MUNICIPAL LEASING ASSOCIATES. INC.

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LEASE WITH OPTION TO PURCHASE #96-112-AF This LEASE WITH OPTION TO PURCHASE dated July 1, 1996 ("Lease") is by and between MUNICIPAL LEASING ASSOCIATES, INC., ("Corporation") a corporation duly organized and operating under the laws of the state of California as lessor and CITY OF SANTA ANA, a political body duly organized and existing- under the laws of the State of California ("Lessee") as lessee. RECITALS: WHEREAS, Lessee deems it essential to acquire the property described herein for its own public purposes; and WHEREAS, it is intended that this Lease be treated as a tax-exempt obligation of Lessee for federal income tax purposes; and WHEREAS, Lessee and Corporation agree to mutually cooperate now and hereafter, to the extent possible, in order to sustain the intent of this Lease and the bargain of both parties hereto.. WITNESSETH: NOW, THEREFORE in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows: SECTION 1. Lease. Corporation hereby leases to Lessee, and Lessee hereby leases and hires from Corporation all property (the "Property") described in the schedule or schedules (collectively, the "Schedule") executed by the parties concurrently herewith and hereafter and made a part hereof. Hereinafter, reference to Corporation means Corporation and Corporation's assigns for those rights, interests and obligations that may be assigned by Corporation. SECTION 2. Term. The term of this Lease respecting each item of Property commences on the Property acceptance date and terminates on the final Rental Payment date or earlier if the Lessee exercises its option to purchase the Property prior to the final Rental Payment date unless the term of this Lease is extended as provided in this Section. If on the scheduled date of termination of this Lease the Rental Payments shall not be fully paid, or provision therefor made, or if such Rental Payments shall have been abated at any time and for'any reason, then the term of this Lease shall be extended until the date upon which all such Rental Payments shall be fully paid, except that the term of this Lease shall in no event extend beyond the date that corresponds to the end of the useful life of the Property. SECTION 3A. Re resentations and Warranties of Lessee. The Lessee represents and warrants to Corporation that: (a) Lessee is a political subdivision, duly organized and existing under the Constitution and laws of the State of California with authority to enter into this Lease and to perform all of its obligations hereunder,