OF THE CITY OF PERRIS and

COMMUNITY FACILITIES DISTRICT NO. 91-1 (PERRIS VALLEY SPECTRUM)

and

COMMUNITY FACILITIES DISTRICT NO. 2014-2 (PERRIS VALLEY SPECTRUM)

OF THE CITY OF PERRIS and

U.S. BANK NATIONAL ASSOCIATION Dated as of June 1, 2015

Relating to the Payment and Redemption of the

$8,010,000 (Initial Principal Amount)

Community Facilities District No. 91-1 (Perris Valley Spectrum) of the City of Perris

Special Tax Revenue Bonds, 1991 Series A

01006.0805/248320.1 1

ESCROW DEPOSIT AND TRUST AGREEMENT

This ESCROW DEPOSIT AND TRUST AGREEMENT (this “Agreement”) is made and entered into as of June 1, 2015, by and among the PERRIS JOINT POWERS AUTHORITY, a joint powers authority existing under the laws of the State of California (the “Authority”), COMMUNITY FACILITIES DISTRICT NO. 91-1 (PERRIS VALLEY SPECTRUM) (the

“Prior District”), COMMUNITY FACILITIES DISTRICT NO. 2014-2 (PERRIS VALLEY SPECTRUM) OF THE CITY OF PERRIS (the “District”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America having a corporate trust office in Los Angeles, California, as escrow agent, 1991 Fiscal Agent, Fiscal Agent, and Trustee (as hereinafter defined) (collectively, the

“Escrow Bank”);

W I T N E S S E T H :

WHEREAS, the City Council (the “City Council”) of the City of Perris (the “City”), previously formed Community Facilities District No. 91-1 (Perris Valley Spectrum) of the City of Perris (“1991 District”) by adoption of Resolution of 1913 on January 28, 1991 pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”); and

WHEREAS, at a special tax election held pursuant to the Act, the electors at the time within the 1991 District voted in favor of the levy of special taxes pursuant to the respective Rate and Method of Apportionment (“1991 RMA”); and

WHEREAS, on March 11, 1991, the City Council authorized the issuance of the Community Facilities District No. 91-1 (Perris Valley Spectrum) of the City of Perris 1991 Special Tax Bonds (the “1991 Bonds” or “Prior District Bonds”) in the aggregate principal amount of 8,010,000, of which $3,350,000 are outstanding; and

WHEREAS, due to high delinquencies in the 1991 District, and the “1991 RMA” which requires undeveloped property to pay for public improvements at the same rate as developed property, the City Council has determined that it is in the best interests of the 1991 District to prepay the 1991 Bonds and special taxes associated therewith (“Refinance Plan”); and

WHEREAS, in order to accomplish the Refinance Plan, the City Council determined to form a new community facilities district to levy special taxes within the area of 1991 District and apportion the special taxes in a manner that spurs further development within the area, and issue a new series of bonds to refund the 1991 Bonds; and

WHEREAS, the City Council of the City (hereinafter sometimes referred to as the

“legislative body of the District”) has, pursuant to its Resolution No. 4776 (“the Resolution of Intention”) adopted on October 14, 2014, and Resolution 4802 (the “Resolution of Formation”) adopted on January 13, 2015, heretofore undertaken proceedings and declared the necessity of Community Facilities District No. 2014-2 (Perris Valley Spectrum) of the City of Perris (the

“District”) to issue bonds pursuant to the terms and provisions of the Act; and

01006.0805/248320.1 2

WHEREAS, on April 14, 2015, the qualified electors within the District approved the levy of special taxes pursuant to the respective Rate and Method of Apportionment (“ New RMA”), pursuant to the Resolution of Formation, Resolution Declaring Results of the Election, and Ordinance No. ______, adopted on April 14, 2015; and

WHEREAS, on April 14, 2015, pursuant to Resolution of Formation, Resolution Nos.

4801 and (resolution declaring results of election), the qualified electors and the District authorized the District to issue bonds in an amount not to exceed $3,500,000 within the District;

and

WHEREAS, the Prior District Bonds were issued pursuant to a Administration Agreement (“Administration Agreement”), dated as of April 1, 1991, (the “1991 Administration Agreement”) by and between the District and the predecessor to U.S. Bank National Association, as fiscal agent thereunder (the “1991 Fiscal Agent”); and

WHEREAS, the Prior District Bonds are currently outstanding in the aggregate principal amount of $3,350,000 ; and

WHEREAS, the City and the Housing Authority of the City of Perris, entered into a Joint Exercise of Powers Agreement, created under the Joint Exercise of Powers Act (Sections 6500 et seq. of the California Government Code) (the "Bond Law"), dated as of March 26, 2013, thereby forming the Perris Joint Powers Authority (the “Authority”) to assist the City and the Housing Authority of the City in their respective financings; and

WHEREAS, the District and the Authority have determined that refunding, canceling, and/or defeasing the Prior District Bonds to effect savings is prudent in the management of their fiscal affairs and a public purpose; and

WHEREAS, the City, on behalf of the District, has taken action and held proceedings to issue $__________ of its Community Facilities District No. 2014-2 (Perris Valley Spectrum) of the City of Perris Special Tax Refunding Bonds, 2015 Series (the “District Bonds”) subject to the terms of a fiscal agent agreement, dated June 1, 2015, by and between U.S. Bank National Association, as Fiscal Agent (the “Fiscal Agent”), and the District (the “Fiscal Agent Agreement”); and

WHEREAS, the Authority is authorized by the Bond Law to issue bonds, and in order to raise funds to purchase the District Bonds and effectuate the refunding, the Authority has determined to issue its $_________ initial principal amount Perris Joint Powers Authority Local Agency Refunding Revenue Bonds (CFD No. 2014-2 (Perris Valley Spectrum), 2015 Series C (the “Authority Bonds”), pursuant to the Bond Law and subject to the terms of an Indenture of Trust, dated as of June 1, 2015, by and between U.S. Bank National Association, as Trustee (the

“Trustee”), and the Authority (the “Indenture”); and

WHEREAS, the Authority will use a portion of the proceeds of the Authority Bonds to purchase the District Bonds; and

01006.0805/248320.1 3

WHEREAS, the District will use a portion of the proceeds of the sale of the District Bonds to the Authority, along with other moneys, to prepay and redeem the Prior District Bonds and discharge the 1991 Administration Agreement; and

WHEREAS, the Prior District Bonds mature, bear interest and are callable as set forth on Schedule A attached hereto; and

WHEREAS, the 1991 Administration Agreement provides for the payment, redemption, and discharge of the Prior District Bonds prior to maturity by the setting apart of money in a special irrevocable escrow fund to insure the payment of principal, premium and interest thereon;

and

WHEREAS, the Authority, the District and the Escrow Bank wish to enter into this Agreement for the purpose of providing the terms and conditions relating to the deposit and application of moneys to provide for the payment and prepayment of the Prior District Bonds in full and, concurrently with said payment, discharge of the 1991 Administration Agreement, pursuant to and in accordance with the provisions of the 1991 Administration Agreement; and

WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable escrow created herein and to perform the duties and obligations to be undertaken pursuant to this Agreement.

NOW, THEREFORE, in consideration of the above premises and of the mutual promises and covenants herein contained and for other valuable consideration, the parties hereto do hereby agree as follows:

Section 1. Certain Definitions. Unless the context otherwise requires, the terms defined in this section shall, for all purposes of this Agreement have the meanings herein specified. Capitalized terms not otherwise defined herein are defined in the 1991 Administration Agreement.

“Act” means the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the California Government Code).

“Agreement” means this Escrow Deposit and Trust Agreement dated as of June 1, 2015, by and among the Authority, the District and the Escrow Bank.

“Authority” means the Perris Joint Powers Authority, a joint powers authority existing under the laws of the State of California, as further described in the preambles hereto.

“Authority Bonds” have the definition set forth in the preambles of this Agreement.

“Bond Counsel” means Aleshire & Wynder, LLP, or any other attorney or firm of attorneys of nationally recognized standing in the field of municipal finance whose opinions are generally accepted by purchasers of municipal bonds or notes, appointed from time to time by the Authority.

01006.0805/248320.1 4

“Bond Fund” means the fund so designated which is established and held by the 1991 Trustee pursuant to the 1991 Administration Agreement.

“Bond Law” means Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California.

“City” means the City of Perris, a municipal corporation.

“City Council” means the City Council of the City.

“Closing Date” means the date of delivery of the Authority Bonds and the District Bonds.

“District” means the Community Facilities District No. 2014-2 (Perris Valley Spectrum) of the City of Perris, as further described in the preambles hereto.

“District Bonds” have the definition set forth in the preambles of this Agreement.

“Escrow Fund” means the fund by that name as created in Section 4 herein.

“Fiscal Agent” has the definition set forth in the preambles of this Agreement.

“Fiscal Agent Agreement” has the definition set forth in the preambles of this Agreement.

“Indenture” has the definition set forth in the preambles of this Agreement.

“Payment Date” means each date upon which interest or principal is due on the Prior District Bonds as shown on Schedule A attached hereto.

“Prior District” means the Community Facilities District No. 91-1 (Perris Valley Spectrum) of the City of Perris, as further described in the preambles hereto.

“Prior District Bonds” have the definition set forth in the preambles of this Agreement.

“Redemption Date” means the date of early redemption of the Prior District Bonds.

“Special Tax Fund” means the Special Tax Fund created pursuant to the 1991 Administration Agreement.

“Trustee” has the definition set forth in the preambles of this Agreement.

“1991 Fiscal Agent” has the definition set forth in the preambles of this Agreement.

“1991 Administration Agreement” has the definition set forth in the preambles of this Agreement.

Section 2. Receipt of 1991 Administration Agreement. The Escrow Bank hereby