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Approval of Legal Proceedings Orrick, Herrington & Sutcliffe LLP, as Bond Counsel, will render opinions with respect to the Bonds which state that the Indenture is a valid and binding obligation of the Successor Agency and enforceable in accordance with its terms. The legal opinions of Bond Counsel will be subject to the effect of bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights and to the exercise of judicial discretion in accordance with general principles of equity. See "APPENDIX F" for the proposed forms of Bond Counsel's opinions with respect to the Bonds. The Successor Agency has no knowledge of any fact or other information which would indicate that the Indenture is not so enforceable against the Successor Agency, except to the extent such enforcement is limited by principles of equity and by state and federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights generally. Certain legal matters will be opined on for the Successor Agency by Assistant City Attorney of the City of Santa Ana, Santa Ana, California, as Successor Agency Counsel. Best Best & Krieger LLP, Riverside, California, will also pass on certain legal matters for the Successor Agency as Disclosure Counsel. Certain legal matters will be passed on for the Underwriter by its counsel, ICutak Rock LLP, Irvine, California. Fees payable to Bond Counsel, Disclosure Counsel and Underwriter's Counsel are contingent upon the sale and delivery of the Bonds. Tax Matters Series 2018A Bonds. In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Successor Agency ("Bond Counsel"), based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Series 2018A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code") and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the Series 2018A Bonds is not a specific preference item for purposes of the federal alternative minimum tax. A complete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix F hereto. To the extent the issue price of any maturity of the Series 2018A Bonds is less than the amount to be paid at maturity of such Series 2018A Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Series 2018A Bonds), the difference constitutes "original issue discount," the accrual of which, to the extent properly allocable to each Beneficial Owner thereof, is treated as interest on the Series 2018A Bonds which is excluded from gross income for federal income tax purposes and State of California personal income taxes. For this purpose, the issue price of a particular maturity of the Series 2018A Bonds is the first price at which a substantial amount of such maturity of the Series 2018A Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Series 2018A Bonds accrues daily over the term to maturity of such Series 2018A Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Series 2018A Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Series 2018A Bonds. Beneficial Owners of the Series 2018A Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Series 2018A Bonds with original issue discount, including the treatment of Beneficial Owners who do not purchase such Series 2018A Bonds in the original offering to the public at the first price at which a substantial amount of such Series 2018A Bonds is sold to the public. Series 2018A Bonds purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) ("Premium Bonds") will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium 48 SA -3-62