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ESCROW INSTRUCTIONS These Escrow Instructions, dated for reference purposes as of May 1, 2013 (the "Instructions"), are provided by the City of Redwood City Public Financing Authority (the "Authority") and the City of Redwood Ciry (the "City") in connection with the prior issuance by the Authority of its Lease Revenue Bonds, Series 2003 originally issued in the principal amount of$11,475,000, of which $5,130,000 remains outstanding (the "2003 Bonds"), to The Bank of New York Mellon Trust Company,N.A., as escrow agent hereunder(the"Escrow Agent")and as successor trustee pursuant to an Indenture of Trust, dated as of November 1, 2003 (the "Prior Indenture"), between the Authority and The Bank of New York Mellon Trust Company, N.A., as successor to the original trustee (the "Prior Trustee"). The 2003 Bonds are payable solely from and secured by Revenues (as defined in the Prior Indenture) of the Authority, consisting primarily of payments received by the Authority from the City (the "2003 Lease Payments") pursuant to a Subordinate Lease Agreement, dated as of November 1, 2003, between the City and Authority. RECITALS A. Pursuant to a Site and Facility Lease, dated as of May 1, 2013 (the "Site and Facility Lease"), the.City has leased that certain real property situated in San Mateo County, State of California (the "Site"), and those certain improvements thereon (the "Facility" and, with the Site, the "Property"), to the Authority, all for the purpose of enabling the City to refinance its lease payment obligations securing the 2003 Bonds; and B. The Authority will lease the Property back to the City pursuant to a Lease Agreement, dated as of May 1, 2013 (the "Lease Agreement"), and receive lease payments (the "Lease Payments") under the Lease Agreement from the City; and C. The City and the Authority have agreed to enter into the Lease Agreement providing for Lease Payments with an aggregate principal component in the amount of $3,360,Q00 for the purpose of implementing the financing transactions described above and to provide for the termination of the pledge of and lien created by the Prior Indenture; and D. The Authority has entered into that certain Assignment Agreement, currently dated as of May 1, 2013, between the Authority and Compass Bank, an Alabama banking corporation(the"Bank"). I. Instructions to the Escrow Agent. The Authority hereby directs and instructs the Escrow Agent as follows: 1.1 Escrow Fund. The Escrow Agent shall establish and hold in trust, separate and apart from other funds and accounts, a special account designated the "Escrow Fund." The Escrow Agent shall administer such account as provided in these Instructions. Amounts in the Escrow Fund are irrevocably pledged and shall be applied solely for the purposes set forth in -1- 340122_2.DOC