Loading...
14-1104_SAN JUAN BASIN AUTHORITY_Trust AgreementTRUST AGREEMENT among CITY OF SAN JUAN CAPISTRANO and SAN JUAN BASIN AUTHORITY and THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee Dated as of November 1, 2014 RELATING TO SAN JUAN BASIN AUTHORITY LEASE REVENUE BONDS (GROUND WATER RECOVERY PROJECT) ISSUE OF 2014 OHST)SA:754116349,6 OHS DRAFT 11/ /14 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.1. Definitions.......:...........................................................................I Section 1..2. Rules of Construction.............................................................................................7 ARTICLE II ASSIGNMENT; DECLARATION OF TRUST; REPRESENTATIONS AND RECITALS Section 2.1. Assignment of Lease Agreement............................................................................7 Section 2.2. Assignment of Property Lease................................................................................8 Section 2.3. Declaration of Trust by Trustee..............................................................................8 Section 2.4. Deposit of Moneys..................................................................................................8 Section 2.5. Description of the Project....................................................................................... Section 2.6. Conditions Precedent Satisfied...............................................................................8 ARTICLE III BONDS, TERMS AND PROVISIONS Section 3.1. Preparation of Bonds..............................................................................................8 Section 3.2. Payments from Trust Estate Only; Distribution of Trust Estate .............................8 Refunding Account...............................................................................................15 Section3.3. The Bonds...............................................................................................................9 Debt Service Payment Account............................................................................15 Section 3.4. Medium of Payment.............................................................................................11 Redemption Account............................................................................................15 Section3.5. Execution..............................................................................................................11 Insurance and Condemnation Account.................................................................15 Section 3.6. Negotiability, Transfer and Registry.................................................................... I I Section 3.7. Regulations With Respect to Exchanges and Transfers.......................................1.2 Investment of Certain Accounts and Subaccounts...............................................16 Section 3.8. Bonds Mutilated, Destroyed, Stolen or Lost........................................................12 Section 3.9. Temporary Bonds.................................................................................................12 Section 3.10. Privilege of Redemption.......................................................................................13 Section 3.11. Selection of Bonds to be Redeemed.....................................................................13 Section 3.12. Notice of Redemption...........................................................................................13 Section 3.13. Payment of Redeemed Bonds...............................................................................14 Section 3.14. Cancellation of Bonds..........................................................................................14 ARTICLE IV ESTABLISHMENT AND ADMINISTRATION OF FUNDS AND ACCOUNTS Section 4.1. Establishment of Project Trust Fund....................................................................14 Section4.2. Refunding Account...............................................................................................15 Section 4.3. Debt Service Payment Account............................................................................15 Section 4.4. Redemption Account............................................................................................15 Section 4.5. Insurance and Condemnation Account.................................................................15 Section 4.6. Deposits of Money; Payment Procedure..............................................................16 Section 4.7. Investment of Certain Accounts and Subaccounts...............................................16 OHSUSA;754110349.6 _i_ TABLE OF CONTENTS (continued) Page Section 4.8. Valuation and Sale of Investments.......................................................................17 Section 4.9. Costs of Issuance Account....................................................................................18 Section4.10. Rebate Fund..........................................................................................................18 ARTICLE V COVENANTS, EVENTS OF DEFAULT, REMEDIES OF BONDOWNERS AND LIMITATIONS OF LIABILITY Section 5.1. Trustee to Enforce Lease Agreement and Property Lease...................................20 Section 6.2. Section 5.2. Against Amendment or "Termination of Property Lease......................................20 Section 6.3. Section 5.3. Amendment of Lease Agreement.........................................................................21. Section 6.4. Section 5.4. Notice of Non-Payment........................................................................................21 Section6.5. Section 5.5. Assignment of Rights...........................................................................................21 Section 6.6. Section 5.6. Events of Default..................................................................................................21 Section 6.7. Section 5.7. Application of Funds............................................................................................21 Section 6.8. Section 5.8. Institution of Legal Proceedings...........................................................................22 Section 6.9. Section5.9. Non-Waiver..........................................................................................................22 Section 6.10. Section 5.1.0. Remedies Not Exclusive.......................................................................................22 Section 6.11. Section 5.11. Power of Trustee to Control Proceedings.............................................................22 Section 6.12. Section 5.12. Limitation on Bondowners' Right to Sue.............................................................23 Section 5.13. Reconstruction; Application of Insurance Proceeds.............................................23 Section 5.14. Accounts and Reports...........................................................................................24 Section 5.15. No Obligation by the City to Bondowners...........................................................24 Section 5.16. No Obligation With Respect to Performance by Trustee.....................................24 Section 5.17. No Liability to Bondowners for Payment.............................................................24 Section 5.18. Possession and Enjoyment .................... .......... . Section 5.19. Tax Covenants......................................................................................................25 Section 5.20. Parity Obligations.................................................................................................25 ARTICLE VI CONCERNING THE TRUSTEE Section 6.1. Employment of Trustee........................................................................................26 Section 6.2. Trustee Acceptance of Duties...............................................................................26 Section 6.3. Evidence on Which Trustee May Act...................................................................26 Section 6.4. Obligations of Trustee..........................................................................................27 Section6.5. Compensation.......................................................................................................27 Section 6.6. Resignation of Trustee..........................................................................................27 Section 6.7. Removal of Trustee..............................................................................................27 Section 6.8. Appointment of Successor Trustee.......................................................................27 Section 6.9. Transfer of Rights and Project to Successor Trustee............................................28 Section 6.10. Merger or Consolidation.......................................................................................28 Section 6.11. Adoption of Authorized Signature.......................................................................28 Section 6.12. Liability of the Trustee.........................................................................................28 oHS[J SA:7541 [ 6344.6 -ii- Section 7.1. Section 7.2. Section 73. Section 7.4. Section 7.5. Section 7.6. TABLE OF CONTENTS (continued) Page ARTICLE VII AMENDMENTS Mailing................................................................................................................. 30 Powers of Amendment.........................................................................................34 Consentof Bondowners........................................................................................31 Modifications by Unanimous Consent.................................................................32 Exclusionof Bonds...............................................................................................32 Notationon Bonds................................................................................................32 ARTICLE VIII MISCELLANEOUS Section8.1. Defeasance............................................................................................................33 Section 8.2. Evidence of Signatures of Bondowners and Ownership of Bonds.......................34 Section 8.3. Moneys Held for Particular Bonds.......................................................................34 Section 8.4. Preservation and Inspection of Documents..........................................................34 Section 8.5. Parties Interested Herein.......................................................................................34 Section 8.6. Severability of Invalid Provisions........................................................................35 Section 8.7. Recording and Filing............................................................................................35 Section8.8. Notices...— .......................................................... ................................................. 3 5 Section8.9. California Law......................................................................................................35 Section 8.10. Binding on Successors..........................................................................................36 Section8.11. Headings...............................................................................................................36 Section 8.12. Execution in Counterparts....................................................................................36. Section S.13. Actions Due on Saturdays, Sundays and Holidays...............................................36 Section8.14. Force Majeure........................................................................... ........................36 Section 8.15. Facsimile Instructions...........................................................................................36 EXHIBITA FORM OF BOND................................................................................A-1 EXHIBIT B FORM OF COSTS OF ISSUANCE REQUISITION ..........................B-2 oHSIJSA:754116349.6 -iii- TRUST AGREEMENT RELATING TO THE SAN JUAN BASIN AUTHORITY LEASE REVENUE BONDS (GROUND WATER RECOVERY PROJECT) ISSUE OF 2014 THIS TRUST AGREEMENT RELATING TO THE SAN JUAN BASIN AUTHORITY, LEASE REVENUE BONDS (GROUND WATER RECOVERY PROJECT) ISSUE OF 2014, dated as of November 1, 2014 (the "Trust Agreement"), by and among the CITY OF SAN JUAN CAPISTRANO, a municipality duly organized and existing under and by virtue of the laws of the State of California (the "City"), THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee (the "Trustee"), and the SAN JUAN BASIN AUTHORITY, a joint powers authority (the "Authority"), WITNESSETH: In consideration of the mutual agreements and covenants herein contained and for other valuable consideration, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section I.I. Definitions (A) The terms set forth in this section shall have the meanings ascribed to them for all purposes of this Trust Agreement unless the context clearly indicates some other meaning. Additional Pa menu means any amounts payable by the City under the terms of the Lease Agreement, other than the Lease Payments. Annual Debt Service means, for each Bond Year, the sum of (a) the interest payable on the Outstanding Bonds in such Bond Year, assuming that any Outstanding term. Bonds are redeemed #tom mandatory sinking fund payments as scheduled and (b) the principal amount of the Outstanding Bonds scheduled to be paid or redeemed in such Bond Year. Authority means the San Juan Basin Authority, a joint powers authority. Authorized Representative of the Authority means the Chairman, Vice Chairman or a Co - Administrator of the Authority and any person or persons designated by the Chairman, Vice Chairman or a Co -Administrator of the Authority and authorized to act on behalf of the Authority as certified by a written certificate signed on behalf of the Authority by the Chairman, the Vice Chairman or a Co -Administrator of the Authority and containing the specimen signature of each such person. Authorized Representative of the City means the City Manager of the City, the Public Works and Utilities Director of the City, the Chief Financial Officer/Treasurer of the City or any OHSUSA:754 116349.6 person or persons designated by the City Manager of the City and authorized to act on behalf of the City by a written certificate signed on behalf of the City by the City Manager of the City and containing the specimen signature of each such person. Bond Counsel means a nationally -recognized firm of attorneys experienced in the issuance of tax-exempt obligations the interest on which is excludable from gross income under Section 103 of the Code. Bondowner or Owner of Bonds or Owner weans the registered owner of any Bond or Bonds. Bond Year means the twelve month period which commences on December 2 in every year and ends on December I of the succeeding year. The first Bond Year shall commence on the Delivery Date and end on December 1, 2015. Bonds means the San Juan Basin Authority Lease Revenue Bonds (Ground Water Recovery Project) Issue of 2014 issued pursuant to this Trust Agreement. 2002 Bonds means the San Tuan Basin Authority Lease Revenue Bonds (Ground Water Recovery Project) Issue of 2002. Business Day_ means any day other than (i) a Saturday or Sunday or legal holiday or a day on which banking institutions in the city in which the principal office of the Trustee is located are authorized to close or (ii) a day on which the New York Stock Exchange is closed. Certificate of Authorized Representative of the Authority means a certificate executed by an Authorized Representative of the Authority. Certificate of Authorized Representative of the City means a certificate executed by an Authorized Representative of the City. City means the City of San Juan Capistrano, California. Code means the Internal Revenue Code of 1980, as amended, and the United States Treasury Regulations proposed or in effect with respect thereto. Costs of Issuance means all expenses and costs of the Authority or the City incident to the performance of its obligations in connection with the authorization, issuance, sale and delivery of the Bonds, including, but not limited to, printing costs, initial Trustee fees and expenses and fees and expenses of its counsel, fees and expenses of consultants, fees and expenses of bond counsel to the Authority or the City and fees of counsel to the Original Puchaser. Costs of Issuance Account means the account by that name created pursuant to Section 4.1 hereof. Debt Service Pa meat Account means the Debt Service Payment Account established in Section 4.1 hereof. OHSUSh:754,116349.6 2 Delivery Date means the date of the initial issuance of the Bonds. Escrow Age ni means The Bank of New York Mellon Trust Company, N.A., acting in its capacity as trustee and escrow agent under and pursuant to the Escrow Agreement, and its successors and assigns as provided in the Escrow Agreement. Escrow Agreement means that certain Escrow Agreement, dated as of November 1, 2014, by and among the City, the Authority and the Escrow Agent, providing for the refunding of the 2002 Bonds. Events of Default means events of default as set forth in Section 9.1 of the Lease Agreement. Fiscal Year means the twelve month fiscal period of the City which commences on July 1 in every year and ends on June 30 of the succeeding year. GAAP means generally accepted accounting principles. Interest Payment Date means June 1 and December I of each year commencing .lune 1, 2015. Investment Securities means and includes any of the following securities, if and to the extent the same are at the time legal for investment of Authority funds (the Trustee is entitled to rely upon investment direction of the City as a determination that such investment is a legal investment). A. For all purposes including defeasance investments. (1) Cash (insured at all times by the Federal Deposit Insurance Corporation), (2) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America, or (3) Senior debt obligations of other Government Sponsored Agencies. B. For all purposes other than defeasance investments in refunding escrow accounts. (1) 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 -Federal Financing Bank oHSUSA:754116349.6 (2) 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 -Senior debt obligations of other Government Sponsored Agencies; (3) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short terra certificates of deposit on the date of purchase of "P-1" by Moody's and "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); (4) Commercial paper which is rated at the time of purchase in the single highest classification, "P -I" by Moody's and "A -I+" by S&P and which matures not more than 270 calendar days after the date of purchase; (5) Investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P including funds for which the Trustee or an affiliate provides investment advice or other services; (6) 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 Moody's or 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 paragraph A(2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (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; (7) Municipal obligations rated "Aaa/AAA" or general obligations of States with a rating of "A2/A" or higher by both Moody's and S&P; oHSUSA:754116349.6 4 (8) Investment agreements supported by appropriate opinions of counsel, provided that, without limiting the foregoing, any such Investment Agreement shall (i) be from a. provider rated by S&P or Moody's at AA or Aa2 or above and (ii) expressly permit the withdrawal, without penalty, of any amounts necessary at any time to fund any deficiencies on account or debt service requirement s with respect to Bonds, together with such amendments as may be approved by the Authority, the City and the Trustee from time to time; and (9) The Local Agency Investment Fund established by the State of California, including investments in the name of the City. C. The value of the above investments shall be determined as follows: (a) For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued at fair market value. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. (b) As to certificates of deposit and bankers' acceptances: the face amount thereof, plus accrued interest thereon; and (c) As to any investment not specified above: the value thereof established by prior agreement among the Issuer and the Trustee. Lease Agreement means the Amended and Restated Lease Agreement, dated as of the date hereof, between the Authority and the City, and any and all modifications, alterations, amendments and supplements thereto made in accordance with the provisions of the Lease Agreement and the Trust Agreement. Lease Payment means the amount to be paid by the City for the lease of the Project corresponding to the Lease Payment Date set forth in Section 4.4 and Exhibit B of the Lease Agreement. Lease Payment Date means the 15th day of the month preceding each Interest Payment Date (or if the 15th day of the month is not a Business Day, on the next succeeding Business Day). Lease Term means the period during which the Lease Agreement is in effect as specified in the Lease Agreement. Moody's means Moody's Investors Service, Inc., a municipal bond rating service with offices in New York, New York. Net Insurance Proceeds means any insurance or condemnation proceeds paid with respect to the Project and remaining after payment therefrom of all expenses incurred in the collection thereof. Net Revenues means the amounts of Revenues (as defined in the Lease Agreement) remaining after payment therefrom of the Maintenance and Operation Costs. OHSUSA:7.54116349.6 5 Original Purchaser means TPB Investments, Inc., a wholly-owned subsidiary of Western Alliance Bank, an Arizona corporation, the first purchaser of the Bonds upon their delivery by the Trustee. Outstanding, when used with reference to Bonds, means, as of any date, Bonds theretofore or thereupon being issued under this Trust Agreement, including Bonds that are "Outstanding" in accordance with Section 8.1(c), except: (a) Bonds canceled or delivered for cancellation by the Trustee on or prior to such date; (b) Bonds (or portions of Bonds) defeased as provided in Section 8.1 of this Trust Agreement; and (c) Bonds in lieu of or in substitution for which other Bonds shall have been issued pursuant to Article III of this Trust Agreement. Prat means, collectively, the Property and the. improvements thereon, and any and all additions or modifications thereto made as provided in Section 7.8 of the Lease. hereof. Project Trust Fund means the :fund so designated which is established in Section 4.1 Property means the real property described in the Lease Agreement. Property Lease means the Property Lease, dated as of December 1, 2002, between the City, as lessor, and the Authority, as lessee, as amended and supplemented from time to time in accordance with its terms. Rating Ai4ncies means Moody's and S&P, any successors thereto or any other nationally recognized rating service to the extent such rating agencies are maintaining a rating in connection with the Bonds as requested by or on behalf of the City. Rebatable Arbitrage shall have the meaning attributed to such term in Section 4.11(b). Rebate Fund means the account so designated established pursuant to Section 4.1 hereof. Rebate .Regulations means the Regulations issued under Section 148(f) of the Code. Record Date means the fifteenth day of the calendar month preceding an Interest Payment Date. Redemption Account means the Redemption Account established in Section 4.1 hereof. Refunding._ Account means the account by that name established pursuant to Section 4.1 hereof. Revenue Fuad means the fund by that name described in Section 4.8 of the Lease Agreement. OHSUSA:7541.16349.6 6 S&P or Standard & Poor's means Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business, a municipal bond rating service with offices in New York, New York. State means the State of California, Supplemental Trust Agreement means any agreement supplemental or amendatory of this Trust Agreement. Tax Certificate means the certificate by that name to be executed by the Authority and the City on the Delivery Date to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Code. Trust Agreement means this Trust Agreement relating to the San Juan Basin Authority, Lease Revenue Bonds (Ground Water Recovery Project) Issue of 2014, dated as of November 1, 2014, entered into by and among the City, the Authority and the Trustee, and any and all Supplemental Trust Agreements. Trust Estate means all amounts received by the Trustee for the account of the City pursuant to or with respect to the Lease Agreement including, without limitation, the Lease Payments and all amounts from time to time deposited in the funds, accounts and subaccounts created pursuant to this Trust Agreement, including all investments and investment earnings thereon, excluding, however, all moneys deposited or required to be deposited in the Rebate Fund. Trustee means The Bank of New York Trust Company, N.A., national bank association, duly organized and existing under and by virtue of the laws of the United States of America, having a corporate trust office in Los Angeles, California, or such other offices as the Trustee may designate, or its successor as Trustee hereunder. Water System means the entire water system of the City, including, without limitation, all real property and buildings and, including all improvements, works or facilities assessed, controlled or operated by the City to provide water, as such improvements, works or facilities now exist, together with all improvements and extensions to said water system later acquired, constructed or organized. Section 1.2. Rules of Construction. Except where the context otherwise requires, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include firms, associations, corporations and other entities. ARTICLE II ASSIGNMENT; DECLARATION OF TRUST; REPRESENTATIONS AND RECITALS Section 2.1. Assignment of Lease Ag reement. The Authority hereby absolutely assigns all of its rights, title and interest in the Lease Agreement to the Trustee for the benefit of the Bondowners, and the Authority retains no right, title or interest therein (other than its right to OHSUSA:754116349.6 certain Additional Payments under Section 4.14 of the Lease Agreement). The City hereby consents to such assignment. Section 2.2. Assignment of Property..Lease. The Authority hereby absolutely assigns, for so long as any Bond is Outstanding, all of its rights, title and interest in the Property Lease to the Trustee for the benefit of the Bondowners, and the Authority retains no right, title or interest therein (other than such right, title and interest as may exist from and after the payment in full, or defeasance pursuant to Section 8.1 hereof, of the Bonds). Section 2.3. Declaration of Trust by Trustee. The Trustee hereby declares that it holds and will hold the Trust Estate upon the trusts hereinafter set forth and for the use and benefit of the Bondowners. Section 2.4. Deposit of Moneys. In order to effect the refunding of the 2002 Bonds, the Authority has executed the Lease Agreement and caused the Trustee to authenticate and deliver the Bonds and from the proceeds of the sale of the Bonds, the 'T'rustee shall deposit into the various accounts in the Project Trust Fund the amounts provided for in Section 4.1 hereof. Section 2.5. Description of the Project. The description of the Project to be leased to the City, as lessee, from the Authority, as lessor pursuant to the Lease Agreement is set forth in Exhibit A attached thereto and incorporated herein by reference. Section 2.6. Conditions Precedent Satisfied. The City and the Authority hereby declare that all acts, conditions and things required by law to exist, happen and be performed on their parts precedent to and in connection with the execution and entering into of this Trust Agreement 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 empowered to execute and enter into this Trust Agreement. ARTICLE III BONDS, TERMS AND PROVISIONS Section 3.1.. Preparation of Bonds. (a) The Authority hereby directs the Trustee to authenticate and deliver to the Original Purchaser thereof, the Bonds in an aggregate principal amount of $ . The Bonds shall be and are special obligations of the Authority and are secured by an irrevocable pledge of, and are payable as to principal and interest from the Trust Estate. (b) The Trustee shall not at any time while any Bond is Outstanding authenticate and deliver additional bonds payable from the Lease Payments except as provided in Sections 3.5, 3.6, 3.7, 3.8, 3.9 and 3.13 hereof. Section 3.2. Payments from Trust Estate Onl • Distribution of Trust Estate. (a) All amounts payable by the Trustee with respect to the Bonds pursuant to this Trust Agreement shall be paid only from the income of and proceeds from the Trust Estate oHSUSA:754I t 6349.6 8 and only to the extent that the Trustee shall have actually received sufficient income or proceeds from the Trust Estate to make such payments in accordance with the terms of Article IV hereof: Each Bondowner agrees to look solely to the income of and the proceeds from the Trust Estate to the extent available for distribution to such holder as herein provided, and each Bondowner agrees that the Trustee is not personally liable to any Bondowner for any amounts payable under this Trust Agreement or subject to any liability under this Trust Agreement except liability under this Trust Agreement as a result of negligence or willful misconduct by the Trustee. (b) So long as the Bonds shall be Outstanding, all amounts of Lease Payments (including without limitation prepayments), Additional Payments, indemnity payments and other payments of any kind constituting a part of the Trust Estate payable to the Trustee, shall be paid directly to the Trustee for distribution, in accordance with Article IV of this Trust Agreement, to or for the Bondowners. Section 3.3. The Bonds. (a) The Bonds shall mature on December 1, 2034. Interest on the Bonds shall be payable from the preceding Interest Payment Date to which interest was paid, provided, Bonds registered on or prior to May 15, 2015 shall have interest payable with respect thereto from the Delivery Date, and Bonds registered after a Record Date and on or prior to an Interest Payment Date shall have interest payable with respect thereto from such Interest Payment Date. (b) The Bonds shall mature on December 1. and shall bear interest at the rate of 3.85% per annum. (c) Interest due with respect to the Bonds shall be payable on each Interest Payment Date to and including the date of maturity or redemption, whichever is earlier. The interest to he paid to Bondowners on each Interest Payment Date shall be calculated on the basis of the rates per annum set forth in subsection (b) above. Interest shall be calculated on the basis of a 360 day year of twelve 30 day months. Interest with respect to any Bond shall be payable to the person appearing on the registration books of the Trustee as the Owner thereof, such interest to be paid by check mailed to such Owner on the Interest Payment Date by first class mail at his address as it appears on such registration books at the close of business on the Record Date. Payment of interest with respect to the Bonds may, at the option of any Owner, be transmitted by wire transfer to an account specified in writing to the Trustee on or before the applicable Record Date by said Owner. Any such written request shall remain in effect until rescinded in writing by the Owner. (d) The Bonds shall be delivered in fully registered form in the denomination of $250,000 or any integral multiple of $1.00 in excess thereof. Unless the Authority shall otherwise direct, in writing, the Bonds shall be lettered and numbered in such manner as the Trustee shall deem adequate and appropriate for record keeping purposes. Subject to the provisions of this Trust Agreement, the Bonds shall be substantially in the form set forth in Exhibit A hereof. The Trustee shall maintain, or cause to be maintained at its corporate trust office a system by which a record of the names and addresses of Bondowners as of any particular time can be OHSUSA:754116349.6 9 kept, and the Trustee shall, upon request of the Authority or the City, furnish such information to the Authority or the City. (e) The principal of the Bonds shall be payable at the corporate trust office of the Trustee, or such other location as so designated by the Trustee. (f) The Bonds are subject to redemption as Collows: (i) Extraordinary Redemption. The Bonds are subject to redemption in whole or in part, without premium, on any date in the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, upon the occurrence of damage, destruction or condemnation of the Project, or any portion thereof, which results in Net Insurance Proceeds to the extent required or permitted by the Lease Agreement to be applied to prepayment of Lease Payments. (ii) Optional Redemption. The Bonds are subject to optional redemption prior to maturity, at the option of the City pursuant to the Lease Agreement, as a whole or in part on any date on or after December 1, 2024 from available funds in the Redemption Account, at a redemption price equal to the principal amount to be redeemed plus accrued interest to the redemption date. (iii) Mandatory Term Bond _Redemption. The Bonds are subject to mandatory redemption, by lot, in the principal amounts hereinafter set forth, without premium, on December I of each year, commencing on December 1, from the principal portion of the Lease Payments required to be on deposit in the Debt Service Payment Account on the Lease Payment Date immediately prior to December 1 of each of the years and in the amounts as follows: Year Principal Amount (Maturity) (g) In the event redemption is made pursuant to Section 3.3(f) hereof, all Bonds called for redemption shall be paid in the following manner: (i) In the event of a redemption of Bonds pursuant to Section 3.3(f)(i) hereof, the Trustee shall deposit in the Redemption Account to be applied to the ©i 1SUSA:754116349,b 10 redemption on any date of Bonds and the payment of accrued interest on the Bonds to be redeemed, to the extent such interest is not paid out of the Debt Service Payment Account as provided in Section 4.3(b) hereof, the balance, if any, of Net Insurance Proceeds received by the Trustee pursuant to Section 5.3(b) of the Lease Agreement; (ii) In the event the City exercises its option to purchase the Project as provided in Section 7.3 of the Lease Agreement and there is a redemption of Bonds pursuant to Section 3.3(f)(ii) hereof, the Trustee shall transfer and deposit in the Redemption Account the amount received by Trustee from the City and all amounts then on deposit in all funds and accounts hereunder (excepting only the Rebate Fund) pursuant to Section 7.3 of the . Lease Agreement which amount shall be applied to the redemption of Bonds on the earliest redemption date on which Bonds can be redeemed; and (iii) In the event sinking fund payments are due and payable, the Trustee shall transfer an. amount equal to each such payment on or prior to the respective sinking fund payment date and deposit such amount into the Redemption Account, which amount shall be applied to the redemption of term Bonds pursuant to Section 3.3(f)(iii) hereof. Section 3.4. Medium of Pa ment. The Bonds shall be payable, with respect to interest and principal, and premium, if any, in lawful money of the United States of America. Section 3.5. Execution. (a) The Bonds shall be executed by the Chairman of the Board of Directors, the Vice Chairman of the Board of Directors or by a Co -Administrator of the Authority by the facsimile or manual signature and authenticated in the name of, and by, the Trustee, as trustee under this Trust Agreement, by the manual signature of an authorized signatory of the Trustee. (b) Upon surrender of a Bond at the corporate trust office of the Trustee with a written instrument of transfer satisfactory to the Trustee, duly executed by the Bondowner or his duly authorized attorney, the Trustee shall, at the option of the Bondowner and upon payment by such Bondowner of any charges which the Trustee may make as provided in Section 3.7, exchange such Bond for an equal aggregate principal amount of Bonds of the same aggregate principal amount and maturity and interest rate. (c) The Bonds shall be sold and subsequently transferred only to a Qualified Institutional Buyer as defined in Rule 144A of the Securities Act of 1933 ("QIB") or any affiliate or other party related to the Original Purchaser or a special purpose entity, a trust or custodial arrangement, from which the Bonds are not expected to be sold except to beneficial owners who are QIBs. Section 3.6. Negotiability, Transfer and Re istr . (a) Each Bond shall be transferable only upon the books of the Trustee which shall be kept for that purpose at the corporate trust office of the Trustee, by the Bondowner in person or by his attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the Trustee duly executed by the Bondowner or his OIJSUSA,754I 16349.6 1 duly authorized attorney. Upon the transfer of any such Bond the Trustee shall deliver in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and maturity and interest rate as the surrendered Bond. (b) The Trustee may deem and treat the person in whose name any Bond shall be registered upon the books of the Trustee as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal, if any, of and interest with respect to such Bond and for all other purposes; and all such payments so made to any such Bondowner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid; and the Trustee shall not be affected by any notice to the contrary. Section 3.7. Regulations With Respect to Exchan es and Transfers. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Trustee shall authenticate and deliver Bonds in accordance with the provisions of this Trust Agreement. All Bonds surrendered in any such exchanges or transfers shall forthwith be canceled by the Trustee pursuant to Section 3.14 hereof. For every such exchange or transfer of Bonds, except an exchange of a temporary Bond for a definitive Bond, the Trustee may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. The cost of printing any new Bonds and any services rendered or any expenses incurred by the Trustee in connection with any exchange or transfer shall be paid by the City (except governmental taxes and charges and the costs of replacing lost, stolen or mutilated Bonds which shall be paid by the Owner). The Trustee shall not be required to transfer or exchange any Bonds selected for redemption or within the 15 days before the selection of Bonds for redemption. Section 3.8. Bonds Mutilated Destro ed Stolen or Lost. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Trustee shall authenticate and deliver a new Bond of like maturity and principal amount as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrender and cancellation of such mutilated Bond, or in lieu of and substitution for the Bond, destroyed, stolen or lost, upon receipt by the Trustee of evidence satisfactory to the Trustee that such Bond has been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the Trustee with indemnity satisfactory to the Trustee and complying with such other regulations as the Trustee may prescribe and paying such expenses as the Trustee may incur. All Bonds so surrendered to the Trustee shall be canceled by it pursuant to Section 3.14 hereof. Any such new Bonds issued pursuant to this Section in substitution for Bonds mutilated or alleged to be destroyed, stolen or lost shall be equally secured by and entitled to equal and proportionate benefits of, with all other Bonds delivered under this Trust Agreement, any moneys or securities held by the Trustee for the benefit of the Bondowners. Section 3.9. Temporary Bonds. Until the definitive Bonds are prepared, the Trustee may authenticate and deliver, in the same manner as is provided in Section 3.5, in lieu of definitive Bonds, one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in any authorized denomination, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Trustee at the expense of the City shall authenticate and, upon. the surrender of such temporary QHS USA:754116344.6 12 Bonds and the cancellation of such surrendered temporary Bonds, shall, without charge to the Owners thereof, in exchange therefor, deliver definitive Bonds, of the same aggregate principal amount and maturity as the temporary Bonds. Section 3.10. Privilege of Redemption. The Bonds shall be redeemable at such times, in such amount, upon such terms and upon such notice as are provided in this Article III. Section 3.11. Selection of Bonds to be Redeemed. If less than all of the Bonds of a single maturity shall be called for redemption, the particular Bonds or portions thereof to be redeemed shall be selected by the Trustee by lot in any manner which the Trustee in its sole discretion shall deem appropriate and fair. In selecting Bonds for redemption, the Trustee shall treat each Bond as representing that number of Bonds of $1.00 denomination which is obtained by dividing the principal amount of such Bond to be redeemed in part by $1.00. Unless the City directs the Trustee in writing as to any other method of redemption, whenever provisions are made for the redemption of Bonds in part, the Bonds to be redeemed will. be redeemed from each maturity, with the mandatory redemption schedule set forth. above to be adjusted accordingly. Section 3.12. Notice of Redemption. When redemption of Bonds is required, the Trustee shall, at the expense of the City, give notice of the redemption of such Bonds, the redemption date and the place or places where amounts due upon such redemption will be payable and, if less than all of the Bonds are to be redeemed, the letters and numbers of such Bonds so to be redeemed, and, in the case of Bonds to be redeemed in part only, such notice shall also specify the respective portions of the principal amount thereof to be redeemed. Such notice shall further state that on such date there shall become due and payable upon each Bond to be redeemed the principal amount to be redeemed, together with interest accrued to the redemption date, and that from and after such date interest on the principal amount redeemed shall cease to accrue and be payable. The Trustee shall mail a copy of such notice, postage prepaid, first class United States mail, not less than 30 days and not more than 60 days before the redemption date, to the Bondowners of any Bonds or portions of Bonds which are to be redeemed, at their addresses as the same appear upon the registry books, but neither the failure of a Bondowner to receive such notice nor any immaterial defect therein shall affect the validity of the proceedings for the redemption of Bonds. In the case of a redemption described in Section 3.3(f)(i) or (ii), the notice may state (i) that it is conditioned upon the deposit of money, in an amount equal to the amount necessary to effect the redemption, with the Trustee no later than the redemption date or (ii) that the Authority retains the right to rescind such notice on or prior to the scheduled redemption date (in either case, a "Conditional Redemption"), and such notice and optional redemption shall be of no effect if such money is not so deposited or if the notice is rescinded. Any Conditional Redemption may be rescinded in whole or in part at any time prior to the redemption date if the Authority delivers a Certificate of Authorized Representative of the Authority to the Trustee instructing the Trustee to rescind the redemption notice. The Trustee shall give prompt notice of such rescission to the affected Owners. Any Bonds subject to Conditional Redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an Event of Default. Further, in the case of a Conditional Redemption, the failure of the Authority to make funds available in part or in whole on or before 01-ISUSA:7541I6349.6 LI the redemption date shall not constitute an Event of Default, and the Trustee shall give prompt notice to the affected Owners that the redemption did not occur and that the Bonds called for redemption and not so paid remain Outstanding. Section 3.13. Payment of Redeemed Bonds. Notice having been given in the manner provided in Section 3.12, and payment having been provided for, the Bonds or portions thereof so called for redemption. shall become due and payable on the redemption date so designated at the principal amount to be redeemed plus interest accrued and unpaid to the redemption date, and, upon presentation and surrender thereof at the office specified in such notice, such Bonds, or portions thereof, the principal amount and interest shall be paid as provided in Section 3.3. If there shall be called for redemption less than all of a Bond, the Trustee shall execute and deliver, upon the surrender of such Bond, without charge to the Owner thereof, for the unredeemed balance of the principal amount of the Bond so surrendered, Bonds of like maturity in any of the authorized denominations, at the option of the Owner thereof. If, on the redemption date, moneys for the redemption of all the Bonds or portions thereof to be redeemed together with interest to the redemption date shall be held by the Trustee so as to be available therefor on said date; and if notice of redemption shall have been given to the Owners as aforesaid, then from and after the redemption date interest on the Bonds or portions thereof so called for redemption shall cease to accrue and become payable. Upon the payment of the redemption price of the Bonds being redeemed, each check or other transfer of funds issued for such purpose shall to the extent practicable by the Trustee bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. Section 3.14. Cancellation of Bonds. All Bonds paid or redeemed, either at or before maturity, shall be delivered to the Trustee when such payment or redemption is made, and such Bonds shall thereupon be promptly canceled. Bonds so canceled shall be destroyed by the Trustee and upon written request of the City a certificate of destruction shall be provided to the city. ARTICLE IV ESTABLISHMENT AND ADMINISTRATION OF FUNDS AND ACCOUNTS Section 4.1. Establishment of Project Trust Fund. There is hereby established with the Trustee a special trust fund to be designated as the "Project Trust Fund"; which shall be held in trust by the Trustee for the benefit of the Bondholders pending application of the funds on deposit therein as provided in this Trust Agreement. The Trustee shall keep the Project Trust Fund separate and apart from all other funds and moneys held by it. Within the Project Trust Fund there are hereby established the following accounts (the "Accounts"): (i) Debt Service Payment Account; (ii) Costs of Issuance Account; (iii) Refunding Account; (iv) Redemption Account; and (v) Insurance and Condemnation. Account. There is established by Section 4.11 hereof with the Trustee a special trust fund to be designated as the "Rebate Fund", which the Trustee shall maintain and manage pursuant to the provisions of Section 4.11 hereof. On the Delivery Date the Trustee shall deposit proceeds of the sale of the Bonds ($ ), in the Project Trust Fund as follows. O}3SUSA:754I 16349.6 14 The Trustee shall deposit in the Accounts the following amounts: Costs of Issuance Account: Refunding Account: an amount equal to $ payment of Costs of Issuance. an amount equal to $ refunding of the 2002 Bonds. for the for the Section 4.2. Refunding Account. 4n the Delivery Date, the Trustee shall transfer $ . in the Refunding Account to the Escrow Agent for application as provided in the Escrow Agreement (and thereupon the Trustee shall close the Refunding Account). Section 4.3. Debt Service Pa meat Account. (a) In addition to the moneys required to be deposited in the Debt Service Payment Account pursuant to Sections 4.2, 4.4 and 4.7 hereof, all Lease Payments received by the Trustee shall be deposited by the Trustee in the Debt Service Payment Account immediately upon their receipt. The Trustee shall pay from the Debt Service Payment Account on each Interest Payment Date, the amount required for the interest payable on such date and the amount required for the principal payable, if any, on such date. Such amounts shall be applied by the Trustee on the due dates thereof. (b) The Trustee shall also transfer to the Redemption Account from the Debt Service Payment Account any amount available therein to pay principal, premium, if any, and the accrued interest on the Bonds redeemed pursuant to Section 3.3(f). Section 4.4. Redemption Account. (a) The Trustee shall apply moneys in the Redemption Account as provided in this Section 4.5 and Section 4.6. Amounts in the Redemption Account shall be applied to the redemption of Bonds in accordance with Section 3.3(f). Interest on Bonds so redeemed shall be paid from the Debt Service Payment Account, except to the extent Net Insurance Proceeds are used to pay such interest, and all expenses in connection with such redemption shall be paid by the City as Additional Payments. (b) The Trustee shall deposit in the Redemption Account as received, all moneys, if any, paid to it by the City for prepayment of Lease Payments pursuant to Sections 6.1(c) and 7.3 and Article X of the Lease Agreement. All of said moneys shall be set aside in the Redemption. Account for the purpose of redeeming the Bonds in advance of their maturity and shall be applied on or after the date of redemption designated pursuant to Section 3.3(f) and Section 3.3(g) to the payment of principal, redemption premium, if any, and accrued interest, if any, with respect to the Bonds to be redeemed upon presentation and surrender of such Bonds. Section 4.5. Insurance and Condemnation Account. Subject to the provisions of Section 6.1(a) of the Lease Agreement, the proceeds of insurance maintained pursuant to the Lease Agreement against physical loss of or damage to the Project or any portion thereof shall be deposited in the Insurance and Condemnation Account immediately upon receipt and applied as provided in Article VI of the Lease Agreement. 01ISUSA:754 1 1 6349.6 15 Section 4.6. Deposits of Money; Payment Procedure. All moneys required to be held by the Trustee under the provisions of this Trust Agreement shall be deposited with the Trustee. All moneys deposited under the provisions of this Trust Agreement with the Trustee shall be held in trust and applied only in accordance with the provisions of this Trust Agreement, and the Project Trust Fund shall be a trust fund for the purposes thereof. Section 4.7. Investment of Certain Accounts and Subaccounts. Subject to the requirements of Section 4.9 hereof, all moneys in the funds, accounts and Subaccounts held by the Trustee hereunder shall be invested as follows: (a) Moneys held in the Debt Service Payment Account shall be invested and reinvested by the Trustee pursuant to this Section 4.7. Moneys held in the Insurance and Condemnation Account may be invested and reinvested in Investment Securities which mature not later than such times as shall be necessary to provide moneys when needed for payments to be made from such Account. Moneys in the Redemption Account shall be invested only in Investment Securities which have a maturity no longer than 30 days. The Trustee shall make all such investments of moneys held by it in accordance with written instructions received from an Authorized Representative of the City at least two Business Days in advance of the investment. The Authorized Representative of the City may instruct the Trustee, in making any investment in any Investment Securities with moneys in any Account established under this Trust Agreement, to combine such moneys with moneys in any other Account, but solely for purposes of making such investment in such Investment Securities. In the absence of instructions from. the City, the Trustee shall invest solely in Investment Securities set forth in (13)(5) of the definition thereof and shall provide notice to the City of such investment by means of its customary statements; provided, however, the Trustee shall incur no liability for its failure to so notify the City. Absent negligence or willful misconduct on its part, the Trustee shall have no liability or responsibility for any loss resulting from any investment made in accordance with the provisions of this Section 4.7. The Trustee shall have no obligation to pay additional interest or maximize investment income on any funds held by it and neither the Authority, nor the Bond Owners shall have any claim of any kind against the Trustee in connection with such Investments. (b) Any income or interest earned by the Debt Service Payment Account due to the investment thereof shall. be retained in the Debt Service Payment Account and applied as a credit against the Lease Payments due on the next occurring Lease Payment Date and deemed to be the payment of the interest portion thereof to the extent thereof and then to principal. (c) Moneys held in the Costs of Issuance Account shall be invested and reinvested by the Trustee in Investment Securities set forth in clause (13)(5) of the definition thereof. Any income or interest earned by the Costs of Issuance Account due to the investment thereof shall transferred to the Debt Service Payment Account. (d) Nothing herein shall prevent any Investment Securities acquired as investments of funds held hereunder from being issued or held in book -entry form on the books of the Department of the Treasury of the United States of :America. €}HSUSA:754116349.6 16 (e) The Trustee or an affiliate may act as principal or agent in the acquisition or disposition of an investment and shall be entitled to its customary fees therefor pursuant to a prior written fee agreement with the Authority and the City. (f) If at any time after investment therein an investment ceases to meet the criteria set forth in the definition of Investment Securities as determined by a valuation of such investment and such obligation, aggregated with other non -conforming investments, exceeds ten percent (10%) of invested funds, such investment shall be sold or liquidated unless otherwise approved by the City. (g) Investments (except investment agreements) in Trust Agreement funds and accounts and subaccounts shall be valued by the Trustee as frequently as deemed necessary by the Authority, but not less often than semi-annually nor more often than monthly, at the fair market value thereof, exclusive of accrued interest. Deficiencies in the amount on deposit in any fund or account resulting from a decline in market value shall be restored not later than the next succeeding semiannual valuation date which is at least six months after the valuation date. Investments purchased with funds on deposit in the Reserve Account shall have an average aggregate weighted term to maturity not greater than five years. The Trustee shall terminate any repurchase agreement upon a failure of the counterparty thereto to maintain the requisite collateral percentage after the restoration period and, if not paid by the counterparty in federal funds against transfer of the repo securities, liquidate the collateral. The Trustee shall give notice to any provider of an investment agreement in accordance with the terms of the. investment agreement so as to receive funds thereunder with no penalty or premium paid. The Trustee shall, upon actual knowledge of the withdrawal or suspension of either of the ratings of an investment agreement provider or a drop in the ratings thereon below "A," so notify the Authority and, if so directed by the Authority, shall demand further collateralization of the agreement or liquidation thereof. The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City will not receive such confirmations to the extent permitted by law. The Trustee will furnish the City periodic cash transaction statements which the Trustee may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. Section 4.8. Valuation and Sale of Investments. Obligations purchased as an investment of moneys in any fund, account or subaccount created under the provisions hereof shall be deemed at all times to be a part of such fund, account or subaccount and any profit realized from the liquidation of such investment shall be credited to, and any loss resulting from the liquidation of such investment shall be charged to, the computation of net interest earned on the moneys and investments of such fund, account or subaccount. 011SUSA:75411 G349.b 17 The value of the above investments shall be determined as provided in "Value" below. "Value," which shall be determined as of the 10th day of March and September of each year unless otherwise directed in writing by the Authority, means that the value of any investments shall be calculated as follows: (a) as to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times): the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination; .................. (b) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times: the average bid price at such time of determination for such investments by any two nationally recognized government securities dealers (selected by the Trustee in its absolute discretion) at the time making a market in such investments or the bid price published by a nationally recognized pricing service; (c) as to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest; (d) as to any investment not specified above: the value thereof established by prior agreement between the Authority, the Trustee and the City; and (e) alternatively, by any reasonable method used by the Trustee and approved by the City, including without limitation, computer pricing services. Except as otherwise provided herein, the Trustee shall sell or present for redemption or transfer as provided in the next sentence any obligation so purchased as an investment whenever it shall be requested in writing by an Authorized Representative of the City so to do or whenever it shall be necessary in order to provide .moneys to meet any payment or transfer from any fund, account or subaccount held by it. In lieu of such sale or presentment for redemption, the Trustee may, in making the payment or transfer from any fund, account or subaccount mentioned in the preceding sentence, transfer such investment obligations or interest appertaining thereto if such investment obligations shall mature or be collectable at or prior to the time the proceeds thereof shall be needed and such transfer of investment obligations may be made in book entry form. Absent bad faith or willful misconduct or negligence on its part, the Trustee shall not be liable or responsible for making or liquidating any such investment in the manner provided above or for any loss resulting from any such investment. Section 4.9. Costs of Issuance Account. The Trustee shall deposit to the Costs of Issuance Account the amount required by Section 4.1 hereof. The Trustee shall disburse funds from the Costs of Issuance Account upon receipt by the Trustee of an executed Requisition in the form. of Exhibit B hereto. Any amounts remaining on deposit in the Costs of Issuance Account on May 1, 2015 shall be transferred to the Debt Service Payment Account. Section 4.10. Rebate Fund. (a) Establishment. The Trustee shall establish a special fund designated the "Rebate Fund" (the "Rebate Fund"). All amounts at any time on deposit in the Rebate Fund OHSUSA:754116349.€i 18 shall be held by the Trustee in trust, to the extent required to satisfy the requirement to make rebate payments to the United States pursuant to Section 148 of the Code and the Treasury Regulations promulgated thereunder. Such amounts shall be free and clear of any lien under this Trust Agreement and shall be governed by this Section and Section 5.17 of this Trust Agreement and by the Tax Certificate executed by the City and Authority. The Trustee shall have no independent responsibility to, or liability resulting from its failure to, enforce compliance by the Authority with the Rebate Requirement. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for the Bonds shall be governed by this Section and the Tax Certificate for the Bonds, unless and to the extent that the Authority delivers to the Trustee an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected if such requirements are not satisfied. (i) Computation of Rebate Amount. Within 55 days of the end of the fifth Bond Year (as such term is defined in the Tax Certificate) and each five years thereafter, the Authority shall calculate or cause to be calculated the amount of "rebate amount," in accordance with. Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to the computation of the "rebate amount," described, if applicable, in the Tax Certificate (e.g., the temporary investment exceptions of Section 148(f)(4)(B) of the Code, the expenditure exception of Section 1.48(f)(4)(C) of the Code or Section 1.148-7(c) and (d) of the Treasury Regulations, the exception for certain "small governmental issuers" as set forth in Section 148(f)(4)(D) of the Code, and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the "1-1/2% Penalty") has been made)), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulations. The Authority shall obtain expert advice as to the calculation of the "rebate amount" to comply with this Section. (ii) Transfer of Moneys. Within 55 days of the end of the fifth Bond Year and each five years thereafter, upon the written request of the Authority, an amount shall be deposited to the Rebate Fund by the Trustee from any legally available moneys for such purpose (as specified by the Authority in the aforesaid written request), if and to the extent required so that the balance in the Rebate Fund shall equal the "rebate amount" so calculated in accordance with this Section. In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon written request of the Authority, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Debt Service Payment Fund. (iii) Timing of Rebate Payment to the Treasury. The Trustee shall pay, as directed by request of the Authority, to the United States Treasury, out of amounts in the Rebate Fund, (1) not later than 60 days after the end of (A) the fifth Bond Year, and (B) each applicable fifth Bond Year thereafter, an amount O HsasA:754116349,6 19 that, together with all previous rebate payments, is equal to at least 90% of the "rebate amount" calculated as of the end of such Bond Year; and (2) not later than 60 days after the payment of the Bonds or Parity Obligations of any series, as applicable, an amount equal to 1.00% of the "rebate amount" calculated as of the date of such payment (and any income attributable to the "rebate amount" determined to be due and payable) in accordance with Section 1.148-3 of the Treasury Regulations. Each payment required to be made pursuant to this Section shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by internal Revenue Service Form 8038-T prepared by the Authority, or shall be made in such other manner as provided under the Code. (b) Deficiencies in the Rebate Fund. In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to male such payment when such payment is due, the Authority shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. (c) Disposition or Unexpended Moneys. Any moneys remaining in the Rebate Fund after redemption and payment of the Bonds and the payments described in this Section being made may be withdrawn by the Authority and utilized in any lawful manner by the Authority. (d) Record Keeping. The Authority shall retain records of all determinations made hereunder until six years after the complete retirement of the Bonds. (e) Survival of Defeasance. Notwithstanding anything in this Trust Agreement to the contrary, the obligation to comply with the requirements of this Section shall survive the payment in full or defeasance of the Bonds. ARTICLE V COVENANTS, EVENTS OF DEFAULT, REMEDIES OF BONDOWNERS AND LIMITATIONS OF LIABILITY Section 5.1. Trustee to Enforce Lease Agreement and Property Lease. The Trustee covenants and agrees with the Bondowners, subject to the provisions of the Trust Agreement to exercise the rights assigned to it under the Lease Agreement and the Property Lease as assignee of the Authority, and to enforce the Property Lease against the City as provided therein and the Lease Agreement against the City as provided therein, all subject to the provisions of Section 6.12 hereof. Section 5.2. Against Amendment or Termination of Property Lease. The Authority and the City hereby covenant and agree not to amend the Property Lease in a manner that OHSUSA:754116349.6 20 materially adversely affects the security for the Bonds or to terminate the Property Lease so long as the Bonds remain Outstanding. Section 5.3. Amendment of Lease Agreement. The terms of the Lease Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written instrument signed by the Authority and the City, subject to the same conditions as set forth in Section 7.2 hereof. Section 5.4. Notice of Non -Payment. In the event of delinquency in the payment of Lease Payments due by the City pursuant to the Lease Agreement, the Trustee shall promptly give written notice of the delinquency and the amount thereof to the City. Section S.S. Assignment of Rights. Pursuant to this Trust Agreement, the Authority has transferred, assigned and set over to the Trustee all of the Authority's rights in and to the Property Lease and the Lease Agreement including without limitation all of the Authority's right to receive Lease Payments from the City under the Lease Agreement, its right to receive the proceeds of insurance or of an eminent domain award on the Project, its right to pursue the remedies to which it is entitled in the event of default by the City under the Lease Agreement (a "Lease Default Event"), its right to enforce payment of such Lease Payments when due, or otherwise protect its interests and enforce its rights under the Lease Agreement. Section 5.6. Events of Default. The following events shall be Events of Default hereunder: (a) Default in the due and punctual payment of the principal on any Bonds when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise. (b) Default in the due and punctual payment of any installment of interest on any Bonds when and as the same shall become due and payable. (c) Default by the Authority in the observance of any of the other covenants, agreements or conditions on its part in this Trust Agreement or in the Bonds contained, if such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authority by the Trustee; provided, however, that if in the reasonable opinion of the Authority the default stated in the notice can be corrected, but not within such thirty (30) day period, such default shall not constitute an Event of Default hereunder if the Authority shall commence to cure such default within such thirty (30) day period and thereafter diligently and in good faith cure such failure in a reasonable period of time. (d) The occurrence and continuation of a Lease Default Event. Notwithstanding anything in this Trust Agreement to the contrary, the Trustee shall have no right to declare the principal or interest on the Bonds to be due and payable immediately Section 5.7. Application of bunds. All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article V or Article 1X of the Lease 0HSUSA:754116344.6 21 Agreement shall be applied by the Trustee in the order following upon presentation of the several Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid - First, to the payment of the costs and expenses of the Trustee and of the Bondowners in declaring such Event of Default, including reasonable compensation to its or their agents, attorneys, consultants and counsel and any fees and expenses due or owing the Trustee; Second, to the payment of the whole amount then owing and unpaid with respect to the Bonds for principal and interest and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid with respect to the Bonds, then to the payment of such principal and interest without preference or priority of principal over interest, or of interest over principal, or of any installment over any other installment of interest, ratably to the aggregate of such principal and interest. Section 5.8. Institution of Legal Proceedings. If one or .more Events of Default shall happen and be continuing, the Trustee in its discretion may, and upon the written request of the Owners of a majority in principal amount of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of the Owners of Bonds as provided in the Lease Agreement or in this Trust Agreement. Section 5.9. Non -Waiver. Nothing in this Article V or in any other provision of this Trust Agreement or in the Bonds, shall affect or impair the obligation of City to pay or prepay the Lease Payments in accordance with and subject to the terms and provisions of the Lease Agreement, or affect or impair the right of action, which is also absolute and unconditional, of the Bondowners to institute suit to enforce and collect such payment. No delay or omission of the Trustee or of any Bondowners to institute suit to enforce and collect such payment and no delay or omission of the Trustee or of any Bondowner of any of the Bonds to exercise any right or power arising upon the happening of any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein, and every power and remedy given by this Article V to the Trustee or to the Bondowner may be exercised from time to time and as often as shall be deemed expedient by the Trustee or the Bondowner. Section 5.10. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or the Bondowners is intended to be exclusive of any other remedy, and every 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. Section 5.11. Power of Trustee to Control Proceedin s. Except as provided in Section 5.3, in the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Bondowners of a majority in principal amount of the Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not discontinue, withdraw, compromise or settle, or otherwise dispose of any OI ISUSA:754116349.6 22 litigation pending at law or in equity, without the consent of a majority in aggregate principal amount of the Bonds Outstanding. Section 5.12. Limitation on Bondowners' Right to Sue. Except as provided in Section 5.3, no Bondowner shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Trust Agreement, unless (a) such Bondowner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Bondowners of at least twenty-five percent (25%) in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers granted to the Trustee as assignee of the Authority or to institute such action, suit or proceeding in its own name; (c) said Bondowner shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Bondowner of any remedy hereunder; it being understood and intended that no one or more Bondowners shall have any right in any manner whatever by his or their action to enforce any right under this Trust Agreement, except in the manner herein provided, and that all proceedings at law or in equity with respect to an Event of Default shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Bondowners of the Outstanding Bonds. The right of any Bondowner of any Bond to receive payment of said Bondowner's interest in the Lease Payments as the same become due, or to institute suit for the enforcement of such payment, shall not be impaired or affected without the consent of such Bondowner, notwithstanding the foregoing provisions of this Section or any other provision of this Trust Agreement. Section 5.13. Reconstruction,• Application of Insurance Proceeds. (a) If any useful portion of the Project shall be destroyed or is damaged by fire or other casualty, or title to, or the temporary use of, such portion shall be taken under the exercise of the power of eminent domain, the City shall as expeditiously as possible, continuously and diligently prosecute or cause to be prosecuted the repair, reconstruction, restoration or replacement thereof, unless it is determined under the provisions of the Lease Agreement that such repair, reconstruction, restoration or replacement is not to be undertaken. The proceeds of any insurance paid on account of such damage or destruction, shall be held by the Trustee in the Insurance and Condemnation Account and made available for, and to the extent necessary be applied to, the cost of such repair, reconstruction, restoration or replacement. Such moneys deposited in the Insurance and Condemnation Account shall be applied and paid out by the Trustee as provided in the Lease Agreement. Pending such application, such proceeds shall be invested, upon direction of an Authorized Representative of the City, by the Trustee in Investment Securities which mature not later than such times as shall be necessary to provide moneys when needed to pay such cost of repair, reconstruction, restoration or replacement. The interest, as well as the gain, if any, on such investments shall remain a part of any such Insurance oH.SUSA:754116349.6 23 and Condemnation Account to be applied as provided in this Section. The proceeds of any insurance not applied within six months after receipt thereof by Trustee to repairing, reconstructing, restoring or replacing damaged or destroyed property, or in respect of which notice in writing of intention to apply the same to the work of repairing, reconstruction, restoring or replacing the property damaged or destroyed shall not have been given to the Trustee by City within such six months, or which City shall at any time notify the Trustee are not to be so applied, shall be deposited in the Redemption Account and applied to the redemption of Bonds pursuant to Section 3.3(i)(i). After the completion of any repair, reconstruction, restoration, any remaining insurance proceeds shall be deposited in the Redemption Account and applied to the redemption of Bonds pursuant to Section 3.3. Section 5.14. Accounts and Reports. (a) The Trustee shall keep proper books of record and account in which complete and correct entries shall be made of its transactions relating to each fund and account established under this Trust Agreement and the principal amount of the Bonds and which shall at all reasonable times upon reasonable prior notice be subject to the inspection of the City and Bondowners. (b) The Trustee shall provide the City, promptly after the end of each calendar month a statement of its transactions during such month relating to each fund, account or subaccount held by it under the Trust Agreement. Section 5.15. No Oblation by the City to Bondowners. Except for the payment of Lease Payments when due in accordance with the Lease Agreement and any other payment due and owing by the City under the Lease Agreement and the performance of the other covenants and agreements of the City contained in the Lease Agreement or hereunder, the City shall have no obligation or liability to any of the other parties or to the Bondowners with respect to this Trust Agreement or the terms, execution, delivery or transfer of the Bonds, or the distribution of Lease Payments to the Bondowners by the Trustee. Section 5.16. No Obligation With Respect to Performance by Trustee. The City or the Authority shall not have any obligation or liability to any of the other parties or to the Bondowners with respect to the performance by the Trustee of any duty imposed upon it under this Trust Agreement. Section 5.17, No Liability to Bondowners for Pant. Except as provided in this Trust Agreement, neither the Trustee nor the Authority shall have any obligation or liability to the Bondowners with respect to the payment of the Lease Payments by the City when due, or with respect to the performance by the City of any other covenant by it in the Lease Agreement. Section 5.18. Possession and Enjoyment. So long as no Lease Termination shall have occurred, the City shall during such Lease Term peaceably and quietly have and hold and enjoy the Project, without suit, trouble or hindrance from the Trustee, except as expressly set forth in the Lease Agreement. The Trustee will, at the written request of the City and at the City's cost, join in any legal action in which the City asserts its right to such possession and enjoyment,'to the extent Trustee lawfully may do so; provided, however, the Trustee may decline to join in OHSUSA:754116349.6 24 such action if it believes it will be exposed to liability for which it has not been satisfactorily indemnified against. Section 5.19. Tax Covenants. Notwithstanding any other provision of this Trust Agreement, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds will not be adversely affected for federal income tax purposes, the Authority and the City covenant to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenant, without limiting the generality of the foregoing, as follows: (a) Private Activity. The Authority and the City will not take or omit to take any action or make any use of the proceeds of the Bonds, the Service Contract Project Improvements or of any other moneys or property which would cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the Code. (b) Arbitrate. The Authority and the City will make no use of the proceeds of the Bonds, the Project or of any other amounts or property, regardless of the sources, or take or omit to take any action which would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code; (c) Federal Guarantee. The Authority and the City will make no use of the proceeds of the Bonds, the Project, or take or omit to take any action that would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code; (d) Information Roo . The Authority and the City will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code; (e) Hedge Bonds. The Authority and the City will make no use of the proceeds of the Bonds, the Project, or any other amounts or property, regardless of the source, or take or omit to take any action that would cause the Bonds to be considered "hedge bonds" within the meaning of Section 149(8) of the Code unless the Authority and the City take all necessary action to assure compliance with the requirements of Section 149(8) of the Code to maintain the exclusion from gross income of interest on the Bonds for federal income tax purposes; and (f) Miscellaneous. The Authority and the City will take no action inconsistent with their expectations stated in the Tax Certificate and will comply with the covenants and requirements stated therein and incorporated by reference herein. Section. 5.20. Parity Obligations, Neither the Authority nor the City shall issue or incur evidences of indebtedness or other obligations payable from the Lease Payments having any priority in payment over the Bonds. The City may at any time issue obligations secured on a parity with the Lease Payments which are incurred in accordance with Section 4.11 of the Lease. oHSUSA:754116349.6 25 ARTICLE VI CONCERNING THE TRUSTEE Section 6.1. Employment of Trustee. The Authority hereby appoints The Bank of New York Mellon Trust Company, N.A., as Trustee. The Trustee shall, prior to an Event of Default, and after the curing of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Trust Agreement, and no implied covenants or obligations shall be read into this Trust Agreement against the Trustee. The Trustee shall, during the existence of any Event of Default (which has not been cured in accordance herewith), exercise such of the rights and powers vested in it by this Trust Agreement, 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 such person's own affairs. Section 6.2. Trustee Acceptance of Duties. The Trustee shall signify its acceptance of the duties and obligations imposed upon it hereby by executing and delivering this Trust Agreement; and by executing such acceptance the Trustee shall be deemed to have accepted such duties and obligations with respect to all the Bonds thereafter delivered, but only, however, upon the terms and conditions set forth herein. Section 6.3. Evidence on Which Trustee May Act. (a) The Trustee, upon receipt of any notice, resolution, request, consent, order, certificate, report, opinion, bond, or other paper or document furnished to it pursuant to any provision hereof, shall examine such instrument to determine whether it conforms to the requirements hereof and shall not be liable for acting upon any such instrument believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may or may not be counsel to the City, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Trustee may rely on and shall not be liable for acting upon the written instructions of the Authority and the City and such employees and representatives of the City as the City may hereinafter designate in writing. (b) Whenever 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 therein specifically prescribed) may be deemed to be conclusively proved and established by a certificate of an Authorized Representative of the City, and such certificate shall be full warrant for any action taken or suffered in good faith under the provisions hereof upon the terms hereof; but in its discretion the Trustee may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as to it may seem reasonable. (c) Except as otherwise expressly provided herein, any request, order, notice or other direction required or permitted to be furnished pursuant to any provision hereof by the Authority or the City to the Trustee shall. be sufficiently executed in the name of the Authority or the City by an Authorized Representative of the Authority or the City, as appropriate. oHSUSA:754116349.6 26 Section 6.4. Obligations of Trustee. Upon receipt of written notice of the termination of the Lease Agreement, the Trustee shall at the written request of the City convey any right, title or interest in the Project created by this Trust Agreement free and clear of all liens thereon which Trustee may have. Section 6.5. Compensation.. The City has agreed in the Lease Agreement to pay to the Trustee compensation for all services rendered hereunder and also all expenses, charges, counsel fees and other disbursements, including those of its attorneys, agents, and employees, incurred in and about the performance of its powers and duties hereunder, at the rates and charges specified in a separate written fee agreement among the Authority, the City and the Trustee. The City shall reimburse the Trustee for any advances of its own funds to make payments for which the City and Authority is obligated hereunder, with interest at the maximum rate allowed by law. Section 6.6. Resignation of Trustee. The Trustee may at any time resign. and be discharged of the duties and obligations created hereby by giving not less than, 60 day's written notice to the City and the Bond€iwners, specifying the date when such resignation shall take effect, and such resignation shall take effect upon the day specified in such notice unless previously a successor shall have been appointed by the City and the Authority or the Bondowners as provided in Section 6.8, in which event such resignation shall take effect immediately on the appointment of such successor; provided that in the event the City and the Authority are unable to appoint a successor on or before the date specified, the resigning Trustee shall continue to serve hereunder until a successor is appointed pursuant to Section 6.8. Section 6.7. Removal of Trustee. So long as no Event of Default has occurred and is continuing, the City may remove the Trustee upon 60 days' written notice by an instrument in writing filed with the Trustee. The Trustee may be removed upon 60 days' written notice by an instrument or concurrent instruments in writing filed with the Trustee and signed by the Owners of a majority in principal amount of the Bonds then Outstanding or their attorneys -in -fact duly authorized. Section 6.8. Appointment of Successor Trustee. (a) In case at any time the Trustee shall resign or shall be removed 'or shall become incapable of acting, or shall be adjudged as bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee, or of its property, shall be appointed, or if any public officer shall take charge or control of the Trustee or of its property or affairs, a successor may be appointed by the Authority and the City. (b) If in a proper case no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section 6.8 within 45 days after the Trustee shall have given to the City written notice as provided in Section 6.6 or after a vacancy in the office of the Trustee shall have occurred by reason of its inability to act, the Trustee may petition at the expense of the City a court to appoint a successor Trustee. (c) Any Trustee appointed under the provisions of this Section 6.8 in succession to the Trustee shall be a commercial bank or trust company or national banking oHsusA:754116349,6 27 association, having capital stock and surplus aggregating at least $75,000,000 and authorized to exercise trust powers. (d) Notwithstanding any other provision of this Trust Agreement, no removal, resignation or termination of the Trustee shall take effect until a successor shall be appointed. Section 6.9. Transfer of Rights and Project to Successor Trustee. Any successor Trustee appointed under the Trust Agreement shall execute, acknowledge and deliver to its predecessor Trustee an instrument accepting such appointment, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become fully vested with all moneys, estates, properties, rights, powers, duties and obligations of such predecessor Trustee, with like effect as if originally named as Trustee; but the Trustee ceasing to act shall nevertheless, on the written request of the successor Trustee, execute, acknowledge and. deliver such instrument of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Trustee all the right, tide and interest of the predecessor Trustee in and to any property held by it under the Trust Agreement, and shall pay over, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Should any deed, conveyance or instrument in writing from the City or the Authority be required by such successor Trustee for more fully and certainly vesting in and confirming to such successor Trustee any such estates, rights, power and duties, any and all. such deeds, conveyances and instruments in writing shall, on request, and so far as may be authorized by law, be executed, acknowledged and delivered by the City or the Authority. Section 6.10. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be a bank or trustee company organized under the laws of any state of the United States or a national banking association, shall meet the other requirements of Section 6.8(c), and shall be authorized by law to perform all the duties imposed upon it hereby, shall be the successor to the Trustee without the execution or filing of any paper or the performance of any further act. Section 6.11.. Adoption of Authorized Signature. In case any of the Bonds contemplated to be delivered hereunder shall have been executed but not delivered, any successor Trustee may adopt the authorized signature of any predecessor Trustee so authenticating such Bonds and deliver such Bonds so executed; and in case any of the said Bonds shall not have been executed, any successor Trustee may authenticate such Bonds in the name of the successor Trustee, and in all such cases such authentication shall have the full force which it is anywhere in said Bonds or herein provided that the authentication of the Trustee shall have. . Section 6.12. Liability of the Trustee. The recitals, statements and representations by the City or the Authority contained in this Trust Agreement or in the Bonds shall be taken and construed as made by and on the part of the City and Authority and not by the Trustee and the Trustee does not assume, and shall not have, any responsibility or obligations for the correctness of any thereof. OIISUSA:754116349.0 28 The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder either directly or by or through attorneys or agents and. shall be entitled to advice of counsel concerning all matters of trust and its duties hereunder and shall be absolutely protected in relying thereon. The Trustee shall not be responsible for the misconduct of such persons selected by it with reasonable care. No provision in this Trust Agreement shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not assured to it. The Trustee shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. In accepting the trust hereby created, the Trustee acts solely as Trustee for the Owners and not in its individual capacity and all persons, including without limitation the Owners and the City or the Authority, having any claim against the Trustee arising from this Trust Agreement shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds. 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 or the Authority of the Project. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from the Lease Agreement or this Trust Agreement. The Trustee shall not be responsible for the sufficiency or enforceability of the Property Lease or the Lease Agreement or the assignment under the Trust Agreement of its rights to receive Lease Payments. The Trustee shall not be deemed to have knowledge of any Event of Default hereunder or under the Lease Agreement unless and until it shall have actual knowledge thereof. The Trustee shall not be accountable for the use or application by the City or the Authority or any other party of any funds which the Trustee has released under this Trust Agreement. The Trustee shall not be responsible for accounting for, or paying to, any party to this transaction, including but not limited to the City, the Authority, and the Bondowners, any return on or benefit from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of the same shall affect, or result in any offset against, fees due to the Trustee under this Trust Agreement. The Trustee's rights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and the final payment or the defeasance of the Bonds (or the discharge of the Bonds or the defeasance of the lien of this Trust Agreement). OHSUSA:754116349.6 29 All indemnification and releases from liability granted to the Trustee herein or in the Lease Agreement shall extend to the directors, officers, employees, attorneys and agents of the Trustee. The Trustee shall have no responsibility, opinion, or liability with respect to any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds except for information provided by the Trustee. Before taking any action under Article V hereof or this section at the request of Owners, the Trustee may require that a satisfactory indemnity bond be furnished by the Owners for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or willful misconduct in connection with any action so taken. ARTICLE VII AMENDMENTS Section 7.1. Mailin . Any provision in this Article for the mailing of a notice or other paper to Bondowners small be fully complied with if it is mailed first class United States mail, postage prepaid only (i) to each Owner of Bonds then Outstanding at his address, if any, appearing upon the registry books of the Trustee, and (ii) to the Trustee. Section 7.2. Powers of Amendment. This Trust Agreement and the rights and obligations provided may be modified or amended at any time by a Supplemental Trust Agreement, entered into among the Trustee, the Authority and the City but without the consent of any Bondowners, but only (a) to cure any ambiguity, supply any omission, or cure or correct any defect or inconsistent provision in this Trust Agreement, (b) to insert such provisions clarifying matters or questions arising hereunder as are necessary or desirable and are not contrary to or inconsistent herewith as theretofore in effect, (c) to provide for the authorization, execution and delivery of Parity Obligations, or (d) in regard to matters arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable which shall not in the opinion of Bond Counsel which may be supported by a certificate of an independent financial consultant materially adversely affect the interest of the Bondowners. Any other modification or amendment hereof and of the rights and obligations of the Trustee or of the Owners of the Bonds hereunder, in any particular, may be made by a Supplemental Trust Agreement, entered into among the Trustee, the Authority and the City with the written consent, given as provided in Section 7.3, of the Owners of at least sixty percent (60%) in principal amount of the Bonds Outstanding at the time such consent is given. No such modification or amendment shall permit a change in the terms of redemption or maturity of the principal with respect to any Outstanding Bonds or of any installment of interest with respect thereto or a reduction in the principal amount or the redemption price with respect thereto or in the rate of interest with respect thereto or which will have an adverse effect on the security interest of the Owner without the consent of the Owner of such Bond, or shall reduce the percentages or otherwise affect the classes of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or shall change or modify any of the rights or obligations of the Trustee without the written assent OHSUSA,:754116349.6 30 of the Trustee. .The Trustee may in its discretion determine whether or not, in accordance with the foregoing powers of amendment, Bonds of any particular maturity would be affected by any modification or amendment hereof, and any such determination shall be binding and conclusive on the Authority, the City and all Owners of Bonds. The Trustee may obtain an opinion of counsel that any such Supplemental Trust Agreement entered into by the Authority, the City and the Trustee complies with the provisions of this Section 7.2 and the Trustee may conclusively rely upon such opinion. The Authority shall be provided with a full original transcript of all proceedings relating to the execution of any amendatory or Supplemental Trust Agreement or Lease Agreement. Section 7.3. Consent of Bondowners. The Trustee, the Authority and the City may at any time enter into a Supplemental Trust Agreement making a modification or amendment permitted by the provisions of Section 7.2 to take effect when and as provided in this Section. A copy of such Supplemental Trust Agreement (or brief summary thereof), together with a request to Bondowners to approve the same shall be mailed to each Bondowner (but failure to mail such copy and request shall not affect the validity of the Supplemental Trust Agreement when consented to as in this Section 7.3 provided). Such Supplemental Trust Agreement shall not be effective unless and until (i) there shall have been filed with the Trustee (a) the written consents of Owners of the percentage of Outstanding Bonds specified in Section 7.2 and (b) an opinion of Bond Counsel stating that such Supplemental Trust Agreement has been duly and lawfully entered into by the parties thereto and filed with the City and the Trustee in accordance with the provisions hereof, is authorized or permitted hereby, and is valid and binding upon the parties thereto in accordance with its terms. Each such consent shall be effective only if accompanied by proof of the Owner, at the date of such consent, of the Bonds with respect to which such consent is given, which proof shall be such as is permitted by Section 8.2. The request for consent of Bondowners pursuant to this Section may provide a date by which such consents must be received to be effective. A certificate or certificates executed by the Trustee and filed with the City stating that it has examined such proof and that such proof is sufficient in accordance with Section 8.2 shall be conclusive that the consents have been given by the Owners of the Bonds described in such certificate or certificates of the Trustee. Any such consent shall be binding upon the holder of the Bonds giving such consent and, anything in Section 8.2 to the contrary notwithstanding, upon any subsequent Owner of such Bonds and of any Bonds issued in exchange therefor (whether or not such subsequent Owner thereof has notice thereof) unless such consent is revoked in writing by the Owner of such Bonds giving such consent or a subsequent Owner thereof by filing with the Trustee, prior to the time when the written statement of the Trustee hereinafter in this Section 7.3 provided for is filed. Such revocation and, if such Bonds are held by the signer of such revocation, proof of ownership shall be evidenced in the manner permitted by Section 8.2. The fact that a consent has not been revoked may likewise be proved by a certificate of the Trustee tiled with the City to the effect that no revocation thereof is on file with the Trustee. At any time after the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Trust Agreement, the Trustee shall make and file with the City a written statement that the Owners of such required percentage of Bonds have filed such consents. Such written statements shall be conclusive that such consents have been so filed. At any time thereafter notice, stating in substance that the Supplemental Trust Agreement (which may be referred to as a Supplemental Trust Agreement entered into by the parties thereto on a stated date, a copy of which is on file with the Trustee) has been consented to by the Owners of the required percentages of Bonds and will be effective as provided. in this Section, may be given DHSUSA:754116349.6 31 to Bondowners by the City or the Trustee at the direction of the City, by mailing such notice pursuant to Section 7.1 hereof to Bondowners (but failure to receive such notice shall not prevent such Supplemental Trust Agreement from becoming effective and binding as in this Section provided). The City shall file with the Trustee proof of the mailing of such notice. A record, consisting of the certificates or statements required or permitted by this Section to be made by the Trustee, shall be proof of the matters therein stated. Such Supplemental Trust Agreement making such amendment or modification shall be deemed conclusively binding upon the City, the Trustee, the Authority and the Owners of all Bonds at the expiration of 40 days after the filing with the Trustee of the proof of the trailing of such last mentioned notice, except in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Trust Agreement in a legal action or equitable proceeding for such purpose commenced within such 40 day period; provided, however, that the Trustee, the Authority or the City during such 40 day period and any such further period during which any such action or proceeding may be pending shall be entitled in their absolute discretion to take such action, or to refrain from taking such action, with respect to such Supplemental Trust Agreement as they may deem expedient. Section 7.4. Modifications by Unanimous Consent. The terms and provisions hereof and the rights and obligations of the Trustee and of the Owners of the Bonds hereunder may be modified or amended in any respect upon entering into by the parties hereto of a Supplemental Trust Agreement with the unanimous consent of the Owners of all the Bonds then Outstanding, such consent to be given as provided in Section 7.3 except that no notice to Bondowners by mailing shall be provided and to the extent any such Supplemental Trust Agreement alters the rights and obligations of the Trustee the Trustee's approval shall be required. Section 7.5. Exclusion of Bonds. Bonds owned or held by or for the account of the City shall not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Bonds provided for in this Article or Section 6.7, and the City shall not be entitled with respect to such Bonds to give any consent or take any other action provided for in this Article or Section 6.7. At the time of any consent or other action taken under this Article or Section 6.7, the City shall furnish the Trustee a Certificate of Authorized Representative of the City; upon which the Trustee may rely, describing all Bonds so to be excluded. Section 7.6. Notation on Bonds. Bonds issued after the effective date of any action taken as provided in Article V or this Article provided may, and if the City so determines shall, bear a notation by endorsement or otherwise in form approved by the City and the Trustee as to such action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date and presentation of the Bond or Bonds for the purpose at the principal corporate trust office of the Trustee or upon any transfer or exchange of any Bond Outstanding at such effective date, suitable notation shall be made on such Bond or upon any Bonds issued upon any such transfer or exchange by the Trustee as to any such action. If the City and the Trustee shall so determine, new Bonds so modified as in the opinion of the Trustee and the City may be necessary to conform to such action shall be prepared, issued, and upon demand of the Owner of any Bond then Outstanding shall be exchanged, without cost to such Bondowner, for Bonds of the same maturity then Outstanding, upon surrender of such Bonds. oHsusa:7541 16349.6 32 AR'T'ICLE VIII MISCELLANEOUS Section 8.1.. Defeasance. (a) Outstanding Bonds shall be paid and discharged in any one or more of the following ways - (i) by paying or causing to be paid the principal of and interest with respect to said Outstanding Bonds, as and when the same become due and payable; or (ii) by depositing with the Trustee, in trust, cash or Investment Securities of the type set forth in part (A) of the definition thereof in such amount, including without limitation cash or Investment Securities of the type set forth in part (A) of the definition thereof then on deposit in the Debt Service Payment Account and Reserve Account applicable to the Outstanding Bonds, together with the interest to accrue with respect thereto, as will be sufficient, as shown on a certificate of a nationally recognized certified public accountant or firm of certified public accountants, to pay and discharge the Outstanding Bonds to be paid and discharged (including all principal, interest and premium, if any) at or before their respective maturity dates. In the event of a refunding, the City shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants ("Accountant") verifying the sufficiency of the escrow established to pay the Bonds in full and (ii) an opinion of nationally recognized Bond Counsel to the effect that the Bonds are no longer "Outstanding" under the Trust Agreement, each of which shall be addressed to the City, the Trustee and the Authority. Notwithstanding that any Bonds shall not have been surrendered for payment, all obligations of Authority, the Trustee and the City under this Trust Agreement with respect to those Bonds paid, as provided in the above subsections (i) (ii) or (iii), and the trust created by this Trust Agreement shall cease and terminate, except only the obligation of the Trustee to pay or cause to be paid to the Owner of the Bonds not so surrendered and paid all sums due thereon, to transfer title to the City as provided in Section 7.3 of the Lease Agreement, and the obligation of City to cause rebates pursuant to Section 4.11 and the obligation of the Trustee to make transfers and exchanges of Bonds pursuant to Section 3.7. Notice of defeasance of the Bonds and the obligations under this Trust Agreement as provided in this Section shall be given by the Trustee in the manner provided in Section 3.12. The fees and charges of the Trustee (including reasonable counsel fees and expenses) must be paid in order to effect such discharge. The satisfaction and discharge of this Trust Agreement shall be without prejudice of the rights, if any, of the Trustee to charge and be reimbursed by the City for any expenditures which it may thereafter incur in connection therewith. Any funds held by the Trustee, at the time of one of the events described above in paragraphs (i), (ii) or (iii), shall have occurred, which are not required for the payment to be made to Owners, or for payments to be made to the Trustee by the City, or for payment to the United States under Section 4.11, shall be paid over to the City. 0HSUSN754116349.6 33 (b) Anything in this Trust Agreement to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment of any of the Bonds which remain unclaimed for two years after the date when such Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the said date when such Bonds became due and payable, shall be repaid by the Trustee to the City, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bondowners shall look only to the City for the payment of such Bonds. Section 8.2. Evidence of Signatures of Bondowners and Ownership of Bonds. (a) Any request, consent, revocation of consent or other instrument which this Trust Agreement may require or permit to be signed and executed by the Bondowners may be in one or more instruments of similar tenor, and shall be signed or executed by such Bondowners in person or by their attorneys appointed in writing. Proof of (i) the execution of any such instrument, or of an instrument. appointing any such attorney, or (ii) the ownership by any person of the Bonds, shall be sufficient for any purpose hereof (except as otherwise therein expressly provided) if made in the following manner, or in any other manner satisfactory to the Trustee, which may nevertheless in its discretion require further or other proof in cases where it deems the same desirable: the fact and date of the execution by any Bondowner or his attorney of such instruments may be proved by a guaranty of the signature thereon by a commercial bank or trust company or member firm of the New York Stock Exchange or by the certificate of any notary public or other officer authorized to take acknowledgments of deeds, that the person signing such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. Where such execution is by an officer of a corporation or association or a member of a partnership, on behalf of such corporation, association or partnership, such signature guaranty, certificate or affidavit shall also constitute sufficient proof of his authority. (b) The ownership of Bonds and the amount, numbers and other identification, and date of owning the same shall be proved by the registry books of the Trustee. Section 8.3. Moneys Held for Particular Bonds. The amounts held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular Bonds shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto. Section 8.4. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Trust Agreement shall be retained in its possession and shall be subject at all reasonable times to the inspection of the City, the Authority or any Bondowner and their agents and representatives, any of whom may make copies thereof.. Section 8.5. Parties Interested Herein. Nothing in this Trust Agreement expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the City, the Authority, the Trustee and the registered Owners of the Bonds, any right, remedy or claim under or by reason of this Trust Agreement or any covenant, OHSUSA:754116349.6 34 condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Trust Agreement contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the City, the Authority, the Trustee and the registered Owers of the Bonds. Section 8.6. Severability of Invalid Provisions. If any one or more of the covenants or agreements provided herein should be contrary to law, then such covenant or covenants or agreement or agreements shall be deemed severable from the remaining covenants and agreements, and shall in no way affect the validity of the other provisions hereof. Section 8.7. Recording and Filing. The City shall be responsible for the recording and filing of the Property Lease, Lease Agreement and financing statements (or continuation statements in connection therewith) or of any supplemental instruments or documents of further assurance as may be required by law in order to perfect the security interests created by the Property Lease or the Lease Agreement. The City and the Authority shall take such further actions as may be necessary to effectuate the transactions contemplated by this Trust Agreement, the Property Lease and the Lease Agreement. Section 8.8. Notices. All notices, certificates, requests or other communications (other than payments by City) hereunder shall be in writing and shall be sufficiently given and shall be deemed given when delivered or mailed by certified or first class mail, postage prepaid, to the parties at their respective places of business as follows: If to the City: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attention: City Manager and Chief Financial Officer/City Treasurer If to the Authority: San Juan Basin Authority 2611 Antonio Parkway Rancho Santa Margarita, CA 92688 Attention: If to the Trustee: The Bank of New York Mellon Trust Company, N.A. 400 S. hope Street, Ste 400 Los Angeles, CA 90071 Attention: Corporate Trust Department Section 8.9. California Law. This Trust Agreement shall be construed and governed in accordance with the laws of the State of California. OI ISI; SA:7541 16343.6 35 Section 8.10. Binding on Successors. This Trust Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Section 8.11, Headings. Headings preceding the text of the severalArticles and Sections hereof, and the table of contents, are solely for convenience of reference and ,shall not constitute a part of this Trust Agreement or affect its meaning, construction or effect. Section 8.12. Execution in Counterparts. This Trust Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. Section 8.13. Actions Due on Saturdays, Sundays and Holidays. If any date on which a payment, notice or other action required by this "frust Agreement falls on other than a Business Day, then that action or payment need not be taken or made on such date, but may be taken or made on the next succeeding Business Day with the same force and effect as if made on such date. Section 8.14. Force Majeure. From the effective date of this Trust Agreement, the Trustee, or any successor in. interest, shall not be considered in breach of or in default in its obligations with respect to any obligations created hereunder or progress in respect thereto, in the event of enforced delay ("unavoidable delay") in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, acts of God, or of the public enemy, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee. Section 8.15. Facsimile Instructions. The Trustee agrees to accept and act upon facsimile transmission of written instructions and/or directions pursuant to this Trust Agreement provided, however that: (a) the City, subsequent to such facsimile transmission of written instructions, shall provide the originally executed instructions and/or directions to the Trustee in a timely manner, (b) such originally executed instructions and/or directions shall be signed by a person as may be designated and authorized to sign for the City by an Authorized Representative of the City and, (c) the City shall provide to the Trustee an incumbency certificate listing such designated persons which such incumbency certificate shall be amended whenever a person is to be added or deleted from the listing. oHsusA:754116349.6 36 IN WITNESS WHEREOF, the parties have executed and attested this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. ATTEST: City Clerk ATTEST: Secretary of the Board of Directors CITY OF SAN JUAN CAPISTRANO Mayor SAN JUAN BASIN AUTHORITY By: Chairman of the Board of Directors THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee By: Authorized Officer 014SUSA:754116349.6 S-1 EXHIBIT A FORM OF BOND UNITED STATES OF AMERICA STATE OF CALIFORNIA (COUNTY OF ORANGE) SAN JUAN BASIN AUTHORITY LEASE REVENUE BOND (GROUND WATER RECOVERY PROJECT) ISSUE OF 2014 INTEREST RATE MATURITY DATE DATED DATE 3.85% December 1, 2034 November 14, 2014 REGISTERED OWNER: PRINCIPAL SUM: AND NO/ 100 DOLLARS The SAN JUAN BASIN AUTHORITY, a public body, corporate and politic, duly organized and existing under and by virtue of the laws of the State of California (the "Authority"), for value received hereby promises to pay to the Registered Owner stated above, or registered assigns, on the Maturity Date stated above (subject to any right of prior redemption hereinafter provided for), the Principal Sum stated above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the preceding Interest Payment Date to which interest was paid, provided, Bonds registered on or prior to May 15, 2015 shall have interest payable with respect thereto from the Delivery Date, and Bonds registered after a Record Date (the fifteenth day of the calendar month preceding an Interest Payment Date) and on or prior to an Interest Payment Date shall have interest payable with respect thereto from such Interest Payment Date; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on this Bond, until payment of such Principal Sum in full, at the rate per annum stated above, payable semiannually on June I and December I in each year (each, an "Interest Payment Date"), commencing June 1, 2015, calculated on the basis of a 360 -day year composed of twelve 30 -day months. Principal hereof is payable upon presentation and surrender of this Bond at the corporate trust office of The Barak of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), in Los Angeles, California or such other location as designated by the Trustee. Interest hereon (including the final interest payment upon maturity or earlier redemption) is payable by check of the Trustee mailed on the Interest Payment Date by first class mail to the Registered Owner hereof at the Registered Owner's address as it appears on the registration books maintained by the Trustee at the close of business on the Record Date next preceding such Interest Payment Date; provided, however, that upon the written request of any Registered oHSU SA: 754716349.6 A-1 Owner received by the Trustee on or before such Record Date, payment shall be made by wire transfer in immediately available funds to an account designated by such'Owner. This Bond is one of a duly authorized issue of Bonds of the Authority designated as "San Tuan Basin Authority Lease Revenue Bonds (Ground Water Recovery Project) Issue of 2014" (the "Bonds"), in an aggregate principal amount of ( , all of like tenor (except for such variation, if any, as may be required to designate varying series, numbers or redemption and other provisions) and all issued pursuant to the provisions of the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.) including the Marks -Roos Local Bond Pooling Act (Government Code Sections 6584 et seq.) (the "Law") and pursuant to a Trust Agreement, dated as of November 1, 2014, entered into by and among the Authority, the City of San Juan Capistrano (the "City") and the Trustee (the "Trust Agreement"), authorizing the issuance of the Bonds. Reference is hereby made to the Trust Agreement (copies of which are on file at the office of the Trustee) and all trust agreements supplemental thereto and to the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Lease Payments, as that term is defined in the Trust Agreement, and the rights thereunder of the registered owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of the provisions of which Trust Agreement the Registered Owner of this Bond, by acceptance hereof, assents and agrees. The Bonds have been issued by the Authority to refund the San Tuan Basin Authority Lease Revenue Bonds (Ground Water Recovery Project) Issue of 2002. The Bonds are special obligations of the Authority and this Bond and the interest hereon and all other Bonds and the interest thereon (to the extent set forth in the Trust Agreement) are payable from, and are secured by the Lease Payments derived by the Authority from the City under the Amended and Restated Lease Agreement, dated as of November 1, 2014 (the "Lease Agreement"), by and between. the Authority and the City. The Lease Payments are secured by a pledge of Revenues (as defined in the Trust Agreement) derived from the City's Water System (as defined in the Trust Agreement). There has been created and will be maintained by the Trustee the Project Trust Fund within which there is the Debt Service Payment Account (as defined in the Trust Agreement) into which Lease Payments shall be deposited from which the Trustee shall pay the principal of and the interest and redemption premium, if any, on the Bonds when due. As and to the extent set forth in the Trust Agreement, all such Lease Payments are exclusively and irrevocably pledged to and constitute a trust fund for, in accordance with the terms hereof and the provisions of the Trust Agreement and the Law, the security and payment or redemption of, and for the security and payment of interest on, the Bonds and any Parity Obligations, authorized by the Trust Agreement to be issued on a parity therewith. In addition, the Bonds (and, if the indenture authorizing any loans, advances or indebtedness issued on a parity with the Bonds shall so provide, any such loan., advance or indebtedness) shall be additionally secured at all times by a first and exclusive pledge of and lien upon all of the moneys in the Project Trust Fund, including the Debt Service Payment Account and the Redemption Account (as such terms are defined in the Trust Agreement). Except for the Lease Payments and such moneys, no funds or properties 01{{sUSA:754116349.6 A-2 of the Authority or the City shall be pledged to, or otherwise liable for, the payment of principal of or interest on the Bonds. The Bonds are subject to redemption, in whole or in part, at the times, at the redemption prices, with the notice, and on the other terms set out in the Trust Agreement. The Bonds are subject to default as further described in the Lease Agreement and the Trust Agreement. The Bonds are issuable as fully registered Bonds without coupons in denominations of $250,000 and integral multiples of $1.00 in excess thereof. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Trust Agreement, Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations and of the same maturity. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the corporate trust office of the Trustee, in Los Angeles, California, but only in the manner and subject to the limitations provided in the Trust Agreement, and upon surrender and cancellation of this Bond. Upon registration of such transfer a new fully registered Bond or Bonds, of authorized denornination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. The Trustee shall not be required to register the transfer or exchange of any Bond (i) during the period established by the Trustee for selection of Bonds for redemption or (ii) selected for redemption. The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. The rights and obligations of the Authority and the registered owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Trust Agreement, but no such modification or amendment shall extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Authority to pay the principal, interest or redemption premiums (if any) at the time and place and at the rate and in the currency provided herein of any Bond without the express written consent of the registered owner of such Bond, reduce the percentage of Bonds required for the written consent to any such amendment or modification or, without its written consent thereto, modify any of the rights or obligations of the Trustee. This Bond is not a debt, liability or obligation of the City, the State of California, or any of its political subdivisions, and none of said City, said State, nor any of its political subdivisions is liable hereon, nor in any event shall this Bond be payable out of any funds or properties other than those of the Authority as set forth in the Trust Agreement. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have oHSUSA:7541 1 6349.6 A-3 happened or have been performed in due and regular time and manner as required by the Law and the laws of the State of California, and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Trust Agreement. This Bond shall not be entitled to any benefit under the Trust Agreement or become valid or obligatory for any purpose until the Trustee's Certificate of Authentication hereon shall have been manually signed by the Trustee. OHSIJSA:754116349.6 A-4 IN WITNESS WHEREOF, the San Juan Basin Authority has caused this Bond to be executed in its name and on its behalf with the manual signature of its Chairman of the Board of Directors, all as of the Dated Date, SAN JUAN BASIN AUTHORITY By: Chairman of the Board of Directors OHSUSA.754116349.6 A-5 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Bonds described in the within -mentioned Trust Agreement. Authentication Date: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee M. Authorized Officer OHS1.)SA;754 t 16349.6 A..( [FORM OF ASSIGNMENT] For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within -registered Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the bond register of the Trustee with full power of substitution in the premises. Dated: Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. Signature Guaranteed: Note: Signature(s) must be guaranteed by an eligible guarantor institution. OHSUSA:7541.16349.6 A-7 EXHIBIT B FORM OF COSTS OF ISSUANCE REQUISITION SAN JUAN BASIN AUTHORITY LEASE REVENUE BONDS (GROUND WATER RECOVERY PROJECT) ISSUE OF 2014 REQUISITION FOR DISBURSEMENT OF COSTS OF ISSUANCE The undersigned hereby states and certifies: (i) that he is the duly appointed, qualified and acting of the City of San Juan Capistrano or his/her designee, a municipality organized and existing under the laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that, pursuant to Section 4.1 of that certain Trust Agreement, dated as of November 1, 2014, among the San Juan Basin Authority, the City and The Bank of New York. Mellon Trust Company, N.A., (the "Trust Agreement"), the undersigned hereby requests the Trustee to pay from the Cost of Issuance Account, established by the Trust Agreement, to the parties listed in Schedule I attached hereto the amounts listed on such Schedule I. (iii) that each obligation to be incurred by the City from the foregoing Cost of Issuance Account transfer will be a proper charge against the Cost of Issuance Account. Dated: November_, 2014 CITY OF SAN JUAN CAPISTRANO By: OHSUSA:754116349.6 B-1 SCHEDULEI Party to Be Paid Amount P=Ose OHSUSA:754116349.6 S-1 IN WITNESS WHEREOF, the parties have executed and attested this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. ATTEST: L�D V1 -r�- Secretary of the Board of Directors CITY OF SAN JU N CAPISTRANO By: Mayor SAN JUAN BASIN AUTHORITY By' Chairman of 6e Board of Directors THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Authorized Officer OHSUSA:754116349 S -I IN WITNESS WHEREOF, the parties have executed and attested this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. CITY OF SAN JUAN CAPISTRANO y: —ZZVI�WMayor ff���� ATTEST: --- oyl i�-= Secretary of the Board of Directors SAN JUAN BASIN AUTHORITY By: Chairman , f %e Board of Directors THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee By: Authorized Officer 0HSUSA:754116349 S-1 IN WITNESS WHEREOF, the parties have executed and attested this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. ATTEST: Qsr Secretary of the Boar of Directors CITY OF SAN JUAN CAPISTRANO By: Mayor SAN JUAN BASIN AUTHORITY B• i . . . . . . .. . ....................... Chairman of the Board of Directors THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee IN Authorized Officer OHSUSA:754116349 S-1 IN WITNESS WHEREOF, the parties have executed and attested this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. ATTEST: Secretary of the Board of Directors CITY OF SAN JUAN CAPISTRANO By: Mayor SAN JUAN BASIN AUTHORITY By: Chairman oft Board of Directors THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Authorized Officer 0HSU8A:754 t 16349 S-1