80A - JOINT - SAFA - WATER SYS BONDS

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ESCROW AGREEMENT THIS ESCROW AGREEMENT (this "Escrow Agreement "), executed and entered into as of August 1, 2014, is by and among the SANTA ANA FINANCING AUTHORITY (the "Authority "), the CITY OF SANTA ANA (the "City ") and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as escrow agent (the "Escrow Agent "). WITNESSETH: WHEREAS, there are currently outstanding Santa Ana Financing Authority Water Revenue Bonds, Series 2004 (Payable Solely from Installment Payments Secured by Water System Net Revenues) (the "Prior Bonds "), in the original aggregate principal amount of WHEREAS, the Prior Bonds were issued under the Indenture, dated as of February 1, 2004 (as supplemented and amended, the "Prior Indenture "), by and between The Bank of New York Mellon Trust Company, N.A. (the "Trustee "), and the Authority; WHEREAS, the Prior Bonds are payable from component installment payments (the "2004 Installment Payments ") payable by the City tinder the Master Installment Purchase Agreement, dated as of February 1, 2004 (the "Master Installment Purchase Agreement "), between the City and the Authority, and the First Supplement to Master Installment Purchase Agreement, dated as of February 1, 2004, between the City and the Authority (the "Prior Supplement" and together with the Master Installment Purchase Agreement, the "Prior Installment Purchase Agreement ") and pertaining to the City's water system; WHEREAS, the Escrow Agent is the trustee under the Prior Indenture; WHEREAS, the City has determined that a savings will be realized by exercising its option under the Prior Installment Purchase Agreement to prepay said component installment payments, thereby providing the funds necessary to pay, when due, the principal of and interest on the Prior Bonds to and including September 1, 2014 and to redeem the Prior Bonds on September 1, 2014 (the "Redemption Date ") at a redemption price (the "Redemption Price ") equal to 102% of the principal amount of the Prior Bonds plus the accrued but unpaid interest on the Prior Bonds, to the Redemption Date; WHEREAS, in order to provide the funds necessary to exercise said option, the Authority has issued $ aggregate principal amount of Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) (the "Bonds ") pursuant to the Indenture, dated as of August 1, 2014 (the "Indenture "), by and between the Trustee and the Authority; WHEREAS, the Prior Bonds are subject to redemption on the Redemption Date and `the City and the Authority have determined to provide for the call for redemption on the Redemption Date of the Prior Bonds outstanding on the Redemption Date; NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Authority, the City and the Escrow Agent agree as follows: 80A-11 26