CITY OF SAN MATEO. and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee TRUST AGREEMENT. Dated as of January 1, 2012.

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1 CITY OF SAN MATEO and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee TRUST AGREEMENT Dated as of January 1, 2012 Relating to City of San Mateo Community Facilities District No (Bay Meadows) Special Tax Bonds, Series 2012

2 TRUST AGREEMENT This Trust Agreement (the Trust Agreement ) is made and entered into as of January 1, 2012, by and between the CITY OF SAN MATEO, a public municipality of the State of California (the City ), and 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 and authorized to accept and execute trusts of the character herein set forth, as Trustee (the Trustee ); WITNESSETH: WHEREAS, on August 11, 2008, the City duly adopted its Resolution No. 85 (2008) establishing the Community Facilities District No (Bay Meadows), City of San Mateo, County of San Mateo, State of California (the Community Facilities District ) for the purpose of financing the acquisition and construction of certain public facilities, the provision of certain services in and for the Community Facilities District, and to fund certain development fees; and WHEREAS, at an election in the Community Facilities District that was held on August 11, 2008, the qualified electors of the District duly authorized the issuance of bonds in the aggregate principal amount of one-hundred and twenty million dollars ($120,000,000) for the purpose of financing the public facilities and the fees; and WHEREAS, on October 3, 2011, the City instituted change proceedings to alter and lower the rates of the special tax and to reduce the amount of authorized bonds by adopting its Resolution of Consideration No. 113 (2011); and WHEREAS, at an election in the Community Facilities District that was held on November 21, 2011, the qualified electors of the District duly approved the proposed changes, which included reducing the authorized issuance of bonds to the aggregate principal amount of not to exceed ninety-two million dollars ($92,000,000) for the purpose of financing the public facilities and the fees; and WHEREAS, the City has determined to issue its City of San Mateo Community Facilities District No (Bay Meadows) Special Tax Bonds, Series 2012 (the Bonds ) in the aggregate principal amount of million, hundred thousand dollars ($,_00,000) pursuant to and secured by this Trust Agreement; and WHEREAS, all things necessary to cause the Bonds, when executed by the City and authenticated by the Trustee and delivered as provided herein, to be legal special tax obligations of the City, enforceable in accordance with their terms, and to constitute this Trust Agreement a valid agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery hereof and the execution and delivery of the Bonds, subject to the terms hereof, have in all respects been duly authorized; NOW, THEREFORE, THIS TRUST AGREEMENT WITNESSETH, that in order to secure the payment of the interest on and principal of and redemption premiums, if any, on all Bonds at any time issued and outstanding hereunder according to their tenor, and to secure

3 the observance and performance of all the agreements, conditions, covenants and terms therein and herein set forth, and to declare the conditions and terms upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual agreements and covenants herein contained and of the purchase and acceptance of the Bonds by the respective owners thereof from time to time, and for other valuable consideration, the receipt of which is hereby acknowledged, the City does hereby agree and covenant with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows: ARTICLE I DEFINITIONS; EQUAL SECURITY SECTION Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any Supplemental Trust Agreement and of the Bonds and of any certificate, opinion, report, request or other document mentioned herein or therein have the meanings defined herein. The following definitions shall be equally applicable to both the singular and plural forms of any of the terms defined herein. Acquisition and Construction Fund Acquisition and Construction Fund means the Bay Meadows Community Facilities District Acquisition and Construction Fund established pursuant to Section 4.04 and maintained by the Trustee. Additional Bonds Additional Bonds means Bonds other than the Series 2012 Bonds and that are issued pursuant to Sections 2.12 and Authorized Representative Authorized Representative means any of the following officers of the City: the Mayor, the City Manager, the Finance Director, the City Attorney, the Director of Public Works, and any other officer specifically authorized to act in the premises by the City Council. Average Annual Debt Service Average Annual Debt Service means the average over all Bond Years, for all Outstanding Bonds, of the annual debt service from the date of the Bonds to their maturity, including: (1) the principal amount of all such Outstanding Bonds payable in such Bond Year either at maturity or pursuant to a Sinking Account Payment; and (2) the interest payable on the aggregate principal amount of such Bonds Outstanding in such Bond Year assuming such Bonds are retired as scheduled. 2

4 Bond Year September 1. Bond Year means the period from September 2 through the following Bonds, Serial Bonds, Term Bonds Bonds means the special tax bonds of the City, authorized by the Community Facilities District, at any time Outstanding hereunder or under any Supplemental Trust Agreement, that are executed, issued and delivered in accordance with the provisions hereof or of any Supplemental Trust Agreement and that were authorized at the special election held in the Community Facilities District on August 11, 2008, which authorization was amended at the special election held in the Community Facilities District on November 21, Serial Bonds means the Bonds for which no Mandatory Sinking Account Payments are established. Term Bonds means the Bonds which are redeemable or payable on or before their specified maturity date or dates from the Mandatory Sinking Account Payments established for the purpose of redeeming or paying such Bonds on or before their specified maturity date or dates. Certificate of the City Certificate of the City means an instrument in writing signed by an Authorized Representative. City City Clerk Closing Date City means the City of San Mateo, California. City Clerk means the City Clerk of the City. Closing Date, for purposes of the Series 2012 Bonds, means, 2012, the date upon which the Series 2012 Bonds are delivered. Code Code means the Internal Revenue Code of 1986 and the regulations issued thereunder from time to time, and in this regard reference to any particular section of the Code shall include reference to any successor to such section of the Code. City Council City Council means the City Council of the City. 3

5 Community Facilities District Community Facilities District means Community Facilities District No (Bay Meadows), City of San Mateo, County of San Mateo, State of California, a community facilities district duly organized by the City Council and existing in the City under and by virtue of the Law. Costs of Issuance Account Costs of Issuance Account means the Bay Meadows Community Facilities District Costs of Issuance Account established pursuant to Section 4.03 and maintained by the Trustee. Debt Service Debt Service means, for any period, the sum of (1) the interest payable during such period on all Outstanding Bonds, assuming that all Outstanding Serial Bonds are retired as scheduled and that all Outstanding Term Bonds are redeemed or paid as scheduled at the times of and in amounts equal to the sum of all Mandatory Sinking Account Payments (but excluding the amount of any such interest funded from the proceeds of the sale of Bonds or investment earnings thereon), plus (2) the principal amount of all Outstanding Serial Bonds maturing by their terms in such period, plus (3) the aggregate amount of all Mandatory Sinking Account Payments required to be deposited in all Sinking Accounts in such period. For purposes of any test for the issuance of Refunding Bonds, Debt Service shall be deemed to include Debt Service on the proposed Refunding Bonds but shall not include Debt Service on any Bonds proposed to be defeased concurrently. Developer Development Fees Developer means Bay Meadows Main Track Investors, LLC. Development Fees means the development impact fees to be financed with proceeds of the Bonds. Expense Fund Expense Fund means the Bay Meadows Community Facilities District Expense Fund established pursuant to Section 5.03 and maintained by the Trustee. Expenses Expenses means all expenses paid or incurred by the City for the cost of planning and designing the Improvements or the financing of the Development Fees, including the cost of environmental evaluations of the Improvements and the costs associated with the creation of the Community Facilities District, the issuance of the Bonds, the determination of the amount of the Special Tax, the collection of the Special Tax and the payment of the Special Tax, 4

6 or costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District, and any other expenses incidental to the acquisition and construction of the Improvements or the financing of the Development Fees; all as determined in accordance with Generally Accepted Accounting Principles. Federal Securities Federal Securities means: (1) Cash; (2) Obligations of, or obligations guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America including: A. U.S. Treasury obligations; B. All direct or fully guaranteed obligations; C. Farmers Home Administration; D. General Services Administration; E. Guaranteed Title XI financing; F. Government National Mortgage Association (GNMA); and G. U.S. Treasury - State and Local Government Series. (3) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: Fiscal Year A. Export-Import Bank; B. Rural Economic Community Development Administration; C. U.S. Maritime Administration; D. Small Business Administration; E. U.S. Department of Housing & Urban Development (PHAs); F. Federal Housing Administration; and G. Federal Financing Bank. Fiscal Year means the twelve-month period terminating on June 30 of each year, or any other annual accounting period hereafter selected and designated by the City as its Fiscal Year in accordance with applicable law. 5

7 Generally Accepted Accounting Principles Generally Accepted Accounting Principles means the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor. Holder Holder means any person who shall be the registered owner of any Outstanding Bond, as shown on the registration books maintained by the Trustee pursuant to Section Improvements Improvements means the public capital improvements authorized to be financed under the Community Facilities District and that are to be acquired by the City from the Developer. Independent Certified Public Accountant Independent Certified Public Accountant means any certified public accountant or firm of such accountants duly licensed and entitled to practice and of recognized national reputation as a verification agent, appointed and paid by the City, and who, or each of whom: (1) is in fact independent and not under the domination of the City; (2) does not have a substantial financial interest, direct or indirect, in the operations of the City; and (3) is not connected with the City as an officer or employee of the City, but who may be regularly retained to audit the accounting records of and make reports thereon to the City. Interest Payment Date Interest Payment Date means March 1 and September 1 of each year, commencing September 1, Law Law means the Mello-Roos Community Facilities Act of 1982, as amended (being Sections et seq. of the Government Code of the State of California) and all laws amendatory thereof or supplemental thereto. 6

8 Mandatory Sinking Account Payments Mandatory Sinking Account Payments means the payments required hereby and by all Supplemental Trust Agreements to be deposited in all Sinking Accounts established for the payment of all Term Bonds. Maximum Annual Debt Service Maximum Annual Debt Service means the maximum sum obtained for any Bond Year prior to the final maturity of Bonds by totaling the following for each Bond Year: Moody s (1) The amount of all such Outstanding Bonds payable in such Bond Year; (2) The principal amount of any such Bonds scheduled to be called and redeemed in such Bond Year; and (3) The interest payable on the aggregate principal amount of such Outstanding Bonds in such Bond Year if such Outstanding Bonds are retired as scheduled. Moody s means Moody s Investors Service, Inc., a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors or assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term Moody s shall be deemed to refer to any other nationally recognized securities rating agency selected by the City. Opinion of Counsel by the City. Opinion of Counsel means a written opinion of counsel retained or employed Outstanding Outstanding, when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 8.02) all Bonds except: (1) Bonds cancelled and destroyed by the Trustee or delivered to the Trustee for cancellation and destruction; (2) Bonds paid or deemed to have been paid within the meaning of Section 10.01; and (3) Bonds in lieu of or in substitution for which other Bonds shall have been executed by the City and authenticated and delivered by the Trustee pursuant to Section

9 Permitted Investments Permitted Investments means any of the following obligations if and to the extent that, at the time of making the investment, they are permitted by law: (1) Direct obligations of, or obligations the interest on and principal of which are unconditionally guaranteed by, the United States of America, including obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States of America and including a receipt, certificate or any other evidence of an ownership interest in such an obligation or in specified portions thereof (which may consist of specified portions of interest thereon); (2) Obligations issued by the Resolution Funding Corporation, the Student Loan Marketing Association, the Federal National Mortgage Association, the Federal Home Loan Bank Board, the Federal Farm Credit Bank or the Federal Home Loan Mortgage Association, or obligations, participations or other instruments of or issued by, or fully guaranteed as to interest and principal by, the Government National Mortgage Association (excluding stripped mortgage backed securities which are valued at greater than par on the unpaid principal); (3) Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, which are eligible for purchase through a bank that is a member of the Federal Reserve System and which are drawn on any such commercial bank the short-term obligations of which are rated in the highest letter and numerical rating category as provided by each of the Rating Agencies; provided, that purchases of eligible bankers acceptances may not exceed one hundred eighty (180) days maturity; (4) Commercial paper of prime quality of the highest letter and numerical rating category as provided by each of the Rating Agencies, which commercial paper is limited to issuing corporations that are organized and operating within the United States of America and that have total assets in excess of five hundred million dollars ($500,000,000) and that have an A or higher rating for the issuer s unsecured debentures, other than commercial paper, as provided by each of the Rating Agencies; provided, that purchases of eligible commercial paper may not exceed two hundred seventy (270) days maturity nor represent more than ten percent (10%) of the outstanding commercial paper of an issuing corporation; or medium-term notes with a maximum maturity of five (5) years and subject to the credit qualifications listed above; (5) Negotiable and non-negotiable certificates of deposit or thrift or bank notes issued by a state or national bank or a state-licensed branch of a foreign bank that have maturities of not more than three hundred sixty-five (365) days and that are fully insured by the Federal Deposit Insurance Corporation or the short term obligations of which state or national bank or statelicensed branch of a foreign bank are rated no lower than Al by Moody s and A+ by Standard & Poor s; (6) Any repurchase agreement or reverse repurchase agreement of any securities enumerated in subdivisions (1) and (2) of this definition with any state or national bank or government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York, and with respect to any such repurchase agreement, it is 8

10 either: (A) with any institution which has debt rated no lower than Al by Moody s and A+ by Standard & Poor s or whose commercial paper is rated no lower than P-1 by Moody s and A- 1 by Standard & Poor s; (B) with any corporation or other entity that falls under the jurisdiction of the Federal Bankruptcy Code; provided, that (1) the term of such repurchase agreement is less than one (1) year or due on demand; (2) the Finance Director or a third party acting solely as agent for the Finance Director has possession of the collateral; (3) the market value of the collateral (as determined at least once in every seven (7) days) exceeds the principal amount of the repurchase agreement plus accrued interest and the market value of the collateral is maintained at levels acceptable to each of the Rating Agencies; (4) failure to maintain the requisite collateral levels will require the Finance Director to liquidate the collateral immediately; and (5) the repurchase agreement securities are free and clear of any third-party lien or claim; or (C) with financial institutions insured by the Federal Deposit Insurance Corporation or any broker-dealer with retail customers which falls under the jurisdiction of the Securities Investors Protection Corporation; provided, that (1) the market value of the collateral (as determined at least once in every seven (7) days) exceeds the principal amount of the repurchase agreement plus accrued interest and the market value of the collateral is maintained at levels acceptable to each of the Rating Agencies; (2) the Finance Director or a third party acting solely as agent for the Finance Director has possession of the collateral; (3) the Finance Director has a perfected first priority security interest in the collateral; (4) the collateral is free and clear of third-party liens and in the case of a Securities Investors Protection Corporation broker was not acquired pursuant to a repurchase agreement or reverse repurchase agreement; and (5) failure to maintain the requisite collateral percentage will require the Finance Director to liquidate the collateral immediately; and with respect to any such reverse repurchase agreement, the investment is solely done to supplement the income normally received from such securities; (7) Certificates, notes, warrants, bonds or other evidence of indebtedness of the State of California or any local agencies therein which are rated in the highest short-term rating category or within one of the three highest long-term rating categories by each of the Rating Agencies (excluding securities that do not have a fixed par value and/or whose terms do not provide a fixed dollar amount at maturity or call date); (8) Interest-bearing demand or time deposits (including certificates of deposit) in a state or national bank fully insured by the Federal Deposit Insurance Corporation; provided, that not greater than the amount that is fully insured by the Federal Deposit Insurance Corporation, in the aggregate, shall be deposited in any one financial institution; (9) Investments in units of a money-market fund portfolio that is rated in the highest letter and numerical rating category by each of the Rating Agencies and that is composed of obligations guaranteed by the full faith and credit of the United States of America or repurchase agreements collateralized by such obligations; (10) Investment agreements with any corporation, including banking or financial institutions, provided that: (a) the long-term debt of the provider of any such investment agreement is rated, at the time of investment, in one of the two highest rating categories offered by each 9

11 Rating Agency (without regard to gradations of plus or minus, or numerical gradations, within such category), and (b) any such agreement shall include a provision to the effect that if (a) the longterm debt rating of the provider of such agreement is downgraded below the second highest rating category offered by any Rating Agency (without regard to gradations of plus or minus, or numerical gradations, within such category), (b) such provider shall default under such investment agreement, or (c) there shall be an event of bankruptcy of such provider, then the City shall have the right to withdraw or cause the Trustee to withdraw all funds invested in such agreement and thereafter to invest such funds pursuant to this Trust Agreement, and (c) any such investment agreement permits withdrawal upon reasonable notice for any purpose authorized for the use of the invested funds under this Trust Agreement. (11) Investments in the Local Agency Investment Fund maintained by the Office of the California State Treasurer, which such investments shall only be invested in the special portion of the Local Agency Investment Fund for bond proceeds that are not subject to arbitrage restrictions; provided, that the Finance Director shall be designated as the authorized authority to transact these investments; (12) Investments in the County of San Mateo Pooled Fund; and (13) Investments approved in writing by each of the Rating Agencies. Prepayment Fund Prepayment Fund means the Bay Meadows Community Facilities District Prepayment Fund established pursuant to Section 5.10 and maintained by the Trustee. Principal Corporate Trust Office Principal Corporate Trust Office means the corporate trust office of the original Trustee at which at any particular time corporate trust business shall be administered, or such other office as it shall designate; and any such office designated by any successor Trustee. Rate and Method Rate and Method means the Rate and Method of Apportionment of Special Tax adopted by the City Council as part of the Resolution of Consideration of October 3, 2011 and approved by the election of November 21, 2011, as the same may be amended from time to time. Rating Agencies Rating Agencies means Moody s and Standard & Poor s. 10

12 Rating Agency Rebate Fund Rating Agency means either Moody s or Standard & Poor s. Rebate Fund means the Bay Meadows Community Facilities District Rebate Fund established pursuant to Section 6.03, to be maintained by the City. Redemption Fund Redemption Fund means the Bay Meadows Community Facilities District Redemption Fund established pursuant to Section 5.04 and maintained by the Trustee. Refunding Bonds Refunding Bonds means Bonds issued under both Section and related provisions of the Law, and under Section 2.14 and related provisions hereof. Required Bond Reserve Required Bond Reserve means, as of any date of calculation, an amount equal to the lesser of (a) Maximum Annual Debt Service, (b) 10% of the proceeds (within the meaning of Section 148 of the Code) of all Outstanding Bonds or (c) 125% of Average Annual Debt Service. Reserve Fund Reserve Fund means the Bay Meadows Community Facilities District Reserve Fund established pursuant to Section 4.02 and maintained by the Trustee. Resolution of Change Resolution of Change means Resolution No. (2011) adopted by the City Council on November 21, Resolution of Consideration Resolution of Consideration means Resolution No. 113 (2011) adopted by the City Council on October 3, 2011, which was made effective in amending the Resolution of Formation by the Resolution of Change. Resolution of Formation Resolution of Formation means Resolution No. 85 (2008), adopted by the City Council on August 11,

13 Series Series means all Bonds of like designation authenticated and delivered on original issuance at the same time pursuant to this Trust Agreement or a Supplemental Trust Agreement and any Bond or Bonds thereafter delivered in lieu of or as substitution for any of such Bonds pursuant to this Trust Agreement. Series 2012 Bonds Series 2012 Bonds means the million, -hundred thousand dollars ($,_00,000) principal amount of special tax bonds of the City at any time Outstanding hereunder that are executed, issued and delivered in accordance with Section 2.01(a) and the other provisions hereof. Services Services means the services authorized to be funded by Special Tax revenues as described in the Resolution of Formation. Services Fund Services Fund means the Bay Meadows Community Facilities District Services Fund established pursuant to Section 5.07 and maintained by the Trustee. Sinking Account Sinking Account means the account referred to by that name in the Redemption Fund established pursuant to Section Special Tax Special Tax means the special tax authorized to be levied and collected annually on all Taxable Property in the Community Facilities District under and pursuant to the Rate and Method. Special Tax Fund Special Tax Fund means the City of San Mateo Community Facilities District No (Bay Meadows) Special Tax Fund established pursuant to Section 5.01 and maintained by the Trustee. Standard & Poor s Standard & Poor s means Standard & Poor s Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation duly organized and existing under and by virtue of the laws of the State of New York, and its successors or assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities 12

14 rating agency, then the term Standard & Poor s shall be deemed to refer to any other nationally recognized securities rating agency selected by the City. Supplemental Trust Agreement Supplemental Trust Agreement means any Trust Agreement then in full force and effect that has been made and entered into by the City and the Trustee, amendatory of or supplemental hereto; but only to the extent that such Supplemental Trust Agreement is specifically authorized hereunder. Surplus Fund Surplus Fund means the Bay Meadows Community Facilities District Surplus Fund established pursuant to Section 5.09 and maintained by the City. Tax Certificate Tax Certificate means the certificate delivered upon the issuance of the Bonds relating to Section 148 of the Code. Taxable Property Trust Agreement Taxable Property has the meaning given in the Rate and Method. Trust Agreement means this Trust Agreement and includes all Supplemental Trust Agreements. Trustee Trustee means 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 and authorized to accept and execute trusts of the character herein set forth, at its Principal Corporate Trust Office, or any other bank or trust company having a corporate trust office in Los Angeles or San Francisco, California, which may at any time be substituted in its place as provided in Section Written Request of the City Written Request of the City means an instrument in writing signed by an Authorized Representative. SECTION Equal Security. In consideration of the acceptance of the Bonds by the Holders thereof, this Trust Agreement shall be deemed to be and shall constitute a contract between the City and the Holders from time to time to secure the full and final payment of the interest on and principal of and redemption premiums, if any, on all Bonds which may from time to time be authorized, sold, executed, authenticated and delivered hereunder, subject 13

15 to the agreements, conditions, covenants and terms contained herein; and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the City shall be for the equal and proportionate benefit, security and protection of all Holders without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number thereof or the time of execution, authentication or delivery thereof or otherwise for any cause whatsoever, except as expressly provided herein or therein. ARTICLE II AUTHORIZATION AND ISSUANCE OF THE SERIES 2012 BONDS AND GENERAL PROVISIONS FOR THE BONDS SECTION Authorization and Purpose of Series 2012 Bonds. (a) The City Council has reviewed all proceedings heretofore taken relative to the authorization of the Series 2012 Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of the Series 2012 Bonds do exist, have happened and have been performed in due time, form and manner as required by the Law, and the City is now authorized, pursuant to each and every requirement of the Law and hereof, to issue the Series 2012 Bonds in the aggregate principal amount of million, -hundred thousand dollars ($,_00,000) in the form and manner provided herein. The Series 2012 Bonds shall be entitled to the benefit, protection and security of the provisions hereof, shall be designated as the City of San Mateo Community Facilities District No (Bay Meadows) Special Tax Bonds, Series 2012, and shall be issued by the City under and pursuant to the Law and under and pursuant hereto. The Series 2012 Bonds may contain or have endorsed thereon such other descriptive provisions, specifications and words not inconsistent with the provisions hereof as may be desirable or necessary to comply with custom or the rules of any securities exchange or commission or brokerage board or otherwise as may be determined by the City prior to the delivery thereof. (b) The purpose for which the Bonds are to be issued is to provide funds to finance the Improvements and the Development Fees. SECTION Denominations of Bonds. The Bonds shall be issued as fully registered Bonds in denominations of five thousand dollars ($5,000) or any integral multiple of five thousand dollars ($5,000) (not exceeding the principal amount of Bonds maturing at any one time). SECTION Certain Provisions of the Bonds. (a) The interest on and principal of and redemption premiums, if any, on the Bonds shall be payable in lawful money of the United States of America at the Principal Corporate Trust Office of the Trustee. (b) Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (i) it is authenticated on a day during the 14

16 period from the sixteenth (16th) day of the calendar month next preceding an Interest Payment Date to such Interest Payment Date, both days inclusive, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated on a day on or before the fifteenth (15th) day of the month preceding the first Interest Payment Date, in which event it shall bear interest from its date; provided, that if at the time of authentication of any Bond interest is then in default on the Bond, the Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment of interest on the Bond. Payment of interest on the Bonds due on or before the maturity or prior redemption thereof shall be made only to the Holder whose name appears in the registration books required to be kept by the Trustee pursuant to Section 2.08 at the close of business as of the 15th day of the calendar month preceding the month in which the applicable Interest Payment Date falls, such interest to be paid by check mailed by first class mail on each such Interest Payment Date to such registered owner at his address as it appears on such books, except that in the case of a Holder of one million dollars ($1,000,000) or more in principal amount of Bonds then Outstanding, payment shall be made at such Holder s option by wire transfer on any Interest Payment Date of immediately available funds to an account in a bank or trust company or savings bank that is a member of the Federal Reserve System and that is located in the United States of America according to written instructions provided by such Holder to the Trustee at least fifteen (15) days before each such Interest Payment Date. Payment of the principal of and redemption premiums, if any, on the Bonds shall be made only to the Holder whose name appears in the registration books required to be kept by the Trustee pursuant to Section 2.08, such principal and redemption premiums, if any, to be paid only on the surrender of the Bonds at the Principal Corporate Trust Office of the Trustee at maturity or on redemption prior to maturity. All such payments of interest and principal and redemption premium, if any, on any Bond shall be valid and effectual to satisfy and discharge the liability on such Bond to the extent of the sum or sums so paid. (c) The Bonds shall recite in substance that the interest on and principal of and redemption premiums, if any, on the Bonds are payable solely from the proceeds of the Special Tax, and that the City is not obligated to pay the Bonds except from the proceeds of the Special Tax; that the general funds and assets of the City are not liable and the full faith and credit of the City is not pledged for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds, and that no tax or assessment other than the Special Tax shall ever be levied or collected to pay the interest on or principal of or redemption premiums, if any, on the Bonds; that the Bonds are not secured by a legal or equitable pledge of or charge, lien or encumbrance upon any of the property of the City or any of its income or receipts except the money so pledged in the Special Tax Fund; and that neither the payment of the interest on or principal of or redemption premiums, if any, on the Bonds is a general debt, liability or obligation of the City. (d) From and after the issuance of the Bonds the findings and determinations of the City Council related to the Bonds shall be conclusive evidence of the existence of the facts so found and determined in any action or proceeding in any court in which the validity of such Bonds is at issue, and no bona fide purchaser of any of such Bonds shall be required to see to the existence of any fact or to the performance of any condition or to the taking of any proceeding required prior to such issuance or to the application of the purchase price paid for such Bonds. The validity of the issuance of the Bonds shall not be dependent on or affected in any way by (i) any proceedings taken by the City for the acquisition or construction of any Improvements, or 15

17 (ii) any contracts made by the City in connection therewith, or (iii) the failure to complete the acquisition or construction of any Improvements. The recital contained in the Bonds that the Bonds are issued under and pursuant to the Law and under and pursuant hereto shall be conclusive evidence of their validity and of the regularity of their issuance and all Bonds shall be incontestable from and after their issuance. The Bonds shall be deemed to be issued, within the meaning hereof, whenever the definitive Bonds (or any temporary Bonds exchangeable therefor) have been delivered to the purchaser thereof and the purchase price thereof received. SECTION Date and Maturity Dates of and Interest Rates on and Mandatory Sinking Account Payments for Series 2012 Bonds; Establishment of 2042 Sinking Account in the Redemption Fund for the Series 2012 Bonds. The Series 2012 Bonds shall be dated, (a) The Series 2012 Bonds shall mature on the dates and in the principal amounts and shall bear interest at the rates per annum as set forth in the following schedule: * Term Bond Maturity Date (September 1) Principal Amount Interest Rate 2014 $,000.% 2015, , , , , , , , , , , , , , *,000. (b) A 2042 Sinking Account (the 2042 Sinking Account ) is hereby established in the Redemption Fund for the 2042 Mandatory Sinking Account Payments (the 2042 Mandatory Sinking Account Payments ) for the mandatory redemption and payment of the Series 2012 Bonds maturing on September 1, 2042 (the 2042 Term Bonds ), which payments shall become due on the dates and in the amounts as set forth in the following schedule (except that if any 2042 Term Bonds shall have been redeemed pursuant to Section 2.05(b) and/or Section 2.05(c), the amounts of the 2042 Mandatory Sinking Account Payments shall be reduced proportionately by the principal amount of all such 2042 Term Bonds so redeemed), namely: 16

18 Payment Date (September 1) Minimum Sinking Account Account Payment *Maturity Date $, , , , , , , , , , , , , *,000 All such 2042 Mandatory Sinking Account Payments shall be deposited in the 2042 Sinking Account, which account the Trustee hereby agrees to maintain so long as any of the 2042 Term Bonds are Outstanding. All money in the 2042 Sinking Account shall be used and withdrawn by the Trustee at any time upon receipt of a Written Request of the City for the purchase of the 2042 Term Bonds at public or private sale as and when and at such prices (including brokerage and other charges) as the City may in its discretion determine, but not to exceed the principal amount of such Bonds. All money in the 2042 Sinking Account on September 1 of each year, beginning on September 1, 2029, shall be used and withdrawn by the Trustee on such September 1 for the mandatory redemption or payment of the 2042 Term Bonds, and the Trustee hereby agrees and covenants with the Holders of the Bonds to call and redeem in accordance with Article III of this Trust Agreement or pay such Bonds from the 2042 Mandatory Sinking Account Payments deposited in the 2042 Sinking Account pursuant to this paragraph whenever on September 1 of any year there is money in the 2042 Sinking Account available for such purpose. SECTION Redemption Prices of Series 2012 Bonds. (a) The 2042 Term Bonds are subject to mandatory redemption by the City prior to their maturity date in part on any September 1 on or after September 1, 2029, to and including September 1, 2041 solely from money derived by the City from the 2042 Mandatory Sinking Account Payments deposited in the 2042 Sinking Account pursuant to Section 2.04(b), upon mailed notice as provided herein, at the principal amount thereof together with accrued interest thereon to the date of redemption. (b) The Series 2012 Bonds are subject to redemption as a result of property owner prepayments of the Special Tax obligation prior to their respective maturity dates as a 17

19 whole or in part on any date on or after September 1, 201_ solely from money derived by the City from prepayments of the Special Tax under the Law, upon mailed notice as provided herein, at the following redemption prices (computed upon the principal amount of the Bonds or portions thereof called for redemption) together with accrued interest thereon to the date of redemption, to wit: 102% if redeemed prior to or on September 1, 2022; and 100% if redeemed on any date after September 1, 2022, and prior to maturity. (c) The Series 2012 Bonds are not subject to optional redemption prior to September 1, Thereafter the Series 2012 Bonds are subject to optional redemption by the City prior to their respective maturity dates as a whole or in part on any date from money derived by the City from any source other than Mandatory Sinking Account Payments or property owner prepayments of the Special Tax obligation, upon mailed notice as provided herein, at the redemption price of 100% of the principal amount of the Bonds or portions thereof called for redemption, without premium, together with accrued interest thereon to the date of redemption. SECTION Form of Series 2012 Bonds. The Series 2012 Bonds and the authentication endorsement and the form of assignment to appear thereon shall be substantially in the forms set forth in Exhibit A hereto. SECTION Execution of Bonds. The Bonds shall be signed on behalf of the City by the manual or facsimile signature of the Mayor of the City and attested by the manual or facsimile signature of the City Clerk. In case any officer of the City who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been delivered to the purchaser by the Trustee, such Bonds may nevertheless be delivered and issued and, upon such delivery and issuance, shall be as binding upon the City as though such officer who signed the same had continued to be such officer until such delivery and issuance. Also, any Bond may be signed on behalf of the City by any person who on the actual date of the execution of such Bond shall be the proper officer of the City, although on the nominal date of such Bond such person shall not have been such officer of the City. Only those Bonds that bear thereon a certificate of authentication manually executed by the Trustee shall be entitled to any benefit, protection or security hereunder or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly authorized, sold, executed, authenticated and delivered hereunder and are entitled to the benefits hereof. SECTION Transfer and Exchange of Bonds. The Trustee shall keep at its Principal Corporate Trust Office sufficient books for the transfer and exchange of the Bonds, which books shall at all times during normal business hours with reasonable prior notice be open to inspection by the City or by any Holder. Any Bond may, in accordance with its terms, be transferred or exchanged on such books by the person in whose name it is registered, in person or by his duly authorized attorney, upon payment by the Holder requesting such transfer or exchange of any tax or other governmental charge required to be paid with respect to such transfer or exchange and upon surrender of such Bond for cancellation accompanied by delivery of a duly executed written instrument of transfer or exchange in a form acceptable to the Trustee. 18

20 Whenever any Bond or Bonds shall be surrendered for transfer or exchange, the City shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds of the same maturity date and of authorized denominations for the same aggregate principal amount, except that neither the City nor the Trustee shall be required (i) to transfer or exchange any Bonds during the fifteen-day period prior to the selection of any Bonds for redemption under Article III, or (ii) to transfer or exchange any Bond which has been selected for redemption in whole or in part, except the unredeemed portion of such Bond selected for redemption in part, from and after the day that such Bond has been selected for redemption in whole or in part under Article III. SECTION Mutilated, Destroyed, Stolen or Lost Bonds. In case any Bond shall become mutilated in respect of the body of such Bond or shall be believed by the City to have been destroyed, stolen or lost, upon proof of ownership satisfactory to the City and the Trustee and upon the surrender of such mutilated Bond at the Principal Corporate Trust Office of the Trustee, or upon the receipt of evidence satisfactory to the City and the Trustee of such destruction, theft or loss and upon receipt of indemnity satisfactory to the City and the Trustee, and also upon payment of all expenses incurred by the City and the Trustee in the premises, the City shall execute and the Trustee shall authenticate and deliver at its Principal Corporate Trust Office a new Bond or Bonds of the same maturity date for the same aggregate principal amount in authorized denominations of like tenor and date and bearing such numbers and notations as the Trustee shall determine in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for the Bond so destroyed, stolen or lost. If any such destroyed, stolen or lost Bond shall have matured or shall have been called for redemption, payment of the amount due thereon may be made by the Trustee upon receipt of like proof, indemnity and payment of expenses. Any replacement Bonds issued pursuant to this section shall be entitled to equal and proportionate benefits with all other Bonds issued hereunder, and the City and the Trustee shall not be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and the replacement Bond shall be treated as one and the same. SECTION Temporary Bonds. Any Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds shall be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City, shall be issued in fully registered form, shall contain such reference to any of the provisions hereof as may be appropriate and shall be executed by the City upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds, it shall execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds may be surrendered in exchange therefor at the Principal Corporate Trust Office of the Trustee, and the Trustee shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations of the same maturity date or dates, and until so exchanged, the temporary Bonds shall be entitled to the same benefits as definitive Bonds issued hereunder. 19

21 SECTION Use of Depository for Bonds. (a) The Depository Trust Company, in New York, New York, is hereby appointed depository for the Bonds, and the Bonds shall be initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, and shall be initially issued as one Bond for each of the maturities in the principal amounts set forth herein, and registered ownership of the Bonds, or any portion thereof, may not thereafter be transferred except: (i) To any successor of Cede & Co., as nominee of The Depository Trust Company, or its nominee, or to any substitute depository designated pursuant to clause (ii) of this section (a substitute depository ); provided, that any successor of Cede & Co., as nominee of The Depository Trust Company, or any substitute depository, shall be qualified under any applicable laws to provide the services proposed to be provided by it; (ii) To any substitute depository not objected to by the Trustee, upon (1) the resignation of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository, or (2) a determination by the City to substitute another depository for The Depository Trust Company or its successor because The Depository Trust Company or its successor (or any substitute depository or its successor) is no longer able to carry out its functions as depository; provided, that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) To any person as provided below, upon (1) the resignation of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository, or (2) a determination by the City to remove The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository. (b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) hereof, upon receipt of the Bonds by the Trustee, together with a Written Request of the City to the Trustee, a new Bond for each maturity date of the Bonds shall be executed by the City and authenticated and delivered by the Trustee in the aggregate principal amount of the Bonds so received, in such denominations and registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such Written Request of the City. In the case of any transfer pursuant to clause (iii) of subsection (a) hereof, upon receipt of the Bonds by the Trustee, together with a Written Request of the City to the Trustee, a new Bond or Bonds for each maturity date of the Bonds shall be executed by the City and authenticated and delivered by the Trustee in the aggregate principal amount of the Bonds so received, in such denominations and registered in the names of such persons as are requested in such Written Request of the City, subject to the limitations of Section 2.02, and thereafter, the Bonds shall be transferred pursuant to Section 2.08; provided, that the Trustee shall not be required to deliver such new Bonds on a date prior to sixty (60) days after receipt of such Written Request of the City. 20