TRUST AGREEMENT RICHMOND JOINT POWERS FINANCING AUTHORITY.

Transcription

1 TRUST AGREEMENT between the RICHMOND JOINT POWERS FINANCING AUTHORITY. and UNION BANK OF CALIFORNIA, N. as Trustee Dated as of May 1, Richmond Joint Powers Financing Authority Point Portrero Lease Revenue Note DOCSSFI:

2 ... ;... TABLE OF CONTENTS Page ARTICLE I DEFINITIONS. SECTION Definitions... ARTICLE II ISSUANCE OF NOTE; GENERAL NOTE PROVISIONS... SECTION Authorization and Purpose of Note... SECTION SECTION 2. Terms of the Note... Mandatory Prepayment Upon Call of the Note... SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION 11. SECTION Validity Reset of Interest Rate and Payment Schedule Reset Rate Formula... 9 Prepayment of the Note... Form of Note... Execution of Note Transfer and Payment of Note... Mutilated, Destroyed, Stolen or Lost Note Procedure for the Issuance of Note of Note... 1 ARTICLE III REVENUES... SECTION Pledge of Revenues SECTION Receipt and Deposit of Revenues in the Revenue Fund... SECTION Establishment and Maintenance of Accounts for Use of Money in the Revenue Fund SECTION Application of Insurance Proceeds... SECTION Deposit and Investments of Money in Accounts and Funds... ARTICLE IV COVENANTS OF THE AUTHORITY; ASSIGNMENT TO TRUSTEE... SECTION Punctual Payment and Performance SECTION Against Encumbrances... SECTION Tax Covenants... SECTION Accounting Records and Reports SECTION Prosecution and Defense of Suits... SECTION Further Assurances... SECTION Assignment to Trustee; Enforcement of Obligations... DOCSSFl:

3 :...,... TABLE OF CONTENTS (continued) Page ARTICLE V THE TRUSTEE... SECTION The Trustee... SECTION Liability of Trustee SECTION Compensation and Indemnification of Trustee... ARTICLE VI AMENDMENT OF THE TRUST AGREEMENT SECTION Amendment of the Trust Agreement... ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF NOTEHOLDER... SECTION Events of Default and Acceleration of Maturities SECTION Application of Funds Upon Acceleration... SECTION Institution of Legal Proceedings by Trustee SECTION Non-Waiver... SECTION Actions by Trustee as Attorney-in-Fact... SECTION Remedies Not Exclusive... SECTION Limitation on Noteholder s Right to Sue.... ARTICLE VIII DEFEASANCE... SECTION Discharge ofnote... ARTICLE IX MISCELLANEOUS... SECTION Liability of Authority Limited to Revenues... SECTION Benefits of the Trust Agreement Limited to Parties... SECTION Successor Is Deemed Included In All References To Predecessor... SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION Execution of Documents by Noteholder... Waiver of Personal Liability Content of Certificates Accounts and Funds; Business Days... Notices...,... Article and Section Headings and References... Partial Invalidity... Execution in Several Counterparts SECTION Amendments to Facilities Lease... EXHIBIT A... EXHIBIT B..."""""""""""""""""""""""""""""""""""""""""""""" B- EXHIBIT C... DOCSSF1: ll-

4 TABLE OF CONTENTS (continued) Page EXHIBIT D... DOCSSFl:

5 THIS TRUST AGREEMENT made and entered into as of May 1, 2004 (the "Trust Agreement ) by and between Union Bank of California, N., a national banking association duly organized and existing under and by virtue of the laws of the United States, as Trustee (the Trustee ) and the RICHMOND JOINT POWERS FINANCING AUTHORITY (the Authority ), a public entity and agency, duly organized and existing pursuant to an Agreement entided " Joint Exercise of Powers Agreement by and between the City of Richmond and the Redevelopment Agency of the City of Richmond WITNESSETH: WHEREAS, the Authority is a joint exercise of powers authority duly organized and operating pursuant to Article 1 of Chapter 5 of Division 7 of Tide 1 of the Government Code of the State of California; WHEREAS, Article 4 of Chapter 5 of Division 7 of Tide 1 of the Government Code of the State of California authorizes and empowers the Authority to issue notes to assist local agencies in financing certain projects whenever a local agency determines that there are significant public benefits from so doing; WHEREAS, the City of Richmond (the "City ) has determined that the consummation of the transactions contemplated in the Facilities Lease (as hereinafter defined) and this Trust Agreement will result in significant public benefits; WHEREAS, the Authority, the City, and the Richmond Surplus Property Authority (the "SPA") have agreed to enter into a leasing arrangement of that certain real property (as more particularly described in Exhibit A 1, the "Demised Premises ) and improvements thereon commonly known as the Point Portrero Facilities (as more particularly described in Exhibit A2, the Facilities ) in order to raise funds for the construction of an automobile shipping and warehousing facility (the "Project ); and WHEREAS, the Authority has authorized the issuance of its Point Portrero Lease Revenue Note (the "Note ), in an aggregate principal amount of $ to assist in the financing of the Project; and WHEREAS, the Note shall be issued pursuant to Article 4 of Chapter 5 of Division 7 of Tide 1 of the Government Code of the State of California; WHEREAS, in order to provide for the authentication and delivery of the Note, to establish and declare the terms and conditions upon which the Note is to be issued and secured and to secure the payment of the principal and interest thereon, the Authority has authorized the execution and delivery of this :Trust Agreement; WHEREAS, the Authority has determined that all acts and proceedings required by law necessary to make the Note, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal obligation of the Authority payable in accordance with its terms, and to constitute this Trust Agreement a valid and binding agreement of the parties hereto for the uses and purposes herein set forth in accordance with its terms, have been DOCSSFI :

6 done and taken, and the execution and delivery of this Trust Agreement have been in all respects duly authorized; NOW, THEREFORE, THIS TRUST AGREEMENT WITNESSETH, that in order to secure the payment of the principal of and the interest on the Note, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Note is to be issued and received and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Note by the N oteholder thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the Noteholder, as follows: ARTICLE I DEFINITIONS 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 any certificate, opinion, request or other document herein or therein mentioned have the meanings herein specified: Act The term "Act" means the Joint Exercise of Powers Act (being Chapter 5 of Division 7 of Tide 1 of the California Government Code, as amended) and all laws amendatory thereof or supplemental thereto. Agency Authority The term "Agency" means the Richmond Redevelopment Agency. The term "Authority" means the Richmond Joint Powers Financing Authority created pursuant to the Act and its successors and assigns in accordance herewith. A WC Base Payments The term "A WC Base Payments" means payments denominated "Base Payments under the Operating Lease, dated as of May 1, 2004, by and between the City and Auto Warehousing Company. Base Rental Payments The term "Base Rental Payments" shall have the meaning ascribed to such term in the Facilities Lease. DOCSSFI:

7 Business Day The term "Business Day" means any day other than a Saturday or Sunday or day upon which the Trustee is authorized by law to remain closed. Certificate of the Authority The term "Certificate of the Authority" means an instrument in writing signed by or on behalf of the Authority by its President, Vice President, Executive Director or Treasurer/ Auditor, or by any other officer of the Authority duly authorized by the governing board of the Authority to sign documents on its behalf hereunder. City The term "City" means the City of Richmond, a municipal corporation duly organized and existing pursuant to its Charter and the Constitution of the State. Code The term "Code" means the Internal Revenue Code of 1986, as amended, or any successor statute thereto, and any regulations promulgated thereunder. Costs of Issuance The term "Costs of Issuance" means all items of expense direcdy or indirectly payable by or reimbursable to the City or the Authority and related to the authorization, execution and delivery of the Site Lease, the Facilities Lease, the Trust Agreement, and the sale of the Note including, but not limited to, costs of preparation and reproduction of documents, filing and recording fees, initial fees and charges of the Trustee, legal fees and charges, fees and disbursements of the Placement Agent, consultants and professionals, fees and charges for preparation, execution and safekeeping of the Note, fees of the Authority and any other cost, charge or fee in connection with the original execution and delivery of the Note. Costs of Issuance Fund The term "Costs of Issuance Fund" means the fund by that name established pursuant to Section 2. 11(b). Default Rate The term "Default Rate" means the annual rate of interest borne by the Note at the time of occurrence of any Event of Default pursuant to Section 7.01 of this Trust Agreement, plus an additional 2%. Facilities Lease The term "Facilities Lease" means the Facilities Lease, dated as of May 1, 2004, between the Authority and the City, as originally executed and as it may from time to time be amended supplemented pursuant to the provisions hereof and thereof. DOCSSFI:

8 Facilities The term "Facilities" means the buildings and other facilities existing on the portion of the Demised Premises described in Exhibit A2 attached hereto and the Project. Financial Institution The Term "Financial Institution" means a state or federally chartered bank or banking association authorized to conduct business in the State. Fiscal Year The term "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. Guaranty Agreement The term "Guaranty Agreement" means the Guaranty Agreement, dated as of May 2004, by and between the Richmond Redevelopment Agency and the Trustee. Guaranty Payments Agreement. The term "Guaranty Payments" shall have the meaning given in the Guaranty Independent Certified Public Accountant The term "Independent Certified Public Accountant" means any certified public accountant or firm of such accountants duly licensed and entided to practice and practicing as such under the laws of the State or a comparable successor, appointed and paid by the Authority, and who, or each of whom -- (1) is in fact independent according to the Statement of Auditing Standards No. 1 and not under the domination of the A~thority; (2) does not have a substantial financial interest, direct or indirect, in the operations of the Authority; and (3) is not connected with the Authority as a member, officer or employee of the Authority, but who may be regularly retained to audit the accounting records of and make reports thereon to the Authority. Interest Payment Date The term "Interest Payment Date" means a date on which payment of interest is due on the Note being August 1, November 1, February 1, and May 1 of each year to which reference is made commencing on August 1, DOCSSFI :

9 Joint Powers Agreement The term " Joint Powers Agreement " means the Joint Exercise of Powers Agreement by and between the City of Richmond and the Redevelopment Agency of the City of Richmond dated December 1, 1989, as originally executed and as it may from time to time be amended or supplemented pursuant to the provisions hereof and thereof. Noteholder The term "Noteholder" means the initial registered holder of the Note, being Comerica Bank, and any transferee of the Note as shown on the registration books of the Trustee kept pursuant to Section Note Surcharge The term "Note Surcharge" means an amount payable as an additional payment on the Note pursuant to Section 2. 02(b) or Section 2. 02(c). Note Year The term "Note Year" means the twelve-month period ending on April 30 of each year to which reference is made. Opinion of Counsel The term "Opinion of Counsel" means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the Authority. Permitted Investments The term "Permitted Investments" means to the extent permitted by State law, the following obligations which may be used as permitted investments for all purposes, including defeasance investments in refunding escrow accounts:. (1) Cash deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in the next paragraph). (2) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of Treasury) the United States of America.. In the event these securities are used for defeasance, they shall be non-callable and non-prepayable. (3) Obligations of the following federal agencies so long as such obligations are backed by the full faith and credit of the United States of America. S. Export-Import Bank (Eximbank) Rural Economic Community Development Administration Federal Financing Bank General Services Administration DOCSSFl:

10 S. Maritime Administration S. Department of Housing and Urban Development (PHAs) General Services Administration Small Business Administration Government National Mortgage Association (GNMA) Federal Housing Administration Farm Credit System Financial Assistance Corporation (4) 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: a. Senior debt obligations rated in the highest long-term rating category by at least two. nationally recognized rating agencies issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC). Senior debt obligations of the Federal Home Loan Bank System. (5) u.s. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which either (a) have a rating on their short-term debt obligations rated in the highest short-term rating category of at least two nationally recognized rating agencies (b) are insured at all times by the Federal Deposit Insurance Corporation, or (c) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank). (6) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two nationally recognized rating agencies and which matures not more than 270 days after the date of purchase. (7) Investments in (a) money market funds subject to SEC Rule 2a- 7 and rated in the highest short-term rating category of at least two nationally recognized rating agencies including any such funds for which the Trustee or an affiliate provides investment management or other services and (b) public sector investment pools operated pursuant to SEC Rule 2a- 7 in which the Issuer deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short-term rating categories of at least two nationally recognized rating agencies. (8) Pre-refunded municipal obligations defined as follows: The 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 which are rated, based on an irrevocable escrow accountor fund (the "escrow ), in the highest long-term rating category of at least two nationally recognized rating agencies; or which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and DOCSSFI :

11 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 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. (9) General obligations of states with a short-term rating in one of the two highest rating categories and a long-term rating in one of the two highest rating categories of at least two nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less &equendy than annually. The value of the above investments, other than cash, shall be determined as follows: Value " which shall be determined as of the end of the month, means "fair market value which may be determined using a computer pricing service including any service contained in the Trustee s accounting system, provided that the Trustee shall not be liable for any error made by any such service. Placement Agent Prepayment Date The term "Placement Agent" means RBC Dain Rausher, Inc. The term "Prepayment Date" means any Interest Payment Date on which the Authority elects to make a prepayment of the principal amount of the Note pursuant to the terms Section 2.06 of this Trust Agreement. Prepayment Penalty Amount The term "Prepayment Penalty Amount means the sum of (i) $500, plus (ll) the present value, discounted at the Reinvestment Rate, of the positive amount, if any, by which (A) interest which would have been payable on the Note at the then-applicable interest rate on the Note as specified in Sections 2.02 or 2., as the case may be, exceeds (B) interest that would be earned by the Noteholder if the Noteholder reinvested the principal amount of the Note prepaid at the Reinvestment Rate, in each case based upon t1j.e scheduled principal amortization of the Note absent the prepayment. Principal Payment Date The term "Principal Payment Date" means a date on which payment of principal is due on the Note, being November 1 and May 1 of each year to which reference is made, commencing on November Qualified Institutional Buyer DOCSSF I :

12 The term " Qualified Institutional Buyer " means any entity falling within the definition of a Qualified Institutional Buyer pursuant to SEC Rule 144A. Rebate Fund The term "Rebate Fund" shall have the meaning given in the Tax Certificate. Reinvestment Rate The term "Reinvestment Rate" means the.41terest rate per annum equal to one-half of one percent (. 5%) above the yield reasonably determined by the Noteholdet or the Trustee (as required pursuant to Section 2.06) available in the secondary market for United States Treasury Obligations with a maturity which corresponds (as closely as possible) to the weighted average maturity of all of the remaining unpaid principal installment amount(s) and Principal Payment Date(s) against which the applicable prepayment is applied, measured on a date not more than five Business Days prior to the Prepayment Date for which such calculation is made. Reserve Account Requirement The term "Reserve Account Requirement" means, as of any date of calculation by the Authority, an amount equal to $ Revenues The term "Revenues" means all Base Rental Payments and other payments paid by the City and received by the Authority pursuant to the Facilities Lease, all Guaranty Payments paid by the Agency, all A WC Base Payments, and all interest or other income from any investment pursuant to Section 3., of any money in any fund or account established pursuant to this Trust Agreement or the Facilities Lease (other than the Rebate Fund). State The term "State" means the State of California. Supplemental Trust Agreement The term "Supplemental Trust Agreement" means any trust agreement then in full force and eff~ct which has been duly executed and delivered by the Authority and the Trustee amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental Trust Agreement is specifically authorized hereunder. Tax Certificate The term "Tax Certificate" means the Tax Certificate delivered by the City and the Authority at the time of the issuance and delivery of the Note, as the same may be amended or supplemented in accordance with its terms. DOCSSFI:

13 Trust Agreement The term "Trust Agreement" means this Trust Agreement, dated as of May 2004 between the Authority and the Trustee, as originally executed and as it may from time to time be amended or supplemented by any Supplemental Trust Agreements executed pursuant to the provisions hereof. Trustee The term "Trustee" means Union Bank of California, N., or any other association or corporation which may at any time be substituted in its place as provided in Section Written Notice of Extension The term "Written Notice of Extension" means an instrument in writing signed by or on behalf of the Noteholder or any officer of the Noteholder duly authorized to sign documents on its behalf hereunder directing the Trustee to adjust the interest rate and payment schedule of the Note pursuant to Section 2.04 of this Trust Agreement. Written Request of the Authority The term "Written Request of the Authority" means an instrument in writing signed by or on behalf of the Authority by its President, Vice President, Executive Director or Treasurer/Auditor, or by any other officer of the Authority duly authorized by the governing board of the Authority to sign documents on its behalf hereunder. ARTICLE II ISSUANCE OF NOTE; GENERAL NOTE PROVISIONS SECTION Authorization and Purpose of Note. The Authority has reviewed all proceedings heretofore taken relative to the authorization of the Note and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of the Note do exist, have happened and have been performed in due time, form and manner as required by law, and that the Authority is now duly authorized, pursuant to each and every requirement of the Act, to issue the Note in the form and manner provided herein for the purpose of providing funds to finance the Project, and that the Note shall be entided to the benefit protection and security of the provisions hereof. SECTION Terms of the Note. (a) The Note shall be designated "Richmond Joint Powers Financing Authority Point Potrero Lease Revenue Note" and shall be issued as a fully registered Note in the principal amount of $ The Note shall be dated as of May 2004 and shall mature on May 1, 2019, subject to the provisions of Section 2.03 of this Trust Agreement. The Note shall bear interest at the initial rate of 4.75% per annum (based on a 360-day year of twelve 30-day months), subject to adjustment pursuant to the provision of DOCSSFI :

14 Section 2.04 of this Trust Agreement. The principal of and interest on the Note shall be payable in lawful money of the United States of America at the corporate trust office of the Trustee in San Francisco or Los Angeles, California. Subject to the provisions of Sections 04 and 2.06 of this Trust Agreement, (i) interest on the Note shall be payable in quarterly installments beginning on August 1, 2004 and on each Interest Payment Date thereafter, as set forth in Exhibit B hereto, and (ll) principal of the Note shall be payable in semi-annual installments beginning on November 1, 2004 and on each Principal Payment Date thereafter, as set forth in Exhibit B hereto, until the entire principal amount of the Note shall have been paid in full. Payments received by the Trustee on an Interest Payment Date shall be applied first against interest accrued on the Note and then against principal of the Note. (b) Notwithstanding any other provision hereof, in addition to the payments payable on the Note pursuant to Section 2.02(a), during any period from (i) the date on which the Trustee has received a certificate of the Agency under Section 5. 02(c) of the Guaranty Agreement to the effect that the Annual Coverage Factor is less than 1.35 to (ll) the date on which the Trustee receives a certificate of the Agency to the effect that the Annual Coverage Factor is at least equal to 1.35, the Authority shall pay to the Noteholder an amount on each Interest Payment Date equal to the Note Surcharge. The Note Surcharge shall be equal to the product of (i) the weighted average principal amount of the Note outstanding from the immediately preceding Interest Payment Date to the interest Payment Date on which the Note Surcharge is applied, times (ll) one eighth of one percent (1/8%). (c) Notwithstanding any other provision hereof, in addition to the payments payable on the Note pursuant to Section 2.02(a), during any period from (i) the date on which the Trustee has received a certificate of the Agency under Section 5.02(d) of the Guaranty Agreement to the effect that the Maximum Annual Coverage Factor is less than 1.10 to (ll) the date on which the Trustee receives a certificate of the Agency to the effect. that the Maximum Annual Coverage Factor is at least equal to 1.10, the Authority shall pay, to the Noteholder an amount on each Interest Payment Date equal to the Note Surcharge as described in Section 2.02(b) of this Trust Agreement. SECTION Mandatory Prepayment Upon Call of the Note. (a) If on May 1, 2009 the Trustee shall not have received a Written Notice of Extension from the N oteholder, the following shall occur: (1) The aggregate outstanding principal amount of the Note, if any, along with any unpaid interest thereon, shall become immediately due and payable in lawful money of the United States of America at the corporate office of the Trustee in San Francisco or Los Angeles California; and (2) Upon receipt by the Trustee of such payment as may be required to be made by the Authority to pay all principal of the Note, all interest thereon, and any other amounts then owing under this Trust Agreement, the Note shall be considered discharged as provided in Section 8.01 of this Trust Agreement. DOCSSFI :

15 (b) If on May the Trustee shall not have received a Written Notice of Extension from the Noteholder, the following shall occur: (1) The aggregate outstanding principal amount of the Note, if any, along with any unpaid interest thereon, shall become immediately due and payable in lawful money of the United States of America at the corporate office of the Trustee in San Francisco or Los Angeles California; and (2) Upon receipt by the Trustee of such payment as may be required to be made by the Authority to pay all principal of the Note, all interest thereon, and any other amounts then owing under this Trust Agreement, the Note shall be considered discharged as provided in Section 8.01 of this Trust Agreement. (c) The provisions of Section 2.06 shall not apply to any mandatory prepayment of the Note pursuant to this Section (d) The Authority may request that the Noteholder issue a Written Notice of Extension by delivery to the Noteholder of a Written Request of the Authority not earlier than 18 months prior to the date on which the Note would become due and payable pursuant to this Section 2.03 if such Written Notice of Extension were not issued. SECTION Reset of Interest Rate and Payment Schedule. (a) If on May 1, 2009 any of the principal amount of the Note remains outstanding and the Trustee shall have received a Written Notice of Extension from the Noteholder, the following shall occur: (1) The interest rate borne by the Note shall be adjusted in accordance with the formula set forth in Section 2.05 of this Trust Agreement (provided that such interest rate shall not exceed twelve percent (12%) per annum); and (2) Interest shall become payable in quarterly installments on each Interest Payment Date and principal shall become payable in semi-annual installments on each Principal Payment Date in such amounts as will result in a ten (10) year amortization of the remaining principal of the Note with level annual debt service. (b) If on May any of the principal amount of the Note remains outstanding and the Trustee shall have received a Written Notice of Extension from the Notehoder, the following shall occur: (1) The interest rate borne by the Note shall be adjusted in accordance with the formula set forth in Section 2.05 of this Trust Agreement (provided that such interest rate shall not exceed twelve percent (12%) per annum); and (2) Interest shall become payable in quarterly installments on each Interest Payment Date and principal shall become payable in semi-annual installments on each Principal Payment Date in such amounts as will result in a five (5) year amortization of the remaining principal of the Note with level annual debt service. DOCSSFI :

16 SECTION Reset Rate Formula. If the interest rate on the Note is reset pursuant to Section 2.04(a)(1) or 2.04(b)(1), the new interest rate on the Note shall be the interest rate per annum equal to two percent (2%) above the yield reasonably determined by the Noteholder or, ifthe Noteholder does not notify the Trustee of such rate within 5 business days prior to the date on which the interest rate is to be reset, by the Trustee (or such qualified person or firm as the Trustee may engage, provided that the Trustee shall not be liable for any error made by such person or firm), which is available in the secondary market for United States Treasury Obligations with a maturity which corresponds (as closely as possible) to the weighted average maturity of all of the remaining unpaid principal installment amount(s) of the Note. SECTION Prepayment of the Note. Principal on the Note may be prepaid at the election of the Authority on any Prepayment Date in integral multiples of $500 of principal amount &om amounts in the Sinking Account within the Revenue Fund or &om any other source of available funds at a prepayment price of (i) interest accrued on the principal amount of the Note to be prepaid to the Prepayment Date, plus (ll) the principal amount of the Note to be prepaid plus (ill) the Prepayment Penalty Amount. Not less than 15 Business Days prior to making a prepayment of the Note pursuant to this section, the Authority shall notify the Trustee of the amount to be applied to a prepayment of the Note and shall deposit such amount with the Trustee (or shall direct the Trustee to apply amounts available in the Sinking Account if applicable). The Trustee shall notify the Noteholder of the prepayment not later than 10 Business Days prior to the Prepayment Date and the Noteholder shall determine the applicable Prepayment Penalty Amount and shall notify the Trustee of such amount; provided, that if the Noteholder shall fail to notify the Trustee of the Prepayment Penalty Amount within five (5) Business Days of the Prepayment Date the Trustee (or such qualified person or firm as the Trustee may engage, provided that the Trustee shall not be liable for any error made by such person or firm) shall calculate the Prepayment Penalty Amount and such calculation shall be binding and conclusive. On the Prepayment Date the Trustee shall apply the funds designated for prepayment by the Authority to the prepayment of the Note. Prepayments of the principal of the Note shall be applied in inverse order of maturity of the principal installments of the Note, and shall not affect the amount or timing of future payments on the Note pursuant to Sections 2.02 or SECTION Form of Note. The Note and the authentication endorsement and assignment to appear thereon shall be substantially in the form set forth in Exhibit A hereto attached and by this reference herein incorporated. SECTION Execution of Note. The Treasurer/Auditor of the Authority is hereby authorized and directed to execute the Note on behalf of the Authority and the Secretary of the Authority is hereby authorized and directed to countersign the Note on behalf of the Authority. The signatures of such Treasurer/Auditor and Secretary may be by printed, lithographed or engraved by facsimile reproduction. In case any officer whose signature appears on the Note shall cease to. be such officer before the delivery of the Note to the purchaser thereof, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until such delivery of the Note. SECTION Regjstration. Transfer and Payment of Note. The Note may be transferred or exchanged and tide thereto shall pass only in the manner provided herein, and the Trustee shall keep books for the registration and transfer of the Note as provided herein. The Authority and the Trustee may deem and treat the Noteholder as shown on the books of the DOCSSFl:

17 Trustee as the absolute owner of the Note for the purpose of receiving any payment on the Note and for all other purposes hereof, whether the Note shall be overdue or not, and neither the Authority nor the Trustee shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the note to the extent of the sum or sums so paid. The Note may be transferred in whole, (but not in part) on the registration books required to be kept by the Trustee pursuant to this Section 2., upon surrender of such Note for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee, duly executed by the Noteholder or its attorney duly authorized in writing. Such instrument shall represent and warrant that the transferee is a Financial Institution or Qualified Instituti()nal Buyer., In the event that the Note shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver to the transferee a new Note. The Trustee shall require the payment by the Noteholder requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer as a condition precedent to the exercise of such privilege. SECTION Mutilated. Destroyed. Stolen or Lost Note. If the Note shall become mutilated the Trustee at the expense of the Noteholder shall thereupon authenticate and deliver, a new Note of like tenor and amount in exchange and substitution for the Note so mutilated, but only upon surrender to the Trustee of the Note so mutilated. Any mutilated Note so surrendered to the Trustee shall be cancelled. If the Note shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Noteholder shall thereupon authenticate and deliver, a new Note of like tenor in lieu of and in substitution for the Note so lost, destroyed or stolen. The Trustee may require payment of a reasonable sum for each new Note issued under this Section and of the expenses which may be incurred by the Authority and the Trustee relating thereto. SECTION Procedure for the Issuance of Note. At any time after the execution of this Trust Agreement, the Authority shall execute the Note for issuance hereunder and shall deliver the Note to the Trustee, and thereupon the Note shall be authenticated and delivered by the Trustee to the Noteholder upon the Written Request of the Authority and upon receipt of payment therefor from the Noteholder. Upon receipt of payment for the Note from the Noteholder, the Trustee shall set aside and deposit the proceeds received from such sale in the following respective accounts or funds or with the following respective persons, in the following order of priority: (a) The Trustee shall deposit in the Reserve Account established pursuant to Section a sum equal to $ , equaling the Reserve Account Requirement. (b) The Trustee shall deposit $106, in the Costs of Issuance Fund, which fund is hereby created and which fund the Authority hereby agrees to maintain with the Trustee until July 1, All money in the Costs of Issuance Fund shall be used and withdrawn by the Authority to pay the Costs of Issuance of the Note upon receipt of a Written Request of the Authority (in substantially the form set forth in Exhibit C hereto) filed with the Trustee, each of which shall be sequentially numbered and shall state the person to whom payment is to be made, the amount to be paid, the purpose for which the DOCSSFl:

18 obligation was incurred and that such payment is a proper charge against said fund. On July 2004, or upon the earlier Written Request of the Authority, any remaining balance in the Costs of Issuance Fund shall be transferred to the City. (c) The Trustee shall deposit $ in the Project Fund, which fund is hereby created and which fund the Authority hereby agrees to maintain with the Trustee. All money in the Project Fund shall be used and withdrawn by the Authority to pay the costs of the Project upon receipt of a Written Request of the Authority (in substantially the form set forth in Exhibit D hereto) filed with the Trustee, each of which shall be sequentially numbered and shall state the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that payment is a proper charge against said fund. Upon notice to by the Authority to the Trustee that the construction of the Project has been completed, any remaining balance in the Project Fund shall be transferred to the Revenue Fund to be applied to the repayment of the Note. SECTION Validity of Note. The validity of the issuance of the Note shall not be dep.endent on or affected in any way by the proceedings taken by the Authority for the financing of the Project or by any contracts made by the Authority or its agents in connection therewith, and shall not be dependent upon the completion of the Project or upon the performance by any person, firm or corporation of his or its obligation with respect thereto. The recital contained in the Note that the note is issued pursuant to the Act and pursuant hereto shall be conclusive evidence of its validity and of the regularity of its issuance, and the Note shall be incontestable &om and after its issuance. The Note shall be deemed to be issued, within the meaning hereof, whenever the Note shall have been delivered to the Noteholder and the proceeds of sale thereof received. ARTICLE III REVENUES SECTION Pledge of Revenues. (a) All Revenues and any other amounts (including proceeds of the sale of the Note) held by the Trustee in any fund or account established hereunder (other than amounts on deposit in the Rebate Fund) are hereby irrevocably pledged to the payment of the interest on and principal of the Note as provided herein, and the Revenues shall not be used for any other purpose while any of the principal amount of the Note remains unpaid; provided, however, that out of the Revenues and other moneys there may be applied such sums for such purposes as are permitted hereunder. This pledge shall constitute a first pledge of and charge and lien upon the Revenues and all other moneys on deposit in the funds and accounts established hereunder (other than amounts on deposit in the Rebate Fund) for the payment of the interest on and principal of the Note in accordance with the terms hereof and thereof. In Section 4.07 hereof the Authority assigned to the Trustee all of the Authority s rights and remedies under the Facilities Lease; such assignment shall confer no duties or obligations of the Authority upon the Trustee and shall be subject to the provisions of this Indenture. SECTION Receipt and Deposit of Revenues in the Revenue Fund. In order to carry out and effectuate the pledge, charge and lien contained herein, the Authority agrees and covenants that all Revenues when and as received shall be received by the Authority in trust hereunder for the benefit of the Noteholder and shall be transferred when and as received by the DOCSSFI:

19 Authority to the Trustee for deposit in the Revenue Fund (the "Revenue Fund"), which fund is hereby created and which fund the Authority hereby agrees and covenants to maintain with the Trustee so long as any of the principal of the Note remains unpaid. All Revenues shall be accounted for through and held in trust in the Revenue Fund, and the Authority shall have no beneficial right or interest in any of the Revenues except only as herein provided. All Revenues, whether received by the Authority in trust or deposited with the Trustee as herein provided, shall nevertheless be allocated, applied and disbursed solely to the purposes and uses hereinafter in this Article set forth and shall be accounted for separately and apart from all other accounts, funds, money or other resources of the Authority. The Trustee agrees to deliver, on or before the fifteenth (15th) day of each month in which any of the principal of the Note remains unpaid, a written statement to the Noteholder indicating the total amount of Revenues then on deposit in the Revenue Fund. SECTION Establishment and Maintenance of Accounts for Use of Money in the Revenue Fund. Subject to Section 4., all money in the Revenue Fund shall be set aside by the Trustee in the following respective special accounts or funds within the Revenue Fund (each of which is hereby created and each of which the Authority hereby covenants and agrees to cause to be maintained) in the following order of priority: (a) (b) (c) Note Repayment Account Reserve Account, and Sinkitig Account All money in each of such accounts shall be held in trust by the Trustee and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this section. (a) Note Repayment Account. Twenty (20) Business Days prior to each Interest Payment Date, the Trustee shall set aside from the Revenue Fund and deposit in the Note Repayment Account that amount of money which, when added to any amounts then on deposit in the Note Repayment Account, is equal to the amount of interest and principal, if any, becoming due and payable on such Interest Payment Date. No deposit need be made in the Note Repayment Account if the amount contained therein is at least equal to the aggregate amount of interest and principal, if any, becoming due and payable on such Interest Payment Date. Reserve Account. (b) After making the deposit to the Note Repayment Account required pursuant to Section 3.03(a) the Trustee shall transfer from the Revenue Fund to the Reserve Account the amount, if any, by which the amount then on deposit in the Reserve Account is less than the Reserve Account Requirement. All money in the Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of replenishing the Note Repayment Account in the event of any deficiency at any time in either of such accounts, but solely for the purpose of paying the interest or principal on the Note; provided, however, that when the amount on deposit in the Reserve Account is at least equal to the remaining scheduled payments on the Note, the Trustee shall transfer such amount to the Note Repayment Account to be applied to make such scheduled payments on the Note. (c) Sinking Account. After making the deposits to the Note Payment Account and the Reserve Account as provided in Sections 3. 03(a) and 3. 03(b), the Trustee shall deposit any DOCSSFI :

20 remaining amounts available in the Revenue Fund in the Sinking Account. Amounts in the Sinking Account shall be used and applied by the Trustee (i) to make prepayments of the Note as directed by the Authority pursuant to Section 2.06 or (ll) to make deposits to the Note Repayment Account to the extent that amounts in the Revenue Fund or the Reserve Account are insufficient to make such deposits at the times and in the amounts required pursuant to Section 3. 03(a)or to the Reserve Account at the times and in the amounts required pursuant to Section 3.03(b). Any amount remaining on deposit in the Sinking Account on the date all obligations under the Note and this Trust Agreement have been paid shall be transferred to the City. SECTION Application of Insurance Proceeds. In the event of any damage to or destruction of any part of the Facilities covered by insurance, the Trustee, upon receipt of the proceeds of such insurance, shall cause such proceeds to be applied pursuant to the terms contained in Section 5.04 of the Facilities Lease. SECTION Deposit and Investments of Money in Accounts and Funds. Subject to Section 5., all money held by the Trustee in any of the accounts or funds established pursuant hereto shall be invested in Permitted Investments at the Written Request of the Authority. Such investments shall, as nearly as practicable, mature on or before the dates on which such money is anticipated to be needed for disbursement hereunder; provided, however, that moneys in the Reserve Account shall be invested in Permitted Investments with a term to maturity not exceeding five (5) years. Subject to Section 5., all interest or profits received shall be deposited first in the Reserve Account, to the extent necessary to make amounts on deposit in the Reserve Account equal to the Reserve Account Requirement, and then in the Revenue Fund. The Trustee may commingle the funds and accounts established hereunder for investment purposes, but shall account for each separately. The Trustee or an affiliate may act principal or agent in the acquisition or disposition of any investment and shall be entided to its customary fees therefor. In the absence of written investment instructions from the Authority, the Trustee shall (i) notify the Authority in writing that it does not have investment instructions, and (ll) until such instructions are received, invest in those investments described in clause (7) of the definition of Permitted Investments. The Trustee shall not be liable for any loss for any investment made in accordance with this section ARTICLE IV COVENANTS OF THE AUTHORITY; ASSIGNMENT TO TRUSTEE SECTION Punctual Payment and Performance. The Authority will punctually transfer all Revenues to the Trustee for deposit in the Revenue Fund for payment of the interest on and the principal of the Note in strict conformity with the terms hereof and of the Note and will faithfully observe and perform all the agreements and covenants to be observed or performed by the Authority contained herein and in the Note. SECTION Against Encumbrances. The Authority will not make any pledge of or place any charge or lien upon the Revenues except as provided herein, and will not issue the Note, notes or obligations payable &om the Revenues or secured by a pledge of or charge or lien upon the Revenues except the Note. DOCSSFI:

21 (a) The Authority covenants that it shall not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of the interest payable on the Note under Section 103 of the Code. Without limiting the generality of the foregoing, the Authority covenants that it will comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive payment in full of the Note. (b) In the event that at any time the Authority is of the opinion that for purposes of this Section it is necessary or helpful to restrict or limit the yield on the investment of any moneys held by the Trustee under this Trust Agreement, the Authority shall so instruct the Trustee under this Trust Agreement in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. (c) Notwithstanding any provisions of this Section, if the Authority shall provide to the Trustee an Opinion of Counsel of recognized standing in the field of law relating to municipal financing that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Note, the Trustee may conclusively rely on such opinion in complying with the requirements of this Section and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent. SECTION Tax Covenants. SECTION Accounting Records and Reports. The Authority will keep or cause to be kept proper books of record and accounts in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocation and application of the Revenues, and such books shall be available for inspection by the Trustee, at reasonable hours and under reasonable conditions. Not more than one hundred eighty (180) days after the close of each Fiscal Year, the Authority shall furnish or cause to be furnished to the Trustee a complete financial statement covering receipts, disbursements, allocation and application of Revenues for such Fiscal Year. The Authority shall also keep or cause to be kept such other information as required under the Tax Certificate. The Trustee shall have no duty to review or examine such statement. SECTION Prosecution and Defense of Suits. The Authority will defend against every suit, action or proceeding at any time brought against the Trustee upon any claim to the extent arising out of the receipt, application or disbursement of any of the Revenues or to the extent involving the failure of the Authority to fulfill its obligations hereunder; provided that the Trustee or the Noteholder at its election may appear in and defend any such suit, action or proceeding. The Authority will indemnify and hold harmless the Trustee against any and all liability claimed or asserted by any person to the extent arising out of such failure by the Authority, and will indemnify and hold harmless the Trustee against any attorney s fees or other expenses which it may incur in connection with any litigation to which it may become a party by reason of its actions hereunder, except for any loss, cost, damage or expense resulting from the active or passiv.e negligence or willful misconduct of the Trustee. Notwithstanding any contrary provision hereof this covenant shall remain in full force and effect even though the Note secured hereby may have been fully paid and satisfied. DOCSSFI: