the Issuance of Additional Bonds, The Agency may at any time after the issuance and delivery of the Series 2016 Bonds hereunder issue Additional Bonds hereunder payable from the Tax Revenues and secured by a lien and charge upon the Tax Revenues equal to and on a parity with the lien and charge securing the Outstanding Bonds theretofore issued under the Indenture, for the purpose of refunding bonds or other indebtedness of the Agency or the Former RDA (including, without limitation, refunding Bonds outstanding under the Indenture) in accordance with the Law, including payment of all costs incidental to or connected with such refunding or providing for the funding of related reserves, but only subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such Additional Bonds: (a) A Written Request of the Agency shall have been filed with the Trustee containing a statement to the effect that the Agency shall be in compliance with all covenants set forth in the Indenture and any Supplemental Indentures, and no Event of Default shall have occurred and be continuing. (b) The issuance of such Additional Bonds shall have been duly authorized pursuant to the haw and all applicable laws, and the issuance of such Additional Bonds shall have been provided for by a Supplemental Indenture; which shall specify the following: (i) The authorized principal amount of such Additional Bonds; (ii) The date and the maturity date or dates of such Additional Bonds; provided that (i) Principal Payment Dates and Sinking Account Payment Dates may occur only on Interest Payment Dates, and (ii) fixed serial maturities or mandatory Sinking Account Installments, or any combination thereof, shall be established to provide for the retirement of all such Additional Bonds on or before their respective maturity dates; (iii) The Interest Payment Dates for such Additional Bonds; provided that Interest Payment Dates shall be on the same semiannual dates as the Interest Payment Dates for Series 2016 Bonds; (iv) The denomination and method of numbering of such Additional Bonds; (v) The redemption premiums, if any, and the redemption terms, if any, for such Additional Bonds; (vi) The amount and due date of each mandatory Sinking Account Installment, if any, for such Additional Bonds; 24 3 -42 (vii) The amount, if any, to be deposited from the proceeds of such Additional Bonds in the Reserve Account; provided that the amount deposited in or credited to such Reserve Account shall be increased at or prior to the time such Additional Bonds become Outstanding to an amount at least equal to the Reserve Account Requirement on all then Outstanding Bonds and such Additional Bonds, and that an amount at least equal to the Reserve Account Requirement on all Outstanding Bonds shall thereafter be maintained in or credited to such Reserve Account; (viii) The form of such Additional Bonds; and (ix) Such other provisions, as are necessary or appropriate and not inconsistent with the Indenture. (c) Such Additional Bonds may be issued only for the purpose of refunding bonds or other indebtedness of the Agency or its Former RDA (including, without limitation, refunding Bonds outstanding under the Indenture) in accordance with the Law, including payment of all costs incidental to or connected with such refunding and funding or providing for the funding of related reserves, and the payment of all costs incidental to or connected with such refunding, provided that the issuance of such Additional Bonds shall comply with the terms of California Health and Safety Code Section 34177.5. The Agency shall refund outstanding Senior Bonds on a parity with the Bonds only to the extent such refunding would be permitted by Section 34177.5(a) of the Dissolution Act. Nothing contained in the Indenture shall limit the issuance of any tax increment bonds or other obligations of the Agency secured by a lien and charge on Tax Revenues junior to that of the Bonds. Section 4.02 Procedure for the Issuance of Additional Bonds. All of the Additional Bonds shall be executed by the Agency for issuance under the Indenture and delivered to the Trustee and thereupon shall be delivered by the Trustee upon the Written Request of the Agency, but only upon receipt by the Trustee of the following documents or money or securities; (a) A certified copy of the Supplemental Indenture authorizing the issuance of such Additional Bonds; (b) A Written Request of the Agency as to the authentication and delivery of such Additional Bonds; (c) An opinion of Bond Counsel to the effect that (1) the Agency has the right and power under the Law to enter into the Indenture and all Supplemental Indentures thereto, and the Indenture and all such Supplemental Indentures have been duly executed by the Agency and are valid and binding upon the Agency and enforceable against the Agency in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights, by application of equitable principles and by exercise of judicial discretion in appropriate cases), and no other authorization for the Indenture or such Supplemental Indentures is required; (2) the Indenture creates the valid pledge which it 25 3 -43 purports to create of the Tax Revenues as provided in the Indenture, subject to the application thereof to the purposes and on the conditions permitted by the Indenture; and (3) such Additional Bonds are valid and binding spacial obligations of the Agency, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights, by application of equitable principles and by exercise of judicial discretion in appropriate cases) and the terms of the Indenture and all Supplemental Indentures thereto and entitled to the benefits of the Indenture and all such Supplemental Indentures and the Law, and such Additional Bonds have been duly and validly authorized and issued in accordance with the Law and the Indenture and all such Supplemental Indentures; (d) A Written Request of the Agency containing such statements as may be reasonably necessary to show compliance with the requirements of the Indenture; and (e) Such further documents, money and securities as are required by the provisions of the Indenture and the Supplemental Indenture providing for the issuance of such Additional Bonds. ARTICLE V TAX REVENUES; CREATION OF FUNDS Section 5.01 Pledpo of Tax Revenues; Tax Increment Fund. Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Tax Revenues and all amounts on deposit from time to time in the finds and accounts established hereunder (other than the Expense Account and the Rebate Fund) are hereby pledged to the payment of the principal of and interest on the Outstanding Bonds and any Parity Debt as provided herein. The Agency hereby irrevocably grants to the Trustee for the benefit of the 2016 Bond Insuuer, the issuer of the 2016 Reserve Policy and the Owners of the Outstanding Bonds a first charge and lion on, and a security interest in, and hereby pledges and assigns, the Tax Revenues, whether held by the Agency, the County Auditor - Controller or the Trustee, and all amounts in the funds and accounts established hereunder (other than the Expense Account and the Rebate Fund), including the "Successor Agency to the Community Redevelopment of the City of Santa Ana Tax Increment Ftrnd" (hereinafter called the "Tax Increment Fund "), which is hereby created by the Agency and which fiord the Agency hereby covenants and agrees to maintain with the Trustee so long as any Bonds shall be Outstanding hereunder or amounts are owed to the 2016 Bond Insurer or the issuer of the 2016 Reserve Policy, to the Trustee for the benefit of the 2016 Bond Insurer, the issuer of the 2016 Reserve Policy and the Owners of the Outstanding Bonds. Notwithstanding the foregoing, there shall not be deposited with the Trustee for deposit in the Tax Increment Fund any taxes eligible for allocation to the Agency pi i suant to the Law in an amount in excess of that amount which, together with all money then on deposit with the Trustee in the Tax Increment Fund and the accounts therein, shall be sufficient to discharge all Outstanding Bonds as provided in Article X hereof. No additional bonds payable from Tax FM 3 -44 Revenues on a basis senior to or on a parity with the Bonds will be issued except pursuant to Article IV of the Indenture. The Agency covenants and agrees that, subject to the prior application and lien in favor of the Senior Bonds, all Tax Revenues when and as received, will be received by the Agency in trust hereunder and will be transferred to the Trustee within a reasonable period of time from the receipt by the Agency thereof, for deposit by the Trustee in the Tax Increment Fund and will be accounted for through and held in trust in the Tax Increment Fund, and the Agency shall have no beneficial right or interest in any of such money, except only as specifically provided otherwise in the Indenture. All such Tax Revenues, whether received by the Agency and held in trust pending transfer or deposited with the Trustee, all as herein provided, shall nevertheless be disbursed, allocated and applied solely to the uses and purposes hereinafter set forth in the Indenture, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the Agency. Any Tax Revenues received by the Trustee in the Tax Increment Fund (other than amounts deposited in the Reserve Account) in excess of the amounts required to be, held by the Trustee in the Tax Increment Fund shall be released from the pledge and lien hereunder and transferred to the Agency and may be used for any lawful purpose of the Agency. Pursuant to the laws of the State of California, including California Health and Safety Code Sections 34183 and 34170.5(b), the County Auditor - Controller is obligated to deposit the Tax Revenues into the Redevelopment Property Tax Trust Fund. In furtherance of this Section 5,01 and the Dissolution Act, and in accordance with the County Auditor - Controller's obligations as set forth in California Health and Safety Code Section 34183, the Agency shall take all steps to ensure that the County Auditor - Controller (1) deposits the Tax Revenues into the Redevelopment Property Tax Trust Fund, (2) allocates funds for the principal and interest payments due on the Outstanding Bonds and any Parity Debt and any deficiency in the Reserve Account (including amounts due to the issuer of the 2016 Reserve Policy) pursuant to each valid Recognized Obligation Payment Schedule in accordance with the Dissolution Act and as provided in this Section 5.01, and (3) make the transfers to the Trustee required under Section 5.02 of the Indenture. The Agency will take all actions required under the Dissolution Act to include on its BOPS the amounts described below to be transmitted to the Trustee for the applicable ROPS Period in order to satisfy the requirements of the Indenture, including any amounts required to pay principal and interest payments due on the Senior Bonds, Outstanding Bonds and any Parity Debt, any Compliance Costs, any deficiency in the Reserve Account to the full amount of the Reserve Account Requirement (including amounts due to the issuer of the 2016 Reserve Policy) and any deficiency in the reserve accounts under the indentures for the Senior Bonds, The Agency shall submit an Oversight Board - approved BOPS to the County Auditor - Controller and the Department of Finance on or before February 1 with respect to the BOPS Period commencing the following July 1. Expected Compliance Costs, if any, will be included in each ROPS in accordance with the Dissolution Act. 27 3 -45 In furtherance of such pledge, and in preparing a given ROPS, the Agency shall reflect on each amoral ROPS that the amount due to the Trustee, received in trust from the County Auditor - Controller for deposit in the Tax Increment Fund on June 1 of the then - currant calendar year from Tax Revenues required to be deposited into the RPTTF shall equal (1) the sum of (a) all scheduled principal payments and Sinking Account Installments due and payable on the Outstanding Bonds and any Parity Debt daring the then - current calendar year as shown on Appendix B - Schedule of Semi-Annual and Annual Interest and Principal Payments of the Outstanding Bonds, and (b) all scheduled interest payments due and payable on the Outstanding Bonds and any Parity Debt during the then - current calendar year as shown on Appendix B - Schedule of Semi - Annual and Annual Interest and Principal Payments of the Outstanding Bonds, plus (2) the amount of any deficiency in the Reserve Account (including amounts due to the issuer of the 2016 Reserve Policy), less (3) the amounts, if any, on deposit in the Tax Increment Fund as of the date of submission for the ROPS pursuant to this Section that are in excess of the amounts required to be applied to payment of principal of or interest or sinking account payments on the Outstanding Bonds and any Parity Debt in the then current calendar year. The amount due to the Trustee from the County Auditor- Controller for deposit in the Tax Increment Fund on January 2 of the then- current calendar year from amounts required to be deposited into the RPTTF shall be equal to the remainder due and payable on the Outstanding Bonds and any Parity Debt during the then - current calendar year in an amount equal to not less than (1) the remaining the sum of (a) all scheduled principal payments and Sinking Account Installments due and payable on the Outstanding Bonds and any Parity Debt during the then - current calendar year as shown on Appendix B - Schedule of Semi - Annual and Annual Interest and Principal Payments of the Outstanding Bonds, and (b) all scheduled interest payments due and payable on the Outstanding Bonds and any Parity Debt dining the then - current calendar year as shown on Appendix B - Schedule of Semi - Annual and Annual Interest and Principal Payments of the Outstanding Bonds, plus (2) the amount of any remaining deficiency in the Reserve Account. Tax Revenues received by the Agency during a BOPS Period in excess of the amount required, as provided in this Section, to be deposited in the Tax Increment Fund shall, immediately following the deposit with the Trustee of the amounts required to be so deposited as provided in this Section on each such date, be released fiom the pledge, security interest and lien hereunder for the security of the Outstanding Bonds, and may be applied by the Agency for any lawful purpose of the Agency, including but not limited to the payment of subordinate debt, or the payment of any amounts due and owing to the United States of America pursuant to Section 6.11. Prior to the payment in full of the principal of and interest and redemption premium (if any) on the Outstanding Bonds and any Parity Debt and the payment in full of all other amounts payable hereunder and under any Supplemental Indentures, the Agency shall not have any beneficial right or interest in the moneys on deposit in the Tax Increment Fund, except as may be provided in the Indenture and in any Supplemental Indenture, Section 5.02 Receipt and Deposit of Tax Revenues, The Agency covenants and agrees that, subject to the prior application and lien in favor of the Senior Bonds, all Tax Revenues, when and as received in accordance with Section 5.01 hereof, will be received by the Agency in trust hereunder and shall be deemed to be held by the Agency as agent for the Trustee and will, not later than five (5) Business Days following such receipt, be deposited by the Agency with the Trustee in the Tax Increment Fund and will be accounted for through and held in trust in the Tax Increment Fund, and the Agency shall have no beneficial right or interest in any of such money, 28 WN except only as in the Indenture provided; provided that the Agency shall not be obligated to deposit in the Tax Increment Fund in any calendar year an amount which exceeds the amounts required to be transferred to the Trustee for deposit into the Tax Increment Fund pursuant to Section 5.01. All such Tax Revenues, whether received by the Agency in trust or deposited with the Trustee, all as herein provided, shall nevertheless be disbursed, allocated and applied solely to the uses and purposes set forth heroin, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the Agency. Section 5.03 Establishment and Maintenance of Accounts for Use of Moneys in the Tax Increment Fund. Subject to the prior application and lien in favor of the Senior Bonds, all Tax Revenues in the Tax Increment Fund shall be set aside by the Trustee in each Bond Year when and as received in the following respective special accounts within the Tax Increment Fund (each of which is hereby created and each of which the Agency hereby covenants and agrees to cause to be maintained with the Trustee so long as the Bonds shall be Outstanding hereunder), in the following order of priority (except as otherwise provided in subsection (b) below): (1) Interest Account; (2) Principal Account; (3) Term Bonds Sinking Account; (4) Reserve Account; and (5) Expense Account. All moneys in each of such accounts shall be held in trust by the Trustee and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this Section 5.03. (a) Interest Account. The Trustee shall set aside from the Tax Increment Fund and deposit in the interest Account an amount of money which, together with any money contained therein, is equal to the aggregate amount of the interest becoming due and payable on all Outstanding Bonds on the Interest Payment Dates in such Bond Year. No deposit need be made into the Interest Account if the amount contained therein is at least equal to the aggregate amount of the interest becoming due and payable on all Outstanding Bonds on the Interest Payment Dates in such Bond Year. All moneys in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity). (b) Principal Account. The Trustee shall set aside from the Tax Increment Find and deposit in the Principal Account an amount of money which, together with any money contained therein, is equal to the aggregate amount of principal becoming due and payable on all Outstanding Serial Bonds on the Principal Payment Date in such Bond Year, No deposit need be made into the Principal Account if the amount contained therein is at least equal to the aggregate amount of principal of all Outstanding Serial Bonds becoming due and payable on the Principal Payment Date in such Bond Year. All money in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying principal of the Serial Bonds as they shall become due and payable. 3 -47 In the event that there shall be insufficient money in the Tax Increment Fund to pay in full all such principal and Sinking Account Installments due pursuant to Section 5,03(c) hereof in such Bond Year, then the money available in the Tax Increment Fund shall be applied pro rata to the payment of such principal and Sinking Account Installments in the proportion which all such principal and Sinking Account Installments bear to each other. (c) Term Bonds Sinking Account. The Trustee shall deposit in the Term Bonds Sinking Account an amount of money which, together with any money contained therein, is equal to the Sinking Account Installments payable on the Sinking Account Payment Date in such Bond Year. No deposit need be made in the Term Bonds Sinking Account if the amount contained therein is at least equal to the aggregate amount of all Sinking Account Installments required to be made on the Sinking Account Payment Date in such Bond Year. All moneys in the Term Bonds Sinking Account shall be used and withdrawn by the Trustee solely for the purpose of purchasing or redeeming the Term Bonds in accordance with Section 2.04(c) hereof. (d) Reserve Account, The Trustee shall set aside from the Tax Increment Fund and deposit in the Reserve Account such amount as may be necessary to maintain on deposit therein an amount equal to the Reserve Account Requirement. No deposit need be made into the Reserve Account so long as there shall be on deposit therein an amount equal to the Reserve Account Requirement. All money in or credited to the Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of replenishing the Interest Account, the Principal Account or the Term Bonds Sinking Account in such order, in the event of any deficiency in any of such accounts occurring on any Interest Payment Date, Principal Payment Date or Sinking Account Payment Date, or for the purpose of paying the interest on or the principal of the Bonds in the event that no other money of the Agency is lawfully available therefor, or for the retirement of all Bonds then Outstanding, except that for so long as the Agency is not in default hereunder, any amount in the Reserve Account in excess of the Reserve Account Requirement shall be transferred to the Tax Increment Fund. On any date on which Bonds are defeased in accordance with Section 11.02 hereof, the Trustee shall, if so directed in a Written Request of the Agency, transfer any moneys in the Reserve Account in excess of the Reserve Account Requirement resulting from such defeasance to the entity or find so specified in such Written Request of the Agency, to be applied to such defeasance. If at any time the Trustee fails to pay principal or interest due on any scheduled payment date for the Bonds and any Parity Debt or withdraws funds from the Reserve Account to pay principal and interest on the Bonds and any Parity Debt, the Trustee shall notify the Agency in writing of such failure or withdrawal, as applicable. The prior written consent of the 2016 Bond Insurer shall be a condition precedent to the deposit of any Qualified Reserve Account Credit Instrument credited to the Reserve Account established for the Series 2016 Bonds (other than the 2016 Reserve Policy) in lieu of a cash deposit into the Reserve Account. Amounts drawn under the 2016 Reserve Policy shall be available only for the payment of scheduled principal and interest on the Series 2016 Bonds when (Inc. 30 The Trustee shall ascertain the necessity for a claim upon the 2016 Reserve Policy in accordance with the provisions of paragraph (a) of Section 5.05 hereof and to provide notice to the 2016 Bond. Insurer in accordance with the terms of the 2016 Reserve Policy at least five Business Days prior to each date upon which interest or principal is due on the Series 2016 Bonds, respectively. Where deposits are required to be made by the Agency with the Trustee to the Interest Account and Principal Account of the Tax Increment Fund for the Series 2016 Bonds, respectively, more often than semi- amrually, the Trustee shall be instructed to give notice to the 2016 Bond Insurer of any failure of the Agency to make timely payment in full of such deposits within two Business Days of the date due. (e) Expense Account. The 'trustee shall set aside from the Tax Increment Fluid and deposit in the Expense Account such amount as may be necessary to pay from time to time Compliance Costs as specified in a Written Request of the Agency setting forth the amounts. All moneys in the Expense Account shall be applied to the payment of Compliance Costs, upon presentation of a Written Request of the Agency setting forth the amounts, purposes, the names of the payees and a statement that the amounts to be paid are proper charges against the Expense Account. So long as any of the Bonds herein authorized, or any interest thereon, remain unpaid, the moneys in the Expense Account shall be used for no purpose other than those required or permitted by the Indenture and the Law. Section 5.04 Investment of Moneys In Funds and Accounts. Moneys in the Tax Increment Fund and the Interest Account, the Principal Account, the Term Bonds Sinking Account and the Expense Account thereunder, upon the Written Request of the Agency, shall be invested by the Trustee in Permitted Investments, If such instructions are not provided, the Trustee shall invest such funds in Permitted Investments described in clause (6) of the definition thereof. Moneys in the Interest Account representing accrued interest paid to the Agency upon the initial sale and delivery of any Bonds and in the Reserve Account, upon the Written Request of the Agency, shall be invested by the Trustee in Permitted Investments. Permitted Investments purchased with amounts on deposit in the Reserve Account shall have an average aggregate weighted term to maturity of not greater than five (5) years; provided, however, that if such investments may be redeemed at par so as to be available on each Interest Payment Date, any amormt in the Reserve Account may be invested in such redeemable Permitted Investments maturing on any date on or prior to the final maturity date of the Bonds, The obligations in which moneys in the Tax Increment Fund and the Interest Account, the Principal Account, the Tenn Bonds Sinking Account and the Expense Account thereunder are so invested shall mature prior to the date on which such moneys are estimated to be required to be paid out hereunder. Any interest, income or profits from the deposits or investments of all other fluids and accounts held by the Trustee (other than the Expense Account and the Rebate Fund) shall be deposited in the Tax Increment Fund. For purposes of determining the amount on deposit in any fund or account hold by the Trustee hereunder, all Permitted Investments credited to such fund or account shall be valued at the lower of cost or the market price thereof (excluding accrued interest and brokerage commissions, if any); provided that Permitted Investments credited to the Reserve Account shall be valued at market value (exclusive of accrued interest and brokerage commissions, if any), and any deficiency in the Reserve Account resulting from a decline in market value shall be restored to the Reserve Account Requirement no later than the next Bond Year. Amounts in the funds and accounts held, by the Trustee under the Indenture shall be valued at least annually on the first day of August after the principal payment has been made. 31 3 -49 The Agency acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Agency the right to receive brokerage confirmations of security transactions as they occur, the Agency will not receive such confirmations to the extent permitted by law. The Trustee will furnish the Agency periodic cash transaction statements which shall include detail for all investment transactions made by the Trustee hereunder. The Trustee or any of its affiliates may act as agent, sponsor or advisor in connection with any investment made by the Trustee hereunder. To the extent Permitted Investments are registrable, such investments shall be registered in the name of the Trustee. The Trustee may sell or present for redemption, any securities so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such securities are credited, and the Trustee shall not be responsible for any loss resulting from such investment, The Trustee is hereby authorized t, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or dealing as principal for its own account. The Trustee shall have no investment discretion. Section 5.05 2016 Reserve Policy Payment and Reimbursement Provisions. [TAE FOLLOWING ARE SAMPLE BOND INSURER PROVISIOINS] The following provisions shall govern in the event of a conflict with any contrary provision of the Indenture. (a) The Agency shall repay from available Tax Revenues any draws under the 2016 Reserve Policy and pay all related reasonable expenses incurred by the 2016 Bond Insurer and shall pay interest thereon from the date of payment by the 2016 Bond Insurer at the Late Payment Rate, "Late Payment Rate" means the lesser of (x) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in the City of New York, as its prime or base lending rate ( "Prime Rate ") (any change in such Prime Rate to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3.00 %, and (ii) the then applicable highest rate of interest on the outstanding Series 2016 Bonds and (y) the maximum rate permissible under applicable usury or similar laws limiting interest rates, The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced prime or base lending rate of such national bank as the 2016 Bond Insurer shall specify. If the interest provisions of this subparagraph (a) shall result in an effective rate of interest which, for any period, exceeds the limit of the usury or any other laws applicable to the indebtedness created herein, then all suns in excess of those lawfully collectible as interest for the period in question shall, without Rather agreement or notice between or by any party hereto, be applied as additional interest for any later periods of time when amounts are outstanding hereunder to the extent that interest otherwise due hereunder for such periods plus such additional interest would not exceed the limit of the usury or such other laws, and any excess shall 32 3 -50 be applied upon principal immediately upon receipt of such moneys by the 2016 Bond Insurer, with the same force and effect as if the Agency had specifically designated such extra sums to be so applied and the 2016 Bond Insurer had agreed to accept such extra payment(s) as additional interest for such later periods. In no event shall any agreed -to or actual exaction as consideration for the indebtedness created herein exceed the limits imposed or provided by the law applicable to this transaction for the use or detention of money or for forbearance in seeking its collection. (b) Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, "Policy Costs ") shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1(12 of the aggregate of Policy Costs related to such draw. (c) The obligation to pay Policy Costs shall be secured by a valid lien on all revenues and other collateral pledged as security for the Series 2016 Bonds (subject only to the priority of payment provisions set forth under the Indenture). Amounts in respect of Policy Costs paid to the 2016 Bond Insurer shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the 2016 Bond Insurer on account of principal due, the coverage under the 2016 Reserve Policy will be increased by a like amount, subject to the terms of the 2016 Reserve Policy. (d) All cash and investments in the Reserve Account not otherwise securing a particular Series of Bonds shall be transferred to the Interest Account and Principal Account of the Tax Increment Fund for payment of debt service on the Series 2016 Bonds before any drawing may be made on the 2016 Reserve Policy or any other Qualified Reserve Account Credit Instrument credited to the Reserve Account in lieu of cash, Payment of any Policy Costs shall be made prior to replenishment of any such cash amounts. Draws on all Qualified Reserve Account Credit Instruments (including the 2016 Reserve Policy) on which there is available coverage shall be made on a pro -rata basis (calculated by reference to the coverage then available thereunder) after applying all available cash and investments in the Reserve Account. Payment of Policy Costs and reimbursement of amounts with respect to other Qualified Reserve Account Credit Instruments shall be made on a pro -rata basis prior to replenishment of any cash drawn from the Reserve Account. For the avoidance of doubt, "available coverage means the coverage then available for disbursement pursuant to the terms of the applicable alternative credit instrument without regard to the legal or financial ability or willingness of the provider of such instrument to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw. (e) Upon a faihue to pay Policy Costs when due or any other breach of the terms of this Section, the 2016 Bond Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under the Indenture, other than (i) acceleration of the maturity of the Series 2016 Bonds, if any, or (ii) remedies which would adversely affect owners of the Series 2016 Bonds. 33 3 -51. (f) The Indenture shall not be discharged until all Policy Costs owing to the 2016 Bond Insurer shall have been paid in full. The Agency's obligation to pay such amounts shall expressly survive payment in fall of the Series 2016 Bonds. (g) The Agency shall include any Policy Costs then due and owing the 2016 Bond Insurer in the calculation of the additional bonds test. (h) The Agency will pay or reimburse the 2016 Bond Insurer any and all reasonable charges, fees, costs, losses, liabilities and expenses which the 2016 Bond Insurer may pay or incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, in connection with (i) any accounts established to facilitate payments under the 2016 Reserve Policy, (ii) the administration, enforcement, defense or preservation of any rights in respect of the Indenture or the Related Documents, including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy proceeding in respect of the Agency) relating to the Indenture or any other Related Document, any party to the Indenture or any other Related Document or the transactions contemplated by the Related Documents, (iii) the foreclosure against, sale or other disposition of any collateral securing any obligations under the Indenture or any other Related Document, if any, or the pursuit of any remedies under the Indenture or any other Related Document, to the extent such costs and expenses are not recovered from Stich foreclosure, sale or other disposition, (iv) any amendment, waiver or other action with respect to, or related to the Indenture, the 2016 Reserve Policy or any other Related Document whether or not executed or completed, or (v) any action taken by the 2016 Bond Insurer to cure a default or termination or similar event (or to mitigate the effect thereof) under the Indenture or any other Related Document; costs and expenses shall include a reasonable allocation of compensation and overhead attributable to time of employees of the 2016 Bond Insurer spent in connection with the actions described in clauses (ii) through (v) above. The 2016 Bond Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Indenture or any other Related Document, Amounts payable by the Agency hereunder shall bear interest at the Late Payment Rate from the date such amount is paid or incurred by the 2016 Bond Insurer until the date the 2016 Bond Insurer is paid in fall. (i) The obligation of the Agency to pay all amounts due to the 2016 Bond Insurer shall be an absolute and unconditional obligation of the Agency and will be paid or performed strictly in accordance with the provisions of this Section, irrespective of (i) any lack of validity or enforceability of or any amendment or other modifications of, or waiver with respect to the Series 2016 Bonds, the Indenture or any other Related Document, or (ii) any amendment or other modification of, or waiver with respect to the 2016 Reserve Policy; (iii) any exchange, release or non - perfection of any security interest in property securing the Series 2016 Bonds, the Indenture or any other Related Documents; (iv) whether or not such Series 2016 Bonds are contingent or matured, disputed or undisputed, liquidated or unliquidated; (v) any amendment, modification or waiver of or any consent to departure from the 2016 Reserve Policy, the Indenture or all or any of the other Related Documents; (vi) the existence of any claim, setoff, defense (other than the defense of payment in full), reduction, abatement or other right which the 34 3 -52 Agency may have at any time against the Trustee or any other person or entity other than the 2016 Bond Insurer, whether in connection with the transactions contemplated herein or hi any other Related Documents or any unrelated transactions; (vii) any statement or any other document presented under or in connection with the 2016 Reserve Policy proving in any and all respects invalid, inaccurate, insufficient, fraudulent or forged or any statement therein being untrue or inaccurate in any respect; or (viii) any payment by the 2016 Bond Insurer under the 2016 Reserve Policy against presentation of a certificate or other document which does not strictly comply with the terms of the 2016 Reserve Policy. 0) The Agency shall fully observe, perform, and fulfill each of the provisions (as each of those provisions may be amended, supplemented, modified or waived with the prior written consent of the 2016 Bond Insurer) of the Indenture applicable to it, each of the provisions thereof being expressly incorporated into this Section by reference solely for the benefit of the 2016 Bond Insurer as if set forth directly herein. No provision of the Indenture or any other Related Document shall be amended, supplemented, modified or waived, without the prior written consent of the 2016 Bond Insurer, in any material respect or otherwise in a manner that could adversely affect the payment obligations of the Agency hereunder or the priority accorded to the reimbursement of Policy Costs under the Indenture. (lc) The Agency covenants to provide to the 2016 Bond insurer, promptly upon request, any information regarding the Series 2016 Bonds or the financial condition and operations of the Agency as reasonably requested by the 2016 Bond Insurer, The Agency will permit the 2016 Bond Insurer to discuss the affairs, finances and accounts of the Agency or any information the 2016 Bond Insurer may reasonably request regarding the security for the Series 2016 Bonds with appropriate officers of the Agency and will use commercially reasonable efforts to enable the 2016 Bond Insurer to have access to the facilities, books and records of the Agency on any Business Day upon reasonable prior notice. Section 5.06 Costs of Issuance Fund. Moneys deposited in the Costs of Issuance Fund shall be held by the Trustee in trust and applied to the payment of Costs of Issuance upon a Requisition of the Agency filed with the Trustee. Each such requisition shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. In no event shall moneys from any other fiend or account established hereunder be used to pay Costs of Issuance. All payments from the Costs of Issuance Fund shall be reflected on the Trustee's regular accounting statements. At the end of twelve months from the date of issuance of the Bonds, or upon earlier receipt of a Written Order of the Agency stating that amounts in such fiend are no longer required for the payment of Costs of Issuance, such fund shall be terminated and any amounts then remaining in such fiend shall be transferred to the Tax Increment Fund. The Trustee shall then close the Costs of Issuance Fund. 35 3 -53 ARTICLE VI COVENANTS OF THE AGENCY Section 6.01 Punctual Payment. The Agency will punctually pay the principal of, premium, if any, and the interest to become due with respect to the Bonds, in strict conformity with the teens of the Bonds and of the Indenture and will faithfully satisfy, observe and perform all conditions, covenants and requirements of the Bonds and of the Indenture, Section 6.02 Aaainst Encumbrances. The Agency will not mortgage or otherwise encumber, pledge or place any charge upon any of the Tax Revenues, except as provided in the Indenture, and will not issue any obligation or security superior to or on a parity with then Outstanding Bonds payable in whole or in part from the Tax Revenues (other than Additional Bonds in accordance with Section 4.01). The Agency shall refund outstanding Senior Bonds on a parity with the Bonds only to the extent such refunding would be permitted by Section 34177.5(a)(1) of the Dissolution Act. Section 6.03 Extension or Funding of Claims for Interest. In order to prevent any claims for interest after maturity, the Agency will not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any Bonds and will not, directly or indirectly, be a party to or approve any such arrangements by purchasing or funding said claims for interest or in any other manner, In case any such claim for interest shall be extended or funded, whether or not with the consent of the Agency, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of the Indenture, except subject to the prior payment in full of the principal of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded. Section 6.04 Payment of Claims. Subject to the terms of the Dissolution Act, the Agency will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the properties owned by the Agency or upon the Tax Revenues or any part thereof, or upon any funds in the hands of the Trustee, or which might impair the security of the Bonds; provided that nothing herein contained shall require the Agency to make any such payments so long as the Agency in good faith shall contest the validity of any such claims. Section 6.05 Books and Accounts; Financial Statements. The Agency will keep proper books of record and accounts, separate from all other records and accounts of the Agency, in which complete and correct entries shall be made of all transactions relating to the Tax Increment Fund. Such books of record and accounts shall at all times during business hours be subject to the inspection of the Trustee (who shall have no duty to inspect) and the Owners of not less than ten per cent (10 %) of the aggregate principal amount of Bonds Outstanding or their representatives authorized in writing. The Agency will prepare and file with the Trustee and the Bond Insurer annually, so long as any Bonds are Outstanding, the audited financial statements of the Agency as part of the Annual Report (as defined in the Continuing Disclosure Agreement), provided, however, that the audited financial statements of the Agency may be submitted separately from the balance of the 36 3 -54 Annual Report, and later than the date required for the filing of the Annual Report and as soon as practicable if they are not available by that date, Section 6.06 Protection of Security and Rights of Owners. The Agency will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the sale and delivery of any Bonds by the Agency, such Bonds shall be incontestable by the Agency. Section 6.07 Payment of Taxes and Other Charges, The Agency will pay and discharge all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the Agency or any properties owned by the Agency in the Project Area, or upon the revenues therefrom, when the same shall become due; provided that nothing herein contained shall require the Agency to make any such payments so long as the Agency in good faith shall contest the validity of any such taxes, service charges, assessments or other governmental charges. Section 6.08 Amendment of Redevelopment Plan. The Agency will not amend the Redevelopment Plan except as provided in this section and as permitted by the Law. If the Agency proposes to amend the Redevelopment Plan, it shall cause to be filed with the Trustee a Consultant's Report on the effect of such proposed amendment. If the Consultant's Report concludes that Tax Revenues will not be materially reduced by such proposed amendment, the Agency may undertake such amendment. If the Consultant's Report concludes that Tax Revenues will be materially reduced by such proposed amendment, the Agency may not undertake such proposed amendment. Notwithstanding the foregoing, the Agency must obtain the Bond Insurer's prior written consent for any amendment of the Redevelopment Plan. which would (i) reduce the amount of Tax Revenues that may be received by the Agency or (ii) reduce the period during which the Agency may collect Tax Revenues. Section 6.09 Tax Revenues, The Agency shall comply with all requirements of the Law to ensure the allocation and payment to it of the Tax Revenues, including without limitation the timely filing of any necessary ROPE. The Agency shall manage its fiscal affairs in a manner so that it will have sufficient Tax Revenues available under the Redevelopment Plan in the amounts and at the times required to enable the Agency to pay the principal of, premium, if any and interest on the outstanding Senior Bonds, and any parity debt thereof, and the Series 2016 Bonds and any Parity Debt when due. Section 6.10 Further Assurances. The Agency will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Indenture, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in the Indenture. Section 6.11 Tax Covenants,, Rebate Fund. (a) The Agency covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on any of the Tax Exempt Bonds under Section 103 of the Code. Without limiting 37 3 -55 the generality of the foregoing, the Agency shall comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive payment in full or defeasance of the Bonds. (b) The Agency agrees that there shall be paid from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the Tax Exempt Bonds from time to time. (c) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the Rebate Fund. Notwithstanding any other provision of the Indenture to the contrary, all amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section 6.11 and by the Tax Certificate (which is incorporated herein by reference). The Agency shall cause to be deposited in the Rebate Fund the Rebate Requirement as provided in the Tax Certificate. Subject to the provisions of this Section 6.11, all money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the federal government of the United States of America from time to time in accordance with the Tax Certificate. The Agency and the Owners shall have no rights in or claim to such money. (d) Upon the written direction of the Agency, the Trustee shall invest all amounts held in the Rebate Fund in Permitted Investments, subject to the restrictions set forth in the Tax Certificate. (e) Upon receipt of the Rebate Instructions required to be delivered to the Trustee by the Tax Certificate, the Trustee shall remit part or all of the balances held in the Rebate Fund to the Trustee for payment to the federal government of the United States of America, as so directed. In addition, if the Rebate Instructions so direct, the Trustee shall deposit moneys into or transfer moneys out of the Rebate Fund from or into such accounts or funds as the Rebate Instructions direct. Any funds remaining in the Rebate Fund after redemption and payment of all of the Tax Exempt Bonds and payment of any required rebate amount, or provision made therrefor satisfactory to the Trustee, shall be withdrawn and remitted to the Agency. (f) The Trustee shall have no obligation to pay any amounts required to be remitted pursuant to this Section 6,11, other than from moneys hold in the funds and accounts created under the Indenture or from other moneys provided to it by the Agency. (g) The Trustee shall conclusively be deemed to have complied with the provisions of this Section 6.11 if it follows the directions of the Agency set forth in the Rebate Instructions, and shall not be required to take any actions thereunder in the absence of Rebate Instructions from the Agency. (h) Notwithstanding any other provision of the Indenture, the obligation of the Agency to remit or cause to be remitted any required rebate arnount to the United States government and to comply with all other requirements of this Section 6.11 and the Tax Certificate shall survive the defeasance or payment in full of the Tax Exempt Bonds. 38 3 -56 (i) Notwithstanding any provision of this Section 6.11 to the contrary, if the Agency shall provide to the Trustee an opinion of counsel of recognized standing in the field of law relating to municipal bonds (and approved in writing by the Agency) to the effect that any action required under this Section 6.11 is no longer required, or that some further or different action is required, to maintain the exclusion from federal gross income of the interest on the Tax Exempt Bonds pursuant to the Code, the Trustee and the Agency may conclusively rely on such opinion in complying with the provisions of this Section 6.11, and the provisions hereof shall be deemed to be modified to that extent, Section 6.12 Compliance with the Dissolution Act, The Agency covenants that in addition to complying with the requirements of Section 5,01 hereof, it will comply with all other requirements of the Dissolution Act. Without limiting the generality of the foregoing, the Agency covenants and agrees to file all required statements and seek all necessary successor agency or an oversight board approvals required under the Dissolution Act to assure compliance by the Agency with its covenants under the Indenture. Further, the Agency will take all actions required under the Dissolution Act to include on its ROPS for each ROPS Period all payments expected to be made to the Trustee in order to satisfy the requirements of the Indenture, including any amounts required to pay principal and interest payments due on the Senior Bonds, Outstanding Bonds and any Parity Debt, any deficiency in the Reserve Account to the Rill amount of the Reserve Account Requirement (including amounts due to the 2016 Bond Insurer as issuer of the 2016 Reserve Policy) and any deficiency in the reserve accounts under the indentures for the Senior Bonds, any Compliance Costs, and any required debt service, reserve set - asides, and any other payments required under the Indenture or similar documents pursuant to Section 34171(d)(1)(A) of the California Health and Safety Code, so as to enable the County Auditor - Controller to distribute from the RPTTF amounts to the Trustee for deposit in the Tax Increment Fimd on each ROPS Distribution Date amounts required for the Agency to pay the principal of, premium, if any, and the interest on the Outstanding Bonds and any Parity Debt coming due in the respective ROPS Period. These actions will include, without limitation, placing on the periodic ROPS for approval by the Oversight Board and the DOF, to the extent necessary, the amounts to be held by the Agency as a reserve until the next ROPS Period, as contemplated by paragraph (1)(A) of subdivision (d) of Section 34171 of the Dissolution Act, that are necessary to provide for the payment of principal of, premium, if any, and the interest under the Indenture when the next property tax allocation is projected to be insufficient to pay all obligations due under the Indenture for the next payment due in the following ROPS Period. The Agency covenants that (i) it will include all amounts presently due and payable to the 2016 Bond Insurer on each Recognized Payment Obligation Schedule ( "ROPS ") submission, (ii) if any amounts payable to the 2016 Bond Insurer are not included on any current ROPS and the Agency is then legally permitted to amend such BOPS, the Agency will amend its current ROPS to include such amounts payable to the 2016 Bond Insurer, and (iii) the Agency will not submit for approval by the Oversight Board or the DOF a ROPS covering multiple ROPS Periods or any Last and Final Recognized Obligation Payment Schedule as provided in the Dissolution Law without the prior consent of the 2016 Bond Insurer. Section 6.13 Negative Pledge. The Agency may not create or allow to exist any liens on Tax Revenues senior to (except as provided in the indenture securing the Senior Bonds) or on a parity with the Series 2016 Bonds except as provided in Article IV hereof. The Agency shall 39 3 -57 refund outstanding Senior Bonds on a parity with the Bonds only to the extent such refunding would be permitted by Section 34177.5(a)(1) of the Dissolution Act, Section 6.14 Adverse Change in State Law. If, due to an adverse change in State law resulting from legislation or the decision of a court of competent jurisdiction, the Agency determines that it can no longer comply with Section 6.12, then the Agency shall immediately notify the County Auditor - Controller and the Trustee in writing of such determination. The Agency shall immediately seek a declaratory judgment or take other appropriate action in a court of competent jurisdiction to determine the duties of all parties to the Indenture, including the County Auditor - Controller and the Agency, with regard to the performance of Section 6.12 by the Agency. The Trustee may, but is in no event obligated to, participate in the process of seeking such declaratory judgment to protect its rights hereunder. Any reasonable fees and expenses incurred by the Trustee (including, without limitation, legal fees and expenses) in connection with such participation shall be borne by the Agency. Section 6.15 Credits to Redevelopment Obligation Retirement Fund. The Agency covenants, subject to the prior application and lien in favor of the Senior Bonds, to credit all Tax Revenues withdrawn from the RPTTF by the County Auditor - Controller and remitted to the Trustee for the payment of the Bonds and any Parity Debt to the Redevelopment Obligation Retirement Fund established pursuant to Section 34170.5(a) of the California Health and Safety Code. Section 6.16 Compliance Costs. The Agency, to the fullest extent permitted by law, shall pay the annual Compliance Costs, from amounts on deposit in the Expense Account, including fees and disbursements of the consultants and professionals engaged in connection with the Bonds, costs of the Agency and the Trustee payable from the RPTTF. Section 6.17 Continuing Disclosure. The Agency hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of the Indenture, failure of the Agency to comply with the Continuing Disclosure Agreement shall not be considered an Event of Definilt; provided, however, the Trustee, at the written request of any Participating Underwriter (as defined in the Continuing Disclosure Agreement), the Bond Insurer or the Bondowners of at least 25% aggregate principal amount of Bonds Outstanding, shall to the extent the Trustee is indemnified to its satisfaction from and against any liability or expense related thereto, or any Bondowner or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Agency to comply with its obligations tinder this section and the Continuing Disclosure Agreement. For purposes of this section, "Beneficial Owner" shall mean any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). M 3 -58 ARTICLE VII THE TRUSTEE Section 7.01 Appointment and Acceptance of Duties. The Trustee hereby accepts and agrees to the trusts hereby created to all of which the Agency agrees and the respective Owners of the Bonds, by their purchase and acceptance thereof, agree. Section 7.02 Duties. Immunities and Liability of Trustee. (a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in the Indenture, and no implied ditties or obligations shall be read into the Indenture against the Trustee, The Trustee shall, during the existence of any Event of Default (which has not been cured or waived), exercise the rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise as a reasonable individual would exercise or use under the circumstances in the conduct of his own affairs. (b) Subject to Section 12.15, the Agency may, in the absence of an Event of Default, and upon receipt of an instrument or concurrent instruments in writing signed by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or upon receipt of a written request of the Bond Insurer stating good cause, or upon receipt of a written request of any Bond Insurer following an Event of Default (irrespective of cause), or if at any time the Trustee shall cease to be eligible in accordance with subsection (e) of this section, or shall become incapable of acting, or shall commence a case under any bankruptcy, insolvency or similar law, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take control or charge of the Trustee or its property or affairs for the purpose of rehabilitation, conservation or liquidation, shall, remove the Trustee by giving written notice of such removal to the Trustee, and thereupon the Agency shall promptly appoint a successor Trustee by an instrument in writing. (c) The Trustee may, subject to (d) below, resign by giving written notice of such resignation to the Agency and the Bond Insurer and by giving notice of such resignation by mail, first class postage prepaid, to the Owners at the addresses listed in the Bond Register. Upon receiving such notice of resignation, the Agency shall promptly appoint a successor Trustee by an instrument in writing, and shall notify the Bond Insurer of such appointment. (d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and shall have accepted appointment within thirty (30) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Owner (on behalf of himself and all other Owners) may petition, at the expense of the Agency, any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such 41 3 -59 notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under the Indenture shall signify its acceptance of such appointment by executing slid delivering to the Agency and to its predecessor Trustee and the Bond Insurer a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect, as if originally named Trustee herein; but, nevertheless, at the written request of the Agency or of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or father assurance and do such other things as may reasonably be required for fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under the Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions set forth herein. Upon request of the successor Trustee, the Agency shall execute and deliver any and all instruments as may be reasonably required for fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, such successor Trustee shall mail a notice of the succession of such Trustee to the trusts hereunder by first class mail, postage prepaid, to the Owners at their addresses listed in the Bond Register. (e) Any Trustee appointed under the provisions of this section shall be a trust company or bank having the powers of a trust company or authorized to exercise trust powers, having a corporate trust office in California, having (or in the case of a bank, trust company or bank holding company which is a member of a bank holding company system, the related bank holding company shall have) a combined 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, trust company or bank holding 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 purpose of this subsection the combined capital and surplus of such bank, trust company or bank holding company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. in case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection, the Trustee shall resign immediately in the manner and with the effect specified in this section. (l) No provision in the Indenture shall require the Trustee to risk or expend its own Rinds or otherwise incur any financial liability in the performance of any of its duties hereunder unless the Owners shall have offered to the Trustee security or indemnity it deems reasonable, against the costs, expenses and liabilities that may be incurred. (g) In accepting the trust hereby created, the Trustee acts solely as Trustee for the Owners and not in its individual capacity, and under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds, 42 3 -60 (h) The Trustee makes no representation or warranty, express or implied, as to the compliance with legal requirements of the use contemplated by the Agency of the funds under the Indenture. (i) The Trustee shall not be responsible for the recording or filing of any document relating to the Indenture or of financing statements (or continuation statements in connection therewith). The Trustee shall not be deemed to have made representations as to the security afforded thereby or as to the validity, sufficiency or priority of any such document, collateral or security of the Bonds. 6) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless and until a Responsible Officer shall have actual knowledge thereof at the Trustee's Principal Corporate Trust Office. The Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any documents executed in connection with the Bonds or as to the existence of an Event of Default hereunder. (k) The Trustee shalt not be accountable for the use or application by the Agency or any other party of any funds which the Trustee has released under the Indenture. (1) The Trustee shall provide a monthly accounting of all Funds held pursuant to the Indenture to the Agency within fifteen (15) Business Days after the end of each month and shall provide statements of account for each annual period beginning July 1 and ending June 30, within 90 days after the end of such period. Such accounting shall show in reasonable detail all transactions made by the Trustee under the Indenture during the accounting period and the balance in any Funds and accounts created under the Indenture as of the beginning and close of such accounting period. (m) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received but need not be segregated from other finds except to the extent required by law. (n) The permissive rights of the Trustee to do things enumerated in the Indenture shall not be construed as a duty unless so specified herein. (o) The Trustee may appoint and act through an agent and shall not be responsible for any misconduct or negligence of any such agent appointed with due care. The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, affiliates, or receivers, and shall be entitled to advice of counsel concerning all matters of bust and its duty hereunder, and the Trustee shall not be answerable for the acts or omissions of any such attorney, agent, or receiver selected by it with reasonable care. (p) The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e -mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or 43 3 -61 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 Agency elects to give the Trustee e -mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee's understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Agency agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. (q) The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term "force majeure" means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include but not be limited to acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences, (r) To the fullest extent permitted by law and notwithstanding anything in this Indenture to the contrary, the Trustee shall not be personally liable for (i) special, consequential or punitive damages, however styled, including, without limitation, lost profits or (ii) the acts or omissions of any nominee, correspondent, clearing agency, or securities depository through which it holds securities or assets. Section 7.03 Mercer or Consolidation. Any company into which the Trustee 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 Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under subsection (e) of Section 7.02, shall succeed to the rights and obligations of such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. Section 7.04 Compensation. The Agency shall pay to the Trustee a reasonable compensation for its services rendered hereunder and reimburse the Trustee for reasonable expenses, disbursements and advances, including attorney's and agent's fees and expenses, incurred by the Trustee in the performance of its obligations hereunder. The Agency agrees, to the extent permitted by law, to indemnify the Trustee and its officers, directors, employees, attorneys and agents for, and to hold it harmless against, any loss, liability or expense incurred without negligence or willful misconduct on its part arising out of or in connection with (i) the acceptance or administration of the trusts imposed by the Indenture, including performance of its duties hereunder, including the costs and expenses of defending itself against any claims or liability in connection with the exercise or performance of any of its powers or duties hereunder (ii) the Bonds; (iii) the sale of any Bonds and the carrying out of any of the transactions contemplated by the Bonds; or (iv) any untrue statement of any material fact 44 3 -62 or omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading in any official statement or other disclosure document utilized by the Agency or under its authority in connection with the sale of the Bonds. The Agency's obligations hereunder with respect to indemnity of the Trustee and the provision for its compensation set forth in this Article shall survive and remain valid and binding notwithstanding the maturity and payment of the Bonds, or the resignation, or removal of the Trustee. The Trustee shall have no responsibility for or liability in connection with assuring that all of the procedures or conditions to closing set forth in the contract of purchase for sale of the Bonds are satisfied, or that all documents required to be delivered on the closing date to the parties are actually delivered, except its own responsibility to receive or deliver the proceeds of the sale, deliver the Bonds and other certificates expressly required to be delivered by it and its counsel. Section 7.05 Liability of Trustee. The recitals of facts herein and in the Bonds contained shall be taken as statements of the Agency, and the Trustee does not assume any responsibility for the correctness of the same, and does not make any representations as to the validity or sufficiency of the Indenture or of the Bonds, and shall not incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it; provided, that the Trustee shall be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. The Trustee (in its individual or any other capacity) may become the Owner of Bonds with the same rights it would have if it were not Trustee hereunder, and, to the extent permitted by law, may act as depository for and permit any of its officers, directors and employees to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners, whether or not such committee shall represent the Owners of a majority in principal amount (or any lesser amount that may direct the Trustee in accordance with, and as provided in, the provisions of the Indenture) of the Bonds then Outstanding. The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Bond Insurer or the Owners of a majority in principal amount (or any lesser amount that may direct the Trustee in accordance with, and as provided in, the provisions of the Indenture) of the Outstanding Bonds relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, hereunder. Whether or not therein expressly so provided, every provision of the Indenture or related documents relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article. All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee. Section 7.06 Right to Rely on Documents. The Trustee may rely on and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be counsel of or to the Agency, with regard to legal questions, 45 3 -63 and the opinion of such counsel shall be full and complete authorization and protection for any action taken or suffered or omitted by it hereunder in good faith and in accordance therewith. Whenever in the administration of the trusts imposed upon it by the Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by an Officer's Certificate, and such Certificate shall be full warrant to the Trustee for any action taken or suffered or omitted in good faith under the provisions of the Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. The Trustee shall be entitled to advice of counsel and other professionals concerning all matters of trust and its duty hereunder, but the Trustee shall not be answerable for the professional malpractice of any attorney -at -law or certified public accountant in connection with the rendering of his professional advice in accordance with the terms of the Indenture, if such attorney -at -law or certified public accountant was selected by the Trustee with due care. Section 7.07 Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of the Indenture shall be retained in its possession and shall be subject at all reasonable times upon prior notice to the inspection of the Agency, the Bond Insurer and the Owners of at least twenty -five percent (25 %) of the aggregate principal amount of the Bonds, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonable conditions. Section 7.08 Indemnity for Trustee. Before taking any action or exercising any rights or powers render the Indenture, the Trustee may require that satisfactory indemnity be furnished to it for the reimbursement of all costs and expenses which it may incur and to indemnify it against all liability, except liability which may result from its negligence or willful misconduct, by reason of any action so taken. ARTICLE VIII EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF OF OWNERSHIP OF THE BONDS Section 8.01 Execution of Instruments, Proof of Ownership. Any request, direction, consent or other instrument in writing required or permitted by the Indenture to be signed or executed by Owners may be in any number of concurrent instruments of similar tenor by different parties and may be signed or executed by such Owners in person or by agent appointed by an instrument in writing. Proof of the execution of any such instrument and of the ownership of the Bonds shall be sufficient for any purpose of the Indenture and shall be conclusive in favor of the Trustee with regard to any action taken, suffered or omitted by either of them under such instrtmnent if made in the following manner: (a) The fact and date of the execution by any person of any such instnunent may be proved by the certificate of any officer in any jurisdiction who, by the laws 46 3 -64 thereof, has power to take acknowledgments within such jurisdiction, to the effect that the person signing such instrument acknowledged before him the execution thereof, or by an affidavit of a witness to such execution. (b) The fact of the ownership of the Bonds under the Indenture by any Owner and the serial numbers of such Bonds and the date of his ownership of the same shall be proved by the Bond Register. Nothing contained in this Article shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters in this Article stated which to it may seem sufficient. Any request or consent of the Owner of any Bond shall bind every future Owner of the same Bond and any Bond or Bonds issued in exchange or substitution therefor or upon the registration of transfer thereof in respect of anything done by the Trustee in pursuance of such request or consent. ARTICLE IX AMENDMENT OF THE INDENTURE Section 9.01 Amendment by Consent of Owners. The indenture and the rights and obligations of the Agency and of the Owners may be amended at any tune, upon the written consent of the Bond Insurer, by a Supplemental Indenture which shall become binding when the written consents of the Owners of sixty per cent (60 %) in aggregate principal amount of Bonds Outstanding, exclusive of Bonds disqualified as provided in Section 9.02 are filed with the Trustee, provided that no such amendment shall (1) extend the maturity of or reduce the interest rate on, or otherwise alter or impair the obligation of the Agency to pay the interest or principal of, and premium, if any, at the time and place and at the rate and in the currency provided herein of any Bond, without the express written consent of the Owner of such Bond, or (2) permit the creation by the Agency of any mortgage, pledge or lien upon the Tax Revenues superior to or on a parity with the pledge and lien created in the Indenture for the benefit of the Bonds, without the express written consent of the Owner of such Bond, or (3) reduce the percentage of Bonds required for the written consent to any such amendment, without the express written consent of the Owner of such Bond, or (4) modify the rights or obligations of the Trustee without its prior written assent thereto. Any amendment, supplement, modification to, or waiver of, the terms of any Related Document that requires the consent of Bondowners or adversely affects the rights and interests of the 2016 Bond Insurer shall be subject to the prior written consent of the 2016 Bond Insurer. The Indenture and the rights and obligations of the Agency and of the Owners may also be amended at any time, upon the written notice to the Bond Insurer, by a Supplemental Indenture which shall become binding upon adoption, without the consent of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes: (a) To add to the covenants and agreements of the Agency in the Indenture contained, other covenants and agreements thereafter to be observed, or to surrender any right or power herein reserved to or conferred upon the Agency; 47 3 -65 (b) To make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Indenture, or in regard to questions arising under the Indenture, as the Agency may deem necessary or desirable and not inconsistent with the Indenture, and which shall not materially adversely affect the interests of the Owners of the Bonds or the Bond Insurer; (c) To provide for the issuance of any Additional Bonds, and to provide the terms and conditions under which such Additional Bonds may be issued, subject to and in accordance with the provisions of Article IV; (d) To modify, amend or supplement the Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Owners of the Bonds; (e) To maintain the exclusion of interest on the Tax Exempt Bonds from gross income for federal income tax purposes; (f) To modify, amend or supplement the Indenture in such manner as to conform to changes in the Dissolution Act so long as there is no material adverse effect to holders of the Bonds; or (g) To obtain a bond insurance policy or a rating on the Bonds. Section 9.02 Disqualified Bonds. Bonds owned or held by or for the account of the Agency or the City shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Bonds in this Article provided for, and shall not be entitled to consent to, or take any other action in this Article provided for. Section 9.03 Endorsement or Replacement of Bonds After Amendment. After the effective date of any action taken as horeinabove provided, the Agency may determine that the Bonds may bear a notation, by endorsement in form approved by the Agency, as to such action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for the purpose at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation as to such action shall be made on such Bond. If the Agency shall so determine, new Bonds so modified as, in the opinion of the Agency, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Bond Outstanding at such effective date such new Bonds shall be exchanged at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, without cost to each Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds. Section 9.04 Amendment by Mutual Consent. The provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds. M Section 9.05 Opinion of Counsel, The Trustee may request and conclusively accept an opinion of counsel to the Agency that an amendment of the Indenture is in conformity with the provisions of this Article. Section 9.06 Notice to Rating Agencies. The Agency shall provide each rating agency rating the Bonds with a notice of any amendment to the Indenture pursuant to this Article and a copy of any Supplemental Indenture at least 15 days in advance of its execution. Section 9.07 Transcript of Proceedings to Bond Insurer. The Agency shall provide the Bond Insurer with a full transcript of the proceedings relating to the execution and delivery of any Supplemental Indenture. ARTICLE X EVENTS OF DEFAULT AND REMEDIES OF OWNERS Section 10.01 Events of Default and Acceleration of Maturities. If one or more of the following events (herein called "Events of Default ") shall happen, that is to say: (a) If default shall be made in the due and punctual payment of the principal of, or premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) If default shall be made in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; (c) If default shall be made. by the Agency in the observance of any of the agreements, conditions or covenants on its part in the Indenture or in the Bonds contained, and such default shall have continued for a period of thirty (30) days after the Agency shall have been given notice in writing of such default by the Trustee; provided, however, that such default shall not constitute an Event of Default hereunder if the Agency shall commence to cure such default within said 30 -day period and thereafter diligently and in good faith proceed to cure such default within a reasonable period of time not to exceed 60 days after such notice; and provided further that no grace period for such covenant default shall exceed 30 days or be extended for more than 60 days without the without the prior written consent of the Bond Insurer; or (d) If the Agency shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property; then, and in each and every such case during the continuance of such Event of Default, with the written consent of the Bond Insurer, the Trustee may, and upon the written request of the Owners ,. 3 -67 of not less than twenty -five per cent (25 %) in aggregate principal amount of Bonds Outstanding, shall, by notice in writing to the Agency, declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, For all purposes tinder this Article X, the 2016 Bond. Insurer is deemed to be an owner of one hundred percent (100 %) of the Bonds insured by it imless such Bond Insurer is in default under the teens of its Bond Insurance Policy. The maturity of Insured Series 2016 Bonds shall not be accelerated without the consent of the 2016 Bond Insurer and in the event the maturity of the Insured Series 2016 Bonds is accelerated, the 2016 Bond Insurer may elect, in its sole discretion, to pay accelerated principal and interest accrued, on such principal to the date of acceleration (to the extent unpaid by the Agency) and the Trustee shall be required to accept such amounts. Upon payment of such accelerated principal and interest accrued to the acceleration date as provided above, the 2016 Bond Insurer's obligations under the 2016 Bond Insurance Policy with respect to such Insured Series 2016 Bonds shall be fully discharged. If, at any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the money due shall have been obtained or entered, the Agency shall deposit with the Trustee a sum sufficient to pay all principal on the Outstanding Bonds and any Parity Debt matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest at the rate of ten per cent (10 %) per annum on such overdue installments of principal and interest, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Outstanding Bonds and any Parity Debt due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Owners of at least twenty -five per cent (25 0/0) in aggregate principal amount of Bonds Outstanding, by written notice to the Agency and to the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences. No such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. An Event of Default shall continue to exist under subsections (a) and (b) of this Section 10.01 after payment is made by the Bond Insurer when due, pursuant to the terms of its Bond Insurance Policy. Section 10.02 Application of Funds Upon Acceleration. All money in the funds and accounts provided for in the Indenture upon the date of the declaration of acceleration by the Trustee as provided in Section 10.01, and subject to the prior application and lien in favor of the Senior Bonds, all Tax Revenues thereafter received by the Agency hereunder, shall be transmitted to the Trustee and shall be applied by the Trustee in the following order: First, to the payment of the costs and expenses of the Trustee, if any, in carrying out the provisions of this Article, including reasonable compensation to its agents, attorneys and counsel and then to the payment of the costs and expenses of the Owners in providing for the declaration W, • of such Event of Default, including reasonable compensation to their agents, attorneys and counsel; Second, upon presentation of the several Bonds, and the stamping thereon of the amount of the payment if only partially paid, or upon the surrender thereof if fully paid, (A) to the payment of the whole amount then owing and unpaid upon the Outstanding Bonds and any Parity Debt for principal of, and interest on the Outstanding Bonds and any Parity Debt, with interest on the overdue interest and principal at the rate of ten per cent (10 %) per annum, and (B) in case such money shall be insufficient to pay in full the whole amount so owing and unpaid upon the Outstanding Bonds and any Parity Debt, then to the payment of such interest, principal, and interest on overdue interest and principal without preference or priority among such interest, principal, and interest on overdue interest and principal, ratably to the aggregate of such interest, principal, and interest on overdue interest and principal. Section 10.03 Trustee to Represent Bondowners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and owning the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney -in -fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, the Indenture, the Law and applicable provisions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Owners of the Bonds, the Trustee in its discretion may with the consent of the Bond Insurer, and upon the written request of the Owners of not less than twenty -five per cent (25 %) in aggregate principal amount of Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Owners under the Indenture, the Law or any other law, All rights of action under the Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of the Indenture. Section 10.04 Bondowners' Direction of Proceedings. The Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder; provided, that such direction shall not be otherwise than in accordance with law and the provisions of the Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondowners not parties to such direction. Section 10.05 Limitation on Bondowners' Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under the Indenture, the Law or any other applicable law 51 3 -69 with respect to such Bond, unless (1) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default; (2) the Owners of not less than twenty -five per cent (25 %) in aggregate principal amount of Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (3) such Owner or said Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (4) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee, Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owner of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of the Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Indenture, the Law or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of the Indenture. Section 10,06 Non - Waiver. Nothing in this Article or in any other provision of the Indenture, or in the Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay the principal of, slid the interest on the Bonds to the respective Owners of the Bonds at the respective dates of maturity, as herein provided, out of the Tax Revenues pledged for such payment, or affect or impair the right of action, which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in the Indenture, A waiver of any default or breach of duty or contract by any Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Law or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the Trustee, the Agency and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. Section 10.07 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised 52 3 -70 without exhausting and without regard to any other remedy conferred by the Law or any other law. ARTICLE XI DETEASANCE Section 11.01 Discharge of Indebtedness. (a) If (i) the Agency shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, and (ii) all other amounts due and payable hereunder shall have been paid, then the Owners shall cease to be entitled to the lien created hereby, and all agreements, covenants and other obligations of the Agency hereunder shall thereupon cease, terminate and become void and be discharged and satisfied, In such event, the Trustee shall execute and deliver to the Agency all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the Agency all money or securities held by it pursuant hereto which are not required for the payment of the principal of and interest and premium, if any, on the Bonds. (b) Subject to the provisions of subsection (a) of this section, when any Bond shall have been paid and if, at the time of such payment, the Agency shall have kept, performed and observed all of the covenants and promises in such Bonds and in the Indenture required or contemplated to be kept, performed and observed by it or on its part on or prior to that time, then the Indenture shall be considered, to have been discharged in respect of such Bond and such Bond shall cease to be entitled to the lien created hereby, and all agreements, covenants and other obligations of the Agency hereunder shall cease, terminate, become void and be completely discharged and satisfied as to such Bond. (c) Notwithstanding the discharge and satisfaction of the Indenture or the discharge and satisfaction of the Indenture in respect of any Bond, those provisions of the Indenture relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non- presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owners and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and interest and premium, if any, on the Bonds, to pay to the Owners of the Bonds the fluids so held by the Trustee as and when such payment becomes due. Section 11.02 Bonds Deemed to Have Been Paid. (a) If moneys shall have been set aside and held by the Trustee for the payment or redemption of any Bond and the payment of the interest thereon to the maturity or redemption date thereof, such Bond shall be deemed to have been paid within the meaning and with the effect provided in Section 11.01 hereof. Any Outstanding Bond shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 11.01 hereof if: 53 3 -71 (i) there shall have been deposited with the Trustee either (A) money in an amount which shall be sufficient, or (B) Federal Securities, the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys which shall be sufficient to pay when due the interest to become due on such Bond on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and premium, if any, on such Bond, and (ii) in the event such Bond is not by its terms subject to redemption within the next succeeding 60 days, the Agency shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the owners of such Bond that the deposit required by clause (i) above has been made with the Trustee and that such Bond is deemed to have been paid in accordance with this section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and premium, if any, on such Bond, Neither the money nor the Federal Securities deposited with the Trustee pursuant to this subsection in connection with the deemed payment of Bonds, nor principal or interest payments on any such Federal Securities, shall be withdrawn or used for any purpose other than, and shall be held in trust for and pledged to, the payment of the principal of and, premium, if any, and interest on such Bonds. (b) No Bond shall be deemed to have been paid pursuant to clause (i) of subsection (a) of this section unless the Agency shall cause to be delivered (A) an executed copy of a Verification Report with respect to such deemed payment, (B) a copy of the escrow agreement entered into in connection with the deposit pursuant to clause (i) of subsection (a) of this section resulting in such deemed payment, which escrow agreement shall be acceptable to the Bond Insurer and provide that no substitution of Federal Securities shall be permitted except with other Federal Securities and upon delivery of a new Verification Report and no reinvestment of Federal Securities shall be permitted except as contemplated by the original Verification Report or upon delivery of a new Verification Report, and (C) a copy of an opinion of counsel of recognized standing in the field of law relating to municipal bonds, dated the date of such deemed payment and addressed to the Agency, the Trustee and the Bond Insurer, insuring the Bonds to be defeased, to the effect (hat such Bond has been paid within the meaning and with the effect expressed in the Indenture, and all agreements, covenants and other obligations of the Agency hereunder as to such Bond have ceased, terminated, become void and been completely discharged and satisfied. The 2016 Bond Insurer shall be provided with drafts of the above - referenced documentation not less than five (5) business days prior to the funding of the escrow. Insured Series 2016 Bonds shall be deemed to be "Outstanding" under the Indenture unless and until they are in fact paid and retired or the above criteria are met, (c) The Trustee is entitled to rely upon (i) an opinion of counsel of recognized standing in the field of law relating to municipal bonds to the effect that the conditions precedent to a deemed payment pursuant to clause (ii) of subsection (a) of this section have been satisfied, 54 3 -72 and (ii) such other opinions, certifications and computations, of accountants or other financial consultants concerning the matters described in paragraph (a)(i) of this section. ARTICLE XII MISCELLANEOUS Section 12.01 Liability of Agency Limited to Tax Revenues. The Agency shall not be required to advance any money derived from any source of income other than the Tax Revenues for the payment of the principal of, and the interest on the Bonds or for the performance of any covenants herein contained, other than the covenants contained in Section 6.11 hereof. The Agency may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose. The Bonds are special obligations of the Agency and are payable, as to interest thereon and principal thereof, exclusively from the Tax Revenues, and the Agency is not obligated to pay them except from the Tax Revenues. All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Tax Revenues, and the Tax Revenues constitute a trust fund for the security and payment of the principal of, and the interest on the Bonds, to the extent set forth in the Indenture, The Bonds are not a debt of the City, the County, the State of California or any other political subdivision of the State, and neither said City, said State, said County nor any of the State's other political subdivisions is liable therefor, nor in any event shall the Bonds be payable out of any funds or properties other than those of the Agency pledged therefor as provided in the Indenture. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory limitation or restriction, and neither the City Council members acting for the Agency nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance, Section 12.02 Parties Interested Herein. Nothing in the Indenture, expressed or implied, is intended to give to any person other than the Agency, the Trustee, the Bond Insurer and the Owners any right, remedy or claim under or by reason of the Indenture. Any covenants, stipulations, promises or agreements in the Indenture contained by and on behalf of the Agency or any City Council member or officer or employee of the Agency shall be for the sole and exclusive benefit of the Trustee, the Bond Insurer and the Owners. Section 12.03 Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of the interest on, or principal or prepayment premium, if any, of any Bond which remains unclaimed for two (2) years after the date when such amounts have become payable, if such money was held by the Trustee on such date, or for two (2) years after the date of deposit of such money if deposited with the Trustee after the date such amounts have become payable shall be paid by the Trustee to the Agency as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Agency for the payment of such amounts; provided, that before being required to make any such payment to the Agency, the Trustee shall, at the expense of the Agency, give notice by first class mail to all Owners and to the Securities Depository and the MSRB that such money remains unclaimed and that after a date named in such notice, which date shall not be less than sixty (60) days after the 55 3 -73 date of giving such notice, the balance of such money then unclahned will be returned to the Agency. Section 12.04 Moneys Held for Particular Bonds. The money held by the Trustee for the payment of the principal of or premirun or interest on particular Bonds due on any date (or portions of Bands in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 12.03 hereof, but without any liability for interest thereon. Section 12.05 Successor Is Deemed Included to Ad xererences w X-FRUSUEM .. Whenever in the Indenture either the Agency or any City Council member or officer or employee thereof is named or referred to, such reference shall be deemed to include the successor to the powers, duties and functions, with respect to the management, administration and control of the affairs of the Agency, that are presently vested in the Agency or such City Council member, officer or employee, and all the agreements, covenants and provisions contained in the Indenture by or on behalf of the Agency or any City Council member, officer or employee thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. Section 12.06 Fxecution of Documents by Owners. Any request, declaration or other instrument which the Indenture may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, declaration or other instrument, ox of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. The Trustee may nevertheless in its discretion require further or other proof in cases where it deems the same desirable. The ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registry books provided for in Section 2.12. Any request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond with respect to anything done by the Agency in good faith and in accordance therewith. Section 12.07 Waiver of Personal Liability. No City Council member or officer or employee of the Agency shall be individually or personally liable for the payment of the principal of, premium, if any, and the interest on the Bonds, but nothing herein contained shall relieve any City Council member or officer or employee of the Agency from the performance of any official duty provided by law. 56 3 -74 Section 12.08 Acquisition of Bonds by Agency. All Bonds acquired by the Agency, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. Section 12.09 Destruction of Cancelled Bonds. Whenever in the Indenture provision is made for return to the Agency of any Bonds which have been cancelled pursuant to the provisions of the Indenture, the Agency may, by a Written Request of the Agency, direct the Trustee to destroy such Bonds and furnish to the Agency a certificate of such destruction. Section 12.10 Content of Certificates and Reports. Every certificate or report with respect to compliance with a condition or covenant provided for in the Indenture shall include (a) a statement that the person or persons making or giving such certificate or report have read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or report are based; (c) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of the signers, such condition or covenant has been complied with. Any such certificate made or given by an officer of the Agency may be based, insofar as it relates to legal matters, upon a. certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate may be based, as aforesaid, are erroneous, or in the exercise of reasonable care should have known that the same were erroneous. Any such certificate or opinion or representation made or given by counsel may be based, insofar as it relates to factual matters information with respect to which is in the possession of the Agency, upon the certificate or opinion of or representations by an officer or officers of the Agency, unless such counsel knows that the certificate or opinion or representations with respect to the matters upon which his certificate, opinion or representation may be based, as aforesaid, are erroneous, or in exercise of reasonable care should have known that the same were erroneous, Section 12.11 Funds and Accounts. Any fund or accoiant required by the Indenture to be established and maintained by the Agency or the Trustee may be established and maintained in the accounting records of the Agency or the Trustee either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such fuuids and accounts shall at all times be maintained in accordance with sound accounting practices and with due regard for the protection of the security of the Bonds and the rights of the Owners. Section 12.12 Article and Section Headings and References. The headings or titles of the several Articles and sections hereof, and the table of contents appended hereto, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of the Indenture. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding articles, sections or subdivisions of the Indenture; and the words `9lerein," 57 3 -75 "hereof," "hereunder" and other words of similar import refer to the Indenture as a whole and not to any particular article, section or subdivision hereof. Section 12.13 Partial Invalidity. If any one or more of the agreements or covenants or portions thereof provided in the Indenture to be performed on the part of the Agency (or of the Trustee) should be contrary to law, then such agreement or agreements, such covenant or covenants, or such portions thereof, shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity of the Indenture or of the Bonds; but the Owners shall retain all the rights and benefits accorded to them under the Law or any other applicable provisions of law. The Agency hereby declares that it would have entered into the Indenture and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases of the Indenture or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. Section 12.14 Notices. All notices required to be given hereunder to the Agency, the Trustee and the 2016 Bond Insurer, shall be sent to the following addresses: Agency: Successor Agency to the Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Attention: Executive Director Trustee: The Bank of New York Mellon Trust Company, N.A. 700 South Flower Street, Suite 500 Los Angeles, California 90017 Attention: Corporate Trust Department 2016 Bond Insurer: Telephone: Telecopier: In each case in which notice or other communication refers to an Event of Default, then a copy of such notice or other communication shall also be sent to the attention of the Deputy General Counsel - Public Finance and shall be marked to indicate "URGENT MATERIAL ENCLOSED." Section 12.15 2016 Bond Insurance Policy Payment and Reimbursement Provisions. [SAMPLE PROVISIONS] 9j 3 -76 The following provisions shall govern in the event of a conflict with any contrary provision of the Indenture. If, on the third Business Day prior to the related scheduled interest payment date or principal payment date ( "Payment Date ") there is not on deposit with the Trustee, after making all transfers and deposits required under the Indenture, moneys sufficient to pay the principal of and interest on the Insured Series 2016 Bonds due on such Payment Date, the Trustee shall give notice to the 2016 Bond Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second Business Day prior to the related Payment Date, there continues to be a deficiency in the amount available to pay the principal of and interest on the Insured Series 2016 Bonds due on such Payment Date, the Trustee shall make a claim under the 2016 Bond Insurance Policy and give notice to the 2016 Bond Insurer and the Insurer's Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Insured Series 2016 Bonds and the amount required to pay principal of the Insured Series 2016 Bonds, confirmed in writing to the 2016 Bond Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the form of Notice of Claim and Certificate delivered with the 2016 Bond Insurance Policy. The Trustee shall designate any portion of payment of principal on Insured Series 2016 Bonds paid by the 2016 Bond Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Insured Series 2016 Bonds registered to the then. current Owner, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the 2016 Bond Insurer, registered in the name of Assured Guaranty Municipal Corp., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Trustee's failure to so designate any payment or issue any replacement Insured Series 2016 Bond shall have no effect on the amount of principal or interest payable by the Agency on any Insured Series 2016 Bond or the subrogation rights of the 2016 Bond Insurer. The Trustee shall keep a complete and accurate record of all funds deposited by the 2016 Bond Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of interest on and principal of any Insured Series 2016 Bond, The 2016 Bond Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Trustee. Upon payment of a claim under the 2016 Bond Insurance Policy, the Trustee shall establish a separate special purpose trust account for the benefit of Owners referred to herein as the "Policy Payments Account" and over which the Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall receive any amount paid under the 2016 Bond Insurance Policy in trust on behalf of Owners and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Trustee to Owners in the same manner as principal and interest payments are to be made with respect to the Insured Series 2016 Bonds under the sections hereof regarding payment of Insured Series 2016 Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or 59 3 -77 wire transfer used to pay debt service with other funds available to make such payments. Notwithstanding anything herein to the contrary, the Agency agrees to pay to the 2016 Bond Insurer (i) a sum equal to the total of all amounts paid by the 2016 Bond Insurer under the 2016 Bond Instuance Policy (the "Insurer Advances "); and (ii) interest on such Insurer Advances from the date paid by the 2016 Bond Insurer until payment thereof in full, payable to the 2016 Bond Insurer at the Late Payment Rate per annum (collectively, the "Insurer Reimbursement Amounts "). "Late Payment Rate" means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in The City of New York, as its prime or base lending rate (any change in such rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3.00 %, and (ii) the then applicable highest rate of interest on the Insured Series 2016 Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. The Agency hereby covenants and agrees that the Insurer Reimbursement Amounts are secured by a lien on and pledge of the Tax Revenues and payable from such Tax Revenues on a parity with debt service due on the Insured Series 2016 Bonds, payable solely 8•orn the Tax Revenues. Funds held in the Policy Payments Account shall not be invested by the Trustee and may not be applied to satisfy any costs, expenses or liabilities of the Trustee. Any funds remaining in the Policy Payments Account following a bond payment date shall promptly be remitted to the 2016 Bond Insurer. The 2016 Bond Insurer shall, to the extent it makes any payment of principal of or interest on the Insured Series 2016 Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the 2016 Bond Insurance Policy (which subrogation rights shall include the rights of any such recipients in connection with any Insolvency Proceeding). Each obligation of the Agency to the 2016 Bond Insurer under the Related Documents shall survive discharge or termination of such Related Documents. The Agency shall pay or reimburse the 2016 Bond Insurer any and all charges, fees, costs and expenses that the 2016 Bond Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in any Related Document; (ii) the purstut of any remedies under the Indenture or any other Related Document or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, the Indenture or any other Related Document whether or not executed or completed, or (iv) any litigation or other dispute in connection with the Indenture or any other Related Document or the transactions contemplated thereby, other than costs resulting from the failure of the 2016 Bond Insurer to honor its obligations under the 2016 Bond Insurance Policy. The 2016 Bond Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Indenture or any other Related Document. After payment of reasonable expenses of the Trustee, the application of funds realized upon default shall be applied to the payment of expenses of the Agency or rebate only after the payment of past due and current debt service on the Insured Series 2016 Bonds and amounts required to restore the Reserve Account to the Reserve Account Requirement. 11 3 -78 The 2016 Bond Insurer shall be entitled to pay principal or interest on the Insured Series 2016 Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the 2016 Bond Insurance Policy) and any amounts due on the Insured Series 2016 Bonds as a result of acceleration of the maturity thereof in accordance with the Indenture, whether or not the 2016 Bond Insurer has received a Notice of Nonpayment (as such terms are defined in the 2016 Bond Insurance Policy) or a claim upon the 2016 Bond Insurance Policy. The rights granted to the 2016 Bond Insurer under the Indenture or any other Related Document to request, consent to or direct any action are rights granted to the 2016 Bond Insurer in consideration of its issuance of the 2016 Bond Insurance Policy. Any exercise by the 2016 Bond Insurer of such rights is merely an exercise of the 2016 Bond Insurer's contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the Owners and such action does not evidence any position of the 2016 Bond Insurer, affirmative or negative, as to whether the consent of the Bondowners or any other person is required in addition to the consent of the 2016 Bond Insurer. Amounts paid by the 2016 Bond Insurer under the 2016.Bond Insurance Policy shall not be deemed paid for purposes of the Indenture and the Insured Series 2016 Bonds relating to such payments shall remain Outstanding and continue to be due and owing until paid by the Agency in accordance with the Indenture. The Indenture shall not be discharged unless all amounts due or to become due to the 2016 Bond Insurer have been paid in full or duly provided for. In determining whether any amendment, consent, waiver or other action to be taken, or any failure to take action, under the Indenture would adversely affect the security for the Insured Series 2016 Bonds or the rights of the Owners, the Trustee shall consider the effect of any such amendment, consent, waiver, action or inaction as if there were no 2016 Bond Insurance Policy. The 2016 Bond Insurer shall be deemed to be the sole holder of the Insured Series 2016 Bonds for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Bonds insured by it are entitled to take pursuant to the Indenture pertaining to (i) defaults and remedies and (ii) the duties and obligations of the Trustee. In furtherance thereof and as a term of the Indenture and each Insured Series 2016 Bond, the Trustee (solely with respect to the Insured Series 2016 Bonds) and each holder of an Insured Series 2016 Bond appoint the 2016 Bond Insurer as their agent and attorney -in -fact and agree that the 2016 Bond Insurer may at any time daring the continuation of any proceeding by or against the Agency under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding ") direct all matters relating to such Insolvency Proceeding, including without limitation, (A) all matters relating to any claim or enforcement proceeding in connection with an Insolvency Proceeding (a "Claim "), (B) the direction of any appeal of any order relating to any Claim, (C) the posting of any surety, supersedeas or performance bond pending any such appeal, and (D) the right to vote to accept or reject any plan of adjustment. In addition, the Trustee (solely with respect to the Insured Series 2016 Bonds) and each holder of an Insured Series 2016 Bond delegate and assign to the 2016 Bond Insurer, to the fullest extent permitted by law, the rights of the Trustee and each holder of an Insured Series 2016 Bond in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party to an adversary 61 3 -79 proceeding or action with respect to any court order issued in connection with any such Insolvency Proceeding. Remedies granted to the Bondholders shall expressly include mandamus. No contract shall be entered into or any action taken by which the rights of the 2016 Bond Insurer or security for or sources of payment of the Insured Series 2016 Bonds may be impaired or prejudiced in any material respect except upon obtaining the prior written consent of the 2016 Bond Insurer. Any interest rate exchange agreement ( "Swap Agreement ") entered into by the Agency with respect to the Series 2016 Bonds shall meet the following conditions: (i) the Swap Agreement must be entered into to manage interest costs related to, or a hedge against (a) assets then held, or (b) debt then outstanding, or (iii) debt reasonably expected to be issued within the next twelve (12) months, and (ii) the Swap Agreement shall not contain any leverage element or multiplier component greater than 1.Ox unless there is a matching hedge arrangement which effectively off -sets the exposure from any such element or component. Unless otherwise consented to in writing by the 2016 Bond Insurer, any uninsured net settlement, breakage or other termination amount then in effect shall be subordinate to debt service on the Insured Series 2016 Bonds and on any debt on parity with the Bonds. The Agency shall not terminate a Swap Agreement unless it demonstrates to the satisfaction of the 2016 Bond Insurer prior to the payment of any such termination amount that such payment will not cause the Agency to be in default under the Related Documents, including but not limited to, any monetary obligations thereunder. All counterparties or guarantors to any Swap Agreement must have a rating of at least "A-" and "AY by Standard & Poor's (S &P ") and Moody's Investors Service ( "Moody's "). If the counterparty or guarantor's rating falls below "A -" or "AT' by either S &P or Moody's, the counterparty or guarantor shall execute a credit support annex to the Swap Agreement, which credit support annex shall be acceptable to the 2016 Bond Insurer. If the counterparty or the guarantor's long term unsecured rating falls below `Baal" or "BBB +" by either Moody's or S &P, a replacement cmurterparty or guarantor, acceptable to the 2016 Bond Insurer, shall be required. Section 12.16 Bond Insurer Notice Provisions. [SAMPLE PROVISIONS] The Bond Insurer shall be provided with the following information by the Agency or Trustee, as the case maybe: (i) Annual audited financial statements as part of the Annual Report (as defined in the Continuing Disclosure Agreement), provided, however, that the audited financial statements of the Agency may be submitted separately from the balance of the Annual Report, and later than the date required for the filing of the Annual Report and as soon as practicable if they are not available by that date, and such other information, data or reports as the Bond Insurer shall reasonably request from time to time; (ii) Notice of any draw upon the Agency's Reserve Account within two Business Days after knowledge thereof other than (i) withdrawals of amounts in excess of the applicable Reserve Account Requirement and (ii) withdrawals in connection with a refunding of the Bonds insured by the Bond Insurer; (iii) Notice of any default known to the Trustee or Agency within five Business Days after knowledge thereof; 62 .' (iv) Prior notice of the advance refunding or redemption of any of the Bonds insured by the Bond Insurer, including the principal amount, maturities and CUSIP numbers thereof; (v) Notice of the resignation or removal of the Trustee and Bond Registrar and the appointment of, and acceptance of duties by, any successor thereto; (vi) Notice of the commencement of any proceeding by or against the Agency commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding "); (vii) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Bonds insured by the Bond Insurer; (viii) A full original transcript of all proceedings relating to the execution of any amendment, supplement, or waiver to the Related Documents; and (ix) All reports, notices and correspondence to be delivered to Bondowners under the terms of the Related Documents, In addition, to the extent that the Agency has entered into a continuing disclosure agreement, covenant or undertaking with respect to the Bonds insured by the Bond Insurer, all information fumished pursuant to such agreements shall also be provided to the Bond Insurer, simultaneously with the furnishing of such information. The Bond Insurer shall have the right to receive such additional information as it may reasonably request. Notwithstanding the foregoing, the Bond Insurer agrees to receive notice, and shall be deemed to have received notice in satisfaction of the provisions set forth in this Section, by filings made (or caused to be made) by the Agency through the Electronic Municipal Market Access website of the Municipal Securities Rulemaking Board (including in accordance with Section 12.16(1)), currently located at http: / /einma.msrb.org. The Agency will use good faith efforts to provide notice (by first class mail or facsimile or electronic mail) of such filings to the Bond Insurer. Section 12.17 Bond Insurer as Third Party Beneficiary. The Bond Insurer is hereby expressly made a third party beneficiary of the Indenture and each other Related Documents. Section 12.18 California Law, The Indenture of Trust shall be construed and governed in accordance with the laws of the State of California. [Remainder of page intentionally left blank.) 63 3 -81 IN WITNESS WHEREOF, the Agency and the Trustee have entered into this Indenture of Trust by their officers thereunto duly authorized as of the clay and year first above written. SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA ATTEST. City Cleric of the City of Santa Ana, acting for Successor Agency to the Community Redevelopment Agency of the City of Santa Ana A5 TO FORM Attorney !l Director of Finance, acting for the Successor Agency to the Community Redevelopment Agency of the City of Santa Ana THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.., as Trustee 52 Authorized Officer [Signature page to Indenture] OHSUSA:76547.4766.1 3 -82 APPENDIX A 1T._1L toll tti \.1 No. $ SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA TAX ALLOCATION REFUNDING BONDS [SERIES 2016A (TAX EXEMPT)] [2016B (FEDERALLY TAXABLE)] RATE OF BOND DATE: MATURITY DATE: INTEREST: CUSIP NUMBER: , 2016 September 1, 20 Registered Owner: CEDE & CO. Principal Amount: THE SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic, duly organized and existing under and pursuant to the laws of the State of California (the "Agency"), for value received hereby promises to pay to the registered owner specified above, or registered assigns, on the maturity date set forth above (subject to any right of prior redemption hereinafter mentioned) the principal sum set forth above in lawful money of the United States of America; and to pay interest thereon at the interest rate per annum set forth above in like lawful money from the date hereof. The interest on this Bond will be payable on March 1 and September 1 in each year (each an "Interest Payment Date'), commencing on March 1, 2017. The principal hereof and redemption premium hereon, if any, are payable upon presentation and surrender hereof at the Principal Corporate Trust Office (as defined in the Indenture) of The Bank of Now York Mellon Trust Company, N.A. (together with any successor as trustee under the Indenture hereinafter mentioned, the "Trustee"), Interest hereon is payable by check, mailed by first class mail, on each interest payment date to the owner whose name appears on the Band Register maintained by the Trustee as of the close of business on the fifteenth day of the month preceding the month in which the interest payment date occurs (the "Record Date "), except with respect to defaulted interest for which a special record date will be established; provided, that in the case of an owner of one million dollars ($1,000,000) or more in aggregate principal amount of Bonds, upon written request of such owner to the Trustee received not later than the Record Date, such interest shall be paid on the interest payment date in immediately available funds by wire transfer. Interest shall be calculated on the basis of a 360 -day year consisting of twelve 30 -day months. This Bond is a duly authorized issue of Successor Agency to the Community Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds, Series 2016A (Tax Exempt) (the `Bonds "), limited in aggregate principal amount to $XX,000,000 all of like tenor and date (except for such variations, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions), all issued under the provisions of A -1 0MUSA:765424766.1 • � the Community Redevelopment Law of the State of California, as amended including, without limitation, by Parts 1.8 (commencing with Section 34161) and 1.85 (commencing with Section 34170) (the "Law "), and pursuant to the provisions of the Indenture of Trust, dated as of [DATED DATE], by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Indenture "). [Simultaneously with the issuance of the Bonds, the Agency is issuing its Successor Agency to the Community Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds, Series 2016B (Federally Taxable) (the "Series 2016B Bonds'), in the aggregate principal amount of $YY,000,0001. The Bonds are on a parity with the Series 2016B Bonds,] Pursuant to and as more particularly provided in the Indenture, Additional Bonds may be issued by the Agency payable from Tax Revenues as provided in the Indenture. All Bonds are equally and ratably secured in accordance with the terms and conditions of the Indenture, and reference is hereby made to the Indenture, to any resolutions supplemental thereto and to the Law for a description of the terms on which the Bonds are issued, for the provisions with regard to the nature and extent of the security provided for the Bonds and of the nature, extent and manner of enforcement of such security, and for a statement of the rights of the registered owners of the Bonds; and all the terms of the Indenture and the Law are hereby incorporated herein and constitute a contract between the Agency and the registered owner from time to time of this Bond, and to all the provisions thereof the registered owner of this Bond, by his acceptance hereof, consents and agrees. Each registered owner hereof shall have recourse to all the provisions of the Law and the Indenture and shall be bound by all the terms and conditions thereof. The Bonds are issued to provide funds to aid in refunding outstanding bonds of the Agency as more particularly described in the Indenture. The Bonds are special obligations of the Agency and are payable, as to interest thereon, principal thereof and any premiums upon the redemption thereof, exclusively from the Tax Revenues (as that term is defined in the Indenture and herein called the "Tax Revenues "), and the Agency is not obligated to pay them except from the Tax Revenues, The Bonds are equally secured by a pledge of, and charge and lien upon, the Tax Revenues, and the Tax Revenues constitute a nest fund for the security and payment of the principal of, premium, if any, and the interest on the Bonds, The Agency hereby covenants and warrants that, for the payment of the principal of, premium, if any, and the interest on this Bond and all other Bonds issued under the Indenture when due, there has been created and will be maintained by the Trustee a special fund into which Tax Revenues shall be deposited, as provided in the Indenture, and as an irrevocable charge the Agency has allocated the Tax Revenues solely to the payment of the principal of premium, if any, and the interest on the Bonds to the extent set forth in the Indenture, and the Agency will pay promptly when due the principal of, premium, if any, and the interest on this Bond and all other Bonds of this issue out of said special fund, all in accordance with the terms and provisions set forth in the Indenture. The Bond shall be subject to redemption on the dates, in the amounts and in the manner provided therefor in the Indenture. [The Series 2016B Bonds are not subject to optional redemption.] A -2 oe If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture; except that the Indenture provides that in certain events such declaration and its consequences may be rescinded by the registered owners of at least twenty -five per cent (25 %) in aggregate principal amount of the Bonds then Outstanding. The Bonds are issuable only in the form of fully registered Bonds in the denomination of $5,000 or any integral multiple thereof (not exceeding the principal amount of Bonds maturing at any one time), The owner of any Bond or Bonds may surrender the same at the above - mentioned office of the Trustee in exchange for an equal aggregate principal amount of fully registered Bonds of any other authorized denominations, in the manner, subject to the conditions and upon the payment of the charges provided in the Indenture. This Bond is transferable, as provided in the Indenture, only upon a register to be kept for that purpose at the above - mentioned office of the Trustee by the registered owner hereof in person, or by his duly authorized attorney, upon surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new fully registered Bond or Bonds, in the same aggregate principal amount, shall be issued to the transferee in exchange therefor as provided in the Indenture, and upon payment of the charges therein prescribed. The Agency and the Trustee may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the interest hereon and principal hereof and redemption premium, if any, hereon and for all other purposes, and the Agency and the Trustee shall not be affected by any notice to the contrary. The rights and obligations of the Agency and of the registered owners of the Bonds may be amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such amendment shall (1) extend the maturity of this Bond, or reduce the interest rate hereon, or otherwise alter or impair the obligation of the Agency to pay the interest hereon or principal hereof or any premitun payable on the redemption hereof at the time and place and at the rate and in the currency provided herein, without the express written consent of the registered owner of this Bond, or (2) permit the creation by the Agency of any mortgage, pledge or lien upon the Tax Revenues superior to or on a parity with the pledge and lien created in the Indenture for the benefit of the Bonds and all additional tax allocation bonds authorized by the Indenture or (3) reduce the percentage of Bonds required for the written consent to an amendment of the Indenture, or (4) modify any rights or obligations of the Trustee without its prior written assent thereto; all as more fully set forth in the Indenture. This Bond is not a debt of the City of Santa Ana, the County of Orange, the State of California or any other political subdivision of the State, and neither said City, said State, said County nor any of the State's other political subdivisions is liable therefor, nor in any event shall this Bond be payable out of any funds or properties other than those of the Agency pledged therefor as provided in the Indenture. This Bond does not constitute an indebtedness within the meaning of any constitutional or statutory limitation or restriction, and neither the City Council members acting for the Agency nor any persons executing the Bonds are liable personally on this Bond by reason of its issuance. A -3 • This Bond shall not be entitled to any benefits under the Indenture or become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been signed by the Trustee. It is hereby certified that all of the acts, conditions and things required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law and that the amount of this Bond, together with All other indebtedness of the Agency, does not exceed any limit prescribed by the Constitution or laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered'owner hereof, Cede & Co., has an interest herein. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture. [Remainder of page intentionally left blank] EM, MIILOXO. IN WITNESS WHEREOF, the Successor Agency to the Community Redevelopment Agency of the City of Santa Ana has caused this Bond to be executed in its name and on its behalf by its Mayor, acting as Chair for Successor Agency to the Community Redevelopment Agency of the City of Santa Ana and attested by its City Cleric, acting as Secretary for Successor Agency to the Community Redevelopment Agency of the City of Santa Ana, and has caused this Bond to be dated as of the date above written, ATTEST: City Clerk of the City of Santa Ana, acting as Secretary for Successor Agency to the Community Redevelopment Agency of the City of Santa Ana SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA By Mayor of the City of Santa Ana, acting as Chair for Successor Agency to the Community Redevelopment Agency of the City of Santa Ana A -5 3 -87 STATEMENT OF INSURANCE A -6 •• [FORM OF TRUSTEE CERTIFICATE OF AUTHENTICATYON AND REGISTRATION TO APPEAR ON BONDS] This is one of the Bonds described in the within- mentioned Indenture which has been authenticated and registered on the date set forth below. DATED: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as trustee UA Authorized Officer [FORM OF ASSIGNMENT TO APPEAR ON BONDS] For value received the undersigned do(es) hereby sell, assign and transfer unto the within - mentioned registered Bond and do(es) hereby irrevocably constitute and appoint attorney to transfer the same on the bond register of the Trustee, with fill power of substitution in the premises. Date; Note: The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within registered Bond in every particular, without alteration or enlargement or any change whatsoever, Signature Guaranteed: Notice: Signature must be guaranteed by an eligible guarantor institution. A -7 .. APPENDIX B SCHEDULE OF SEMI - ANNUAL AND ANNUAL INTEREST AND PRINCIPAL PAYMENTS OF THE SERIES 2016 BONDS SERIES 2016A BONDS Annual Interest and Principal Payments: Period Annual Ending Principal Interest Debt Service 9/1/2017 9/1/2018 9/1/2019 9/1/2020 9/1/2021 9/1/2022 9/1/2023 9/1/2024 9/1/2025 9/1/2026 9/1/2027 9/1/2028 9/1/2029 9/1/2030 9/1/2031 ml 3 -90 Semi - Annual Interest and Principal Payments: Period Ending Principal Interest 9/1/2016 3/1/2017 9/1/2017 3/1/2018 9/1/2018 3/1/2019 9/1/2019 3/1/2020 9/1/2020 3/1/2021 9/1/2021 3/1/2022 9/1/2022 3/1/2023 9/1/2023 3/1/2024 9/1/2024 3/1/2025 9/1/2025 3/1/2026 9/1/2026 3/1/2027 911/2027 3/1/2028 9/1/2028 3/1/2029 9/1/2029 3/1/2030 9/1/2030 3/1/2031 9/1/2031 I3 -2 3 -91 Annual Debt Debt Service Service SERIES 2016B BONDS Annual Interest and Principal Payments: Period Ending Principal 9/1/2016 9/1/2017 9/1/2018 9/1/2019 9/1/2020 9/1/2021 9/1/2022 9/1/2023 9/1/2024 9/1/2025 Annual Interest Debt Service Semi - Annual Interest and Principal Payments: Period Ending Principal Interest 9/1/2016 3/1/2017 9/1/2017 3/1/2018 9/1/2018 3/1/2019 9/1/2019 3/1/2020 9/1/2020 3/l/2021 9/1/2021 3/1/2022 9/1/2022 3/'1/2023 9/1/2023 3/1/2024 9/1/2024 3/1/2025 9/1/2025 I: 3 -92 Annual Debt Debt Service Service SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA TAX ALLOCATION REFUNDING BONDS, (MERGED PROJECT AREA), SERIES 2016A Stradling Yocca Carlson & Rauth Draft of 6 1I5 1I6 SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA TAX ALLOCATION REFUNDING BONDS, (MERGED PROJECT AREA), SERIES 2016B [FEDERALLY TAXABLE]] BOND PURCHASE AGREEMENT , 2016 Successor Agency to the Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92702 Ladies and Gentlemen: Stifel, Nicolaus & Company, Incorporated (the "Underwriter ") offers to enter into this Bond Purchase Agreement (this "Purchase Agreement, ") with the Successor Agency to the Community Redevelopment Agency of the City of Santa Ana (the "Agency ") which will be binding upon the Agency and the Underwriter upon the acceptance hereof by the Agency. This offer is made subject to its acceptance by the Agency by execution of this Purchase Agreement and its delivery to the Underwriter on or before 5:00 p.m., California time, on the date hereof. All terms used herein and not otherwise defined herein shall have the respective meanings given to such terms in the Indenture (as such term is defined herein). The Agency acknowledges and agrees that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm's length commercial transaction between the Agency and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consrunmation of such transaction, the Underwriter is and has been acting solely as principal and not as agent, fiduciary or Municipal Advisor (as such term is defined in Section 15B of The Securities Exchange Act of 1934, as amended) of the Agency; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Agency with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Agency on other matters); (iv) the Underwriter has financial interests that may differ from and be adverse to those of the Agency; and (v) the Agency has consulted with its own legal and financial advisors to the extent that it has deemed appropriate, I, Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the Agency for offering to the public, and the Agency hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the: (i) $ aggregate principal amount of the Agency's Tax Allocation Refunding Bonds (Merged Project Area), Series 2016A (the "Series A Bonds "), at a purchase price equal to $ (being the aggregate principal amount EXHIBIT 3 3 -93 thereof, less an Underwriter's discount of $ and phis a net original issue premium of and (ii) $ aggregate principal amount of the Agency's Tax Allocation Refunding Bonds, (Merged Project Area), Series 2016E [Federally Taxable](the "Series 2016B Bonds" and, together with Series A Bonds,] the `Bonds" or, individually, a "Series of Bonds "), at a purchase price equal to $ (being the aggregate principal amount thereof less an Underwriter's discount of $ and less an original issue discount of $ ). [As an accommodation to the Agency, the Underwriter shall pay from the purchase price of the Bonds, by wire transfer, the amount of $ to the Insurer (as such term is defined herein) to pay the premium for the Policy (as such term is defined herein) and $ to the Insurer to pay the premium for the Reserve Policy (as such term is defined herein).] Such payment and the other actions contemplated hereby to take place at the time of such payment are herein sometimes called the "Closing." 2, The Bonds and Related Documents, Each Series of Bonds shall be substantially in the form described in, and shall be issued and secured under the provisions of an Indenture of Trust, dated as of February 1, 20t 1, (the "Original Indenture "), by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee "), as amended and supplemented, including as supplemented by the First Supplemental Indenture, dated as of 1, 2016 (the "First Supplement" and, together with the Original Indenture as amended and supplemented, the "Indenture "), pursuant to Section 34177.5 of the California Health and Safety Code (the "Law ") and Article I1 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Act ") and Resolution No, of the Agency adopted on , 2016 (the "Agency Resolution "). The issuance of each Series of Bonds was approved by the Oversight Board for the Successor Agency by a resolution adopted on , 2016 (the "Oversight Board Resolution "). The Bonds shall be as described in the Indenture and the Official Statement dated the date hereof relating to the Bonds (which, together with all exhibits and appendices included therein or attached thereto and such amendments or supplements thereto which shall be approved by the Underwriter, is hereinafter called the "Official Statement "). [The Bonds shall be insured under a municipal bond insurance policy (the "Policy ") from [INSURER] (the "Insurer "), A debt service reserve insurance policy (the "Reserve Policy ") shall also be purchased from the Insurer for the Bonds.] The net proceeds of the Bonds will be used to currently refund two series of outstanding bonds (collectively, the "Prior Bonds ") issued by the forner Community Redevelopment Agency of the City of Santa Ana (the "Former Agency "). The Agency will undertake pursuant to the provisions of a Continuing Disclosure Certificate, dated as of 1, 2016 (the "Disclosure Certificate ") and executed by the Agency, to provide certain annual information and notices of the occurrence of certain enumerated events. A description of the undertaking is set forth in the Preliminary Official Statement (as defined below) and will also be set forth in the Official Statement. The Indenture, the Continuing Disclosure Certificate, the two [irrevocable refunding escrow instructions] [Escrow Agreements, each dated as of 1, 2016, and each by and between the Agency and the Trustee, as escrow bank,] relating to the Prior Bonds (collectively, the "Escrow Agreements "), and this Purchase Agreement are sometimes collectively referred to herein as the "Agency Legal Documents." 3 -94 3. Offering. It shall be a condition to the Agency's obligations to sell and to deliver the Bonds to the Underwriter and to the Underwriter's obligations to purchase, to accept delivery of and to pay for the Bonds that the entire $ _ aggregate principal amount of the Series A Bonds and $ aggregate principal amount of the Series 2016B Bonds shall be issued, sold and delivered by the Agency and purchased, accepted and paid for by the Underwriter at the Closing. The Underwriter agrees to make a bona fide public offering of all of the Bonds at the initial public offering prices or yields set forth in Exhibit A hereto and on the inside front cover page of the Official Statement. The Underwriter reserves the right to change, subsequent to the initial public offering, such initial offering prices as it shall deem necessary in connection with the marketing of the Bonds. 4. Use and Pre aration of Documents. The Agency has caused to be prepared and delivered to the Underwriter prior to the execution of this Purchase Agreement copies of the Preliminary Official Statement dated , 2016, relating to the Bonds (the "Preliminary Official Statement "), which was approved by a resolution of the Agency adopted on , 2016 (the "Agency OS Resolution "). The Agency ratifies, confirms and approves the use by the Underwriter prior to the date hereof of the Preliminary Official Statement, The Agency has previously deemed the Preliminary Official Statement to be final as of its date for purposes of Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934 ( "Rule 15c2 -12 "), except for information permitted to be omitted therefrom by Rule 15c2 -12. The Agency hereby agrees to deliver or cause to be delivered to the Underwriter, within seven (7) business days of the date hereof, but not less than one (1) business clay prior to Closing, an electronic version of the Official Statement and a sufficient number of physical copies of the final Official Statement relating to the Bonds, dated the date hereof, which includes all information permitted to be omitted by Rule 15c2 -12 and any amendments or supplements to such Official Statement as have been approved by the Agency and the Underwriter to enable the Underwriter to distribute a single copy of each Official Statement to any potential customer of the Underwriter requesting an Official Statement during the time period beginning when the Official Statement becomes available and ending 25 days after the End of the Underwriting Period (as such tern is defined herein). The Agency hereby approves of the use and distribution (including the electronic distribution) by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offer and sale of the Bonds. The Agency shall have executed and delivered to the Underwriter a certification to such effect in the form attached hereto as Exhibit B. The Underwriter agrees that it will not confirm the sale of any Bonds unless the confirmation of sale is accompanied or preceded by the delivery of a copy of the Official Statement. 5. Representations, Warranties and Agreements of the Agency. The Agency hereby represents and warrants to and agrees with the Underwriter as follows: (a) The Agency is a public entity existing under the laws of the State of California, including the Law. (b) The Agency has fall legal right, power and authority to enter into the Agency Legal Documents and carry out and consutmnate the transactions on its part contemplated by the Agency Legal Documents. (c) By all necessary official action of the Agency prior to or concurrently with the acceptance hereof, the Agency has duly authorized and approved the preparation and use of the 3 -95 Preliminary Official Statement and the Official Statement, the execution and delivery of the Official Statement and the Agency Legal Documents and the performance by the Agency of all transactions on its part contemplated by the Agency Legal Documents; and as of the Closing the Agency Legal Documents will constitute legal, valid and binding obligations of the Agency, enforceable against the Agency in accordance with their respective tears, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally. (d) The Agency is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation to which it is subject or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the Indenture) or other instrument to which the Agency is a party or to which the Agency or any of its property or assets is otherwise subject, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the execution and delivery of the Agency Legal Documents, and compliance with the provisions on the Agency's part contained therein, will not conflict with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Agency is a party or to which the Agency or any of its property or assets is otherwise subject, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Agency or under the terms of any such constitutional provision, law, regulation or instrument, except as provided by the Indenture and the Escrow Agreements. (e) Except as described in or conterplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Agency of its obligations under the Agency Legal Documents have been duly obtained. (1) Between the date of this Purchase Agreement and the date of the Closing, the Agency will not, without the prior written consent of the Underwriter, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent, payable from Tax Revenues, nor will there be any adverse change of a material nature in the financial position, results of operations or condition, financial or otherwise, of the Agency. (g) To the best knowledge of the officer of the Agency executing this Purchase Agreement, after due inquiry, as of the date hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, government agency, public board or body, pending with respect to which the Agency has been served with process or threatened against the Agency, affecting the existence of the Agency or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the execution and delivery of the Indenture or the collection of the Tax Revenues or contesting or affecting, as to the Agency, the validity or enforceability of the Agency Legal Documents or contesting the exclusion from gross income of interest on the Series A Bonds for federal income tax purposes, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the Agency, or in any way contesting or challenging the consummation of the transactions • •. contemplated hereby, or which might result in a material adverse change in the financial condition of the Agency or which might materially adversely affect the Tax Revenues of the Agency; nor, to the best knowledge of the Agency, is there any known basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the authorization, execution, delivery or performance by the Agency of the Agency Legal Documents. (h) As of the time of acceptance hereof and as of the date of the Closing, the Agency does not and will not have outstanding any indebtedness which indebtedness is secured by a lien on the Tax Revenues of the Agency superior to or on a parity with the lien provided for in the Indenture on the Tax Revenues, other than as disclosed in the Official Statement. (i) As of the time of acceptance hereof and as of the date of the Closing, the Agency has complied with the filing requirements of the Law, including, without limitation, the tiling of all Recognized Obligation Payment Schedules, as required by the Law. 6) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein in light of the circumstances under which they were made, not misleading (except that this representation does not include information relating to The Depository Trust Company or the book -entry -only system, the Insurer, the Policy or the Reserve Policy). (k) As of the date hereof and at all times subsequent hereto up to and including the date which is 25 days following the End of the Underwriting Period for the Bonds, the Official Statement will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made not misleading (except that this representation does not include information relating to The Depository Trust Company, the book - entry -only system, the Insurer, the Policy or the Reserve Policy). (1) If between the date hereof and the date which is 25 clays after the End of the Underwriting Period for the Bonds, an event occurs which would cause the information contained in the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading, the Agency will notify the Underwriter, and, if in the opinion of the Underwriter or the Agency, or their respective counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Agency will cooperate in the preparation of such amendment or supplement to the Official Statement in a form and manner approved by the Underwriter, and shall pay all expenses thereby incurred. For the purposes of this subsection, between the date hereof and the date which is 25 days of the End of the Underwriting Period for the Bonds, the Agency will famish such information with respect to itself as the Underwriter may from time to time reasonably request, As used herein, the term "End of the Underwriting Period" means the later of such time as: (i) the Agency delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Notwithstanding the foregoing, unless the Underwriter gives written notice to the contrary, the "End of the Underwriting Period" shall be the date of Closing. 3 -97 (in) If the information contained in the Official Statement is amended or supplemented pursuant to paragraph (1) hereof, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the date which is 25 days after the End of the Underwriting Period for the Bonds, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact required to be stated therein or necessary to make such information therein in the light of the circumstances raider which it was presented, not misleading (except that this representation does not include information relating to The Depository Trust Company or the book - entry -only system), the Insurer, the Policy or the Reserve Policy. (n) After the Closing, the Agency will not participate in the issuance of any amendment of or supplement to the Official Statement to which, after being furnished with a copy, the Underwriter shall reasonably object in, writing or which shall be disapproved by counsel for the Underwriter. (o) Any certificate signed by any officer of the Agency and delivered to the Underwriter shall be deemed a representation by the Agency to the Underwriter as to the statements made therein. (p) The Agency will apply the proceeds from the sale of the Bonds for the purposes specified in the Official Statement. (q) The Agency has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the Agency is not a bond issuer whose arbitrage certifications may not be relied upon. (r) The Agency will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter, at the expense of the Underwriter, as it may reasonably request in order to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States of America as the Underwriter may designate; provided, however, that the Agency will not be required to execute a special or general consent to service of process or qualify as a foreign corporation in connection with any such qualification in any jurisdiction. (s) The Agency will refrain from taking any action with regard to which the Agency may exercise control that results in the inclusion in gross income for federal income tax purposes of the interest on the Series A Bonds or State of California income tax purposes of the interest on the Bonds. (t) Except as disclosed in the Official Statement, neither the Agency nor the Former Agency has failed to comply in all material respects with any prior continuing disclosure undertaking in regard to Rule 15c2 -12 within the previous five years. (u) The Oversight Board has duly adopted the Oversight Board Resolution approving the issuance of the Bonds and no further Oversight Board approval or consent is required for the issuing of the Bonds or the consummation of the transactions on the part of the Agency described in the Official Statement. (v) The Department of Finance of the State (the "Department of Finance ") has issued a letter, dated , 2016, approving the Oversight Board Resolution. No further Department of Finance approval or consent is required for the issuance of the Bonds or the consummation of the transactions on the part of the Agency described in the Official Statement. Except as disclosed in the Official Statement, the Agency is not aware of the Department of Finance directing or having any basis to direct the County Auditor- Controller to deduct unpaid unencumbered fimds from future allocations of property tax to the Agency pursuant to Section 34183 of the Dissolution Act. 6, Closing. At 8:00 A.M., California time, on , 2016, or on such other date or at such other time as may be mutually agreed upon by the Agency and the Underwriter, the Agency will, subject to the terms and conditions hereof, sell and deliver the Bonds to the Underwriter, duly executed and authenticated, together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof in federal funds. Sale, delivery and payment as aforesaid shall be made at the offices of Orrick, Herrington & Sutcliffe LLP, Los Angeles, California ( "Bond Counsel "), or such other place as shall have been mutually agreed upon by the Agency and the Underwriter, except that the Bonds (with one certificate for each maturity of each series and otherwise in a form suitable for the book -entry system) shall be delivered to the Underwriter in New York, New York, through the book -entry system of The Depository Trust Company ( "DTC "). Unless the DTC Fast Automated Securities Transfer ( "FAST ") is utilized, the Bonds will be made available for inspection by DTC at least one business day prior to the Closing. 7. Closing Conditions. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the Agency contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Agency of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriter's obligations under this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Agency of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to.the following additional conditions: (a) The Underwriter shall receive copies of the Official Statement (including all information previously permitted to have been ornitted fi•om the Preliminary Official Statement by Rule 15c2 -12 and any amendments or supplements thereto as have been approved by the Underwriter as required by Section 4 hereoD. (b) The representations and warranties of the Agency contained herein shall be true and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing, and the statements of the officers and other officials of the Agency made in any certificate or other document famished pursuant to the provisions hereof are accurate. (e) At the time of the Closing, the Agency Legal Documents shall have been duly authorized, executed and delivered by the respective parties thereto, and the Official Statement shall have been duly authorized, executed and delivered by the Agency, all in substantially the forms heretofore submitted to the Underwriter, with only such changes as shall have been agreed to by the Underwriter, and shall be in full force and effect; and there shall be in full force and effect such resolution or resolutions of the governing body of the Agency as, in the opinion of Bond Counsel, 7 3 -99 shall be necessary or appropriate in connection with the transactions on the part of the Agency contemplated hereby. (d) At the time of the Closing, all necessary official action of the Agency relating to the Official Statement and the Agency Legal Documents shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect. (e) At or prior to the Closing, the Underwriter shall have received copies of each of the following documents: (1) Bond Counsel Opinions. The approving opinions of Bond Counsel to the Agency, dated the date of the Closing and substantially in the form included as Appendix B to the Official Statement. (2) Supplemental Opinion of Bond Counsel. A supplemental opinion or opinions of Bond Counsel addressed to the Underwriter, in form and substance acceptable to the Underwriter, and dated the date of the Closing, stating that the Underwriter may rely on the opinions of Bond Counsel described in paragraph (1) above as if such opinions were addressed to the Underwriter and to the following effect: (i) this Purchase Agreement has been duly executed and delivered by the Agency and (assuming due authorization, execution and delivery by and validity against the Underwriter) constitutes the valid and binding agreement of the Agency, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors' rights and by the application of equitable principles; (ii) the statements contained in the Official Statement under the captions "INTRODUCTION," "THE BONDS," "SECURITY FOR THE BONDS," "TAX MATTERS," and in Appendices A and B, are accurate insofar as such statements expressly sunrunarize certain provisions of the Indenture or the opinions of Bond Counsel; (iii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; and (iv) the Agency has taken all actions required to defease the Prior Bonds and the Prior Bonds are no longer outstanding under the terms of the indenture of trust, as amended, pursuant to which they were issued. (3) Financial Advisor Certificate. A certificate, dated the date of Closing, signed by a duly authorized official of Urban Futures, Incorporated, the Agency's Financial Advisor (the "Financial Advisor ") addressed to the Underwriter and the Agency to the effect, that, in connection with its participation in the preparation of the Official Statement and without undertaking any independent investigation and without having undertaken to determine independently the fairness, accuracy or completeness of the statements contained in the Official Statement, nothing has come to the attention of the Financial Advisor that would lead it to believe that the statements and information contained in the Official Statement as of the date thereof and the date of the Closing, contains an untrue statement of a material fact or omits to state a material fact required to be stated 3 -100 therein as necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. (4) Fiscal Consultant's Certificate. A certificate of Keyser Marston Associates, Inc. (the "Fiscal Consultant "), dated the date of the Closing, addressed to the Agency and the Underwriter, in form and substance acceptable to the Underwriter: (i) certifying as to the accuracy of the Fiscal Consultant's Report set forth in Appendix G to the Official Statement and the information in the Official Statement attributable to the Fiscal Consultant; (ii) consenting to the inclusion of such fern's Fiscal Consultant's Repoli in the Preliminary Official Statement and the Official Statement; and (iii) stating that, to the best of the Fiscal Consultant's knowledge, but without having conducted any investigation with respect thereto, nothing has come to the Fiscal Consultant's attention between the date of such report and the date of the Closing which would materially alter any of the conclusions set forth in such report. (5) Agency Counsel Opinion. An opinion of general counsel to the Agency, dated the date of the Closing and addressed to the Underwriter, in form and substance acceptable to the Underwriter, to the following effect: (i) the Agency is a public body, corporate and politic, duly organized and existing under the laws of the State, with full right, power and authority to execute, deliver and perform its obligations under the Agency Legal Documents; (H) the Agency Resolution and the Agency OS Resolution were duly adopted at meetings of the Agency called and held pursuant to law, with all public notice required by law and at which quorums were present and acting throughout; and the Agency Resolution and the Agency OS Resolution are in full force and effect and have not been modified amended or rescinded since their respective adoption date; (iii) the Agency Legal Documents and the Official Statement have been duly authorized, executed and delivered by the Agency and, assuming due authorization, execution and delivery by the other parties thereto, as applicable, the Agency Legal Documents constitute the valid, legal and binding obligations of the Agency enforceable in accordance with their respective terns, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors' rights and by the application of equitable principles if equitable remedies are sought; (iv) the execution and delivery of the Agency Legal Documents and the Official Statement and compliance with the provisions of the Agency Legal Documents, under the circumstances contemplated thereby: (1) do not and will not in any material respect conflict with or constitute on the part of the Agency a breach of or default under any agreement or other instrument to which the Agency is a party or by which it is bound; and (2) do not and will not in any material respect constitute on the part of the Agency a violation, breach of or default under any existing law, regulation, court order or consent decree to which the Agency is subject; (v) to the best of such counsel's knowledge, except as otherwise disclosed in the Official Statement, there is no litigation or proceeding, pending and served upon the Agency, or threatened, challenging the creation, organization or existence of the Agency, or the validity of the Bonds or the Agency Legal Documents or seeking to restrain or enjoin any of the transactions referred to therein or contemplated thereby, or Linder which a determination adverse to 3 -101 the Agency would have a material adverse effect upon the financial condition or the revenues of the Agency, or which, in any manner, questions the right of the Agency to issue, sell and deliver the Bonds, to enter into the Indenture or to use the Tax Revenues for repayment of the Bonds or affects in any manner the right or ability of the Agency to collect or pledge the Tax Revenues; and (vi) based upon such counsel's participation as counsel to the Agency in the preparation of the Official Statement, and without having undertaken to determine independently the fairness, accuracy or completeness of the statements contained in the Official Statement, Agency Counsel has no reason to 'believe that, as of its date and as of date of Closing, the information in the Official Statement relating to the Agency, the Tax Revenues and the Redevelopment Projects (as such term is defined in the Indenture) (excluding any financial or statistical data with respect thereto, as to which no opinion is expressed) contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (6) Trustee Counsel Opinion. The opinion of counsel to the Trustee, dated the date of the Closing, addressed to the Underwriter and the Agency, to the effect that: (i) the Trustee is a national banking association, duly organized and validly existing under the laws of the United States of America, having full power to enter 'into, accept and administer the trusts created under the Indentuue and the Escrow Agreements; (ii) the Indenture and the Escrow Agreements have been duly authorized, executed and delivered by the Trustee and the Indenhue and the Escrow Agreements constitute the legal, valid and binding obligation of the Trustee, enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles if equitable remedies are sought; and (iii) except as may be required under Blue Sky or other securities laws of any state, no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the execution and delivery by the Trustee of the Indenture or the Escrow Agreements, or the consummation of the transactions on the part of the Trustee contemplated by the Indenture and the Escrow Agreements. (7) Agency Certificate. A certificate of the Agency, dated the date of the Closing, signed on behalf of the Agency by a duly authorized officer of the Agency, to the effect that: (i) the representations and warranties of the Agency contained herein are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing; (ii) no event affecting the Agency has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and 10 3 -102 (iii) the Agency is not, in any material respect, in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Agency is a party or is otherwise subject, which would have a material adverse impact on the Agency's ability to perform its obligations under the Agency Legal Documents, 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 event of default under any such instrument. (8) Trustee's Certificate. A certificate of the Trustee, dated the date of the Closing, signed on behalf of the Trustee by a duly authorized officer of the Trustee, to the effect that; (i) the Trustee is a national banking association duly organized and validly existing under the laws of the United States of America; (ii) the Trustee has full power, authority and legal right to comply with the terms of the Indenture and the Escrow Agreements and to perform its obligations stated therein; and (iii) the Indenture and the Escrow Agreements have been duly authorized, executed and delivered by the Trustee and (assuming due authorization, execution and delivery by the Agency) constitute legal, valid and binding obligations of the Trustee in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally. (9) Documents. Executed copies of the Agency Legal Documents and the Official Statement and a copy of the Preliminary Official Statement. (10) Rating Letter. A letter from Standard & Poor's Credit Ratings Services ( "S &P ") to the effect that the Insured Bonds have been assigned an insured rating of "AA" and the Bonds have been assigned an underlying rating of "_," which ratings shall be in effect as of the date of the Closing. (11) Disclosure Letter. A letter of Best Best & Krieger LLP ( "Disclosure Counsel "), dated the date of the Closing, addressed to the Underwriter and the Agency, to the effect that, based upon its participation in the preparation of the Official Statement and without having undertaken to determine independently the fairness, accuracy or completeness of the statements contained in the Official Statement, such counsel has no reason to believe that, as of the date of the Closing, the Official Statement (excluding therefrom the reports, financial and statistical data and forecasts therein and the information included in the appendices thereto and infornation relating to DTC, the Insurer, the Policy and the Reserve Policy, as to which no advice need be expressed) contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (12) Agency Resolutions; A copy of the Agency Resolution and the Agency OS Resolution, together with a certificate of the Secretary of the Agency to the effect that 11 3 -103 the Agency Resolution and the Agency OS Resolution remain in full force and effect, and have not been amended, rescinded or otherwise modified since their respective dates of adoption. (13) Oversight Board Resolution. A copy of the Oversight Board Resolution. (14) Oversight Board Certificate. A certificate of the Clerk of the Oversight Board to the effect that the Oversight Board Resolution remains in fall force and effect and has not been amended, rescinded or otherwise modified since its date of adoption. (15) Verification ReporK. A report, dated the date of the Closing, of independent certified public accountants (the "Verification Agent "), to die effect that it has verified the accuracy of the mathematical computations of the adequacy of the deposits in the escrow Rinds for the Prior Bonds for the Rill and timely payment of all principal (including premium, if any) and interest due on Cie Prior Bonds as contemplated by the Escrow Agreements. (16) Bond Insurance Policv. The executed Policy of the Insurer insuring the scheduled payment of principal of and interest on the Insured Bonds, substantially in the form attached as Appendix H to the Official Statement. (17) Reserve Policv. The executed Reserve Policy issued by the Insurer. (13) Insurer Certificate. A certificate of the Insurer as to the accuracy of the information in the Official Statement relating to the Insurer, the Policy and the Reserve Policy. (19) Insurer Counsel Opinion. An opinion of counsel to the Insurer, dated as of the date of Closing, addressed to the Underwriter and the Agency in form and substance acceptable to the Underwriter, substantially to the effect that: (i) the Insurer has been duly incorporated and is validly existing and in good standing under the laws of the state of its incorporation; (ii) the Policy and Reserve Policy constitute legal, valid and binding obligations of the Insurer enforceable in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, rehabilitation and other similar laws of general applicability relating to or affecting creditors' and /or claimants' rights against insurance companies and to general equity principles; and (iii) the information contained in the Official Statement under the caption "MUNICIPAL BOND INSURANCE" does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances ender which they were made, not misleading. (20) DTC Letter of Representations, The executed Blanket Letter of Representations of the Agency. (21) CDIAC Forms. A report of proposed debt issuance, acknowledgement thereof and final report to the California Debt and Investment Advisory Commission with respect to the Bonds. (22) Tax Certificate. A no arbitrage certificate with respect to the Series A Bonds in a form acceptable to Bond Counsel. 12 3 -104 (23) Additional Documents. Such additional certificates, instruments and other documents as Bond Counsel, the Agency or the Underwriter may reasonably deem necessary. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Underwriter. If the Agency shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Agreement, if the Agency shall determine in good faith (and provide written notice to the Underwriter) that legislation has been introduced or proposals made by the Governor of the State which if enacted and effective would impose additional limitations or burdens on the Agency by reason of the issuance of the Bonds or which purport to prohibit the issuance of the Bonds, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and the Underwriter shall be under no further obligation hereunder; except that Section 9 hereof shall remain in effect in any event. 8. Termination. The Underwriter shall have the right to terminate this Purchase Agreement, without liability therefor, by notification to the Agency if at any time between the date hereof and prior to the Closing: (a) any event shall occur which causes any statement contained in the Official Statement to be materially misleading or results in a failure of the Official Statement to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (b) the marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State, or the amendment of legislation pending as of the date of this Purchase Agreement in the Congress of the United States, or the recormnendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States house of Representatives, or the proposal for consideration of legislation by either such Committee or by any member thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such I-Iouse to which such legislation has been referred for consideration, or any decision of any Federal or State court or any ruling or regulation (final, temporary or proposed) or official statement on behalf of the United States Treasury Department, the Internal Revenue Service or other federal or State authority materially adversely affecting the federal or State tax status of the Agency, or the interest on bonds or notes or obligations of the general character of the Bonds; or (c) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State or any court of the United States shall be rendered which, in 13 3 -105 the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or (d) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United, States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or (e) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange which, restrictions materially adversely affect the Underwriter's ability to trade the Bonds; or (f) a general banking moratorium shalt have been established by federal or State authorities; or (g) the United States has become engaged in hostilities which have resulted in a declaration of war or a national emergency or there has occurred any other outbreak of hostilities or a national or international calamity or crisis, or there has occurred any osculation of existing hostilities, calamity or crisis, financial or otherwise, the effect of which on the financial markets of the United States being such as, in the reasonable opinion of the Underwriter, would affect materially and adversely the ability of the Underwriter to market the Bonds; or (h) any rating of the Bonds shall have been downgraded, suspended or withdrawn by a national rating service, which, in the Underwriter's reasonable opinion, materially adversely affects the marketability or market price of the Bonds; or (i) the commencement of any action, suit or proceeding described in Section 5(g) hereof which, in the judgment of the Underwriter, materially adversely affects the market price of the Bonds; or 0) there shall be in force a general suspension of trading on the New York. Stock Exchange. 9. Expenses. The Agency will pay or cause to be paid the approved expenses incident to the performance of its obligations hereunder and certain expenses relating to the sale of the Bonds, including, but not limited to: (a) the cost of the preparation and printing or other reproduction of the Agency Legal Documents (other than this Purchase Agreement); (b) the fees and disbursements of Bond Counsel, Disclosure Counsel, the Financial Advisor, the Fiscal Consultant, counsel to the Agency and any other experts or other consultants retained by the Agency; (c) the costs and fees of the credit rating agencies; (d) the cost of preparing and delivering the definitive Bonds; (e) the cost of providing immediately available funds on the date of the Closing; (f) the cost of the printing or other 14 3 -106 reproduction of the Preliminary Official Statement and Official Statement and any amendment or supplement thereto; including a reasonable number of certified or conformed copies thereof; (g) [the Underwriter's out -of- pocket expenses incurred with the financing]; (h) the fees of for a continuing disclosure undertaking compliance review; and (i) expenses (included in the expense component of the spread) incurred on behalf of the City's or the Agency's employees which are incidental to implementing this Purchase Agreement and the rating presentation. The Underwriter will pay the expenses of the preparation of this Purchase Agreement and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds and the fees and disbursements of Underwriter's Counsel, The Underwriter is required to pay the fees of the California, Debt and Investment Advisory Commission in connection with the offering of the Bonds. The Agency acknowledges that it has had an opportunity, in consultation with such advisors as it may deem appropriate, if any, to evaluate and consider such fees. Notwithstanding the fact that such fees are solely the legal obligation of the Underwriter, the Agency agrees to reimburse the Underwriter for such fees. 10. Notices. Any notice or other communication to be given to the Agency under this Purchase Agreement may be given by delivering the same in writing at the Agency's address set forth above; Attention; Executive Director, and to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, California 94104, Attention: Jim Cervantes, 11. Parties in Interest. This Purchase Agreement is made solely for the benefit of the Agency and the Underwriter and no other person shall acquire or have any right hereunder or by virtue hereof. All of the representations, warranties and agreements of the Agency contained in this Purchase Agreement shall remain operative and in full force and effect, regardless of: (i) any investigations made by or on behalf of the Underwriter; (ii) delivery of and payment for the Bonds pursuant to this Purchase Agreement; and (iii) any termination of this Purchase Agreement. 12, Effectiveness and Counterpart Signatures. This Purchase Agreement shall become effective upon the execution of the acceptance by an authorized officer of the Agency and shall be valid and enforceable at the time of such acceptance and approval, This Purchase Agreement may be executed by the parties hereto by facsimile transmission and in separate counterparts, each of which when so executed and delivered (including delivery by facsimile transmission) shall be an original, but all such coruiterparts shall together constitute but one and the same instrument. 13. Headings. The headings of the sections of this Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof, 15 3 -107 14. Governing Law, This Purchase Agreement shall be construed in accordance with the laws of the State. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED Its: Authorized Officer Accepted: SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA Sy: Time: Executive Director AS TO FORM 0.11ODGE 16 3 -108 EXHIBIT A MATURITY SCHEDULE S SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA TAX ALLOCATION REFUNDING BONDS (MERGED PROJECT AREA), SERIES 2016A Maturity Date ( — 1) Amount Coupon A -I 3 -109 Yield Price SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA TAX ALLOCATION REFUNDING BONDS, (MERGED PROJECT AREA), SERIES 2016B [FEDERALLY TAXABLE] Maturity Date ( I) Amount Coupon Yield Price] A -2 3 -110 EXHIBIT B RULE 15c2 -12 CERTIFICATE The undersigned hereby certifies and represents to Stifel, Nicolaus & Company, Incorporated (the "Underwriter ") that the undersigned is a duly appointed and acting officer of the Successor Agency to the Community Redevelopment Agency of the City of Santa Ana (the "Agency ") authorized to execute this Certificate, and further hereby certifies and confirms on behalf of the Agency to the Underwriter as follows; (1) This Certificate is delivered to enable the Underwriter to comply with Securities and Exchange Commission Rule 15c2 -12 Larder the Securities Exchange Act of 1934 (the "Rule ") in connection with the offering and sale of the Agency's: (i) Tax Allocation Refunding Bonds (Merged Project Area), Series 2016A; and (ii) Tax Allocation Refunding Bonds, (Merged Project Area), Series 2016B [Federally Taxable] (collectively, the "Bonds"), (2) In connection with the offering and sale of the Bonds, there has been prepared a Preliminary Official Statement, dated , 2016, setting forth information concerting the Bonds and the Agency, as issuer of the Bonds (the "Preliminary Official Statement'). (3) As used herein, "Permitted Omissions" shall mean the offering price(s), interest rate(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending oil such matters and the identity of the underwriter(s), all with respect to the Bonds. (4) The Preliminary Official Statement is, except for the Permitted Omissions, deemed final within the meaning of the Rule and has been, and the information therein is accurate and complete in all material respects except for the Permitted Omissions. (5) If, at any time prior to the execution of the final contract of purchase with respect to the Bonds, any event occurs as a result of which the Preliminary Official Statement might include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Agency shall promptly notify the Underwriter thereof. IN WITNESS WHEREOF, I have hereunto set my hand as of the _ day of , 2016. SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA Authorized Officer Iiml 3 -111 3 -112 CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate ") is executed and delivered by the Successor Agency to the Community Redevelopment Agency of the City of Santa Ana (the "Agency ") in connection with the issuance of $ aggregate principal amount of Successor Agency to the Community Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds (Merged Project Area), Series 2016A (the `Bonds "). The Bonds are being issued pursuant to an Indenture of Trust, dated as of , between the Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee "), (the "Indenture "). The Agency covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Agency for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with Securities and Exchange Commission ( "S.E.C. ") Rule 15c2- 12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Agency pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). "City" means the City of Santa Ana, California. "County" means the County of Orange. "Dissemination Agent" shall mean the [Agency], or any successor Dissemination Agent designated in writing by the Agency and which has filed with the Agency a written acceptance of such designation. "Holder" shall mean the person in whose name any Bond shall be registered. "Listed Events" shall mean any of the events listed in Section 5(a) or 5(b) of this Disclosure Certificate. "MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Conmaission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org. "Official Statement" means the Official Statement of the Agency dated , 2016. "Participating Underwriter" shall mean the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. SECTION 3. Provision of Annual Reports. (a) The Agency shall, or shall cause the Dissemination Agent to, on March 31, 2017, and on or before each March 31 thereafter, commencing with the report for the 2015 -16 Fiscal Year, provide to the MSRB X1134 an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may cross - reference other information as provided in Section 4 of this Disclosure Certificate; provided, that the audited financial statements of the Agency may be submitted separately from the balance of the Annual Report and later than the date required above for the 'filing of the Annual Report if they are not available by that date. If the Agency's fiscal year changes, it shall give notice of such change in a filing with the MSRB. The Annual Report shall be submitted on a standard form in use by industry participants or other appropriate form and shall identify the Bonds by name and CUSIP number. (b) Not later than fifteen (15) Business Days prior to said date, the Agency shall provide the Annual Report to the Dissemination Agent (if other than the Agency). If the Agency is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the Agency shall send or cause to be sent to the MSRB a notice in substantially the form attached as Exhibit A or such other form as prescribed or acceptable to the MSRB. (c) The Dissemination Agent shall (if the Dissemination Agent is other than the Agency), file a report with the Agency certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided to the MSRB. SECTION 4. Content of Annual Reports, The Agency's Annual Report shall contain or include by reference the following: (a) Audited financial statements of the Agency for the preceding fiscal year either as a separate audit of the Agency or as a combined statement with the City's comprehensive audited financial report, prepared in accordance with generally accepted accounting principles and the laws of the state of California, including all statements and information prescribed for inclusion therein by the Governmental Accounting Standards Board. If the audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual ,Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be provided to the MSRB in the same manner as the Annual Report when they become available. To the extent not included in the audited financial statement of the Agency, the Annual Report shall also include the following: (b) Principal amount of Bonds outstanding (c) Agency outstanding debt, including without limitation any Parity Debt and subordinate debt (including a description of date, amount, term, rating, insurance in the Fiscal Year to which the Annual Report pertains and of the amount of all Agency debt outstanding and payable with Housing Tax Revenues. (d) Information regarding total historic assessed values and tax increment within the Merged Project Areas, as set forth in Table — of the Official Statement, together with "Tax Revenues," and "Debt Service Coverage" as shown in Table _ of the Official Statement. (e) Information regarding the top ten (10) tax payers within the Merged Project Areas, as set forth in Table of the Official Statement. (f) Information regarding assessment appeals for the ten largest taxpayers as shown in Table _ of the Official Statement. (g) Information regarding assessment appeals for the Project Areas as shown in Table _ of the Official Statement. Any or all of the items listed above may be set forth in one or a set of documents or may be included by specific reference to other documents, including official statements of debt issues of the Agency or related public 3 -114 entities, which have been available to the public on the MSRB's website. The Agency shall clearly identify each such other document so included by reference. (i) An annual statement regarding the status of Orange County's most recent policy regarding the advancement of annual tax delinquencies to the Agency's Redevelopment Project pursuant to the "Teeter Plan." SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Agency shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than ten business days after the occurrence of the event: 1. Principal and interest payment delinquencies; 2. Unscheduled draws on debt service reserves reflecting financial difficulties; 3. Unscheduled draws on credit enhancements reflecting financial difficulties; 4. Substitution of credit or liquidity providers, or their failure to perform; 5. Adverse tax opinions or issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB); 6. Tender offers; 7. Defeasances; 8. Rating changes; or 9. Bankruptcy, insolvency, receivership or similar event of the obligated person. Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law, in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (b) The Agency shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event: 1. Unless described in paragraph 5(a)(5), other material notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; 2. Modifications to rights of Bondholders; 3. Optional, unscheduled or contingent Bond calls; 4. Release, substitution, or sale of property securing repayment of the Bonds; 3 3 -115 5. Non- payment related defaults; 6. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; or Appointment of a successor or additional trustee or the change of name of a trustee. (c) Upon the occurrence of a Listed Event described in Section 5(a), or upon the occurrence of a Listed Event described in Section 5(b) which the Issuer determines would be material under applicable federal securities laws, the Agency shall within ten (10) Business Days of occurrence file a notice of such occurrence with the MSRB. Notwithstanding the foregoing, notice of the Listed Event described in subsection (b)(3) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Indenture. SECTION 6. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Certificate must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB. SECTION 7. Termination of Reporting Obligation. The Agency's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Agency shall give notice of such termination in the same manner as for a Listed Event under Section 5(c). SECTION 8. Dissemination Agent. The Agency may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Agency pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Agency. SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Agency may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, 5(a) or 5(b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Agency shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Agency. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in a filing with the MSRB, and (ii) the Annual Report for the year in 3 -116 which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Agency from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice required to be filed pursuant to this Disclosure Certificate, in addition to that which is required by this Disclosure Certificate. If the Agency chooses to include any information in any Annual Report or notice in addition to that which is specifically required by this Disclosure Certificate, the Agency shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event or any other event required to be reported. SECTION 11. Default. hi the event of a failure of the Agency to comply with any provision of this Disclosure Certificate any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Agency to comply with its obligations under this Disclosure Certificate; provided, that any such action may be instituted only in Superior Court of the State of California in and for the County of Orange or in U.S. District Court in or nearest to the County. The sole remedy under this Disclosure Certificate in the event of any failure of the Agency to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Agency, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Date: SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA 5 3 -117 CONTINUING DISCLOSURE EXHIBIT A FORM OF NOTICE TO THE MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name of Agency: SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF TIIE CITY OF SANTA ANA Name of Bond Issue: SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY FOR THE CITY OF SANTA ANA TAX ALLOCATION REFUNDING BONDS, SERIES 2016A Date of Issuance: NOTICE IS HEREBY GIVEN that the Agency has not provided an Annual Report with respect to the above -named Bonds as required by Section 4 of the Continuing Disclosure Certificate of the Agency, dated the Date of Issuance. [The Agency anticipates that the Annual Report will be filed by .] Dated: SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA By [to be signed only if filed] A -1 3 -118 CtXT,rCr)+ NsuRANCEfQ & WO E N -2016 -064 WORK MAY ( EED UNTIL INSURANCE EXPIRES Exhibit vC. R -9-Al :LEM O CCOUNCIL DATE: PROFESSIONAL SERVICES AGREEMENT WITH URBAN FUTURES, INC. FOR FINANCIAL ADVISORY SERVICES THIS CONT T SERVICES AGREEMENT (herein "Agreement ") ismade and entered into this � day o 16, by and between the CITY OF SANTA ANA, in its capacity as the Successor Agency to the former Community Redevelopment Agency of the City of Santa Ana ("Successor Agency ") and Urban Futures, Incorporated (herein "Consultant"). NOW, THEREFORE, the parties hereto agree as follows: 1.0 SERVICES OF CONSULTANT 11 Scope of Services. In compliance with all of the terms and conditions of this Agreement, the Consultant shall perform the work or services set forth in the "Scope of Services" attached hereto as Exhibit "A" and incorporated herein by reference. Consultant warrants that all work and services set forth in the Scope of Services will be performed in a competent, professional and satisfactory manner. 1.2 Complianq( With Law All work and services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statutes, rules, and regulations of the City of Santa Ana and any Federal, State or local governmental agency of competent jurisdiction. 1.3 Licenses Permits Fees and Assessments. Consultant shall obtain at its sole cost and expense such licenses, penults and approvals as may be required by law for the performance of the services required by this Agreement including, but not limited to, registration as a financial advisor with the Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB), 2.0 CONTINGENT COMPENSATION 2.1 Contract Sum. Payment to Consultant is contingent upon final bond team and package approval by City Council with regard to the refunding of outstanding City of Santa Ana Successor Agency Series 2003A and 2003B Tax Allocation Hoods (TABS). For the services rendered pursuant to this Agreement, the Consultant shall be compensated in accordance with the "Schedule of Compensation" attached hereto as Exhibit "B" and incorporated herein by this reference. This schedule was previously approved by the City on January 21, 2014. 2.2 Invoicing. Consultant shall maintain a detailed invoice, in the fann approved by City's Finance Director, describing the tasks performed and amount charged for each such task. The City shall review the invoice and pay Consultant the approved charges no later than thirty (30) days following the City Council action referenced above. 3.0 COORDINATION OF WORK. 3.1 Representative of Consultant. Michael Busch is hereby designated as being the principal and representative of the Consultant authorized to act in its behalf with respect to the work and services specified herein and make all decisions in connection therewith.. 3 -119 3.2 Contract Officer, The City Manager of the City of Santa Ana, is hereby designated as being the representative of the City authorized to act in its behalf with respect to the work and services specified herein and make all decisions in connection therewith ( "Contract Officer "). The City Manager shall have the right to designate another Contract Officer by providing written notice to the Consultant. 3.3 Prohibition Against Subcontracting or Assi nment. Consultant shall not contract with any entity to perform in whole or in part the work or services required hereunder without the express written approval of the City. Neither this Agreement nor any interest herein may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of the City. Any such prohibited assignment or transfer shall be void. 3.4 Independent Contractor. Neither the City nor any of its employees shall have any control over the manner, mode or means by which the Consultant, its agents or employees, perform the services required herein, except as otherwise set forth. Consultant shall perform all services required herein as an independent the contractor of the City and shall remain Linder only such obligations as are consistent with that role. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of the City. 4.0 INSURANCE AND INDEMNIFICATION 41 Insurance The Consultant shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the City, during the entire term of this Agreement including any extension thereof, the following policies of insurance: (a) Comprehensive General Liability Insurance. Consultantshall maintain commercial general liability insurance which shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of Consultant's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $1,000,000 per occurrence, and $2,000,000 in the aggregate. Such insurance shall (a) name the City, its officers, employees, agents, volunteers and representatives as additional insured(s); (b) be primary and not contributory with respect to insurance or self - insurance programs maintained by the City; and (e) contain standard separation of insureds provisions. (b) Worker's Compensation Insurance. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both the Consultant and the City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the Consultant in the course of carrying out the work or services contemplated in this Agreement. (c) Automotive Insurance_ Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence. Said policy shall include coverage for owned, non- owned, leased and hired cars. 3 -120 (d) Professional Liability or Error and Omissions Insurance A policy of insurance in an amount not less than $1,000,000,00 per claim or as is customary for the work to be performed under this contract with respect to loss arising from the actions of Consultant perforating professional services hereunder onbehalf ofthe City. All of the above policies of insurance shall be primary insurance and shall name the City, its officers, employees and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the City, its officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or canceled without providing thirty (30) days prior written notice by registered mail to the City. In the event any of said policies of insurance are canceled, the Consultant shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section 4.1 to the Contract Officer. No work or services under this Agreement shall commence until the Consultant has provided the City with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverage and said Certificates of insurance or binders are approved by the City. The Consultant agrees that the provisions of this Section 4,1 shall not be construed as limiting in any way the extent to which the Consultant may be held responsible for the payment of damages to any persons or property resulting from the Consultant's activities or the activities of any person orpersons for which the Consultant is otherwise responsible, The insurance required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated "A" or better in the most recent edition of Best Rating Guide, The Ivey Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better, unless such requirements are waived by the City Attorney due to unique circurnstances. 4.2 Indemnification. Consultant agrees to defend and indemnify the City, its officers, agents and employees against, and will hold and save them and each of them harmless from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities, including paying any legal costs, attorney's fees, or paying any judgment (herein "claims or liabilities ") that may be asserted or claimed by any person, firm or entity arising out of or in connection with the performance of the work or services of the Consultant, its agents, employees, subcontractors, or invitees, provided for herein, or arising from the negligent acts or omissions of the Consultant hereunder, or arising from the Consultant's negligent performance of or failure to perform any term, provision covenant or condition of this Agreement, but excluding such claims or liabilities to the extent caused by the sole negligence or willful misconduct ofthc City. 3 -121 5.0 TERM 5,1 ;i'omi. Unless earlier terminated in accordance with Section 5.2 below, this Agreement shall begin on the Effective Date and continue in Poll force and effect until Marroh 31, 2018. There is a one -year option to extend this Agreement subject to approval of both parties. 5.2 Termination Prior to Expiration of Term. Either party may terminate this Agreement at any tune, with or without cause, upon thirty (30) days' written notice to the other party. Upon receipt of the notice of termination, the Consultant shall immediately cease all work or services hereunder except as may be specifically approved by the Contract Officer. In the event of termination by the City, the Consultant shall be entitled to compensation for all services rendered prior to the effectiveness of the notice of termination and for such additional services specifically authorized by the Contract Officer and the City shall be entitled to reimbursement for any compensation paid in excess of the services rendered. 6.0 MISCELLANEOUS 6.1 Covenant Against Discrimination. Consultant covenants that, by and for itself, its heirs, executors, assigns and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the performance of this Agreement, Consultant shall take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, marital status, national origin or ancestry. 6.2 Non - liability of City Officers and Employee_ss.. No officer or employee of the City shall be personally liable to the Consultant, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Consultant or to its successor, or for breach of any obligation of the terms of this Agreement. 6.3 Conflict of Interest No officer or employee of the City shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which affects his financial interest or the financial interest of any corporation, partnership or association in which he is, directly or indirectly, interested, in violation of any State statute or regulation. The Consultant warrants that it has not paid or given and will not pay or give any third party any money or other consideration for obtaining this Agreement. 6.4 Notice. Any notice, demand, request, document, consent, approval, or communication either party desires or is required to give to the other party or any other person shall be in writing and either served personally or sent by prepaid, first -class mail, in the case of the City, to the City Manager and to the attention of the Contract Officer, Clerk of the Council, City of Santa Ana, 20 Civic Center Plaza (M -30), P.O. Box 1988, Santa Ana, California 927024988, and in the case of the Consultant, to the person at the address designated on the execution page of this Agreement. 6.5 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either panty by reason of the authorship of this Agreement or any other rule of construction which might 3 -122 otherwise apply. 6,6 Integration: Amendmen It is understood that there are no oral agreements between the parties hereto affecting this Agreement and this Agreement supersedes and cancels any arrangements, agreements and understandings, if any, between th and all previous negotiations, arrange e parties, and none shall be used to interpret this Agreement. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing. 6.7 Severability. In the event that part of this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceabitity shall not affect any of the remaining portions of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder unless the invalid provision is so material that its invalidity deprives either party of the basic benefit of their bargain orrenders this Agreement meaningless. 6.8 Waiver. No delay or omission in the exercise of any right or remedy by a non - defaulting party on any default shall impair such right or remedy or be construed as a waiver. A party's consent to or approval of any act by the other party requiring the party's consent or approval shall not be deemed to waive or render unnecessary the other party's consent to or approval of any subsequent act. Any waiver by either party of any default must be in writ ng and shall not be a waiver of any other default concerning the same or any other provision of this Agreement. 6.9 Attorneys' Fees If either party to this Agreement is required to initiate or defend or made a party to any action or proceeding in any way connected with this Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney's fees, whether or not the matter proceeds tojudgment. 6,10 Corporate Authority The persons executing this Agreement on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said parlay, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate anyprovision of any other Agreement to which said party is bound, 3 -123 RMITNIsss tha date ru-st w GV'7fF'RRG' , the Pal't'es tIRVO executed 4rd antorLd Into this Agreement as of ,rittcl, above. ATTLS7; IM IA D. RUIZAR CIO Of the COAULGI I APPROVED As TO FORIN/J: SOMA, R. CARVALHO CltyAtEaxney r llip mistalli City Attorliffy SUCCESSORAGENCY DAVID CAVAZO5 City molager co I S-W—T2 i Urban F ps, In Hy' Michael I3usc11 C11 [of Executive Officor Ad&aqs: 3111 M Tqstfll, Salto 230 Orange, CA 92965 3-124 EXHIBIT "A" SCOPE OF SERVICES The specific tasks to be performed and completed by Consultant in performing the financial advisory services are as provided below in this Exhibit "A ". Consultant sha I I complete all services under this Agreement within the Term, as described in Section 5.1. 1. Assist in the selection of appropriate team members, such as underwriter, band counsel, and other members of the financing team (depending on method of sale). 2. If requested, prepare fee comparables necessary to negotiate professional service fees. 3. Coordinate review and approval of financing documents with outside State agencies. 4. Evaluate the financing structure, to include debt service schedules; call features; bond security; flow of funds; sources and uses of funds including costs of issuance; underwriters discount and original issue discount; investment of bond proceeds; and estimated positive and negative cash flow to the Client. 5. Assist client staff, underwriters and other financing team members in working with credit rating agencies and financial 'institutions, and prepare any presentation materials and documentation for rating and credit reviews. 6. Work with client staff, bond counsel, disclosure counsel, underwriters and other participants, to review, prepare and advise on information contained in the preliminary and final official statements, Indenture of Trust, fiscal agent agreement, investment agreements, and other legal and disclosure documents and materials required to facilitate the sale of the bonds. 7. Prepare a pre - pricing book and comparable rates and scales to ensure the client is receiving the best yield in the market. 8. Assist in the final closing of the financing and monitor market conditions including interest rate "spreads" between various tax - exempt and taxable securities, up until the actual marketing and pricing of the bonds. 3 -125 EXI IIBIT'B" _SCHEDULE OF COMPENSATION S 1,000,000 - $ 5,000,000 = $22,500 $ 1,000,000 - $ 5,000,000 = $25,000 S 5,000,000 - $ 10,000,000 = $26,500 $ 5,000,000 - 3 10,000,000 = $31,500 $10,000,000 - $ 15,000,000 = $31,500 $10,000,000 - $ 15,000,000 = $38,000 $15,000,000 - S 20,000,000 = $38,500 $15,000,000 - $ 20,000,000 = $43,500 $20,000,000 - $ 30,000,000 = $45,000 $20,000,000 - $ 30,000,000 = $49,500 $30,000,000 - $ 40,000,000 = $50,500 330,000,000 - $ 40,000,000 = $55,000 $40,000,000 - S 50,000,000 = $55,500 $40,000,000 - $ 50,000,000 = $60,000 $50,000,000 - S 80,000,000 = $60,000 $50,000,000 - $ 60,000,000 = $64,250 $60,000,000 - $ 70,000,000 = $64,000 $60,000,000 - $ 70,000,000 = $68,000 $70,000,000 - $ 80,000,000 = $67,500 $70,000,000 - $ 80,000,000 = $71,500 $80,000,000 - $ 90,000,000 = $72,000 $80,000,000 - $ 00,000,000 = $75,500 $ 90,000,000 - $100,000,000 = $ 75,000 $ 90,000,000 - $100,000,000 = $ 80,000 ' The Fbtai CanaubnVs RepM Off r.0,b6Ufad M ft above Le WwdtA.-. An adAWW $10,004 x# be added 0 h9 fft to caa W* tlsa Fbol Cm bnro Rtpaa Imaimisam $ 1,000,000 - $ 5,000,000 = $22,500 $ 1,000,000 - It 5,000,000 = $30,000 $ 5,000,000 - S 10,000,000 = $26,500 $ 5,000,000 - $ 10,000,000 = $35,000 $10,000,000 - $ 15,000,000 = $31,500 $10,000,000 - $ 15,000,000 = $40,825 $15,000,000 - $ 20,000,000 = $38,500 $15,000,000 - $ 20,000,000 = $45,500 $20,000,000 - $ 30,000,000 = $45,000 $20,000,000 - $ 30,000,000 = $51,250 $ 30,000,000 - $ 40,000,000 = $ 50,500 $ 30,000,000 - $ 40,000,000 = $56,000 $40,000,000 - $ 50,000,000 = $55,500 $40,000,000 - $ 50,000,000 = $61,500 $50,000,000 - $ 60,000,000 = $60,000 $50,000,000 - $ 60,000,000 = $67,000 $ 60,000,000 - $ 70,000,000 = $ 64,000 $ 60,000,000 - $ 70,000,000 = $ 72,000 $70,000,090 - S 80,000,000 = $67,500 $70,000,000 - S 80,000,000 = $78,000 $ 80,000,000 - $ 90,000,000 = $ 72,000 $ 80,000,000 - $ 90,000,000 = $ 83,575 $ 90,000,000 - $100,000,000 = $ 75,000 $ 90,000,000 - $100,000,000 = $ 90,000 r11r1 1f1111 $ 1,000,000 - $ 5,000,000 = $27,250 Enterprise Revenue $10,000 $ 5,000,000 - $ 10,000,000 = $ 33,500 GOtCOP /t ease Revenue $12,500 $10,000,000 - $ 15,000,000 = $ 39,500 Special Tax $15,000 $15,000,000 - S 20,000,000 = $44,500 $ 20,000,000 - $ 30,000,000 = $ 50,500 A $ 30,000,000 - $ 40,000,000 = $ 55,500 $40,000,000 . S 50,000,000 = $60;000 CEO /President $275 $ 50,000,000 - S 60,000,000 = $ 65,000 Managing Principal $250 $60,000,000 - S 70,000,000 = $69,500 Principal $200 $70,000,000 - $ 80,000,000 = $74,000 Associate $125 $ 80,000,000 - S 90,000,000 = $78,000 Analyst $100 $ 90,000,000 - $100,000,000 = $82,500 Administrative Assistant $80 3 -126 AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA AND STIFEL, NICOLAUS & COMPANY, INC. THIS AGREEMENT is made and entered into this _ day of June 2016, by and between Stifel, Nicolaus & Company, Inc. (hereinafter "Consultant "), and the Successor Agency to the Community Redevelopment Agency of the City of Santa Ana, a public body, corporate and politic (hereinafter "Successor Agency ") RECITALS A. The Successor Agency desires to retain a Consultant having special skill and knowledge to perform on -call underwriting services to assist with the normal duties associated with providing unde1writing services on all debt issues, bond issuances, maintenance, and dissolution, and specialized legal counsel related to affordable housing financing, refinancing, tax opinions, and additional legal services related to various questions that may arise from time -to -time on programs, debt or borrowing matters, and general statutory or constitutional law. B. Consultant represents that it is able and willing to provide such services to the Successor Agency. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultaut under this Agreement will be performed in compliance with such standards as may reasonably be expected. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: L SCOPE OF SERVICES Consultant shall provide on -call bond counsel services to assist with the normal duties associated with providing bond counsel services on all debt issues, bond issuances, refinancing, maintenance, and dissolution, and specialized legal counsel related to affordable housing financing, tax opinions, and additional legal services related to various questions that may arise from time -to -tinge on programs, debt or borrowing matters, and general statutory or constitution law. See Exhibit A to this Agreement. 2. COMPENSATION a. Successor Agency agrees to cormpensate Consultant pursuant to the Consultant's Proposal dated November 14, 2014 attached hereto and incorporated herein as Exhibit B to this Agreement. ,t• It. Payment by Successor Agency shrill be made within forty -five (45) clays following receipt and acceptance of an invoice and a detailed time log of work performed. The time log shall individuate the service hours performed by date, deliverable and the name of the individual performed the services. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by Successor Agency. 3. TERM The term of this Agreement shall commence on the date first written above and terminate on December 31, 2017, unless terminated earlier pursuant to Section 12 below. The term of this Agreement may be extended upon a writing executed by both parties, including the City Manager and the Successor Agency Legal Counsel. 4. INDEPENDENT CONTRACTOR Consultant shall, during the entire teen of this Agreement, be construed to be an independent contractor and not an employee of the Successor Agency. This Agreement is not intended nor shall it be construed to create an cnrployer- employee relationship, ajoint venture relationship, or to allow the Successor Agency to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to its employees and shall be responsible for all applicable withholding taxes. 5. INSURANCE Prior to undertaking performance of work Linder this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Errors and Omissions (Professional Liability) Insurance. Consultant shall maintain Errors and Omissions (Professional Liability) insurance which shall include, but not be limited to protection against claims arising from Consultant's operations in the performance of this Agreement. The amounts of insurance shall be not less than the total amount of $1,000,000 per occurrence, $1,000,000 in the aggregate. b. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self - insurance. Prior to cormnencing the performance of the work under this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. 3 -128 c. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: (i) Consultant shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. Certificates of insurance shall be furnished to the Successor Agency upon execution of this Agreement and shall be approved in form by the Successor Agency. (ii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the Successor Agency. d, If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the Successor Agency with required proof that insurance has been procured and is in force and paid for, the Successor Agency shall have the right, at the Successor Agency's election, to terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the Successor Agency for any work performed prior to approval of insurance by the Successor Agency. 6. INDEMNIFICATION Consultant agrees to indemnify and hold Successor Agency harmless from and against any and all third party claims, suits and actions, and all associated damages, settlements, losses, liabilities, costs, and expenses, including without limitation reasonable attorneys' fees, to the extent finally determined to have resulted from Consultant's negligent performance of the services set forth in this Agreement. Notwithstanding the foregoing, nothing herein shall (i) serve to expand Consultant's scope of professional responsibilities as set forth in the laws and canons of ethics, (ii) extend any statute of limitations governing any claim arising from Consultant's acts or omissions, or (iii) waive any claims or defenses that Consultant may have against the Successor Agency or any other party." CONFIDENTIALITY If Consultant received from the Successor Agency information which due to the nature of such information is reasonably understood to be confidential and /or proprietary, Consultant agrees that it shall not use or disclose such infonnation except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other 3 -129 means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant and disclosed without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the Successor Agency. 8. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interest and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 9. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by facsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, California 92702 -1988 Facsimile (714) 647 -6956 Copies to: Successor Agency of the City of Santa Ana Community Development Agency 20 Civic Center Plaza (M -26) P.O. Box '1988 and Santa Ana, California 92701 Facsimile (714) 667 -2225 Successor Agency Legal Counsel City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 -1988 Facsimile (714) 647 -6515 To Consultant: Stifel, Nicolaus & Company, Inc. One Montgomery Street, 37 "' Floor San. Francisco, CA 94104 3 -130 Attn: Jim Cervantes: Cervantes c stifel.com (415) 364 -6837 A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) clays after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 10. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the Successor Agency and Consultant regarding the subject matter herein, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail and will serve to fully supersede existing Agreement. This Agreement may not be modified except by written instrument signed by the Successor Agency and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms or conditions hereof, shall not bind or obligate Consultant nor the Successor Agency. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or other-wise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 11. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the Successor Agency and any such assigmment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the Successor Agency's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by Successor Agency. 12. TERMINATION This Agreement may be terminated by the Successor Agency with or without cause upon thirty (30) days written notice of termination to the Consultant. in such event, Consultant shall be entitled to receive and City shall pay Consultant, compensation for all services rendered prior to the effective date of tennination. 5 3 -131 13. NON DISCRIMINATION Consultant shall not discriminate' because of race, color, creed, relation, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities or any activities under this Agreement. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 14. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 15. PROFESSIONAL LICENSES Consultant shall, throughout the tern of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of tine services hereunder and required by the laws and regulations of the United Sates, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the Successor Agency inumediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. (Signature Page to F'ollowra 3 -132 IN WITNESS WHEREOF, the parties hereto have exeouted this Agreement the date and year first above written. ATTEST: MARIA D. HUILAR Cleric of the Council APPROVED AS TO FORM: Successor Agency Legal Counsel By: Lisa. E. Storck Assistant Counsel SUCCESSOR AGENCY OF THE CITY OF SANTA ANA David Cavazos City Manager CONSULTANT: Stifel, Nicolaus & Company, Inc. Jim Cervantes Managing Director 3 -133 Exhibit A CITY OF SANTA ANA Series 2014 Tax Allocation Refunding Bonds Request for Proposal NOVEMBER 149 2014 JIM CERVANTES IM.ANAGING DIRECTOR (415) 364 -6837 JCERVATES@STI EEL. COM 3 -134 STT FLT 515 S. Figueroa Street, 18 "' Floor, Los Angeles, CA 90071 November 14, 2014 . Michael Busch, Chief Executive Officer Urban Futures Inc. 3111 N. Tustin, Suite 230 Orange, CA 92865 Re: Request for Proposal – City of Santa Ana Series 2014 Tax Allocation Refunding Bonds Dear Mike, On behalf of Stifel, Nicotaus & Company, Inc,, thank you for the opportunity to present our credentials to serve the Successor Agency to the City of Santa Ana Community Development Agency as underwriter for the proposed refunding of the 2003 Series A &B Tax Allocation Bonds. Although not a household name, Stifel is the leader in California municipal finance, drawing on the legacies of two well - established predecessor firms —Stone & Youngberg, acquired in 2011, and De La Rosa & Co., acquired earlier this year. With regards to the Agency's financing program, Stifel's position in the California market is distinctive for a number of reasons: We I{now the Credit Story. Through our earlier work on the Community Development Agency's 2011 Bonds, we are familiar with the Merged Project Area. We toured through the entire Project Area as part of our due diligence process, reviewed the interrelationship between the Component Project Areas and examined much of the underlying documentation and agreements involving the Agency. Like many redevelopment credits, Santa Ana's Merged Project is not a cookie- cutter credit. We understand the nuance of the story and can explain it to credit analysts and 'investors. We Also Know Santa Ana Community and the Area. Stifel has a strong presence in California and experience in selling bonds for issuers with the "Santa Ana" name. In addition to the Community Development Agency's 2011 Bonds and this summer's Water Revenue Bonds, we have underwritten bonds for the Santa Ana Unified School District, Our lead banker believes in the strength of the community and owns SAUSD bonds, being precluded from buying the City's issues. Further, we are active in marketing bonds for neighboring issuers throughout Orange County. With a Los Angeles based underwriting desk, we understand the contours of the local economy and the City's leading role in Orange County and the entire region. We helped craft the City's story last summer as a part of the Water Bands financing and are well positioned to expand on that story with this financing. Stifel is the Dominant California Local Public Firm. In combining two of the most active municipal underwriting fimns in California, Stifel brings together bankers, salespeople and underwriters with more collective experience underwriting California issues than any other firm. According to the Securities Data Corporation, Stifel and its predecessor components rank as the top underwriter of California municipal bonds by number of issues over the past five years, having sole or lead managed over 1,232 financings totaling nearly $37 billion. We know the market for California bonds. Top Underwriter of Post - Dissolution Tax Allocation Bonds Both Stone & Youngberg and De La Rosa & Co. were long- standing stalwarts in the redevelopment sector prior to dissolution. Post dissolution, we have structured, priced, and sold 52 California Tax Allocation Bonds ( "TABs ") financings totaling over $L6 billion in par, including 47 senior or sole- managed issues totaling over $l.5 billion. By virtue of this track record, Stifel has cultivated an expansive network of institutional investors, asset managers and individual retail investors who understand redevelopment credits and participate actively in this sector. The tatter two investor categories should be of particular interest to the Agency, as both will be critical for your proposed Financing. 3 -135 STIFEL Our Involvement with Redevelopment Goes Beyond Bond Sales. Beyond our work in financing redevelopment, we worked over the years to support our public agency clients in this area as long -time supporter of the California Redevelopment Association. At the CRA's request, we analyzed alternatives to backstop their negotiations with the Governor's Office in 2011 in an effort to head off the Redevelopment Dissolution Act. We worked with the League of Cities in early 2012 as a part of their team meeting with the Department of Finance in an effort to delay the implementation of the State Supreme Court's ruling. Our lead banker proffered language to the DOF that allowed for the refunding of redevelopment bonds, which was included in AB 1484. Since then, we have coordinated meetings with DOF staff and major institutional investors in an effort to resolve residual Dissolution Act issues and have proposed legislative language to resolve the tax increment cap problem, Of interest to the Agency, through the California Public Securities Association, our lead banker went on record supporting the effort to allow for the use of 2011 bond proceeds by successor agencies. Our commitment to clients goes beyond selling their bonds. We have worked for years to support their policy objectives and the organizations representing California local government. Stifel has earned a reputation for honest, thoughtful, energetic service to our clients. We are pleased to present our qualifications and look forward to earning this business. S incerely, r - � . James Cervantes Managing Director Raul Amezeu t Managing Director 3 -136 PROPOSAL. TABLE OF CONTENTS Finninformation ........................................................................................... ............................... I a. Finance Team ............................ ......................... ............................... . .............................. I b. TAB Market Leader .............. .... ............... ............................... ........................... ........ ...... I e, 2014 Stifel TAB Spreads .................................................................... ..............................2 d. Marketing and Distribution Capabilities............................................ ..............................2 e. Recent Experience .............................................................................. ..............................4 f- h.Conllicts of Interest and Additional Disclosure ................................. ..............................4 It. Financing, Credit and Marketing Approach..... ........................ ............. ........... -- ......... ....... 5 a. Savings Analysis ................................................................................ ..............................5 b. Financing and Credit Approach .......................................................... ..............................5 c. Credit Presentation ............................................................................. ..............................7 Appendix A: 2014 Stifel Tax Allocation Bond Spreads to MMD Appendix B: Successor Agency to the City of Burbank RDA Credit Rating Presentation Disclosure: As outlined in the SEC's Municipal Advisor Rule, Stifel, Nicnlaus & Company, Incorporated t "Stit'el') is providing the attached material and all intramntion and advice contained therein in response to a request for proposals or request I'or qualifications (the "R,FP ") by a municipal issuer at obligated person with respect to a specific issue of municipal securities. Stile[ has not acted, and will not act, as your municipal advisor with respect to die issuance of the municipal securities that is the subject to the REP. Stirel Is providing information and is declaring to die proposed municipal issuer and any obligated person that it has done so within the regulatory framework of NISRB Rule G -23 as rte undawriler (by definition also including the tale of placement agent) and not as a in anciai adviser, as defined therein, with respect to the referenced proposed issuance of municipal securities. 'rhe primary role of Stifel, as an underwriter, is to purchase securities for resale to investors in an amt's- length commercial transaction. Serving in the role of underwriter, Stifel has financial and other interests that dia'ei [iron those of Ate issuer, The issuer should consult with its' own financial and/iii nmunicipal, legal, accounting, tax and other advisors, as applicable, to the extant it deenhs appropriate. These materials have been prepared by Stifel for the client or potential client to whom such materials are directly addressed and delivered for discussion purposes only. All terns raid conditions are subject in further discussion aid negotapion. Stiref does not express any view as to whether financing options presented at those materials are achievable or will be available at the [line or any contemplated transaction. Tlhcse materials do not constitute ah offer or solicitation to sell or purchase any securities and are not it commiuneuf by Stifel to provide or arrange any financing for any transaction or to purchase any security in connection therewith and may rat relied upon as an indication tat such an offer will be provided in the future. where indicated, this presentation may contain hrfonnation derived floor sources other than Stirel. While we believe such information to be accurate and complete, Stifel does not guarantee the accurrcy of this information. This material is based on ialonnation currently available to Stifel or its sources and is subject to change without notice. Stifel does not provide accounting, tax in legal advice; however, you should be aware that any proposed indicative transaction could have accounting, tax, legal or other implications that should be discussed with youadvisors and /or counsel as you deem appropriate. CITY OF SANTA ANA 3-137 1. FIRM INFORMATION A. Pittance Team List the individuals who rvoedd work on the proposed financing. Include the role, responsibilities, relevant experience, and contact information for each individual, ,Iim Cervantes will serve as the firm's team leader with back-up from Raul Amezeua. Jim is based in our San Francisco office and will work closely with Rant in our Los Angeles office to ensure depth of coverage and the attention of senior bankers at all times. Both Jim and Raul have extensive experience in redevelopment and working with all types of California local government issuers. Vince Lazalde will provide credit and analytical support. Ben Stern will serve as the lead underwriter for the sale from our Los Angeles underwriting desk, with assistance from Betsy Kiehn in San Francisco. Ben has had a role in most of the California underwritings the firm has brought to market in the last several years. Together, Ben and Betsy make commitments for the firm on nearly 200 new issues totaling more than $3.5 billion each year. Jim Cervantes Jim Cervantes is a Managing Director in the San Francisco Public Finance office of Stifel. Jim joined Stone & Managing Director Youngberg in 1986 and Stifel with its acquisition of Stone S Youngberg in 201 L He has helped to raise over $6 Lead Banker billion of capital for California's cities, counties, redevelopment authorities, water and wastewater districts, and non- profit borrowers. Jim earned a Bachelor of Arts degree from Harvard University and a Master of Business i Administration from Stanford. He currently chairs the California Public Securities Association, the organization (415) 364-6837 I representing California's municipal bond broker dealers and has worked extensively in the past with the League ' srbstifeLcam Lof Cdhes and California Redevelopment Association. • Rancho Mirage RDA Successor Agency, Whitewater Sub-Area, $10,470,000 • Rancho Mirage RDA Successor Agency, Northside Sub -Area, $16,570,000 • Rancho Mirage RDA Successor Agency, Housing Set - Aside, $23,330,000 • Brea RDA Successor Agency, Series A, $96,620,000 • Richmond RDA Successor Agency, Series A (Tax - exempt), $25,795,000 • Richmond RDA Successor Agency, Series B (Taxable), $1,655,000 • Riverside RDA Successor Agency, Series A (Tax - exempt), $61,230,000 Raul Amezeun Raul Amezeuajoined Stifel in 2014 as the head of California Public Finance following more than a decade at De Nla aging Director La Rosa & Co. Prior to joining De La Rosa & Co., he spent 12 years with New York -based investment banks. Co Lead Banker During 23 years in California public finance, he has completer) well over 100 senior- managed debt financings with an aggregate par value exceeding $22 billion. Raul has served on the board of the PULNTE Learning Center since 2001, still recently commenced his fifth year as Chairman of the Board He received an MBA from (213) 443 -5202 1. the Anderson School of Business at UCLA in 1991, and a Bachelor's degree in finance from USC in 1987, ramezcua(�iistifel.com ,•` ""` " ".` "t' " " „ °`. • Los Angeles County Pool Program, Series 2013A -F, $145mm Los Angeles County Pool Program, Series 2014A -B, S37to n Riverside County RDA Successor Agency, Series 2014A, D&E, $64mm ! • Riverside City RDA Successor Agency, Series 2014A -B, $63mm li • Los Angeles County Pool Program, Series 2014C -D, $171 turn • Otange_Comnty RDA Successor Agency, Series 2014A, S29mm Vince Lmakte ! Vince Lazalde is an Associate in Stifel's Los Angeles office. As a member of the firm's local government Associate practice, Vince has executed tease revenue, utility revenue, special tare (community facilities district) and tax increment financings for cities across the state including Azusa, Beverly Hills, Commerce, Indio, Long Beach. Analytical Support . Norwalk, and Palm Springs. In addition, Vince also works with high profile revenue bond issuers including Los Angeles World Airports and California State University, the State of California and the State of Hawaii. Vince (213) 443 5207 has a Bachelor of Science degree in Public Policy, Urban Planning and Development and most recently received vlazaldc(n).stifel com an MBA from USC's Marshall School of Business in 2011. Vince holds the Series 52 and 63 licenses. ! Coachella RDA Successor Agency, Series 2013, Plant • Azusa RDA Successor Agency, Series 2014, $ I Onun Coachella RDA Successor ,Agency, Series 2014, $Sam • Burbank RDA Successor Agency, Series 2014, $45nun (pending ) ___ B. TAB Market Lender Describe ynnrJinu's eepertence as sc+nior manager �adanrritw• of ins nllocatiorl bonds financings bn California .since Jarurary 1, 2011 CITY Oa SANTA ANA Page Leader in California Redevelopment Finance. Stifel's bankers, underwriters and sales professionals have a long history of structuring, marketing and selling more California tax allocation bonds ( "TABS ") than any other firm. Stifel's predecessor firms, Stone & Youngberg (acquired in 20 t 1) and De La Rosa & Co. (acquired in 2014), each ranked among the top two Firms underwriting California redevelopment bonds in the years prior to dissolution, Post - dissolution, Stifel has continued to build on this experience and now, as a combined entity, remains the most active underwriter of post - dissolution tax - exempt and taxable California TABS. The graph to the tight illustrates the firm's dominance of this market with 47 senior - managed transactions totaling $1.48 billion, Stifel's 47 senior - managed issues represent almost 57% of the $2,6 billion in par issued since AB 1484 was passed. Stifel has been particularly active locally in Southern California having underwritten post dissolution tax allocation refunding bonds for successor agencies in Azusa, Brea, Carson, Coachella, Irwindale, Rancho Mirage, Rialto, Riverside, and Walnut as well as for the counties of Los Angeles, Orange and Riverside, Forward Calendar. Stifel is actively engaged on 17 financings, representing more than $1,1 billion, expected to come to market by early 2015. A list of these transactions is presented to Fit light Please note that many of these are interest rate sensitive of have legal or structuring challenges that may alter the schedule. We believe that Stifel's forward calendar is a strong advantage Qt 2015 Debuo SuccessurAgeney, 13,000.,70 to the Agency's proposed transaction. Because our sales people 2015 CulverCily SuccesanrAgeney 90.00kow and underwriters will be speaking to credit analysts and 2015 IndusirySucemsorAgency 5rroain10co 2015 Arcadia Suceessor Agency 0.050so portfolio manager's every week on similar credits, we will have 2015 Lt County Redev. Re&Authorky(MUkipk) 130,00000, their attention and can push them to review the Agency's -rhat tending TAD Volume 51,079,920,000 Bonds. Despite what seems like a busy calendar, there is still Total Pendng TAD Transactions 17 significant pent up demand from investors — both retail and institutional. °rhe reality is that most of the supply that has come over the past year has been refundings. The result is net negative issuance. In other words, the supply is not really creating much new municipal debt to meet the inflows into the bond funds. Consequently, most of the bond funds and a large number of our individual retail investors are sitting with uninvested cash.. C. 2014 Stifel7AB bVpreads Provide a listing 9f Tay. flilocation Bonds issued in 2014 herd include the sproad to MMl7 for each transaction. A listing of our 2014 transactions with spreads to MMD is shown in Appendix A. D. Harketing and Distribution Capabilities lndi de a el"cripthnr ofyourjinn's marketing and distribution capabilities. Sales & D!StributIOD Capabilities. Stifel has one of the most comprehensive, most balanced municipal distribution platforms in the industry. Our platform includes our own network of Private Client sales professionals located in California and other parts of the county and a large team of institutional sales professionals located in all the major financial hubs. The two groups, working almost in competition to place the bonds the firm originates, allow Stifel to employ an exhaustive approach to marketing municipal issues, For our issuer clients, Stifel's distribution network -- combined with the firm's frequency in underwriting California municipal bonds— provides insight on market conditions generally, intelligence regarding specific sector developments that are unique to an individual credit type, and an understanding of shifting institutional investment strategies. `File graphic and paragraphs below summarize the two main parts of our distribution platform as they relate to the sale and distribution of the Agency's Bonds, CITY OF SANTA ANA 3 —1 39 Page 2 Top 5 Underwriters of Post- Dissohtdon TADS Ranked by Par Amount $1,606 47 $1,400 Qmnge(Cay of) SuccessorAgency $1}00 of 2014 $ sl,006 45,000,000 5 $$no nuibankSuccessorAgency 86W 042014 $40 a z to 4 a7a6 Huntington Pa&SursussorAgency so — lughlind SuecessarAgeney SWO sambwen aamluys Cid Mmgon.similey We believe that Stifel's forward calendar is a strong advantage Qt 2015 Debuo SuccessurAgeney, 13,000.,70 to the Agency's proposed transaction. Because our sales people 2015 CulverCily SuccesanrAgeney 90.00kow and underwriters will be speaking to credit analysts and 2015 IndusirySucemsorAgency 5rroain10co 2015 Arcadia Suceessor Agency 0.050so portfolio manager's every week on similar credits, we will have 2015 Lt County Redev. Re&Authorky(MUkipk) 130,00000, their attention and can push them to review the Agency's -rhat tending TAD Volume 51,079,920,000 Bonds. Despite what seems like a busy calendar, there is still Total Pendng TAD Transactions 17 significant pent up demand from investors — both retail and institutional. °rhe reality is that most of the supply that has come over the past year has been refundings. The result is net negative issuance. In other words, the supply is not really creating much new municipal debt to meet the inflows into the bond funds. Consequently, most of the bond funds and a large number of our individual retail investors are sitting with uninvested cash.. C. 2014 Stifel7AB bVpreads Provide a listing 9f Tay. flilocation Bonds issued in 2014 herd include the sproad to MMl7 for each transaction. A listing of our 2014 transactions with spreads to MMD is shown in Appendix A. D. Harketing and Distribution Capabilities lndi de a el"cripthnr ofyourjinn's marketing and distribution capabilities. Sales & D!StributIOD Capabilities. Stifel has one of the most comprehensive, most balanced municipal distribution platforms in the industry. Our platform includes our own network of Private Client sales professionals located in California and other parts of the county and a large team of institutional sales professionals located in all the major financial hubs. The two groups, working almost in competition to place the bonds the firm originates, allow Stifel to employ an exhaustive approach to marketing municipal issues, For our issuer clients, Stifel's distribution network -- combined with the firm's frequency in underwriting California municipal bonds— provides insight on market conditions generally, intelligence regarding specific sector developments that are unique to an individual credit type, and an understanding of shifting institutional investment strategies. `File graphic and paragraphs below summarize the two main parts of our distribution platform as they relate to the sale and distribution of the Agency's Bonds, CITY OF SANTA ANA 3 —1 39 Page 2 Q42014 Qmnge(Cay of) SuccessorAgency $70,000,000 of 2014 Suisun City: Successor Agency 45,000,000 Q42014 nuibankSuccessorAgency 45,000,000 042014 Anesie SuccessorAgcay 11,945,000 04.20144 Huntington Pa&SursussorAgency 3500.000 Q42014 lughlind SuecessarAgeney 30,000,IXq Q42014 Calexico Succmar Agency 17,006,00 Q42014 South take Tothoe, SuceessorAgency 70,000.000 Q12014 LA County Rider'. Ref. Aut7rarRy(Coline) &30,00 of 2015 LA County Redev. Ref. Authnnty (lanca ;ter) 19A75,00 012015 Coherence Successorhgetmy 52,0X00 Q12015 Vern Connunity Dewlapnent COtuilesan 27,900,(X0 We believe that Stifel's forward calendar is a strong advantage Qt 2015 Debuo SuccessurAgeney, 13,000.,70 to the Agency's proposed transaction. Because our sales people 2015 CulverCily SuccesanrAgeney 90.00kow and underwriters will be speaking to credit analysts and 2015 IndusirySucemsorAgency 5rroain10co 2015 Arcadia Suceessor Agency 0.050so portfolio manager's every week on similar credits, we will have 2015 Lt County Redev. Re&Authorky(MUkipk) 130,00000, their attention and can push them to review the Agency's -rhat tending TAD Volume 51,079,920,000 Bonds. Despite what seems like a busy calendar, there is still Total Pendng TAD Transactions 17 significant pent up demand from investors — both retail and institutional. °rhe reality is that most of the supply that has come over the past year has been refundings. The result is net negative issuance. In other words, the supply is not really creating much new municipal debt to meet the inflows into the bond funds. Consequently, most of the bond funds and a large number of our individual retail investors are sitting with uninvested cash.. C. 2014 Stifel7AB bVpreads Provide a listing 9f Tay. flilocation Bonds issued in 2014 herd include the sproad to MMl7 for each transaction. A listing of our 2014 transactions with spreads to MMD is shown in Appendix A. D. Harketing and Distribution Capabilities lndi de a el"cripthnr ofyourjinn's marketing and distribution capabilities. Sales & D!StributIOD Capabilities. Stifel has one of the most comprehensive, most balanced municipal distribution platforms in the industry. Our platform includes our own network of Private Client sales professionals located in California and other parts of the county and a large team of institutional sales professionals located in all the major financial hubs. The two groups, working almost in competition to place the bonds the firm originates, allow Stifel to employ an exhaustive approach to marketing municipal issues, For our issuer clients, Stifel's distribution network -- combined with the firm's frequency in underwriting California municipal bonds— provides insight on market conditions generally, intelligence regarding specific sector developments that are unique to an individual credit type, and an understanding of shifting institutional investment strategies. `File graphic and paragraphs below summarize the two main parts of our distribution platform as they relate to the sale and distribution of the Agency's Bonds, CITY OF SANTA ANA 3 —1 39 Page 2 Retail lavesunent Executives: Over 2,UUU Institutional Fixed Intone Over 50 Sates & Tmding Professionals: National $roketage Offices: Over 700 Calilomia Retail Offices: 34 California Retail Executives: Over 200 Target Audience for the Agency's Bonds. As the Agency's sole /senior - managing underwriter, Stifel would target three distinct audiences of investors: These audiences tend to be interested in different types of couponing /dollar price structures. Specifically, individual investors beyond ten years tend to buy bonds with slight discount coupons (coupon lower than yield), which generates a dollar price below par. Institutions and larger investment advisors tend to require 5% coupons, which they believe perform better in a rising interest rate environment. These 5% coupons result in pricing of the bonds above par. Assuming the Bonds are structured with a 10 -year par 1.o call, incorporating some discount maturities will result in lower yields to maturity and present a lower true interest cost for the Agency. We think the best way to accomplish the result the Agency most wants is to incorporate in the Bonds' interest rate scale a variety of couponing structures along the yield curve and target those audiences in the maturities that most attract them. To elaborate, please consider the following. Retail Investors. Stifel's retail advantage is derived from the firm's network of over 220 California Private Client Group sales executives who manage more than 69,000 individual retail accounts, most of which are for high net -worth California residents. As noted in the adjacent graphic, these professionals are located in 34 offices throughout the State and have clients throughout California. slim calsomla offices m.a< ... ....... Dl L • lc,uA Ilun,A U(fi,< a N14.1 `nmac Vitiu< Stifel has cultivated a network of individual investors who understand redevelopment credits. Over 60 of these individuals currently own the Agency's 2003 and 2011 Bonds, which are domiciled in Stifel's system. These sophisticated individual investors have remained active in recent post - dissolution underwritings — for example, last month's $1.09 million Emeryville RDA sale of its "A +" credit garnered over $27 million in orders from individual retail investors and small money managers or family offices. We would expect the strongest retail interest in the maturities through about five years, and then at spots along the yield curve in later years. Separately Managed Accounts. In addition to the professional retail accounts referenced above, our institutional sales staff covers larger financial institutions that invest funds on behalf of high net worth accounts. 'Phis buyer class, represented by firms like BlaekRock, Columbia Asset Management and Franklin is capable of putting in orders for strings of maturities and create significant momentum in a pricing. These accounts generally have dedicated municipal analysts reviewing credits, often tatting an independent view On bonds relative to the rating agencies. Investment Advisors and Bond Funds. The next audience that we would target for the Agency's Bonds are institution-like investment advisors and top tier and second -tier bond funds. Institutional participation will serve to augment the orders of retail investors and provide anchor orders in the middle and longer maturities. Some of the targets that we have ue familiar names —like Nuveen for its separate managed accounts, Schwab, Prudential, Franklin CITY OF SANTA ANA 3 -140 Pate 3 and Wells Fargo. Other targets are less familiar but have recently had an insatiable appetite for refunding TABS. Included in this list are Belle Raven, Bel Air, Enterprise Trust, Payden & Rygel, Thornburg and Waddell & Reed. The case shiny below is indicative of Stifel's pledge to personalized service that helps us to meet the ever changing needs of our clients. Case Study: Richmond Successor Agency (Sale Date: 3127(2014) Background: In August 2013, the Successor Agency to the Richmond Community Redevelopment Agency attempted to come to market with a $34 million tax - exempt and taxable refunding program. Unfortunately, despite an "A-" underlying rating and BAM insurance, Richmond's underwriter —a major investment bank -- reported that they were unable to sell any bonds during the order period due to investor concerns relating to the City's "Richmond Cares" program. "Richmond Cares" represented the City's effort to assist homeowners with "underwater mortgages" through the write -down of existing mortgages and the potential use of eminent domain. Challenge: Stifel's banking team approached the City a few weeks after the failed pricing to present our analysis of the credit and a marketing strategy. We stated our belief that the bonds could be sold, but with a possible premium to compensate for the "headline risk." The City considered our offer and asked. Stifel to bring the refunding bonds to market. As the pricing date approached, our banking team prepared an internal briefing book for our sales team and set up a series of meetings with both our institutional and San Francisco retail sales staff. We explained the Richmond Cares program, its de rniniinus impact on the 'financing and other credit features. By the time we priced, our sales staff was fully versed on the credit and engaged in a full -on marketing effort. Results: Our pre - marketing efforts paid off dramatically for the Successor Agency, Nearly 30 institutions were engaged in reviewing the credit. Ultimately, 13 institutions placed orders for the bonds, representing a very broad cross - section of buyers for a successor agency credit of this size. Further, we received over $1.6 million of orders from our retail sales force. In total, we received $183 million of orders for $27.6 million of par, an oversubscription rate that allowed our underwriter to reduce yields by 12 -15 basis points. In contrast with the prior failed attempt, the Successor Agency was able to realize over $2.6 million in NPV savings. Our bonds priced at levels approximating the higher rated Lafayette Successor Agency refunding ( "A" underlying, Assured Guaranty insured). In short, our sales effort succeeded in overcoming the headline risk that had stymied the 'initial effort to execute the refunding. E. Recent Experience Discuss your firm is recent extrerience with a si nilar,slzm and scope transaction and yyourfirn 's e.eperienee with the City of Santa Ana, including . participation on prior bond transactions or other activities. Stifel has significant experience working with the City. Most recently Stifel served as sole senior manager on the $15.7 million Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 which financed system improvements and 'refunded prior obligations. In 2011, the firm served as the underwriters on the Community Redevelopment Agency's $66.8 million 2011A Tax Allocation Bonds, Prior to this transaction, Stifel's predecessor turn, De La Rosa, sole managed the City's $68.01 million 2007 Gas Tax Revenue Certificates of Participation. Aside from bringing to market the City's two most recent bond issues, both Stifel and Do La Rosa have provided the City with multiple refunding updates and new money structuring ideas for the City throughout the years. F. -13. Conflicts of Interest and Additional Disclosure ,l) Please list any potential conflicts of interestyourflnn may have in aching as undarwriterfbr the Cth+. Stifel is currently unaware of any client or other relationship it has with any public or private entity which could be viewed as a definite or potential conflict of interest if Stifel was selected to serve as underwriter. g) Has your finn andlor any of its principals ever been subject of any investigation relating to the naaicipal indushy by the SEC, NASD, NYSE or any other State or Federal organization that oversm regulates, licenses ar is oiliamise responsiblefor the rmnnicipal industry? In the normal course of business, at any given time, Stifel is subject to a number of claims and disputes, as well as regulatory matters including examinations, reviews, investigations, or formal actions. Given our limited space for a response, we are unable to disclose all litigation and regulatory matters. We note that all required disclosures of material litigation and regulatory matter are made with the SEC and other regulatory authorities and thus, are publicly available, In any event, the outstanding legal and regulatory inquiries will not impair our team's ability to underwrite the Agency's Bards. h) Has yourfinn andlor any of its principals ever been involved in any irrigation, arbitration, disciplinary to other actions arising from the finn underwriting, management or handling gfmunicipat securities? Please see our response to the previous question. CITY OF SANTA ANA Page 4 3 -141 II. FINANCING, CREDIT AND MARKETING APPROACH A. Savings Analysis Present a.retvings analysis fir reftn iding the ontsianding bonds through a negotiated bond safe, Refunding Summary. As discussed below, we believe the refunding program may garner an "AA -" rating. We have therefore presented a pair of refunding analyses reflecting an "A" rated base case (corresponding to the rating of the 2011 Bonds) with bond insurance and a reserve surety, and the "AA-" upgrade scenario. The table below suumarizes these outcomes: "A" Rated $158396 $2,27355 7.96% Yes Yes lime 015tucd savings "AA =" Rated $187,715 $2,681,168 9.58% No Yes Level Savutgs As an alternative, the Agency can pursue an "upfront" savings structure to increase cash flow directed to the taxing entities in the near term. In this scenario, the refunding would demonstrate approximately $2.3 million of savings through 2017, thereafter cash flow savings would be minimal, 2015: $1587,616 W' Raced 2016: 5628:105 Up6ont Insured 2017: 575,905 78:191 814% Yes Yes SaveWn 2018 -2031: $3,206 2015: 5060.483 7016. $637,505 Uprmnt "AA,'yintoS 20 17: 8320,305 V.691 -150 9.62 ^% No Yes avor gs S 2018 -2031: 91206 J.00f6 9.154: a949i 4.9Md 0.1Cfl6 0.3496 toll 035% 063% 44ffll 0.12 n U3�6 4,043°6 035% oar. -W. 035% 07r, 5S000 0.30% um SVs 0.lsl' Les's sip. 0.32% tAr. 3.w% 0209. 135% 9.694 033?+ 151011. 519s U' 6 1.664: iW9: 040% 214% S.W; 11251. 1936. JIM Sofia, 040% 43 % 5A0'A' a3twb IM 9.11 04tes 24794 5.0696 om 231% 5.WP6 045% ikl% sm 615% 25:6 JIM 5b7,. 09096 278% 3_oas, 09W5 26". 5A0°m 0-55% 293% s.IX OS5% 2&1% 5m ow0 3p59. S.Ovs om& Z'u% sms 055% 3.1596 S.wf USSva 3.0.5% 5.wi 0.70',6 3.'596 5tll UMP= mss. IBM 3.0: 070% 330% SWIs 06(i'l- 3?096 smq 0.7U,, 335'6 sms A5094 3'5 °'e PWmvr nulu: RuIYmAlnprvsWluvu M�xl ml:nlW Iwol1111 $Rllly wltlah,,, la all 'AM " un "ilttinsrinh,nenng,reaa nun Ixwmhtmnwan nL MAll �Nn6'Y, eon snnlelnam loons. RvGn ?inn Mntlyawmmannmltlaicn a Aanala 014rsl f3W2n I5. All ni ax0 mm�M+xurc ... llmumry mA.,biwl,o dmnye. The table to the right contains the scale used to reach these savings figures. A Finmrcing and CG'edit Approacli Oattine your financing and credit approach as well as your rnarketing streliegy for the City's proposed financing in it of VilllVot market conditions. Stifel's financing and credit approach is geared toward developing the most efficient financing structure possible thereby enabling the Agency to capture the lowest borrowing cost possible. To this end, we have developed the following ideas regarding the financing program: Getting the Financing Structure Right. In our review, under the bond documents and AB 1484 we believe the Agency has three theoretical options in structuring the refunding of the 2003 Bonds -1) a refunding on the same basis as the existing bonds, 2) a subordinate pledge after the 20 t 1 Bonds, utilizing the RPTTF and 3) a parity pledge to the 2011. We recommend the Agency choose the last option for the following reasons: Rr funding oil the same basis as the 2003 Bonds — Based on our reading of the 2011 Bond documents, this approach was closed off when that latter issue was sold. As a practical matter, this approach would continue the already complex current structure, maintaining the 2011 Bonds' subordinate claim on the South Main Component. Refunding on a subordinate basis to the 2011 Bonds — We have utilized this approach in a number of transactions to take advantage of the pledge of revenues into the RPTTF allowed under AB 1.484, This allows for a de facto merger of project areas, a strategy the Riverside utilized to achieve a higher rating ( "AA - ") for its subordinate bonds than its senior bonds. In Santa Ana's case, however, the original project areas are already merged, which eliminates much of the upside of this approach. Parity pledge to the 2011 Bonds — We recommend this approach as our Goldilocks strategy —"just right" for the Agency, With this, the refunding captures a first lien on all of the Merged Project, losing the senior claim on the South Main Project, but picking up a claim on all the other components. Further, as discussed below, coverage will be enhanced with the elimination of the Housing Set - Aside. With a simpler, more compelling story, we will argue with Standard & Poor's that the appropriate rating for the 2011/2015 Bonds should be "AA - ", rather than the current "A" CITY OR SANTA ANA 3 -142 Page 5 rating on the 2011 Bonds, As noted earlier, this upgrade will produce a meaningful increase in savings for the Agency and another feather in flee City's cap after the success of last summer's Water Revenue refinancing. Financing Considerations. Following the approach outlined above, we believe the Agency will offer a more compelling package for rating analysts and investors relative to the 2011 Bonds. The following summarizes our rationale: 4i1hy the Elimination of the Housing Set -Aside Matters — The Dissolution Act eliminated the Housing Set -Aside requirement and the Department of Finance has been dogged in enforcing this part of the statute. We reviewed a number of the DOF's ROP's letters relating to the Agency and all note the denial of costs related to the Settlement Agreements (and litigation expenses, unfortunately). We understand that the parties to the Agency's Settlement Agreements sued the Agency and the DOF on this point and that the State has prevailed in two of the three suits. While we are not sure of the final disposition of the third lawsuit, we think the planti£f s clahn would likely become characterized as another "enforceable obligation ", not "Rousing Set - Aside ". All this matters because the "Tax Revenues" securing the 2011 Bonds and any parity bonds are net of amounts "which are required to be deposited into the Low and Moderate Income Housing Fund... pursuant to the Redevelopment Law and the Settlement Agreements ". In Santa Ana's case, the housing deposits exceeded the typical 20% requirement meaning that the increase in "Tax Revenues" for the bond pledge will be significant. Tax Increment Caps — In 2011, the finance team spent a good deal of tune on plan limitation issues and cumulative tax increment caps. Unfortunately, the Dissolution Act did not explicitly eliminate this feature of the Redevelopment Code and we have proposed language to the DOF to fix this problem. Until the DOF decides to act, this disclosure issue remains. However with the reduction in farads allocated to the Agency, we believe an argument exists that the impact of these limits on Inter - City, North harbor Boulevard, South Main and Bristol Corridor are effectively moot. Superior Coverage — Under our proposed approach, the 2011/2015 Bonds will demonstrate 69,450 significant debt service coverage as summarized in 750 the table to the right: 8,736 2,081 Finding of Completion, Incomplete — We note from 57,892 our review of the DOF website that the Agency has VAT 11 noneonon, not yet received its Finding of Completion. While 7.53x this milestone is helpful in simplifying the 13.266 disclosure process —and S &P and some investor 436x (I) Dffin dafvad rmm Orioles report oC2014t13 assessed vntues multiplied by l% analysts will ask about this topic —we have found (2) estimate acing ln,1.1 eel.luted from ToW 6 efthe Awcey's 2013 Continuing Dedosure 2ep.n. that a Cleat' explanation can help with this matter. (3) Estimate per footnote (2). Moybesubordfnuted. The Richmond Successor Agency, for example, had (4)C ... buted 2011 [leads and totunaed 2013 lrefimding Bonds debt service, not yet obtained its Finding of Completion when we ( 1)@ mbined2011Bonds end estimated2015RefatuurgD ondsmuxunmmnnnnanl debt ervice. brought their bonds to market earlier this year. We talked with Richmond staff who explained the status of their work and that the DOF had been approving the relevant items on the RODS. This explanation satisfied the credit analysts. In Santa Ana's case, we understand that the hold -up relates to moneys gathered pursuant to the Settlement Agreements. As this litigation moves to resolution, this matter will also likely move toward resolution. In any case, the contested funds do not represent security for the Bonds. We do not see this as a credit issue. Why We Think Santa Ana Redevelopment is a Great Credit. As noted above, we believe n parity issue with the 2011 Bonds should achieve an "AA" 'A" -AV' "AA-" category rating —the highest realistic rating for a 4 89 xIf' 16297 successor agency credit. We say this with 46.945 53373 s10,061 confidence based on our work with other top tier E-1 19.5% 90. 40.0^4 redevelopment credits and noting the Merged 739x4366 2,24x 2, 77x Project's significant size, moderate base year value t. -, -4 17,3 1. 169% 16 -6 and tax payer diversity. Further, the Santa Ana 3 story is a credit positive - -a central Orange County a_rr� 67° ° hull), steady growth In eCO170tnrC health and a 9UigC ¢, Comnu.r LA516% � 3 rndtutml: 327 n Como real 389% htdu vat 274. Conuv n.al: l_'.ft',b lmiusnal. RIP% of property values back to peak re- Recesston 1 1 y p p `' ad -b ft �ilentuil 15 7% Rua &dental II I% Rv kfentmk 44.1% levels with 2014 /15 reported values. The adjacent senroa: urbfas, omemt%Wouni, CITY OF SANTA ANA 3 -143 Pn [le 6 table makes a comparison to two other recent Southern California "AA -" rated successor agency credits. We think Santa Ana stacks up well in this comparison. Implementing the Marketing Program. Given the audiences we have identified for the Agency's Bonds in Section 1- D, the following concrete steps represent our approach in spreading the credit story: Early Dissemination of POS. In order to ensure adequate time and attention to the Agency's credit, we recommend distributing the Preliminary Official Statement at leas[ 10 days prior to pr clog. This will allow investors to digest the Fiscal Consultant Report and enable our sales staff to spend more time with their accounts. Internal Education and "Teach In ". On a number of successor agency credits, in particular issues targeting the retail sector, we have found organizing an internal briefing for our sales team connecting our bankers with our California brokers to be an effective approach. We will likely follow up with one -on -one sessions with key sales persons. This approach is modeled on the Richmond pre - marketing work discussed in the case study. Start with Satisfied Customers. Stifel's retail investors currently account for over $2.5 million of outstanding Agency 'Nuveen Asset Management LLC $38,310 bonds, Many of these investors will be refunded their principal ;Franklin Terapletonlnvestments 25,505 with the new Bonds. We believe these individuals represent our Capital Research& Managetveht CO 9,835 first call for the marketing effort. Further, a number of major Vanguard Group Inc, Vic 8,055 institutions account for $98.7 million of Agency Bonds with an wells CapitalManagementtne 5,000 additional group already invested in the City's Gas Tax and Multiple Managing Finns 4,750 Water Revenue issues. These investors are shown in the table to Standish Wetla Asset Management 3,000 2,000 the right. All of these entities have approved Santa Ana and Waddell & Reed InvestmentNlanngemout 675 represent strong candidates in our first round of calls. Capital Guardian Trust Co sit investmcat Fixedlm one Advisors Inc 475 Direct Marketing to Local Investors. The Santa Ana name and ;Canning Asset Manegemeat `, 350 its location ht the heart of Orange County has a distinctive Brookfield Investment Management Im 250 recognition factor that lends itself to direct outreach by our retail :Delphi Capital mattaltuacna hie 200 sales force. Stifel has 162 individual investor accounts owing Opponhennerhimds 1" 150 125 $59.8 million of municipal bonds in and around the City that Zazove Associates LLC $98480 represent buyer candidates. Our retail brokers will follow up Total s, re.eMan,, with these local accounts In an "Invest local" program.. Further, Figures mprosem avrunt WnA,uldc,xof the 2003A &6TAasand 2011 TAni . we anticipate that a number of our brokers will use direct marketing by mail to prospective accounts as a way to create new accounts. R Tinning the Bond Sale Relative to Other Successor Agency Pricings We expect the volume of successor agency refinancings to pick rip over the next several months ahead of upcoming current call dates. For example, through the end of this year, we currently have 9 tax - increment financings with almost $250 million of bonds in au• year- end pipeline. It will be important to manage the timing in order to avoid selling in a week overcrowded with competing issues. Our leadership underwriting successor agency bonds will ensure that we actively guide the Agency's sale to avoid heavy sale weeks and garner the lowest rates in a potentially busy end of year calendar. C Credit Presentation Provide a credit presentaitaa yourlLafr prepared far a recenttax allocation bony! issuance (oat hmhided with the 3 page Magi), Attached in Appendix B is the credit presentation Stifel prepared for the Successor Agency to tine City of Burbank Redevelopment Agency's upcoming bond sale. We believe this document illustrates our comprehensive approach to creating a compelling credit narrative for post- dissolution tax increment credits to the rating agencies. Cl 'I Y OF SANTA ANA 1 age 7 3 -144 Appendix A: 2014 Stifel Tax Allocation Bond Spreads to MMD a ss wimgit u n .Wwuv��nt = n is ab ss m u Ls a%amlm�%1 n +srun�%t A 9r )t ,AfSVr,nu n3 Yi u :rrwfmwt u *%1]YIUAI b f5 ?» {6 1r b 9 aYll9pvu) A br k 3p V is pl Ax WISYracl 33 E N 9t ti Mr 33 M •fi11Yrw1 fd b rIID(ie. wY d! YS 2F 2 .i +ttfil)Y•wJ 51 =tAftuvruvtl 5! 3t 3Y 55 S +till6r•whl v tt n a u m N .u+mnwl si sr 4r » a A ro +i<sUanvnl y 63 63 Sf A +19r391hru11 b5 W e 6/ E: W R Br b3 fie a ?'9IW rr M1 rz 6 y A a C9 u u v] g as n bl s! s BE w 6r v m 6L as 3@ YA iN 6t 65 � Y. mueugr�,l 6t w u A w s bl. R I('! 91 ZPI 61. 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N � i L � N E tB O O O O m (0 ® ">, 3 -177 P m Exhibit B PROPOSAL TASGE OF CONTENTS Pee Proposal ............ ............................... ..............................1 Disclosure: As outlined in the SEC's Municipal Advisor Rule, Stifel, Nicolaus & Company, Incorporated ( "Stifel ") is providing the attached uateial and all intunnatinn and advice contained therein in response to a request for proposals or request for qualifications (the "RUP ") by it municipal issuer or obligated person with respect to a specific issue of municipal securities. sdfed bas not acted, and will not act, as your municipal advisor with respect to die issuance of the municipal securities that is the subject to the RRP, Stlfet is providing information and is docbnring to the proposed municipal Issuer mid any obligated person that it has done so within the tsgulahny limmework or NISRB Rude C -23 as an underwriter (by defmttion also hadading tine role or placement agent) and riot ss a financial advisor, as defined therein, with respect to the referenced proposed issuance of municipal securities. The primary rate of Stit'el, as all underwriter, is to purchase securities for resale to investors in an arm's- length commercial transaction. Serving fit the role of underwriter, Stifel has financial and other interest's that (truer fintn those of the issuer. The issuer should consult with its' own financial anchor municipal, legal. accounting, tax and odieradvisors, as applicable, to the extent it deems appropriate. These rnatenals have been prepared by Stifel for the client or potential client to whonr such materials are directly addressed and delivered for discussion purposes only. All terms and conditions are subject to further discussion laid negotiation. Stifel does not express any view as to whether trouncing options presented in these materials ore achievable or will be available at the title or any contemplated transaction. These materials (lo nut constitute an crier or solicitation to sell or purchase any securities and are not a commitment by Sauter to provide or arrange any financing tar any transaction or to purchase any security in connection therewith and tiny not relied upon as an indication that such an o@erwill be provided in the (hone. Micro indicated, this presentation may contain information derived horn sauces other than Stifet, while we believe such information to be accurate and complete, SURI does 1101, guarantee the accuracy of this infommtion. 'this nudenial is based on information currently available to Stifel or its sources amd is subject to change without notice. Stifel does not provide accounting, lax or legal advice; however, you should be aware that any proposed indicative transaction could have accounting, tax, legal at other implications that should be discussed with your advisors and for counsel as you decal appropriate. CITY OF SANTA ANA 3-179 A. Fee Proposal lnehtde your not -ta- exceed aranagetnent fee, average takedown and detaded oat- of- pockei expenses far fronds at the following tar exempt levels: a)$25- 30million. Cost of underwriting. Ensuring the lowest cost of borrowing is a shared goal of Stifel and the Agency. We believe that Stifel's track record in the tax allocation space, consistent attention to the Agency and the City as well as our ability to provide superior execution in today's marketplace represents a much greater factor in lowering borrowing cost than the underwriting fee. As shown to the right, on a typical financing, the underwriter's tee makes up less than I % of the total interest cost. The borrowing cost is a function of the market, issuer credit and the execution delivered by the Underwriter. An aggressive and appropriate marketing approach, coupled with comprehensive coverage of tax increment investors that Stifel stands ready to mobilize, will have a larger impact on the final borrowing cost than the underwriting fee. To demonstrate this, the table to the right illustrates the incremental impact of the underwriting fee on a generic "AA" general obligation credit. in this case, the borrowing cost increases less than 0.01 %, or a basis point, for every additional dollar included in the underwriter's fee on a per bond basis. We highlight this relationship to make the point that a few dollars more in sales compensation adds minimally to cost and can more than cover that cost if it provides better sales execution. Essentially, if the Agency can achieve even two basis points of better pricing with a dollar higher sales compensation, then that approach would make economic sense to fallow. Stifel's Proposed Fee. The tables on the following page provide our proposed underwriter's discount, assuming a sole managed financing totaling $25.6 million completed by the middle of 2015. Our proposed fee would represent an average takedown of $2.50 /$1,000 on the bonds, plus expenses and an allowance for management. $1 3.79% $2 3.79% $3 3.50% $4 3.81% $5 3.81% $6 3.82% $7 3.83% $8 3.93% $9 3.84% Please note- -the proposed management fee is currently $12,500. This $10 385% acknowledges the time required to direct an aggressive pre - marketing program to our sales staff, conduct proper due diligence on a complex credit and meet the regulatory needs of our current market environment. Depending on the issues encountered in the Financing program, we may want to talk with the Agency and the Financial Advisor about this fee. Our estimate for underwriter's counsel assumes that this party reviews transaction documents but does not prepare the official statement. If that work is included, our sense is that underwriter's counsel costs would range from $25,000 to $35,000 depending on the issues uncovered in the due diligence process. As to the takedown, we have assumed an aggressive institutionally oriented pricing. As we approach Clio underwriting, if we believe that the participation of retail or professional retail buyers could enhance the marketing process and drive down the interest rate, then we may want to revisit the takedowns where those parties could be most active, probably in the first ten years of the amortization schedule. Clearly, any changes will be subject to review and approval of the Financial Advisor and the Agency. Finally, the identified fees do not include the costs associated with a continuing disclosure review. As for the recent Water Enterprise financing, we plan on working with the Financial Advisor and the Agency to ensure appropriate disclosure, noting that we will likely need to add the 2013/14 flings to the work performed last summer. While we believe these fees are competitive for the work involved, we do not want fees to become the determinant of the selection process and are willing to discuss fees further, as necessary. CITY OF SANTA ANA 3-180 '1' "''Asswnes review ofdomnents only. Pmducbonorgre POs wou req allocation r bonds that have priced included tl e below rt six atnonths. Tl e s veyt includes "A" rated TABsaco np eted n12014 con pen par was t$6.13 per $1 000 par a nou$40 1n this context, wetbel eve our fee Proposal is very co apetitive.s ®�'°zs Undenvrizing Pee 00 7,031 2017 0.27 Expenses 2.50 fi3,868 Average Takedown* S 3.15 S 95,898 Total Gross Spread 3,245,000 -00 2.50 I P Mumm e ** 0.49 12,5 0 Underwriter's counsel' $0.98 S 25,000 Total Gross Spreadcg1 7 202_ 73000 00 2.50 Out or Pocket 790 1prco Bookninning System 003 384 1prea Order Monitor 0.02 0.02 500 Blue Sky Stuvey 0.03 800 DTC Setup 0.12 3.00 CDIAC 0.02 497 CUS1P Numbers _ - Day Loan S 0,27 $ 7,031 Total EXpenses subject tocl,enge Pending approval and nmrkding pint' *Assrmres urstiodarwlsak. /approvalby Agenoymrd FA based on work perlbnned, ^' *Gfiimle. Fendkrgrevlew B one a Iriglrer the '1' "''Asswnes review ofdomnents only. Pmducbonorgre POs wou req allocation r bonds that have priced included tl e below rt six atnonths. Tl e s veyt includes "A" rated TABsaco np eted n12014 con pen par was t$6.13 per $1 000 par a nou$40 1n this context, wetbel eve our fee Proposal is very co apetitive.s 2016 2,850,000.00 2.00 2017 2,965,000.00 ' -� 2018 3,090,00.0 2.0 2019 3,245,000 -00 2.50 2020 655,00.0 250 2021 695.00'00 2.50 7 202_ 73000 00 2.50 2023 770,00.0 230 2024 810,00.0 2.50 2025 845.00 -0 3.75 2026 890,00.0 3.75 2027 935,000.0 3.75 2023 985,00.0 3,75 2029 1,035,000.0 3.75 2030 1,085,00.0 3.75 2031 1,145,00.0 3.75 Total S 25,575,000 S 2S0 '1' "''Asswnes review ofdomnents only. Pmducbonorgre POs wou req allocation r bonds that have priced included tl e below rt six atnonths. Tl e s veyt includes "A" rated TABsaco np eted n12014 con pen par was t$6.13 per $1 000 par a nou$40 1n this context, wetbel eve our fee Proposal is very co apetitive.s CITY OF SANTA ANA 1 _y�Yii 29,850,1 %10 Am 6.30 Tax Alloention Rstundbrg Bonds 2014 series A. 22440.OM A.. 5 -17 II /512014 Orange (City 0 Revenue IteN¢dds Bonds - 20S55A11U As" 6.50 10/22/2014 Los Angeles County S.,b,mlination Suborttinate TnxAlloeatian Bonds 2014 SeriesA 37.550,000 A 3.92 1011512014 La Mirada Tnx Allocation Refunding Bonds Series 2014 2$130,1%10 A- 5.13 )01112014 Concord Mason Riverside Cnty Mason Couny) Tax Allocation Idehnrding Fonds 2014 Series n 36,46,(1f10 A' 5.23 9/10/2014 9110/20L4 Riverside CntY TuxAllocotion Refunding bonds 20H 28,n50,t%%) A., 6.49 TaxAlkeltion Refbnding Bonds 20515,000 A.. 73A1 8113/2014 _ Jio1Ls {er ,. Ta %A1lneadnrl Refundlny Hinds , Issur. of =Uld 33 215.0(%1 A 1.77 7/2312014 Nomo TaxAdomtion Revenue Reflmding Bonds A 825 7117l2U IA t.ns Angeles Qwmy Re#uading Bonds Issue of ?014 Issue of 18,810.000 6.71 6/26/2014 Cunten Umce Tax Allocation Re0lnding Bonds seder 2014A '_ 7395'01%1 A 633 61312014 Chinn Tox Allocation Aierage CITY OF SANTA ANA 3 -182 O G N dl 4u QI b�A "CJ U u V N bA N 6 } Q.1 N C ttt ,17 F. W O N ci O C�7 a O Qa U U O C/1 S<; CS V N Es L'J 'i M/ Vi.�. 3 -183 N CO 1..1.. W/ �/ y V y_ L o ( C co VJ C • y/id�-//r LL ^�' W O p�� Q� VJ CL Q o O4 0 ® U) LL . a) V L.L. 0 ^' /4U) U y ■ ■ ■ ■ ■ ■ ■ I i N i+ C6 LO CV >+ >I L N E VJ N E ^v W q� J L Q d W ai -Q G 3 -183 N CO 3 -184 SPECIAL LEGAL COUNSEL SERVICES AGREEMENT This AGREEMENT, made and entered into this __ day o£ , 2016, by and between Orrick, Herrington & Sutcliffe LLP, a California professional law corporation ( "Attorneys "), and the Successor Agency to the Community Redevelopment Agency for the City of Santa Ana, a public body, corporate and politic (hereinafter "Successor Agency "). RECITALS A. Successor Agency desires to employ Attorneys to assist the Successor Agency Legal Counsel in the provision of specialized legal services to the Successor Agency in a bond issuance, refinancing and refunding, and other related legal matters, as well as serving as disclosure counsel, and B. Attorneys represent that they are licensed to practice law in the State of California, have special experience and knowledge in the field of public financing and desire to undertake said services. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. RETENTION OF ATTORNEYS Successor Agency hereby agrees to and does retain Attorneys, for the compensation hereinafter specified, to assist the Successor Agency Legal Counsel in disclosure counsel services related to 2016 Tax Allocation Refunding Bonds and other legal issues when and as requested by the Successor Agency Legal Counsel to do so. Attorneys accept said retention and agree to perform, in timely and efficient manner, all such services as may be requested by the Successor Agency Legal Counsel. Attorneys shall confirm their acceptance of work requested by Successor Agency in writing by e -mail or letter, 2. PAYMENT FOR SERVICES RENDERED A. FEES Successor Agency agrees to compensate Attorneys, and Attorneys agree to accept from Successor Agency, as and for payment in frill for all of said services in regard to each such action, compensation which shall not exceed, $50,000.00, (See Correspondence dated June 28, 2016, attached hereto and incorporated herein as Exhibit A). B. REIMBURSEMENT FOR COSTS Successor Agency agrees to reimburse Attorneys for out-of-pocket expenses, including but not limited to, mileage, expert witness fees, copying costs, service of process, and mail services authorized by the Successor Agency Legal Counsel in connection with the performance of duties under this Agreement. Any costs in excess of $5,000 require Successor Agency Legal Counsel approval prior to incurring the expense. All expenses must have supporting documentation submitted with the invoice. 3. METHOD OF PAYMENT Attorneys shall submit a monthly statement specifying the services performed, dates and number of hours, and an itemization of expenses related thereto with supporting documentation (i.e. receipts, invoices, copy of check, etc). �_ u 4. CONTROL OF LEGAL MATTERS Attorneys agree that each and every matter or proceeding in which they undertake to assist the Successor Agency Legal Counsel, as aforesaid, shall be and remain under, and subject to the control and direction of said Successor Agency Legal Counsel at all stages, and that they shall at all times keep the Successor Agency Legal Counsel informed of all matters pertaining thereto. Successor Agency will keep Attorneys informed of all significant developments in matters relating to any representation undertaken by Attorneys. Attorneys further agree, if and when their retention hereunder is terminated by Successor Agency, as hereinafter specified, they shall return to Successor Agency Legal Counsel any and all fries then in their possession concerning each and every matter or proceeding in which they represented the Successor Agency pursuant to this Agreement. 5. REPORTING REQUIREMENTS Attorneys agree to keep the Successor Agency Legal Counsel, Director of Personnel, and anyone other person(s) designated by the Successor Agency informed of significant events in the litigation, including but not limited to trial date, filing of motions for summary judgment, hearing date for motion for summary judgment, settlement conference date, and mediation date. Attorneys also agree to provide the following reports: a. 45 day initial evaluation of case and budget; and b. Pre -trial report 90 days before trial; 6. TERM The term of this Agreement shall commence on the date first written above and terminate on December 31, 2017, unless terminated earlier pursuant to Section 13 below. The term of this Agreement may be extended upon a writing executed by both parties, including the City Manager and the Successor Agency Legal Counsel. 7. INDEPENDENT CONTRACTORS It is mutually agreed by and between the parties that, in the performance of their covenants hereunder, Attorneys are and shall be independent contractors, and not officers or employees of Successor Agency. S. INSURANCE Attorneys shall provide to the Successor Agency Legal Counsel proof of Professional Liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, and maintain such insurance throughout the term of this Agreement. If Attorneys fail or refuse to produce and maintain the insurance required by this section, or fail or refuse to furnish the Successor Agency with required proof that insurance has been procured and is in force and paid for, the Successor Agency shall have the right, at the Successor Agency's election, to forthwith terminate this Agreement. Such ternination shall not affect Attorneys' right to be paid for its time and materials expended prior to notification of termination. 7. INDEMNIFICATION Attorneys agree to and shall indemnify and hold harmless the Successor Agency, its officers, agents, employees, and representatives from liability for personal injury, damages, restitution, judicial or equitable relief arising out of Attorneys' negligent or wrongful performance or conduct of this Agreement. 2 3 -186 S. CONFIDENTIALITY If Attorneys receive from the Successor Agency information, which due to the nature of such information is reasonably iuiderstood to be confidential and/or proprietary, Attorneys agree that it shall not use or disclose such information except in the performance of this Agreement, and further agree to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Attorneys, disclosed in a publicly available source; (c) is in rightful possession of the Attorneys without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Attorneys without reference to information disclosed by the Successor Agency. 9. CONFLICT OF INTEREST CLAUSE Attorneys covenant that it presently has no interests and shall not have interests, direct or indirect, that would conflict in any manner with performance of services specified under this Agreement. 10. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by (elefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: Successor Agency: Clerk of the Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, California 92702 -1988 Facsimile (714) 647.6956 Courtesy Copy: Successor Agency Legal Counsel City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 Facsimile (714) 647 -6515 To Attorneys; Justin Cooper, Partner Orrick, Herrington & Sutcliffe LLP 405 Howard Street San Francisco, CA 94105 Facsimile: (415) 773 -5759 Email: jcooDernorriciccom 3 3 -187 A party may change its address by giving notice in writing to the other party. Thereafter, any notice, tender, demand, delivery, or other communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 11. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the Successor Agency and Attorneys, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the Successor Agency and by an authorized representative of Attorneys. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Attorneys or the Successor Agency. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any parties, which are not embodied herein. 12. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Attorneys, Attorneys may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the Successor Agency and any such assignment, transfer, delegation or subcontract without the Successor Agency's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the Successor Agency's ability to have any of the services which are the subject of this Agreement performed by Successor Agency personnel or by other Attorneys retained by Successor Agency. 13. TERMINATION This Agreement may be terminated by Successor Agency at any time. In such event, Attorneys shall be entitled to receive and the Successor Agency shall pay Attorneys compensation for all services performed by Attorneys prior to receipt of such notice of termination. As a condition of such payment, Attorneys shall deliver to the Successor Agency all files and records generated under this Agreement as of such date. Attorneys may terminate this agreement, subject to their obligation to provide reasonable notice to arrange alternative representation. In such case, Successor Agency agrees to secure new counsel as quickly as possible and to cooperate fully in the substitution of the new counsel as counsel of record in any litigation in which Attorneys may be involved. 14. DISCRIMINATION Attorneys shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin., ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, 4 3 -188 promotion, termination or other employment related activities. Attorneys affirm that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations, 15. JURISDICTION — VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 16. MISCELLANEOUS PROVISIONS Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify Successor Agency fully, including reasonable costs and attorney's fees, for any injuries or damages to Successor Agency in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written, ATTEST: Maria D. Huizar Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO Successor Agency Legal Counsel By; Lisa Storok Assistant Legal Counsel SUCCESSOR AGENCY OF THE CITY OF SANTA ANA David, Cavazos City Manager ORRICK, HERRINGTON & SUTCLIFFE LLP By: Name: Title: Tax ID No. 5 3 -189 Exhibit A 0 0 n R I C Fl. June 28, 2016 Francisco Gutierrez Executive Director of Finance & Management Services City of Santa Ana Attention, Alvaro Castellon Re: Bond Counsel Services to the Santa Ana Successor Agency (Series 2016 Tax Allocation Refunding Bonds) ORRICK, HERRINGTON & SUTCLIFFE LLF 777 SOUTH FIGUEROA STREET SUITE 3200 LOS ANGELES, CALIFORNIA 90017 tel «7213- 6293020 fax +1- 213 -612 -2499 WWW.CRRICK.COM Bill W. Bothwell (213) 6122403 wbothwelleorrick.com You have asked for our not to exceed fee quote for our services as bond counsel in connection with the issuance of your Successor Agency to the Community Redevelopment Agency of the City of Santa Ana Tax Allocation Refunding Bonds (Merged Project Area), Series 2016 in one or more series, on the same sale date, for the refunding of the former Agency's Tax Allocation Refunding Bonds, Series 2003A and Tax Allocation Refunding Bonds, Series 2003E Bonds. On behalf of Orrick, Herrington & Sutcliffe LLP, our not to exceed fee quote is $50,000. Our proposed fees and expenses were stated in our November 14•, 2014 as follows: Fees and Expenses for Bond Counsel Services: $40,000 Fees and Expenses for Disclosure Counsel Services: $30,000 That fee quote assumed services as both bond and disclosure and accordingly each was discounted. The proposed fee above is intended as a reasonable adjustment for bond counsel only. If you wish to discuss this matter further, please contact me at (213) 612 -2403. Respectfully submitted, e William W. Bothwell OHSUSA;76545 1315.1 3 -190 SPECIAL LEGAL COUNSEL SERVICES AGREEMENT This AGREEMENT, made and entered into this _ day of 2016, by and between Best Best & Krieger, a California Professional Corporation ( "Attorneys "), and the Successor Agency to the Community Redevelopment Agency for the City of Santa Ana, a public body, corporate and politic (hereinafter "Successor Agency'). RECITALS A. Successor Agency desires to employ Attorneys to assist the Successor Agency Legal Counsel in the provision of specialized legal services to the Successor Agency in a bond issuance, refinancing and refunding, and other related legal matters, as well as serving as disclosure counsel, and B. Attorneys represent that they are licensed to practice law in the State of California, have special experience and knowledge in the field of public financing and desire to undertake said services. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. RETENTION OF ATTORNEYS Successor Agency hereby agrees to and does retain Attorneys, for the compensation hereinafter specified, to assist the Successor Agency Legal Counsel in disclosure counsel services related to 2016 Tax Allocation Refunding Bonds and other legal issues when and as requested by the Successor Agency Legal Counsel to do so. Attorneys accept said retention and agree to perform, in timely and efficient mariner, all such services as may be requested by the Successor Agency Legal Counsel, Attorneys shall confirm thew acceptance of work requested by Successor Agency in writing by e -mail or letter. 2. PAYMENT FOR SERVICES RENDERED A. FEES Successor Agency agrees to compensate Attorneys, and Attorneys agree to accept from Successor Agency, as and for payment in full for all of said services in regard to each such action, compensation which shall not exceed $31,000 (See Correspondence dated May 26, 2016, attached hereto and incorporated herein as Exhibit A). B. REIMBURSEMENT FOR COSTS Successor Agency agrees to reimburse Attorneys for out -of- pocket expenses, including but not limited to, mileage, expert witness fees, copying costs, service of process, and mail services authorized by the Successor Agency Legal Counsel in connection with the performance of duties under this Agreement. Any costs in excess of $5,000 require Successor Agency Legal Counsel approval prior to incurring the expense. All expenses must have supporting documentation submitted with the invoice. 3. METHOD OF PAYMENT Attorneys shall submit a monthly statement specifying the services performed, dates and number of hours, and an itemization of expenses related thereto with supporting documentation (i.e. receipts, invoices, copy of check, etc). 3 -494IT 8 4. CONTROL OF LEGAL MATTERS Attorneys agree that each and every matter or proceeding in which they undertake to assist the Successor Agency Legal Counsel, as aforesaid, shall be and remain under, and subject to the control and direction of said Successor Agency Legal Counsel at all stages, and that they shall at all times keep the Successor Agency Legal Counsel informed of all matters pertaining thereto. Successor Agency will keep Attorneys informed of all significant developments in matters relating to any representation undertaken by Attorneys. Attorneys further agree, if and when their retention hereunder is terminated by Successor Agency, as hereinafter specified, they shall reriim to Successor Agency Legal Counsel any and all files then in their possession concerning each and every matter or proceeding in which they represented the Successor Agency pursuant to this Agreement. 5. REPORTING REQUIREMENTS Attorneys agree to keep the Successor Agency Legal Counsel, Director of Personnel, and anyone other person(s) designated by the Successor Agency informed of significant events in the litigation, including but not limited to trial date, filing of motions for summary judgment, hearing date for motion for sununary judgment, settlement conference date, and mediation date. Attorneys also agree to provide the following reports; I . 45 day initial evaluation of case and budget; and b. Pre -trial report 90 days before trial; 6. T.ER _ The term of this Agreement shall commence on the date first written above and terminate on December 3l, 2017, unless termnated earlier pursuant to Section 13 below. The term of this Agreement may be extended upon a writing executed by both parties, including the City Manager and the Successor Agency Legal CounseL 7. INDEPENDENT CONTRACTORS It is mutually agreed by and between the parties that, in the performance of their covenants hereunder, Attorneys are and shall be independent contractors; and not officers or employees of Successor Agency. 8. INSURANCE Attorneys shall provide to the Successor Agency Legal Counsel proof of Professional Liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, and maintain such insurance tluoughout the term of this Agreement. If Attorneys fail or refuse to produce and maintain the insurance required by this section, or fail or refiise to furnish the Successor Agency with required proof that insurance has been procured and is in force and paid for, the Successor Agency shall have the right, at the Successor Agency's election, to forthwith terminate this Agreement. Such termination shall not affect Attorneys' tight to be paid for its time and materials expended prior to notification of termination. 7. INDEMNIFICATION Attorneys agree to and shall indemnify and hold harmless the Successor Agency, its officers, agents, employees, and representatives from liability for personal injury, damages, restitution, judicial or equitable relief arising out of Attorneys' negligent or wrongful performance or conduct of this Agreement. 3 -192 8. CONFIDENTIALITY If Attorneys receive from the Successor Agency information, which clue to the nature of such information is reasonably understood to be confidential and /or proprietary, Attorneys agree that it shall not use or disclose such information except in the performance of this Agreement, and further agree to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential. Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Attorneys, disclosed in a publicly available source; (c) is in rightful possession of the Attorneys without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Attorneys without reference to information disclosed by the Successor Agency. 9. CONFLICT OF INTEREST CLAUSE Attorneys covenant that it presently has no interests and shall not have interests, direct or indirect, that would conflict in any manner with performance of services specified under this Agreement. 10. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: Successor Agency: Clerk of the Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, California 92702 -1988 Facsimile (714) 547 -6956 Courtesy Copy: Successor Agency Legal Counsel City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 Facsimile (714) 647 -6515 To Attorneys: Best Best 8s Krieger 3390 University Avenue, 511' Floor P.O. Box 1028 Riverside, California 92502 Phone: (95 1) 686 -1450 Facsimile: (951) 686 -3083 3 -193 A party may change its address by giving notice in writing to the other party. Thereafter, any notice, tender, demand, delivery, or other communication shall be addressed and transmitted to the new address. If sent by mail; communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, drily registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 11. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the Successor Agency and Attorneys, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the Successor Agency and by an authorized representative of Attorneys. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Attorneys or the Successor Agency. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any parties, which are not embodied herein. 12. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Attorneys, Attorneys may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the Successor Agency and any such assignment, transfer, delegation or subcontract without the Successor Agency's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the Successor Agency's ability to have any of the services which are the subject of this Agreement performed by Successor Agency personnel or by other Attorneys retained by Successor Agency. 13. TERMINATION This Agreement maybe terminated by Successor Agency at any time. In such event, Attorneys shall be entitled to receive and the Successor Agency shall pay Attorneys compensation for all services performed by Attorneys prior to receipt of such notice of termination. As a condition of such payment, Attorneys shall deliver to the Successor Agency all files and records generated under this Agreement as of such date. Attorneys may terminate this agreement, subject to their obligation to provide reasonable notice to arrange alternative representation. In such case; Successor Agency agrees to secure new counsel as quickly as possible and to cooperate fully in the substitution of the new counsel as counsel of record in any litigation in which Attorneys may be involved. 14. DISCRIMINATION Attorneys shall not discriminate because of race, color, creed, religion; sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Attorneys affirm that it is an 4 3 -194 equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 15, JURISDICTION — VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, perforntance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 16. MISCELLANEOUS PROVISIONS Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective patties to each of the terms of this Agreement, and shall inderni fy Successor Agency fully, including reasonable costs and attorney's fees, for any injuries or damages to Successor Agency in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ATTEST: Maria D. Huizar Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO Successor Agency Legal Counsel By: -� � Z±' �� Lisa Storck Assistant Legal Counsel SUCCESSOR AGENCY OF THE CITY OF SANTA ANA David Cavazos City Manager BEST BEST & KR.IEGER By: Name: Title: Tax ID No. 3 -195 EXHIBIT A Kim A. Byrens (951) 626.8273 kim.byrens@bbklaw.com File No, 55394.00019 May 26, 2016 Francisco Gutierrez Successor Agency to the Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92702 Re: Disclosure Counsel Services to Successor Agency to the Redevelopment Agency of the City of Santa Ana for 2016 'Fax Allocation Refunding Bonds Dear Francisco: We are pleased to submit this letter to you in connection with our services as disclosure counsel to the Successor Agency to the Redevelopment Agency of the City of Santa Ana (the "Agency") relating to the proposed issuance of the Agency's above - captioned financing (the "Bonds*'). The firm of Best Best & Krieger LLP will serve as disclosure counsel on this matter and proposes to perform the following services on the basis set forth in this letter. Disclosure Counsel Services Our disclosure counsel services include conferring with the Agency and other financing team members regarding the financing and the scope of due diligence inquiry to be conducted; preparing the drafts of a Preliminary Official Statement relating to the sale of the Bonds and advising the Agency as to the scope of disclosure, the sources of all information, and its compliance with applicable securities laws; attending administrative or financing team meetings Ell which the financing is discussed when requested to attend or when attendance is deemed neccssary; facilitating the printing of the Preliminary and Final Official Statements; any additional support or documentation related to the role of disclosure counsel and required for closing and ongoing advice on continuing disclosure requirements and prepare certificates and agreements to comply with applicable securities laws. Our role as disclosure counsel will include the following: Review the Agency's disclosure program and its compliance; Y Assemble and prepare preliminary and final official statement; 553940001928201543 I 3 -196 �9 Indian Wells Sacramento (916)325.4000 (790)580 -2611 BEST BEST & KWIEGER San Diego livles (849)293.2600 ATTARNEY8 AT LAW (918)526 -1300 Los Angeles Walnut Creek (926) 977 -3306 (213)417.6100 3390 University Avenue, 5th Floor, P.O. Box 1028, Riverside, CA 92502 Washinglon. DC Orland (900) 989.4594 Phone: (951) 888 -1450 1 Fax: (951) 886 -3063 1 www.bbklew.com (202) 795 -0400 Kim A. Byrens (951) 626.8273 kim.byrens@bbklaw.com File No, 55394.00019 May 26, 2016 Francisco Gutierrez Successor Agency to the Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92702 Re: Disclosure Counsel Services to Successor Agency to the Redevelopment Agency of the City of Santa Ana for 2016 'Fax Allocation Refunding Bonds Dear Francisco: We are pleased to submit this letter to you in connection with our services as disclosure counsel to the Successor Agency to the Redevelopment Agency of the City of Santa Ana (the "Agency") relating to the proposed issuance of the Agency's above - captioned financing (the "Bonds*'). The firm of Best Best & Krieger LLP will serve as disclosure counsel on this matter and proposes to perform the following services on the basis set forth in this letter. Disclosure Counsel Services Our disclosure counsel services include conferring with the Agency and other financing team members regarding the financing and the scope of due diligence inquiry to be conducted; preparing the drafts of a Preliminary Official Statement relating to the sale of the Bonds and advising the Agency as to the scope of disclosure, the sources of all information, and its compliance with applicable securities laws; attending administrative or financing team meetings Ell which the financing is discussed when requested to attend or when attendance is deemed neccssary; facilitating the printing of the Preliminary and Final Official Statements; any additional support or documentation related to the role of disclosure counsel and required for closing and ongoing advice on continuing disclosure requirements and prepare certificates and agreements to comply with applicable securities laws. Our role as disclosure counsel will include the following: Review the Agency's disclosure program and its compliance; Y Assemble and prepare preliminary and final official statement; 553940001928201543 I 3 -196 i 11111 It k EST BEST&Knimcm ATTORNEYS AT LAW Francisco Gutierrez May 26, 2016 Page 2 ➢ Review, for disclosure purposes, any intended investment arrangement for the proceeds of the proposed bonds; • Review legal documents and approving resolutions prepared by bond counsel for disclosure purposes and in particular review compliance with the disclosure of Rule 15c2 -12; • Undertake such independent inquiry as may be necessary at the time of initial offering to render an appropriate disclosure opinion. This would likely include meetings with the management staff of the Agency and the Agency's financial consultant at which oral and written inquiries and requests for information can be directed to describe the financial story of the Agency; • Review materials to be distributed at any investor presentations; We world render an appropriate disclosure counsel opinion which will describe the nature of our review and inquiries and indicate that the issuer has appropriately disclosed all material information with respect to the financing in the disclosure document; and A Provide, as required, legal advice with respect to an "event" disclosure under Rule 15c2 -12. Proposed Fees Disclosure Counsel Based upon our understanding of the transaction, we propose a fee of $30,000. The fees are payable upon submission of our invoice at the completion of the financing. In the event that no financing is completed and bonds are not issued, we will work with the Agency to determine reasonable compensation for the time submitted by the involved attorneys. If the transaction is completed or our involvement differs significantly from our expectations, we would expect to be paid a fee that we mutually agree would reflect reasonable compensation for legal services rendered considering the risk undertaken and the level of expertise required to undertake such legal service. By your signature and return of this letter, you agree to pay our fees and expenses as set forth in this paragraph. Additionally, we will charge the Agency for out -of- pocket expenses which would include, the costs of duplicating and mailing, transportation, long distance telephone calls, 55344bQP1 M20154.31 3 -197 BEST INC $ BEST EST &z KRIIRGVR 3 ATTORNEYS AT LAW Francisco Gutierrez May 26, 2016 Page 3 messenger and courier service and the preparation of transcripts of the financing. This expense is not expected to exceed $1,000, If this arrangement is satisfactory to you, please authorize our employment according to the terms of this letter by having this letter executed by you or your agent. We look forward to working with you and the staff of the Successor Agency to the Redevelopment Agency of the City of Santa Ana in order to bring this matter to a successful conclusion. Sincerelly,, KYm A. Byrens of BEST BEST RIEGER LLP TERMS OF PAYMENT OF FEES AND EXPENSES APPROVED THIS DAY OF 2016 -- Francisco Gutierrez 5539,100019\28201513) 3 -198 AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA AND KEYSER MARSTON ASSOCIATES, INC. THIS AGREEMENT is made and entered into this _ day of , 2016 by and between Keyser Marston Associates, Inc., a California Corporation, (hereinafter "Consultant "), and the Successor Agency to the Community Redevelopment Agency of the City of Santa Ana, a public body, corporate and politic (hereinafter "Successor Agency "). RECITALS A. The Successor Agency desires to retain a consultant having special skill and knowledge in the field of fiscal consultant services for bond refinancing and related actions. B. Consultant represents that Consultant is able and willing to provide such services to the Successor Agency. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: I SCOPE OF SERVICES Consultant shall perform those services as set forth in its proposal dated May 16, 2016, attached hereto and incorporated herein as Exhibit A to this Agreement. 2. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services, the rates and charges identified on page 9 of Exhibit A. The total sum to be expended tinder this Agreement shall not exceed $37,500.00, which is comprised of $35,000.00 for the Fiscal Consultant Report with an additional $2,500.00 for other services as needed by the request and direction of Successor Agency staff. Any other services will be billed at the rates and charges identified on page 9 of Exhibit A during the term of this Agreement. b. Payment by Successor Agency shall be made within forty -five (45) days following receipt of proper invoice evidencing work performed, subject to Successor Agency accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by Successor Agency. RE r 3. TERM This Agreement shall commence on the date first written above and terminate on December 31, 2017, unless terminated earlier in accordance with Section 15, below. The tern of this Agreement may be extended upon a writing executed by the City Manager and the Successor Agency Legal Counsel. 4. INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the Successor Agency. This Agreement is not intended nor shall it be construed to create an employer - employee relationship, ajoint venture relationship, or to allow the Successor Agency to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. S. OWNERSHIP OF MATERIALS This Agreement creates a non- exclusive and perpetual license for Successor Agency to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medinrn of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ( "Documents & Data'). Consultant shall require all subcontractors to agree in writing that Successor Agency is granted a non - exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were provided to Consultant by the Successor Agency. Successor Agency shall not be limited in anyway in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at Successor Agency's sole risk. 6. INSURANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain slid maintain insurance as described below: a. Commercial General Liability Insurance. Consultant shall maintain commercial general liability insurance naming the City, Successor Agency, its officers, employees, agents, volunteers and representatives as additional insured(s) and shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of Consultant's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $1,000,000 per occurrence, with $2,000,000 in the aggregate. Consultant shall supply Successor Agency with a frilly executed additional insured endorsement upon execution of this Agreement. 3 -200 b. Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for owned, hired and non -owned automobiles. c. Worker's Compensation Insurance. In accordance with the provisions of Section 3700 of the Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self-insurance. Prior to commencing the performance of the work under this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. If Consultant is or employs a licensed professional such as an architect or engineer: Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim with $2,000,000 in the aggregate. e. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: (i) Consultant shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. (ii) Certificates of insuranoe shall be furnished to the City upon execution of this Agreement and shall be approved by the Successor Agency. (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the Successor Agency. f If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the Successor Agency with required proof that insurance has been procured and is in force and paid for, the Successor Agency shall have the right, at the Successor Agency's election, to forthwith terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to 'indemnify the Successor Agency for any work performed prior to approval of insurance by the Successor Agency. INDEMNIFICATION Consultant agrees to and shall indemnify and hold harmless the Successor Agency, its officers, agents, employees, consultants, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the direct or indirect operations of the Consultant or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold hamiless agreement, applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of; or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold 3 3 -201 harmless, and pay all costs for the defense of the Successor Agency, including fees and costs for special counsel to be selected by the Successor Agency, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terns of, or effects arising from this Agreement. Successor Agency may make all reasonable decisions with respect to its representation in any legal proceeding. 8. INTELLECTUAL PROPERTY INDEMNIFICATION Consultant shall defend and indemnify the Successor Agency, its officers, agents, representatives, and employees against any and all liability, including costs, for infringement of any United States' letters patent, trademark, or copyright infringement, including costs, contained in the work product or documents provided by Consultant to the Successor Agency pursuant to this Agreement. 4. RECORDS Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures, and disbursements charged to the Successor Agency for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of the Successor Agency to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement during regular business hours. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. to. CONFIDENTIALITY If Consultant receives from the Successor Agency information which due to the nature of such infonnation is reasonably understood to the confidential and /or proprietary, Consultant agrees that it shall not or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential infonnation includes not oily written information, but also infonnation transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the Successor Agency. it. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 3 -202 12. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this Section, to the following persons: Successor Agency: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 Fax 714- 647 -6956 With courtesy copies to: and Executive Director, Finance & Management Services Agency City of Santa Ana 20 Civic Center Plaza (M- 17) P.O. Box 1988 Santa Ana, California 92702 Fax 714- 647 -5420 Successor Agency Legal Counsel City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 Fax 714- 647 -6515 Consultant: Keyser Marston Associates 500 S. Grand Ave., Suite 1480 Los Angeles, CA 90071 Phone 213- 622 -8095 Fax 213- 622 -5204 A patty may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above, if sent by fax, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 13. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the Successor Agency and Consultant, and supersedes any and all other agreements, oral or written, between the parties. In the 5 3 -203 event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the Successor Agency and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Consultant or the Successor Agen c . ach party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any patty, which are not embodied herein. 14. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the Successor Agency and any such assigmnent, transfer, delegation or subcontract without the Successor Agency's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the Successor Agency's ability to have any of the services which are the subject to this Agreement performed by Successor Agency personnel or by other consultants retained by Successor Agency. 15. TERMINATION This Agreement may be terminated by the Successor Agency upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the Successor Agency shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the Successor Agency all work product completed as of such date, and in such case such work product shall be the property of the Successor Agency unless prohibited by law, and Consultant consents to the Successor Agency's use thereof for such purposes as the Successor Agency deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 16. DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 17. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 6 3 -204 18. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the Successor Agency immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 19. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature herembelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify Successor Agency fully, including reasonable costs and attorney's fees, for any injuries or damages to Successor Agency in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. (Signatures on Following Page) 3 -205 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date quid year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SOMA R. CARVALHO Successor Agency Legal Counsel By: lut - f r ` "�a ✓ Lisa.StoTCk Assistant Legal Counsel RECOMMENDED FOR APPROVAL: Francisco Guiterrez Executive Director Finance & Management Services Agency SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA DAVID CAVAZOS City Manager 8 3 -206 CONSULTANT: Greg Soo -Hoo Senior Principal Tax ID# EXHIBIT A KEYSER M E2STON ASSOCIATES. ADVISORS IN PURLWIPRIVATE REAL ESTATE DEVELOPMENT AO1U11(01M May 16, 2016 MEN. FSYATt IUIIGVFLOpAIIM AFM9J,%9LU I ICUMNU Eamwc Ounummm Ms. Susan Gorospe JAN 711111 ,11 Senior Management Analyst A.,my KarvnN Santa Ana Community Development Agency I'Munlyc uu.r 20 CIVIC Center Plaza, M -2$ Dnnme M. K,.wv Santa Ana, California 92701 DAVIVD, 41N4l Re: Proposal for Fiscal Consultant Services LUSANGnv, tiM XMI H. Hems UW-1 A, WV Dear Ms. Gorospe: Otmaonr R ficxnHrv� xm+m K Enarrans, hILIFL.R Ag, Keyser Marston Associates, Inc. (KMA) is pleased to present this proposal to provide Fiscal E D m Consulting Services to the Santa Ana Community Development Agency (the Agency) PAOI. c Mmm related to the proposed refinancing of 2003 Series A and B Tax Allocation Bonds previously issued by the former Redevelopment Agency of the City of Santa Ana. KMA is uniquely qualified to provide Fiscal Consultant services to the Agency, For over 40 years, KMA has provided a full range of redevelopment financial and real estate advisory services to public agencies In support of tax allocation bonds, public facilities financing. and affordable housing. Our current client base includes the largest Successor Agencies in the State, including the Agency. Our firm's involvement with the City of Santa Ana, the former Redevelopment Agency, and the current Agency is both historic and extensive, having served In various economic consulting and fiscal consulting capacities over the years. KMA provides analyses for the continuing annual disclosure of the South Main Street Series 2003A and 20038 Tax Allocation Refunding Bonds, the Merged Project Areas Tax Allocation Refunding Bonds 2010 Series A and B Bonds, and the Main Place 1989 Tax Allocation Refunding Bonds Series E, The firm website at www.keysermarston.com contains a broad summary of our firm's background and expertise, Our principal strengths include: 500 SOU VIA CIWID AVENUP, SU 116 1-080 r LOS ANGELES, CAI. IFORN IA 90071 - PHONE: 213 6218093 , FAY 213 623 5204 WWW.K NSFRMARS'I'ON.COM 3 -207 t0tl50tLGSH 90900.000.002 Ms, Susan Gorospe May 16, 2016 Santa Ana Community Development Agency Page 2 • KMA is local. KMA is located in Los Angeles and our long -term presence working with the City has enhanced our understanding of local financial, real estate, planning, and public policy trends that have impacted Santa Ana's redevelopment project areas. KMA is efficient and responsive, KMA clients enjoy direct access to principals with specialized areas of expertise, enabling KMA to provide the highest level of service in a responsive and cost - effective manner. The philosophy and structure of our firm results in clients having maximum direct contact with principals and other senior staff at KMA. We have garnered praise from our clients, bond underwriters and bond disclosure counsels regarding our ability to provide timely and accurate Fiscal Consulting analyses. • KMA has strong Fiscal Consultant experience, KMA integrates real estate expertise, technical tax roll database expertise and a strong public finance background that results in analyses appropriate for Fiscal Consultant Report due diligence. KMA has prepared Fiscal Consultant Reports for bond financings totaling over $5,5 billion, IL APPROACH AND SCOPE OF SERVICES It should be noted that.since dissolution of redevelopment agencies in California, KMA has actively been Involved as Fiscal Consultant on bond refundings for some of the largest Successor Agencies in the State and has already successfully participated in Successor Agency bond refinancing closings totaling over $1.7 billion. Nearly all of these financings have been secured by the Redevelopment Property Tax Trust Fund (RPTTF) whose credit is based on all redevelopment project areas contributing to the RPTTF. The Fiscal Consultant analyses are created in tandem with the expectations and schedule set forth by the bond underwriters, financial advisors, bond disclosure counsel, and Agency staff. Early in the process, KMA ensures that the current year secured and unsecured property tax roll databases are obtained from the County Assessor, the current and historic Project Area reported assessed values and levy distribution reports are obtained from the County Auditor - Controller, and the latest assessment appeal database is obtained from the County Clerk of the Board/ Assessment Appeals Board, The Fiscal Consultant is also responsible for the review of contractual and statutory pass through agreements entered into by the former Redevelopment Agency and to ensure that the County Auditor - Controller's computation of the tax sharing formulas is consistent to the provisions of the agreements. The County reports of value, assessment appeal impacts and contractual and statutory pass through formulas all provide the foundation 160501IOSH 99900,000,002 3 -208 Ms. Susan Gorospe May 16, 2016 Santa Ana Community Development Agency Page 3 from which the necessary Fiscal Consultant Report revenue forecasts are created under both a growth and no growth scenario, As noted above, the credit worthiness of successor agency bond refundings are now scrutinized from the perspective of the credit worthiness of the entire RPTTF, not just individual project areas. Therefore the Fiscal Consultant Report will include revenue projections for all of the six Project Areas of the Agency, as well as certain summary tables combining all of the Project Areas, based on FY 2015 -16 and FY 2016 -17 values. The refunding of Series 2003 A and B bonds (secured by the tax increment revenues of the South Main Street Project Area) warrants, in our opinion, separate tables for the South Main Street Project Area. 1. Historic Assessed Values — Project Area specific tables and a combined summary from FY 2005.06 to FY 2015 -16 will be prepared, based on historic reports provided by the County Auditor - Controller. These tables will be updated upon release of the FY 2016 -17 tax roll aggregation by the County Auditor - Controller. 2. Ten Largest Taxpayers (Merged) — Combined summary of the ten largest taxpayers based on FY 2015 -16 secured and unsecured tax roll data provided by the County Assessor. The table will be updated upon release of the FY 2016 -17 tax roll by the County Assessor. 3. Ten Largest Taxpayers (South Main) --The South Main Project Area's ten largest taxpayers will be separately provided based on FY 2015 -16 secured and unsecured tax roll data provided by the County Assessor. The table will be updated upon release of the FY 2016-17 tax roll by the County Assessor, 4. Taxpayer Composition by Land Use (Merged) — Combined summary of the taxpayer composition by land use based on FY 2015 -16 secured and unsecured tax roll data provided by the County Assessor. The table will be updated upon release of the FY 2016 -17 tax roll by the County Assessor. 5. Taxpayer Composition by Land Use (South Main) — The South Main Project Area's taxpayer composition by land use will be provided based on FY 2015 -16 secured and unsecured tax roll data provided by the County Assessor. The table will be updated upon release of the FY 2016 -17 tax roll by the County Assessor. 6, Tax Levy and Collections Historic Comparison (Merged) — Combined summary of the FY 2010 -11 through FY 2014 -15 historic computed receipts vis- a -vis actual Original Charge tax allocations identified by the County Auditor- 160501 V3Stl 09900.000.002 3 -209 Ms, Susan Gorospe May 16, 2016 Santa Ana Community Development Agency Page 4 Controller. The table will be updated upon the County Auditor-Controller's close of the FY 2015 -16 tax year after August 2016. 7. Tax Levy and Collections Historic Comparison (South Main) —The South Main Project Area's summary of FY 2010 -11 through FY 2014 -15 historic computed receipts vis -a -vis actual Original Charge tax allocations will be provided based on the County Auditor - Controller data. The table will be updated upon the County Auditor - Controller's close of the FY 2015 -16 tax year after August 2016. B. Summary of Assessment Appeal (Merged) —Combined summary of open appeals and their corresponding impact to projected values and RPTTF tax refunds, based on a review of historic appeal trends from records to be provided by the County Assessment Appeals Board. The initial analysis will be based on the most recent database provided by the County Appeals Board. 9. Summary of Assessment Appeal (South Main) —The South Main Project Area's open appeals and their corresponding impact to the South Main Project Area's projected values and RPTTF tax refunds will be provided, based on a review of historic appeal trends from records to be provided by the County Assessment Appeals Board. The initial analysis will be based on the most recent database provided by the County Appeals Board. 10. Review of Contractual and Statutory Pass - Through Allocations - A review of each Project Area's pass - through obligation will be Incorporated into the tax revenue projections, based on documents to be provided by Agency staff. To the extent certain pass through allocations are subordinated to pledged tax revenues, this priority of payment will be incorporated into the projection of pledged tax revenues. 11. Projection of Pledged Tax Revenues —A projection of the pledged tax revenues, over the life of the refunded bond debt service, for each Project Area and a combined summary will incorporate trended valuation assumptions and tax refund and valuation impacts resulting from assessment appeals identified. The projection will be based on reported FY 2015 -16 assessed values and then be updated upon release of FY 2016 -17 Project Area assessed values. WOW 90900.000.002 3 -210 Ms. Susan Gorospe May 16, 2016 Santa Ana Community Development Agency Page 5 12. No Growth Projection of Pledged Tax Revenues - An alternative "no growth" projection of the pledged tax revenues for each Project Area and a combined summary will be prepared based on FY 2015 -16 assessed values and then be updated upon release of FY 2016 -17 Project Area assessed values. 13. County Allocation Procedures - A summary explanation of the County assessment, tax collection and RPTTF tax allocation practices will be presented In the Fiscal Consultant Report. 14, Fiscal Consultant Report —A draft Fiscal Consultant Report will be submitted to the financing team for review and comment based on FY 2015 -16 roll data. A final version of the Report incorporating FY 2016 -17 roll data will then be submitted for inclusion in the bond documents. 15. Finance Team Supporting Tables —The Fiscal Consultant Report tables created from Excel files and narrative drafted from Word files will be provided to the financing team for inclusion in official statements, and credit presentations. Iii. QUALIFICATIONS AND EXPERIENCE Prior to the elimination of California redevelopment agencies under A6 1x26, Fiscal Consultant services for a given project area typically included: Review of historic and current project area values, Analysis of tax receipts and delinquencies, Identification of the ten largest property owners, Estimate of fiscal impacts due to open assessment appeals, Analysis of senior lien tax sharing obligations and Projection of long -term tax increment revenues. The pre- dissolution Fiscal Consulting expertise of our firm has carried over Into the post - dissolution bond refinancing undertaken by various successor agencies throughout California on the following bond refundings with individual Successor Agencies: 1005011.fSH 98500.000.002 3 -211 Ms. Susan Gorospe May 16, 2016 Santa Ana Community Development Agency Page 6 Kameda Successor Agency WECIP /BWIP Merged Project Area 2014 Tax Allocation Refunding Bonds Series A& B $48,575,000 Brea Successor Agency Redevelopment Project AS 2013 Tax Allocation Refunding Bonds $96,620,000 Concord Successor Agency Central Concord Project Area Tax Allocation Refunding Bonds, Series 2014 $37,550,000 East Palo Alto Successor Agency University Circle Project Area, Gateway 101 & 2015 Tax Allocation Revenue Refunding Bonds, Series A $16,950,000 2015 Tax Allocation Revenue Refunding Bonds, Series B $2,500,000 Emeryville Successor Agency Emeryville & Shell Mound Project Areas Tax Allocation Refunding Bonds, Series 2014 A $95,450,000 Tax Allocation Refunding Bonds, Series 2014 B $14,270,000 Industry Successor Agency Industry Public Facilities Authority Civic Recreational Industrial Redevelopment Project No.1 Tax Allocation Revenue Refunding Bonds, Series 2016A $239,525,000 Transportation Distribution Industrial Redevelopment Project No. 2 Tax Allocation Revenue Refunding Bonds, Series 2015A $7,140,000 Tax Allocation Revenue Refunding Bonds, Series 2015B $249,770,000 Subordinate Tax Allocation Revenue Refunding Bonds, $33,815,000 Transportation Distribution Industrial Redevelopment Project No. 3 Tax Allocation Revenue Refunding Bonds, Series 2015A $7,230,000 Tax Allocation Revenue Refunding Bonds, Series 20156 $37,425,000 Oceanside Successor Agency Downtown Redevelopment Project Tax Allocation Refunding Bonds, Series 2015A $20,370,000 Taxable Tax Allocation Refunding Bonds, Series 20158 $10,080,000 160601 t.esn 99900.000.002 3 -212 Ms. Susan Gorospe Santa Ana Community Development Agency Poway Successor Agency Paguay Redevelopment Project Area Tax Allocation Revenue Refunding Bonds, Series A Tax Allocation Revenue Refunding Bonds, Series B Union City Successor Agency 2015 Tax Allocation Revenue Refunding Bonds, Series A 2015 Tax Allocation Revenue Refunding Bonds, Series B San Diego Successor Agency RPTTF Pledge: All Project Areas 2016A Tax Allocation Revenue Refunding Bonds 20168 Tax Allocation Revenue Refunding Bonds (Taxable) May 16, 2016 Page 7 $133,110,000 $26,845,000 $72,135,000 $5,005,000 $145,080,000 $30,105,000 Beginning in 2013, KMA was Invited to be Fiscal Consultant on the pooled bond refinancing program sponsored by the Agency. Our firm has been Fiscal Consultant on the following bond refundings with the Agency program to -date: CRAILA- A Designated Local Authority/ CLARRA Bunker Hill Redevelopment Project Area 2014C (Tax Exempt) Tax Allocation Revenue Refunding Bunker Hill Redevelopment Project Area 2014D (Taxable) Tax Allocation Revenue Refunding Little Tokyo Redevelopment Project Area 2013 Series F Tax Allocation Revenue Refunding Bonds North Hollywood Redevelopment Project Area 2013 Series I Tax Allocation Revenue Refunding Bonds Hollywood Redevelopment Project Area 2013 Series G Tax Allocation Revenue Refunding Bonds 2013 Series H Tax Allocation Revenue Refunding Bonds Mid -City Recovery Redevelopment Project Area 2013 Series D Tax Allocation Revenue Refunding Bonds Adelante Eastside Redevelopment Project Area 2013 Series E Tax Allocation Revenue Refunding Bonds Long Beach Successor Agency/ CLARRRA West Beach, Poly High, Downtown, West Long Beach Tax Allocation Revenue Refunding Bonds, Series 2015A Tax Allocation Revenue Refunding Bonds, Series 20158 3 -213 $148,640,000 $22,440,000 $7,965,000 $16,675,000 $14,975,000 $11,875,000 $5,515,000 $4,605,000 $74,375,000 $81,445,000 180501 1.G &H 99900.000.002 Ms, Susan Gorospe May 16, 2016 Santa Ana Community Development Agency Page 8 IV. PROJECT PERSONNEL A unique strength of KMA is the depth, continuity and availability of our principals. All major work assignments are directly supervised by a principal and, when appropriate, by a second principal, whose participation oftentimes goes beyond the review capacity. KMA's principals are frequent speakers to industry groups such as the former California Redevelopment Association, League of Cities, Urban Land Institute, International Council of Shopping Centers, and other similar organizations. KMA's principals have advised both the California Legislature's Committee on Economic Development and the former California Redevelopment Association, and served on the Governor's Task Force on Military Base Reuse. For the Fiscal Consulting services, KMA is offering a range of the firm's resources and services through the direct involvement of senior staff. Greg Soo -Hoo is KMA's Senior Principal overseeing all fiscal consultant and financial consulting services for the past twenty years and brings over thirty years of experience in redevelopment and public finance. V. FEE PROPOSAL The proposed fee for the Fiscal Consultant scope of services outlined above and a not - to- exceed fee for anticipated Additional Services, are as follows: The total fee for the Fiscal Consultant Report will be $35,000. The fee amount is fixed -fee and based on the preceding work scope outlined above. a To the extent Additional Services are requested beyond the stated work scope, including KMA's attendance and participation to any bond rating or bond insurer presentation, such Services will be billed at KMA's prevailing hourly rates. These fees are based on the expectation that the Fiscal Consultant Report will review the creditworthiness of the RPTTF and tax projections from each of the six Project Areas that contribute to the RPTTF. The fee amount includes two separate Reports: the first based on FY 2015 -16 assessed value and tax roll data and the second based on the FY 2016 -17 release of tax roll data and 2015 -16 year -end tax receipt data in the summer of 2016. 100501i.asH q9900.000.002 3 -214 Stradg '' STRADLING YOCCA CARLSON S. RAUTH, P.C, CALIFORNIA 650 NEWPORT CENTER DRIVE, SUITE 1600 NEWPORT BEACH Attorneys at Law NEWPORT NEWPORT BEACH, CA 92680 -6422 SACRAMENTO SAN DIEGO SAN FRANCISCO SANTA BARBARA _ SANTA MONICA THOMAS CLARK, JR. COLORADO (949) 725 4140 DENVER TCLARK @SYCR.COM EN VADA RENO WASMNGTON SEATTLE June 28, 2016 David Cavazos, City Manager City of Santa Ana, as Successor Agency to the former Community Redevelopment Agency 20 Civic Center Plaza, M -25 Santa Ana, California 92701 Re: Successor Agency to the Former Community Redevelopment Agency of the City of Santa Ana Refinancing Dear Mr. Cavazos: Stradling Yocca Carlson & Rauth (the "Firm ") has been invited to represent Stifel, Nicolaus & Company, Incorporated (the "Underwriter ") as underwriter's counsel in connection with the refunding of certain outstanding bonds of the Community Redevelopment Agency of the City of Santa Ana (the "Successor Agency "). The refunding transaction is referred to herein as the "Transaction ". The Firm represents and has represented the Successor Agency as special counsel with respect to various matters from time to time as requested by the Successor Agency. The Firm acted as disclosure counsel to the former agency in connection with its 2011 issue of bonds and the bonds to be issued as part of the Transaction are proposed to be issued on a parity with the 2011 Bonds. The Firm also has represented and represents the Underwriter on numerous municipal bond financings with respect to other matters having to the best of our knowledge no bearing on the Successor Agency's interests or projects. In light of these past representations, we believe it is necessary to inform you of the potential conflict of interest and obtain a consent from the Successor Agency and the Underwriter with respect to such conflict. Conflicts of Interest The Firm's representation of the Underwriter in connection with the bond issue creates certain conflicts of interest, in that the interests and objectives of the Underwriter may be in conflict with the objectives of the Successor Agency with respect to the financing documents. DOCSOC/ 1763956 v4/029999 -0000 It 0' 11 City of Santa Ana, as Successor Agency to the former Community Redevelopment Agency Re: Successor Agency to the Former Community Redevelopment Agency of the City of Santa Ana Refinancing June 28, 2016 Page Two The Firm will not be representing the Successor Agency in connection with any aspect of the Transaction. The Successor Agency has engaged other counsel for the representation of the Successor Agency in connection with such transaction. Although we do not believe the Firm's prior and present representation of the Successor Agency will be compromised by our representation of the Underwriter, the Successor Agency's interest in this Transaction will obviously be adverse to those of the Underwriter. Under the ethical standards discussed immediately below, we are required to bring this matter to your attention and to obtain your consent before representing the Underwriter in connection with the proposed bond transaction. Rules of Professional Conduct As attorneys, we are governed by specific rules relating to our representation of clients when present or potential conflicts of interest exist. Rule 3 -310 of the Rules of Professional Conduct of the State Bar of California provides, in relevant part, as follows: (A) For purposes of this rule: (1) "Disclosure" means informing the client or former client of the relevant circumstances and of the actual and reasonably foreseeable adverse consequences to the client or former client; (2) "Informed written consent" means the client's or former client's written agreement to the representation following written disclosure; (3) "Written" means any writing as defined in Evidence Code section 250. (B) A member shall not accept or continue representation of a client without providing written disclosure to the client where: (1) The member has a legal, business, financial, professional, or personal relationship with a party or witness in the same matter; or (2) The member lniows or reasonably should lmow that: (a) the member previously had a legal, business, financial, professional, or personal relationship with a party or witness in the same matter; and (b) the previous relationship would substantially affect the member's representation; or D 0 CS OC/1763956v4/029999 -0000 3 -216 City of Santa Ana, as Successor Agency to the former Community Redevelopment Agency Re: Successor Agency to the Former° Community Redevelopment Agency of the City of Santa Ana Refinancing June 28, 2016 Page Three (3) The member has or had a legal, business, financial, professional, or personal relationship with another person or entity the member knows or reasonably should know would be affected substantially by resolution of the matter; or (4) The mernber has or had a legal, business, financial, or professional interest in the subject matter of the representation. (C) A member shall not, without the informed written consent of each client: (1) Accept representation of more than one client in a matter in which the interests of the clients potentially conflict; or (2) Accept or continue representation of more than one client in a matter in which the interests of the clients actually conflict; or (3) Represent a client in a matter and at the same time in a separate matter accept as a client a person or entity whose interest in the first matter is adverse to the client in the first matter. (D) A member who represents two or more clients shall not enter into an aggregate settlement of the claims of or against the clients without the informed written consent of each client. (E) A member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment. (F) A member shall not accept compensation for representing a client from one other than the client unless: (1) There is no interference with the member's independence of professional judgment or with the client- lawyer relationship; and (2) Information relating to representation of the client is protected as required by Business and Professions Code section 6068, subdivision (e); and (3) The member obtains the client's informed written consent, provided that no disclosure or consent is required if: (a) such nondisclosure is otherwise authorized by law; or (b) the member is rendering legal services on behalf of any public agency which provides legal services to other public agencies or the public." D OCS OC/ 1763 956v4/029999 -0000 3 -217 City of Santa Ana, as Successor Agency to the former Community Redevelopment Agency Re: Successor Agency to the Former Community Redevelopment Agency of the City of Santa Ana Refinancing .Tune 28, 2016 Page Pour Accordingly, we must request that you sign and return to us a copy of this letter acknowledging that: (1) You have been advised of Ride 3 -310 and of the conflicts associated with your respective interests; (2) You have been advised of Stradling, Yocca, Carlson & Rauth's present and continuing relationship with the Underwriter on the one hand and the Successor Agency on the other; and (3) The Successor Agency nevertheless consents to our representation of the Underwriter in connection with the matters discussed above. We want to stress that you remain completely free to seek independent counsel at any time, even if you decide to sign the Consent set forth below. Should you have any questions concerning this letter or the Consent, please discuss them with us before signing and returning the enclosed copy of this letter. If you have any questions or comments regarding the attached Consent, billing fees, or otherwise, please do not hesitate to call me. DOCSOC/ M 63 956v4/029999.0000 Respectfully submitted, Thomas P. Clark, Jr. Shareholder 3 -218 CARLSON & RAUTH City of Santa Ana, as Successor Agency to the former Community Redevelopment Agency Re: Successor Agency to the F'ornzer Community Redevelopment Agency of the City of'Sania Ana Refinancing June 28, 2016 Page Five CONSENT The undersigned hereby acknowledges disclosure by Stradling Yocca Carlson & Rauth, a Professional Corporation, of its representation of the Underwriter and of potential conflicts as described above, and the undersigned hereby waives the same and consents to the Firm's representation of the Underwriter in connection with the matters discussed above. This consent is given on the condition that (a) with the exception of Mr. Kurt Yeager and Ms. Vanessa Locklin, attorneys of the Firm who perform or have performed services on behalf of the Successor Agency or its affiliates will not assist attorneys assigned to the Transaction, (b) during the pendency of the Transaction, the attorneys representing the Underwriter will not have any involvement in any other matter relating to the Successor Agency, and (c) an "information wall" be established between the attorneys representing the Underwriter and the attorneys who perform services for the Successor Agency. Please note that this consent (a) is conditioned on the Firm not representing the Underwriter in any action or proceeding or in connection with any claim or defense by the Underwriter contesting the validity or priority of any of the Successor Agency's claims in the Transaction or any action or claim involving the Successor Agency contesting the discharge of any of its claims in the Transaction and (b) does not extend to the representation by the Firm of the Underwriter in any litigation, arbitration or other adversarial proceeding or claim, that might arise between the Successor Agency and the Underwriter in connection with the Transaction, or otherwise. In the event of any such litigation, arbitration, other adverse proceeding or claim, the Firm will not represent the Underwriter unless the Successor Agency gives the Firm a new written consent at that time to represent such person or persons. The foregoing consent is also subject to the Firm's receipt of a written consent from the Underwriter to the F'irm's present representation of the Successor Agency in connection with any and all matters in which the Firm currently represents the Successor Agency or its subsidiaries and affiliates, Dated this day of 2016 City of Santa Ana, as Successor Agency to the former Community Redevelopment Agency David Cavazos, City Manager DOCSOC/ 1763956v4/029999 -0000 3 -219 3 -220