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55A - RESO - GAS TAX BONDS
REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: NOVEMBER 5, 2019 TITLE: ADOPT A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF GAS TAX REVENUE REFUNDING BONDS, SERIES 2019; MAKING CERTAIN DETERMINATIONS RELATING THERETO; AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH {STRATEGIC PLAN NO. 4, 2D} is/ Kristine Ridge CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 111 Reading ❑ Ordinance on 211d Reading ❑ Implementing Resolution ❑ Set Public Hearing For Wis]►111►111101i[w FILE NUMBER 1. Adopt a Resolution authorizing the Issuance of the City of Santa Ana Gas Tax Refunding Bonds, Series 2019 ("the Bonds") in connection with the proposed refunding of the Gas Tax Revenue Certificates of Participation, Series 2007. 2. Authorize the execution of and approving a form of the Indenture of Trust, Escrow Agreement, Preliminary Official Statement, Bond Purchase Agreement and Continuing Disclosure Agreement. 3. Authorize the transfer of the reserve account of the Series 2007 Certificates of Participation ("COPs") in the amount of approximately $4,335,179, or the amount reflected upon closing, to the respective fund and to apply such proceeds to maximize the savings on the refunding. BACKGROUND On December 26, 2007, the City of Santa Ana (the "City") issued the Gas Tax Revenue Certificates of Participation, Series 2007 ("2007 COP") in the amount of $68,010,000 with a final maturity on January 1, 2040. The 2007 COPS financed local roadway projects, including but not limited to: grind and overlay, reconstruction, critical repair of sidewalks, curbs and gutters, and street resurfacing projects within the City. The City completed most of the improvements by 2012. Gas Tax revenues allocated to the City secured the original 2007 COP. The City's ability to pledge gas tax revenues toward the repayment of the 2007 COP was legally validated in Orange County Superior Court on November 16, 2007. On July 25, 2019, the City received correspondence from the Chief Counsel to California State Controller, reauthorizing the pledge of gas tax revenues for the refinancing of the 2007 COPS. On September 3, 2019, the City Council approved consulting agreements for the financing team to move forward with refinancing. 55A-1 Resolution of the City of Santa Ana Authorizing the issuance and Sale of Gas Tax Revenue Refunding Bonds November 5, 2019 Page 2 The City's 2007 COP have a current outstanding obligations totaling $56 million (as June 30, 2019), and the refinancing is expected to generate interest rate savings for the City. DISCUSSION The municipal interest rate environment continues to be at favorable levels. By issuing the Bonds to refinance the outstanding principal of the 2007 COP, the City is expected to generate cash flow savings of approximately $18.4 million (approximately 20% net present value ("NPV") savings) over the life of the bond (average annual savings of approximately $916K), without extending the current maturity date. The City's Debt Management Policy requires at least 3% savings for a refinancing. To maximize the savings, the City will contribute cash from the existing reserve account (approx. $4.3M) from the 2007 COPS to the refunding escrow for the 2019 Bonds. These figures assume the use of the reserve fund, a surety policy, and bond insurance; and are subject to bond market conditions at the time of the sale. The principal amount of the refinanced Bonds will be approximately $44 million, approximately $12 million less than the current outstanding obligation. The 2007 COPS may be redeemed on any date. The City will deposit the refunding proceeds into a short-term escrow account in order to call the 2007 COP on the earliest date possible. Refunding Bond Structure The Bonds will be structured as refunding obligations issued by the City. The City is authorized pursuant to the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 et seq. and Section 53580 et seq. of said Code (the "Bond Law"), to issue the Bonds for the purpose of refunding any outstanding indebtedness of the City which is payable from the revenues of the Gas Tax Fund. In addition, contingent on prevailing market conditions at the time of sale, the Bonds may be structured with bond insurance and a surety policy. The City financing team anticipates setting a date to price and sell the Bonds and determine the final interest rate structure in late November 2019. DOCUMENTS TO BE APPROVED Approval of the Resolution and related bond documents, which have been reviewed by Bond Counsel, will authorize the execution of the following documents: • Indenture of Trust - This document contains the terms of the Bonds, including payment and redemption provisions, definition and pledge of Revenues to pay the Bonds, Rights and Duties of the Trustee, remedies upon a default in the payment of the Bonds, and final discharge of the Bonds and other related matters. • Escrow Agreement - This document contains terms by which the Trustee will hold 2019 Refunding Bond proceeds on the behalf of the owners of the 2007 COPs to pay and discharge all the 2007 COPS on the call date. • Preliminary Official Statement - This is the City's document pursuant to which the Bonds will be offered for purchase by the public. This document must contain all facts material to 55A-2 Resolution of the City of Santa Ana Authorizing the issuance and Sale of Gas Tax Revenue Refunding Bonds November 5, 2019 Page 3 the Bonds and the City (with certain permitted exceptions to be completed in the final Official Statement) and must not omit any such material facts. • Bond Purchase Agreement - This document contains the obligation of the underwriter to accept and pay for the Bonds, provided that all of the covenants and representations of the City are met and certain other conditions excusing performance by the underwriter do not exist. • Continuing Disclosure Agreement - This document outlines the City's requirements to provide certain annual reports to investors in order to allow the underwriter to comply with federal securities laws. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal $4 — City Financial Stability, Objective #2, 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 2019 Bonds. The proposed 2019 Bonds will generate an estimated cash flow savings of approximately $18.4 million or 20% NPV savings over the life of the bond, net of all costs related to the issuance of this debt, and the term of the Bonds will not exceed the term of the 2007 COP being refunded. The source of repayment for the Bonds is the City's Gas Tax revenue from the State's Highway Users Tax Account. Additionally, upon Council authorization, staff will transfer the 2007 COPS reserve account to the trustee for this transaction (US Bank National Association) and place it into the respective fund for the 2019 Bonds. The balance at September 30, 2019 is $4,335,179 (general ledger account 02917002-15115); however, the actual amount to transfer will be the amount available as of the closing transaction date (late November 2019). Annual payment of Debt Service for FY 2019-20 through FY 2039-40 will be budgeted and paid from 02917021-67300 (principal) and 02917021-67310 (interest). 55A-3 Resolution of the City of Santa Ana Authorizing the issuance and Sale of Gas Tax Revenue Refunding Bonds November 5, 2019 Page 4 APPROVED AS TO FUNDS AND ACCOUNTS: Kathryn Downs, CPA Executive Director Finance and Management Services Agency Exhibits: 1. Resolution 2. Indenture of Trust 3. Escrow and Deposit Trust Agreement 4. Preliminary Official Statement 5. Bond Purchase Agreement 6. Continuing Disclosure Agreement 55A-4 EXHIBIT 7 RESOLUTION NO. 2019-xxx RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING THE ISSUANCE AND SALE OF GAS TAX REVENUE REFUNDING BONDS, SERIES 2019 TO REFINANCE OUTSTANDING OBLIGATIONS, AUTHORIZING EXECUTION OF AN INDENTURE OF TRUST, AND AUTHORIZING EXECUTION OF AND APPROVING RELATED AGREEMENTS AND OFFICIAL ACTIONS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1. The City Council of the City of Santa Ana conclusively finds, determines and declares as follows: WHEREAS, the Santa Ana Financing Authority (the "Authority") caused to be executed and delivered its $68,010,000 Gas Tax Revenue Certificates of Participation (2007 Local Street Improvement Project) (the "2007 Certificates"), pursuant to a Trust Agreement, dated December 1, 2007, by and between the Authority and the trustee named therein (the "2007 Trust Agreement'), for the purpose of financing street pavement improvements for the City; and WHEREAS, the 2007 Certificates were secured in part by payments to be made under an Installment Sale Agreement (the "2007 Installment Sale Agreement'), dated as of December 1, 2007, between the City and the Authority; and WHEREAS, on November 16, 2007, the City was granted a favorable judgment in Case No. 07CCO9172 with respect to the issuance of the 2007 Certificates, the 2007 Trust Agreement, the 2007 Installment Sale Agreement and the pledge of the Gas Tax Revenues to make Installment Sale Payments thereunder; and WHEREAS, the City, after due investigation and deliberation, has determined that it is in the interests of the City at this time to provide for the issuance of gas tax revenue refunding bonds for the purpose of prepaying the 2007 Certificates and to prepay the 2007 Installment Sale Agreement, and to that end the City Council desires to approve and authorize the issuance of its City of Santa Ana Gas Tax Revenue Refunding Bonds, Series 2019 (the "Bonds") for such purposes; and WHEREAS, the City is authorized pursuant to the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 et seq. and Section 53580 et seq. of said Code (the "Bond Law"), to issue the Bonds for the purpose of refunding any outstanding indebtedness of the City which is payable from the revenues of the gas tax fund, and the City Council has determined that it is in the interests of the City at this time to provide for Resolution No. 2019-xxx Page 1 of 6 55394.00055\32329888.4 #13276v2 55A-5 the issuance of the Bonds under the Bond Law to prepay the 2007 Certificates and to prepay the 2007 Installment Sale Agreement; and WHEREAS, the City has determined that the Bonds will be sold to Ramirez & Co., Inc., as Underwriter, and there has been presented to the City a form of bond purchase contract (the "Bond Purchase Contract'); and WHEREAS, Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California Legislature) ("SB 450") requires that the City Council obtain from an underwriter, municipal advisor or private lender and disclose, prior to authorization of the issuance of bonds, including debt instruments such as the Bonds, with a term of greater than 13 months, good faith estimates of the following information in a meeting open to the public: (a) the true interest cost of the Bonds, (b) the sum of all fees and charges paid to third parties with respect to the Bonds, (c) the amount of proceeds of the Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the Bonds, and (d) the sum total of all debt service payments on the Bonds calculated to the final maturity of the Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Bonds; and WHEREAS, it is anticipated that the Bonds will be issued with fixed interest rates, as tax-exempt bonds, and that the proceeds of the Bonds will be applied pursuant to the provisions of the Indenture as finally executed and delivered (i) to prepay all of the 2007 Certificates; (ii) to fund a debt service reserve fund, and (iii) to pay costs incurred in connection with the issuance of the Bonds; and WHEREAS, the City Council wishes at this time to authorize all proceedings relating to the issuance and sale of the Bonds and all other agreements and documents relating thereto; NOW, THEREFORE, it is hereby ORDERED, RESOLVED and DETERMINED, as follows: Section 2. Issuance of Bonds. The City Council hereby authorizes the issuance of the Bonds under and pursuant to the Bond Law and an Indenture of Trust (the "Indenture") by and between the City and U.S. Bank National Association, as trustee, so long as the combined net present value savings to be achieved by the City resulting from the issuance of the Bonds shall be at least 3.00% of the principal amount of the 2007 Certificates remaining outstanding. The City Council hereby approves the Indenture in substantially the form on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by the Mayor, the City Manager, or the Executive Director and Treasurer (together the "Authorized Officers"), whose execution thereof shall be conclusive evidence of such approval. The Authorized Officers are hereby authorized and directed for and in the name and on behalf of the City to execute, and the City Clerk is hereby authorized and directed to attest, the final form of the Indenture. The good faith estimates required by SB 450 relating to the Bonds are set forth in Exhibit A hereto. Resolution No. 2019- Page 2 of 6 55394.00055\32329888.4 55A-6 The proceeds of the Bonds shall be applied to (i) cause the redemption of a portion of the 2007 Certificates which are payable from the 2007 Installment Sale Agreement, (ii) fund a debt service reserve fund, either in cash or provide a debt service reserve insurance policy, and (iii) pay costs incurred in connection with the issuance of the Bonds, all in accordance with the provisions of this Resolution and the Indenture. Section 3. Approval of Bond Purchase Contract and Conditions of Approval. The form of Bond Purchase Contract presented at this meeting is hereby approved and the Authorized Officers are each individually hereby authorized to accept, for and in the name of the City, such Bond Purchase Contract in substantially the form hereby approved 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 that the aggregate principal amount of Bonds to be sold pursuant to the Bond Purchase Contract shall not exceed $45,800,000, which may include a series of bonds of which the interest paid on such Bonds is includable as income for federal tax purposes, and the Underwriter's discount or fee (not including any original issue discount or premium on the bonds) shall not exceed 0.77% of the principal amount of Bonds sold, and provided that, with respect to the 2007 Certificates, the net present value savings is at least 3.00%. Section 4. Official Statement. The City Council hereby authorizes the Authorized Officers to approve and to deem nearly final, within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934, a form of Preliminary Official Statement describing the Bonds. Distribution of such Preliminary Official Statement by the Underwriter is hereby approved. The Authorized Officers are hereby authorized and directed to approve any changes in or additions to such Preliminary Official Statement for the purpose of finalizing such document, and the execution thereof by the Authorized Officers shall be conclusive evidence of approval of any such changes and additions. The City Council hereby authorizes the distribution of the final Official Statement by the Underwriter. The final Official Statement shall be executed in the name and on behalf of the City by the Authorized Officers. Section 5. Approval of Continuing Disclosure Agreement. Each of the Authorized Officers acting individually, is authorized to, for and in the name and on behalf of the City, negotiate, execute and deliver the Continuing Disclosure Agreement in substantially the same form as contained in the appendix of the Official Statement, with such changes therein as the Authorized Officer executing the same may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof). Section 6. Approval of Escrow Deposit and Trust Agreement. The City Council hereby authorizes the prepayment of the 2007 Certificates and the 2007 Installment Sale Agreement with the proceeds of the Bonds. The form of the Escrow Deposit and Trust Agreement which provides for (i) the defeasance and prepayment of the 2007 Certificates, (ii) the creation and administration by U.S. Bank National Association, as Escrow Agent, of the Escrow Fund for the benefit of the owners of 2007 Certificates, and (iii) the performance of other duties by the Escrow Agent, is approved in the form on file with the City Clerk, and the Authorized Officer are each individually authorized to execute and deliver, on behalf of the City, such Escrow Deposit and Trust Agreement with respect Resolution No. 2019- Page 3 of 6 55394.00055\32329888.4 55A- / to the 2007 Certificates. If the Authorized Officers so determine, the Escrow Agreement may be replaced with refunding instructions to be given to the Trustee for the 2007 Certificates. Section 7. Modifications. The approval of the Indenture, the Escrow Deposit and Trust Agreement, the Preliminary Official Statement and Bond Purchase Contract given by this Resolution shall apply to any modification or amendment of any of said agreements which is agreed upon and approved by Bond Counsel and the Authorized Officers as being necessary to carry out the provisions thereof and the authorization and direction provided in this Resolution. Section 8. Official Actions. The Authorized Officers are each authorized and directed in the name and on behalf of the City to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate the issuance and sale of the Bonds, obtain a rating from a reputable rating agency, and any of the other transactions contemplated by the agreements and documents approved pursuant to this Resolution. Any Authorized Officer is authorized to obtain municipal bond insurance or a debt service reserve fund policy for the Bonds. Whenever in this resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. Resolution No. 2019- Page 4 of 6 55394.00055\32329888.4 55A-8 Section 9. Effective Date. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this 5th day of November, 2019: Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: '�14 7g, -f.L John M. unk, Assistant City Attorney NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers Resolution No. 2019- Page 5 of 6 55394.00055\32329888.4 55A-9 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Daisy Gomez, Clerk of the Council, do hereby certify the attached Resolution No. 2019- to be the original resolution adopted by the City Council of the City of Santa Ana on November 5, 2019. Dated: Daisy Gomez Clerk of the Council City of Santa Ana Resolution No. 2019- Page 6 of 6 55394.00055\32329888.4 55A-10 EXHIBIT A GOOD FAITH ESTIMATES The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by Urban Futures, Inc. as municipal advisor to the City (the "Municipal Advisor"), each with respect to the Bonds. Principal Amount. The Municipal Advisor has informed the City that, based on the City's financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $44,125,000 (the "Estimated Principal Amount"). True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 2.74%. Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $878,386. Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserve fund funded with proceeds of the Bonds, is $52,918,396. Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $69,314,590. The foregoing estimates constitute good faith estimates only. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, 55394.00055\32329888.4 55.41-11 (b) the actual principal amount of Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City's financing plan, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City. 55394.00055\32329888.4 55 ? 1 2 EXHIBIT 2 1-3.1.1 A ITM Ca I'M 1411:1 INDENTURE OF TRUST By and between the CITY OF SANTA ANA and U.S. BANK NATIONAL ASSOCIATION, As Trustee Dated as of December 1, 2019 Relating to City of Santa Ana Gas Tax Revenue Refunding Bonds, Series 2019 55394.00055\32329348.3 55A-1 3 INDENTURE OF TRUST THIS INDENTURE OF TRUST, made and entered into as of , 2019, by and between the CITY OF SANTA ANA, a municipal corporation organized and existing under the constitution and laws of the State of California (the "City"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, California, and being qualified to accept and administer the trusts hereby created, as trustee (the "Trustee"), WITNESSETH: WHEREAS, the City issued its $68,010,000 Gas Tax Revenue Certificates of Participation (2007 Local Street Improvement Program Project) (the "2007 Certificates"), for the purpose of financing street pavement improvements for the City; and WHEREAS, the 2007 Certificates were secured in part by payments to be made under an Installment Sale Agreement (the "2007 Installment Sale Agreement'), dated as of December 1, 2007, between the City and the Santa Ana Financing Authority (the "Authority"); and WHEREAS, on November 16, 2007, the City was granted a favorable judgment in Case No. 07CCO9172 with respect to the issuance of the 2007 Certificates, the 2007 Trust Agreement, defined herein, the 2007 Installment Sale Agreement and the pledge of the Gas Tax Revenues to make Installment Sale Payments thereunder; WHEREAS, the City, after due investigation and deliberation, has determined that it is in the interests of the City at this time to provide for the issuance of its gas tax revenue refunding bonds under this Indenture for the purpose of refunding the 2007 Certificates and the 2007 Installment Sale Agreement, and to that end the City Council has heretofore adopted its Resolution No. approving and authorizing the issuance of its City of Santa Ana Gas Tax Revenue Refunding Bonds, Series 2019 (the "Series 2019 Bonds") for such purposes; WHEREAS, in order to provide for the authentication and delivery of the Series 2019 Bonds, to establish and declare the terms and conditions upon which the Series 2019 Bonds are to be issued and secured and to secure the payment of the principal thereof and of the interest and premium, if any, thereon, the City Council has authorized the execution and delivery of this Indenture; WHEREAS, all of the Series 2019 Bonds will be secured by a pledge of the Gas Tax Revenues, as defined herein, and certain other moneys and securities held by the City and the Trustee hereunder; and WHEREAS, the City has determined that all acts and proceedings required by law necessary to make the Series 2019 Bonds, when executed by the City, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the City, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth, in accordance with its terms, have been done and taken; and the execution and delivery of this Indenture have been in all respects duly authorized; 55394.00055\32329348.3 55A-1 w NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and the interest and premium (if any) on all Series 2019 Bonds at any time issued and Outstanding under this 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 Series 2019 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 Series 2019 Bonds by the Owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the City does hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time to time of the Series 2019 Bonds, as follows: ARTICLE I DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS; EQUAL SECURITY SECTION 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any Additional Obligations Instrument and of the Series 2019 Bonds and of any certificate, opinion, request or other documents herein mentioned have the meanings herein specified. "Additional Obligations" means Obligations other than the Series 2019 Bonds, which are either currently outstanding or issued pursuant to Section 3.04 hereof. "Additional Obligations Instrument" means the resolution, trust indenture or installment sale agreement adopted, entered into or executed and delivered by the City and under which Additional Obligations are issued. "Administrative Costs" means the ordinary and necessary administrative costs and incidental expenses related to the Series 2019 Bonds, the Indenture, and any Additional Obligations, including, but not limited to Trustee fees (including any fees and expenses of its counsel) and fees incurred in connection with the calculation of arbitrage rebate due to the federal government with respect to the Series 2019 Bonds. "Authority" means the Santa Ana Financing Authority. "Authorized Investments" means any of the following, but only to the extent that the same are acquired at Fair Market Value, which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein: (a) direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America; (b) obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including: (i) Export - Import Bank; (ii) Farm Credit System Financial Assistance Corporation, (iii) Farmers Home Administration; (iv) General Services Administration; (v) U.S. Maritime Administration; (vi) Small Business Administration; (vii) Government National 55394.00055\32329348.3 5 5A-15 Mortgage Association (GNMA); (viii) U.S. Department of Housing & Urban Development (PHA's); (ix) Federal Housing Administration and (x) Federal Financing Bank; (c) senior debt obligations rated "Aa" by Moody's and "AA" by S&P issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, senior debt obligations of other government -sponsored agencies, obligations of the Resolution Funding Corporation (REFCORP) and senior debt obligations of other government sponsored agencies; (d) U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks (including the Trustee and its affiliates) which have a rating on their short term certificates of deposit on the date of purchase of "P-I" by Moody's and "A-1" or "A -I+" by S&P and maturing no more than 360 days after the date of purchase, provided that ratings on holding companies are not considered as the rating of the bank; (e) commercial paper which is rated, at the time of purchase, in the single highest classification, "P-1" by Moody's and "A-1+" by S&P, and which matures not more than 270 days after the date of purchase; (f) investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P, including such funds for which the Trustee, its affiliates or subsidiaries provide investment advisory or other management services or for which the Trustee or an affiliate of the Trustee serves as investment administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives and retains a fee for services provided to the fund, (ii) the Trustee collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds, and (iii) services performed for such funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee; (g) pre -refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) which are rated, based upon an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's and S&P or any successors thereto; or (ii)(A) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (a) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (B) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates 55394.00055\32329348.3 5 5Q-16 thereof or on the redemption date or dates specified in the irrevocable instructions referred to above, as appropriate; (h) investment agreements, supported by appropriate opinions of counsel, between the Trustee and a financial institution whose long-term debt has a rating of A or better from S&P or Moody's or a short-term rating which is in the highest general rating category of S&P and Moody's, in any event determined without regard to any refinement or gradation of such rating by a numerical modifier, a plus or a minus sign, or otherwise; (i) Repurchase agreements repos") that provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to the Trustee (buyer/lender), and the transfer of cash from the Trustee to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the Trustee in exchange for the securities at a specified date. Repurchase agreements must satisfy the following criteria: firm. I. Repos must be between the Trustee and a dealer bank or securities a. Primary dealers on the Federal Reserve reporting dealer list which fall under the jurisdiction of the SIPC and which are rated "A" or better by S&P and Moody's, or b. Banks rated "A" or above by S&P and Moody's. 2. The written repo contract must include the following: a. Securities which are acceptable for transfer are: (1) Direct U.S. governments (2) Federal agencies backed by the full faith and credit of the U.S. government (and FNMA and FHLMC) b. The term of the repo may be up to 30 days C. The collateral must be delivered to the Trustee (if the Trustee is not supplying the collateral) or third party acting as agent for the Trustee (if the Trustee is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities). d. The Trustee has a perfected first priority security interest in the collateral. e. Collateral is free and clear of third -party liens and in the case of an SIPC broker was not acquired pursuant to a repo or reverse repo. 55394.00055\32329348.3 4 55 7 I. Failure to maintain the requisite collateral percentage, after a two day restoration period, will require the Trustee to liquidate collateral. g. Valuation of Collateral (1) The securities must be valued by such dealer bank or securities firm weekly, marked -to -market at current market price plus accrued interest. (a) The value of collateral must be equal to 104% of the amount of cash transferred by the Trustee to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral falls below 104% of the value of the cash transferred by the Trustee, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or F ILMC, then the value of collateral must equal 105%. 3. A legal opinion must be delivered to the Trustee to the effect that the repo meets guidelines under state law for legal investment of public funds; and 0) the Local Agency Investment Fund maintained by the State of California. "Authorized Official" means the City Manager, Finance Director, Treasurer or any other officer of the City duly authorized by the City Council for that purpose. "Bond Counsel" means any attorney at law or firm of attorneys, of nationally recognized standing in matters pertaining to the federal tax exemption of interest on bonds issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America. "Bond Law" means Sections 53570 et seq. and 53580 et seq. of the California Government Code, as in effect on the Closing Date. "Bond Registration Books" means the books maintained by the Trustee pursuant to Section 2.08 for the registration and transfer of ownership of the Series 2019 Bonds. "Bond Year" means the twelve-month period beginning on January 1 in each year and ending on December 31 in the following year except that the Bust Bond Year shall begin on the Closing Date. `Business Day" means any day other than a Saturday, Sunday or a day on which the Trustee is authorized by law to remain closed. 55394.00055\32329348.3 5 5Q-18 "Certificate of the City" means a certificate in writing signed by an Authorized Official, or by any other officer of the City duly authorized by the City Council for that purpose. "Liff" means the City of Santa Ana, a municipal corporation organized and existing under the laws of the State of California. "City Bonds" means all revenue bonds or notes of the City authorized, executed, issued, and delivered under and pursuant to the laws of the State of California, the payments of which are made from the Gas Tax Revenues and which are on a parity with the Series 2019 Bonds. The term "City Bonds" includes, but is not limited to, obligations in the form of bonds, notes, bond anticipation notes, and commercial paper. "City Council" means the City Council of the City or any other legislative body of the City hereafter provided for pursuant to law. "Closing Date" means the date upon which there is an exchange of the Series 2019 Bonds for the proceeds representing the purchase of such Series by the Original Purchaser thereof. "Continuing Disclosure Agreement" means that certain Continuing Disclosure Agreement executed by the City and dated the date of original execution and delivery of the Series 2019 Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Contract Payment Date" means any date on which Contract Payments are scheduled to be paid by the City under and pursuant to any Contract. "Contract Payments" means debt service on the Series 2019 Bonds due and payable under this Indenture or the installment or lease payments of interest and principal or, if there are no separate payments of interest and principal, the installment or lease payments, scheduled to be paid by the City under and pursuant to the Contracts. "Contracts" means the Series 2019 Bonds and all contracts or leases of the City authorized and executed by the City under and pursuant to the laws of the State of California, the debt service, installment or lease payments under which are made from the Gas Tax Revenues and which are on a parity with the Series 2019 Bonds. "Cost of Issuance Fund" means the fund by that name established pursuant to Section 3.03. "Costs of Issuance" means all expenses incurred in connection with the authorization, issuance, sale and delivery of the Series 2019 Bonds, including but not limited to compensation, fees and expenses of the City and the Trustee and their respective counsel, compensation to any financial consultants and underwriters, legal fees and expenses, filing and recording costs, rating agency fees, costs of preparation and reproduction of documents and costs of printing. "Debt Service" means, for any Fiscal Year or other period, the sum of (i) the interest payable during such Fiscal Year or other period on all outstanding City Bonds, assuming that all outstanding serial City Bonds are retired as scheduled and that all outstanding term City Bonds 55394.00055\32329348.3 5 5A-19 are redeemed or paid from sinking fund payments as scheduled (except to the extent that such interest is to be paid from the proceeds of sale of any City Bonds), (2) that portion of the principal amount of all outstanding serial City Bonds maturing on any principal payment date which falls in such Fiscal Year or other period, (3) that portion of the principal amount of all outstanding term City Bonds required to be redeemed or paid on any redemption date which falls in such Fiscal Year or other period, and (4) that portion of the Contract Payments required to be made in such Fiscal Year or other period (except to the extent any interest is capitalized). For purposes of calculating Debt Service, the following assumptions shall be used: (i) in determining the principal amount due in each Fiscal Year or other period, payment shall be assumed to be made in accordance with any amortization schedule established for such Obligations, including any scheduled payment at maturity or mandatory redemption or prepayment of Obligations on the basis of value, and for such purpose, the scheduled payment at maturity or redemption payment or prepayment shall be deemed a principal payment; (ii) in determining the interest due in each Fiscal Year or other period, interest payable at a fixed rate shall be assumed to be made at such fixed rate and on the required payment dates; (iii) if any outstanding Obligations constitute variable rate indebtedness, the interest rate on such Obligations shall be assumed to be one hundred ten percent (110%) of the greater of (a) the daily average interest rate on such Obligations during the twelve (12) calendar months ending with the month preceding the date of calculation, or (b) the rate of interest on such Obligations on the date of calculation; (iv) in the event that the City shall issue Additional Obligations that bear interest at a variable rate, such Additional Obligations shall be assumed to bear interest at the highest of: (i) the actual rate on the date of calculation or, if the indebtedness is not yet outstanding, the initial rate (if established and binding), (ii) if the indebtedness has been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation, and (iii) (1) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Tax Code, the most recently published Bond Buyer 25 Bond Revenue Index (or comparable index if no longer published) plus fifty (50) basis points, or (2) if interest is not so excludable, the interest rate on direct U.S. Treasury obligations with comparable maturities plus fifty (50) basis points. Notwithstanding the foregoing, for purposes of any rate covenant measuring actual debt service coverage during a test period, variable rate indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the test period; (v) if moneys or Defeasance Obligations have been deposited by the City into a separate fund or account or are otherwise held by the City or by a fiduciary to be used to pay Debt Service on specified Obligations, and such Obligations are discharged, or no longer outstanding, pursuant to the terms of the instrument under which they are issued or arise, then the Debt Service to be paid from such moneys or Defeasance Obligations, or 55394.00055\32329348.3 55 7-2O from the earnings thereon, shall be disregarded and not included in calculating Debt Service; (vi) the amount on deposit in a debt service reserve fund on any date of calculation of Debt Service shall be deducted from the amount of principal due at the final maturity of the Obligations for which such debt service reserve fund was established and in each preceding year until such amount is exhausted; and (vii) with respect to Contract Payments, that are not comprised of separate payments of interest and principal but which, rather, are required pursuant to the instrument under which they arise to be paid in amounts sufficient to pay principal and interest on bonds, notes, or other obligations of an entity other than the City, for purposes of calculating Debt Service, interest payments and principal payments (whether at maturity or by redemption or prepayment) with respect to such bonds, notes, or other obligations shall be deemed to be interest payments and principal payments with respect to such Contract Payments; provided, however, that for purposes of such calculation, the Contract Payment Dates applicable to such Contract Payments shall be used, whether or not such Contract Payment Dates coincide with the dates on which such Contract Payments are to be applied to the payment of interest and principal with respect to such bonds, notes, or other obligations. "Debt Service Fund" means the fund by that name established and held by the Trustee pursuant to Section 4.03. "Defeasance Obligations" means (a) cash, (b) non -callable Federal Securities described in paragraph (a) of the definition thereof ("Treasuries"), (c) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries 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 and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated or (d) pre -refunded municipal obligations rated "AA" and "Aa" by S&P or Moody's, respectively (or any combination thereof). "Depository" means (a) initially, DTC, and (b) any other securities depositories acting as Depository pursuant to Section 2.10. "Depository System Participant" means any participant in the Depository's book -entry system. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Escrow Bank" means The Bank of New York Mellon Trust Company, N.A., acting as Escrow Bank under the Escrow Deposit and Trust Agreement. "Escrow Deposit and Trust Agreement" means the Escrow Deposit and Trust Agreement, dated as of December 1, 2019, by and among the City, the Authority and the Escrow Bank. 55394.00055\32329348.3 55A-21 "Escrow Fund" means the fund of that name established and held by the Escrow Bank pursuant to the Escrow Deposit and Trust Agreement. "Event of Default" means any of the events described in Section 8.01. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Tax Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Tax Code, (iii) the investment is a United States Treasury Security State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled investment fund in which the City and related parties do not own more than a ten percent (10%) beneficial interest therein if the return paid by the fund is without regard to the source of the investment. "Federal Securities" means any of the following, which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein: (a) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America); and (b) obligations of any department, agency or instrumentality of the United States of America the timely payment of principal of and interest on which are unconditionally and fully guaranteed by the United States of America. "Fiscal Year" means the period commencing on July 1 of each year and terminating on the next succeeding June 30. "Gas Tax Fund" means the State Gas Tax Special Revenue Fund established pursuant to State law by ordinance adopted by the City Council. "Gas Tax Revenues" means all amounts received by the City from the State in accordance with Streets and Highways Code Section 2105, 2106 and 2107, as such provisions may be amended, and all other revenues (except revenues received by the City in accordance with Streets and Highways Code Section 2107.5), if any, received by the City from taxes imposed on the purchase of motor vehicle fuels and any payments, subventions or reimbursements received by the City from the State in lieu of such revenues. "Improvement" means any addition, extension, improvement, equipment, machinery or other facilities for which Gas Tax Revenues may be used pursuant to law. 55394.00055\32329348.3 55 9-2 "Indenture" means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended pursuant to the provisions hereof. "Independent Certified Public Accountant" means any certified public accountant or firm of such accountants appointed and paid by the City, and who, or each of whom - (a) is in fact independent and not under domination of the City; (b) does not have any substantial identity of interest, direct or indirect, with the City; and (c) is not and no member of which is connected with the City as an officer or employee of the City, but who may be regularly retained to make annual or other audits of the books of or reports to the City. "Information Services" means in accordance with then -current guidelines of the Securities and Exchange Commission, the Electronic Municipal Market Access System (referred to as "EMMA"), a facility of the Municipal Securities Rulemaking Board (at http://emma.msrb.org), or such service or services as the City may designate in a certificate delivered to the Trustee. ["Insurance Policy" means the municipal bond insurance policy securing the Series 2019 Bonds and delivered by the Insurer.] ["Insurer" means (i) as provider of the Reserve Policy and as provider of the Insurance Policy, and (ii) the provider of a municipal bond or financial guaranty insurance policy with respect to an issue of Additional Obligations (other than the Series 2019 Bonds) or with respect to an issue of bonds the proceeds of which are used to purchase an issue of Bonds (other than the Series 2019 Bonds).] "Interest Payment Date" means, with respect to the Series 2019 Bonds, January 1 and July 1 in each year, beginning [July 1, 2020]. "Maximum Annual Debt Service" means, at any point in time, with respect to Obligations then outstanding, the maximum amount of Debt Service on the Obligations in the then current or any future Fiscal Year or other period, calculated by the City or by an Independent Certified Public Accountant and provided to the Trustee. "Moody's ' means Moody's Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors or assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency selected by the City. "Nominee" means (a) initially, Cede & Co. as nominee of DTC, and (b) any other nominee of the Depository designated pursuant to Section 2.10(a) of the Indenture. "Obligations" means City Bonds and Contract Payments. 55394.00055\32329348.3 554-2 V "Original Purchaser" means, in the case of the Series 2019 Bonds, Ramirez & Co., Inc., and its successors and assigns. "Outstanding," when used as of any particular time with reference to Series 2019 Bonds, means (subject to the provisions of Section 7.03) all Series 2019 Bonds theretofore executed, issued and delivered by the City under this Indenture except - (a) Series 2019 Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (b) Series 2019 Bonds paid or deemed to have been paid within the meaning of Section 9.03; and (c) Series 2019 Bonds in lieu of or in substitution for which other Series 2019 Bonds shall have been executed, issued and delivered by the City pursuant to this Indenture or any Contracts for Additional Obligations. "Owner" or "Bond Owner" or `Bondowner", when used with respect to any Series 2019 Bond, means the person in whose name the ownership of such Series 2019 Bond shall be registered on the Bond Registration Books. "Participating Underwriter" has the meaning ascribed thereto in the Continuing Disclosure Agreement. "Principal Corporate Trust Office" means the corporate trust office of the Trustee at the address set forth in Section 9.10, provided that for purposes of payment, cancellation, surrender, exchange and transfer of Bonds, such term means the corporate trust office of the Trustee in [Los Angeles, California] or such other or additional offices as may be designated by the Trustee from time to time. ["Qualified Reserve Account Credit Instrument" means (i) the Reserve Policy or (ii) an irrevocable standby or direct -pay letter of credit or Reserve Policy issued by a commercial bank or insurance company and deposited with the Trustee pursuant to Section 4.03(d), provided that all of the following requirements are met by the City at the time of delivery thereof to the Trustee: (a) the long-term credit rating of such bank or insurance company is "A" (without regard to modifier) or higher; (b) such letter of credit or Reserve Policy has a term of at least twelve (12) months; (c) such letter of credit or Reserve Policy has a stated amount at least equal to the portion of the Reserve Requirement with respect to which funds are proposed to be released pursuant to Section 4.03(d); (d) the Trustee is authorized pursuant to the terms of such letter of credit or Reserve Policy to draw thereunder an amount equal to any deficiencies which may exist from time to time in the Interest Account and the Principal Account; and (e) prior written notice is given pursuant to the Indenture before the effective date of any such Qualified Reserve Account Credit Instrument.] "Record Date" means, with respect to the Series 2019 Bonds, the fifteenth (15th) calendar day of the month immediately preceding an Interest Payment Date or, with respect to any Additional Obligations, any other date established in the applicable Additional Obligations Instrument. 55394.00055\32329348.3 554-24 "Reserve Account" means the account by that name established and held by the Trustee pursuant to Section 4.03(d) hereof. ["Reserve Policy" means the municipal bond debt service reserve insurance policy issued by the Insurer as Policy Number in the stated amount of S deposited into the Reserve Account relating to the Series 2019 Bonds.] "Reserve Requirement" means, with respect to the Series 2019 Bonds, as of any date of calculation, the least of (i) ten percent (10%) of the original par amount of the Series 2019 Bonds, (ii) Maximum Annual Debt Service with respect to the Series 2019 Bonds, or (iii) 125% of average annual Debt Service on the Series 2019 Bonds; provided, however, that the Reserve Requirement shall not exceed the Reserve Requirement calculated on the Closing Date; and provided, further that the City may meet all or a portion of the Reserve Requirement by depositing a Qualified Reserve Account Credit Instrument meeting the requirements of Section 4.03(d) hereof. "S&P" means S&P Global Ratings, a Standard & Poor's Financial Service LLC business, and its successors or assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "S&P" shall be deemed to refer to any other nationally recognized securities rating agency selected by the City. "Series 2019 Bonds" means the City of Santa Ana Gas Tax Revenue Refunding Bonds, Series 2019, issued and at any time Outstanding hereunder. "State" means the State of California. "Supplemental Indenture" means any supplement or amendment to this Indenture which complies with the provisions of Section 7.01 or 7.02. "Tax Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Series 2019 Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Tax Code. "Term Bonds" means the Series 2019 Bonds maturing on January 1, "Trustee" means U.S. Bank National Association, appointed by the City to act as trustee hereunder pursuant to Section 6.01, and its assigns or any other corporation or association which may at any time be substituted in its place, as provided in Article VI. "2007 Certificates" means the $68,010,000 original principal amount Gas Tax Revenue Certificates of Participation (Street Improvement Program Project). "2007 Trust Agreement" means the Trust Agreement, dated as of December 1, 2007, among the 2007 Trustee, the City, and the Authority. 55394.00055\32329348.3 5 54-2 5 "2007 Installment Sale Agreement" means the Installment Sale Agreement, dated as of December 1, 2007, between the City and the Authority. "2007 Trustee" means The Bank of New York Mellon Trust Company, N.A., as trustee under the 2007 Trust Agreement. SECTION 1.02 Rules of Construction. All references in this Indenture to "Articles," "Sections," and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; and the words "herein," "hereof .. "hereunder," and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. SECTION 1.03 Authorization and Purpose of Series 2019 Bonds. The City has reviewed all proceedings heretofore taken relative to the authorization of the Series 2019 Bonds and has found, as a result of such review, and hereby finds and determines that all things, conditions, and acts required by law to exist, happen and/or be performed precedent to and in the issuance of the Series 2019 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the City is now authorized, as an exercise of its powers as a municipal corporation under the constitution and laws of the State and pursuant to the Bond Law and each and every requirement of law, to issue the Series 2019 Bonds in the manner and form provided in this Indenture. Accordingly, the City hereby authorizes the issuance of the Series 2019 Bonds pursuant to the Bond Law and this Indenture for the purpose of providing funds to refund the 2007 Certificates and 2007 Installment Sale Agreement, to fund a reserve account, and to pay Costs of Issuance of the Series 2019 Bonds. SECTION 1.04 Equal Security. In consideration of the acceptance of the Series 2019 Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the City, the Trustee and the Owners from time to time of the Series 2019 Bonds; and the covenants and agreements herein set forth to be performed on behalf of the City shall be for the equal and proportionate benefit, security and protection of all Owners of the Series 2019 Bonds without preference, priority or distinction as to security or otherwise of any of the Series 2019 Bonds over any of the others by reason of the number or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. ARTICLE II ISSUANCE OF SERIES 2019 BONDS SECTION 2.01 Terms of Series 2019 Bonds. The Series 2019 Bonds authorized to be issued by the City under and subject to the Bond Law and the terms of this Indenture shall be designated the "City of Santa Ana Gas Tax Revenue Refunding Bonds, Series 2019", and shall 55394.00055\32329348.3 55d'-2 V be issued in the original principal amount of Dollars The Series 2019 Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof, so long as no Series 2019 Bond shall have more than one maturity date. The Series 2019 Bonds shall mature on January 1 in each of the years and in the amounts, and shall bear interest at the rates, as follows: Maturity Date Principal Interest (January 1) Amount Rate Interest on the Series 2019 Bonds shall be payable on each Interest Payment Date to the person whose name appears on the Bond Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check or draft of the Trustee mailed by first class mail to the Owner or, at the option of any Owner of at least $1,000,000 aggregate principal amount of the Series 2019 Bonds with respect to which written instructions have been filed with the Trustee prior to the Record Date, by wire transfer, at the address of such Owner as it appears on the Bond Registration Books. In the event there exists a default in payment of interest due on such Interest Payment Date, such interest shall be payable on a payment date established by the Trustee to the persons in whose names the Series 2019 Bonds are registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by the Trustee to the registered Owners of the Series 2019 Bonds not less than 15 days preceding such special record date. Principal of and premium (if any) on any Series 2019 Bond shall be paid upon presentation and surrender thereof at the Principal Corporate Trust Office of the Trustee. Both the principal of and interest and premium (if any) on the Series 2019 Bonds shall be payable in lawful money of the United States of America. The Series 2019 Bonds shall be dated the Closing Date and bear interest based on a 360- day year comprised of twelve 30-day months from the Interest Payment Date next preceding the date of authentication thereof, unless said date of authentication is an Interest Payment Date, in which event such interest is payable from such date of authentication, and unless said date of authentication is prior to [June 15, 20201, in which event such interest is payable from the Closing Date; provided, however, that if, as of the date of authentication of any Series 2019 Bond, interest thereon is in default, such Series 2019 Bond shall bear interest from the date to which interest has previously been paid or made available for payment thereon in full. SECTION 2.02 Terms of Redemption. (a) Mandatory Sinking Fund Redemption. (i) The Series 2019 Bonds maturing January 1, are subject to redemption in part by lot, on January 1, in each year commencing January 1, from sinking account payments made by the City into the Sinking Account, at a redemption price equal to the principal amount to be redeemed, without premium, 55394.00055\32329348.3 554-2 / in the aggregate respective principal amounts and on January I in the respective years set forth in the following table, or in lieu thereof may be purchased as described in clause (h) below. If some but not all of the Series 2019 Bonds have been redeemed as described in Section 2.02(b) below, the total amount of all future sinking account payments with respect to the Series 2019 Bonds of a particular maturity will be reduced by the aggregate principal amount of Series 2019 Bonds of such maturity so redeemed or purchased, to be allocated among such sinking fund payments in integral multiples of $5,000 as determined by the City. The sinking account payments applicable to the Series 2019 Bonds maturing January 1, are as follows: Series 2019 Bonds Maturing January 1, Sinking Fund Account Redemption Date Sinking Fund Payment (January 1) Redeemed or Purchased (b) Optional Redemption. The Series 2019 Bonds maturing on or before January 1, are not subject to optional redemption prior to maturity. The Series 2019 Bonds maturing on January 1, and thereafter are subject to redemption prior to their stated maturity at the option of the City, as a whole or in part on any date, by such maturities as are selected by the City from any available source of funds on or after January 1, at a redemption price equal to the principal amount of the Series 2019 Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption. The City shall provide the Trustee a written request of its intention to redeem Series 2019 Bonds under this subsection (b), and the manner of selecting such Series 2019 Bonds for redemption from among the maturities thereof and the redemption price thereof, at least 45 days prior to the redemption date. (c) Selection of Series 2019 Bonds for Redemption. Whenever provision is made in Section 2.02 of this Indenture for the redemption of less than all of the Series 2019 Bonds of any series, the Trustee shall select the Series 2019 Bonds to be redeemed from all Series 2019 Bonds or such given portion thereof not previously called for redemption, among maturities as directed by the City and by lot within a maturity in any manner which the Trustee in its sole discretion shall deem appropriate and fair; provided, however, that if less than all of the Series 2019 Bonds are called for redemption at any one time, upon the written direction of the City, the City shall specify a reduction in any pending Sinking Account payments for such Series 2019 Bonds required to be made hereunder. 55394.00055\32329348.3 554-2 V (d) Notice of Redemption. Notice of redemption shall be mailed by Bust class mail, postage prepaid, not less than thirty (30) nor more than sixty (60) days before any redemption date, to respective Owners of any Series 2019 Bonds designated for redemption at their addresses appearing on the Registration Books, and to the Securities Depositories and to the Information Services. Each notice of redemption shall state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the Series 2019 Bonds (or all Series 2019 Bonds of a single maturity) are to be redeemed, the CUSIP numbers and bond numbers of the Series 2019 Bonds to be redeemed, the maturity or maturities of the Series 2019 Bonds to be redeemed and in the case of Series 2019 Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the redemption date there will become due and payable on each of said Series 2019 Bonds the redemption price thereof, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Series 2019 Bonds be then surrendered. Neither the failure to receive any notice nor any defect therein shall affect the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of Series 2019 Bonds shall be given by the Trustee, at the expense of the City, for and on behalf of the City. (e) Conditional Notice of Optional Redemption of Series 2019 Bonds. With respect to the optional redemption of the Series 2019 Bonds pursuant to 2.02(b) the City may instruct the Trustee to include a statement in the notice of such redemption which shall state that such redemption is conditioned upon the receipt by the Trustee on or before the date fixed for such redemption of sufficient funds for such purpose. In the event that sufficient funds shall not have been deposited with the Trustee on or before the date fixed for redemption, the Trustee shall promptly notify the Owners in the same manner in which notice was sent that such redemption is cancelled and the notice thereof shall be deemed to be cancelled and rescinded. (f) Partial Redemption of Series 2019 Bonds. Upon surrender of any Series 2019 Bonds redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, a new Series 2019 Bond or Series 2019 Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Series 2019 Bonds surrendered. (g) Effect of Redemption. Notice of redemption having been duly given as aforesaid, and moneys for payment of the redemption price of, together with interest accrued to the date fixed for redemption on, the Series 2019 Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Series 2019 Bonds (or portions thereof) so called for redemption shall become due and payable, interest on the Series 2019 Bonds so called for redemption shall cease to accrue, said Series 2019 Bonds (or portions thereof) shall cease to be entitled to any benefit or security under this Indenture, and the Owners of said Series 2019 Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. All Series 2019 Bonds redeemed pursuant to the provisions of this Article shall be canceled by the Trustee upon surrender thereof and destroyed. 55394.00055\32329348.3 554-29 (h) Purchase of Series 2019 Bonds in Lieu of Redemption. In lieu of mandatory sinking fund redemption of Series 2019 Bonds, the City may place funds on deposit with the Trustee at any time for the purchase of Series 2019 Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as the City may in its discretion determine, but not to exceed the principal amount of the Series 2019 Bonds to be purchased plus the redemption premium applicable on the next ensuing optional redemption date. SECTION 2.03 Form of Series 2019 Bonds. The Series 2019 Bonds, the Trustee's certificate of authentication, and the assignment to appear thereon, shall be substantially in the respective forms set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture. SECTION 2.04 Execution of Series 2019 Bonds. The Series 2019 Bonds shall be signed in the name and on behalf of the City with the manual or facsimile signatures of its City Manager, and attested by the manual or facsimile signature of its City Clerk under the seal of the City. Such seal may be in the form of a facsimile of the City's seal and shall be imprinted or impressed upon the Series 2019 Bonds. The Series 2019 Bonds shall then be delivered to the Trustee for authentication by it. In case any officer who shall have signed any of the Series 2019 Bonds shall cease to be such officer before the Series 2019 Bonds so signed shall have been authenticated or delivered by the Trustee or issued by the City, such Series 2019 Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the City as though the individual who signed the same had continued to be such officer of the City. Also, any Series 2019 Bond may be signed on behalf of the City by any individual who on the actual date of the execution of such Series 2019 Bond shall be the proper officer although on the nominal date of such Series 2019 Bond such individual shall not have been such officer. Only such of the Series 2019 Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Series 2019 Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. SECTION 2.05 Transfer of Series 2019 Bonds. Any Series 2019 Bond may, in accordance with its terms, be transferred upon the Bond Registration Books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Series 2019 Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly executed. Whenever any Series 2019 Bond shall be surrendered for transfer, the City shall execute and the Trustee shall thereupon authenticate and deliver to the transferee a new Series 2019 Bond or Series 2019 Bonds of like tenor, maturity and aggregate principal amount. The City shall pay all costs of the Trustee incurred in connection with any such transfers, except that the Trustee may require the payment by the Bond Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. 55394.00055\32329348.3 5 54- V U SECTION 2.06 Exchange of Series 2019 Bonds. Series 2019 Bonds may be exchanged at the Principal Corporate Trust Office of the Trustee for Series 2019 Bonds of the same tenor and maturity and of other authorized denominations. The City shall pay all costs of the Trustee incurred in connection with any such exchanges, except that the Trustee may require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. SECTION 2.07 Temporary Series 2019 Bonds. The Series 2019 Bonds may be issued initially in temporary form exchangeable for definitive Series 2019 Bonds when ready for delivery. The temporary Series 2019 Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Series 2019 Bond shall be executed by the City and be registered and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Series 2019 Bonds. If the City issues temporary Series 2019 Bonds, it will execute and furnish definitive Series 2019 Bonds without delay, and thereupon the temporary Series 2019 Bonds may be surrendered, for cancellation, in exchange therefor at the Principal Corporate Trust Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such temporary Series 2019 Bonds an equal aggregate principal amount of definitive Series 2019 Bonds of authorized denominations. Until so exchanged, the temporary Series 2019 Bonds shall be entitled to the same benefits under this Indenture as definitive Series 2019 Bonds authenticated and delivered hereunder. SECTION 2.08 Bond Registration Books. The Trustee will keep or cause to be kept at its Principal Corporate Trust Office sufficient Bond Registration Books for the registration and transfer of the Series 2019 Bonds, which shall at all times during regular business hours, and upon reasonable notice, be open to inspection by the City; 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 said books, Series 2019 Bonds as hereinbefore provided. SECTION 2.09 Series 2019 Bonds Mutilated, Lost, Destroyed or Stolen. If any Series 2019 Bond shall become mutilated, the City, at the expense of the Owner of said Series 2019 Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Series 2019 Bond of like maturity and principal amount in exchange and substitution for the Series 2019 Bond so mutilated, but only upon surrender to the Trustee of the Series 2019 Bond so mutilated. Every mutilated Series 2019 Bond so surrendered to the Trustee shall be cancelled by it and delivered to, or upon the order of, the City. If any Series 2019 Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the City, at the expense of the Bond Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Series 2019 Bond of like maturity and principal amount in lieu of and in substitution for the Series 2019 Bond so lost, destroyed or stolen. The City may require payment of a reasonable fee for each new Series 2019 Bond issued under this Section and of the expenses which may be incurred by the City and the Trustee. Any Series 2019 Bond issued under the provisions of this Section in lieu of any Series 2019 Bond alleged to be lost, destroyed or stolen shall constitute an original contractual obligation on the part of the City whether or not the Series 2019 Bond alleged to be lost, destroyed or stolen be at any time enforceable by 55394.00055\32329348.3 554-31 anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Series 2019 Bonds secured by this Indenture. SECTION 2.10 Book Entry System. (a) Original Delivery. The Series 2019 Bonds shall be initially delivered in the form of a separate single fully registered Series 2019 Bond (which may be typewritten) for each maturity of the Series 2019 Bonds. Upon initial delivery, the ownership of each such Series 2019 Bond shall be registered on the Bond Registration Books maintained by the Trustee pursuant to Section 2.08 hereof in the name of the Nominee. Except as provided in subsection (c), the ownership of all of the Outstanding Series 2019 Bonds shall be registered in the name of the Nominee on such Bond Registration Books. With respect to Series 2019 Bonds the ownership of which shall be registered in the name of the Nominee, the City and the Trustee shall have no responsibility or obligation to any Depository System Participant or to any person on behalf of which the City holds an interest in the Series 2019 Bonds. Without limiting the generality of the immediately preceding sentence, the City and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Depository System Participant with respect to any ownership interest in the Series 2019 Bonds, (ii) the delivery to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any notice with respect to the Series 2019 Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Series 2019 Bonds to be redeemed in the event the City elects to redeem the Series 2019 Bonds in part, (iv) the payment to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any amount with respect to principal, premium, if any, or interest represented by the Series 2019 Bonds or (v) any consent given or other action taken by the Depository as Bond Owner. The City and the Trustee may treat and consider the person in whose name each Series 2019 Bond is registered as the absolute owner of such Series 2019 Bond for the purpose of payment of principal, premium, if any, and interest represented by such Series 2019 Bond, for the purpose of giving notices of redemption and other matters with respect to such Series 2019 Bond, for the purpose of registering transfers of ownership of such Series 2019 Bond, and for all other purposes whatsoever. The Trustee shall pay the principal, interest and premium, if any, represented by the Series 2019 Bonds only to the respective Owners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of principal, interest and premium, if any, represented by the Series 2019 Bonds to the extent of the sum or sums so paid. No person other than a Bond Owner shall receive a Series 2019 Bond evidencing the obligation of the City to make payments of principal, interest and premium, if any, pursuant to this Indenture. Upon delivery by the Depository to the Nominee of written notice to the effect that the Depository has determined to substitute a new Nominee in its place, such new nominee shall become the Nominee hereunder for all purposes; and upon receipt of such a notice the City shall promptly deliver a copy of the same to the Trustee. (b) Representation Letter. In order to qualify the Series 2019 Bonds for the Depository's book -entry system, the City shall execute and deliver to such Depository a letter 55394.00055\32329348.3 5 54- V 2 representing such matters as shall be necessary to so qualify the Series 2019 Bonds. The execution and delivery of such letter shall not in any way limit the provisions of subsection (a) above or in any other way impose upon the City or the Trustee any obligation whatsoever with respect to persons having interests in the Series 2019 Bonds other than the Bond Owners. In addition to the execution and delivery of such letter, the City may take any other actions, not inconsistent with this Indenture, to qualify the Series 2019 Bonds for the Depository's book - entry program. (c) Transfers Outside Book -Entry System. In the event that either (i) the Depository determines not to continue to act as Depository for the Series 2019 Bonds, or (ii) the City determines to terminate the Depository as such, then the City shall thereupon discontinue the book -entry system with such Depository. In such event, the Depository shall cooperate with the City and the Trustee in the execution of replacement Series 2019 Bonds by providing the Trustee with a list showing the interests of the Depository System Participants in the Series 2019 Bonds, and by surrendering the Series 2019 Bonds, registered in the name of the Nominee, to the Trustee on or before the date such replacement Series 2019 Bonds are to be issued. The Depository, by accepting delivery of the Series 2019 Bonds, agrees to be bound by the provisions of this subsection (c). If, prior to the termination of the Depository acting as such, the City fails to identify another Securities Depository to replace the Depository, then the Series 2019 Bonds shall no longer be required to be registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging Series 2019 Bonds shall designate, in accordance with the provisions hereof. In the event the City determines that it is in the best interests of the beneficial owners of the Series 2019 Bonds that they be able to obtain certificated Series 2019 Bonds, the City may notify the Depository System Participants of the availability of such certificated Series 2019 Bonds through the Depository. In such event, the Trustee will execute, transfer and exchange Series 2019 Bonds as required by the Depository and others in appropriate amounts; and whenever the Depository requests, the Trustee and the City shall cooperate with the Depository in taking appropriate action (y) to make available one or more separate certificates evidencing the Series 2019 Bonds to any Depository System Participant having Series 2019 Bonds credited to its account with the Depository, or (z) to arrange for another Securities Depository to maintain custody of a single certificate evidencing such Series 2019 Bonds, all at the City's expense. (d) Payments to the Nominee. Notwithstanding any other provision of this Indenture to the contrary, so long as any Series 2019 Bond is registered in the name of the Nominee, all payments with respect to principal, interest and premium, if any, represented by such Series 2019 Bond and all notices with respect to such Series 2019 Bond shall be made and given, respectively, as provided in the letter described in subsection (b) of this Section or as otherwise instructed by the Depository. ARTICLE III ISSUE OF SERIES 2019 BONDS; ADDITIONAL OBLIGATIONS SECTION 3.01 Issuance of Series 2019 Bonds. Upon the execution and delivery of this Indenture, the City shall execute and deliver Series 2019 Bonds in the aggregate principal 55394.00055\32329348.3 554-33 amount of Dollars ($ ) to the Trustee for authentication and delivery to the Original Purchaser thereof upon the written request of the City. SECTION 3.02 Application of Proceeds of Sale of Series 2019 Bonds; Transfers from the 2007 Trust Agreement. Upon the receipt of payment for the Series 2019 Bonds on the Closing Date in the amount of $ (being an amount equal to the principal amount of the Series 2019 Bonds ($ .00), [less the amount delivered to the Insurer for the Insurance Policy and the Reserve Policy ($ )] plus an original issue premium of $ , less Underwriter's discount ($ ), the Trustee shall apply the proceeds of sale thereof as follows: (a) The Trustee shall transfer to the Escrow Bank, for deposit to the Escrow Fund for the 2007 Certificates, the amount of $ ; and (b) The Trustee shall deposit in the Cost of Issuance Fund an amount equal to $ ; and (c) The Reserve Policy is hereby delivered to the Trustee for deposit in the Reserve Account. SECTION 3.03 Cost of Issuance Fund. There is hereby created a fund to be known as the "City of Santa Ana Gas Tax Revenue Refunding Bonds, Series 2019 Cost of Issuance Fund" (the "Cost of Issuance Fund"), which the City hereby covenants and agrees to cause to be maintained and which shall be held in trust by the Trustee. The moneys in the Cost of Issuance Fund shall be used in the manner provided by law solely for the purpose of the payment of Costs of Issuance upon receipt by the Trustee of written requests of the City therefor, on or after the Closing Date. Each such request of the City 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. Any funds remaining in the Cost of Issuance Fund on the earlier of (1) the date an Authorized Official notifies the Trustee that all third party Costs of Issuance have been paid, or (2) 2020, shall be transferred by the Trustee to the Debt Service Fund. SECTION 3.04 Issuance of Additional Obligations. In addition to the Series 2019 Bonds, the City may, by Additional Obligations Instrument, issue or incur other loans, advances or indebtedness payable from Gas Tax Revenues on a parity with the Series 2019 Bonds to provide for the full or partial refunding of the Series 2019 Bonds, provided that there is a savings in debt service as a result of the issuance of such refunding bonds. SECTION 3.05 Validity of Series 2019 Bonds. The validity of the authorization and issuance of the Series 2019 Bonds shall not be affected in any way by any proceedings taken by the City in connection with the Gas Tax Revenues, and the recital contained in the Series 2019 Bonds that the same are issued pursuant to the Bond Law shall be conclusive evidence of their validity and of the regularity of their issuance. 55394.00055\32329348.3 5 554-34 ARTICLE IV PLEDGE OF GAS TAX REVENUES; FUNDS AND ACCOUNTS SECTION 4.01 Pledge of Gas Tax Revenues, Gas Tax Fund. (a) The Series 2019 Bonds and Additional Obligations shall be secured by a first pledge of all Gas Tax Revenues. In addition, the City hereby transfers, places a charge upon, assigns and sets over to the Trustee, for the benefit of the Owners, that portion of the Gas Tax Revenues which is necessary to pay the principal of and interest on the Series 2019 Bonds in any Fiscal Year, together with all moneys on deposit in the Debt Service Fund, including the Interest Account, the Principal Account, the Sinking Account and the Reserve Account established therein, and such portion of the Gas Tax Revenues is hereby irrevocably pledged to the punctual payment of the principal of and interest on the Series 2019 Bonds. The Series 2019 Bonds and any Additional Obligations shall be equally secured by a pledge, charge and lien upon the Gas Tax Revenues, without priority for number or date. The Gas Tax Revenues shall not be used for any other purpose while any of the Series 2019 Bonds or Additional Obligations remain Outstanding, except that out of Gas Tax Revenues there may be apportioned and paid such sums for such purposes, as are expressly permitted by this Article. Said pledge shall constitute a first, direct and exclusive charge and lien on the Gas Tax Revenues for the payment of the principal of and interest on the Series 2019 Bonds in accordance with the terms thereof and on the Debt Service Fund, and the Interest Account, Principal Account and Sinking Account established therein. (b) The Gas Tax Revenues constitute a trust fund for the security and payment of the principal of and interest on the Series 2019 Bonds. The general fund of the City is not liable and the credit of the City is not pledged for the payment of the principal of and interest on the Series 2019 Bonds. The Owner of the Series 2019 Bonds shall not compel the exercise of the taxing power by the City or the forfeiture of its property. The principal of and interest on the Series 2019 Bonds are not a debt of the City, nor a legal or equitable pledge, charge, lien or encumbrance, upon any of its property, or upon any of its income, receipts, or revenues except the Gas Tax Revenues. SECTION 4.02 Receipt and Deposit of Revenues. The City has heretofore established the Gas Tax Fund, which the City agrees to continue to hold and maintain for the purposes and uses set forth herein. The City covenants and agrees that all Gas Tax Revenues, when and as received, will be received and held by the City in trust hereunder and will be deposited by the City in the Gas Tax Fund and will be accounted for through and held in trust in the Gas Tax Fund, and the City shall only have such beneficial right or interest in any of such money as in this Indenture provided. All such Gas Tax Revenues shall be transferred, disbursed, allocated and applied solely to the uses and purposes hereinafter in this Article set forth, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the City. SECTION 4.03 Establishment of Funds and Accounts and Allocation of Revenues Thereto. The Debt Service Fund, as a special fund, is hereby created. The Debt Service Fund shall be held and maintained by the Trustee. All Gas Tax Revenues shall be held in trust by the 55394.00055\32329348.3 554-35 City in the Gas Tax Fund and shall be applied, transferred, used and withdrawn only for the purposes hereinafter authorized in this Article. (1) Administrative Costs. The City shall first pay from the moneys in the Gas Tax Fund the budgeted Administrative Costs as such Administrative Costs become due and payable. (2) Debt Service Payments. At least 5 days prior to each Interest Payment Date, the City shall transfer Gas Tax Revenues to the Trustee for the purpose of paying the Series 2019 Bonds. Not later than the first Business Day preceding each date on which principal of or interest on the Series 2019 Bonds becomes due and payable, the Trustee shall transfer from the Debt Service Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain within the Debt Service Fund), the following amounts in the following order of priority, the requirements of each such account at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority: (a) Interest Account. The Trustee shall deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such Interest Payment Date on all Series 2019 Bonds then Outstanding. (b) Principal Account. The Trustee shall deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Series 2019 Bonds coming due and payable on such Interest Payment Date. (c) Sinking Account. The Trustee shall deposit in the Sinking Account an amount equal to the aggregate principal amount of the Term Bonds required to be redeemed on such date, if any, pursuant to Section 2.02(a). (d) Reserve Account. In the event that the amount on deposit in the Reserve Account at any time becomes less than the Reserve Requirement, the Trustee shall promptly notify the City of such fact. Promptly upon receipt of any such notice, the City shall transfer to the Trustee an amount sufficient to maintain the Reserve Requirement of the Reserve Account. If there shall then not be sufficient Gas Tax Revenues on deposit in the Gas Tax Fund to transfer an amount sufficient to maintain the Reserve Requirement of the Reserve Account, the City shall be obligated to continue making transfers as Gas Tax Revenues become available in the Gas Tax Fund until there is an amount sufficient to maintain the Reserve Requirement of the Reserve Account. No such transfer and deposit need be made to the Reserve Account so long as there shall be on deposit therein a sum at least equal to the Reserve Requirement. All money in the Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of making transfers to the Interest Account, the Principal Account and Sinking Account in such order of priority, in the event of any deficiency at any time in any of such accounts or for the retirement of Series 2019 Bonds then 55394.00055\32329348.3 554-36 Outstanding, except that so long as the City is not in default hereunder, any amount in the Reserve Account in excess of the Reserve Requirement shall be withdrawn from the Reserve Account semiannually on or before four (4) Business Days preceding each January 1 and July I by the Trustee and deposited in the Interest Account. All amounts in the Reserve Account on the Business Day preceding the final Interest Payment Date shall be withdrawn from the Reserve Account and shall be transferred either (i) to the Interest Account, the Principal Account and Sinking Account, in such order, to the extent required to make the deposits then required to be made pursuant to this Section 4.03 or, (ii) if the City shall have caused to be transferred to the Trustee an amount sufficient to make the deposits required by this Section 4.03, then, at the Request of the City, such amount shall be transferred as directed by the City. The Reserve Requirement with respect to the Series 2019 Bonds shall be satisfied by the delivery of the Reserve Policy to the Trustee. The Trustee shall credit the Reserve Policy to the Reserve Account. Under the terms and conditions of the Reserve Policy, the Trustee shall deliver to the Insurer a demand for payment under the Reserve Policy in the required form at least five Business Days before the date on which funds are required for the purposes set forth in this Section 4.03(d). The Trustee shall comply with all of the terms and provisions of the Reserve Policy for the purpose of assuring that funds are available thereunder when required for the purposes of the Reserve Account, within the limits of the coverage amount provided by the Reserve Policy. All amounts drawn by the Trustee under the Reserve Policy will be deposited into the Reserve Account and applied for the purposes thereof. The City shall reimburse the Insurer for all draws under Reserve Policy in accordance with the terms of the Reserve Policy and Section 4.08 hereof. (e) Equal Rights. It is the intention of the City that the Series 2019 Bonds and Additional Obligations shall be secured by and payable from all moneys deposited in the Gas Tax Fund on an equal basis. To the extent that moneys deposited in the Gas Tax Fund are insufficient to pay debt service on the Series 2019 Bonds and Additional Obligations as they become due, the Series 2019 Bonds and Additional Obligations shall be payable on a pro-rata basis from all available moneys deposited in the Gas Tax Fund. Additionally, any moneys which remain in the Debt Service Fund after payment of principal of and interest on the Series 2019 Bonds shall be used to pay the Insurer for any other unpaid advances under the Reserve Policy. (3) Sur -plus. As long as all of the foregoing payments, allocations and transfers are made at the times and in the manner set forth above in subsections (1) and (2), any moneys remaining in the Gas Tax Fund may at any time be treated as surplus and applied for any lawful purpose. 55394.00055\32329348.3 55 4-J7 SECTION 4.04 Application of Debt Service Fund. Moneys in the Debt Service Fund shall be applied as follows: (a) Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Series 2019 Bonds as it shall become due and payable (including accrued interest on any Series 2019 Bonds purchased or redeemed prior to maturity pursuant to this Indenture). (b) Application of Principal Account. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the Series 2019 Bonds at their respective maturity dates. (c) Application of Sinking Account. All moneys on deposit in the Sinking Account shall be used and withdrawn by the Trustee for the sole purpose of redeeming or purchasing (in lieu of redemption) Term Bonds pursuant to Section 2.02(a). (d) Application of the Reserve Account. All moneys in the Reserve Account shall be applied as set forth in Section 4.03(d) hereof. SECTION 4.05 Investments. All moneys in the Gas Tax Fund may be invested by the City from time to time in any investments authorized by law, consistent with the City's investment policy. All moneys in the Debt Service Fund, and the accounts established therein, and Cost of Issuance Fund shall be invested by the Trustee solely in Authorized Investments, as directed pursuant to a written request of the City. In the absence of any such written request of the City, the Trustee may (but shall not be required to) invest any such moneys in money market funds described in paragraph (f) of the definition of Authorized Investments; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a written request of the City specifying a specific money market fund and, if no such written request of the City is so received, the Trustee shall hold such moneys uninvested. The Trustee shall be entitled to rely upon any investment written request of the City as conclusive certification to the Trustee that the investments described therein are so authorized under the laws of the State of California. Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account, and all interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the fund or account from which such investment was made; and shall be accounted for and applied as provided in Section 4.06(c) with respect to the Debt Service Fund; provided, however, that all interest or gain from the investment of amounts in the Reserve Account shall be deposited by the Trustee in the Interest Account to the extent not required to cause the balance in the Reserve Account to equal the Reserve Requirement. No Authorized Investment of moneys in the Reserve Account shall have a maturity in excess of five (5) years following the date of its acquisition, except that such restriction shall not apply to any investment agreement approved by the Insurer. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder with the written approval of the City. The Trustee or an affiliate may act as principal or agent in the acquisition or disposition of any investment, and shall be entitled to its customary fees therefor. The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section. 55394.00055\32329348.3 554-38 The Trustee shall furnish the City periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the City. Upon the City's election, such statements will be delivered via the Trustee's online service and upon electing such service, paper statements will be provide only upon request. The City waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker. SECTION 4.06 Valuation; Investments. (a) Method of Valuation and Frequency of Valuation. In computing the amount in any fund or account, Authorized Investments shall be valued at Fair Market Value. With respect to all funds and accounts, valuation shall occur annually. (b) Investments Subiect to Yield Restriction. Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Tax Code and investments in the Reserve Account shall be valued at cost thereof, (consisting of present value thereof, as determined by the City, within the meaning of Section 148 of the Tax Code); provided that the City shall inform the Trustee which funds are subject to a yield restriction. (c) Additional Limitations. Except as provided in the proceeding subsection (b), with respect to a yield restriction, for the purpose of determining the amount in any fund, the value of Authorized Investments credited to such fund shall be valued by the Trustee at least annually at the market value thereof. For purposes of valuation, the Trustee shall be entitled to utilize any pricing services it considers reliable. The Trustee may sell in any commercially reasonable manner, or present for redemption, any Authorized Investment so purchased by the Trustee whenever it shall be necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Authorized Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from sale or redemption of any such Authorized Investment. SECTION 4.07 Municipal Bond Insurance. [TO COME] SECTION 4.08 Reserve Policy Provisions. [TO COME] SECTION 4.09 Additional Rights of Insurer; Notices and Other Information to be Provided to Insurer. 55394.00055\32329348.3 554-39 ARTICLE V COVENANTS OF THE CITY; SPECIAL TAX COVENANTS SECTION 5.01 Punctual Payment; Compliance With Documents. The City shall punctually pay or cause to be paid the interest and principal to become due with respect to all of the Series 2019 Bonds in strict conformity with the terms of the Series 2019 Bonds and of this Indenture, and will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Contracts for Additional Obligations. SECTION 5.02 Against Encumbrances. The City will not mortgage or otherwise encumber, pledge or place any charge upon the facilities, suppliers or equipment or any part thereof, furnished by any of the Gas Tax Revenues, except as provided in the Indenture. SECTION 5.03 Discharge of Claims. The City covenants that in order to fully preserve and protect the priority and security of the Series 2019 Bonds the City shall pay from the Gas Tax Revenues and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the Improvements which, if unpaid, may become a lien or charge upon the Gas Tax Revenues prior or superior to the lien of the Series 2019 Bonds and impair the security of the Series 2019 Bonds. The City shall also pay from the Gas Tax Revenues all taxes and assessments or other governmental charges lawfully levied or assessed upon or in respect of the Improvements or upon any part thereof or upon any of the Gas Tax Revenues therefrom. SECTION 5.04 Maintenance of Gas Tax Revenues. The City will use its best efforts to comply with all provisions of law and any regulations issued thereunder relating to the Gas Tax Revenues, including, but not limited to, Sections 2119 and 2151 through 2155 of the California Streets and Highways Code and Sections 65089.3 and 65089.4 of the California Government Code relating to conformance with the congestion management program relating to the City and will take any and all reasonable actions required in order to maintain the City's ability to receive the Gas Tax Revenues and apply the same as provided herein; provided, that nothing herein shall require the City to take any action or expend any City funds to comply with any such requirements deemed unreasonable in the sole discretion of the City, so long as failure to take such action or expend such funds will not cause the amount of estimated Gas Tax Revenues to be received by the City in the next Fiscal Year to be less than one hundred fifty percent (150%) of the Maximum Annual Debt Service as of the date of calculation. SECTION 5.05 Records and Accounts. The City covenants that it shall keep proper books of record and accounts of the Gas Tax Fund, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the Gas Tax Fund. Said books shall, upon reasonable request, be subject to the inspection of the Owners of not less than ten percent (10%) of the Outstanding Series 2019 Bonds or their representatives authorized in writing. The City covenants that it will cause the Gas Tax Fund to be audited annually by an Independent Certified Public Accountant and will make available for inspection by the Bond Owners at the Principal Corporate Trust Office of the Trustee in Los Angeles, California, upon reasonable request, a copy of the report of such Independent Certified Public Accountant. 55394.00055\32329348.3 554-40 The City covenants that it will cause to be prepared annually, not more than one hundred eighty (180) days after the close of each Fiscal Year, as a part of its regular annual financial report, a summary statement showing the Gas Tax Fund and the amount of all other funds collected which are required to be pledged or otherwise made available as security for payment of principal of and interest on the Series 2019 Bonds, the disbursements from the Gas Tax Fund and other funds in reasonable detail. The City shall furnish a copy of the statement to the Trustee, and upon written request, to any Bond Owner. The Trustee shall not be responsible for reviewing the audited financial statements and annual financial report. [The City will permit the Insurer to discuss the affairs, finances and accounts of the City or any information the Insurer may reasonably request regarding the security for the Series 2019 Bonds with appropriate officials of the City.] SECTION 5.06 Protection of Security and Rights of Owners. The City will preserve and protect the security of the Series 2019 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 Additional Obligations by the City, such Additional Obligations shall be incontestable by the City. SECTION 5.07 No Priority for Additional Obligations. The City covenants that no Additional Obligations shall be issued or incurred having any priority in payment of principal or interest out of the Gas Tax Revenues over the Series 2019 Bonds. SECTION 5.08 No Arbitrage. The City shall not take, nor permit nor suffer to be taken any action with respect to the proceeds of any of the Series 2019 Bonds which would cause any of the Series 2019 Bonds to be "arbitrage bonds" within the meaning of the Tax Code. SECTION 5.09 Information Report. The City shall cause to be filed an information report for the Series 2019 Bonds in compliance with Section 149(e) of the Tax Code. SECTION 5.10 Private Activity Series 2019 Bond Limitation. The City shall assure that the proceeds of the Series 2019 Bonds are not so used as to cause the Series 2019 Bonds to satisfy the private business tests of section 141(b) of the Tax Code or the private loan financing test of section 141(c) of the Tax Code. SECTION 5.11 Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Series 2019 Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Tax Code. SECTION 5.12 Further Assurances. The City 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 this Indenture, and for the better assuring and confirming unto the Owners of the Series 2019 Bonds the rights and benefits provided in this Indenture. SECTION 5.13 Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. 55394.00055\32329348.3 554-41 Notwithstanding any other provision of this Indenture, failure of the City to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; however, the Trustee, at the written request of any Participating Underwriter or the holders of at least 25% aggregate principal amount of Outstanding Series 2019 Bonds, shall, but only to the extent indemnified to its satisfaction from any liability or expense, including, without limitation fees and expenses of its attorneys, or any holder or beneficial owner of the Series 2019 Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. SECTION 5.14 Rebate Requirement. The City shall take any and all actions necessary to assure compliance with section 148(f) of the Tax Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Series 2019 Bonds. SECTION 5.15 Maintenance of Tax -Exemption. The City shall take all actions necessary to assure the exclusion of interest on the Series 2019 Bonds from the gross income of the Bond Owners to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the date of issuance of the Series 2019 Bonds. ARTICLE VI THE TRUSTEE SECTION 6.01 Appointment of Trustee. U.S. Bank National Association, with an office in Los Angeles, California, a banking association organized and existing under and by virtue of the laws of the United States of America, is hereby appointed Trustee by the City for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The City agrees that it will maintain a Trustee having a corporate trust office in San Francisco or Los Angeles, California, with a combined capital and surplus of at least Seventy -Five Million Dollars ($75,000,000), and subject to supervision or examination by federal or State authority, so long as any Series 2019 Bonds are Outstanding. If such bank or trust company publishes a report of condition at least annually pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this Section 6.01 the combined capital and surplus of such bank, banking association, or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee is hereby authorized to pay the Series 2019 Bonds when duly presented for payment at maturity or purchase prior to maturity, and to cancel all Series 2019 Bonds upon payment thereof. The Trustee shall keep accurate records of all funds administered by it and of all Series 2019 Bonds paid and discharged. SECTION 6.02 Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions: 55394.00055\32329348.3 554 42 (a) The Trustee, prior to the occurrence of an Event of Default and after curing all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. hi case an Event of Default hereunder has occurred (which has not been cured or waived) the Trustee may exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to rely conclusively on advice of counsel of its choice concerning all matters of trust and its duty hereunder and the Trustee shall not be answerable for any willful misconduct or negligence on the part of any such attorneys, agents or receivers selected by it with reasonable care. (c) The Trustee shall not be responsible for any recital herein, or in the Series 2019 Bonds, or for the validity of this Indenture or any of the supplements thereto or instruments of further assurance, or for the sufficiency of the security for the Series 2019 Bonds issued hereunder or intended to be secured hereby and the Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, conditions or agreements on the part of the City hereunder. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with Section 4.05. (d) The Trustee shall not be accountable for the use of any proceeds of sale of the Series 2019 Bonds delivered hereunder. The Trustee may become the Owner of Series 2019 Bonds secured hereby with the same rights which it would have if not the Trustee; may acquire and dispose of other bonds or evidence of indebtedness of the City with the same rights it would have if it were not the Trustee; and may act as a depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Series 2019 Bonds, whether or not such committee shall represent the Owners of the majority in principal amount of the Series 2019 Bonds then Outstanding. (e) In the absence of bad faith on its part, the Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken or omitted to be taken by the Trustee pursuant to this Indenture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner of any Series 2019 Bond, shall be conclusive and binding upon all future Owners of the same Series 2019 Bond and upon Series 2019 Bonds issued in exchange therefor or in place thereof. The Trustee shall not be bound to recognize any person as an Owner of any Series 2019 Bond or to take any action at his request unless the ownership of such Series 2019 Bond by such person shall be reflected on the Bond Registration Books. 55394.00055\32329348.3 554 43 (f) As to the existence or non-existence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a Certificate of the City as sufficient evidence of the facts therein contained and prior to the occurrence of an Event of Default hereunder of which the Trustee has been given notice or is deemed to have notice, as provided in Section 6.02(h) hereof, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same. The Trustee may accept a Certificate of the City to the effect that an authorization in the form therein set forth has been adopted by the City as conclusive evidence that such authorization has been duly adopted and is in full force and effect. (g) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful default. The immunities and exceptions from liability of the Trustee shall extend to its officers, as finally adjudicated by a court of law, directors, employees and agents. (h) The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default hereunder except failure by the City to make any of the payments to the Trustee required to be made by the City pursuant hereto or failure by the City to file with the Trustee any document required by this Indenture to be so filed subsequent to the issuance of the Series 2019 Bonds, unless the Trustee shall be specifically notified in writing of such default by the City or by the Owners of at least twenty-five percent (25%) in aggregate principal amount of the Series 2019 Bonds then Outstanding, and all notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered at the Principal Corporate Trust Office, and in the absence of such notice so delivered the Trustee may conclusively assume there is no Event of Default hereunder except as aforesaid. (i) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right fully to inspect the Gas Tax Fund, including all books, papers and records of the City pertaining to the Gas Tax Fund and the Series 2019 Bonds, and to take such memoranda from and with regard thereto as may be desired but which is not privileged by statute or by law. 0) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. (k) Notwithstanding anything elsewhere in this Indenture with respect to the execution of any Series 2019 Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, as may be deemed desirable for the purpose of establishing the right of the City to the execution of any Series 2019 Bonds, the withdrawal of any cash, or the taking of any other action by the Trustee. 55394.00055\32329348.3 554-44 (1) Before taking the action referred to in Section 8.03 and this Article the Trustee may require that an indemnity bond satisfactory in terms and amount be furnished for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is finally adjudicated by a court of law to have resulted from its negligence or willful default in connection with any such action. (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 funds except to the extent required by law. The Trustee shall not be under any liability for interest on any moneys received hereunder except such as it may agree to in writing. (n) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions ("Instructions") given pursuant to this Indenture and delivered using Electronic Means ("Electronic Means" shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions ("Authorized Officers") and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee's understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. 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 the fact that such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions 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; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. 55394.00055\32329348.3 554-45 (o) 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. (p) The Trustee does not have a duty to review any financial statements or reports of the City, is not considered to have notice of the content of any such statements or reports and does not have a duty to verify the accuracy of such financial statements or reports. (q) The Trustee may consult with counsel, who may be bond counsel or other counsel of or to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. (r) The Trustee shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Series 2019 Bonds. (s) Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering 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 a Certificate of the City, and such certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this 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 it may deem sufficient. SECTION 6.03 Fees, Charges and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for reasonable fees for its services rendered hereunder and all advances, counsel fees (including expenses) and other expenses reasonably and necessarily made or incurred by the Trustee in connection with such services. Upon the occurrence of an Event of Default hereunder, but only upon an Event of Default, the Trustee shall have a lust lien with right of payment prior to payment of any Series 2019 Bond upon the amounts held hereunder for the foregoing fees, charges and expenses incurred by it respectively. SECTION 6.04 Notice to Bond Owners of Default. If an Event of Default hereunder occurs with respect to any Series 2019 Bonds, of which the Trustee has been given or is deemed to have notice, as provided in Section 6.02(h) hereof, then the Trustee shall promptly give written notice thereof by first-class mail to the Owner of each such Series 2019 Bond, unless such Event of Default shall have been cured before the giving of such notice; provided, however, that unless such Event of Default consists of the failure by the City to make any payment when due, the Trustee may elect not to give such notice if and so long as the Trustee in good faith determines that it is in the best interests of the Bond Owners not to give such notice. 55394.00055\32329348.3 554-46 SECTION 6.05 Intervention by Trustee. In any judicial proceeding to which the City is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing on the interests of Owners of any of the Series 2019 Bonds, the Trustee may intervene on behalf of such Bond Owners, and subject to Section 6.02 hereof, shall do so if requested in writing by the Owners of at least twenty-five percent (25%) in aggregate principal amount of such Series 2019 Bonds then Outstanding. SECTION 6.06 Removal of Trustee. The Owners of a majority in aggregate principal amount of the Outstanding Series 2019 Bonds may at any time, and the City may so long as no Event of Default shall have occurred and then be continuing, remove the Trustee initially appointed, and any successor thereto, by an instrument or concurrent instruments in writing delivered to the Trustee (where applicable), whereupon the City or such Owners, as the case may be, shall appoint a successor or successors thereto; provided that any such successor shall be a bank or trust company meeting the requirements set forth in Section 6.01 hereof. The Trustee shall be precluded from charging a termination fee in such event. SECTION 6.07 Resignation by Trustee. The Trustee and any successor Trustee may at any time resign by giving thirty (30) days' written notice, as provided in Section 9.10 hereof, to the City. Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. Upon such acceptance, the City shall cause notice thereof to be given by first class mail to the Bond Owners at their respective addresses set forth on the Bond Registration Books. No resignation of the Trustee shall take effect until a successor is appointed and has accepted. SECTION 6.08 Appointment of Successor Trustee. In the event of the removal or resignation of the Trustee pursuant to Sections 6.06 or 6.07, respectively, the City shall promptly appoint a successor Trustee. In the event the City shall for any reason whatsoever fail to appoint a successor Trustee within forty-five (45) days following the delivery to the Trustee of the instrument described in Section 6.06 or within forty-five (45) days following the receipt of notice by the City pursuant to Section 6.07, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor Trustee meeting the requirements of Section 6.01 hereof. Any such successor Trustee appointed by such court shall become the successor Trustee hereunder notwithstanding any action by the City purporting to appoint a successor Trustee following the expiration of such forty -five-day period. SECTION 6.09 Merger 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 that such company shall be eligible under Section 6.01), shall be the successor to the Trustee and vested with all of the title to the trust estate and all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding. SECTION 6.10 Concerning any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the City an 55394.00055\32329348.3 554 47 instrument in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the written request of the City, or of its successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as the Trustee hereunder to its successor. Should any instrument in writing from the City be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the City. SECTION 6.11 Appointment of Co -Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional individual or institution as a separate or co -trustee. The following provisions of this Section 6.11 are adopted to these ends. In the event that the Trustee appoints an additional individual or institution as a separate or co -trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co -trustee but only to the extent necessary to enable such separate or co -trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co -trustee shall run to and be enforceable by either of them. Should any instrument in writing from the City be required by the separate trustee or co - trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the City. In case any separate trustee or co -trustee, or a successor to either, shall become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co -trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co -trustee. SECTION 6.12 Indemnification; Limited Liability of Trustee. The City shall indemnify and hold the Trustee harmless from and against all claims, losses, costs, expenses, liabilities and damages including legal fees and expenses arising from the exercise and performance of its duties hereunder and the termination of this Indenture. Such indemnity and fees and expenses pursuant to Section 6.03 shall survive the resignation or removal of the Trustee hereunder and the payment of the Series 2019 Bonds. No provision in this Indenture shall require the Trustee to 55394.00055\32329348.3 554-48 risk or expend its own funds or otherwise incur any financial liability hereunder if it shall have reasonable grounds for believing repayment of such funds or adequate indemnity against such liability or risk is not assured to it. The Trustee shall not be liable for any action taken or omitted to be taken by it in accordance with the direction of a majority of the Owners of the principal amount of Series 2019 Bonds Outstanding relating to the time, method and place of conducting any proceeding or remedy available to the Trustee under this Indenture. ARTICLE VH MODIFICATION AND AMENDMENT OF THE INDENTURE SECTION 7.01 Amendment by Consent of Bond Owners. This Indenture and the rights and obligations of the City and of the Owners of the Series 2019 Bonds may be modified or amended at any time by a Supplemental Indenture which shall become binding when the written consent of the Owners of a majority in aggregate principal amount of the Series 2019 Bonds then Outstanding, exclusive of Series 2019 Bonds disqualified as provided in Section 7.03 hereof, are filed with the Trustee. No such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Series 2019 Bond or otherwise alter or impair the obligation of the City to pay the principal of or interest on at the time and place and at the rate and in the currency provided therein of any Series 2019 Bond without the express written consent of the Owner of such Series 2019 Bond, (b) reduce the percentage of Series 2019 Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee. SECTION 7.02 Amendment Without Consent of Bondholders. This Indenture and the rights and obligations of the City and of the Owners of the Series 2019 Bonds may also be modified or amended at any time by a Supplemental Indenture which shall become binding upon execution and delivery, without consent of any Bond 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 City in this Indenture contained, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the City; or (b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Indenture, or in any other respect whatsoever as the City may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not adversely affect the interests of the Owners of the Series 2019 Bonds; (c) to provide for the issuance of any Additional Obligations, and to provide the terms and conditions under which such Additional Obligations may be issued, including but not limited to the establishment of special funds and accounts relating to such Additional Obligations and any other provisions relating solely to such Additional Obligations, subject to and in accordance with the provisions of Section 3.04; or 55394.00055\32329348.3 5546 49 (d) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the Series 2019 Bonds. Any rating agency rating the Series 2019 Bonds must receive notification of any amendment to this Indenture at least 15 days prior to its execution. [As long as an Insurer is not in default under the terms of its Insurance Policy, it shall be deemed the owner of all of the Series 2019 Bonds insured by its Insurance Policy for all purposes of this Section 7.02.1 SECTION 7.03 Disqualified Series 2019 Bonds. Series 2019 Bonds owned or held by or for the account of the City (but excluding Series 2019 Bonds held in any employees' retirement fund) shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Series 2019 Bonds in this Article provided for, and shall not be entitled to consent to, or take any other action in this article provided for. Upon request of the Trustee, the City shall specify in a certificate to the Trustee those Series 2019 Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such certificate. SECTION 7.04 Endorsement or Replacement of Series 2019 Bonds After Amendment. After the effective date of any action taken as hereinabove provided, the City may determine that the Series 2019 Bonds shall bear a notation, by endorsement in form approved by the City, as to such action, and in that case upon demand of the Owner of any Series 2019 Bond Outstanding at such effective date and presentation of his Series 2019 Bond for that purpose at the Principal Corporate Trust Office, a suitable notation as to such action shall be made on such Series 2019 Bond. If the City shall so determine, new Series 2019 Bonds so modified as, in the opinion of the City, shall be necessary to conform to such Bond Owners' action shall be prepared and executed, and in that case upon demand of the Owner of any Series 2019 Bond Outstanding at such effective date such new Series 2019 Bonds shall be exchanged at the Principal Corporate Trust Office, without cost to each Bond Owner, for Series 2019 Bonds then Outstanding, upon surrender of such Outstanding Series 2019 Bonds. SECTION 7.05 Amendment by Mutual Consent. The provisions of this Article VII shall not prevent any Bond Owner from accepting any amendment as to the particular Series 2019 Bond held by him, provided that due notation thereof is made on such Series 2019 Bond. SECTION 7.06 Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and complies with the terms hereof. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. 55394.00055\32329348.3 554 50 SECTION 7.07 [Transcript of Proceedings to Insurer. The City shall provide or cause to be provided to the Insurer a full transcript of proceedings relating to any Supplemental Indenture or providing for the amendment or supplement of this Indenture.] ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS SECTION 8.01 Events of Default and Acceleration of Maturities. The following events shall be Events of Default hereunder: (a) Default in the due and punctual payment of the principal of any Series 2019 Bond or Additional Obligations when and as the same shall become due and payable, whether at maturity as therein expressed by declaration or otherwise; (b) Default in the due and punctual payment of any installment of interest on any Series 2019 Bond or Additional Obligations when and as such interest installment shall become due and payable; (c) Default by the City in the observance of any of the other covenants, agreements or conditions on its part in this Indenture or in any Contracts or in the Series 2019 Bonds contained, and such default shall have continued for a period of sixty (60) days after the City shall have been given notice in writing of such default by the Trustee; or (d) The filing by the City of 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 City, 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 City or of the whole or any substantial part of its property. Upon the occurrence of an Event of Default, the Trustee may, and shall, at the direction of the owners of a majority of the principal amount of the Series 2019 Bonds by written notice to the City, declare the principal of the Series 2019 Bonds to be immediately due and payable, whereupon the principal of the Series 2019 Bonds and interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in this Indenture or in the Series 2019 Bonds to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after the principal of the Series 2019 Bonds shall have been so declared due and payable and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay all of the principal of and interest on the Series 2019 Bonds having come due prior to such declaration, with interest on such overdue principal and interest calculated at the rate of interest per annum then borne by the Outstanding Series 2019 Bonds, and the reasonable fees and expenses of the Trustee and those of its attorneys, and any and all 55394.00055\32329348.3 554-51 other defaults known to the Trustee (other than in the payment of the principal of and interest on the Series 2019 Bonds having come 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 a majority in aggregate principal amount of the Series 2019 Bonds at the time Outstanding may, by written notice to the City and to the Trustee, on behalf of the Owners of all of the Outstanding Series 2019 Bonds, rescind and annul such declaration and its consequences. However, 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. SECTION 8.02 Application of Funds Upon Acceleration. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenture shall be applied by the Trustee in the following order upon presentation of the several Series 2019 Bonds, and the stamping thereon of the amount of the payment if only partially paid, or upon the surrender thereof if fully paid; First, to the payment of the fees, costs and expenses of the Trustee and of Bond Owners in declaring such Event of Default, including reasonable compensation to their agents, attorneys and counsel, and to the payment of the fees, costs and expenses of the Trustee, if any, in carrying out the provisions of this Article VIIf including reasonable compensation to its agents, attorneys and counsel and any outstanding fees and expenses of the Trustee, then to the payment of the fees, costs and expenses of the Bond Owners in declaring such Event of Default, including reasonable compensation to its agents, attorneys and counsel; and Second, to the payment of the whole amount then owing and unpaid upon the Series 2019 Bonds and Additional Obligations for interest and principal, with interest on such overdue amounts to the extent permitted by law at the rate of interest then borne by the Outstanding Series 2019 Bonds and Additional Obligations, and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Series 2019 Bonds and Additional Obligations, then to the payment of such interest, principal and interest on overdue amounts without preference or priority among such interest, principal and interest on overdue amounts ratably in proportion to the aggregate of such interest, principal and interest on overdue amounts. SECTION 8.03 Other Remedies; Rights of Bond Owners. Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy, in addition to the remedy specified in Section 8.01, at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Series 2019 Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture. If an Event of Default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Series 2019 Bonds and indemnified as provided in Section 6.02(l), the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article V1II, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bond Owners. 55394.00055\32329348.3 554 52 No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to the Bond Owners) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or to the Bond Owners hereunder or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein; such right or power may be exercised from time to time as often as may be deemed expedient. SECTION 8.04 Power of Trustee to Control Proceedings. In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of a majority in principal amount of the Series 2019 Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Series 2019 Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in principal amount of the Outstanding Series 2019 Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation. Any suit, action or proceeding which any Owner of Series 2019 Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Series 2019 Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Series 2019 Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney -in - fact of the respective Owners of the Series 2019 Bonds for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Series 2019 Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney -in -fact. SECTION 8.05 Appointment of Receivers. Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bond Owners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Gas Tax Revenues and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer. SECTION 8.06 Non -Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Series 2019 Bonds, shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the interest on and principal of the Series 2019 Bonds to the respective Bond Owners at the respective dates of maturity, as herein provided, out of the Gas Tax Revenues and other moneys herein pledged for such payment. A waiver of any default or breach of duty or contract by the Trustee or any Bond Owners shall not affect any subsequent default or breach of duty or contract, or impair any rights or 55394.00055\32329348.3 554 53 remedies on any such subsequent default or breach. No delay or omission of any Owner of any of the Series 2019 Bonds 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 Trustee or Bond Owners by the Bond Law or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Bond Owners, as the case may be. If a suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Bond Owners, the City and the Bond 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 8.07 Rights and Remedies of Bond Owners. No Owner of any Series 2019 Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of all the Series 2019 Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) 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 any remedy hereunder; it being understood and intended that no one or more Owners shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners. The right of any Owner to receive payment of the principal of and interest and premium (if any) on such Series 2019 Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture. SECTION 8.08 [Rights of the Insurer. Anything in this Indenture to the contrary notwithstanding, upon the occurrence and continuation of an Event of Default, the Insurer shall be entitled to control and direct the enforcement of all rights and remedies (including the right to require a declaration of acceleration) granted hereunder to the Owners, or to the Trustee for the benefit of the Owners, including but not limited to rights and remedies granted pursuant to Section 8.02 and including but not limited to the right to approve all waivers of any Events of Default. The rights granted to the Insurer under this Indenture shall be deemed terminated and shall not be exercisable by the Insurer during any period during which the Insurer shall be in default under the Insurance Policy. 55394.00055\32329348.3 554-54 So long as the Insurer shall be in compliance with its payment obligations under the Insurance Policy, the Insurer shall be deemed to be the sole owner of the Series 2019 Bonds for purposes of all provisions relating to an event of default with respect to the Series 2019 Bonds, except with respect to the giving of notice of such an Event of Default. The Insurer shall be included as a party in interest and as a party entitled to (1) notify the Trustee of the occurrence of an Event of Default and (2) request the Trustee to intervene in judicial proceedings that affect the Series 2019 Bonds or the security therefor. In addition, the provisions herein requiring the consent, approval or direction of the Insurer shall be applicable only at such time as the Insurer shall be in compliance with its payment obligations under the Insurance Policy and the Reserve Policy.] SECTION 8.09 Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the City, the Trustee and the Bond Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. ARTICLE IX MISCELLANEOUS SECTION 9.01 Limited Liability of City. Notwithstanding anything in this Indenture contained, the City shall not be required to advance any moneys derived from any source of income other than the Gas Tax Revenues for the payment of the principal of or interest on the Series 2019 Bonds, or for the performance of any covenants herein contained (except to the extent any such covenants are expressly payable hereunder from the Gas Tax Revenues). The City may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose and may be used by the City for such purpose without incurring indebtedness. SECTION 9.02 Parties Interested Herein. Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the City, the Trustee, [the Insurer] and the Owners any right, remedy or claim under or by reason of this Indenture, or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the City shall be for the sole and exclusive benefit of the City, the Trustee and the Owners. SECTION 9.03 Discharge of Indenture. If the City shall pay and discharge any or all of the Outstanding Series 2019 Bonds in any one or more of the following ways: (a) by well and truly paying or causing to be paid the principal of and interest and premium (if any) on such Series 2019 Bonds, as and when the same become due and payable; 55394.00055\32329348.3 554-55 (b) by depositing with the Trustee, in trust, at or before maturity, money which, together with the available amounts then on deposit in the funds and accounts established pursuant to this Indenture, is fully sufficient to pay such Series 2019 Bonds, including all principal of and interest thereon; or (c) by depositing with a qualified escrow holder, in trust, Defeasance Obligations in such amount as the City (verified by an Independent Certified Public Accountant) shall determine will, together with the interest to accrue thereon and available moneys then on deposit in the Funds and Accounts established pursuant to this Indenture, be fully sufficient to pay and discharge the indebtedness on such Series 2019 Bonds (including all principal and interest at their respective maturity dates; then, at the election of the City, and notwithstanding that any of such Series 2019 Bonds shall not have been surrendered for payment, the pledge of the Gas Tax Revenues and other funds provided for in this Indenture with respect to such Series 2019 Bonds, and all other pecuniary obligations of the City under this Indenture with respect to all such Series 2019 Bonds, shall cease and terminate, except only the obligation of the City to pay or cause to be paid to the Owners of such Series 2019 Bonds not so surrendered and paid all sums due thereon from amounts set aside for such purpose as aforesaid, and all expenses and costs of the Trustee. Notice of such election shall be filed with the Trustee. Any funds thereafter held by the Trustee, which are not required for said purposes, shall be paid over to the City. To accomplish a defeasance under (c) of this section the City shall cause to be delivered (i) a report of an Independent Certified Public Accountant verifying the sufficiency of the escrow established to pay the Series 2019 Bonds in full on the maturity date ("Verification"), (ii) an escrow deposit agreement, and (iii) an opinion of nationally recognized bond counsel to the effect that the Series 2019 Bonds are no longer "Outstanding" under this Indenture; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the City and the Trustee. If a forward supply contract is employed in connection with the refunding, (i) such verification report shall expressly state that the adequacy of the escrow to accomplish the refunding relies solely on the initial escrowed investments and the maturing principal thereof and interest income thereon and does not assume performance under or compliance with the forward supply contract, and (ii) the applicable escrow agreement shall provide that in the event of any discrepancy or difference between the terms of the forward supply contract and the escrow agreement (or authorizing document, if no separate escrow agreement is utilized), the terms of the escrow agreement or authorizing document, if applicable, shall be controlling. [At least (three) 3 Business Days prior to any defeasance with respect to the Series 2019 Bonds, the City shall deliver to the Insurer draft copies of an escrow agreement, an opinion of bond counsel regarding the validity and enforceability of the escrow agreement and the defeasance of the Series 2019 Bonds, a Verification Report regarding the sufficiency of the escrow fund. Such opinion and Verification Report shall be addressed to the Insurer and shall be in form and substance satisfactory to the Insurer. In addition, the escrow agreement shall provide that: 55394.00055\32329348.3 554-56 (a) Any substitution of securities following the execution and delivery of the escrow agreement shall require the delivery of a Verification Report, an opinion of bond counsel that such substitution will not adversely affect the exclusion (if interest on the Series 2019 Bonds is excludable) from gross income of the holders of the Series 2019 Bonds of the interest on the Series 2019 Bonds for federal income tax purposes and the prior written consent of the Insurer, which consent will not be unreasonably withheld. (b) The City will not exercise any prior optional redemption of Series 2019 Bonds secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions unless (i) the right to make any such redemption has been expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the official statement for the refunding bonds, and (ii) as a condition to any such redemption there shall be provided to the Insurer a Verification Report as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following any such redemption. (c) The City shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of the hisurer.] SECTION 9.04 Content of Certificates. Every certificate with respect to compliance with a condition or covenant provided for in this Indenture shall include (a) a statement that the person or persons making or giving such certificate 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 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 City 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, on information with respect to which is in the possession of the City, upon the certificate or opinion of or representations by an officer or officers of the City, 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 the exercise of reasonable care should have known that the same were erroneous. SECTION 9.05 Execution of Documents by Bond Owners. Any request, consent or other instrument required by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent writings of substantially similar tenor and may be signed or executed by such Bond Owners in person or by agent or agents duly appointed in writing. Proof of the 55394.00055\32329348.3 55 44 57 execution of any such request, consent or other instrument or of a writing appointing any such agent, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and of the City if made in the manner provided in this Section 9.05. The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such request, consent or other instrument or writing acknowledged to him the execution thereof. The ownership of Series 2019 Bonds shall be provided by the Bond Registration Books. Any request, consent or vote of the Owner of any Series 2019 Bond shall bind every future Owner of the same Series 2019 Bond and the Owner of any Series 2019 Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the City in pursuance of such request, consent or vote. In lieu of obtaining any demand, request, direction, consent or waiver in writing, the Trustee may call and hold a meeting of the Bond Owners upon such notice and in accordance with such rules and obligations as the Trustee considers fair and reasonable for the purpose of obtaining any such action. SECTION 9.06 Waiver of Personal Liability. No officer, agent or employee of the City shall be individually or personally liable for the payment of the interest on or principal of the Series 2019 Bonds; but nothing herein contained shall relieve any such officer, agent or employee from the performance of any official duty provided by law. SECTION 9.07 Partial Invalidity. If any one or more of the covenants or agreements, or portions thereof, provided in this Indenture on the part of the City (or of the Trustee) to be performed should be contrary to law, then such covenant or covenants, such agreement or agreements, or such portions thereof, shall be null and void and shall be deemed separable from the remaining covenants and agreements or portions thereof and shall in no way affect the validity of this Indenture or of the Series 2019 Bonds; but the Bond Owners shall retain all rights and benefits accorded to them under the Bond Law or any other applicable provisions of law. The City hereby declares that it would have entered into this Indenture and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Series 2019 Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases of this Indenture or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. SECTION 9.08 Destruction of Cancelled Series 2019 Bonds. Whenever in this Indenture provision is made for the surrender to the City of any Series 2019 Bonds which have been paid or cancelled pursuant to the provisions of this Indenture, the Trustee shall destroy such Series 2019 Bonds and furnish to the City a certificate of such destruction. SECTION 9.09 Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the City or the Trustee may be established and maintained in the 55394.00055\32329348.3 55 45_58 accounting records of the City or the Trustee, as the case may be, either as a fund or an account, and may, for the purpose of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account. All such records with respect to all such funds and accounts held by the City shall at all times be maintained in accordance with generally accepted accounting principles and all such records with respect to all such Funds and Accounts held by the Trustee shall be at all times maintained in accordance with corporate trust industry practices; in each case with due regard for the protection of the security of the Series 2019 Bonds and the rights of every Owner thereof. SECTION 9.10 Notices. Any notice, request, complaint, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, first class mail, overnight and hand delivery, fax and email addressed as follows: If to the City: City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Attention: Executive Director and Treasurer If to the Trustee: U.S. Bank National Association US Bank Tower Los Angeles 633 W. 5th St., 24th Floor Los Angeles, CA 90071 Attention: If to the Insurer: As directed in Section 4.09 The City and the Trustee may designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. SECTION 9.11 Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of the Series 2019 Bonds which remain unclaimed for one (1) year after the date when such Series 2019 Bonds have become due and payable, either at their stated maturity dates if such moneys were held by the Trustee at such date, or for one (1) year after the date of deposit of such moneys if deposited with the Trustee after said date when such Series 2019 Bonds become due and payable, shall, at the written request of the City, be repaid by the Trustee to the City, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the City for the payment of such Series 2019 Bonds; provided, however, that before being required to make any such payment to the City, the Trustee shall, at the expense and direction of the City, cause to be mailed to the Owners of all such Series 2019 Bonds, at their respective addresses appearing on the Bond Registration Books, a notice that said moneys remain unclaimed and that, after a date named in said notice, which date shall not be less than thirty (30) days after the date of mailing of such notice, the balance of such moneys then unclaimed will be returned to the City. (Signature page follows) 55394.00055\32329348.3 554 59 IN WITNESS WHEREOF, the CfFY OF SANTA ANA has caused this Indenture to be signed in its name and on its behalf by the Mayor and attested by its City Clerk, and U.S. Bank National Association, in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officer identified below, all as of the day and year first above written. ATTEST: Daisy Gomez Clerk of the Council CITY OF SANTA ANA Miguel Pulido Mayor U.S. BANK NATIONAL ASSOCIATION, as Trustee Authorized Officer -Signature Page - Indenture of Trust 55394.00055\32329348.3 55 S 1 6O IM EXHIBIT A FORM OF SERIES 2019 BOND UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF SANTA ANA GAS TAX REVENUE REFUNDING BOND SERIES 2019 94 INTEREST RATE MATURITY DATE DATED DATE CUSIP REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS Under and by virtue of Sections 53570 et seq. and 53580 et seq. of the California Government Code (the "Bond Law"), the City of Santa Ana (the "City"), for value received, will, on the Maturity Date specified above, pay to the Registered Owner named above, or registered assigns (the "Owner"), the Principal Amount stated above, in lawful money of the United States of America, and pay interest thereon in like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Series 2019 Bond (unless (i) this Series 2019 Bond is authenticated on an Interest Payment Date, in which event it shall bear interest from such date of authentication, or (ii) this Series 2019 Bond is authenticated prior to [June 15, 20201, in which event it shall bear interest from the Dated Date stated above; provided, however, that if at the time of authentication of this Series 2019 Bond, interest is in default on this Series 2019 Bond, this Series 2019 Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on this Series 2019 Bond) until payment of such Principal Amount in full, at the Interest Rate per annum stated above, payable on January I and July 1 in each year, commencing [July 1, 20201 (each an "Interest Payment Date"), calculated on the basis of a 360-day year comprised of twelve 30-day months. Principal hereof and premium, if any, are payable at the corporate trust office of U.S. Bank National Association (the "Trustee"), in [Los Angeles, California]. Interest hereon (including the final interest payment upon maturity) is payable by check or draft of the Trustee 55394.00055\32329348.3 55A161 mailed by first class mail to the Owner at the Owner's address as it appears on the registration books maintained by the Trustee as of the close of business on the fifteenth (15th) day of the month next preceding such Interest Payment Date (the "Record Date"); provided, that at the option of any Owner of at least $1,000,000 aggregate principal amount of the Series 2019 Bonds with respect to which written instructions have been filed with the Trustee prior to the Record Date, such interest may be paid by wire transfer. This Series 2019 Bond is one of a duly authorized issue of Series 2019 Bonds of the City designated as its "Gas Tax Revenue Refunding Bonds, Series 2019" (the "Series 2019 Bonds") issued under and pursuant to the Bond Law and under an Indenture of Trust (the "Indenture") by and between the City and the Trustee, dated as of , 2019, and approved by the City by Resolution No. adopted by the City Council of the City on 12019 (the "Resolution"). Copies of the Indenture are on file at the office of the City Clerk and at the above -mentioned office of the Trustee, and reference to the Indenture and any and all supplements thereto and modifications and amendments thereof and to the Bond Law is made for a description of the terms on which the Series 2019 Bonds are issued, the provisions with regard to the nature and extent of the Gas Tax Revenues, as that term is defined in the Indenture, and the rights of the Owners of the Series 2019 Bonds. All the terms of the Indenture and the Bond Law are hereby incorporated herein and constitute a contract between the City and the Owner from time to time of this Series 2019 Bond, and to all the provisions thereof the Owner of this Series 2019 Bond, by acceptance hereof, consents and agrees. Each subsequent Owner hereof shall have recourse to all of the provisions of the Bond Law and the Indenture and shall be bound by all of the terms and conditions thereof. The Series 2019 Bonds are being issued for the purpose of (i) refunding the 2007 Gas Tax Revenue Certificates of Participation; (ii) paying certain costs of issuing the Series 2019 Bonds; and (iii) funding a reserve account. The Series 2019 Bonds are special obligations of the City and are secured by amounts held from time to time in the Debt Service Fund established and held by the Trustee under the Indenture and, subject to certain restrictions set forth in the Indenture, a pledge of and lien on certain Gas Tax Revenues (as defined in the Indenture) deposited into the Gas Tax Fund. Neither the general fund, the full faith and credit, nor the taxing power of the City, the State of California or any other political subdivision thereof is pledged to the payment of the Series 2019 Bonds. The Series 2019 Bonds are not secured by a legal or equitable pledge of or charge, lien or encumbrance upon any property of the City or any of its income or receipts except the Gas Tax Revenues. The Series 2019 Bonds maturing on or before January 1, are not subject to optional redemption prior to maturity. The Series 2019 Bonds maturing on January 1, and thereafter are subject to redemption prior to their stated maturity at the option of the City, as a whole or in part on any date, by such maturities as are selected by the City from any available source of funds on or after January 1, at a redemption price equal to the principal amount of the Series 2019 Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption. 55394.00055\32329348.3 55k- 62 The Series 2019 Bonds maturing January 1, are subject to redemption in part by lot, on January 1, in each year commencing January 1, from payments made by the City into the Sinking Account, at a redemption price equal to the principal amount to be redeemed, without premium, in the aggregate respective principal amounts and on January 1 in the respective years set forth in the Indenture. Additional Obligations payable on a parity with the Series 2019 Bonds may be issued pursuant to the Indenture, solely for the purpose of redeeming all or a portion of the Series 2019 Bonds, and may be made subject to redemption prior to maturity, as a whole or in part, at such time or times, and upon payment of the principal amount thereof and accrued interest thereon plus such premium or premiums, if any, as may be determined by the City in the applicable Additional Obligations Instrument. The Series 2019 Bonds are issuable as fully registered Series 2019 Bonds, without coupons, in denominations of $5,000 or any integral multiple thereof. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Indenture, Series 2019 Bonds may be exchanged for a like aggregate principal amount of Series 2019 Bonds of other authorized denominations and of the same maturity. This Series 2019 Bond is transferable by the Owner hereof, in person, or by his attorney duly authorized in writing, at the Principal Corporate Trust Office, but only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of this Series 2019 Bond. Upon registration of such transfer a new Series 2019 Bond or Series 2019 Bonds, of any authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. The City and the Trustee may treat the Owner hereof as the absolute Owner hereof for all purposes, and the City and the Trustee shall not be affected by any notice to the contrary. The Indenture may be amended without the consent of the Owners of the Series 2019 Bonds to the extent set forth in the Indenture. It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Series 2019 Bond do exist, have happened or have been performed in due and regular time and manner as required by the laws of the State of California and that the amount of this Series 2019 Bond, together with all other indebtedness of the City, does not exceed any limit prescribed by any laws of the State of California, and is not in excess of the amount of Series 2019 Bonds permitted to be issued under the Indenture. This Series 2019 Bond shall not become valid or obligatory for any purpose or be entitled to the benefits of the Indenture until the certificate of authentication and registration hereon shall have been manually signed by an authorized officer or signatory of the Trustee. Unless this Series 2019 Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the City or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and 55394.00055\32329348.3 55A'63 any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. IN WITNESS WHEREOF, the City of Santa Ana has caused this Series 2019 Bond to be executed in its name and on its behalf with the facsimile signatures of the City of Santa Ana Mayor and of its Clerk of the Council, all as of the Dated Date specified above. CITY OF SANTA ANA Miguel Pulido Mayor ATTEST: Daisy Gomez Clerk of the Council 55394.00055\32329348.3 55 -64 CERTIFICATE OF AUTHENTICATION This is one of the Series 2019 Bonds described in the within -mentioned Indenture. Dated: U.S. BANK NATIONAL ASSOCIATION By: Authorized Signatory 55394.00055\32329348.3 55A'_65 FORM OF ASSIGNMENT For value received the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute and appoint attorney, to transfer the same on the books of the Trustee, with full power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature guarantee shall be made by a Note guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. 55394.00055\32329348.3 55A'66 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS; EQUAL SECURITY SECTION 1.01 Definitions .................................................................................................. 2 SECTION 1.02 Rules of Construction.............................................................................. 13 SECTION 1.03 Authorization and Purpose of Series 2019 Bonds ................................... 13 SECTION 1.04 Equal Security.......................................................................................... 13 ARTICLE H ISSUANCE OF SERIES 2019 BONDS SECTION 2.01 Terms of Series 2019 Bonds.................................................................... 13 SECTION 2.02 Terms of Redemption.............................................................................. 14 SECTION 2.03 Form of Series 2019 Bonds...................................................................... 17 SECTION 2.04 Execution of Series 2019 Bonds.............................................................. 17 SECTION 2.05 Transfer of Series 2019 Bonds................................................................. 17 SECTION 2.06 Exchange of Series 2019 Bonds.............................................................. 18 SECTION 2.07 Temporary Series 2019 Bonds................................................................. 18 SECTION 2.08 Bond Registration Books......................................................................... 18 SECTION 2.09 Series 2019 Bonds Mutilated, Lost, Destroyed or Stolen ........................ 18 SECTION 2.10 Book Entry System.................................................................................. 19 ARTICLE III ISSUE OF SERIES 2019 BONDS; ADDITIONAL OBLIGATIONS SECTION 3.01 Issuance of Series 2019 Bonds................................................................ 20 SECTION 3.02 Application of Proceeds of Sale of Series 2019 Bonds; Transfers from the 2007 Trust Agreement............................................................... 21 SECTION 3.03 Cost of Issuance Fund.............................................................................. 21 SECTION 3.04 Issuance of Additional Obligations.......................................................... 21 SECTION 3.05 Validity of Series 2019 Bonds................................................................. 21 ARTICLE IV PLEDGE OF GAS TAX REVENUES; FUNDS AND ACCOUNTS SECTION 4.01 Pledge of Gas Tax Revenues, Gas Tax Fund ........................................... 22 SECTION 4.02 Receipt and Deposit of Revenues............................................................ 22 SECTION 4.03 Establishment of Funds and Accounts and Allocation of Revenues Thereto..................................................................................................... 22 SECTION 4.04 Application of Debt Service Fund........................................................... 25 SECTION 4.05 Investments.............................................................................................. 25 SECTION 4.06 Valuation; Investments............................................................................ 26 SECTION 4.07 Municipal Bond Insurance....................................................................... 26 55394.00055\32329348.3 _i_ 55A-67 TABLE OF CONTENTS (continued) Page SECTION 4.08 Reserve Policy Provisions........................................................................ 26 SECTION 4.09 Additional Rights of hisurer; Notices and Other Information to be Provided to hisurer................................................................................... 26 ARTICLE V COVENANTS OF THE CITY; SPECIAL TAX COVENANTS SECTION 5.01 Punctual Payment; Compliance With Documents ................................... 27 SECTION 5.02 Against Encumbrances............................................................................. 27 SECTION 5.03 Discharge of Claims................................................................................. 27 SECTION 5.04 Maintenance of Gas Tax Revenues.......................................................... 27 SECTION 5.05 Records and Accounts.............................................................................. 27 SECTION 5.06 Protection of Security and Rights of Owners .......................................... 28 SECTION 5.07 No Priority for Additional Obligations.................................................... 28 SECTION 5.08 No Arbitrage............................................................................................ 28 SECTION 5.09 Information Report ................................................................................... 28 SECTION 5.10 Private Activity Series 2019 Bond Limitation ......................................... 28 SECTION 5.11 Federal Guarantee Prohibition................................................................. 28 SECTION 5.12 Further Assurances................................................................................... 28 SECTION 5.13 Continuing Disclosure............................................................................. 28 SECTION 5.14 Rebate Requirement................................................................................. 29 SECTION 5.15 Maintenance of Tax-Exemption.............................................................. 29 SECTION 6.01 SECTION 6.02 SECTION 6.03 SECTION 6.04 SECTION 6.05 SECTION 6.06 SECTION 6.07 SECTION 6.08 SECTION 6.09 SECTION 6.10 SECTION 6.11 SECTION 6.12 SECTION 7.01 ARTICLE VI THE TRUSTEE Appointment of Trustee........................................................................... 29 Acceptance of Trusts................................................................................ 29 Fees, Charges and Expenses of Trustee ................................................... 33 Notice to Bond Owners of Default.......................................................... 33 Intervention by Trustee............................................................................ 34 Removal of Trustee.................................................................................. 34 Resignation by Trustee............................................................................ 34 Appointment of Successor Trustee.......................................................... 34 Merger or Consolidation.......................................................................... 34 Concerning any Successor Trustee.......................................................... 34 Appointment of Co-Trustee..................................................................... 35 Indemnification; Limited Liability of Trustee ......................................... 35 ARTICLE VII MODIFICATION AND AMENDMENT OF THE INDENTURE 55394.00055\32329348.3 Amendment by Consent of Bond Owners 36 55A-68 TABLE OF CONTENTS (continued) SECTION 7.02 Amendment Without Consent of Bondholders .................. SECTION 7.03 Disqualified Series 2019 Bonds ......................................... SECTION 7.04 Endorsement or Replacement of Series 2019 Bonds After Amendment........................................................................ SECTION 7.05 Amendment by Mutual Consent ........................................ SECTION 7.06 Execution of Supplemental Indentures .............................. SECTION 7.07 [Transcript of Proceedings to Insurer ................................ Page ...................... 36 ...................... 37 ...................... 37 ...................... 37 ...................... 37 ...................... 38 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS SECTION 8.01 Events of Default and Acceleration of Maturities ................................... 38 SECTION 8.02 Application of Funds Upon Acceleration ................................................ 39 SECTION 8.03 Other Remedies; Rights of Bond Owners ................................................ 39 SECTION 8.04 Power of Trustee to Control Proceedings ................................................ 40 SECTION 8.05 Appointment of Receivers....................................................................... 40 SECTION 8.06 Non-Waiver.............................................................................................. 40 SECTION 8.07 Rights and Remedies of Bond Owners .................................................... 41 SECTION 8.08 [Rights of the Insurer............................................................................... 41 SECTION 8.09 Termination of Proceedings..................................................................... 42 ARTICLE IX MISCELLANEOUS SECTION 9.01 Limited Liability of City.......................................................................... 42 SECTION 9.02 Parties Interested Herein.......................................................................... 42 SECTION 9.03 Discharge of Indenture............................................................................. 42 SECTION 9.04 Content of Certificates............................................................................. 44 SECTION 9.05 Execution of Documents by Bond Owners .............................................. 44 SECTION 9.06 Waiver of Personal Liability.................................................................... 45 SECTION 9.07 Partial Invalidity....................................................................................... 45 SECTION 9.08 Destruction of Cancelled Series 2019 Bonds ........................................... 45 SECTION 9.09 Funds and Accounts................................................................................. 45 SECTION 9.10 Notices..................................................................................................... 46 SECTION 9.11 Unclaimed Moneys.................................................................................. 46 EXHIBIT A — FORM OF SERIES 2019 BOND 55394.00055\32329348.3 -lll- A-1 55A-69 1*:/:I1-3hd1l;3 BB&K Draft 10/16/19 ESCROW DEPOSIT AND TRUST AGREEMENT by and among the SANTA ANA FINANCING AUTHORITY, CITY OF SANTA ANA, CALIFORNIA, and U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent Dated as of December 1, 2019 55394.00055\32329256.4 5 5A -7 0 ESCROW DEPOSIT AND TRUST AGREEMENT This ESCROW DEPOSIT AND TRUST AGREEMENT (the "Escrow Agreement") is made and entered into as of December 1, 2019, by and among the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the State of California (the "Authority"), CITY OF SANTA ANA, a municipal corporation organized and existing by virtue of Constitution and laws of the State of California (the "City") and U.S. BANK NATIONAL ASSOCIATION, as escrow agent (the "Escrow Agent"); WITNESSETH: WHEREAS, the City and the Authority have heretofore entered into a 2007 Installment Sale Agreement, dated as of December 1, 2007 (the "2007 Agreement"); WHEREAS, payments by the City of installment payments pursuant to the 2007 Agreement (the "2007 Payments") are applied to the payment of the $68,010,000 Gas Tax Revenue Certificates of Participation (2007 Local Street Improvement Project) (the "2007 Certificates"); WHEREAS, the 2007 Agreement provides that in the event that the City deposits, or causes the deposit on its behalf of, moneys and certain securities (as defined in Section 7.01 of the 2007 Trust Agreement (defined below)) in an amount, together with investment earnings and certain funds held under the 2007 Trust Agreement, sufficient to pay and discharge all or a portion of the indebtedness of the 2007 Agreement at or before maturity, then the obligations of the City under the 2007 Agreement shall cease and terminate with respect to the obligations so discharged, except only the obligation of the City to pay or cause to be paid to the Authority all sums due thereon out of the Escrow Fund with respect to the obligations so discharged and thereafter such Gas Tax Revenues (as defined in the 2007 Agreement) shall be released from the lien of the 2007 Agreement; and WHEREAS, pursuant to the 2007 Agreement, the Authority assigned to the Prior Trustee, defined below, its rights to receive installment payments (the "Prior Installment Payments") from the City under the 2007 Agreement and the right to exercise such rights and remedies conferred on the Authority under the 2007 Agreement to enforce payment of the Prior Installment Payments; and WHEREAS, pursuant to a Trust Agreement, relating to and dated as of the same date as the 2007 Agreement, by and among the Authority, The Bank of New York Mellon Trust Company, N.A. (the "Prior Trustee") and the City (the "2007 Trust Agreement"), the 2007 Certificates were issued, secured in part by the prior payments; and WHEREAS, the City has determined that it is in the best interests of the Authority at this time to refinance the City's obligation to make the remaining Prior Installment Payments under the 2007 Agreement and, as a result thereof, to provide for the prepayment of such Prior Installment Payments on said , 2019, at a prepayment price of 100% of the principal amount thereof, plus accrued interest; and 55394.00055\32329256.4 55A_7 1 WHEREAS, the Authority and the City propose to make the deposit of moneys and to appoint the Escrow Agent as their agent for the purpose of applying said deposit to the payment of remaining Prior Installment Payments in accordance with the instructions provided by this Escrow Agreement and of applying said remaining Prior Installment Payments to the prepayment of the 2007 Certificates in accordance with the 2007 Trust Agreement and 2007 Agreement; and WHEREAS, to obtain moneys to make such deposit, the City proposes to issue its $ City of Santa Ana Gas Tax Revenue Refunding Bonds, Series 2019 (the "Bonds") pursuant to that certain Indenture of Trust, dated as of December 1, 2019, (the "Indenture"), by and between the City and the U.S. Bank National Association, as trustee (the "2019 Trustee"); and WHEREAS, the City wishes to make such a deposit with the Escrow Agent and to enter into this Escrow Agreement for the purpose of providing the terms and conditions for the deposit and application of amounts so deposited; and WHEREAS, the Escrow Agent has full powers to act with respect to the irrevocable escrow and trust created herein and to perform the duties and obligations to be undertaken pursuant to this Escrow Agreement. NOW, THEREFORE, in consideration of the above premises and of the mutual promises and covenants herein contained and for other valuable consideration, the parties hereto do hereby agree as follows: Section 1. Definition of Federal Securities. As used herein, the term "Federal Securities" means direct non -callable obligations of the United States of America, Refcorp interest strips, or securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, provided, that the full faith and credit of the United States of America has been pledged to any such obligation or guarantee. Section 2. Appointment of Escrow Agent. The City and the Authority hereby appoint the Escrow Agent as Escrow Agent for all purposes of this Escrow Agreement and in accordance with the terms and provisions of this Escrow Agreement, and the Escrow Agent hereby accepts such appointment. Section 3. Establishment of Escrow Fund. There is hereby created by the City and the Authority with, and to be held by, the Escrow Agent, as security for the payment of the remaining Prior Installment Payments as hereinafter set forth, an irrevocable escrow to be maintained in trust by the Escrow Agent on behalf of the City and the Authority and for the benefit of the owners of the 2007 Certificates, said escrow to be designated the "Escrow Fund." All moneys and Federal Securities, if any, deposited in the Escrow Fund shall be held as a special fund for the payment of the remaining Prior Installment Payments in accordance with the provisions of the 2007 Agreement. If at any time the Escrow Agent shall receive actual knowledge that the moneys and Federal Securities in the Escrow Fund will not be sufficient to make any payment required by Section 5 hereof, the Escrow Agent shall notify the City of such fact and the City shall immediately cure such deficiency. 55394.00055\32329256.4 55A_72 Section 4. Deposit into Escrow Fund, Investment of Amounts. Concurrently with delivery of the Bonds, the City and the Authority shall cause to be transferred to the Escrow Agent for deposit into the Escrow Fund the amount of $ in immediately available funds. All amounts deposited to the Escrow Fund shall be held as cash uninvested. Section 5. Instructions as to Application of Deposit; Authority Retains Right of Optional Redemption. The City and the Authority hereby irrevocably direct and instruct the Escrow Agent to apply cash and securities held in the Escrow Fund to transfer to the Prior Trustee to pay the remaining Prior Installment Payments relating to the 2007 Agreement in full on , 2019 at a prepayment price of 100% of the principal amount hereof. For such purpose of call and prepayment prior to maturity of the 2007 Certificates, the City and the Authority have previously instructed the Escrow Agent to give notice of prepayment of the 2007 Certificates, and such notice of prepayment has been given timely for prepayment of the 2007 Certificates on , 2019, in accordance with the applicable provisions of the 2007 Trust Agreement. Any funds remaining in the Escrow Fund after 2019, shall be delivered to the City. Section 6. Application of Certain Terms of 2007 Trust Agreement. All of the terms of the 2007 Trust Agreement relating to the making of payments of principal and interest with respect to the 2007 Certificates are incorporated in this Escrow Agreement as if set forth in full herein. The provisions of the 2007 Trust Agreement relating to the limitations from liability and protections afforded the Prior Trustee and the resignation and removal of the Prior Trustee are also incorporated in this Escrow Agreement as if set forth in full herein and shall be the procedure to be followed with respect to any resignation or removal of the Escrow Agent hereunder. Section 7. Compensation to Escrow Agent. The City shall pay the Escrow Agent full compensation for its duties under this Escrow Agreement, including out-of-pocket costs such as publication costs, prepayment or redemption expenses, legal fees and other costs and expenses relating hereto and, in addition, fees, costs and expenses relating to the purchase of any Federal Securities after the date hereof, pursuant to a separate agreement between the City and the Escrow Agent. Under no circumstances shall amounts deposited in the Escrow Fund be deemed to be available for said purposes. Section 8. Liabilities and Obligations of Escrow Agent. The Escrow Agent shall have no obligation to make any payment or disbursement of any type or incur any financial liability in the performance of its duties under this Escrow Agreement unless the City shall have deposited sufficient funds with the Escrow Agent to satisfy such obligation. The Escrow Agent may rely and shall be protected in acting upon the written instructions of the City or its agents relating to any matter or action as Escrow Agent under this Escrow Agreement. The Escrow Agent undertakes such duties as specifically set forth herein and no implied duties or obligations shall be read into this Escrow Agreement against the Escrow Agent. The City hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and hold harmless the Escrow Agent and its respective successors, assigns, agents and servants from and 55394.00055\32329256.4 5 5Q _7 3 against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any time, the Escrow Agent (whether or not also indemnified against by any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Escrow Agreement, the establishment of the Escrow Fund, the retention of the moneys therein and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Escrow Agreement, or as may arise by reason of any act, omission or error of the Escrow Agent made in good faith in the conduct of its duties; provided, however, that the City shall not be required to indemnify the Escrow Agent against its own negligence or willful misconduct. The indemnities contained in this Section 8 shall survive the termination of this Escrow Agreement and the resignation and removal of the Escrow Agent. The Escrow Agent shall not have any liability hereunder except to the extent of its own negligence or willful misconduct. In no event shall the Escrow Agent be liable for any special, indirect or consequential damages. The Escrow Agent may consult with counsel of its own choice and the opinion of such counsel shall be full and complete authorization to take or suffer in good faith any action hereunder in accordance with such opinion of counsel. The Escrow Agent shall not be responsible for any of the recitals or representations contained herein. Whenever in the administration of this Escrow Agreement the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Escrow Agent, be deemed to be conclusively proved and established by a certificate of an authorized representative of the City and Authority, and such certificate shall, in the absence of negligence or willful misconduct on the part of the Escrow Agent, be full warrant to the Escrow Agent for any action taken or suffered by it under the provisions of this Escrow Agreement upon the faith thereof. The liability of the Escrow Agent to make the payments required by this Escrow Agreement shall be limited to the moneys and Federal Securities in the Escrow Fund. The Escrow Agent shall not be liable for the accuracy of any calculations provided as to the sufficiency of the moneys or Federal securities deposited with it to pay the principal, interest, or premiums, if any, on the 2007 Certificates. No provision of this Escrow Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers. The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees 55394.00055\32329256.4 4 55 / w appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed. The Escrow Agent agrees to accept and act upon instructions or directions pursuant to this Escrow Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Escrow Agent shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority or the City elects to give the Escrow Agent e-mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Agent in its discretion elects to act upon such instructions, the Escrow Agent's understanding of such instructions shall be deemed controlling. The Escrow Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Agent's reliance upon and compliance with such instructions notwithstanding the fact that such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Agent, including without limitation the risk of the Escrow Agent acting on unauthorized instructions, and the risk of interception and misuse by third parties. The Authority and City acknowledge that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority and City the right to receive brokerage confirmations of security transactions as they occur, the Authority and City specifically waives receipt of such confirmations to the extent permitted by law. The Escrow Agent will furnish the Authority and City periodic cash transaction statements which include detail for all investment transactions made by the Escrow Agent hereunder. Section 9. Amendment. This Escrow Agreement may be modified or amended at any time by a supplemental agreement which shall become effective when the written consents of the owners of one hundred percent (100%) in aggregate principal amount of the 2007 Certificates then outstanding shall have been filed with the Escrow Agent. This Escrow Agreement may be modified or amended at any time by a supplemental agreement, without the consent of any such owners, but only (1) to add to the covenants and agreements of any party, other covenants to be observed, or to surrender any right or power herein or therein reserved to the City, (2) to cure, correct or supplement any ambiguous or defective provision contained herein, or (3) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which, in the opinion of counsel, shall not adversely affect the interests of the owners of the 2007 Certificates or the Bonds, and that such amendment will not cause interest on the 2007 Certificates or the Bonds to become subject to federal income taxation. Section 10. Termination; Unclaimed Money. This Escrow Agreement shall terminate when the 2007 Certificates have been paid; provided, however, that (i) money held by the Escrow Agent pursuant to this Escrow Agreement for the payment and discharge of any of the 2007 Certificates (which shall not be payable as to interest from and after the date set for redemption) which remain unclaimed for two (2) years after such payments were due, shall be repaid by the Escrow Agent to the City free from the trust created by the 2007 Trust Agreement 55394.00055\32329256.4 5 5A _7 5 and this Escrow Agreement, and the Escrow Agent shall thereupon be released and discharged with respect thereto and hereto and all liability of the Escrow Agent with respect to such money shall thereupon cease and (ii) excess moneys held by the Escrow Agent not needed for the payment and discharge of the remaining Prior Installment Payments shall be transferred to the City. Section 11. Severability. If any section, paragraph, sentence, clause or provision of this Escrow Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, sentence, clause or provision shall not affect any of the remaining provisions of this Escrow Agreement. Section 12. Notice of Escrow Agent, Authority and City. Any notice to or demand upon the Escrow Agent may be served and presented, and such demand may be made, at the principal corporate trust office of the Escrow Agent as specified by the Escrow Agent as prior trustee (the "Prior Trustee") in accordance with the provisions of the 2007 Trust Agreement or by physical delivery with confirmation of receipt or by confirmed telecopy. Any notice to or demand upon the City or the Authority shall be deemed to have been sufficiently given or served for all purposes by being mailed by registered or certified mail, and deposited, postage prepaid, in a post office letter box, addressed to such party as provided in the 2007 Agreement (or such other address as may have been filed in writing by the City or the Authority with the Escrow Agent). Section 13. Merger or Consolidation of Escrow Agent. Any company into which the Escrow Agent may be merged or converted or with which may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Escrow Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible to act as trustee under the 2007 Trust Agreement, shall be the successor hereunder to the Escrow Agent without the execution or filing of any paper or any further act. Section 14. Governing Law. This Escrow Agreement shall be construed and governed in accordance with the laws of the State of California. Section 15. Execution in Several Counterparts. This Escrow Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall constitute but one and the same instrument. (Signature page follows) 55394.00055\32329256.4 55A_76 IN WITNESS WHEREOF, the Authority, the City and the Escrow Agent have each caused this Escrow Agreement to be executed by their duly authorized officers all as of the date first above written. ATTEST: ATTEST: Daisy Gomez Clerk of the Council Daisy Gomez Secretary CITY OF SANTA ANA Kristine Ridge City Manager U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent Authorized Officer SANTA ANA FINANCING AUTHORITY Kristine Ridge Executive Director -Signature Page - Escrow Deposit and Trust Agreement 55394.00055\32329256.4 551 77 TABLE OF CONTENTS Page Section 1. Definition of Federal Securities............................................................................. 2 Section 2. Appointment of Escrow Agent.............................................................................. 2 Section 3. Establishment of Escrow Fund.............................................................................. 2 Section 4. Deposit into Escrow Fund; Investment of Amounts .............................................. 3 Section 5. Instructions as to Application of Deposit; Authority Retains Right of OptionalRedemption............................................................................................. 3 Section 6. Application of Certain Terms of 2007 Trust Agreement ....................................... 3 Section 7. Compensation to Escrow Agent............................................................................. 3 Section 8. Liabilities and Obligations of Escrow Agent......................................................... 3 Section9. Amendment............................................................................................................ 5 Section 10. Termination; Unclaimed Money............................................................................ 5 Section11. Severability............................................................................................................6 Section 12. Notice of Escrow Agent, Authority and City ......................................................... 6 Section 13. Merger or Consolidation of Escrow Agent............................................................ 6 Section 14. Governing Law...................................................................................................... 6 Section 15. Execution in Several Counterparts......................................................................... 6 553 94.000 55\32329256.4 _i_ 55A-78 1=:1:INhdEI '^ C o TP � o PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER _, 2019 NEW ISSUE - BOOK -ENTRY ONLY UNDERLYING RATING S&P: INSURED RATING S&P: In the opinion of Best Best & Krieger LLP, Riverside, California, Bond Counsel, subject to certain qualifications described herein, under existing statutes, regulations, rules and court decisions, and assuming certain representations noncompliance with certain covenants and requirements described herein, the interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item oftax preference for purposes of the federal alternative minimum taxes. In the further opinion ofBond Counsel, such interest is exemptfrom California personal income taxes. See "TAXMATTERS"herein. " Dated: Date of Delivery CITY OF SANTA ANA Gas Tax Revenue Refunding Bonds, Series 2019 Due: January 1, as shown on inside cover Authority for Issuance. The bonds captioned above (the `Bonds') are being issued by the City of Santa Ana (the "City') pursuant to the provisions of Sections 53570 et seq. and 53580 et seq. of the California Government Code, a resolution adopted by the City Council of the City on 2019 and an Indenture of Trust, dated as of December 1, 2019 (the "Indenture') by and between the City and U.S. Bank National Association, as trustee for the Bonds (the "Trustee"). Use of Proceeds. The Bonds are being issued to provide funds to (i) to prepay the Santa Ana Financing Authority (the "Authority') Gas Tax Revenue Certificates of Participation (2007 Local Street Improvement Project), (ii) purchase a municipal bond insurance policy and a debt service reserve surety for the Bonds, and (iii) pay the costs of issuing the Bonds. See "REFUNDING PLAN." Security for the Bonds. The Bonds are payable from and secured by the City's pledge of Gas Tax Revenues (as defined herein) and certain funds and accounts held under the Indenture. Gas Tax Revenues consist of certain amounts received by the City from taxes imposed on the sale of motor vehicle fuels. See "SECURITY FOR THE BONDS." Bond Terms; Book -Entry Only. The Bonds will bear interest at the rates shown on the inside cover page, payable semiannually on January 1 and July 1 of each year, commencing on July 1, 2020, and will be issued in fully registered form without coupons in the denomination of $5,000 or any integral multiple of $5,000. The Bonds will be issued in book -entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC'). Purchasers of the Bonds will not receive certificates representing their interests in the Bonds. Payments of the principal of, premium, if any, and interest on the Bonds will be made to OTC, which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the beneficial owners of the Bonds. See "THE BONDS — General Provisions." Redemption. The Bonds are subject to optional redemption prior to maturity. See "THE BONDS Redemption." [Bond Insurance. The scheduled payment of principal of and interest on a portion, mall, of the Bonds (such maturities insured to be specified in the final Official Statement) when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the Bonds by (the "Insurer'). See `BOND INSURANCE' herein.] [Reserve Policy. The Reserve Account will be fimded by the purcbase of a municipal bond debt service reserve insurance policy relating to the Bonds issued by the Insurer (the "Reserve Policy") to be issued concurrently with the delivery of the Bonds by .] [INSERT INSURER LOGO] NEITHER THE BONDS NOR THE OBLIGATION OF THE CITY TO PAY PRINCIPAL OF OR INTEREST THEREON CONSTITUTE A DEBT OR A LIABILITY OF THE CITY, THE COUNTY OF ORANGE, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL LIMITATION ON INDEBTEDNESS, OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE CITY. THE BONDS ARE SECURED SOLELY BY THE PLEDGE OF GAS TAX REVENUES AND CERTAIN FUNDS AND ACCOUNTS FIELD UNDER THE INDENTURE. THE BONDS ARE NOT SECURED BY A PLEDGE OF THE TAXING POWER OF THE CITY. TIES COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF TIES ISSUE OF BONDS. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION WITH RESPECT TO THE PURCHASE OF THE BONDS. The Bonds are offered when, as and if issued and received by the Underwriter and subject to the approval as to their legality by Best Best & Krieger LLP, Riverside, California, Bond Counsel. Certain legal matters will be passed upon for the City by Best Best & Krieger LLP, Riverside, California as Disclosure Counsel and in its role as the City Attorney, and for Ramirez & Co., Inc., as the Underwriter by Curls Battling P.C., Oakland, California, as Underwriter's Counsel. It is anticipated that the Bonds will be delivered in definitive form through DTC on or about December 5, 2019. Ramirez & Co., Inc. Preliminary, subject to change. 55A-79 EXHIBIT 4 Dated: ,2019, 55A-80 EXHIBIT 4 Maturity Date June 1 61 CITY OF SANTA ANA Gas Tag Revenue Refunding Bonds, Series 2019 MATURITY SCHEDULE Serial Bonds Principal Interest Amount Rate Yield Price % Term Bonds Due June 1, Yield % CUSIP: CUSHXo Preliminary, subject to change. CUSIP® is a registered trademark of the American Bankers Association. Copyright© 1999-2019 American Bankers Association. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services, managed by Standard & Poor's Financial Services LLC on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for CUSIP Global Services. CUSIP® numbers are provided for convenience of reference only. None of the City, the Municipal Advisor or the Underwriter takes any responsibility for the accuracy of such numbers. 55A-81 EXHIBIT 4 CITY OF SANTA ANA MAYOR AND CITY COUNCIL Miguel Pulido, Mayor Juan Villegas, Mayor Pro Tem (Ward S) Vicente Sarmiento, Esq., Councilmember (Ward 1) David Penaloza, Councilmember (Ward 2) Jose Solorio, Councilmember (Ward 3) Cecilia Iglesias, Councilmember (Ward 6) Vacant, Councilmember (Ward 4) CITY OFFICIALS Kristine Ridge City Manager Daisy Gomez, City Clerk Sonia Carvalho, Esq., City Attorney Kathryn Downs, Executive Director & City Treasurer PROFESSIONAL SERVICES MUNICIPAL ADVISOR Urban Futures, Inc. Tustin, California BOND COUNSEL Best Best & Krieger LLP Riverside, California DISCLOSURE COUNSEL Best Best & Krieger LLP Riverside, California TRUSTEE/ESCROW BANK U.S. Bank National Association Los Angeles, California 55A-82 GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representations in connection with the offer or sale of the Bonds other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person, in any jurisdiction where such offer, solicitation or sale would be unlawful. This Official Statement has been deemed final, as of its date, by the City for the purpose of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The information set forth herein has been obtained from sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation, by the City. Neither the delivery of this Official Statement nor any sale made hereunder will, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. The information and expressions of opinion stated herein are subject to change without notice. Certain statements included or incorporated by reference in this Official Statement constitute "forward - looking" statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the words "expects," "forecasts," "projects," "intends," "anticipates," "estimates," "assumes" and analogous expressions. The achievement of certain results or other expectations contained in such forward -looking statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those that have been projected. No assurance is given that actual results will meet the forecasts of the City in any way, regardless of the optimism communicated in the information, and such statements speak only as of the date of this Official Statement. The City disclaims any obligation or undertaking to release publicly any updates or revisions to any forward -looking statement contained herein to reflect any changes in the expectations of the City with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All summaries of the Indenture (as defined herein), and of statutes and other documents referred to herein do not purport to be comprehensive or definitive and are qualified in their entireties by reference to each such statute and document. This Official Statement, including any amendment or supplement hereto, is intended to be deposited with one or more depositories. This Official Statement does not constitute a contract between any Owner of a Bond and the City. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. [ (" ") makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding supplied by and presented under the heading `BOND INSURANCE" and "APPENDIX F - SPECIMEN MUNICIPAL BOND INSURANCE POLICY."] The issuance and sale of the Bonds have not been registered under the Securities Act of 1933 or the Securities Exchange Act of 1934, both as amended, in reliance upon exemptions provided thereunder by Sections 3(a)(2) and 3(a)(12), respectively, for the issuance and sale of municipal securities. While the City maintains an intemet website for various purposes, the information provided on that website is not incorporated by reference as part of this Official Statement and none of the information on that website is intended to assist investors in making any investment decision or to provide any continuing information with respect to the Bonds or any other bonds or obligations of the City. 55A-83 [INSERT MAP] 55A-84 THIS PAGE INTENTIONALLY LEFT BLANK 55A-85 TABLE OF CONTENTS INTRODUCTION ........................................... 1 REFUNDING PLAN ....................................... 2 Estimated Sources and Uses of Funds...................................................... 3 DEBT SERVICE SCHEDULE ....................... 3 THE BONDS ................................................... 3 Authority for Issuance ................................. 3 General Provisions ...................................... 3 Redemption................................................. 4 Book -Entry Only System ............................ 5 BOND INSURANCE......................................6 SECURITY FOR THE BONDS ...................... 6 Pledge of Gas Tax Revenues ....................... 6 Gas Tax Fund .............................................. 6 Reserve Account ......................................... 8 Maintenance of Gas Tax Revenues ............. 8 Additional Obligations ................................ 8 GAS TAX REVENUES ..... E General........................................................ 8 Statewide Gas Tax Apportionments............ 9 City of Santa Ana Gas Tax Revenues ....... 11 BOND OWNERS' RISKS ............................ 13 Limited Obligations .................................. 14 Passive Revenue Source ............................ 14 Economic, Political, Social, and Environmental Conditions ................... 14 Initiative to Repeal Gas Tax ...................... 14 Limitations on Remedies Available to Bondowners..................................... 15 Diversion of Gas Tax Revenues ................ 15 Gasoline Sales Subject to Fluctuation....... 16 Secondary Market for Bonds .................... 16 Federal Tax -Exempt Status of the Bonds................................................... 16 IRS Audit of Tax -Exempt Issues .............. 16 Bond Insurance .......................................... 16 Cybersecurity............................................ 17 CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS ......... 17 -i- Article XHIB of the California Constitution — Limitation on Appropriations ...................................... 17 Article XIIIC and XIED of the California Constitution — The Right to Vote on Taxes ........................ 18 Future Initiatives........................................20 TAX MATTERS ............................................ 20 CERTAIN LEGAL MATTERS ....................21 FINANCIAL STATEMENTS .......................21 MUNICIPAL ADVISOR...............................21 RATINGS ...................................................... 21 LITIGATION ................................................. 22 CONTINUING DISCLOSURE .....................22 UNDERWRITING ........................................ 22 EXECUTION ................................................. 23 " U• lulu :: • : I►I PROVISIONS OF THE INDENTURE........................................A-1 APPENDIX B — COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018...................................... B-1 APPENDIX C — FORM OF CONTINUING DISCLOSURE AGREEMENT ............. C-1 APPENDIX D — FORM OF BOND COUNSEL OPINION ...........................D-1 APPENDIX E — DTC AND THE BOOK - ENTRY ONLY SYSTEM ..................... E-1 APPENDIX F — SPECIMEN MUNICIPAL BOND INSURANCE POLICY..............F-1 APPENDIX G — GENERAL INFORMATION REGARDING THE CITY OF SANTA ANA AND THE REGION ................................................ G-1 55A-86 THIS PAGE INTENTIONALLY LEFT BLANK 55A-87 OFFICIAL STATEMENT CITY OF SANTA ANA Gas Tax Revenue Refunding Bonds, Series 2019 INTRODUCTION This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms not defined herein have the meanings specified in the Indenture. City of Santa Ana. The City of Santa Ana (the "City"), county seat of the County of Orange (the "County'), is one of the oldest communities in Southern California. The City is located 33 miles southeast of Los Angeles, 20 miles east of the Ports of Los Angeles and Long Beach, ten miles inland from the Pacific Ocean and 90 miles north of San Diego. The City covers an area in excess of 27 square miles and has a current population of approximately 337,192. Interstate 5 and State Routes 22, 55 and 57 traverse the City. The City was incorporated in 1886. In 1952, the voters approved a charter which established a council-manager form of government. The City Council consists of a mayor that is elected directly for a two-year term and six -members that are elected annually at large for four-year terms. See APPENDIX G — "GENERAL INFORMATION ABOUT THE CITY OF SANTA ANA AND THE REGION," for additional information concerning the City. Authority for Issuance. The Bonds are authorized pursuant to the provisions of Sections 53570 et seq. and 53580 et seq. of the California Government Code, a resolution adopted by the City Council of the City on [November 5], 2019 (the "City Resolution'), and an Indenture of Trust, dated as of December 1, 2019 (the "Indenture'), between the City and U.S. Bank National Association, as trustee (the "Trustee'). Form of Bonds. The Bonds will be dated their date of delivery and will be issued in fully registered form, without coupons, in the minimum denominations of $5,000 or any integral multiple thereof. See "THE BONDS — General Provisions." When delivered, the Bonds will be registered in the name of The Depository Trust Company, New York, New York ("DTC'), or its nominee. DTC will act as securities depository for the Bonds. Individual purchases of Bonds will be made in book -entry form only in the principal amount of $5,000 each or any integral multiple thereof Purchasers of the Bonds will not receive certificates representing the Bonds purchased. See "THE BONDS - Book -Entry Only System" and "APPENDIX E — DTC AND THE BOOK - ENTRY ONLY SYSTEM." Purpose of the Bonds. The Bonds are being issued to provide funds to (i) to prepay the Santa Ana Financing Authority's (the "Authority') Gas Tax Revenue Certificates of Participation (2007 Local Street Improvement Program) (the "2007 Certificates'), (ii) purchase a municipal bond insurance policy and debt service reserve surety for the Bonds, and (iii) pay the costs of issuing the Bonds. See "REFUNDING PLAN." Pledge of Gas Tax Revenues. The Bonds are payable from the Gas Tax Revenues generally consisting of amounts received by the City from taxes imposed on the purchase of motor vehicle fuels and any payments, subventions or reimbursements received by the City from the State in lieu of such revenues and certain funds and accounts held under the Indenture. See "SECURITY FOR THE BONDS — Pledge of Gas Tax Revenues" and "GAS TAX REVENUES." ' Preliminary, subject to change. 55A-88 [Bond Insurance. The scheduled payment of principal of and interest on a portion, or all, of the Bonds (such maturities insured to be specified in the final Official Statement) when due will be guaranteed under a municipal bond insurance policy (the "Policy') to be issued concurrently with the delivery of the Bonds by (the "Insurer"). See `BOND INSURANCE" herein.] Reserve Account. A Reserve Account (the "Reserve Accounf') will be established under the Indenture for the Bonds in an amount equal to the Reserve Requirement. The "Reserve Requirement" is defined as an amount equal to, at any date of determination, the least of (i) ten percent (10%) of the original par amount of the Bonds, (ii) Maximum Annual Debt Service with respect to the Bonds, or (iii) 125% of average annual debt service on the Bonds; provided, further that the City may meet all or a portion of the Reserve Requirement by depositing a Qualified Reserve Account Credit Instrument meeting the requirements of the Indenture. See "SECURITY FOR THE BONDS — Reserve Account." The City will satisfy the Reserve Requirement with respect to the Bonds by depositing the Reserve Policy in the Reserve Account in accordance with the Indenture. "Reserve Policy" means the municipal bond debt service reserve insurance policy relating to the Bonds issued by the Insurer. Issuance of Additional Obligations. The City may issue or incur additional obligations and bonds on a parity with the Bonds for the full or partial refunding of the Bonds, provided that there is a savings in debt service as a result of the issuance of such refunding bonds. Payment. Principal of the Bonds will be payable in each of the years and in the amounts set forth on the inside cover page hereof at the office of the Trustee. Interest on the Bonds will be paid by check or draft of the Trustee mailed by first class mail to the person entitled thereto. See "THE BONDS — General Provisions." Initially, interest on and principal and premium, if any, of the Bonds will be payable when due by wire transfer of the Trustee to the Depository DTC which will in turn remit such interest, principal and premium, if any, to DTC Participants (as defined herein), which will in turn remit such interest, principal and premium, if any, to Beneficial Owners (as defined herein) of the Bonds. See "TILE BONDS - Book -Entry Only System" and "APPENDIX E — DTC AND THE BOOK -ENTRY ONLY SYSTEM." Redemption. The Bonds are subject to optional redemption prior to their stated maturity dates. See "THE BONDS — Redemption." Risks of Investment. The Bonds are payable only from Gas Tax Revenues. For a discussion of some of the risks associated with the purchase of the Bonds, see `BOND OWNERS' RISKS." Neither the Bonds nor the obligation of the City to pay principal of or interest thereon constitutes a debt of the City, the County, the State of California or any of its political subdivisions within the meaning of any constitutional limitation on indebtedness, or a pledge of the full faith and credit of the City or the County. The Bonds are secured solely by the pledge of Gas Tax Revenues and certain funds and accounts held under the Indenture. REFUNDING PLAN The 2007 Certificates were issued by the Authority and executed and delivered for the purpose of financing certain local street improvements within the City and are currently outstanding in the principal amount of $ . The 2007 Certificates and the 2007 Installment Sale Agreement, together with the pledge of Gas Tax Revenues, were judicially validated upon the delivery of a default judgment rendered on November 16, 2007, in the Superior Court of the County of Orange in the action entitled City of Santa Ana and the Santa Ana Financing Authority v. All Persons Interested in the Matter, Case No. 07CC09172. Proceeds of the Bonds, together with certain funds made available through the prepayment of the outstanding 2007 Certificates, will be deposited with U.S. Bank National Association, as escrow agent (the `Escrow Bank"), pursuant to an Escrow Deposit and Trust Agreement, dated as of December 1, 2019, by and 55.4-89 among the Authority, the City and the Escrow Bank. Amounts so deposited will be held uninvested by the Escrow Bank and will be sufficient to prepay the 2007 Certificates on [December 20]. Estimated Sources and Uses of Funds The estimated sources and uses of funds relating to the Bonds are as follows: Sources: Principal Amount of Bonds Original Issue Premium/Discount Released Funds Relating to the 2007 Certificates TOTAL SOURCES Uses: Deposit to Escrow Fund Deposit to Costs of Issuance Fund o TOTAL USES 0) Costs of Issuance include legal fees, fees of the Municipal Advisor, underwriter's discount, bond insurance and reserve surety premiums, printing costs, rating agency fees and other miscellaneous expenses. DEBT SERVICE SCHEDULE Annualized debt service on the Bonds assuming no optional redemption is presented below. Bond Year Ending June I Authority for Issuance Principal of Interest of Total Bond Bonds Bonds Debt Service THE BONDS The Bonds are authorized pursuant to the provisions of Sections 53570 et seq. and 53580 et seq. of the California Government Code, a resolution adopted by the City Council of the City on [November 5], 2019, and the Indenture. General Provisions Bond Terms. The Bonds will be dated their date of delivery and issued in fully registered form without coupons in denominations of $5,000 or any integral multiple of $5,000, so long as no Bond has more than one maturity date. The Bonds will mature in the amounts and on the dates, and bear interest at the rates per annum, set forth on the inside cover page of this Official Statement. Payments of Principal and Interest. Interest on the Bonds will be payable on January 1 and July 1 in each year, beginning [July 1, 2020] (each an "Interest Payment Date") to the person whose name appears on the Bond Registration Books as the Owner thereof as of the fifteenth (15th) calendar day of the month immediately preceding an Interest Payment Date (the "Record Date"). While the Bonds are subject to the book -entry system, the principal, interest and any prepayment premium with respect to a Bond will be paid by the Trustee to DTC for subsequent disbursement to beneficial owners of the Bonds. 55A-90 If there exists a default in payment of interest due on any Interest Payment Date, interest will be payable on a payment date established by the Trustee to the persons in whose names the Bonds are registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by the Trustee to the registered Owners of the Bonds not less than 15 days preceding such special record date. Principal of and premium (if any) on any Bond will be paid upon presentation and surrender thereof at the Principal Corporate Trust Office of the Trustee. Both the principal of and interest and premium (if any) on the Bonds will be payable in lawful money of the United States of America. Calculation of Interest. The Bonds will be dated the Closing Date and bear interest based on a 360-day year comprised of twelve 30-day months from the Interest Payment Date next preceding the date of authentication thereof, unless said date of authentication is an Interest Payment Date, in which event such interest is payable from such date of authentication, and unless said date of authentication is prior to May 15, 2020, in which event such interest is payable from the Closing Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond will bear interest from the date to which interest has previously been paid or made available for payment thereon in full. Redemption Optional Redemption. The Bonds maturing on or before June 1, 20 are not subject to optional redemption prior to maturity. The Bonds maturing on June 1, 20 and thereafter are subject to redemption prior to their stated maturity at the option of the City, as a whole or in part on any date, by such maturities as are selected by the City from any available source of funds on or after June 1, 20 at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption. Mandatory Sinking Fund Redemption. The Bonds maturing June 1, 20 are subject to redemption in part by lot, on June 1, in each year commencing June 1, 20 from Sinking Account payments made by the City into the Sinking Account, at a redemption price equal to the principal amount to be redeemed, without premium, in the aggregate respective principal amounts and on June 1 in the respective years set forth in the following table, or in lieu thereof may be purchased as described below. See "— Purchase in Lieu of Redemption." If some but not all of the Bonds have been optionally redeemed, the total amount of all future sinking account payments with respect to the Bonds of a particular maturity will be reduced by the aggregate principal amount of the Bonds of such maturity so redeemed or purchased, to be allocated among such sinking fund payments in integral multiples of $5,000 as determined by the City. The Sinking Account payments applicable to the Bonds maturing June 1, 20 are as follows: Sinking Fund Account Redemption Date Sinking Fund Payment June 1 Redeemed or Purchased Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the optional redemption of less than all of the Bonds, the Trustee will select the Bonds to be redeemed from all Bonds or such given portion thereof not previously called for redemption, among maturities as directed by the City and by lot within a maturity in any manner which the Trustee in its sole discretion will deem appropriate and fair; provided, however, that if less than all of the Bonds are called for redemption at any one time, upon the written direction of the City, the City will specify a reduction in any pending Sinking Account payments. 55A-91 Notice of Redemption. Notice of redemption will be mailed by first class mail, postage prepaid, not less than thirty (30) nor more than sixty (60) days before any redemption date, to respective Owners of any Bonds designated for redemption at their addresses appearing on the registration books, and to the securities depositories and to the information services. Each notice of redemption will state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the Bonds (or all Bonds of a single maturity) are to be redeemed, the CUSIP numbers and Bond numbers of the Bonds to be redeemed, the maturity or maturities of the Bonds to be redeemed and in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice will also state that on the redemption date there will become due and payable on each of said Bonds the redemption price thereof, and that from and after such redemption date interest thereon will cease to accrue, and will require that such Bonds be then surrendered. Neither the failure to receive any notice nor any defect therein will affect the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of Bonds will be given by the Trustee, at the expense of the City, for and on behalf of the City. With respect to the optional redemption of the Bonds, the City may instruct the Trustee to include a statement in the notice of such redemption which will state that such redemption is conditioned upon the receipt by the Trustee on or before the date fixed for such redemption of sufficient funds for such purpose. In the event that sufficient funds will not have been deposited with the Trustee on or before the date fixed for redemption, the Trustee will promptly notify the Owners in the same manner in which notice was sent that such redemption is cancelled and the notice thereof will be deemed to be cancelled and rescinded. Effect of Redemption. Notice of redemption having been duly given as aforesaid, and moneys for payment of the redemption price of, together with interest accrued to the date fixed for redemption on, the Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Bonds (or portions thereof) so called for redemption will become due and payable, interest on the Bonds so called for redemption will cease to accrue, said Bonds (or portions thereof) will cease to be entitled to any benefit or security under the Indenture, and the Owners of said Bonds will have no rights in respect thereof except to receive payment of the redemption price thereof. All Bonds redeemed pursuant to the provisions of the Indenture will be canceled by the Trustee upon surrender thereof and destroyed. Purchase in Lieu of Redemption. In lieu of mandatory sinking fund redemption of the Bonds, the City may place funds on deposit with the Trustee at any time for the purchase of the Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as the City may in its discretion determine, but not to exceed the principal amount of the Bonds to be purchased plus the redemption premium applicable on the next ensuing optional redemption date. Book -Entry Only System The Bonds will be issued as fully registered bonds in book -entry only form, registered in the name of Cede & Co. as nominee of DTC, and will be available to ultimate purchasers in the denomination of $5,000 or any integral multiple of $5,000, under the book -entry system maintained by DTC. While the Bonds are subject to the book -entry system, the principal, interest and any prepayment premium with respect to a Bond will be paid by the Trustee to DTC, which in turn is obligated to remit such payment to its DTC Participants for subsequent disbursement to Beneficial Owners of the Bonds. Purchasers of the Bonds will not receive certificates representing their interests therein, which will be held at DTC. See "APPENDIX E — DTC AND THE BOOK -ENTRY ONLY SYSTEM'' for further information regarding DTC and the book -entry system. 55.4-92 It1UI h t:\ [Reserved] SECURITY FOR THE BONDS Pledge of Gas Tax Revenues First and Exclusive Lien on Gas Tax Revenues. The Bonds and Additional Obligations shall be secured by a first pledge of all Gas Tax Revenues. Under the Indenture, the City transfers, places a charge upon, assigns and sets over to the Trustee, for the benefit of the Owners, that portion of the Gas Tax Revenues which is necessary to pay the principal of and interest on the Bonds in any Fiscal Year, together with all moneys on deposit in the Debt Service Fund, including the Interest Account, the Principal Account, the Sinking Account and the Reserve Account and such portion of the Gas Tax Revenues is irrevocably pledged to the punctual payment of the principal or Redemption Price of and interest on the Bonds. The Bonds and any Additional Obligations will be equally secured by a pledge charge and lien upon the Gas Tax Revenues, without priority for number or date. The Gas Tax Revenues may not be used for any other purpose while any of the Bonds or Additional Obligations remain Outstanding, except that out of Gas Tax Revenues there may be apportioned and paid such sums for such purposes, as are expressly permitted by the Indenture. See "SECURITY FOR THE BONDS — Additional Obligations." This pledge constitutes a first, direct and exclusive charge and lien on the Gas Tax Revenues for the payment of the principal of and interest on the Bonds in accordance with the terms thereof. Gas Tax Revenues. The Indenture defines Gas Tax revenues as all amounts received by the City from the State in accordance with Streets and Highways Code Section 2105, 2106 and 2107, as such provisions may be amended, and all other revenues (except revenues received by the City in accordance with Streets and Highways Code Section 2107.5), if any, received by the City from taxes imposed on the purchase of motor vehicle fuels and any payments, subventions or reimbursements received by the City from the State in lieu of such revenues. Gas Tax Fund In order to carry out and effectuate the pledge and lien of Gas Tax Revenues to payment of debt service on the Bonds, the City will covenant and agree in the Indenture that all Gas Tax Revenues, when and as received, will be held by the City in trust and will be deposited by the City in its Gas Tax Fund and will be accounted for through and held in trust in the Gas Tax Fund, and the City will only have such beneficial right or interest in any of such money as provided in the Indenture. All Gas Tax Revenues will be accounted for separately and apart from all other money, funds, accounts or other resources of the City. All Gas Tax Revenues will be transferred, disbursed, allocated and applied solely to the uses and purposes set forth below: (1) Administrative Costs. The City will first pay from the moneys in the Gas Tax Fund the budgeted Administrative Costs as such costs become due and payable. (2) Debt Service Fund. At least five Business Days prior to each Interest Payment Date, the City shall transfer Gas Tax Revenues to the Trustee for the purpose of paying the Bonds. Not later than the first Business Day preceding each date on which principal of or interest on the Bonds becomes due and payable, the Trustee will transfer from the Debt Service Fund and deposit into the following respective accounts (each of which the Trustee will establish and maintain within the Debt Service Fund), the following amounts in the following order of priority, the requirements of each such account at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority: A 55-93 (i) Interest Account. The Trustee will deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such Interest Payment Date on all Bonds then Outstanding. (ii) Principal Account. The Trustee will deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds coming due and payable on such Interest Payment Date. (iii) Sinking Account. The Trustee will deposit in the Sinking Account an amount equal to the aggregate principal amount of the Term Bonds required to be redeemed on such date, if any, pursuant to Indenture. (iv) Reserve Account. In the event that the amount on deposit in the Reserve Account at any time becomes less than the Reserve Requirement, the Trustee will promptly notify the City of such fact. Promptly upon receipt of any such notice, the City will transfer to the Trustee an amount sufficient to maintain the Reserve Requirement of the Reserve Account. If there will then not be sufficient Gas Tax Revenues on deposit in the Gas Tax Fund to transfer an amount sufficient to maintain the Reserve Requirement of the Reserve Account, the City will be obligated to continue making transfers as Gas Tax Revenues become available in the Gas Tax Fund until there is an amount sufficient to maintain the Reserve Requirement of the Reserve Account. No such transfer and deposit need be made to the Reserve Account so long as there will be on deposit therein a sum at least equal to the Reserve Requirement. All money in the Reserve Account will be used and withdrawn by the Trustee solely for the purpose of making transfers to the Interest Account, the Principal Account and Sinking Account in such order of priority, in the event of any deficiency at any time in any of such accounts or for the retirement of Bonds then Outstanding, except that so long as the City is not in default hereunder, any amount in the Reserve Account in excess of the Reserve Requirement will be withdrawn from the Reserve Account semiannually on or before four (4) Business Days preceding each January 1 and July 1 by the Trustee and deposited in the Interest Account. All amounts in the Reserve Account on the Business Day preceding the final Interest Payment Date will be withdrawn from the Reserve Account and will be transferred either (i) to the Interest Account, the Principal Account and Sinking Account, in such order, to the extent required to make the deposits then required to be made pursuant to the Indenture or, (ii) if the City will have caused to be transferred to the Trustee an amount sufficient to make the deposits required by the Indenture, then, at the Request of the City, such amount will be transferred as directed by the City. The Reserve Requirement with respect to the Bonds will be satisfied by the delivery of the Reserve Policy to the Trustee. The Trustee will credit the Reserve Policy to the Reserve Account. Under the terms and conditions of the Reserve Policy, the Trustee will deliver to the Insurer a demand for payment under the Reserve Policy in the required form at least five Business Days before the date on which funds are required for the purposes set forth in the Indenture. The Trustee will comply with all of the terms and provisions of the Reserve Policy for the purpose of assuring that funds are available thereunder when required for the purposes of the Reserve Account, within the limits of the coverage amount provided by the Reserve Policy. All amounts drawn by the Trustee under the Reserve Policy will be deposited into the Reserve Account and applied for the purposes thereof. The City will reimburse the Insurer for all draws under Reserve Policy in accordance with the terms of the Reserve Policy and the Indenture. (v) Equal Rights. It is the intention of the City that the Bonds and Additional Obligations will be secured by and payable from all moneys deposited in the Gas Tax Fund on an equal basis. To the extent that moneys deposited in the Gas Tax Fund are insufficient to pay debt service on the Bonds and Additional Obligations as it becomes due, the Bonds and Additional 55A-94 Obligations will be payable on a pro-rata basis from all available moneys deposited in the Gas Tax Fund. Additionally, any moneys which remain in the Debt Service Fund after payment of principal of and interest on the Bonds and Additional Obligations will be used to pay the Insurer for any other unpaid advances under the Reserve Policy. (3) Surplus. As long as all of the foregoing payments, allocations and transfers are made at the times and in the manner described above in subsections (1) and (2), any moneys remaining in the Gas Tax Fund may at any time be treated as surplus and applied for any lawful purpose. Reserve Account A Reserve Account will be established under the Indenture for the Bonds in an amount equal to the Reserve Requirement. The "Reserve Requirement" is defined as an amount equal to, at any date of determination, the least of (i) ten percent (10%) of the original par amount of the Bonds, (ii) Maximum Annual Debt Service with respect to the Bonds, or (iii) 125% of average annual debt service on the Bonds; provided, however, that the Reserve Requirement shall not exceed the Reserve Requirement calculated on the Closing Date; provided, however, that the Reserve Requirement shall not exceed the Reserve Requirement calculated on the Closing Date; provided, further that the City may meet all or a portion of the Reserve Requirement by depositing a Qualified Reserve Account Credit Instrument meeting the requirements of the Indenture. The City will satisfy the Reserve Requirement with respect to the Bonds by depositing the Reserve Policy (as defined herein) in the Reserve Account in accordance with the Indenture. The City is not obligated to replace the Reserve Policy or to fund the Reserve Account with cash if, at any time that the Bonds are Outstanding, amounts are not available under the Reserve Policy other than in connection with a draw on the Reserve Policy. Maintenance of Gas Tax Revenues The City will use its best efforts to comply with all provisions of law and any regulations issued thereunder relating to the Gas Tax Revenues, including, but not limited to, Sections 2119 and 2151 through 2155 of the California Streets and Highways Code and Sections 65089.3 and 65089.4 of the California Government Code relating to conformance with the congestion management program relating to the City and will take any and all reasonable actions required in order to maintain the City's ability to receive the Gas Tax Revenues and apply the same as provided herein; provided, that nothing herein shall require the City to take any action or expend any City funds to comply with any such requirements deemed unreasonable in the sole discretion of the City, so long as failure to take such action or expend such funds will not cause the amount of estimated Gas Tax Revenues to be received by the City in the next Fiscal Year to be less than one hundred fifty percent (150%) of the Maximum Annual Debt Service as of the date of calculation. Additional Obligations In addition to the Bonds, the City may, by Additional Obligations Instrument (as defined in the Indenture), issue or incur other loans, advances or indebtedness payable from Gas Tax Revenues on a parity with the Bonds to provide for the full or partial refunding of the Bonds, provided that there is a savings in debt service as a result of the issuance of such refunding bonds. GAS TAX REVENUES General Pursuant to the Indenture, the City has pledged its Gas Tax Revenues for the payment of the Bonds. Gas Tax Revenues are comprised of all amounts received by the City from the State in accordance with Streets and Highways Code Sections 2105, 2106, and 2107, as such provisions may be amended, and all other revenues 55A-95 (except revenues received by the City in accordance with Streets and Highways Code Section 2107.5), if any, received by the City from taxes imposed on the purchase of motor vehicle fuels and any payments, subventions, or reimbursements received by the City from the State in lieu of such revenues. Gas Tax Revenues are received by the City, as applicable, and held and maintained in the Gas Tax Fund of the City. See " Statewide Gas Tax Apportionments" below. Statewide Gas Tax Apportionments Statewide Gas Tar Apportionments. Apportionment to the City of per gallon gas taxes that comprise the City's Gas Tax Revenues is made monthly by the Controller of the State pursuant to Sections 2103, 2105, 2106, and 2107 of the California Streets and Highways Code (respectively, "Section 2103," "Section 2105," "Section 2106," and "Section 210T). Section 2103. In March 2010, subsequent to the issuance of the 2017 Certificates, a part of a special budget session called by Governor Schwarzenegger, the State legislature enacted a swap of State sales taxes on gasoline for a gasoline excise tax. Intended to be "revenue neutral," the gas tax swap provided the State legislature with greater flexibility in the use of funds, in particular relieving the general fund from the cost of State transportation debt service payments. The gas tax swap set forth the following: 1. Repealed the State sales tax on gasoline, excluding certain local rates; 2. Increased the excise tax on gasoline by 17.322 cents and added an annual adjustment mechanism intended to ensure the new excise tax provides, over time, the same amount of revenues expected from the sales tax on gas (no more, no less); 3. Increased the sales tax on diesel by 1.75 percent and allocates 75 percent to local transit agencies and 25 percent to state transit programs. The excise tax on diesel is reduced from 18 cents to 13.6 cents. Sales tax revenues from diesel must go to transit funding; and 4. Provided for a speck allocation of the funds among state and local transportation needs. Revenues from such excise tax rate authorized pursuant to California Streets & Highways Code Section 2103 are now allocated as follows: 1. State transportation debt service; and 2. Remainder allocated: a. 44 percent to the State Transportation Improvement Program (STIP); b. 12 percent State Highway Operation and Protection Program (SHOPP); and C. 44 percent evenly split between cities and counties using current HUTA formulas. Section 2103 funds are allocated to cities on a per capita basis and to counties 75 percent based on the proportion of registered vehicles and 25 percent based on the proportion of maintained county road miles. Section 2105. Pursuant to Section 2105, cities are apportioned a sum equal to 5.8 percent of the per gallon tax under Section 7360 of the Revenue and Taxation Code, 11.5 percent of any per gallon tax in excess of nine cents ($0.09) per gallon under Sections 8651, 8651.5 and 8651.6 of the Revenue and Taxation Code, and 6.5 percent of the per gallon tax under Sections 60050 and 60115 of the Revenue and Taxation Code. Section 2106. Pursuant to Section 2106, a sum equal to the net revenue derived from 5.8 percent of the per gallon tax under the Motor Vehicle Fuel License Tax Law (Part 2, commencing with Section 7301, of Division 9 55A-96 2) of the Revenue and Taxation Code, shall be apportioned monthly from the Highway Users Tax Account in the Transportation Tax Fund among the counties and cities as follows: (a) $400 per month is apportioned to each city and city and county, and $800 per month is apportioned to each county and city and county, (b) $600,000 per month is transferred to the Bicycle Transportation Account in the State Transportation Fund, and (c) the balance is apportioned as follows: (1) a base sum will be computed for each county by using the same proportions of fee - paid and exempt vehicles as are established for purposes of apportionment of funds under Section 2104(d), (2) within a county, the percentage of the total assessed valuation of tangible property subject to local tax levies within the county which is represented by the assessed valuation of tangible property outside the incorporated cities of the county shall be applied to its base sum, and the resulting amount shall be apportioned to the county, and (3) the difference between the base sum for each county and the amount apportioned to the county will be apportioned to the cities of that county in the proportion that the population of each city bears to the total population of all the cities in the county. Section 2107. Pursuant to Section 2107, a sum equal to the net revenues derived from 7.3 percent of the per gallon gas tax under the Motor Vehicle Fuel License Tax Law (Part 2, commencing with Section 7301, of Division 2), $0.0259 per gallon under the Use Gas Tax Law (Part 3, commencing with Section 8601, of Division 2) and 11.5 percent under the Diesel Gas Tax Law (Part 31, commencing with Section 60001, of Division 2), of the Revenue and Taxation Code, is apportioned monthly to cities from the Highways Users Tax Account as follows: the State Controller allocates annually to each city that has filed a report containing the information prescribed by subdivision (c) of Section 2152 of the California Streets and Highways Code, and that had expenditures in excess of $5,000 during the preceding fiscal year for snow removal, an amount equal to one-half the amount of its expenditures for snow removal in excess of $5,000 during such fiscal year. The balance of such sum is allocated to each city in the proportion that the total population of the city bears to the total population of all cities in the State. For purposes of the foregoing statutory apportionment of per gallon gas taxes, the population of each city is determined for that city by the last federal decennial or special census, or by a subsequent census validated by the Demographic Research Unit of the State Department of Finance, or (if applicable) by the method described in Section 11105.3 of the California Revenue and Taxation Code or Sections 2107.1 or 2107.2 of the California Streets and Highways Code. Gas Tax Revenues received by the City pursuant to Sections 2104 and 2107.5 of the California Streets and Highways Code are not included in the defmition of Gas Tax Revenues and are not pledged as security for the Bonds. 554-97 City of Santa Ana Gas Tax Revenues Historical Gas Tar Revenues The following table details the historical Gas Tax Revenues received by the City, as apportioned under the California Streets and Highway Code to the City for fiscal years 2011 through 2019. TABLE 1 HISTORIC GAS TAX REVENUES CITY OF SANTA ANA Fiscal Years 2011 through 2019 Fiscal Year Section 2103 Section 2105 Section 2106 Section 2107 Totals(n 2011 $3,387,162 $1,924,851 $1,205,093 $2,571,874 $ 9,088,980 2012 4,810,786 1,627,786 1,132,802 2,336,425 9,907,799 2013 2,810,610 1,547,906 1,156,975 2,536,457 8,051,948 2014 4,939,105 2,411,151 1,089,379 2,677,806 11,117,441 2015 3,311,799 1,937,816 1,246,203 2,480,047 8,975,865 2016 1,538,141 1,883,063 1,220,771 2,296,670 6,938,645 2017 864,267 1,929,772 1,250,084 2,546,885 6,591,008 2018 1,334,292 1,816,633 1,196,676 2,413,625 6,761,226 20190) 1,138,430 1,847,363 1,216,446 2,321,697 6,523,936 t't Unaudited figures. (2) Totals for the Pledged Revenues do not match the total Gas Tax Fund revenues due to other revenues recorded in the fund that are not pledged to the payment of the Bonds including but not limited to: Road Maintenance Rehabilitation Account (RMRA), HUTA section 2107.5, and other miscellaneous revenues and non -cash accounting entries Source: State of California Controller's Office (Streets & Roads Annual Report); The City. 554-98 Gas Tax Fund Financial Statements -The following tables present the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances relating to the City's Gas Tax Fund for the fiscal years ended June 30, 2015 through June 30, 2019. TABLE 2 BALANCESHEET CITY OF SANTA ANA GAS TAX FUND For the Fiscal Years Ended June 30, 2015, through June 30, 2019 2015 2016 2017 2018 2019tr1 ASSETS Cash and investments $13,594,607 $ 12,613,302 $ 12,464,106 $ 13,149,169 $19,320,228 Receivables, net of allowances: Taxes - - - - - Interest 11,784 16,916 40,458 59,726 78,238 Intergovernmental 10,000 524,218 587201 1,248,705 1,617,175 Restricted assets: Cash and investments 4,656,231 304,302 118,140 155,696 - Cash and investments with fiscal agents 4,212,789 4,213,039 4,217,738 4,254,993 4,335,179 Total assets 122485.411 $17,671,777 $17A27.643 $18,868289 $25.350.820 LIA]MIITIES Accounts payable $ 311,185 $ 328,733 $ 191,519 $ 80,495 $ 149,638 Total liabilities $ 311,185 $ 328,733 $ 191,519 $ 80,495 $ 149,638 Deferred inflows of resources: Unavailable revenues - - 15,583 25,096 32,635 Fund balances: Restricted 22,174,226 17,343,044 17,220,541 18,762,698 25,168,547 Total fund balances $22,174,226 $17,343,044 $17220,541 $18762698 $25,168,547 Total liabilities, deferred inflows of resources, and fund balances $22A85.411 $17,671,777 $17A27.643 $18,868289 $25.350.820 m Unaudited. Source: City of Santa Ana Comprehensive Annual Financial Reports for the applicable periods. 554-99 TABLE 3 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES CITY OF SANTA ANA GAS TAX FUND For the Fiscal Years Ended June 30, 2015, through June 30, 2019 2015 20161'1 2017 2019 2019(2x5) Revenues: Intergovemmen[afn $ 8,985,866 $ 6,948,645 $ 6,601,023 $ 9,159,380 $13,118,218 Investment income (loss) 166,455 327,947 (21,420) 16,153 746,878 Cost recoveries 681 7,271 14,484 Total revenues $ 9,152,321 $ 7,277,273 $ 6,579,603 $ 9,182,804 $13,879,580 Expenditures: Current: Public works $ 2,765,637 $ 2,747,987 $ 2,174,397 $ 2,667,797 $ 1,581,394 Capital Outlay - - - 6,278 - Deb[ Service: Principal 1,325,000 1,380,000 1,450,000 1,525,000 1,600,000 Interest and fiscal charges 2,857,681 2,794,681 2,723,931 2,649,556 2,574,431 Total expenditures $ 6,948,318 $ 6,922,668 $ 6,348,328 $ 6,848,631 $ 5,755,825 Excess (deficiency) of revenues over (under) expenditmes $ 2 204 003 $ 354 605 $ 231,275 $ 2334 173 $ 8 123.755 Other financing sources (uses): Transfers in - - - - - Transfers oriff ($ 4,688,482) ($ 6,038,247) IS 353,778) ($ 792,016) IS 1,717,906) Issuance of deb[ Total other financing sources (uses) ($ 4.688.482) ($ 6,038,247) ($ 353,778) is 792,016) ($ 1,717,906) Net change in fund balances IS 2,484,479) IS 5,683,642) IS 122,503) $ 1,542,157 $ 6,405,849 Fund balances - beginning $24 65% 705 $23 026 686 $17 343 044 $17 220 541 $18 762 698 Fund balances - ending $22.174.226 $17,343,044 $17,220,541 $18,762,698 SZL 68.547 1O Prior period adjustment increased revenue and is attributable to accrual of gas tax received within revenue accrual period for 2015. (2) Intergovernmental Revenues do not match the[otal Gas Tax Revenues reported in Table l above due to the inchrsion of Section2103 and Section2107.5 Revenues, which are not pledged to the payment of the Bonds. (l) Includes revenues received pursuant to Section 2107.5 of the California Streets and Highways code and revenues received from the Road Maintenance and Rehabilitation Act of California Streets and Highways Code Section 2030 et seq. (4) Transfers out to Capital Improvement Fund for construction. (5) Unaudited. Source: City of Santa Ana Comprehensive Annual Financial Reports for the applicable periods. Historical and Projected Gas Tax Revenues - The following table presents the historical and projected Gas Tax Revenues as prepared by the City. The projections are based upon current circumstances and available information that the City believes to be reasonable. The assumptions may be affected by numerous factors and there can be no assurance that such projections will be achieved. TABLE 4 HISTORICAL AND PROJECTED GAS TAX REVENUES AND DEBT SERVICE COVERAGE CITY OF SANTA ANA GAS TAX FUND For Fiscal Years Ending June 30, 20[ ], through June 30, 201 j Historical Gas Projected Gas Debt Service FiscalYear Tax Revenues Tax Revenues Debt Service Coverage BOND OWNERS' RISKS The following describes certain special considerations and risk factors affecting the payment of and security for the Bonds. The following discussion is not meant to be an exhaustive list of the risks associated with 553100 the purchase of any Bonds and the order in which such matters appear does not necessarily reflect the relative importance of the various risks. Potential investors in the Bonds are advised to consider the following special factors along with all other information in this Official Statement in evaluating the Bonds. There can be no assurance that other considerations will not materialize in the future. Limited Obligations The obligation of the City to make debt service payments on the Bonds is a special obligation and does not constitute a debt of the City, the County, the State, or any political subdivision of the State within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the City, the County, the State, or any political subdivision of the State is obligated to levy or pledge any form of taxation or for which the City, the County, the State, or any political subdivision of the State has levied or pledged any form of taxation. Passive Revenue Source The payment of debt service on the Bonds is secured solely by a pledge of the Gas Tax Revenues and certain funds under the Indenture. The City has no control over the amount of Gas Tax Revenues to be received by the City because (1) the amount of Gas Tax Revenues received by the City is based on Statewide fuel consumption and the City has no ability to control such consumption or to increase the rate at which such fuel is taxed within the State, and (2) the City has no control over the collection or distribution procedures related to any State taxes, including taxes levied in connection with fuel consumption. There can be no assurance that Gas Tax Revenues will be available in the amounts estimated in this Official Statement. A decrease in fuel consumption in the State, which would adversely affect the amount and/or availability of Gas Tax Revenues, could result from a variety of circumstances, including, without limitation, oil shortages or embargos, increased use of alternative fuel sources, or natural disasters. See also " Gasoline Sales Subject to Fluctuation" below. Economic, Political, Social, and Environmental Conditions Prospective investors are encouraged to evaluate current and prospective economic, political, social, and environmental conditions as part of an informed investment decision. Changes in economic, political, social, or environmental conditions on a local, state, federal, or international level may adversely affect investment risk generally. Such conditional changes may include (but are not limited to) the reduction or elimination of previously available State or federal revenues, fluctuations in business production, consumer prices, or financial markets, unemployment rates, technological advancements, shortages or surpluses in natural resources or energy supplies, changes in law, social unrest, fluctuations in the crime rate, political conflict, acts of war or terrorism, environmental damage and natural disasters. Initiative to Repeal Gas Tax At the November 6, 2018 General Election, the California electorate defeated Proposition 6, the Voter Approval for Future Gas and Vehicle Taxes and 2017 Repeal Initiative ("Proposition 6"), an initiative amendment to the California Constitution. Proposition 6 proposed the repeal of Gas Tax increases and vehicles fees that were enacted in 2017, including the Road Repair and Accountability Act of 2017 ("RRAA"), and adding voter approval as a requirement for the Legislature to impose, increase or extend Gas Taxes or vehicle fees in the future. If approved, Proposition 6 would have reduced, but not eliminated, the amount of Gas Tax Revenues available for apportionment to local agencies. Although Proposition 6 was defeated, there can be no assurances that future similar initiatives will not threaten the imposition and collection of Gas Tax Revenues. 55A4101 Limitations on Remedies Available to Bondowners The rights and obligations under the Bonds and the hidenture may be subject to the following: the United States Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of California and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation or modification of their rights. Diversion of Gas Tax Revenues Section 6 of Article XIX of the California Constitution permits the State to loan to the State General Fund the revenues derived from taxes imposed on gasoline and diesel fuels within the State (collectively, the "Gas Tax Revenues") if (a) any amount loaned is to be repaid in full during the same fiscal year in which the loan was made, except that repayment may be delayed until a date not more than 30 days after the date of enactment of the State budget bill for the subsequent fiscal year, or (b) any amount loaned is to be repaid in full within three fiscal years from the date on which the loan was made and one of the following has occurred: (1) the Governor has proclaimed a state of emergency and declares that the emergency will result in a significant negative fiscal impact to the State General Fund, or (2) the aggregate amount of State General Fund revenues for the current fiscal year, as projected by the Governor in a report to the State Legislature in May of the current fiscal year, is less than the aggregate amount of State General Fund revenues for the previous fiscal year, adjusted for the change in the cost of living and the change in population, as specified in the budget submitted by the Governor in the current fiscal year. A loan made to the General Fund as described in this paragraph could have an adverse impact on the amount or availability of Gas Tax Revenues. While the State has, in the past, loaned Gas Tax Revenues to the State General Fund, such amounts have been loaned from the State portion of such Gas Tax Revenues, and not from amounts paid to local governments, and the City has received its full payment of applicable Gas Tax Revenues in each of the last 20 years. Notwithstanding the foregoing, on February 16, 2008, then Governor Arnold Schwarzenegger signed a six -bill budget package designed to reduce expenses in the State's fiscal year 2007-08. One of the bills enacted into law was Assembly Bill No. 7 ("ABX3 7"), which provided, as it pertained to local agencies, that gas tax revenues collected during the months of March, April, May, June, and July of 2008, and otherwise transferrable to local agencies pursuant to Section 2104, Section 2105, Section 2106, and Section 2107, would be suspended and would instead be transferred to respective local agencies along with the August 2008 Gas Tax Revenues in September 2008. ABX3 7 also permitted each of the local agencies, for cash management purposes during this five -month suspension period, to use any cash received pursuant to Proposition 1B (the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 (Chapter 12.49 of Division 1 of Title 2 of the California Government Code)) for the same purposes for which the gas tax revenues are authorized under Article XIX of the California Constitution; provided that such cash is replaced after the suspended Gas Tax Revenues were received by the local agency in September 2008. funds. There is no guarantee that during the life of the Bonds the State will not enact another bill diverting such 5515 102 Gasoline Sales Subject to Fluctuation The collection of taxes imposed on the purchase of motor vehicle fuels is necessarily subject to fluctuations in spending which is affected by, among other things, general economic cycles. Gas Tax Revenues may increase along with the increasing fuel prices brought about by inflation, but collections also are vulnerable to adverse economic conditions and reduced spending and may decrease as a result. Consequently, the rate of collection of taxes imposed on the purchase of motor vehicle fuels and, particularly, Gas Tax Revenues may be expected to correspond generally to economic cycles, patterns of usage of automobiles and truck transport, alternative transportation and energy sources as may be developed, and changes in population and density, among other factors. The City has no control over general economic cycles, alternate energy sources, or changes in usage over time, and is unable to predict what economic factors, demands, changes in use or cycles of collection will occur while the Bonds remain outstanding. Secondary Market for Bonds There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that any Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then -prevailing circumstances. Such prices could be substantially different from the original purchase price. Federal Tax -Exempt Status of the Bonds The Internal Revenue Code of 1986, as amended (the "Code') imposes a number of requirements that must be satisfied for interest on state and local obligations, such as the Bonds, to be excludable from gross income for federal income tax purposes. These requirements include limitations on the use of Bond proceeds, limitations on the investment earnings on Bonds proceeds prior to expenditure, a requirement that certain investment earnings on the Bond proceeds be paid periodically to the United States and a requirement that the issuers file an information report with the Internal Revenue Service (the "IRS'). The City has covenanted in certain of the documents referred to herein that it will comply with such requirements. Failure to comply with the requirements stated in the Code and related regulations, rulings and policies may result in the treatment of interest on the Bonds as taxable, retroactively to the date of issuance of such Bonds. The Bonds are not subject to early redemption in the event of taxability. IRS Audit of Tax -Exempt Issues The IRS has initiated an expanded program for the auditing of tax-exempt issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar obligations). Bond Insurance In the event of default of the payment of the scheduled principal of or interest on the Bonds when all or some becomes due, the Trustee on behalf of any owner of the Bonds shall have a claim under the Policy for such payments. The Insurer may direct and must consent to any remedies with respect to the Bonds and the Insurer's consent may be required in connection with amendments to any applicable documents relating to the Bonds. The Insurer will have the ability to direct the actions of the Trustee, give consents and waivers, and take other actions without regard to the views of the Owners of any Bonds. The S&P long-term ratings on the Bonds are dependent in part on the financial strength of the Insurer and its claims paying ability. The Insurer's financial strength and claims paying ability are predicated upon a number 55A6103 of factors which could change over time. No assurance is given that the S&P long-term ratings of the Insurer and the ratings on the Bonds will not be subject to downgrade and such event could adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. See `BOND INSURANCE" and "RATINGS" herein. The obligations of the Insurer are unsecured contractual obligations and in an event of default by the Insurer, the remedies available may be limited by applicable bankruptcy law or state law related to insolvency of insurance companies. Neither the City nor the Underwriter has made independent investigation into the claims paying ability of the Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Insurer is given. Thus, when making an investment decision, potential investors should carefully consider the ability of the City to make debt service payments and the claims paying ability of the Insurer, particularly over the life of the investment. See `BOND INSURANCE" herein for further information regarding the Insurer and the Policy, which includes further instructions for obtaining current financial information concerning the Insurer. Cybersecurity The City relies on computers and technology to conduct its operations. The City and its departments face cyber threats from time to time including, but not limited to, hacking, viruses, malware and other forms of technology attacks. The City owns and operates its own enterprise class data network serving the municipal city government and its operations. The City has retained information technology professionals to support, maintain and protect these operations locally in a purpose-built and physically secure environment. This network and its operations are governed by and in compliance with all applicable governmental regulations as well as the City's own administrative regulations. Within the City's operations and guidance is an active cyber-security program designed to protect from, and to quickly identify and mitigate, a multitude of complex security threats. While no network is completely immune from all possible compromise, the City exercises its due diligence in protecting the data it possesses and the systems it operates. To date, there have been no significant cyber-attacks on the City's computers and technologies. [To be Confirmed] While the City is routinely maintaining its technology systems and continuously implementing new information security controls, no assurances can be given that the City's security and operational control measures will be successful in guarding against all cyber threats and attacks. The results of any attack on the City's computer and technology could negatively impact the City's operations, and the costs related to such attacks could be substantial. 1► Y YI►: :►I1 It lul 1► 1► :.� :►I1:"t1't YI► Article XIM of the California Constitution —Limitation on Appropriations On November 6, 1979, State voters approved Proposition 4, the so-called Gann Initiative, which added Article XIIIB to the California Constitution ("Article XIIIB'). In June 1990, Article XIIB was amended by the voters through their approval of Proposition 111. Article XIIIB limits the annual appropriations of the State and of any city, county, school district, authority, or other political subdivision of the State to the level of appropriations for the prior fiscal year, as adjusted annually for changes in the cost of living, population, and cost of services rendered by the governmental entity. The "base year" for establishing such appropriation limit is fiscal year 1978-79. Increases in appropriations by a governmental entity are also permitted (i) if financial responsibility for providing services is transferred to the governmental entity, or (ii) for emergencies, so long as the appropriations limits for the three years following the emergency are reduced to prevent any aggregate increase above the Constitutional limit. Decreases are required where responsibility for providing services is transferred from the government entity. Appropriations of an entity of local government subject to Article XIIIB include generally any authorization to expend during the fiscal year the proceeds of taxes levied by the State or other entity of local 55A-104 government, exclusive of certain State subventions, refunds of taxes, benefit payments from retirement, unemployment insurance, and disability insurance funds. Appropriations subject to limitation pursuant to Article XIIIB do not include debt service on indebtedness existing or legally authorized as of January 1, 1979, on bonded indebtedness thereafter approved according to law by a vote of the electors of the issuing entity voting in an election for such purpose, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriations by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990 levels. "Proceeds of taxes" include, but are not limited to, all tax revenues and the proceeds to any entity of government from (i) regulatory licenses, user charges, and user fees to the extent such proceeds exceed the cost of providing the service or regulation, (ii) the investment of tax revenues, and (iii) certain State subventions received by local governments. Article XIIIB includes a requirement that if an entity's revenues in any year exceed the amount permitted to be spent, the excess must be returned by revising tax rates or fee schedules over the subsequent two fiscal years. Article XIIIB allows voters to approve a temporary waiver of a government's Article XIIIB limit. Such a waiver is often referred to as a "Gann limit waiver." The length of any such waiver is limited to four years. The Gann limit waiver does not provide any additional revenues to the City or allow the City to finance additional services. The debt service payments on the Bonds are subject to the Article XIIIB appropriations limitations. For fiscal year 2018-19, the City calculated its appropriations limit at $ . For fiscal year 2019-20, the City has budgeted its appropriations limit at $ . The City has never made appropriations that exceeded the limitation on appropriations under Article XIIIB. The impact of the appropriations limit on the City's financial needs in the future is unknown. Article XIIIC and XIIID of the California Constitution — The Right to Vote on Taxes On November 5, 1996, State voters approved Proposition 218, entitled the "Right to Vote on Taxes Act" ("Proposition 218'). Proposition 218 added Article XIIIC ("Article XIIIC") and Article XIIID ("Article XIIID') to the California Constitution, which contain a number of provisions affecting the ability of local agencies to levy and collect both existing and future taxes, assessments, fees, and charges. The interpretation and application of certain provisions of Proposition 218 will ultimately be determined by the courts with respect to some of the matters discussed below. It is not possible at this time to predict with certainty the future impact of such interpretations. The provisions of Proposition 218, as so interpreted and applied, may affect the ability of the City to meet certain obligations, as applicable. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes require a majority vote and taxes for specific purposes, even if deposited in a general fund such as a general fund of the City, require a two-thirds vote. Article XIIIC further provides that any general purpose tax imposed, extended, or increased, without voter approval, after December 31, 1994, may continue to be imposed only if approved by a majority vote in an election, which must be held within two years of November 5, 1996. The City has not imposed, extended, or increased any such taxes which are currently in effect. Article XIIIC also expressly extends the initiative power to give voters the power to reduce or repeal local taxes, assessments, fees, and charges, regardless of the date such taxes, assessments, fees, and charges were imposed. Article XIIIC expands the initiative power to include reducing or repealing assessments, fees, and charges, which had previously been considered administrative rather than legislative matters and therefore beyond the initiative power. This extension of the initiative power is not limited by the terms of Article XIIIC to fees imposed after November 6, 1996, and absent other legal authority could result in the retroactive reduction in any existing taxes, assessments, fees, or charges. No assurance can be given that the voters within the jurisdiction of the City will not, in the future, approve initiatives which reduce or repeal, or prohibit the future imposition or increase of, local taxes, assessments, fees or charges currently comprising a substantial part of the City's general fund. "Assessments," "fees," and "charges" are not defined in Article XIIIC, and it is unclear whether these terms 55Ag105 are intended to have the same meanings for purposes of Article XIIIC as for Article XIIID described below. If not, the scope of the initiative power under Article XIIIC potentially could include any general fund local tax, assessment, or fee not received from or imposed by the federal or State government or derived from investment income. The City does not levy any property related "fees" or "charges" that it considers subject to challenge under Article XIIIC. The voter approval requirements of Proposition 218 reduce the flexibility of the City to raise revenues for its general fund, and no assurance can be given that the City will be able to impose, extend, or increase taxes in the future to meet increased expenditure needs. Article XIIID also added several new provisions relating to how local agencies may levy and maintain "assessments" for municipal services and programs. These provisions include, among other things, (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel, (ii) a requirement that the assessment must confer a "special benefit," as defined in Article XIIID, over and above any general benefits conferred, and (iii) a majority protest procedure which involves the mailing of a notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligation of the affected party. "Assessment" in Article XIIID is defined to mean any levy or charge upon real property for a special benefit conferred upon the real property and applies to landscape and maintenance assessments for open space areas, street medians, street lights, and parks. In addition, Article XIIID added several provisions affecting "fees" and "charges," defined for purposes of Article XIIID to mean "any levy other than an ad valorem tax, a special tax, or an assessment, imposed by [a local government] upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property related service." All new and existing property related fees and charges must conform to requirements prohibiting, among other things, fees and charges which (i) generate revenues exceeding the funds required to provide the property related service, (ii) are used for any purpose other than those for which the fees and charges are imposed, (iii) are for a service not actually used by, or immediately available to, the owner of the property in question, or (iv) are used for general governmental services, including police, fire, ambulance, or library services, where the service is available to the public at large in substantially the same manner as it is to property owners. Depending on the interpretation of what constitutes a "property related fee" under Article XIIID, there could be future restrictions on the ability of the City to charge its respective enterprise funds for various services provided. Further, before any property related fee or charge may be imposed or increased, written notice must be given to the record owner of each parcel of land affected by such fee or charge. The City must then hold a hearing upon the proposed imposition or increase, and if written protests against the proposal are presented by a majority of the owners of the identified parcels, the City may not impose or increase the fee or charge. Moreover, except for fees or charges for wastewater, water, and refuse collection services, or fees for electrical and gas service, which are not treated as "property related" for purposes of Article XIIID, no property related fee or charge may be imposed or increased without majority approval by the property owners subject to the fee or charge or, at the option of the City, two-thirds voter approval by the electorate residing in the affected area. The City does not believe that the provisions of Article XIIIC or Article XIIID will directly impact the Gas Tax Revenues available to the City to make debt service payments on the Bonds required pursuant to the Indenture. Future Initiatives Article XIIIB, Article XIIIC, and Article XIIID were each adopted as measures that qualified for the ballot pursuant to the State's Constitutional initiative process. From time to time other initiative measures could be adopted, affecting the ability of the City to increase or apply revenues and to make or increase appropriations. 55A9106 FrIVETFIVOURM In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Code and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the Bonds is not a specific preference item for purposes of federal alternative minimum taxes. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The City has covenanted to comply with certain restrictions designed to insure that interest on the Bonds will not be included in federal gross income. Failure to comply with these covenants may result in interest on the Bonds being included in federal gross income, possibly from the date of original issuance of the Bonds. The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds. Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Owners from realizing the full current benefit of the tax status of such interest. For example, legislative proposals are announced from time to time which generally would limit the exclusion from gross income of interest on obligations like the Bonds to some extent for taxpayers who are individuals and whose income is subject to higher marginal income tax rates. Other proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income of interest on obligations like the Bonds. The introduction or enactment of any such legislative proposals, clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, and regarding the impact of future legislation, regulations or litigation, as to which Bond Counsel expresses no opinion. Certain requirements and procedures contained or referred to in the Indenture, the tax certificate, and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Bonds) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to the exclusion from gross income of interest on any Bond if any such change occurs or action is taken or omitted upon the advice or approval of counsel other than Best Best & Krieger LLP. The IRS has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of other similar bonds). Although Bond Counsel is of the opinion that interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may otherwise affect an Owner's federal or state tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the Bond Owner or the Owner's other items of income or deduction, and Bond Counsel expresses no opinion regarding any such other tax consequences. A copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix D. 255A0107 CERTAIN LEGAL MATTERS Best Best & Krieger, LLP, Bond Counsel, will render an opinion with respect to the validity of the Bonds, the form of which opinion is set forth in Appendix D. Bond Counsel has assumed no responsibility for the accuracy, completeness or fairness of the Official Statement. Certain legal matters will also be passed upon for the City by Best Best & Krieger LLP, as Disclosure Counsel, and as the City Attorney, and for the Underwriter by Curls Bartling P.C., Oakland, California, as Underwriter's Counsel. Payment of the fees and expenses of Disclosure Counsel is contingent upon issuance of the Bonds. FINANCIAL STATEMENTS The City's comprehensive annual financial report for the Fiscal Year ended June 30, 2018, included in Appendix B, have been audited by White Nelson Diehl Evans LLP (the "Auditor'). The Auditor was not requested to consent to the inclusion of its report in Appendix B and it has not undertaken to update its report or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in the Official Statement, and no opinion is expressed by the Auditor with respect to any event subsequent to the date of its report. MUNICIPAL ADVISOR Urban Futures, Inc., Tustin, California, is engaged as Municipal Advisor to the City in connection with the issuance of the Bonds. The Municipal Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. The Municipal Advisor does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending, or future actions taken by any legislative or judicial bodies. The Municipal Advisor has provided the following sentence for inclusion in this Official Statement. The Municipal Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the City and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Municipal Advisor does not guarantee the accuracy or completeness of such information. In connection with the issuance and delivery of the Bonds, S&P Global Ratings ("S&P') is expected to assign their municipal bond rating of" "to the Bonds with the understanding that, upon delivery of such Bonds, a policy insuring the payment when due of the principal of and interest on the Bonds will be issued by . S&P has assigned their underlying municipal bond rating of " " to the Bonds. Such ratings reflect only the views of such organization and any desired explanation of the significance of such rating should be obtained from the rating agency furnishing the same. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that this rating will continue for any given period of time or that this rating will not be revised downward or withdrawn entirely by S&P, if in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of any rating obtained may have an adverse effect on the market price of the Bonds. Any such downward change in or withdrawal of a rating might have an adverse effect on the market price or marketability of the Bonds. LITIGATION There is no controversy or litigation of any nature now pending against the City (with service of process having been completed), or to the knowledge of its officers, threatened, restraining or enjoining the issuance, sale, 255A1108 execution or delivery of the Bonds, or contesting the validity of the Bonds, any proceeds of the City, concerning the issuance or sale thereof, pledge or application of the money or security provided for payment of the Bonds, or the existence or powers of the City. There are currently various litigation matters pending against the City. The City does not believe that these actions materially adversely affect the collection of Gas Tax Revenues or the payment of debt service on the Bonds. CONTINUING The City has covenanted for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the City and the Gas Tax Revenues by not later than March 31 of each year commencing with the report for the 2018-19 Fiscal Year (the "Annual Report") and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed by the Dissemination Agent with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access system ("EMMA') or any successor assigned by the Municipal Securities Rulemaking Board or Securities and Exchange Commission. These covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (the "Rule'). The specific nature of the information to be contained in the Annual Report or the notices of enumerated events by the City is set forth in "APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT." [TO BE UPDATED] UNDERWRITING The Bonds are being purchased by Samuel A. Ramirez & Co., Inc. (the "Underwriter'). The Underwriter has agreed to purchase the Bonds at a purchase price of $ (which is equal to the principal amount of the Bonds ($ ), plus/less original issue premium/discount of $ less an underwriter's discount of $ ). The contract of purchase pursuant to which the Bonds are being purchased by the Underwriter provides that the Underwriter will purchase all of the Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to certain terms and conditions set forth in the contract of purchase. The Underwriter may offer and sell the Bonds to certain dealers and others at prices or yields different from the prices or yields stated on the cover page of this Official Statement. In addition, the offering prices or yields may be changed from time to time by the Underwriter. Although the Underwriter expects to maintain a secondary market in the Bonds after the initial offering, no guarantee can be made that such a market will develop or be maintained by the Underwriter or others. 255A2109 City. EXECUTION The execution of this Official Statement and its delivery have been authorized by the City Council of the CITY OF SANTA ANA City Manager 255A3110 SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE Certain provisions of the Indenture are summarized below. This summary does not purport to be complete or definitive and is qualified in its entirety by reference to the full terms of the Indenture. 55.41111 .n ► ; COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 551112 UIT''NORTM FORM OF CONTINUING DISCLOSURE AGREEMENT 55A 1113 UITUYNHITERITO FORM OF OPINION OF BOND COUNSEL (Closing Date) City of Santa Ana 1515 Sixth Street Santa Ana, California 92236 Re: $ City of Santa Ana Gas Tax Revenue Refunding Bonds, Series 2019 Ladies and Gentlemen: We have reviewed the Constitution and the laws of the State of California and certain proceedings taken by the City of Santa Ana (the "City') in connection with the issuance by the City of its $ Gas Tax Revenue Refunding Bonds, Series 2019 (the `Bonds'). The Bonds have been issued under that certain Indenture of Trust, dated as of December 1, 2019 (the "Indenture'), by and between the City and U.S. Bank National Association, as trustee and pursuant to the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 et seq. and Section 53580 et seq. (the "Refunding Law'). The City Council adopted its resolution approving the issuance of the Bonds on 2019 (the "Resolution'). The proceeds of the Bonds have been applied by the City to refinance certain street improvements. In such connection, we have reviewed the Indenture, the tax certificate of the City for the Bonds dated the date hereof (the "Tax Certificate'), certificates of the City and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions, including the default judgment rendered on November 16, 2007, in the Superior Court of the County of Orange in the action entitled City of Santa Ana and the Santa Ana FinancingAuthority v. All Persons Interested in the Matter, Case No. 07CCO9172 and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other events come to our attention after the date hereof. Accordingly, this opinion speaks only as of its date and is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Our engagement with respect to the Bonds has concluded with their issuance, and we disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the City. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Indenture and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to ensure that future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Indenture and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the limitations on legal remedies against cities and their subordinate entities in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the documents mentioned in the preceding sentence. Finally, we undertake no responsibility for the accuracy, completeness or 5541114 fairness of the Official Statement or other offering materials relating to the Bonds and express no opinion with respect thereto. All terms not defined herein have the meaning ascribed to those terms in the Indenture. Based upon the foregoing, we are of the opinion, under existing law, that: 1. The Bonds have been duly and validly authorized by the City and are legal, valid and binding limited obligations of the City. The Bonds are secured and payable solely from sources provided therefor in the Indenture. 2. The Indenture has been duly authorized by the City, and constitutes the valid and legally binding obligation of the City enforceable against the City in accordance with its terms, as such enforcement may be limited by bankruptcy, insolvency, moratorium, transfer or conveyance or other laws affecting creditors' rights generally, or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases; provided, however, that we express no opinion with respect to any indemnification, contribution, choice of law or waiver provisions contained therein. 3. The Indenture creates a valid pledge of that which the Indenture purports to pledge, subject to the provisions of the Indenture, except to the extent that the enforceability of the Indenture may be limited by moratorium, bankruptcy, reorganization, fraudulent conveyance or transfer, insolvency or other laws affecting creditors' rights generally, or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases. 4. Under existing statutes, regulations, rulings and court decisions, the interest on the Bonds is excluded from gross income for purposes of federal income taxation. Interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum taxable income. Although the interest on the Bonds is excluded from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds, or any portion thereof, may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend on the recipient's particular tax status or other items of income or deduction. We express no opinion regarding any such consequences. 5. Interest on the Bonds is exempt from State of California personal income tax. Respectfully submitted, 554-2115 U711MMITIND DTC AND THE BOOK -ENTRY ONLY SYSTEM The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Bonds, payment of principal of, premium, if any, and interest on the Bonds to Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in the Bonds, and other related transactions by and between DTC, Participants and Beneficial Owners, is based on information furnished by DTC which the City believes to be reliable, but the City does not take responsibility for the completeness or accuracy thereof The City cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners either (a) payments of principal, premium, if any, and interest with respect to the Bonds or (b) certificates representing ownership interests in or other confirmation of ownership interests in the Bonds, or that they will so do on a timely basis or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Official Statement. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC. The Depository Trust Company ("DTC'), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered bond will be issued for each maturity (and each individual yield in the case of bifurcated maturities) of the Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ('DTCC'). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants'). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com; provided that nothing contained in such website is incorporated into this Official Statement. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (`Beneficial Owner') is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing 55.42116 their ownership interests in Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Indenture. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit will agree to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or the Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. The City may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered to DTC. NEITHER THE CITY NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS WITH RESPECT TO THE PAYMENTS OR THE PROVIDING OF NOTICE TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS OR THE SELECTION OF BONDS FOR REDEMPTION. 55.43117 DTC (or a successor securities depository) may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City. The City, in its sole discretion and without the consent of any other person, may terminate the services of DTC (or a successor securities depository) with respect to the Bonds. The City undertakes no obligation to investigate matters that would enable the City to make such a determination. In the event that the book -entry system is discontinued as described above, the requirements of the Indenture will apply. THE CITY AND THE UNDERWRITER CANNOT AND DO NOT G17VE ANY ASSURANCES THAT DTC, THE PARTICIPANTS OR OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL, INTEREST OR PREMIUM, IF ANY, WITH RESPECT TO THE BONDS PAID TO DTC OR ITS NOMINEE AS THE REGISTERED OWNER, OR WILL DISTRIBUTE ANY REDEMPTION NOTICES OR OTHER NOTICES, TO THE BENEFICIAL OWNERS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CITY AND THE UNDERWRITER ARE NOT RESPONSIBLE OR LIABLE FOR THE FAILURE OF DTC OR ANY PARTICIPANT TO MAKE ANY PAYMENT OR GIVE ANY NOTICE TO A BENEFICIAL OWNER WITH RESPECT TO THE BONDS OR AN ERROR OR DELAY RELATING THERETO. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the City deems reliable, but the City takes no responsibility for the accuracy thereof. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, bond certificates are required to be printed and delivered as described in the Indenture. The City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered as described in the Indenture and payment of interest to each Owner who owns of record $1,000,000 or more in aggregate principal amount of Bonds may be made to such Owner by wire transfer to such wire address within the United States that such Owner may request in writing for all Interest Payment Dates following the 15th day after the Trustee's receipt of such request. 55.42118 Efli Tlkqn SPECIMEN MUNICIPAL BOND INSURANCE POLICY 55A-1119 APPENDIX G SANTA ANA INFORMATION GENERAL ECONOMIC DATA CONCERNING THE CITY OF SANTA ANA AND THE COUNTY OF ORANGE The following material is descriptive of the City of Santa Ana (the "City') and the surrounding areas of Orange County (the "County'). It has been prepared by or excerpted from sources as noted in the Official Statement, and has not been independently verified by Bond Counsel, Disclosure Counsel or the Underwriter. The Bonds are payable solely from the sources described in the Official Statement (see "SECURITY FOR THE BONDS'). General The City, county seat of the County and one of the oldest communities in Southern California, is located 33 miles southeast of Los Angeles, 20 miles east of the Ports of Los Angeles and Long Beach, ten miles inland from the Pacific Ocean and 90 miles north of San Diego. The City encompasses an area of approximately 27 square miles and lies on generally level land at an elevation approximately 135 feet above sea level. The City was established by William H. Spurgeon in 1869. The City was incorporated on June 1, 1886 and reorganized under a City Charter in 1888. In 1952, the voters approved a charter which established a council- manager form of government. The charter was modified by an election in 1986 to provide for the mayor to be elected by the voters. A 1988 redistricting resulted in a six -member City Council, in addition to the Mayor. The City Council is elected biannually at large for four-year terms and the Mayor is elected directly for two-year terms. The City has served as the county seat since the formation of the County in 1889. Numerous government offices have taken advantage of the City's central location and position as county seat. City, County, State of California (the "State') and federal offices are conveniently located in the multi -government civic center in the heart of the City. The City has an industrial base which supports the local economy. Orange County The County is located in southern California, north of San Diego County and south of Los Angeles County. The County occupies a land area of approximately 798 square miles, with a coastline of approximately 42 miles, and serves a population of over 3 million. The County represents the third most populous county in the State, and ranks sixth in the United States. 55A 1120 Population The following table summarizes population estimates for the United States, State, County, and City for 1990, 2000, 2010 and the last five years. POPULATION ESTIMATES The United States, State of California, County of Orange and the City of Santa Anao) United California County of Year States State Total Orange Santa Ana 1990 249,622,814 29,758213 2,410,668 293,827 2000 282,162,411 33,721,583 2,831,799 336,223 201012> 307,528,001 37,253,956 3,010,232 324,647 2015 318,474,252 38,912,464 3,152,314 337,180 2016 320,808,676 39,179,627 3,172,222 337,373 2017 323,032,791 39,500,973 3,198,968 337,843 2018 325,032,134 39,740,508 3,213,275 339,192 2019 327,044,416 39,927,315 3,222,498 337,192 (1) As of January 1 of Each Year (2) As of April 1. Source: California State Department of Finance, Demographic Research Unit. 55A2 -121 Employment The following table summarizes the labor force, employment and unemployment figures for calendar years 2014 through 2018 for the County, State of California and the United States and as of December of each year for the City. CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT City of Santa Ana, County of Orange, State of California and the United States 2014-20181l> Unemployment Area Labor Force Employment Unemplovment Rate 2014 City of Santa Ana 158,500 150,200 8,400 5.3 Orange County 1,572,700 1,486,400 86,300 5.5 State of California 18,758,400 17,351,300 1,407,100 7.5 United States 155,922,000 146,305,000 9,617,000 62 2015 City of Santa Ana 158,600 151,300 7,300 4.6 Orange County 1,588,800 1,517,800 70,900 4.5 State of California 18,896,500 17,724,800 1,171,700 62 United States 157,130,000 148,834,000 8,296,000 53 2016 City of Santa Ana 158,300 152,400 5,900 3.7 Orange County 1,602,500 1,537,700 64,800 4.0 State of California 19,093,700 18,048,800 1,044,800 5.5 United States 159,187,000 151,436,000 7,751,000 4.9 2017 City of Santa Ana 160,200 155,500 4,700 2.9 Orange County 1,619,200 1,562,600 56,600 3.5 State of California 19,312,000 18,393,100 918,900 4.8 United States 160,320,000 153,337,000 6,982,000 4.4 2018 City of Santa Ana 158,900 154,200 4,700 3.0 Orange County 1,625,400 1,577,900 47,500 2.9 State of California 19,398,200 18,582,800 815,400 4.2 United States 162,075,000 155,761,000 6,314,000 3.9 (1) Data is based on annual averages. Source: U.S. Department of Labor — Bureau of Labor Statistics, California Employment Development Department. March 2010 Benchmark. 55A3 -122 Income The following tables show the personal income and per capita income for the County, State, and United States for calendar years 2013 through 2017. PERSONAL INCOME ) County of Orange, State of California, and United States Calendar Years 2013 through 2017 County of Year Orange California United States 2013 169,986,956 1,885,672,430 14,175,503,000 2014 179,141,029 2,021,640,034 14,983,140,000 2015 193,358,936 2,173,299,670 15,711,634,000 2016 199,441,555 2,259,413,865 16,115,630,000 201712> 208,653,019 2,364,129,404 16,820,250,000 All dollar estimates are in current dollars (not adjusted for inflation). Estimates for 2013-2017 reflect Census Bureau midyear population estimates available as of December 2017. Estimates for 2013-2017 reflect County population estimates available as of March 2018. (2) Last year such data is available. Source: U.S. Department of Commerce, Bureau of Economic Analysis. PER CAPITA PERSONAL INCOMEo) County of Orange, State of California and United States Calendar Years 2013 through 2017 County of Year Orange California United States 2013 $54,594 $49,173 $44,826 2014 57,110 52,237 47,025 2015 61,178 55,679 48,940 2016 62,763 57,497 49,831 201712> 65,400 59,796 51,640 f> Per capita personal income is the total personal income divided by the total midyear population estimates of the Census Bureau. All dollar estimates are in current dollars (not adjusted for inflation). Estimates for 2013-2017 reflect Census Bureau midyear state population estimates available as of December 2018. Estimates for 2013-2017 reflect County population estimates available as of March 2018. (2) Last year such data is available_ Source: U.S. Department of Commerce, Bureau of Economic Analysis and City of Santa Ana Audited Financial Statements for the Fiscal Year Ended June 30, 2018. 55A4 -123 Industry The following table summarizes employment figures by industry for the County. INDUSTRY EMPLOYMENT & LABOR FORCE ANNUAL AVERAGES County of Orange Calendar Years 2014 through 2018 2014 2015 2016 2017 2018 Total Farm T800 1400 2,400 2,200 2,000 Mining and Logging 700 600 600 700 500 Construction 83,100 91,700 97,400 101,700 106,100 Manufacturing 157,400 157,000 157,000 158,600 159,800 Retail Trade 148,500 151,400 152,400 153,400 152,900 Transportation, Warehousing and Utilities 26,500 26,900 27,200 27,600 29,300 Information 24,500 25,500 26,400 27,300 26,700 Financial Activities 113,600 116,100 117,600 119,000 119,100 Professional and Business Services 276,600 286,600 296,900 301,700 315,400 Education and Health Services 190,800 198,800 206,000 215,700 225,000 Leisure and Hospitality 194,500 203.800 212,000 218,200 222,600 Other Services 47,300 48,900 50,400 50,200 51,100 Government 152,200 156,400 159,600 160,500 160,800 Note: Items may not add to total due to independent rounding. Source: California Employment Development Department, Labor Market Information Division. March 2018 Benchmark Principal Employers The following tables present the principal employers in the City and County for fiscal year 2017/ 18. PRINCIPAL EMPLOYERS County of Orange Fiscal Year 2017/18 Number of Percentage of Total Name of Business Employees City Employment Walt Disney Co. 30,000 1.87% University of California, Irvine 23,605 1.47 County of Orange 18,257 1.14 St. Joseph Health System 13,786 0.86 Allied Universal 7,800 0.49 Kaiser Permanente 6,103 0.38 Boeing Co. 6,057 0.38 Wal-Mart 6,000 0.37 California State University, Fullerton 5,680 0.35 Bank of America 5,400 0.34 Source: Comprehensive Annual Financial Report of the County of Orange for Fiscal Year 2017-18 55A5 -124 PRINCIPAL EMPLOYERS City of Santa Ana Fiscal Year 2017/18 Number of Percentage of Total Name of Business Employees County Employment County of Orange 19,145 12.1 % Santa Ana Unified School District 4,963 3.1 Santa Ana College 3,433 2.2 First American Title Co. 1,815 1.1 KPC Healthcare (formerly Integrated 1,739 1.1 Healthcare Holdings) City of Santa Ana 1,454 0.9 United States Postal Service (3 locations) 1,324 0.8 Superior Court of CA -County of Orange 760 0.5 Johnson & Johnson (Prev: Abbott Medical 600 0.4 Optics Inc (AMO)) Allied Universal (aka Universal protection, 544 0.3 Legacy Universal) Source: Comprehensive Annual Financial Report of the City of Santa Ana for Fiscal Year 2017-18 Taxable Sales The history of taxable transactions in the City from calendar year 2009 through 2018 is shown in the following table. TAXABLE SALES City of Santa Ana Calendar Years 2009 through 2018 Total Outlets Retail Retail and Food Taxable Year Permits Taxable Transactiionsttl Total Permits Transactions(') 2009 3,715 2,139,858 6,717 $3,116,988 2010 3,863 2,235,903 6,838 3,178,264 2011 3,926 2,363,736 6,845 3,326,962 2012 4,003 2,518,026 6,848 3,492,395 2013 3,988 2,608,681 6,745 3,655,025 2014 4,146 2,708,189 6,918 3,816,866 2015 4,362 2,799,397 7,531 3,954,540 2016 4,592 2,935,193 7,857 4,134,901 2017i2> 4588 3,009,393 7881 4,195,521 2018 4428 3,124,575 7955 4,404,535 (1) Taxable transactions in thousands of dollars. (2) As of fourth quarter. Annual data is not available. Source: "Taxable Sales in California (Sales & Use Tax)," California Board of Equalization 55A6 -125 EXHIBIT 5 I�:1:11-3Y�•y CB Draft 10/1612019 CITY OF SANTA ANA GAS TAX REVENUE REFUNDING BONDS, SERIES 2019 BOND PURCHASE AGREEMENT 12019 City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Ladies and Gentlemen: Samuel A. Ramirez & Co., Inc., (the "Underwriter') offers to enter into the following agreement with the City of Santa Ana (the "City') for the purchase of the above -captioned bonds (the `Bonds"). Upon the acceptance of this offer by the City, this Bond Purchase Agreement (the "Purchase Agreement') will be binding upon the City and the Underwriter. This offer is made subject to the acceptance of this Purchase Agreement by the City on or before 5:00 P.M. California time on the date hereof and, if not so accepted, will be subject to withdrawal upon written notice (by facsimile transmission or otherwise) from the Underwriter delivered to the City at any time prior to the acceptance of this Purchase Agreement by the City. If the Underwriter withdraws this offer, or the Underwriter's obligation to purchase Bonds is otherwise terminated pursuant to Section 8(c) hereof, then and in such case the City shall be without any further obligation to the Underwriter, including the payment of any casts set forth under Section 9(b) hereof, and the City shall be free to sell the Bonds to any other party. Capitalized terms used in this Purchase Agreement not otherwise defined herein shall have the respective meanings set forth for such terms in the Indenture (as hereinafter defined). Inasmuch as this purchase and sale represents a negotiated transaction, the City understands, and hereby confirms, that the Underwriter is not acting as a fiduciary of the City, but rather is acting solely in its capacity as an underwriter for its own account. The Underwriter represents and warrants to the City that it is duly authorized to enter into this Purchase Agreement and to act hereunder. Sectionl. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the City, and the City agrees to sell and deliver to the Underwriter, all (but not less than all) of the $ principal amount of the Bonds. The Bonds shall be dated as of December [5], 2019 (the "Closing Date') and shall have the maturities, be subject to redemption, and bear interest at the rates per annum and have the yields all as further described in the Official Statement, dated the date hereof, relating to the Bonds (including its appendices, 55A-126 any documents incorporating there by reference and as amended and supplemented, the "Official Statement'). The purchase price for the Bonds shall be $ calculated as the aggregate principal amount of the Bonds in the amount of $ , plus an original issue premium in the amount of $ and less an underwriter's discount in the amount of $�. Section 2. Authorization and Purpose of the Bonds. The Bonds are being issued pursuant to resolution of the City adopted on , 2019 (the "Resolution') and shall be as described in and shall be executed, delivered and secured in accordance with the provisions of an Indenture of Trust, dated as of December 1, 2019, (the "Indenture") between the City and U.S. BankNational Association, as trustee. The Bonds are being issued for the purpose of providing funds to (i) prepay the outstanding Gas Tax Revenue Certificates of Participation (2007 Local Street Improvement Program), (ii) purchase a municipal bond insurance policy and debt service reserve surety for the Bonds, and (iii) pay the costs of issuing the Bonds. The Bonds shall be payable, and shall be subject to prepayment prior to their respective stated maturities, as provided in the Indenture and as described in the Official Statement. The Bonds are secured a pledge by the City of the Gas Tax Revenues (as defined in the Indenture) for the payment of the principal of and interest on the Bonds when due. A municipal bond insurance policy (the "Insurance Policy') [debt reserve surety bond (the "Surety Bond")] shall be purchased from (the "Insurer') for the Bonds. In connection with the issuance of the Bonds, the City will enter into a Continuing Disclosure Agreement (defined herein) and an Escrow Deposit and Trust Agreement, dated as of 12019, (the "Escrow Agreement') with U.S. Bank National Association, as escrow agent (the "Escrow Agent. The Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Escrow Agreement are referred to collectively herein as the "City Documents." Section 3. Official Statement. The City ratifies, approves and confirms the distribution of the Preliminary Official Statement with respect to the Bonds, dated November , 2019 (together with the appendices thereto, any documents incorporated therein by reference, and any supplements or amendments thereto, the "Preliminary Official Statement'), in connection with the offering and sale of the Bonds by the Underwriter prior to the availability of the Official Statement. The City represents that the Preliminary Official Statement was deemed final as of its date for purposes of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended ("Rule 15c2-12"), except for any information permitted to be omitted therefrom in accordance with paragraph (b)(1) thereof. The City shall provide the Underwriter, within 7 business days after the date hereof (but in any event at least 2 business days prior to the Closing Date) with a reasonable number of copies of the Official Statement in the form of the Preliminary Official Statement, with such changes thereto as have been approved by the Underwriter (which approval shall not be unreasonably withheld), as requested by the Underwriter for distribution. The City authorizes and approves the distribution by the Underwriter of the Official Statement in connection with the offering and sale of the Bonds. The City authorizes the Underwriter to file, and the Underwriter hereby agrees to file at or prior to the Closing Date, the Official Statement with Municipal Securities Rulemaking Board Rule G-32 (the "MSRB'), or its designees. 55A2127 In order to assist the Underwriter in complying with Rule 15c2-12, the City will undertake, pursuant to the Continuing Disclosure Agreement, dated as of December , 2019 (the "Continuing Disclosure Agreement'), between the City and Urban Futures Inc., as dissemination agent (the "Dissemination Agent'), to provide annual financial information and notices of the occurrence of specified events. A description of the Disclosure Agreement is set forth in, and a form of such agreement is attached as Appendix E to, the Official Statement. Section 4. City Representations, Covenants and Agreements. The City represents and covenants and agrees with the Underwriter that as of the date hereof: (a) The City is duly organized and validly existing as municipal corporation under the general laws of the State of California (the "State") and has full right and authority to issue the Bonds under the Bond Law (as such term is defined in the Indenture). (b) The City has full legal right, power and authority to enter into the City Documents, to approve the Resolution, and to observe, perform and consummate the covenants, agreements and transactions contemplated by the City Documents and the Resolution; by all necessary official action of the City, the City has duly adopted the Resolution prior to or concurrently with the acceptance hereof and has approved the Preliminary Official Statement and the Official Statement; the Resolution are in full force and effect and have not been amended, modified, rescinded or challenged by referendum; the City has duly authorized and approved the execution and delivery of, and the performance by the City of its obligations contained in the City Documents; the City has duly authorized and approved the execution and delivery of the Official Statement; and the City is in compliance in all material respects with the obligations in connection with the execution and delivery of the Bonds on its part contained in the City Documents. (c) As of the date thereof, the Preliminary Official Statement (except for information regarding The Depository Trust Company (` DTC') and its book -entry only system, [the Insurer or the Surety Bond]) did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. (d) From the date of delivery of the Official Statement (as hereinafter defined) up to and including the end of the underwriting period (as such term is defined in Rule 15c2-12), the Official Statement (except for information regarding DTC and its book -entry only system) does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. For purposes of this Purchase Agreement, the end of the underwriting period shall be deemed to be the Closing Date, unless the Underwriter notes the City to the contrary on or prior to such date. (e) If the Official Statement is supplemented or amended pursuant to Section 4(g), at the time of each supplement or amendment thereto and at all times subsequent thereto up to and including the Closing Date or the end of the underwriting period, as the case may be, the Official Statement as so supplemented or amended (except for information regarding DTC and its book - entry only system) will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 55A3128 (f) Except as described in the Official Statement, the City has not failed during the previous 5 years to comply in any material respect with any previous undertakings in a written continuing disclosure certificate or agreement under Rule 15c2-12. (g) If between the date of delivery of the Official Statement and the end of the underwriting period (i) any event occurs or any fact or condition becomes known to the City that might or would cause the Official Statement as then supplemented or amended, to contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Underwriter thereof, and (ii) if in the reasonable opinion of the Underwriter such event, fact or condition requires the preparation and publication of a supplement or amendment to the Official Statement, the City will at its expense supplement or amend the Official Statement in a form and in a manner approved by the Underwriter. (h) To the best of the City's knowledge, the City is not in material violation of, or in material breach of or in material default under, any applicable constitutional provision, charter provision, law or administrative regulation or order of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, or other agreement or instrument to which the City is a party or to which the City or any of its properties 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 a material default or event of default under any such instrument; and the execution and delivery of the City Documents, the adoption of the Resolution and compliance with the provisions of the City Documents will not conflict with or constitute a material breach of or material default under any constitutional provision, charter provision, law, administrative regulation, order, judgment court decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is subject or by which it or any of its properties is bound, 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 its properties or under the terms of any such law, regulation or instrument, except as permitted by the City Documents. (i) Except as disclosed in the Official Statement, 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 service of process having been accomplished, or to the best knowledge of the City after due inquiry, threatened by a prospective party or their counsel in writing addressed to the City, (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) in any way contesting, affecting or seeking to prohibit restrain or enjoin the execution or delivery of any of the Bonds, or the payment of the principal and interest with respect to the Bonds, or the application of the proceeds of the Bonds; (iii) in any way contesting or affecting the validity of the Bonds or the City Documents, or contesting the powers of the City or any authority for the execution and delivery of the Bonds, the approval of the Resolution or the execution and delivery by the City of the City Documents or the Official Statement; (iv) which would likely result in any material adverse change relating to the business, operations or financial condition of the City or the City's or the State's, as applicable, ability to levy and collect the Gas Tax Revenues securing the Bonds, or otherwise satisfy its payment obligations with respect to the Bonds; or (v) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 55A4129 (j) The City will furnish such information, execute such instruments and take such other action not inconsistent with law or established policy of the City in cooperation with the Underwriter as may be reasonably requested (i) 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 may be designated by the Underwriter and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions; provided that (x) the Underwriter shall be responsible for all costs relating to such determination and qualification, (y) the City shall not be required to register as a dealer or a broker of securities or to consent to service of process with any blue sky filing, and (z) the City shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction. (k) The City Documents when executed by the City, will be legal, valid and binding obligations of the City enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium, other laws affecting creditors rights generally, to the application of equitable principles if equitable remedies are sought and to limitations on remedies against cities and counties under California law. (1) All material authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, court, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the City of, its respective obligations under City Documents have been duly obtained or when required for future performance are expected to be obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds. (m) The financial statements of the City for the fiscal year ended June 30, 2018, set forth as Appendix B to the Official Statement fairly present the financial position of the City as of the dates indicated therein and the results of its operations, the sources and uses of its cash and the changes in its fund balances for the periods therein specified to the extent included therein and, other than as set forth in the Official Statement, were prepared in conformity with generally accepted accounting principles applied on a consistent basis. (n) The City has no current intention to, and will not, prior to the Closing Date, offer or issue bonds, notes or other obligations for borrowed money or incur any material liabilities direct or contingent, except in the ordinary course of business, without prior notice to the Underwriter. (o)The City is not presently, and as a result of the sale of the Bonds will not be, in violation of any debt limitation, appropriation limitation or any similar restrictive provision of the California Constitution or statutes. (p) To the best knowledge of the City, the City has not defaulted in the payment of principal or interest with respect to any of its bonds in the past 10 years. (q) The City will undertake, pursuant to the Resolution and a Continuing Disclosure Agreement to provide certain annual financial information and notices of the occurrence of certain enumerated events pursuant to paragraph (b)(5) of Rule 15c2-12. An accurate description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement. The City has been and is in compliance with its continuing disclosure obligations under Rule 15c2-12, as described in the Official Statement. 55A5130 (r) Between the date hereof and the Closing Date, the City will not supplement or amend the City Documents, the Resolution or the Official Statement in any respect that is material to the obligations of the City under this Purchase Agreement without the prior written consent of the Underwriter, which consent shall not be unreasonably withheld. Section 5. Underwriter's Representations, Covenants and Agreements. The Underwriter represents and covenants and agrees with the City that the Underwriter has been duly authorized to enter into this Purchase Agreement and to act hereunder. Section 6. Offering. (a) It shall be a condition to the City's obligations to sell and to deliver the Bonds to the Underwriter and to the Underwriter's obligations to purchase and to accept delivery of the Bonds that the entire $ principal amount of the Bonds shall be issued, sold and delivered by or at the direction of the City and purchased, accepted and paid for by the Underwriter at the Closing. On or prior to the Closing, the Underwriter will provide the City with information regarding the reoffering prices and yields on the Bonds, in such form as the City may reasonably request. (b) The Underwriter agrees to make a bona fide public offering of all the Bonds, at prices not in excess of the initial public offering prices as set forth in the Official Statement and in Exhibit D attached hereto. The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the public offering price stated on the cover of the Official Statement. The Underwriter will provide, consistent with the requirements of MSRB, for the delivery of a copy of the Official Statement to each customer who purchases a Bond during the underwriting period. The Underwriter further agrees that it will comply with applicable laws and regulations, including without limitation Rule 15c2-12, in connection with the offering and sale of the Bonds. (c) Issue Price. Notwithstanding any provision of this Purchase Agreement to the contrary, the Underwriter and City agree to the following provisions related to the issue price of the Bonds: (1) For purposes of this section, the following defmitions apply: (i) "Public" means any person other than an underwriter or a related party to an underwriter. (ii) "underwriter" means (A) any person that agrees pursuant to a written contract with the City, as accepted and agreed to by its Controller, (or with the lead underwriter for the Bonds to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public). (iii) "Related Party" means a purchaser of any of the Bonds who, along with the underwriter, are both subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are 55A6131 partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other). (iv) "Sale Date" means the date of execution of this Purchase Agreement by all parties. (2) The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing an "issue price" or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit A, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. (3) The Underwriter confirms that the Underwriter has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the "initial offering price'), or at the corresponding yield or yields, set forth in Appendix A attached hereto, except as otherwise set forth herein. The City will treat the first price at which 10% of each maturity of the Bonds (the "10% test") is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which the it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which Bonds of that maturity have been sold by the Underwriter to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public. (4) Schedule I also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the City and the Underwriter agrees that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the "hold -the -offering -price rule"). So long as the hold -the -offering -price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following: (i) the close of the fifth (5") business day after the sale date; or (ii) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. The Underwriter shall promptly advise the City when it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. 55A- 132 (5) The Underwriter understands that sales of any Bonds to any person that is a Related Party to an underwriter shall not constitute sales to the Public for purposes of this Section 6. Section 7. Closing. At a.m., California time, on the Closing Date or at such earlier or later time or date as shall be mutually agreed upon by the City and the Underwriter, the City will, subject to the terms and conditions hereof, sell and deliver the Bonds to or for the account of the Underwriter in definitive form, duly executed, 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. Sale, delivery and payment as aforesaid shall be made at the offices of Best, Best & Krieger LLP in Riverside, California (`Bond Counsel'), or such other place as shall have been mutually agreed upon by the City and the Underwriter, except that the Bonds shall be delivered through the FAST facilities of DTC, or at such other place as shall have been mutually agreed upon by the City and the Underwriter, in fully registered, book -entry eligible form (which may be typewritten) and registered in the name of Cede & Co., as nominee of DTC. The Bonds will be made available to the Underwriter for checking not less than two business days prior to the Closing Date. Section 8. Closing Conditions. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the City of the obligations to be performed hereunder and under such documents and instruments to be delivered at or prior to the Closing, and the Underwriter's obligations under this Purchase Agreement are and shall also be subject to the following conditions: (a) the representations and warranties of the City herein shall be true, complete and correct on the date thereof and on and as of the Closing Date, as if made on the Closing Date; (b) at the time of the Closing, the City Documents shall be in full force and effect and shall not have been amended, modified or supplemented, and the Official Statement shall not have been amended, modified or supplemented, except as may have been agreed to by the Underwriter; (c) (1) the Underwriter shall have the right to cancel its obligation to purchase the Bonds by written notification from the Underwriter to the City if at any time after the date of this Purchase Agreement and prior to the Closing: (i) any event shall have occurred or any fact or condition shall have become known which, in the reasonable judgment of the Underwriter upon consultation with the City and Disclosure Counsel (both as hereinafter defined), either (A) makes untrue or incorrect in any material respect any statement or information contained in the Official Statement or (B) is not reflected in the Official Statement but should be reflected therein in order to make the statements and information contained therein not misleading in any material respect; or (ii) legislation shall be enacted, or a decision by a court of the United States shall be rendered, or any action shall be taken by, or on behalf of, the Securities and Exchange Commission which in the reasonable opinion of the Underwrites has the effect of requiring the Bonds to be registered under the Securities Act of 1933, as amended, or requires the qualification of the Indenture under the Trust Indenture Act of 1939, as amended, or any laws analogous thereto relating to governmental bodies; or (iii) any national securities exchange, the Comptroller of the Currency, or any other governmental authority, shall impose as to the Bonds or obligations of the general 55Ag 133 character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; or (iv) any state blue sky or securities commission or other governmental agency or body shall have withheld registration, exemption or clearance of the offering of the Bonds as described herein, or issued a stop order or similar ruling relating thereto; or (v) there shall have occurred any materially adverse change in the affairs or financial condition of the City, except for changes which the Official Statement discloses are expected to occur; provided however, that any such material adverse change shall have the effect of materially adversely affecting, directly or indirectly, the market price of the Bonds, the ability of the Underwriter to enforce contracts for the Bonds or the sale at the contemplated offering price by the Underwriter of the Bonds; (2) The Underwriter shall have the further right to terminate, or subject to agreement by the City, delay without liability, upon notice to the City, the Underwriter's obligation to purchase, to accept delivery of and to pay for the Bonds if at any time after the date of this Purchase Agreement and prior to the Closing Date any of the following occurs and in the reasonable judgment of the Underwriter would have the effect of materially adversely affecting, directly or indirectly, the market price of the Bonds, the ability of the Underwriter to enforce contracts for the Bonds or the sale at the contemplated offering price by the Underwriter of the Bonds: (i) there shall have occurred or any notice shall have been given of any, downgrading, suspension, withdrawal, or negative change in credit watch status by Moody's Investors Service, S&P Global Ratings and Fitch, Inc. or any other national rating service to any of the City's obligations (including the ratings to be accorded the Bonds); (ii) any proceeding shall have been commenced or be threatened in writing by the Securities and Exchange Commission (the "SEC") against the City; (iii) an amendment to the Constitution of the United States or the State of California shall have been passed or legislation shall have been introduced in or enacted by the Congress of the United States or the California legislature or legislation pending in the Congress of the United States shall have been amended or legislation shall have been recommended to the Congress of the United States or to the California legislature or otherwise endorsed for passage (by press release, other form of notice or otherwise) 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 legislation shall have been proposed for consideration by either such Committee by any member thereof or presented as an option for consideration by either such Committee by the staff of such Committee or by the staff of the Joint Committee on Taxation of the Congress of the United States, or legislation shall have been favorably reported for passage to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or a decision shall have been rendered by a court of the United States or of the State of California or the Tax Court of the United States, or a ruling shall have been made or a regulation or temporary regulation shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States, the Internal Revenue Service or other federal or State of California authority, 55A9134 with respect to federal or State of California taxation upon revenues or other income of the general character to be derived pursuant to the Resolution which may have the purpose or effect, directly or indirectly, of affecting the tax status of the City, its property or income, its securities (including the Bonds) or any tax exemption granted or authorized by State of California legislation or, in the reasonable judgment of the Underwriter, materially and adversely affecting the market for the Bonds or the market price generally of obligations of the general character of the Bonds; (iv) the declaration of war or engagement in, or escalation of, military hostilities by the United States or the occurrence of any other national emergency or calamity relating to the effective operation of the government of, or the financial community in, the United States; any other extraordinary event, material national or international calamity or crisis, or any material adverse change in the financial, political or economic conditions affecting the United States, the State of California or the City; a downgrade of the sovereign debt rating of the United States by any major credit rating agency or payment default on United States Treasury obligations; or a default with respect to the debt obligations of, or the institution of proceedings under any federal bankruptcy laws by or against any state of the United States or any city, county, or other political subdivision located in the United States having a population of over 1,000,000; (v) the declaration of a general banking moratorium by federal, New York or California authorities, or the general suspension of trading on any national securities exchange or the establishment of minimum prices on such national securities exchanges, or the establishment of material restrictions (not in force as the date hereof) upon trading securities generally by any governmental authority or any national securities exchange; (vi) an order, decree or injunction of any court of competent jurisdiction, or order, ruling, regulation or official statement by the SEC, or any other governmental agency having jurisdiction of the subject matter, issued or made to the effect that the delivery, offering or sale of obligations of the general character of the Bonds, or the delivery, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect or to the effect that obligations of the general character of the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended; (vii) the New York Stock Exchange or other national securities exchange or any governmental authority, shall impose, as to the Bonds or as to obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, Underwriter; (viii) the purchase of and payment for the Bonds by the Underwriter, or the resale of the Bonds by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission; (ix) any event occurring, or information becoming known which, in the reasonable judgment of the Underwriter, makes untrue in any material respect any material statement or information contained in the Official Statement, or has the effect of causing 55A-135 the Official Statement to contain any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and in either such event (i) the City refuses to permit the Official Statement to be supplemented to supply such statement or information in a manner satisfactory to the Underwriter or (ii) the effect of the Official Statement as so supplemented is, in the judgment of the Underwriter, to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields) of the Bonds; or (x) since the date of this Purchase Agreement, any materially adverse change in the operations, affairs or financial condition of the City, except for changes which the Official Statement discloses are expected to occur. (d) at or prior to the Closing, the Underwriter shall have received each of the following documents: (1) executed copies of each of the City Documents; (2) the Official Statement, together with any supplements or amendments thereto in the event the Official Statement has been supplemented or amended, with the Official Statement and each supplement or amendment (if any) signed on behalf of the City by its authorized officer; (3) the Preliminary Official Statement, a certificate pursuant to Rule 15c2-12 related to the Preliminary Official Statement signed on behalf of the City by authorized representatives thereof, (4) copies of the adopted Resolution, certified by the Clerk of the City Council as having been duly enacted by the City Council of the City and as being in full force and effect; (5) a certificate of the City executed by its authorized officer, dated the Closing, in form and substance satisfactory to the Underwriter, to the effect that: (i) the representations and warranties of the City contained in this Purchase Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) except as disclosed in the Preliminary Official Statement and the Official Statement, no litigation is pending or, to the best of such official's knowledge, threatened against the City (a) to prohibit, restrain or enjoin the sale or delivery of the Bonds; (b) in any way contesting or affecting the validity of the City Documents to which the City is a party; (c) attempting to limit, enjoin or otherwise restrict or prevent the City from collecting revenues and other income, and applying them pursuant to the Official Statement including payments on the Bonds, and other income or the anticipated receipt of the Gas Tax Revenues; or (d) in any way contesting the existence or powers of the City; and (iii) no event affecting the City has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement or information contained in the Official Statement relating to the City (excluding therefrom information relating to DTC and the book -entry system, the information under the caption 'UNDERWRITING") or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein relating to the City not misleading; (6) A certificate of U.S. Bank National Association as trustee, dated the Closing Date, signed by a duly authorized official of the Trustee, satisfactory in form and substance to the Underwriter, to the effect that: (i) it is duly organized and existing under and by virtue of the laws 55A 1136 of the United States of America, having the full power and qualified to enter into and perform its duties under the hidentureand the Escrow Agreement; (ii) the execution and delivery of the Indenture and the Escrow Agreement and compliance therewith, will not conflict with or constitute a breach by it of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which it is a party or is otherwise subject; and (iii) it has not been served with any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, nor is any such action, to the best of such official's knowledge after reasonable investigation, threatened against it, affecting its existence, the titles of its officers to their respective offices, or contesting or affecting the validity or enforceability of the Indenture or the Escrow Agreement, or contesting its power or authority to enter into, adopt or perform its obligations under the foregoing, wherein an unfavorable decision, ruling or fmding would materially adversely affect the validity or enforceability of the Indenture or the Escrow Agreement; (7) A certified copy of the general resolution of by-laws of the Trustee authorizing the execution and delivery of the Indenture; (8) an opinion of the City Attorney of the City addressed to the Underwriter substantially in the form attached hereto as Exhibit C; (9) an opinion of Bond Counsel, in substantially the form set forth in Appendix D to the Official Statement and a letter of such counsel in the customary form, dated the Closing Date and addressed to the Underwriter, to the effect that such opinion may be relied upon by the Underwriter to the same extent as if such opinion were addressed to it; (10) a supplemental opinion of Bond Counsel, addressed to the City and the Underwriter, dated the Closing Date, to the effect that: (A) This Purchase Agreement has been duly executed and delivered by the City and is a legal, valid and binding obligation of the City, subject to laws relating to bankruptcy, insolvency, reorganization or creditors' rights generally, to the application of equitable principles, the exercise of judicial discretion and the limitations on legal remedies against public entities in the State; (B) The statements contained in the Preliminary Official Statement and the Official Statement as of their respective dates and as of the Closing Date in the captions entitled "INTRODUCTION", ` FIIE BONDS" (other than the information concerning DTC and the book -entry system), "SECURITY FOR THE BONDS," "TAX MATTERS," "APPENDIX A — SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE," and "APPENDIX D — FORM OF BOND COUNSEL OPINION" insofar as such statements expressly summarize certain provisions of the Indenture and the form and content of such counsel's opinion attached as Appendix D to the Official Statement, are accurate in all material respects; and (C) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended (the "1933 Act') and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"); 55A�137 (11) an opinion of Best Best and Krieger LLP, addressed to the City and the Underwriter to the effect that: Based upon the information made available to them in the course of their participation in the preparation of the Preliminary Official Statement and the Official Statement and without passing on and without assuming any responsibility for the accuracy, completeness and fairness of the statements in the Preliminary Official Statement and the Official Statement, and having made no independent investigation or verification thereof, nothing has come to the attention of the attorneys in the firm rendering legal services in connection with the Bonds which would lead them to believe that the Preliminary Official Statement as of its date, and the Official Statement, as of its date and as of the Closing Date (excluding therefrom any information in the Preliminary Official Statement and the Official Statement relating to DTC, the operation of the book -entry system, information regarding financial or statistical data or projections or estimates or expressions of opinion included in the Preliminary Official Statement and the Official Statement and the appendices thereto, as to which no opinion need be expressed) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (12) an opinion of Curls Battling P.C., Underwriter's Counsel ("Underwriter's Counsel"), dated the Closing Date and addressed to the Underwriter in form and substance acceptable to the Underwriter; (13) an opinion of counsel to the Trustee, dated the Closing Date and addressed to the Underwriter and the City, in a form acceptable to the Underwriter's Counsel and Bond Counsel; (14) Tax Certificate of the City, executed by the City, in form and substance acceptable to Bond Counsel and the Underwriter, setting forth, among other things, the use of proceeds of the Bonds, and sufficient facts, estimates and circumstances (including covenants of and by the City) in existence on the Closing Date, to support the conclusion that (i) it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and the regulations, temporary regulations and proposed regulations promulgated with respect thereto, and (ii) to the best knowledge of the City, there are no other facts, estimates, or circumstances that would materially affect such expectations; (15) evidence of required filings with the California Debt and Investment Advisory Commission; (16) the Blue Sky Memorandum with respect to the Bonds prepared by Underwriter's Counsel; (17) a copy of the Blanket Letter of Representation to DTC relating to the City; (18) evidence satisfactory to the Underwriter that. Standard & Poor's Global Ratings. has assigned ratings to the Bonds set forth in the Preliminary Official Statement and that all such ratings are in full force and effect as of the Closing date; (19) [the executed Surety Bond issued by the Insurer, in form and substance acceptable to the Underwriter]; 5513 138 (20) [the Insurance Policy issued by the Insurer, in form and substance acceptable to the Underwriter]; (21) [opinions of counsel and/or certificates of the Insurer as to the enforceability of its [Surety Bond][Insurance Policy] and as to the accuracy of the information in the Official Statement relating to the Insurer and its [Surety Bond][Insurance Policy]; and (22) such additional legal opinions, certificates, instruments or other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date of this Purchase Agreement and as of the Closing Date, of the City's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City on or prior to the Closing Date of all agreements then to be performed and all conditions then to be satisfied by the City. All of the opinions, letters, certificates, instruments and other documents mentioned in this Purchase Agreement shall be deemed to be in compliance with the provisions of this Purchase Agreement if, but only if, they are in form and substance satisfactory to the Underwriter and Underwriter's Counsel. If the City is 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, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds are terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the City shall be under further obligations hereunder, except that the respective obligations of the City and the Underwriter set forth in Section 9 of this Purchase Agreement shall continue in full force and effect. Section 9. EMenses. (a) Except for those expenses assigned to the Underwriter pursuant to Section 9(b) hereof, the Underwriter shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the City's obligations under this Purchase Agreement and the fulfillment of the conditions imposed hereunder, including but not limited to: (i) the fees and disbursements of Bond Counsel and Disclosure Counsel and Urban Futures, Inc. Tustin, California (the 'Municipal Advisor'); (ii) the fees and disbursements of the Trustee and Escrow Agent and any verification agent counsel, auditors, engineers, insurers, consultants or others retained by the City in connection with the transactions contemplated herein; (iii) the costs of preparing and printing the Bonds; (iv) the costs of the printing of the Official Statement (and any amendment or supplement prepared pursuant to Section 4(g) of this Purchase Agreement); and (v) any fees charged by investment rating agencies for the rating of the Bonds. [As an accommodation for the City, on the Closing Date, the Underwriter will deliver $ of the purchase price directly to the Insurer (reflecting payment of the sum of the premium payable with respect to the Reserve Policy.] The City shall also pay for any expenses upon issuance of the Bonds included in the expense component of the Underwriter's discount incurred by the Underwriter which are incidental to the negotiation, marketing, issuance and delivery of the Bonds, including, but not limited to, intemet roadshow (if any) and meals, transportation, and lodging, if any, incurred by or on behalf of the City and its representatives or employees, and any other miscellaneous closing costs. In the event that the Underwriter incurs or advances the cost of any expense for which the City is responsible hereunder, the City shall reimburse the Underwriter at or prior to the Closing Date; if on the Closing Date, reimbursement may be included in the expense component of the Underwriter's discount. 55A4139 (b) Except as provided for above, the Underwriter shall pay from the expense component of the Underwriter's discount, all expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds: (i) all advertising expenses in connection with the offering of the Bonds; (ii) the costs of printing the Blue Sky memorandum used by the Underwriter: (iii) all out-of-pocket disbursements and expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds, including the fees of the CUSIP Service Bureau for the assignment of CUSIP numbers; and (iv) all other expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds, including the fees and disbursements of Underwriter's Counsel. Notwithstanding that the fees of the California Debt and Investment Advisory Commission are solely the legal obligation of the Underwriter, the City agrees to reimburse the Underwriter for such fees. (c) The City acknowledges that it has had an opportunity, in consultation with such advisors as it may deem appropriate, if any, to evaluate and consider the fees and expenses being incurred as part of the issuance of the Bonds. Section 10. Notices. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the City at the address set forth above and any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to the Underwriter: If to the City: City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Attention: Telephone: If to the Underwriter: Samuel A. Ramirez & Co., Inc. 445 S. Figueroa St., Suite 2310 Los Angeles, CA 90071 Attention: Michael Mejia, Vice President Telephone:(213) 627-6121 Section 11. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City and the Underwriter (including the successors or assigns of the Underwriter), and no other person shall acquire or have any right hereunder or by virtue of this Purchase Agreement. All of the representations, warranties and agreements of the City 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. Section 12. Invalid or Unenforceable Provisions. hi the event that any provision of this Purchase Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Purchase Agreement. Section 13. Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. This Purchase Agreement may be 55A 5140 signed in counterparts, and upon delivery to the other party of such signed Purchase Agreement, which delivery may be by facsimile transmission, shall constitute the binding agreement of each party to this Purchase Agreement. Section 14. Governing Law; Venue. This Purchase Agreement shall be governed by and interpreted under the laws of the State of California. Venue for all litigation relative to the formation, interpretation and performance of this Purchase Agreement shall be in the City of Santa Ana. Section 15. Headings. The Section headings in this Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof. Section 16. Entire Agreement. This Purchase Agreement, when accepted by the City, shall constitute the entire agreement between the City and the Underwriter and is made solely for the benefit of the City and the Underwriter (including the successors or assigns of the Underwriter with the consent of the City) and no other person shall acquire or have any right hereunder by virtue hereof. All of the City's representations, warranties and agreements in this Purchase Agreement shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of the Underwriter, (b) delivery of and payment for the Bonds hereunder, and (c) any termination of this Purchase Agreement. Section 17. No Fiduciary or Advisory Role; Aim's Length Transaction. The Underwriter and the City acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm's-length commercial transaction between City, on the one hand, and the Underwriter, on the other hand, (ii) in connection with such transaction, each Underwriter is acting solely as a principal and not as a municipal advisor, a financial advisor, or a fiduciary of the City, and may have financial and other interests that differ from those of the City, (iii) the Underwriter has not assumed (individually or collectively) a fiduciary responsibility in favor of the City with respect to the offering of the Bonds or the discussions, undertakings and procedures leading thereto (whether or not the Underwriter, or any affiliate of the Underwriter, has provided or is currently providing services or advice to City on other matters), (iv) the only obligations the Underwriter has to the City with respect to the transactions contemplated hereby are expressly set forth in this Purchase Agreement, and (v) the City and the Underwriter have consulted with their respective legal, financial and other advisors to the extent they deemed appropriate in connection with the offering of the Bonds. The Underwriter is not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended) in connection with the matters contemplated by this Purchase Agreement. [Remainder of page intentionally left blank] 556141 55�142 This Purchase Agreement shall become effective upon execution of the acceptance of this Purchase Agreement by the City and shall be valid and enforceable as of the time of such acceptance. Very truly yours, SAMUEL A. RAMIREZ & CO., INC., as Underwriter [Title] CITY OF SANTA ANA ACCEPTED at [[a.m./p.m.] Pacific Time this day of 12019 I_\» .ZGTA 0 11 F.Vy 110 all] 115 CITY ATTORNEY 55A g143 EXHIBIT A FORM OF ISSUE PRICE CERTIFICATE CITY OF SANTA ANA GAS TAX REVENUE REFUNDING BONDS, SERIES 2019 The undersigned, on behalf of Samuel A. Ramirez & Co., Inc., hereby certifies as set forth below with respect to the sale and execution and delivery of the above -captioned bonds (the `Bonds") of the City of Santa Ana (the "City"). 1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the [General Rule Maturities], the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A. [2. Initial Offering Price of the Hold -the -Offering -Price Maturities. (a) Samuel A. Ramirez & Co., Inc. offered the Hold -the -Offering -Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the "Initial Offering Prices') on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Certificates is attached to this certificate as Schedule B. (b) As set forth in the Purchase Agreement, Samuel A. Ramirez & Co., Inc. agreed in writing on or prior to the Sale Date that, (i) for each Maturity of the Hold -the -Offering -Price Maturities, they would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold -the -offering -price rule'), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail or other third -party distribution agreement shall contain the agreement of each broker -dealer who is a party to the retail or other third -party distribution agreement, to comply with the hold -the -offering -price rule. [Pursuant to such agreement, no Underwriter (as defined below) offered or sold any Maturity of the Hold -the -Offering -Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.] 3. Defined Terms. [(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the "General Rule Maturities." (b) Hold -the -Offering -Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the "Hold -the -Offering -Price Maturities." (c) Holding Period means, with respect to a Hold -the -Offering -Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Samuel A. Ramirez & Co., Inc. sold at least 10% of such Hold -the -Offering - Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold -the - Offering -Price Maturity.] 5541144 (d) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (e) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term `related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (1) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is {SALE DATE). (h) Underwriter means (i) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail or other third -party distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Samuel A. Ramirez & Co., Inc.'s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the City with respect to certain of the representations set forth in the tax certificate with respect to the Bonds and with respect to compliance with the federal income tax rules affecting the Bonds, and by Best Best & Krieger LIP in connection with rendering its opinion that the interest with respect to the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the City from time to time relating to the Bonds. 554-2145 SCHEDULE A TO ISSUE PRICE CERTIFICATE GENERAL RULE MATURITIES AND HOLD -THE -OFFERING -PRICE MATURITIES General Rule Maturities [Insert] Hold -The -Offering -Price Maturities [Insert] Schedule A-1 55A-146 EXHIBIT B FORM OF CERTIFICATE OF THE CITY 55A-1147 EXHIBIT C FORM OF OPINION OF CITY ATTORNEY C-1 55A-148 EXHIBIT D City of Santa Ana Gas Tag Revenue Refunding Bonds, Series 2019 MATURITY SCHEDULE Maturity Date (January 1 Principal Amount Interest Rate Yield Initial Offering Price 10% Test Used Hold the Offering Price Rule Used C-1 55A-149 EXHIBIT 6 CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (the "Disclosure Agreement') is executed and delivered by and between the City of Santa Ana (the "City') and Urban Futures, Inc., as dissemination agent (the "Dissemination Agent, in connection with the issuance and delivery of W,025,000 City of Santa Ana Gas Tax Revenue Refunding Bonds, Series 2019 (the `Bonds"). The Bonds are issued pursuant to an Indenture of Trust, dated as of December 1, 2019 (the "Indenture'), by and between the City and US Bank National Association (the "Trustee"). SECTION 1. Purpose of this Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the City for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule. SECTION 2. Defmitions. In addition to the defmitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement 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 City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Annual Report Date" shall mean March 31 of each year (beginning on March 31, 2020). "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tux purposes. "Fiscal Year" shall mean the one-year period ending on June 30 of each year. "Holder" shall mean a registered owner of the Bonds. "Listed Events" shall mean any of the events listed in Section 5 of this Disclosure Agreement. "MSRB" shall mean the Municipal Securities Rulemaking Board established pursuant to Section 1513(b)(1) of the Securities Exchange Act of 1934 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 Commission, filings with the MSRB are to be made through the Electronic Municipal Marketplace Access (EMMA) website of the MSRB, currently located at http: //emma. msrb. org. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2-12 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 City shall provide, or cause the Dissemination Agent to provide, not later than the Annual Report Date to MSRB an Annual Report relating to the immediately preceding Fiscal Year which 55394.00055\32427465.1 55A-150 is consistent with the requirements of Section 4 of this Disclosure Agreement, which Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement. (b) Not later than 15 business days prior to the Annual Report Date the City shall provide the Annual Report to the Dissemination Agent. If by such date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the first sentence of this subsection (b). (c) If the City is unable to provide to MSRB an Annual Report by the date required in subsection (a), the City, in a timely manner, shall send to MSRB a notice in substantially the form attached hereto as Exhibit A. SECTION 4. Content of Annual Reports. The Annual Report shall contain or incorporate by reference the following: 1. The audited financial statements of the City for the most recently completed Fiscal Year, prepared in accordance with generally accepted accounting principles for governmental enterprises as prescribed from time to time by any regulatory body with jurisdiction over the City and by the Governmental Accounting Standards Board. If the City's audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available; 2. An update, for the fiscal year ended the June 30 next preceding the Annual Report Date, of the information contained in the Official Statement in Table Nos. 1, 2 and 3 (to the extent not included in the audited financial statements described in paragraph (1) above). In addition to any of the information expressly required to be provided under subsections (1) and (2) of this Section, the City shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB's Internet Web site or filed with the Securities and Exchange Commission. SECTION 5. Reporting of Listed Events. The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds (in each case to the extent applicable) in a timely manner not more than ten business days after the occurrence of the event: 1. principal or interest payment delinquencies; 2. non-payment related defaults, if material; 3. modifications to the rights of the Holders, if material; 4. optional, contingent or unscheduled calls, if material, and tender offers; 5. defeasances; 55394.00055\32427465.1 2 55A-151 6. rating changes; 7. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; 8. unscheduled draws on the debt service reserves reflecting financial difficulties; 9. unscheduled draws on the credit enhancements reflecting financial difficulties; 10. substitution of the credit or liquidity providers or their failure to perform; 11. release, substitution or sale of property securing repayment of the Bonds, if material; 12. bankruptcy, insolvency, receivership or similar proceedings of the City, which shall occur as described below; 13. appointment of a successor or additional trustee or the change of name of a trustee, if material; 14. the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a defmitive agreement relating to any such actions, other than pursuant to its terms, if material; 15. incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material; or 16. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties. For these purposes, any event described in item 12 of this Section 5 is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States 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 City, or if such jurisdiction has been assumed by leaving the existing governing 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 City. The term financial obligation means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (3) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. 55394.00055\32427465.1 3 55A-152 SECTION 6. Termination of Obligation. The City's obligations under this Disclosure Agreement 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 City shall give notice of such termination in the same manner as for a Listed Event under Section 5. SECTION 7. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing 30 days' written notice to the City and the Trustee (if the Trustee is not the Dissemination Agent). The Dissemination Agent shall have no duty to prepare or review the Annual Report nor shall the Dissemination Agent be responsible for filing any Annual Report not provided to it by the City in a timely manner and in a form suitable for filing. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that, in the opinion of nationally recognized bond counsel, such amendment or waiver is permitted by the Rule. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the City shall give notice of such amendment or waiver in the same manner as for a Listed Event under Section 5. SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the City chooses to include any information in any notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the City shall not thereby have any obligation under this Disclosure Agreement to update such information or include it in any future notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the City to comply with any provision of this Disclosure Agreement, 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 City to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the City to comply with this Disclosure Agreement shall be an action to compel performance. No Holder or Beneficial Owner of the Bonds may institute such action, suit or proceeding to compel performance unless they shall have first delivered to the City satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the City shall have refused to comply therewith within a reasonable time. SECTION 11. Duties, Immunities and Liabilities of the Dissemination Agent. The Dissemination Agent (if other than the City) shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time and all expenses, legal fees and advances made or incurred by the Dissemination 55394.00055\32427465.1 4 55A-153 Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to them hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Holders, or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. No person shall have any right to commence any action against the Dissemination Agent hereunder, seeking any remedy other than to compel specific performance of this Disclosure Certificate. The Dissemination Agent shall not be liable under any circumstances for monetary damages to any person for any breach under this Disclosure Certificate. SECTION 12. Filings with the MSRB. All financial information, operating data, financial statements, notices, and other documents provided to MSRB in accordance with this Disclosure Agreement shall be provided in an electronic format prescribed by MSRB and shall be accompanied by identifying information as prescribed by MSRB. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the City, 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. SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. (Signature page follows) 553 94.000 5 5\32427465.1 5 55A-154 EXHIBIT 6 Date: December 2, 2019 CITY OF SANTA ANA Kristine Ridge City Manager URBAN FUTURES, INC., as Dissemination Agent Authorized Signatory -Signature Page - Continuing Disclosure Agreement 55394.00055\32427465.1 55A2155 T1 1 NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: CITY OF SANTA ANA Name of Issue: CITY OF SANTA ANA GAS TAX REVENUE REFUNDING BONDS, SERIES 2019 Date of Issuance: December 2, 2019 NOTICE IS HEREBY GIVEN that the City has not provided to the MSRB an Annual Report with respect to the above -named Bonds as required by the Continuing Disclosure Agreement, dated October 1, 2019. The City anticipates that the Annual Report will be filed by Dated: CITY OF SANTA ANA 55394.00055\32427465.1 554-1156