Garden Grove City Council
April 9, 2024

AGENDA

Garden Grove City Council

Tuesday, April 9, 2024
6:30 PM

Community Meeting Center
11300 Stanford Avenue
Garden Grove, California 92840
Steve Jones
Mayor
Cindy Tran
Mayor Pro Tem –District 3
George S. Brietigam
Council Member – District 1
John R. O’Neill
Council Member – District 2
Joe DoVinh
Council Member – District 4
Stephanie Klopfenstein
Council Member – District 5
Kim B. Nguyen-Penaloza
Council Member – District 6

Meeting Assistance: Any person requiring auxiliary aids and services, due to a disability, to address the City Council, should contact the City Clerk's Office 72 hours prior to the meeting to arrange for accommodations. Phone: (714) 741-5040.

Agenda Item Descriptions: Are intended to give a brief, general description of the item. The City Council may take legislative action deemed appropriate with respect to the item and is not limited to the recommended action indicated in staff reports or the agenda.

Documents/Writings: Any revised or additional documents/writings related to an item on the agenda distributed to all or a majority of the Council Members within 72 hours of a meeting, are made available for public inspection at the same time (1) in the City Clerk's Office at 11222 Acacia Parkway, Garden Grove, CA 92840, during normal business hours; (2) on the City's website as an attachment to the City Council meeting agenda; and (3) at the Council Chamber at the time of the meeting.

Public Co mments: Members of the public who attend the meeting in -person and would like to address the City Council are requested to complete a pink speaker card indicating their name and address, and identifying the subject matter they wish to address. This card sh ould be given to the City Clerk before the meeting begins. General comments are made during "Oral Communications" and should be limited to matters under consideration and/or what the City Council has jurisdiction over. Persons wishing to address the City C ouncil regarding a Public Hearing matter will be called to the podium at the time the matter is being considered.

Manner of Addressing the City Council: After being called by the Mayor, you may approach the podium, it is requested that you state your nam e for the record, and proceed to address the City Council. All remarks and questions should be addressed to the City Council as a whole and not to individual Council Members or staff members. Any person making impertinent, slanderous, or profane remarks or who becomes boisterous while addressing the City Council shall be called to order by the Mayor. If such conduct continues, the Mayor may order the person barred from addressing the City Council any further during that meeting.

Time Limitation: When any group of persons wishes to address the City Council on the same subject matter, the Mayor may request a spokesperson be chosen to represent the group, so as to avoid unnecessary repetition. At the City Council's discretion, a limit on the total amount of time for public comments during Oral Communications and/or a further limit on the time allotted to each speaker during Oral Communications may be set.

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PLEASE SILENCE YOUR CELL PHONES DURING THE MEETING.

AGENDA

ROLL CALL: COUNCIL MEMBER BRIETIGAM, COUNCIL MEMBER O'NEILL, COUNCIL MEMBER DOVINH, COUNCIL MEMBER KLOPFENSTEIN, COUNCIL MEMBER K. NGUYEN -

PENALOZA, MAYOR PRO TEM TRAN, MAYOR JONES

INVOCATION

PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA

1. PRESENTATIONS

1.a. Community Spotlight in recognition of Garden Grove High School’s cheer team for winning the CIF-SS Division 4AA championship.

2. ORAL COMMUNICATIONS (TO BE HELD SIMULTANEOUSLY WITH OTHER

LEGISLATIVE BODIES)

3. WRITTEN COMMUNICATIONS

3.a. Consideration of a written request from the Christ Cathedral Parish, Diocese of Orange to extend the higher noise levels from 10:00 p.m. to 11:00 p.m. on Friday, July 12 and Saturday, July 13, 2024, at the Christ Cathedral property. (Action Item)

RECESS

CONDUCT OTHER LEGISLATIVE BODIES' BUSINESS

RECONVENE

4. CONSENT ITEMS (CONSENT ITEMS WILL BE ACTED ON SIMULTANEOUSLY

WITH ONE MOTION UNLESS SEPARATE DISCUSSION AND/OR ACTION IS

REQUESTED BY A COUNCIL MEMBER)

4.a. Adoption of a Proclamation recognizing April as Fair Housing Month. (Action Item)

4.b. Adoption of a Proclamation recognizing April as Sexual Assault Awareness Month. (Action Item)

4.c. Adoption of a Proclamation commemorating and celebrating April 22-26, 2024, Afterschool Professionals Appreciation Week. (Action Item)

4.d. Adoption of a Proclamation recognizing April as Child Abuse Prevention Month. (Action Item)

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4.e. Adoption of a Resolution amending the City of Garden Grove Debt Management Policy. (Joint Action Item with the Sanitary District)

4.f. Approval of overnight travel to attend the Southern California Association of Governments (SCAG) 2024 Regional Conference and General Assembly (Cost:
$1,000) (Action Item)

4.g. Approval of Amendment No 1 to the Cooperative Agreement with the City of Stanton for Fiscal Year 2023/24 Citywide Street Resurfacing Project (Cost:
$60,500) (Action Item)

4.h. Authorization of the issuance of a purchase order to National Auto Fleet Group for three (3) new Police Department vehicles. (Cost: $134,521.23) (Action Item)

4.i. Authorization of the issuance of a purchase order to National Auto Fleet Group for two (2) new Public Works Department electric pickup trucks. (Cost:
$147,699.88) (Action Item)

4.j. Receive and file minutes from the meetings held on March 12, 2024, and March 26, 2024. (Action Item)

4.k. Receive and file warrants. (Action Item)

5. PUBLIC HEARINGS (MOTION TO APPROVE WILL INCLUDE ADOPTION OF EACH RESOLUTION UNLESS OTHERWISE STATED.)

5.a. Adoption of a Resolution approving the issuance of the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A, authorizing the execution and distribution of documents related to such bond issuance. (Joint Action Item with the Public Financing Authority)

5.b. Approval of the Fiscal Year 2024-25 Action Plan for the use of the U.S.

Department of Housing and Urban Development Funding. (Action Item)

6. ITEMS FOR CONSIDERATION

6.a. Award a contract to CBRE, Inc. to provide commercial broker, property management and leasing services for the property located at 12966 Euclid Street, RFP GPM-No. 2401. (Cost: $86,400) (Action Item)

7. MATTERS FROM THE MAYOR, CITY COUNCIL MEMBERS, AND CITY

MANAGER

8. ADJOURNMENT

The next Regular City Council Meeting is scheduled for Tuesday, April 23, 2024, at 5:30 p.m. in the Community Meeting Center, 11300 Stanford Avenue, Garden Grove, California 92840.
3 City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: John Montanchez
Dept:

City Manager Dept: Community Services
Date: 4/9/2024

Subject: Consideration of a written request from the Christ Cathedral Parish, Diocese of Orange to extend the higher noise levels from 10:00 p.m. to 11:00 p.m. on Friday, July 12 and Saturday, July 13, 2024, at the Christ Cathedral property. (Action Item)

OBJECTIVE

To transmit a written request on behalf of Diocese of Orange, requesting approval to extend the operating hours and make an exemption to the City's Noise Ordinance, Municipal Code Section 8.47.040, to extend the higher noise levels from 10:00 p.m. to 11:00 p.m. on Friday, July 12 and Saturday, July 13, 2024, at the Christ Cathedral property.

BACKGROUND

The Diocese of Orange has organized the annual "Marian Days" event since 2021.

The celebration draws Vietnamese faithful from Orange County, Los Angeles, San Diego, San Bernardino, and San Jose. In 2023, the event welcomed approximately 20,000 attendees over two days, including a significant presence of out-of-state and international visitors.

DISCUSSION
Staff received a request from the Diocese of Orange, who will be organizing the annual Marian Days at the Christ Cathedral on Friday, July 12 and Saturday, July 13, 2024, requesting to extend the operating hours from 10:00 p.m. to 11:00 p.m.

Additionally, this request would also require the approval to make an exemption (per Garden Grove Municipal Code Section 8.47.040) to the hours listed in the Noise Ordinance establishing lower noise thresholds after 10:00 p.m.

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Given the event's heightened demand from faithful attendees, extending the operating hours will provide attendees more time to relish the diverse culinary offerings and immerse themselves in the rich cultural entertainment.

FINANCIAL IMPACT

Approval of this request will not have a financial impact to the City. The Police Department will be reimbursed for all personnel services provided during the event.

RECOMMENDATION

It is recommended that the City Council:

Consider the written request from Diocese of Orange to extend the operating hours and make an exemption to the Noise Ordinance from 10:00 p.m. to 11:00 p.m. on Friday, July 12 and Saturday, July 13, 2024 at the Christ Cathedral.

By: Janet Pelayo, Deputy Director

ATTACHMENT(S):

1. Ltr Request from Christ Cathedral Parish

5 6

City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Teresa Pomeroy
Dept:

City Manager Dept: City Clerk
Date: 4/9/2024

Subject: Adoption of a Proclamation recognizing April as Fair Housing Month. (Action Item)

Attached is a Proclamation recognizing April as Fair Housing Month recommended for adoption.

ATTACHMENT(S):

1. Proclamation

7 PROCLAMATION
Fair Housing Month

WHEREAS, One of the greatest freedoms enjoyed by Americans is the freedom to live in a home of one’s choice; and
WHEREAS, This promise made to us by the Nation’s Fair Housing Law which requires that all people be treated equally in connection with sale or rental of housing, regardless of race, color, national origin, sex, gender identity, disability, sexual orientation, marital status, age, familial status or religion; and
WHEREAS, This year marks the 56th anniversary of the Federal Fair Housing Act, the original legislation targeting the elimination of housing discrimination in America; and
WHEREAS, Since the adoption of the fair housing legislation in April 1968, April has been designated Fair Housing Month. Each year the U.S. Department of Housing and Urban Development and the Fair Housing Foundation organize events and activities during this month to focus attention on the issue of equal opportunity in housing; and
WHEREAS, April is Fair Housing Month throughout the nation, we are asking each resident of the City of Garden Grove to support efforts to put into practice the principles of freedom, justice and equality upon which this great nation was founded.

NOW THEREFORE BE IT PROCLAIMED that April 2024 is Fair Housing Month in Garden Grove.

April 9, 2024

8 City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Teresa Pomeroy
Dept:

City Manager Dept: City Clerk
Date: 4/9/2024

Subject: Adoption of a Proclamation recognizing April as Sexual Assault Awareness Month. (Action Item)

Attached is a Proclamation recognizing April as Sexual Assault Awareness Month recommended for adoption.

ATTACHMENT(S):

1. Proclamation

9 Proclamation

APRIL 2024 SEXUAL ASSAULT AWARENESS MONTH

WHEREAS, Sexual Assault Awareness Month (SAAM) calls attention to the fact that sexual violence is widespread leaving millions of our neighbors, friends, colleagues, and loved ones scarred ; and

WHEREAS, the goal of Sexual Assault Awareness Month is to raise public awareness and bring advocates, survivors, their loved ones, and the community to increase knowledge and identify prevention strategies; and

WHEREAS, rape, sexual assault, and sexual harassment harm our community, and statistics show that nationwide 81 percent of women and 43 percent of men reported experiencing some form of harassment and/or assault in their lifetime; and

WHEREAS, child sexual abuse prevention must be a priority to confront the reality that what is reported is that one in three girls and one in four boys between the ages of 11 and 17 experience sexual abuse or assault; and

WHEREAS, sexual assault affects individuals across all ages, abilities, sexual orientations, gender identities, and of all racial, social, religious, ethnic, and economic backgrounds; and

WHEREAS, the National Sexual Violence Resource Center is promoting thirty days of SAAM with this year’s theme “Building Connected Communities”; and

WHEREAS, together we can make a difference and promote the safety of others, and to show survivors they are believed and supported.

NOW, THEREFORE, BE IT PROCLAIMED, by the City of Garden Grove City Council that April 2024 is Sexual Assault Awareness Month and that each day of the month and year is an opportunity to work towards building connected communities for a better future free of sexual violence.

April 9, 2024
10 City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Teresa Pomeroy
Dept:

City Manager Dept: Secretary
Date: 4/9/2024

Subject: Adoption of a Proclamation commemorating and celebrating April 22-26, 2024, Afterschool Professionals Appreciation Week. (Action Item)

Attached is a Proclamation commemorating and celebrating April 22-26, 2024, Afterschool Professionals Appreciation Week recommended for adoption.

ATTACHMENT(S):

1. Proclamation

11 PROCLAMATION
Celebrating April 22-26, 2024, as Afterschool Professionals Appreciation Week

WHEREAS, Garden Grove residents benefit with access to afterschool programs that are well attended, which is a testament in the value placed with those who work with children and youth in a wide variety of program settings to provide extended learning opportunities during out-of- school hours resulting in a positive effect on our children, families, community and businesses;

WHEREAS, afterschool professionals are a decisive element for our children’s access to high-quality relationships and expanded opportunities beyond school and home environments that significantly impacts the ability for reaching full potential;
WHEREAS, afterschool professionals deserve appreciation for all that they do for children to enhance their education, promote physical and emotional health, provide a safe environment and expose them to new experiences; and
WHEREAS, The City of Garden Grove is committed to supporting the professionals who provide expanded learning opportunities that will help close the achievement gap and prepare young people to compete in the global economy.

NOW THEREFORE, the Garden Grove City Council does hereby proclaim April 22-26, 2024, as Afterschool Professionals Appreciation Week in Garden Grove in recognition of all of the efforts from afterschool professionals working with our children by instilling a sense of belonging to a larger community with shared goals for making life better for the children they serve.

April 9, 2024

12 City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Teresa Pomeroy
Dept:

City Manager Dept: City Clerk
Date: 4/9/2024

Subject: Adoption of a Proclamation recognizing April as Child Abuse Prevention Month. (Action Item)

Attached is a Proclamation recognizing April as Child Abuse Prevention Month recommended for adoption.

ATTACHMENT(S):

1. Proclamation

13 PROCLAMATION
April as National Child Abuse Prevention Month
WHEREAS, In Garden Grove, as in any community, children are our most precious members who deserve to grow in a safe, happy, healthy, stable, and caring environment where they can experience the wonders and innocence of a childhood free of violence, neglect, and abuse;
WHEREAS, the latest data is based on federal fiscal year 2021, a nationally estimated 3,016,000 children received either an investigation response or alternative response at a rate of 40.7 children per 1,000 in population; WHEREAS, in federal fiscal year 2021, 51 states reported 588,229 victims of child abuse and neglect that equates to a national rate of 8.1 victims per 1,000 children, and estimating for missing data, there are 60 0,000 victims of maltreatment;
WHEREAS, child abuse and neglect can have long-term psychological, emotional, and physical effects that have lasting consequences;
WHEREAS, protective factors are conditions that reduce or eliminate risk and promote the social, emotional, and developmental well-being of children; WHEREAS, effective prevention activities succeed because of the partnerships created between child welfare professionals, education, health, community and faith based organizations, businesses, law en forcement agencies, and families;
WHEREAS, the City of Garden Grove actively places efforts in raising awareness and preventing child abuse through family support services offered by the Magnolia Park Family Resource Center and the Buena Clinton Youth and Family Center;
WHEREAS, we acknowledge that we must work together as a community to increase awareness about child abuse and contribute to promote the social and emotional well -being of children and families in a safe, stable, and nurturing environment; and
WHEREAS, prevention remains the best defense for our children and families.

NOW THEREFORE, the Garden Grove City Council does hereby proclaim April 20 23 as National Child Abuse Prevention Month in Garden Grove, and urges all communities to take actions to end the tragedy of child abuse and neglect in our nation.

April 9, 2024
14 City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Patricia Song
Dept:

City Manager Dept: Finance
Date: 4/9/2024

Subject: Adoption of a Resolution amending the City of Garden Grove Debt Management Policy. (Joint Action Item with the Sanitary District)

OBJECTIVE
For the City Council and the Garden Grove Sanitary District to jointly consider the adoption of a resolution amending the City of Garden Grove Debt Management Policy.

BACKGROUND
The City Council adopted the current Debt Management Policy (the Policy) pursuant to Resolution No. 9408-17 on January 24, 2017 to comply with state law (SB 1029 – Government Code Section 8855 (i )). Regularly updated polices and procedures are important tools to ensure the use of the City’s resources to meet its commitments and maintain sound financial management practices. Staff is now amending the Policy to add sections pertaining to the City’s disclosure obligations when issuing new debt, and restructuring the Policy layout for easier reference.

DISCUSSION
The Policy has been restructured into four sections. Section One sets the objectives of the Policy, which are to maintain accountability for the fiscal health of the City, enhance transparency of the City’s financing program, attain the best possible credit rating for each debt issue to reduce borrowing costs, select the most cost effective method of debt offering, and preser ve financial flexibility and meet capital funding requirements.

Section Two covers seven aspects of the policy standards, including the purpose of debt issuance, types of allowable debt, methods of debt offering, issuance costs and fees, debt refunding, debt limits and debt structure. 15

Much of the amendments were included in Section Three, Compliance. Compliance requirements cover from the use and investment of debt proceeds, arbitrage rebate calculation, post-issuance compliance, and disclosure requirements. The City must comply with the “anti-fraud rules” of federal securities laws and regulations that are enforced by the Security Exchange Commission (SEC). The proposed amendment ensures that the City continues to comply with all applicable disclosure obligations and requirements and the federal securities laws and is also consistent with best practices as recommended by the Government Finance Officers Association (GFOA) and the California Society of Municipal Finance Officers (CSMFO).

The last Section of the Policy provides provisions for City staff to utilize professional services when issuing or refinancing debts.

FINANCIAL IMPACT
The adoption of the resolution to amend the City’s Debt Management Policy does not have a financial impact. The Policy standardizes the issuance and management of debt by the City as well as its component units, and promotes accountability, transparency, and economic growth of the City.

RECOMMENDATION

It is recommended that the City Council:
 Adopt the attached resolution amending the City of Garden Grove Debt Management Policy.

ATTACHMENT(S):

1. Attachment 1 - Resolution

2. Attachment 2 - City of Garden Grove Debt Management Policy

16 RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GARDEN GROVE APPROVING AN AMENDMENT TO THE CITY’S DEBT MANAGEMENT
POLICY

WHEREAS, the City of Garden Grove , California (the “City”) is a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California;
WHEREAS, the City Council has adopted a Debt Management Policy pursuant to Resolution No. 9408-17;
WHEREAS, from time to time the City incurs debt and other obligations (collectively, “Obligations”) in order to fund or refund capital investments, or other short -term and long -term programs; and
WHEREAS, in offering Obligations to the public, and at other times when the City makes certain reports, the City must comply with the “anti-fraud rules” of federal securities laws (the “anti- fraud rules” includes Section 17 of the Securities Act of 1933 [15 U.S.C. § 77a, et seq.] and Section 10(b) of the Securities and Exchange Act of 1934 [15 U.S.C.A. § 78j], and regulations promulgated by the Securities and Exchange Commission under those Acts (particularly “Rule 10b-5” under the 1934 Act at 17 C.F.R. § 240.10b–5); and WHEREAS, the City Council of the City now desires to amend the Debt Policy to ensure the City’s compliance with the federal securities laws in connection with the offering of Obligations to the public as well as other rules and regulations.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Garden Grove that the Debt Management Policy be approved and adopted.

PASSED AND ADOPTED this 9th day of April, 2024.

Mayor of the City of Garden Grove
ATTEST:

City Clerk of the City of Garden Grove

17 STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

CITY OF GARDEN GROVE )
I, Teresa Pomeroy, City Clerk of said City, do hereby certify that the foregoing Resolution was duly adopted by the City Council of said City and was signed by the Mayor of said City at an adjourned regular meeting of said City Council held on the 9th day of April, 202 4 and was approved by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

CITY CLERK
BY:

City Clerk of the City of Garden Grove

18 City of Garden Grove

DEBT MANAGEMENT POLICY

Amended April 2024
19 CITY OF GARDEN GROVE

DEBT MANAGEMENT POLICY

TABLE OF CONTENTS

PAGE

1. Objectives 1

2. Policy Components ....................................................................... 1 A. Purpose of Issuance............................................................. 1 B. Types of Debt ..................................................................... 2 C. Method of Offering .............................................................. 6 D. Cost and Fees ..................................................................... 7 E. Refunding Debt ................................................................... 7 F. Debt Limits ......................................................................... 7 G. Debt Structure .................................................................... 8

3. Compliance .................................................................................. 8 A. Use of Proceeds .................................................................. 8 B. Investment of Proceeds........................................................ 9 C. Arbitrage Rebate ................................................................. 9 D. Post-Issuance Compliance .................................................... 9 E. Disclosure Requirements ...................................................... 10

4. Professional Assistance ................................................................. 14

20 CITY OF GARDEN GROVE

DEBT MANAGEMENT POLICY

This Debt Management Policy (the Policy) is enacted to standardize the issuance and management of debt by the City of Garden Grove and its component units.

The Policy applies to all debt issued by the City and its component units. To ensure the efficient use of the City's re sources to meet its commitments and the needs of the citizens, and to maintain sound financial management practices, the Policy may be updated and resubmitted to the City Council periodically. These guidelines are for general use and allow for exceptions under extraordinary conditions.

The Policy is intended to comply with all applicable Government Codes, rules and regulations.

1. OBJECTIVES

The primary objectives of the Policy are:
 Maintain accountability for the fiscal health of the City;  Enhance transparency of the City’s financing programs;  Attain the best possible credit rating for each debt issue to reduce borrowing costs;
 Select the most cost effective method of debt offering; and  Preserve financial flexibility and meet capital funding requirements.

Debt, properly issued and managed, is a critical element in any financial management program. It assists in the City’s effort to allocate limited resources to provide the highest quality of service to the public. A properly managed debt program promotes economic growth and enhances the vitality of the City of Garden Grove for its residents and businesses.

2. POLICIE COMPONENTS

A. Purpose of Issuance

The City shall integrate its debt issuance with its Capital Improvement Program (CIP) spending to ensure that planned financing conforms to Council established priorities and the overall impact of the current and future debt burden . This planning considers the long-term horizon, paying particular attention to financing priorities, capital outlays and competing projects.

Long-term borrowing shall be confined to the acquisition and/or construction of capital improvements and shall not be used to fund operating or maintenance costs. For all capital projects under consideration, the City shall set aside sufficient revenue from operations to fund ongoing normal m aintenance needs and to provide reserves for periodic replacement and renewal. Capital improvement planning shall be conducted in accordance with the City ’s c omprehensive Infrastructure Funding Policy (Council Policy Number 200-12). 21 DEBT MANAGEMENT POLICY
PAGE 2

The issuance of debt to fund operating deficits is not permitted. The issuance of short-term cash-flow instruments is excluded from this limitation.

B. Types of Debt

In order to maximize the financial options available to benefit the public, it is the policy of the City to allo w for the consideration of issuing all generally accepted types of debt, including, but not exclusive to the following:

 General Obligation (GO) Bonds

General Obligation Bonds are suitable for use in the construction or acquisition of improvements to real property that benefit the public at large.

Examples of projects include libraries, parks, and public safety facilities.

GO bonds may be considered where there is no other funding source available to meet project costs.

All GO bonds shall be authorized by the requisite number of voters in order to pass.

 Revenue Bonds/Certificates of Participation (COPs)

Revenue Bonds are limited-liability obligations tied to a specific enterprise or special fund revenue stream where the projects financed clearly benefit or relate to the enterprise or are otherwise permissible uses of the special revenue. Genera lly, no voter approval is required to issue this type of obligation but in some cases, the City must comply with proposition 218 regarding rate adjustments.

The following criteria will be used to evaluate the financing:
1) Revenues available for debt service are deemed to be sufficient and reliable for the term of the bonds;
2) The project securing the financing is of the type that will support an investment grade credit rating.
3) Market conditions present favorable interest rates and demand for the financing.
4) The project has been approved by the City Council either through the adopted CIP budget or through City Council actions.
5) The project is essential to meet or relieve capacity needs and current resources are insufficient or unavailable.
6) The useful life of the project or asset to be financed is at least equal to the term of the bonds to be issued.

This type of obligation is often structured as Lease Revenue Bonds or Certificates of Participation (COP’s). If so structured, debt service shall not exceed the fair rental value of the leased asset for the term of the lease.

22 DEBT MANAGEMENT POLICY
PAGE 3

Lease-Backed Debt does not constitute indebtedness under the State or the City’s constitutional debt limit and does not require voter approval. Lease Revenue Bonds may be issued by the Garden Grove Public Financing Authority on behalf of the City.

 Joint Powers Authority (JPA) Revenue Bonds

As an alternative to COPs, the City may obtain finan cing through the issuance of debt by a joint exercise of powers agency with such debt payable from amounts paid by the City under a lease, installment sale agreement, or contract of indebtedness.

 Loans

The City is authorized to enter into loans, installment payment obligations, or other similar funding structures secured by a prudent source, or sources of repayment.

 Special Assessment/Special District Debt:

The City will consider requests from developers for the use of debt financing secured by property based assessments or special taxes in order to provide for necessary infrastructure for new development under guidelines adopted by City Council, which may include minimum value -to-lien ratios and maximum tax burdens. Examples of this type of debt are Assessment Districts (AD) and Community Facilities Districts (CFD) or more commonly known as Mello-Roos Districts. In order to protect bondholders as well as the City’s credit rating, the City will also comply with all State guidelines regarding the issuance of special district or special assessment debt.

 Tax Allocation Bonds

Tax Allocation Bonds are special obligations that are secured by the allocation of tax increment revenues that are generated by increased property taxes in the designated redevelopment area. Tax Allocation Bonds are not debt of the City. Due to changes in the law affecting California redevelopment agencies with the passage of ABX1 26 (as amended, the Dissolution Act) as codified in the California Health and Safety Code, the Garden Grove Agency for Community Development (RDA) was dissolved as of February 1, 2012, and its operations substantially eliminated but for the continuation of certain enforceable RDA obligations to be administered by the Successor Agency to the Garden Grove Agency for Community Development (Successor Agency). The Successor Agency may issue Tax Allocation Bonds to refinance out standing obligations of the RDA, subject to limitations included in the Dissolution Act.

23 DEBT MANAGEMENT POLICY
PAGE 4

 Multi-Family Mortgage Revenue Bonds

The City is authorized to issue mortgage revenue bonds to finance the development, acquisition, and rehabilitation of multi-family rental projects.

The interest on the bonds can be exempt from Federal and State taxation.

As a result, bonds provide below market financing for qualified rental projects. In addition, the bonds issued can qualify projects for allocations of Federal low-income housing tax credits, which can provide a significant portion of the funding necessary to develop affordable housing.

 HUD Section 108 Loan Guarantee Program

The U.S. Department of Housing and Urban Development (HUD) Section 108 Loan Guarantee Program allows cities to use their annual Community Development Block Grant (CDBG) entitlement grants to obtain federally guaranteed funds large enough to stimulate or pay for major community development and economic development projects. The program does not require a pledge of the City’s General Fund, only of future CDBG entitlements. By pledging future CDBG entitlement grants as security, the City can borrow at favorable interest rates because of HUD’s guarantee of repayment to investors.

 Conduit Financing

The City may sponsor conduit financing for the activities that have a general public purpose and are consistent with the City's overall service and policy objectives, including economic development, housing, and public health. All conduit financing must insulate the City completely from any credit risk or exposure. The City will determine if it is interested in considering a request for conduit financing and establish the ground rules for evaluating the request on a case by case basis with the following criteria and procedures:

1) There is a clearly articulated public purpose in providing the conduit financing.

2) The applicant is capable of achieving this public purpose.

3) The proposed financing meets the City’s minimum credit standards for conduit financings.

4) The Finance Director in consultation with the City’s municipal advisor reviews the proposed terms of the financing to determine if the project is appropriate for City sponsorship and that the proposed financing structure will adequately insulate th e City from any and all financial risks.

24 DEBT MANAGEMENT POLICY
PAGE 5

5) The City’s bond counsel will review the terms of the financing, and render an opinion that there will be no liability to the City in issuing the bonds on behalf of the applicant.

6) Present the evaluation results and recommendation to the City Council for the approval of the conduit financing request.

The City may, at its sole discretion, require additional protections including but not limited to asset appraisals, financial audits of the non -City participants, and additional security.

The City may seek an initial deposit and issuer fee to cover costs relate to such financing and may request for reimbursement if additional costs are incurred.

The City Council may elect to participate in other conduit type financings that are administered by County or statewide financing authorities if it is determined to be in the best interest of the City. As stated above, there must be no liability or risk to the City to participate in these programs.

Additional deposits or fees shall be determined by the Finance Director based on the specifics of the financing.

The City may from time to time find that other forms of financing would be beneficial to further its public purposes and may approve such debt without an amendment of this Policy.

C. Method of Offering

The City shall evaluate the best method of sale for each proposed bond issue, including:

 Competitive sale

In a competitive sale, bids for the purchase of the bonds are opened at a specified place and time and are awarded to the underwriter whose confirming bid represents the lowest true interest cost to the City.

 Negotiated sale

When a negotiated sale is deemed advantageous in consultation with the City’s Municipal Advisor, the Finance Director shall negotiate the most competitive pricing on debt issues and underwriter discounts in order to ensure the best value to the City. In a n egotiated sale, the underwriter may be selected based on a formal RFP process. The Ci ty, with the assistance of its municipal advisor, shall evaluate the RFP on prices, interest rates, fees, and discounts. Criteria for selection will be determined on a 25 DEBT MANAGEMENT POLICY
PAGE 6

case by case basis. No debt issue will be sold on a negotiated basis without an independent municipal advisor.

 Private placement

In certain instances, the City may determine to utilize private placements or offerings to specially defined or otherwise limited investor types, but will only do so in the absence of other avenues for acquiring the required capital in a more cost effective manner or in instances where the purpose is determined to be of significant strategic importance to the City. Any and all private placement offerings which do not include a private placement memorandum (executed by the City) in compliance with Securities and Exchange Commission Rule 15c2-12 prepared by counsel delivery, a 10b5 Opinion, shall require the purchaser(s) to each del iver a “Sophisticated Investor Letter” prepared in a form acceptable to the City’s bond counsel where the buyer(s) represent they have completed their own due diligence regarding the investment, have not relied on information provided by the City except as explicitly stipulated therein, and are able and qualified to purchase without an official statement or disclosure document prepared in compliance with federal and/or state securities laws.

D. Cost and Fees

All costs and fees related to the issuance of debt will be paid o ut of debt proceeds. An amount will be determined at the time of the issuance to reimburse the City for costs incurred based on the time factors and complexity of the issue.

Where applicable, the annual, recurring costs to the City of administering the debt are charged to the appropriate debt service, enterprise or agency funds.

E. Refunding Debt

Periodic reviews of all outstanding debt will be undertaken by the Finance Director and the City’s municipal advisor to determine refunding (refinancing) opportunities.

The purpose of the refinancing may be to:

 Achieve or monetize debt service cost savings;

 Eliminate restrictive or burdensome bond covenants;

 Restructure debt to shorten the duration of repayment, relieve debt service spikes, reduce volatility in interest rates or free up reserve funds, or

 Alter debt characteristics such as call provisions or payment dates. 26 DEBT MANAGEMENT POLICY
PAGE 7

Generally, the City shall striv e to achieve a minimum of 3% present value savings for a current r efunding and a minimum of 5% present value savings for an advance refunding , net of issuance costs . Upon the advice of the Finance Director and with the assistance of a municipal advisor and bond counsel, the City will consider undertaking refundings for other than economic purposes upon a finding that such a restructuring is in the City’s overall best financial interest.

F. Debt Limits

The City will keep outstanding debt within the limits prescribed by State of California statutes and at levels consistent with credit objectives. There is no statutory restriction on the amount of revenue bonds that can be outstanding at any given time. However, each proposed financing will be individually assessed by the Finance Director and subject to the approval of the City Council.

G. Debt Structure

The City will normally issue debt with an average term of 30 years or less. The structure should approximate level debt service for the term where it is practical. Debt will be structured in such a way as to avoid increasing debt service payments in subsequent years, with the exception of the first a nd second year of a debt payoff schedule. Variable rate debt may be considered for utility debt when determined to be in the best interest of the City. There will always be at least interest paid in the first fiscal year after debt issuance and principal starting no later than the second fiscal year. Capitalized Interest will not be for a period of more than one year except for a City initiated project where the construction period exceeds one year.

3. COMPLIANCE

When issuing debt, in addition to complying with the terms of this Policy, the City shall comply with any other applicable policies regarding initial bond disclosure, continuing disclosure, post -issuance compliance, and investment of bond proceeds. The Director of Finance has the responsibility to determine and oversee internal control procedures to ensure compliance.

The City will periodically review the requirements of and will remain in compliance with the following:

 Federal securities law, including any continuing disclosure undertakings under SEC Rule 15c2-12;

 Any federal tax compliance requirements, including without limitation arbitrage and rebate compliance, related to any prior bond issues; 27 DEBT MANAGEMENT POLICY
PAGE 8

 The City’s investment policies as they relate to the investment of bond proceeds; and

 Government Code section 8855(k) and the annual reporting requirements therein.

A. Use of Proceeds

The City shall be vigilant in using bond proceeds in accordance with the stated purpose at the ti me that such debt was issued. Whenever reasonably possible, proceeds of debt will be held by a third -party trustee and the City will submit written requisitions for such proceeds. The City will submit a requisition only after obtaining the signature of t he City Manager or the Director of Finance.

B. Investment of Proceeds

The City shall comply with all applicable Federal, State and contractual restrictions regarding the investment of bond proceeds. This includes compliance with restrictions on the types of inve stment securities allowed, restrictions on the allowable yield of invested funds as well as restriction on the time period over which the proceeds may be invested.

C. Arbitrage Rebate

Due to the complexity of arbitrage rebate regulations and the severity of non- compliance penalties, the City shall contract with an independent consultant for preparation of the arbitrage rebate calculation in accordance with the IRS code and regulations.

The City shall maintain an internal system for tracking expenditure of bond proceeds and investment earnings by each issue with the assistance from its fiscal agent(s).

D. Post-Issuance Compliance

Tax-exempt bonds issued by the City retain their tax -exempt status throughout the life of the issue if all applicable federal tax laws are satisfied while the bonds are outstanding. Various requirements apply under the Internal Revenue Code and Income Tax Regulations including information filing and other requirements related to issuance, the proper and timely use of bond -financed property, and arbitrage y ield restriction and rebate requirements.

The Finance Director is responsible for ensuring that the rules are met at the time the bonds are issued and throughout the term of the bonds. This 28 DEBT MANAGEMENT POLICY
PAGE 9

requires coordination and accountability on the part of other City departments with respect to the expenditure of bond proceeds and the continued proper use and operation of the facilities financed. It also requires proper maintenance of records sufficient to establish compliance w ith all applicable federal tax requirements until three years after the final maturity of the bonds.

Specific written procedures are on file with the Finance Department for the ongoing administration and maintenance of the City’s bond issues. These written procedures address the internal control procedures used to ensure that debt proceeds are directed for their intended use.

E. Disclosure Requirements

In offering obligations to the public, and at other times when the City makes certain reports, the City must comply with the “anti -fraud rules” of federal securities laws (the “anti -fraud rules” includes Section 17 of the Securities Act of 1933 [15 U.S.C. § 77a, et seq.] and Section 10(b) of the Securities and Exchange Act of 1934 [15 U.S.C.A. § 78j], and regulations promulgated by the Securities and Exchange Commiss ion under those Acts (particularly “Rule 10b-5” under the 1934 Act at 17 C.F.R. § 240.10b–5).

The core requirement of these rules is that potential investors in obligations must be provided with all “material” information relating to the offered obligations. The information provided to investors must not contain any material misstatements, and the City must not omit material information which would be necessary to provide to investors a complete and transparent description of the obligations and the City’s financial condition.

When the City issues obligations, the two central disclosure documents which are prepared are a preliminary official statement (“POS”) and a final official statement (“OS”); collectively with the POS, “Official Statement”). The Official Statement includes pertinent information to assist investors in making informed investment decisions regarding the City’s obligations.

 Engagement of Outside Disclosure Counsel

The City engages outside legal counsel with expertise in securities laws for advice with respect to the City’s disclosure obligations and requirements under the federal securities laws (“Disclosure Counsel”).

Disclosure Counsel assists the City in preparing the Official Statement and reviews all new data and updates to the Official Statement. Throughout the process of receiving and incorporating material, Disclosure Counsel provides advice as to standards of materiality and other securities law issues. Disclosure Counsel has a confidential, attorney-client relationship with the City.

29 DEBT MANAGEMENT POLICY
PAGE 10

Disclosure Counsel provides a negative assurance letter to the underwriters as to the disclosure set forth in the Official Statement for each Obligation. The letter advises the underwriters that, as a matter of fact and not opinion, no information came to the attention of the attorneys working on the transaction which caused them to believe that the Official Statement as of its date and as of the date of their letter (except for any financial, statistical, economic or demographic data or forecasts, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, and other customary exclusions), contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 Disclosure Process

When the City determines to issue obligations, Department Directors shall commence the preparat ion of the Official Statement sections for which they are responsible. Additionally, all participants in the disclosure process are separately responsible for reviewing the entire Official Statement.

The Disclosure Counsel and the City’s Municipal Advisor shall assist the Finance Director and City Manager in determining the materiality of any particular item, and the development of specific language in the Official Statement. The Finance Director sh all manage the process of reviewing the POS and OS, as well as all other disclosure and offering documents, and will send comments to the assigned disclosure counsel for each particular obligation. The drafts of all disclosure and offering documents shall be reviewed by the financing team working group (which includes, City officials, municipal advisor, Bond and Disclosure counsel, the underwriter and the underwriter’s counsel) and other assigned parties.

Before distributing a POS to potential investors, there is a formal meeting which includes City officials involved in the preparation of the POS and the underwriters and their counsel, during which the Official Statement is reviewed in its entirety. This is referred to as a “due diligence” meeting.

In connection with the closing of the transaction, one or more senior City officials execute certificates stating that certain portions of the OS do not contain any untrue statements of material information or omit to state any material information necessary to make the statements contained in the OS, not misleading.

 Development of Information for the Obligation

The following principles govern the work of the respective City personnel that contribute information to the disclosure and offering documents:
30 DEBT MANAGEMENT POLICY
PAGE 11

­ City employees involved in the disclosure process are responsible for being familiar with federal securities laws as they relate to disclosure.

­ City employees involved in the disclosure process should be instructed to err on the side of raising issues when preparing or reviewing information for disclosure. Officials and other personnel are encouraged to consult with Disclosure Counsel if there are questions regarding whether an issue is material or not.

­ The process of updating Official Statements fro m transaction to transaction should not be viewed as being limited to updating tables and numerical information. While it is not anticipated that there will be major changes in the form and content of the Official Statements, everyone involved in the proce ss should consider the need for revisions in the form, content and tone of the sections for which they are responsible at the time of each update.

­ The City must make sure that the particular officials involved in the disclosure process are of sufficient seniority such that it is reasonable to believe that, collectively, they are in possession of material information relating to the City and its finances.

 Training

Periodic training for the personnel involved in the preparation of the all disclosure and o ffering documents is coordinated by the office of the Finance Director, with the assistance of Disclosure Counsel. These training sessions are provided to identify relevant disclosure information to be included in all disclosure and offering documents. The training sessions also provide an overview of federal laws relating to disclosure, situations in which disclosure rules apply, the purpose of the offering documents (such as, the POS & OS), a description of previous SEC enforcement actions and a discussion of recent developments in the area of municipal disclosure.

 Annual Continuing Disclosure Requirements

In connection with issuing of debt, the City enter s into a number of agreements (“Continuing Disclosure Certificates”) to provide annual reports related to its financial condition (including its audited financial statements) as well as notice of certain events relating to the Obligations specified in the Continuing Disclosure Certificates. The City must comply with the specific requirements of each Continuing Disclosure Certificate.

The City’s Continuing Disclosure Certificates generally require that the annual reports be filed within nine months after the end of the City’s fiscal 31 DEBT MANAGEMENT POLICY
PAGE 12

year, and event notices are generally required to be filed within 10 days of their occurrence.

Specific events which require “enumerated event” notices are set forth in each particular Continuing Disclosure Certificate.

The Finance Director is responsible for preparing and filing the annual reports and enumerated event notices required pursuant to the Continuing Disclosure Certificates and for other secondary market disclosures as described under the caption “Secondary Market Disclosure.” Particular care must be paid to the timely filing of any changes in credit ratings on obligations (including changes resulting from changes in the credit ratings of insurers of particular obligations).

The City Attorney or Finance Director will provide written notice to the City Council and the Board of Directors of the Authority of any receipt by the City or the Authority of any default, event of acceleration, termination event, modification of terms (only if material or may reflect financial difficulties), or other similar events (collectively, a “Potentially Reportable Event”) under any agreement or obligation to which the City is a party and which may be a “financial obligation”. If filing on Electronic Municipal Market Access (“EMMA”) is required, the filing is due within 10 business days of such Potentially Reportable Event to compl y with the continuing disclosure undertaking for the various debt obligations of the City. The Finance Director will notify the City Council and the Board of Directors of the Authority of such events.

The City Attorney or Finance Director will report to th e City Council and the Board of Directors of the Authority regarding the execution by the City of any agreement or other obligation which might constitute a “financial obligation” for purposes of disclosure requirements of SEC Rule 15c2-12.

The Finance Dir ector shall determine whether such agreement or other obligation constitutes a material “financial obligation”. The types of agreements of other obligations that could constitute “financial obligations” and would need to be reported on EMMA include:

1) Bank loans or other obligations which are privately placed;

2) State or federal loans;

3) Commercial paper or other short -term indebtedness for which no offering document has been filed on EMMA;

4) Letters of credit, surety policies or other credit enhancemen t with respect to the City’s publicly offered debt;

5) Letters of credit, including letters of credit which are provided to third parties to secure the City’s obligation to pay or perform (an example 32 DEBT MANAGEMENT POLICY
PAGE 13

of this is a standby letter of credit delivered to secur e the City’s obligations for performance under a mitigation agreement);

6) Capital leases for property, facilities, fleet or equipment; and

7) Agreements which guarantee the payment or performance obligations of a third party (regardless of whether the agr eements constitute guarantees under California law).

Types of agreements that could be a “financial obligation” under the Rule include:

1) Payment agreements which obligate the City to pay a share of another public agency’s debt service (for example, an ag reement with a joint powers agency whereby the City agrees to pay a share of the joint powers agency’s bonds, notes or other obligations); and

2) Service contracts with a public agency or a private party pursuant to which the City is obligated to pay a sha re of such public agency or private party’s debt service obligation (for example, certain types of Public-Private Partnership arrangements).

Additionally, agreements that may be a “financial obligati on” subject to the Rule include payments under which are not characterized as an operation and maintenance expenses for accounting purposes if such agreement could be characterized as the borrowing of money.

The Finance Director will continue to work with the City Attorney and Bond and Disclosure Counsel to refine the definition of financial obligation going forward based on future SEC guidance.

 Secondary Market Disclosure

On February 7, 2020, the SEC released a staff legal bulletin (the “Bulletin”) concerning secondary market disclosure in the municipal bond market. The Bulletin included SEC views on a variety of matters including, without limitation, the applicability of the federal securities law to public agency websites, reports delivered to governmental and inst itutional bodies and statements made by public officials including elected board members. Documents, reports and other written statements of the City which contain current financial and operational conditions of the City will be included in a section of the City’s website appropriately identified. The City and its Bond and Disclosure Counsel have reviewed the Bulletin and have incorporated certain SEC staff recommendations into this Policy and into disclosure training for staff and City Council members. The City and its Bond and Disclosure Counsel will be cognizant of those reviews and 33 DEBT MANAGEMENT POLICY
PAGE 14

will consider whether those reviews require the City to make secondary market disclosures.

4. PROFESSIONAL ASSISTANCE

The City shall utilize the s ervices of independent municipal advisors and bond counsel on all debt financings. The Finance Director shall have the authority to periodically select service providers as necessary to meet legal requirements and minimize cost. Such services, depending on the type of financing, may include municipal advisory, underwriting, trustee, bond counse l, disclosure counsel, verification agent, escrow agent, arbitrage consulting, continuing disclosure, and special tax consulting. Depending upon the circumstances, service providers may be selected through a competitive process when appropriate.

34 City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Matt West
Dept:

City Manager Dept: City Manager
Date: 4/9/2024

Subject: Approval of overnight travel to attend the Southern California Association of Governments (SCAG) 2024 Regional Conference and General Assembly (Cost:
$1,000) (Action Item)

OBJECTIVE
For the City Council to approve overnight travel to attend the Southern California Association of Governments (SCAG) 2024 Regional Conference and General Assembly from May 2, through May 3, 2024 in Palm Desert, California.

BACKGROUND
Founded in 1965, SCAG is a Joint Powers Authority under California state law, established as an association of local governments and agencies that voluntarily convene as a forum to address regional issues. Under federal law, SCAG is designated as a Metropolitan Planning Organization (MPO) and under state law as a Regional Transportation Planning Agency and a Council of Governments. The SCAG region encompasses six counties (Imperial, Los Angeles, Orange, Riverside, San Bernardino and Ventura) and 191 cities in an area covering more than 38,000 square miles. The agency develops long -range regional tr ansportation plans including sustainable communities’ strategy and growth forecast components, regional transportation improvement programs, regional housing needs allocations and a portion of the South Coast Air Quality management plans.

In accordance w ith City Council Policy Number 100 -17, the City Council approved overnight conference and training expenditures during the FY 2023-24 and FY 2024- 25 budget adoption process (see attached). At the time of budget approval, the SCAG conference was not included on the overnight conference and training list. The City Council is being requested to add the SCAG conference to the approved list of conferences under the City Manager's Office, and authorize the City Manager, or designee, to attend the conference.

35

Per City Council Policy Number 100-19, the City Council is also being requested to 1) concur that the costs incurred in attending the SCAG conference are justified based on the benefits of attending (additional detail in the below “Discussion” section of this staff report) and 2) authorize and approve overnight travel for one (1) City Council member. The costs associated with the conference are provided in the “Fiscal Impact” section of this staff report.

DISCUSSION
The upcoming SCAG 2024 Regional Conference and General Assembly presents a valuable opportunity for the City to promote its commitment to the region and meet with elected officials, decision makers, community leaders, and business stakeholders through Southern California. The 20 24 Regional Conference will bring together local and regional leaders to share and learn from each other on topics including the future of mobility, housing and community, the environment and economic resilience.

FINANCIAL IMPACT
The cost for the City Council member and designee from the City Manager’s Office to attend the conference is estimated at $1,000. No additional appropriation is needed as funds are available within the FY 23-24 approved budget.

RECOMMENDATION

It is recommended that the City Council:
 Concur that the costs incurred in attending the SCAG conference are justified based on the benefits of attending, add the SCAG conference to the approved list of conferences for the City Manager's Office, and authorize the City Manager, or designee, to attend the conference; and
 Approve the overnight travel for one (1) Council Member to attend the SCAG conference.

By: Shawn Park, Sr. Administrative Analyst

ATTACHMENT(S):

1. Overnight Conference and Training List 2023-25

36 City of Garden Grove
FY 2023-24 & FY 2024-25 Budgets
Overnight Conferences, Training and Seminars

DEPARTMENT POSITION

CONFERENCES:

City Manager
ICMA Annual Conference City Manager, Assistant City Manager New Laws & Elections/CCAC Annual Conference City Clerk, Deputy City Clerk CAHA Housing Manager
Finance Officers Meetings (4) Housing Manager/ Housing Supervisor HAASC Housing Manager
HUD Training Housing Supervisor
LOCC City Manager, Assistant City Manager
NAHRO/HUD Housing Manager, Housing Supervisor
Community/Economic Development
ALIS Sr Proj Mgr, Project Mgr, Sr Program Specialist
APA Conference Director, Planning Mgr, Planning Staff
CACEO Annual Conference Code Officers
CAL CASp Seminar/ Annual Summit Bldg Official, Permit Ctr Supvsr, Plan Check Engr, Bldg Inspctr, Permit Tech CALED Annual Conference Director, Sr Proj Mgr, Project Mgr, Sr Program Specialist ICC Annual Conference Bldg Official, Permit Ctr Supvsr, Bldg Spvsr ICSC RECon Director, Sr Proj Mgr, Project Mgr, Sr Program Specialist ICSC West Division Director, Sr Proj Mgr, Project Mgr, Sr Program Specialist NAHRO/HUD Neighborhood Improvement Manager
Finance
CALPERS Director, Acctg Mgr, Acctg Staff, Budget Mgr
CentralSquare User Conference CentralSquare Administrators CMRTA Annual Conference Bus Tax Spvsr, Bus Tax Inspctr, 2 Sr Acctg Specialists CSMFO Director, Acctg Mgr, Acctg Staff, Budget Mgr, Budget Staff PARMA Director, Risk Mgmt Staff
PRIMA Director, Risk Mgmt Staff

Human Resources
CALPELRA Annual Conference Director, Manager
PARMA Manager
Information Technology
MISAC IT Director, IT Manager
Rubyconf Sr IT Analyst
Central Square Users Conference IT Manager, Sr IT Analyst RSA Conference Sr IT Analyst
Vue.js Conference Programmer
Police
IACP Police Management Staff - TBD
ICAC Sexual Assault Detectives
CAHN Hostage Negotiators
Cal Chiefs Police Chief
CALEA CALEA Coordinator
CHIA Homicide Detective
CNOA SIU Officers
CRIA Robbery Detectives
Crime Intel Analyst Assn Crime Analyst
OCCSA Police Chief
Public Works
LOCC Public Works Director
State Humane Association Animal Control Officers
AWWA/WEF Utility Managers, Supervisors, Analyst, Program Specialist CWEA Managers, Supervisors, Analyst, Program Specialist CRRA Sr. Program Specialist
SWA of North America Sr. Program Specialist
WCISA Supervisor, Sr. Lead
Humane Pro Supervisor, Sr. Lead

1 37
City of Garden Grove
FY 2023-24 & FY 2024-25 Budgets
Overnight Conferences, Training and Seminars

DEPARTMENT POSITION

TRAINING AND SEMINARS:

City Manager's Office
LOCC City Manager Training City Manager, Assisant City Manager LOCC New Laws and Elections City Clerk, Deputy City Clerk Finance/HUD Housing Manager
HAMA/HUD Housing Mgr, Housing Supervisor, Sr Housing Spec Community/Ecomonic Development
AEP Current Planners
ALIS Sr Proj Mgr, Project Mgr, Sr Program Specialist
CALBO Leadership Academy Bldg Official, Permit Ctr Spvsr, Bldg Supvsr CEQA & GIS Current Planners
CTI Bldg. Inspector, Plans Examiner
IAPMO POA, Bldg Inspector, Permit Tech, Supervising Bldg Inspector NFPA Building Official, Bldg Inspector, Plan Check Engineer OCVA Tourism Conferences Sr Project Mgr, Project Mgr, Sr Program Specialist Open Streets National Summit/CICLAVIA Director, Planning Manger, Sr. Planner Community Services
CPRS Director, Manager, Supervisor
NRPA Director, Manager, Supervisor
Finance
CAPPO Purchasing Mgr
GFOA (Various Training) Acctg Mgr, Acctg Staff, Budget Mgr, Budget Staff Human Resources
CalPERS Annual Educational Forum Director, Manager
NEOGov Training Principal Personnel Analyst
PASMA Meetings Benefits Supervisor
Information Technology
CISSP Training Sr IT Analyst
ITIL Training IT Manager
Police
CalNENA Communications Mgr, Comm Supervisors
CALRO Resort Unit Officer, Intel Officer
CAPE Property & Evidence CSOs
CCPOA Crime Prevention CSOs
CVSA Training Background Investigators
FARA Ordinance Coordinator
Government Social Media Training PD Social Media Coordinator LEIU Lieutenant, Intel Officer
Non-POST Training Officers & Civilians
POST Reimbursable Classes Officers & Civilians
Spillman Users Conference Spillman Administrators
SWAT Training SWAT Team
Public Works
ISA/TRAQ Supervisor, Sr. Lead
San Diego Humane Law Academy Supervisor
2 38

City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: William E. Murray
Dept:

City Manager Dept: Public Works
Date: 4/9/2024

Subject: Approval of Amendment No 1 to the Cooperative Agreement with the City of Stanton for Fiscal Year 2023/24 Citywide Street Resurfacing Project (Cost:
$60,500) (Action Item)

OBJECTIVE
For City Council to approve Amendment No. 1 to the Cooperative Agreement between the City of Stanton and the City of Garden Grove for the FY 2023/24 Citywide Street Resurfacing Project (CP1380000).

BACKGROUND
On August 22, 2023, the City entered into a cooperative agreement with the City of Stanton as part of a citywide street resurfacing project which includes sections of Katella Avenue and Dale Street. Approximately 4,300 square feet of this intersection where work is expected to be completed falls within the City of Garden Grove.

The cooperative agreement was established for construction costs and construction administration of Garden Grove’s portion of the project (estimated at $7,690), with the City of Stanton to serve as lead agency.

DISCUSSION
Subsequent to the execution of the cooperative agreement, both cities agreed to an increased scope of work for Garden Grove’s portion of the project. On February 8, 2024, the City of Stanton held its bid opening. The City of Garden Grove’s portion of the lowest responsible bid was $55,000. Allowing for a 10% cont ingency, the amended cost is $60,500. Following receipt of this bid, the City of Stanton presented the City of Garden Grove with a proposed amendment to the existing cooperative agreement for an adjusted scope of work and construction cost.

39

FINANCIAL IMPACT
There is no financial impact to the General Fund. The funding for the new amount for the City of Garden Grove’s portion of the City of Stanton FY 2023/24 Citywide Street Resurfacing Project is included in the Fiscal Year 2023 -24 adopted C apital Improvement Plan budget and is funded by Gas Tax funds.

RECOMMENDATION

It is recommended that the City Council:
 Approve Amendment No. 1 to the Cooperative Agreement with the City of Stanton for the FY 2023/24 Citywide Street Resurfacing Project (CP1380000); and
 Authorize the City Manager to execute the amendment, and make minor modifications as appropriate, thereto, on behalf of the City.

By: Mark Uphus, Sr. Civil Engineer

ATTACHMENT(S):

1. Amendment No. 1

2. Cooperative Agreement

40 FIRST AMENDMENT TO COOPERATIVE AGREEMENT BY AND BETWEEN

THE CITY OF STANTON AND CITY OF GARDEN GROVE

This First Amendment to the Cooperative Agreement (“First Amendment”) is made and entered into on this ___ day of ___________, 2024 (“Effective Date”), by and between the City of Stanton, a California municipal corporation (“City”), and the City of Garden Grove (“Garden Grove”), a California municipal corporation. The City and Garde n Grove are sometimes referred to in this First Amendment as the “Parties.”

RECITALS
A. On August 22, 2023, the Parties executed the Cooperative Agreement (“Agreement”) to share the costs of rehabilitating designated portions of the intersection at Katella Avenue and Dale Avenue located within the boundaries of their respective cities.

B. To reflect the increased scope of work for Garden Grove’ s portions of the Katella Avenue and Dale Avenue intersection, the Parties now desire to amend the terms of the Agreement to increase Garden Grove’ s financial contribution for rehabilitation costs from $7,690.00 to $60,500.00.

TERMS
The Parties agree to the following terms:

1. Recitals. The Recitals included at the beginning of this First Amendment are true and correct and are made a part of this First Amendment. The Agreement is incorporated herein by reference and attached hereto as Attachment “1” of this First Amendment. Capitalized terms herein which are not otherwise defined herein shall have the respective meanings ascribed thereto in the Agreement.

2. Compensation. The third paragraph of the Agreement’s recitals is hereby amended to read as follows (additions made in underline and deletions made in strikethrough):

WHEREAS, GARDEN GROVE desires to have STANTON rehabilitate the GG PORTION of Katella Avenue and Dale Avenue in conjunction with the STANTON PORTION, collectively the "PROJECT", and STANTON is willing to do so. The exact location of the GARDEN GROVE is described in detail in the document a ttached hereto as Exhibit A, incorporated herein by this reference. The estimated cost of the GG PORTION, including a ten percent (10%) contingency, is Seven Thousand Six Hundred Ninety Sixty Thousand, Five Hundred Dollars ($ 7,690.00 60,500.00) (the "Esti mated Cost").

3. Remaining Provisions of Agreement. All terms, conditions, and other provisions of the Agreement, including all exhibits, not affected by this First Amendment , shall remain in full force and effect. If there is any conflict between the terms o f this First Amendment and the Agreement, the provisions in this First Amendment shall govern. 41 4. Multiple Counterparts . This First Amendment may be executed in one or more counterparts, each of which is deemed an original, but all of which together constitute one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE]
42 IN WITNESS WHEREOF, the Parties have executed this First Amendment to the Cooperative Agreement as of the Effective Date listed above.

CITY OF STANTON CITY OF GARDEN GROVE
By:

Hannah Shin-Heydorn
City Manager

By:

Lisa Kim
City Manager, Garden Grove
ATTEST: ATTEST:

By:

Patricia Vazquez
City Clerk
By:

Teresa Pomeroy
City Clerk, Garden Grove
APPROVED AS TO FORM: APPROVED AS TO FORM:

By:

Best Best & Krieger LLP
City Attorney
By:

Omar Sandoval
City Attorney, Garden Grove

DATE OF EXECUTION: DATE OF EXECUTION:
_________________________________

_________________________________

43 44
45 46
47 City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: William E. Murray
Dept:

City Manager Dept: Public Works
Date: 4/9/2024

Subject: Authorization of the issuance of a purchase order to National Auto Fleet Group for three (3) new Police Department vehicles. (Cost: $134,521.23) (Action Item)

OBJECTIVE
To secure City Council authorization to purchase three (3) new Police Department vehicles from National Auto Fleet Group through the Sourcewell competitive bid program, Contract #091521-NAF.

BACKGROUND
The Public Works Department has three (3) Police Department vehicles that currently meet the City’s guidelines for replacement and were approved through the FY-23/24 budget process. The vehicles being replaced are a 2007 Ford Crown Victoria with 48,000 miles, VIN#2FAHP71W67X139500, a 2007 Ford Crown Victoria with 67,000 miles, VIN# 2FAHP71W17X132504, and a 2013 Ford Explorer with 119,000 miles, VIN# 1FM5K8ARXDGC20976.

DISCUSSION
Experience has shown that the City’s buying power is enhanced through joining with other public agencies to purchase fleet vehicles and equipment. Sourcewell nationally solicits, evaluates and awards contracts through a competitive bid process. As a member of Sourcewell, the City is able to utilize bid awards for equipment purchases. Staff recommends piggybackin g on the results of a recent Sourcewell competitive bid program, Contract #091521 -NAF. The results deemed National Auto Fleet Group as the lowest responsive bid.

National Auto Fleet Group $44,840.41*each

* This price includes all applicable tax and destination charges. 48

FINANCIAL IMPACT
There is no impact to the General Fund. Total cost for the purchase of the three (3) new Police Department vehicles is $134,521.23. Funds are budgeted in the Fleet Management internal service fund. The surplus equipment will be sold at public auction, and proceeds will be posted in the Fleet Management fund.

RECOMMENDATION

It is recommended that the City Council:
 Authorize the Finance Director to issue a purchase order in the amount of $134,521.23 to National Auto Fleet Group for the purchase of three (3) new Police Department vehicles.

By: Steve Sudduth, Equipment Maintenance Supervisor

ATTACHMENT(S):

1. Nation Auto Fleet Group Quote

49 50
51 52
53 54
55 56
57 City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: William E. Murray
Dept:

City Manager Dept: Public Works
Date: 4/9/2024

Subject: Authorization of the issuance of a purchase order to National Auto Fleet Group for two (2) new Public Works Department electric pickup trucks. (Cost:
$147,699.88) (Action Item)

OBJECTIVE
To secure City Council authorization to purchase two (2) new Public Works Department electric pickup trucks from National Auto Fleet Group through the Sourcewell competitive bid program, contract #091521-NAF.

BACKGROUND
The Public Works Department has two (2) pickup trucks that currently meet the City’s guidelines for replacement. These vehicles were approved through the FY 23/24 budget process. The vehicles being replaced are a 2008 Ford Ranger with 138,643 miles, VIN #1FTYR14DX8PA61001, and a 2012 Chevy Malibu with 96,640 miles, VIN #1G1ZB5E06CF163043.

DISCUSSION
Experience has shown that the City’s buying power is enhanced through joining with other public agencies to purchase fleet vehicles and equipment. Sourcewell nationally solicits, evaluates and awards contracts through a competitive bid process. As a member of Sourcewell, the City is able to utilize bid awards for equipment purchases. Staff recommends piggybacking on the results of a recent Sourcewell competitive bid program, contract #091521 -NAF. The results deemed National Auto Fleet Group as the lowest responsive bid.

National Auto Fleet Group $73,849.94* each
Two (2) Ford F-150 Lightning
crew cab electric pickup trucks
58

* This price includes all applicable tax and destination charges.

FINANCIAL IMPACT
There is no impact to the General Fund. Total cost for the purchase of two (2) new Public Works Department electric pickup trucks is $147,699.88. Funds are budgeted in the Fleet Management internal service fund. The surplus equipment will be sold at public auction, and proceeds will be posted in the Fleet Management fund.

RECOMMENDATION

It is recommended that the City Council:
 Authorize the Finance Director to issue a purchase order in the amount of $147,699.88 to National Auto Fleet Group for the purchase of two (2) new Public Works Department electric pickup trucks.

By: Steve Sudduth, Equipment Maintenance Supervisor

ATTACHMENT(S):

1. Nation Auto Fleet Group Quote

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City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Teresa Pomeroy
Dept:

City Manager Dept: City Clerk
Date: 4/9/2024

Subject: Receive and file minutes from the meetings held on March 12, 2024, and March 26, 2024. (Action Item)

Attached are the minutes from the meetings held on March 12, 2024, and March 26, 2024, recommended to be received and filed as submitted or amended.

ATTACHMENT(S):

1. Minutes - March 12, 2024

2. Minutes - March 26, 2024

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MINUTES

GARDEN GROVE CITY COUNCIL

Regular Meeting

Tuesday, March 12, 2024

Community Meeting Center
11300 Stanford Avenue, Garden Grove, CA 92840

CONVENE CLOSED SESSION

At 5:45 p.m., Mayor Jones convened closed session.

ROLL CALL PRESENT: (6) Council Members Brietigam, O’Neill, DoVinh, Klopfenstein, Nguyen-Penaloza, Mayor Jones

ABSENT: (1) Mayor Pro Tem Tran was absent at Roll Call
but joined the meeting at 6:42 p.m.

ORAL COMMUNICATIONS FOR CLOSED SESSION

Speakers: None.

CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Pursuant to Government Code Section 54956.8
City Property: 12966 Euclid Street
City Negotiator: Lisa Kim, City Manager
Negotiating Parties: Christine M. Walker, F&M Bank
Under Negotiation: To obtain direction regarding the price and terms of payment for a lease of space in the building at the property.

ADJOURN CLOSED SESSION

At 6:30 p.m., Mayor Jones adjourned closed session.

CONVENE REGULAR MEETING

At 6:35 p.m., Mayor Jones convened the meeting in the Council Chamber with Council Members Brieitgam, O’Neill, DoVinh, Klopfenstein, and Nguyen-Penaloza present.

INVOCATION
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PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA

COMMUNITY SPOTLIGHT IN RECOGNITION OF THE SCS TECHNACOLTS FOR THEIR FIRST LEGO LEAGUE CHALLENGE ACCOMPLISHMENTS (F: 83.1-2024)

COMMUNITY SPOTLIGHT IN RECOGNITION OF SISTER CITY ASSOCIATION OF

GARDEN GROVE EXCHANGE STUDENT AMBASSADORS VISITING ANYANG, REPUBLIC OF KOREA (F: 83.1-2024) (F: 102.3)

ORAL COMMUNICATIONS

Speakers: Randall Noline, Ron Skolzae, Lupe Lopez, Kyle Mason.

RECESS

At 7:09 p.m., Mayor Jones recessed the meeting.

RECONVENE

At 7:11 p.m., Mayor Jones reconvened the meeting with all Council Members present.

ADOPTION OF A PROCLAMATION CELEBRATING MARCH AS WOMEN’S HISTORY MONTH (F: 83.1-2024)

It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

A Proclamation be adopted celebrating March as Women’s History Month.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

RECEIVE AND FILE THE 2023 ANNUAL PROGRESS REPORT ON THE STATUS OF THE GENERAL PLAN (F: 20.2)

It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

The 2023 Annual Progress Report on the Status of the General Plan be received and filed; and
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Staff be authorized to transmit the annual Report to the Governor's Office of Planning and Research, and to the California Department of Housing and Community Development.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

ACCEPTANCE OF PROJECT COMPLETION FOR VARIOUS RESIDENTIAL STREETS RECONSTRUCTION 2023. (ACACIA-JOSEPHINE NEIGHBORHOOD) PROJECT NO. CP- 1259000 (F: 96.PROJ.CP-1259000)

It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

Project CP-1259000, Various Residential Streets Reconstruction 2023 (Acacia- Josephine neighborhood) be accepted as complete;
The City Manager be authorized to execute the Notice of Completion of Public Works Improvement and Work; and
The Finance Director be authorized to release the retention payment when appropriate to do so.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

APPROVAL OF OUT-OF-STATE TRAVEL TO ATTEND THE INNOVATING COMMERCE SERVING COMMUNITIES (ICSC) 2024 CONFERENCE FROM MAY 19, THROUGH MAY 21, 2024 (F: 46.1) (F: A-78.1)

It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

Costs, in the estimated amount of $8,000, incurred attending the ICSC conference be approved;
The Senior Program Specialist be approved for overnight travel to attend the conference;
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ICSC conference be approved on the list of conferences for the City Manager's Office;
The City Manager, or designee, be authorized to attend the conference; and Out-of-state travel for up to three Council Members to attend the ICSC conference, be approved.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

AUTHORIZATION FOR THE ISSUANCE OF A PURCHASE ORDER TO THE CHARLES MACHINE WORKS FOR ONE (1) NEW DITCH WITCH RIDE ON TRENCHER/ROOT PRUNER

It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

The Finance Director be authorized to issue a purchase order in the amount of $74,304.48 to The Charles Machine Works for the purchase of one (1) new Ditch Witch Trencher/Root pruner.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

AUTHORIZATION FOR TH E ISSUANCE OF A PURC HASE ORDER WITH HARB OR POINTE TO REPLACE FO UR (4) HEATING, VENT ILATION AND AIR CONDITIONING (HVAC) PACKAGE UNITS AT FIRE STATION 81
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

The Finance Director be authorized to issue a purchase order in the amount of $83,184 to Harbor Pointe for the replacement of four (4) HVAC package units at Fire Station 81.

The motion carried by a 7-0 vote as follows:

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Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
RECEIVE AND FILE MINUTES FROM THE MEETINGS HELD ON FEBRUARY 13, 2024 AND FEBRUARY 16, 2024 (F: Vault)
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

The Minutes from the meetings held on February 13, 2024, and February 16, 2024, be received and filed.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

WARRANTS
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

Demands covered by EFT numbers 00035558 through 00036193 and check numbers 00185668 through 00185679 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed;

Demands covered by EFT numbers 00035558 through 00036193 and check numbers 00185668 through 00185679 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed; and

Demands covered by EFT numbers 00045628 through 00046692, and check numbers 00691640 through 00691841 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed; and

Demands covered by EFT numbers 00046693 through 00046714, and check numbers 00691842 through 00691906 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed; and

Demands covered by EFT numbers 00046715 through 00046752, and check numbers 00691907 through 00692021 inclusive as listed and have been verified by 74 -6- 03/12/24
the Finance Division as properly issued and bear all proper signatures, be received and filed; and

Demands covered by EFT numbers 00046753 through 00046765, and check numbers 00692022 through 00692111 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed; and

Demands covered by EFT numbers 00046766 through 00046798, and check numbers 00692112 through 00692193 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed; and

Demands covered by wire numbers 00001959 through 00002010, EFT numbers 00045594 through 00045627, and check numbers 00691572 through 00691639 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

WAIVER

It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

Full reading of ordinances listed be waived.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

PUBLIC HEARING - INTRODUCTION OF AN ORDINANCE APPROVING AN

AMENDMENT TO THE GARDEN GROVE POLICE DEPARTMENT MILITARY EQUIPMENT USE POLICY; AND AUTHORIZE THE ISSUANCE OF A PURCHASE ORDER FOR 22 GEISSELE SUPER DUTY AR-15 RIFLES (F: 82.1A)

(It was moved earlier in the meeting by Council Member Brietigam, seconded by Council Member Klopfenstein and approved unanimously that full reading of the ordinances listed be waived.)

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Following staff introduction, Mayor Jones declared the public hearing open.

With no testimony from the audience, Mayor Jones closed the public hearing.

Written Communication in support was submitted by Maureen Blackmun.

With no further discussion, it was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

Ordinance No. 2953 entitled: An Ordinance of the City Council of the City of Garden Grove approving an amendment to attachment 706.5 of the Garden Grove Police Department Military Equipment Use Policy pursuant to Government Code 7071, be passed to second reading, and
The Finance Director be authorized to issue a purchase order for 22 Geissele Super Duty AR-015 rifles and exchange of the existing Sig Sauer MCX rifles and additional non-utilized SWAT gear.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

AUTHORIZATION FOR THE ISSUANCE OF A PURCHASE ORDER TO NATIONAL AUTO FLEET GROUP FOR TWO (2) NEW PUBLIC WORKS DEPARTMENT TRUCKS Following staff introduction, it was moved by Council Member Brietigam, seconded by Council Member O’Neill that:

The Finance Director be authorized to issue a purchase order in the amount of $306,984.66 to National Auto Fleet Group for the purchase of two (2) new Public Works Department trucks.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
AWARD A CONTRACT TO INTERNATIONAL LINE BUILDERS, INC. FOR TRAFFIC

SIGNAL MODIFICATIONS AT GARDEN GROVE BOULEVARD/NELSON STREET-

CENTURY BOULEVARD AND GARDEN GROVE BOULEVARD/NEWLAND STREET (CITY PROJECTS: CP-1345000 AND CP-1346000) (F: 100.PROJ.CP-1345000) (F: 100.PROJ.CP-1346000)
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Following staff introduction and City Council comment, it was moved by Council Member DoVinh, seconded by Council Member Brietigam that:

A contract be awarded to International Line Builders, Inc. (dba ILB Electric) in the amount of $983,817 for Traffic Signal Modifications at Garden Grove Boulevard/Nelson Street-Century Boulevard and Garden Grove Boulevard/Newland Street (City Projects: CP-1345000 and CP-1346000); and
The City Manager be authorized to execute the agreement and make minor modifications as appropriate thereto, on behalf of the City.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None
AWARD A CONTRACT TO COMET ELECTRIC, INC., FOR PROJECT NO. CP-1344023, TRAFFIC SIGNAL MODIFICATIONS AT VARIOUS LOCATIONS FY 23-24 (F: 100.PROJ.CP-1344023)
Following staff introduction, it was moved by Mayor Pro Tem Tran, seconded by Council Member Nguyen-Penaloza that:

A contract be awarded to Comet Electric, Inc., in the amount of $1,385,087, for construction of Project No. CP-1344023, Traffic Signal Modifications at Various Locations FY 23-24; and
The City Manager be authorized to execute the agreement and make minor modifications as appropriate thereto, on behalf of the City.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

AWARD A CONTRACT TO BKM OFFICE ENVIRONMENTS TO PROCURE AND INSTALL

FURNITURE, FIXTURES, AND EQUIPMENT (FF&E) FOR THE CENTRAL CITIES NAVIGATION CENTER PROJECT NO. CP1350000-1 (F: 55-bkm Office Environments) (F: 117.15B)

Following staff introduction with representatives from bkm Office Environments and City Council discussion, it was moved by Council Member Nguyen-Penaloza, seconded by Council Member Klopfenstein that:
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A contract be awarded to bkm Office Environments for FF&E services for the Central Cities Navigation Center in an amount not-to-exceed $425,089.34; and The City Manager, or designee(s), be authorized to execute the agreement, approve additional amendments as necessary, and make minor modifications as appropriate thereto, on behalf of the City.

The motion carried by a 7-0 vote as follows:

Ayes: (7) Brietigam, O’Neill, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

MATTERS FROM THE MAYOR, CITY COUNCIL MEMBERS, AND CITY MANAGER

Council Member O’Neill announced the upcoming community clean-up day, an opportunity for Garden Grove residents to get rid of their bulky items, on Saturday, March 16, 2024, from 9:00 a.m. to 11:00 a.m. at Skylark Elementary School.

Mayor Pro Tem Tran stated she attended the Women’s Leadership Summit with City Manager Kim and Council Member Klopfenstein. She was impressed with many of the stories from women in leadership roles who began with very little. Her takeaway quote from the day was “to treat others as though they will be your boss in the future.” She thanked the Police Department for their response to a recent theft of a laptop from a local business. On behalf of a business owner, she thanked the Fire Authority for their quick response to a fire incident on the corner of Chapman Avenue and Brookhurst Street. She announced the upcoming ribbon-cutting for bb.q Chicken on Garden Grove Boulevard on Thursday, March 14, 2024, and she thanked Council Member Brietigam and Council Member Klopfenstein for attending the anniversary celebration of the Uni Restaurant.

Council Member DoVinh expressed his appreciation for the students who were recognized at tonight’s meeting for their first Lego League Challenge, and he is glad to see student participation with STEM. He also expressed appreciation for the ambassador students chosen to visit Garden Grove’s Sister City, Anyang Korea, noting that South Korea is an ally to the United States. He commented on tonight’s adoption of a proclamation celebrating Women’s History Month and that tonight the City Council awarded a contract to bkm Office Environments, a woman owned business.

Council Member Klopfenstein expressed excitement for Chef Winnie’s Smoke Queen Barbeque’s recent soft opening in the Civic Center at 12941 9th Street. Having Smoke Queen Barbeque in District 5 is a proud moment and she is optimistic that the businesses that locate within the Civic Center will flourish, and that it will be a destination spot in Garden Grove and in the County.

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Council Member Nguyen-Penaloza thanked the Garden Grove Police Department’s Special Resource Team for their hard work, and she was pleased to see the fencing installed around the area of Newhope Street and Westminster Avenue. She noted that the clean-up of the area around the Motel 6 was done; however, the issues are picking up once again. This area is a hot spot that is not safe for the community, and that there was a recent decedent as well on the CalTrans property. She asked that staff communicate with CalTrans to shorten the response time, and suggested that CalTrans establish a landscaping design that would minimize the activity. She noted the new brick wall behind the Shell Service Station on Harbor Boulevard at Trask Avenue has been completely covered with graffiti and she suspects there are encampments behind the line of sight. She is happy that the City Council awarded a contract to a woman owned business at tonight’s meeting alongside the adoption of a Proclamation for Women’s History Month that she initiated and brought to the City Council.

City Manager Kim thanked the Garden Grove Unified School District for collaborating with the City and bringing the First Impressions Art Exhibit this past weekend to the Courtyard Center on Main Street next to the Village Green Park. The Gallery art will be available for viewing through Thursday, March 14, 2024. She thanked Council Member Brietigam and Mayor Pro Tem Tran for handing out awards to the students for their art, noting this is the first year that Pre-kindergarten students were added into the program.

City Attorney Sandoval stated that there was no reportable action for the Closed Session item discussed earlier.

ADJOURNMENT

At 7:40 p.m., Mayor Jones adjourned the meeting. The next Regular City Council Meeting is scheduled on Tuesday, March 26, 2024, at 5:30 p.m. at the Community Meeting Center, 11300 Stanford Avenue, Garden Grove, California.

Teresa Pomeroy
City Clerk
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MINUTES

GARDEN GROVE CITY COUNCIL

Regular Meeting

Tuesday, March 26, 2024

Community Meeting Center
11300 Stanford Avenue, Garden Grove, CA 92840

CONVENE CLOSED SESSION

At 5:45 p.m., Mayor Jones convened closed session.

ROLL CALL PRESENT: (6) Council Members Brietigam, DoVinh, Klopfenstein, Nguyen-Penaloza, Tran, Mayor
Jones

ABSENT: (1) Council Member O’Neill

ORAL COMMUNICATIONS FOR CLOSED SESSION

Speakers: None.

CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Pursuant to Government Code Section 54956.9(a): One case.

ADJOURN CLOSED SESSION

At 6:25 p.m., Mayor Jones adjourned closed session.

CONVENE REGULAR MEETING

At 6:30 p.m., Mayor Jones convened the meeting in the Council Chamber with Council Members Brietigam, DoVinh, Klopfenstein, Nguyen-Penaloza, and Tran present.

INVOCATION

PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA

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RECESS

At 6:32 p.m., Mayor Jones recessed the meeting.

RECONVENE

At 6:39 p.m., Mayor Jones reconvened the meeting with Council Members Brietigam, DoVinh, Klopfenstein, Nguyen-Penaloza, and Tran present.

ADOPTION OF A RESOLUTION COMMENDING JOE HAMMER FOR BEING NAMED THE CYPRESS COLLEGE AMERICANA CITIZEN OF THE YEAR (F: 83.1.2024)

It was moved by Mayor Jones, seconded by Council Member Brietigam that:

A Resolution of Commendation recognizing Joe Hammer for being named the Cypress College Americana Citizen of the Year, be adopted.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

ADOPTION OF A PROCLAMATION RECOGNIZING APRIL AS DONATE LIFE MONTH (F: 83.1.2024)

It was moved by Mayor Jones, seconded by Council Member Brietigam that:

A Proclamation recognizing April as Donate Life Month, be adopted.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

COMMUNITY SPOTLIGHT IN RECOGNITION OF JOE HAMMER FOR BEING NAMED CYPRESS COLLEGE 2024 AMERICANA AWARDS’ GARDEN GROVE CITIZEN OF THE YEAR (F: 83.1-2024)

Mayor Jones presented a framed Resolution of Commendation to Joe Hammer, and Mr. Hammer addressed the City Council thanking them for the recognition.

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Following the Community Spotlight, Mayor Jones called Rachel Rodriguez forward to present her with a framed Proclamation recognizing April as Donate Life Month.

ORAL COMMUNICATIONS

Speakers: Rubi Garcia, Julian de la O, Claire Bischoff, Randy Wetmar, Nicholas Dibs, Andrew Gonzales, Verla Lambert, and Maureen Blackmun.

Written Communications: Leslie Nelson, Elvia Dieguez.

RECESS

At 7:07 p.m., Mayor Jones recessed the meeting.

RECONVENE

At 7:10 p.m., Mayor Jones reconvened the meeting with Council Members Brietigam, DoVinh, Klopfenstein, Nguyen-Penaloza, and Tran present.

ADOPTION OF A RESOLUTION COMMENDING JOE HAMMER FOR BEING NAMED THE CYPRESS COLLEGE AMERICANA CITIZEN OF THE YEAR (F: 83.1.2024)

This matter was considered earlier in the meeting.

ADOPTION OF A PROCLAMATION RECOGNIZING APRIL AS DONATE LIFE MONTH (F: 83.1.2024)

This matter was considered earlier in the meeting.

ADOPTION OF A PROCLAMATION CELEBRATING APRIL AS ARAB AMERICAN HERITAGE MONTH (F: 83.1.2024)

It was moved by Council Member Nguyen-Penaloza, seconded by Council Member Klopfenstein that:

A Proclamation celebrating April as Arab American Heritage Month, be adopted.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

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ADOPTION OF A PROCLAMATION RECOGNIZING BLACK APRIL MONTH (F: 83.1.2024)

It was moved by Council Member Nguyen-Penaloza, seconded by Council Member Klopfenstein that:

A Proclamation recognizing Black April Month, be adopted.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

CONSIDERATION OF FINAL PARCEL MAP NO. PM-2020-174 FOR THE PROPERTY LOCATED AT 9852 CHAPMAN AVENUE, GARDEN GROVE (F: 118.1)

It was moved by Council Member Nguyen-Penaloza, seconded by Council Member Klopfenstein that:

Final Parcel Map No. PM-2020-174 for the property located at 9852 Chapman Avenue, Garden Grove (south side of Chapman Avenue, west of Brookhurst Street) be approved; and
The City Clerk be authorized to sign the Final Parcel Map.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

APPROPRIATION OF FISCAL YEAR 2023-24 PUBLIC SAFETY REALIGNMENT AND POST-RELEASE COMMUNITY SUPERVISION FUNDS (F: 82.1) (F: 82.15)

It was moved by Council Member Nguyen-Penaloza, seconded by Council Member Klopfenstein that:

Additional appropriation in the Police Department's operating budget for F iscal Year 2023-24 in the amount of AB 109 funding allocated to the City for approximately $194,022, be appropriated, and unspent F iscal Year 2023-24 AB 109 funding be carried over to a future fiscal year.

The motion carried by a 6-0-1 vote as follows:
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Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill
RECEIVE AND FILE MINUTES FROM THE MEETING HELD ON FEBRUARY 27, 2024 (F: Vault)
It was moved by Council Member Nguyen-Penaloza, seconded by Council Member Klopfenstein that:

The Minutes from the meeting held on February 27, 2024, be received and filed.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

WARRANTS
It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

Demands covered by Wire numbers 00002011 through 00002059, EFT numbers 00046799 through 00046852, check numbers 00692194 through 00692284, and check numbers 00692484 through 00692485 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed;

Demands covered by EFT numbers 00046853 through 00047918, and check numbers 00692285 through 00692483 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed; and

Demands covered by EFT numbers 00047919 through 00047968, and check numbers 00692486 through 00692576 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed; and

Demands covered by EFT numbers 00047969 through 00048003, and check numbers 00692577 through 00692729 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed; and

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Demands covered by EFT numbers 00048004 through 00048045, and check numbers 00692730 through 00692834 inclusive as listed and have been verified by the Finance Division as properly issued and bear all proper signatures, be received and filed.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

WAIVER

It was moved by Council Member Brietigam, seconded by Council Member Klopfenstein that:

Full reading of ordinances listed be waived.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

APPROVAL OF A PROJECT AGREEMENT WITH EDGEMOOR GARDEN GROVE CIVIC

PARTNERS LLC FOR THE DESIGN AND CONSTRUCTION OF THE CIVIC CENTER

REVITALIZATION PROJECT INCLUDING A NEW PUBLIC SAFETY FACILITY, PARKING GARAGE, AND A NEW CIVIC CENTER PARK (F: 55-EDGEMOOR GARDEN GROVE CIVIC PARTNERS, LLC) (F: 48.11)

Following the introduction by Police Chief El-Farra, Project Consultant Craig Beck and consultants Brian Dugan and Christina Solomon with Edgemoor, Marc Kersey with Clark Construction, and Tammy Jow with ACMartin, provided a PowerPoint presentation that overviewed the project history and current status, and the design, construction, entitlements, financing, legal, and building commissioning elements of the Civic Center Revitalization and Public Safety Project.

Following City Council comments expressing support, it was moved by Mayor Jones, seconded by Council Member Brietigam that:

The Project Agreement be approved and the City Manager be authorized to execute the Project Agreement by and b etween the City of Garden Grove and Edgemoor Garden Grove Civic Partners, LLC, in an amount not to exceed $152 million, and to make minor modifications as appropriate thereto, on behalf of the City; and 85 -7- 03/26/24
The City Manager be directed to finalize documents necessary to issue lease revenue bonds with a par amount of $140 million consistent with Resolution 9833 -23 approved on November 14, 2023, and return to City Council for final approval and authorization to issue bonds; and
The City M anager be authorized to negotiate and execute a short -term lease with Edgemoor/Clark Construction for occupancy of existing vacant space within the City owned facility at 11277 Garden Grove Boulevard (Purcell) for construction related activities in connection with the Civic Center Revitalization Project.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

SECOND READING OF ORDINANCE NO. 2953 (F:82.1A)

Following the reading of the title, it was moved by Council Member Brietigam, seconded by Council Member Nguyen-Penaloza that:

Ordinance No. 2953 entitled: An Ordinance of the City Council of the City of Garden Grove approving an amendment to attachment 706.5 of the Garden Grove Police Department Military Equipment Use Policy pursuant to Government Code 7071, be adopted.

The motion carried by a 6-0-1 vote as follows:

Ayes: (6) Brietigam, DoVinh, Klopfenstein,
Nguyen-Penaloza, Tran, Jones
Noes: (0) None

Absent: (1) O’Neill

MATTERS FROM THE MAYOR, CITY COUNCIL MEMBERS, AND CITY MANAGER

Council Member Brietigam encouraged residents to contact Republic Services when they need bulky items picked up. The service is available to all residents three times a year. He commended Joe Hammer for his volunteer service to the community, and he encouraged involvement in the numerous local service clubs. He welcomed Verla Lambert who spoke at tonight’s meeting, noting her long absence from the City.

Mayor Pro Tem Tran stated it was her honor to escort Mr. Joe Hammer at the Cypress College Americana Awards ceremony. She also attended Kid Healthy Orange County’s culinary competition with Council Member Klopfenstein. The organization has held the competition for 12 years, and the six participating high 86 -8- 03/26/24
schools included Garden Grove High School, Lynwood High School, which had two teams, Bolsa Grande High School, Rancho Alamitos High School, Valley High School, and Bell Gardens High School. All of the student teams were paired with a professional chef mentor who provided expertise, creative consultation, and insights into the culinary profession. Garden Grove High School and Lynwood High School’s team 2 placed second and third in the competition, respectively. She announced the next Community Clean-up Day taking place on Saturday, May 11, 2024, between 9:00 a.m. to 11:00 a.m. at Garden Grove Park located at 9301 Westminster Avenue.

Council Member DoVinh spoke on the Proclamations that were adopted at tonight’s meeting, and he thanked Rachel Rodriguez, for coming to speak about her personal tragedy that brought her to be Garden Grove’s One Legacy Ambassador and advocate for Donate Life Month. He noted that as a child growing up in the midst of war, Black April is important to commemorate, and it is important to understand that children of war suffer from Post-Traumatic Stress Disorder. He expressed that his aspiration is that of a child of peace. Tonight’s Proclamation recognizing Arab American Heritage should be done in many cities. And, he wished for peace throughout the Middle East.

Council Member Klopfenstein spoke on attending the Culinary Competition and expressed her enthusiasm for the students of Garden Grove, Bolsa Grande and Rancho Alamitos High Schools who were in the competition representing Garden Grove. The recipes from the competition will be incorporated into the school lunch menus. She announced the upcoming Garden Grove GEMS nomination period beginning on April 1, 2024, through April 24, 2024, and she encouraged the residents to get involved. Information is available on the City’s website at ggcity.org/community-services/garden-grove-gems

Mayor Jones shared that Council Member O’Neill, although absent at tonight’s meeting, is 100 percent in support of the Civic Center Revitalization and Public Safety Project, and he expressed he is happy that all of the Council Members are in support of this project.

City Manager Kim thanked the City Council for their support and guidance moving forward with the Civic Center Revitalization and Public Safety Project, and she thanked the entire team and City Attorney Sandoval for all of their work bringing the project forward.

City Attorney Sandoval announced that no reportable action was taken during closed session. And, he wished his wife a Happy 30th Wedding Anniversary.

ADJOURNMENT

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At 8:03 p.m., Mayor Jones adjourned the meeting. The next Regular City Council Meeting is scheduled on Tuesday, April 9, 2024, at 5:30 p.m. at the Community Meeting Center, 11300 Stanford Avenue, Garden Grove, California.

Teresa Pomeroy
City Clerk
88 City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Patricia Song
Dept:

City Manager Dept: Finance
Date: 4/9/2024

Subject: Receive and file warrants. (Action Item)

Attached are the warrants recommended to be received and filed.

ATTACHMENT(S):

1. Warrants

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99 100
101
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105
106
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City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Patricia Song
Dept:

City Manager Dept: Finance
Date: 4/9/2024

Subject: Adoption of a Resolution approving the issuance of the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A, authorizing the execution and distribution of documents related to such bond issuance. (Joint Action Item with the Public Financing Authority)

OBJECTIVE
For City Council to hold a public hearing and adopt a resolution approving the issuance of the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A in the principal amount of $140,000,000 (the Bonds) and the execution and delivery of a Ground Lease, Lease Agreement, Indenture, Continuing Disclosure Certificate and Bond Purchase Agreement in connection with the bond issuance, and authorizing the distribution of an official statement in connection with the offering and sale of s uch bonds, and other necessary documents, certificates and related actions.

BACKGROUND
On March 26, 2024, the City Council approved a certain Project Agreement with Edgemoor Garden Grove Civic Center Partners LLC (the Developer) for the design and construction of the Civic Center Revitalization Project, which includes a new public safety facility, a parking structure, a re -imagined Civic Center Park, and the demolition of the existing police headquarters (the Project).

The estimated cost of the Project is $152 million. The City set aside $12 million in cash during the Fiscal Year 2021-22 budget process since the planning phase of the Project. The remaining $140 million will be financed.

Various financing options were evaluated with the Developer’s financing team and the City’s municipal advisor. It was concluded that issuing tax-exempt lease revenue bonds through the Garden Grove Financing Authority (the Authority) was t he most cost-effective method to finance the Project cost. On November 14, 2023, the City 110

Council adopted Resolution 9833 -23 authorizing staff to take necessary actions to present the Bonds and related agreements and documents to the City Council and the Board of the Authority for approval at a future meeting.

DISCUSSION
If approved, the Bonds are anticipated to be issued on or about June 4, 2024. Proceeds will be used to pay a portion of the Project cost. The Bonds are special obligations of the Authority, payable solely from base rental payments to be made by the City. The obligation of the City to make such rental payments does not constitute a debt of the City, and does not constitute an obligation for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The Authority has no power to tax.

The City has covenanted to provide timely disclosures to the Municipal Securities Rulemaking Board, including certain finan cial and operating data, and notice of certain events listed in the Continuing Disclosure Certificate (Attachment 5).

To avoid capitalized interest and save on borrowing costs, the City will pledge certain facilities for the Bonds while the Public Safety Facility (PSF) and the parking structure are under construction. These properties include the City Hall, the existing Police headquarters, the Community Meeting Center, the Senior Center, the Municipal Services Center/Public Works Yard, the City Administrative Office Building, and the Garden Grove Park, including the Sports and Recreation Center and the Atlantis Play Center. The liens on these properties will be released upon the occupancy of the new PSF, at which time the PSF and parking structu re will serve as the sole pledge for the Bonds.

The financing team for the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A consists of the following parties:
 Municipal Advisor – Fieldman, Rolapp & Associates, Inc.  Bond and Disclosure Counsel - Stradling Yocca Carlson & Rauth LLP  Underwriter - Stifel, Nicolaus & Company, Incorporated  Underwriter’s Counsel – Anzel Galvan LLP
 Trustee - U.S. Bank Trust Company, National Association  City Attorney and City staff

FINANCIAL IMPACT
The par amount of the Bonds is $140 million, to be paid over 30 years. Per preliminary sizing performed by the Bonds’ underwriter, Stifel, Nicolaus & Company, Inc. based on market conditions as of March 15, 2024, the average coupon rate is 111

4.690%, with true interest cost of 4.196%. Average annual debt service is $8.85 million. This amount will be programmed into the City’s annual operating budget in the General Fund.

On January 9, 2024, staff presented a five -year General Fund forecast to the City Council. Under the base case scenario, the General Fund’s revenue would continue to exceed its operating expenditures after factoring in an estimated $9 million annual debt service payment.

Using market conditions as March 15, 2024, and assuming an underlying rating of AA for the Bonds based on the City’s current rating received from Standard & Poor’s in September 2021, the underwriter projects the Bonds would be issued with a premium of approximately $9.95 million. The premium will be used to pay for (1) the cost of issuance, which is estimated to be $833,200, and bond insurance in the amount of $527,657, and (2) to reimburse the City’s General Fund for eligible Project costs incurred prior to the bond issuance. However, all proceeds from the Bonds including potential interest earnings will remain designated for the Project and other purposes directly related to the Civic Center Revitalization plan thro ugh the City’s budgeting process. Such uses might include the potential installation of solar equipment which would include a Power Purchase Agreement for the PSF and possibly other adjacent City facilities, such as the Fire Station, the Community Meeting Center and the Senior Center.

The issuance of the Bonds will not result in additional taxes or fees to the City’s taxpayers.

RECOMMENDATION

It is recommended that the City Council and the Garden Grove Public Financing Authority:
 Hold a public hearing to hear testimony for possible issuance by the Garden Grove Public Financing Authority of its Lease Revenue Bonds, Series 2024A in the principal amount of not to exceed $140,000,000 and the execution and delivery by the City and the Authority of a Lease Agreement, under which the City will make base rental payments to the Authority which shall be sufficient in time and amount to pay scheduled debt service on the Bonds and to finance the design and construction of certain public capital improvements to be located at Acacia Parkway, east of Euclid Street, in the city of Garden Grove, California, including an approximately 100,000 square foot public safety facility, a four -level parking structure that will provide approximately 350 parking spaces, and a reconfigured 2.8-acre Civic Center Park, as well as the demolition of the existing police headquarters building located at 11301 Acacia Parkway, Garden Grove, California.
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 Adopt a resolution authorizing the execution and delivery of a Ground Lease, Lease A greement, Indenture, Continuing Disclosure Certificate, and Bond Purchase Agreement in connection with the issuance of Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A, approving the issuance of such Bonds in an aggregate principal amount of not to exceed $140,000,000, authorizing the distribution of an Official Statement in connection with the offering and sale of such Bonds, and authorizing the execution of necessary documents and certificates and related actions (Attachment 1).
 Approve and authorize the execution of the Ground Lease by and between the City of Garden Grove and Garden Grove Public Financing Authority relating to the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A (Attachment 2).  Approve and authorize the execution of a Lease Agreement by and between the City of Garden Grove and Garden Grove Public Financing Authority relating to the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A (Attachment 3).
 Approve and author ize the execution of the Indenture by and among Garden Grove Public Financing Authority, the City of Garden Grove, and U.S. Bank Trust Company, National Association (Attachment 4).
 Approve and authorize the execution of the Continuing Disclosure Certificat ion (Attachment 5).
 Approve and authorize the execution of the Bond Purchase Agreement between Stifel, Nicolaus & Company, Incorporated and the Garden Grove Public Financing Authority and the City of Garden Grove (Attachment 6).  Approve and authorize the d istribution of the Preliminary Official Statement relating to the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A (Attachment 7).
 Approve and authorize the execution of the Memorandum of Lease Agreement by and between the City of Garden Grove Garden Grove and the Garden Grove Public Financing Authority (Attachment 8).
 Approve and authorize the execution of the Indenture by and between the Garden Grove Public Financing Authority and U.S. Bank Trust Company, National Association (Attachment 9).
 Authorize the City Manager or her designee to execute any other documents that are necessary to cause the issuance of the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A.
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 Authorize the City Manager or her designee to negotiate and finalize documents for a power purchase agreement to provide sustainable energy for the Public Safety Facility and adjacent areas; and, return to City Council for final approval and authorization to enter into such agreement.
 Authorize the Cit y Manager or her designee to appropriate funds from the proceeds of the Bonds including potential premiums and interest earnings after paying the cost of the issuance for the Project and other items

ATTACHMENT(S):

1. Attachment 1 - Resolution

2. Attachment 2 - Ground Lease

3. Attachment 3 - Lease Agreement

4. Attachment 4 - Indenture

5. Attachment 5 - Continuing Disclosure Certificate

6. Attachment 6 - Bond Purchase Agreement

7. Attachment 7 - Preliminary Official Statement

8. Attachment 8 - Memorandum of Lease Agreement

9. Attachment 9 - Assignment Agreement

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Stradling Yocca Carlson & Rauth
Draft of 4/2/24

4872-3337-8977v7/022046-0062
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GARDEN GROVE

AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF GARDEN

GROVE OF A GROUND LEASE, LEASE AGREEMENT, INDENTURE,

CONTINUING DISCLOSURE CERTIFICATE AND BOND PURCHASE

AGREEMENT IN CONNECTION WITH THE ISSUANCE OF GARDEN GROVE PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2024A,

APPROVING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT OF NOT TO EXCEED $140,000,000, AUTHORIZING

THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH

THE OFFERING AND SALE OF SUCH BONDS AND AUTHORIZING THE

EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND

RELATED ACTIONS
WHEREAS, the City of Garden Grove , California (the “City”) is a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California;
WHEREAS, the Garden Grove Public Fina ncing Authority (the “Authority”) is a joint exercise of powers entity duly organized and existing pursuant to the laws of the State of California and that certain Joint Exercise of Powers Agreement, dated June 22, 1993, as amended by Amendment No. 1 there to dated March 28, 2006, and by Amendment No. 2 thereto dated November 1, 2020, the current members of which are the City and the Garden Grove Sanitary District (the “Joint Powers Agreement”);
WHEREAS, pursuant to the Joint Powers Agreement and Section 6588(h) of the Marks- Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the “Act”), the Authority has the legal authority to lease and sublease lands, structures, real or personal property, and other interests in lands that are located within the State of California that the Authority determines are necessary or convenient for the financing of public capital improvements, or any portion thereof;
WHEREAS, the City has entered into a Project Agreement (the “Project Agreement”), with Edgemoor Garden Grove Civic Center Partners, LLC, a Maryland limited liability company (“Edgemoor”), pursuant to which Edgemoor has agreed to develop certain public capital improvements to be located on City-owned property at Acacia Parkway, east of Euclid Street, in the City, including an approximately 100,000 square foot public safety facility (the “PSF”), a four- level parking structure that will provide approximately 350 parking spaces (the “Parking Structure”), and a reconfigured 2.8-acre Civic Center Park, as well as the demolition of the existing police headquarters building located at 11301 Acacia Parkway in the City (collectively, the “Project”);
WHEREAS, the City and the Authority desire to finance all or a portion of the acquisition, construction, installation, and demolition work constituting the Project as provided in the Project Agreement;
WHEREAS, the City is a member of the Authority and the Project is located within the boundaries of the City;
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WHEREAS, the City has, prior to the consideration of this Resolution, held a public hearing on the financing of the Project in accordance with Section 6586.5 of the Act, which hearing was held at 11300 Stanford Avenue, Garden Grove, California 92840 on April 9, 2024; WHEREAS, in accordance with Section 6586.5 of the Act, notice of such hearing was published once at least five days prior to the hearing in the Orange County News, an adjudicated local newspaper of general circulation in the City;
WHEREAS, th e Authority and the City have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Bonds”) for the purpose of financing all or a portion of the Project; WHEREAS, in order to facilitate the issuance of the Bonds, the City and the Authority desire to enter into a Ground Lease between the City and the Authority (the “Ground Lease”) pursuant to which the City will lease certain real property , which real property shall consist of property the property on which the PSF and Parking Structure will be located and, during the period of construction of the PSF and Parking Structure (Phase 1 of the Project), the following additional City-owned properties : the City Hall, Community Meeting Center, Senior Center, Municipal Services Center/Public Works Yard, City Administrative Office Building, and Garden Grove Park (including the Garden Grove Sports and Recreation Center and Atlantis Play Center), and the existing police headquarters, subject to adjustment as described in Section 2 below (the “Leased Assets”) to the Authority, and a Lease Agreement between the City and the Authority (the “Lease Agreement”), pursuant to which the City will lease the Leased Assets back from the Authority, and pay certain Base Rental Payments (as defined in the Lease Agreement), which will be pledged to the owners of the Bonds by the Authority pursuant to an Indenture by and among U.S. Bank Trust Company, National Association (the “Trustee”), the City and the Authority (the “Indenture”);
WHEREAS, the Authority will issue the Bonds pursuant to the Act; WHEREAS, the City and the Authority desire to provide for the negotiated sa le of the Bonds;
WHEREAS, the City and the Authority have selected Stifel, Nicolaus & Company, Incorporated to act as underwriter (the “Underwriter”) and to purchase the Bonds from the Authority pursuant to a Bond Purchase Agreement (the “Bond Purchase Agreement”); WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) requires that, in order to be able to purchase or sell the Bonds, the underwriter thereof must have reasonably determined that the City has undertaken in a written agreement or contract for the benefit of the holders of the Bonds to provide disclosure of certain financial information and certain events on an ongoing basis;
WHEREAS, in order to cause such requirement to be satisfied, the City desires to execute and deliver a Continuing Disclosure Certificate (the “Continuing Disclosure Certificate”); WHEREAS, a form of the Preliminary Official Statement (the “Preliminary Official Statement”) has been prepared;
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WHEREAS, good faith estimates of certain information relating to the Bonds are disclosed and set forth in Exhibit A attached to this Resolution as required by California Government Code Section 5852.1; such estimates were provided by Fieldman, Rolapp & Associates , Inc. (the “Municipal Advisor”) based on preliminary bond pricing information provided by the Underwriter; WHEREAS, the City Council has been presented with the form of each document referred to herein relating to the financing contemplated hereby, and th e City Council has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such financing; and
WHEREAS, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of such financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Garden Grove that:

Section 1. Each of the above recitals is true and correct. Following a duly noticed public hearing, the City Council hereby approves the financing of the Project described in this Resolution and further finds and determines that there are significant public benefits to the citizens of the City through the issuance of the Bonds and execution and delivery of the Ground Lease and Lease Agreement pursuant to the Act and otherwise hereunder within the meaning of Section 6586(a) through (d), inclusive, of the Act, in that the delivery of the Bonds and related transactions will result in demonstrable savings in effective interest rate to the City and enable the City to undertake the Project on a timely basis, and provide a more efficient delivery of public safety services to the community.

Section 2. The forms of the Ground Lease and Lease Agreement, on file with the City Clerk, are hereby approved, and the Mayor, the Mayor Pro Tem, the City Manager, the Finance Director, and the City Clerk , and each of their authorized designees (the “Authorized Officers”), are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Ground Lease and Lease Agreement in substantially said forms, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the term of the Ground Lease and Lease Agreement shall terminate no later than April 1, 2054 (provided that such term may be extended as provided therein) and the all -in true interest cost applicable to the Bonds shall not exceed 6.00% per annum. In the event that it is determined by the City Manager, or h er designee, that there are limitations or restrictions on the ability of the City to lease or sublease any portion of the Leased Assets as contemplated by the Ground Lease and Lease Agreement or that other City -owned property would be more appropriate to use as Leased Assets under the Ground Lease and the Lease Agreement, the City Manager, or her designee, is hereby expressly authorized to designate other or additional real property of the City to be leased or subleased pursuant to the Ground Lease and Lease Agr eement, with such designation to be conclusively evidenced by the execution and delivery of the Ground Lease and Lease Agreement by one or more of the Authorized Officers.
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Section 3. The form of Indenture, on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Indenture in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate principal amount of the Bonds shall not exceed $140,000,000, the final maturity date of the Bonds shall be no later than April 1, 2054 and the all- in true interest cost applicable to the Bonds shall not exceed 6.00% per annum, and, provided, further, that such changes, insertions and omissions shall be consistent with the terms of the Bonds established at negotiated sale pursuant to the Bond Purchase Agreement. In the event that it is determined by the Finance Director, or her designee, that the funding or financing of capitalized interest on the Bonds would be in the best interests of the City, the Indenture may be modified to provide for capitalized interest on such basis as is determined by the Finance Director or her designee, such determination to be conclusively evidenced by the execution and delivery of the Indenture by an Authorized Officer.

Section 4. The Bon d Purchase Agreement, on file with the City Clerk, is hereby approved and the Authorized Officers are each hereby authorized and directed, for and in the name of the City, to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Bond Purchase Agreement by such Authorized Officer; provided, howe ver, that such changes, insertions and omissions shall not result in an aggregate underwriter’s discount (not including any original issue discount paid by the Underwriter) from the principal amount of the Bonds in excess of one half of one percent (0.50%) of the aggregate principal amount of the Bonds.

Section 5. The issuance by the Authority of not to exceed $140,000,000 aggregate principal amount of the Bonds, in the principal amounts, bearing interest at the rates and maturing on the dates as specified in the Indenture as finally executed, is hereby approved.

The sale and issuance of the Bonds and execution and delivery of the Lease Agreement is hereby determined to be consistent with the City’s Debt Management Policy and to the extent the sale and issuance of the Bonds is not in compliance with the City’s Debt Management Policy, such noncompliance is waived in accordance with the terms of the City’s Debt Management Policy.

Section 6. The form of Preliminary Official Statement, on file with the City Clerk, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Bonds is hereby authorized and approved. The Authorized Offi cers are each hereby authorized to certify on behalf of the City that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2 -12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12).

The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Bonds a reasonable number of copies of the Preliminary Official Statement.
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Section 7. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the City.

Section 8. The form of Continuing Disclosure Certificate, on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Certificate in substantially said form, with such changes, insertions and omissions 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 9. Stradling Yocca Carlson & Rauth LLP, is hereby approved and appointed as Bond and Disclosure Counsel, Fieldman, Rolapp & Associates, Inc., is hereby approved and appointed as Municipal Advisor, and U.S. Bank Trust Company, National Association is hereby appointed as Trustee, each to provide such services to the City and any other related services as may be required to issue the Bonds.

Section 10. The officers, employees and agents of the City are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including, but not limited to, taking such actions and executing such instruments as may be necessary or appropriate to remove encumbrances and clear title to any Leased Assets. Anything to the contrary herein notwithstanding, in the event the Finance Director determines in consultation with the Municipal Advisor that the cost efficient marketing of the Bonds requires creation of a funded reserve under the Indenture, each of t he Indenture, Lease Agreement and other documents approved herein may be revised to reflect the funding of such a reserve. Specifically and without limiting the foregoing, the Finance Director is authorized and directed to solicit and accept bids for bond insurance and, if applicable, a reserve account insurance policy, for the Bonds, provided she determines acceptance of the best bid will result in lower overall debt service or lower interest cost, and appropriate changes to each of the documents referenced herein to evidence such bond insurance, and, if applicable, a reserve account insurance policy, and the terms thereof, are hereby authorized and approved. All actions heretofore taken by the officers, employees and agents of the City with respect to the transactions set forth above are hereby approved, confirmed and ratified.

Section 11. This Resolution will take effect from and after its date of adoption. 119
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PASSED AND ADOPTED this 9th day of April, 2024.

Mayor of the City of Garden Grove
ATTEST:

City Clerk of the City of Garden Grove

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STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

CITY OF GARDEN GROVE )
I, Teresa Pomeroy, City Clerk of said City, do hereby certify that the foregoing Resolution was duly adopted by the City Council of said City and was signed by the Mayor of said City at an adjourned regular meeting of said City Council held on the 9th day of April, 202 4 and was approved by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

CITY CLERK
BY:

City Clerk of the City of Garden Grove
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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 Cit y by its Municipal Advisor, Fieldman, Rolapp & Associates, Inc. , in consultation with Stifel, Nicolaus & Company, Incorporated, the Underwriter of 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 issued and sold is $140,000,000 (the “Estimated Principal Amount”), which excludes approximately $9,949,766 of net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of such bonds. The Estimated Principal Amount plus the net premium represent the total estimated proceeds available in the aggregate amount of $149,949,766.

True Interest Cost of the Bonds . The Municipal Advisor has informed the C ity that, assuming that the Estimated Principal Amount of the Bonds is issued and 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 4.20%.

Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate and expectation to purchase bond insurance at a net beneficial cost to the City (meaning the cost of the insurance premium will be less than the reduced inter est cost to the City) , 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 $1,360,857.

Amount of Proceeds to be Received . The Municipal Advi sor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and 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 expec ted to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $148,588,909.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and 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 $263,933,400, which excludes any reserves or capitalized interest paid or funded with proceeds of the Bonds (which may offset such total payment amount).

The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of 122
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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 fr om 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, (b) the actual principal amount of Bonds issued and sold being different from the Estimated Principal Amo unt, (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, (f) alterations to the City’s financing plan, or a combination of such factors.

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RECORDING REQUESTED BY:

Garden Grove Public Financing Authority
AND WHEN RECORDED RETURN TO:

Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Vanessa S. Legbandt, Esq.

[Space above for Recorder’s use.]

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE.

THE GRANTOR AND THE GRANTEE ARE GOVERNMENTAL AGENCIES.

GROUND LEASE
by and between

CITY OF GARDEN GROVE
and

GARDEN GROVE PUBLIC FINANCING AUTHORITY
Dated as of June 1, 2024
Relating to
$__________

GARDEN GROVE PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A

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GROUND LEASE
THIS GROUND LEASE (this “Ground Lease”), executed and entered into as of June 1, 2024, is by and between the CITY OF GARDEN GROVE (the “City”), a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California, as lessor, and the GARDEN GROVE PUBLIC FINANCING AUTHORITY (the “Authority”), a joint exercise of powers entity duly organized and existing under the laws of the State of California, as lessee.

WITNESSETH:

WHEREAS, the City has entered into that certain Project Agreement dated as of April 1, 2024 (the “Project Agreement”), with Edgemoor Garden Grove Civic Cent er Partners, LLC, a Maryland limited liability company (“Edgemoor”), pursuant to which Edgemoor has agreed to develop certain public capital improvements to be located on City-owned property located at Acacia Parkway, east of Euclid Street, in the City, including an approximately 100,000 square foot public safety facility, a four- level parking structure that will provide approximately 350 parking spaces, and a reconfigured 2.8 - acre Civic Center Park, as well as the demolition of the existing police headquar ters building located at 11301 Acacia Parkway in the City (collectively, the “Project”); WHEREAS, the City and the Authority desire to finance all or a portion of the acquisition, construction, installation, and demolition work constituting the Project as provided in the Project Agreement;
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “ Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Series 2024A Bonds”) for the purpose of financing the Project;
WHEREAS, in order to facilitate the issuance of the Series 2024A Bonds, the City will lease certain real property and the improvements located thereon (the “Property”) to the Authority pursuant to this Ground Lease and the City will sublease the Property back from the Authority pursuant to the Lease Agreement dated as of the date hereof (the “Lease Agreement”); WHEREAS, during the construction of the Project, the Property will consist of the Project Site (described in Exhibit A) and the Release Property (described in Exhibit B); upon completion of construction of the Property the City is permitted to release the Release Property from the Lease Agreement and this Ground Lease as provided in more detail in Section 10.04 of the Lease Agreement.

WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to finance all or a portion of the Project through the issuance by the Authority of the Series 2024A Bonds payable from the base rental payments (the “Base Rental Payments”) to be made by the City under the Lease Agreement; WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide for the issuance of such bonds payable from the Base Rental Payments pursuant to an Indenture, dated as of the date hereof, by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); 125

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WHEREAS, all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignme nt Agreement, dated as of the date hereof (the “Assignment Agreement”);
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of th is Ground Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Ground Lease;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS
Except as otherwise defined herein, or unless the context clearly otherwise requires, words and phrases defined in the Lease Agreement shall have the same meaning in this Ground Lease.

ARTICLE II

LEASE OF THE PROPERTY; RENTAL
Section 2.01 Lease of Property. The City hereby leases to the Authority, and the Authority hereby leases from the City, for the benefit of the Owners of the Bonds, the Property, subject only to Permitted Encumbrances, to have and to hold for the term of this Ground Lease.

Section 2.02 Rental. The Authority shall pay to the City as and for rental of the Property hereunder, the sum of $1.00, the receipt of which is hereby acknowledged.

ARTICLE III

QUIET ENJOYMENT
The parties intend that the Property will be leased back to the City pursuant to the Lease Agreement for the term thereof. It is further intended that, to the extent provided herein and in the Lease Agreement, if an event of default occurs under the Lease Agreement, the Authority, or its assignee, will have the right, for the then remaining term of this Ground Lease to (a) take possession of the Property, subject to Permitted Encumbrances, (b) if it deems it appropriate, cause an appraisal of the Property and a study of the then rea sonable use thereof to be undertaken, and/or (c) relet the Property. Subject to any rights the City may have under the Lease Agreement (in the absence of an event of default) to possession and enjoyment of the Property, the City hereby covenants and agrees that it will not take any action to prevent the Authority from having quiet and peaceable possession and enjoyment of the Property during the term hereof and will, at the request of the Authority and at the City’s cost, to the extent that it may lawfully do so, join in any legal action in which the Authority asserts its right to such possession and enjoyment.
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ARTICLE IV

SPECIAL COVENANTS AND PROVISIONS
Section 4.01 Waste. The Authority agrees that at all times that it is in possession of the Property, it will not commit, suffer or permit any waste on the Property, and t hat it will not willfully or knowingly use or permit the use of the Property for any illegal purpose or act.

Section 4.02 Further Assurances and Corrective Instruments . The City and the Authority agree that they will, from time to time, execute, acknowledge and delive r, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby leased or intended so to be or for carr ying out the expressed intention of this Ground Lease, the Indenture and the Lease Agreement.

Section 4.03 Waiver of Personal Liability. All liabilities under this Ground Lease on the part of the Authority shall be solely liabilities of the Authority as a joint exercise of powers entity, and the City hereby releases each and every director, officer and employee of the Authority from any personal or individual liability under this Ground Lease. No director, officer or employee of the Authority shall at any time or under any circumstances be individually or personally liable under this Ground Lease to the City or to any other party whomsoever for anything done or omitted to be done by the Authority hereunder.

All liabilities under this Ground Lease on the part of the Cit y shall be solely liabilities of the City as a public corporation, and the Authority hereby releases each and every member, officer and employee of the City from any personal or individual liability under this Ground Lease. No member, officer or employee of the City shall at any time or under any circumstances be individually or personally liable under this Ground Lease to the Authority or to any other party whomsoever for anything done or omitted to be done by the City hereunder.

Section 4.04 Taxes. The City covenant s and agrees to pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Property.

Section 4.05 Right of Entry . The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same.

Section 4.06 Representations of the City . The City represents and warrants to the Authority and the Trustee as follows:
(a) the City has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution of this Ground Lease;
(b) except for Permitted Encumbrances, the Property is not subject to any dedication, easement, right of way, reser vation in patent, covenant, condition, restriction, lien or encumbrance which would prohibit or materially interfere with the use of the Property for governmental purposes as contemplated by the City;
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(c) all taxes, assessments or impositions of any kind with respect to the Property, except current taxes, have been paid in full; and
(d) the Property is necessary to the City in order for the City to perform its governmental functions.

Section 4.07 Representations of the Authority. The Authority represents and warrants to the City and the Trustee that the Authority has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution and delivery of this Ground Lease.

ARTICLE V

ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 5.01 Assignment and Subleasing. This Ground Lease may be sold or assigned and the Property subleased, as a whole or in part, by the Authority without the necessity of obtaining the consent of the City, i f an event of default occurs under the Lease Agreement. The Authority shall, within 30 days after such an assignment, sale or sublease, furnish or cause to be furnished to the City a true and correct copy of such assignment, sale or sublease, as the case may be.

Section 5.02 Restrictions on City. The City agrees that, except with respect to Permitted Encumbrances, it will not mortgage, sell, encumber, assign, transfer or convey the Property or any portion thereof during the term of this Ground Lease.

ARTICLE VI

TERM; TERMINATION
Section 6.01 Term. The term of this Ground Lease shall commence as of the date of commencement of the term of the Lease Agreement and shall remain in full force and effect from such date to and including [April 1, 2054], unless such term is extended or sooner terminated as hereinafter provided.

Section 6.02 Extension; Early Termination. If, on [April 1, 2054], the Bonds shall not be fully paid, or provision therefor made in accordance with Article X of the Indenture, or the Indenture shall not be discharged by its term s, or if the Rental Payments payable under the Lease Agreement shall have been abated at any time, then the term of this Ground Lease shall be automatically extended until the date upon which all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, and the Indenture shall be discharged by its terms, except that the term of this Ground Lease shall in no event be extended more than ten years. If, prior to [April 1, 2054], all Bonds shall be fully paid, or provi sions therefor made in accordance with Article X of the Indenture, and the Indenture shall be discharged by its terms, the term of this Ground Lease shall end simultaneously therewith.
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ARTICLE VII

MISCELLANEOUS
Section 7.01 Binding Effect. This Ground Lease shall inure to the b enefit of and shall be binding upon the City, the Authority and their respective successors and assigns.

Section 7.02 Severability. In the event any provision of this Ground Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such hold ing shall not invalidate or render unenforceable any other provision hereof.

Section 7.03 Amendments, Changes and Modifications . This Ground Lease may be amended, changed, modified, altered or terminated only in accordance with the provisions of the Lease Agreement.

Section 7.04 Assignment to Trustee . The Authority and City acknowledge that the Authority has assigned its right, title and interest in and to this Ground Lease (but none of its obligations and none of its rights to provide consents or approvals hereunder) to the Trust ee pursuant to certain provisions of the Assignment Agreement. The City consents to such assignment.

Section 7.05 Execution In Counterparts . This Ground Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 7.06 Applicable Law. This Ground Lease shall be governed by and construed in accordance with the laws of the State of California.

Section 7.07 Captions. The captions or headings in this Ground Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Ground Lease.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Authority and the City have caused this Ground Lease to be executed by their respective officers hereunto duly authorized, all as of the day and year first above written.

CITY OF GARDEN GROVE
By:

Steven R. Jones
Mayor
ATTEST:

Teresa Pomeroy
City Clerk

GARDEN GROVE PUBLIC FINANCING AUTHORITY
By:

Steven R. Jones
Chair
ATTEST:

Teresa Pomeroy
Secretary
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CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in the Property conveyed under the foregoing to the Garden Grove Public Financing Authority, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and the laws of the State of California, is hereby accepted by the undersigned officer or agent on behalf of the Board of Directors of the Garden Grove Public Financing Authority, pursuant to authority conferred by resolution of said Board of Directors adopted on April 9, 2024, and the grantee consents to recordation thereof by its duly authorized officer.

Dated: June 1, 2024 GARDEN GROVE PUBLIC FINANCING AUTHORITY By:

Lisa Kim, Executive Director

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) ss.

COUNTY OF ORANGE )

On ___________________ before me, ____________________________________, Notary Public,

personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) ss.

COUNTY OF ORANGE )

On ___________________ before me, ____________________________________, Notary Public,

personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

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EXHIBIT A

LEGAL DESCRIPTION OF THE PROJECT SITE
[To come]

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EXHIBIT B

LEGAL DESCRIPTION OF THE RELEASE PROPERTY
[To come]

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4868-4074-8705v7/022046-0062

LEASE AGREEMENT
by and between

CITY OF GARDEN GROVE
and

GARDEN GROVE PUBLIC FINANCING AUTHORITY
Dated as of June 1, 2024
Relating to

$__________

GARDEN GROVE PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A

136

TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ....................................................................................................... 2 Section 1.01 Definitions .............................................................................................................. 2 ARTICLE II LEASE OF PROPERTY; TERM ........................................................................... 5 Section 2.01 Lease of Property .................................................................................................... 5 Section 2.02 Term; Occupancy .................................................................................................... 5 ARTICLE III RENTAL PAYMENTS .......................................................................................... 5 Section 3.01 Base Rental Payments ............................................................................................. 5 Section 3.02 Additional Rental Payments ................................................................................... 6 Section 3.03 Fair Rental Value .................................................................................................... 6 Section 3.04 Payment Provisions ................................................................................................ 7 Section 3.05 Appropriations Covenant ........................................................................................ 7 Section 3.06 Rental Abatement ................................................................................................... 7

ARTICLE IV ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF THE PROJECT ............................................................................................................... 8 Section 4.01 Deposit of Bond Proceeds; City Deposit ................................................................ 8 Section 4.02 Acquisition, Construction and Improvement of the Project ................................... 8 Section 4.03 Compliance with Law ............................................................................................. 8 Section 4.04 Payment of Costs .................................................................................................... 8 Section 4.05 Time of Completion and Liquidated Damages ....................................................... 8 Section 4.06 Construction and Acquisition of the Project ........................................................... 9 Section 4.07 Completion Date; Certification ............................................................................... 9 ARTICLE V MAINTENANCE, ALTERATIONS AND ADDITIONS ..................................... 9 Section 5.01 Modification of the Property .................................................................................. 9 Section 5.02 Maintenance and Utilities ..................................................................................... 10 Section 5.03 Installation of City’s Equipment ........................................................................... 10 ARTICLE VI INSURANCE ....................................................................................................... 11 Section 6.01 Commercial General Liability and Property Damage Insurance; Workers’ Compensation Insurance ....................................................................................... 11 Section 6.02 Title Insurance ...................................................................................................... 12 Section 6.03 Additional Insurance Provision; Form of Policies ................................................ 12 Section 6.04 Self-Insurance ....................................................................................................... 12 ARTICLE VII DEFAULTS AND REMEDIES ........................................................................... 13 Section 7.01 Defaults and Remedies ......................................................................................... 13 Section 7.02 Waiver................................................................................................................... 16 ARTICLE VIII EMINENT DOMAIN; PREPAYMENT .............................................................. 16 Section 8.01 Eminent Domain ................................................................................................... 16 Section 8.02 Prepayment ........................................................................................................... 16 ARTICLE IX COVENANTS ...................................................................................................... 17 Section 9.01 Right of Entry ....................................................................................................... 17 Section 9.02 Liens ..................................................................................................................... 17 137

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(continued)
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Section 9.03 Quiet Enjoyment ................................................................................................... 18 Section 9.04 Authority Not Liable ............................................................................................. 18 Section 9.05 Assignment and Subleasing .................................................................................. 18 Section 9.06 Title to Property .................................................................................................... 19 Section 9.07 Authority’s Purpose .............................................................................................. 19 Section 9.08 Representations of the City ................................................................................... 19 Section 9.09 Representation of the Authority ............................................................................ 19 ARTICLE X NO CONSEQUENTIAL DAMAGES; USE OF THE PROPERTY; SUBSTITUTION OR RELEASE ......................................................................... 19 Section 10.01 No Consequential Damages .................................................................................. 19 Section 10.02 Use of the Property ............................................................................................... 19 Section 10.03 Substitution or Release of the Property ................................................................ 19 Section 10.04 Release of Release Property After Completion of Project ................................... 20 ARTICLE XI MISCELLANEOUS ............................................................................................. 21 Section 11.01 Law Governing ..................................................................................................... 21 Section 11.02 Notices .................................................................................................................. 21 Section 11.03 Validity and Severability ...................................................................................... 21 Section 11.04 Net-Net-Net Lease ................................................................................................ 22 Section 11.05 Taxes ..................................................................................................................... 22 Section 11.06 Section Headings .................................................................................................. 22 Section 11.07 Amendments ......................................................................................................... 22 Section 11.08 Assignment ........................................................................................................... 23 Section 11.09 Execution .............................................................................................................. 23

Signatures ................................................................................................................................... S-1

EXHIBIT A LEGAL DESCRIPTION OF THE PROJECT SITE ................................................ A-1 EXHIBIT B LEGAL DESCRIPTION OF THE RELEASE PROPERTY .................................... B-1 EXHIBIT C DESCRIPTION OF THE PROJECT ........................................................................ C-1 EXHIBIT D BASE RENTAL PAYMENT SCHEDULE ............................................................. D-1

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LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease Agreement”) executed and entered into as of June 1, 2024, is by and between the CITY OF GARDEN GROVE (the “City”), a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California, as lessee, and the GARDEN GROVE PUBLIC FINA NCING AUTHORITY (the “Authority”), a joint exercise of powers entity duly organized and existing under and by virtue of the laws of the State of California, as lessor.

RECITALS
WHEREAS, the City has entered into that certain Project Agreement dated as of April 1, 2024 (the “Project Agreement”), with Edgemoor Garden Grove Civic Center Partners, LLC, a Maryland limited liability company (“Edgemoor”), pursuant to which Edgemoor has agreed to develop certain public capital improvements to be located on City-owned property located at Acacia Parkway, east of Euclid Street, in the City, including an approximately 100,000 square foot public safety facility (the “PSF”), a four-level parking structure that will provide approximately 350 parking spaces (the “Parking Structure”), and a reconfigured 2.8 -acre Civic Center Park, as well as the demolition of the existing police headquarters building located at 11301 Acacia Parkway (collectively, the “Project”); WHEREAS, the City and the Authority desire to finance all or a p ortion of the acquisition, construction, installation , and demolition work constituting the Project as provided in the Project Agreement;
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and residents o f the City to authorize the preparation, sale and delivery of the “ Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Series 2024A Bonds”) for the purpose of financing the Project;
WHEREAS, in order to facilitate the issuance of the Series 2024A Bonds, the City will lease certain real property and the improvements located thereon (the “Property”) to the Authority pursuant to a Ground Lease, dated as of the date hereof, and the City will sublease the Property back from the Authority pursuant to this Lease Agreement;
WHEREAS, during the construction of the Project, the Property will consist of the Project Site (defined below and described in Exhibit A) and the Release Property (defined below and described in Exhibit B); upon completion of construction of the Property the City is permitted to release the Release Property from this Lease Agreement and the Ground Lease as provided in more detail in Section 10.04 herein;
WHEREAS, the City and the Authority desire to provide for the issuance of the Series 2024A Bonds pursuant to an Indenture, dated as of the date hereof, by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); WHEREAS, the Series 2024A Bonds are payable from base rental payments (the “Base Rental Payments”) to be made by the City hereunder;
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WHEREAS, all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof, between the Trustee and the Authority; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Lease Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Lease Agreement;
NOW, THEREFORE, in consideration of the mu tual covenants hereinafter contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease Agreement, have the meanings herein specified, which meanings shall be equally applicable to both the singular and plural forms of any of the terms herein defined. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Indenture.
“Additional Bon ds” means bonds other than the Series 2024A Bonds issued under the Indenture in accordance with the provisions thereof
“Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 hereof.
“Authority” means the Garden Grove Public Financing Authority, a joint exercise of powers authority organized and existing under the laws of the State of California. “Base Rental Deposit Date” means the third (3rd) Business Day next preceding each Interest Payment Date.
“Base Rental Payments” means all amounts payable to the Authority from the City as Base Rental Payments pursuant to Section 3.01 hereof.
“Base Rental Payment Schedule ” means the schedule of Base Rental Payments payable to the Authority from the City pursuant to Section 3.01 hereof and attached hereto as Exhibit D. “Bonds” means the Series 2024A Bonds, and any Additional Bonds. “City” means the City of Garden Grove , a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California. “Closing Date” means June __, 2024.
“Completion Certificate” means a certificate of an Authorized City Representative delivered pursuant to Section 4.07 hereof to the effect that Phase 1 of the Project, consisting of the completion 140

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of the PSF and the Parking Structure components of the Project, has been substantially completed in conformity with the Plans and Specifications for the Project and is available for occupancy. “Costs” means, with respect to the Project, together with any other proper item of cost not specifically mentioned herein, (a) costs of payment of, or reimbursement for, acquisition, design, construction, rehabilitation, installation, delivery and financing of t he Project, including, but not limited to, the payment of real property rental, administrative costs and capital expenditures relating to acquisition, construction , installation, and demolition, inspection costs, filing and recording costs, printing costs, reproduction and binding costs, fees and charges of the Trustee pursuant to the Indenture and other financing documents, legal fees and charges, financial, accounting and other professional consultant fees, costs of rating agencies or credit ratings, fees for the printing, execution, transportation and safekeeping of the Series 2024A Bonds; (b) all other costs which the City shall be required to pay under the terms of any contract or contracts for the acquisition, construction, delivery and installation of the Project, and demolition work required for the Project, including, but not limited to, the cost of insurance; (c) any sums required to reimburse the City for advances made for any of the above items, or for any other costs incurred and for work done, which is properly chargeable to the Project; (d) any costs paid from the Net Insurance Proceeds to repair, restore or replace the Project; and (e) such other expenses not specified herein as may be necessary or incidental to the acquisition, construction, delivery and installation of the Project, the financing thereof and the placing of the same in use and operation. Costs, as defined herein, shall be deemed to include the cost and expenses incurred by any agent of the City for any of the above mentioned items. “Ground Lease” means the Ground Lease, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with to the provisions thereof and hereof.
“Indenture” means the Indenture, dated as of the date hereof, by and among the Authority, the City and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions thereof. “Joint Powers Agreement” means the Joint Exercise of Powers Agreement, dated June 22, 1993, as amended by Amendment No. 1 thereto dated March 28, 2006, and by Amendment No. 2 thereto dated November 1, 2020, by and among the City, the Successor Agency to the Garden Grove Agency for Community Development and the Garden Grove Sanitary District, pursuant to which the Authority is established , as originally executed and as it may from time to time be amended in accordance with the provisions thereof. The current members of the Authority are th e City and the Garden Grove Sanitary District.
“Lease Agreement” means this Lease Agreement, as originally executed and as it may from time to time be amended in accordance with the provisions hereof. “Net Insurance Proceeds ” means any insurance proceeds , condemnation award , or rental payment received pursuant to the Garden Grove Park Quitclaim Deed in excess of $50,000, paid with respect to any of the Property, remaining after payment therefrom of all reasonable expenses incurred in the collection thereof.
“Parking Structure” is defined in the Recitals.
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“Permitted Encumbrances” means, with respect to the Property, as of any particular time, (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to provisions of Article VI hereof, permit to remain unpaid, (b) the Assignment Agreement, (c) this Lease Agreement, (d) the Ground Lease, (e) any right or claim of any me chanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law as normally exist with respect to properties similar to the Property for the purposes for which it was acquired or is held by the City, ( f) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the Closing Date which the City certifies in writing will not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and the Assignment Agreement and to which the Authority and the City consent in writing, ( g) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the Closing Date which the City certifies in writing do not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owne rs of the Bonds by the Indenture and the Assignment Agreement and to which the Authority and the City consent in writing, (h) that certain quitclaim deed to the City from the United States of America, acting through the Administration of General Services, dated January 19, 1959 and recorded in the Official Records of Orange County, California on May 29, 1959 in Book 4736, Page 385 , which contains a right to take and use all or a portion of Garden Grove Park during the existence of a national emergency declared by the President or Congress (the “Garden Grove Park Quitclaim Deed”), (i) that certain lease agreement between the City and the Orange County Association for Mental Health, for approximately 5,500 square feet of office space located at 11277 Garden Grove Blvd, Garden Grove, California, and (j) future subleases of the Property, including subleases for office space at the building located at 11277 Garden Grove Blvd., Garden Grove, California, entered into by the City, as sublessor, and third party tenants, as sublessee, so long as such subleases are entered into in compliance with Section 9.05 hereof. “Project” is defined in the Recitals.
“Project Agreement” is defined in the Recitals.
“Project Site ” means the real property described in Exhibit A hereto and improvements located thereon, including the Project.
“Property” means the Project Site and, until released pursuant to Section 10.04, the Release Property.
“PSF” is defined in the Recitals.
“Release Property” means all real property described in Exhibit B hereto and improvements located thereon.
“Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
“Rental Period” means the twelve-month period commencing on April 1 of each year during the term of the Lease Agreement.
“Series 2024A Bonds” means the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A issued under the Indenture.
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“Termination Date” means [April 1, 2054], unless extended or sooner terminated as provided in Section 2.02 hereof.
“Trustee” means the trustee appointed under the Indenture and referred to therein as the Trustee.

ARTICLE II

LEASE OF PROPERTY; TERM
Section 2.01 Lease of Property.
(a) The Authority hereby leases to the City and the City hereby leases from the Authority the Property, on th e terms and conditions hereinafter set forth, subject to all Permitted Encumbrances.
(b) The leasing of the Property by the City to the Authority pursuant to the Ground Lease shall not effect or result in a merger of the City’s leasehold estate pursuant to thi s Lease Agreement and its fee estate as lessor under the Ground Lease, and the Authority shall continue to have a leasehold estate in the Property pursuant to the Ground Lease throughout the term thereof and hereof.

The leasehold interest granted by the C ity to the Authority pursuant to the Ground Lease is and shall be independent of this Lease Agreement; this Lease Agreement shall not be an assignment or surrender of the leasehold interest granted to the Authority under the Ground Lease.

Section 2.02 Term; Occupancy. The term of this Lease Agreement shall commence on the Closing Date and shall end on the Termination Date, unless such term is extended or sooner terminated as hereinafter provided. If on the Termination Date the Bonds shall not be fully paid, or provisi on therefor made in accordance with Article X of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments shall remain due and payable or shall have been abated at any time and for any reason, then the term of this Le ase Agreement shall be extended until the date upon which (i) all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, or (ii) the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full. Notwithstanding the foregoing, the term of this Lease Agreement shall in no event be extended more than ten years beyond the Termination Date, such extended date being the “Maximum Lease Term.” If prior to the Termination Date, all Bo nds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full, then the term of this Lease Agreement shall end simultaneously therewith.

ARTICLE III

RENTAL PAYMENTS
Section 3.01 Base Rental Payments.
(a) Subject to the provisions hereof relating to a revision of the Base Rental Payment Schedule pursuant to subsection (b) of this Section, the City shall pay to the Authority, as Base Rental Payments (subject to the provisions of Section 3.06 and Article VIII hereof) the amount at the times specified in the Base Rental Payment Schedule, a portion of which Base Rental Payments 143

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shall constitute principal, and a portion of which shall constitute interest. Rental Payments, including Base Rental Payments, shall be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof during each Rental Period for which such Rental Payments are to be paid.

The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or of the State of California, or of any political subdivision thereof, within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. (b) If the term of this Lease Agreement shall have been extended pursuant to Section 2.02 hereof, the obligation of the City to pay Rental Payments shall continue to and including the Base Rental Deposit Date preceding the date o f termination of this Lease Agreement (as so extended pursuant to Section 2.02 hereof). Upon such extension, the Base Rental Payments shall be established so that they will be sufficient to pay all extended and unpaid Base Rental Payments; provided, however, that the Rental Payments payable in any Rental Period shall not exceed the annual fair rental value of the Property.

Section 3.02 Additional Rental Payments. The City shall also pay, as Additional Rental Payments, such amounts as shall be required for the payment of the following:
(a) all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein; (b) all reasonable administrative costs of the Authori ty relating to the Property including, but without limiting the generality of the foregoing, salaries, wages, fees and expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or the Lease Agreement or to defend the Authority and its members, officers, agents and employees;
(c) insurance premiums for all insurance required pursuant to Article VI hereof; (d) any amounts with respect to the Lease Agreement or the Bonds required to be rebated to the federal government in accordance with Section 148(f) of the Code; and (e) all other payments required to be paid by the City under the provisions of this Lease Agreement or the Indenture.

Amounts constituting Additional Rental Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof.

Section 3.03 Fair Rental Value . The parties hereto have agreed and determined that the annual fair rental value of the Property is not less than the maximum annua l Rental Payments due in 144

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any year. In making such determination of fair rental value, consideration has been given to the uses and purposes that may be served by the Property and the benefits therefrom which will accrue to the City and the general public. Payments of the Rental Payments for the Property during each Rental Period shall constitute the total rental for said Rental Period.

Section 3.04 Payment Provisions . Each installment of Base Rental Payments payable hereunder shall be paid in lawful money of the Unit ed States of America to or upon the order of the Authority at the principal office of the Trustee in Los Angeles, California, or such other place or entity as the Authority or Trustee shall designate. Each Base Rental Payment shall be deposited with the Trustee no later than the Base Rental Deposit Date preceding the Interest Payment Date on which such Base Rental Payment is due. Any Base Rental Payment which shall not be paid by the City when due and payable under the terms of this Lease Agreement shall bear interest from the date when the same is due hereunder until the same shall be paid at the rate equal to the highest rate of interest on any of the Outstanding Bonds. Notwithstanding any dispute between the Authority and the City, the City shall make all Rental Payments when due without deduction or offset of any kind and shall not withhold any Rental Payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said Rental Payments or any port ion thereof, said payments or excess of payments, as the case may be, shall be credited against subsequent Rental Payments due hereunder or refunded at the time of such determination. Amounts required to be deposited by the City with the Trustee pursuant to this Section on any date shall be reduced to the extent of available amounts on deposit in the Base Rental Payment Fund, the Interest Fund or the Principal Fund.

Section 3.05 Appropriations Covenant. The City covenants to take such action as may be necessary to include all Rental Payments due hereunder as a separate line item in its biennial budgets and to make necessary annual appropriations for all such Rental Payments. The City will deliver to the Authority and the Trustee a Certificate of the City stating that its final biennial budget includes all Base Rental Payments due in the fiscal years addressed in such budget within ten days after the filing or adoption thereof. The covenants on the part of the City herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City.

Section 3.06 Rental Abatement. Except as otherwise specifically provided in this Section, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, a taking of all or a portion of the Property by the United States of America pursuant to rights reserved in the Garden Grove Park Quitclaim Deed, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments shall be abated proportionately, an d the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Lease Agreement by virtue of any such interference, and the Lease Agreement shall continue in full force and effect.

The amount of such abatement shall be agreed upon by the City and the Authority; provided, however, that the Rental Payments due for any Rental Period shall not exceed the annual fair rental value of that portion of the Property available for use and occupancy by t he City during such Rental Period. The City and the Authority shall calculate such abatement and shall provide the Trustee with a certificate setting forth such calculation and the basis therefor. Such abatement shall continue for the period commencing with the date of interference resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or 145

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destroyed; and the term of this Lease Agreement shall be extended as provided in Section 2.02 hereof, except that the term shall in no event be extended beyond the Maximum Lease Term.

Notwithstanding the foregoing, to th e extent that moneys are available for the payment of Rental Payments in any of the funds and accounts established under the Indenture or proceeds of the rental interruption insurance required by section 601(d) hereof are available, Rental Payments shall not be abated as provided above but, rather, shall be payable by the City as a special obligation payable solely from said funds, accounts, and proceeds.

ARTICLE IV

ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF THE PROJECT Section 4.01 Deposit of Bond Proceeds; City Deposit . Upo n the issuance of the Series 2024A Bonds, the Authority agrees that all proceeds of the Series 2024A Bonds shall be paid to the Trustee and that such moneys shall be deposited with the Trustee and be applied as provided in Section 3.02 of the Indenture
Section 4.02 Acquisition, Construction and Improvement of the Project. The City agrees to acquire, construct, deliver and install any portion of the Project to be financed with the proceeds of the Series 2024A Bonds, or to cause such portion to be acquired, constructe d, delivered and installed, with the proceeds of Series 2024A Bonds paid to the City by the Authority pursuant to Section 4.01 above and the Authority shall have no responsibility with respect thereto. The parties acknowledge that the City has entered int o the Project Agreement to provide for the construction, delivery, and acquisition of the Project, including demolition of existing facilities as necessary to complete the Project.

Section 4.03 Compliance with Law. The City shall comply with all applicable provisions for bids and contracts prescribed by law with respect to the Project, including, without limitation, any applicable environmental review and approvals, Sections 22160 et seq. of the Public Contracts Code and Section 2.52.020 of the Garden Grove Municipal C ode. The City acknowledges and agrees that specific expenditures for all or any portion of the Project, as now or hereafter designated, are expressly subject to compliance with such requirements.

Section 4.04 Payment of Costs. Payment of Costs shall be made from the moneys deposited with the Trustee in the Project Fund as provided in Section 4.01 hereof and Section 3.05 of the Indenture, which shall be disbursed from the Project Fund in accordance and upon compliance with Section 3.05 of the Indenture.

Section 4.05 Time of Complet ion and Liquidated Damages . Substantial completion of the PSF and Parking Structure shall be completed on or prior to May 2026 and substantial completion of the park reconfiguration and demolition of the existing police headquarters shall be completed on or prior to May 2027, subject to excused delays pursuant to standard City procedures (the “Completion Date”). The City agrees that if and to the extent the Project is not completed on or before the Completion Date, the City shall seek and enforce Edgemoor’s obligation to pay Delay Credits (defined in the Project Agreement) from Edgemoor as provided in Section 9.3(d) of the Project Agreement. 146

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Section 4.06 Construction and Acquisition of the Project. The City agrees to oversee the construction, acquisition, delivery a nd installation of the Project in accordance with the following terms:
(a) Construction and Completion . The City agrees to proceed with all due diligence to complete the construction, acquisition, delivery and installation of the Project, all in accordance with the plans and specifications for the Project (the “Plans and Specifications”) approved by the City Engineer. The City shall comply with all statutes and laws applicable to the performance of its obligations hereunder, including all public laws applicable thereto and all laws regarding the approval, acquisition and construction of public projects by cities in the State of California. The City shall make certain that each contract relating to the Project is awarded in accordance with applicable law and contains a scheduled completion date which requi res completion on or before the scheduled Completion Date referred to in Section 4.05 above;
(b) Change Orders. Subject to any other restrictions imposed upon the City, the City may approve any changes to the Plans and Specifications so long as any change does not, and all such changes as a whole do not, (i) substantially alter the nature of the Project, (ii) delay the completion of the Project beyond June 2027, (iii) reduce the fair rental value of the Project, or (iv) increase the total Costs of the Project to an amount in excess of the amount in the Project Fund unless there has been deposited with the City an amount equal to such excess or unless there has been deposited with the City a certificate of an Authorized Representative of the City, together with a revised construction budget demonstrating that the total amount on deposit to pay for the Project is adequate to allow the completion of the Project as planned;
(c) Payment of Costs of the Project. Payment of the portion of the Costs of the Project being financed by the City shall be made from moneys deposited in the Project Fund, and shall be disbursed for such purpose in accordance and upon compliance with the Indenture. Neither the Authority nor the City shall be liable for the payment of Costs of the Project other than from amounts on deposit in the Project Fund; and
(d) Unexpended Monies. The City agrees that unexpended moneys remaining in the Project Fund shall, upon payment in full of all Costs of the Project, be applied solely in accordance with the provisions of the Indenture.

Section 4.07 Completion Date; Certification . Upon the completion of acquisition, construction, delivery and installation of the portion of the Project to be financed with each issue of Bonds, the City shall deliver to the Trustee a Completion Certificate with respect thereto. On the date of filing a Completion Certificate concerning that portion of the Project financed with proceeds of Series 2024A Bonds, all excess moneys remaining in the Project Fund for the Series 2024A Bonds for which such Completion Certificate is delivered shall be applied in accordance with the provisions of Section 3.05 of the Indenture.

ARTICLE V

MAINTENANCE, ALTERATIONS AND ADDITIONS
Section 5.01 Modification of the Property.
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(a) Subject to Section 9.02 hereof, the City and any sublessee sha ll, at its own expense, or with the proceeds of Additional Bonds, have the right to make additions, modifications, and improvements to any portion of the Property if such improvements are necessary or beneficial for the use of such portion of the Property. All such additions, modifications and improvements shall thereafter comprise part of the Property and be subject to the provisions of this Lease. Such additions, modifications and improvements shall not in any way cause an abatement of Rental Payments with respect to the Property or cause it to be used for purposes other than those authorized under the provisions of State and federal law or in any way which would impair the State tax -exempt status or the exclusion from gross income for federal income tax purposes of the interest on the Bonds and Additional Bonds (to the extent such Additional Bonds were issued as tax exempt Bonds); and the Property, upon completion of any additions, modifications and improvements made pursuant to this Section, shall have an annual fair rental value which is not less than the annual Rental Payments. (b) Subject to Section 9.02 hereof, the City and any sublessee shall, at its own expense, or with the proceeds of Additional Bonds, have the right to make replacements, redevelopment or renovation of all or a portion of the Property if the following conditions precedent are satisfied:
(i) The City receives an opinion of Bond Counsel, a copy of which the City shall furnish to the Authority and the Trustee, that (1) such replacement does not adversely affect the federal income tax exclusion or the State tax -exempt status of the interest on the Bonds and Additional Bonds (to the extent such Additional Bonds were issued as tax exempt Bonds), and (2) this Lease will remain the legal, valid, binding and enforceable obligation of the City; (ii) In the event such replacement, redevelopment or renovation would result in the temporary abatement of Rental Payments as provided in Section 3.06 hereof the City shall have notified any rating agency then provi ding a rating on the Bonds and shall deposit moneys with the Trustee in advance for payment of Rental Payments from the proceeds of Additional Bonds or from special funds of the City or other moneys, the application of which would not, in the opinion of Bond Counsel (a copy of which shall have been delivered to the Trustee), result in such Rental Payments constituting indebtedness of the City in contravention of the Constitution and laws of the State; and (iii) The City shall certify to the Trustee that it has su fficient funds to complete such replacement, redevelopment or renovation.

Section 5.02 Maintenance and Utilities. Throughout the term of this Lease Agreement, as part of the consideration for rental of the Property, all improvement, repair and maintenance of the Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power gas, telephone, light, heating, ventilation, air conditioning, water and all other utility services, and shall pay for or otherwise arrange for payment of the cost of the repair and replacement of the Property resulting from ordinary wear and tear or want of care on the part of th e City or any assignee or sublessee thereof. In exchange for the Rental Payments, the Authority agrees to provide only the Property.

Section 5.03 Installation of City’s Equipment . The City and any sublessee may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any 148

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interest therein. The City or such sublessee may remove or modify such equipment or other personal property at any time, provided that such party shall repair and restore any and all damage to the Property resulting from the installation, modifi cation or removal of any such items. Nothing in this Lease Agreement shall prevent the City or any sublessee from purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase contract, or subject to a vendor’s lien or security agreement as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Property.

ARTICLE VI

INSURANCE
Section 6.01 Commercial General Liability and Property Damage Insurance; Workers’ Compensation Insurance.
(a) The City shall maintain or cause to be maintained, throughout the term of this Lease Agreement, a standard commercial general liability insurance policy or policies in protection of the City, the Authority and their respective me mbers, officers, agents and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the use or ownership of the Property. Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in a single accident or event, and in a minimum amount of $500,000 for damage to property (subject to a deductible clause of not to exceed $100,000) resulting from a single accident or event. Such commercial general liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried or required to be carried by the City, and may be maintained in whole or in part in the form of self-insurance by the City provided such self -insurance complies with the provisions of Section 6.04 hereof. The Net Insurance Proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the Net Insurance Proceeds of such insurance shall have been paid.
(b) The City shall maintain or cause to be maintained, throughout the term of this Lease Agreement, workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the California Labor Code, or any act enacted as an amendment or supplement thereto or in lieu thereof, such workers’ compensation insurance to cover all persons employed by the City in connection with the Property and to cover full liability for compensation under any such act; provided, however, that the City’s obligations under this subsection may be satisfied by self-insurance, provided such self - insurance complies with the provisions of Section 6.04 hereof. (c) The City shall maintain or cause to be maintained, fire, lightning and special extended coverage insurance (which shall include coverage for vandalism and malicious mischief, but need not include coverage for earthquake damage) on all improvements constituting any part of the Property in an amount equal to the greater of 100% of the replacement cost of such improvements or 100% of the outstanding principal amount of the Bonds. The City has an insurance policy which provides replacement cost coverage. All insurance required to be maintained pursuant to this subsection may be subject to a deductible in an amount not to exceed $500,000. The City’s obligations 149

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under this subsection may be satisfied by self -insurance, provided such self-insurance complies with the provisions of Section 6.04 hereof.
(d) The City shall maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards required to b e covered pursuant to subsection (c) of this Section in an amount sufficient at all times to pay an amount not less than the product of two times the maximum amount of Base Rental Payments scheduled to be paid during any Rental Period.

The City’s obligati ons under this subsection may be satisfied by self -insurance, provided such self - insurance complies with the provisions of Section 6.04 hereof. (e) The insurance required by this Section shall be provided by reputable insurance companies with claims paying abi lities determined, in the reasonable opinion of a professionally certified risk manager or an independent insurance consultant, to be adequate for the purposes hereof.

Section 6.02 Title Insurance . The City shall provide, at its own expense, one or more CLTA or ALTA title insurance policies for the Property, in the aggregate amount of not less than the initial aggregate principal amount of the Series 2024A Bonds and the initial aggregate principal amount of any Additional Bonds issued after the Closing Date. Such policy or policies shall insure (a) the fee interest of the City in the Property, (b) the Authority’s ground leasehold estate in the Property under the Ground Lease, and (c) the City’s leasehold estate hereunder in the Property, subject only to Permitted Encumbrances. All Net Insurance Proceeds received under said policy or policies shall be deposited with the Trustee and applied as provided in Section 5.03 of the Indenture. So long as any of the Bonds remain Outstanding, each policy of title insurance obtained pursuant to the Indenture or this Lease Agreement or required thereby or hereby shall provide that all proceeds thereunder shall be payable to the Trustee for the benefit of the Bond Owners.

Section 6.03 Additional Insurance Provision; Form of Policies . The City shall pay or cause to be paid when due the premiums for all insurance policies required by Section 6.01 hereof, and shall promptly furnish or cause to be furnished evidence of such payments to the Trustee. All such policies shall provide that the Trustee shall be given 30 days’ notice of the expiration thereof or any intended cancellation thereof. The Trustee shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee.

The City shall cause to be delivered to the Trustee on or before August 15 each year, commencing August 15, 2025, a Certificate of the City stating that such policies are in full force and effect and that the City is in full compliance with the requirements of this Article. The Trustee shall be entitled to rely upon said Certificate of the City as to the City’s compliance with this Article. The Trustee shall not be responsible for the sufficiency of coverage or amounts of such policies.

Section 6.04 Self-Insurance. Insurance provided through a California joint powers authority of which the City is a member or with which the City contracts for insurance shall be deemed to be self-insurance for purposes hereof. Any self -insurance maintained by the City pursuant to this Article shall comply with the following terms:
(a) the self -insurance program shall be approved in writing by the City’s Risk Manager, a professionally certified risk manager, or an independent insurance consultant; 150

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(b) the self-insurance program shall include an actuarially sound claims reserve fund out of which each self -insured claim shall be paid, the adequacy of each such fund shall be evaluated on an annual basis by the City’s Risk Management Department, a professionally certified risk manager or an independent insurance consultant and any deficiencies in any self -insured claims reserve fund shall be remedied in accordance with the recommendation of the City’s Risk Management Department, a professionally certified risk manager or an indep endent insurance consultant, as applicable; and
(c) in the event that the self-insurance program shall be discontinued, the actuarial soundness of its claims reserve fund, as determined by a professionally certified risk manager or by an independent insurance consultant, shall be maintained.

ARTICLE VII

DEFAULTS AND REMEDIES
Section 7.01 Defaults and Remedies.
(a) (i) If the City shall fail (A) to pay any Rental Payment payable hereunder when the same becomes due and payable, time being expressly declared to be of the essence in this Lea se Agreement, or (B) to keep, observe or perform any other term, covenant or condition contained herein or in the Indenture to be kept or performed by the City, or (ii) upon the happening of any of the events specified in this subsection or in subsection (b) of this Section, the City shall be deemed to be in default hereunder and it shall be lawful for the Authority to exercise any and all remedies available pursuant to law or granted pursuant to this Lease Agreement. The City shall in no event be in defau lt in the observance or performance of any covenant, condition or agreement in this Lease Agreement on its part to be observed or performed, other than as referred to in clause (i)(A) or (ii) of the preceding sentence, unless the City shall have failed, fo r a period of 30 days or such additional time as is reasonably required to correct any such default after notice by the Authority to the City properly specifying wherein the City has failed to perform any such covenant, condition or agreement. Upon any such default, the Authority, in addition to all other rights and remedies it may have at law, shall have the option to do any of the following:
(1) To terminate this Lease Agreement in the manner hereinafter provided on account of default by the City, notwithsta nding any re -entry or re -letting of the Property as hereinafter provided for in subparagraph (2) hereof, and to re-enter the Property and remove all persons in possession thereof and all personal property whatsoever situated upon the Property and place suc h personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City. In the event of such termination, the City agrees to surrender immediately possession of the Property, without let or hindrance, and to pay the Authority all damages recoverable at law that the Authority may incur by reason of default by the City, including, without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re -entry upon the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. Neither notice to pay Rental Payments or to deliver up possession of the Property given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property nor the appointment of a receiver upon initiative of the Authority to protect the Authority’s interest under this Lease Agreement shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of 151

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default by the City shall be or become effective by ope ration of law or acts of the parties hereto, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property or of the remainder of the term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated by the Authority by such written notice.
(2) Without terminating this Lease Agreem ent, (x) to collect each installment of Rental Payments as the same become due and enforce any other terms or provisions hereof to be kept or performed by the City, regardless of whether or not the City has abandoned the Property, or (y) to exercise any and all rights of entry and re-entry upon the Property. In the event the Authority does not elect to terminate this Lease Agreement in the manner provided for in subparagraph (1) hereof, the City shall remain liable and agrees to keep or perform all covenan ts and conditions herein contained to be kept or performed by the City and, if the Property is not re -let, to pay the full amount of the Rental Payments to the end of the term of this Lease Agreement or, in the event that the Property is re-let, to pay any deficiency in Rental Payments that results therefrom; and further agrees to pay said Rental Payments and/or Rental Payment deficiency punctually at the same time and in the same manner as hereinabove provided for the payment of Rental Payments hereunder, notwithstanding the fact that the Authority may have received in previous years or may receive thereafter in subsequent years Rental Payments in excess of the Rental Payments herein specified, and notwithstanding any entry or re-entry by the Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property. Should the Authority elect to re -enter as herein provided, the City hereby irrevocably appoints the Author ity as the agent and attorney-in-fact of the City to re-let the Property, or any part thereof, from time to time, either in the Authority’s name or otherwise, upon such terms and conditions and for such use and period as the Authority may deem advisable an d to remove all persons in possession thereof and all personal property whatsoever situated upon the Property and to place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City, and the City hereby indemnifies and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re -entry upon and re-letting of the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to re-let the Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re -letting shall constitute a surrender or termination of this Lease Agreement irrespective of the use or the term for which such re-letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in t he sole and exclusive manner provided for in subparagraph (1) hereof. The City further agrees to pay the Authority the cost of any alterations or additions to the Property necessary to place the Property in condition for re-letting immediately upon notice to the City of the completion and installation of such additions or alterations.

The City hereby waives any and all claims for damages caused or which may be caused by the Authority in re-entering and taking possession of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Property. (b) If (i) the City’s interest in this Lease Agreement or any part thereof is assigned or transferred, either voluntarily or by operation of law or otherwise, without the written consent of the 152

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Authority and, as hereinafter provided for, or (ii) the City or any assignee shall file any pet ition or institute any proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of the City’s debts or obligations, or offers to the City’s creditors to elect a composition or extension o f time to pay the City’s debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of the City’s debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character be filed or be instituted or taken against the City, or if a receiver of the business or of the property or assets of the City shall be appointed by any court, except a receiver appointed at the instance or request of the Authority, o r if the City shall make a general assignment for the benefit of the City’s creditors, or (iii) the City shall abandon or vacate the Property, then the City shall be deemed to be in default hereunder. (c) In addition to the other remedies set forth in this Section, upon the occurrence of an event of default, the Authority and its assignee shall be entitled to proceed to protect and enforce the rights vested in the Authority and its assignee by the Lease Agreement or by law. The provisions of the Lease Agreement and the duties of the City and of its city council, officers or employees shall be enforceable by the Authority or its assignee by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the gene rality of the foregoing, the Authority and its assignee shall have the right to bring the following actions:
(i) Accounting. By action or suit in equity to require the City and its city council, officers and employees and its assigns to account as the trustee of an express trust. (ii) Injunction. By action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the Authority or its assignee. (iii) Mandamus. By mandamus or other suit, action or proceeding at law or in equity to enforce the Authority’s or its assignee’s rights against the City (and its city council, officers and employees) and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the City as provided herein.

Each and all of the remedies given to the Authority hereunder or by any law now or hereafter enacted are cumulative and the single or partial exercise of any right, power or privilege hereunder shall not impair the right of the Authority t o the further exercise thereof or the exercise of any or all other rights, powers or privileges. The term “re -let” or “re-letting” as used in this Section shall include, but not be limited to, re -letting by means of the operation by the Authority of the Property. If any statute or rule of law validly shall limit the remedies given to the Authority hereunder, the Authority nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of law.

In the event the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Lease Agreement, the City agrees to pay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder.

Notwithstanding anything to the contrary contained in this Lease Agreement, the Authority shall have no right upon a default hereunder by the City to accelerate Rental Payments. 153

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(d) Notwithstanding anything to the contrary contained in this Lease Agreement, the termination of this Lease Agreement by the Authority and its assignees on account of a default by the City under this Section shall not effect or result in a termination of the Ground Lease.

Section 7.02 Waiver. Failure of the Authority to take ad vantage of any default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this instrument be construed to waive or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or condition hereof, or to exercise any rights given the Authority on account of such default. A waiver of a particular default shall not be deemed to be a waiver of any o ther default or of the same default subsequently occurring. The acceptance of Rental Payments hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Lease Agreement.

ARTICLE VIII

EMINENT DOMAIN; PREPAYMENT
Section 8.01 Eminent Domain. If all of the Property (or portions thereof such that the remainder is not usable for public purposes by the City) shall be taken under the power of eminent domain, the term hereof shall cease as of the day that possession shall be so taken. If less th an all of the Property shall be taken under the power of eminent domain and the remainder is usable for public purposes by the City at the time of such taking, then the Lease Agreement shall continue in full force and effect as to such remainder, and the p arties waive the benefits of any law to the contrary, and in such event there shall be a partial abatement of the Rental Payments in accordance with the provisions of Section 3.06 hereof. So long as any Bonds shall be Outstanding, any award made in eminent domain proceedings for the taking of the Property, or any portion thereof, shall be paid to the Trustee and applied to the redemption of Bonds as provided in subsection (a) of Section 4.01 of the Indenture, in the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued and in Section 5.03 of the Indenture. Any such award made after all of the Bonds, and all other amounts due under the Indenture and hereunder, have been fully paid, shall be paid to the Authorit y and to the City as their respective interests may appear.

Section 8.02 Prepayment.
(a) The City may prepay all or a portion of the Base Rental Payments attributable to the Series 2024A Bonds which are payable after April 1, 20__ from any source of available funds, on any date on or after April 1, 20__, by paying a prepayment price equal to (i) all or a portion, as selected by the City, of the principal components of such Base Rental Payments, and (ii) the accrued but unpaid interest component of such Base Rental Payments to be prepaid to the date of such prepayment.
(b) The City may prepay, from any source of available funds, all or any portion of the Base Rental Payments attributable to the Series 2024A Bonds by depositing with the Trustee moneys or securities as provided, and subject to the terms and conditions set forth, in Article X of the Indenture sufficient to make such Base Rental Payments when due or to make such Base Rental Payments through a specified date on which the City has a right to prepay such Base Rental Payments pursuant to subsection (a) of this Section, and to prepay such Base Rental Payments on such prepayment date, at a prepayment price determined in accordance with subsection (a) of this Section. 154

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(c) If less than all of the Base Rental Payments attributable to the Series 2024A Bonds are prepaid pursuant to this Section then, as of the date of such prepayment pursuant to subsection (a) of this Section, or the date of a deposit pursuant to subsection (b) of this Section, the principal and interest components of such Base Rental Payments shall be recalculated by the City and transmitted to the Trustee in order to take such prepayment into account. The City agrees that if, following a partial prepayment of such Base Rental Payments, the Property is damaged or des troyed or taken by eminent domain, or a defect in title to the Property is discovered, the City shall not be entitled to, and by such prepayment waives the right of, abatement of such prepaid Base Rental Payments and the City shall not be entitled to any reimbursement of such Base Rental Payments. (d) If all of the Base Rental Payments are prepaid in accordance with the provisions of this Lease Agreement then, as of the date of such prepayment pursuant to subsection (a) of this Section and, if applicable, the c orresponding provisions hereof relating to the prepayment of Base Rental Payments attributable to Additional Bonds, or deposit pursuant to subsection (b) of this Section and, if applicable, such corresponding provisions, and payment of all other amounts ow ed under this Lease Agreement, the term of this Lease Agreement shall be terminated. (e) Prepayments of Base Rental Payments attributable to the Series 2024A Bonds made pursuant to this Section shall be applied to the redemption of the Series 2024A Bonds as directed by the City and as provided in Section 4.01 of the Indenture. (f) Before making any prepayment pursuant to this Article, the City shall give written notice to the Authority and the Trustee specifying the date on which the prepayment will be made (conditionally or otherwise), which date shall be not less than 20 nor more than 60 days from the date such notice is given to the Authority.

ARTICLE IX

COVENANTS
Section 9.01 Right of Entry. The Authority and its assignees shall have the right to enter upon and to examine and inspec t the Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority’s rights or obligations under this Lease Agreement, and for all other lawful purposes.

Section 9.02 Liens. In the event the City shall at any time during the term of this Lease Agreement cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Property and which may be secured by a mechanics’, materialmen’s or other lien a gainst the Property or the Authority’s interest therein, and will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to co ntest any such lien, it may do so as long as such contestment is in good faith.

If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment.
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Section 9.03 Quiet Enjoyment . The parties hereto mutually covenant that the City, by keeping and performing the covenants and agreements herein contained, shall at all times during the term of this Lease Agreement peaceably and quietly have, hold and enjoy the Property without suit, trouble or hindrance from the Authority.

Section 9.04 Authority Not Liable . The Authority and its directors, officers, agents and employees, shall not be liable to the City or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Property. To the extent permitted by law, the City shall, at its expense, indemnify and hold the Authority and the Trustee and all directors, members, officers and employees thereof harmless against and from any and all claims by or on behalf of any person, firm, corporation or governmental authority arising from the acquisition, constructio n, occupation, use, operation, maintenance, possession, conduct or management of or from any work done in or about the Property or from the subletting of any part thereof, including any liability for violation of conditions, agreements, restrictions, laws, ordinances, or regulations affecting the Property or the occupancy or use thereof, but excepting the negligence or willful misconduct of the persons or entity seeking indemnity. The City also covenants and agrees, at its expense, to pay and indemnify and save the Authority and the Trustee and all directors, officers and employees thereof harmless against and from any and all claims arising from (a) any condition of the Property and the adjoining sidewalks and passageways, (b) any breach or default on the part of the City in the performance of any covenant or agreement to be performed by the City pursuant to this Lease Agreement, (c) any act or negligence of licensees in connection with their use, occupancy or operation of the Property, or (d) any accident, injury or damage whatsoever caused to any person, firm or corporation in or about the Property or upon or under the sidewalks and from and against all costs, reasonable counsel fees, expenses and liabilities incurred in any action or proceeding brought by reason of any claim referred to in this Section, but excepting the negligence or willful misconduct of the person or entity seeking indemnity. In the event that any action or proceeding is brought against the Authority or the Trustee or any director, mem ber, officer or employee thereof, by reason of any such claim, the City, upon notice from the Authority or the Trustee or such director, member, officer employee thereof, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to the Authority or the Trustee or such director, member, officer or employee thereof.

Section 9.05 Assignment and Subleasing. This Lease Agreement may not be assigned by the City. The City may sublease the Property or any portion thereof to any other person or entity for any other purpose, subject to the satisfaction of all of the following conditions (a) through (d) below:
(a) this Lease Agreement and the obligation of the City to make all Rental Payments hereunder shall remain the primary obligation of the City; (b) the City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of such sublease; (c) any sublease of the Property by the City shall explicitly provide that such sublease is subject to all rights of the Authority under the Lease Agreement, including, the right to re-enter and re-let the Property or terminate the Lease Agreement upon a default by the City; and (d) the City shall furnish the Authority and the Trustee with an Opinion of Counsel to the effect that such sublease will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes.
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The parties acknowledge that the City may, from time to time , enter into office leases with tenants at the building located at 11277 Garden Grove Blvd pursuant to this Section 9.05 and such office leases shall be considered Permitted Leases under this Lease Agreement.

Section 9.06 Title to Property. Upon the termination or expiration of this Lease Agreement (other than as provided in Section 7.01 and Section 8.01 hereof), and the first date upon which the Bonds are no longer Outstanding, all right, title and interest in and to the Property shall vest in the City.

Upon any such termination or expiration, the Authority shall execute such conveyances, deeds and other documents as may be necessary to effect such vesting of record.

Section 9.07 Authority’s Purpose. The Authority covenants that, prior to the discharge of this Lease Agreement and the Bonds, it will not engage in any activities inconsistent with the purposes for which the Authority is organized, as set forth in the Joint Powers Agreement.

Section 9.08 Representations of the City . The City represents and warrants to the Authority that (a) the City has the full power and authority to enter into, to execute and to deliver this Lease Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement and the Indenture, and (b) the Property will be used in the performance of essential governmental functions.

Section 9.09 Representation of the Authority. The Authority represents and warrants to the City that the Authority has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Assignment Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Assignment Agreement and the Indenture.

ARTICLE X

NO CONSEQUENTIAL DAMAGES;
USE OF THE PROPERTY; SUBSTITUTION OR RELEASE
Section 10.01 No Consequential Damages. In no event shall the Authority or the Trustee be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Lease Agreement or the City’s use of the Property.

Section 10.02 Use of the Property. The City will not use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Lease Agreement. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of the Property) with all laws of the jurisdictions in which it s operations may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Property; provided, however, that the City may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of the Authority, adversely affect the estate of the Authority in and to any of the Property or its interest or rights under this Lease Agreement.

Section 10.03 Substitution or Release of the Property . The City shall have the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from this Lease Agreement. All costs and expenses incurred in connection with such substitution or release shall be borne by the City. Notwithstanding any substitution or release of Property pursuant to 157

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this subsection, there shall be no reduction in or abatement of the Base Rental Payments due from the City hereunder as a result of such substitution or release. Any such subs titution or release of any portion of the Property shall be subject to the following specific conditions, which are hereby made conditions precedent to such substitution or release:
(a) the City shall have found (as set forth in a certificate delivered by the City to the Trustee) that the Property, as constituted after such substitution or release, (i) has an annual fair rental value at least equal to the maximum Base Rental Payments payable by the City in any Rental Period, and (ii) has a useful life in excess of the final maturity of any Outstanding Bonds; (b) the City shall have obtained or caused to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in the amount at least equal to the aggregate principal amount of any Outstanding Bonds of the type and with the endorsements described in Section 6.02 hereof;
(c) the City shall have provided the Trustee with an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the inte rest on the Bonds to be included in gross income for federal income tax purposes; (d) the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the Orange County Clerk – Recorder, any document necessary to reconvey to the City the portion of the Property being released and to include any substituted real property in the description of the Property contained herein and in the Ground Lease; (e) the City shall have provided notice of such substitution to each rati ng agency then rating the Bonds;
(f) no event of default ( a described in Article VII hereof) has occurred and is continuing;
(g) the City will give, or cause to be given, any notice of the occurrence of such substitution required to be given pursuant to the Continuing Disclosure Certificate; (h) the City will certify to the Trustee that the City has a current need for the substituted real property; and
(i) the City shall certify to the Trustee that any substitution shall not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement.

Section 10.04 Release of Release Property After Completion of Project. Without regard to the requirements of Section 10.03 above, the City may provide for release and deletion of the Release Property from the Property such that the Project Site constitutes the entire Property, provided that the City shall satisfy conditions ( a), (b), and (c) below, compliance with each of which requirements is hereby declared to be a condition precedent to such release:
(a) The City shall file with the Authority and the Trustee a copy of a Lease Supplement which deletes the Release Property from the Lease Agreement (and, at the election of the City, from the Ground Lease);
(b) The City shall have delivered the Completion Certificate to the Trustee; and 158

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(c) no event of default (a described in Article VII hereof) has occurred and is continuing.

Upon the satisfaction of all such conditions under this Section 10.04, this Lease Agreement shall thereupon end as to the Released Portion and shall thereupon continue as to the Project Site, and the Release Property shall be released from the Lease Agreement and no longer form part of the Property hereunder without further act or deed of the City, the Authority, or the Trustee, provided the Authority and the Trustee shall execute any such instruments evidencing such release as may be reasonably requested by the City from time to time. The City shall not be entitled to any reduction, diminution, extension or other modification of the Base Rental Paym ents whatsoever as a result of such deletion.

ARTICLE XI

MISCELLANEOUS
Section 11.01 Law Governing . THIS LEASE AGREEMENT SHALL BE GOVERNED

EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.

Section 11.02 Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the City: City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92840
Attention: City Manager
If to the Authority: Garden Grove Public Financing Authority c/o City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92840
Attention: Executive Director
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section.

Section 11.03 Validity and Severability . If for any reason this Lease Agreement shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the Authority or by the City, or if for any reason it is held by such a court that any of the covenants and conditions of the 159

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City hereunder, including the covenant to pay Rental Payments, is unenforcea ble for the full term hereof; then and in such event this Lease Agreement is and shall be deemed to be a Lease Agreement under which the Rental Payments are to be paid by the City annually in consideration of the right of the City to possess, occupy and use the Property, and all of the terms, provisions and conditions of this Lease Agreement, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.

Section 11.04 Net-Net-Net Lease. This Lease Agreement shall be deemed and construed to be a “net-net-net lease” and the City hereby agrees that the Rental Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set -offs whatsoever and notwithstanding any dispute between the City and the Authority.

Section 11.05 Taxes. The City shall pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or affecting the Property or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the term of this Lease Agreement as and when the same become due.

The City or any sublessee may, at the City’s or such sublessee’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority or the Trustee shall notify the City or such sublessee that, in the opinion of independent counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any part thereof, will be subject to loss or forfeiture, in which event the City or such sublessee shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority and the Trustee.

Section 11.06 Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease Agreement.

Section 11.07 Amendments.
(a) This Lease Agreement and the Ground Lease may be amended and the rights and obligations of the Authority and the City hereu nder and thereunder may be amended at any time by an amendment hereto or thereto which shall become binding upon execution and delivery by the Authority and the City, but only with the prior written consent of the Owners of a majority of the principal amou nt of the Bonds then Outstanding pursuant to the Indenture, provided that no such amendment shall (i) extend the payment date of any Base Rental Payments, reduce the interest component or principal component of any Base Rental Payments or change the prepayment terms and provisions, without the prior written consent of the Owner of each Bond so affected, or (ii) reduce the percentage of the principal amount of the Bonds the consent of the Owners of which is required for the execution of any amendment of this Lease Agreement or the Ground Lease. (b) This Lease Agreement and the Ground Lease and the rights and obligations of the Authority and the City hereunder and thereunder may also be amended at any time by an amendment hereto or thereto which shall become bin ding upon execution by the Authority and the 160

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City, without the written consents of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms require d by the Authority or the City to be observed or performed herein or therein other agreements, conditions, covenants and terms thereafter to be observed or performed by the Authority or the City, or to surrender any right or power reserved herein or therein to or conferred herein or therein on the Authority or the City, and which in either case shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel;
(ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or therein or in regard to questions arising hereunder or thereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith or therewith, and which shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel; (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of the interest on the Bonds;
(iv) to provide for the substitution or release of a portion of the Property in accordance with the provisions of Sections 10.03 or 10.04 hereof; (v) to provide for the issuance of Additional Bond s in accordance with Article III of the Indenture; or
(vi) to make such other changes herein or therein or modifications hereto or thereto as the Authority or the City may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel.

Section 11.08 Assignment. The City and the Authority hereby acknowledge the assignment of this Lease Agreement (except for the Authority’s obligations and its rights to give consents or approvals hereunder), and the Base Rental Payments payable hereunder, to the Trustee pursuant to the Assignment Agreement. To the extent that this Lease Agreement confers upon or gives or grants the Trustee any right, remedy or claim under or by reason of this Lease Agreement, the Trustee is hereby explicitly recognized as being a third -party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder.

Section 11.09 Execution. This Lease Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Lease Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the Authority and the City have caused this Lease Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

CITY OF GARDEN GROVE
By:

Steven R. Jones
Mayor
ATTEST:

City Clerk

GARDEN GROVE PUBLIC FINANCING AUTHORITY
By:

Steven R. Jones
Chair
ATTEST:

Secretary
162

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EXHIBIT A

LEGAL DESCRIPTION OF THE PROJECT SITE
[To come]

163

B-1
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EXHIBIT B

LEGAL DESCRIPTION OF THE RELEASE PROPERTY
[To come]

164

C-1
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EXHIBIT C

DESCRIPTION OF THE PROJECT
The design and construction of certain public capital improvements to be located on City- owned property located at Acacia Parkway, east of Euclid Street, in the City, including an approximately 100,000 square foot public safety facility (the “PSF”), a four -level parking structure that will provide approximately 350 parking spaces (the “Parking Structure”), and a reconfigured 2.8- acre Civic Center Park, as well as the demolition of the existing police headquarters building located at 11301 Acacia Parkway, and related infrastructure improvements.

165

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EXHIBIT D

BASE RENTAL PAYMENT SCHEDULE
Base Rental Deposit
Date
(Third Business Day
Prior to) Principal Component Interest Component
Total Base Rental
Payment
04/01/2025 $ $ $
10/01/2025
04/01/2026
10/01/2026
04/01/2027
10/01/2027
04/01/2028
10/01/2028
04/01/2029
10/01/2029
04/01/2030
10/01/2030
04/01/2031
10/01/2031
04/01/2032
10/01/2032
04/01/2033
10/01/2033
04/01/2034
10/01/2034
04/01/2035
10/01/2035
04/01/2036
10/01/2036
04/01/2037
10/01/2037
04/01/2038
10/01/2038
04/01/2039
10/01/2039
04/01/2040
10/01/2040
04/01/2041
10/01/2041
04/01/2042
10/01/2042
04/01/2043
10/01/2043
04/01/2044
10/01/2044
04/012045
10/01/2045
166

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Base Rental Deposit
Date
(Third Business Day
Prior to) Principal Component Interest Component
Total Base Rental
Payment
04/01/2046
10/01/2046
04/01/2047
10/01/2047
04/01/2048
10/01/2048
04/01/2049
10/01/2049
04/01/2050
10/01/2050
04/01/2051
10/01/2051
04/01/2052
10/01/2052
04/01/2053
10/01/2053
04/01/2054
Total $ $ $

167
Stradling Yocca Carlson & Rauth
Draft of 4/2/24

4893-7850-1281v8/022046-0062

INDENTURE
by and among

GARDEN GROVE PUBLIC FINANCING AUTHORITY
and

CITY OF GARDEN GROVE
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of June 1, 2024
Relating to
$__________

GARDEN GROVE PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A

168

TABLE OF CONTENTS

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ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions ..................................................................................................................... 2 Section 1.02 Equal Security ............................................................................................................. 12

ARTICLE II

THE BONDS
Section 2.01 Authorization of Bonds ............................................................................................... 12 Section 2.02 Terms of Series 2024A Bonds .................................................................................... 12 Section 2.03 Form of Series 2024A Bonds ...................................................................................... 13 Section 2.04 Transfer and Exchange of Bonds ................................................................................ 14 Section 2.05 Registration Books ...................................................................................................... 14 Section 2.06 Execution of Bonds ..................................................................................................... 14 Section 2.07 Authentication of Bonds ............................................................................................. 14 Section 2.08 Temporary Bonds ........................................................................................................ 14 Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen ............................................................... 15 Section 2.10 Book-Entry Bonds ...................................................................................................... 15

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2024A Bonds ................................................................................. 17 Section 3.02 Application of Proceeds of the Series 2024A Bonds .................................................. 17 Section 3.03 [Reserved] ................................................................................................................... 17 Section 3.04 Costs of Issuance Fund ............................................................................................... 17 Section 3.05 Project Fund ................................................................................................................ 17 Section 3.06 Conditions for the Issuance of Additional Bonds ....................................................... 18 Section 3.07 Procedure for the Issuance of Additional Bonds ........................................................ 19 Section 3.08 Additional Bonds ........................................................................................................ 20

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2024A Bonds ........................................................................... 20 Section 4.02 Notice of Redemption ................................................................................................. 21 Section 4.03 Selection of Bonds for Redemption ............................................................................ 22 Section 4.04 Partial Redemption of Bonds ...................................................................................... 22 Section 4.05 Effect of Notice of Redemption .................................................................................. 22

ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations ........................................................................................ 23 Section 5.02 Flow of Funds ............................................................................................................. 23 Section 5.03 Application of Net Insurance Proceeds ....................................................................... 24 Section 5.04 Title Insurance ............................................................................................................ 25 Section 5.05 Rebate Fund ................................................................................................................ 25 Section 5.06 Investment of Moneys ................................................................................................. 27 169

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ARTICLE VI

COVENANTS
Section 6.01 Compliance with Agreements ..................................................................................... 28 Section 6.02 Compliance with Ground Lease and Lease Agreement .............................................. 28 Section 6.03 Observance of Laws and Regulations ......................................................................... 28 Section 6.04 Other Liens .................................................................................................................. 28 Section 6.05 Prosecution and Defense of Suits ............................................................................... 29 Section 6.06 Accounting Records and Statements........................................................................... 29 Section 6.07 Recordation and Filing ................................................................................................ 29 Section 6.08 Tax Covenants ............................................................................................................ 29 Section 6.09 Continuing Disclosure ................................................................................................ 30 Section 6.10 Further Assurances ...................................................................................................... 30

ARTICLE VII

DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Action on Default ........................................................................................................ 30 Section 7.02 Other Remedies of the Trustee.................................................................................... 31 Section 7.03 Non-Waiver ................................................................................................................. 31 Section 7.04 Remedies Not Exclusive ............................................................................................. 31 Section 7.05 No Liability by the Authority to the Owners .............................................................. 31 Section 7.06 No Liability by the City to the Owners ....................................................................... 32 Section 7.07 No Liability of the Trustee to the Owners .................................................................. 32 Section 7.08 Application of Amounts After Default ....................................................................... 32 Section 7.09 Trustee May Enforce Claims Without Possession of Bonds ...................................... 32 Section 7.10 Limitation on Suits ...................................................................................................... 33

ARTICLE VIII

THE TRUSTEE
Section 8.01 Employment of the Trustee ......................................................................................... 33 Section 8.02 Duties, Removal and Resignation of the Trustee ........................................................ 33 Section 8.03 Compensation of the Trustee ...................................................................................... 34 Section 8.04 Protection of the Trustee ............................................................................................. 35

ARTICLE IX

MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted................................................................. 37 Section 9.02 Effect of Supplemental Indenture ............................................................................... 38 Section 9.03 Endorsement of Bonds; Preparation of New Bonds ................................................... 38 Section 9.04 Amendment of Particular Bonds ................................................................................. 38

ARTICLE X

DEFEASANCE
Section 10.01 Discharge of Indenture ................................................................................................ 39 Section 10.02 Bonds Deemed To Have Been Paid ............................................................................ 39 Section 10.03 Payment of Bonds After Discharge of Indenture ........................................................ 40 170

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ARTICLE XI

MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties ..................................................................... 40 Section 11.02 Successor Deemed Included in all References to Predecessor ................................... 40 Section 11.03 Execution of Documents by Owners .......................................................................... 40 Section 11.04 Waiver of Personal Liability ....................................................................................... 41 Section 11.05 Destruction of Bonds .................................................................................................. 41 Section 11.06 Funds and Accounts .................................................................................................... 41 Section 11.07 Article and Section Headings Gender and References ............................................... 41 Section 11.08 Partial Invalidity .......................................................................................................... 41 Section 11.09 Disqualified Bonds ...................................................................................................... 42 Section 11.10 Money Held for Particular Bonds ............................................................................... 42 Section 11.11 Payment on Non-Business Days ................................................................................. 42 Section 11.12 California Law ............................................................................................................ 42 Section 11.13 Notices ........................................................................................................................ 43 Section 11.14 Notice to Rating Agencies .......................................................................................... 43 Section 11.15 Execution in Counterparts ........................................................................................... 43

Signatures ................................................................................................................................... S-1

EXHIBIT A FORM OF SERIES 2024A BOND ........................................................................... A-1 EXHIBIT B FORM OF PROJECT FUND REQUISITION ......................................................... B-1

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INDENTURE
THIS INDENTURE (this “Indenture”), executed and entered into as of June 1, 2024, is by and among the GARDEN GROVE PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing pursuant to the Joint Powers Agreement (defined below) and the laws of the State of California (the “Authority”), the CITY OF GARDEN GROVE , a municipal corporation and general law city duly organized and existin g under and by virtue of the Constitution and laws of the State of California (the “City”), and U.S. Bank Trust Company, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States, as Trustee (the “Trustee”);
WITNESSETH:

WHEREAS, the City has entered into that certain Project Agreement dated as of April 1, 2024 (the “Project Agreement”), with Edgemoor Garden Grove Civic Center Partners, LLC, a Maryland limited liability company (“Edgemoor”), pursuant to which Edgemoor has agreed to design and construct certain public capital improvements to be located at A cacia Parkway, east of Euclid Street, in the City, including an approximately 100,000 square foot public safety facility, a four-level parking structure that will provide approximately 350 parking spaces, and a reconfigured 2.8-acre Civic Center Park, as well as the demolition of the existing police headquarters building located at 11301 Acacia Parkway in the City (collectively, the “Project”);
WHEREAS, the City and the Authority desire to finance all or a portion of the acquisition, construction, installat ion, and demolition work constituting the Project as provided in the Project Agreement;
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “ Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Series 2024A Bonds”) for the purpose of financing the Project;
WHEREAS, in order to facilitate the issuance of the Series 2024A Bonds, the City will lease certain real property and the improvements located thereon (the “Property”) to the Authority pursuant to a Ground Lease, dated as of the date hereof, and the City will sublease the Property back from the Authority pursuant to a Lease Agreement, dated as of the date hereof (the “Lease Agreement”); WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to finance all or a portion of the Project through the issuance by the Authority of the Series 2024A Bonds payable from the base rental payments (the “Base Rental Payments”) to be made by the City under the Lease Agreement; WHEREAS, all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof;
WHEREAS, the Series 2024A Bonds will be payable equally and ratably from the Base Rental Payments;
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WHEREAS, the Authority and the City desire to provide for the issuance of additional bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the Series 2024A Bonds (the Series 2024A Bonds and any such Additional Bonds being collectively referred to as the “Bonds”);
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Authority and the City have authorized the execution and delivery of this Indenture; and WHEREAS, the Authority and the City have determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, 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 the Indenture has been in all respects duly authorized;
NOW THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties do hereby agree as follows:

ARTICLE I

DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of the Bonds and of any certificate, opinion, request or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Lease Agreement. “Additional Bonds” means Bonds other than the Series 2024A Bonds issued hereunder in accordance with the provisions of Sections 3.06 and 3.07 hereof. “Act” means the Marks -Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code.
“Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 of the Lease Agreement. “Assignment Agreement” means the Assignment Agreement, dated as of the date hereof, by and between the Authority and the Trustee, as amended and supplemented from time to time. “Authority” means the Garden Grove Public Financing Authority, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California. “Authorized Authority Representative ” means the Chair, Vice Chair, Executive Director, Treasurer and Secretary of the Authority, or any other person authorized by the Board of Commissioners of the Authority to act on behalf of the Authority under or with respect to this Indenture.
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“Authorized City Representative” means the Mayor of the City, the Mayor Pro Tem of the City, the City Manager of th e City, the Finance Director of the City or the City Clerk, or any other person authorized by the City Council of the City to act on behalf of the City under or with respect to this Indenture.
“Authorized Denominations” means $5,000 or any integral multiple thereof. “Base Rental Payment Fund ” means the fund by that name established in accordance with Section 5.02 hereof.
“Base Rental Payments ” means all amounts payable to the Authority by the City as Base Rental Payments pursuant to Section 3.01 of the Lease Agreement. “Beneficial Owner” means, whenever used with respect to a Book -Entry Bond, the person whose name is recorded as the beneficial owner of such Book-Entry Bond or a portion of such Book- Entry Bond by a Participant on the records of such Participant or such person’s subrogee. “Bonds” means the Series 2024A Bonds and any Additional Bonds issued hereunder. “Book-Entry Bonds” means the Bonds of a Series registered in the name of the nominee of DTC, or any successor securities depository for such Series of Bonds, as the registered owner thereof pursuant to the terms and provisions of Section 2.10 hereof. “Business Day” means a day which is not (a) a Saturday, Sunday or legal holiday, (b) a day on which banking institutions in the State of California, or in any state in which the Office of the Trustee is located, are required or authorized by law (including executive order) to close, or (c) a day on which the New York Stock Exchange is closed.
“Cede & Co.” means Cede & Co., the nominee of DTC, and any suc cessor nominee of DTC with respect to a Series of Book-Entry Bonds.
“City” means the City of Garden Grove , a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California. “Closing Date” means May __, 2024.
“Code” means the Internal Revenue Code of 1986, as amended. “Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated as of the date hereof, executed by the City, as originally executed and a s it may from time to time be amended in accordance with the provisions thereof.
“Costs of Issuance” means all the costs of issuing and delivering the Bonds, including, but not limited to, all printing and document preparation expenses in connection with this Indenture, the Lease Agreement, the Ground Lease, the Assignment Agreement, the Bonds and any preliminary official statement and final official statement pertaining to the Bonds, rating agency fees, CUSIP Service Bureau charges, market study fees, legal fees and expenses of counsel with the issuance and delivery of the Bonds, the initial fees and expenses of the Trustee and its counsel, the initial fees and expenses of any bond insurer or reserve fund credit facility provider, and other fees and expense s incurred in 174

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connection with the issuance and delivery of the Bonds, to the extent such fees and expenses are approved by the City.
“Costs of Issuance Fund ” means the fund by that name established in accordance with Section 3.04 hereof.
“DTC” means The De pository Trust Company, a limited -purpose trust company organized under the laws of the State of New York, and its successors as securities depository for any Series of Book-Entry Bonds, including any such successor appointed pursuant to Section 2.10 hereof. “Federal Securities ” means (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 agency, department or instrumentality of the United States of America the timely payment of principal of and interest on which are fully guaranteed by the United States of America.
“Ground Lease” means the Ground Lease, dated as of the date hereof, by an d between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof and of the Lease Agreement. “Indenture” means this Indenture, as originally executed and as it may be amended or supplemented from time to time by any Supplemental Indenture. “Information Services ” means Municipal Securities Rulemaking Board through the Electronic Municipal Marketplace Access (EMMA) website; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee.
“Interest Fund” means the fund by that name establi shed in accordance with Section 5.02 hereof.
“Interest Payment Date ” means April 1 and October 1 of each year, commencing on [October 1, 2024].
“Lease Agreement” means the Lease Agreement, dated as of the date hereof, by and between the City and the Author ity, as originally executed and as it may be from time to time amended in accordance with the provisions thereof.
“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Office of the Trustee ” means the principal corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or the agency of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as specified to the Authority and the City by the Trustee in writing.
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“Opinion of Counsel” means a written opinion of Stradling Yocca Carlson & Rauth LLP, or other counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the Authority or the City and which written opinion is satisfactory to the Trustee. “Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.09 hereof) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except:
(a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation;
(b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.01 hereof; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture. “Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books.
“Participant” means any entity which is recognized as a participant by DTC in the book-entry system of maintaining records with respect to Book-Entry Bonds. “Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure Certificate.
“Permitted Investments ” means any of the following to the extent then permitted by the general laws of the State of California:
(1) (a) Direct obligations (other than an obligation subject to —variation in principal repayment) of the United States of America (“United States Treasury Obligations”), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above 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 government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated (collectively “United States Obligations”).

These include, but are not necessarily limited to:
-U.S. Treasury obligations
All direct or fully guaranteed obligations
-Farmers Home Administration
Certificates of beneficial ownership
-General Services Administration
Participation certificates
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-U.S. Maritime Administration
Guaranteed Title XI financing
-Small Business Administration
Guaranteed participation certificates
Guaranteed pool certificates
-Government National Mortgage Association (GNMA)
GNMA-guaranteed mortgage-backed securities
GNMA-guaranteed participation certificates
-U.S. Department of Housing & Urban Development
Local authority bonds
-Washington Metropolitan Area Transit Authority
Guaranteed transit bonds
(2) Federal Housing Administration debentures.
(3) The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America:
-Federal Home Loan Mortgage Corporation (FHLMC)
Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) Senior debt obligations
-Farm Credit Banks (formerly: Federal Land Banks, Federal intermediate Credit Banks and Banks for Cooperatives)
Consolidated systemwide bonds and notes
-Federal Home Loan Banks (FHL Banks)
Consolidated debt obligations
-Federal National Mortgage Association (FNMA)
Senior debt obligations
Mortgage-backed securities (excluded are stripped mortgages securities which are purchased at prices exceeding their principal amounts) -Financing Corporation (FICO)
Debt obligations
-Resolution Funding Corporation (REFCORP)
Debt obligations
(4) Bank deposit products, unsecured certificates of deposit (including those placed by a third party pursuant to an agreement between the City and the Trustee), trust funds, trust accounts, o vernight banking deposits, interest bearing deposits, interest bearing money market accounts, time deposits, demand deposits, and bankers’ acceptances (having maturities of not more than 30 days) of any bank (including the Trustee and any affiliate) the short-term obligations of which are rated “A-1” or “A-2” without regard to qualifier by a nationally recognized rating agency service. (5) Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks, including the Trustee and its affiliates, which have capital and surplus of at least $5 million.
(6) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, “A-1” or better by S&P and “Prime-1” by Moody’s. 177

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(7) Money market mutual funds rated “AAm” or “AAm -G” by a nationally recognized rating agency service, or better (including those for which the Trustee or its affiliates receives and retains a fee for services provided to the fund, whether as a custodian, t ransfer agent, investment advisor or otherwise) but excluding such funds with a floating net asset value. (8) Repurchase agreements:

With (1) any domestic bank, or domestic branch of a foreign bank or any non -bank financial institution or primary dealer as designated by the Federal Reserve the long term debt of which is rated at least “BBB+” by Standard & Poor’s or Moody’s (including the Trustee or any of its affiliates); or (2) any broker -dealer with “retail customers” or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long -term debt rated at least “BBB+” by Standard & Poor’s or Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity rated “BBB+” or better by Standard & Poor’s or Moody’s, provided that:
(a) The collateral shall be securities described in clause 1(a), (b) or (c) of this subsection, and the market value of the collateral is maintained at levels equal to 104% of the amount of cash transferred by the Trustee or the City to the provider of the repurchase agreement plus accrued interest with the collateral being valued weekly and marked-to-market at current market price plus accrued interest; (b) The Trustee or a third party acting solely as agent therefor or for the City (the “Holder of the Collateral”) has possession of the collateral or the collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferor’s books); (c) The repurchase or reverse repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Holder of the Collateral has a first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession);
(d) The repurchase or reverse repurchase agreement shall p rovide that if during its term the provider’s rating by either Moody’s or Standard & Poor’s is withdrawn or suspended or falls below “BBB” by Standard & Poor’s or “Baa2” by Moody’s, as appropriate, the provider must, at the direction of Trustee, within 10 days of receipt of such direction, repurchase all collateral and terminate the agreement, with no penalty or premium to the Trustee or the City.

Notwithstanding the above, if a repurchase agreement has a term of 270 days or less (with no evergreen provision), collateral levels need not be as specified in (a) above, so long as such collateral levels are 103% or better and the provider is rated at least “A” by Standard & Poor’s or Moody’s, respectively.
(9) State Obligations
(a) Direct general obligat ions of any state of the United States or any subdivision or agency thereof to which is pledged the full faith and credit of a state the 178

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unsecured general obligation debt of which is rated “A2” by Moody’s and “A” by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated. (b) Direct, general short -term obligations of any state agency or subdivision described in (a) above and rated “A -1+” by S&P and “Prime -1” by Moody’s.
(c) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (a) above and rated “AA” or better by S&P and “Aa” or better by Moody’s.
(10) Local Agency Investment Fund of the State of California. (11) Investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) the long -term debt of which, or, in the case of a guaranteed corporation the long -term debt of the guarantor, or in the case of a monoline financial guaranty insurance company the claims paying ability of the guarantor, is rated at least “A+” by S&P and “A1” by Moody’s; provided, that prior written notice of an investment in the investment agreement is provided to S&P and, provided, further, by the terms of the investment agreement:
(a) interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service on the Bonds;
(b) the invested funds are available for withdrawa l without penalty or premium, at any time for purposes identified in this Indenture other than acquisition of alternative investment property upon not more than seven days prior notice (which notice may be amended or withdrawn at any time prior to the spec ified withdrawal date); provided that the Indenture specifically requires the Trustee or the City to give notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid;
(c) the investment agreement shall state that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof;
(d) a guaranteed rate of interest is to be paid on invested funds and all future deposits, if any, required to be made to restore the amount of such funds to the level specified under the Indenture;
(e) the Trustee and the City receive the opinion of domestic counsel (which opinion shall be addressed to the City) that such investment agreement is legal, vali d and binding and enforceable against the provider in accordance with its terms and of foreign counsel (if applicable);
(f) the investment agreement shall provide that if during its term (A) the provider’s or the guarantor’s rating by either Moody’s or S&P is withdrawn or suspended or falls below “A+” or “A1”, respectively, or, with respect to a foreign bank, below the ratings of such provider at the delivery date of the investment agreement, the 179

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provider must, at the direction of the City or the Trustee (acting at the direction of the City) within 10 days of receipt of such direction, either (1) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the pro vider’s books) to the Trustee, the City or a Holder of the Collateral, United States Treasury Obligations which are free and clear of any third -party liens or claims at the Collateral Levels set forth below; or (2) repay the principal of and accrued but unpaid interest on the investment (the choice of (1) or (2) above shall be that of the City or Trustee (acting at the direction of the City), as appropriate), and (B) the provider’s or the guarantor’s rating by either Moody’s or S&P is withdrawn or suspended or falls below “BBB” or “Baa2,” or, with respect to a foreign bank, below “A+” or “A1” by S&P or Moody’s, as appropriate, the provider must, at the direction of the City or the Trustee (acting at the direction of the City), within 10 days of receipt of su ch direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the City or Trustee;
(g) the investment agreement shall state, and an opinion of counsel shall be rendered to the effect, that the Trustee has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Trustee is in possession); and (h) the investment agreement must provi de that if during its term (A) the provider shall default in its payment obligations, the provider’s obligation under the investment agreement shall, at the direction of the City or the Trustee, be accelerated and amounts invested and accrued but unpaid in terest thereon shall be repaid to the City or Trustee, as appropriate, and (B) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. (“event of insolvency”), the provider’s obligati ons shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the City or Trustee, as appropriate.
(12) Pre-refunded municipal obligations rated “AAA” by S&P and “Aaa” by Moody’s meeting the following requirements:
(a) the municipal obligations are (1) not subject to redemption prior to maturity or (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions;
(b) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations;
(c) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification”); 180

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(d) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations;
(e) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and
(f) the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent.

The Trustee shall have no responsibility to monitor the ratings of Permitted Investments after the initial purchase of such Permitted Investments.
“Person” means an individual, corporation, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.
“Project” means the acquisition, construction and installation of certain public capital improvements to be located at Acacia Parkway, east of Euclid Street, in the City, including an approximately 100,000 square foot public safety facility, a four -level parking str ucture that will provide approximately 350 parking spaces, and a reconfigured 2.8 -acre Civic Center Park, as well as the demolition of the existing police headquarters building located at 11301 Acacia Parkway in the City, and related infrastructure improvements.
“Project Fund” means the fund by that name established in accordance with Section 3.05 hereof.
“Principal Fund” means the account by that name established in accordance with Section 5.02 hereof.
“Rebate Fund ” means the fund by that name established in accordance with Section 5.05 hereof.
“Rebate Requirement” has the meaning ascribed thereto in the Tax Certificate. “Record Date” means the fifteenth day of the month next preceding an Interest Payment Date, whether or not such day is a Business Day.
“Redemption Fund” means the fund by that name established in accordance with Section 5.02 hereof.
“Redemption Price” means the aggregate amount of principal of and premium, if any, on the Bonds upon the redemption thereof pursuant hereto.
“Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.05 hereof. “Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
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“Rental Period ” means the period from the Closing Date through [March 31, 2025] and, thereafter, the twelve-month period commencing on April 1 of each year during the term of the Lease Agreement.
“Representation Letter” means the Letter of Representations from the Authority to DTC, or any successor securities depository for any Series of Book-Entry Bonds, in which the Authority makes certain representations with respect to issues of its securities for deposit by DTC or such successor depository.
“S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Securities Depositories” means The Depository Trust Company; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee. “Series” means the Series 2024A Bonds executed, authenticated and delivered on the Closing Date and identified pursuant to this Indenture and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a separate Series of Bonds. “Series 2024A Bonds” means the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A issued hereunder.
“Supplemental Indentu re” means any supplemental indenture amendatory of or supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means the Tax Certificate executed by the Authority and the City at the time of issuance of the Series 2024A Bonds relating to the requirements of Section 148 of the Code, as originally executed and as it may from time to time be amended in accordance with the provisions thereof.
“Trustee” means U.S. Bank Trust Company, National Association , a national banking association duly organized and existing under and by virtue of the laws of the United States, or any successor thereto as Trustee hereunder, appointed as provided herein. “Written Certificate of the A uthority” and “ Written Request of the Authority ” mean, respectively, a written certificate or written request signed in the name of the Authority by an Authorized Authority Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. “Written Certificate of the City” and “Written Request of the City” mean, respectively, a written certificate or written request signed in the name of the City by an Authorized City Representative. Any such certificate or request may, but need, not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.
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Section 1.02 Equal Security . In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the City, the Trustee and the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full and final payment of the principal of, premium, if any, and interest on all Bonds which may from time t o time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Authority or the City shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the t ime of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein.

ARTICLE II

THE BONDS
Section 2.01 Authorization of Bonds. The Authority hereby authorizes the issuance of the Bonds under and subject to the terms of this Indenture and applicable laws of the State of California for the purpose of financing and refinancing the Project. The Bonds may consist of one or more Series of Bonds of varying denominations, dates, maturities, interest rates and other provisions, subject to the provisions and conditions contained herein.

Section 2.02 Terms of Series 2024A Bonds.
(a) The Series 2024A Bonds shall be designated the “ Garden Grove Public Financing Authority Lease Revenue Bonds , Series 2024A.” Each Series of Additional Bonds shall bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series, of Bonds.
(b) The Series 2024A Bonds shall be issued in fully registered form without coupons in Authorized Denominations, so l ong as no Series 2024A Bond shall have more than one maturity date. The Series 2024A Bonds shall be dated as of the Closing Date, shall be issued in the aggregate principal amount of $__________, shall mature on April 1 of each year and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rates per annum as follows:
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Maturity Date
(April 1)
Principal
Amount
Interest
Rate
$ %

(c) Interest on the Series 2024A Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Series 2024A Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it shall bear interest from such Interest Payment Date, (ii) a Series 2024A Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the dated date thereof, or (iii) interest on any Series 2024A Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest shall b e paid in lawful money of the United States on each Interest Payment Date to the Persons in whose names the ownership of the Series 2024A Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Series 2024A Bond Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date.
(d) The principal and premium, if any, of the Series 2024A Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee.
(e) The Series 2024A Bonds shall be subject to redemption as provided in Article IV.

Section 2.03 Form of Series 2024A Bonds. The Series 2024A Bonds shall be in substantially the form set forth in Exhibit A hereto, with appropriate or necessary insertions, omissions and variations as permitted or required hereby.
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Section 2.04 Transfer and Exchange of Bonds . Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee.

Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.

The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series of other authorized denominations. The Trustee shall 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.

The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series pursuant to this Section during the period established by the Trustee for the selection of Bonds of such Series for redemption, or with respect to any Bonds of such Series selected for redemption.

Section 2.05 Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall be open to inspection during regular business hours and upon reasonable notice by the City; and, upon presentation for such purpose, the Tru stee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as hereinbefore provided.

Section 2.06 Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Authority with the manual or facsimile signature of an Authorized Authority Representative attested by the manual or facsimile signature of the Secretary or any duly authorized deputy secretary of the Authority. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of such officers of the Authority who shall have signed or attested any of the Bonds shall cease to be such officers of the Authority before the Bonds so signed or attested shall have b een authenticated or delivered by the Trustee, or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who sign ed and attested the same had continued to be such officers of the Authority, and also any Bonds may be signed and attested on behalf of the Authority by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the Autho rity although at the nominal date of such Bonds any such Person shall not have been such officer of the Authority.

Section 2.07 Authentication of Bonds . Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form as that set forth in Exhibit A hereto, 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 or on behalf of the Trustee shall be conclusive evidence that the Bonds so auth enticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

Section 2.08 Temporary Bonds. The Bonds of a Series may be issued in temporary form exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such authorized denominations as may be 185

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determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues t emporary Bonds of a Series it will execute and deliver definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary Bonds of such Series, may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of such Series in Authorized Denominations.

Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under this Indenture as definitive Bonds of such Series authenticated and delivered hereunder.

Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen . If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and Series in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or in accordance with the order of, the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and indemnity satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and Series in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been selected for redemption, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, an d shall be entitled to the benefits of this Indenture with all other Bonds of such Series secured by this Indenture.

Section 2.10 Book-Entry Bonds.
(a) Prior to the issuance of a Series of Bonds, the Authority may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds and, in such event, the Bonds of such Series for each maturity shall be in the form of a separate single fully registered Bond (which may be typewritten). The Series 2024A Bonds shall initially be issued as Book-Entry Bonds.

Except as provided in subsection (c) of this Section, the registered Owner of all of the Book-Entry Bonds shall be Cede & Co., as nominee of DTC. Notwithstanding anything to the contrary contained in this Indenture, payment of interest with respect to any Book-Entry Bond registered as of each Record Date in the name of Cede & Co. shall be made by wire transfer of same-day funds to the account of Cede & Co. on the Interest Payment Date at the address indicated on the Record Date for Cede & Co. in the Registration Books or as otherwise provided in the Representation Letter. (b) The Trustee and the Authority may treat DTC (or its nominee) as the sole and exclusive Owner of Book -Entry Bonds registered in its name for the purposes of payment of the principal, premium, if any, or interest with respect to Book-Entry Bonds, selecting Book-Entry Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Owners of Book-Entry Bonds under this Indenture, registering the transfer of Book -Entry Bonds, obtaining any 186

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consent or other action to be taken by Owners of Book -Entry Bonds and for all other purposes whatsoever, and neither the Trustee nor the Authority shall be affected by any notice to the contrary.

Neither the Trustee nor the Authority shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in Book -Entry Bonds under or through DTC or any Participant, or any other person which is not shown on the Registration Books as being an Owner, with respect to the accuracy of any records maintained by DTC or any Participant, the payment by DTC or any Participant of any amount in respect of the principal, premium, if any, or interest with respect to Book-Entry Bonds, any notice which is permitt ed or required to be given to Owners of Book -Entry Bonds under this Indenture, the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of Book -Entry Bonds, or any consent given or other action taken by DTC as Owner of Book -Entry Bonds. The Trustee shall pay all principal, premium, if any and interest with respect to Book -Entry Bonds, only to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligation s with respect to the principal, premium, if any, and interest with respect to the Book -Entry Bonds to the extent of the sum or sums so paid. Except under the conditions of subsection (c) of this Section, no person other than DTC shall receive an executed Book-Entry Bond for each separate stated maturity. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to record dates, the term “Cede & Co.” in this Indenture shall refer to such new nominee of DTC. (c) In the event (i) DTC, including any successor as securities depository for a Series of Bonds, determines not to continue to act as securities depository for such Series of Bonds, or (ii) the Authority determines that the incumbent securities depository shall no longer so act, and delivers a written certificate to the Trustee to that effect, then the Authority will discontinue the book- entry system with the incumbent secu rities depository for such Series of Bonds. If the Authority determines to replace the incumbent securities depository for such Series of Bonds with another qualified securities depository, the Authority shall prepare or direct the preparation of a new si ngle, separate fully registered Bond of such Series for the aggregate outstanding principal amount of Bonds of such Series of each maturity, registered in the name of such successor or substitute qualified securities depository, or its nominee, or make such other arrangement acceptable to the Authority, the Trustee and the successor securities depository for the Bonds of such Series as are not inconsistent with the terms of this Indenture. If the Authority fails to identify another qualified successor securities depository for such Series of Bonds to replace the incumbent securities depository, then the Bonds of such Series shall no longer be restricted to being registered in the Registration Books in the name of the incumbent securities depository or its nominee, but shall be registered in whatever name or names the incumbent securities depository for such Series of Bonds, or its nominee, shall designate. In such event the Authority shall execute, and deliver to the Trustee, a sufficient quantity of Bonds of such Series to carry out the transfers and exchanges provided in Sections 2.04, 2.08 and 2.09 hereof. All such Bonds of such Series shall be in fully registered form in Authorized Denominations. (d) Notwithstanding any other provision of this Indenture to the contrary, so long as any Book-Entry Bond is registered in the name of DTC, or its nominee, all payments with respect to the principal, premium, if any, and interest with respect to such Book -Entry Bond and all notices with respect to such Book -Entry Bo nd shall be made and given, respectively, as provided in the Representation Letter.
(e) In connection with any notice or other communication to be provided to Owners of Book-Entry Bonds pursuant to this Indenture by the Authority, the City or the Trustee with respect to any consent or other action to be taken by Owners, the Authority, the City or the Trustee, as 187

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the case may be, shall establish a record date for such consent or other action and give DTC notice of such record date not less than 15 calendar days in advance of such record date to the extent possible.

ARTICLE III

ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2024A Bonds. The Authority may, at any time, execute the Series 2024A Bonds for issuance hereunder and deliver the same to the Trustee. The Trustee shall authenticate the Series 2024A Bonds and deliver the Series 2024A Bonds to the original purchaser thereof upon receipt of a Written Request of the Authority and upon receipt of the purchase price therefor.

Section 3.02 Application of Proceeds of the Series 2024A Bonds. On the Closing Date, the net proceeds of the sale of the Series 2024A Bonds received by the Trustee, $__________ (being the purchase price for the Series 2024A Bonds), shall be deposited by the Trustee as follows:
(a) The Trustee shall deposit the amount of $__________ in the Costs of Issuance Fund.
(b) The Trustee shall deposit the amount of $ __________ in the Project Fund to be applied as provided in Section 3.05 hereof.

Section 3.03 [Reserved].

Section 3.04 Costs of Issuance Fund. The Trustee shall establish and maintain a separate fund designated the “Costs of Issuance Fund.” On the Closing Date, there shall be deposited in the Costs of Issuance Fund the amount specified in Section 3.02 hereof. There shall be additionally deposited in the Cost of Issuance Fund the portion, if any, of the proceeds of the sale of any Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued.

The moneys in the Costs of Issuance Fund shall be used and withdr awn by the Trustee from time to time to pay the Costs of Issuance upon submission of a Written Request of the Authority stating (a) the Person to whom payment is to be made, (b) the amount to be paid, (c) the purpose for which the obligation was incurred, (d) that such payment is a proper charge against the Costs of Issuance Fund, and (e) that such amounts have not been the subject of a prior disbursement from the Costs of Issuance Fund, in each case together with a statement or invoice for each amount requested thereunder.

Each such Written Request of the Authority 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. One hundred eighty (180) days following the Closing Date, or earlier upon the Written Request of the Authority, all amounts, if any, remaining in the Costs of Issuance Fund shall be withdrawn therefrom by the Trustee and transferred to the Interest Fund.

Section 3.05 Project Fund.

The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Project Fund.” The moneys in the Project Fund or the accounts therein shall be disbursed by the Trustee on behalf of the City as specified in a Written Request of the City in the form attached her eto as Exhibit 188

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B. Each Written 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. On the date on which the City determines that amounts in the Project Fund are no longer necessary for payment of the cost of the Project, the City shall submit a Written Request to the Trustee to transfer any remaining balance in the Project Fund not needed for Project Fund purposes, at the City’s sole discretio n, to the City for use on eligible capital facilities, and the Project Fund shall be closed. Investment earnings on amounts on deposit in the Project Fund shall remain on deposit in the Project Fund for application in accordance with this Section.

Section 3.06 Conditions for the Issuance of Additional Bonds. The Authority may at any time issue one or more Series of Additional Bonds (in addition to the Series 2024A Bonds) payable from Base Rental Payments as provided herein on a parity with all other Bonds there tofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) The issuance of such Additional Bonds shall have been authorized under and pursuant hereto and shall have been provided for by a Supplemental Indenture which shall specify the following:
(i) The application of the proceeds of the sale of such Additional Bonds; (ii) The principal amount and designation of such Series of Additional Bonds and the denomination or denominations of the Additional Bonds; (iii) The date, the maturity date or dates, the interest payment dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, however, that (i) the serial Bonds o f such Series of Additional Bonds shall be payable as to principal annually on April 1 of each year in which principal falls due, and the term Bonds of such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on April 1, (ii) the Additional Bonds shall be payable as to interest semiannually on April 1 and October 1 of each year, except that the first installment of interest may be payable on either April 1 and October 1 and shall be for a period of not longer than twelve months and the interest shall be payable thereafter semiannually on April 1 and October 1 , (iii) all Additional Bonds of a Series of like maturity shall be identical in all respects, except as to number or denomination, and (iv) serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates;
(iv) The redemption premiums and terms, if any, for such Additional Bonds;
(v) The form of such Additional Bonds; and
(vi) If a reserve fund is to be established and maintained for such Series of Additional Bonds, the applicable reserve requirement and the amount, if any, to be deposited from the proceeds of sale of such Additional Bonds in such reserve fund to be held as separate security for such Series of Additional Bonds;
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(vii) Designate accounts in the Interest Fund, the Principal Fund, the Redemption Fund, the Rebate Fund and the reserve fund (if any) to be app licable to such Additional Bonds; and
(viii) Such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof, including the establishment of a capitalized interest fund for the Additional Bonds, if appropriate;
(b) The Auth ority shall be in compliance with all agreements, conditions, covenants and terms contained herein, in the Lease Agreement and in the Ground Lease required to be observed or performed by it;
(c) The City shall be in compliance with all agreements, conditions, covenants and terms contained herein, in the Lease Agreement and in the Ground Lease required to be observed or performed by it; and
(d) The Ground Lease shall have been amended, to the extent necessary, and the Lease Agreement shall have been amended so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds, payable at such times and in such manner as may be necessary to provide for the timely payment of the principal of and interest on such Additional Bonds; provided, however, that no such amendment shall be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period shall be in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith (evidence of the satisfaction of such condition shall be made by a Written Certificate of the City).

Nothing contained herein shall limit the issuance of any bonds or other obligations payable from Base Rental Payments if, after the issuance and delivery of such bonds or other obligations, none of the Bonds theretofore issued hereunder will be Outstanding.

Section 3.07 Procedure for the Issuance of Additional Bonds. At any time after the sale of any Additional Bonds in accordance with the Act, such Additional Bonds shall be executed by the Authority for issuance hereunde r and shall be delivered to the Trustee and thereupon shall be authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a) Certified copies of the Supplemental Indenture authorizing the issuance of such Additional Bonds, the amendment to the Lease Agreement required by Section 3.06 hereof and the amendment to the Ground Lease, if any, required by Section 3.06 hereof, together with satisfactory evidence that such amendment to the Lease Agreement and such amendment to th e Ground Lease, if any, have been (or will be immediately upon issuance of such Additional Bonds) duly recorded in the Official Records of the Orange County, California Recorder’s office; (b) A Written Request of the Authority as to the delivery of such Additional Bonds; (c) An opinion of Bond Counsel substantially to the effect that (i) the Indenture (including all Supplemental Indentures), the Lease Agreement (including the amendment thereto required by Section 3.06 hereof) and the Ground Lease (including any amendment thereto required by Section 3.06 hereof) have been duly authorized, executed and delivered by, and constitute the valid 190

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and binding obligations of, the Authority and the City, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights and by the application of equitable principles and by the exercise of judicial discretion in appropriate cases and subject to the limitations o n legal remedies against political subdivisions in the State of California), (ii) such Additional Bonds constitute valid and binding special obligations of the Authority payable solely from Base Rental Payments as provided herein and are enforceable in acc ordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights and by the application of equitable principles and by the exercise of judicial discretio n in appropriate cases and subject to the limitations on legal remedies against political subdivisions in the State of California), and (iii) the issuance of such Additional Bonds, in and of itself, will not adversely affect the exclusion of interest on any tax-exempt Bonds Outstanding prior to the issuance of such Additional Bonds from gross income for federal income tax purposes; (d) a Written Certificate of the Authority that the requirements of Section 3.06 hereof have been met;
(e) a Written Certificate of the City that the requirements of Section 3.06 hereof and Sections 6.01 and 6.02 of the Lease Agreement have been met, and a Written Certificate of the City directing the application of the proceeds of such Additional Bonds; and (f) Such further documents as are required by the provisions hereof or by the provisions of the Supplemental Indenture authorizing the issuance of such Additional Bonds.

Section 3.08 Additional Bonds . So long as any of the Bonds remain Outstanding, the Authority shall not issue any Additional Bonds or obligations payable from the Base Rental Payments, except pursuant to Sections 3.06 and 3.07 hereof.

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2024A Bonds.
(a) Extraordinary Redemption . The Series 2024A Bonds shall be subject to redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of any Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Fund pursuant to Sections 5.03 and 5.04 hereof, at a R edemption Price equal to the principal amount of the Series 2024A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.
(b) Optional Redemption. The Series 2024A Bonds maturing on or after April 1, 20__, shall be subject to optional redemption, in whole or in part, on any date on or after April 1, 20__, in Authorized Denominations, from and to the extent of prepaid Base Rental Payments paid pursuant to subsection (a) of Section 8.02 of the Lease Agreement, at a Redemption Price equal to the principal amount of the Series 2024A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.
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(c) Sinking Fund Redemption. The Series 2024A Bonds maturing on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, wit hout premium, in accordance with the following schedule:

Sinking Fund Redemption Date
(April 1)
Principal Amount
To Be Redeemed
$

(maturity)

The Series 2024A Bonds maturing on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Sinking Fund Redemption Date
(April 1)
Principal Amount
To Be Redeemed
$

(maturity)

In the event of a partial redemption pursuant to Section 4.01(a) or (b), the City shall provide the Trustee with a revised mandatory sinking fund schedule giving effect to the redemption so completed.

Section 4.02 Notice of Redemption . The Trustee on behalf and at the expense of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the Bond numbers and the maturity or maturities (except in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the dat e fixed for redemption.

Such notice of redemption may also state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds. Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.

With respect to any notice of optional redemption of the Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee, on or prior to the date fixed for such redemption, of moneys sufficient to pay the principal of, premium if any, and interest on the Bonds to 192

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be redeemed and upon other conditions set forth therein and that, if such money shall not have been so received or such other conditions shall not have been satisfied, said notice shall be of no force and effect and the Trustee shall not be required to redeem such Bonds. If an y condition stated in the redemption notice for an optional redemption shall not have been satisfied on or prior to the redemption date: (i) the redemption notice shall be of no force and effect, (ii) the Authority shall not be required to redeem such Bon ds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.

Section 4.03 Selection of Bonds for Redemption . Whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for rede mption (a) with respect to any optional redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written Request of the Authority, (b) with respect to any redemption pursuant to Section 4.01(a) hereof and the corresponding provision of any Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner which the Trustee in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000 denominations and such separate denominations shall be treated as separate Bonds which may be separately redeemed.

Section 4.04 Partial Redemption of Bonds . Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in authorized denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered.

Section 4.05 Effect of Notice of Redemption. Notice having been mailed as aforesaid, and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption, having been set aside in the Redemption Fund, the Bonds shall become due and payable on said date, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date.

If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof shall have been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon.

All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof shall be canceled upon surrender thereof and destroyed.
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ARTICLE V

SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund are hereby pledged to secure the payment of the principal of, premium , if any, and interest on the Bonds in accordance with their terms, the provisions of this Indenture and the Act. Said pledge shall constitute a first lien on such assets.

All obligations of the Authority under this Indenture shall be special obligations of the Authority, payable solely from Rental Payments and the other assets pledged therefor hereunder; provided, however, that all obligations of the Authority under the Bonds shall be special obligations of the Authority, payable solely from Base Rental P ayments and the other assets pledged therefor hereunder. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.

Section 5.02 Flow of Funds.
(a) The Trustee shall establish and maintain separate funds designated the “Base Rental Payment Fund,” the “Interest Fund,” the “Principal Fund” and the “Redemption Fund.” If Additional Bonds are issued, the Trustee shall establish subaccounts within each fun d for each Series of Additional Bonds.

All Base Rental Payments shall be paid directly by the City to the Trustee, and if received by the Authority at any time shall be transferred by the Authority to the Trustee within one Business Day after the receipt t hereof. All Base Rental Payments received by the Trustee shall be deposited by the Trustee in the Base Rental Payment Fund. (b) The Trustee shall transfer the amounts on deposit in the Base Rental Payment Fund, at the times and in the manner hereinafter provi ded, to the following respective funds in the following order of priority:
(1) Interest Fund . On the Business Day immediately preceding each Interest Payment Date, the Trustee shall transfer from the Base Rental Payment Fund to the Interest Fund the amount, if any, necessary to cause the amount on deposit in the Interest Fund to be equal to the interest due on the Bonds on such Interest Payment Date. Moneys in the Interest Fund shall be used by the Trustee to pay interest due on the Bonds on each Interest Payment Date.
(2) Principal Fund . On the Business Day immediately preceding each April 1, commencing [April 1, 2025], the Trustee shall transfer from the Base Rental Payment Fund to the Principal Fund the amount, if any, necessary to cause the amount on deposit in the Principal Fund to be equal to the principal amount of the Bonds due on such April 1 either as a result of the maturity thereof or mandatory sinking fund redemption payments required to be made with respect thereto. Moneys in the Principal Fund shal l be used by the Trustee for the 194

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purpose of paying the principal of the Bonds when due and payable at their maturity dates or upon earlier mandatory sinking fund redemption.
(3) Redemption Fund. The Trustee, on the redemption date specified in the Written Request of the City filed with the Trustee at the time that any prepaid Base Rental Payment is paid to the Trustee pursuant to the Lease Agreement, shall deposit in the Redemption Fund that amount of moneys representing the portion of the Base Rental Payments designated as prepaid Base Rental Payments. Additionally, the Trustee shall deposit in the Redemption Fund any amounts required to be deposited therein pursuant to Section 5.03 or Section 5.04 hereof. Moneys in the Redemption Fund shall be used by the T rustee for the purpose of paying the principal of and interest and premium, if any, on Series 2024A Bonds redeemed pursuant to the provisions of subsections (a) and (b) of Section 4.01 hereof and Additional Bonds redeemed pursuant to the corresponding prov isions of the Supplemental Indenture pursuant to which such Additional Bonds are issued.

Section 5.03 Application of Net Insurance Proceeds. If the Property or any portion thereof shall be damaged or destroyed, subject to the further requirements of this Section, the City shall, as expeditiously as possible, continuously and diligently prosecute or cause to be prosecuted the repair or replacement thereof, unless the City elects not to repair or replace the Property or the affected portion thereof in accordance with the provisions hereof.

The Net Insurance Proceeds (other than Net Insurance Proceeds of rental interruption insurance), including the proceeds of any self -insurance, received on account of any damage or destruction of the Property or a portion thereof shall as soon as possible be deposited with the Trustee and be held by the Trustee in a special account and made available for and, to the extent necessary, shall be applied to the cost of repair or replacement of the Property or the affected portion thereof upon receipt of a Written Request of the City, together with invoices therefor. Pending such application, such proceeds may be invested by the Trustee as directed by the City in Permitted Investments that mature not later than such times moneys are expected t o be needed to pay such costs of repair or replacement.

Notwithstanding the foregoing, the City shall, within 60 days of the occurrence of the event of damage or destruction, notify the Trustee in writing as to whether the City intends to replace or repair the Property or the portions of the Property which were damaged or destroyed. If the City does intend to replace or repair the Property or portions thereof, the City shall deposit with the Trustee the full amount of any insurance deductible to be credited to the special account.

In the event of any damage to or destruction of the Property caused by one of the perils covered by the insurance required by Section 6.01(c) of the Lease Agreement which would result in an abatement of rental payments or any port ion thereof pursuant to Section 3.06 thereof, then the City shall apply the Net Insurance Proceeds (other than Net Insurance Proceeds of rental interruption insurance), together with other legally available funds that the City elects to contribute, to the repair, reconstruction or replacement of the damaged or destroyed portions of the Property; provided, however, that the City shall not be required to repair or replace any portion of the Property pursuant to this Section 5.03 if such Net Insurance Proceeds , together with any other amounts held under this Indenture and any other legally available funds made available by the City at its election, are sufficient to prepay (i) all of the Outstanding Bonds, or (ii) a portion of the Outstanding Bonds such that th e resulting Base Rental Payments under Section 4.01(a) in any Rental Period following such partial prepayment are sufficient to pay in such Rental Period the principal of and interest on all Bonds to 195

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remain Outstanding immediately after such partial redemption. If the City is not required to replace or repair the Property, or the affected portion thereof, or to use such amounts to redeem Bonds, in each case as set forth in this Section 5.03, then such proceeds (and rental interruption insurance proceeds not applied pursuant to the next paragraph) shall, if there is first delivered to the Trustee a Written Certificate of the City to the effect that the annual fair rental value of the Property after such damage or destruction, and after any repairs or replacements made as a result of such damage or destruction, is at least equal to 100% of the maximum amount of Base Rental Payments becoming due under the Lease Agreement in the then current Rental Period or any subsequent Rental Period and the fair replacement value of the Property after such damage or destruction is at least equal to the principal amount of the Outstanding Bonds, be paid to the City to be used for any lawful purpose.

Proceeds of rental interruption insurance shall be deposited to the Base Rental Payment Fund and applied to the payment of Base Rental Payments to the extent of any abatement thereof pursuant to the Lease Agreement, and otherwise as directed by the City.

The proceeds of any award in eminent domain received in respect to the Proper ty shall be deposited by the Trustee in the Redemption Fund and applied to the redemption of Bonds pursuant to subsection (a) of Section 4.01 hereof and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued.

Section 5.04 Title Insurance . Proceeds of any policy of title insurance received by the Trustee in respect of the Property shall be applied and disbursed by the Trustee as follows:
(a) if the City determines that the title defect giving rise to such proceeds has not substantially interfered with its use and occupancy of the Property and will not result in an abatement of Rental Payments payable by the City under the Lease Agreement, such proceeds shall be remitted to the City and used for any lawful purpose thereof; or (b) if the City determines that the title defect giving rise to such proceeds has substantially interfered with its use and occupancy of the Property and will result in an abatement of Rental Payments payable by the City under the Lease Agreement, then the Tru stee shall immediately deposit such proceeds in the Redemption Fund and such proceeds shall be applied to the redemption of Bonds in the manner provided in subsection (a) of Section 4.01 hereof and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued.

Section 5.05 Rebate Fund.
(a) Establishment. The Trustee shall establish a fund for the Bonds designated the “Rebate Fund” when required in accordance herewith. Absent an Opinion of Counsel that the exclusion from gross inc ome for federal income tax purposes of interest on the Series 2024A Bonds will not be adversely affected, the Authority shall cause to be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for the Series 2024A Bonds shall be governed by this Section and t he Tax Certificate, unless and to the extent that the Authority delivers to the Trustee an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected if such requirem ents are not satisfied. Notwithstanding anything to the contrary contained herein or in the Tax Certificate, the Trustee: (1) shall be deemed conclusively to have complied with the provisions thereof if it follows 196

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all Written Requests of the Authority or Written Requests of the City; (2) shall have no liability or responsibility to enforce compliance by the Authority or the City with the terms of the Tax Certificate and shall not be deemed to have knowledge of the terms thereof; (3) may rely conclusively on the Authority’s or the City’s calculations and determinations and certifications relating to rebate matters; and (4) shall have no responsibility to independently make any calculations or determinations or to review the Authority’s or the City’s calculations or determinations thereunder. (i) Annual Computation. Within 55 days of the end of each fifth Bond Year (as such term is defined in the Tax Certificate), the Authority shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and the construction expenditures exception of Section 148(f)(4)(C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “1½% Penalty”) has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulations (the “Rebatable Arbitrage”). The Authority shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Annual Transfer. Within 55 days of the end of each fifth Bond Year, upon the Written Request of the Authority or Written Request of the City, an amount shall be deposited to the Rebate Fund by the Trustee from any Rental Payments legally available for such purpose (as specified by the Auth ority or the City in the aforesaid Written Request), if and to the extent required, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with clause (i) of this subsection (a). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon Written Request of the Authority or Written Request of the City, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Base Rental Payment Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed by Written Request of the Authority, to the United States Treasury, out of amounts in the Rebate Fund:
(A) Not later than 60 days after the end of: (X) the fifth Bond Year; and (Y) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and (B) Not later than 60 days after the payment of all of the Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code and Section 1.148 -3 of the Treasury Regulations.

In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the Authority shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such 197

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payment is due. Each payment required to be made pursuan t to this subsection (a) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038 -T (prepared by the Authority), or shall be made in such other manner as provided under the Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the Series 2024A Bonds and the payments described in subsection (a) above being made may be withdrawn by the Authority and utilized in any manner by the Authority. (c) Survival of Defeasance . Notwithstanding anything in this Section to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance or payment in full of the Series 2024A Bonds.

Section 5.06 Investment of Moneys. Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Indenture and held by the Trustee shall be invested by the Trustee solely in Permitted Invest ments, as directed in writing by the Authority.

Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Indenture. Absent timely written direction from the Authority, the Trustee shall hold any funds held by it uninvested.

Subject to the provisions of Section 5.06 hereof, all interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Indenture shall be retained in such fund or account.

Permitted Investments acquired as an investment of moneys in any fund established under this Indenture shall be credited to such fund. For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued by the Trustee at the fair market value thereof, such valuation to be performed not less frequently than semiannually on or before each April 15 and October 15. In determining fair market value, the Trustee may use and rely conclusively on any generally recognized securities pricing service available to it (including brokers and dealers in securities).

The Trustee may act as principal or agent in the making or disposing of any investment. Upon the Written Request of the Authority, the Trustee shall sell or present for redemption any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investments is credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the funds and accounts established hereunder.

The Trustee may make any investments hereunder through the bond or investment department or trust investment department of the entity acting as Trustee hereunder, or those of such entity’s parent or any affiliate, and such entity, or its parent or affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for such services.

The entity acting as Trustee hereunder, or any of its affiliates, may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder and such entity, or its 198

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affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for such services.

The Authority and the City acknowledge that, to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority and the City the right to receive brokerage confirmations of security transactions as they occur, at no additional cost, the Authority and the City specifically waive receipt of such confirmations to the extent permitted by law.

ARTICLE VI

COVENANTS
Section 6.01 Compliance with Agreements. The Trustee will not authenticate or deliver any Bonds in any manner other tha n in accordance with the provisions hereof, and the Authority and the City will not suffer or permit any default by them to occur hereunder, but will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms here of required to be complied with, kept, observed and performed by them.

Section 6.02 Compliance with Ground Lease and Lease Agreement. The Authority and the City will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Ground Lease and the Lease Agreement required to be complied with, kept, observed and performed by them and, together with the Trustee, will enforce the Ground Lease and the Lease Agreement against the other party thereto in accordance wit h their respective terms.

Section 6.03 Observance of Laws and Regulations . The Authority, the City and the Trustee will faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or p rescribed by any law of the United States of America or of the State of California, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned o r hereafter acquired by them, including their right to exist and carry on their respective businesses, to the end that such franchises, rights and privileges shall be maintained and preserved and shall not become abandoned, forfeited or in any manner impaired.

Section 6.04 Other Liens. The City will keep the Property and all parts thereof free from judgments and materialmen’s and mechanics’ liens and free from all claims, demands, encumbrances and other liens of whatever nature or character, and free from any claim or liability which materially impairs the City in conducting its business or utilizing the Property, and the Trustee at its option (after first giving the City ten days’ written notice to comply therewith and failure of the City to so comply within such ten-day period) may, but is in no event obligated to, defend against any and all actions or proceedings, or may pay or compromise any claim or demand asserted in any such actions or proceedings; provided, however, that, in defending against any such actions or proceedings or in paying or compromising any such claims or demands, the Trustee shall not in any event be deemed to have waived or released the City from liability for or on account of any of its agreements and covenants contained herein, or from its liability hereunder and to perform such agreements and covenants.

So long as any Bonds are Outstanding, none of the Trustee, the Authority or the City shall create or suffer to be created any pledge of or lien the amounts on deposit in any of the funds or accounts created hereunder, other than the pledge and lien hereof. 199

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The Authority, the City and the Trustee shall not encumber the Property other than in accordance with the Ground Lease, the Lease Agreement, the Indenture and the Assignment Agreement.

Section 6.05 Prosecution and Defense of Suits . The City will promptly, upon request of the Trustee (which request the Trustee is not required to make), take such action from time to time as may be necessary or proper to remedy or cure any cloud upon or defect in the title to the Property or any part thereof, whether now existing or hereafter developing, will prosecute all actions, suits or other proceedings as may be appropriate for such purpose and will indemnify and save the Trustee harmless from all cost, damage, expense or loss, including attorneys’ fees and expenses, which it or the Owners may incur by reason of any such cloud, defect, action, suit or other proceeding.

Section 6.06 Accounting Records and Statements . The Trustee will keep proper accounting records in which complete and correct entries shall be made of all transactions relating to the receipt, deposit and disbursement of the Base Rental Payments, and such accounting records shall be available for inspection by the Authority and the City at reasonable hours and under reas onable conditions.

Section 6.07 Recordation and Filing. The City will record, or cause to be recorded, with the appropriate county recorder, the Lease Agreement, the Ground Lease and the Assignment Agreement, or memoranda thereof.

Section 6.08 Tax Covenants. Notwithstanding any other provision of the Indenture, absent an Opinion of Counsel that the exclusion from gross income of the interest on the Series 2024A Bonds will not be adversely affected for federal income tax purposes, the City and the Authority covenant to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income with respect to the Series 2024A Bonds and specifically covenant, without limiting the generality of the foregoing, as follows:
(a) Private Activity. The City and the Authority will not take any action or refrain from taking any action or make any use of the proceeds of the Series 2024A Bonds or of any other moneys or property which would cause the Series 2024A Bonds to be “private activity bonds” within the meaning of Section 141 of the Code;
(b) Arbitrage. The City and the Authority will make no use of the proceeds of the Series 2024A Bonds or of any other amounts or property, regardless of the source, and will not take any action or refrain fr om taking any action which would cause the Series 2024A Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code; (c) Federal Guarantee . The City and the Authority will make no use of the proceeds of the Series 2024A Bonds and will not take or omit to take any action that would cause the Series 2024A Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (d) Information Reporting. The City and the Authority will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code necessary to preserve the exclusion of interest on the Series 2024A Bonds pursuant to Section 103(a) of the Code;
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(e) Hedge Bonds. The City and the Authority will make no use of the proceeds of the Series 2024A Bonds or any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action that would cause the Series 2024A Bonds to be considered “hedge bonds” within the meaning of Sec tion 149(g) of the Code unless the City and the Authority take all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest on the Series 2024A Bonds for federal incom e tax purposes; and
(f) Miscellaneous. The City and the Authority will not take any action or refrain from taking any action inconsistent with its expectations stated in the Tax Certificate and will comply with the covenants and requirements stated therein and incorporated by reference herein.

This Section and the covenants set forth herein shall not be applicable to, and nothing contained herein shall be deemed to prevent the City and the Authority from causing the Trustee to issue revenue bonds or to execute and deliver contracts payable on a parity with the Series 2024A Bonds, the interest with respect to which has been determined by an Opinion of Counsel to be subject to federal income taxation.

Section 6.09 Continuing Disclosure. The City will comply with and carry ou t all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Indenture, failure of the City to comply with the Continuing Disclosure Certificate shall not constitute an event of default hereunder; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the holders of at least 25% of the aggregate principal amount of Outstanding Bonds, and upon being indemnified to its reasonable satisfaction therefor, shall) or any holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.

Section 6.10 Further Assurances. Whenever and so often as requested to do so by the Trustee, the Authority and the City will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee all advantages, benefits, interests, powers, privileges and rights conferred or intended to be conferred upon it hereby or by the Assignment Agreement, the Groun d Lease or the Lease Agreement.

ARTICLE VII

DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Action on Default. If an event of default ( as described in Article VII of the Lease Agreement) shall happen, then such event of default shall constitute an event of default hereunder. The Trustee, as assignee of the Authority, shall give notice to the City of an event of default under the Lease Agreement. In each and every case during the continuance of an event of default, the Trustee may, upon being indemnified to its reasonable satisfaction therefor, upon notice in writing to the City and the Authority, exercise any of the remedies granted to the Authority under the Lease Agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to protect and enforce any of the rights vested in the Trustee or the Owners by this Indenture or by the Bonds, either at law or in equity or in bankruptcy or otherwise, whether for the speci fic enforcement of any covenant or 201

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agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 7.02 hereof.

Section 7.02 Other Remedies of the Trustee . Subject to the provisions of Section 7.01 hereof, the Trustee shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Authority or the City or any member, director, officer or employee thereof, and to compel the Authority or the City or any such member, director, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein;
(b) by suit in equity to enjoin any acts or thin gs which are unlawful or violate the rights of the Trustee; or
(c) by suit in equity upon the happening of any event of default hereunder to require the Authority and the City to account as the trustee of an express trust.

Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners so affected.

Section 7.03 Non-Waiver. A waiver of any default or breach of duty or contract by the Trustee shall not affect any subsequent default or breach of duty or contract or im pair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by law or by this Article may be enforced and exercised from time to time and as often the Trustee shall deem expedient.

If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee or any Owner, then subject to any adverse determination, the Trustee, such Owner, the Authority and the City shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.

Section 7.04 Remedies Not Exclusive. Subject to the provisions of Section 7.01 hereof, no remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 7.05 No Liability by the Authority to the Owners. Except as expressly provided herein, the Authority shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the City of the other agreements and covenants required to be performed by it contained in the Lease 202

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Agreement or herein, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.

Section 7.06 No Liability by the City to the Owners. Except for the payment when due of the Base Rental Payments and the performance of the other agreements and covenants required to be performed by it contained in the Lease Agreement, the Ground Lease or herein, the City shall not have any obligation or liability to the Owners with respect to this Indenture or the preparation, execution, delivery or transfer of the Bonds or the disbursement of the Base Rental Payments by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.

Section 7.07 No Liability of the Trustee to the Owners . Except as expressly provided herein, the Trustee shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the Authority or the City of the other agreements and covenants required to be performed by them contained in th e Lease Agreement, the Ground Lease or herein.

Section 7.08 Application of Amounts After Default. All payments received by the Trustee with respect to the rental of the Property after a default by the City pursuant to Article VII of the Lease Agreement (including, wit hout limitation, any proceeds received in connection with the sale, assignment or sublease of the Authority’s right, title and interest in the Ground Lease), and all damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under Article VII of the Lease Agreement, shall be deposited into the Base Rental Payment Fund and as soon as practicable thereafter applied, together with all other funds held hereunder (except funds in the Rebate Fund):
(a) to the payment of all amounts due the Trustee under Article VIII hereof; (b) to the payment of all amounts then due for interest on the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of interest on such Bonds due and payable; and
(c) to the payment of all amounts then due for principal of the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of principal of such Bonds due and payable.

Section 7.09 Trustee May Enforce Claims Without Possession of Bonds . All rights of action and claims under this Indenture or the Bonds may be prosecuted and enforced by the Tru stee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment sh all, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners in respect of which such judgment has been recovered. 203

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Section 7.10 Limitation on Suits. No Owner of any Bond shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or Trustee, or for any other remedy hereunder, unless (a) such Owner shall have previo usly given written notice to the Trustee of a continuing event of default, (b) the Owners of not less than 25% of the aggregate principal amount of Bonds then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such event of default in its own name as Trustee hereunder, (c) such Owner or Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceedings, and (e) no direction inconsistent with such written request shall have been given to the Trustee during such 60 day period by the Owners of a majority of the aggregate principal amount of Bonds then Outstanding; it being understood and intended that no one or more Owners shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Owner, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Owners.

ARTICLE VIII

THE TRUSTEE
Section 8.01 Employment of the Trustee. The Authority hereby appoints and employs the Trustee to receive, deposit and disburse the Base Rental Payments, to authenticate, deliver and transfer the Bonds and to perform the other functions contained herein, all in the manner provided herein and subject to the conditions and terms hereof. By executing and delivering this Indenture, the Trustee accepts the appointment and employment hereinabove referred to and accepts the rights and obligations of the Trustee provided herein, subject to the conditions and terms hereof. Other than when an event of default has occurred and is continuing, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an event of default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and 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. The Trustee hereby covenants and agrees that it will not encumber the Property.

Section 8.02 Duties, Removal and Resignation of the Trustee . The Authority shall remove the Trustee initially a party hereto and any successor thereto if at any time (a) requested to do so by an instrument or concurrent instruments in writing signed by the Owner s of a majority of the aggregate principal amount of Bonds at the time Outstanding (or their attorneys duly authorized in writing), or (b) the Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a successor Trust ee. The Trustee and any successor Trustee shall be: (i) a national banking association in good standing authorized to exercise trust powers or having the powers of a trust company and duly authorized to exercise trust powers within the State having a combined capital and surplus of at least $250,000,000, and subject to supervision or examination by federal or state authority, or (ii) a state -chartered commercial bank that is a member of the Federal Reserve System having at least $1,000,000,000 of assets. No removal, resignation or termination of the Trustee shall take effect until a successor, meeting the requirements above, shall be qualified and appointed. If such entity publishes a report of condition at least annually, pursuant to law or to the requir ements of any supervising or examining authority above referred to, then for the purposes of this Section the 204

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combined capital and surplus of such entity shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the Registration Books. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event the Authority does not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the Authority, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of a Trustee and appointment of a su ccessor Trustee shall become effective only upon acceptance of appointment by the successor Trustee.

Any corporation, association or agency into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and become successor trustee under this Indenture and vested with all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

Section 8.03 Compensation of the Trustee . The City shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and expenditures (which shall not include “overhead expenses” except as such expenses are included as a component of the Trustee’s stated annual fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys retained by the Trustee, employed by it in the exercise and performance of its rights and obligations hereunder.

The Trustee may take whatever legal actions are lawfully available to it directly against the Authority or the City.

The City shall, to the extent permitted by law, indemnify and save the Trustee harmless against any liabilities, costs, claims or expenses, including those of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder, under the Lease Agreement, or in connection with any document or transaction contemplated hereunder or thereunder, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its misconduct. The duty of the City to indemnify the Trustee shall survive the termination and discharge of this Indenture and the earlier removal or resignation of the Trustee.

No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder.

Upon an Event of Default, and only upon an Event of Defaul t, the Trustee shall have a first lien with right of payment prior to payment on account of principal of and premium, if any, and interest on any Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by it. When 205

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the Trustee inc urs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, morator ium, reorganization or other debtor relief law.

Section 8.04 Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Owners of the Bonds pursuant to this Indenture, unless such Owners shall have offered to the Trustee security or ind emnity, reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Trustee may consult with counsel, who may be counsel to the Authority or the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect to any action taken or suffered by it hereunder in good faith in accordance therewith.

The Trustee shall not be responsible for the sufficiency of the Bonds or the Lease Agreement, or of the assignment made to it by the Assignment Agreement, or for statements made in any preliminary or final official statement relating to the Bonds, or of the title to the Property.

Whenever in the administration of its rights and obligations hereunder 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 Written Certificate of the City or a Written Certificate of the Authority, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable.

The Trustee may buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto. The Trustee, either as principal or agent, may also engage in or be interested in any financial o r other transaction with the Authority or the City, and may act as agent, depository or trustee for any committee or body of Owners or of owners of obligations of the Authority or the City as freely as if it were not the Trustee hereunder.

The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers hereof and perform any rights and obligations required of it hereunder by or through agents, attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided, however, that in the event of any negligence or misconduct of any such attorney, agent or receiver, the Trustee shall in a commercially reasonable manner pursue all remedies of the Trustee against such agent, attorney or 206

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receiver. The Trustee shall not be liable for any error of judgment made by it in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.

The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for anything whatsoever in connection with the funds established hereunder, except only for its own willful misconduct, negligence or breach of an obligation hereunder.

The Trustee shall not be deemed to have knowledge of an event of default unless it has actual knowledge thereof.

The Trustee may, on behalf of th e Owners, intervene in any judicial proceeding to which the Authority or the City is a party and which, in the opinion of the Trustee and its counsel, affects the Bonds or the security therefor, and shall do so if requested in writing by the Owners of at l east 5% of the aggregate principal amount of Bonds then Outstanding, provided the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action.

The Trustee’s rights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance of the Bonds.

All indemnifications and releases from liability gra nted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee.

The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful default. The Trustee shall have no responsibility or liability with respect to any information, statements or recitals in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Bonds. The Trustee shall not be accountable for the use or application by the Borrower of any of the Bonds or the proceeds thereof or for the use or application of any money paid over by the Trustee in accordance with the provision s of this Indenture or for the use and application of money received by any paying agent.

The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e -mail, facsimile transmission or other similar uns ecured electronic methods; provided, however, that the Trustee 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 incumb ency 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 Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Authority and the City agree to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. 207

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In acting or omitting to act pursuant to the Lease Agreement or Ground Lease, the Trustee shall be entitled to all of the rights, immunities and indemnities accorded to it under this Indenture and the Lease Agreement, including, but not limited to, this Article VIII.

ARTICLE IX

MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted.
(a) This Indenture and the rights and obligations of the Authority, the City, the Owners of the Bonds and the Trustee may be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into with the prior written consent of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding, which shall have been filed with the Trustee. No such modification or amendment shall (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or the rate of interest thereon, or extend the time of payment, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bo nds the consent of the Owners of which is required to effect any such modification or amendment, or (iii) permit the creation of any lien on the Base Rental Payments and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture on such Base Rental Payments and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstand ing. It shall not be necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. (b) This Indenture and the rights and obligations o f the Authority, the City, the Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into without the consent of any Bond Owners for any one or more of the following purposes:
(1) to add to the covenants and agreements of the Authority or the City in this Indenture contained other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority or the City; (2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in this Indenture;
(3) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Sections 3.06 and 3.07 hereof; (4) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute; 208

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(5) to modify, amend or supplement this Indenture in such manner as to cause interest on the Bonds to be excludable from gross income for purposes of federal income taxation by the United States of America; and
(6) in any other respect whatsoever as the Authority and the City may deem necessary or desirable, provided that such modification or amendment does not materially adversely affect the interests of the Bond Owners hereunder. (c) Promptly after the execution by the Authority, the City and the Trustee of any Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Authority), by first class mail postage p repaid, setting forth in general terms the substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. (d) No Supplemental Indenture shall modify any of the rights or obligations of the Trustee without the Trustee’s prior written consent.

Section 9.02 Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the City, the Trustee and a ll Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of th e terms and conditions of this Indenture for any and all purposes.

Section 9.03 Endorsement of Bonds; Preparation of New Bonds . Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bonds Outstanding at the time of such execution and presentation of his Bonds for the purpose at the Office of the Trustee a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authorit y and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall be exchanged a t the Office of the Trustee, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of the same interest rate and maturity.

Section 9.04 Amendment of Particular Bonds . The provisio ns of this Article shall not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such Owner.
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ARTICLE X

DEFEASANCE
Section 10.01 Discharge of Indenture. If the Authority shall pay or cause to be paid or there shall otherwise be paid to the Own ers of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners of such Bonds shall cease to be entitled to the pledge of the Base Rental Payment s and the other assets as provided herein, and all agreements, covenants and other obligations of the Authority and the City to the Owners of such Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Authority and the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the City all money or securities held b y it pursuant hereto which are not required for the payment of the principal of and interest and premium, if any, on such Bonds.

Subject to the provisions of the above paragraph, when any of the Bonds shall have been paid and if, at the time of such payment, the Authority and the City shall have kept, performed and observed all of the covenants and promises in such Bonds and in this Indenture required or contemplated to be kept, performed and observed by them on or prior to that time, then this Indenture shall be considered to have been discharged in respect of such Bonds and such Bonds shall cease to be entitled to the lien of this Indenture and such lien and all covenants, agreements and other obligations of the Authority and the City hereunder shall cease , terminate become void and be completely discharged as to such Bonds.

Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any Bonds, those provisions of this Indenture relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owners of the Bonds and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and interest and premium, if any, on the Bonds, to pay to the Owners of Bonds the funds so held by the Trustee as and when such payment becomes due. Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indent ure in respect of any Bonds, those provisions of this Indenture relating to the compensation and indemnity of the Trustee shall remain in effect and shall be binding upon the Trustee, the City and the Authority.

Section 10.02 Bonds Deemed To Have Been Paid. If moneys shall have been set aside and held by the Trustee (or an escrow agent or other fiduciary) for the payment or redemption of any Bonds and the interest thereon at the maturity or redemption date thereof, such Bonds shall be deemed to have been paid within the meaning and with the effect provided in Section 10.01 hereof. Any Outstanding Bonds shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 10.01 hereof if (a) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Authority shall have given to the Trustee in form satisfactory to it irrevocable instructions to mail, on a date in accordance with the provisions of Section 4.02 hereof, notice of redemption of such Bonds on said redemption date, said notice to be given in accordance with Section 4.02 hereof, (b) there shall have been deposited with the Trustee (or an escrow agent or other fiduciary) either (i) money in an amount wh ich shall be sufficient, or 210

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(ii) Federal Securities that are not subject to redemption other than at the option of the holder thereof, the interest on and principal of which when paid will provide money which, together with the money, if any deposited or o n deposit with the Trustee at the same time, shall, as verified by an independent certified public accountant, be sufficient to pay when due the interest to become due on such Bonds on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and premium, if any, on such Bonds, and (c) in the event such Bonds are not by their terms subject to redemption within the next succeeding 60 days, the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the owners of such Bonds that the deposit required by clause (b) above has been made with the Trustee (or an escrow agent or other fiduciary) and that such Bonds, are deemed to have been paid in accordance with this Section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and premium, if any, on such Bonds.

Section 10.03 Payment of Bonds After Discharge of Indenture . Notwithstanding any provisions of this Indenture, to the extent permitted by law, any moneys held by the Trustee in trust for the payment of the principal of, or premium or interest on, any Bonds and remaining unclaimed for two years after the date of deposit of such moneys, sh all be repaid to the Authority (without liability for interest) free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee may (at the cost of the Authority) first mail, by first class mail postage prepaid, to the Owners of Bonds which have not yet been paid, at the respective addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof.

ARTICLE XI

MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties . Nothing contained herein, expressed or implied, is intended to give to any person other than the Authority, the City, the Trustee and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, conditi on, covenant or term required herein to be observed or performed by or on behalf of the Authority or the City shall be for the sole and exclusive benefit of the Trustee and the Owners.

Section 11.02 Successor Deemed Included in all References to Predecessor . Whenever the Authority, the City or the Trustee, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Authority, the City or the Trustee, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Authority, the City or the Trustee, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.

Section 11.03 Execution of Documents by Owners . Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state 211

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or territory in which he purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him the exe cution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by such other proof as the Trustee may accept which it may deem sufficient.

The ownership of any Bonds and the amount, payment da te, number and date of owning the same may be proved by the Registration Books.

Any declaration, request or other instrument in writing of the Owner of any Bond shall bind all future Owners of such Bond with respect to anything done or suffered to be done by the Authority, the City or the Trustee in good faith and in accordance therewith.

Section 11.04 Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the Authority or the City shall be individually or personally liable for the payment of any moneys, including without limitation, the principal of or interest on the Bonds, but nothing contained herein shall relieve any member, officer or employee of the City or the Authority from the performance of an y official duty provided by any applicable provisions of law, by the Lease Agreement or hereby.

Section 11.05 Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may, in lieu of such cancellation and delivery, destroy such Bonds.

Section 11.06 Funds and Accounts . Any fund or account required to be established and maintained herein by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and acco unts shall at an times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Bonds and the rights of the Owners.

The Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to this Indenture. The Trustee may establish such funds and accounts as it deems necessary or appropriate to perform its obligations hereunder.

Section 11.07 Article and Section Headings Gender and References . The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to “Articles,” “Sections,” subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, subsection or clause thereof.

Section 11.08 Partial Invalidity . If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Authority, the 212

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City or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall retain all the benefit, protection and security afforded to them under any applicable provisions of law.

The Authority, the City and the Trustee hereby declare that they would have executed this Indenture, and each and every Article, Section, paragraph, subsection, s entence, clause and phrase hereof and would have authorized the execution and delivery of the Bonds pursuant hereto irrespective of the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the appli cation thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

Section 11.09 Disqualified Bonds . In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, di rection, consent or waiver under this Indenture, Bonds which are actually known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination; except that, in determining whether the Trustee shall be protected in relying upon any such demand, re quest, direction, consent or waiver of an Owner, only Bonds which the Trustee actually knows to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or con trolled by, or under direct or indirect common control with, the Authority or the City. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Authority and the City shall specify in a Written Certificate of the City and Authority those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such Certificate.

Section 11.10 Money Held for Particular Bonds . The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on it s books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.03 hereof but without any liability for interest thereon.

Section 11.11 Payment on Non-Business Days. In the event any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day with the same effect as if made on such non-Business Day.

Section 11.12 California Law . This Indenture shall be construed and governed in accordance with the laws of the State of California.
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Section 11.13 Notices. All written notices to be given hereunder shall be given by mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the City: City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92840
Attention: City Manager
If to the Authority: Garden Grove Public Financing Authority c/o City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92840
Attention: Executive Director
If to the Trustee: U.S. Bank Trust Company, National Association 633 West Fifth St., 24th Floor
Los Angeles, California 90071
Attention: Global Corporate Trust
Ref: City of Garden Grove
Each s uch notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate answer back or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the Unite d States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (d) if given by any other means, upon delivery at the address specified in this Section.

Section 11.14 Notice to Rating Agencies. The Trustee shall provide S&P, if the Bonds are then rated by S&P, and Moody’s, if the Bonds are then rated by Moody’s, with prompt notice of any substitution or release of property pursuant to Sections 10.03 and 10.04 of the Lease Agreement.

Section 11.15 Execution in Counterparts . This Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Authority and the City have caused this Indenture to be signed in their respective names by their representative thereunto duly authorized, and the Trustee, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.

GARDEN GROVE PUBLIC FINANCING

AUTHORITY
By:

Chair
ATTEST:

Secretary

CITY OF GARDEN GROVE
By:

Mayor
ATTEST:

City Clerk
[SIGNATURES CONTINUED ON NEXT PAGE.]

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[SIGNATURE PAGE CONTINUED.]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Officer
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EXHIBIT A
FORM OF SERIES 2024A BOND
No. ____ $___________

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE

DEPOSITORY TRUST COMPANY TO THE TRUSTEE FOR REGISTRATION OF TRANSFER,

EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS R EQUESTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE

OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

GARDEN GROVE PUBLIC FINANCING AUTHORITY

LEASE REVENUE BOND,
SERIES 2024A

INTEREST RATE MATURITY DATE DATED DATE CUSIP
______% April 1, 20__ ________, 2024

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: _________________________ THOUSAND DOLLARS The Garden Grove Public Financing Authority (the “Authority”), for value received, hereby promises to pay, solely from the Base Rental Payments (as hereinafter defined) or amounts in certain funds and accounts held under the Indenture (as hereinafter defined), to the Registered Owner identified above or registered assigns (the “Registered Owner”); on the Maturity Date identified above or on any earlier redemption date, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like lawful money from the date hereof payable semiannually on April 1 and October 1 in each year, commencing [October 1, 2024] (the “Interest Payment Dates”), until payment of such Principal Amount in full. This Bond shall bear interest from the Interest Payment Date next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth calendar day of the month next preceding such Interest Payment Date, whether or not such day is a Business Day, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to [September 15, 2024], in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, interest on this Bond shall be payable from the date to which interest hereon has been paid in full, payable on each Interest Payment Date).

The Principal Amount hereof is payable upon surrender hereof upon maturity or earlier redemption at the Office of the Trustee (as hereinafter defined). Interest hereon is payable by wire or check of U.S.

Bank Trust Company, National Association , as Trustee (the “Trustee”), mailed by first class mail, postage prepaid, on each Interest Payment Date to the Registered Owner hereof at the address of the 217

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Registered Owner shown on the Registration Books at the close of business on the fifteenth calendar day of the month next preceding such Interest Payment Date. “Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Authority and the City of Garden Grove (the “City”) by the Trustee in writing, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or the agency of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as specified to the Authority and the City by the Trustee in writing.

This Bond is one of a series of a duly authorized issue of bonds issued for the purpose of financing the Project (as defined in the Indenture), and is one of the series of bonds designated “Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Series 2024A Bonds”) in the aggregate principal amount of $__________. The Series 2024A Bonds are issued pursuant to the Indenture, dated as of June 1, 2024 (the “Indenture”), by and among the Authority, the City and the Trustee, and this reference incorporates the Indenture herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Indenture, additional bonds (“Additional Bonds”), may be issued by the Authority secured by a lien on a parity with the lien on Base Rental Payments and amounts in certain funds and accounts held under the Indenture securing the Series 2024A Bonds. The Series 2024A Bonds and any Additional Bonds are collectively referred to as the “Bonds.” The Indenture is entered into, and this Bond is issued under, the Marks-Roos Local Bond Pooling Act of 1985 (the “Act”) and the laws of the State of California.

Pursuant to the Indenture, the principal of and interest on the Bonds are payable solely from certain base rental payments (the “Base Rental Payments”) under and pursuant to that certain Lease Agreement, dated as of June 1, 2024 (the “Lease Agreement”), by and between the City, as lessee, and the Authority, as lessor, all of which rights to receive such Base Rental Payments have been assigned without recourse by the Authority to the Trustee. Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set for th therein, all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund established under the Indenture are pledged to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act.

Said pledge constitutes a first lien on such assets.

The Series 2024A Bonds are authorized t o be issued in the form of fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof (“Authorized Denominations”).

The Series 2024A Bonds shall be subject to redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of any Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Fund pursuant to the Indenture, at a Redemption Price equal to the principal amount of the Series 2024A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

The Series 2024A Bonds maturing on or after April 1 , 20__ , shall be subject to optional redemption, in whole or in part, on any date on or after April 1, 20__, in Authorized Denominations, from and to the extent of prepaid Base Rental Payments paid pursuant to the Lease Agreement, at a Redemption Price equal to the principal amount of the Series 2024A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. 218

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The Series 2024A Bonds maturing on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a Redem ption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Sinking Fund Redemption Date
(April 1)
Principal Amount
To Be Redeemed
$

(maturity)

The Series 2024A Bonds maturing on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a Redemption Price of the principal amount thereof plus accrue d interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Sinking Fund Redemption Date
(April 1)
Principal Amount
To Be Redeemed
$

(maturity)

In the event of a partial redemption pursuant to the Indenture, the City shall provide the Trustee with a revised mandatory sinking fund schedule giving effect to the redemption so completed.

The Trustee on behalf and at the expense of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Series 2024A Bonds designated for redemption at their respective addresses appearing on the Registration Books, to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the Series 2024A Bond numbers and the maturity or maturities (except in the event of redemption of all of the Series 2024A Bonds of such maturity or maturities in whole) of the Series 2024A Bonds to be redeemed, and shall require that such Series 2024A Bonds be then surrendered at the Office of the Trustee for rede mption at the Redemption Price, giving notice also that further interest on such Series 2024A Bonds will not accrue from and after the date fixed for redemption. Such notice may state that such redemption is conditioned upon sufficient funds being on depo sit on the redemption date to redeem the Series 2024A Bonds so called for redemption. Such notice of redemption may also state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Series 2024A Bonds.

Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Series 2024A Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.

Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, fully registered Series 2024A Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount and maturity of fully re gistered Series 2024A Bonds of other authorized denominations.
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This Bond is transferable by the Registered Owner hereof, in person or by his duly authorized attorney, but only in the manner, subject to the limitations and upon payment of the charges provid ed in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Series 2024A Bond or Series 2024A Bonds, in Authorized Denominations, for the same aggregate principal amount will be issued to the transferee in exchange herefor. The Authority, the City and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority, the City and the Trustee shall not be affected by any notice to the contrary.

The Indenture and the rights and obligations of the Authority, the City, the owners of the Bonds and the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall (a) extend the fixed maturity of any Bonds, or reduce the principal thereof or the rate of interest thereon, or extend the time of payment, without the consent of the owner of each Bond so affected, or, (b) reduce the percentage of Bonds the consent of the owners of which is required to effect any such amendment or modification, or (c) permit the creation of any lien on the Base Rental Payments and other assets pledged under the Indenture prior to or on a parity with the lien created by the Indenture or deprive the owners of the Bonds of the lien created by the Indenture on such the Base Rental Payments and such other assets (except as expressly provided in the Indenture), without the consent of the owners of all Bonds then outstanding.

The Indenture contains provisions permitting the Authority to make provision for the payment of interest on, and the principal and premium, if any, of any of the Bond so that such Bonds shall no longer be deemed to be outstanding under the terms of the Indenture.

All obligations of the Authority under the Indenture and under the Bonds shall be special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.

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IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its name and on its behalf by the facsimile signatures of its Chair and Secretary, all as of the Dated Date identified above.

GARDEN GROVE PUBLIC FINANCING

AUTHORITY
By:

Chair
Attest:

Secretary

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]
This is one of the Series 2024A Bonds described in the within -mentioned Indenture and registered on the Registration Books.

Date: _____________, 2024 U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee
By:

Authorized Signatory

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[FORM OF LEGAL OPINION]

The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth LLP, in connection with the issuance of, and dated as of the date of the origina l delivery of, the Bonds. A signed copy is on file in my office.

Secretary of the Board of the Garden Grove Public
Financing Authority

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[FORM OF ASSIGNMENT]
For value, received the undersigned hereby sells, assigns and transfers unto ____________________________________________ whose address and social security or other tax identifying number is ______________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ____________________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.

Dated: ____________________
Signature Guaranteed:

Note: Signature(s) must be guaranteed by an eligible
guarantor.

Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of
the within pond in every particular without alteration or enlargement or any change whatsoever.
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EXHIBIT B

FORM OF PROJECT FUND REQUISITION
REQUISITION NO. _____ FOR

DISBURSEMENT FROM THE PROJECT FUND
The undersigned hereby states and certifies:
(i) that he/she is the duly appointed, qualified and acting _________ of the City of Garden Grove, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California (the “City”), and as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that, pursuant to Section 3.05 of the Indenture, dated a s of June 1, 2024 (the “Indenture”), by and among the Garden Grove Public Financing Authority (the “Authority”), the City and U.S. Bank Trust Company, National Association , as trustee (the “Trustee”), related to the Authority’s Lease Revenue Bonds, Series 2024A, the undersigned hereby requests the Trustee to disburse this date the following amounts from the Project Fund established under the Indenture, to the payees designated on the attached Exhibit A;
(iii) that each obligation mentioned herein has been i ncurred by the City and is a proper charge against the Project Fund; and
(iv) that there has not been filed with or served upon the City notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys payable to any of the payees named on the attached Exhibit A, which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by mere operation of law.

All c apitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Indenture.

Dated: ______________ CITY OF GARDEN GROVE
By:

Its:
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EXHIBIT A

PROJECT FUND DISBURSEMENTS
Item
Number Payee Name and Address
Purpose of
Obligation Amount

225
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CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disc losure Certificate, dated as of June __, 2024 (the “Disclosure Certificate”) is executed and delivered by the City of Garden Grove (the “City”) in connection with the issuance by the Garden Grove Public Financing Authority (the “Authority”) of its Lease Revenue Bonds, Series 2024A (the “Bonds”) pursuant to an Indenture dated as of June 1, 2024, by and among the City, the Authority, a nd U.S. Bank Trust Company, National Association, as Trustee (the “Trustee”).

Capitalized terms not defined herein shall have the meaning set forth in the Indenture. The City covenants and agrees as follows:

SECTION 1. Purpose of this Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule (as the foregoing capitalized terms are hereinafter defined).

SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“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 tax purposes.
“Dissemination Agent” shall mean [Applied Best Practices LLC] or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation. In the absence of such a designation, the City shall act as the Dissemination Agent. “Financial Obligation” shall mean, for purposes of the Listed Events set out in Section 5(a)(10) and Section (5)(b)(8), 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 (iii) guarantee of (i) or (ii). The term “Financial Obligation” shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule.
“Listed Events” shall mean any of the events listed in Section 5 of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (“EMMA”) website of the MSRB, currently located at http://emma.msrb.org.
“Official Statement” shall mean the Official Statement for the Bonds dated _____, 2024, as amended or supplemented.
“Participating Underwriter” shall mean the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. 226
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SECTION 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dis semination Agent by written direction to such Dissemination Agent to, not later than March 31 after the end of the City’s fiscal year (which currently ends on June 30), commencing with the report due for the fiscal year ending June 30, 2024, provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the City may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report.

An Annual Report shall be provided at least annually notwithstanding any fiscal year longer than 12 calendar months. The City’s fiscal year is currently effective from July 1 to the immediately succeeding June 30 of the following year. The City will promptly notify the MSRB of a change in the fiscal year dates. (b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, the City shall provide the Annual Report to the Dissemination Agent (if the Dissemination Agent is not the City). If by fifteen (15) Business Days prior to the date specified in (a) for the Annual Report, the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall notify the City of such failure to receive the report. If the Dissemination Agent is other than the City, the City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report. (c) If the City fails to provide an Annual Report by the date required in subsection (a), the City shall or shall cause the Dissemination Agent to, in a timely manner, send a notice of such failure to file to the MSRB, in substantially the form attached as Exhibit A.

SECTION 4. Content of Annual Reports . The City’s Annual Report shall contain or include by reference the following:
(a) Financial Statements. The audited financial statements of the City for the most recent fiscal year of the Cit y then ended. If the City prepares audited financial statements and if the audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain any unaudited financial statements of the City in a format similar to the financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.

Audited financial statements of the City shall be audited by such auditor as shall th en be required or permitted by State law. Audited financial statements, if prepared by the City, shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the City may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the City shall modify the basis upon which its financial statements are prepared, the City shall provide a notice of such modification to the MSRB, including a reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis. (b) Financial and Operating Data . Numerical and tabular information for the immediately preceding fiscal year in the following charts and tables:

1. Information of the type contained in Table 5 of the Official Statement;

2. Information of the type contained in Table 6 of the Official Statement; 227
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3. Information of the type contained in Table 7 of the Official Statement;

4. Information of the type contained in Table 8 of the Official Statement; and

5. Information of the type contained in Table 9 of the Official Statement, except that it is not necessary to identify the Land Use.

Any or all of the items listed above may be included in, or by specific reference to, other documents, including the City’s Annual Comprehensive Financial Reports, or official statements of debt issues of the City or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission.

If the document included by reference is a final official statement, it must be available from the MSRB. The City shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Significant Events.
(a) 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 a timely manner not later than ten business days after the occurrence of the event:

1. Principal and interest payment delinquencies;

2. Unscheduled draws on debt service reserves reflecting financial difficulties;

3. Unscheduled draws on credit enhancements reflecting financial difficulties;

4. Substitution of credit or liquidity providers, or their failure to perform;

5. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB);

6. Tender offers;

7. Defeasances;

8. Rating changes;

9. Bankruptcy, insolvency, receivership or similar event of the obligated person; or

10. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties.

Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(b) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event:
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1. Unless described in paragraph 5(a)(5), notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds;

2. Modifications to rights of Bond holders;

3. Bond calls;

4. Release, substitution, or sale of property securing repayment of the Bonds;

5. Non-payment related defaults;

6. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substa ntially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms;

7. Appointment of a successor or additional trustee or the change of name of a trustee; or

8. Incurrence of a Financial Obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders.
(c) Whenever the City obtains knowledge of the occurrence of a Listed Event described in Section 5(b), the City shall determine if such event would be material under applicable federal securities laws. (d) If the City learns of the occurrence of a Listed Event described in Section 5(a), or determines that knowledge of a Listed Event described in Section 5(b) would be material under applicable federal securities laws, the City shall within ten business days of occurrence file a notice of such occurrence with the MSRB.

Notwithstanding the foregoing, notice of the Listed Event described in subsections (b)(3) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to owners of affected Bonds pursuant to the Indenture.

SECTION 6. Format for Filings with MSRB . Any report or filing with the MSRB pursuant to this Disclosure Certificate must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB.

SECTION 7. Termination of Reporting Obligation . The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance or payment in full of all of the Bonds. If such termination occurs prior to the final maturity date of the Bonds, the City shall give notice of such termination in a filing with the MSRB.

SECTION 8. 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 Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be Applied Best Practices LLC.

SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
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(a) If the amendment or waiver relates to the provisions of Sections 3, 4 or 5(a) or (b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or Beneficial Owners of the Bonds.

SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in an y notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future notice of occurrence of a Listed Event.

SECTION 11. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, any Owner or Beneficial Owner of 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 Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture or an event of default under the Lease Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

SECTION 12. Duties, Immunities an d Liabilities of Dissemination Agent . A Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save such Dissemination Agent, its officers, directors, employees an d 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 obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
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SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, if any, the Participating Underwriter and the Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

CITY OF GARDEN GROVE

By:

City Manager
ACKNOWLEDGED:

APPLIED BEST PRACTICES LLC,
as Dissemination Agent

By:

Authorized Signatory

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EXHIBIT A

NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD

OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Garden Grove Public Financing Authority Name of Issue: Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A Date of Issuance: _____, 2024
NOTICE IS HEREBY GIVEN that the City of Garden Grove (the “City”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate, dated as of June __, 2024, executed by the City. [The City anticipates that the Annual Report will be filed by __________.] Dated: __________
APPLIED BEST PRACTICES LLC, as Dissemination
Agent
By:

Name:

Title:

232
Anzel Galvan Draft of 4/1/24
1 GARDEN GROVE PUBLIC FINANCING AUTHORITY
Lease Revenue Bonds, Series 2024A

BOND PURCHASE AGREEMENT
[Pricing Date]
Garden Grove Public Financing Authority
c/o City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92840
Attention: Executive Director
City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92840
Attention: City Manager
Ladies and Gentlemen:

The undersigned, Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (which, together with the exhibits hereto, is referred to as the “Purchase Agreement”) with the Garden Grove Public Financing Authority (the “ Authority”) and the City of Garden Grove, California (the “City”), which, upon the acceptance of the Authority and the City, will be binding upon the Authority, the City and the Underwriter. This offer is made subject to accept ance by the Authority and by the City by the execution of this Purchase Agreement and delivery of the same to the Underwriter prior to 11:59 P.M., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwrite r upon notice delivered to the Authority and the City at any time prior to the acceptance hereof by the Authority and the City. Capitalized terms that are used herein and not otherwise defined have the meanings that are set forth in the Indenture, dated a s of June 1, 2024 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association , as trustee (the “Trustee”).

Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase from the Authority, and the Authority hereby agrees to issue, sell and deliver to the Underwriter all (but not less than all) of the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A in the aggregate principal amount of $__________ (the “Bonds”). The Bonds will be dated as of their date of delivery. Interest on the Bonds shall be payable semiannually on October 1, 2024 and each April 1 and October 1 thereafter, and will mature, bear interest and be subject to redemption prior to maturity as set forth in Exhibit A. The purchase price of the Bonds shall be equal to $__________ (being the aggregate principal amount thereof [plus][less] a [net] original issue [premium][discount] of $___________, less an underwriter’s discount of $___________). 233
2 Section 2. The Bonds. The Bonds shall be secured by a pledge of revenues consisting primarily of base rental payments (“Base Rental Payments”) to be paid by the City to the Authority pursuant to the Lease Agreement, dated as of June 1, 2024 (the “Lease”), by and between the City and the Authority, under which the Authority will sublease certain real property to the City in consideration for the City’s payment of the Base Rental Payments. The Authority’s right to receive the Base Rental Payments due under the Lease and to exercise remedies upon default under such Lease shall be assigned to th e Trustee for the benefit of the owners of the Bonds pursuant to an Assignment Agreement, dated as of June 1, 2024 (the “Assignment Agreement”), by and between the Authority and the Trustee.

The Bonds shall be as described in, and shall be secured under an d pursuant to the Indenture substantially in the form previously submitted to the Underwriter with only such changes therein as shall be mutually agreed upon by the Authority, the City and the Underwriter.

The proceeds of the Bonds shall be used to: (i) finance a portion of the costs of constructing a new public safety facility, parking garage, park improvements, demolition of the existing police headquarters, and certain other related capital improvements, and (ii) pay the costs incurred in connection with the issuance of the Bond s. The Bonds, this Purchase Agreement, the Indenture, the Lease, the Ground Lease, dated as of June 1, 2024 (the “Ground Lease”), by and between the Authority and the City, the Assignment Agreement and the resolution of the Authori ty authorizing the issuance of the Bonds (the “ Authority Resolution ”) are collectively referred to herein as the “ Authority Documents.”
This Purchase Agreement, the Continuing Disclosure Certificate of the City, dated the date of issuance of the Bonds (the “Continuing Disclosure Certificate”), relating to the Bonds, the Lease, the Ground Lease and the resolution of the City relating to the Bonds (the “ City Resolution”) are collectively referred to herein as the “City Documents.” Section 3. Public Offering and Establishment of Issue Price. (a) The Underwriter agrees to make an initial public offering of all of the Bonds at the public offering prices (or yields) set forth in Exhibit A and incorporated herein by reference.

Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as the Underwriter deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices.

The City and the Authority 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 the City and the Authority, on one hand, and the Underwriter, on the other; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 15B of The Securities Exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City or Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Und erwriter has provided other services or is currently providing other services to the City or Authority on other matters); (iv) the Underwriter has financial and other interests that differ from those of the City and the Authority; and (v) the City and Authority have consulted their own legal, financial and other advisors to the extent that they have deemed appropriate. 234
3 (b) The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing (as defined below) an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form set forth in Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel (as such term is defined below), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the Authority under this section to establish the issue price of the Bonds may be taken on behalf of the Authority by the Authority’s municipal advisor, Fieldman, Rolapp & Associates, Inc. (the “Municipal Advisor”) and any notice or report to be provided to the Authority may be provided to the Authority’s Municipal Advisor. (c) Except as otherwise set forth in Exhibit A, the Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public ea ch 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 Authority the prices at which it sells the unsold Bonds of that maturity to the public. That repor ting obligation shall continue, whether or not the Closing Date (as defined below) has occurred, until either: (i) the Underwriter has sold all of the Bonds of that maturity; or (ii), the 10% test has been satisfied as to the Bonds of that maturity , provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon the request of the Authority or Bond Counsel.

For purposes of this Section, if Bonds mature on the same date but have differen t interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds . For clarity, and notwithstanding any other condition to Closing set forth in this Purchase Agreement, the sale of 10% of each maturity of the Bonds to the public prior to the Closing Date shall not be a condition to Closing.
(d) The Underwriter confirms that it 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 Exhibit A, except as otherwise set forth therein.

Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, th e maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial off ering 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 (5th) 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 will advise the Authority promptly after the close of the fifth (5th) business day after the sale date whether 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. 235
4 (e) The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group, and each broker- dealer that is a party to such third-party distribution agreement, as applicable, (A) (i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter; (B) to promptly notify the Underwriter of any sales o f Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker -dealer is a sale to the public; and
(2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the rel ated pricing wires, contains or will contain language obligating each dealer that is a party to a third -party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker -dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it ha ve been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer and (B) comply with the hold -the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (f) The Authority acknowledges that, in making the representations set forth in this Section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third- party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker -dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third -party distribution agreement and the related pricing wir es. The Authority further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a third -party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold -the-offering-price rule, if applicable to the Bonds.
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5 (g) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party; (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees p ursuant 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 third party distribution agreement participating in the initial sale of the Bonds to the public); (iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) 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), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including d irect ownership by one partnership of another), or (C) 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); and (iv) “sale date” means the date of execution of this Purchase Agreement by all parties.

Section 4. The Official Statement. By their acceptance of this proposal, the Authority and the City ratify, confirm and approve of the use and distribution by the Underwriter prior to the date hereof of the preliminary official statement relating to the Bonds dated [POS Date] (including the cover page, all appendices and all information incorporated therein and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “ Preliminary Official Statement”) that an authorized officers of the City and the Authority deemed “final” as of its date, for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (“ Rule 15c2-12”), except for certain information that is pe rmitted to be omitted therefrom by Rule 15c2 -12. The Authority and the City agree to deliver or cause to be delivered to the Underwriter, within seven business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Bonds (including all information that was previously permitted to have been omitted by Rule 15c2-12), including the cover page, all appendices, all information incorporated therein and any amendments or supplements as have been approved by the Aut hority, the City and the Underwriter (the “ Official Statement ”) in such quantity as the Underwriter shall reasonably request to comply with Section (b)(4) of Rule 15c2 -12 and the rules of the Municipal Securities Rulemaking Board (the “MSRB”).

The Underwriter hereby agrees that it will not request that payment be made by any purchaser of the Bonds prior to delivery by the Underwriter to the purchaser of a copy of the Official Statement.

The Underwriter agrees: (i) to provide the Authority and the City with final pricing information on the Bonds on a timely basis; and (ii) to file a copy of the Official Statement, including any supplements prepared by the Authority or the City in accordance with MSRB rules with the MSRB at 237
6 http://emma.msrb.org. The Authority and the City hereby approve of the use and distribution by the Underwriter of the Preliminary Official Statement in connection with the offer and sale of the Bonds.

The Authority and the City will cooperate with the Underwriter in the filing by the Underwriter of the Official Statement with the MSRB.

Section 5. Closing. At 8:30 a.m., California time, on [Closing Date], or at such other time or date as the Authority and the Underwriter agree upon (the “ Closing Date”), the Authority shall deliver or cause to be delivered to the Trustee, the Bonds, in definitive form, registered in the name of Cede & Co., as the nominee of The Depository Trust Company (“DTC”), so that the Bonds may be authenticated by the Trustee and credited to the account specified by the Underwriter under DTC’s FAST procedures. Concurrently with the delivery of the Bonds, the Authority and the City will deliver the documents hereinafter mentioned at the offices of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California (“Bond Counsel”), or another place to be mutually agreed upon by the Authority, the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof b y wire transfer in immediately available funds. This payment for and delivery of the Bonds, together with the delivery of the aforementioned documents, is herein called the “Closing.”
The Bonds shall be registered in the name of Cede & Co., as nominee of DTC in denominations of five thousand dollars ($5,000) or any integral multiple thereof. The Authority and the City acknowledge that the services of DTC will be used initially by the Underwriter in order to permit the issuance of the Bonds in book -entry f orm, and agree to cooperate fully with the Underwriter in employing such services.

Section 6. Representations, Warranties and Covenants of the Authority. The Authority represents, warrants and covenants to the Underwriter and the City that:
(a) The Authority is a public body that is duly organized and existing under the Constitution and laws of the State of California (the “State”), including Articles 1, 2 and 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “ JPA Act”) and th e Joint Exercise of Powers Agreement, dated as of June 22, 1993 (as amended, the “JPA Agreement”), by and between the City and the Garden Grove Agency for Community Development. By an Amendment No. 1 to the JPA Agreement dated as of March 28, 2006, the G arden Grove Sanitary District became a member of the Authority and by an Amendment No. 2 to the JPA Agreement dated November 1, 2020, the Successor Agency to the Garden Grove Agency for Community Development, as successor to the Garden Grove Agency for Community Development, was removed as a member of the Authority.
(b) The Authority has full legal right, power and authority to adopt or enter into, as the case may be, and to carry out and consummate the transactions on its part contemplated by the Authority Documents.
(c) By all necessary official action at a regular meeting of the Authority’s Board of Directors that was duly noticed and held, the Authority has adopted the Authority Resolution, has duly authorized and approved the issuance of the Bonds and the execution of the Authority Documents, has duly authorized and approved the Preliminary Official Statement, will, by execution thereof, duly authorize and approve the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in, the Authority Documents and the consummation by it of all other transactions contemplated by the 238
7 Authority Documents in connection with the issuance of the Bonds. As of the date he reof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, and assuming due execution and delivery by the other parties thereto, if applicable, the Authority Documents will constitute the legally valid and binding obligations of the Authority enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally, or by the exercise of judicial discretion and the limitations on legal remedies against joint powers authorities in the State. The Authority has complied, and will at the Closing be in complianc e in all material respects, with the terms of the Authority Documents.
(d) The Authority is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party which breach or default has or may have a materially adverse effect on the ability of the Authority to perform its obligations under the Authority Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the adoption, execution and delivery of the Authority Documents, if applicable, and compliance with the provisions on the Authority’s part contained therein, will not conflict in any material way with or constitu te a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Authority or under the terms of any such law, regulation or instrument, except as may be provided by the Authority Documents.
(e) All material authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the Authority of its obligations in connection w ith the Authority Documents have been duly obtained or, when required for future performance, are expected to be obtained, other than 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; except as described in or contemplated by the Preliminary Official Statement and the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agen cy or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations under the Authority Documents have been duly obtained. (f) The Authority hereby agrees that it will notify the other parties hereto if, within the period from the date of this Purchase Agreement to and including the date that is twenty-five (25) days following the end of the underwriting period (as such term is defined below), the Authority discovers any pre-existing or subsequent fact or becomes aware of the occurrence of any event, in any such case, which might cause the Official Statement (as the s ame may have then been supplemented or amended) to contain any untrue statement of a material fact or to omit to state a material fact 239
8 necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) As of the time of acceptance hereof and the Closing, 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, governmental authority, public board or body, pending, with service of process upon the Authority having been accomplished, or threatened in writing to the Authority: (i) in any way questioning the corporate existence of the Authority or the titles of the officers of the Authority to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of Base Rental Payments with respect to the Lease or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the other Authority Documents or the consummation of the transactions contemplated thereby or hereby, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the Authority or its authority to issue the Bonds; (iii) which would be likely to result in any material adverse change relating to the business, operations or financial condition of the Authority; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (h) To the Authority’s knowledge, there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of paragraph 6(g). (i) The information in the Official Statement set forth under the caption “THE AUTHORITY” does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
(j) The Authority will refrain from taking any action, or permitting any action to be taken, with regard to which the Authorit y may exercise control, that results in the loss of the tax-exempt status of the interest on the Bonds.
(k) The Authority will refrain from taking any action, or permitting any action to be taken, to reduce the amount of the Base Rental Payments while the Bonds are Outstanding, and the Authority will collect the Base Rental Payments in accordance with the Lease. (l) Any certificate signed by any officer of the Authority authorized to execute such certificate in connection with the execution, sale and delivery of th e Bonds and delivered to the Underwriter shall be deemed a representation and warranty of the Authority to the Underwriter and the City as to the statements made therein but not of the person signing such certificate.

Section 7. Representations, Warranties and Covena nts of the City. The City represents, warrants and covenants to the Underwriter and the Authority that:
(a) The City is a political subdivision of the State that is duly organized and existing under and by virtue of the general laws of the State. 240
9 (b) The City has full legal right, power and authority to adopt or enter into, as the case may be, and to carry out and consummate the transactions on its part contemplated by the City Documents.
(c) By all necessary official action, the City has adopted the City Resolution, has duly authorized and approved the City Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement and has duly authorized and approved the execution and delivery of, and the performance by the City of t he obligations on its part contained in, the City Documents and the consummation by it of all other transactions contemplated by the City Documents in connection with the issuance of the Bonds. As of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, and assuming due execution and delivery by the other parties thereto, if applicable, the City Documents will constitute the legally valid and binding o bligations of the City enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally, or by the exercise of judicial discretion and the limitations on legal remedies against municipal corporations in the State. The City has complied, and will at the Closing be in compliance in all material respects, with the terms of the City Documents. (d) The City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party which breach or default has or may have a materially adverse effect on the ability of the City to perform its obligations under the City Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the adoption, execution and delivery of th e City Documents, if applicable, and compliance with the provisions on the City’s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administr ative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lie n, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such law, regulation or instrument, except as may be provided by the City Documents.
(e) All material authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the City of its obligations in connection with the City Documents have been duly obtained or, when required for future performance, are expected to be obtained, other than 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; except as described in or contemplated by the Preliminary Official Statement, all aut horizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations under the City Documents have been duly obtained.
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10 (f) The Preliminary Official Statement was as of its date, and the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Preliminary Official Statement and the Official Statement do not and will not contain and up to and including the Closing will not contain any untrue statement of a material fact or omit to state a material fact that is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading (except that this representation does not include statements in the Official Statement under the captions “THE AUTHORITY” and “UNDERWRITING” and information regarding DTC and its book-entry only system, as to which no view is expressed). (g) The City will advise the Underwri ter promptly of any proposal to amend or supplement the Official Statement. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (h) As of the time of acceptance hereof and the Closing, except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law o r in equity, before or by any court, governmental authority, public board or body, pending, with service of process upon the City having been accomplished, or threatened in writing 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) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of Base Rental Payments with respect to the Lease or of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the City Documents or the consummation of the transactions contempla ted thereby or hereby, or contesting the exclusion of the interest on the Bonds from taxation, or contesting the powers of the Authority to issue the Bonds; (iii) which would be likely to result in any material adverse change relating to the business, oper ations or financial condition of the City; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) To the City’s knowledge, there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of paragraph 7(h). (j) Until the date which is twenty-five (25) days after the end of the underwriting period, if any event shall occur of which the City is aware that would cause the Official Statement to contain any untrue statement of a material fact or omit to state a material fact that is necessary in order to make the statements in the Official Statement, in light of the circ umstances under which they were made, not misleading (except that this representation does not include information regarding DTC and its book entry only system, as to which no view is expressed) , the City shall forthwith notify the Underwriter of any such event of which it has knowledge and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter’s reasonable opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. As used herein, the term “ end of the underwriting period” means the later of suc h time as: (i) the Authority delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold 242
11 balance of the Bonds for sale to the public. Unless the Underwriter gives notice t o the contrary, the end of the underwriting period shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered by the Underwriter to the City at or prior to the Closing Date of the Bonds and shall specify a date (other than the Closing Date) to be deemed the end of the underwriting period.
(k) Except as disclosed in the Preliminary Official Statement and the Official Statement, the City has not within the last five years failed to comply in any material respect with any continuing disclosure undertakings with regard to Rule 15c2-12 to provide annual reports or notices of material events specified in such rule.
(l) The City will refrain from taking any action, or permitting any action to be taken, with re gard to which the City may exercise control, that results in the loss of the tax -exempt status of the interest on the Bonds.
(m) The financial statements relating to the receipts, expenditures and cash balances of the City as of June 30, 202 3 attached as Appen dix C to the Official Statement fairly represent the receipts, expenditures and cash balances of the City. Except as disclosed in the Official Statement or otherwise disclosed in writing to the Underwriter, there has not been any materially adverse change in the financial condition of the City or in its operations since June 30, 2023 and there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change.
(n) To the extent required by l aw, the City will undertake, pursuant to the Continuing Disclosure Certificate, to provide annual reports and notices of certain events. A form of the Continuing Disclosure Certificate is set forth in Appendix E to the Preliminary Official Statement and will also be set forth in the Official Statement.
(o) Except in connection with the redemption or defeasance of bonds pursuant to the terms of the Indenture or as permitted under the Lease due to damage, destruction, eminent domain, or substantial interference with the use and occupancy by the City of the property that is subject to the Lease or any portion thereof, the City will refrain from taking any action, or permitting any action to be taken, to reduce the amount of the Base Rental Payments while the Bonds are Outstanding, and the City will pay the Base Rental Payments in accordance with the Lease. (p) Any certificate signed by any officer of the City authorized to execute such certificate in connection with the execution, sale and delivery of the Bonds and del ivered to the Underwriter shall be deemed a representation and warranty of the City to the Underwriter and the Authority as to the statements made therein but not of the person signing such certificate.

Section 8. Conditions to the Obligations of the Underwriter. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the statements of the officers and other officials of the Authority and of the City, as well as authorized representatives of Bond Counsel and the Trustee made in any certificates or other documents furnished pursuant to the provisions hereof; to the performance by the Authority and the City of their obligations to be performed under the Authority Documents and the City Documents, respectively, at or prior to the Closing Date; and to the following additional conditions:
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12 (a) The representations, warranties and covenants of the City and the Authority contained herein shall be true and correct at the date hereof and at the time of the Closing, as if made on the Closing Date.
(b) At the time of Closing, the City Documents and the Authority Documents shall be in full force and effect as valid and binding agreements between or among the various parties thereto, and the City Documents, the Authority Documents and the Official St atement shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter.
(c) At the time of the Closing, no material default shall have occurred or be existing under the City Documents or the Authority Documents, and the City and the Authority shall not be in default in the payment of principal or interest with respect to any of their respective financial obligations, which default would materially adversely impact the ability of the City to pay the Base Rental Payments or the Authority to pay the Bonds.
(d) In recognition of the desire of the Authority, the City and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall be subject to termination in the discretion of the Underwriter by notification, in writing, to the Authority and the City prior to delivery of and payment for the Bonds, if between the date hereof and th e time of Closing , in the Underwriter’s sole and reasonable judgment any of the following events shall occur (each a “Termination Event”):
(i) the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale o f the Bonds, shall be materially adversely affected by any of the following events:
(A) legislation shall have been enacted by the Congress of the United States or the legislature of the State or shall have been favorably reported out of committee of either body or be pending in committee of either body, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President’s Cabinet, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling, resolution, regulation or temporary regulation, release or announcement shall have been made or sha ll have been proposed to be made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or state authority with appropriate jurisdiction, with respect to federal or state taxation upon interest received on obligat ions of the general character of the Bonds;
(B) there shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis in the financial markets of the Un ited States or elsewhere or the escalation of such calamity or crisis; or
(C) a general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order 244
13 of U.S. Securities and Exchange Commission (“ SEC”) or any other governmental auth ority having jurisdiction; or
(D) legislation shall have been enacted by the Congress of the United States or shall have been favorably reported out of committee or be pending in committee, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President's Cabinet, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the SEC or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that any obligations of the general character of the Securities, or the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; or (E) except as disclosed in or contemplated by the O fficial Statement, any material adverse change in the affairs of the City or the Authority shall have occurred; or
(F) any rating of the Bonds or the rating of any obligations of the City secured by the City’s general fund shall have been downgraded, withdrawn or placed on credit watch with negative outlook by any major credit rating agency; or (ii) any event or circumstance shall exist that either makes untrue or incorrect in any material respect any statement or information in the Official Statement (other than any statement provided by the Underwriter) or is not reflected in the Official Statement but should be reflected therein 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, the Authority or the City refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented is to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; or
(iii) a general banking moratorium shall have been declared by federal or State authorities having jurisdiction and be in force; or (iv) a material disruption in s ecurities settlement, payment or clearance services affecting the Bonds shall have occurred; or
(v) any new restriction on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a charge to the net capital requirements of, underwriters shall have been established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or
(vi) a decision by a court of the United States shall be rendered, or a stop order, release, regulation or no -action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Bonds, including the underlying obligations as contemplated by this Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of 245
14 the Bonds, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939; or (vii) the commencement of any action, suit or proceeding described in Section 6(g) or Section 7(h).

Subject to Section 18, upon the occurrence of a Termination Event and the termination of this Purchase Agreement by the Underwriter, all obligations of the Authority, the City and the Underwriter under this Purchase Agreement shall terminate, without further liability. (e) at or prior to the Closing, the Underwriter shall receive the following documents, in each case to the reasonable satisfaction in form and substance of the Underwriter:
(i) The executed Authority Resolution;
(ii) The executed City Resolution;
(iii) The City Documents and the Authority Documents, each duly executed and delivered by the respective parties thereto, with only such amendments, modifications or supplements as may have been agreed to in writing by the Underwriter; (iv) Specimen Bonds;
(v) Evidence that the Assignment Agreement, the Lease and the Ground Lease, or memoranda thereof, have been recorded in the Office of the County Recorder of the County of Orange;
(vi) Evidence that the insurance required to be in effect on the Closing Date under the Lease is in fact in effect as of such date;
(vii) The approving opinion of Bond Counsel dated the Closing Date and addressed to the City, in substantially the form attached as Appendix D to the Official Statement, and a reliance letter or letters thereon addressed to the Underwriter and the Trustee; (viii) A supplemental opinion of Bond Counsel dated the Closing Date and addressed to the Underwriter in substantially the form attached hereto as Exhibit D:
(ix) The Official Statement, executed on behalf of the City and the Authority, and the Preliminary Official Statement;
(x) Evidence that the rating on the Bonds is as described in the Official Statement;
(xi) A certificate, dated the Closing Date, signed by a duly authorized officer of the Authority, satisfactory in form and substance to the Underwriter, to the effect that: (i) the Authority Resolution was duly adopted at a regular meeting of the Authority held on April 9, 2024, at which a quorum was present and acting throughout, is in full force and effect as of the date hereof and has not been amended, modified or supplemented, except as agreed to by the Underwriter ; (ii) the representations, warranties and covenants of the Authority contained in this Purchase Agreement are 246
15 true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date by the Authority, and the Authority has complied with, in all material respects, all of the terms and conditions of the Purchase Agreement required to be complied with by the Authority at or prior to the Closing Date; (iii) no event affecting the Authority has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iv) the information and statements contained in the Official Statement under the caption “THE AUTHORITY” did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact that is necessary to make the statements therein, in the light of the circumstances und er which they were made, not misleading in any material respect ; and (v) the Authority is not, in any material respect, in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including but not limited to the Lease) or other instrument to which the Authority is a party or is otherwise subject, which would have a material adverse impact on the Autho rity’s ability to perform its obligations under the Authority Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument;
(xii) A certificate, dated the Closing Date, signed by a duly authorized officer of the City, satisfactory in form and substance to the Underwriter, to the effect that: (i) the City Resolution was duly adopted at a regular meeting of the City Council of the City held on April 9, 2024, at which a quorum was present and acting throughout, is in full force and effect as of the date hereof and has not been amended, modified or supplemented, except as agreed to by the Underwriter; (ii) the representations, warranties and covenants of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date by the City, and the City has complied with, in all material respects, all of the terms and conditions of the Purchase Agreement required to be complied with by the City at or prior to the Closing Date; (iii) no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iv) the information and statements contained in the Official Statement (other than information in the Official Statement under the caption s “THE AUTHORITY” and “UNDERWRITING” and information regarding DTC and its book-entry only system) did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and (v) the City is not, in any material respect, in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including but not limited to the Lease) or other instrument to which the City is a party or is otherwise subject, which would have a material adverse impact on the City’s ability to perform its obligations under the City Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument;
(xiii) An opinion dated the Closing Date and addressed to the Underwriter, of counsel to the Authority, to the effect that:
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16 (A) the Authority is duly organized and validly existing as a joint exercise of powers agency under the laws of the State of California and is possessed of full power to own and hold real and personal property and to lease and sell the same; (B) the Authority Resolution was duly adopted at a regular meeting of the governing body of the Authority which was called and held pursuant to law, with all public notice required by law and at which a quorum was present and acting throughout; (C) the Authority has full right and lawful authority to execute and deliver the Authority Documents and such documents have been duly authorized, executed and delivered by and on behalf of the Authority. Assuming the due authorization, execution and delivery by the other parties thereto, the Authority Documents are valid and binding obligations of the Authority enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium, or similar laws, or by legal or equitable principles relating to or limiting creditors’ rights generally;
(D) to the best of our knowledge, there is no action, suit, proceeding, inquiry, or investigation before or by any court o r public board or body pending or threatened wherein an unfavorable decision, ruling, or finding would adversely affect the transactions contemplated by the Bonds, the Authority Documents or any other agreement, document, or certificate related to such transaction;
(E) insofar as it will have a material adverse effect on the ability of the Authority to enter into, carry out or perform its obligations under the foregoing agreements or to consummate the transactions contemplated thereby, to the best of our knowledge, the Authority is not in material breach of or default under any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or to which the Authority or any of its property or assets is otherwise subject, and, to the best of our knowledge no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; and (F) no authorization, approval, consent, or order of any governmental agency or, to the best of our knowledge, any other person or corporation is required for the valid authorization, execution and delivery of the Authority Documents on behalf of the Authority that has not been obtained.
(xiv) An opinion dated the Closing Date and addressed to the Underwriter, of the City Attorney, to the effect that:
(A) The City is a political subdivision of the State of California that is duly organized and existing under and by virtue of the general laws of the State of California; (B) The City Resolution was duly adopted at a regular meeting of the City at which a quorum was present and acting throughout, is in full force and effect and has not been modified, amended, rescinded or repealed since its date of adoption; (C) The City Documents have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the other parties thereto, as applicable, constitute the valid and bindin g obligations of the City, except as enforcement 248
17 may be limited by bankruptcy, insolvency, moratorium, or similar laws, or by legal or equitable principles relating to or limiting creditors’ rights generally; (D) No consent, authorization or approval of, or fi ling or registration with, any governmental or regulatory officer or body which has not already been obtained is required to be obtained by the City for the execution and performance of the City Documents or the actions on the part of the City contemplated thereby, including causing the issuance of the Bonds; (E) Except as otherwise disclosed in the Official Statement, there is no litigation, proceeding, action, suit or investigation at law or in equity before or by any court, governmental authority or body, pe nding, with service of process upon the City having been accomplished, or , to the best knowledge of such counsel , threatened in writing against the City, challenging the creation, organization or existence of the City, or the validity of the City Documents or seeking to restrain or enjoin the payment of the Base Rental Payments or the repayment of the Bonds or in any way contesting or affecting the validity of the City Documents or contesting the authority of the City to enter into or perform its obligations under any of the City Documents, or which, in any manner, questions the right of the City to pay the Base Rental Payments under the Lease; and (F) The execution and delivery of the City Documents and compliance with the provisions thereof do not an d will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject, which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the City Documents; (xv) A letter of Stradling Yocca Carlson & Rauth LLP , Newport Beach, California, as disclosure counsel to the City and the Authority, dated the Closing Date and addressed to the Underwriter in substantially the form attached hereto as Exhibit C; (xvi) An opinion of Anzel Galvan LLP, San Francisco, California, counsel to the Underwriter, in form and substance satisfactory to the Underwriter; (xvii) An opinion of counsel to the Trustee, addressed to the Underwriter and dated the Closing Date, to the effect that:
(A) The Trustee is a national banking association duly organized, validly exi sting and in good standing under the laws of the United States having full power and authority and being qualified to enter into, accept and administer the trust created under the Indenture to which it is a party and to enter into the Indenture; (B) The Indenture and the Assignment Agreement have been duly authorized, executed and delivered by the Trustee and constitute the legal, valid and binding obligations of the Trustee enforceable against the Trustee in accordance with their respective terms, except as en forcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors’ rights generally and by the application of equitable principles if equitable remedies are sought;
249
18 (C) The execution, delivery and performance of the Indenture and the Assignment Agreement will not conflict with or cause a default under any law, ruling, agreement, administrative regulation or other instrument by which the Trustee is bound; (D) All authorization s and approvals required by law and the articles of association and bylaws of the Trustee in order for the Trustee to execute and deliver and perform its obligations under Indenture and the Assignment Agreement have been obtained; and (E) An authorized represe ntative of the Trustee has duly authenticated the Bonds;
(xviii) A certificate, dated the Closing Date, signed by a duly authorized official of the Trustee, in form and substance satisfactory to the Underwriter, and an incumbency certificate of the Trustee;
(xix) For ea ch of the Bonds and the Lease, the preliminary and final Statement of Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of the Government Code; (xx) A copy of the executed Blanket Issuer Letter of Representations by and between the Authority and DTC relating to the book-entry system; (xxi) Certificates regarding tax, arbitrage and use of proceeds of the City and the Authority relating to the Bonds in form and sub stance to the reasonable satisfaction of Bond Counsel and the Underwriter;
(xxii) A certificate, dated the date of the Preliminary Official Statement, of the City and the Authority, as required under Rule 15c2-12; (xxiii) Evidence that a debt management policy which complies with Section 8855 of the Government Code has been adopted by the City and the Authority; (xxiv) Certified copies of the JPA Agreement and all amendments thereto and related certificates issued by the Secretary of State of the State (or, alternatively, a cer tificate of the Authority confirming that notice of the JPA Agreement and all amendments thereto have been filed with the Secretary of State prior to the Closing Date), together with documentation from the Secretary of State with respect to the Authority’s good standing; (xxv) a copy of an ALTA or CLTA title insurance policy in an amount equal to the original aggregate principal amount of the Bonds, insuring the City’s leasehold interest in the Property, subject only to permitted encumbrances or such other encumbrances approved in writing by the Underwriter; and
(xxvi) Such additional legal opinions, certificates, proceedings, instruments or other documents as Bond Counsel or the Underwriter may reasonably request.

Section 9. Changes in Official Statement. Within 90 days after the Closing or within 25 days following the “end of the underwriting period” (as defined in Rule 15c2 -12), whichever occurs first, if any event relating to or affecting the Bonds, the Trustee, the City or the Authority shall occur as a result of which it is n ecessary, in the reasonable opinion of the Underwriter, to amend or 250
19 supplement the Official Statement in order to make the Official Statement not misleading in any material respect in the light of the circumstances existing at the time it is delivered to a purchaser, the Authority will forthwith prepare and furnish to the Underwriter an amendment or supplement that will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to purchaser, not misleading. The City and the Authority shall cooperate with the Underwriter in the filing b y the Underwriter of such amendment or supplement to the Official Statement with the MSRB. The Underwriter acknowledges that the “end of the underwriting period” will be the Closing Date.

Section 10. Expenses. Whether or not the Bonds are sold to the Underwriter, the Underwriter shall be under no obligation to pay any expenses incident to the performance of the obligations of the City and the Authority hereunder. If the Bonds are delivered by the Authority to the Underwriter, the Authority and the City shall pay, from the proceeds of the Bonds or from other funds of the Authority or the City, the following expenses: (a) the cost of preparing, duplicating or printing, mailing and delivering the City Documents, the Authority Documents , the Preliminary Official Statement, the Official Statement and all other agreements and documents that are contemplated hereby (and drafts of any thereof); (b) the cost of preparation and printing of the definitive Bonds; (c) the fees and expenses of the Authority, the City, the Trustee, Bond Counsel, Disclosure Counsel, the Municipal Advisor, any entity retained by the Authority or the City to perform continuing disclosure compliance research or provid e continuing disclosure compliance reports and any other experts or consultants retained by the Authority or the City; (d) the charges of any rating agency with respect to the Bonds; (e) reimbursement to the Underwriter for payment of any fees and expenses reasonably incurred in connection with the initial offering, sale and delivery of the Bonds, including but not limited to industry fees (e.g., DTC, DAC, IPREO, CUSIP and Day Loan fees) only if the City, the Authority and Underwriter have previously discussed and approved the allocation of proceeds towards these fees, and meal and travel e xpenses of the personnel of the City or the Authority, but not including entertainment expenses or those to be paid by the Underwriter pursuant to the last paragraph of this Section 10, and (f) all other fees and expenses, not including entertainment expen ses, reasonably incurred in connection with the preparation of the City Documents, the Authority Documents , the Preliminary Official Statement, the Official Statement and all other agreements and documents that are contemplated hereby (and drafts of any th ereof) and/or the initial offering, sale and delivery of the Bonds. The City and the Authority have authorized, and do hereby authorize, the Underwriter to pay such expenses on behalf of the City and the Authority from proceeds of the Bonds at Closing as further described in the closing memorandum relating to the Bonds.

If the Bonds are sold to the Underwriter by the Authority, the Authority and the City shall pay out of the proceeds of the Bonds the discount of the Underwriter or the purchase price paid f or the Bonds shall reflect such discount.

Except as otherwise provided in this Section 10, the Underwriter shall pay the cost, if any, of qualifying the Bonds for sale in the various states chosen by the Underwriter, all advertising expenses in connection with the public offering of the Bonds and all other expenses incurred by it in connection with its public offering and distribution of the Bonds, not described above.

Section 11. Qualification of Bonds . The Authority and the City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request 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 as the 251
20 Underwriter may designate and to provide for the continuance of such qualification; provided, however, that neither the City nor the Authority will be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any state.

Section 12. Notices. Any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writi ng to Stifel, Nicolaus & Company, Incorporated , 2121 Avenue of the Stars, Suite 2150, Los Angeles , California 90067, Attention: Sara Brown. All notices or communications hereunder by any party shall be given and served upon each other party. Any notice or communication to be given to the City or the Authority under this Purchase Agreement may be given by delivering the same in writing to the applicable address set forth on the first page of this Purchase Agreement.

Section 13. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City, the Authority and the Underwriter (including the successors or assigns thereof) and no other person shall acquire or have any right hereunder or by virtue hereof.

Section 14. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.

Section 15. Entire Agreement. This Purchase Agreement cont ains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements, prior writings and representations with respect thereto.

Section 16. 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.

Section 17. Survival of R epresentations and Warranties . The representations and warranties of the City and the Authority in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and the Authority and regardless of delivery of and payment for the Bonds.

Section 18. Effectiveness. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and the Authority and shall be valid and enforceable as of the time of such acceptance. [Signature Page Follows]
252

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Section 19. Governing Law. This Purchase Agreement shall be governed by and construed in accordance with the laws of the State.

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Title: Authorized Officer

Accepted as of the date first stated above:

CITY OF GARDEN GROVE
By:

Its:

Printed Name:

Time of Execution: _____ a.m./p.m. Pacific Time

GARDEN GROVE PUBLIC FINANCING AUTHORITY
By:

Its:

Printed Name:

Time of Execution: _____ a.m./p.m. Pacific Time

253

A-1
Error! Unknown document property name.

EXHIBIT A

GARDEN GROVE PUBLIC FINANCING AUTHORITY
Lease Revenue Bonds, Series 2024A

MATURITY SCHEDULE
Maturity Date
(April 1)
Principal
Amount Interest Rate Yield
Initial
Offering Price
10% Test
Used
Hold-the-
Offering-
Price Rule
Used
20__ $ % %

______________
C Priced to first optional redemption date of ______ 1, 20__ at par.

T Term Bond.

REDEMPTION PROVISIONS

Extraordinary Redemption from Net Proceeds. The Bonds are subject to redemption, in whole or in part, on any date, in denominations of $5,000 or any integral multiple thereof, from and to the extent of any Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trus tee in the Redemption Fund pursuant to the Indenture, at a Redemption Price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Optional Redemption. The Bonds maturing on or after April 1, 20__, are subject to optional redemption, in whole or in part, on any date on or after April 1, 20__, in denominations of $5,000 or any integral multiple thereof, from and to the extent of prepaid Base Rental Payments paid pursuant to the Lease, at a Redemption Price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. 254

A-2
Error! Unknown document property name.

Mandatory Sinking Fund Redemption. The Bonds with stated maturities on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Redemption Date
(April 1)
Principal
Amount

**

** Final Maturity.

The Bonds with stated maturities on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Redemption Date
(April 1)
Principal
Amount

**

** Final Maturity.

The Bonds with stated maturities on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Redemption Date
(April 1)
Principal
Amount

**

** Final Maturity.
255

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EXHIBIT B

GARDEN GROVE PUBLIC FINANCING AUTHORITY
Lease Revenue Bonds, Series 2024A

FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”) hereby certifies as set forth below with respect to the sale and delivery of the above-captioned obligations (the “Bonds”).

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) Stifel 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 Bonds is attached to this certificate as Schedule B.
(b) As set forth i n the Bond Purchase Agreement, dated [Pricing Date], by and among Stifel, as the Underwriter (as defined below), the City of Garden Grove and the Issuer (as defined below), Stifel has agreed in writing that: (i) for each Maturity of the Hold -the-Offering-Price Maturities, it 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”); a nd (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any third -party distribution agreement shall contain the agreement of each broker -dealer who is a party to the third -party distribution agreement, to comply with the hold -the-offering-price rule. Pursuant to such agreement, no Underwriter has 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 (which Sale Date is [Pricing Date]), or (ii) the date on which Stifel has sold at least 10% of 256

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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.
(d) Issuer means the Garden Grove Public Financing Authority. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date b ut different stated interest rates, are treated as separate maturities.
(f) 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. (g) 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 [Pricing Date]. (h) Underwriter means: (i) any person that agrees pursuant to a written contract with the Issuer and the City of Garden Grove (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 initia l sale of the Bonds to the Public (including a member of a selling group or a party to a 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 fact ual matters only. Nothing in this certificate represents Stifel’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 Issuer and the City of Garden Grove with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth LLP , Newport Beach, California , in connection with rendering its opinion that the interest on 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 Issuer or the City of Garden Grove from time to time relating to the Bonds. The certifications contained herein are not necessarily based on personal knowledge, but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein.

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Name:

By:

Name:

Dated: [Closing Date]
257

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SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING

PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
(Attached)

258

B-4

SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
259

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EXHIBIT C

FORM OF DISCLOSURE COUNSEL LETTER

June __, 2024
Stifel, Nicolaus & Company, Incorporated
Los Angeles, California
Re: $_____________ Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A
Ladies and Gentlemen:

We have acted as Disclosure Counsel to the Garden Grove Public Financing Authority (the “Authority”) and the City of Garden Grove (the “City”) in connection with the issuance by the Authority of the above-referenced bonds (the “Bonds”). The Bonds are being delivered pursuant to an Indenture dated as of June 1, 2024, (the “Indenture”), by and among the Authority, the City and U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Bond Purchase Agreement dated May __, 2024 (the “Purchase Agreement”), among Stifel, Nicolaus & Company, Incorpo rated, (the “Underwriter”), the Authority and the City. This letter is being delivered to you pursuant to Section 8(e)(xv) of the Purchase Agreement.

In rendering the advice contained herein, we have examined originals or copies certified or otherwise identified to our satisfaction of: (i) the Preliminary Official Statement dated April __, 2024 (the “Preliminary Official Statement”) relating to the Bonds; (ii) the Official Statement, dated May __, 2024 (the “Official Statement”), relating to the Bonds; and (iii) the agreements, letters, certificates, and opinions delivered to you pursuant to Section 8 of the Purchase Agreement. We do not assume any responsibility for any electronic version of the Preliminary Official Statement or the Official Statement and assume that any such version is identical in all respects to the version printed at closing for the transcript.

We have assumed, but not independently verified, that the signatures on all documents, letters, opinions and certificates which we have examined are genuine, that all documents submitted to us are authentic and were duly and properly executed by the parties thereto and that all representations made in the documents that we have reviewed are true and accurate.

We express no opinion regarding any tax consequences with respect to the Bonds. No opinion is expressed herein with respect to the compliance with, or applicability of, any “blue sky” laws of any state as they relate to the offer or sale of the Bonds.

We are not passing upon and have not undertaken to determine independently or to verify the accuracy or completeness of the statements contained in the Preliminary Official Statement and the Official Statement and are, therefore, unable to make any representation to you in that regard. Based on our participation in conferences prior to the date of the Official Statement with representatives of 260

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the Authority and the City, Fieldman, Rolapp & Associates, Inc., as municipal advisor to the City, Edgemoor Infrastructure & Real Estate, developer of the Project (defined in the Official Statement), Project Finance Advisory LTD, the City’s public private partnerships advisor with respect to the Project, the City Attorney, the Underwriter and Underwriter’s counsel, and others, during which the content of th e Preliminary Official Statement and the Official Statement and related matters were discussed, our reliance on the oral and written statements of the Authority, the City and others, our review of and reliance upon the documents, certificates, instructions and records and the opinions of counsel described above and our understanding of applicable law, and subject to the limitations on our role as Disclosure Counsel, we advise you as a matter of fact but not opinion that no information has come to the attention of the attorneys in the firm representing the Authority and the City as Disclosure Counsel on this matter which caused us to believe that: (a) the Preliminary Official Statement as of its date or as of May __, 2024 (excluding therefrom financial, demographic and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Preliminary Official Statement as to which we express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, no t misleading, except for such information as is permitted to be excluded from the Preliminary Official Statement pursuant to Rule 15c2-12, including but not limited to information as to pricing, yields, interest rates, maturities, amortization, redemption provisions, ratings, debt service requirements, Underwriters’ discount and CUSIP numbers; or (b) the Official Statement as of its date and as of the date hereof (excluding therefrom financial, demographic, statistical or economic or demographic data; forec asts, numbers, charts, tables, graphs, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system or CUSIP numbers; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Official Statement, as to which we express no view) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. However, in providing advice and assistance as Disclosure Counsel, we provided no independent diligence on the MSRB’s Electronic Municipal Market Access website, and we express no view regarding the City’s or th e City’s related entities’ compliance with any obligation to file annual reports or provide notice of events, each as described in Rule 15c2-12. Finally, we advise you that, other than reviewing the various certificates and opinions required by Section 8 of the Purchase Agreement, we have not taken any steps since the date of the Official Statement to verify the accuracy of the statements contained in the Preliminary Official Statement or the Official Statement as of the date hereof. No responsibility is undertaken or opinion rendered with respect to any other disclosure document, materials or activity, or as to any information from another document or source referred to by, or incorporated by reference in, the Official Statement.

By acceptance of this letter you acknowledge that the preceding paragraph is neither a legal opinion nor a guarantee regarding the Preliminary Official Statement or the Official Statement; rather it is a statement of negative assurance regarding factual information that did not come to the attention of the attorneys in our firm working on this matter during the limited activities that we performed as Disclosure Counsel. Our services did not include financial or other non-legal advice.

By acceptance of the letter, the Underwriter recognizes and acknowledges that: (i) the advice herein is based on certain limited activities performed by specific attorneys in our firm in our role as Disclosure Counsel; (ii) the scope of the activities performed by such attorneys in our role as Disclosure Counsel and for purposes of delivering such advice was inherently limited and does not 261

C-3

purport to encompass all activities necessary for compliance by the Underwriters with applicable state and federal securities laws; and (iii) the activities performed by such attorneys in our role as Disclosure Counsel rely in part by representations, warranties, certifications and opinions of other parties to the transaction, including representations, warranties and certifications made by the Authority, the City , the Underwriter and others.

This letter is furnished by us as Disclosure Counsel to the Authority and the City. No attorney- client relationship has existed or exists between our firm and you in connection with the Bonds or by virtue of this letter. Thi s letter is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose without our prior written consent. This letter is not intended to and may not be relied upon by owners of Bonds or any beneficial interest therein.

Our engagement with respect to the Bonds terminates as of the date hereof, and we have not undertaken any duty, and expressly disclaim any responsibility, to advise you as to events occurring after the date hereof with resp ect to the Bonds or other matters discussed herein or in the Official Statement.

Respectfully submitted,

262

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EXHIBIT D

FORM OF SUPPLEMENTAL OPINION

June __, 2024
Stifel, Nicolaus & Company, Incorporated
Los Angeles, California
Re: $_____________ Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A
Ladies and Gentlemen:

We have examined certified copies of proceedings taken for the sale and issuance of the above- referenced bonds (the “Bonds”), and we have rendered our opinion to the Garden Grove Public Financing Authority (the “Authority”) this day regarding the validity and enforceability of the Bonds (the “Approving Opinion”). The Bonds are being issued pursuant to an I ndenture dated as of June 1, 2024 (the “Indenture”), by and among the Authority, the City of Garden Grove (the “City”) and U.S.

Bank Trust Company, National Association, as Trustee. You may rely upon our Approving Opinion as if it were addressed to you. Capitalized terms used herein and not otherwise defined shall have the meaning given to such terms in the Bond Purchase Agreement dated May __, 2024 (the “Purchase Agreement”), among the Authority, the City and Stifel, Nicolaus & Company, Incorporated (the “Underwriter”).

We have assumed, but not independently verified, that the signatures on all documents, letters, certificates and instructions which we have examined are genuine, that all documents submitted to us are authentic and were duly and properly e xecuted by the parties thereto and that all representations made in the documents that we have reviewed are true and accurate.

We express no opinion herein with respect to any indemnification, contribution, choice of law, choice of forum, penalty or waiver provisions contained in the Bonds, the Indenture, the Ground Lease, the Lease Agreement or the Purchase Agreement (collectively, the “Legal Documents”), nor do we express any opinion with respect to the state or quality of title to any of the real or pers onal property described in the Ground Lease, the Lease Agreement or the Indenture, or the accuracy or sufficiency of the description of any such property contained therein.

Based upon the foregoing and such other information and documents as we consider necessary to render this opinion, we are of the opinion that:

1. The Purchase Agreement has been duly authorized, executed and delivered by the Authority and the City and is a valid and binding agreement of the Authority and the City.

2. The statements on th e cover of the Official Statement and in the Official Statement under the captions “INTRODUCTION,” “THE SERIES 2024A BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS,” and “TAX MATTERS,” and in “APPENDIX B – SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS” and “APPENDIX D 263

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– PROPOSED FORM OF BOND COUNSEL OPINION,” excluding any material that may be treated as included under such captions and appendices by any cross -reference, insofar as such statements expressly summarize provisions of the Bonds, the Ground Lease, the Lease Agreement, the Assignment Agreement, the Indenture and Bond Counsel’s final opinion concerning certain federal tax and state tax matters relating to the Bonds, are accurate in all material respects as of the date of Closing.

4. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended.

The opinions expressed herein are based upon our analysis and interpretation of existing laws, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. This opinion is limited to matters governed by the laws of the State of California and federal securities laws, and we assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

We call attention to the fact that the rights and obligations under the Legal Documents are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State of California.

We express no opinion herein regarding any tax consequences with respect to the Bonds. No opinion is expressed herein with respect to the compliance with, or a pplicability of, any “blue sky” laws of any state as they relate to the offer or sale of the Bonds.

We call attention to the fact that the foregoing opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the d ate hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or occur (or do not occur).

This opinion is furnished by us to you and is solely for your benefit, and may not be used, circulated, quoted or otherwise referred to or relied upon by others without our prior written consent.

This letter is not intended to be, and may not be, relied upon by the owners of the Bonds or any beneficial ownership interest therein. You have acknowled ged that no attorney -client relationship exists between us and you with respect to any matters related to the Bonds.

Our engagement with respect to the Bonds has concluded with their delivery, and we disclaim any obligation to update this opinion or other matters discussed in the Official Statement.

Respectfully submitted,

264
Stradling Yocca Carlson & Rauth
Draft of 4/2/2024
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PRELIMINARY OFFICIAL STATEMENT DATED APRIL __, 2024
NEW ISSUE—BOOK-ENTRY ONLY RATING: S&P: “_____”
(See “RATING” herein)
In the opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements descri bed in this Official Statement, interest (and original issue discount) on the Series 2024A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals.

In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2024A Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” with respect to tax consequences relating to the Series 2024A Bonds, including with respect to the alternative minimum tax imposed on certain large corporations for tax years beginning after December 31, 2022. $140,000,000

GARDEN GROVE PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A
Dated: Date of Delivery Due: April 1, as shown on inside cover The Garden Grove Public Financing Authority Lease Revenue Bonds , Series 2024A (the “Series 2024A Bonds”) are payable from base rental payments (the “Base Rental Payments”) to be made by the City of Garden Grove (the “City”) for the right to use certain real property (the “Property”) pursuant to a Lease Agreement, dated as of June 1, 2024 (the “Lease Agreement”), by and between the City, as lessee, and the Garden Grove Public Financing Authority (the “Authority”), as lessor. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS.”
The Series 2024A Bonds are being issued to provide funds to (i ) finance a portion of the costs of constructing a new public safety facility, parking structure, park improvements, demolition of the existing police headquarters building, and certain other related capital improvements, and (ii) pay the costs incurred in connection with the issuance of the Series 2024A Bonds. See “THE PROJECT.” The City has covenanted under the Lease Agreement to make all Base Rental Payments provided for therein, to include all such payments as a separate line item in its biennial budgets, and to make all the necessary annual appropriations for such Base Rental Payments. The City’s obligation to mak e Base Rental Payments is subject to abatement during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defects in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property. See “RISK FACTORS—Abatements.” The Series 2024A Bonds are being issued in fully registered book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Interest on the Series 2024A Bonds is payable semiannually on April 1 and October 1 of each year, commencing October 1, 2024. Purchasers will not receive certificates representing their interest in the Series 2024A Bonds. Individual purchases will be in principal amounts of $5,000 or integral multiples thereof. Principal of and interest and premium, if any, on the Series 2024A Bonds will be paid by U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) to DTC for subsequent disbursement to DTC Participants who are obligated to remit such payments to the Beneficial Owners of the Series 2024A Bonds. See “THE SERIES 2024A BONDS—Book-Entry Only System” herein.

The Series 2024A Bonds will be issued pursuant to an Indenture, dated as of June 1, 2024 (the “Indenture”) by and among the City, the Authority and the Trustee. The Series 2024A Bonds and any additional bonds issued pursuant to the Indenture ( “Additional Bonds”) are collectively referred to as the “Bonds.”
The Series 2024A Bonds are subject to optional, extraordinary and mandatory sinking fund redemption prior to maturity. See “THE SERIES 2024A BONDS—Redemption.”
The Series 2024A Bonds are special obligations of the Authority, payable solely from Base Ren tal Payments and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Series 2024A Bonds.

The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restricti on, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. The Authority has no power to tax.

The Authority has applied for a municipal bond insurance policy with respect to the Series 2024A Bonds. If a municipal bond insurance policy is obtained, the municipal bond insurance policy would guarantee the scheduled payment of principal o f and interest on all or a portion of the Series 2024A Bonds. No assurance can be given as to whether the Authority will purchase a municipal bond insurance policy for the Series 2024A Bonds.

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

The Series 2024A Bonds will be offered when, as and if issued and received by t he Underwriter, subject to the approval as to their validity by Stradling Yocca Carlson & Rauth LLP , Newport Beach, California, Bond Counsel. Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, is also acting as Disclosure Counsel to the City and the Authority. Certain legal matters will be passed upon for the City and the Authority by the City Attorney of the City of Garden Grove, and for the Underwriter by Anzel Galvan LLP, San Francisco, California. It is anticipated that the Series 2024A Bonds in definitive form will be available for delivery to DTC in New York, New York on or about June __, 2024.

Dated: May __, 2024

 Preliminary, subject to change.

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. 265

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MATURITY SCHEDULE
$140,000,000

GARDEN GROVE PUBLIC FINANCING AUTHORITY
Lease Revenue Bonds, Series 2024A
Base CUSIP†: 365273
Maturity Date
(April 1) Principal Amount Interest Rate Yield Price CUSIP†

$__________ _____ % Term Bonds due April 1, 20__ Yield: _____% Price: _____ CUSIP† _____ $__________ _____ % Term Bonds due April 1, 2054 Yield: _____% Price: _____ CUSIP† _____

 Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright© 2024 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only .

None of the Underwriter, the Authority or the City, or their agents or counsel, assume responsibility for the accuracy of suc h numbers.
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No dealer, broker, salesperson or other person has been authorized by the City or the Authority to give any information or to make any representations in connection with the offer or sale of the Series 2024A Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or the Authority. 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 Series 2024A Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Series 2024A Bonds.

Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expr essly so described herein, are intended solely as such and are not to be construed as representations of fact.

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 a part of, its responsibilities to investors u nder 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.

This Official Statement and the information contained herein are subject to completion or amendment without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or the Authority or any other parties descri bed herein since the date hereof.

These securities may not be sold nor may an offer to buy be accepted prior to the time the Official Statement is delivered in final form. This Official Statement is being submitted in connection with the sale of the Series 2024A Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the City. All summari es of documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions.

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 terminology used such as “plan,” “expect,” “estimate,” “project,” “budget,” “intend” or similar words. Such forward -looking statements include, but are not limited to, certain statements contained in the information under the captions “THE CITY OF GARDEN GROVE ,” “CITY FINANCIAL INFORMATION ” and “RISK FACTORS.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH

FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND

OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS

DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES

NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STA TEMENT. IN EVALUATING SUCH STATEMENTS, POTENTIAL INVESTORS SHOULD

SPECIFICALLY CONSIDER THE VARIOUS FACTORS WHICH COULD CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

IN CONNECTION WITH THE OFF ERING OF THE SERIES 2024A BONDS , THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2024A BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMEN CED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE SERIES 2024A BONDS TO CERTAIN DEALERS AND DEALER

BANKS AND BANKS ACTING AS AGENT AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING

PRICE STATED ON THE COVER PAGE HEREOF AND SAI D PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

THE SERIES 2024A BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

The City maintains a website; however, information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Series 2024A Bonds. 267

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CITY OF GARDEN GROVE

ORANGE COUNTY, CALIFORNIA

GARDEN GROVE PUBLIC FINANCING AUTHORITY GOVERNING BOARD AND CITY

COUNCIL OF THE CITY OF GARDEN GROVE
Steve Jones, Chair/Mayor
Cindy Ngoc Tran, Vice Chair/Mayor Pro Tem
George S. Brietigam III, Board Member/Council Member
John R. O’Neill, Board Member/Council Member
Joe DoVinh, Board Member/Council Member
Stephanie Klopfenstein, Board Member/Council Member
Kim B. Nguyen-Penaloza, Board Member/Council Member

_____________

CITY / AUTHORITY OFFICIALS
Lisa L. Kim, City Manager/Executive Director
Patricia Song, Finance Director/Treasurer
Teresa Pomeroy, CMC, City Clerk/Secretary
_____________

BOND COUNSEL AND DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California
_____________

MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc.

Irvine, California
_____________

TRUSTEE
U.S. Bank Trust Company, National Association
Los Angeles, California
_____________

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TABLE OF CONTENTS
Page
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INTRODUCTION ......................................................................................................................................................... 1 THE SERIES 2024A BONDS ....................................................................................................................................... 3 General ...................................................................................................................................................................... 3 Registration, Transfers and Exchanges...................................................................................................................... 4 Redemption ............................................................................................................................................................... 4 Book-Entry Only System .......................................................................................................................................... 6 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS ................................................... 7 Pledge of Revenues ................................................................................................................................................... 7 Base Rental Payments ............................................................................................................................................... 8 Additional Rental Payments ...................................................................................................................................... 8 Abatement ................................................................................................................................................................. 9 Substitution or Release of the Property ..................................................................................................................... 9 Action on Default .................................................................................................................................................... 11 No Reserve Fund ..................................................................................................................................................... 11 Additional Bonds ..................................................................................................................................................... 11 Insurance ................................................................................................................................................................. 12 SOURCES AND USES OF FUNDS ........................................................................................................................... 13 BASE RENTAL PAYMENT SCHEDULE ................................................................................................................ 13 THE PROJECT ........................................................................................................................................................... 13 The Project and the Project Site .............................................................................................................................. 13 Construction of the Project ...................................................................................................................................... 14 Plan of Finance ........................................................................................................................................................ 15 THE PROPERTY ........................................................................................................................................................ 15 General .................................................................................................................................................................... 15 The Release Property ............................................................................................................................................... 16 The Project Site ....................................................................................................................................................... 17 THE AUTHORITY ..................................................................................................................................................... 18 THE CITY OF GARDEN GROVE ............................................................................................................................. 18 General .................................................................................................................................................................... 18 City Council ............................................................................................................................................................ 18 City Management .................................................................................................................................................... 19 Employee and Employee Relations ......................................................................................................................... 19 Risk Management .................................................................................................................................................... 20 CITY FINANCIAL INFORMATION ......................................................................................................................... 21 Accounting and Financial Reporting ....................................................................................................................... 21 City Component Units and Discrete Component Units ........................................................................................... 22 Financial Policies .................................................................................................................................................... 23 Budget Procedure, Current Budget and Historical Budget Information .................................................................. 26 Comparative Change in Fund Balance of the City General Fund ........................................................................... 31 Comparative General Fund Balance Sheets of the City .......................................................................................... 32 Tax Revenues By Source......................................................................................................................................... 34 Property Taxes ......................................................................................................................................................... 34 Sales Taxes .............................................................................................................................................................. 37 Hotel Visitor’s Tax .................................................................................................................................................. 38 Business Operation Tax ........................................................................................................................................... 39 Franchise Taxes ....................................................................................................................................................... 39 Charges for Services ................................................................................................................................................ 39 Licenses and Permits ............................................................................................................................................... 39 Fines and Forfeitures ............................................................................................................................................... 39 Other Revenue Sources ........................................................................................................................................... 40 Indebtedness ............................................................................................................................................................ 40 269

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Retirement System .................................................................................................................................................. 40 Other Post-Employment Benefits ............................................................................................................................ 47 RISK FACTORS ......................................................................................................................................................... 50 General Considerations – Security for the Series 2024A Bonds ............................................................................. 50 Abatements .............................................................................................................................................................. 50 No Reserve Fund ..................................................................................................................................................... 51 Effect of Economy on Revenues ............................................................................................................................. 51 Natural Disasters ..................................................................................................................................................... 51 Hazardous Substances ............................................................................................................................................. 53 Other Financial Matters ........................................................................................................................................... 53 Substitution, Addition and Removal of Property; Additional Bonds ...................................................................... 53 Limited Recourse on Default; No Acceleration of Base Rental .............................................................................. 54 Limitations on Remedies Available; Bankruptcy .................................................................................................... 54 Possible Insufficiency of Insurance Proceeds .......................................................................................................... 55 Loss of Tax Exemption ........................................................................................................................................... 56 No Liability of Authority to the Owners ................................................................................................................. 56 Dependence on State for Certain Revenues............................................................................................................. 56 Cybersecurity........................................................................................................................................................... 57 CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS ..................... 57 Article XIIIA of the State Constitution ................................................................................................................... 57 Legislation Implementing Article XIIIA ................................................................................................................. 57 Article XIIIB of the State Constitution .................................................................................................................... 58 Articles XIIIC and XIIID of the State Constitution ................................................................................................. 58 Proposition 62 ......................................................................................................................................................... 59 Proposition 1A ......................................................................................................................................................... 60 Proposition 22 ......................................................................................................................................................... 60 Proposition 26 ......................................................................................................................................................... 61 Possible Future Initiatives ....................................................................................................................................... 61 TAX MATTERS ......................................................................................................................................................... 62 CERTAIN LEGAL MATTERS .................................................................................................................................. 64 ABSENCE OF LITIGATION ..................................................................................................................................... 64 UNDERWRITING ...................................................................................................................................................... 64 RATING ...................................................................................................................................................................... 64 MUNICIPAL ADVISOR ............................................................................................................................................ 65 CONTINUING DISCLOSURE ................................................................................................................................... 65 FINANCIAL STATEMENTS OF THE CITY ............................................................................................................ 65 MISCELLANEOUS .................................................................................................................................................... 65

APPENDIX A ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING THE CITY OF GARDEN GROVE ................................................................................................................... A-1 APPENDIX B SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS .................................................. B-1

APPENDIX C AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR ENDED JUNE 30, 2023 .......................................................................................................................... C-1 APPENDIX D PROPOSED FORM OF BOND COUNSEL OPINION ........................................................... D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE .................................................... E-1 APPENDIX F BOOK-ENTRY ONLY SYSTEM ........................................................................................... F-1 270

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CITY OF GARDEN GROVE

REGIONAL LOCATION MAP

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OFFICIAL STATEMENT
$140,000,000

GARDEN GROVE PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A

INTRODUCTION
This Official Statement (which includes the cover page and the appendices hereto) (the “Official Statement”) provides certain information concerning the sale and delivery of $140,000,000* aggregate principal amount of Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A (the “Series 2024A Bonds”).

The net proceeds of the sale of the Series 2024A Bonds will be used to (i) finance a portion of the costs of constructing a new public safety facility, parking structure, park improvements, demolition of the existing police headquarters building, and certain other related capital improvements (collectively, the “Project”), and (ii) pay the costs incurred in connection with the issuance of the Series 2024A Bonds. See “THE PROJECT” herein for a further description of the Project.

The Series 2024A Bonds are equally and ratably payable from base rental payments (the “Base Rental Payments”) to be made by the City of Garden Grove (the “City”) for the right to use certain real property (collectively, the “Property” and described further under the caption “TH E PROPERTY”) pursuant to a Lease Agreement, dated as of June 1, 2024 (the “Lease Agreement”), between the City, as lessee, and the Garden Grove Public Financing Authority (the “Authority”), as lessor.

The Series 2024A Bonds will be issued pursuant to an In denture, dated as of June 1, 2024 (the “Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). Pursuant to the Indenture, the Authority may issue additional bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the Series 2024A Bonds (the Series 2024A Bonds and any such Additional Bonds being collectively referred to as the “Bonds”). See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Additional Bonds.” Pursuant to a Ground Lease, dated as of June 1, 2024 (the “Ground Lease”), by and between the City and the Authority, the City has leased the Property to the Authority. The Authority has subleased the Property to the City under the Lease Agreement. The Lease Agreement obligates the City to make Base Rental Payments to the Authority.

The Trustee and the Authority have entered into an Assignment Agreement, dated as of June 1, 2024, pursuant to which the Authority has assigned to the Trustee for the benefit of the Bond Owners substantially all of the Authority’s right, title and interest in and to the Ground Lease and the Lease Agreement, including its right to receive the Base Rental Payments due under the Lease Agreement and to e nforce any remedies in the event of a default by the City.

The Property leased under the Ground Lease and the Lease Agreement will initially consist of the Project Site and the Release Property (as such terms are defined under the captions “THE PROJECT” and “THE PROPERTY”). The Project Site generally consists of the site of construction of the new public safety facility and parking structure described under the caption “THE PROJECT.” The Release Property consists of numerous other City -owned properties, i ncluding City Hall, Community Meeting Center, Senior Center, Municipal Services Center/Public Works Yard, City Administrative Office Building, and Garden Grove Park (including the Garden Grove Sports and Recreation Center (Gymnasium) and Atlantis Play Center), as well as the property on which Phase 2 of the Project is located (specifically, the existing police headquarters building, which will be

 Preliminary, subject to change.
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demolished and replaced with the reconfigured Civic Center Park). See the captions “THE PROPERTY” and “THE PROJECT—The Project and the Project Site.” The Release Property is included in the Property during the period of construction of Phase 1 of the Project (the PSF and Parking Structure, defined below) to provide sufficient fair rental value to support the City’s payment of Rental Payments under the Lease Agreement. Upon completion of Phase 1 of the Project, which generally consists of the construction of the public safety facility and parking structure, the Lease Agreement provides that the City may release the Release Property from the Property such that the Project Site (including the completed public safety facility and parking structure) constitutes the entire Property upon completion of the Project and the satisfaction of certain requirements under the Lease Agreement. The City also has the right to substitute or release all or a portion of the Property subject to certain conditions precedent. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDSSubstitution, Addition and Removal of Property.”
The City will covenant under the Lease Agreement to take such action as may be necessary to include all Rental Payments, which are comprised of Base Rental Payments and Additional Rental Payments (which include taxes and assessments affecting the Property, administrative costs of the Authority relating to the Property, fees and expenses of the Trustee and other amounts payable under the Lease Agreement), due under the Lease Agreement as a separate line item in its biennial budgets and to make the necessary a nnual appropriations therefor, subject to abatement as described herein.

Base Rental Payments are subject to complete or partial abatement in the event and to the extent that there is substantial interference with the City’s right to use and occupy the Property or any portion thereof. See “RISK FACTORS—Abatements.” Abatement of Base Rental Payments under the Lease Agreement, to the extent that payment is not made from alternative sources as set forth below, would result in all Bond Owners receiving less than the full amount of principal of and interest on the Series 2024A Bonds. To the extent that proceeds of insurance are available or moneys are available in certain funds and accounts pledged as security for the Series 2024A Bonds , Base Rental Payments ( or a portion thereof) may be made during periods of abatement.

THE SERIES 2024A BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY, PAYABLE

SOLELY FROM BASE RENTAL PAYMENTS AND THE OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE AUTHORITY, THE CITY OR THE STATE OF CALIFORNIA (THE “STATE”), OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE SERIES 2024A BONDS . THE AUTHORITY HAS NO TAXING POWER.

THE OBLIGATION OF THE CITY TO MAKE TH E BASE RENTAL PAYMENTS DOES NOT

CONSTITUTE A DEBT OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF

WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR

RESTRICTION, AND DOES NOT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY OR THE

STATE IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY OR THE STATE HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.

The Authority is not funding a debt service reserve fund for the Series 2024A Bonds.

The City has agreed to provide, or cause to be provided, to the Municipal Securities Rulemaking Board for purposes of Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission (“Rule 15c2 -12”) certain annual financial information and operating data and, in a timely manner, notice of certain listed events.

These covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12. See “CONTINUING DISCLOSURE” herein for a description of the Authority’s and the City’s compliance with its prior continuing discl osure undertakings pursuant to Rule 15c2 -12 and APPENDIX —E “FORM OF CONTINUING DISCLOSURE CERTIFICATE” for a description of the specific nature of the annual report and notices of listed events and the terms of the disclosure undertaking pursuant to which such reports are to be made.
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U.S. Bank Trust Company, National Association, Los Angeles, California, will act as Trustee with respect to the Series 2024A Bonds. The Series 2024A Bonds will be issued subject to the approval as to their legality by Stradling Yocca Carlson & Rauth LLP , Newport Beach, California, Bond Counsel. Certain legal matters will be passed upon for the City and the Authority by the City Attorney of the City of Garden Grove and by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by Anzel Galvan LLP, San Francisco, California. The City’s financial statements for the fiscal year ended June 30, 2023 included as Appendix C hereto have been audited by Davis Farr LLP, Irvine, California (the “Auditor”). See APPENDIX C—“AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023” herein. The City’s financial statements are public documents and are included within thi s Official Statement without the prior approval of the Auditor.

Accordingly, the Auditor has not performed any post-audit review of the financial condition of the City and also has not performed any procedures relating to this Official Statement.

Certain events could affect the ability of the City to make the Base Rental Payments when due. See “RISK FACTORS” for a discussion of certain factors that should be considered, in addition to other matters set forth herein, in evaluating an investment in the Series 2024A Bonds.

The presentation of information, including tables of receipt of revenues, is intended to show recent historical information and, except for a budget discussion for the 2023-25 biennial period and the City’s periodic five-year forecast, is not intended to indicate future or continuing trends in the financial position or other affairs of the City. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue or be repeated in the future. See the captions “THE CITY OF GARDEN GROVE” and “CITY FINANCIAL INFORMATION” for financial and operating information related to the City.

The summaries or references to the Indenture, the Lease Agreement, the Ground Lease, the Assignment Agreement and other documents, agreements and statutes referred to herein, and the description of the Series 2024A Bonds included in this Official Statement, do not purport to be comprehensive or definitive, and such summaries, references and descriptions are qualified in their entireties by reference to each such document or statute. All capitalized terms used in this Official Statement (unless otherwise defined herein) which are defined in the Indenture or the Lease Agreement shall have the meanings se t forth therein . See APPENDIX B— “SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS.”
THE SERIES 2024A BONDS
General
The Series 2024A Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. The Series 2024A Bonds will be dated as of and bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) from the dated date thereof at the rates set forth on the inside cover page hereof. Interest on the Series 2024A Bonds will be paid semiannually on April 1 and October 1 (each, an “Interest Payment Date”) of each year, commencing October 1, 2024.

Interest on the Series 2024A Bonds will be payable from the Interest Payment Date next preceding the date of authentication thereof (a “Record Date”) unless (i) a Series 2024A Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it will bear interest from such Interest Payment Date, (ii) a Series 2024A Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the dated date thereof, or (iii) interest on any Series 2024A Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest will be paid in lawful money of the United Stat es on each Interest Payment Date to the Persons in whose names the ownership of the Series 2024A Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest will be pa id by check of the Trustee 274

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mailed by first class mail, postage prepaid, on each Interest Payment Date to the Series 2024A Bond Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date.

The principal and premium, if any, of the Series 2024A Bonds will be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee. The Series 2024A Bonds will be subject to redemption as set forth herein.

Registration, Transfers and Exchanges
The Series 2024A Bonds will be issued as fully registered bonds, registered in the name of Cede & Co. as nominee of DTC, and will be available to actual purchasers of the Series 2024A Bonds (the “Beneficial Owners”) in the denominations set forth above, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants (as defined in Appendix F) as described herein.

Beneficial Owners will not be entitled to receive physical delivery of the Series 2024A Bonds . See “THE SERIES 2024A BONDS—Book-Entry Only System.”
Redemption*
Extraordinary Redemption from Net Proceeds. The Series 2024A Bonds are subject to redemption, in whole or in part, on any date, in denominations of $5,000 or any integral multiple thereof, from and to the extent of any Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Fund pursuant to the Indenture, at a Redemption Price equal to the principal amount of the Series 2024A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Optional Redemption of Series 2024A Bond s. The Series 2024A Bond s maturing on or after April 1, 20__, are subject to optional redemption, in whole or in part, on any date on or after April 1, 20__, in denominations of $5,000 or any integral multiple thereof, from and to the extent of prepaid Base Rental Payments paid pursuant to the Lease, at a Redemption Price equal to the principal amount of the Series 2024A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Mandatory Sinking Fund Redemption . The Series 2024A Bonds with st ated maturities on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Redemption Date
(April 1)
Principal
Amount

**

** Final Maturity.

The Series 2024A Bonds with stated maturities on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a

* Preliminary, subject to change.
275

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Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemptio n, without premium, in accordance with the following schedule:

Redemption Date
(April 1)
Principal
Amount

**

** Final Maturity.

The Series 2024A Bonds with stated maturities on April 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each April 1 on and after April 1, 20__, in integral multiples of $5,000 at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemptio n, without premium, in accordance with the following schedule:

Redemption Date
(April 1)
Principal
Amount

**

** Final Maturity.

In the event of a partial optional redemption or extraordinary mandatory redemption of any of the Term Bonds, the City will provide the Trustee with a revised mandatory sinking fund schedule giving effect to the redemption so completed.

Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption (a) with respect to any optional redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written Request of the Authority, (b) with respect to any redemption from and to the extent of any insurance proceeds or condemnation award received with respect to all or a p ortion of the Property and the corresponding provision of any Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, and (c) with respect to any other rede mption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner which the Trustee in its sole discretion deems appropriate and fair. For purposes of such selection, all Bonds will be deemed to be comprised of separate $5,000 denominations and such separate denominations will be treated as separate Bonds which may be separately redeemed.