Agenda packet — Placentia City Council, July 25, 2023 (part 4 of 5)

RECOMMENDATION:

It is recommended that the City Council take the following actions:

1. Open the Public Hearing concerning the sale of Lease Revenue Bonds to fund the construction of the Placentia Public Safety Center; and

2. Receive the Staff Report, consider all public testimony, ask questions of Staff; and

3. Close the Public Hearing; and

4. Adopt Resolution R-2023-72 authorizing the issuance of bonds by the Placentia Public Financing Authority in an amount not -to -exceed $10 million, approving the form of the Indenture, Site Lease, Lease Agreement, Preliminary Official Statement, Bond Purchase Agreement and Continuing Disclosure Agreement; and

5. Authorize the City Administrator to execute all the necessary documents, in a form approved by the City Attorney.

It is recommended that the Placentia Public Financing Authority take the following actions:

1. Adopt Resolution PPFA-2023-02 authorizing the issuance of bonds by the Placentia Public Financing Authority in an amount not to exceed $10 million and approving the form of the Indenture, Site Lease, Lease Agreement, Preliminary Official Statement, Bond Purchase Agreement and, Assignment Agreement; and

2. Authorize the Executive Director to execute all the necessary documents, in a form approved by the Authority's Counsel.

STRATEGIC PLANNING STATEMENT:

This agenda item conforms to Strategic Planning Goal and Objective 5.4, Construct the Placentia Public Safety Center.

DISCUSSION:

Lease Revenue Bond Issuance
In October 2020, Council directed Staff to develop a plan for the replacement of the current Police Evidence Facility that is currently being leased by the City. The lease for the facility is expiring in December 2023, requiring the City to find or construct an alternate facility. Lease Revenue Bonds (LRB) are a common and widely accepted financing tool in California used to acquire project financing. LRBs utilize a lease/lease-back structure of certain City assets. Staff is proposing certain City assets to be the leased assets for the proposed LRBs, primarily the new Placentia Public Safety Center itself. However, State law prohibits the City from making lease payments prior to the facility being completed. To avoid using bond proceeds to fund interest payments due during construction, the proposed structure would lease other City assets such as City Hall and

City Council Agenda
July 25, 2023
Page3of5
the City Yard during the construction period. Once the City issues a Certificate of Occupancy for the new facility, the other assets will be released from the lease and the lease for the remainder of the term of the LRBs will only be for the new Public Safety Center.

The City will lease the assets to the Placentia Public Financing Authority ("PPFA"). The PPFA will then lease the assets back to the City. The City pledges each year it will budget and appropriate lease payments to the PPFA. In turn, the PPFA will pay debt service on the Bonds. The estimated valuation of the City's Assets will need to meet or exceed the amount of the Bond issuance.

The list of proposed City assets that could be pledged is referenced below. The Public Safety Center will be pledged once construction has been completed and the building is occupied. A final determination on which City assets will be pledged during construction will occur before the LRBs are priced and sold.

ASSET
Public Safety Facility
City Corporate Yard & Facilities
City Hall

ESTIMATED VALUE
$21.6 million (project budget)
$14.1 million
$14.2 million
The LRBs will be sized to fund the "gap" in the construction fund that is not funded by other City resources, as indicated in the following table:

Option
Construction
Fund
Estimated
Costs of
Issuance
Estimated
Total Bond
Arlo ssue eeds
Estimated
Average
Annual
Debt
Service
Total Principal
and Interest
(30 years)
1 $9,289,804
$447,848
$9,737,652
$581,342
$17,690,872
The City has received a "AA-" bond rating on the LRBs from Standard & Poor's. The bond rating is based primarily on the strength of the City's General Fund. The assigned rating on the Bonds of AA- reflects S&P criteria of rating "leases" at "1 -notch" below the City's Issuer Credit Rating, which reflects S&Ps opinion of the strength of the City's General Fund. The City's Issuer Credit Rating has been recently upgraded and is now AA, which is among the highest ratings in California.

Due the strength of the City's credit, the LRBs will not require bond insurance, nor does the City have to fund a debt service reserve fund to enhance the credit of the LRB. Purchasing a bond insurance policy remains an option and the City will only purchase a bond insurance policy if it results in reduced debt service costs over the life of the LRBs.

The current estimated Bond issuance amount is $9,737,652, with a not to exceed amount of $10 million as set forth in the Resolution. The "not -to -exceed" amount is recommended to provide the Financing Team the flexibility to react to changes in market conditions. As an example, if interest rates are slightly higher on the day of bond sale, that would increase the bond par amount.

City Council Agenda
July 25, 2023

Page 4 of 5 ends

The forms of financing documents to issue Lease Revenue Bonds are attached and include:
• Preliminary Official Statement: Offering document used for marketing of the LRBs • Indenture: Defines the terms of the Bonds and responsibilities of the Trustee • Site Lease: Establishes and defines the terms of the site lease from the City to the Authority • Lease Agreement: Establishes and defines the terms of the lease from the Authority to the City
• Assignment Agreement: The Authority assigns the right to receive lease payments to the Trustee
• Continuing Disclosure Agreement: Agreement to file annual reports and disclose material events
• Bond Purchase Agreement: Agreement among the Underwriter, the Authority and the City defining the terms and conditions of the Underwriter's purchase of the Bonds.

FISCAL IMPACT:

In accordance with Government Code Section 5852.1, the following information has been obtained and disclosed to the City Council prior to the issuance of the LRBs: (i) the estimated true interest cost of the Bonds (being 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

4.5%; (ii) the estimated finance charge of the Bonds (being the sum of all fees and charges paid to third parties, including underwriter's discount and a bond insurance premium) is $447,848; (iii) the estimated proceeds of the Bonds expected to be received (net of proceeds for finance charges to be paid from the principal amount of the Bonds and any reserves or capitalized interest paid or funded with Bonds) is $9,289,804; and (iv) the estimated total payment amount of the Bonds (being the sum of debt service plus finance to be paid to final maturity, plus any financing costs not paid from proceeds of the Bonds) is $17,690,872. This information is based on good - faith estimates provided by the City's municipal advisor and bond underwriter.

Prepared by: Reviewed and approved:

Buis f sf
Luis Estevez Jennifer Lampman
Deputy City Administrator Director of Finance
Reviewed and approved:
,AtAacpc
Da [en R. Arrula
City Administrator

City Council Agenda
July 25, 2023

Page 5 of 5 ends

Attachments:

1. City Resolution R-2023-72

2. Authority Resolution No. PPFA-2023-02

3. Preliminary Official Statement

4. Bond Purchase Agreement

5. Continuing Disclosure Agreement

6. Assignment Agreement

7. Lease Agreement

8. Site Lease

9. Indenture

RESOLUTION NO. R-2023-72

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

PLACENTIA APPROVING THE ISSUANCE BY THE

PLACENTIA PUBLIC FINANCING AUTHORITY OF NOT TO
EXCEED $10,000,000 OF PLACENTIA PUBLIC FINANCING

AUTHORITY LEASE REVENUE BONDS (PUBLIC SAFETY
CENTER PROJECT) SERIES 2023A; APPROVING THE

EXECUTION AND DELIVERY OF RELATED DOCUMENTS

IN CONNECTION WITH THE OFFERING AND SALE OF
SUCH BONDS; AND AUTHORIZING OTHER MATTERS

RELATED THERETO
WHEREAS, the Placentia Public Financing Authority (the "Authority") was established for the purpose of carrying out the intent of the State Legislature as set forth in Article 4 of the Joint Powers Act, namely the financing of public capital improvements, and working capital whenever there are significant public benefits for taking such actions; and WHEREAS, the City of Placentia (the "City") desires to finance the construction, acquisition and equipping of a public safety center (the "Project"); and WHEREAS, in order to provide funds to finance the Project and other related costs, the City desires that the Authority issue its Lease Revenue Bonds (Public Safety Center Project) Series 2023A (the "Series 2023A Bonds"); and
WHEREAS, Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California Legislature) ("SB 450") requires that the City obtain from an underwriter, financial advisor or private lender and disclose, prior to authorization of the issuance of bonds with a term of greater than 13 months, good faith estimates of the following information in a meeting open to the public:
(a) the true interest cost of the bonds, (b) the sum of all fees and charges paid to third parties with respect to the bonds, (c) the amount of proceeds of the bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the bonds, and (d) the sum total of all debt service payments on the bonds calculated to the final maturity of the bonds plus the fees and charges paid to third parties not paid with the proceeds of the bonds; and
WHEREAS, in compliance with SB 450, the City has obtained from its municipal advisors and the underwriter the required good faith estimates and such estimates are disclosed and set forth in the staff report related to this item; and
WHEREAS, as required by Section 6586.5 of the California Government Code, the City has caused the publication of a notice of a public hearing on the financing of the Project once at least five days prior to the hearing in a newspaper of general circulation in the City; and WHEREAS, the City held a public hearing at which all interested persons were provided the opportunity to speak on the subject of financing the Project; and 4828-3227-3110.2

WHEREAS, there have been presented to this meeting the proposed forms of the following documents:
(a) the Indenture;
(b) the Site Lease;
(c) the Lease Agreement;
(d) the Preliminary Official Statement;
(e) the Bond Purchase Agreement; and
(f) the Continuing Disclosure Agreement;
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Placentia, as follows:

SECTION 1. Findings and Determinations. The City hereby specifically finds and declares that the actions authorized hereby constitute and are with respect to public affairs of the City and that the statements, findings and determinations of the City set forth above are true and correct and that the issuance of the Series 2023A Bonds by the Authority will result in the following public benefits (i) demonstrable savings in effective interest rate, bond preparation, bond underwriting, or bond issuance costs (ii) significant reductions in effective user charges levied by the City, and (iii) more efficient delivery of local agency services to residential and commercial development.

SECTION 2. Approval of Issuance of Series 2023A Bonds by the Authority. The issuance of the Series 2023A Bonds by the Authority on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture and this Resolution, is hereby approved; provided, however, that (i) the aggregate principal amount of Series 2023A Bonds shall not exceed $10,000,000, (ii) the maturity of the Series 2023A Bonds shall not exceed October 1, 2053 and (iii) true interest cost of the Series 2023A Bonds shall not exceed 5.5%.

SECTION 3. Approval of Indenture. The form of Indenture presented at this meeting is hereby approved, and the City's Mayor, Mayor Pro Tem, City Administrator or Finance Director, or his or her designee (each, an "Authorized Officer") are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge and deliver the Indenture in substantially the form presented at this meeting with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof, including with respect to whether and what type(s) of credit enhancement supports the Bonds, or by other factors, as determined by the Authorized Officers in consultation with the City's financial and legal consultants as being in the best interests of the City.

SECTION 4. Approval of Site Lease. The form of Site Lease presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge and deliver the Site Lease 4828-3227-3110.2

in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 5. Approval of Lease Agreement. The form of Lease Agreement presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge and deliver the Lease Agreement in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 6. Approval of Bond Purchase Agreement. The City is hereby authorized to enter into the Bond Purchase Agreement and each Authorized Officer is hereby authorized and directed to execute and deliver the Bond Purchase Agreement on behalf of the City, in substantially the form presented to this meeting, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer shall approve in consultation with the City's financial and legal consultants, which approval shall be conclusively evidenced by the execution and delivery thereof; provided, that the underwriting discount payable by the City pursuant to the Bond Purchase Agreement shall not exceed 1.0% of the aggregate principal amount of the Series 2023A Bonds.

SECTION 7. Approval of Official Statement. The Preliminary Official Statement is hereby approved and the same may be used and is hereby authorized to be used and distributed in the market by the underwriter incident to the marketing of the Series 2023A Bonds. Each Authorized Officer is hereby authorized to (a) make such changes in such form of the Preliminary Official Statement as such officer, in consultation with the City's financial and legal consultants and the Underwriter, shall determine to be appropriate, and (b) on behalf of the City, to deem such Preliminary Official Statement "final" pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"). Each Authorized Officer is authorized and directed to prepare a final Official Statement, with such additional information as may be permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, which final Official Statement shall be executed and delivered in the name and on behalf of the City by an Authorized Officer, and such Authorized Officer is authorized and directed to prepare, execute and deliver in the name and on behalf of the City any supplemental filings related to such final Official Statement.

SECTION 8. Approval of Continuing Disclosure Agreement. The form of Continuing Disclosure Agreement presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the City, to execute, acknowledge and deliver the Continuing Disclosure Agreement in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 9. Anlroval of Financing Team. The City has requested the Authority to issue the Series 2023A Bonds for the purpose of financing the Project as described herein, and in connection therewith the City hereby approves (i) Kosmont Financial Services Inc. to provide municipal advisory services, (ii) Nixon Peabody LLP to provide bond and disclosure counsel 4828-3227-3110.2

services, (iii) Samuel A. Ramirez & Co., Inc. to provide underwriting services, and (iv) U.S. Bank Trust Company, National Association to provide trustee services.

SECTION 10. Other Acts. The officers and staff of the City are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with the City Attorney or with bond counsel, they may deem necessary or advisable in order to effectuate the purposes of this Resolution, and any and all such actions previously taken by such officers or staff members are hereby ratified and confirmed. Any one of the Authorized Officers is hereby authorized and directed, for and in the name of and on behalf of the City, to evaluate and select one or more municipal bond insurers for all or any portion of the Series 2023A Bonds and to execute and deliver such contracts and agreements with such bond insurers as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery.

SECTION 11. Effective Date. This Resolution shall take effect upon adoption.

PASSED and ADOPTED this 25th day of July, 2023.

WARD L. SMITH, MAYOR
ATTEST:

ROBERT S. MCKINNELL, CITY CLERK

STATE OF CALIFORNIA

COUNTY OF ORANGE
I, Robert S. McKinnell, City Clerk of the City of Placentia do hereby certify that the foregoing Resolution was adopted at a regular meeting of the City Council held on the 25th day of July 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Councilmembers:

None
None
None
None
Robert S. McKinnell, City Clerk
APPROVED AS TO FORM:

Christian L. Bettenhausen, City Attorney
4828-3227-3110.2

RESOLUTION NO. PPFA-02

A RESOLUTION OF THE GOVERNING BOARD OF THE

PLACENTIA PUBLIC FINANCING AUTHORITY

AUTHORIZING THE ISSUANCE OF NOT TO EXCEED
$10,000,000 OF PLACENTIA PUBLIC FINANCING

AUTHORITY LEASE REVENUE BONDS (PUBLIC SAFETY
CENTER PROJECT) SERIES 2023A AND; APPROVING THE

EXECUTION AND DELIVERY OF RELATED DOCUMENTS

IN CONNECTION WITH THE OFFERING AND SALE OF
SUCH BONDS; AND AUTHORIZING OTHER MATTERS

RELATED THERETO
WHEREAS, the Placentia Public Financing Authority (the "Authority") was established for the purpose of carrying out the intent of the State Legislature as set forth in Article 4 of the Joint Powers Act, namely the financing of public capital improvements, and working capital whenever there are significant public benefits for taking such actions; and WHEREAS, the City of Placentia (the "City") desires to finance the construction, acquisition and equipping of a public safety center (the "Project"); and WHEREAS, in order to provide funds to finance the Project and other related costs, the City desires that the Authority issue its Lease Revenue Bonds (Public Safety Center Project) Series 2023A (the "Series 2023A Bonds"); and
WHEREAS, Senate Bill 450 (Chapter 625 of the 2017-2018 Session of the California Legislature) ("SB 450") requires that the Authority obtain from an underwriter, financial advisor or private lender and disclose, prior to authorization of the issuance of bonds with a term of greater than 13 months, good faith estimates of the following information in a meeting open to the public:
(a) the true interest cost of the bonds, (b) the sum of all fees and charges paid to third parties with respect to the bonds, (c) the amount of proceeds of the bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the bonds, and (d) the sum total of all debt service payments on the bonds calculated to the final maturity of the bonds plus the fees and charges paid to third parties not paid with the proceeds of the bonds; and
WHEREAS, in compliance with SB 450, the Authority has obtained from its municipal advisors and the underwriter the required good faith estimates and such estimates are disclosed and set forth in the staff report related to this item; and WHEREAS, there have been presented to this meeting the proposed forms of the following documents:
(a) the Indenture;
(b) the Site Lease;
4826-4765-8198.2

(c) the Lease Agreement;
(d) the Preliminary Official Statement;
(e) the Bond Purchase Agreement; and
(f) the Assignment Agreement;

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY OF PLACENTIA PUBLIC FINANCING AUTHORITY AS FOLLOWS:

SECTION 1. Approval of Issuance of Series 2023A Bonds by the Authority. The issuance of the Series 2023A Bonds by the Authority on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture and this Resolution, is hereby approved; provided, however, that (i) the aggregate principal amount of Series 2023A Bonds shall not exceed $10,000,000, (ii) the maturity of the Series 2023A Bonds shall not exceed October 1, 2053, and (iii) the true interest cost of the Series 2023A Bonds shall not exceed 5.5%.

SECTION 2. Approval of Indenture. The form of Indenture presented at this meeting is hereby approved and the Chair, Vice -Chair, the City Administrator of the City who is hereby designated Executive Director, the Treasurer and the Controller or their respective designated representatives (each an "Authorized Officer") are hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute, acknowledge and deliver the Indenture in substantially the form presented at this meeting with such changes therein as the officers executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 3. Approval of Site Lease. The form of Site Lease presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute, acknowledge and deliver the Site Lease in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 4. Approval of Lease Agreement. The form of Lease Agreement presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute, acknowledge and deliver the Lease Agreement in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 5. Approval of Bond Purchase Agreement. The Authority is hereby authorized to enter into the Bond Purchase Agreement and each Authorized Officer is hereby authorized and directed to execute and deliver the Bond Purchase Agreement on behalf of the Authority, in substantially the form presented to this meeting, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer shall approve in consultation with the Authority's financial and legal consultants, which approval shall be conclusively evidenced by the execution and delivery thereof; provided, that the underwriting discount payable pursuant to the Bond 4826-4765-8198.2

Purchase Contract shall not exceed 1.0% of the aggregate principal amount of the Series 2023A Bonds.

SECTION 6. Approval of Assignment Agreement. The form of Assignment Agreement presented at this meeting is hereby approved and each Authorized Officer is hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute, acknowledge and deliver the Assignment Agreement in substantially the form presented at this meeting with such changes therein as the Authorized Officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 7. Approval of Official Statement. The Preliminary Official Statement is hereby approved and the same may be used and is hereby authorized to be used and distributed in the market by the Underwriter incident to the marketing of the Series 2023A Bonds. Each Authorized Officer is hereby authorized to (a) make such changes in such form of the Preliminary Official Statement as such officer, in consultation with the Authority's financial and legal consultants and the Underwriter, shall determine to be appropriate, and (b) on behalf of the Authority, to deem such Preliminary Official Statement "final" pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"). Each Authorized Officer is authorized and directed to prepare a final Official Statement, with such additional information as may be permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, which final Official Statement shall be executed and delivered in the name and on behalf of the Authority by an Authorized Officer, and such Authorized Officer is authorized and directed to prepare, execute and deliver in the name and on behalf of the Authority any supplemental filings related to such final Official Statement.

SECTION 8. Other Acts. The officers and staff of the Authority are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with Authority Counsel and with bond counsel, they may deem necessary or advisable in order to effectuate the purposes of this Resolution, and any and all such actions previously taken by such officers or staff members are hereby ratified and confirmed. Any one of the Authorized Officers is hereby authorized and directed, for and in the name of and on behalf of the Authority, to evaluate and select one or more municipal bond insurers for all or any portion of the Series 2023A Bonds and to execute and deliver such contracts and agreements with such bond insurers as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery.

SECTION 9. Effective Date. This Resolution shall take effect upon adoption. 4826-4765-8198.2

PASSED and ADOPTED this 25th day of July, 2023.

WARD L. SMITH, CHAIR
ATTEST:

ROBERT S. MCKINNELL, SECRETARY

STATE OF CALIFORNIA

COUNTY OF ORANGE
I, Robert S. McKinnell, Secretary of the Placentia Public Financing Authority of The City of Placentia, California, do hereby certify that the foregoing Resolution, was duly passed, approved, and adopted by the Placentia Public Financing Authority, approved and signed by the Chair and attested by the Secretary, all at the regular meeting of the said Placentia Public Financing Authority held on the 25th day of July 2023, and the same was passed and adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Councilmembers:

None
None
None
None
Robert S. McKinnell, Secretary
APPROVED AS TO FORM:

Christian L. Bettenhausen, Agency Attorney
4826-4765-8198.2

NP DRAFT 6/28/23
PRELIMINARY OFFICIAL STATEMENT DATED , 2023
2 0 NEW ISSUE - BOOK -ENTRY ONLY INSURED RATING: S&P: "[_]" .J -,.J
UNDERLYING RATING: S&P: "[ ]"
(See "CONCLUDING INFORMATION - Rating on the Bonds" herein) 0 a In the opinion of Nixon Peabody LLP, Bond Counsel, under existing law and assuming compliance with the tax covenants

0.". P p
.� 4 4 described herein, and the accuracy of certain representations and certifications made by the Authority and the City 0 0 described herein, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 v w o of the Internal Revenue Code of 1986, as amended (the "Code'). Bond Counsel, is also of the opinion that interest on the 0 r Bonds is not treated as a preference item in calculating the alternative minimum tax imposed under the Code. Bond Counsel is further of the opinion that interest on the Bonds is exempt from personal income taxes of the State of California a .$4 ("State') under present law. See "TAX MATTERS" herein regarding certain other tax consequences. a' U +.'
0 N N O N $ w
." *
° 4 PLACENTIA PUBLIC FINANCING AUTHORITY
v
'al LEASE REVENUE BONDS
g (PUBLIC SAFETY CENTER PROJECT)
Z
2 SERIES 2023A
2 [(BANK QUALIFIED)]
0 ' o. Dated: Date of Delivery Due: As shown on the inside front cover page .o _
co O The Placentia Public Financing Authority Lease Revenue Bonds (Public Safety Center Project) Series 2023A [(Bank °a ° Qualified)] (the "Bonds") are being issued to finance, along with other available funds of the City, the construction and o › equipping of an approximately 18,805 square foot public safety center, to purchase a municipal bond insurance policy ow,n • and a debt serve reserve surety policy for the Bonds and to pay the costs incurred in connection with the issuance of the n
is 1 Bonds. The Bonds are payable from the revenues pledged under the Indenture, as defined herein, consisting primarily of °' ° •r base rental payments(the "Base Rental Payments") to be made by the City of Placentia(the "City") to the Placentia Public o w , p ym ym )
° .° m Financing Authority (the "Authority") as rental for certain City -owned property (the "Leased Property") pursuant to a po 0 Lease Agreement, as defined herein, and from certain funds held under the Indenture and insurance or condemnation B awards. The City is required under the Lease Agreement to make Base Rental Payments in each fiscal year in consideration aS of the use and possession of the Leased Property from any source of available funds in an amount sufficient to pay the g .,, annual principal and interest due with respect to the Bonds, subject to abatement, as described herein. See "SOURCES .o .0 ›, OF PAYMENT FOR THE BONDS" and "RISK FACTORS" herein. u co
•o y o Interest on the Bonds is payable semiannually on [June] 1 and [December] 1 of each year, commencing [December 1, y0 O 2023], until maturity or earlier redemption. See "THE BONDS — General Provisions" and "THE BONDS — 0 7,,11 ; Redemption" herein.
o rr , w
0 o o ° THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND '° SECURED BY A PLEDGE OF REVENUES AND CERTAIN FUNDS AND ACCOUNTS HELD UNDER THE .rd w i' C
5 0 5 INDENTURE. THE AUTHORITY HAS NO TAXING POWER. THE OBLIGATION OF THE CITY TO PAY u ' w BASE RENTAL PAYMENTS AND ADDITIONAL PAYMENTS DOES NOT CONSTITUTE AN OBLIGATION y y FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR " .' w WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE BONDS AND THE g o o u OBLIGATION OF THE CITY TO PAY BASE RENTAL PAYMENTS AND ADDITIONAL PAYMENTS DOES a NOT CONSTITUTE A DEBT OF THE CITY, THE STATE OR OF ANY POLITICAL SUBDIVISION " THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION °' t y OR RESTRICTION.
cn
- g g The scheduled payment of principal and interest on a portion, or all, of the Bonds (such maturities insured to be 13 "5o E specified in the final Official Statement) when due will be guaranteed under a municipal bond insurance policy Ltoo `6 s (the "Policy") to be issued concurrently with the delivery of the Bonds by [INSURER " See "BOND INSURANCE" herein.

A A 7, w The Indenture establishes the Reserve Fund which will serve as security for the applicable payments payable by ', o the Authority under the Indenture with respect to the Bonds. Concurrently with the delivery of the Bonds, a a a" 5 •, municipal bond debt service reserve insurance policy relating to the Bonds will be issued by [INSURER] (the .5.ny . o 4,54 "Reserve Policy") which the Trustee will credit to the respective reserve fund.

F .- a ¢ [INSURER LOGO]
4885-9887-4678.9

The cover page contains certain information for quick reference only. It is not a summary of the issue. Potential investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision.

See "RISK FACTORS" herein for a discussion of special risk factors that should be considered in evaluating the investment quality of the Bonds.

The Bonds are offered, when, as and if issued, subject to the approval as to their legality by Nixon Peabody LLP, Los Angeles, California, Bond Counsel. Certain legal matters will be passed on for the City and the Authority by the City Attorney, and by Nixon Peabody LLP, Los Angeles, California, as Disclosure Counsel. Certain legal matters will be passed on for the Underwriter by its counsel, Kutak Rock LLP, Irvine, California. It is anticipated that the Bonds, in book - entry form, will be available for delivery on or about , 2023 through the facilities of The Depository Trust Company (see "APPENDIX E - THE BOOK -ENTRY SYSTEM" herein).

Ramirez & Co., Inc.

The date of the Official Statement is , 2023.
4885-9887-4678.9

PLACENTIA PUBLIC FINANCING AUTHORITY

LEASE REVENUE BONDS
(PUBLIC SAFETY CENTER PROJECT)
SERIES 2023A
[(BANK QUALIFIED)]

MATURITY SCHEDULE
$ Serial Bonds
(Base CUSIP®t 72588R)
Maturity Date Principal Interest Reoffering Reoffering
[June] 1 Amount Rate Yield Price CUSIP®t
$ % Term Bonds maturing [June] 1, 20 , Yield %, Price CUSIP®t $ % Term Bonds maturing [June] 1, 20 , Yield %, Price CUSIP®t Preliminary, subject to change.
t CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association.

CUSIP numbers have been assigned by an independent company not affiliated with the Authority, the City, the Underwriter or the Municipal Advisor and are included solely for the convenience of the holders of the Bonds.

None of the Authority, the City, the Underwriter or the Municipal Advisor is responsible for the selection or use of these CUSIP numbers, and no representation is made as to their correctness on the Bonds or as indicated above.

The CUSIP number for a specific maturity is subject to being changed after the execution and delivery of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds. 4885-9887-4678.9

GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in connection with the offer and sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not to be construed as a contract with the purchasers of the Bonds.

Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the City or any other parties described in this Official Statement.

No Offering May be Made Except by This Official Statement No dealer, broker, salesperson or other person has been authorized by the Authority or the City to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and if given or made, such other information or representation must not be relied upon as having been authorized by the Authority, the City, the Municipal Advisor or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

Preparation of This Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable. The information and expressions of opinions herein are subject to change without notice and neither the 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 since the date hereof.

This Official Statement is submitted in connection with the sale of the 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 summaries of the Bonds, the Lease Agreement, the Indenture or other documents, are made subject to the provisions of such documents and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the City Clerk for further information. See "INTRODUCTION — Summaries Not Definitive."
The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

Bonds are Exempt From Securities Laws Registration. The issuance, sale and delivery of the Bonds has not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the execution, sale and delivery of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.

Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the City, any press release and any oral statement made with the approval of an authorized officer of the City or any other entity described or referenced herein, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "forecast," "expect," "intend" and similar expressions identify "forward -looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward -looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material.

Stabilization of and Changes to Offering Prices. In connection with this offering, the Underwriter may overallot or effect transactions which stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public offering prices set forth on the inside front cover page hereof and said public offering prices may be changed from time to time by the Underwriter.

City Website. The City maintains a website. The information on such website is not part of this Official Statement and is not intended to be relied on by investors with respect to the Bonds unless specifically set forth or incorporated herein.
4885-9887-4678.9

CITY OF PLACENTIA, CALIFORNIA

CITY COUNCIL MEMBERS
Ward L. Smith, Mayor
Jeremy B. Yamaguchi, Mayor Pro Tem
Rhonda Shader, Councilmember
Chad P. Wanke, Councilmember
Kevin Kirwin, Councilmember

CITY STAFF
Damien R. Arrula, City Administrator
Luis Estevez, Deputy City Administrator
Jennifer Lampman, Director of Finance
Christian L. Bettenhausen, City Attorney

PROFESSIONAL SERVICES
Bond Counsel and Disclosure Counsel
Nixon Peabody LLP
Los Angeles, California
Municipal Advisor
Kosmont Financial Services
Manhattan Beach, California
Trustee
U.S. Bank Trust Company, National Association
Los Angeles, California
4885-9887-4678.9

TABLE OF CONTENTS
Page Page

INTRODUCTION
The City and the Authority 1
Purpose 2
Security and Sources of Repayment 2
Limited Obligation 3
Legal Matters 3
Offering of the Bonds 4
Summaries Not Definitive 4
THE FINANCING PLAN 4
Estimated Sources and Uses of Funds

THE LEASED PROPERTY

THE BONDS
General Provisions 6
Redemption 6
Scheduled Debt Service on the Bonds 9
No Additional Bonds 10
BOND INSURANCE 10
[TO COME] 10

SOURCES OF PAYMENT FOR THE
BONDS
Pledge of Revenues
Base Rental Payments
Additional Payments
Abatement
Insurance Relating to the Property
Substitution or Removal of Property
Action on Default
Bond Insurance
Reserve Fund
1 Other Postemployment Benefits 40
Risk Management 42
City Investment Policy and Portfolio 44
Obligations of the City 44
Financial Statements 45
RISK FACTORS 50
The Base Rental Payments 50
Natural Hazards 51
Cybersecurity 53
5 State Budget 53
Limited Recourse on Default; No Acceleration 56
5 Enforcement of Remedies 57
6 Bankruptcy 57
Risks Related to COVID-19 59
Constitutional Limitation on Taxes and
Expenditures 59
Early Redemption Risk 64
Secondary Market Risk 64
Substitution or Removal of Property 64
Loss of Tax Exemption 65
LEGAL MATTERS 65
10 Enforceability of Remedies 65
Approval of Legal Proceedings 65
Absence of Litigation 65
TAX MATTERS 66
10 11
11 12
12 13
13 14
14 CITY OF PLACENTIA 15
General Information 15
General Organization 15
Governmental Services 16
Transportation 16
Population 17
Median Household Income 17
Employment and Industry 18
Commercial Activity 20
Building Activity 20
FINANCIAL INFORMATION 21
Financial Policies [CONFIRM/UPDATE] 21
Budgetary Process and Administration 25
Comparative General Fund Revenues and
Expenditures 26
Ad Valorem Property Taxes 28
Local Taxes 33
Employee Relations and Collective Bargaining 34
Retirement Plans 34
CONCLUDING INFORMATION 68
Rating on the Bonds 68
Underwriting 68
[Bank Qualified] 68
The Municipal Advisor 69
Continuing Disclosure 69
Additional Information 69
References 70
Execution 70

APPENDIX A - SUMMARY OF THE

PRINCIPAL LEGAL DOCUMENTS

APPENDIX B - CITY AUDITED FINANCIAL

STATEMENTS

APPENDIX C - FORM OF CONTINUING

DISCLOSURE AGREEMENT

APPENDIX D - PROPOSED FORM OF BOND

COUNSEL OPINION

APPENDIX E - THE BOOK -ENTRY SYSTEM

APPENDIX F - SPECIMEN MUNICIPAL BOND

INSURANCE POLICY
i
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[THIS PAGE INTENTIONALLY LEFT BLANK]
4885-9887-4678.9

OFFICIAL STATEMENT

PLACENTIA PUBLIC FINANCING AUTHORITY

LEASE REVENUE BONDS
(PUBLIC SAFETY CENTER PROJECT)
SERIES 2023A
[(BANK QUALIFIED)]
This Official Statement which includes the cover page and appendices (the "Official Statement"), is provided to furnish certain information concerning the sale of the Placentia Public Financing Authority (the "Authority") Lease Revenue Bonds (Public Safety Center Project), Series 2023A [(Bank Qualified)] (the "Bonds"), in the aggregate principal amount of $ *.

INTRODUCTION
This Introduction contains only a brief description of this issue and does not purport to be complete. This Introduction is subject in all respects to more complete information in the entire Official Statement and the offering of the Bonds to potential investors is made only by means of the entire Official Statement and the documents summarized herein. Potential investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision (see "RISK FACTORS" herein).

For definitions of certain capitalized terms used herein and not otherwise defined, and the terms relating to the Bonds, see the summary included in "APPENDIXA — SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS" herein.

The City and the Authority
The City of Placentia (the "City") was incorporated in 1926 as a general law city, adopted a charter form of government in 1965 and operates under the council -administrator form of government. The City encompasses approximately 6.7 square miles and is located in northern Orange County, adjacent to the cities of Brea, Fullerton, Anaheim and Yorba Linda. The City provides a full range of municipal services, which include public safety (police, fire and paramedic), streets, sanitation, refuse collection, parks and recreation, planning and zoning, and housing and community development (see "CITY OF PLACENTIA" herein).

The Authority is a joint exercise of powers authority organized and existing under and by virtue of the Joint Exercise of Powers Act, constituting Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the "Joint Powers Act"). The City and the former Placentia Redevelopment Agency formed the Authority by the execution of a joint exercise of powers agreement ("JPA Agreement") on July 1, 1996. The Successor Agency to the Placentia Redevelopment Agency (the "Successor Agency") succeeded the former Placentia Redevelopment Agency in 2012. The City, the Successor Agency and the Industrial/Commercial Development Authority of the City of Placentia (the "Development Authority") approved an amendment to the JPA Agreement dated as of October 20, 2020 which removed the Successor Agency as member of the Authority and a party to the JPA * Preliminary; subject to change.
1 4885-9887-4678.9

Agreement and added the Development Authority as a member of the Authority and a party to the JPA Agreement.

Under the JPA Agreement, the Authority is authorized to provide funds to acquire or construct and to refinance public capital improvements, and to refinance obligations of its members issued for such purposes, through the issuance of bonds in accordance with the Joint Powers Act.

The Authority is governed by a five -member Board which consists of all members of the City Council. The Mayor serves as the Chair of the Authority. The City Administrator acts as the Executive Director, the City Clerk acts as the Secretary, the City Treasurer acts as the Treasurer and the City's Director of Finance acts as the Controller of the Authority.

Purpose
The Bonds are being issued to finance, along with other available funds of the City, the construction and equipping of an approximately 18,805 square foot public safety center, to purchase a municipal bond insurance policy and debt service reserve surety policy for the Bonds and pay the costs of issuing the Bonds.

See "THE FINANCING PLAN" herein.

Security and Sources of Repayment
The Bonds are secured under an Indenture, dated as of [August] 1, 2023, (the "Indenture"), by and among the Authority, the City and U.S. Bank Trust Company, National Association, Los Angeles, California, as trustee (the "Trustee") (see "APPENDIX A SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS" herein).

The Bonds are payable from the revenues pledged under the Indenture. Under the Indenture, "Revenues" includes all base rental payments (the "Base Rental Payments") to be made by the City to the Authority as the rental for real property and improvements thereon (the "Leased Property") pursuant to the Lease Agreement, and all other benefits, charges, income, proceeds, profits, receipts, rents and revenues derived by the Authority from the operation or use of the Leased Property, including interest or profits from the investment of money in any account or fund pursuant to the Indenture. The Bonds are also payable from net proceeds of insurance or condemnation awards with respect to the Leased Property. See "THE LEASED PROPERTY" herein.

Pursuant to a Site Lease, dated as of [August] 1, 2023 (the "Site Lease"), by and between the Authority and the City, the City has leased the Leased Property to the Authority. The Authority has leased the Leased Property back to the City under the Lease Agreement, dated as of [August] 1, 2023, by and between the City and the Authority (the "Lease Agreement"). The Base Rental Payments are to be made by the City pursuant to the Lease Agreement.

Under the Lease Agreement and, subject to abatement, the City is required to make the Base Rental Payments from legally available funds in amounts calculated to be sufficient to pay principal of and interest on the Bonds when due. The City has covenanted in the Lease Agreement to take such actions as may be necessary to include all Base Rental Payments in its annual budgets and to make the necessary annual appropriations for all such Base Rental Payments subject to complete or partial abatement of such Base Rental Payments resulting from a taking of the Leased Property (either in whole or in part) under the powers of eminent domain or resulting from damage or loss of all or any portion of the Leased Property. Pursuant to the Assignment Agreement between the Authority and the Trustee dated as of [August] 1, 2023 (the "Assignment Agreement") the Authority will grant, transfer and assign to the Trustee: (i) all the Authority's rights to receive the Base Rental Payments under and pursuant to the Lease Agreement, (ii) the right to take 2 4885-9887-4678.9

all actions under the Lease Agreement, (iii) the right of access more particularly described in the Lease Agreement, and (iv) any and all other rights and remedies of the Authority in the Lease Agreement as lessor thereunder, provided that so long as no default in payment of Base Rental Payments under the Lease Agreement shall have occurred or be continuing, the Authority shall have and may exercise all rights of the Authority under the Lease Agreement other than the right to receive the Base Rental Payments.

For a summary of the Indenture, the Lease Agreement and the Site Lease, see "APPENDIX A - SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS" herein. Certain capitalized terms used in this Official Statement and not otherwise defined have the meanings given them in "APPENDIX A." In general, the City is required under the Lease Agreement to pay to the Authority specified amounts for use and possession of the Leased Property which amounts are calculated to be sufficient in both time and amount to pay, when due, the principal of and interest on the Bonds. The City is also required to pay any taxes and assessments levied on the Leased Property and all costs of maintenance and repair of the Leased Property. Except for the Authority's right, title and interest in and to the Base Rental Payments and otherwise to the Lease Agreement which have been assigned to the Trustee, no funds or properties of the Authority or the City are pledged to or otherwise liable for the Bonds or any other obligations of the Authority (see "RISK FACTORS" herein).

Limited Obligation

THE BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM REVENUES 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 ("STATE"), OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE BONDS. THE AUTHORITY HAS NO TAXING POWER.

THE OBLIGATION OF THE CITY TO PAY BASE RENTAL PAYMENTS AND ADDITIONAL

PAYMENTS 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 PLEDGED ANY FORM OF TAXATION. THE BONDS AND THE OBLIGATION OF THE CITY TO PAY BASE

RENTAL PAYMENTS AND ADDITIONAL PAYMENTS DOES NOT CONSTITUTE A DEBT OF

THE CITY, THE STATE OR OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. [THE SCHEDULED PAYMENT OF PRINCIPAL AND INTEREST ON A PORTION, OR ALL, OF THE

BONDS (SUCH MATURITIES INSURED TO BE SPECIFIED IN THE FINAL OFFICIAL

STATEMENT) WHEN DUE WILL BE GUARANTEED UNDER MUNICIPAL BOND INSURANCE POLICIES (THE "POLICY") TO BE ISSUED CONCURRENTLY WITH THE DELIVERY OF THE BONDS BY [INSURER]. SEE "BOND INSURANCE" HEREIN.]
Legal Matters
All legal proceedings in connection with the issuance of the Bonds are subject to the approving opinion of Nixon Peabody LLP, Los Angeles, California, as Bond Counsel. Such opinion, and certain tax consequences incident to the ownership of the Bonds are described more fully under the heading "TAX MATTERS" herein. Certain legal matters will be passed on for the City and the Authority by Nixon Peabody LLP, Los Angeles, California as Disclosure Counsel, and by Jones & Mayer, Fullerton, California, as City Attorney and General Counsel to the Authority. Certain legal matters will be passed on for the Underwriter by its Counsel, Kutak Rock LLP, Irvine, California. 3 4885-9887-4678.9

Offering of the Bonds
Authority for Issuance and Delivery. The Bonds are to be issued in accordance with applicable provisions of the California Government Code, the Indenture and by Resolution PPFA-2023- of the Authority adopted on [July 25], 2023.

Offering and Delivery of the Bonds. The Bonds are offered, when, as and if issued, subject to the approval as to their legality by Nixon Peabody LLP, Los Angeles, California, Bond Counsel. It is anticipated that the Bonds, in book -entry form, will be available for delivery on or about [August —], 2023 through the facilities of The Depository Trust Company ("DTC"). See "APPENDIX E — THE BOOK -ENTRY SYSTEM."
Summaries Not Definitive
The summaries and references contained herein with respect to the Indenture, the Site Lease, the Lease Agreement, the Assignment Agreement, the Bonds and other statutes or documents do not purport to be comprehensive or definitive and are qualified by reference to each such document or statute, and references to the Bonds are qualified in their entirety by reference to the form thereof included in the Indenture. Copies of these documents may be obtained after delivery of the Bonds at the trust office of the Trustee, U.S. Bank Trust Company National Association, Los Angeles, California or from the City at 401 East Chapman Avenue, Placentia, California 92870.

THE FINANCING PLAN
The proceeds of the Bonds are expected to be used to finance, along with other available funds of the City, the construction and equipping of a public safety center to be located on the City owned site at 2999 E. La Jolla Street, Anaheim, CA 92806. The public safety center is expected to comprise of a two-story, 18,805 square foot building with a ground -level indoor shooting range and an engineered prefabricated building to house property and evidence collected by the City's police department. A new 911 emergency communications center will be constructed on the second floor of the building. The building will also include a training/conference center, staff office space and outdoor storage units for City depai lruents.

The public safety center is expected to be completed in the summer of 2024 and the total project cost is estimated to be $[20,555,017]. In addition to proceeds from the Bonds, the City expects to contribute $[11,130,000] for the construction of the public safety center. See "— Estimated Sources and Uses of Funds."
4 4885-9887-4678.9

Estimated Sources and Uses of Funds
Under the provisions of the Indenture, the Trustee will receive the proceeds from the sale of the Bonds and will apply them as follows:

Sources:

Principal Amount of Bonds
Plus/Less Original Issue Premium/Discount
Total Sources
Uses:

Construction Fund
Costs of Issuance Fund(')
Total
$
(1) Expenses include Underwriter's Discount and fees and expenses of Bond Counsel, Municipal Advisor, the City Attorney, Disclosure Counsel and Trustee, [premium for the Policy and the Reserve Policy], rating fees, costs of printing the Official Statement, title insurance and other costs of issuance of the Bonds.

THE LEASED PROPERTY
The Leased Property consists of (i) the City's corporate yard of approximately eleven acres, consisting of the main administrative building, a service garage, storage facilities, fuel dispensing station and miscellaneous appurtenant improvements, and (ii) the City Hall, which consists of a single story, concrete building of approximately 38,000 square feet located on a 3.7 acre site. The City Hall was built in 1974 and houses the main administrative functions of the City, as well as the City's police department. It is part of the City's Civic Center complex which includes the City' library. Upon completion of the public safety center and the issuance of a certificate of occupancy, the Leased Property will consist solely of the public safety center and the site on which the public safety center is located, which is within the City's corporate yard.

The City has estimated the value of the Leased Property prior to the completion of the public safety center, excluding all improvements, to be not less than $[ ], based upon the highest and best use value of such Property. A copy of the valuation and supporting documentation is on file with the City's Director of Finance. The estimated value of the Leased Property upon the completion of the public safety center is expected to be $
The Leased Property is not subject to a mortgage or a deed of trust.

The City, with the assistance of Kosmont Realty, a real estate advisory services company, has determined the estimated value of the Leased Property shown above. Pursuant to the Lease Agreement, the City and the Authority will agree and determine that the Base Rental Payments required to be made under the Lease Agreement represents the fair rental value of the Leased Property. The estimated values are provided for informational purposes only. The Leased Property will not be subject to a deed of trust securing the Base Rental Payments and the Trustee has no remedy of foreclosure relating to the Leased Property, although the Authority may repossess and relet the Leased Property upon an event of default under the terms of the Lease Agreement. See "RISK FACTORS — Limited Recourse on Default; No Acceleration" herein. 5 4885-9887-4678.9

As described in "RISK FACTORS Limited Recourse on Default; No Acceleration," the Lease Agreement permits the Trustee to take possession of and release the Leased Property in the event of a default by the City under the Lease.

Substitution or Removal of Property. Under the terms of the Lease Agreement, the City may substitute other real property and/or improvements for existing Leased Property and/or remove real property (including undivided interests therein) and/or improvements from the definition of the Leased Property, or any portion thereof provided that certain conditions set forth in the Lease Agreement are met. See "APPENDIX A - SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS THE LEASED PROPERTY — Substitution or Removal of Leased Property."

THE BONDS
General Provisions
The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. The Bonds shall bear interest from their date of delivery and such interest shall be computed on the basis of a 360 -day year of twelve 30 -day months. Interest on the Bonds will be paid semiannually on [June] 1 and [December] 1 (each, an "Interest Payment Date") of each year, commencing [December 1, 2023].

The interest on the Bonds will be paid in lawful money of the United States. The interest on the Bonds shall be payable on each Interest Payment Date by check sent by first class mail by the Trustee to the Owners of the Bonds as of the Record Date for such Interest Payment Date at their addresses shown on the books required to be kept by the Trustee pursuant to the provisions of the Indenture. The principal and premium, if any, of the Bonds shall be payable upon presentation and surrender thereof on maturity or on redemption prior thereto at the Principal Corporate Trust Office of the Trustee. The term "Record Date," as defined in the Indenture, means the close of business on the 15th day of the month preceding any Interest Payment Date, whether or not such day is a Business Day.

Book -Entry System. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. as nominee for DTC or such other name as may be requested by an authorized representative of DTC. Interest on and principal of the Bonds will be payable when due by wire of the Trustee to DTC which will in turn remit such interest and principal to participants in DTC's book -entry only system, which will in turn remit such interest and principal to Beneficial Owners (as defined herein) of the Bonds (see "APPENDIX E — THE BOOK -ENTRY SYSTEM" herein). As long as DTC is the registered owner of the Bonds and DTC's book -entry method is used for the Bonds, the Trustee will send any notices to Bond Owners only to DTC.

Redemption
Optional Redemption. The Bonds maturing on or after [June] 1, 20_ are subject to optional redemption prior to maturity on or after [June] 1, 20 at the option of the City, in whole, or in part, on any date, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued but unpaid interest to the redemption date, without premium.
6 4885-9887-4678.9

Mandatory Sinking Fund Redemption. The Bonds maturing on [June] 1, 20 and [June] 1, 20 (the "Term Bonds") are subject to mandatory redemption on [June] 1 in each year shown below until maturity, from Mandatory Sinking Account Payments (as defined in the Indenture) made by the Authority, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, that in lieu of redemption thereof, such Term Bonds may be purchased by the Authority and tendered to the Trustee.

Term Bonds Maturing on [June] 1, 20_
Sinking Fund
Redemption Date
([June] 1)
* Maturity.

Principal Amount to be
Redeemed or Purchased
Term Bonds Maturing on [June] 1, 20_
Sinking Fund
Redemption Date
([June] 1)
Final maturity.

Principal Amount to be
Redeemed or Purchased
If some but not all of the Term Bonds have been redeemed pursuant to extraordinary or optional redemptions, the total amount of Mandatory Sinking Account Payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the Term Bonds so redeemed by reducing each such future Mandatory Sinking Account Payment on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated pursuant to written notice filed by Authority with the Trustee.

Extraordinary Redemption From Condemnation Award or Insurance Proceeds. To the extent permitted or required by the Indenture, the Bonds are subject to redemption on any date prior to their respective maturity dates, as a whole, or in part, at the written direction of the City, from the net proceeds of any insurance or condemnation award with respect to the Leased Property or portions thereof, at a redemption price equal to the principal amount of the Bonds plus accrued interest thereon to the date fixed for redemption, without premium.

Notice of Redemption; Rescission. Notice of redemption shall be mailed by first class mail by the Trustee, on behalf and at the expense of the City, not less than 30 nor more than 60 days prior to the redemption date to the respective Owners of Bonds designated for redemption at their addresses appearing on the bond registration books of the Trustee and, unless otherwise instructed by the Authority, provided by the Trustee to the Municipal Securities Rulemaking Board. Each notice of redemption shall state the date of such notice, 7 4885-9887-4678.9

the Bonds to be redeemed, the Series and date of issue of such Bonds, the redemption date, the redemption price, the place or places of redemption (including the name and appropriate address or addresses), the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity are to be redeemed, the distinctive certificate numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice of optional redemption shall also state that such redemption may be rescinded by the City and that, unless such redemption is so rescinded, and provided that on said date funds are available for payment in full of the Bonds then called for redemption, on said date there will become due and payable on each of such Bonds the redemption price thereof or of said specified portion of the principal amount thereof in the case of a Bond to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the address or addresses of the Trustee specified in the redemption notice.

Failure by the Trustee to give notice of redemption pursuant to Indenture to any one or more of the information services or securities depositories, or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. The failure of any Owner to receive any redemption notice mailed to such Owner and any defect in the notice so mailed shall not affect the sufficiency of the proceedings for redemption.

The City has the right to rescind any optional redemption by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of redemption shall be canceled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Indenture. The Trustee shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent.

Partial Redemption of Bonds. Whenever less than all the Outstanding Bonds maturing on any one date are called for redemption at any one time, the Trustee shall select the Bonds to be redeemed, from the Outstanding Bonds maturing on such date not previously selected for redemption, by lot in any manner which the Trustee deems appropriate.

Effect of Redemption. If notice of redemption has been duly given as set forth in the Indenture and moneys for the payment of the redemption price of the Bonds to be redeemed are held by the Trustee, then on the redemption date designated in such notice, the Bonds so called for redemption shall become payable at the redemption price specified in such notice; and from and after the date so designated interest on the Bonds so called for redemption shall cease to accrue, such Bonds shall cease to be entitled to any benefit or security under the Indenture and the Owners of such Bonds shall have no rights in respect thereof except to receive payment of the redemption price represented thereby. The Trustee shall, upon surrender for payment of any of the Bonds to be redeemed, pay such Bonds at the redemption price thereof. 8 4885-9887-4678.9

Scheduled Debt Service on the Bonds
The following is a schedule of Base Rental Payments and therefore the total scheduled debt service on the Bonds, assuming no early redemption of Bonds prior to maturity, except for mandatory sinking fund redemption.

Semi -Annual
Period Ending Principal Interest Total
Total
Annual Total
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9 No Additional Bonds
No additional bonds, notes or other indebtedness will be issued or incurred payable from the Revenues in whole or in part. However, the City may issue other obligations against its revenues in the future. See "RISK FACTORS — The Base Rental Payments."

BOND INSURANCE
[TO COME]

SOURCES OF PAYMENT FOR THE BONDS
Pledge of Revenues
Under the Indenture, the City will irrevocably pledge and transfer to the Trustee, for the benefit of the Owners, all of its right, title and interest in and to all amounts on deposit from time to time in the funds and accounts established under the Indenture, subject to the provisions thereof permitting the disbursement thereof for or to the purposes and on the conditions and terms set forth therein, and in and to the Revenues (as defined below), which shall be used for the punctual payment of the interest and principal of the Bonds.

The Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding.

It is the intent of the parties to the Indenture that the Authority shall not have any right, title, in or to the Revenues. In the event, however, that it should be determined that the Authority has any right, title or interest in or to the Revenues, then the Authority irrevocably pledges and transfers to the Trustee, for the benefit of the Owners, all of such right, title and interest, which shall be used for the punctual payment of the interest and principal of the Bonds. These pledges shall constitute a first and exclusive lien on the funds established under the Indenture and the Revenues in accordance with the terms thereof.

Under the Indenture, "Revenues" includes all Base Rental Payments pursuant to the Lease Agreement, and all other benefits, charges, income, proceeds, profits, receipts, rents and revenues derived by the Authority from the operation or use of the Leased Property, including interest or profits from the investment of money in any account or fund pursuant to the Indenture. See "RISK FACTORS" and "APPENDIX A." The City will covenant in the Lease Agreement to take such action as may be necessary to include all Base Rental Payments and Additional Payments due under the Lease Agreement in its annual budgets and to make the necessary annual appropriations therefor, subject to abatement as provided in the Lease Agreement.

The Authority, pursuant to the Assignment Agreement, will unconditionally grant, transfer and assign to the Trustee without recourse (i) all its rights to receive the Base Rental Payments under and pursuant to the Lease Agreement, (ii) the right to take all actions under the Lease Agreement, (iii) the right of access more particularly described in the Lease Agreement, and (iv) any and all other rights and remedies of the Authority in the Lease Agreement as lessor thereunder; provided, that so long as no default in payment of Base Rental Payments under the Lease Agreement shall have occurred or be continuing, the Authority shall have and may exercise all rights of the Authority under the Lease Agreement other than the right to receive the Base Rental Payments (which rights to receive have been assigned to the Trustee). The City will pay Base Rental Payments directly to the Trustee, as assignee of the Authority. See " — Base Rental Payments" below.

THE BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM REVENUES AND THE OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE AUTHORITY, THE CITY 10 4885-9887-4678.9

OR THE STATE, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE BONDS. THE AUTHORITY HAS NO TAXING POWER.

Base Rental Payments
The City will agree under the Lease Agreement to pay to the Trustee, as assignee of the Authority, the Base Rental Payments no later than the five days prior to each Interest Payment Date (the "Base Rental Payment Date") on which such Base Rental Payment is due. All Base Rental Payments received by the Trustee will be deposited by the Trustee in the Revenue Fund to be established under the Indenture (the "Revenue Fund"). Such payments of Base Rental Payments will be paid or payable by the City for and in consideration of the right of the use and possession of, and the continued quiet use and enjoyment of, the Leased Property.

Base Rental Payments for each 12 month period ending [June] 1 (each, a "Lease Year") or portion thereof during the term of the Lease Agreement shall constitute, together with the Additional Payments, the total amount due for such Lease Year or portion thereof and shall be paid or payable by the City for and in consideration of the right of the use and possession of, and the continued quiet use and enjoyment of, the Leased Property. Pursuant to the Indenture, on each Interest Payment Date, the Trustee will transfer amounts in the Revenue Fund as are necessary to provide for the payment of the interest on the Bonds and on each Principal Payment Date, the Trustee will transfer amounts in the Revenue Fund as are necessary to provide for the payment of principal of the Bonds.

The City will covenant in the Lease Agreement to take such action as may be necessary to include all Base Rental Payments and Additional Payments in its operating budget for each fiscal year and to make all necessary appropriations for such Base Rental Payments and Additional Payments, subject to abatement as provided in the Lease Agreement.

THE OBLIGATION OF THE CITY TO MAKE THE BASE RENTAL PAYMENTS AND TO PAY

ADDITIONAL PAYMENTS DOES NOT CONSTITUTE A DEBT OF THE CITY OR THE STATE 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 IS OBLIGATED TO LEVY OR PLEDGE

ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.

Additional Payments
The Lease Agreement requires the City to pay to the Authority or the Trustee, as Additional Payments thereunder, in addition to the Base Rental Payments, such amounts as shall be required for the payment of all costs and expenses incurred in connection with the execution, performance or enforcement of the Lease Agreement or the assignment thereof, the Indenture, or the respective interests in the Leased Property and the lease of the Leased Property by the Authority to the City thereunder, including but not limited to all fees, costs and expenses and all administrative costs of the Authority relating to the Leased Property. Such fees and costs include, without limitation, salaries and wages of employees, overhead, insurance premiums, taxes and assessments (if any), expenses, compensation and indemnification of the Trustee (to the extent not paid or otherwise provided for out of the proceeds of the sale of the Bonds), fees of auditors, accountants, attorneys or engineers, insurance premiums, and all other reasonable and necessary administrative costs of the Authority or charges required to be paid by it to comply with the terms of the Bonds or the Indenture.

Additional Payments will be billed to the City by the appropriate party from time to time, together with a statement certifying that the amount billed has been incurred or paid for one or more of the items 11 4885-9887-4678.9

constituting Additional Payments, or that such amount is then so payable for such items. Amounts so billed shall be paid by the City within 60 days after receipt of a bill by the City for such amounts.

Abatement
Base Rental Payments and Additional Payments are paid by the City in each Lease Year or portion thereof for and in consideration of the right of the use and possession of, and the continued quiet use and enjoyment of, the Leased Property. During any period in which, by reason of material damage, destruction, title defect, or condemnation, there is substantial interference with the use and possession by the City of any portion of the Leased Property, Base Rental Payments due under the Lease Agreement with respect to the Leased Property shall be abated to the extent that the annual fair rental value of the portion of the Leased Property in respect of which there is no substantial interference is less than the annual Base Rental Payments, in which case rental payments shall be abated only by an amount equal to the difference.

In the event the City assigns, transfers or subleases any or all of the Leased Property or other rights under the Lease Agreement, as permitted by the Lease Agreement, for purposes of determining the annual fair rental value available to pay Base Rental Payments, annual fair rental value of the Leased Property shall first be allocated to the Lease Agreement. The City waives the benefits of California Civil Code Sections 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.

Abatement shall continue for the period commencing with the date of such damage, destruction, title defect or condemnation and ending with the substantial completion of the work of repair or replacement of the portions of the Leased Property so damaged, destroyed, defective or condemned.

Notwithstanding the foregoing, to the extent there are (a) amounts held by the Trustee in the Revenue Fund, (b) amounts received in respect of rental interruption insurance and (c) amounts, if any, otherwise legally available to the Trustee for payments in respect of the Bonds, Base Rental Payments and Additional Payments will not be abated as provided above but, rather, will be payable by the City as a special obligation payable solely from said funds and accounts.

Any abatement of rental payments pursuant to the Lease Agreement is not considered an Event of Default as defined in the Lease Agreement.

See "APPENDIX A - SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS - RENTAL PAYMENTS — Rental Abatement."
Insurance Relating to the Property
The Lease Agreement requires the City to maintain general public liability and property damage insurance on the Leased Property in an amount at least equal to the lesser of the replacement value of the insured buildings and the aggregate principal amount of the Base Rental Payments outstanding. Such insurance must, as nearly as practicable, cover loss or damage by all "special form" perils. Earthquake insurance will only be carried if available from reputable insurers at a reasonable cost as determined by the Finance Director of the City, therefore, damage from earthquakes may not be covered in future years. The City is also required to maintain rental interruption insurance covering loss of the use of any part of the Leased Property in an amount equal to the maximum Base Rental Payments due during any immediately succeeding 24 -month period. If required by applicable California law, the City shall carry worker's compensation insurance covering all employees on, in, near or about the Leased Property. The Lease Agreement also requires the City to insure title to the Leased Property in an amount not less than the initial principal amount of the Bonds.
12 4885-9887-4678.9

If prior to the termination of the term of the Lease Agreement (a) the Leased Property or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty; or (b) title to, or the temporary use of, the Leased Property or any portion thereof or the estate of the City or the Authority in the Leased Property or any portion thereof is defective or shall be taken under the exercise of the power of eminent domain by any governmental body or by any person or firm or Authority acting under governmental authority, then the City and the Authority will cause the net proceeds of any insurance claim or condemnation award to be applied to the prompt repair, restoration, modification, improvement or replacement of the damaged, destroyed, defective or condemned portion of the Leased Property, and any balance of the net proceeds remaining after such work has been completed shall be paid to the City; provided, that the City, at its option and provided the proceeds of insurance or condemnation award together with any other moneys then available for the purpose are at least sufficient to prepay the aggregate annual amounts of principal and interest components of the Base Rental Payments due under the Lease Agreement attributable to the portion of the Leased Property so destroyed, damaged, defective or condemned (determined by reference to the proportion which the annual fair rental value of the destroyed, damaged, defective or condemned portion thereof bears to the annual fair rental value of the Leased Property), may elect not to repair, reconstruct or replace the damaged, destroyed, defective or condemned portion of the Leased Property and thereupon shall cause said proceeds to be used for the redemption of Outstanding Bonds pursuant to the provisions of the Indenture (see "THE BONDS Redemption — Extraordinary Redemption From Condemnation Award or Insurance Proceeds"). Notwithstanding any other provision in the Lease Agreement, the City shall only prepay less than all of the principal component of the then - remaining Base Rental Payments if the annual fair rental value of the Leased Property after such damage, destruction, title defect or condemnation is at least equal to the aggregate annual amount of the principal and interest components of the Base Rental Payments not being prepaid.

In the event that the proceeds, if any, of said insurance or condemnation award are insufficient either to (i) repair, rebuild or replace the Leased Property so that the fair rental value of the Leased Property would be at least equal to the Base Rental Payments or (ii) to redeem all the Outstanding Bonds, both as provided in the preceding paragraph, then the City may, in its sole discretion, budget and appropriate an amount necessary to effect such repair, rebuilding or replacement or prepayment; provided that the failure of the City to so budget and/or appropriate shall not be a breach of or default under the Lease Agreement.

If there are not sufficient insurance proceeds to complete repair of the Leased Property, the Lease Payment schedule will be proportionally reduced in accordance with the Lease Agreement. Such reduced Lease Payments may not be sufficient to pay principal and interest with respect to the Bonds.

Such reduction would not constitute a default under either the Indenture or the Lease Agreement.

Substitution or Removal of Property
Under the terms of the Lease Agreement, the City may substitute other real property and/or improvements for existing Leased Property and/or remove real property (including undivided interests therein) and/or improvements from the definition of the Leased Property, or any portion thereof provided that certain conditions set forth in the Lease Agreement are met. See "APPENDIX A - SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS THE LEASED PROPERTY — Substitution or Removal of Leased Property."
Action on Default
If the City defaults on its obligations to make Base Rental Payments with respect to any of the Leased Property, the Trustee, as assignee of the Authority, shall have the option (i) without terminating the related Lease Agreement, to collect each installment of rent as it becomes due regardless of whether or not the City 13 4885-9887-4678.9

has abandoned such Leased Property, or to exercise any and all rights of re-entry upon and to release the Leased Property, or (ii) to terminate the related Lease Agreement and release such Leased Property. The City shall remain liable, if such Leased Property are not relet, to pay the full amount of the rent to the end of the term of the related Lease Agreement or, in the event that such Leased Property are relet, to pay any deficiency in rent that results therefrom. In the event of a default, there is no available remedy of acceleration of Base Rental Payments which have not become due and payable under the Lease Agreement.

The City will only be liable for Base Rental Payments on an annual basis, and the Trustee may be required to seek a separate judgment in each fiscal year for that fiscal year's defaulted Base Rental Payments. In the event that the Trustee elects to terminate the Lease Agreement, such Leased Property may be relet for the remaining term of the Lease Agreement.

It is uncertain what remedies will be practically available to the Trustee in the event of a default, and the enforcement of any remedies may prove both expensive and time-consuming. Due to the nature of the Leased Property, no assurance can be given that the Trustee will be able to relet the Leased Property so as to provide rental income sufficient to make principal and interest payments on the Bonds in a timely manner, and the Trustee is not empowered to sell the Leased Property for the benefit of the Owners of the Bonds.

Any suit for money damages would be subject to limitations on legal remedies against cities in California, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest.

For a description of the events of default and permitted remedies of the Trustee (as assignee of the Authority) contained in the Lease Agreement and the Indenture, see "APPENDIX A - SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS - MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES Insurance."
Bond Insurance
[To Come]
Reserve Fund
A Reserve Fund will be established under the Indenture for the Bonds in an amount equal to the Reserve Requirement. The "Reserve Requirement" means as of any calculation date in a Bond Year, an amount equal to the least of (i) ten percent (10%) of the sale proceeds (within the meaning of section 148 of the Internal Revenue Code (the "Code")) of the Bonds, (ii) 125% of average annual debt service on the Bonds for that and every succeeding Bond Year, or (iii) Maximum Annual Debt Service, provided, however, the Reserve Requirement on any calculation date shall not be greater than the Reserve Requirement amount on the Closing Date. On the Closing Date, the Reserve Requirement has been calculated as $ - The Indenture provides that the Authority may deposit a "Qualified Reserve Fund Credit Instrument" in the Reserve Fund to satisfy the Reserve Requirement (see "APPENDIX A - SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS - INDENTURE - DEFINITIONS."
Concurrently with the closing of the Bonds, the Trustee shall credit the Reserve Policy, a Qualified Reserve Fund Credit Instrument, in the amount of $[ ] to the Reserve Fund.

On or before each Interest Payment Date, the Trustee shall deposit in the Reserve Fund such amount as may be necessary to maintain a balance therein equal to the Reserve Requirement. No deposit shall be made in the Reserve Fund so long as there shall be on deposit therein an amount equal to the Reserve Requirement. The investments in the Reserve Fund will be valued at their initial cost and there is no requirement to value such investments at their market value or to add moneys to the Reserve Fund should 14 4885-9887-4678.9

the market value of the investments therein be at any time less than the Reserve Requirement. All moneys in the Reserve Fund (or available to be drawn from a Qualified Reserve Fund Credit Instrument as defined in the Indenture) shall be used and withdrawn by the Trustee solely for the purpose of replenishing the Interest Fund or the Principal Fund in such order, in the event of any deficiency at any time in either of such accounts, or for the purpose of paying the interest on or principal of or redemption premiums, if any, on the Bonds in the event that no other money of the Authority is lawfully available therefor. All moneys in the Reserve Fund (or available to be drawn from a Qualified Reserve Fund Credit Instrument) in excess of the Reserve Requirement will be applied as a credit against the next following Base Rental Payment or may be applied to the retirement of all Bonds then Outstanding as directed in a Request by the City.

CITY OF PLACENTIA
General Information
The City of Placentia covers 6.7 square miles in northern Orange County. The City is 24 miles southeast of Los Angeles and 22 miles northeast of Long Beach. Placentia's proximity to the junction of the Riverside and Orange freeways provides easy access to all points of the region. The City is bordered by the neighboring communities of Brea, Fullerton, Anaheim and Yorba Linda.

General Organization
The City of Placentia is a charter city and was incorporated in 1926 and adopted a charter form of government in 1965. The City has a Council/ Administrator form of government. The City Council is composed of five members elected by district to four-year terms. The positions of City Clerk and City Treasurer are also elected positions. The City Council appoints the City Administrator who is responsible for the day-to-day administration of City business and the coordination of all departments of the City. The City Council also appoints the City Attorney. As of May 8, 2023, the City employed a staff of 168 full-time employees under the direction of the City Administrator and 7 elected or appointed positions. 15 4885-9887-4678.9

The current members of the City Council, the expiration dates of their terms and key administrative personnel are set forth below.

CITY COUNCIL
Council Member Term Expires
Ward Smith, Mayor
Jeremy B. Yamaguchi, Mayor Pro Tem
Rhonda Shader, Councilmember
Chad P. Wanke, Councilmember
Kevin Kirwin, Councilmember
December 2024
December 2024
December 2024
December 2026
December 2026

CHIEF ADMINISTRATIVE PERSONNEL
Damien R. Arrula, City Administrator
Luis Estevez, Deputy City Administrator
Jennifer Lampman, Director of Finance
Christian L. Bettenhausen, City Attorney
Governmental Services
The City is a full service City including a Police Department, Fire & Life Safety Department, Public Works Department, Development Services Department and Community Services Department. The Public Works Department is responsible for engineering, street maintenance, building maintenance, vehicle maintenance and park maintenance. The Development Services Department is responsible for planning, building inspection and redevelopment. The Community Services Department is responsible for recreational activities, cultural events and public assistance. Fire services were previously contracted with the Orange County Fire Authority, but the City organized its own Fire & Life Safety Department to provide these services beginning July 1, 2020. Refuse collection is franchised to a private hauler.

Transportation
Highway 57, the Orange Freeway, passes through the City and provides a major north -south link to the surrounding area. Highway 91, the Riverside Freeway, provides access to southern Los Angeles County and the eastern communities of Riverside County.

In 2016, the Orange County Transportation Authority approved the funding and cooperative agreement for the construction of the newest Metrolink Station in Placentia. This station will be the 13th station serving the 91 Metrolink line, which runs from Los Angeles Union Station to downtown Riverside. The Placentia Metrolink station will be the closest station in proximity to the California State University at Fullerton campus and will provide passengers with an alternative to the Fullerton Metrolink station.

John Wayne -Orange County Airport is 14 miles south of the City, Los Angeles International Airport is approximately 36 miles to the west and Ontario International Airport is approximately 27 miles to the northeast.
16 4885-9887-4678.9

Population
The following table provides population growth for Placentia and Orange County between 2019 and 2023.

TABLE NO. 1

CHANGE IN POPULATION

PLACENTIA AND ORANGE COUNTY
2019 — 2023
Placentia Orange County
January 1 Percentage Percentage
Year Population Change Population Change
2019 51,871 3,185,378
2020 51,569 (0.58%) 3,180,491 (0.15%)
2021 51,488 (0.16) 3,167,783 (0.40)
2022 51,327 (0.31) 3,151,946 (0.50)
2023 52,507 2.30 3,137,164 (0.47)
Source: State of California, Department of Finance, "E-4 Population Estimates for Cities, Counties and the State, 2011-2020, with 2010 Census Benchmark" released May 7, 2021 and "E-4 Population Estimates for Cities, Counties and the State, 2021-2023, with 2020 Census Benchmark" released May 1, 2023.

Median Household Income
The most recent available median household income information for the City, the County and the United States is summarized in the following table.

TABLE NO. 2

MEDIAN HOUSEHOLD INCOME

CITY OF PLACENTIA, ORANGE COUNTY AND UNITED STATES
[2017 — 2022]
Year Placentia
2017 88,501
2018 89,690
2019 102,212
2020 100,707
2021 103,041
[2022] [ l
Orange County
81,851
85,398
95,934
94,441
100,485
[
Source: U.S. Census, American Community Survey.

United States
57,652
60,293
65,712
64,994
69,021
17 4885-9887-4678.9

Employment and Industry
Civilian labor force, employment and unemployment statistics for the City, the County, the State and the nation for the years 2018 through 2022 are shown in the following table. As a result of the COVID-19 pandemic (referred to herein as "COVID-19" or "Pandemic"), unemployment rates increased from March 2020, with some recovery in 2021. Unemployment rates at the end of fiscal year 2021-22 have returned to pre -Pandemic levels at 3.2%, 3.2%, 4.2% and 3.6% for the City, County, State and Country, respectively.

TABLE NO. 3

CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT

ANNUAL AVERAGES
Year
Civilian Unemployment
Labor Force Employment Unemployment Rate
2018
City of Placentia 25,800 25,000 800
Orange County 1,616,144 1,568,273 47,871
California 19,289,500 18,469,900 819,600
United States 162,075,000 155,761,000 6,314,000
2019
City of Placentia 25,700 24,900 800
Orange County 1,616,766 1,571,261 45,505
California 19,413,200 18,617,900 795,300
United States 163,539,000 157,538,000 6,001,000

3.0%

3.0 4.2

3.9 2.9%

2.8 4.1

3.7 2020
City of Placentia 25,100 22,800 2,200 8.8%
Orange County 1,566,866 1,426,971 139,895 8.9
California 18,971,600 17,047,600 1,924,000 10.1
United States 160,742,000 147,795,000 12,947,000 8.1
2021
City of Placentia 24,900 23,500 1,400
Orange County 1,560,697 1,467,342 93,355
California 18,973,400 17,586,300 1,387,100
United States 161,204,000 152,581,000 8,623,000
2022
City of Placentia 25,500 24,700 800
Orange County 1,590,882 1,540,561 50,321
California 19,252,000 18,440,900 811,100
United States 164,287,000 158,291,000 5,996,000

5.8%

6.0 7.3

5.3 3.2%

3.2 4.2

3.6 Note: The unemployment rate is calculated using unrounded data. Data may not add due to rounding.

Source: State of California Employment Development Department and United States Bureau of Labor Statistics.

The City is located in the Anaheim -Santa Ana -Irvine Metropolitan Division (the "Metropolitan Division").

Wage and salary workers by industry for each of the years 2018 through 2022 in the Metropolitan Division 18 4885-9887-4678.9

is presented in Table No. 4 below. The data below is shown annually for the month of July, and for 2020 and 2021, reflects the declines as a result of the Pandemic.

The industry sectors with the largest declines as a result of the shelter in place orders are Leisure and Hospitality, Manufacturing and Service Producing.

TABLE NO. 4

ANAHEIM -SANTA ANA -IRVINE METROPOLITAN DIVISION

WAGE AND SALARY WORKERS BY INDUSTRY'
(in thousands)
Industry
Government
Other Services
Leisure and Hospitality
Private Education and Health Services
Professional and Business Services
Finance and Insurance
Transportation, Warehousing and Utilities
Service Producing
Retail Trade
Wholesale Trade
Manufacturing
Nondurable Goods
Durable Goods
Goods Producing
Construction
Mining and Logging
Total Nonfarm
Total Farm
Total (all industries)
2018 2019 2020 2021 2022
161.2 162.5 156.1 155.7 160.2

51.4 52.0 44.1 47.5 52.7
222.6 227.7 161.8 180.4 217.7
225.2 233.1 225.8 237.3 249.5
317.3 328.4 309.2 321.7 332.5

79.3 77.7 77.7 78.1 74.0

29.2 29.5 29.6 31.1 33.7
152.6 150.6 137.6 143.4 146.0

79.8 79.4 74.9 75.6 76.9

42.2 41.3 37.7 38.3 39.2
118.6 118.8 112.4 111.4 116.1
105.9 106.1 101.3 102.2 106.2
.5 .5 .4 .4 .3
1,651.8 1,673.4 1,530.8 1,585.9 1,670.0

2.0 1.9 1.9 2.0 1.6
1,653.8 1,675.3 1,532.7 1,587.9 1,671.5
0 ) Annually, as of April 24, 2023.

Source: State of California Employment Development Department, Labor Market Information Division, "Industry Employment & Labor Force - by month March 2021 Benchmark." 19 4885-9887-4678.9

TABLE NO. 5

PRINCIPAL EMPLOYERS
The principal employers operating within the City and their respective number of employees as of June 30, 2022 are as follows:

Name of Company
Placentia-Yorba Linda Unified School District
Blackburn Daewoo
Interface Rehab Overview
Placentia -Linda Hospital
Hartwell
Employment
3,200
500
456
435
375
Source: City of Placentia.

Commercial Activity
The following table compares taxable transactions by type of business for the City for the years 2017 through 2021.

TABLE NO. 6

TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
(in thousands)
2017 — 2021
2017 2018 2019 2020 2021
Apparel Stores1 - - - $21,114
General Merchandise $7,178 $7,440 $ 7,649 $ 8,208 7,907 Food Stores 17,102 17,530 18,363 20,539 19,152
Eating and Drinking Places 85,373 83,083 87,912 77,897 101,361 Building Materials 60,664 68,803 74,767 69,616 89,608
Auto Dealers and Supplies 104,963 82,789 72,781 71,301 99,240 Service Stations 68,101 74,924 73,200 49,981 72,505
Other Retail Stores 74,578 75,597 76,411 65,702 62,668
All Other Outlets 234,501 245,115 268,067 269,831 278,458 Total $652,460 $655,281 $679,150 $633,075 $730,899
1 The category "Apparel Stores" was added in the fiscal year ending June 30, 2022 Annual Comprehensive Financial Report.

Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.

See "FINANCIAL INFORMATION — Local Taxes" herein for a further discussion of City sales tax.

Building Activity
The City issues building permits for new construction (both residential and commercial), remodels, additions, renovations and a variety of other improvements.

The following table provides the building permits issued by the City of Placentia for the five Fiscal Years 2017-18 through 2021-22.
20 4885-9887-4678.9

TABLE NO. 7

BUILDING ACTIVITY
2017-18 through 2021-22
Year Number of Permits Issued
2017-18
2018-19
2019-20
2020-21
2021-22
1,347
1,263
1,407
1,346
1,425
Source: City of Placentia Annual Comprehensive
Financial Report for fiscal year ending June 30,
2022.

FINANCIAL INFORMATION
Financial Policies
Budget- and Reserve -Related Policies. The City Council has adopted the following financial policies as a primary guide for the preparation of the City's annual budget:
• In order to comply with City Charter Section 1203, which requires submission of a proposed budget to the City Council at least 35 days prior to the first day of the fiscal year, the Director of Finance shall publish, by February of each year, a schedule of budget preparation activities, entitled "Budget Calendar for (year)".
• To ensure that future General Fund budgets promote fiscal sustainability:
- All General Fund budgets should be structurally balanced, such that ongoing revenues equal or exceed ongoing expenditures.
- The Contingency Reserve and one-time revenues should be used only for one-time expenditures. Ongoing expenditures should be funded only from ongoing revenues. - A mid -year budget review shall be conducted each year to verify projections and recommend adjustments as necessary so that the budget remains balanced. - Conservative budget planning shall be utilized to identify potential problems and solutions. - Careful, five- and ten-year budget projections shall also be developed and updated to keep the budget in check and to determine continued fiscal sustainability. • A General Fund Reserve Policy is established to maintain a stable revenue structure while providing for the orderly provision of services to the citizens of Placentia, and to assist with maintaining a positive credit rating and to meet seasonal cash flow shortfalls, economic downturns, or a local disaster. It shall be the policy of the City Council of the City of Placentia:

1. To establish a target of and build towards a minimum Contingency Reserve balance in the General Fund of 25% of the General Fund operating expenditures. The reserve goal shall 21 4885-9887-4678.9

be reviewed by the City Council at least once per year during the normal city budgeting cycle to determine if the reserve goal needs to be redefined. The City Council may also adjust the reserve goal as needed at times other than the budget cycle. Such a change, however, must be made as a regular agenda item and cannot be made as part of the consent calendar.
a. The Contingency Reserve Balance shall be available only as a temporary revenue source.
b. Any use of the Contingency Reserve Balance shall require the approval of the City Council by means of approved appropriations. Any such appropriation must be approved as a regular agenda item and not as part of the consent calendar. c. Whenever the Contingency Reserve Balance falls below the Reserve Goal, the City Council shall place a priority on restoring the Contingency Reserve Balance. d. If the City Council approves the use of any portion of the Contingency Reserve Balance which results in the Contingency Reserve Balance falling below the Reserve Goal level, the City Council shall approve at the same time a plan to replenish the Contingency Reserve Balance to the Reserve Goal within a reasonable time period. e. Each fiscal year as a part of the budget process, a multi -year proforma of the General Fund identifying the annual adjustment to the Contingency Reserve Balance shall be presented to members of the community for an independent citizen review and later presented to City Council. The pro forma forecast shall be for a period of no less than five (5) years beyond the current fiscal year being budgeted and the "Forecast" and shall form the basis of determining whether the expected level of General Fund's Contingency Reserve Balance satisfies the Reserve Goal for the entire duration of the Forecast.

2. To commit certain new unrestricted revenues to various reserves to be used for specific purposes.

New Ongoing Revenues:
a. "New Ongoing Revenues" are defined as a new general tax, an increase in the rate of an existing general tax, a new lease of City property or other new, clearly identifiable unrestricted revenue source not previously included in the City's budget at the time of adoption of this policy, which generates at least $100,000 per year in revenue and is expected to continue for at least a period of 20 years. b. Beginning in Fiscal Year 2023-24, revenues generated from New Ongoing Revenues will be allocated as follows, until such time as the General Fund Contingency Reserve reaches the 25% target level:

c. When the General Fund Contingency Reserve has reached its 25% target level, revenues generated from New Ongoing Revenues will be allocated as follows:

Reserve
Infrastructure, Vehicles, and Equipment Reserve
Post -Employment Benefits Sustainability
Employee Recruitment and Retention Reserve
General Fund Contingency Reserve
Amount
50%
10%
30%
10%
d. New Ongoing Revenues deposited into the above reserve accounts may be appropriated for ongoing or one-time expenditures.

New One-time Revenues:
a. New One-time Revenues are defined as either: (1) unrestricted revenue from new one- time events (for example, property sales, etc.) of at least $100,000 (excluding recapturing of lost funds); (2) a new, clearly identifiable unrestricted revenue source of at least $100,000 per year and not previously included in the City's budget at the time of adoption of this policy, which is expected to continue for a period of less than 20 years; or (3) unanticipated positive General Fund budget variances of any amount (i.e., positive changes in General Fund financial position greater than final budgeted amounts).
b. Beginning in Fiscal Year 2018-19, revenues generated from New One-time Revenues will be allocated as follows, until such time as the General Fund Contingency Reserve reaches the 25% target level:

Reserve
Infrastructure, Vehicles, and Equipment Reserve
Post -Employment Benefits Sustainability
General Fund Contingency Reserve
Amount
40%
10%
50%
c. When the General Fund Contingency Reserve has reached its 25% target level, revenues generated from New One-time Revenues will be allocated as follows:

Reserve
Infrastructure, Vehicles, and Equipment Reserve
Post -Employment Benefits Sustainability
Amount
80%
20%
d. New One-time Revenues deposited into the above reserve accounts may only be spent on one-time expenditures.

Purpose of Reserves:
a. Infrastructure, Vehicles, and Equipment Reserve: This reserve will be utilized to fund capital improvement projects that improve public roads and adjacent rights -of -way infrastructure, parks and public facilities, and vehicle and major equipment replacement.
b. Post -Employment Benefits Sustainability Reserve: This reserve is for the purpose of making post -employment benefits (e.g., pension and retiree health benefits) 23 4885-9887-4678.9

sustainable, by setting aside funds to address unfunded liabilities, to reduce the impact of cost increases on the operating budget and to fund these programs based on sound actuarial methods.
c. Employee Recruitment and Retention Reserve: This reserve serves multiple purposes.

It is for the purpose of ensuring that City employees are compensated at levels comparable to employees in similar positions in cities similar to Placentia, to encourage employee retention and to stay competitive with other cities for hiring talented individuals. Part of employee retention is ensuring that the City is adequately staffed so this reserve may also be used to increase staffing levels based on the future growth of the City or to improve efficiency. This reserve may also be used to restore service levels for all City programs cut during the preparation of the 2018-19 budget, using the 2017-18 budget as a baseline.

Use of Reserves:
a. The City Administrator may request from the City Council the ability to utilize the reserves in this section for their specified purposes, as part of the annual budget process or at any other time during the fiscal year.
b. Any use of the reserves shall require the majority approval of the City Council by means of approved appropriations.

Accounting and Reporting of New Ongoing Revenues and Reserve Accounts:
a. New Ongoing Revenues and each reserve account shall be accounted for in separate funds for budgeting purposes.
b. Reports shall be prepared at the time of budget adoption, as part of the mid -year budget review and at fiscal year-end that demonstrate compliance with this policy and indicate the portions of each reserve account balance that can be spent on one-time expenditures and ongoing expenditures.
c. New Ongoing Revenues and New One-time Revenues shall be included as General Fund revenues, and all reserve accounts shall be reported as committed fund balances of the General Fund in the City's Annual Comprehensive Financial Report.

3. Any future bond covenants shall be written to be compliant with this General Fund Reserve Policy.

4. The City established an independent Citizens Oversight Committee (the "Committee") in connection with the voter -approval of 1% sales tax measure in 2018 which constitutes, a new ongoing revenue for purposes of the reserve policy described above. The Committee reviews and reports on all related expenditure plans and financial reports to ensure spending is consistent with reserve policy.
• Capital Improvement Program. The City's Capital Improvement Program ("CIP") document outlines project delivery timelines and funding schedules over a seven-year planning horizon.

As part of the planning process, budget -level cost estimates for capital improvements are identified, and projects are prioritized based on available funding sources and community needs. The City leverages outside funding sources such as Federal and State grant funds as well 24 4885-9887-4678.9

as other non -General Fund revenues to fund capital improvements to the greatest extent possible. Projects are re -prioritized and funded when these outside funds are made available for that purpose.

The CIP is reviewed yearly, during which time the City's needs are re -prioritized and the City's financial capacity to fund capital improvements are re-evaluated. Thus, the CIP is a dynamic planning tool that provides the City flexibility in how and when capital improvements and investments in the City's infrastructure are made. Its overall goal is to provide a thoughtful approach to preserving and enhancing the quality of life for the entire community. The CIP priorities are segregated into the following components:
— Assure Safe Right of Way, Parks and Facilities
Preventative Maintenance and Facility Improvements
Replace or Upgrade Outdated or Inadequate Facilities or Equipment — Implement Master Planned Facilities or Upgrades
Future Projects
Debt and Liability -Related Policies. These Financial Policies include:

Debt Management Policy — The City Council formally established the City's Debt Management Policy on July 18, 2017. This policy includes guidelines for the issuance of debt, including the types of debt that may be issued, responsibilities for debt management activities, maintenance of appropriate internal controls, post issuance compliance, and other related issues.

Continuing Disclosure Compliance Policy — The City Council formally established the City's Continuing Disclosure Compliance Policy on October 20, 2020. This policy identifies the staff member of the City with the responsibility for reviewing all reporting requirements for all bond issues, being familiar with the listed events that require notice, and preparing and timely filing of reports and notices.

Other Financial Policies.

Investment Policy — The City's current Investment Policy was most recently approved on July 19, 2022. The Investment Policy imposes certain restrictions on the City's investment management that consistent with those authorized under State law.

Internal Control Policies — The City's internal control policies identify those with responsibility for ensuring the effectiveness of policies and procedures designed to implement internal controls.

These policies cover a range of financial operations including operations of City bank accounts, wire transfer of funds, credit card use, check stock storage and security, daily reconciliation for credit card terminals, cash handling procedures and a fictitious vendors policy.

Budgetary Process and Administration
The City prepares its budgets on the basis of estimated revenues and expenditures and, accordingly, the budget amounts included in the financial statements are presented on a basis substantially consistent with generally accepted accounting principles. Encumbrance accounting is utilized during the fiscal year, whereby purchase orders, contracts and other commitments are recorded in order to control appropriations.

However, at fiscal year-end, all appropriations lapse. Accordingly, encumbrances are canceled and generally are re -appropriated as part of the following year's budget. Encumbrances are not included in reported expenditures.
25 4885-9887-4678.9

Annual budgets are adopted for the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Projects Funds. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year.

The Finance Director, upon approval of the City Administrator, may authorize transfers of funds from one object to another, within operating departments.

City Administrator approval is required for transfers from one department to another department within the same fund.

Comparative General Fund Revenues and Expenditures
The City's General Fund Budget includes programs which are provided on a largely city-wide basis. The programs and services are financed primarily by the City's share of property taxes, sales tax, and charges for services provided.

Budget and Actual Comparisons
The General Fund actual results for Fiscal Years 2019-20 and 2020-21 along with Fiscal Year 2021-22 Budget and actual results and the Fiscal Year 2022-23 Budget is shown in Table No. 8.

General Fund Revenues
The General Fund revenues in Table No. 8 that follows are categorized as:
• Taxes, detailed in "Table No. 13 - General Fund Tax Revenues by Source," include general property tax (including property tax in -lieu of motor vehicle license fees), sales tax, utility users' tax, transient occupancy tax, franchise tax (cable, gas, telephone), real property transfer tax and other taxes;
• Intergovernmental mainly consist of federal, State and local grants; • Licenses and Permits include building permits, business license permits, and plan check fees; • Fines and Forfeitures are derived from the collection of penalties for vehicle code violations, parking code violations and other administrative citations; • Investment earnings;
• Charges for Services are generally known as user fees that are charged for a variety of services provided to the general public, including plan checking, engineering, recreation fees, special police fees, and code enforcement fees;
• Leases and Rents include facilities rental and cell tower lease revenue as well as lease payments from the Successor Agency relating to the City's 2003 Certificates of Participation (which were refunded in 2022);
• Miscellaneous Revenues consist of revenues such as sale of property, collections from advertising, unclaimed money and contributions and donations; and 26 4885-9887-4678.9

• Transfers in, generally from the Gas Tax Fund, the Supplemental Law Enforcement Fund, Community Development Block Grant Fund and other funds to reimburse for qualifying expenditures in the General Fund.

The largest components of Fiscal Year 2022-23 General Fund budgeted revenues are property tax (40%), sales tax (19%), other revenues (18%), Measure U transfers into the General Fund (8%), utility users' tax (5%) and franchise fees (4%).

General Fund Expenditures
The General Fund expenditures in Table No. 8 that follows are categorized by governmental function. Each function generally includes salaries and benefits, materials and supplies, and contractual services.

Salaries and Benefits include direct personnel costs, benefits, health insurance costs and workers' compensation and unemployment insurance costs. Materials and supplies include non -personnel operating costs. Contractual services include contracts for professional and general services.

Public safety expenditures represent approximately 43% of the total budgeted General Fund budgeted expenditures for Fiscal Year 2022-23. The City established its Fire & Life Safety Department in Fiscal Year 2020-21. The depai tiiient provides 24 -hour emergency response to a wide variety of critical situations, including fires, medical emergencies, accidents, and miscellaneous public assistance requests. The City eliminated its contract for such services with the Orange County Fire Authority ("Fire Authority") as of July 1, 2020 and the City has enjoyed significant savings as a result. There were some overlapping costs in Fiscal Year 2019-20 in preparation for transfer of services. 27 4885-9887-4678.9

TABLE NO. 8

GENERAL FUND REVENUES AND EXPENDITURES
FOR FISCAL YEAR ENDING JUNE 30
Budget Budget Budget
2022 2022 2023 2024
Revenues:

Taxes
Intergovernmental
Licenses and permits
Fines and forfeitures
Investment earnings (losses)
Charges for services
Leases and rents
Contributions
Miscellaneous
Total revenues
Expenditures:

Current:

General government
Public safety
Public works
Community development
Community services
Capital outlay
Debt service
Total expenditures
Revenues over (under) expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Proceeds from sale of property
Proceeds from capital lease
Issuance of Debt
Payment to Refunding Bond Escrow Agent
Total other financing sources (uses)
Net change in fund balances
Fund balances:

Beginning of year
End of year
Fund balances:

Nonspendable
Restricted
Committed
Unassigned (deficit)
Total
Source: City of Placentia.
$34,168,100 $41,621,461 $37,191,624 $35,848,523
265,000 952,389 1,140,000 312,000
874,900 2,440,102 2,455,000 2,802,000
444,200 503,302 355,000 452,500
- (323,152) - -
1,278,200 1,263,215 1,305,400 1,514,000
- 1,422,831 - -
2,285,700 785,684 1,920,200 2,454,000
39,316,100 48,665,832 44,367,224 43,383,023
11,991,300 12,055,475 13,534,021 14,531,090
16,081,300 15,441,982 16,883,593 18,116,117
4,158,300 3,514,281 4,449,440 4,795,070
1,351,000 1,482,732 1,835,200 1,571,100
2,357,100 2,289,940 2,646,380 2,947,452
529,400 5,034,753 863,746 4,264,280
5,177,100 2,271,085 5,179,250 6,021,200
41,645,500 42,090,248 45,391,630 52,246,309
(2,329,400) 6,575,584 (1,024,406) (8,863,286)
3,746,300 102,947 1,115,744 6,418,395
(53,000) (3,444,522) (37,500) (36,214)
2,189,027
(2,069,027)
3,693,300 (3,221,575) 1,078,244 6,382,181
1,363,900 3,354,009 53,838 (2,481,105)
16,929,162 20,230,471 20,445,146 21,425,994
18,293,062 23,584,480 20,498,984 18,944,889
2,209,112 2,521,767 3,262,084 2,128,711
522,982 2,024 556,084 -
6,499,328 - -
9,061,639 21,060,689 6,849,833 16,816,178
$18,293,062 $23,584,480 $20,498,984 $18,944,889
Ad Valorem Property Taxes
Taxes are levied for each fiscal year on taxable real and personal property which is situated in the City as of the preceding January 1. For assessment and collection purposes, property is classified either as "secured" or "unsecured," and is listed accordingly on separate parts of the assessment roll. The "secured roll" is that part of the assessment roll containing State assessed property and real property having a tax lien which is sufficient, in the opinion of the assessor, to secure payment of the taxes. Other property is assessed on the "unsecured roll."
28 4885-9887-4678.9

Property taxes on the secured roll are due in two installments, on November 1 and February 1 of the fiscal year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment in addition to a $20 cost on the second installment. On July 1 of each fiscal year any property which is delinquent will become defaulted. Such property may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption penalty of 11/2% per month to the time of redemption, together with any other charges permitted by law. If taxes are unpaid for a period of five years or more, the property is subject to sale by the County Tax Collector. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes for the amount of taxes which are delinquent.

Property taxes on the unsecured roll become delinquent, if unpaid on August 31. A 10% penalty attaches to delinquent taxes on property on the unsecured roll, and an additional penalty of 11/2% per month begins to accrue on November 1 of the fiscal year. The County has four ways of collecting delinquent unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder's Office, in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee.

Taxable Property and Assessed Valuation. Set forth in Table No. 9 are historical assessed valuations for taxable property within the City. Article XIIIA of the California Constitution prescribes the method for determining the full cash value of real property and the maximum ad valorem tax on real property. The full cash value, once established, is subject to annual adjustment to reflect inflation at a rate not to exceed 2% or a reduction in the California Consumer Price Index. There may also be declines in valuations if the California Consumer Price Index is negative.

Proposition 8 provides for the assessment of real property at the lesser of its originally determined (base year) full cash value compounded annually by the inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based on Proposition 8 do not establish new base year values, and the property may be reassessed as of the following lien date up to the lower of the then -current fair market value or the factored base year value. The City experienced a small Proposition 8 reduction in property values at the start of the recession in 2008. Assessed value remained level for a period and pre -recession assessed value was achieved by 2012. Assessed values have continued to increase each year thereafter. See "RISK FACTORS — Constitutional Limitation on Taxes and Expenditures — Article XIIIA" and "— Proposition 8 Adjustments" herein.
29 4885-9887-4678.9

TABLE NO. 9

GROSS ASSESSED VALUE OF ALL TAXABLE PROPERTY
(in thousands)
Fiscal Year
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
Source: City of Placentia
Assessed Value
$5,206,770
5,515,584
5,877,006
6,135,107
6,443,173
6,775,240
7,053,115
7,352,050
7,561,131
8,129,792
Change

5.9%

6.6%

4.4%

5.0%

5.2%

4.2%

2.8%

7.5%
Proposition 19. Voters in November 2020 approved a Statewide ballot ("Proposition 19") that amends Article XIIIA to: (i) expand special rules that give property tax savings to homeowners who are over the age of 55, severely disabled, or whose property has been impacted by wildfire or natural disaster, when they buy a different home; (ii) narrow existing special rules for inherited properties; and (iii) dedicate most of the potential new State revenue generated from Proposition 19 toward fire protection. The City is unable to predict how it would affect the relationship of the assessed value between land use types (i.e., residential versus commercial) in the City in future years or what other impacts Proposition 19 might have on the local economy or the City's financial condition in future years.

Largest Taxpayers. The principal property taxpayers for Fiscal Year 2021-22 are as shown in Table No.

10. The City does not anticipate any material changes to this list for Fiscal Year 2022-23. 30 4885-9887-4678.9

TABLE NO. 10

LARGEST PROPERTY TAXPAYERS
FOR FISCAL YEAR ENDING JUNE 30, 2022
(in thousands)
Taxpayer
Fairfield Placentia Place LLC
Placentia 422
Villa Angelina Apartment Fund LTD
MG Union Place Apartments LLC
Placentia -Linda Hospital Inc.

Sedona-Placentia Owner LLC
NMC Placentia LLC
Reef Imperial Rose Inc.

Donahue Schriber Realty Group
Arlon Graphics LLC
Assessed
Valuation
$112,754
60,612
57,955
47,445
40,374
39,650
37,553
31,639
29,428
28,897
Total $486,307
Percent
of Total

1.49%
.80
.77
.63
.53
.52
.50
.42
.39
.38

6.43%
Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.

Property Tax Collections. Property tax levies and collections for the City for the last five fiscal years are set forth in Table No. 11. The amount of the levy of property tax revenue that can be allocated to the City depends upon the actual collections of taxes within the City. Substantial delinquencies in the payment of property taxes could impair the timely receipt by the City of property tax revenues.

TABLE NO. 11

SECURED TAX LEVIES AND COLLECTIONS
Collections within the
Fiscal Year Total Fiscal Year of the Levy
Ended Tax Levy for Percentage
June 30 Fiscal Year Amount of Levy
2018 $13,471,679 $13,421,607 99.63%
2019 14,144,498 14,244,954 100.71%
2020 14,623,234 14,675,128 100.35%
2021 15,211,067 15,384,500 101.14%
2022 15,734,335 15,777,022 100.27
Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.

Redevelopment - Related Property Tax Considerations. The California Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code of the State) authorized the redevelopment agency of any city or county to receive an allocation of tax revenues resulting from increases in assessed values of properties within designated redevelopment project areas (the "incremental value") occurring after the year the project area was formed. In effect, local taxing authorities, such as the City, realized tax revenues only on the assessed value of such property at the time the redevelopment project was created for the duration of such redevelopment project. Although Assembly Bill No. 26 ("AB X1 26"), enacted on June 29, 2011 as Chapter 31 4885-9887-4678.9

5 of Statutes of 2011, statutorily dissolved redevelopment agencies as of February 1, 2012, the enforceable obligations of dissolved redevelopment agencies continue to be paid from property taxes derived from such incremental value until the enforceable obligations are paid in full in accordance with Parts 1.8 (commencing with Section 34161) and 1.85 (commencing with Section 34170) of Division 24 of the California Health and Safety Code (as such statutory provisions may be amended from time to time the "Dissolution Act").

Under the Dissolution Act, taxing entities within redevelopment projects, such as the City, are to receive distributions (in proportion to such taxing entity's share of property tax revenues in the tax rate area for the applicable fiscal year) of residual amounts of property taxes attributable to incremental value of the redevelopment projects on each June 1 and January 2, after payment of: (i) tax sharing obligations established previously pursuant to the Community Redevelopment Law, (ii) enforceable obligations of the successor agency to the former redevelopment agency, and (iii) an administrative cost allowance to such successor agency. As enforceable obligations of the former redevelopment agency and its successor agency are paid and retired, residual amounts of property tax revenues attributable to redevelopment project area incremental value are expected to increase over time.

The table below summarizes the distributions received by the City of its share of residual amounts of property taxes derived from its redevelopment project from Fiscal Year 2016-17 to 2021-22. These amounts are included in property tax revenues in Table No. 13.

TABLE NO. 12

CITY SHARE OF RESIDUAL PROPERTY TAXES
Fiscal Year Residual Property Taxes
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
$154,678
15,889
188,399
119,858
208,716
171,153
Source: Orange County Auditor -Controller.

Enhanced Infrastructure Financing District. The City formed its Enhanced Infrastructure Financing District ("EIFD") in 2019 in partnership with the County. The EIFD boundaries encompass just over 300 acres of land, representing approximately 7% of the City. The EIFD includes the City's Old Town Placentia Revitalization Plan area, the proposed Metrolink station and the City's Transit -oriented Development Packing House District. Similar to the former redevelopment tax allocation process, the EIFD will receive an allocation of the City's share and the County's share of tax revenues resulting from increases in assessed values of properties within the EIFD (the "incremental value") occurring after the year the EIFD is formed.

The City limited the contribution to the EIFD to approximately 50% of the City's incremental property tax revenues generated in the EIFD. The City's General Fund will receive the remaining approximate 50% of incremental property tax revenues generated by incremental value of property in the EIFD. The County has also limited its contribution to the EIFD to approximately 50% of the County's incremental property tax revenues generated in the EIFD. The majority of new development in the City is expected to occur in the EIFD. [Discuss proposed amendment to EIFDI
Property Taxes in Lieu of Motor Vehicle License Fees. The motor vehicle license fee ("VLF") is an annual fee on the ownership of a registered vehicle in California. The City received a portion of VLF collected state-wide, until State budget changes altered the payment from a distribution of VLF to a payment 32 4885-9887-4678.9

of property taxes in lieu of VLF. The total amount budgeted for Fiscal Year 2022-23 is approximately $6.0 million and is shown in Table No. 13 as "Property tax in lieu of VLF." Local Taxes
In addition to ad valorem taxes on real property, the City receives the following non -real estate local taxes (see "RISK FACTORS — Constitutional Limitation on Taxes and Expenditures — Proposition 218" herein):

Sales and Use Taxes. Sales tax is collected and distributed by the California Department of Tax and Fee Administration ("CDTFA" - formerly the State Board of Equalization). Each local jurisdiction receives an amount equal to 1% of taxable sales within their jurisdiction.

Measure U. On November 6, 2018, voters in the City approved "Measure U," the levy of an additional 1% sales tax, commencing April 1, 2019.

Proposition 172. The City also receives a portion of a permanent statewide '/2 cent sales tax approved by voters in 1993 by Proposition 172. Sales tax generated by this increase is recorded in the General Fund and used to offset certain expenses for public safety. These amounts are included in the sales tax revenues shown in Table No. 13.

Utility Users' Tax. The City levies a utility users' tax, which was approved by voters in 1970 and is restricted for capital equipment replacement, special capital projects or general City operations support. A current tax rate of 3.5% applies to electricity, water, and gas services. Until 2018, these revenues were recorded in a separate Utility Users' Tax Fund and transferred during the year to the General Fund.

Beginning in 2019, these revenues are recorded in the General Fund.

Franchise Taxes. The City levies franchise fees on its utility, trash collection and cable television franchises by agreement.

Transient Occupancy Tax. The City levies a transient occupancy tax on hotel and motel bills. The City's current transient occupancy tax ordinance provides for a rate of 10%. The rate was last modified by ordinance adopted in 1985.

Property Transfer Tax. This is the documentary stamp tax which is assessed for recordation of real property transfers.

There is no time limit established for the collection of the utility users' tax, Measure U sales tax, franchise tax, or transient occupancy tax. See "RISK FACTORS — Constitutional Limitation on Taxes and Expenditures - Proposition 218" herein.

Business License Tax. Business license tax is collected based on gross receipts. The business license tax is approximately $1.02 million in Fiscal Year 2021-22. The City includes business license tax in "Licenses and Permits" for the purposes of its audited financial statements, and such amounts are not included in Table No. 13.

A history of actual tax revenue by source are shown for Fiscal Years 2017-18 through 2021-22, together with the budget for Fiscal Year 2022-23 and 2023-24 in Table No. 13. 33 4885-9887-4678.9

TABLE NO. 13

GENERAL FUND TAX REVENUES BY SOURCE
General Property Tax
Property Tax in Lieu of VLF
Total Property Tax
Sales Tax
Sales Tax -Measure U
Transient Occupancy Tax
Utility User Tax
Franchise Tax
Property Transfer Tax
Other Taxes
Total
Actual
2018 2019
$ 9,709,857 $10,389,889
4,813,706 5,087,698
14,523, 563 15,477,587
6,948,279 6,757,698
1,426,966
968,396 961,796
2,544,637 2,461,438
2,270,265 2,340,329
224,818 205,369
62,395 40,075
Budget Budget
2020 2021 2022 2023 2024
$10,666,292 $11,218,098 $11,843,166 $12,365,432 $13,183,023 5,314,516 5,534,014 5,708,260 6,072,651 6,395,000
15,980, 808 16,752,112 17,191,426 18,43 8,083 19,578,023 6,861,920 7,409,742 8,491,412 8,975,000 9,175,000
6,278,995 7,702,915 8,756,568 8,850,000 9,200,000
767,421 674,854 1,385,271 1,425,000 1,475,000
2,362,270 2,502,705 2,689,314 2,550,000 2,550,000
2,650,604 2,709,000 2,735,000
188,358 312,328 450,575 415,000 330,000
91,405 35,624 6,291 5,140 5,500
$27,542,353 $29,671,258 $34,888,961 $37,856,465 $41,621,461 $43,367,223 $45,048,523 Source: City of Placentia.

Employee Relations and Collective Bargaining
City employees are represented by four bargaining units. The largest unit is the Placentia City Employees' Association which represents approximately 40% of all City employees. Most City employees are covered by negotiated agreements. Executive Management and Mid Management groups are unrepresented. The City is in negotiations with the bargaining units. Terms under the respective Memoranda of Understanding will continue to be observed during negotiations of new contracts.

Bargaining Unit
Placentia City Employees' Association
Placentia Police Officers Association
Placentia Police Management Association
Placentia Fire Fighter's Association
Retirement Plans
Lease Revenue Bonds, Series 2020A
Expiration Date of
Memorandum of Understanding
June 30, 2023
June 30, 2023
June 30, 2023
June 30, 2023
In August 2020, Ca1PERS notified the City as to the amount of the currently unamortized, unfunded accrued actuarial liability (the "Unfunded Liability") for each of the City's Miscellaneous Plan (the "Miscellaneous Plan"), and Safety Police Plan (the "Safety Plan") based on the actuarial valuation reports as of June 30, 2019 (the "2019 Ca1PERS Reports"), which is the most recent actuarial valuation routinely performed by Ca1PERS.

On November 12, 2020, the Authority issued its Lease Revenue Bonds, Series 2020A (Federally Taxable) (the "Series 2020A Bonds") to fund 100% of the City's Unfunded Liability for the Miscellaneous Plan and Safety Plan. Upon the issuance of the Series 2020A Bonds, the City paid $43,777,218 to Ca1PERS for deposit to the Ca1PERS Payment Fund. This amount represents the June 30, 2019 Unfunded Liability for the Miscellaneous Plan and Safety Plan shown in the 2019 Ca1PERS Reports, rolled forward to November 12, 2020 and taking into account payments made during Fiscal Year 2019-20 and Fiscal Year 2020-21. The 34 4885-9887-4678.9

City also paid the $1,932,562 remaining monthly Unfunded Liability payments due for the Miscellaneous Plan and Safety Plan for the balance of Fiscal Year 2020-21.

As a result, the City projects average annual savings of approximately $500,000 per year for the next 25 years and City Council has decided to deposit 50% of those savings into a pension trust.

The information provided below does not reflect the payment of the Unfunded Liability with the Series 2020A Bonds.

Defined Benefit Plan
This caption contains certain information relating to CalPERS. The information is primarily derived from information produced by CalPERS, its independent accountants and its actuaries. Neither the City nor the Underwriter has independently verified the information provided by CalPERS and neither makes any representations nor expresses any opinion as to the accuracy of the information provided by CalPERS.

The comprehensive annual financial reports of CalPERS are available on its Internet website at www.calpers.ca.gov . The CalPERS website also contains CalPERS' most recent actuarial valuation reports and other information concerning benefits and other matters. The textual reference to such Internet website is provided for convenience only. None of the information on such Internet website is incorporated by reference herein. Neither the City nor the Underwriter can guarantee the accuracy of such information.

Actuarial assessments are `forward -looking" statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future.

Plan Description. The City provides retirement benefits, disability benefits, periodic cost -of -living adjustments, and death benefits to plan members and beneficiaries (the "Plans"). The Plans are part of Ca1PERS, an agent multiple -employer plan administered by Ca1PERS, which acts as a common investment and administrative agent for participating public employers within the State. Benefit provisions are established by State statute and by City resolution covering separate employee bargaining groups. The Plans as described herein cover two separate employee groups - Miscellaneous and Public Safety.

California Public Employees' Pension Reform Act of 2013. On September 12, 2012, the Governor signed into law the California Public Employees' Pension Reform Act of 2013 ("PEPRA"), which made changes to Ca1PERS Plans, most substantially affecting new employees hired after January 1, 2013 (the "Implementation Date"). For non -safety Ca1PERS participants hired after the Implementation Date, PEPRA changed the normal retirement age by increasing the eligibility for the 2% age factor from age 55 to 62 and increased the eligibility requirement for the maximum age factor of 2.5% to age 67.

PEPRA also: (i) requires all new participants enrolled in Ca1PERS after the Implementation Date to contribute at least 50% of the total annual normal cost of their pension benefit each year as determined by an actuary to a maximum of 8% of salary, (ii) requires Ca1PERS to determine the final compensation amount for employees based upon the highest annual compensation earnable averaged over a consecutive 36 -month period as the basis for calculating retirement benefits for new participants enrolled after the Implementation Date, and (iii) caps "pensionable compensation" for new participants enrolled after the Implementation Date at 100% of the federal Social Security contribution and benefit base for members participating in Social Security or 120% for members not participating in Social Security, while excluding previously allowed forms of compensation under the formula such as payments for unused vacation, annual leave, personal leave, sick leave, or compensatory time off. 35 4885-9887-4678.9

Benefit Tiers. In 2011 the City established two tiers of benefits for employees in the Miscellaneous Plan, based on date of hire ("Tier 1" and "Tier 2"). Benefits were reduced for Tier 2 employees hired on or after January 1, 2011.

Due to PEPRA, the City added a benefit tier in each employee group for employees subject to PEPRA ("PEPRA Tier"). Ultimately, PEPRA is expected to reduce the City's long-term pension obligation as existing employees retire and new employees are hired to replace them. The table below details the benefit provisions for each plan for the year ended June 30, 2022.

Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of
eligible compensation
Required employee
contribution rate
Required employer
contribution rate
Miscellaneous
Tier 1

2.0% @ 55
5 years service
monthly for life
55 2.0%

7.000%

10.880%
Miscellaneous
Tier 2

2.0% @ 60
5 years service
monthly for life
60 2.0%

7.000%

9.130%
Miscellaneous
PEPRA

2.0% @ 62
5 years service
monthly for life
62 2.0%

6.750%

7.590%
Safety Safety PEPRA

3.0%@50 2.7%@57
5 years service 5 years service
monthly for life monthly for life
50 50-57

3.0% 2.7%

9.000% 13.000%

23.710% 13.130%
Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.

Funding Policy. Active members in the Plans are required to contribute a percent of their annual covered salary as shown in the charts above. All employees pay their own employee contributions towards retirement.

Employees Covered. At the June 30, 2020 measurement date, the following employees were covered by the benefit terms for each plan:

Active employees
Transferred employees
Separated employees
Retired employees and
beneficiaries
Total
Miscellaneous Miscellaneous Miscellaneous Safety
Tier 1 Tier 2 PEPRA Safety PEPRA
23 9 61 22 29
52 13 36 19 10
31 2 32 10 6
180
286 24
2 119
131 170 45
Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.

The Safety Plan as of June 30, 2018 includes both the Police Safety employees and former Fire Safety employees. The City joined the Fire Authority in 1995 to provide for mutual fire protection, prevention, and suppression services and related and incidental services including, but not limited to, emergency medical and transport services, hazardous materials regulation, as well as providing facilities and personnel for such services. At that time, all City fire personnel were no longer City employees and the Safety Plan with respect to such personnel was closed, although the City's obligation to provide for a portion of fire 36 4885-9887-4678.9

personnel retirement cost continued. In 2019, the City negotiated with Ca1PERS to remove the remaining liability for such fire personnel from the Safety Plan and agreed to a separate repayment schedule for that amount (the "Fire Repayment Plan").

As described herein, the City terminated its contract with the Fire Authority and hired personnel to staff its newly -created Fire & Life Safety Department ("Fire Department"). Employees serving the Fire Department are not included in the Safety Plan. The retirement benefits contributed for Employees serving the Fire Department are described below under "Defined Contribution Plan." Funding Policy. Active members in the Plans are required to contribute a percent of their annual covered salary as shown in the chart below. All employees pay their own employee contributions towards retirement.

Actuarial Methods and Assumptions Used to Determine Total Pension Liability. The total pension liabilities in the June 30, 2019 actuarial valuations, were determined using the following actuarial assumptions:

Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Projected Salary Increase
Mortality
Post -retirement benefit increase
June 30, 2019
June 30, 2020
Entry -Age Normal Cost Method

7.15%

2.50%
Varies by Entry Age and Service
Derived using Ca1PERS' Membership Data for all Funds
Contract COLA up to 2.5% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.5% thereafter The probabilities of mortality are based on the 2017 Ca1PERS experience study ("Experience Study") for the period 1997 to 2015. Pre -retirement and post -retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP -2016 published by the Society of Actuaries. Further details of the Experience Study can be found on the Ca1PERS website under Forms and Publications.

Changes in Actuarial Assumptions. Changes in actuarial assumptions generally take two years to affect the City's contribution rate due to the time required by Ca1PERS to calculate and implement the change.

For example, a change made effective July 1, 2018 is reflected in the City's contribution rates (normal cost or unfunded liability) for Fiscal Year 2020-21.

The Ca1PERS Board of Administration has made numerous changes that are reflected in the calculation of the pension liability and the annual contribution toward the unfunded pension liability. The most significant change was a reduction over a period of years to reduce the discount rate from 7.5% to 7.0%. The reduced rate was fully reflected in the Ca1PERS June 30, 2018 actuarial valuation.

Other assumption changes include a reduction in the payroll growth and inflation and, beginning with the June 30, 2019 calculation, changing the amortization of investment gains or losses to 20 years from 30 years. Ca1PERS' Chief Actuary stated that the revised approach provides a single measure of funded status and unfunded liabilities, less rate volatility in extreme years, a faster path to full funding and more transparency to employers about future contribution rates. These changes accelerate the repayment of unfunded liabilities (including Ca1PERS' Fiscal Year 2009 market losses) of the City's Plans in the near term.
37 4885-9887-4678.9

In 2015, the Ca1PERS Board of Administration also adopted a funding risk mitigation policy intended to incrementally lower its discount rate. The funding risk mitigation policy was revised in 2017 and the Ca1PERS Board of Administration suspended implementation of the policy until Fiscal Year 2020-21. The City anticipates the policy will result in a lowering of the discount rate but cannot guarantee when the discount rate will be lowered and at what rate. More information about the funding risk mitigation policy can be accessed through Ca1PERS' web site at the following website address:
https://www.calpers.ca.gov/docs/funding-risk-mitigation-policy.pdf . The reference to this Internet website is provided for reference and convenience only. The information contained within the website may not be current, has not been reviewed by the City and is not incorporated in this Official Statement by reference.

Table No. 14 shows the Ca1PERS impact of the actuarial assumption changes on the City's pension costs.

Contribution Rates. The contribution requirements of Plan members and the City are established by Ca1PERS. Ca1PERS modified the calculation of the contribution rates beginning in Fiscal Year 2017-18.

Ca1PERS now represents only the employer's normal cost as a percentage of payroll and includes a dollar amount for the amortization of the unfunded actuarial liability (UAL). Shown in Table No. 14 are the actual or Ca1PERS projections of the normal cost and amortization of the UAL for the City.

TABLE NO. 14

PROJECTED EMPLOYER RETIREMENT CONTRIBUTIONS
Miscellaneous Safety(3)
Fiscal Year Normal Cost(1) Amortize UAL Normal Coste') Amortize UAL 2023-24 12.5% $0 27.1% $0
2024-25(2) 12.5 0 27.1 0
2025-26(2) 12.5 0 27.1 0
2026-27(2) 12.5 0 27.1 0
2027-28(2) 12.5 0 27.1 0
2028-29(2) 12.5 0 27.1 0
(1) For Tier 1 employees, does not reflect lower PEPRA rates (7.68% for Miscellaneous PEPRA Plan and 13.75% for Safety PEPRA Plan in 2023-24).
(2) Projected by Ca1PERS based on various assumptions as of the June 30, 2021 actuarial valuation. (3) Excludes former Fire Safety employees.

Source: California Public Employees' Retirement System Miscellaneous Plan of the City of Placentia Annual Valuation Report as of June 30, 2021 and the Safety Police Plan of the City of Placentia Annual Valuation Report as of June 30, 2021.

The remaining payments under the Fire Repayment Plan are as follows: [Confirm/Update] Fiscal Year Payment
2022-23 $379,968
2023-24 379,968
2024-25 348,304
Pension Liabilities. The City's net pension liability for the Plans is measured as the total pension liability, less the pension plan's fiduciary net position. The City's changes in net pension liability for the Plans between June 30, 2017 and June 30, 2021 was as follows:
38 4885-9887-4678.9

TABLE NO. 15

CHANGES IN NET PENSION LIABILITY BY PLAN

MISCELLANEOUS PLAN
Measurement period, year ended
Plan's proportion of the net pension liability
Plan's proportionate share of the net pension liability Plan's covered payroll
Plan's proportionate share of the net pension liability as a percentage of covered payroll
Plan's fiduciary net position
Plan's fiduciary net position as a percentage of the total pension liability
Plan's proportionate share of aggregate employer
contributions
6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017
(0.45585%) 0.38926% 0.14843% 0.14479% 0.14212%
($8,655,720) $16,419,169 $15,209,436 $13,952,246 $14,094,828 $4,587,533 $4,453,916 $ 4,324,190 $ 4,198,243 $ 4,075,964 (188.68%) 368.65% 351.73% 332.34% 345.80%
$67,193,906 $42,161,022 $41,142,220 $40,682,189 $39,816,871 114.79% 71.97% 73.01% 74.46% 73.86%
$2,642,842 $1,383,994 $ 1,139,534 $ 932,993 $ 785,438
Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.

TABLE NO. 16

CHANGES IN NET PENSION LIABILITY BY PLAN

SAFETY PLAN
Measurement period, year ended
Plan's proportion of the net pension liability
Plan's proportionate share of the net pension liability Plan's covered payroll
Plan's proportionate share of the net pension liability as a percentage of covered payroll
Plan's fiduciary net position
Plan's fiduciary net position as a percentage of the total pension liability
Plan's proportionate share of aggregate employer
contributions
6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017
(0.41630%) 0.44230% 0.26351% 0.27222% 0.27240%
($14,609,905) $29,467,303 $27,002,144 $26,231,540 $27,017,047 $4,381,633 $4,254,013 $ 4,130,110 $ 4,009,816 $ 3,893,025

0.00% 692.69% 653.79% 654.18% 693.99%
$113,454,370 $69,454,497 $69,358,418 $65,913,238 $62,459,293 114.78% 70.21% 71.99% 71.53% 69.81%
$6,061,344
$2,517,884 $ 2,108,590 $ 3,034,432 $ 2,753,462
Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the City's net pension liability at June 30, 2022, calculated using the discount rate of 7.15%, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current rate:

Miscellaneous Plan Safety Plan
Net Pension Liability Net Pension Liability Total
Net Pension Liability 1% Decrease in Discount Rate ($926,869) ($1,304,587) ($2,231,456) Net Pension Liability at June 30, 2022 Discount Rate (8,655,720) (14,609,905) (23,265,625) Net Pension Liability 1% Increase in Discount Rate (15,045,048) (25,538,580) (40,583,628) Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.

See Note 8 of the City's Annual Comprehensive Financial Report included in "APPENDIX B" for further information about the Plan.
39 4885-9887-4678.9

Fire UAL Payoff Loan. On May 5, 2020 the City approved a payment plan to Cal PERS to pay off the $1,878,760 unfunded accrued liability (UAL) on the termination of the City's Safety -Fire category of the City's contract with Ca1PERS. The payment plan is for a period of 5 years with an interest rate of 1.95%.

Payments of $31,664 are payable monthly through May 2025.

Defined Contribution Plan
The City has adopted a 401(a) defined contribution plan through Independent City/County Management Association Retirement Corporation (ICMA-RC) for newly -hired Fire personnel effective January 1, 2020 (the "401(a) Plan"). This alternative retirement benefit is in lieu of a Ca1PERS retirement plan otherwise provided to City employees. The 401(a) Plan highlights are:
• Only provided to sworn full-time fire personnel
• Employees are eligible to participate upon employment without any waiting period • City will contribute 10% of base earnings on behalf of each participant • Earnings do not include any overtime, bonuses or additional pay incentives The City's payroll for employees covered by the 401(a) Plan for the year ended June 30, 2022, was $2,659,736. Total employee contributions paid by the City amounted to $187,311 or 7.04% of covered payroll and of total payroll. As of June 30, 2022, the 401(a) Plan had 26 participants and the market value of the 401(a) Plan amounted to $16,035,262.

Other Postemployment Benefits
Plan Description. The City provides single employer postemployment defined benefits (known as "other postemployment benefits" or "OPEB") to retired employees in the form of a contribution towards their health insurance premiums under the Ca1PERS health plan which provides health insurance benefits to eligible retirees in accordance with various labor agreements (the "OPEB Plan").

All employees hired prior to November 21, 1995 are in Tier I and become eligible for these benefits as long as they are 50 years of age or older and have worked for the City a minimum of five years and elect a service retirement from the City. The health benefits for Tier I retirees include medical, dental, optical, and life. These benefits are considered to be vested for Tier I employees. The City pays the same contribution for these benefits to Tier I employees as is paid to active employees. Vision benefits are also provided to Tier I employees who retired after September 30, 1990. The life insurance is available to Tier I retirees until they reach age of 70.

All employees hired on or after November 21, 1995 are Tier II. The City pays the minimum required medical insurance contribution established by Ca1PERS for Tier II employees.

At June 30, 2020, the most recent valuation date, the following current and former employees were covered by the benefit terms under the Plan:

Active plan members 168
Retirees 148
Total 316
40 4885-9887-4678.9

Total OPEB Liability. The City's total OPEB liability was measured as of June 30, 2020. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2020. The total OPEB liability at June 30, 2022 was $24,910,487.

Contributions. The obligation of the City to contribute to the plan is established and may be amended by the City Council. The City Council has established a policy of funding the actuarially determined contribution (ADC) on a pay as you go basis. For the fiscal year ended June 30, 2022, the City's average contribution rate was 8.16% of covered payroll. Employees are not required to contribute to the plan.

On November 16, 2021, the City Council approved an updated Memorandum of Understanding ("MOU") with the Placentia City Employees Association ("PCEA"). The MOU capped the City's medical contributions at the 2021 contribution levels for active employees and retirees eligible under the 1995 Insurance Benefits Agreement with PCEA. The City Council also approved an updated MOU with the Placentia Police Management Association ("PPMA") which included the addition of the Fire Battalion Chiefs thereby creating the Placentia Police and Fire Management Association ("PPFMA"). The MOU capped the City's medical contributions at the 2021 contribution levels for active employees and retirees eligible under the 1995 Insurance Benefits Agreement with PPMA. On November 16, 2021, the City Council approved benefits for unrepresented employees that included caps on medical contributions at the 2019 rates for active employees and retirees. On December 7, 2021, the City Council approved an updated MOU with the Placentia Police Officers Association ("PPOA"). The MOU capped the City's medical contributions at the 2021 contribution levels for active employees and retirees eligible under the 1995 Insurance Benefits agreement with PPOA. On December 6, 2022 the City Council approved the first MOU with the Placentia Firefighters' Association. The MOU capped the City's medical contributions at the 2022 levels for active employees.

Funded Status and Funding Progress. The net OPEB liability as of June 30, 2019, June 30, 2020 and June 30, 2021 is calculated as shown below. The schedule of funding progress, included in the required supplementary information section of the City's Annual Comprehensive Financial Report, will present multi -year trend information about whether the actuarial value of plan assets (if any) is increasing or decreasing over time relative to the actuarial accrued liability for the benefits. 41 4885-9887-4678.9

TABLE NO. 17

CHANGES IN NET OPEB LIABILITY
Measurement period, year ending:

Total OPEB liability
Service cost
Interest
Changes of benefit terms
Differences between expected and actual experience
Changes of assumptions
Benefit payments, including refunds of member contributions Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending (a)
OPEB fiduciary net position
Contributions - employer
Net investment income
Benefit payments, including refunds of member contributions Administrative expense
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Plan net OPEB liability - ending (a) - (b)
Plan fiduciary net position as a percentage of the total OPEB liability Covered payroll
Plan net OPEB liability as a percentage of covered payroll 6/30/2021 6/30/2020 6/30/2019
$532,568 $359,454 $542,976
691,435 919,735 1,092,405
(4,989,665) - (2,606,242)
(1,506,167) 4,699,117 332,593
(1,143,510) (1,142,314) (1,112,888)
(6,415,339) 4,835,992 (1,751,156)
31,325,826 26,489,834 28,240,990
$24,910,487 $31,325,826 $26,489,834
$1,132,073 $1,146,160
(1,132,073) (1,146,160)
$24,910,487
$1,142,314
(1,142,314)
$31,325,826 $26,489,189

0.00% 0.00% 0.00%
$17,448,843 $13,993,405 $12,286,189
143% 224% 216%
Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.

Actuarial Methods and Assumptions. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future.

Examples include assumptions about future employment, mortality, and the health care cost trend. Amounts determined regarding the funded status of the plan and the Actuarially Required Contribution of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

In the June 30, 2020 actuarial valuation, the entry age normal actuarial cost method was used to value liabilities. Under the entry age normal cost method, an average age at hire and average retirement age are determined for eligible employees. The actuarial assumptions included (1) a 2.21% discount rate and (2) inflation of 2.50%.

Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City participates in municipal agency risk pools for its property, workers' compensation, and excess liability coverage. 42 4885-9887-4678.9

General Liability. The City is a member of the Public Agency Risk Sharing Authority of California ("PARSAC"), a joint powers authority, which provides joint protection programs for public entities covering automobile, general liability, errors and omission losses, workers' compensation, and property claims. Under the program, the City has a $100,000 retention limits similar to a deductible with the PARSAC being responsible for losses above that amount up to $1 million.

The PARSAC has additional coverage of $34 million in excess of its $1 million retention limit affiliated risk management authorities. The PARSAC also provides $1 billion aggregate per occurrence property coverage to its members with such coverage provided by purchased insurance.

Worker's Compensation. The City is a member of the Local Agency Workers' Compensation Excess (the "LAWCX"), a joint powers authority, which provides joint protection programs for public entities covering worker's compensation claims. Under the program, the City has a $250,000 retention limits similar to a deductible with the LAWCX being responsible for losses above that amount up to $4.7 million. The City has purchased excess coverage for Workers' Compensation excess of $5 million.

Other Insurance. The City has Crime Bond Insurance coverage as a member of PARSAC under Alliant Crime Insurance Program (the "ACIP") excess of $2,500 up to $1 million. This insurance includes coverage for faithful performance of duty, forgery or alteration, inside premises theft of money and securities, inside premises robbery and safe burglary other property, outside the premises, computer fraud, funds transfer fraud, and money orders and counterfeit paper currency fraud.

A reconciliation of changes in aggregates for claims filed in the current and prior fiscal years are as follows:

Worker's Compensation
Fiscal Year
Ending
June 30
2018-19
2019-20
2020-21
2021-22
Beginning
Balance
$1,927,153
2,207,945
1,975,587
3,435,173
Claims and
Changes
$944,772
153,342
2,157,487
1,034,044
General Liability
Fiscal Year
Ending Beginning Claims and
June 30 Balance Changes
2018-19 $69,015 $19,428
2019-20 23,901 264,501
2020-21 259,657 230,514
2021-22 435,330 272,173
Claims
Payments
$(663,980)
(385,700)
(697,901)
(762,874)
Ending
Balance
$2,207,945
1,975,587
3,435,173
3,706,343
Claims Ending
Payments Balance
$(64,542) $23,901
(28,745) 259,657
(54,841) 435,330
601,365 1,308,868
Source: City of Placentia Annual Comprehensive Financial Report for the year ending June 30, 2022.

There have been no significant changes to insurance coverage as compared to last year and the City has not experienced settlements in excess of insurance coverage during the past three years. 43 4885-9887-4678.9

City Investment Policy and Portfolio
The City administers a pooled investment program, except for those funds which are managed separately by trustees appointed under bond indentures. This program enables the City to combine available cash from all funds and to invest cash that exceeds current needs. Under the City's most current investment policy adopted by the City Council on July 19, 2022, and in accordance with the Government Code, the City may invest in the following types of investments subject to certain limitations on maturity and amount:

California Local Agency Bonds
State Obligations
Federal Agencies Securities
Commercial Paper
Federally Insured Time Deposits
Local Agency Investment Fund (LAIF)
Money Market Funds
Orange County Investment Pool
California Local Agency Obligations
U.S. Treasury Obligations
Banker's Acceptances
Negotiable Certificates of Deposits
Repurchase Agreements
Medium Term Notes
Passbook Savings/Demand Deposits
Joint Powers Authority Pools (JPA)
As of June 30, 2022, the fair value of the City Treasurer's investment portfolio (including cash) was $35.9 million. The diversification of the City Treasurer's investment portfolio assets as of such date is shown in the following table.

Type of Investment % of Combined Portfolio
LAIF
Money Market Mutual Funds
Negotiable Certificates of Deposit(')
U.S. Treasury Securities(')
Federal Agency Securitiee
Held by Fiscal Agent:

Money Market Mutual Funds

0.04%

0.06 2.54

74.74 2.59

20.03 100.00%
(1) Pricing based on institutional bond quotes — evaluations based on various market and industry inputs.

Source: City of Placentia Annual Comprehensive Financial Report for the year ending June 30, 2022.
[As of , 20% of bonds mature within 1-6 months and 80% of bonds mature within 1-5 years.] [Confirm/Update]
Obligations of the City
In addition to the OPEB liability, compensated absences and claims payable, the City had the following outstanding obligations as of June 30, 2022 that are payable from the City's general fund. 44 4885-9887-4678.9

Obligation
2022 Lease Private Placement
2020A Lease Revenue Bonds
Capital Lease — Radios(1)
Capital Lease - Fire Trucks(1)
Capital Lease - Fire Trucks(1)
Fire Repayment Plan(2)
Other Leases Payable
Original
Issue
$2,189,027.38
52,950,000.00
1,319,360.00
3,400,000.00
1,795,000.00
1,808,760.00
Various
June 30, 2022
Amount Final
Outstanding Maturity
$2,189,027 2027
51,890,000 2045
664,014 2027
2,785,389 2030
1,460,450 2030
1,076,463 2025
656,703 2026
(') The annual payment for the radio equipment is approximately $167,500, and the combined annual payments for the fire trucks are approximately $422,000, commencing in Fiscal Year 2020-21. (2) See "Retirement Plans" above. The annual payment is approximately $380,000 commencing in Fiscal Year 2020-21.

Source: City of Placentia.

Financial Statements
The City's accounting policies conform to generally accepted accounting principles and reporting standards set forth by the State Controller. The audited financial statements also conform to the principles and standards for public financial reporting established by the National Council of Government Accounting and the Governmental Accounting Standards Board ("GASB").

Basis of Accounting and Financial Statement Presentation. The government -wide financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the modified accrual basis of accounting.

Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

The City retained the firm of CliftonLarsonAllen LLP, Irvine, California, to examine the general purpose financial statements of the City as of and for the Fiscal Year ended June 30, 2022. The Table Nos. 19 and 20 summarize the audited Balance Sheet and audited Statement of Revenues, Expenditures and Changes in Fund Balance of the City's General Fund for Fiscal Years 2017-18 through 2021-22.

See "APPENDIX B" hereto for the audited financial statements for the Fiscal Year ended June 30, 2022.

The City has not requested, and the auditor has not provided, any review or update of such statements in connection with the inclusion in this Official Statement.

GASB Statement No. 54 Fund Balance Reserves. GASB No. 54 establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds.

The initial distinction that is made in reporting fund balance information is identifying amounts that are considered nonspendable, which are amounts that cannot be spent because they are either (a) not spendable 45 4885-9887-4678.9

in form or (b) legally or contractually required to be maintained intact. GASB No. 54 also provides for additional classification as "restricted," "committed," "assigned," and "unassigned" based on the relative strength of the constraints that control how specific amounts can be spent.

Pursuant to the City's Reserve Policy (see "Financial Policies" above), the City designates certain of the sales tax generated by Measure U as "Committed" fund balance for specific purposes.

The table below shows General Fund fund balances as of June 30, 2022. The City has estimated the fund balances for June 30, 2022 and June 30, 2023 and can be found in Table No. 8 above under the caption "General Fund Revenues and Expenditures."
Non -Spendable:

Inventory
Prepaid Items
Loans Receivable
Total Non -Spendable
Restricted:

Debt Service
Committed:

Measure U - Infrastructure
Measure U — OPEB
Metrolink Station
Total Committed
Unassigned
Total Fund Balance
$173,020
95,891
2,252,856
2,521,767
2,024
4,035,815
770,595
9,049,313
13,855,723
21,060,689
$37,440,203
Source: City of Placentia Annual Comprehensive Financial Report for fiscal year ending June 30, 2022.
46 4885-9887-4678.9

GASB Statements Regarding Pension and OPEB Liabilities. GASB has issued various statements relating to the reporting of pension and other post -retirement benefit liabilities and expense, and most recently, new accounting and financial reporting requirements for OPEB plans. The required reporting of net pension liability was incorporated into the City's financial statements for the Fiscal Year ending June 30, 2015 and the required reporting of net OPEB liability was incorporated into the City's financial statements for the Fiscal Year ending June 30, 2018. The audited financial statements of the City for the Fiscal Year ended June 30, 2022 included in "APPENDIX B" contain additional information about the retirement plan liabilities and the OPEB liability.

See Note 1 in the City's audited financial statements attached in "APPENDIX B" for a discussion of additional accounting changes.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
47 4885-9887-4678.9

TABLE NO. 19

GENERAL FUND BALANCE SHEET
As of June 30
2018 2019 2020 2021 2022
ASSETS
Cash and investments
Receivables:

Accounts
Taxes
Grants
Accrued interest
Loans and notes
Leases
Prepaid items
Due from other funds
Inventories
Restricted assets:

Cash and investments with fiscal agents
Total assets

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable
Accrued Payroll and Benefits
Deposits Payable
Retentions Payable
Accrued liabilities
Due to other governments
Due to other funds
Advances from other funds
Unearned revenue
Total liabilities
$ 2,264,185 $ 2,976,618 $6,813,870 $14,701,605 $26,088,314 222,950 717,450 3,388,436 253,961 228,067
1,880,509 3,085,095 3,176,169 3,646,695 4,222,000
116,458 6,249 - - -
29,246 62,163 50,120 13,867 210,518
4,934,104 4,624,306 3,950,040 3,462,484 2,634,732
20,743,281
41,868 16,300 93,658 95,891
409,780 1,313,088 858,052 1,371,540 2,620,039
20,322 40,121 60,855 97,075 173,020
1,019,010 571,396 555,258 556,084 2,024
$10,896,564 $13,438,354 $18,869,550 $24,196,969 $57,017,886 $765,337 $1,014,894 $2,490,566 $2,012,903 $1,743,077
1,029,247
1,207,237
41,668
469,772 511,212 731,842 885,312
186 186 186 190
34,130 - - -
1,719
6,483 8,185,730
1,269,425 1,528,011 3,222,594 2,904,888 12,206,959
Deferred Inflows of resources:

Leases — — — — 20,771,263
Unavailable revenues 1,599,592 1,561,106 1,680,505 1,061,610 455,184 Total deferred inflows of resources $ 1,599,592 $ 1,561,106 $ 1,680,505 $ 1,061,610 $21,226,447 Fund balances:

Nonspendable
Restricted
Committed
Assigned
Unassigned (deficit)
Total fund balances
Total liabilities, deferred inflows of
resources and fund balances
4,954,426 4,706,295 3,734,003 3,346,897 2,521,767
1,019,010 571,396 555,258 556,084 2,024
3,400,000 4,528,259 5,810,898 6,433,605 13,855,723
(1,345,889) 543,287 3,866,292 9,893,885 7,204,966
8,027,547 10,349,237 13,966,451 20,230,471 23,584,480
$10,896,564 $13,438,354 $18,869,550 $24,196,969 $57,017,886 Source: City of Placentia Annual Comprehensive Financial Reports. 48 4885-9887-4678.9

TABLE NO. 20

GENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For the year ended June 30
2018 2019 2020 2021 2022
Revenues:

Taxes
Intergovernmental
Licenses and permits
Fines & forfeitures
Investment earnings
Charges for services
Leases and rents
Contributions from Successor Agency
Miscellaneous
Total revenues
Expenditures:

Current:

General government
Public safety
Public works
Community development
Community services
Capital outlay
Debt service:

Principal retirement
Payment to refunding bond escrow agent
Interest and fiscal charges
Debt issuance costs
Total expenditures
Revenues over (under) expenditures
$27,542,353 $29,671,258 $34,830,127 $37,858,390 $41,621,461 252,963 353,354 701,864 9,743 952,389
1,701,878 1,922,689 2,453,827 2,827,761 2,440,102
562,390 438,581 418,752 290,534 503,302
31,161 164,724 170,567 (28,258) (323,152)
1,284,507 1,070,821 885,206 879,298 1,263,215
1,255,240 1,230,532 1,211,622 1,079,979 1,422,831
19,000 30,000 -
708,662 944,874 866,076 460,006 785,684
33,339,154 35,796,833 41,557,041 43,407,453 48,665,832
7,977,778 7,823,758 8,298,766 10,911,110 12,055,475
18,493,951 17,861,015 21,399,386 14,899,543 15,441,982
3,272,875 3,435,887 3,980,719 3,430,456 3,514,281
823,895 997,888 1,198,254 1,215,937 1,482,732
1,398,588 1,343,251 1,537,369 1,437,912 2,289,940
334,139 719,324 7,271,232 3,811,664 5,034,753
1,320,000 1,545,000 582,614 1,270,240 1,320,810
488,521
427,530 293,723 206,426 391,808 343,759
117,995
34,048,756 34,019,846 44,474,766 37,368,670 42,090,248
(709,602) 1,776,987 (2,917,725) 6,038,783 6,575,584
Other financing sources (uses):

Issuance of Debt — — — — 2,189,027
Payment to refunding bond escrow agent — — — — (2,069,027) Issuance of capital lease — — — 976,899 —
Transfers in 1,217,225 714,708 1,039,700 725,096 102,947 Transfers out (554,103) (246,098) (270,300) (1,476,758) (3,444,522) Transfer from Successor Agency — 76,093 — — —
Proceeds from sale of property — — 1,547,438 — —
Proceeds from capital lease — — 4,218,101 — —
Total other financing sources (uses) 663,122 544,703 6,534,939 225,237 (3,221,575) Net change in fund balances (46,480) 2,321,690 3,617,214 6,264,020 3,354,009 Fund balances:

Beginning of year, as restated 8,074,027 8,027,547 10,349,237 13,966,451 20,230,471 End of year $ 8,027,547 $10,349,237 $13,966,451 $20,230,471 $23,584,480 Source: City of Placentia Annual Comprehensive Financial Reports. 4885-9887-4678.9
49 RISK FACTORS
The purchase of the Bonds involves investment risk. If a risk factor materializes to a sufficient degree, it could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include, but are not limited to, the following matters and should be considered, along with other information in this Official Statement, by potential investors.

The Base Rental Payments
Base Rental Payments are Limited Obligations of the City. The Base Rental Payments and other payments due under the Lease Agreement (including a proportionate share of the costs of improvement, repair and maintenance of the Leased Property and taxes, other governmental charges and assessments levied against the Leased Property) are not secured by any pledge of taxes or other revenues of the City but are payable from yearly appropriations of any funds lawfully available to the City. In the event the City's revenue sources are less than its total obligations, the City could choose to fund other services before paying Base Rental Payments and other payments due under the Lease Agreement. The same result could occur if, because of State Constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues (see "Constitutional Limitation on Taxes and Expenditures" below). To the extent these types of events or other events adversely affecting the funds available to the City occur in any year, the funds available to pay Base Rental Payments may be decreased.

The City has entered into other obligations which constitute additional charges against its revenues and may enter into additional obligations in the future. To the extent that additional obligations are incurred by the City, the funds available to the City to pay Base Rental Payments may be decreased (see "FINANCIAL INFORMATION — Obligations of the City" herein).

Abatement. In the event of substantial interference with the City's right to use and occupy any portion of the Leased Property by reason of damage to, or destruction or condemnation of the Leased Property, or any defects in title to the Leased Property, Base Rental Payments will be subject to abatement. See "SOURCES OF PAYMENT FOR THE BONDS — Abatement." In the event that such portion of the Leased Property, if damaged or destroyed could not be replaced during the period of time in which proceeds of the City's rental interruption insurance will be available in lieu of Base Rental Payments, plus the period for which funds are available from (a) amounts held by the Trustee in the Revenue Bond, and (b) amounts, if any, otherwise legally available to the Trustee for payments in respect of the Bonds under the Indenture, there could be insufficient funds to make payments to Owners in full.

The Lease Agreement requires casualty insurance on the Leased Property in an amount equal to the lesser of the outstanding principal amount of the Base Rental Payments outstanding, or the replacement cost of the structures located on the Leased Property. Therefore, due to the nature of the Leased Property and limited structures located thereon, there is a minimal amount of casualty insurance currently in place with respect to the Leased Property.

If damage, destruction, title defect or eminent domain proceedings with respect to the Leased Property results in abatement of the Base Rental Payments related to such Leased Property and if such abated Base Rental Payments, if any, together with moneys from rental interruption or use and occupancy insurance (in the event of any insured loss due to damage or destruction) and eminent domain proceeds, if any, are insufficient to make all payments of principal and interest with respect to the Bonds during the period that the Leased Property is being replaced, repaired or reconstructed, then all or a portion of such payments of principal and interest may not be made. Under the Lease Agreement and the Indenture, no remedy is available to the Owners for nonpayment under such circumstances. 50 4885-9887-4678.9

Notwithstanding the provisions of the Lease Agreement and the Indenture specifying the extent of abatement of Base Rental Payments and the application of other funds in the event of the City's failure to have use and occupancy of the Leased Property, such provisions may be superseded by operation of law, and, in such event, the resulting Base Rental Payments of the City may not be sufficient to pay all of the remaining principal and interest represented by the Bonds.

Insurance. The Lease Agreement obligates the City to obtain and keep in force rental interruption insurance in an amount equal to maximum annual Base Rental Payments due during any immediately succeeding 24 - month period (see "APPENDIX A SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS - LEASE AGREEMENT - MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES - Insurance" herein). The Lease Agreement requires property insurance against loss or damage to all of the buildings situated on the Leased Property and owned by the City, in an amount at least equal to the lesser of the replacement value of the insured buildings and the aggregate principal amount of the Base Rental Payments outstanding. The City makes no representation as to the ability of any insurer to fulfill its obligations under any insurance policy provided for in the Lease Agreement. In the event the Leased Property is partially or completely damaged or destroyed due to any uninsured or underinsured event, it is likely that Base Rental Payments will be partially or completely abated. If any Leased Property so damaged or destroyed is not repaired or replaced within the period during which the proceeds of rental interruption insurance are available, any such abatement could prevent the City from timely paying Base Rental Payments.

Discovery of a Hazardous Substance That Would Limit the Beneficial Use of the Leased Property. In general, the owners and lessees of a parcel may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 sometimes referred to as CERCLA or the Superfund Act, is the most well-known and widely applicable of these laws but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner (or lessee) is obligated to remedy a hazardous substance condition of property whether or not the owner (or lessee) had any involvement in creating or handling the hazardous substance. The effect, therefore, should the Leased Property be affected by a hazardous substance, might be to limit the beneficial use of the Leased Property upon discovery and during remediation. The City is not aware of any such condition on the Leased Property.

Natural Hazards
General. The City, like all southern California communities, may be subject to unpredictable seismic activity, fires or floods. In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in the City.

Seismic Considerations. Southern California is a seismically active area. Potentially active faults are located adjacent to the City; however, there are no Alquist-Priolo Earthquake Fault Zones ("AP Zone") within the city limits. According to the Safety Element of the City's General Plan, although the City does not lie within an AP Zone, seismic risk is still considered high because of the proximity to other active AP faulting in the region. Major faults that have potential to impact the City are (1) the Yorba Linda seismic source zone, a group of faults approximately 0.3 miles northeast of the City which can produce a magnitude

6.4 earthquake, (2) the Puente Hills Thrust Fault that extends approximately 26 miles between downtown Los Angeles and northern Orange County and is considered capable of generating a magnitude 7.1 earthquake, (3) the Peralta Hills Thrust, about 3 mile southeast of the center of the City and the closest known active fault to the City, where the length of the fault zone suggests that a maximum earthquake of about 6.0 to 6.5 is capable of occurring, (4) the Whittier Fault, part of the Whittier -Elsinore fault system that extends from the Los Angeles basin to Mexico, located about 3.8 mile north of the center of the City 51 4885-9887-4678.9

and could be capable of generating a magnitude 6 to 7.2 earthquake, (5) the Newport -Inglewood Structural Zone, located approximately 14.6 miles southwest of the City and considered capable of producing earthquakes with a magnitude of up to 7.4, (6) the Sierra Madre Fault, part of a set of north -dipping reverse faults extending between Santa Barbara Channel east to Chino Basin, located about 17 miles north of the City and considered capable of producing earthquakes with a magnitude of up to 8.0, (7) the San Jacinto Fault system, which is highly seismically active and has been the source of several historical fault ruptures associated with the earthquake magnitudes in the range of 6 to 7, is located about 34 miles northeast of the City and considered capable of producing earthquakes with a magnitude of up to 7.5, (8) the San Andreas Fault system, located approximately 36 miles northerly of the City and considered capable of producing earthquakes with a magnitude of up to 7.9, and (9) the Norwalk Fault located approximately 4.5 miles west- northwest of the City but not classified as an active AP fault by the California Geological Survey.

Although ground rupture is not considered to be a major concern for the City, it is still likely that the City will be subject to some moderate to severe seismic shaking. [There are some areas of the City with high liquefaction potential, but none of the Leased Property are located in an area designated with potential for liquefaction.] [Confirm]
A major earthquake could cause widespread destruction and significant loss of life in a populated area such as the City. If an earthquake were to substantially damage or destroy taxable property within the City, a reduction in taxable values of property in the City and a reduction in revenues available to the General Fund to pay Base Rental Payments would be likely to occur.

Flooding. Flooding hazards may be considered in two categories: natural flooding and dam inundation. [Most of the City, including the Leased Property, is not within the limits of a 100 -year storm plain.][Confirm] In the event of a 500 -year storm, a portion of City would be flooded, primarily around the southern and western borders of the City. Flood inundation resulting from dam failure of Prado Dam or Carbon Canyon Dam is a potential hazard for the City. Inundation from Prado Dam would affect the very southern portions of the City. Inundation from Carbon Canyon would affect the majority of the City generally west of Rose Drive/Tustin Avenue. If such a flood were to substantially damage or destroy taxable property within the City, a reduction in taxable values of property in the City and a reduction in revenues available to the General Fund to pay debt service on the Bonds would be likely to occur.

Fire Hazards. [As of 2019, the City is approaching "build -out" conditions with approximately 98 percent of developable land developed or in the process of developing. Approximately 54.5 acres, or 1.3 percent, of the City's total acreage is vacant.][Update/Confirm] Placentia is surrounded by other build -out cities and is not adjacent to wildland areas; therefore, the risk of Wildland-Urban Interface fires is relatively nonexistent. However, in recent years, wildfires have caused extensive damage throughout the State.

Certain of these fires have burned thousands of acres and in some cases destroyed thousands of homes. In some instances, entire neighborhoods have been destroyed. There can be no assurances that future wildfires will not affect the property located in the City. Property damage due to wildfire could result in a significant decrease in the market value of property in the City and in the ability or willingness of property owners to pay property taxes when due.

The City has adopted a Natural Hazards Mitigation Plan. This plan includes a hazard analysis for earthquake, flood, landslide and fire risk, and is required to comply with Federal Emergency Management Agency requirements for disaster relief funding.

If such events described above occur, the City's emergency response to such an event may add unanticipated expenditures to the General Fund budget, some or all of which may not be reimbursed by federal or state disaster funding, and, if reimbursed, may not be received by the City in a timely manner.

This could lead to reduced ability by the City to make Base Rental Payments. 52 4885-9887-4678.9

Cybersecurity
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations and finances. As a recipient and provider of personal, private or other electronic sensitive information, the City is potentially subject to multiple cyber threats including, but not limited to, hacking, viruses, malware, ransomeware and other attacks on computer and other sensitive digital networks and systems. Entities or individuals may attempt to gain unauthorized access to the City's systems for the purposes of misappropriating assets or information or causing operational disruption or damage.

The City has never had a major cyber breach that resulted in a financial loss. The City provides training to its staff on phishing and safe browsing and how to avoid potential cyber threats. However, no assurances can be given that the security and operational control measures of the City will be successful in guarding against any and each cyber threat or breach. Although the City maintains insurance coverage for cyber security losses should a successful breach ever occur, the cost of any such disruption or remedying damage caused by future attacks could be substantial and in excess of such insurance coverage. The City has recently started looking into updating the insurance coverage for cybersecurity and currently has a supplemental insurance plan in place.

State Budget
State Budget. Information regarding the State Budget is regularly available at various State -maintained websites. The 2023-24 Proposed State Budget defined and described below may be found at the website of the Department of Finance, www.dof.ca.gov , under the heading "California Budget." Additionally, an impartial analysis of the State's Budgets is posted by the California Legislative Analyst's Office (the "LAO") at www.lao.ca.gov . The information referred to is prepared by the respective State agency maintaining each website and not by the City, and the City, the Underwriter and the Municipal Advisor take no responsibility for the continued accuracy of the internet addresses or for the accuracy, completeness or timeliness of information posted there, and such information is not incorporated herein by these references.

According to the State Constitution, the Governor of the State (the "Governor") is required to propose a budget to the State Legislature (the "Legislature") by no later than January 10 of each year, and a final budget must be adopted by the vote of each house of the Legislature no later than June 15. The State budget becomes law upon the signature of the Governor, who may veto specific items of expenditure.

Prior to Fiscal Year 2010-11, the State budget had to be adopted by a two-thirds vote of each house of the Legislature. However, in November 2010, the voters of the State passed Proposition 25, which reduced the vote required to adopt a budget to a majority vote of each house and which provided that there would be no appropriation from the current budget or future budget to pay any salary or reimbursement for travel or living expenses for members of the Legislature for the period during which the budget was presented late to the Governor.

Fiscal Year 2023-24 Proposed State Budget. On January 10, 2023, Governor Newsom released his proposed fiscal year 2023-24 State budget (the "2023-24 Proposed State Budget"), which projects general fund revenues at $208 billion in fiscal year 2022-23 and $210 billion in fiscal year 2023-24. The 2023-24 Proposed State Budget describes these revenues as significantly lower than previously anticipated, mainly due to declines in withholding and capital gains taxes. The 2023-24 Proposed State Budget forecasts State General Fund revenues to be $29.5 billion lower than was projected in the 2022-23 State Budget, resulting in an estimated budget gap of $22.5 billion in the 2023-24 fiscal year. The 2023-24 Proposed State Budget 53 4885-9887-4678.9

plans to close the projected shortfall using a number of tools including funding delays, reductions, funding shifts, and limited revenue generation and borrowing.

The State is projected to end fiscal year 2022-23 with a reserve balance of approximately $39.6 billion, comprised of approximately $17.2. billion in the Special Fund for Economic Uncertainties (the "SFEU") and approximately $21.4 billion in the Budget Stabilization Account (the "BSA"). Fiscal year 2023-24 is expected to end with a reserve balance of approximately $35.6 billion, comprised of approximately $3.8. billion in the SFEU and approximately $22.4 billion in the BSA. The BSA is now at its constitutional maximum (10% of General Fund revenues) requiring $951 million to be dedicated for infrastructure investments in fiscal year 2023-24. The 2023-24 Proposed State Budget reflects a payment of $365 million into the Public School System Stabilization Account (the "PSSSA"), for a total revised balance of more than $8.5 billion at the end of fiscal year 2022-23.

The 2023-24 Proposed State Budget supports various education, safety, health, business and climate change initiatives. The 2023-24 Proposed State Budget accelerates the pay down of the State's retirement liabilities as required by Proposition 2, with $1.9 billion in additional payments required in fiscal year 2023-24 and approximately $5.3 billion projected to be paid over the next three years.

Although the 2023-24 Proposed State Budget revenue outlook is substantially different than seen in the last two years, the 2023-24 Proposed State Budget recognizes that by using the bulk of the recent surplus to boost the State's budget reserves and pay down prior debts, by focusing on one-time and near -term spending instead of costly long-term obligations, and by tying or "triggering" a handful of new ongoing programs to sufficient revenue availability in fiscal year 2024-25, the State does not have to propose the kind of deep reductions to priority programs that marked the budget shortfalls over the past two decades. It will, however, require the State to delay or forego some spending in the near term.

No prediction can be made by the City as to whether the State will encounter budgetary problems in future fiscal years, and if it were to do so, it is not clear what measures would be taken by the State to balance its budget, as required by law. In addition, the City cannot predict the final outcome of future State budget negotiations, the impact that such budgets will have on City finances and operations or what actions will be taken in the future by the Legislature and the Governor to deal with changing State revenues and expenditures.

Fiscal Year 2023-24 May Revised State Budget.

On May 12, 2023, Governor Gavin Newsom released his May Revision to the 2023-24 Proposed State Budget (the "2023-24 May Revised State Budget"). The 2023-24 May Revised State Budget projects a revenue shortfall, after transfers and adjustments, of $9.3 billion in additional to the $22.5 billion shortfall already projected in the 2023-24 Proposed State Budget. The additional revenue shortfall results in part from higher - than -expected inflation rates, lower -than -expected tax receipts, and federal and State tax filing deadline delays for taxpayers in winter -storm effected counties. When combined with, and accounting for slight adjustments to the $22.5 billion shortfall in the 2023-24 Proposed State Budget, the 2023-24 May Revised State Budget projects a $31.5 billion shortfall.

The 2023-24 May Revised State Budget reflects $37.2 billion in total budgetary reserves and does not project a need to draw on any of the State's reserves as a solution to the budget problem except for a portion of the Safety Net Reserve (the "Safety Net Reserve"). The reserve levels in the 2023-24 May Revised State Budget includes $22.3 billion in the BSA, which fulfills the constitutional maximum mandatory deposit limit of 10% of General Fund tax proceeds, $10.7 billion in the PSSSA, $450 million in the Safety Net Reserve (net of a 54 4885-9887-4678.9

$450 million dollar draw), and $3.8 billion in the SFEU. As the BSA balance is at its constitutional maximum amount, a total of $2.3 billion must be dedicated for infrastructure investments in Fiscal Year 2023-24.

The 2023-24 May Revised State Budget addresses the projected additional $9.3 billion budget shortfall through several solutions to be considered in addition to those already included in the 2023-24 Proposed State Budget, including:
• Spending Reductions and Pullbacks —Reduction of an additional $1.1 billion in spending across the State's 2021-22 through 2023-24 fiscal years. Combined with the 2023-24 Proposed State Budget's $5.7 billion in reductions and pullbacks and a $57 million adjustment, the 2023-24 May Revised State Budget includes total solutions in this category of $6.7 billion. Generally, the reductions in the 2023-24 May Revised State Budget reflect reversions of unused funds, rather than cuts to programs. For example, $200 million in unallocated Middle Class Tax Refunds, $149.4 million in unused funds for the Utility Arrearages Program, and $280 million of unspent funds for the 2021-22 fiscal year for Ca1WORKs county administration and services will revert to the General Fund.
• Delayed Spending —Delays an additional $695 million across the multi -year budget period without reducing the total amount of funding through the same period. Combined with the 2023-24 Proposed State Budget delays of $7.4 billion, $8.1 billion in spending delays is spread across the multi -year.

Major items in this category in the 2023-24 May Revised State Budget include: $295 million moved into the out -years for the Foreclosure Intervention Housing Prevention Program (while maintaining $205 million in the current year and budget year).
• Fund Shifts —Includes $3.3 billion in shifts of spending commitments from the General Fund to other funds. Combined with the 2023-24 Proposed State Budget fund shifts of $4.3 billion and a $90 million adjustment, there is a total of $7.5 billion in shifts to other funds. Major items in this category in the 2023-24 May Revised State Budget include $1.1 billion in climate related investments shifted to a climate bond, $635 million of Zero Emission Vehicle investments shifted to Greenhouse Gas Reduction Fund, and $1.1 billion for student housing projects shifted to bonds. • Revenue/Borrowing—Includes $3.7 billion in revenue and borrowing, which consist primarily of an additional $2.5 billion from the Managed Care Organization tax and $1.2 billion in additional borrowing from special funds. Combined with the 2023-24 Proposed State Budget amount of $1.2 billion, there is a total of $4.9 billion in new revenue or borrowing. • Safety Net Reserve Withdrawal —Includes the withdrawal of $450 million from the Safety Net Reserve. This represents half of the funds available in the reserve, leaving a balance of $450 million if subsequently needed.

The Governor notes in the 2023-24 May Revised State Budget that the State faces additional risks to its finances that could result from the economic fallout from a debt limit impasse if Congress is unable to meet raise the federal debt limit, continued inflation and interest rate growth, uncertainty in the financial system caused by the failures of regional banks, and the difficulty in projecting tax revenues due to the tax returns from most counties in the State not being due until October. While the 2023-24 May Revised State Budget does not project a recession, should risks be realized and a moderate recession occur, revenue declines below the 2023-24 May Revised State Budget forecast could be significant. The 2023-24 May Revised State Budget recognizes that the magnitude of the revenue loss would depend upon the depth and duration of a recession, 55 4885-9887-4678.9

as well as its relative impacts on higher -income individuals. Based on a moderate recession scenario in fiscal year 2023-24, revenues could decrease by $40 billion in fiscal year 2023-24 alone, largely driven by losses in personal income tax and revenue declines relative to the 2023-24 May Revised State Budget forecast could reach an additional $100 billion through fiscal year 2026-27.

There can be no assurance that actions taken by the State to address its financial condition will not materially adversely affect the financial condition of the City. Current and future State budgets will be affected by national and State economic conditions and other factors over which the City has no control.

State Legislative Shifts of Property Tax Allocation. From time to time, the State has realigned certain property tax revenue to deal with its budget problems. Since 1992-93, the State has required that local agencies including cities remit a portion of property taxes received to augment school funding. These funds are deposited in each county's Education Revenue Augmentation Fund ("ERAF"). These property taxes (approximately 17.5%) are permanently excluded from the City's property tax revenues.

On July 24, 2009, the Legislature approved amendments to the 2009-10 Budget to close its anticipated $26.3 billion budget shortfall. The approved amendments included borrowing from local governments by withholding of the equivalent of 8% of Fiscal Year 2008-09 property related tax revenues from cities' and counties' property tax collections under provisions of Proposition 1A (approved by the voters in 2004), which the State was required to repay with interest within three years. The first (and to date, only) shift occurred in Fiscal Year 2009-10. Fiscal Year 2012-13 was the first year that another shift was allowable, but the State has not implemented another borrowing yet.

On March 2, 2004, voters approved a bond initiative formally known as the "California Economic Recovery Act." This act authorized the issuance of $15 billion in bonds to finance the Fiscal Year 2002-03 and Fiscal Year 2003-04 State budget deficits, which would be payable from a fund to be established by the redirection of tax revenues through the "Triple Flip." Under the "Triple Flip," one -quarter of local governments' 1% share of the sales tax imposed on taxable transactions within their jurisdiction were redirected to the State.

In an effort to eliminate the adverse impact of the sales tax revenue redirection on local government, the legislation provided for property taxes in the ERAF to be redirected to local government. Because the ERAF moneys were previously earmarked for schools, the legislation provided for schools to receive other state general fund revenues. The swap of sales taxes for property taxes terminated once the deficit financing bonds were repaid in September 2015. The City treated the Triple Flip property tax revenue as sales tax in its financial statements.

The City also received a portion of Department of Motor Vehicles license fees ("VLF") collected statewide.

Several years ago, the State-wide VLF was reduced by approximately two-thirds. However, the State continued to remit to cities and counties the same amount that those local agencies would have received if the VLF had not been reduced, known as the "VLF backfill." The State VLF backfill was phased out and as of 2011-12 all of the VLF is now received through an in lieu payment from State property tax revenues.

There can be no assurance the State will not take similar actions such as those described above or additional actions to address its financial condition and such actions may materially adversely affect the financial condition of the City. Current and future State budgets will be affected by national and State economic conditions and other factors over which the City has no control, including, and particularly, the Pandemic.

Limited Recourse on Default; No Acceleration
If an event of default occurs and is continuing under the Lease Agreement, there is no remedy of acceleration of any Base Rental Payments which have not come due and payable in accordance with the 56 4885-9887-4678.9

Lease Agreement. The City will continue to be liable for Base Rental Payments as they become due and payable in accordance with the Lease Agreement if the Trustee does not terminate the Lease Agreement, and the Trustee would be required to seek a separate judgment each year for that year's defaulted Base Rental Payments. Any such suit for money damages would be subject to limitations on legal remedies against cities in California, including a limitation on enforcement of judgments against funds or property needed to serve the public welfare and interest. In addition, the enforcement of any remedies provided in the Lease Agreement and the Indenture could prove both expensive and time-consuming.

The Lease Agreement permits the Trustee to take possession of and release the Leased Property in the event of a default by the City under the Lease Agreement. Even if the Trustee could readily release the Leased Property, the rents may not be sufficient to enable it to pay principal of and interest on the Bonds in full when due. Any such releasing of the Leased Property would be subject to existing encumbrances thereon.

In addition, no assurances can be given that a court would permit the Authority or the Trustee to exercise the remedies which are granted under the Lease Agreement to re-enter and relet the Leased Property. See "THE LEASED PROPERTY" herein.

Enforcement of Remedies
The enforcement of any remedies provided in the Lease Agreement and the Indenture could prove both expensive and time consuming. The rights and remedies provided in the Lease Agreement and the Indenture may be limited by and are subject to the limitations on legal remedies against cities, including State constitutional limits on expenditures, and limitations on the enforcement of judgments against funds needed to serve the public welfare and interest; by federal bankruptcy laws, as now or hereafter enacted; applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect (see "Bankruptcy" below); equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Constitution; the reasonable and necessary exercise, in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose; and the limitations on remedies against municipal entities in the State. Bankruptcy proceedings or the exercise of powers by the federal or State government, if initiated, could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation or modification of their rights.

The legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's legal opinion) will be qualified, as to the enforceability of the Bonds, the Indenture, the Site Lease, the Lease Agreement, the Assignment Agreement and other related documents, by bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the limitation on legal remedies against cities and counties in the State. See "Bankruptcy" below.

Bankruptcy
In addition to the limitations on remedies contained in the Indenture and the Lease Agreement, the rights and remedies in the Lease Agreement may be limited and are subject to the provisions of federal bankruptcy laws, as now or hereafter enacted, and to other laws or equitable principles that may affect the enforcement of creditors' rights.

Under Chapter 9 of the Bankruptcy Code (Title 11, United States Code) (the "Bankruptcy Code"), which governs bankruptcy proceedings of public entities such as the City, no involuntary bankruptcy petition may 57 4885-9887-4678.9

be filed against a public entity. However, upon satisfaction of certain prerequisite conditions, a voluntary bankruptcy petition may be filed by the City. The filing of a bankruptcy petition results in a stay against enforcement of certain remedies under agreements to which the bankrupt entity is a party. A bankruptcy filing by the City could thus limit remedies under the Lease Agreement. A bankruptcy debtor may choose to assume or reject executory contracts and leases, such as the Lease Agreement. However, a debtor may not assume or reject executory contracts to loan money or to make a financial accommodation, such as the Indenture. In the event of rejection of a lease by debtor lessee, the leased property is returned to the lessor and the lessor has a claim for a limited amount of the resulting damages.

Under the Indenture, the Trustee holds a security interest in the revenues in the funds pledged thereunder, including Base Rental Payments, for the benefit of the Owners of the Bonds, but such security interest arises only when the Base Rental Payments are actually received by the Trustee following payment by the City.

The Leased Property itself is not subject to a security interest, mortgage or any other lien in favor of the Trustee for the benefit of the Owners of the Bonds. In the event of a bankruptcy filed by the City and the subsequent rejection of the Lease Agreement by the City, the Trustee is entitled to recover possession of the Leased Property, although as discussed above no assurances can be given that a Court would permit such action to be taken by the Trustee due to the essential governmental purposes served by the Leased Property. In addition, the Trustee would have a claim for damages against the City, although such claim would constitute a secured claim only to the extent of revenues in the possession of the Trustee; the balance of such claim would be unsecured.

Such a bankruptcy could adversely affect the payments under the Indenture. Among the adverse effects might be: (i) the application of the automatic stay provisions of the Bankruptcy Code, which, until relief is granted, would prevent collection of payments from the City or the commencement of any judicial or other action for the purpose of recovering or collecting a claim against the City and could prevent the Trustee from making payments from funds in its possession; (ii) the avoidance of preferential transfers occurring during the relevant period prior to the filing of a bankruptcy petition; (iii) the existence of unsecured or secured debt which may have priority of payment superior to that of the Owners of the Bonds; and (iv) the possibility of the adoption of a plan (the "Plan of Adjustment") for the adjustment of the City's debt without the consent of the Trustee or all of the Owners of the Bonds, which Plan of Adjustment may restructure, delay, compromise or reduce the amount of any claim of the Owners of the Bonds if the Bankruptcy Court finds that the Plan of Adjustment is fair and equitable and in the best interests of creditors.

In a bankruptcy of the City, if a material unpaid liability is owed to Ca1PERS or any other pension system (collectively the "Pension Systems") on the filing date, or accrues thereafter, such circumstances could create additional uncertainty as to the City's ability to make Base Rental Payments. Given that municipal pension systems in California are usually administered pursuant to state constitutional provisions and, as applicable, other state and/or city law, the Pension Systems may take the position, among other possible arguments, that their claims enjoy a higher priority than all other claims, that Pension Systems have the right to enforce payment by injunction or other proceedings outside of a City bankruptcy case, and that Pension System claims cannot be the subject of adjustment or other impairment under the Bankruptcy Code because that would purportedly constitute a violation of state statutory, constitutional and/or municipal law.

It is uncertain how a bankruptcy judge in a City bankruptcy would rule on these matters. In addition, this area of law is presently very unsettled as issues of pension underfunding claim priority, pension contribution enforcement, and related bankruptcy plan treatment of such claims (among other pension -related matters) have been the subject of litigation in the Chapter 9 cases of several California municipalities, including the Cities of Stockton and San Bernardino.

The Authority is a public agency and, like the City, is not subject to the involuntary procedures of the Bankruptcy Code. The Authority may also seek voluntary protection under Chapter 9 of the Bankruptcy 58 4885-9887-4678.9

Code. In the event the Authority were to become a debtor under the Bankruptcy Code, the Authority would be entitled to all of the protective provisions of the Bankruptcy Code as applicable in a Chapter 9 proceeding. Such a bankruptcy could adversely affect the payments under the Indenture. Among the adverse effects might be: (i) the application of the automatic stay provisions of the Bankruptcy Code, which, until relief is granted, would prevent collection of payments from the Authority or the commencement of any judicial or other action for the purpose of recovering or collecting a claim against the Authority; (ii) the avoidance of preferential transfers occurring during the relevant period prior to the filing of a bankruptcy petition; (iii) the existence of unsecured or court -approved secured debt which may have priority of payment superior to that of the Owners of the Bonds; and (iv) the possibility of the adoption of a plan for the adjustment of the Authority's debt without the consent of the Trustee or all of the Owners of the Bonds, which plan may restructure, delay, compromise or reduce the amount of any claim of the Owners of the Bonds if the Bankruptcy Court finds that the Plan is fair and equitable. In a bankruptcy the Authority could challenge the assignment of the Site Lease and the Lease Agreement, and the Trustee and/or the Owners of the Bonds could be required to litigate these issues to protect their interests.

Risks Related to COVID-19
The outbreak of a respiratory disease caused by a new strain of coronavirus ("COVID-19"), was declared a global pandemic by the World Health Organization in March 2020. Since the onset of the pandemic, California Governor Gavin Newsom and other federal, state and local officials have issued numerous restrictions and warnings, and have taken and continue to take, various actions, including executive orders and the passage of laws and regulations, on a wide array of topics, to slow the spread of COVID-19 and to address the ongoing public health and economic consequences of the pandemic. The Authority cannot predict the scope or duration of preventative or mitigating actions taken by federal, state and local officials in response to COVID-19, which continue to evolve in response to the conditions of the virus, or any future pandemic, epidemic or outbreak of a contagious disease.

As part of its budget process, the U.S. Department of the Treasury allocated $9,083,054 of the American Rescue Plan Act ("ARPA") funds to the City. Allocations to the City started in July 2021 when the City received $4,541,527 in the first tranche. The City received the second tranche of $4,541,527 in ARPA funding in July of 2022. Additionally, the City received $636,000 in funding from the State Coronavirus Relief Fund, which was established through the CARES Act and anticipates an additional $400,000 from FEMA. Although the City anticipates the reimbursements due from FEMA, the timing of the receipt is unknown. These revenues are to be used to reimburse emergency response expenditures associated with the City's COVID-19 response.

Constitutional Limitation on Taxes and Expenditures
State Initiative Measures Generally. Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. Voters have exercised this power through the adoption of Proposition 13 ("Article XIIIA") and similar measures, such as Propositions 22 and 26 approved in the general election held on November 2, 2010.

Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the City. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter -approved initiatives, possibly to the extent of creating cash -flow problems in the payment of outstanding obligations such as the Lease Agreement.

Article XIIIA. On June 6, 1978, State voters approved Proposition 13, which added Article XIIIA to the State Constitution. Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to 1% of the full cash value thereof, except that additional ad valorem property taxes may be levied to pay 59 4885-9887-4678.9

debt service: (i) on indebtedness approved by the voters prior to December 1, 1978; (ii) on bonded indebtedness approved by a two-thirds vote on or after December 1, 1978, for the acquisition or improvement of real property; or (iii) bonded indebtedness incurred by a school district, community college district, or county office of education for the construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters voting on the proposition. Article XIIIA defines full cash value to mean "the county assessor's valuation of real property as shown on the 1975-76 tax bill under "full cash value," or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment." This full cash value may be increased at a rate not to exceed 2% per year to account for inflation.

Article XIIIA has subsequently been amended to permit reduction of the "full cash value" base in the event of declining property values caused by damage, destruction or other factors, including a general economic downturn, to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a disaster, and in other minor or technical ways.

Legislation Implementing Article XIIIA. Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter -approved indebtedness). The 1% property tax is automatically levied by counties and distributed according to a formula among taxing agencies.

Increases in assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in the "taxing area" based upon their respective "situs." Any such allocation made to a local agency continues as part of its allocation in future years.

All taxable property is shown at full cash value on the tax rolls. Consequently, the tax rate is expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100 percent of taxable value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value.

Property Tax Base Transfer (Proposition 19). At the November 2020 Statewide election, "Proposition 19" was approved by the electorate. Proposition 19 amended California Constitution Article XIIIA to permit eligible homeowners to transfer tax assessments anywhere in the State, narrow existing special rules for inherited properties, and broaden the scope of triggers for reassessment of properties. Any additional revenues and net savings resulting from Proposition 19 will be allocated to fire protection services and reimbursing local governments for taxation -related changes. The City cannot make any assurance as to what effect the implementation of Proposition 19 will have on City revenues or assessed valuation of real property in the City.

Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real property at the lesser of its originally determined (base year) full cash value compounded annually by the inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based on Proposition 8 do not establish new base year values, and the property may be reassessed as of the following lien date up to the lower of the then -current fair market value or the factored base year value. The State Board of Equalization has approved this reassessment formula and such formula has been used by county assessors statewide. The City experienced Proposition 8 reductions in property values between 2009 and 2011. The COVID-19 impact on the economy may impact future property values and cause an increase in Proposition 8 reductions in future years. See "FINANCIAL INFORMATION-- Ad Valorem Property Taxes — Taxable Property and Assessed Valuation" herein. 60 4885-9887-4678.9

Article XIIIB. On November 6, 1979, California voters approved Proposition 4, or the Gann Initiative, which added Article XIIIB to the California Constitution. Article XIIIB limits the annual appropriations of the State and any city, county, city and county, school district, authority or other political subdivision of the State. The "base year" for establishing such appropriations limit is the 1978-79 Fiscal Year, and the limit is to be adjusted annually to reflect changes in population, consumer prices and certain increases in the cost of services provided by public agencies.

Appropriations subject to Article XIIIB include generally the proceeds of taxes levied by or for the entity and the proceeds of certain State subventions, refunds of taxes, benefit payments from retirement, unemployment insurance and disability insurance funds. "Proceeds of taxes" include, but are not limited to, all tax revenues, certain State subventions, and the proceeds to an entity of government, from (1) regulatory licenses, user charges and user fees, to the extent that such charges and fees exceed the costs reasonably borne in providing the regulation, product or service, and (2) the investment of tax revenues.

Article XIIIB includes a requirement that if an entity's revenues in any year exceed the amounts permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules within the next two subsequent fiscal years.

In the June 1990 election, the voters approved Proposition 111 amending the method of calculation of State and local appropriations limits. Proposition 111 made several changes to Article XIIIB. First, the term "change in the cost of living" was redefined as the change in the California per capita personal income ("CPCPI") for the preceding year. Previously, the lower of the CPCPI or the United States Consumer Price Index was used. Second, the appropriations limit for the fiscal year was recomputed by adjusting the 1986-87 limit by the CPCPI for the three subsequent years. Third and lastly, Proposition 111 excluded appropriations for "qualified capital outlay for Fiscal Year 1990-91 as defined by the legislature" from proceeds of taxes.

Section 7910 of the Government Code requires the City to adopt a formal appropriations limit for each fiscal year. The City's appropriations limit for 2018-19 is $307,052,768. The City's appropriations subject to the limit for 2018-19 are $154,045,587. Based on this, the appropriations limit is not expected to have any impact on the ability of the City to continue to budget and appropriate the Base Rental Payments as required by the Lease.

Proposition 62. Proposition 62 was a statutory initiative adopted in the November 1986 general election.

Proposition 62 added Sections 53720 to 53730, inclusive, to the California Government Code. It confirmed the distinction between a general tax and special tax, established by the State Supreme Court in 1982 in City and County of San Francisco v. Farrell, by defining a general tax as one imposed for general governmental purposes and a special tax as one imposed for specific purposes. Proposition 62 further provided that no local government or district may impose (i) a general tax without prior approval of the electorate by majority vote or (ii) a special tax without such prior approval by two-thirds vote. It further provided that if any such tax is imposed without such prior written approval, the amount thereof must be withheld from the levying entity's allocation of annual property taxes for each year that the tax is collected.

By its terms, Proposition 62 applies only to general and special taxes imposed on or after August 1, 1985.

Proposition 62 was generally upheld in Santa Clara County Local Transportation Authority v. Guardino, a California Supreme Court decision filed September 28, 1995.

Proposition 218. On November 5, 1996, California voters approved Proposition 218 — Voter Approval for Local Government Taxes — Limitation on Fees, Assessments, and Charges — Initiative Constitutional Amendment. Proposition 218 added Articles XIIIC and XIIID to the California Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property -related fees and charges. Proposition 218 states that all taxes imposed by local governments shall be deemed to be either general taxes or special taxes. Special purpose districts, including school 61 4885-9887-4678.9

districts, have no power to levy general taxes. No local government may impose, extend or increase any general tax unless and until such tax is submitted to the electorate and approved by a majority vote. No local government may impose, extend or increase any special tax unless and until such tax is submitted to the electorate and approved by a two-thirds vote.

Proposition 218 also provides that no tax, assessment, fee or charge shall be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except: (i) the ad valorem property tax imposed pursuant to Article XIII and Article XIIIA of the California Constitution, (ii) any special tax receiving a two-thirds vote pursuant to Section 4 of Article XIIIA the California Constitution, and (iii) assessments, fees, and charges for property related services as provided in Article XIIID.

Proposition 218 added voter requirements for assessments and fees and charges imposed as an incident of property ownership, other than fees and charges for sewer, water, and refuse collection services. In addition, all assessments and fees and charges imposed as an incident of property ownership, including sewer, water, and refuse collection services, are subjected to various additional procedures, such as hearings and stricter and more individualized benefit requirements and findings. The effect of such provisions will presumably be to increase the difficulty a local agency will have in imposing, increasing or extending such assessments, fees and charges.

Proposition 218 also extended the initiative power to reducing or repealing any local taxes, assessments, fees and charges. This extension of the initiative power is not limited to taxes imposed on or after November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or reduction in any existing taxes, assessments, fees and charges, subject to overriding federal constitutional principles relating to the impairment of contracts.

Proposition 218 provides that, effective July 1, 1997, fees that are charged "as an incident of property ownership" may not "exceed the funds required to provide the property related services" and may only be charged for services that are "immediately available to the owner of the property." The City levies a franchise tax on its cable television, telephone and gas utility franchises. This tax has not been submitted for approval by voters. See "FINANCIAL INFORMATION — Local Taxes" herein for a discussion of these taxes. The City has a street lighting district formed in 1981 and a landscape maintenance formed in 1982 that levy assessments for street lighting and landscape maintenance, which are used to offset certain General Fund expenses. These assessments have not been submitted for approval by voters.

The City does not expect the application of Proposition 218 will have a material adverse impact on its ability to pay Base Rental Payments.

Voter -Approved Taxes. Placentia levies a utility users' tax. The utility users' tax was first levied pursuant to an ordinance of the City Council adopted in 1970. The City levies a transient occupancy tax on hotel and motel bills. In November 2018, voters approved a general one cent sales tax to be levied and collected on behalf of the City, by majority vote of 63%.

There is no time limit established for the collection of the utility users' tax, the transient occupancy tax or the sales tax.

The City has formed community facilities districts which levy special taxes to pay for certain services.

These special taxes are used to offset certain General Fund expenses. The community facilities districts comply with Proposition 218.

Proposition 1A. Proposition 1A, proposed by the Legislature in connection with the 2004-05 Budget Act and approved by the voters in November 2004, restricts State authority to reduce major local tax revenues 62 4885-9887-4678.9

such as the tax shifts permitted to take place in Fiscal Years 2004-05 and 2005-06. Proposition lA provides that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition 1A generally prohibits the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any fiscal year, as set forth under the laws in effect as of November 3, 2004. Any change in the allocation of property tax revenues among local governments within a county must be approved by two-thirds of both houses of the Legislature.

Proposition lA provides, however, that beginning in Fiscal Year 2008-09, the State may shift to schools and community colleges up to 8% of local government property tax revenues, which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are met.

Such a shift may not occur more than twice in any 10 -year period. The State may also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county.

For Fiscal Year 2009-10, 8% of the City's property tax revenues were diverted to the State as a result of a Proposition lA suspension.

Proposition lA also provides that if the State reduces the vehicle license fee rate below 0.65% of vehicle value, the State must provide local governments with equal replacement revenues. Further, Proposition 1A requires the State to suspend State mandates affecting cities, counties and special districts, excepting mandates relating to employee rights, schools or community colleges, in any year that the State does not fully reimburse local governments for their costs to comply with such mandates.

Proposition 22. On November 2, 2010, voters in the State approved Proposition 22. Proposition 22, known as the "Local Taxpayer, Public Safety, and Transportation Protection Act of 2010," eliminates or reduces the State's authority to (i) temporarily shift property taxes from cities, counties and special districts to schools, (ii) use vehicle license fee revenues to reimburse local governments for State -mandated costs (the State will have to use other revenues to reimburse local governments), (iii) redirect property tax increment from redevelopment agencies to any other local government, (iv) use State fuel tax revenues to pay debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel tax revenues.

Proposition 26. On November 2, 2010, voters in the State also approved Proposition 26. Proposition 26 amends Article XIIIC of the State Constitution to expand the definition of "tax" to include "any levy, charge, or exaction of any kind imposed by a local government" except the following: (1) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (2) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (3) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (4) a charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property; (5) a fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law; (6) a charge imposed as a condition of property development; and (7) assessments and property -related fees imposed in accordance with the provisions of Article XIIID. Proposition 26 provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity. The 63 4885-9887-4678.9

City does not expect the provisions of Proposition 26 to materially impede its ability to pay Base Rental Payments when due.

Taxpayer Protection and Government Accountability Act Initiative On February 1, 2023, the California Secretary of State announced that a ballot initiative, designated as Initiative 1935 and known as the "Taxpayer Protection and Government Accountability Act," had received the required number of signatures to appear on the November 5, 2024 ballot.

If approved by a majority of voters casting a ballot at the November 5, 2024 Statewide election, Initiative 1935 would make numerous significant changes to Articles XIII, XIIIA, XIIIC and XIIID of the California Constitution to further limit the authority of local governments, and electors via the initiative process, to adopt and impose taxes and fees. See the caption "— Constitutional Limitations on Taxes and Expenditures." The full text of Initiative 1935 may be viewed at the website of the California Attorney General.

The City cannot predict whether Initiative 1935 will be approved by a majority of voters casting a ballot at the November 5, 2024 Statewide election. If Initiative 1935 is approved, the City cannot provide any assurances as to the effect of the implementation or judicial interpretations of Initiative 1935 on the finances of the State or the City.

Future Initiatives. From time to time other initiative measures could be adopted, limiting or otherwise affecting the ability of the City to increase revenues and appropriations.

Early Redemption Risk
Early payment of the Base Rental Payments and early redemption of the Bonds may occur in whole or in part without premium from the net proceeds of insurance or condemnation award with respect to the Leased Property or portions thereof. See "THE BONDS — Redemption — Extraordinary Redemption from Condemnation Award or Insurance Proceeds."
Secondary Market Risk
There can be no assurance that there will be a secondary market for purchase or sale of the Bonds, and from time to time there may be no market for them, depending upon prevailing market conditions, the financial condition or market position of firms who may make the secondary market and the financial condition of the City.

Substitution or Removal of Property
The Lease Agreement provides that, upon the satisfaction of the other conditions specified therein, the City may substitute other real property and/or improvements for existing Leased Property and/or remove real property (including undivided interests therein) and/or improvements from the definition of the Leased Property. The Lease Agreement requires (a) that any project which will comprise the Leased Property after such a substitution or removal, in each lease year during the remaining term of the Lease Agreement must have an annual fair rental value at least equal to the maximum annual Base Rental Payments payable under the Lease Agreement attributable to the Leased Property prior to the substitution or removal, as determined by the City on the basis of commercially reasonable evidence of the annual fair rental value of the Lease Property after the substitution or removal and (b) that the useful life of the Leased Property after substitution or removal equals or exceeds the remaining term of the Lease Agreement. Such a substitution or removal 64 4885-9887-4678.9

could have an adverse impact on the security for the Bonds, particularly if an event requiring abatement of Base Rental Payments were to occur subsequent to such substitution or removal.

Loss of Tax Exemption
As discussed under the heading "TAX MATTERS," the interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of such Bonds as a result of acts or omissions of the Authority or the City in violation of their respective covenants in the Indenture, the Lease Agreement and the Tax Certificate. Should such an event of taxability occur, the Bonds would not be subject to a special redemption and would remain Outstanding until maturity or until redeemed under the redemption provisions contained in the Indenture.

LEGAL MATTERS
Enforceability of Remedies
The remedies available to the Trustee and the Owners of the Bonds upon an event of default under the Indenture, the Lease Agreement, the Site Lease, or any other document described herein are in many respects dependent upon regulatory and judicial actions which are often subject to discretion and delay.

Under existing law and judicial decisions, the remedies provided for under such documents may not be readily available or may be limited. In the case of any bankruptcy proceeding involving the City, the rights of the Owners could be modified at the direction of the court. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified to the extent that the enforceability of certain legal rights related to the Indenture, the Lease Agreement, the Site Lease and other pertinent documents is subject to limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally and by equitable remedies and proceedings generally.

Approval of Legal Proceedings
Nixon Peabody LLP, Los Angeles, California, as Bond Counsel, will render an opinion with respect to the validity and enforceability of the Indenture and the Lease Agreement, and as to the validity of the Bonds.

See "APPENDIX D" hereto for the proposed form of Bond Counsel's opinion.

The Authority and the City have no knowledge of any fact or other information which would indicate that the Indenture, the Lease Agreement, the Site Lease or the Bonds are not enforceable against the Authority and the City, as applicable, except to the extent such enforcement is limited by principles of equity, by state and federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights generally and by limitations on legal remedies against municipalities in the State.

Certain legal matters will be passed on for the City and the Authority by Nixon Peabody LLP, Los Angeles, California, as Disclosure Counsel and by the City Attorney. Certain legal matters will be passed on for the Underwriter by its Counsel, Kutak Rock LLP, Irvine, California. Fees payable to Disclosure Counsel and Underwriter's Counsel are contingent upon the sale and delivery of the Bonds.

Absence of Litigation
The Authority and the City will each furnish a certificate dated as of the date of delivery of the Bonds that there is not now known to be pending or threatened any litigation restraining or enjoining the execution or delivery of the Indenture, the Lease Agreement or the sale or delivery of the Bonds or in any manner 65 4885-9887-4678.9

questioning the proceedings and authority under which the Indenture, the Site Lease and the Lease Agreement are to be executed or delivered or the Bonds are to be delivered or affecting the validity thereof.

There exist lawsuits and claims against the City that are incidental to the ordinary course of the City's operations. In the view of the City's management and City Attorney, there is no litigation, present or pending against the City, that will individually or in the aggregate impair the City's ability to make Base Rental Payments when due.

TAX MATTERS
Federal Income Taxes. The Internal Revenue Code of 1986, as amended (the "Code"), imposes certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from gross income for Federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income for Federal income tax purposes retroactive to the date of issue of the Bonds. Pursuant to the Resolution and a Tax Certificate as to Arbitrage and the Provisions of Sections 103 and 141-150 of the Internal Revenue Code of 1986 (the "Tax Certificate"), the City and the Authority have covenanted to comply with the applicable requirements of the Code in order to maintain the exclusion of the interest on the Bonds from gross income for Federal income tax purposes pursuant to Section 103 of the Code. In addition, the City and the Authority have made certain representations and certifications in the Resolution, the financing agreements and the Tax Certificate. Bond Counsel will not independently verify the accuracy of those representations and certifications.

In the opinion of Nixon Peabody LLP, Bond Counsel, under existing law and assuming compliance with the aforementioned covenant, and the accuracy of certain representations and certifications made by the City and the Authority described above, interest on the Bonds is excluded from gross income for Federal income tax purposes under Section 103 of the Code. Bond Counsel, is also of the opinion that such interest is not treated as a preference item in calculating the alternative minimum tax imposed under the Code. For taxable years beginning after December 31, 2022, interest on the Bonds will be taken into account in computing the alternative minimum tax imposed on certain corporations under the Code to the extent that such interest is included in the "adjusted financial statement income" of such corporations.

State Taxes. Nixon Peabody LLP, Bond Counsel, is also of the opinion that interest on the Bonds is exempt from personal income taxes of the State of California under present law. Nixon Peabody LLP, Bond Counsel expresses no opinion as to other State or local tax consequences arising with respect to the Bonds nor as to the taxability of the Bonds or the income therefrom under the laws of any state other than the State of California.

Original Issue Discount. Bond Counsel, is further of the opinion that the excess of the principal amount of a maturity of the Bonds over its issue price (i.e., the first price at which price a substantial amount of such maturity of the Bonds was sold to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) (each, a "Discount Bond" and collectively the "Discount Bonds") constitutes original issue discount which is excluded from gross income for federal income tax purposes to the same extent as interest on the Bonds. Further, such original issue discount accrues actuarially on a constant interest rate basis over the term of each Discount Bond and the basis of each Discount Bond acquired at such issue price by an initial purchaser thereof will be increased by the amount of such accrued original issue discount. The accrual of original issue discount may be taken into account as an increase in the amount of tax-exempt income for purposes of determining various other tax consequences of owning the Discount Bonds, even though there will not be a corresponding cash payment. Owners of the Discount Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Discount Bonds. 66 4885-9887-4678.9

Original Issue Premium. Bonds sold at prices in excess of their principal amounts are "Premium Bonds".

An initial purchaser with an initial adjusted basis in a Premium Bond in excess of its principal amount will have amortizable bond premium which offsets the amount of tax-exempt interest and is not deductible from gross income for federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each Premium Bond based on the purchaser's yield to maturity (or, in the case of Premium Bonds callable prior to their maturity, over the period to the call date, based on the purchaser's yield to the call date and giving effect to any call premium).

For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation with an amortizable bond premium is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds.

Ancillary Tax Matters. Ownership of the Bonds may result in other federal tax consequences to certain taxpayers, including, without limitation, certain S corporations, foreign corporations with branches in the United States, property and casualty insurance companies, individuals receiving Social Security or Railroad Retirement benefits, individuals seeking to claim the earned income credit, and taxpayers (including banks, thrift institutions, and other financial institutions) who may be deemed to have incurred or continued indebtedness to purchase or to carry the Bonds. Prospective investors are advised to consult their own tax advisors regarding these rules.

Interest paid on tax-exempt obligations such as the Bonds is subject to information reporting to the Internal Revenue Service (the "IRS") in a manner similar to interest paid on taxable obligations. In addition, interest on the Bonds may be subject to backup withholding if such interest is paid to a registered owner that (a) fails to provide certain identifying information (such as the registered owner's taxpayer identification number) in the manner required by the IRS, or (b) has been identified by the IRS as being subject to backup withholding.

Nixon Peabody LLP, Bond Counsel, is not rendering any opinion as to any Federal tax matters other than those described in its opinion attached as part of APPENDIX D. Prospective investors, particularly those who may be subject to special rules described above, are advised to consult their own tax advisors regarding the federal tax consequences of owning and disposing of the Bonds, as well as any tax consequences arising under the laws of any state or other taxing jurisdiction.

Changes in Law and Post Issuance Events. Legislative or administrative actions and court decisions, at either the federal or state level, could have an adverse impact on the potential benefits of the exclusion from gross income of the interest on the Bonds for Federal or state income tax purposes, and thus on the value or marketability of the Bonds. This could result from changes to Federal or state income tax rates, changes in the structure of Federal or state income taxes (including replacement with another type of tax), repeal of the exclusion of the interest on the Bonds from gross income for Federal or state income tax purposes, or otherwise. It is not possible to predict whether any legislative or administrative actions or court decisions having an adverse impact on the federal or state income tax treatment of holders of the Bonds may occur.

Prospective purchasers of the Bonds should consult their own tax advisors regarding the impact of any changes in law on the Bonds.

Nixon Peabody LLP, Bond Counsel, has not undertaken to advise in the future whether any events after the date of issuance and delivery of the Bonds may affect the tax status of interest on the Bonds. Nixon Peabody LLP, Bond Counsel, expresses no opinion as to any Federal, state or local tax law consequences with respect 67 4885-9887-4678.9

to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof upon the advice or approval of other counsel.

CONCLUDING INFORMATION
Rating on the Bonds
In connection with the issuance and delivery of the Bonds, S&P Global Ratings ("S&P") is expected to assign its municipal bond rating of "[_]" to the Bonds with the understanding that, upon delivery of the Bonds, policies insuring the payment when due of the principal of and interest on each series of Bonds will be issued by [INSURER]. S&P has assigned an underlying credit rating of"[_]" to the Bonds. Such rating reflects only the views of S&P and any desired explanation of the significance of such rating should be obtained from S&P. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own.

Except as otherwise required in the Continuing Disclosure Agreement, the City undertakes no responsibility either to bring to the attention of the owners of any Bonds any downward revision or withdrawal of any rating obtained or to oppose any such revision or withdrawal. There is no assurance such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by S&P, if in the judgment of S&P, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

Underwriting
The Bonds are being sold at an aggregate purchase price of $ (representing the aggregate principal amount of the Bonds, [plus/less an original issue premium/discount of $ ," less an underwriting discount of $ ) pursuant to a bond purchase agreement ("Bond Purchase Agreement") entered into among the Authority, the City and Ramirez & Co., Inc. (the "Underwriter").

The expenses associated with the issuance of the Bonds are being paid by the Authority from proceeds of the Bonds. The right of the Underwriter to receive compensation in connection with the Bonds is contingent upon the issuance and delivery by the Authority, and the purchase by the Underwriter, of the Bonds. The Bond Purchase Agreement provides that the Underwriter will purchase all of the Bonds if any are purchased and that the obligation of the Underwriter to accept and pay for the Bonds is subject to certain terms and conditions set forth therein, including the approval by counsel of certain legal matters.

The Underwriter will initially offer the Bonds for sale at the prices and yields set forth on the inside cover pages of this Official Statement. Such prices or yields may subsequently change. The Underwriter reserves the right to join with dealers and other investment banking firms in offering the Bonds for sale and may offer to sell Bonds to dealers at prices lower than the initial offering prices. [Bank Qualified]
[The City does not expect to issue any additional tax-exempt obligations, other than the Bonds, in the calendar year commencing January 1, 2023, that exceed the aggregate of $10,000,000. On the basis of this expectation, the City has designated the Bonds as qualified tax-exempt obligations under and for the purposes of Section 265(b)(3) of the Code.]
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The Municipal Advisor
The material contained in this Official Statement was prepared by the Authority and the City with the assistance of Kosmont Financial Services (the "Municipal Advisor") who advised the Authority and the City as to the financial structure and certain other financial matters relating to the Bonds. The information set forth herein received from sources other than the City has been obtained by the Authority from sources which are believed to be reliable, but such information is not guaranteed by Municipal Advisor as to accuracy or completeness, nor has it been independently verified. Fees paid to the Municipal Advisor are contingent upon the sale and delivery of the Bonds.

Continuing Disclosure
The City will provide annually certain financial information and data relating to the City by not later than March 31 in each year commencing March 31, 2023 (the "Annual Report"), and to provide notices of the occurrence of certain other enumerated events in accordance with Rule 15c2-12 of the Securities Exchange Act of 1934 as amended (the "Rule"). Kosmont Financial Services will act as Dissemination Agent. The specific nature of the information to be contained in the Annual Report or the notices of enumerated events and certain other terms of the continuing disclosure obligation are found in the form of the City's Continuing Disclosure Agreement attached in "APPENDIX C - FORM OF CONTINUING DISCLOSURE AGREEMENT."
[In the past five years, the City was late 139 days in filing certain financial information or operating data (calculation of surplus funds) required to be filed on November 1, 2017 with respect to the $4,390,000 Placentia Public Financing Authority 2009 Lease Revenue Bonds (Working Capital Financing).][To be updated as needed]
The City has adopted a Continuing Disclosure Compliance Policy. See "FINANCIAL INFORMATION — Financial Policies — Debt and Liability -Related Policies." Additional Information
The summaries and references contained herein with respect to the Indenture, the Site Lease, the Lease Agreement, the Bonds, statutes and other documents, do not purport to be comprehensive or definitive and are qualified by reference to each such document or statute and references to the Bonds are qualified in their entirety by reference to the form hereof included in the Indenture. Copies of the Indenture, the Site Lease and the Lease Agreement may be obtained after delivery of the Bonds from the City at 401 East Chapman Avenue, Placentia, California 92870.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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References
Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Authority and the purchasers or Owners of any of the Bonds.

Execution
The execution of this Official Statement by the Executive Director of the Authority and the City Administrator of the City has been duly authorized by the Authority and by the City, respectively.

PLACENTIA PUBLIC FINANCING AUTHORITY
By:

Executive Director

CITY OF PLACENTIA
By:

City Administrator
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APPENDIX A

SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS
The following summary discussion of selected provisions of the Indenture and the Lease Agreement are made subject to all of the provisions of such documents. This summary discussion does not purport to be a complete statement of said provisions and prospective purchasers of the Bonds are referred to the complete texts of said documents, copies of which are available upon request sent to the Trustee. [Remainder of Page Intentionally Left Blank]
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APPENDIX B

CITY AUDITED FINANCIAL STATEMENTS
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APPENDIX C

FORM OF CONTINUING DISCLOSURE AGREEMENT
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APPENDIX D

PROPOSED FORM OF BOND COUNSEL OPINION
Upon issuance of the Bonds, Nixon Peabody LLP, Bond Counsel to the Authority, proposes to render its final approving opinion with respect to the Bonds in substantially the following form:
[Date of Delivery]
Placentia Public Financing Authority
Placentia, California
City of Placentia
Placentia, California
$

PLACENTIA PUBLIC FINANCING AUTHORITY

LEASE REVENUE BONDS
(PUBLIC SAFETY CENTER PROJECT)
SERIES 2023A
[(BANK QUALIFIED)]
Ladies and Gentlemen:

We have acted as Bond Counsel to the Placentia Public Financing Authority (the "Authority") in connection with the issuance of $ aggregate principal amount of its Lease Revenue Bonds (Public Safety Center Project) Series 2023A [(Bank Qualified)] (the "Bonds"), issued pursuant to an Indenture, dated as of [August] 1, 2023 (the "Indenture"), by and among the Authority, the City of Placentia (the "City") and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meaning ascribed to such term as set forth in the Indenture.

As Bond Counsel, we have examined copies, certified to us as being true and complete, of the Indenture, the Lease Agreement, dated as of [August] 1, 2023 (the "Lease"), between the City and the Authority, the Site Lease, dated as of [August ] 1, 2023, (the "Site Lease"), between the Authority and the City, the Assignment Agreement, dated as of [August] 1, 2023 (the "Assignment Agreement"), between the Authority and the Trustee, the Tax Certificate, dated the date hereof (the "Tax Certificate"), opinions of counsel to the Authority, the City and the Trustee, certificates of the Authority, the City, the Trustee and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein. We have not undertaken to verify independently the accuracy of the factual matters represented, warranted or certified therein, and we have assumed the genuineness of all signatures thereto. The Lease, the Site Lease, the Indenture and the Assignment Agreement are collectively referred to herein as the "Legal Documents."
We have, with your approval, assumed that all items submitted to us as originals are authentic and that all items submitted as copies conform to the originals.

On the basis of such examination, our reliance upon the assumptions contained herein and our consideration of such questions of law as we considered relevant, and subject to the limitations and qualifications in this opinion, we are of the opinion that:

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1. The Bonds constitute the valid and binding limited obligations of the Authority.

2. The Indenture has been duly executed and delivered by, and, assuming due authorization, execution and delivery by the other parties thereto, constitutes the legally valid and binding obligation of, the Authority, enforceable in accordance with its terms. The Indenture establishes a valid lien on and a pledge of the Revenues (as defined in the Indenture) for the security of the Bonds. Enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles affecting the enforcement of creditors' rights generally, the exercise of judicial discretion, the application of equitable principles if equitable remedies are sought and limitations on remedies against counties in the State of California.

3. The Lease, the Site Lease and the Assignment Agreement have been duly executed and delivered by, and, assuming due authorization, execution and delivery by the other parties thereto, constitute the legally valid and binding obligations of, the City (except with respect to the Assignment Agreement) and the Authority, enforceable in accordance with their terms.

Enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles affecting the enforcement of creditors' rights generally, the exercise of judicial discretion, the application of equitable principles if equitable remedies are sought and limitations on remedies against counties in the State of California.

4. The Internal Revenue Code of 1986 (the "Code") sets forth certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from gross income for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issue of the Bonds. Pursuant to the Indenture, the Lease, and the Tax Certificate, the Authority and the City, as applicable, have covenanted to comply with the applicable requirements of the Code in order to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes pursuant to Section 103 of the Code.

In addition, the Authority and the City, as applicable, have made certain representations and certifications in the Indenture, the Lease, and the Tax Certificate. We have not independently verified the accuracy of those certifications and representations.

Under existing law, assuming compliance with the tax covenants described herein and the accuracy of the aforementioned representations and certifications, interest on the Bonds (including any original issue discount properly allocable thereto) is excluded from gross income for federal income tax purposes under Section 103 of the Code. We are also of the opinion that such interest is not treated as a preference item in calculating the alternative minimum tax imposed under the Code.

For taxable years beginning after December 31, 2022, interest on the Bonds will be taken into account in computing the alternative minimum tax imposed on certain corporations under the Code to the extent that such interest is included in the "adjusted financial statement income" of such corporations.

5. Interest on the Bonds is exempt from personal income taxes of the State of California under present state law.

The opinions set forth in paragraphs 1, 2 and 3 above are subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally (including, without limitation, fraudulent conveyance laws), (b) the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and (c) the limitations on legal remedies D-2
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against government entities in the State of California. We express no opinion with respect to any indemnification, contribution, choice of law, choice of forum or waiver provisions contained in the Legal Documents, and we express no opinion on the laws of any jurisdiction other than the State of California and the United States of America.

Except as stated in paragraphs 4 and 5, we express no opinion as to any other federal, state or local tax consequences of the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. Furthermore, we express no opinion as to any federal, state or local tax law consequences with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof upon the advice or approval of other counsel.

No opinion is expressed herein on the accuracy, completeness or sufficiency of any offering material relating to the Bonds. This opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters.

We do not undertake to advise you of any subsequent events or developments which might affect the statements contained herein. Our engagement with respect to this matter has ended as of the date hereof, and we disclaim any obligation to update this letter.

Respectfully submitted,
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APPENDIX E

THE BOOK -ENTRY SYSTEM
The following information has been provided by DTC for use in securities offering documents, and the Authority and the City take no responsibility for the accuracy or completeness thereof. Neither the Authority nor the City can give or does give any assurances that DTC, DTC Direct Participants or DTC Indirect Participants will distribute to the Beneficial Owners either (a) payments of interest, principal or premium, if any, with respect to the Bonds or (b) certificates representing ownership interest in or other confirmation of ownership interest in the Bonds, or that they will so do on a timely basis or that DTC, DTC Direct Participants or DTC Indirect Participants will act in the manner described in this Official Statement.

The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures " of DTC to be followed in dealing with DTC Participants are on file with DTC.

1. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Bond certificate will be issued for each issue of the Bonds, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over

3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has an S&P Global Ratings rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com . The information on such website is not incorporated herein.

3. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as F-1
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periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.

Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book -entry system for the Bonds is discontinued.

4. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. None of the Authority, the City or the Trustee will have any responsibility or obligation to such Direct Participants and Indirect Participants or the persons for whom they act as nominees with respect to the Bonds. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Indenture and the Facility Lease. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures.

Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Principal and interest payments with respect to the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Trustee, on payable dates in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Authority, the City or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority, the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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9. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.

10. The Authority may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered.

11. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the Authority and the City believe to be reliable, but the Authority and the City take no responsibility for the accuracy thereof.

The foregoing description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal of and interest and other payments with respect to the Bonds to Direct Participants, Indirect Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in such Bonds and other related transactions by and between DTC, the Direct Participants, the Indirect Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the Direct Participants, the Indirect Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters but should instead confirm the same with DTC or the Participants, as the case may be.

In the event that the book -entry system is discontinued as described above, the requirements of the Indenture will apply.

THE TRUSTEE, AS LONG AS A BOOK -ENTRY ONLY SYSTEM IS USED FOR THE

BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS TO ONLY DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC

PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT

OR EFFECT WILL NOT AFFECT THE VALIDITY OR SUFFICIENCY OF THE PROCEEDINGS

RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

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APPENDIX F

SPECIMEN MUNICIPAL BOND INSURANCE POLICY
[TBDI
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PLACENTIA PUBLIC FINANCING AUTHORITY

LEASE REVENUE BONDS
(PUBLIC SAFETY CENTER PROJECT)
SERIES 2022A

BOND PURCHASE AGREEMENT
, 2022
Placentia Public Financing Authority
401 East Chapman Avenue
Placentia, California 928702
City of Placentia
401 East Chapman Avenue
Placentia, California 928702
Ladies and Gentlemen:

Samuel A. Ramirez & Co., Inc. (the "Underwriter"), hereby offers to enter into this Bond Purchase Agreement with you, the City of Placentia (the "City") and the Placentia Public Financing Authority (the "Authority"), for the purchase by the Underwriter and the delivery by you of the Authority's Lease Revenue Bonds (Public Safety Center Project) Series 2022A (the "Bonds"). The Bonds are being issued to finance the construction, acquisition and equipping of a public safety center, to fund a reserve account for the Bonds and to pay the costs incurred in connection with the issuance of the Bonds. This offer is made subject to acceptance by you prior to 11:59 p.m., Los Angeles time, on the date hereof. Upon such acceptance, this Bond Purchase Agreement shall be in full force and effect in accordance with its terms and shall be binding upon you and the Underwriter.

1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter agrees to purchase from the Authority all (but not less than all) of the $ aggregate principal amount of the Bonds.

The purchase price for the Bonds shall be $
plus original issue premium in the amount of $ _
amount of $ ).
(being the principal amount of the Bonds,
and less an Underwriter's discount in the
The Bonds will be dated the date of delivery thereof and will have the maturities and bear interest at the rates set forth on Exhibit A hereto. The Bonds will be subject to redemption as set forth in the Indenture and Official Statement herein described. The Bonds will be issued in book -entry form only. It is anticipated that CUSIP identification numbers will be inserted on the Bonds, but neither the failure to provide such numbers nor any error with respect thereto shall constitute a cause for failure or refusal by the Underwriter to accept delivery of the Bonds in accordance with the terms of this Bond Purchase Agreement.
1 2. Authorizing Instruments and Law. The Bonds shall be issued pursuant to the provisions of a resolution (the "Resolution") adopted by the Authority on , 2022 authorizing the issuance of the Bonds and the Marks -Roos Local Bond Pooling Act of 1985, constituting Section 6584, et seq. of the California Government Code (the "JPA Act"). The Bonds are issued pursuant to an Indenture, dated as of December 1, 2022 (the "Indenture"), among the Authority, the City and U.S. Bank National Association, as trustee (the "Trustee"), and shall be as described in the Indenture.

The Bonds are limited obligations of the Authority payable primarily from and secured by certain base rental payments (the "Base Rental Payments") to be paid by the City pursuant to a Lease Agreement, dated as of December 1, 2022, between the City and the Authority (the "Lease"), for certain real property and the improvements thereon (the "Leased Property").

3. Offering the Bonds. The Underwriter agrees to offer all the Bonds to the public initially at the prices (or yields) set forth on the cover pages of the Official Statement of the Authority pertaining to the Bonds, dated , 2022 (the Official Statement, together with all appendices thereto, and with such changes therein and supplements thereto as are consented to in writing by the Authority, the City, the Underwriter or its legal counsel in accordance with the provisions of Sections 6(j) and 7(j) hereof or otherwise consented to by the Underwriter pursuant to Section 10(b)(v), are herein called the "Official Statement"). Subsequent to the initial public offering of the Bonds, the Underwriter reserves the right to change the public offering prices (or yields) as they deem necessary in connection with the marketing of the Bonds. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices. "Public Offering" shall include an offering to a number of institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold.

The City and the Authority acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm's -length commercial transaction between the City, the Authority and the Underwriter, and that the Underwriter has financial and other interests that differ from those of the City and the Authority, (ii) in connection with such transaction the Underwriter is not acting as a municipal advisor, financial advisor or fiduciary to the City and the Authority or any other person or entity and have not assumed a fiduciary responsibility in favor of the City or the Authority with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriter has advised or is currently advising the City or the Authority on other matters), (iii) the only contractual obligations the Underwriter has to the City and the Authority with respect to the transaction contemplated hereby expressly are set forth in this Bond Purchase Agreement, except as otherwise provided by applicable rules and regulations of the SEC or the rules of the Municipal Securities Rulemaking Board (the "MSRB") and (iv) the City and the Authority have consulted with their own legal and other professional advisors to the extent they deemed appropriate in connection with the offering of the Bonds. The City and the Authority acknowledge that they have previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the MSRB relating to disclosures concerning the Underwriter's role in the transaction, disclosures concerning the Underwriter's compensation, conflict disclosures, if any, and disclosures concerning complex municipal securities financing, if any.

4. Delivery of Official Statement. If requested by the Underwriter, the Authority shall deliver to the Underwriter two (2) copies of the Official Statement manually executed on behalf of the Authority and the City. The Authority shall also deliver copies of the Official Statement in such 2 quantities as the Underwriter may reasonably request in order to enable the Underwriter to distribute a single copy of each Official Statement to any potential customer of the Underwriter requesting an Official Statement during the time period beginning when the Official Statement becomes available and ending on the End Date (defined below). The Authority shall deliver these copies to the Underwriter within seven (7) business days after the execution of this Bond Purchase Agreement and in sufficient time to accompany or precede any sales confirmation that requests payment from any customer of the Underwriter. The Authority and the Underwriter hereby agree that the end of the underwriting period shall be the date of Closing (as defined below) unless the Underwriter informs the Authority in writing of a different end of the underwriting period. "End Date" as used herein is that date which is the earlier of:
(a) twenty-five (25) days after the end of the underwriting period, as defined in SEC Rule 15c2-12 originally adopted by the Securities and Exchange Commission on June 28, 1989, as amended ("Rule 15c2-12"); or
(b) the time when the Official Statement becomes available from the MSRB, but in no event less than twenty-five (25) days after the underwriting period (as defined in Rule 15c2-12) ends.

The Underwriter acknowledges that the "End Date" will be the date of Closing unless the Underwriter otherwise notifies the Authority and the City in writing that the Underwriter still owns some or all of the Bonds.

The Authority and the City have authorized the use of the Official Statement in connection with the public offering of the Bonds. The Authority and the City also have consented to the use by the Underwriter prior to the date hereof of the Preliminary Official Statement dated , 2022, relating to the Bonds in connection with the public offering of the Bonds, (which, together with all appendices thereto, is herein called the "Preliminary Official Statement"). Authorized officers of the City and the Authority have certified to the Underwriter that such Preliminary Official Statement was deemed to be final as of its date for purposes of Rule 15c2-12, with the exception of certain final pricing and related information referred to in Rule 15c2-12. The Underwriter has distributed a copy of each Preliminary Official Statement to potential customers on request.

5. The Closing. At 9:00 A.M., California time, on , 2022, or at such other time or on such earlier or later business day as shall have been mutually agreed upon by the Authority, the City and the Underwriter, the Authority, upon receipt of the purchase price thereof, will deliver (i) the Bonds in book -entry form through the facilities of The Depository Trust Company ("DTC"), and (ii) the closing documents hereinafter mentioned at the offices of Nixon Peabody LLP, Los Angeles, 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 from the Authority. The Underwriter will pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer of immediately available funds. This payment and delivery, together with the delivery of the aforementioned documents, is herein called the "Closing."

6. City Representations, Warranties and Covenants. The City represents, warrants and covenants to the Underwriter that:
3 (a) The City is a charter city organized and operating pursuant to the laws of the State of California (the "State") with power and authority to enter into and perform its duties under the Lease, the Continuing Disclosure Agreement, dated the date of Closing (the "Continuing Disclosure Agreement"), the Indenture, the Site Lease, dated as of December 1, 2022 (the "Site Lease"), between the City and the Authority, the Official Statement and this Bond Purchase Agreement (collectively, the "City Documents").
(b) To the best knowledge of the City, neither the approval, execution and delivery of the City Documents, and compliance with the provisions on the City's part contained therein, nor the consummation of any other of the transactions herein and therein contemplated, nor the fulfillment of the terms hereof and thereof, materially conflicts with or constitutes a material breach of or default under nor materially contravenes any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, nor does any such execution, delivery, adoption or compliance result in a security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the City under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the City Documents.
(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, constitute legal, valid and binding agreements of the City enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other laws affecting the enforcement of creditors' rights generally, and by the application of equitable principles if sought, by the exercise of judicial discretion, and by the limitations on legal remedies imposed on actions against cities in the State.
(d) Except as may be required under blue sky or other securities laws of any state, there is no material consent, approval, authorization or other order of, or filing with, or certification by, any regulatory agency having jurisdiction over the City required for the execution and delivery of the Bonds or the consummation by the City of the other transactions contemplated by the Official Statement and this Bond Purchase Agreement. (e) To the best of the knowledge of the City, there is, and on the Closing there will be, no action, suit, proceeding or investigation at law or in equity before or by any court or governmental agency or body pending (notice of which has been received by the City) or threatened against the City to restrain or enjoin the delivery of any of the Bonds, or the payments to be made pursuant to the Lease, or in any way contesting or affecting the validity of the City Documents or the Bonds or the authority of the City to approve this Bond Purchase Agreement, or enter into the City Documents or contesting the powers of the City to enter into or perform its obligations under any of the foregoing or in any way contesting the powers of the City in connection with any action contemplated by this Bond Purchase Agreement or to restrain or enjoin the execution, sale and delivery of the Bonds, contesting the completeness or accuracy of the Preliminary Official Statement as of its date or the Official Statement or any supplement or amendment thereto wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the City Documents to be executed by it or asserting that the Preliminary Official Statement as of its date or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements 4 therein, in light of all the circumstances under which they were made, not misleading, or, except as described in the Preliminary Official Statement and the Official Statement, nor is there any basis for any such action, suit, proceeding or investigation.
(f) The Preliminary Official Statement provided to the Underwriter has been deemed final by the City, as required by Rule 15c2-12. As of the date thereof and at all times subsequent thereto up to and including the Closing, the information relating to the City, the Bonds, the Leased Property and the City Documents contained in the Official Statement was and will be materially complete for its intended purposes. The information relating to the City, the Bonds, the Leased Property and the City Documents contained in the Official Statement as of the date hereof is true and correct in all material respects and such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect.
(g) The City agrees to cooperate with the Underwriter in endeavoring to qualify the Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however, that the City will not be required to execute a special or general consent to service of process in any jurisdiction in which it is not now so subject or to qualify to do business as a foreign corporation in any jurisdiction where it is not so qualified. The Underwriter shall be responsible for all costs relating to such qualification of the Bonds under blue sky or similar laws.
(h) By official action of the City prior to or concurrently with the execution hereof, the City has duly approved the distribution of the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in the City Documents and the consummation by it of all other transactions contemplated by the Official Statement and this Bond Purchase Agreement. (i) To the best knowledge of the City, it is not in any material respect in breach of or default under any material applicable law or administrative regulation of the State or the United States or any material applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject and in connection with which the City is obligated to make payments from its own funds, and 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 the consequence of which could materially and adversely affect the performance of the City under the City Documents. (j) If between the date of this Bond Purchase Agreement and the End Date an event occurs, of which the City has knowledge, which might or would cause the information relating to the City, the City's finances, the Leased Property, or the City's functions, duties and responsibilities contained in the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading in any material respect, the City will notify the Underwriter, and if, in the opinion of the Underwriter, the City or their respective legal counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate with the Underwriter in the preparation of an amendment or supplement to the Official 5 Statement in a form and in a manner approved by the Underwriter, provided all expenses thereby incurred will be paid for by the City.
(k) If the information relating to the Leased Property, the City, its functions, duties and responsibilities contained in the Official Statement is amended or supplemented pursuant to the immediately preceding subparagraph, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subparagraph) at all times subsequent thereto up to and including the date of the Closing, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading in any material respect. (1) The City covenants that it will comply with all tax covenants relating to it in the City Documents and the Tax Certificate.
(m) Any certificate signed by a duly authorized official of the City and delivered to the Underwriter shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein.
(n) As of the time of acceptance hereof and as of the Closing, the City does not and will not have outstanding any indebtedness which is payable from the City's general fund except as disclosed in the Official Statement.
(o) Between the date of this Bond Purchase Agreement and the date of Closing, the City will not, except as disclosed in the Official Statement, offer or issue any certificates, notes or other obligations for borrowed money, or, other than in the normal course of its operations, incur any material liabilities, direct or contingent, secured by or payable from the City's general fund. (p) The City will undertake, pursuant to the Continuing Disclosure Agreement, to provide or cause to be provided annual financial reports and notices of certain events; a description of this undertaking is set forth in the Official Statement. Except as disclosed in the Preliminary Official Statement and Official Statement, the City and its related entities have not failed to comply in any material respect with a continuing disclosure undertaking under Rule 15c2-12 during the previous five years.
(q) The financial statements of, and other financial information regarding the City in the Official Statement fairly present the financial position and results of the operations of the City as of the dates and for the periods therein set forth and the audited financial statements have been prepared in accordance with generally accepted accounting principles applicable to cities.

7. Authority Representations, Warranties and Covenants. The Authority represents, warrants and covenants to the City and the Underwriter that:
(a) The Authority is a joint powers authority, duly organized and existing under the Constitution (the "Constitution") and laws of the State, including the JPA Act, with full right, power and authority to enter into, execute and deliver the Authority Documents (defined below) and to perform its obligations hereunder.
6 (b) By all necessary official action, the Authority 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 Bond Purchase Agreement, the Bonds, the Indenture, the Lease, the Site Lease, and the Assignment Agreement, dated as of December 1, 2022 (the "Assignment Agreement"), between the Authority and the Trustee (collectively, the "Authority Documents"), and has approved the use by the Underwriter of the Preliminary Official Statement, and the Official Statement and, 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 by the parties hereto, the Authority Documents will constitute the legally valid and binding obligations of the Authority enforceable upon the Authority 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, to the exercise of judicial discretion and to the limitations on legal remedies against joint powers authorities in California. The Authority has complied and will at the Closing, be in compliance in all respects, with the terms of the Authority Documents.
(c) The Bonds, when issued in accordance with the Indenture, will be valid and binding limited obligations of the Authority, entitled to the benefits of the Indenture and enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally, to the exercise of judicial discretion and to the limitations on legal remedies against joint powers authorities in California.
(d) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, to the best knowledge of the Authority, the Authority is not and will not be in any material respect in breach of or in default under any law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument which breach, default or event could have an adverse effect on the Authority's ability to perform its obligations under the Authority Documents; and, as of such times, except as disclosed in the Official Statement, the authorization, execution and delivery of the Authority Documents and compliance by the Authority with the provisions thereof do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Authority is subject, or by which it or any of its properties is bound, nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties under the terms of any such law, regulation or instrument except as provided in the Authority Documents. (e) 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, government agency, public board or body, pending (notice of which has been received by the Authority), or to the best knowledge of the Authority threatened against the Authority in any material respect:
7 (i) affecting the 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 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 Authority Documents or the consummation of the transactions on the part of the Authority contemplated thereby, or contesting the exclusion of the interest on the Bonds from Federal or State taxation, as applicable, or contesting the powers of the Authority or its authority to enter into the Lease and to pledge the Base Rental Payments for repayment of the Bonds; (iii) which may result in any material adverse change relating to the financial condition of the Authority;
(iv) contesting the completeness or accuracy of the Preliminary Official Statement as of its date or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement as of its date or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of all the circumstances under which they were made, not misleading; or
(v) challenging the ability of the Authority to sell the Bonds to the Underwriter.
(f) The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order to qualify the Bonds for offer and sale under the blue sky laws or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and will use its best efforts to continue such qualification in effect so long as required for distribution of the Bonds; provided however, that in no event shall the Authority be required to take any action which would subject it to general or unlimited service of process in any jurisdiction in which it is not now so subject.
(g) Any certificate signed by a duly authorized officer of the Authority and delivered to the Underwriter shall be deemed to be a representation and warranty by the Authority to the Underwriter as to the statements made therein.
(h) As of the time of acceptance hereof and as of the date of Closing, except as otherwise disclosed in the Official Statement, the Authority has complied with the filing requirements of the JPA Act.
(i) The Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement from the delivery of the Official Statement to the End Date and will not effect or consent to any such amendment or supplement without prior consultation with the Underwriter. The Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. 8 (j) Substantially all the proceeds from the sale of the Bonds (after deducting the expenses of issuance and sale of the Bonds paid for from such proceeds) will be used as set forth in the Indenture and as described in the Official Statement, and the Authority will not take or omit to take any action which action or omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner contrary to that provided in the Indenture and the Lease, as amended from time to time.
(k) For a period beginning on the date hereof and continuing until the End Date, (a) the Authority will not adopt any amendment of, or supplement to, the Official Statement without prior consultation with the Underwriter and Kutak Rock LLP, counsel to the Underwriter ("Underwriter's Counsel") and (b) if any event relating to or affecting the Authority shall occur as a result of which it is necessary, in the opinion of the Underwriter and Underwriter's Counsel, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser of the Bonds, the Authority will forthwith cause the City to prepare and furnish to the Underwriter a reasonable number of copies of an amendment of, or supplement to, the Official Statement (in form and substance satisfactory to Underwriter's Counsel) which 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 a purchaser of the Bonds, not misleading.

8. Establishment of Issue Price.
(a) 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 an "issue price" or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. (b) Except as otherwise set forth in Exhibit A attached hereto, the Authority will treat the first price at which 10% of each maturity of the Bonds (the "10% test") is sold to the public as the issue price of that maturity. At or promptly after the execution of this Bond Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Authority the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) the Underwriter has sold all 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 request of the Authority or Bond Counsel. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Bond Purchase Agreement at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, as of the date of this Bond Purchase Agreement, the maturities, if any, of the Bonds for which the Underwriter represents that (i) the 10% test has 9 been satisfied (assuming orders are confirmed by the close of the business day immediately following the date of this Bond Purchase Agreement) and (ii) 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 offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the "hold -the -offering -price rule").

So long as the hold -the -offering -price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(A) the close of the fifth (5th) business day after the sale date; or (B) 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. (d) The Underwriter confirms that:
(i) 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 of 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.
(ii) any selling group 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 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 10 have 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. (e) The Authority acknowledges that, in making the representation 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 wires. 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.
(f) 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:
a. "public" means any person other than an underwriter or a related party;
b. "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 pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third -party distribution agreement participating in the initial sale of the Bonds to the public); c. 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 direct 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
11 d. "sale date" means the date of execution of this Bond Purchase Agreement by all parties.

9. Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations, warranties and covenants herein and the performance by the Authority and the City of their respective obligations hereunder, both as of the date hereof and as of the date of the Closing. The Underwriter's obligations hereunder are and shall be subject to the following additional conditions:
(a) Bring -Down Representation. The representations, warranties and covenants of the Authority and the City contained herein shall be true and correct at the date hereof and at the time of the Closing, as if made on the date of the Closing. (b) Executed Agreements and Performance Thereunder. At the time of the Closing:
(i) the City Documents and the Authority Documents shall be in full force and effect, and shall not have been amended, modified or supplemented except with the prior written consent of the Underwriter;
(ii) there shall be in full force and effect such resolutions (the "Authorizing Resolutions") as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions on the part of the Authority and the City contemplated by the City Documents and the Authority Documents;
(iii) the Authority shall perform or have performed its obligations required or specified in the Authority Documents to be performed at or prior to Closing; (iv) the City shall perform or have performed its obligations required as specified in the City Documents to be performed at or prior to Closing; and (v) the Official Statement shall not have been supplemented or amended, except pursuant to Paragraph 6(j) or 7(i), or as otherwise may have been agreed to in writing by the Underwriter.
(c) No Default. At the time of the Closing, no default shall have occurred or be existing under the Authority Documents or the City Documents and neither the Authority nor the City shall be in default in the payment of principal or interest on any of its bonded indebtedness or other obligations payable from the City's general fund which default shall adversely impact the ability of the Authority to make payments on the Bonds or the City to make payments pursuant to the Lease.
(d) Termination Events. The Underwriter shall have the right to terminate this Bond Purchase Agreement, without liability therefor, by written notification to the Authority and the City if at any time at or prior to the Closing the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall have been materially adversely affected in the reasonable judgment of the Underwriter (evidenced by a written notice to the City and the Authority terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds) by reason of any of the following:
12 (i) an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State, or the amendment of legislation pending as of the date of the Authority Documents or the City Documents in the Congress of the United States, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any Federal or State court or any ruling or regulation (final, temporary or proposed) or official statement on behalf of the United States Treasury Department, the Internal Revenue Service or other Federal or State authority materially adversely affecting the Federal or State tax status of the Authority or the City, or the interest on bonds or notes or obligations of the general character of the Bonds; or
(ii) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the States or a decision by any court of competent jurisdiction within the State or any court of the United States shall be rendered which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or
(iii) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or
(iv) the New York Stock Exchange or other national securities exchange, or any governmental or regulatory authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of the Underwriter; or
(v) a general banking moratorium shall have been established by federal or State authorities; or
(vi) there shall have occurred (i) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (ii) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or
13 (vii) the commencement of any action, suit or proceeding described in Paragraphs 6(e) or 7(e) hereof; or
(viii) 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 of the Securities and Exchange Commission or any other governmental authority having jurisdiction; or (ix) any event occurring or information becoming known which, in the reasonable judgment of the Underwriter, makes untrue or incorrect in any material respect any statement or information contained in the Preliminary Official Statement or in the Official Statement or has the effect that the Preliminary Official Statement or the Official Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or
(x) any rating of the Bonds or other obligations of the City shall have been downgraded, suspended or withdrawn or placed on negative outlook or negative watch by a national rating service, which, in the Underwriter's reasonable opinion, materially adversely affects the marketability or market price of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; or
(xi) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the Authority or the City; or (xii) any fact or event shall exist or have existed that requires or has required an amendment of or supplement to the Official Statement in which the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall have been materially adversely affected in the reasonable judgment of the Underwriter; or
(xiii) there shall have occurred any materially adverse change in the affairs or financial condition of the Authority or the City; or (xiv) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or
(xv) the marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially and adversely affected by disruptive events, occurrences or conditions in the securities or debt markets; or (xvi) 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 Bond Purchase Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act, the Exchange Act and the Trust Indenture Act. 14 (e) Closing Documents. At or prior to the Closing, the Underwriter shall receive with respect to the Bonds (unless the context otherwise indicates) the following documents:
(1) Bond Opinion. The approving opinions of Bond Counsel dated the date of Closing and substantially in the forms included as APPENDIX D to the Official Statement and a reliance letter(s) thereon dated the date of Closing addressed to the Underwriter and the Trustee.
(2) Supplemental Opinion. A supplemental opinion of Bond Counsel dated the date of Closing, addressed to the Underwriter, to the effect that:
(A) the statements on the cover of the Official Statement and in the Official Statement under the captions "INTRODUCTION," "THE BONDS," "THE LEASED PROPERTY," "SOURCES OF PAYMENT FOR THE BONDS," and "TAX MATTERS," and in "APPENDIX A - SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS" and "APPENDIX D - 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 Lease, the Site Lease, the Indenture, and Bond Counsel's final opinion concerning certain federal tax matters relating to the Bonds, are accurate in all material respects as of the date of Closing; provided, that Bond Counsel need not express any opinion with respect to any financial or statistical data contained therein or with respect to DTC or the book -entry system in which the Bonds are initially delivered; (B) The Lease, the Site Lease, the Assignment Agreement, the Continuing Disclosure Agreement and this Bond Purchase Agreement have been duly authorized, executed and delivered by the City and the Authority, as applicable, and are valid, legal and binding agreements of the City and the Authority enforceable in accordance with their terms, except that the rights and obligations under the Lease, the Site Lease, the Assignment Agreement, the Continuing Disclosure Agreement and this Bond Purchase Agreement are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance 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, and provided that no opinion is expressed with respect to any indemnification or contribution provisions contained therein.
(C) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended.
(3) Negative Assurance Letter of Disclosure Counsel. A letter of Nixon Peabody LLP, Disclosure Counsel to the Authority and the City, dated the date of Closing and addressed to the Authority, the City, and the Underwriter to the effect that based upon their participation in the preparation of the Official Statement as Disclosure Counsel to the Authority and without having undertaken to determine independently the accuracy or completeness of the contents in the Official Statement, such counsel has no reason to believe that the Preliminary Official Statement (except for the completion of pricing information and any other matters or terms of the Bonds relating thereto) as of its date or as of the date of this Purchase Agreement or the Official Statement as of its date or as of the date of the Closing (except that no opinion need be expressed as to any financial, statistical, economic, engineering or demographic data or forecasts, numbers, charts, 15 tables, graphs, maps, estimates, projections, assumptions or expressions of opinion, any information about feasibility, valuation, appraisals, assessed values, market absorption, real estate, ownership, environmental or archaeological matters, Appendices A, B, C, D, or E thereto, or any information about book -entry, The Depository Trust Company, debt service requirements or tax exemption included or referred to therein, which may be expressly excluded from the scope of the opinions), contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (4) Municipal Advisor Certificate. A certificate of Kosmont Financial Services, Inc. ("KFS"), dated the Closing Date and addressed to the Authority, the City and the Underwriter, to the effect that (i) KFS has reviewed the Preliminary Official Statement and the Official Statement and (ii) no information has come to its attention which would lead it to believe that the information contained in the Preliminary Official Statement, as of its date and as of the date of this Purchase Agreement and the Official Statement, as of its date and the Closing Date, is not true or correct in all material respects, or that the Preliminary Official Statement, as of its date and as of the date of this Purchase Agreement and the Official Statement, as of its date and the Closing Date contains any untrue statement of a material fact or omits to state a material fact where necessary to make a statement not misleading.
(5) Opinion of City Attorney. An opinion of the City Attorney, dated the date of the Closing and addressed to the Authority, the Trustee and the Underwriter, to the effect that:
(A) the City is a charter city duly organized and validly existing under the Constitution and laws of the State of California; (B) the resolution of the City approving and authorizing the execution and delivery of the City Documents and approving and authorizing the issuance of the Bonds and the delivery of the Official Statement and other actions of the City was duly adopted at a meeting of the governing body of the City which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the resolution is now in full force and effect and has not been amended or superseded in any way; (C) the City Documents have been duly authorized, executed and delivered by the City, and (assuming due execution and delivery by parties other than the City) are valid, legal and binding agreements of the City enforceable in accordance with their terms, except that the rights and obligations under the City Documents are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance 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;
(D) the authorization, execution and delivery of the Bonds, the Official Statement, and the City Documents by the City and compliance with the provisions thereof by the City of its obligations thereunder, will not conflict with, or constitute a breach or default under, in any material respect, any law, administrative regulation, court decree, resolution, ordinance or other agreement to which the City is subject or by which it is bound; and (E) there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or public body pending with respect to which the City has 16 been served or, to such counsel's knowledge, threatened against or affecting the City, except as may be disclosed in the Official Statement, which would materially adversely impact the City's ability to complete the transactions contemplated by the City Documents, the Official Statement or any other document or certificate related to such transactions, restrain or enjoin the collection of Base Rental Payments with respect to the Lease, or in any way contesting or affecting the validity of the Bonds, the Official Statement or the City Documents.
(6) Authority Counsel Opinion. An opinion of counsel to the Authority, dated the date of the Closing and addressed to the City, the Trustee and the Underwriter, to the effect that:
(A) the Authority is a joint exercise of powers authority organized and existing under the laws of the State of California; (B) the resolution of the Authority approving and authorizing the execution and delivery of the Authority Documents, the Bonds and the Official Statement and other actions of the Authority was duly adopted at a meeting of the governing body of the Authority which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the resolution is now in full force and effect and has not been amended or superseded in any way;
(C) the Authority Documents have been duly authorized, executed and delivered by the Authority, and (assuming due execution and delivery by parties other than the Authority) are valid, legal and binding agreements of the Authority enforceable in accordance with their terms, except that the rights and obligations under the Authority Documents are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance 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;
(D) there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or public body pending with respect to which the Authority has been served or, to the such counsel's knowledge, threatened against or affecting the Authority, except as may be disclosed in the Official Statement, which would materially adversely impact the Authority's ability to complete the transactions contemplated by the Authority Documents, the Official Statement or any other document or certificate related to such transactions, restrain or enjoin the collection of Base Rental Payments with respect to the Lease, or in any way contesting or affecting the validity of the Bonds, the Official Statement, the Authority Documents or the transactions described in and contemplated thereby wherein an unfavorable decision, ruling or finding would materially adversely affect the validity and enforceability of the Bonds or the Authority Documents or in which a final adverse decision could materially adversely affect the operations of the Authority; and
(E) the execution and delivery of the Authority Documents and the issuance of the Bonds and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Authority is subject, which 17 breach or default has or may have a material adverse effect on the ability of the Authority to perform its obligations under the Authority Documents.
(7) Underwriter's Counsel Opinion. An opinion of Underwriter's Counsel, dated the date of the Closing addressed to the Underwriter, in such form as may be acceptable to the Underwriter.
(8) City Certificate. A certificate, dated the date of Closing, signed by a duly authorized official of the City satisfactory in form and substance to the Underwriter to the effect that: (a) the representations, warranties and covenants of the City contained in this Bond Purchase Agreement are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing; (b) the City has complied with all agreements, covenants and conditions to be complied with by the City at or prior to the Closing under the City Documents; (c) to the best of such official's knowledge, no event affecting the City has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing the statements or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein, in the light of the circumstances under which they were made, not misleading in any material respect. (9) Authority Certificate. A certificate of the Authority, dated the date of the Closing, signed on behalf of the Authority by the Chair or other duly authorized officer of the Authority to the effect that (a) the representations, warranties and covenants of the Authority contained herein and in the Authority Documents are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing; (b) the Authority has complied with all agreements, covenants and conditions to be complied with by the Authority at or prior to the Closing under the Authority Documents and (c) to the best of such official's knowledge, no event affecting the Authority has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(10) Trustee's Certificate. A certificate of the Trustee, dated the Closing Date, in form and substance acceptable to the Authority, Bond Counsel, the Underwriter and Underwriter's Counsel.
(11) Trustee Incumbency Certificate. A certified copy of a certificate of an officer of the Trustee certifying as to the incumbency, signature and signing authority of the officers who have executed and delivered the Indenture and agreed to accept the duties of Trustee under the Indenture.
(12) Trustee Counsel's Opinion. An opinion, dated the date of the Closing addressed to the Authority, the City and the Underwriter, of the Trustee's Counsel, in form and content satisfactory to the Authority, Bond Counsel, the Underwriter and Underwriter's Counsel. (13) Title Policy. A copy of a CLTA or ALTA title insurance policy in an amount equal to the principal amount of the Bonds, insuring the City's leasehold interest in the Leased Property, subject only to Permitted Encumbrances (as defined in the Lease) or such other acceptable encumbrances.
18 (14) Transcripts. Two CD transcripts of the proceedings prepared by Bond Counsel relating to the authorization and issuance of the Bonds will be delivered in due course after the Closing.
(15) Official Statement. The Official Statement and each supplement or amendment, if any, thereto, executed on behalf of the Authority by a duly authorized officer of each. (16) Documents. An original executed or certified copy of each of the Authority Documents, the City Documents and the Joint Exercise of Powers Agreement (the "JPA Agreement"), dated as of July 1, 1996, between the City and the former Placentia Redevelopment Agency and any amendments thereto.
(17) City Resolution. Certified copy by the City Clerk, of each resolution of the City relating to the City Documents, the actions contemplated thereby, provided that such resolutions may be contained in the transcripts.
(18) Authority Resolution. Certified copy by the Secretary or Assistant Secretary of the Authority, of each resolution of the Authority relating to the Authority Documents, the Bonds and the transactions contemplated thereby, provided that such resolutions may be contained in the transcripts.
(19) IRS Form 8038-G. Evidence that the federal tax information form 8038 G has been prepared for filing.
(20) Tax Certificate. A Tax Certificate in a form satisfactory to Bond Counsel.
(21) Rating. Evidence as of the Closing satisfactory to the Underwriter that the Bonds have received the rating set forth in the Official Statement and that such rating has not been reduced or withdrawn.
(22) CDIAC Statement. A copy of the Notice of Final 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. (23) Additional Documents. Such additional certificates, instruments and other documents as the Underwriter and Bond Counsel may reasonably deem necessary.

If the Authority or the City shall be unable to satisfy the conditions contained in this Bond Purchase Agreement, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement may be terminated by the Underwriter, and none of the Underwriter, the Authority or the City shall be under further obligation hereunder.

10. Expenses. Except as otherwise provided in this Section, the Underwriter shall be under no obligation to pay, and the Authority or the City shall pay or cause to be paid, the expenses incident to the performance of the obligations of the Authority and the City hereunder including but not limited to:
19 (a) the costs of the preparation and printing, or other reproduction (for distribution on or prior to the date hereof) of the City Documents and the Authority Documents and the cost of preparing, printing, issuing and delivering the Bonds; (b) the fees and disbursements of any counsel, municipal advisors, accountants, or other experts or consultants retained by the Authority or the City; (c) the fees and disbursements of Bond Counsel and Disclosure Counsel; (d) the cost of preparation and printing the Preliminary Official Statement and any supplements and amendments thereto and the cost of preparation and printing of the Official Statement, including a reasonable number of copies thereof for distribution by the Underwriter; and (e) charges of rating agencies for the rating of the Bonds.

The Underwriter shall pay all expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds including, but not limited to: (i) the fees and disbursements of Underwriter's Counsel; and (ii) all out-of-pocket disbursements and expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds (including other expenses, fees of the California Debt and Investment Advisory Commission, CUSIP Service Bureau fees, and any other fees and expenses), except as otherwise provided in the preceding paragraph or otherwise agreed to by the Underwriter, the Authority and the City in writing. Any meals in connection with or adjacent to meetings, rating agency presentations, pricing activities or other transaction -related activities shall be considered an expense of the transaction and included in the expense component of the Underwriter's discount.

11. Notice. Any notice or other communication to be given to the Underwriter may be given by delivering the same to Samuel A. Ramirez & Co., Inc., 633 West Fifth Street, Suite 2693, Los Angeles, California 90071, Attention: Public Finance. Any notice or other communication to be given to the Authority or the City pursuant to this Bond Purchase Agreement may be given by delivering the same in writing to such entity, at the addresses set forth on the cover page hereof.

12. Entire Agreement. This Bond Purchase Agreement, when accepted by the Authority and the City, shall constitute the entire agreement among the Authority, the City and the Underwriter and is made solely for the benefit of the Authority, the City and the Underwriter (including the successors or assigns of any Underwriter). Except as provided in Section 16 below, no other person shall acquire or have any right hereunder by virtue hereof, except as provided herein.

All the Authority's and the City's representations, warranties and agreements in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriter, until the earlier of (a) delivery of and payment for the Bonds hereunder, and (b) any termination of this Bond Purchase Agreement.

13. Definitions. Terms not otherwise defined herein shall have the same meaning as when used in the Indenture or the Lease.

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. 20 15. State of California Law Governs. The validity, interpretation and performance of the Authority Documents shall be governed by the laws of the State.

16. No Assignment. The rights and obligations created by this Bond Purchase Agreement shall not be subject to assignment by the Underwriter, the Authority or the City without the prior written consent of the other parties hereto.
21 17. Counterparts. This Bond 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.

SAMUEL A. RAMIREZ & CO., INC.

By:

Authorized Officer
The foregoing is hereby agreed to and accepted as of the date first above written:

PLACENTIA PUBLIC FINANCING AUTHORITY
By:

Title:

Time of Execution: p.m. California time

CITY OF PLACENTIA
By:

Title:

Time of Execution: p.m. California time
[EXECUTION PAGE OF BOND PURCHASE AGREEMENT]
S-1

EXHIBIT A

MATURITY SCHEDULE
$

PLACENTIA PUBLIC FINANCING AUTHORITY

LEASE REVENUE BONDS
(PUBLIC SAFETY CENTER PROJECT)
SERIES 2022A

MATURITY SCHEDULE
Subject to
Hold -The-
Offering -
10% Test Price Rule
Maturity Principal Interest 10% Test Not (marked if
(June 1) Amount Rate Yield Price Satisfied* Satisfied used) 2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
20 (T)
(T) Term Bond.
(C) Priced to optional call at [par] on June 1, 20_.
* At the time of execution of this Purchase Agreement and assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Agreement.

A-1

EXHIBIT B

PLACENTIA PUBLIC FINANCING AUTHORITY

LEASE REVENUE BONDS
(PUBLIC SAFETY CENTER PROJECT)
SERIES 2022A

FORM OF ISSUE PRICE CERTIFICATE
[TO COME FROM BOND COUNSEL]
B-1

CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (this "Disclosure Agreement") is executed and delivered by the City of Placentia (the "City") and Kosmont Transactions Services, Inc., as dissemination agent (the "Dissemination Agent"), in connection with the issuance of $ Placentia Public Financing Authority Lease Revenue Bonds (Public Safety Center Project) Series 2023A (the "Bonds"). The Bonds are being issued pursuant to an Indenture, dated as of August 1, 2023 (the "Indenture"), among the Placentia Public Financing Authority (the "Authority"), the City and U.S. Bank Trust Company, National Association, as trustee. Pursuant to the Indenture, the City and the Dissemination Agent covenant and agree as follows:

Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the City for the benefit of the Beneficial Owners of the Bonds and to assist the Participating Underwriter in complying with the Rule (as defined herein).

Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
"Audited Financial Statements" means the audited financial results of the City for the applicable Fiscal Year.
"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.
"Business Day" shall mean a day, other than (a) Saturday or Sunday and (c) a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed. "Disclosure Representative" shall mean the designee of the City designated to act as the Disclosure Representative, or such other person as the City shall designate in writing to the Dissemination Agent from time to time.
"Dissemination Agent" means an entity selected and retained by the City, or any successor thereto selected by the City. The initial Dissemination Agent shall be Kosmont Transactions Services, Inc. "EMMA" shall mean the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System for Municipal Securities disclosures, maintained on the intemet at http://emma.msrb.org . "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. "MSRB" shall mean the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or authorized by the SEC to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the SEC, filings with the MSRB are to be made through the EMMA website of the MSRB, currently located at http://emma.msrb.org .
4844-5310-9462.2

"Participating Underwriter" shall mean any original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Repository" shall mean, until otherwise designated by the SEC, EMMA. "Rule" shall mean Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as amended from time to time.
"State" shall mean the State of California.
"SEC" shall mean the U.S. Securities and Exchange Commission.

Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than March 31 in each year, commencing March 31, 2024, provide to the Repository 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. If the City's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5. (b) Not later than ten Business Days prior to the date specified in subsection (a) for providing the Annual Report to the Repository, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). The City shall provide, or cause the preparer of the Annual Report to provide, a written certificate with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished to it hereunder. The Dissemination Agent may conclusively rely upon such certification and shall have no duty or obligation to review such Annual Report.
(c) If the City is unable to provide to the Repository an Annual Report by the date required in subsection (a), the City in a timely manner shall send, or shall cause the Dissemination Agent to send, a notice to the Repository or to the MSRB, in substantially the form attached as Exhibit A. (d) The Dissemination Agent shall:
(i) determine the electronic filing address of, and then -current procedures for submitting Annual Reports to, the MSRB each year prior to the date for providing the Annual Report; and
(ii) file a report with the City certifying that the Annual Report has been provided to the MSRB pursuant to this Disclosure Agreement, and stating the date it was provided.

Section 4. Content of Annual Reports. The Annual Report shall contain or include by reference the following:
(a) The Audited Financial Statements of the City for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Audited Financial Statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained 2 4844-5310-9462.2

in the final Official Statement, dated , 2023 relating to the Bonds (the "Official Statement") and the Audited Financial Statements shall be filed in the same manner as the Annual Report when such Audited Financial Statements become available.
(b) Updated information for the prior Fiscal Year (unless otherwise noted) set forth in the following tables in the Official Statement:

Table No. 8 — General Fund Revenues and Expenditures
Table No. 9 — Gross Assessed Value of All Taxable Property (for the then current Fiscal Year) Table No. 10 — Largest Property Taxpayers
Table No. 11 — Secured Tax Levies and Collections
Table No. 13 — General Fund Tax Revenues by Source
Table No. 19 — General Fund Balance Sheet
Table No. 20 — Statement of Revenues, Expenditures and Changes in Fund Balance Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been submitted to the Repository or the SEC. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting of Listed Events. The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than ten (10) Business Days after the event:
principal and interest payment delinquencies;
non-payment related defaults, if material;
unscheduled draws on debt service reserves reflecting financial difficulties; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions, the issuance by the Internal Revenue Service of a proposed or final determination of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax- status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to the rights of Bond holders, if material; (8) bond calls, if material, and tender offers;
(9) defeasances;
3 4844-5310-9462.2

(10) release, substitution or sale of property securing repayment of the Bonds, if material;
(11) rating changes;
(12) bankruptcy, insolvency, receivership or similar event of the City; For these purposes, any event described in the immediately preceding paragraph (12) is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.
(13) consummation of a merger, consolidation or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(14) appointment of a successor or additional trustee or the change of the name of a trustee, if material;
(15) incurrence of a financial obligation of the City, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect Bond holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties.

The term financial obligation means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (3) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.

Section 6. Filings with the MSRB. All information, operating data, financial statements, notices and other documents provided to the MSRB in accordance with this Disclosure Agreement shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB.

Section 7. Termination of Reporting Obligation. The City's obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5.

Section 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 Agreement, and may 4 4844-5310-9462.2

discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.

The Dissemination Agent may resign by providing thirty (30) days written notice to the City.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, if the City has received an opinion of counsel knowledgeable in federal securities laws to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule.

Section 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the City shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or 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 Agreement, any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the City or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance.

Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of their respective powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Authority, the Trustee, the Holders, or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

Section 13. Notices. Any notices or communications herein required or permitted to be given shall be in writing and shall be delivered in such manner and to such addresses as are specified in the Indenture. 5 4844-5310-9462.2

Section 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and the Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Date: , 2023

CITY OF PLACENTIA
By:

City Administrator
KOSMONT FINANCIAL SERVICES INC.

By:

Authorized Officer
6 4844-5310-9462.2

EXHIBIT A

NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD

OF FAILURE TO FILE ANNUAL REPORT

NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT
Name of Obligated Party: City of Placentia (the "City") Name of Issue:
$ Placentia Public Financing Authority Lease Revenue Bonds (Public Safety Center Project) Series 2023A
Date of Issuance: , 2023
NOTICE IS HEREBY GIVEN that the City has not provided an Annual Report with respect to the above -captioned Bonds as required by the Continuing Disclosure Agreement, dated 2023, between the City and Kosmont Transactions Services, Inc. The City anticipates that the Annual Report will be filed by [date].

Dated: , 20
cc: City of Placentia

KOSMONT TRANSACTIONS SERVICES,
INC.,
as Dissemination Agent
A-1
4844-5310-9462.2

Recording Requested By And
When Recorded Mail To:

Nixon Peabody LLP
300 South Grand Avenue, Suite 4100
Los Angeles, California 90071
Attention: Danny Kim, Esq.
(Space above for Recorder's Use)
This document is recorded for the benefit of the City of Placentia and the recording is fee -exempt under Section 6103 of the California Government Code and the recording is exempt under Section 27383 of the California Government Code and Section 11928 of the California Revenue and Taxation Code.

ASSIGNMENT AGREEMENT
by and between

PLACENTIA PUBLIC FINANCING AUTHORITY,
as Assignor
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee and Assignee
relating to the
Placentia Public Financing Authority
Lease Revenue Bonds (Public Safety Center Project) Series 2023A Dated as of August 1, 2023
4827-5389-2054.2

ASSIGNMENT AGREEMENT
This Assignment Agreement (the "Assignment Agreement"), executed and entered into as of August 1, 2023, by and between the Placentia Public Financing Authority (the "Authority"), a joint powers authority duly organized and existing under and pursuant to California Government Code Sections 6500 et seq. and U.S. Bank Trust Company, National Association (the "Trustee"), a national banking association existing under and by virtue of the laws of the United States of America, as trustee under the Indenture (as hereinafter defined); WITNESSETH:

WHEREAS, the Authority and the City of Placentia (the "City") have executed and entered into the Lease Agreement (the "Lease Agreement"), dated as of August 1, 2023 (which is recorded concurrently herewith), pursuant to which the Authority has leased that certain real property, as more particularly described in the Lease Agreement (the "Leased Property") to the City, as described in Exhibit A attached hereto and incorporated herein; and WHEREAS, under and pursuant to the Lease Agreement, the City is obligated to make rental payments to the Authority for the lease of the Leased Property to it; and WHEREAS, the Authority desires to assign without recourse all its rights to receive the Base Rental Payments (as defined in the Lease Agreement) and certain other payments scheduled to be paid by the City under and pursuant to the Lease Agreement to the Trustee; and WHEREAS, in consideration of such assignment and the execution and entering into of an Indenture (the "Indenture"), dated as of August 1, 2023, among the Trustee, the City and the Authority, the Authority will issue its Lease Revenue Bonds (Public Safety Center Project) Series 2023A in the aggregate principal amount of $ ; 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 Assignment 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 Assignment Agreement;

NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF

THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR

OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:

SECTION 1. Assignment. The Authority, for good and valuable consideration, the receipt of which is hereby acknowledged, does hereby unconditionally grant, transfer and assign to the Trustee without recourse (i) all its rights to receive the Base Rental Payments (as defined in the Lease Agreement) under and pursuant to the Lease Agreement, (ii) the right to take all actions under the Lease Agreement, (iii) the right of access more particularly described in the Lease Agreement, and (iv) any and all other rights and remedies of the Authority in the Lease Agreement as lessor thereunder; provided, that so long as no default in payment of Base Rental Payments under the Lease Agreement shall have occurred or be continuing, the Authority shall 2 4827-5389-2054.2

have and may exercise all rights of the Authority under the Lease Agreement other than the right to receive the Base Rental Payments.

SECTION 2. Acceptance. The Trustee hereby accepts the foregoing assignment for the benefit of the owners of the Bonds, as defined in the Indenture, subject to the conditions and terms of the Indenture, and all such Base Rental Payments shall be applied and all such rights so assigned shall be exercised by the Trustee as provided in the Indenture.

SECTION 3. Conditions. This Assignment Agreement shall confer no rights and shall impose no obligations upon the Trustee beyond those expressly provided in the Indenture.

SECTION 4. California Law. This Assignment Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California.

SECTION 5. Severability. If any agreement, condition, covenant or term hereof or any application hereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, in whole or in part, all agreements, conditions, covenants and terms hereof and all applications thereof not held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby.

SECTION 6. Execution in Counterparts. This Assignment Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same Assignment Agreement. [This space intentionally left blank]
3 4827-5389-2054.2

IN WITNESS WHEREOF, the parties hereto have executed and entered into this Assignment Agreement by their officers thereunto duly authorized as of the day and year first above written.

PLACENTIA PUBLIC FINANCING

AUTHORITY
By:

Executive Director
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By:

Authorized Signatory
4 4827-5389-2054.2

EXHIBIT A

DESCRIPTION OF LEASED PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PLACENTIA,

IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PRIOR TO ISSUANCE OF A CERTIFICATE OF OCCUPANCY PURSUANT TO THE

LEASE AGREEMENT

SUBSEQUENT TO ISSUANCE OF A CERTIFICATE OF OCCUPANCY PURSUANT TO

THE LEASE AGREEMENT
A-1
4827-5389-2054.2

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 , 2023, before me, , Notary Public,
personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(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 [SEAL]
4827-5389-2054.2

STATE OF CALIFORNIA )
) ss

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 [SEAL]
4827-5389-2054.2

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Nixon Peabody LLP
300 South Grand Avenue, Suite 4100
Los Angeles, California 90071
Attention: Danny Kim, Esq.
(Space above for Recorder's use)
This document is recorded for the benefit of the City of Placentia and the recording is fee -exempt under Section 6103 of the California Government Code and the recording is exempt under Section 27383 of the California Government Code and Section 11928 of the California Revenue and Taxation Code.

LEASE AGREEMENT
by and between the

PLACENTIA PUBLIC FINANCING AUTHORITY,
as Lessor
and the

CITY OF PLACENTIA,
as Lessee
relating to the
$
Placentia Public Financing Authority
Lease Revenue Bonds (Public Safety Center Project) Series 2023A Dated as of August 1, 2023
4816-4731-6694.3

TABLE OF CONTENTS
Page

ARTICLE I DEFINITIONS
Section 1.01 Definitions

ARTICLE II THE LEASED PROPERTY
Section 2.01
Section 2.02
Section 2.03
Section 2.04
Section 2.05
Section 2.06
Lease of the Leased Property
Quiet Enjoyment
Right of Entry and Inspection
Prohibition Against Encumbrance or Sale
Liens
Substitution or Removal of Leased Property

ARTICLE III TERM OF THE LEASE AGREEMENT
Section 3.01 Commencement of the Lease Agreement

ARTICLE IV USE OF PROCEEDS
Section 4.01 Use of Proceeds

ARTICLE V RENTAL PAYMENTS
Section 5.01 Rental Payments
Section 5.02 Annual Budgets; Reporting Requirements
Section 5.03 Application of Rental Payments
Section 5.04 Rental Abatement
Section 5.05 Prepayment of Rental Payments
Section 5.06 Obligation to Make Rental Payments
ARTICLE VI MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES Section 6.01 Maintenance of the Leased Property by the City Section 6.02 Taxes, Other Governmental Charges and Utility Charges Section 6.03 Insurance
Section 6.04 Advances
Section 6.05 Title Insurance

ARTICLE VII DAMAGE, DESTRUCTION, TITLE DEFECT AND

CONDEMNATION
2 2
4 4
4 4
4 5
5 6
6 7
7 7
7 9
9 9
10 10
11 11
11 11
13 13
13 Section 7.01 Damage, Destruction, Title Defect and Condemnation; Use of Net Proceeds 13
-i-
4816-4731-6694.3

TABLE OF CONTENTS
(continued)
Page
ARTICLE VIII DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE LEASED PROPERTY 14
Section 8.01 Disclaimer of Warranties 14
Section 8.02 Use of the Leased Property; Improvements 14 ARTICLE IX ASSIGNMENT AND INDEMNIFICATION 15
Section 9.01 Assignment by Authority 15
Section 9.02 Assignment by City 15
Section 9.03 Indemnification 15
ARTICLE X DEFAULT 16
Section 10.01 Default 16
ARTICLE XI MISCELLANEOUS 19
Section 11.01 Notices 19
Section 11.02 Binding Effect 19
Section 11.03 Trustee as Third Party Beneficiary 19
Section 11.04 Net Lease 19
Section 11.05 Amendments 20
Section 11.06 Discharge of City 20
Section 11.07 Partial Invalidity 21
Section 11.08 California Law 21
Section 11.09 Headings 21
Section 11.10 Execution 21
EXHIBIT A DESCRIPTION OF LEASED PROPERTY A- 1
EXHIBIT B BASE RENTAL PAYMENTS SCHEDULE B-1
4816-4731-6694.3

LEASE AGREEMENT
This Lease Agreement (this "Lease Agreement"), executed and entered into as of August 1, 2023, by and between the PLACENTIA PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under and by virtue of the laws of the State of California (the "Authority"), as lessor, and the CITY OF PLACENTIA, a charter city duly organized and existing under the Constitution and laws of the State of California (the "City"), as lessee;
WITNESSETH:

WHEREAS, concurrently with the execution of this Lease Agreement, the City and the Authority are entering into a Site Lease (the "Site Lease"), dated as of August 1, 2023 (which is recorded concurrently herewith), whereby the Authority will lease certain real property and the improvements thereon or to be located thereon from the City, more particularly described in Exhibit A attached hereto (the "Real Property"), (such Real Property and the improvements thereon being collectively referred to herein as the "Leased Property"); WHEREAS, the City will then sublease the Leased Property back from the Authority pursuant to this Lease Agreement;
WHEREAS, concurrently with the execution of this Lease Agreement the Authority, the City and U.S. Bank National Association, as trustee (the "Trustee"), are entering into an Indenture, dated as of August 1, 2023 (the "Indenture"); WHEREAS, the Authority will issue its Lease Revenue Bonds (Public Safety Center Project) Series 2023A (the "Bonds"), in the aggregate principal amount of $ WHEREAS, the Bonds will be secured by the payments to be made by the City pursuant to this Lease Agreement;
WHEREAS, the City is authorized by law to sublease the Leased Property and the Leased Property is necessary and proper for public purposes; 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 PREMISES AND OF THE

MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER

VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:
4816-4731-6694.3

ARTICLE I

DEFINITIONS
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 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. All other capitalized terms used herein without definition shall have the meanings as set forth in the Indenture.

Additional Payments
"Additional Payments" means all amounts payable by the City pursuant to Section

5.01(b) hereof.

Base Rental Payment Date
The term "Base Rental Payment Date" means the date five days preceding each Interest Payment Date.

Base Rental Payments
"Base Rental Payments" means all amounts payable by the City as Base Rental pursuant to Section 5.01(a) hereof.

Expiry Date
"Expiry Date" means June 1, 20
Insurance Consultant
"Insurance Consultant" means an individual or firm retained by the City as an independent insurance consultant, experienced in the field of risk management.

Leased Property
"Leased Property" means the Real Property and the improvements thereon (as the same may be changed from time to time by Removal or Substitution).

Lease Year
The term "Lease Year" means the period from each June 2 to and including the following June 1 during the term hereof; provided that the final Lease Year shall terminate on the Expiry Date.

Net Proceeds
The term "Net Proceeds" means any insurance or eminent domain award (including any proceeds of sale to a governmental entity under threat of the exercise of eminent domain powers), 2 4816-4731-6694.3

paid with respect to the Leased Property, to the extent remaining after payment therefrom of all expenses incurred in the collection thereof.

Permitted Encumbrances
"Permitted Encumbrances" means, as of any particular time: (i) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to Section 6.02, permit to remain unpaid; (ii) the Assignment Agreement, as it may be amended from time to time; (iii) this Lease Agreement, as it may be amended from time to time; (iv) the Site Lease, as it may be amended from time to time; (v) the Indenture, as it may be amended from time to time; (vi) any right or claim of any mechanic, laborer, materialman, supplier or vendor filed or perfected in the manner prescribed by law; (vii) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the date of recordation of the Lease Agreement in the office of the County Recorder of the County of Orange; and (viii) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions, all of a non -monetary nature, established following the date of recordation of this Lease Agreement and to which the Authority and the City consent in writing and certify to the Trustee will not materially impair the ownership interests of the Authority or use of the Facilities by the City.

Real Property
"Real Property" means the real property described in Exhibit A hereto.

Removal
"Removal" means the release of all or a portion of the Leased Property from the leasehold hereof and of the Site Lease as provided in Section 2.06.

Site Lease
"Site Lease" means that certain Site Lease, executed and entered into as of August 1, 2023 (which is recorded concurrently herewith), by and between the City and the Authority, as originally executed and entered into and as it may from time to time be amended in accordance herewith and therewith.

Substitution
"Substitution" means the release of all or a portion of the Leased Property from the leasehold hereof and of the Site Lease, and the lease of substituted real property and improvements hereunder and under the Site Lease as provided in Section 2.06.

The singular form of any word used herein, including the terms defined in this Section 1.01, 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. All references herein to "Sections" and other subdivisions hereof are to the corresponding Sections or subdivisions of this Lease Agreement as originally executed; and the words "herein," "hereof," 3 4816-4731-6694.3

"hereunder" and other words of similar import refer to this Lease Agreement as a whole and not to any particular Section or subdivision hereof.

ARTICLE II

THE LEASED PROPERTY
Section 2.01 Lease of the Leased Property. The Authority hereby leases to the City, and the City hereby rents and hires from the Authority, the Leased Property, together with the right of access, ingress, and egress across Property A of the Leased Property after a certificate of occupancy has been issued for a public safety building located thereon, on the conditions and terms hereinafter set forth. The City hereby agrees and covenants that during the term hereof, except as hereinafter provided, it will use the Leased Property for public purposes so as to afford the public the benefits contemplated hereby and so as to permit the Authority to carry out its agreements and covenants contained herein and in the Indenture, and the City hereby further agrees and covenants that during the term hereof that it will not abandon or vacate the Leased Property.

Section 2.02 Quiet Enjoyment. The parties hereto mutually covenant that the City, so long as it observes and performs the agreements, conditions, covenants and terms required to be observed or performed by it contained herein and is not in default hereunder, shall at all times during the term hereof peaceably and quietly have, hold and enjoy the Leased Property without suit, trouble or hindrance from the Authority.

Section 2.03 Right of Entry and Inspection. The Authority shall have the right to enter the Leased Property and inspect the Leased Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority's rights or obligations hereunder and for all other lawful purposes.

Section 2.04 Prohibition Against Encumbrance or Sale. The City and the Authority will not create or suffer to be created any mortgage, pledge, lien, charge or encumbrance upon the Leased Property, except Permitted Encumbrances. The City and the Authority will not sell or otherwise dispose of the Leased Property or any property essential to the proper operation of the Leased Property, except as otherwise provided herein. Notwithstanding anything to the contrary herein contained, the City may assign, transfer or sublease any and all of the Leased Property or its other rights hereunder, provided that (a) the rights of any assignee, transferee or sublessee shall be subordinate to all rights of the Authority hereunder, (b) no such assignment, transfer or sublease shall relieve the City of any of its obligations hereunder, (c) the assignment, transfer or sublease shall not result in a breach of any covenant of the City contained in any other Section hereof, (d) any such assignment, transfer or sublease shall by its terms expressly provide that the fair rental value of the Leased Property for all purposes shall be first allocated to this Lease Agreement, as the same may be amended from time to time before or after any such assignment, transfer or sublease and (e) no such assignment, transfer or sublease shall confer upon the parties thereto any remedy which allows reentry upon the Leased Property unless concurrently with granting such remedy the same shall be also granted hereunder by an amendment to this Lease Agreement which shall in all instances be prior to and superior to any such assignment, transfer or sublease.
4 4816-4731-6694.3

Section 2.05 Liens. In the event the City shall at any time during the term hereof cause any improvements to the Leased Property to be constructed or materials to be supplied in or upon or attached to the Leased Property, the City shall pay or cause to be paid when due all sums of money that may become due or purporting to be due for any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon, about or relating to the Leased Property and shall keep the Leased Property free of any and all liens against the Leased Property or the Authority's interest therein. In the event any such lien attaches to or is filed against the Leased Property or the Authority's interest therein, and the enforcement thereof is not stayed or if so stayed such stay thereafter expires, the City shall 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. If any such lien shall be reduced to final judgment and such judgment or any process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and such stay thereafter expires, the City shall forthwith pay and discharge or cause to be paid and discharged such judgment. The City shall, to the maximum extent permitted by law, indemnify and hold the Authority and its assignee and its directors, officers and employees harmless from, and defend each of them against, any claim, demand, loss, damage, liability or expense (including attorneys' fees) as a result of any such lien or claim of lien against the Leased Property or the Authority's interest therein.

Section 2.06 Substitution or Removal of Leased Property. (a) The City may amend this Lease Agreement and the Site Lease to substitute other real property and/or improvements (the "Substituted Property") for existing Leased Property and/or to remove real property (including undivided interests therein) and/or improvements from the definition of Leased Property, and upon compliance with all of the conditions set forth in subsection (b) below. After a substitution or removal, the part of the Leased Property for which the substitution or removal has been effected shall be released from the leasehold hereunder and under the Site Lease.
(b) Except for the removal described in Section 2.06(c) below, no substitution or removal shall take place hereunder until the City delivers to the Authority and the Trustee the following:
(1) A Certificate of the City containing a description of all or part of the Leased Property to be released and, in the event of a substitution, a description of the Substituted Property to be substituted in its place;
(2) A Certificate of the City (A) stating that the annual fair rental value of the Leased Property after a substitution or removal, in each year during the remaining term of this Lease Agreement, is at least equal to the maximum annual Base Rental Payments payable hereunder attributable to the Leased Property prior to said substitution or removal, as determined by the City on the basis of commercially reasonable evidence of the fair rental value of the Leased Property after said substitution or removal; and (B) demonstrating that the useful life of the Leased Property after substitution or removal equals or exceeds the remaining term of this Lease Agreement; 5 4816-4731-6694.3

(3) An Opinion of Counsel addressed to the City, the Authority and the Trustee to the effect that the amendments hereto and to the Site Lease contemplating substitution or removal have been duly authorized, executed and delivered and constitute the valid and binding obligations of the City and the Authority enforceable in accordance with their terms;
(4) (A) In the event of a Substitution, a policy of title insurance in an amount equal to the same proportion of the principal amount as the principal portion of the Base Rental Payments for the Substituted Property bears to the total principal portion of the Base Rental Payments payable hereunder, insuring the City's leasehold interest in the Substituted Property (except any portion thereof which is not real property) subject only to Permitted Encumbrances, together with an endorsement thereto making said policy payable to the Trustee for the benefit of the Owners of the Bonds, and (B) in the event of a partial Removal, evidence that the title insurance in effect immediately prior thereto is not affected;
(5) In the event of a Substitution, an opinion of the City Attorney of the City to the effect that the exceptions, if any, contained in the title insurance policy referred to in (4) above do not interfere with the beneficial use and occupancy of the Substituted Property described in such policy by the City for the purposes of leasing or using the Substituted Property; and
(6) Evidence that the City has complied with the covenants contained in clauses (1) and (2) of Section 6.03 hereof with respect to the Substituted Property. (c) Upon the issuance of a certificate of occupancy for the public safety center being constructed at the City's corporate yard located at 2999 E. La Jolla Avenue, Anaheim, California 92806, the Real Property shall automatically be modified as set forth in Exhibit A.

ARTICLE III

TERM OF THE LEASE AGREEMENT
Section 3.01 Commencement of the Lease Agreement. The effective date of this Lease Agreement is the Closing Date, and the term of this Lease Agreement shall expire on the later of (i) the Expiry Date; (ii) the date the last Base Rental Payment is made under the provisions hereof; or (iii) the date of discharge of all of the Bonds pursuant to Article X of the Indenture. Notwithstanding the foregoing, the term of this Lease Agreement shall automatically be extended for a period of ten (10) years, if, on the Expiry Date, the Base Rental Payments have not been fully paid or prepaid and any Additional Payment have not paid in full, and shall terminate on the date when the Base Rental Payments and Additional Payments have been fully paid or prepaid in accordance with the terms hereof.
6 4816-4731-6694.3

ARTICLE IV

USE OF PROCEEDS
Section 4.01 Use of Proceeds. The parties hereto agree that the proceeds of the Bonds will be used to finance the Project and to pay costs of issuance of the Bonds, as more fully set forth in the Indenture.

ARTICLE V

RENTAL PAYMENTS
Section 5.01 Rental Payments. The City agrees to pay to the Authority, its successors or assigns, without deduction or offset of any kind, as rental for the use and occupancy of the Leased Property, the following amounts at the following times:
(a) Base Rental. Subject to the immediately following sentence, the City shall pay to the Authority rental hereunder as Base Rental Payments for the use and occupancy of the Leased Property for each Lease Year or portion thereof, at the times and in the amounts set forth in the Base Rental Payment Schedule attached hereto as Exhibit B, and made a part hereof.

The interest components of the Base Rental Payments shall be paid by the City as and constitute interest paid on the principal components of the Base Rental Payments to be paid by the City hereunder. The obligation to make the Base Rental Payments set forth on Exhibit B attached hereto shall commence as of the Closing Date.

If the term of this Lease Agreement shall have been extended pursuant to Section 3.01 hereof, Base Rental Payment installments shall continue to be payable on the Base Rental Payment Dates, continuing to and including the date of termination of this Lease Agreement. Upon such extension of this Lease Agreement, the City shall deliver to the Trustee a Certificate setting forth the extended rental payment schedule, which schedule shall establish the Base Rental Payments at an amount sufficient to pay all unpaid principal and interest on the Bonds.
(b) Additional Payments. The City shall also pay in addition to the Base Rental Payments, to the Authority or the Trustee, as hereinafter provided, such amounts ("Additional Payments") in each year as shall be required for the payment of all costs and expenses incurred in connection with the execution, performance or enforcement of this Lease Agreement or the assignment hereof, the Indenture, or the respective interests in the Leased Property and the lease of the Leased Property by the Authority to the City hereunder, including but not limited to all fees, costs and expenses and all administrative costs of the Authority relating to the Leased Property including, without limiting the generality of the foregoing, salaries and wages of employees, overhead, insurance premiums, taxes and assessments (if any), rebate payments, expenses, compensation and indemnification of the Trustee (to the extent not paid or otherwise provided for out of the proceeds of the sale of the Bonds), fees of auditors, accountants, attorneys or engineers, 7 4816-4731-6694.3

insurance premiums, and all other reasonable and necessary administrative costs of the Authority or charges required to be paid by it to comply with the terms of the Bonds or the Indenture.

Such Additional Payments shall be billed to the City by the Authority or the Trustee from time to time. Amounts so billed shall be paid by the City within sixty (60) days after receipt of the bill by the City.

Any taxes levied against the Authority with respect to the Leased Property, the fees of the Trustee, and any other expenses directly attributable to the Leased Property shall be included in the Additional Payments payable hereunder. Any taxes levied against the Authority with respect to real property other than the Leased Property, the fees of any trustee or paying agent under any resolution securing bonds of the Authority or any Indenture other than the Indenture, and any other expenses directly attributable to any facilities other than the Leased Property shall not be included in the administrative costs of the Leased Property and shall not be paid from the Additional Payments payable hereunder.

Any expenses of the Authority not directly attributable to any particular project of the Authority shall be equitably allocated among all such projects, including the Leased Property, in accordance with sound accounting practice. In the event of any question or dispute as to such allocation, the written opinion of an independent firm of certified public accountants, employed by the Authority to consider the question and render an opinion thereon, shall be final and conclusive determination as to such allocation. The Trustee may conclusively rely upon a Certificate of the Authority in making any determination that costs are payable as Additional Payments hereunder, and shall not be required to make any investigation as to whether or not the items so requested to be paid are expenses of operation of the Leased Property.
(c) Consideration.
(i) Such payments of Base Rental Payments for each Lease Year or portion thereof during the term of this Lease Agreement shall constitute, together with the Additional Payments, the total amount due for such Lease Year or portion thereof and shall be paid or payable by the City for and in consideration of the right of the use and possession of, and the continued quiet use and enjoyment of, the Leased Property. On the Closing Date, the City shall deliver a certificate to the Authority and the Trustee, which shall set forth the annual fair rental value of the Leased Property. The parties hereto have agreed and determined that the annual fair rental value of the Leased Property is not less than the maximum Base Rental Payments payable hereunder in any year. In making such determinations of annual fair rental value, consideration has been given to a variety of factors including the replacement costs of the existing improvements on the Leased Property, other obligations of the parties under this Lease Agreement, the uses and purposes which may be served by the improvements on the Leased Property and the benefits therefrom which will accrue to the City and the general public. (ii) Notwithstanding anything to the contrary herein contained, this Lease Agreement may not be amended in a manner such that the sum of Base 8 4816-4731-6694.3

Rental Payments, including Base Rental Payments payable pursuant to such amendment, in any year is in excess of the annual fair rental value of the Leased Property and other land and improvements leased to the City hereunder. (d) Payment; Credit. Each installment of Base Rental Payments payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the corporate trust office of the Trustee in Los Angeles, California, or such other place as the Authority shall designate. Any such installment of rental accruing hereunder which shall not be paid when due shall remain due and payable until received by the Trustee. Notwithstanding any dispute between the City and the Authority, 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 any such dispute. In the event of a determination that the City was not liable for said rental payments or any portion thereof, said payments or excess of payments, as the case may be, shall, at the option of the City, be credited against subsequent rental payments due hereunder or be refunded at the time of such determination. Amounts required to be deposited by the City with the Trustee pursuant to this Section 5.01(d) on any date shall be reduced to the extent of available amounts on deposit on such date in the Revenue Fund, the Interest Fund or the Principal Fund. Any payment scheduled to be made on a date which is not a Business Day shall be made on the next succeeding Business Day.

Section 5.02 Annual Budgets; Reporting Requirements. The City covenants to take such action as may be necessary to include all Base Rental Payments and Additional Payments due under this Lease Agreement in its operating budget for each fiscal year commencing after the date hereof (an "Operating Budget") and to make all necessary appropriations for such Base Rental Payments and Additional Payments.

Section 5.03 Application of Rental Payments. All Base Rental Payments received shall be applied first to the interest components of the Base Rental Payments due hereunder, then to the principal components (including any prepayment premium components) of the Base Rental Payments due hereunder and thereafter to all Additional Payments due hereunder, but no such application of any payments which are less than the total rental due and owing shall be deemed a waiver of any default hereunder.

Section 5.04 Rental Abatement. Except to the extent of (a) amounts held by the Trustee in the Revenue Fund, (b) amounts received in respect of rental interruption insurance, and (c) amounts, if any, otherwise legally available to the Trustee for payments in respect of the Bonds, during any period in which, by reason of material damage, destruction, title defect, or condemnation, there is substantial interference with the use and possession by the City of any portion of the Leased Property, Based Rental Payments due hereunder with respect to the Leased Property shall be abated to the extent that the annual fair rental value of the portion of the Leased Property in respect of which there is no substantial interference is less than the annual Base Rental Payments, in which case Base Rental Payments shall be abated only by an amount equal to the difference. In the event the City shall assign, transfer or sublease any or all of the Leased Property or other rights hereunder, as permitted by Section 2.04 hereof, for purposes of determining the annual fair rental value available to pay Base Rental Payments, annual fair rental value of the Leased Property shall first be allocated to this Lease Agreement as provided in clause (d) of Section 9 4816-4731-6694.3

2.04 hereof. Any abatement of Base Rental Payments pursuant to this Section shall not be considered an Event of Default as defined in Article X hereof. The City waives the benefits of Civil Code Sections 1932(2) and 1933(4) and any and all other rights to terminate this Lease Agreement by virtue of any such interference and this Lease Agreement shall continue in full force and effect. Such abatement shall continue for the period commencing with the date of such damage, destruction, title defect or condemnation and ending with the substantial completion of the work of repair or replacement of the portions of the Leased Property so damaged, destroyed, defective or condemned.

In the event that rental is abated, in whole or in part, pursuant to this Section due to damage, destruction, title defect or condemnation of any part of the Leased Property and the City is unable to repair, replace or rebuild the Leased Property from the proceeds of insurance, if any, the City agrees to apply for and to use its best efforts to obtain any appropriate state and/or federal disaster relief in order to obtain funds to repair, replace or rebuild the Leased Property.

Section 5.05 Prepayment of Rental Payments. The City may prepay, from eminent domain proceeds or net insurance proceeds received by it pursuant to Section 7.01 hereof, all or any portion of the components of Base Rental Payments payable hereunder relating to any portion of the Leased Property then unpaid, in whole on any date, or in part on any date in integral multiples of an Authorized Denomination so that the aggregate annual amounts of principal components of Base Rental Payments payable under this Lease Agreement represented by the Bonds which shall be payable after such prepayment date shall each be in an integral multiple of an Authorized Denomination and shall be as nearly proportional as practicable to the aggregate annual amounts of principal components of Base Rental Payments payable under this Lease Agreement represented by the Bonds.

The City may prepay, from any source of available moneys pursuant to Section 4.01(b) of the Indenture, all or any part (in an integral multiple of an Authorized Denomination) of the principal components of Base Rental Payments payable under this Lease Agreement then unpaid so that the aggregate annual amounts of principal components of Base Rental Payments under this Lease Agreement which shall be payable after such prepayment date shall be as nearly proportional as practicable to the aggregate annual amounts of principal components represented by the Bonds unpaid prior to the prepayment date, at a prepayment amount equal to the principal component prepaid plus accrued interest thereon to the date of prepayment plus any applicable premium.

Before making any prepayment pursuant to this Section, at least 45 days before the prepayment date the City shall give written notice to the Authority and the Trustee describing such event, specifying the order of Principal Payment Dates and specifying the date on which the prepayment will be made, which date shall be not less than 30 nor more than 60 days from the date such written notice is given to the Authority and the Trustee.

Section 5.06 Obligation to Make Rental Payments. The agreements and covenants on the part of the City contained herein 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 10 4816-4731-6694.3

of such officials to enable the City to carry out and perform the agreements and covenants contained herein agreed to be carried out and performed by the City.

THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS

AND TO PAY ADDITIONAL PAYMENTS DOES NOT CONSTITUTE AN OBLIGATION OF

THE CITY 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. NEITHER THE BONDS NOR THE OBLIGATION TO MAKE BASE RENTAL

PAYMENTS AND TO PAY ADDITIONAL PAYMENTS CONSTITUTES AN

INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA OR ANY POLITICAL

SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.

ARTICLE VI
MAINTENANCE; TAXES;

INSURANCE AND OTHER CHARGES
Section 6.01 Maintenance of the Leased Property by the City. The City agrees that, at all times during the term hereof, it will, at its own cost and expense, maintain, preserve and keep the Leased Property and every portion thereof in good repair, working order and condition and that it will from time to time make or cause to be made all necessary and proper repairs, replacements and renewals. The Authority shall have no responsibility in any of these matters or for the making of additions or improvements to the Leased Property.

Section 6.02 Taxes, Other Governmental Charges and Utility Charges. The parties hereto contemplate that the Leased Property will be used for public purposes by the City and, therefore, that the Leased Property will be exempt from all taxes presently assessed and levied with respect to real and personal property, respectively. In the event that the use, possession or acquisition by the City or the Authority of the Leased Property is found to be subject to taxation in any form, the City will pay during the term hereof, as the same respectively become due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Leased Property and any other property acquired by the City in substitution for, as a renewal or replacement of, or a modification, improvement or addition to, the Leased Property, as well as all gas, water, steam, electricity, heat, power, air conditioning, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Leased Property; provided, that with respect to any governmental charges or taxes that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are accrued during such time as this Lease Agreement is in effect.

Section 6.03 Insurance. The City shall secure and maintain or cause to be secured and maintained at all time with insurers of recognized responsibility all coverage on the Leased Property required by this Section 6.03. Such insurance shall consist of:
(1) standard commercial general liability insurance policy or policies or other comparable coverage form in protection of the City and its respective members, officers, agents, employees and assigns. Said policy or policies will provide for 11 4816-4731-6694.3

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 operation of the Leased Property should the City be legally liable. Such policy or policies must provide coverage with limits and subject to such deductibles as the City will deem adequate and prudent, and in all events in form and amount (including any deductibles). Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, a self-insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the proceeds of such liability insurance toward extinguishment or satisfaction of the liability with respect to which such proceeds have been paid.
(2) property insurance against loss or damage to all of the buildings situated on the Leased Property and owned by the City, in an amount at least equal to the lesser of the replacement value of the insured buildings and the aggregate principal amount of the Base Rental Payments outstanding. Such insurance must, as nearly as practicable, cover loss or damage by all "special form" perils. Earthquake insurance will only be carried if available from reputable insurers at a reasonable cost as determined by the Finance Director of the City. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, a self- insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the Net Proceeds of such insurance as provided in Section

7.01. (3) So long as any Bonds are Outstanding, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the Leased Property and the improvements situated thereon as a result of any of the hazards covered in the insurance required by Section 6.03(2), in an amount at least equal to the maximum Base Rental Payments coming due and payable during any immediately succeeding 24 month period.

Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance; provided that such rental interruption insurance shall not be self -insured by the City. The City will apply the Net Proceeds of such insurance towards the payment of the Base Rental Payments allocable to the insured improvements as the same become due and payable.
(4) If required by applicable California law, the City shall carry worker's compensation insurance covering all employees on, in, near or about the Leased Property and, upon request, shall furnish to the Authority certificates evidencing such coverage throughout the Term of this Lease Agreement. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including a self-insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance
12 4816-4731-6694.3

All insurance policies (or riders) required by this Section 6.03 and provided by third party insurance carriers shall be taken out and maintained with responsible insurance companies organized under the laws of one of the states of the United States and qualified to do business in the State, and shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to the insured parties at least ten (10) days before the cancellation or revision becomes effective. Each insurance policy or rider required by Sections

6.03 (1), 6.03(2) and 6.03(3) and provided by third party insurance carriers shall name the City as an insured party. Prior to the Closing Date, the City will provide policies (and riders and endorsements, if applicable) evidencing any such insurance procured by it, or a certificate or certificates of the respective insurers stating that such insurance is in full force and effect. Before the expiration of any such policy (or rider), the City will furnish to the Trustee evidence that the policy has been renewed or replaced by another policy conforming to the provisions of this Article VI unless such insurance is no longer obtainable, in which event the City shall notify the Trustee of such fact.

Section 6.04 Advances. In the event the City shall fail to maintain the full insurance coverage required hereby or shall fail to keep the Leased Property in good repair and operating condition, the Authority may (but shall be under no obligation to) purchase the required policies of insurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by the Authority shall become Additional Payments, which amounts the City agrees to pay within 30 days of a written request therefor, together with interest thereon at the maximum rate allowed by law.

Section 6.05 Title Insurance. The City covenants and agrees to deliver or cause to be delivered to the Trustee on the Closing Date a CLTA or ALTA leasehold owner's policy or policies, or a commitment for such policy or policies, with respect to the Leased Property with liability in the aggregate amount of the principal component of all Base Rental Payments payable hereunder. Such policy or policies, when issued, shall name the Trustee as the insured and shall insure the leasehold estate of the City in the Leased Property subject only to such exceptions as do not materially affect the City's right to the use and occupancy of the Leased Property.

ARTICLE VII

DAMAGE, DESTRUCTION, TITLE DEFECT AND CONDEMNATION
Section 7.01 Damage, Destruction, Title Defect and Condemnation; Use of Net Proceeds. If prior to the termination of the term hereof (a) the Leased Property or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty; or (b) title to, or the temporary use of, the Leased Property or any portion thereof or the estate of the City or the Authority in the Leased Property or any portion thereof is defective or shall be taken under the exercise of the power of eminent domain by any governmental body or by any person or firm or Authority acting under governmental authority, then the City and the Authority will cause the net proceeds of any insurance claim or condemnation award to be applied to the prompt repair, restoration, modification, improvement or replacement of the damaged, destroyed, defective or condemned portion of the Leased Property, and any balance of the net proceeds remaining after such work has been completed shall be paid to the City; provided, that the City, at its option and 13 4816-4731-6694.3

provided the proceeds of such insurance or condemnation award together with any other moneys then available for the purpose are at least sufficient to prepay the aggregate annual amounts of principal and interest components of the Base Rental Payments due hereunder attributable to the portion of the Leased Property so destroyed, damaged, defective or condemned (determined by reference to the proportion which the annual fair rental value of the destroyed, damaged, defective or condemned portion thereof bears to the annual fair rental value of the Leased Property), may elect not to repair, reconstruct or replace the damaged, destroyed, defective or condemned portion of the Leased Property and thereupon shall cause said proceeds to be used for the redemption of Outstanding Bonds pursuant to the provisions of Section 4.01(a) of the Indenture. Notwithstanding any other provision herein, the City shall only prepay less than all of the principal component of the then -remaining Base Rental Payments if the annual fair rental value of the Leased Property after such damage, destruction, title defect or condemnation is at least equal to the aggregate annual amount of the principal and interest components of the Base Rental Payments not being prepaid.

ARTICLE VIII
DISCLAIMER OF WARRANTIES;
VENDOR'S WARRANTIES; USE OF THE LEASED PROPERTY
Section 8.01 Disclaimer of Warranties. NEITHER THE TRUSTEE NOR THE

AUTHORITY MAKES ANY AGREEMENT, WARRANTY OR REPRESENTATION, EITHER

EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION,

MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED PROPERTY, OR WARRANTY WITH RESPECT THERETO. THE CITY

ACKNOWLEDGES THAT NEITHER THE TRUSTEE NOR THE AUTHORITY IS A

MANUFACTURER OF ANY PORTION OF THE LEASED PROPERTY OR A DEALER

THEREIN, THAT THE CITY LEASES THE LEASED PROPERTY AS -IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. 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 existence, furnishing, functioning or the City's use of the Leased Property as provided hereby.

Section 8.02 Use of the Leased Property; Improvements. The City will not use, operate or maintain the Leased Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated hereby. The City shall provide all permits and licenses, if any, necessary for the use of the Leased Property. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of each portion of the Leased Property) with all laws of the jurisdictions in which its operations involving any portion of the Leased Property may extend and any legislative, executive, 14 4816-4731-6694.3

administrative or judicial body exercising any power or jurisdiction over the Leased Property; provided, 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 City adversely affect the estate of the Authority in and to the Leased Property or its interest or rights hereunder.

ARTICLE IX

ASSIGNMENT AND INDEMNIFICATION
Section 9.01 Assignment by Authority. The parties understand that certain of the rights of the Authority hereunder and under the Site Lease will be assigned to the Trustee pursuant to the Assignment Agreement, and accordingly the City agrees to make all payments due hereunder to the Trustee, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach hereof or otherwise) that the City may from time to time have against the Authority. The City agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements, which may be reasonably requested by the Authority or the Trustee to protect their interests in the Leased Property during the term hereof.

Section 9.02 Assignment by City. This Lease Agreement and the interest of the City in the Leased Property may not be assigned or encumbered by the City except as permitted by Section 2.04 hereof.

Section 9.03 Indemnification. The City shall, to the full extent then permitted by law, indemnify, protect, hold harmless, save and keep harmless the Authority and its directors, officers and employees from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless of the cause thereof, and expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties and interest arising out of or as the result of the issuance of the Bonds, the entering into of this Lease Agreement, the acquisition, construction, installation and use of the Leased Property and each portion thereof or any accident in connection with the operation, use, condition or possession of the Leased Property or any portion thereof resulting in damage to property or injury to or death to any person including, without limitation, any claim alleging latent and other defects, whether or not discoverable by the City or the Authority; any claim arising out of the use, presence, storage, disposal or release of any Hazardous Substances on or about the Leased Property; any claim for patent, trademark or copyright infringement; and any claim arising out of strict liability in tort. The indemnification arising under this Section 9.03 shall continue in full force and effect notwithstanding the full payment of all obligations hereunder or the termination hereof for any reason. The City and the Authority mutually agree to promptly give notice to each other of any claim or liability hereby indemnified against following the learning thereof by such party. 15 4816-4731-6694.3

ARTICLE X

DEFAULT
Section 10.01 Default.
(a) The following events shall be "Events of Default" under this Lease Agreement and the terms "Event of Default" and "Default" shall mean, whenever they are used in this Lease Agreement, any one or more of the following events:
(1) The City shall fail to deposit with the Trustee any Base Rental Payment required to be so deposited by the close of business on the day such deposit is required pursuant to Section 5.01(a) hereof, provided, that the failure to deposit any Base Rental Payments abated pursuant to Section 5.04 hereof shall not constitute an Event of Default;
(2) The City shall fail to pay any item of Additional Payments when the same shall become due and payable pursuant to Section 5.01(b) hereof; or (3) The City shall breach any other terms, covenants or conditions contained herein or in the Indenture, and shall fail to remedy any such breach with all reasonable dispatch within a period of 30 days after written notice thereof from the Authority to the City; provided, however, that if the failure stated in the notice cannot be corrected within such period, then the Authority shall not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the City within such period and is diligently pursued until the default is corrected. (b) Upon the happening of any of the Events of Default specified in Section 10.01(a) or (d) hereof, it shall be lawful for the Authority or its assignee, subject to the terms of this Lease Agreement, to exercise any and all remedies available or granted to it pursuant to law or hereunder; provided, however, that notwithstanding anything herein or in the Indenture to the contrary, there shall be no right under any circumstances to accelerate the Base Rental Payments or otherwise declare any Base Rental Payments not then in default to be immediately due and payable. After the occurrence of an event of default hereunder, the City will surrender possession of the Leased Property to the Authority, if requested to do so by the Authority, or by the Trustee or the Owners in accordance with the provisions of the Indenture. (1) No Termination: Repossession and Reletting on Behalf of City. In the event the Authority does not elect to terminate this Lease Agreement in the manner hereinafter provided for in subparagraph (2) hereof, the Authority with the consent of the City, which consent is irrevocably given, may repossess the Leased Property and relet them for the account of the City, in which event the City's obligation will continue to accrue from year to year in accordance with the Lease and the City will continue to receive the value of the use of the Leased Property from year to year in the form of credits against its obligation to pay Base Rental Payments. The obligations of the City shall remain the same as prior to such default to pay Base Rental Payments whether the Authority re-enters or not. The City agrees to and shall remain liable for the payment of all Base Rental Payments 16 4816-4731-6694.3

and the performance of all conditions contained herein and shall reimburse the Authority for any deficiency arising out of the reletting of the Leased Property, or, in the event the Authority is unable to relet the Leased Property, then for the full amount of all Base Rental Payments to the end of the term of this Lease Agreement, but said Base Rental Payments and/or deficiency shall be payable only at the same time and in the same manner as provided above for the payment of Base Rental Payments hereunder, notwithstanding such repossession by the Authority or any suit, brought by the Authority for the purpose of effecting such repossession of the Leased Property or the exercise of any other remedy by the Authority. The City hereby irrevocably appoints the Authority as the agent and attorney -in -fact of the City to repossess and relet the Leased Property in the event of default by the City in the performance of any covenants contained herein to be performed by the City and to remove (any removal to be done with reasonable prudence) all personal property connected to or made a part of the Leased Property, to place such property in storage or other suitable place in the City of Placentia, for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising or occasioned by any such repossession and reletting of the Leased Property. The City hereby waives any and all claims for damages caused or which may be caused by the Authority in repossessing the Leased Property as provided herein and all claims for damages that may result from the destruction of or the injury to the Leased Property and all claims for damage to or loss of any property belonging to the City that may be in or upon the Leased Property.

The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to relet the Leased Property in the event of such repossession without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such reletting shall constitute a surrender or termination of this Lease Agreement irrespective of the term for which such reletting is made or the terms and conditions of such reletting 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 the sole and exclusive manner provided for in subparagraph (2) below. The City further waives the right to any rental obtained by the Authority in excess of the Base Rental Payments and hereby conveys and releases such excess to the Authority as compensation to the Authority for its services in reletting the Leased Property. In the event that the liability of the City under this subsection is held to constitute indebtedness or liability in any year exceeding the income and revenue provided for such year, the Authority, or the Trustee or the Owners as assignees of the Authority, shall not exercise the remedies provided in this subsection. (2) Termination: Repossession and Reletting. In the event of the termination of this Lease Agreement by the Authority at its option and in the manner hereinafter provided on account of default by the City (and notwithstanding any repossession of the Leased Property by the Authority in any manner whatsoever or the sale or reletting of the Leased Property), the City nevertheless agrees to pay to the Authority all costs, losses or damages, but not Base Rental Payments, howsoever arising or occurring payable at the same time and in the same manner as is provided herein in the case of payment of Base Rental Payments. Any proceeds of the reletting or other disposition of the Leased Property or the sale of the improvements located on the Leased Property by the 17 4816-4731-6694.3

Authority shall, after payment of the fees and expenses of the Trustee and other Additional Payments, be deposited into the Revenue Fund and be applied in accordance with the provisions of the Indenture. Any surplus received by the Authority from such sale or reletting shall be the absolute property of the Authority and the City shall have no right thereto, nor shall the City be entitled to any credit in the event of a surplus in the rentals received by the Authority for the Leased Property. Neither notice to pay rent or to deliver up possession of the Leased Property given pursuant to law nor any proceeding taken by the Authority to recover possession of the Leased Property shall by itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law, 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 Leased 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 or accepted by the Authority by such written notice. No such termination shall be effected whether by operation of law or acts of the parties hereto, except only in the manner herein expressly provided.
(c) The Authority expressly waives the right to receive any amount from the City pursuant to Section 1951.2(a)(3) of the California Civil Code. (d) In addition to any Event of Default resulting from breach by the City of any agreement, condition, covenant or term hereof, if the City's interest herein or any part thereof assigned, sublet or transferred without the written consent of the Authority (except as otherwise permitted by Section 2.04 hereof), either voluntarily or by operation of law; or the City or any assignee shall file any petition or institute any proceedings under any act or acts, state or federal, dealing with or relating to the subject 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 its debts or obligations, or offers to its creditors to effect a composition or extension of time to pay its debts, or asks, seeks or prays for a reorganization or to effect a plan of reorganization or for a readjustment of its debts or for any other similar relief, or if the City shall make a general or any assignment for the benefit of its creditors; or the City shall abandon or vacate the Leased Property or any portion thereof (except as permitted by Section 2.04 hereof); then in each and every such case the City shall be deemed to be in default hereunder. (e) Neither the City nor the Authority shall be in default in the performance of any of its obligations hereunder (except for the obligation to make Base Rental Payments pursuant to Section 5.01 hereof) unless and until it shall have failed to perform such obligation within 30 days after notice by the City of the Authority, as the case may be, to the other party properly specifying wherein it has failed to perform such obligation. (f) The City and Authority and its successors and assigns shall honor the exclusive rights of the City to use the Leased Property. 18 4816-4731-6694.3

ARTICLE XI

MISCELLANEOUS
Section 11.01 Notices. All written notices to be given hereunder shall be given by first class 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 Authority:

Placentia Public Financing Authority
401 E. Chapman Avenue
Placentia, California 92870
Attention: Executive Director
If to the City:

City of Placentia
401 E. Chapman Avenue
Placentia, California 92870
Attention: City Administrator
If to the Trustee:

U.S. Bank National Association
633 West 5th Street, 24th Floor
Los Angeles, California 90071
Attention: Global Corporate Trust
Section 11.02 Binding Effect. This Lease Agreement shall inure to the benefit of and shall be binding upon the Authority and the City and their respective successors and assigns.

Section 11.03 Trustee as Third Party Beneficiary. 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 11.04 Net Lease. It is the purpose and intent of the Authority and the City that Base Rental Payments hereunder shall be absolutely net to the Authority so that this Lease Agreement shall yield to the Authority the Base Rental Payments, free of any charges, assessments or impositions of any kind charged, assessed or imposed on or against the Leased Property, and without counterclaim, deduction, defense, deferment or set-off by the City except as herein specifically otherwise provided. The Authority shall not be expected or required to pay any such charge, assessment or imposition, or be under any obligation or liability hereunder except as herein expressly set forth, and all costs, expenses and obligations of any kind relating to the maintenance and operation of the Leased Property which may arise or become due during the term of this Lease 19 4816-4731-6694.3

Agreement shall be paid by the City. This Lease Agreement shall be deemed and construed to be a "Triple -Net Lease."
Section 11.05 Amendments. This Lease Agreement may be amended in writing as may be mutually agreed by the Authority and the City, subject to the written consent of the Trustee; provided, that no such amendment which materially adversely affects the rights of the Owners shall be effective unless it shall have been consented to by the Owners of more than 50% in principal amount of the Bonds Outstanding, and provided further, that no such amendment shall (a) extend the payment date of any Base Rental Payment, or reduce the interest, principal or prepayment premium component of any Base Rental Payment, without the prior written consent of the Owner of each Bond so affected, or (b) reduce the percentage of the principal amount of the Bonds Outstanding the consent of the Owners of which is required for the execution of any amendment hereof.

This Lease Agreement and the rights and obligations of the Authority and the City hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution without the written consents of any Owners, and only to the extent permitted by law and only for any one or more of the following purposes:
(a) to add to the agreements, conditions, covenants and terms required by the Authority or the City to be observed or performed herein and 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 to or conferred herein on the Authority or the City, and which in either case shall not materially adversely affect the interests of the Owners;
(b) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith, and which shall not materially adversely affect the interests of the Owners;
(c) to effect a substitution or removal in accordance with Section 2.06 hereof; or
(d) to make any other addition, amendment or deletion which does not materially adversely affect the interests of the Owners.

Section 11.06 Discharge of City. Upon the payment of all Base Rental Payments and Additional Payments payable hereunder, all of the obligations of the City hereunder shall thereupon cease, terminate and become void and shall be discharged and satisfied; provided, however, if any Outstanding Bonds shall be deemed to have been paid by virtue of a deposit of Base Rental Payments hereunder pursuant to Section 10.01(b) of the Indenture, then the obligation of the City hereunder to make Base Rental Payments hereunder shall continue in full force and effect until the Outstanding Bonds so deemed paid have in fact been paid, but such payments shall be made solely and exclusively from moneys and securities deposited with the Trustee as 20 4816-4731-6694.3

contemplated by Section 10.01(b) of the Indenture, and that shall be the sole source of satisfaction of the City's obligation to make Base Rental Payments. The time period for giving notice by the City to the Authority and the Trustee specified in the third paragraph of Section 5.05 hereof shall not apply incident to the payment to the Owners of all Outstanding Bonds in accordance with Section 10.01, including Section 10.01(b), of the Indenture.

Section 11.07 Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms hereof shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining agreements, conditions, covenants or terms hereof shall be affected thereby, and each provision of this Lease Agreement shall be valid and enforceable to the fullest extent permitted by law.

Section 11.08 California Law. This Lease Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California.

Section 11.09 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 hereof.

Section 11.10 Execution. This Lease Agreement may be executed and entered into in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
21 4816-4731-6694.3

IN WITNESS WHEREOF, the parties hereto have executed and entered into this Lease Agreement by their officers thereunto duly authorized as of the day and year first written above.

PLACENTIA PUBLIC FINANCING

AUTHORITY
By:

Executive Director

CITY OF PLACENTIA
By:

City Administrator
22 4816-4731-6694.3

EXHIBIT A

DESCRIPTION OF LEASED PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PLACENTIA,

IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PRIOR TO ISSUANCE OF A CERTIFICATE OF OCCUPANCY FOR A PUBLIC SAFETY BUILDING LOCATED THEREON ("PROPERTY A")
[TO COME]

SUBSEQUENT TO ISSUANCE OF A CERTIFICATE OF OCCUPANCY FOR A PUBLIC SAFETY BUILDING LOCATED THEREON ("PROPERTY B")
[TO COME]
A-1
4816-4731-6694.3

EXHIBIT B

BASE RENTAL PAYMENTS SCHEDULE
Interest
Principal Component Component of
Interest of Base Rental Base Rental
Payment Date* Payment Payment
12/01/2023
06/01/2024
12/01/2024
06/01/2025
12/01/2025
06/01/2026
12/01/2026
06/01/2027
12/01/2027
06/01/2028
12/01/2028
06/01/2029
12/01/2029
06/01/2030
12/01/2031
06/01/2031
12/01/2031
06/01/2032
12/01/2032
06/01/2033
12/01/2033
06/01/2034
12/01/2034
06/01/2035
12/01/2035
06/01/2036
12/01/2036
06/01/2037
12/01/2037
06/01/2038
12/01/2038
06/01/2039
12/01/2039
06/01/2040
12/01/2040
06/01/2041
Total
* Due on each Base Rental Payment Date or that date five days preceding each Interest Payment Date.

B-1
4816-4731-6694.3

Interest
Principal Component Component of
Interest of Base Rental Base Rental
Payment Date* Payment Payment
12/01/2041
06/01/2042
12/01/2042
06/01/2043
12/01/2043
06/01/2044
12/01/2044
06/01/2045
12/01/2045
06/01/2046
12/01/2046
06/01/2047
12/01/2047
06/01/2048
12/01/2048
06/01/2049
12/01/2049
06/01/2050
12/01/2050
06/01/2051
12/01/2051
06/01/2052
12/01/2052
06/01/2053
Total
Total
B-2
4816-4731-6694.3

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed by the Lease Agreement, dated as of August 1, 2023, by and between the Placentia Public Financing Authority (the "Authority") and the City of Placentia (the "City"), from the Authority to the City, is hereby accepted by the undersigned on behalf of the City pursuant to authority conferred by resolution of the City Council of the City adopted on , 2023, and the City consents to recordation thereof by its duly authorized officer.

Dated as of , 2023

CITY OF PLACENTIA
By:

City Administrator
4816-4731-6694.3

STATE OF CALIFORNIA )
) ss

COUNTY OF ORANGE )
On , 2023, before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(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 [SEAL]
4816-4731-6694.3

STATE OF CALIFORNIA )
) ss

COUNTY OF ORANGE )
On , 2023, before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(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 [SEAL]
4816-4731-6694.3

STATE OF CALIFORNIA

COUNTY OF ORANGE
)
) ss
)
On , 2023, before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(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 [SEAL]
4816-4731-6694.3

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

SITE LEASE
by and between the

CITY OF PLACENTIA,
as Lessor
and the

PLACENTIA PUBLIC FINANCING AUTHORITY,
as Lessee
relating to the
$
Placentia Public Financing Authority
Lease Revenue Bonds (Public Safety Center Project) Series 2023A DATED AS OF AUGUST 1, 2023
4836-9636-5270.3

SITE LEASE
This Site Lease (this "Site Lease"), dated as of August 1, 2023, by and between the CITY OF PLACENTIA, a charter city of the State of California (the "City"), as lessor, and the PLACENTIA PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under and by virtue of the laws of the State of California (the "Authority"), as lessee; WITNESSETH:

WHEREAS, concurrently with the execution of this Site Lease, the Authority and the City are entering into a Lease Agreement (the "Lease Agreement"), dated as of August 1, 2023 (which is recorded concurrently herewith), whereby the Authority will lease certain real property to the City, more particularly described in Exhibit A attached hereto (the "Real Property," and such Real Property, together with the improvements thereon or to be located thereon, being collectively referred to herein as the "Leased Property"); and WHEREAS, concurrently with the execution of this Site Lease, the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), are entering into an Indenture, dated as of August 1, 2023 (the "Indenture"); WHEREAS, the Authority will issue its Lease Revenue Bonds (Public Safety Center Project) Series 2023A (the "Series 2023A Bonds"), in the aggregate principal amount of $ ,
WHEREAS, the Series 2023A Bonds will be secured by the payments to be made by the City pursuant to the Lease Agreement;
WHEREAS, the City is authorized by law to lease the Leased Property and the Leased Property is necessary and proper for public purposes; 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 Site 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 Site Lease;

NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE

MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER

VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:

Section 1. Leased Property. The City hereby leases to the Authority and the Authority hereby rents and hires from the City, the Leased Property, together with the right of access, ingress and egress across Property A of the Leased Property after a certificate of occupancy has been issued for a public safety building located thereon, on the terms and conditions hereinafter set forth. Capitalized terms used herein and not otherwise defined shall have the meanings given such terms pursuant to the Lease Agreement.
4836-9636-5270.3

Section 2. Term.
(a) The term hereof will commence on , 2023 and shall end on the Expiry Date, unless such term is sooner terminated or is extended as hereinafter provided herein and in the Lease Agreement. If prior to the Expiry Date all Base Rental Payments under the Lease Agreement shall have been paid, or provision therefor has been made in accordance with Article X of the Indenture, the term hereof shall end simultaneously therewith. (b) If the Lease Agreement is extended beyond the Expiry Date pursuant to the terms thereof, this Site Lease shall also be extended to the day following the date of termination of the Lease Agreement.

Section 3. Rent. The Authority shall pay to the City an advance rent equal to the proceeds of the Series 2023A Bonds, which, together with the execution and delivery of the Lease Agreement, shall constitute full consideration for this Site Lease over its term. The Authority hereby waives any right that it may have under the laws of the State of California to receive a rebate of such rent in full or in part in the event there is a substantial interference with the use and right of possession by the Authority of the Leased Property or portion thereof as a result of material damage, destruction or condemnation.

Section 4. Purpose. The Authority shall use the Leased Property solely for the purpose of subleasing the same to the City; provided, that in the event of default by the City under the Lease Agreement, the Authority may exercise the remedies provided in the Lease Agreement.

Section 5. Owner in Fee. The City covenants that it is the owner of the Leased Property free and clear of all liens, claims or encumbrances which affect marketability.

Section 6. Assignments and Leases. Unless the City shall be in default under the Lease Agreement, the Authority may not, without the prior written consent of the City, assign its rights hereunder or sublet the Leased Property except that the City expressly approves and consents to the assignment and transfer of the Authority's right, title and interest in this Site Lease to the Trustee pursuant to the Assignment Agreement (which is recorded concurrently herewith).

Section 7. Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Leased Property at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof.

Section 8. Termination. The Authority agrees, upon the termination hereof, to quit and surrender the Leased Property in the same good order and condition as the same was in at the time of commencement of the terms hereunder, reasonable wear and tear excepted, and agrees that any permanent improvements to the Leased Property at the time of the termination hereof shall remain thereon and title thereto shall vest in the City.

Section 9. Default. In the event the Authority shall be in default in the performance of any obligation on its part to be performed under the terms hereof, which default continues for thirty (30) days following notice and demand for correction thereof to the Authority, the City may exercise any and all remedies granted by law, except that no merger of this Site Lease and of the Lease Agreement shall be deemed to occur as a result thereof; provided, that so long as 2 4836-9636-5270.3

the Bonds executed and delivered pursuant to the Indenture are Outstanding, the City shall have no power to terminate this Site Lease by reason of any default on the part of the Authority, if such termination would affect or impair any assignment of the Lease Agreement then in effect between the Authority and the Trustee that authenticates and delivers the Bonds.

Section 10. Quiet Enjoyment. The Authority at all times during the term hereof shall peaceably and quietly have, hold and enjoy the Leased Property.

Section 11. Waiver of Personal Liability. All liabilities hereunder on the part of the Authority shall be solely corporate liabilities of the Authority, and the City hereby releases each and every director, officer and employee of the Authority of and from any personal or individual liability hereunder. No director, officer or employee of the Authority shall at any time or under any circumstances be individually or personally liable hereunder for anything done or omitted to be done by the Authority hereunder.

Section 12. Eminent Domain. In the event the whole or any portion of the Leased Property is taken by eminent domain proceedings, the interest of the Authority shall be recognized and is hereby determined to be the amount of the then unpaid Base Rental Payments payable under the Lease Agreement, and the amount of the unpaid Additional Rental due under the Lease Agreement, and the balance of the award, if any, shall be paid to the City.

Section 13. Amendments. This Site Lease may be amended for the purpose of affecting a Substitution or Removal, as further described in the Lease Agreement.

Section 14. Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms hereof shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining agreements, conditions, covenants or terms hereof shall be affected thereby, and each provision of this Site Lease shall be valid and enforceable to the fullest extent permitted by law.

Section 15. Notices. All written notices to be given shall be given by first class mail to the party entitled thereto as 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 Placentia
401 E. Chapman Avenue
Placentia, California 92870
Attention: City Administrator
3 4836-9636-5270.3

If to the Authority:

Placentia Public Financing Authority
401 E. Chapman Avenue
Placentia, California 92870
Attention: Executive Director
Section 16. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit scope of any provision hereof.

Section 17. Counterparts. This Site Lease may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but such counterparts shall together constitute one and the same instrument.

Section 18. Governing Law. This Site Lease is made in the State of California under the Constitution and laws of the State of California and is to be so construed. [This space intentionally left blank]
4 4836-9636-5270.3

IN WITNESS WHEREOF, the parties hereto have executed and entered into this Site Lease by their officers thereunder duly authorized as of the day and year first above written.

CITY OF PLACENTIA
By:

City Administrator

PLACENTIA PUBLIC FINANCING AUTHORITY
By:

Executive Director
5 4836-9636-5270.3

EXHIBIT A

DESCRIPTION OF THE LEASED PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PLACENTIA,

IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PRIOR TO ISSUANCE OF A CERTIFICATE OF OCCUPANCY FOR A PUBLIC SAFETY BUILDING LOCATED THEREON ("PROPERTY A")
[TO COME]

SUBSEQUENT TO ISSUANCE OF A CERTIFICATE OF OCCUPANCY FOR A PUBLIC SAFETY BUILDING LOCATED THEREON ("PROPERTY B")
[TO COME]
A-1
4836-9636-5270.3

STATE OF CALIFORNIA )
) ss

COUNTY OF ORANGE )
On , 2023, before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(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 [SEAL]
4836-9636-5270.3

STATE OF CALIFORNIA )
) ss

COUNTY OF ORANGE )
On , 2023, before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(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 [SEAL]
4836-9636-5270.3

INDENTURE
by and among
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee,

THE CITY OF PLACENTIA
and

PLACENTIA PUBLIC FINANCING AUTHORITY
Dated as of August 1, 2023
relating to the
Placentia Public Financing Authority
Lease Revenue Bonds (Public Safety Center Project) Series 2023A 4840-4744-1622.2

TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS; EQUAL SECURITY 2
Section 1.01 Definitions 2
Section 1.02 Interpretation 13
Section 1.03 Equal Security 14
ARTICLE II. TERMS AND CONDITIONS OF BONDS 15
Section 2.01 Authorization of Bonds 15
Section 2.02 Terms of Bonds 15
Section 2.03 Payment Dates of Bonds; Interest 15
Section 2.04 Form of Bonds 16
Section 2.05 Execution of Bonds 16
Section 2.06 Transfer and Payment of Bonds; Exchange of Bonds 17 Section 2.07 Book -Entry Bonds 17
Section 2.08 Bond Registration Books 19
Section 2.09 Temporary Bonds 19
Section 2.10 Bonds Mutilated, Lost, Destroyed or Stolen 20 Section 2.11 No Additional Obligations 20
ARTICLE III. PROCEEDS OF BONDS 20
Section 3.01 Delivery of Bonds 20
Section 3.02 Deposit of Proceeds of Bonds and Other Moneys 20 Section 3.03 Construction Fund 21
Section 3.04 Costs of Issuance Fund 21
ARTICLE IV. REDEMPTION OF BONDS 22
Section 4.01 Terms of Redemption 22
Section 4.02 Notice of Redemption 23
Section 4.03 Partial Redemption of Bonds 24
Section 4.04 Effect of Redemption 24
ARTICLE V. REVENUES 24
Section 5.01 Pledge of Revenues; Revenue Fund 24
Section 5.02 Deposit of Revenues 25
Section 5.03 Application of Insurance Proceeds and Condemnation Awards 26 Section 5.04 Title Insurance 27
ARTICLE VI. COVENANTS 28
Section 6.01 Compliance with Indenture 28
Section 6.02 Compliance with Lease Agreement and Site Lease 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
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Section 6.07 Recordation and Filing 29
Section 6.08 Further Assurances 29
Section 6.09 Tax Covenants; Rebate Fund 29
Section 6.10 Continuing Disclosure 31
ARTICLE VII. DEFAULT AND LIMITATIONS OF LIABILITY 31
Section 7.01 Events of Default 31
Section 7.02 Action on Default 31
Section 7.03 Other Remedies of the Trustee 32
Section 7.04 Non -Waiver 32
Section 7.05 Remedies Not Exclusive 32
Section 7.06 No Liability by the Authority to the Owners 32 Section 7.07 No Liability by the City to the Owners 33
Section 7.08 No Liability by the Trustee to the Owners 33 Section 7.09 Application of Amounts After Default 33
Section 7.10 Trustee May Enforce Claims Without Possession of Bonds 33 Section 7.11 Limitation on Suits 33
ARTICLE VIII. THE TRUSTEE 34
Section 8.01 Employment of the Trustee 34
Section 8.02 Duties, Removal and Resignation of the Trustee 34 Section 8.03 Compensation and Indemnification of the Trustee 35 Section 8.04 Protection of the Trustee 35
ARTICLE IX. AMENDMENT OF OR SUPPLEMENT TO INDENTURE 37
Section 9.01 Amendment or Supplement 37
Section 9.02 Disqualified Bonds 38
Section 9.03 Endorsement or Replacement of Bonds After Amendment or Supplement 38
Section 9.04 Amendment by Mutual Consent 39
Section 9.05 Opinion of Counsel 39
ARTICLE X. DEFEASANCE 39
Section 10.01 Discharge of Bonds and Indenture 39
Section 10.02 Unclaimed Moneys 40
ARTICLE XI. [RESERVED] 41
ARTICLE XII. MISCELLANEOUS 41
Section 12.01 Benefits of Indenture Limited to Parties 41 Section 12.02 Successor Deemed Included in all References to Predecessor 41 Section 12.03 Execution of Documents by Owners 41
Section 12.04 Waiver of Personal Liability 41
Section 12.05 Acquisition of Bonds by City 42
Section 12.06 Content of Certificates 42
Section 12.07 Reserved 42
Section 12.08 Funds 42
Section 12.09 Investments 42
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Section 12.10 Partial Invalidity 43
Section 12.11 California Law 43
Section 12.12 Notices 43
Section 12.14 Effective Date 44
Section 12.15 Execution in Counterparts 44
EXHIBIT A DESCRIPTION OF LEASED PROPERTY A-1
EXHIBIT B FORM OF BOND B-1

EXHIBIT C FORM OF REQUISITION FOR FUNDS FROM THE COSTS OF ISSUANCE FUND C-1
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4840-4744-1622.2

INDENTURE
This INDENTURE, made and entered into and dated as of August 1, 2023, by and among 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 of America (the "Trustee"), the CITY OF PLACENTIA, a charter city duly organized and existing under the laws of the State of California (the "City"), and PLACENTIA PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under and by virtue of the laws of the State of California (the "Authority");
WITNESSETH:

WHEREAS, the City and the Authority have executed and entered into a Site Lease (the "Site Lease") dated as of August 1, 2023, whereby the City has agreed to lease to the Authority the real property more particularly described in Exhibit A attached hereto (the "Real Property"), which together with the improvements thereon is referred to as the "Leased Property"; WHEREAS, the City and the Authority have executed and entered into a Lease Agreement (the "Lease Agreement") dated as of August 1, 2023, whereby the City has agreed to sublease back the Leased Property from the Authority;
WHEREAS, under and pursuant to the Lease Agreement, the City is obligated to make rental payments to the Authority;
WHEREAS, the Authority has assigned without recourse all its rights to receive the Base Rental Payments scheduled to be paid by the City under and pursuant to the Lease Agreement, and certain other rights to the Trustee pursuant to the Assignment Agreement (the "Assignment Agreement") executed and entered into as of August 1, 2023; WHEREAS, in consideration of the assignments pursuant to the Assignment Agreement and the execution and delivery of this Indenture, the Authority has agreed to issue its Lease Revenue Bonds (Public Safety Center Project) Series 2023A (the "Bonds"); 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 Indenture 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 Indenture;

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:
1 4840-4744-1622.2

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:

Additional Payments
The term "Additional Payments" means the additional payments payable by the City under and pursuant to Section 5.01(b) of the Lease Agreement.

Annual Debt Service
The term "Annual Debt Service" means, for any Fiscal Year, the sum of (1) the interest payable on all Outstanding Bonds in such Fiscal Year, assuming that all Outstanding Serial Bonds are retired as scheduled and that all Outstanding Term Bonds are redeemed or paid from sinking fund payments as scheduled (except to the extent that such interest is to be paid from the proceeds of the sale of any Bonds), (2) the principal amount of all Outstanding Serial Bonds maturing by their terms in such Fiscal Year, and (3) the principal amount of all Outstanding Term Bonds required to be redeemed or paid in such Fiscal Year (together with the redemption premiums, if any, thereon).

Assignment Agreement
The term "Assignment Agreement" means that certain Assignment Agreement, dated as of August 1, 2023, by and between the Authority and the Trustee, as it may from time to time be amended.

Authority
The term "Authority" means the Placentia Public Financing Authority, a joint powers authority duly organized and existing under and by virtue of the laws of the State of California.

Authorized Denominations
The term "Authorized Denominations" means $5,000 or any integral multiple thereof.

Average Annual Debt Service
The term "Average Annual Debt Service" means an amount equal to the average of the Annual Debt Service for all Bond Years, including the Bond Year in which the calculation is made.
2 4840-4744-1622.2

Base Rental Payments
The term "Base Rental Payments" means the aggregate base rental payments with interest components and principal components payable by the City under and pursuant to Section 5.01(a) of the Lease Agreement in the amounts and at the times set forth in Exhibit B thereof.

Beneficial Owner
The term "Beneficial Owner" shall have the same meaning as the term "Holder" set forth in the Continuing Disclosure Agreement.

Bond Purchase Agreement
The term "Bond Purchase Agreement" means that certain Bond Purchase Agreement, dated , 2023, by and among the Underwriter, the Authority and the City relating to the Bonds.

Bonds; Serial Bonds; Term Bonds
The term "Bonds" means the Placentia Public Financing Authority Lease Revenue Bonds (Public Safety Center Project) Series 2023A.

The term "Serial Bonds" means Bonds for which no sinking fund payments are provided.

The term "Term Bonds" means Bonds which are payable on or before their specified maturity dates from sinking fund payments established for that purpose and calculated to retire such Bonds on or before their specified maturity dates.

Bond Year
The term "Bond Year" means the twelve-month period ending on 1 of each year to which reference is made.

Business Day
The term "Business Day" means a day other than (i) Saturday or Sunday or (ii) a day on which banking institutions in Los Angeles, California, New York, New York, or the city or cities in which the principal corporate trust office of the Trustee are closed or (iii) a day on which the New York Stock Exchange is closed. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture, shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Indenture, and, unless otherwise specifically provided in this Indenture, no interest shall accrue for the period from and after such nominal date. 3 4840-4744-1622.2

Certificate, Statement, Written Request or Requisition of the Authority or the City "Certificate," "Statement," "Written Request" and "Requisition" of the Authority or of the City means, respectively, a written certificate, statement, request or requisition signed in the name of the Authority by its Chair, Executive Director, Treasurer, Controller or any other person designated and authorized to sign for the Authority in writing to the Trustee, and with respect to the City means its Mayor, City Administrator, Treasurer or such other person as may be designated and authorized to sign for the City in writing to the Trustee. Any such instrument and supporting opinions or representations, if any, 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. If and to the extent required by Section 12.06, each such instrument shall include the statements provided for in Section 12.06.

Certificate of Completion
"Certificate of Completion" means a Certificate of the City filed with the Trustee, stating that construction of a Project has been substantially completed and that all Construction Costs have been paid or provided for.

City
The term "City" means the City of Placentia, a charter city duly organized and existing under the Constitution and laws of the State of California.

Closing Date
The term "Closing Date" means , 2023.

Code
The term "Code" means the Internal Revenue Code of 1986, as amended.

Construction Costs
"Construction Costs" means all costs of constructing a Project, including, but not limited to:
(1) all costs which the Authority or the City shall be required to pay to a manufacturer, vendor or contractor or any other person under the terms of any contract or contracts for the construction, installation or improvement of a Project; (2) obligations of the Authority, the City or others incurred for labor and materials (including obligations payable to the Authority, the City or others for actual out-of- pocket expenses of the Authority, the City or others) in connection with the construction, installation or improvements of a Project, including reimbursement to the Authority, the City or others for all advances and payments made in connection with a Project prior to or after delivery of the Bonds;
4 4840-4744-1622.2

(3) the costs of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect during the course of construction, installation or improvement of a Project;
(4) all costs of engineering and architectural services, including the actual out- of-pocket costs of the Authority or the City for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees and sales commissions, and for supervising construction, installation and improvement, as well as for the performance of all other duties required by or consequent to the proper construction, installation or improvement of a Project; and
(5) any sums required to reimburse the Authority or the City for advances made by the Authority or the City for any of the above items or for any other costs incurred and for work done by the Authority or the City which are properly chargeable to the construction, installation or improvement of a Project.

Construction Fund
"Construction Fund" means the fund by that name established pursuant to Section 3.03 hereof.

Continuing Disclosure Agreement
The term "Continuing Disclosure Agreement" means collectively, the Continuing Disclosure Agreement executed by the City at the time of the initial issuance of the Bonds, as originally executed and as such Continuing Disclosure Agreement may be amended from time to time in accordance with the terms thereof.

Costs of Issuance Fund
The term "Costs of Issuance Fund" means the fund by that name established in accordance with Section 3.04 hereof.

Costs of Issuance
The term "Costs of Issuance" means all the costs of executing and delivering the Bonds, including, but not limited to, all printing and document preparation expenses in connection with this Indenture, the Lease Agreement, the Site Lease, the Assignment Agreement, the Bonds and the preliminary official statement and final official statement pertaining to the Bonds; rating agency fees; financial advisor fees; verification agent fees; bidding agent fees; title insurance fees; CUSIP Service Bureau charges; market study fees; legal fees and expenses of counsel with respect to the Lease Agreement of the Leased Property; any computer and other expenses incurred in connection with the Bonds; the fees and expenses of the Trustee, including fees and expenses of their respective counsel; and other fees and expenses incurred in connection with the execution of the Bonds, to the extent such fees and expenses are approved by the City. 5 4840-4744-1622.2

Defeasance Securities
The term "Defeasance Securities" means any of the following:
(1) Cash (insured at all times by the Federal Deposit Insurance Corporation); (2) Obligations of, or obligations guaranteed as to principal and interest by, the U.S. or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the U.S. including:
• U.S. Treasury obligations;
• All direct or fully guaranteed obligations
• Farmers Home Administration
• General Services Administration
• Guaranteed Title XI financing
• Government National Mortgage Association
(GNMA); and
• State and Local Government Series; and
(3)
DTC
Obligations described in paragraph (7) of the definition of Permitted Investments.

The term "DTC" means The Depository Trust Company, New York, New York, a limited -purpose trust company organized under the laws of the State of New York, and its successors as securities depository for the Bonds including any such successor appointed pursuant to Section 2.07 hereof.

Event of Default
The term "Event of Default" means any occurrence or event specified in and defined by Section 7.01 hereof.

Fiscal Year
The term "Fiscal Year" means the fiscal year of the City which, as of the date hereof, is the period from July 1 to and including the following June 30.

Hazardous Substances
The term "Hazardous Substances" means any substances, pollutants, wastes and contaminants now or hereafter included in such (or similar term) term under any federal state or local statute, ordinance, code or regulation now existing or hereafter enacted or amended. 6 4840-4744-1622.2

Indenture
The term "Indenture" means this Indenture by and among the Trustee, the City and the Authority, dated as of August 1, 2023, as originally executed and as it may from time to time be amended or supplemented in accordance herewith.

Insurance Proceeds and Condemnation Awards Fund
The term "Insurance Proceeds and Condemnation Awards Fund" means the fund by that name established in accordance with Section 5.03 hereof.

Interest Fund
The term "Interest Fund" means the Interest Fund within the Revenue Fund established in accordance with Section 5.01(a) hereof.

Interest Payment Date
The term "Interest Payment Date" means
commencing on 1, 2023.

Interest Period
1 and 1 of each year,
The term "Interest Period" means each period from and including one Interest Payment Date to but excluding the next following Interest Payment Date, except that the initial Interest Period will be the period from and including the date of the initial delivery of the Bonds to but excluding 1, 2023.

Joint Powers Agreement
"Joint Powers Agreement" means the Joint Exercise of Powers Agreement by and between the City and the Placentia Redevelopment Agency, dated July 1, 1996, as amended by the Amendment to Joint Exercise of Powers Agreement, dated as of October 20, 2020, by and among the City, the Successor Agency to the Placentia Redevelopment Agency and the Industrial/Commercial Development Authority of the City of Placentia, and as it may from time to time be amended or supplemented pursuant to the provisions hereof and thereof.

Lease Agreement
The term "Lease Agreement" means that certain Lease Agreement, dated as of August 1, 2023, with respect to the Leased Property, by and between the City, as sublessee, and the Authority, as sublessor, as originally executed and as it may be amended from time to time.

Leased Property
The term "Leased Property" means the real property and all the improvements thereon or to be located thereon described in Exhibit A attached hereto, and Exhibit A in the Site 7 4840-4744-1622.2

Lease and in the Lease Agreement (as the same may be changed from time to time by Removal or Substitution, as defined in the Lease Agreement).

Mandatory Sinking Account Payment
The term "Mandatory Sinking Account Payment" means the principal amount of any Bond required to be paid on each Mandatory Sinking Account Payment Date pursuant to the terms of this Indenture or any Supplemental Indenture.

Mandatory Sinking Account Payment Date
The term "Mandatory Sinking Account Payment Date," means 1 of each year pursuant to this Indenture or any Supplemental Indenture.

Maximum Annual Debt Service
The term "Maximum Annual Debt Service" means an amount equal to the largest Annual Debt Service for all future Bond Years beginning in the Bond Year in which the calculation is made.

MSRB
The term "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 .

Opinion of Counsel
The term "Opinion of Counsel" means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the City.

Outstanding
The term "Outstanding" when used as of any particular time with reference to Bonds, means all Bonds, including, but not limited to, the Bonds as described in Section 10.01(b) hereof, except:
(1) Bonds previously canceled by the Trustee or delivered to the Trustee for cancellation;
(2) Bonds which pursuant to Section 9.02 hereof are not deemed outstanding; (3) Bonds paid or deemed to have been paid within the meaning of Section 10.01 hereof; and
(4) Bonds in lieu of or in substitution for which other Bonds shall have been executed and delivered by the Trustee pursuant to Section 2.10 hereof. 8 4840-4744-1622.2

Owner
The term "Owner" means any person who shall be the registered owner of any Outstanding Bond as indicated in the registration books of the Trustee.

Permitted Investments
The term "Permitted Investments" means any of the following to the extent then permitted by applicable laws and any investment policies of the City:
(1) Defeasance Securities;
(2) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including:
— Export -Import Bank;
- Rural Economic Community Development Administration;
— U.S. Maritime Administration;
- Small Business Administration;
— U.S. Department of Housing & Urban Development (PHAs); - Federal Housing Administration; and
— Federal Financing Bank.
(3)
Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America:
— Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC);
- Obligations of the Resolution Funding Corporation (REFCORP); — Senior debt obligations of the Federal Home Loan Bank System; and - Senior debt obligations of other Government Sponsored Agencies. (4) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A-1" or "A- 1+" by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank).
(5)
Commercial paper which is rated at the time of purchase in the single highest classification, "A-1" or better by S&P and which matures not more than 270 calendar days after the date of purchase.
(6) Investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P.
9 4840-4744-1622.2

(7)
(8)
(9)
Pre -refunded Municipal Obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and
(A) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of S&P or any successors thereto; or
(B) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in clause (2) of the definition of "Defeasance Securities" contained in this Indenture, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate;
Municipal Obligations rated in the top two rating categories or higher by S&P.

Investment Agreements with entities rated at the time of entry into the agreement in the top three rating categories or higher by S&P (supported, as may be required, by appropriate opinions of counsel); (10) Any investment authorized by California Government Code Section 53601; (11) The Local Agency Investment Fund or similar pooled fund operated by or on behalf of the State of California and which is authorized to accept investments of moneys held in any of the funds or accounts established pursuant to this Indenture; and
(12) Senior obligations of (a) International Bank for Reconstruction and Development ("IBRD" or "World Bank"); (b) International Financing Corporation ("IFC") and (c) Inter -American Development Bank ("IADB").

Any references to long-term rating categories in this definition of "Permitted Investments" shall not take into account any plus or minus sign or numerical modifiers. 10 4840-4744-1622.2

Principal Corporate Trust Office
The term "Principal Corporate Trust Office" means the corporate trust office of the Trustee at the address set forth in Section 12.12 hereof, except for purposes of payment, registration, transfer, exchange and surrender of Bonds, means the corporate trust operations office of the Trustee in St. Paul, Minnesota, or such other office specified by the Trustee.

Principal Fund
The term "Principal Fund" means the Principal Fund within the Revenue Fund established in accordance with Section 5.01(a) hereof.

Principal Payment
The term "Principal Payment" means the principal amount of Bonds required to be paid on each Principal Payment Date.

Principal Payment Date
The term "Principal Payment Date" means 1 of each year, commencing on the Principal Payment Date or Dates set forth in Section 2.03 hereof.

Project
The term "Project" means, to the extent identified by the City as such, the public facilities to be constructed, acquired and equipped with the proceeds of the Bonds.

Qualified Reserve Fund Credit Instrument
The term "Qualified Reserve Fund Credit Instrument" means an irrevocable standby or direct -pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Trustee pursuant to Section 5.02(c), provided that all of the following requirements are met: (i) at the time of issuance of such letter of credit or surety bond, the long-term credit rating of such commercial bank or insurance company is "AA" or "Aa2" by S&P or Moody's, respectively, or higher, and, if rated by A.M. Best & Company, a minimum rating of "A;" (ii) such letter of credit or surety bond has a term which ends no earlier than the last Interest Payment Date of the Bonds; (iii) such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve Requirement with respect to which funds are proposed to be released pursuant to Section 5.02(c); and (iv) the Trustee is authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder amounts necessary to carry out the purposes specified in Section 5.02(c), including the replenishment of the Interest Fund or the Principal Fund.

Rebate Requirement
The term "Rebate Requirement" means the Rebate Requirement as defined in the Tax Certificate.
11 4840-4744-1622.2

Record Date
The term "Record Date" means the close of business on the 15th day of the month preceding any Interest Payment Date, whether or not such day is a Business Day.

Redemption Fund
The term "Redemption Fund" means the fund by that name established in accordance with Section 5.02(d) hereof.

Rental Payments
The term "Rental Payments" means, collectively, the Base Rental Payments and the Additional Payments.

Representation Letter
The term "Representation Letter" means the Letter of Representations from the City and the Trustee to DTC, or any successor securities depository for the Bonds, in which the City and the Trustee make certain representations with respect to the Bonds, the payment with respect thereto and delivery of notices with respect thereto.

Reserve Fund
The term "Reserve Fund" shall have the meaning given to such term in Section 5.02(c) hereof.

Reserve Requirement
The term "Reserve Requirement" means as of any calculation date in a Bond Year, an amount equal to the least of (i) ten percent (10%) of the sale proceeds (within the meaning of section 148 of the Code) of the Bonds, (ii) 125% of average annual debt service on the Bonds for that and every succeeding Bond Year, or (iii) Maximum Annual Debt Service. Provided, however, the Reserve Requirement on any calculation date shall not be greater than the Reserve Requirement amount on the Closing Date.

Revenue Fund
The term "Revenue Fund" shall have the meaning given to such term in Section 5.01(a).

Revenues
The term "Revenues" means all Base Rental Payments pursuant to the Lease Agreement, and all other benefits, charges, income, proceeds, profits, receipts, rents and revenues derived by the Authority from the operation or use of the Leased Property, including interest or profits from the investment of money in any account or fund pursuant to Section 12.09. 12 4840-4744-1622.2

S&P
"S&P" means S&P Global Ratings, its successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the City by notice in writing to the Authority and the Trustee.

Site Lease
The term "Site Lease" means that certain Site Lease, dated as of August 1, 2023, with respect to the Leased Property, by and between the City, as lessor, and the Authority, as lessee, as originally executed and as it may be amended from time to time.

Supplemental Indenture
The term "Supplemental Indenture" means an agreement amending or supplementing the terms hereof entered into pursuant to the terms hereof.

Surplus Subaccount
The term "Surplus Subaccount" means the account by that name established in accordance with Section 3.03 hereof.

Tax Certificate
The term "Tax Certificate" means that Tax and Nonarbitrage Certificate executed at the time of execution and delivery of the Bonds relating to the requirements of Section 148 of the Code, as such Tax and Nonarbitrage Certificate may be amended or supplemented.

Trustee
The term "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 of America and having a corporate trust office located at Los Angeles, California, or any other bank or trust company which may at any time be substituted in its place as provided in Section 8.02 hereof.

Underwriter
The term "Underwriter" means Samuel A. Ramirez & Co., Inc.

Section 1.02 Interpretation. (a) In this Indenture, unless the context otherwise requires:
(i) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and any similar terms, as used in this Indenture, refer to this Indenture, and the term "hereafter" shall mean after, and the term "heretofore" shall mean before, the date of this Indenture; 13 4840-4744-1622.2

(ii) Words of the masculine gender shall mean and include correlative words of the feminine and neuter genders and words importing the singular number shall mean and include the plural number and vice versa;
(iii) Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons; and (iv) Any headings preceding the text of the several Articles and Sections of this Indenture, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Indenture, nor shall they affect its meaning, construction or effect. (b) Whenever in this Indenture the City, the Authority or the Trustee is named or referred to, it shall include, and shall be deemed to include, its respective successors and assigns whether so expressed or not. All of the covenants, stipulations, obligations and agreements by or on behalf of, and other provisions for the benefit of, the City, the Authority or the Trustee contained in this Indenture shall bind and inure to the benefit of such respective successors and assigns and shall bind and inure to the benefit of any officer, board, commission, authority, agency or instrumentality to whom or to which there shall be transferred by or in accordance with law any right, power or duty of the City or of its successors or assigns, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions of this Indenture.
(c) Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give to, any person other than the City, the Authority, the Trustee and the Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof. All of the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the City shall be for the sole benefit of the City, the Authority, the Trustee (including its agents) and the Owners.

Section 1.03 Equal Security. In consideration of the acceptance of the Bonds by the Owners, this Indenture shall be deemed to be and shall constitute a contract between the Trustee and the Owners to secure the full and final payment of the principal of, premium, if any, and interest on the Bonds which may be executed and delivered hereunder, subject to each of the agreements, conditions, covenants and terms contained herein; and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the Trustee shall be for the equal and proportionate benefit, protection and security of all Owners 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 time of execution or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. 14 4840-4744-1622.2

ARTICLE II.

TERMS AND CONDITIONS OF BONDS
Section 2.01 Authorization of Bonds. The Authority has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and that the Authority is now duly authorized to issue the Bonds in the form and manner provided herein, and that the Bonds shall be entitled to the benefit, protection and security of the provisions hereof.

Section 2.02 Terms of Bonds. The Bonds authorized to be issued by the Authority under and subject to the terms of this Indenture shall be designated "Placentia Public Financing Authority Lease Revenue Bonds (Public Safety Center Project) Series 2023A," in the aggregate principal amount of $ ; and shall be executed and delivered in the form of fully registered Bonds, without coupons, in Authorized Denominations and shall be payable in lawful money of the United States of America.

The Bonds shall be dated their date of delivery. Each Bond shall bear interest from the Interest Payment Date to which interest has been paid or duly provided for next preceding its date of authentication, unless such date of authentication shall be (i) prior to the close of business on May 15, 2023, in which case such Bond shall bear interest from its date of delivery, (ii) subsequent to a Record Date but before the related Interest Payment Date, in which case such Bond shall bear interest from such Interest Payment Date, or (iii) an Interest Payment Date to which interest has been paid in full or duly provided for, in which case such Bond shall bear interest from such date of authentication; provided, however, that if, as shown by the records of the Trustee, interest shall be in default, each Bond shall bear interest from the last Interest Payment Date to which such interest has been paid in full or duly provided for.

Section 2.03 Payment Dates of Bonds; Interest.
(a) Method and Place of Payment. The principal of the Bonds shall be payable, subject to prior redemption, on each Principal Payment Date, as the case may be, in each of the years and in the amounts and with the rate of interest components set forth in the following table:
15 4840-4744-1622.2

Payment Date Rate of
( 1) Principal Amount Interest
* Term Bonds.

The interest on the Bonds shall be payable on each Interest Payment Date by check sent by first class mail by the Trustee to the respective Owners of the Bonds as of the Record Date for such Interest Payment Date at their addresses shown on the books required to be kept by the Trustee pursuant to the provisions of Section 2.08 hereof. Payments of defaulted interest on any Bond shall be paid by check to the Owner as of a special record date to be fixed by the Trustee, notice of which special record date shall be given to the Owner of the Bond not less than ten days prior thereto. The principal and premium, if any, of the Bonds shall be payable upon presentation and surrender thereof on maturity or on redemption prior thereto at the Principal Corporate Trust Office of the Trustee.

The Owner of $1,000,000 or more in aggregate principal amount of the Bonds may request in writing that the Trustee pay the interest on the Bonds by wire transfer to an account in the United States of America and the Trustee shall comply with such request for all Interest Payment Dates following the 15th day after receipt of such request. (c) Principal and Interest Payments. The principal of the Bonds shall be payable on the Principal Payment Dates indicated in subsection (a) above and the interest on the Bonds shall be payable on each Interest Payment Date. Interest shall be computed on the basis of a 360 -day year of twelve 30 -day months.

Section 2.04 Form of Bonds. The Bonds and the assignment to appear thereon shall be in substantially the forms, respectively, of Exhibit B hereto, with necessary or appropriate insertions, omissions and variations as permitted or required hereby.

Section 2.05 Execution of Bonds. The Chair or the Executive Director of the Authority is hereby authorized and directed to execute each of the Bonds on behalf of the Authority and the 16 4840-4744-1622.2

Secretary of the Authority is hereby authorized and directed to countersign each of the Bonds on behalf of the Authority. The signatures of such Chair, Executive Director and Secretary may be by printed, lithographed or engraved by facsimile reproduction. In case any officer whose signature appears on the Bonds shall cease to be such officer before the delivery of the Bonds to the purchaser thereof, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until such delivery of the Bonds.

Only those Bonds bearing thereon a certificate of authentication and registration in substantially the form set forth in Exhibit B hereto, executed manually and dated by the Trustee, shall be entitled to any benefit, protection or security hereunder or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated and registered have been duly authorized, executed, issued and delivered hereunder and are entitled to the benefit, protection and security hereof.

Section 2.06 Transfer and Payment of Bonds; Exchange of Bonds. All Bonds may be presented for transfer by the Owner thereof, in person or by his attorney duly authorized in writing, at the Principal Corporate Trust Office of the Trustee, on the books required to be kept by the Trustee pursuant to the provisions of Section 2.08 hereof, upon surrender of such Bonds for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee. The Trustee may treat the Owner of any Bond as the absolute owner of such Bond for all purposes, whether or not such Bond shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the principal of, premium, if any, and interest on such Bond shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability of by such Bond to the extent of the sum or sums so paid.

Whenever any Bond or Bonds shall be surrendered for transfer, the Trustee shall execute and deliver a new Bond or Bonds in the same principal amount in Authorized Denominations. The Trustee shall require the payment by any Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer.

Bonds may be presented for exchange at the Principal Corporate Trust Office of the Trustee, for a like aggregate principal amount of Bonds of other Authorized Denominations. The Trustee shall require the payment by the 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 required to transfer or exchange any Bond during the period in which the Trustee is selecting Bonds for redemption, nor shall the Trustee be required to transfer or exchange any Bond or portion thereof selected for redemption from and after the date of mailing the notice of redemption thereof.

Section 2.07 Book -Entry Bonds. Notwithstanding any provision of this Indenture to the contrary, the transfer provisions of Section 2.06 hereof do not apply if the ownership of the Bonds is in book -entry form.
(a) Except as provided in subparagraph (d) of this Section 2.07, the registered Owner of all of the Bonds shall be DTC, and the Bonds shall be registered in the name of Cede & 17 4840-4744-1622.2

Co., as nominee for DTC. Notwithstanding anything to the contrary contained in this Indenture, payment of interest with respect to any 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 for the Bonds at the address indicated on the Record Date or special record date for Cede & Co. in the Bond registration books required to be kept by the Trustee pursuant to the provisions of Section 2.08 hereof or as otherwise provided in the Representation Letter. (b) The Bonds shall be initially executed and delivered in the form of separate single fully registered Bonds in the amount of each separate stated maturity of the Bonds. Upon initial execution and delivery, the ownership of such Bonds shall be registered in the Bond registration books required to be kept by the Trustee pursuant to the provisions of Section 2.08 hereof in the name of Cede & Co., as nominee of DTC. The Trustee and the City shall treat DTC (or its nominee) as the sole and exclusive Owner of the Bonds registered in its name for the purposes of payment of the principal, premium, if any, or interest with respect to the Bonds, selecting the Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Owners under this Indenture, registering the transfer of Bonds, obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and neither the Trustee nor the City shall be affected by any notice to the contrary. Neither the Trustee nor the City shall have any responsibility or obligation to any person claiming a beneficial ownership interest in the Bonds under or through DTC, or any other person which is not shown on the Bond registration books required to be kept by the Trustee pursuant to the provisions of Section 2.08 hereof as being an Owner, with respect to (i) the accuracy of any records maintained by DTC; (ii) the payment by DTC of any amount of the principal, premium, if any, or interest on the Bonds; (iii) any notice which is permitted or required to be given to Owners under this Indenture or the selection by DTC of any person to receive payment in the event of a partial redemption of the Bonds; or (iv) any consent given or other action taken by DTC as Owner. The Trustee shall pay all principal, premium, if any, and interest on the Bonds only to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. Except under the conditions of (d) below, no person other than DTC shall receive an executed Bond representing the right to receive principal, premium, if any and interest pursuant to this Indenture. 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 order to qualify the Bonds for DTC's book -entry system, the City and the Trustee, if required by DTC, will execute, countersign and deliver to DTC the Representation Letter. The execution and delivery of the Representation Letter shall not in any way limit the provisions of this Section 2.07 or in any other way impose upon the Trustee, the City or the Authority any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners, as shown on the Bond registration books required to be kept by the Trustee pursuant to the provisions of Section 2.08 hereof.
(d) In the event (i) DTC, including any successor as securities depository for the Bonds, determines not to continue to act as securities depository for the Bonds, or (ii) the City determines that the incumbent securities depository shall no longer so act and delivers a written certificate to the Trustee to that effect, then the City will discontinue the book -entry system with 18 4840-4744-1622.2

the incumbent securities depository for the Bonds. If the City determines to replace the incumbent securities depository for the Bonds with another qualified securities depository, the City shall prepare or direct the preparation of a new single, separate fully registered Bond for the aggregate outstanding principal amount of Bonds 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 City, the Trustee and the successor securities depository for the Bonds as are not inconsistent with the terms of this Indenture. If the City fails to identify another qualified successor securities depository for the Bonds to replace the incumbent securities depository, then the Bonds shall no longer be restricted to being registered in the Bond registration books required to be kept by the Trustee pursuant to the provisions of Section 2.08 hereof 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 the Bonds, or its nominee, shall designate. In such event the Trustee shall execute and deliver a sufficient quantity of Bonds as to carry out the transfers and exchanges provided in this Section and Sections 2.06 and 2.10 hereof. All such Bonds shall be in fully registered form in denominations authorized by this Indenture. (e) Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of DTC, or its nominee, all payments with respect to the principal, premium, if any, and interest on such Bond and all notices with respect to such Bonds shall be made and given, respectively, as provided in the Representation Letter. (f) In connection with any notice or other communication to be provided to Owners pursuant to this Indenture by the City or the Trustee with respect to any consent or other action to be taken by Owner, the City or the Trustee, as 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.

Section 2.08 Bond Registration Books. The Trustee will keep sufficient books for the registration and transfer of the Bonds, which books shall be available for inspection by the Authority and the City at reasonable hours and under reasonable conditions, upon reasonable notice; and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the Bonds on such books as hereinabove provided. The Trustee will, upon written request, make copies of the foregoing available to any Owner of at least five percent in aggregate principal amount of Outstanding Bonds or his agent duly authorized in writing.

Section 2.09 Temporary Bonds. The Bonds may be initially delivered in temporary form exchangeable for definitive Bonds when ready for delivery, which temporary Bonds shall be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Trustee, shall be in fully registered form and shall contain such reference to any of the provisions hereof as may be appropriate. Every temporary Bond shall be authenticated and delivered by the Trustee upon the same conditions and terms and in substantially the same manner as definitive Bonds. If the Trustee authenticates and delivers temporary Bonds, it will authenticate definitive Bonds without delay, and thereupon the temporary Bonds may be surrendered at the Principal Corporate Trust Office of the Trustee, in exchange for such definitive Bonds, and until so exchanged such temporary Bonds shall be entitled to the same benefits hereunder as definitive Bonds executed and delivered hereunder.
19 4840-4744-1622.2

Section 2.10 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Trustee, at the expense of the Owner thereof, shall authenticate and deliver a new Bond of like tenor, payment date 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. 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 is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner thereof, shall authenticate and deliver a new Bond of like tenor, numbered as the Trustee shall determine, in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Trustee shall require payment of a sum not exceeding the actual cost of preparing each new Bond authenticated and delivered by it under this Section and of the expenses which may be incurred by it under this Section. Any Bond authenticated and delivered under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Bonds secured hereby, and the Trustee shall not be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the amount of Bonds which may be executed and delivered hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of authenticating and delivering a new Bond for a Bond which has been lost, destroyed or stolen and which has matured or will mature within 30 days after the Trustee has received all required indemnity and payments on account of a lost, destroyed or stolen Bond, the Trustee may make payment of such Bond to the Owner thereof on or after the maturity date.

Section 2.11 No Additional Obligations. The City, the Authority and the Trustee covenant that no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part.

ARTICLE III.

PROCEEDS OF BONDS
Section 3.01 Delivery of Bonds. The Trustee is hereby authorized to authenticate and deliver the Bonds to the Underwriter pursuant to the Bond Purchase Agreement upon receipt of a Written Request of the Authority and upon receipt of the proceeds of sale thereof.

Section 3.02 Deposit of Proceeds of Bonds and Other Moneys. The proceeds received from the sale of the Bonds in the amount of $ (consisting of the par amount of the Bonds of $ , [plus/less original issue premium/discount of $ ] and less an Underwriter's discount of $ ), shall be transferred for deposit by the Trustee to the following respective funds:
(a) The Trustee shall deposit the amount of $ in the Costs of Issuance Fund;
(b) The Trustee shall deposit the amount of $ in the Reserve Fund; and
20 4840-4744-1622.2

To facilitate any transfers to or for the benefit of the City required in this Section 3.02, the Trustee may, in its discretion open a temporary fund or account on its records which shall be closed upon completion of such transfers.

Section 3.03 Construction Fund. The Construction Fund is to be established and maintained by the Trustee to fund Construction Costs, as follows:
(a) The Trustee shall hold the moneys in the Construction Fund and shall disburse such moneys therefrom to pay Construction Costs. Such disbursements shall be made from time to time upon receipt of a Written Request of the City on behalf of the Authority (in the form as set forth in Exhibit C hereto) which:
(i) states with respect to each disbursement to be made: (A) the requisition number, (B) the name and address of the person, firm or authority to whom payment is due, (C) the amount to be disbursed, and (D) that each obligation therein has been properly incurred, is a Construction Cost and is a proper charge against the Construction Fund and has not been the basis of any previous disbursement; (ii) specifies in reasonable detail the nature of the obligation; (iii) is accompanied by a bill or statement of account for each obligation. (b) If at any time there are insufficient moneys in the Costs of Issuance Fund to disburse moneys in accordance with Section 3.04 hereof, the Trustee shall disburse from the Construction Fund, subject to this Section 3.03, such additional amounts as are necessary to pay such Costs of Issuance.

Upon the delivery to the Trustee of a Certificate of Completion, the Trustee shall transfer any remaining balance of money in the Construction Fund, first, to the Rebate Fund to the extent the amount on deposit therein is less than the Rebate Requirement, and then the remainder to a separate subaccount within the Principal Fund, which the Trustee shall establish and hold in trust, and which shall be entitled the "Surplus Subaccount." After such transfer, if any, the Trustee shall close the Construction Fund. The moneys in the Surplus Subaccount shall be applied (unless some other application of such moneys would not, in the opinion of Bond Counsel, adversely affect the tax-exempt status of interest on the Bonds) as directed in writing by the City to pay principal on the Bonds as such principal becomes due and payable, in annual amounts which bear the same ratio to the principal amount of such Bonds maturing in such year that the amount deposited in the Surplus Subaccount bears to the original principal amount of such Bonds. Notwithstanding Section 6.09 hereof, the moneys in the Surplus Subaccount shall be invested at a yield no higher than the yield on the Bonds (unless, in the opinion of Bond Counsel, investment at a higher yield would not adversely affect the status of interest on Bonds), and all such investment income shall be deposited in the Surplus Subaccount and expended or reinvested as provided above.

Section 3.04 Costs of Issuance Fund. There is hereby established in trust a special fund designated as the "Costs of Issuance Fund" which shall be held by the Trustee and which shall be 21 4840-4744-1622.2

kept separate and apart from all other funds held by the Trustee. The moneys in the Costs of Issuance Fund shall be applied to the payment of Costs of Issuance of the Bonds, upon a Written Request of the City on behalf of the Authority (in the form as set forth in Exhibit C hereto). All payments from the Costs of Issuance Fund shall be reflected in the Trustee's regular accounting statements. On or before 6 months after the issuance of the Bonds, the Trustee shall transfer any amounts then remaining in the Costs of Issuance Fund to the Revenue Fund and the Costs of Issuance Fund shall be closed.

ARTICLE IV.

REDEMPTION OF BONDS
Section 4.01 Terms of Redemption. The Bonds shall be subject to redemption prior to their respective maturity dates as set forth in subsections (a) and (b) hereof. (a) Extraordinary Redemption. To the extent permitted or required by Section 5.03 or 5.04 hereof, the Bonds are subject to redemption on any date prior to their respective maturity dates, as a whole, or in part, at the written direction of the City, from the net proceeds of any insurance or condemnation award with respect to the Leased Property or portions thereof, at a redemption price equal to the principal amount of the Bonds plus accrued interest thereon to the date fixed for redemption, without premium. (b) Optional Redemption. The Bonds maturing on or after 1, 2032 are subject to optional redemption prior to maturity on or after 1, 2031 at the option of the City, in whole, or in part, on any date, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued but unpaid interest to the redemption date, without premium.
(c) Mandatory Sinking Fund Redemption. The Bonds maturing on 1, 20 and 1, 20 (the "Term Bonds") are subject to mandatory redemption on 1 in each year shown below until maturity, from Mandatory Sinking Account Payments made by the Authority, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that in lieu of redemption thereof, such Term Bonds may be purchased by the Authority and tendered to the Trustee.

Term Bonds maturing on 1, 20
Sinking Fund
Redemption Date
( 1)
* Maturity.
22 Principal Amount to be
Redeemed or
Purchased
4840-4744-1622.2

Term Bonds maturing on 1, 20
Sinking Fund
Redemption Date
( 1)
* Maturity.

Principal Amount to be
Redeemed or
Purchased
If some but not all of the Term Bonds have been redeemed pursuant to extraordinary or optional redemptions, the total amount of Mandatory Sinking Account Payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the Term Bonds so redeemed by reducing each such future Mandatory Sinking Account Payments on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated pursuant to written notice filed by Authority with the Trustee.

Section 4.02 Notice of Redemption. Notice of redemption shall be mailed by first class mail by the Trustee, on behalf and at the expense of the City, not less than 30 nor more than 60 days prior to the redemption date to the respective Owners of Bonds designated for redemption at their addresses appearing on the bond registration books of the Trustee and, unless otherwise instructed by the Authority, provided by the Trustee to the MSRB. Each notice of redemption shall state the date of such notice, the Bonds to be redeemed and date of issue of such Bonds, the redemption date, the redemption price, the place or places of redemption (including the name and appropriate address or addresses), the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity are to be redeemed, the distinctive certificate numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice of optional redemption shall also state that such redemption may be rescinded by the City and that, unless such redemption is so rescinded, and provided that on said date funds are available for payment in full of the Bonds then called for redemption, on said date there will become due and payable on each of such Bonds the redemption price thereof or of said specified portion of the principal amount thereof in the case of a Bond to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the address or addresses of the Trustee specified in the redemption notice.
23 4840-4744-1622.2

Failure by the Trustee to give notice pursuant to this Section to any one or more of the information services or securities depositories, or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. The failure of any Owner to receive any redemption notice mailed to such Owner and any defect in the notice so mailed shall not affect the sufficiency of the proceedings for redemption.

The City shall have the right to rescind any optional redemption by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of optional redemption shall be canceled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default hereunder. The Trustee shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent.

Section 4.03 Partial Redemption of Bonds. Upon surrender of any Bond redeemed in part only, the Trustee shall execute and deliver to the Owner thereof a new Bond or Bonds representing the unpaid principal amount of the Bond surrendered.

Whenever less than all the Outstanding Bonds maturing on any one date are called for redemption at any one time, the Trustee shall select the Bonds to be redeemed, from the Outstanding Bonds maturing on such date not previously selected for redemption, by lot in any manner which the Trustee deems appropriate.

Section 4.04 Effect of Redemption. If notice of redemption has been duly given as aforesaid and moneys for the payment of the redemption price of the Bonds to be redeemed are held by the Trustee, then on the redemption date designated in such notice the Bonds so called for redemption shall become payable at the redemption price specified in such notice; and from and after the date so designated interest on the Bonds so called for redemption shall cease to accrue, such Bonds shall cease to be entitled to any benefit or security hereunder and the Owners of such Bonds shall have no rights in respect thereof except to receive payment of the redemption price represented thereby. The Trustee shall, upon surrender for payment of any of the Bonds to be redeemed, pay such Bonds at the redemption price thereof.

All Bonds redeemed pursuant to the provisions of this Article shall be canceled by the Trustee and shall not be redelivered.

ARTICLE V.

REVENUES
Section 5.01 Pledge of Revenues; Revenue Fund.
(a) There is hereby established a special fund designated as the "Revenue Fund" which shall be held by the Trustee and which shall be kept separate and apart from all other funds and moneys held by the Trustee. Within the Revenue Fund, the Trustee shall establish and maintain a separate fund designated the "Interest Fund" and a separate fund designated the "Principal Fund." The Authority and the City hereby irrevocably pledge and transfer to the Trustee, for the benefit of the Owners, all of its right, title and interest in and to all amounts on deposit from time to time in the funds and accounts established hereunder, subject to the provisions 24 4840-4744-1622.2

hereof permitting the disbursement thereof for or to the purposes and on the conditions and terms set forth herein, and in and to the Revenues, which shall be used for the punctual payment of the interest and principal of the Bonds and the Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding. It is the intent of the parties hereto that the Authority shall not have any right, title, in or to the Revenues. In the event, however, that it should be determined that the Authority has any right, title or interest in or to the Revenues, then the Authority hereby irrevocably pledges and transfers to the Trustee, for the benefit of the Owners, all of such right, title and interest, which shall be used for the punctual payment of the interest and principal of the Bonds. These pledges shall constitute a first and exclusive lien on the funds established hereunder and the Revenues in accordance with the terms hereof.
(b) All Revenues shall be paid directly by the City to the Trustee, and if received by the Authority at any time shall be deposited by the Authority, as the case may be, with the Trustee within one Business Day after the receipt thereof. All Revenues, the proceeds of rental interruption insurance and liquidated damages, if any, shall be deposited by the Trustee in the Revenue Fund and all amounts on deposit therein shall be held in trust by the Trustee, which fund the Trustee hereby agrees to establish and maintain for the benefit of the Owners until all required Revenues are paid in full pursuant to the Lease Agreement or until such date as the Bonds are no longer Outstanding; provided, however, and notwithstanding the foregoing, if the Trustee receives Revenues in an amount in excess of the amount necessary to pay the amount due and owing on the next Interest Payment Date, Principal Payment Date or Mandatory Sinking Account Payment Date, as the case may be, after giving effect to the funds then on deposit in the Revenue Fund not needed for any other purpose hereunder, then amounts in the Revenue Fund not needed to make such payments may be utilized by the Trustee, as directed in writing by the City, for any other purpose.

Section 5.02 Deposit of Revenues. Except as otherwise provided in this Section, the Trustee shall deposit the amounts in the Revenue Fund at the time and in the priority and manner hereinafter provided in the following respective funds, each of which the Trustee hereby agrees to establish and maintain until all required Revenues are paid in full pursuant to the Lease Agreement or until such date as the Bonds are no longer Outstanding, and the moneys in each of such funds shall be disbursed only for the purposes and uses hereinafter authorized. (a) Interest Fund. The Trustee, on or before each Interest Payment Date, shall transfer from the Revenue Fund to the Interest Fund an amount equal to the interest on the Bonds coming due on such Interest Payment Date. Moneys in the Interest Fund shall be withdrawn and used by the Trustee for the purpose of paying interest on the Bonds as and when due and payable. (b) Principal Fund. The Trustee, on or before each Principal Payment Date and Mandatory Sinking Account Payment Date, shall transfer from the Revenue Fund to the Principal Fund an amount equal to the principal of the Bonds, including principal due and payable by reason of a Mandatory Sinking Account Payment coming due on such date. Moneys in the Principal Fund shall be withdrawn and used by the Trustee for the purpose of paying principal of the Bonds, including principal due and payable by reason of a Mandatory Sinking Account Payment, as and when due and payable.
(c) Reserve Fund. The Trustee shall establish and maintain a separate account to be known as the "Reserve Fund." On or before each Interest Payment Date, the Trustee shall 25 4840-4744-1622.2

deposit in the Reserve Fund such amount as may be necessary to maintain a balance therein equal to the Reserve Requirement. No deposit shall be made in the Reserve Fund so long as there shall be on deposit an amount equal to the Reserve Requirement. All money in the Reserve Fund (or available to be drawn from a Qualified Reserve Fund Credit Instrument) shall be used and withdrawn by the Trustee solely for the purpose of replenishing the Interest Fund or the Principal Fund in such order, in the event of any deficiency at any time in either of such accounts, or for the purpose of paying the interest on or principal of or redemption premiums, if any, on the Bonds in the event that no other money of the Authority is lawfully available therefor. All moneys in the Reserve Fund (or available to be drawn from a Qualified Reserve Fund Credit Instrument held in the Reserve Fund) in excess of the Reserve Requirement may be applied to the retirement of all Bonds then Outstanding or as a credit against the next following Base Rental Payment as directed in a Request by the City. The Reserve Requirement may be satisfied by crediting to the Reserve Fund moneys or a Qualified Reserve Fund Credit Instrument or any combination thereof, which in the aggregate make funds available in the Reserve Fund in an amount equal to the Reserve Requirement.

Upon the deposit with the Trustee of such Qualified Reserve Fund Credit Instrument to satisfy the Reserve Requirement, the Trustee shall transfer any excess amounts then on deposit in the Reserve Fund into a segregated account of the Revenue Fund to be established by the Trustee, which monies shall be applied pursuant to the written direction of the Authority.

In any case where the Reserve Fund is funded with a combination of cash and a Qualified Reserve Fund Credit Instrument, the Trustee shall deplete all cash balances before drawing on the Qualified Reserve Fund Credit Instrument. With regard to replenishment, any available moneys provided by the Authority or the City shall be used first to reinstate the Qualified Reserve Fund Credit Instrument and second, to replenish the cash in the Reserve Fund. In the event the Qualified Reserve Fund Credit Instrument is drawn upon, the Authority shall make payment of interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after making any payments pursuant to this subsection.
(d) 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. Monies in the Redemption Fund shall be used and withdrawn by the Trustee for the purpose of paying the principal, premium, if any, and interest of the Bonds to be redeemed.

Section 5.03 Application of Insurance Proceeds and Condemnation Awards. The Trustee shall not be responsible for the sufficiency of any insurance required by the Lease Agreement and 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 City or the Authority. Delivery to the Trustee of the schedule of insurance policies under the Lease Agreement shall not confer responsibility upon the Trustee as to the sufficiency of coverage or amounts of such policies.

Except as hereinafter provided, in the event of any damage to or destruction of any part of the Leased Property, caused by the perils covered by the policies of insurance required to be 26 4840-4744-1622.2

maintained by the City pursuant to Section 6.03 of the Lease Agreement, the City and the Authority shall cause the proceeds of such insurance (other than rental interruption insurance which is to be placed in the Revenue Fund) to be used in accordance with Section 7.01 of the Lease Agreement.

The Trustee shall hold said proceeds in a separate fund to be established and maintained by the Trustee when deposit is required and designated the "Insurance Proceeds and Condemnation Awards Fund." The Trustee shall only make disbursements from the Insurance Proceeds and Condemnation Awards Fund upon receipt of a Written Request of the City on behalf of the Authority, which (i) states with respect to each disbursement to be made: (A) the requisition number, (B) the name and address of the person, firm or authority to whom payment is due, (C) the amount to be disbursed, and (D) that each obligation therein has been properly incurred for the purpose of repair, reconstruction or replacement of the Leased Property to at least the same good order, repair and condition as it was in prior to the damage or destruction, insofar as the same may be accomplished by the use of said proceeds and is a proper charge against the Insurance Proceeds and Condemnation Awards Fund and has not been the basis of any previous disbursement; (ii) specifies in reasonable detail the nature of the obligation; and (iii) is accompanied by a bill or statement of account for each obligation. Any balance of said proceeds not required for such repair, reconstruction or replacement as evidenced by a Certificate of the City to the effect that such repair, reconstruction or replacement has been completed and all amounts owing therefor have been paid or provision for the payment therefor has been made shall be transferred by the Trustee to Redemption Fund and applied in the manner provided by Section 4.01(a) hereof.

Alternatively, the City, at its option, and if the proceeds of such insurance together with any other moneys then available for the purpose are at least sufficient to redeem all Outstanding Bonds, may elect not to repair, reconstruct or replace the damaged or destroyed portion of the Leased Property and thereupon shall cause said proceeds to be transferred to the Redemption Fund and used for the redemption of Outstanding Bonds pursuant to Section 4.01(a) hereof; provided, that if the City elects to so redeem the Outstanding Bonds, then the City shall make said election within 45 days after the damage to or destruction of the Leased Property. Notwithstanding any other provision herein, the City shall only redeem less than all of the Outstanding Bonds if the annual fair rental value of the Leased Property after such damage, destruction or condemnation is at least equal to the aggregate annual amount of principal and interest of the Outstanding Bonds not being redeemed.

The proceeds of any award in eminent domain shall be transferred by the City to the Trustee for deposit in the Redemption Fund and applied to the redemption of Outstanding Bonds pursuant to Section 4.01(a) hereof.

Section 5.04 Title Insurance. Proceeds of any policy of title insurance received by the City, the Authority or the Trustee in respect of the Leased Property shall be applied and disbursed by the City, the Authority or the Trustee as follows:
(a) If the City determines that the title defect giving rise to such proceeds has not materially affected the operation of the Leased 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, upon written direction of the City, and used for any lawful purpose thereof; or (b) If any portion of the Leased Property has been affected by such title defect, and if the City determines that such title defect will result in an abatement of Rental Payments 27 4840-4744-1622.2

payable by the City under the Lease Agreement, then the City, the Authority or the Trustee, upon written direction of the City, 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 Section 4.01(a) hereof.

ARTICLE VI.

COVENANTS
Section 6.01 Compliance with Indenture. The Authority will not execute or deliver any Bonds in any manner other than in accordance with the provisions hereof, and neither of the City or the Authority will 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 hereof required to be complied with, kept, observed and performed by them.

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

Section 6.03 Observance of Laws and Regulations. The Trustee, the City and the Authority will faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed 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 or 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 Leased 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, other than Permitted Encumbrances (with respect to the Leased Property, as such term is defined in the Lease Agreement, and free from any claim or liability which materially impairs the City in conducting its business or utilizing the Leased 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 take any necessary steps to defend against or to so comply within such ten-day period) may defend against any and all actions or proceedings in which the validity hereof is or might be questioned, 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 to defend the validity hereof and to perform such agreements and covenants. The Trustee shall have no liability with respect to any determination made in good faith to proceed or decline to defend, pay or compromise any such claim or demand.
28 4840-4744-1622.2

So long as any Bonds are Outstanding, neither the City nor the Authority will create or suffer to be created any pledge of or lien on the Revenues other than as provided or permitted under Section 5.01 hereof.

Section 6.05 Prosecution and Defense of Suits. The City will promptly take such action from time to time as may be necessary or proper, in its reasonable discretion, to remedy or cure any known cloud upon or defect in the title to the Leased Property or any portion thereof, whether now existing or hereafter developing, and will prosecute all actions, suits or other proceedings as may be appropriate for such purpose.

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 made by it relating to the receipt, deposit and disbursement of the Revenues, and such accounting records shall be available for inspection by the City or the Authority at reasonable hours, under reasonable conditions and with reasonable notice. The Trustee shall deliver a monthly accounting to the City; provided that the Trustee shall not be obligated to report as to any fund or account that (a) has a balance of zero and (b) has not had any activity since the last reporting date.

Section 6.07 Recordation and Filing. The Authority will file, record, register, renew, refile and rerecord all such documents, including financing statements (or continuation statements in connection therewith), as may be required by law in order to maintain the Lease Agreement, Site Lease, Assignment Agreement and this Indenture at all times as a security interest in the Revenues, all in such manner, at such times and in such places as may be required and to the extent permitted by law in order to perfect, preserve and protect fully the security of the Owners and the rights and security interests of the Trustee, and the Authority will do whatever else may be necessary or be reasonably required in order to perfect and continue the liens of the Lease Agreement, Site Lease, Assignment Agreement and this Indenture.

Section 6.08 Further Assurances. Whenever and so often as requested to do so by the Trustee or any Owner, the City and the Authority 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 and the Owners all advantages, benefits, interests, powers, privileges and rights conferred or intended to be conferred upon them hereby or by the Assignment Agreement, Lease Agreement or Site Lease.

Section 6.09 Tax Covenants; Rebate Fund.
(a) In addition to the accounts created pursuant to Section 5.02, the Trustee shall establish and maintain a fund separate from any other fund or account established and maintained hereunder designated as the Rebate Fund. There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate. The Trustee may rely conclusively upon the City's determinations, calculations and certifications required by this Section. The Trustee shall have no responsibility to independently make any calculation or determination or to review the City's calculations hereunder. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement (as defined in the Tax Certificate), for payment to the United States of America. 29 4840-4744-1622.2

Notwithstanding the provisions of this Indenture relating to the pledge of Revenues, the allocation of money in the Revenue Fund, the investments of money in any fund or account, the application of funds upon an Event of Default and the defeasance of Outstanding Bonds, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section 6.09 and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Authority, and shall have no liability or responsibility to enforce compliance by the Authority with the terms of the Tax Certificate.
(b) Any funds remaining in the Rebate Fund with respect to the Bonds after redemption and payment of all the Bonds and all other amounts due hereunder or under the Lease Agreement, or provision made therefor satisfactory to the Trustee, including accrued interest and payment of any applicable fees and expenses of the Trustee and satisfaction of the Rebate Requirement (as defined in the Tax Certificate), shall be withdrawn by the Trustee and remitted to or upon the direction of the Authority.
(c) The Authority shall not use or permit the use of any proceeds of the Bonds or any funds of the Authority, directly or indirectly, to acquire any securities or obligations, and shall not take or permit to be taken any other action or actions, which would cause any of the Bonds to be an "arbitrage bond" within the meaning of Section 148 of the Code, "private activity bond" within the meaning of Section 141(a) of the Code, or "federally guaranteed" within the meaning of Section 149(b) of the Code and any such applicable requirements promulgated from time to time thereunder and under Section 103(c) of the Internal Revenue Code of 1954, as amended. The Authority shall observe and not violate the requirements of Section 148 of the Code and any such applicable regulations. The Authority shall comply with all requirements of Sections 148 and 149(b) of the Code to the extent applicable to the Bonds. In the event that at any time the Authority is of the opinion that for purposes of this Section 6.09(c) it is necessary to restrict or to limit the yield on the investment of any moneys held by the Trustee under this Indenture, the Authority shall so instruct the Trustee under this Indenture in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. (d) The Authority and the Trustee (as directed by the Authority) specifically covenant to comply with the provisions and procedures of the Tax Certificate; provided that the Trustee shall not be bound by this covenant if an Event of Default has occurred and is continuing. (e) The Authority shall not use or permit the use of any proceeds of the Bonds or any funds of the Authority, directly or indirectly, in any manner, and shall not take or omit to take any action that would cause any of the Bonds to be treated as an obligation not described in Section 103(a) of the Code.
(f) Notwithstanding any provisions of this Section 6.09, if the Authority shall provide to the Trustee an Opinion of Counsel that any specified action required under this Section 6.09 or the Tax Certificate is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Bonds, the Trustee and the Authority may conclusively rely on such opinion in complying with the requirements of this Section, and, notwithstanding Article IX hereof, the covenants hereunder shall be deemed to be modified to that extent.
30 4840-4744-1622.2

Section 6.10 Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement.

Notwithstanding any other provision of the Indenture, failure of the City to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; however, the Trustee may (and, at the request of the Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Bonds, shall) or 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 Section 6.10; provided, that the Trustee shall only be required to take an action under this Section 6.10 to the extent funds have been provided to it or it has been otherwise indemnified to its reasonable satisfaction from any cost, liability, expense or additional charges of the Trustee whatsoever, including, without limitation, fees and expenses of its attorneys.

ARTICLE VII.

DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Events of Default. The following events shall be Events of Default:
(a) default in the due and punctual payment of the principal of or premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise; (b) default in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable; (c) default by the City in the observance of any of the covenants, agreements or conditions on its part in this Indenture contained, if such default shall have continued for a period of 30 days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the City and the Authority by the Trustee, or to the City, the Authority and the Trustee by the Owners of not less than 25% in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if such default can be remedied but not within such 30 -day period and if the City has taken all action reasonably possible to remedy such default within such 30 -day period, such default shall not become an Event of Default for so long as the City shall diligently proceed to remedy the same in accordance with and subject to any directions or limitations of time reasonably established by the Trustee; or (d) an event of default shall have occurred and be continuing under the Lease Agreement.

Section 7.02 Action on Default. In each and every case during the continuance of an Event of Default, the Trustee or the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding (subject to the provisions of Section 7.11 hereof) shall be entitled, upon notice in writing to the City and the Authority to exercise any of the remedies granted to the City under the Lease Agreement, to the Authority under the Lease Agreement, and in addition, to 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 31 4840-4744-1622.2

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 specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 7.03(a), (b) or (c) hereof.

Section 7.03 Other Remedies of the Trustee. 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 City, the Authority or any director, officer or employee thereof, and to compel the City or the Authority or any such 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 things which are unlawful or violate the rights of the Trustee; or
(c) by suit in equity upon the happening of any default hereunder to require the City and the Authority to account as the trustee of an express trust.

Section 7.04 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 impair 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 or Owners, then subject to any adverse determination, the Trustee or such Owner or Owners and the City and the Authority shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.

Section 7.05 Remedies Not Exclusive. 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 at 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 7.06 No Liability by the Authority to the Owners. Except as expressly provided herein, the Authority shall have no 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 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. 32 4840-4744-1622.2

Section 7.07 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 or herein, the City shall not have any obligation or liability to the Owners with respect to the Indenture or the preparation, execution, delivery or transfer of the Bonds or the disbursement of the Revenues 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 7.08 No Liability by 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 City or the Authority of the other agreements and covenants required to be performed by them, respectively contained in the Lease Agreement or Site Lease or in this Indenture.

Section 7.09 Application of Amounts After Default. Notwithstanding anything to the contrary contained herein, after a default by the City, all funds and accounts held by the Trustee and all payments received by the Trustee with respect to the rental of the Leased Property after a default by the City pursuant to Section 10.01 of the Lease Agreement, and all damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under Section 10.01 of the Lease Agreement, shall be deposited into the Revenue Fund and as soon as practicable thereafter applied:
(a) to the payment of all amounts due the Trustee under Section 8.03 hereof; and
(b) to the payment of all amounts then due as interest with respect to the Bonds, and thereafter to the payment of all amounts due as principal with respect to the Bonds, in respect of which or for the benefit of which, money has been collected (other than Bonds which have matured or otherwise 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 due and payable with respect to such Bonds.

Section 7.10 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 Trustee 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 shall, 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 of the Bonds in respect of which such judgment has been recovered.

Section 7.11 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 such Owner has previously given written notice to the Trustee of a continuing Event of Default; the Owners of not less than 25% in principal amount of the Outstanding Bonds shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee 33 4840-4744-1622.2

hereunder; such Owner or Owners 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; the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceedings; and no direction inconsistent with such written request has been given to the Trustee during such 60 -day period by the Owners of a majority in principal amount of the Outstanding Bonds; it being understood and intended that no one or more Owners of Bonds 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 of Bonds, 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 of Bonds. Nothing in this Indenture contained shall, however, affect or impair the right of any Owner to enforce the payment of the principal of or the redemption price of and the interest of any Bond at and after the maturity or earlier redemption.

ARTICLE VIII.

THE TRUSTEE
Section 8.01 Employment of the Trustee. The City and the Authority hereby appoint and employ the Trustee to receive, deposit and disburse the 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 the 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. 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 person would exercise or use under the circumstances in the conduct of his own affairs.

Section 8.02 Duties, Removal and Resignation of the Trustee. The City and the Authority may, by an instrument in writing and upon 30 days written notice remove the Trustee initially a party hereto and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding (or their attorneys duly authorized in writing), but any such successor Trustee shall be a bank with trust powers or trust company doing business and having a corporate trust office in California or New York, having (or if such bank or trust company is a member of a bank holding company system, its bank holding company has) a combined capital (exclusive of borrowed capital) and surplus of at least seventy-five million dollars ($75,000,000) and subject to supervision or examination by federal or state authorities. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. 34 4840-4744-1622.2

The Trustee may at any time resign by giving written notice of such resignation to the City and the Authority and by mailing notice, first class, postage prepaid, of such resignation to the Owners at their addresses appearing on the books required to be kept by the Trustee pursuant to the provisions of Section 2.08 hereof. Upon receiving such notice of resignation, the City and the Authority shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event the City and the Authority do not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the City, petition the appropriate court having jurisdiction to appoint a successor Trustee.

Section 8.03 Compensation and Indemnification 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 advances and expenditures hereunder, including but not limited to payments, advances to and fees and 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; provided, however, that the Trustee shall not have any lien for such compensation or reimbursement against any moneys held by it in any of the funds or accounts established hereunder or under Lease Agreement (except that such compensation or reimbursement may be made from the Costs of Issuance Fund held by the City to the extent provided in Section 3.03 hereof or as provided in Section 7.09 hereof). The Trustee may take whatever legal actions are lawfully available to it directly against the City or the Authority.

Except as otherwise expressly provided herein, 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.

The City covenants and agrees to indemnify and save the Trustee and its officers, directors, agents and employees, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise and performance of its powers and duties hereunder, including the costs of expenses of defending against any claim of liability including, without limitation, any claim arising out of the use, presence, storage, disposal or lease of any Hazardous Substances on or about the Leased Property, but excluding any and all losses, expenses and liabilities which are due to the negligence or intentional misconduct of the Trustee, its officers, directors, agents or employees.

Such indemnity shall survive the discharge of this Indenture or the resignation or removal of the Trustee.

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, opinion, notice, request, requisition, resolution, direction, instruction, 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 not be bound to recognize any person as an Owner of any Bond or to take any action at the request 35 4840-4744-1622.2

of any such person unless such Bond shall be deposited with the Trustee or satisfactory evidence of the ownership of such Bond shall be furnished to the Trustee. 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 indemnity reasonably satisfactory to the Trustee, against the 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 City or the Authority, 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 or adequacy of the Bonds, the Lease Agreement, the Site Lease, or of the assignment made to it by the Assignment Agreement, or for statements made in the preliminary or final official statement relating to the Bonds or of the title to or value of the Leased Property.

The Trustee shall not be required to take notice or be deemed to have notice of any default or event of default hereunder or an Event of Default under Section 7.01 hereof, except failure of any of the payments to be made to the Trustee required to be made hereunder unless the Trustee shall be specifically notified in writing of such default or Event of Default by the City, the Authority or by the Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding.

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 Certificate of the City, 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 to it may seem 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 or other transaction with the City or the Authority, 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 default or misconduct of any such agent, attorney or receiver selected by it with reasonable care. 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. 36 4840-4744-1622.2

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 or negligence.

The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of not less than a majority (or other percentage provided for herein) in aggregate principal amount of the Bonds at the time Outstanding relating to the exercise of any right or remedy available to the Trustee hereunder.

The Trustee makes no representation or warranty, express or implied as to the title, value, design, compliance with specifications or legal requirements, quality, durability, operation, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City of the Leased Property. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from the Lease Agreement, the Site Lease or this Indenture for the existence, furnishing or use of the Property.

Every provision of this Indenture, the Lease Agreement, the Site Lease and the Assignment Agreement relating to the conduct or liability of the Trustee shall be subject to the provisions of this Indenture, including without limitation, this Article VIII.

In acting as Trustee hereunder, the Trustee acts solely in its capacity as Trustee for the Owners and not in its individual or personal capacity, and all persons, including without limitation, the Owners, the City and the Authority, having any claim against the Trustee shall look only to the funds and accounts held by the Trustee hereunder for payment, except as otherwise specifically provided herein. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds.

The recitals of facts, covenants and agreements herein and in the Bonds shall be taken as statements, covenants and agreements of the City or the Authority, as the case may be, and the Trustee assumes no responsibility for the correctness of the same.

ARTICLE IX.

AMENDMENT OF OR SUPPLEMENT TO

INDENTURE
Section 9.01 Amendment or Supplement. The Indenture and the rights and obligations of the City, the Authority, the Owners and the Trustee hereunder may be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding when the written consents of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 9.02 hereof, are filed with the Trustee. No such amendment or supplement shall (1) extend the Principal Payment Date of any Bond or reduce the rate of interest represented thereby or extend the time of payment of such interest or reduce the amount of principal represented thereby or reduce the amount of any Mandatory Sinking Account Payment without the prior written consent of the Owner of each Bond so affected, or (2) reduce the percentage of Owners whose consent is required for the execution of any amendment hereof or supplement hereto without the prior written consent of the Owners of 37 4840-4744-1622.2

all Bonds then Outstanding, or (3) modify any of the rights or obligations of the Trustee without its prior written consent thereto, or (4) amend this Section 9.01 without the prior written consent of the Owners of all Bonds then Outstanding.

The Indenture and the rights and obligations of the City, the Authority, the Owners and the Trustee hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution, but without the written consents of any Owners, but only to the extent permitted by law and after receipt of an unqualified approving Opinion of Counsel and only for any one or more of the following purposes:
(a) to add to the agreements, conditions, covenants and terms required to be observed or performed herein by the City or the Authority, or to surrender any right or power reserved herein to or conferred herein on the City or the Authority, and which in either case shall not materially adversely affect the interests of the Owners; or (b) to provide for removal of a portion of the Leased Property or substitute Leased Property as may be requested from time to time by the City in accordance with the Lease Agreement; or
(c) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the City or the Authority may deem desirable or necessary and not inconsistent herewith, and which shall not materially adversely affect the interests of the Owners; or
(d) for any other reason, provided such amendment or supplement does not materially adversely affect the interests of the Owners, provided further that the City, the Authority and the Trustee may rely in entering into any such amendment or supplement upon an Opinion of Counsel stating that the requirements of this subsection (d) have been met with respect to such amendment or supplement.

Section 9.02 Disqualified Bonds. Bonds actually known by the Trustee to be owned or held by or for the account of the City (but excluding Bonds held in any pension or retirement fund of the City) shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Bonds provided in this Article, and shall not be entitled to consent to or take any other action provided in this Article, and the Trustee may adopt appropriate regulations to require each Owner, before his consent provided for herein shall be deemed effective, to reveal if the Bonds as to which such consent is given are disqualified as provided in this Section.

Section 9.03 Endorsement or Replacement of Bonds After Amendment or Supplement. After the effective date of any action taken as hereinabove provided in this Article IX, the Trustee may determine that the Bonds may bear a notation by endorsement in form approved by the Trustee as to such action, and in that case upon demand of the Owner of any Outstanding Bond and presentation of such Bond for such purpose at the Principal Corporate Trust Office of the Trustee a suitable notation as to such action shall be made on such Bond. If the Trustee shall receive an Opinion of Counsel advising that new Bonds modified to conform to such action are necessary, modified Bonds shall be prepared, and in that case upon demand of the Owner 38 4840-4744-1622.2

of any Outstanding Bonds such new Bonds shall be exchanged at the Principal Corporate Trust Office of the Trustee, without cost to each Owner for Bonds then Outstanding upon surrender of such Outstanding Bonds.

Section 9.04 Amendment by Mutual Consent. The provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Bonds owned by such person, provided that due notation thereof is made on such Bonds.

Section 9.05 Opinion of Counsel. In executing any amendment or supplement hereto, the Trustee may conclusively rely upon an Opinion of Counsel to the effect that all conditions precedent for the execution of an amendment or supplement to this Indenture have been satisfied.

ARTICLE X.

DEFEASANCE
Section 10.01 Discharge of Bonds and Indenture. (a) If the Trustee shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the interest and principal represented thereby at the times and in the manner stipulated herein and therein, then such Owners shall cease to be entitled to the pledge of and lien on the Revenues as provided herein, and all agreements and covenants of the City, the Authority and the Trustee to such Owners hereunder shall thereupon cease, terminate and become void and shall be discharged and satisfied. (b) Any Outstanding Bonds shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in this Section 10.01 if (i) in case said Bonds are to be redeemed on any date prior to their maturity, the City shall have given to the Trustee in form satisfactory to the Trustee irrevocable instructions to mail, in accordance with the provisions of Article IV of this Indenture, notice of redemption of such Bonds on said redemption date, (ii) there shall have been deposited with the Trustee either moneys in an amount which shall be sufficient, or Defeasance Securities which are not callable or subject to redemption prior to their respective maturity dates, the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys which, together with the moneys, if any, deposited with or held by the Trustee at the same time, shall be sufficient (as verified by a report of an independent certified public accountant or other independent financial consultant), to pay when due the principal or redemption price (if applicable) of, and interest due and to become due on, said Bonds on and prior to the redemption date or maturity date thereof, as the case may be, and (iii) in the event any of said Bonds are not to be redeemed within the next succeeding 60 days, the City shall have given the Trustee in form satisfactory to the Trustee irrevocable instructions to mail, as soon as practicable in the same manner as a notice of redemption is mailed pursuant to Article IV of this Indenture, a notice to the Owners of such Bonds and to the securities depositories and information services specified in clauses (b) and (c) of Section 4.02 hereof that the deposit required by (ii) above has been made with the Trustee and that said Bonds are deemed to have been paid in accordance with this Section 10.01(b) and stating such maturity or redemption dates upon which moneys are to be available for the payment of the principal or redemption price (if applicable) of said Bonds. Neither the securities nor moneys deposited with the Trustee pursuant to this Section 10.01(b) nor principal or interest payments on any such securities shall be withdrawn or used for any purpose other than, and shall be held in trust 39 4840-4744-1622.2

for, the payment of the principal or redemption price (if applicable) of, and interest on said Bonds; provided that Defeasance Securities deposited with the Trustee pursuant to this Section 10.01(b) may be sold upon the written request of the City and the proceeds concurrently reinvested in other Defeasance Securities which satisfy the conditions of (ii) above provided that any cash received from such principal or interest payments on such obligations deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, and at the direction of the City, be reinvested in Defeasance Securities maturing at times and in amounts, together with the other moneys and payments with respect to securities then held by the Trustee pursuant to this Section, sufficient to pay when due the principal or redemption price (if applicable) of, and interest to become due with respect to said Bonds on and prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinvestments shall, upon receipt by the Trustee of a Written Request of the City, be paid over to the City, as received by the Trustee, free and clear of any trust, lien or pledge. Nothing in this Section 10.01(b) shall preclude redemptions pursuant to Section 4.01 hereof.

Placentia City CouncilJuly 25, 2023

Placentia City Council
July 25, 2023