Hesperia City Council
June 6, 2023

7 ARTICLE III

RENTAL PAYMENTS

Section 3.01. Base Rental . The City shall pay to the Authority as Base Rental for the use and occupancy of the Leased Property (subject to the provisions of Sections 2.02, 3.03. 3.06 and 8.01 of this Property Lease) the amounts at the times specified in and in accordance with the Base Rental Payment Schedule set forth in Exhibit B. Base Rental shall be payable on each Base Rental Payment Date during the term of this Property Lease. Base Rental shall be for the use and occupancy of the Leased Property for the Lease Year in which such April 15 and October 15 occurs, provided that the Base Rental paid on any April 15 or October 15 shall only be for that portion of the applicable period that the City has use and occupancy of all or a portion of the Leased Property. If the term of this Property Lease is extended pursuant to Section 2.02 hereof, the payments of Base Rental will continue to and including such time as this Property Lease terminates in accordance with Section 2.02 hereof.

The City shall provide written n otice to the Trustee at least ten (10) Business Days prior to any Base Rental Payment Date upon which the City expects to be unable to pay all or any portion of the Base Rental payment due on such Base Rental Payment Date, informing the Trustee of such expectation.

The City shall receive a credit for any Base Rental payment if and to the extent a credit is due to the City pursuant to the last sentence of Section 3.04 hereof. Any amount held in the Revenue Fund, the Interest Fund and the Principal Fund on any Base Rental Payment Date (other than amounts resulting from the prepayment of the Base Rental payments in part but not in whole under this Article III and other than amounts required for payment of past due principal or interest on any Bonds not present ed for payment) shall be credited towards the Base Rental payment then required to be paid hereunder; and no Base Rental payment need be deposited with the Trustee on any Base Rental Payment Date if the amounts then held in the Revenue Fund, the Interest Fund and the Principal Fund are at least equal to the Base Rental payment then required to be deposited with the Trustee.

Section 3.02. Additional Rental. The City shall also pay to the Authority (but only after payment of Base Rental), as Additional Rental hereunder such amounts as shall be required by the Authority for the payment of the following:

(a) All taxes, assessments or governmental charges of any type or nature charged to the Authority or affectin g the Leased Property or the respective interests or estates of the Authority or the City therein, or affecting the amount available to the Authority from rentals received hereunder for the retirement of the Bonds (including taxes, assessments or governmental charges assessed or levied by any governmental agency or district having power to levy taxes, assessments or governmental charges). In addition, the amounts described in the final sentence of Section 14.05 shall constitute Additional Rental.

(b) To the extent permitted by law, all reasonable administrative costs of the Authority relating to the Leased Property including, but without limiting the generality of the foregoing, salaries, wages, all expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply

8 with the terms of the Bonds or of the Indenture or to defend the Authority and its members, officers, agents and employees.

(c) Insurance premiums for all insurance required pursuant to Article VI of this Property Lease and not obtained by the City.

(d) Amounts, if any, required to be rebated by the Authority to the United States of America pursuant to Section 6.20 of the Indenture.

Such Additional Rental shall be billed to the City by the Authority or the Trustee from time to time, together with a statement certifying that the amount billed has been paid by the Authority or by the Trustee on behalf of the Authority, for one or more of the items above described, or that such amount is then payable by the Authority or the Trustee for such items. Amounts so billed shall be paid by the City within sixty (60) days after receipt of the bill by the City.

Section 3.03. Fair Rental Value . Such payments of the foregoing Base Rental and Additional Rental during the term of this Property Lease shall constitute the total rental for the City’s use and occupancy of the Leased Property for the Lease Year in which such payments are scheduled to be made, and the parties hereto have agreed and determined that such total rental represents the fair rental value of the Leased Property. In making such determination, consideration has been given to the costs of financing and leasing of the Leased Property by the Authority, the uses and purposes which may be served by the Leased Property, and the benefits which will accrue to the Authority, the City and the general public therefrom.

Notwithstanding any other provision of this Property Lease, in the event that rental payments due hereunder shall be abated partially for any period of time, the rental payments due for such period of time shall not exceed the fair rental value of that portion of the Leased Property available for use and occupancy by the City during such period of time.

Section 3.04. Payment Provisions . Each installment of Base Rental and Additional Rental payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the principal corporate trust office of the Trustee in Los Angeles, California, or such other place as the Authority shall designate. Except as otherwise provided herein or in the Indenture, any installment of Base Rental or Additional Rental accruing hereunder which shall not be paid when due shall, from and after such due date until paid, bear interest at the highest interest rate on any outstanding Bond or such lesser rate as may be permitted by law.

Notwithstanding any dispute between the Authority and the City, the City shall make all r ental payments when due without deduction or offset of any kind and shall not withhold any rental payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said rental payments or any portion t hereof, said payments or excess of payments, as the case may be, shall be credited against subsequent rental payments due hereunder or, at the City’s option, refunded at the time of such determination.

Section 3.05. Appropriations Covenant . The City covenants to take such action as may be necessary to include all Base Rental payments and Additional Rental due hereunder in its annual budgets and to make necessary annual appropriations for all such renta l payments.

The covenants on the part of the City herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Property Lease agreed to be carried out and performed by the City.

9 Section 3.06. Rental Abatement.

During any period in which by reason of material damage to or destruction of the Leased Property, or condemnation of or defects in the title of the Leased Property, there is substantial interference with the use and occupancy by the City of any portion of the Leased Property, or the City is otherwise not able to use or enjoy the benefit of the Leased Property, rental payments due hereunder shall be abated proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Property Lease by virtue of any such interference or lack of use and the Property Lease shall continue in full force and effect. Subject to Section 3.03 hereof, in the case of abatement relating to the Leased Property, the amount of abatement shall be in that proportion which the value of that portion of the Leased Property rendered unusable bears to the value of the whole of the Leased Property.

The City shall calculate such abatement and shall provide the Authority and the Trustee with a certificate setting forth such calculation and the basis therefor. Such abatement shall continue for the period commencing with the date on which there is substantial interfer ence with the use and occupancy by the City of the Leased Property and ending with the substantial completion of the work of repair or replacement of the Leased Property so damaged or destroyed; and the term of this Property Lease shall be extended by the period during which the rental is abated hereunder, except that the term shall in no event be extended beyond the term set forth in Section

2.02 hereof. Notwithstanding the foregoing, the City will still be obligated to apply amounts legally available to the City for payments due hereunder, including without limitation, amounts available pursuant to Section 5.02 of the Indenture (including all subsections thereof), amounts available from any capitalized interest account, any debt service reserve fund maint ained under the Indenture and the Surplus Revenue Fund (as defined in the Indenture), and amounts available under Sections 6.13 and 6.17 of the Indenture.

Section 3.07. Application of Rental Payments. All rental payments received shall be applied first to the Base Rental payments due hereunder, and then to the Additional Rental payments due hereunder, but no such application of any payments which are less than the total rental due and owing shall be deemed a waiver of any default hereunder.

Section 3.08. Prepayment of Rental Payments.

(a) The City may prepay, from eminent domain proceeds or net insurance proceeds received by it, all or any portion of the Base Rental payments then unpaid, in whole on any date, or in part on any date in amounts which result in Bonds being redeemed in integral multiples of five thousand dollars ($5,000) so that the aggregate annual amount of Bonds m aturing in each year after such prepayment date shall each be in an integral multiple of five thousand dollars ($5,000), at a prepayment price equal to the sum of the principal components prepaid plus accrued interest thereon to the date of prepayment. Su ch prepayment shall be apportioned among Base Rental payments such that Bonds will be redeemed on a proportionate basis among maturities.

(b) The City may prepay, from any source of available funds, all or any portion of the principal components of the Base Rental payments due on or after October 15, ________, in whole or in part on any date on or after October 15, ______, from such Base Rental payments as are selected by the Authority as set forth in a Request of the Authority, in each case at a prepayment price equal to the sum of the 2023 Bonds being redeemed plus accrued interest thereon to the date of prepayment, without premium.

10 (c) Before making any prepayment pursuant to this section, the City shall, within five (5) Business Days following the event creating such right or obligation to prepay, give written notice to the Authority and the Trustee describing such event and specifying the a mount of the prepayment and the date on which the prepayment will be made, which date shall be not less than forty-five (45) nor more than sixty (60) days from the date such notice is given.

(d) In connection with any prepayment of Base Rental payments, the City and the Authority shall amend the schedules of remaining Base Rental payments attached to this Property Lease as Exhibit B.

Section 3.09. Governmental Relief. The Authority and the City hereby co venant that they will each use their best efforts to appropriate funds and apply for any grants, loans or other relief available from the State or federal government in order to obtain amounts necessary to rebuild any portion of the Leased Property destroyed or damaged in connection with an uninsured or underinsured calamity causing destruction or damage.

Section 3.10. No Obligation to Pay Rent for Future Years. Notwithstanding any other provision of this Property Lease, the City shall in no event be obligated to pay rental due hereunder in any Lease Year for any succeeding Lease Year.

11 ARTICLE IV

TITLE TO THE LEASED PROPERTY; PREPAYMENT OF THE 2013 LEASE PAYMENTS AND THE 2013 BONDS

Section 4.01. Title to the Leased Property. During the term of the Property Lease, the Authority shall hold a leasehold interest in the Leased Property pursuant to the Site Lease. Title to all moveable property that is placed in or about the Leased Property by the City during the term of the Property Lease shall remain in the City during the term of the Property Lease.

The Authority’s interest in and title to the Leased Property shall be transferred, conveyed and assigned to and become vested in the City and the Property Lease shall terminate with respect thereto at the end of the term hereof, upon payment in full of all rental payments due hereunder pertaining to the Leased Property, and the Authority will execute and deliver such conveyances, registration documents and other instruments as may be necessary to effect such vesting of record.

Section 4.02. Refinancing of the 2013 Lease Payments ; Redemption of the 2013 Bonds. The City agrees to prepay the 2013 Lease Paym ents and to cause defeasance and redemption of the 2013 Bonds from moneys deposited into the Escrow Fund established and held by the 2013 Trustee under the Escrow Agreement.

12 ARTICLE V

MAINTENANCE OF THE LEASED PROPERTY;

ALTERATIONS AND ADDITIONS

Section 5.01. Maintenance and Utilities. Throughout the term of this Property Lease, as part of the consideration for rental of the Leased Property, all improvement, repair and maintenance of the Leased Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Leased Property, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, ventilation, air conditioning, water, sewer and all other utility services, and shall pay for or otherwise arrange for payment of the cost of the repair and replacement of the Leased Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the rental payments herein provided, the Authority agrees to provide only the use, possession and quiet enjoyment of the Leased Property.

Section 5.02. Changes to the Leased Property . The City shall have the right during the term of this Property Lea se to make additions, alterations or improvements or to attach fixtures, structures or signs to the Leased Property if said additions, alterations, improvements, fixtures, structures and signs are necessary or beneficial for the use of the Leased Property by the City. The City may remove any fixture, structure or sign added by the City, but such removal shall be accomplished so as to leave the Leased Property in substantially the same condition as it was in before the fixture, structure or sign was attached.

13 ARTICLE VI

INSURANCE

Section 6.01. General Liability and Automobile Liability Insurance . The City shall maintain or cause to be maintained, throughout the term of this Property Lease, general liability insurance naming the Authority, its members, officers, agents and employees, the Trustee and the City and its officers, agents and employees as insured parties. Said policy or policies shall insure said parties against liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Leased Property. Such policy or policies shall provide coverage in such liability limits and be subject to such deductibles as the City deems adequate and prudent.

Section 6.02. Property Insurance.

(a) Throughout the term of this Property Lease, the City shall maintain or cause to be maintained fire and lightning (i.e., property) insurance (with an extended coverage endorsement and with a vandalism and malicious mischief endorsement) on all structures constituting any part of the Leased Property in an amount equal to the lesser of (i) one hundred percent (100%) of the replacement cost of such structures or (ii) an amount equal to the then principal amount of the Outstanding Bonds. Such insurance may be subject to such deductibles as the City deems adequate and prudent. Said extended coverage endorsement shall, as nearly as possible, cover loss or damage by such events as explosion, windstorm, hail, riot, civil commotion, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such endorsement, and shall include earthquake coverage if available at reasonable cost from reputable insurers in the judgment of the City.

(b) The City shall provide, or cause to be provided by the Authority, the title insurance required by Section 6.13(b) of the Indenture.

(c) Each policy of insurance described in this Section 6.02 shall contain a replacement cost endorsement providing for no deduction for depreciation.

Section 6.03. Rental Income Interruption Insurance. The City shall maintain or cause to be maintained, throughout the term of this Property Lease, rental income interruption insurance in an amount not less than the maximum total Base Rental payable by the City pursuant to this Property Lease during any consecutive twenty-four (24) month period, plus the Additional Rental expected to be payable pursuant to this Property Lease for such period, to insure against loss of rental income from the Leased Property caused by perils covered by the insura nce required by Section 6.02 of this Property Lease.

Section 6.04. Insurance Proceeds; Forms of Policies . So long as any of the Bonds remain outstanding, all policies of insurance requi red by Sections 6.02 and 6.03 hereof shall provide that all proceeds thereunder shall be payable to the Trustee pursuant to a lender ’s loss payable endorsement substantially in accordance with the form approved by the Insurance Services Office and the Cali fornia Bankers Association, and all amounts so paid to the Trustee shall be applied as provided in the Indenture. Following payment in full of all rental payable hereunder, or provision therefor made, all such proceeds of insurance shall be paid to the Authority and to the City as their respective interests may appear.

14 Section 6.05. Additional Provisions Relating to Insurance . The City shall pay when due the premiums for all insura nce policies required by this Property Lease, and not later than August 1 of each year. All insurance required under this Property Lease shall be primary to any other insurance available to the Authority and the Trustee, and shall apply separately to each insured against whom claim is made or suit is brought and , to the extent possible, shall provide that the Trustee shall be given thirty (30) days’ prior written notice of each expiration, any intended cancellation thereof or reduction in amount or material change of the coverage provided thereby, provided that such separate coverage shall not increase the limit of liability under any such insurance. All insurance required to be maintained pursuant to this Property Lease may be maintained either separately or as a part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of participation by the City in a joint powers agency or other program providing pooled issuance. The Trustee shall not be responsible for the sufficiency of any insurance herein required and shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee.

Section 6.06. A lternative Risk Management Programs; Additional Insurance .

Notwithstanding anything in this Article VI to the contrary, the City shall have the right to adopt alternative risk management programs to insure against any of the risks required to be insured against under the terms of this Article VI, including a program of self -insurance (except self - insurance against loss of rental income as required by Section 6.03 hereof ), in whole or in part.

Any such alternative risk management program must be approved as reasonable and appropriate by a Risk Manager. The approval of the Risk Manager shall be in the form of a report on the nature of the program and the adequacy of its funding which shall be prepared and filed annually with the Trustee not later than August 1 of each year during any period when such program is in effect, commencing on or prior to the date such program is implemented. If such annual approving report is not timely filed with the Trustee, the Trustee shall promptly notify the City in writing and the City shall immediately obtain insurance as required by this Property Lease. In addition, the City Manager of the City may, if it is in the best interests of the City, approve such other types of insurance, including any increases in the insurance coverage required by this Article, upon the recommendation of a Risk Manager, or in connection with obtaining or maintaining any rating on the Bonds.

15 ARTICLE VII

DEFAULTS AND REMEDIES

Section 7.01. Defaults and Remedies.

(a) The City shall be deemed to be in default hereunder (i) if it shall (A) fail to pay any rental payable hereunder when the same becomes due and payable, time being expressly agreed to be of the essence in this Property Lease, or (B) fail to keep, observe or perform any other term, covenant or condition contained herein to be kep t or performed by the City; or (ii) upon the happening of any of the events specified in subsection (b) of this Section. The Authority may exercise any and all remedies available pursuant to law (other than those specifically waived herein) or granted pursuant to this Property Lease upon the occurrence of any default. The City shall not be in default in the observance or performance of any covenant, condition or agreement in this Property Lease on its part to be observed or performed, other than as referred to in clauses (i)(A), or (ii) of the preceding sentence, unless the City shall have failed, for a period of thirty (30) days or such additional time as is reasonably required, to correct any such default after notice by the Authority to the City properl y specifying wherein the City has failed to perform any such covenant, condition or agreement.

Upon any such default, the Authority shall have the right to collect each installment of rent as it becomes due and enforce any other terms or provision hereof to be kept or performed by the City; notwithstanding the foregoing, the Authority hereby waives the right to re-enter or re-let the Leased Property.

(b) If (1) the City ’s interest in this Property Lease or any part thereof be assigned or transferred, either voluntarily or by operation of law or otherwise, without the written consent of the Authority as hereinafter provided for; or (2) the City or any assignee shall file any petition or institute any proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects of bankruptcy or insolvency, or under any amendment of such acts or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby the City asks or seeks or p rays to be adjudicated a bankrupt, or is to be discharged from any or all of the City ’s debts or obligations, or offers to the City’s creditors to effect a composition or extension of time to pay the City ’s debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of the City’s debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character be filed or be instituted or taken against the City, or if a receiver of the business or of the property or assets of the City shall be appointed by any court, except a receiver appointed at the instance or request of the Authority, or if the City shall make a general or any assignment for the benefit of the City’s creditors; or (3) the City shall abandon or vacate any portion or portions of the Leased Property, then the City shall be deemed to be in default hereunder with respect to that portion or portions of the Leased Property to which the default relates.

(c) The Authority shall in no event be in default in the performance of any of its obligations hereunder or imposed by any statute or rule of law unless and until the Authority shall have failed to perform such obligations within thirty (30) days or such additional time as is reasonably required to correct any such default after notice by the City to the Authority properly specifying wherein the Authority has failed to perform any such obligation.

16 (d) In addition to the other remedies set forth in th is section, upon the occurrence of an event of default as described in this Section 7.01, the Authority and its assignee shall be entitled to proceed to protect and enforce the rights vested in the Authority and its assignee by the Property Lease or by law except as specifically waived herein. The provisions of the Property Lease and the duties of the City and of elected officials, officers or employees shall be enforceable by the Authority or its assignee by mandamus or other appropriate suit, action or p roceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing, the Authority and its assignee shall have the right to bring the following actions:

(1) Accounting. By action or suit in equity to require the City and i ts councilmembers, officers and employees and its assigns to account as the trustee of an express trust.

(2) Injunction. By action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the Authority or its assignee.

(3) Mandamus. By mandamus or other suit, action or proceeding at law or in equity to enforce the Authority ’s or its assignee’s rights against the City (and its councilmembers, officers and employees) and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the City as provided herein.

In the event the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Property Lease, the City agr ees to pay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder.

Section 7.02. Waiver.

(a) Failure of the Authority to take advantage of any default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this instrument be construed to waive or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or condition hereof, or to exercise any rights given the Authority on account of such default. A waiver of a particular default shall not be deemed to be a waiver of the same or any subsequent default.

The acceptance of rent hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Property Lease.

(b) The Authority specifically waives its rights under Section 1951.2 of the California Civil Code to accelerate payment of rent in the event of a default by the City hereunder.

17 ARTICLE VIII

EMINENT DOMAIN

Section 8.01. Eminent Domain. If the entirety of the Leased Property (or portions thereof such that the remainder is not usable for public purposes by the City) shall be taken under the power of eminent domain, the term hereof shall cease as of the day that possessio n shall be so taken. If less than the entirety of the Leased Property shall be taken under the power of eminent domain and the remainder is usable for public purposes by the City at the time of such taking, then the Property Lease shall continue in full force and effect as to such remainder, and the parties waive the benefits of any law to the contrary, and in such event there shall be a partial abatement of the rental due hereunder in an amount to be agreed upon by the City and the Authority, but, subject to Section 3.03 hereof, in no event shall the rental be less than the amount required for the retirement of the Bonds and the payment of the interest thereon as such Bonds and interest become due. So long as any of the Bonds shall be outstanding, any awa rd made in eminent domain proceedings for taking the Leased Property or any portion thereof shall be paid to the Trustee and applied as provided in the Indenture. Any such award made after all of the rentals have been fully paid, or previously made, shall be paid to the Authority and to the City as their respective interests may appear.

18 ARTICLE IX

COVENANTS

Section 9.01. Right of Entry. The Authority and its assignees shall have the right to enter the Leased Property during reasonable business hours (and in emergencies at all times) (a) to inspect the same, (b) for any purpose connected with the Authority ’s rights or obligations under this Property Lease, and (c) for all other lawful purposes.

Section 9.02. Liens. In the event the City shall at any time during the term of this Property Lease cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Leased Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Leased Property and which may be secured by a mechanic ’s, materialman’s or other lien against the Leased Property or the Authority ’s interest therein, and will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment.

Section 9.03. Quiet Enjoyment. The parties hereto mutually covenant that the City, by keeping and performing the covenants and agreements herein contained, shall at all times during the term of this Property Lease peaceably and quietly have, hold and enjoy the Leased Property without suit, trouble or hindrance from the Authority.

Section 9.04. Authority Not Liable. The Authority and its members, officers, agents and employees, shall not be liable to the City or to any other part y whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Leased Property. The City shall indemnify and hold the Authority and its members, officers, agents and employees, and the Trustee and its officers, agents and employees harmless from, and defend each of them against, any and all claims, liens and judgments arising from the construction or operation of the Leased Property, including, without limitation, death of or injur y to any person or damage to property whatsoever occurring in, on or about the Leased Property, but excepting claims, liens and judgments arising from the active negligence of the person or entity seeking indemnity. The provisions of this section shall su rvive the termination of this Property Lease.

Section 9.05. Prohibition Against Encumbrance or Sale . The Authority and the City will not create or suffer to be created any mortgage, pledg e, lien, charge or encumbrance upon the Leased Property, or upon any real or personal property essential to the operation of the Leased Property, except Permitted Encumbrances. The Authority and the City will not sell or otherwise dispose of the Leased Property or any property essential to the proper operation of the Leased Property.

Section 9.06. Assignment . Neither this Property Lease nor any interest of the City hereunder shall be mortgaged, pledged, assigned, sublet or transferred by the City by voluntary act or by operation by law or otherwise, except with the prior written consent of the Authority , which shall not be unreasonably withheld. The execution of this Property Lease shall constitute conclusive evidence of approval of the Indenture by the Authority. Whenever the Indenture by its

19 terms imposes a duty or obligation upon the City, such duty or obligation shall be binding upon the City to the same extent as if the City were an express party to the Indenture, and the City shall carry out and perform all of its obligations under the Indenture as fully as if the City were a party to the Indenture.

Section 9.07. Tax Covenants.

(a) Private Activity Bond Limitation. The City will assure that the proceeds of the 2023 Bonds are not so used as to cause the 2023 Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(c) of the Code.

(b) Federal Guarantee Prohibition. The City will not take any action or permit or suffer any action to be taken if the result of such action would be to cause any of the 2023 Bonds to be “federally guaranteed” within the meaning of section 149(b) of the Code.

(c) Rebate Requirement. The City will take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the 2023 Bonds.

(d) No Arbitrage. The City will not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the 2023 Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the 2023 Bonds would have caused the 2023 Bonds to be “arbitrage bonds” within the meaning of section 148 of the Code.

(e) Maintenance of Tax-Exemption. The City will take all actions necessary to assure the exclusion of interest on the 2023 Bonds from the gross income of the Owners of the 2023 Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the 2023 Bonds.

(f) Record Retention. The City will retain its records of all accounting and monitoring it carries out with respect to the 2023 Bonds for at least three years after the 2023 Bonds mature or are redeemed (whichever is earlier); however, if the 2023 Bonds are redeemed and refunded, the Authority will retain its records of accounting and monitoring at least three years after the earlier of the maturity or redemption of the obligations that refunded the 2023 Bonds.

(g) Compliance with Tax Certificate . The City will comply with the provisions of the Tax Certificate (as defined in the Indenture) with respect to the 2023 Bonds , which are incorporated herein as if fully set forth herein. The covenants of this Section will survive payment in full or defeasance of the 2023 Bonds.

Section 9.08. Nondiscrimination. The City and the Authority herein covenant by and for themselves and assigns, and all persons claiming under or through them, and this Property Lease is made and accepted upon and subject to the following conditions:

That there shall be no discrimination against or segregation of any person or group of persons, on account of age, r ace, color, creed, religion, sex, marital status, sexual orientation, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation

20 with reference to the selection, location, number, use, or occupancy, of tenants, lessees, subleases, subtenants, or vendees in the premises herein leased.

Section 9.09. Continuing Disclosure. The City hereby covenants and agrees to comply with and carry out all of the provisions of the continuing disclosure certificate or agreement (the “Continuing Disclosure Agreement”) as originally executed as of the date of issuance and delivery of the Bonds, and as it may be amended from time to time in accordance with its terms.

Notwithstanding any other provision of this Property Lease, failure by the City to comply with the Continuing Disclosure Agreement shall not constitute a default hereunder or under the Indenture; provided, however, that any Participating Underwriter (as defined in the Continuing Disclosure Agreement) or any Owner or beneficial owner of the Bonds may take such action as may be necessary and appropriate to compel performance by the City of its obligations under this Section

9.09, including seeking mandamus or specific performance by court order. All capitalized terms used but not defined in this Section 9.09 shall have the meanings given in the Continuing Disclosure Agreement.

21

22 ARTICLE X

DISCLAIMER OF WARRANTIES; USE OF THE LEASED PROPERTY

Section 10.01. Disclaimer of Warranties . THE AUTHORITY MAKES NO

AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO

THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR PAR TICULAR

PURPOSE OR FITNESS FOR USE OF THE LEASED PROPERTY, OR WARRANTY WITH RESPECT THERETO. THE CITY ACKNOWLEDGES THAT THE AUTHORITY IS NOT A

MANUFACTURER OF ANY PORTION OF THE LEASED PROPERTY OR A DEALER THEREIN

AND THAT THE CITY LEASES THE LEASED PROPE RTY AS-IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. In no event shall the Authority be liable for any incidental, indirect, special or consequential damage in connection with or arising out of the Property Lease or the existence, furnishing, functioning or the City’s use of the Leased Property as provided hereby.

Section 10.02. Use of the Leased Property. The City will not use, operate or maintain the Leased P roperty improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated hereby. The City shall obtain all permits and licenses, if any, necessary for the use of the Leased Property. In addition, the City agrees to comply in all respects with all laws of the jurisdictions in which its operations involving any portion of the Leased Property may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Leased P roperty; provided, that the City may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of the Trustee, adversely affect the estate of the Authority in and to the Leased Property or its interest or rights hereunder.

23 ARTICLE XI

ASSIGNMENT AND INDEMNIFICATION

Section 11.01. Assignment by Authority . The parties understand that the Property Lease and the rights of the Authority hereunder will be assigned to the Trustee pursuant to the Indenture (evidenced by a Memorandum of Indenture, recorded concurrently herewith), and, accordingly the City agrees to make all rental payments due hereunder directly to the Trustee, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach hereof or otherwise) that the City may from time to time have against the Authority. The City agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements which may be reasonably requested by the Authority or the Trustee or any Owner to protect their interests in the Leased Property during the term hereof.

Section 11.02. Indemnification. The City shall, to the full extent then permitted by law, indemnify, protect, hold harmless, save and keep harmless the Authority and its members, officers and employees, and the Trustee and its officers and employees from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless of the cause thereof (other than the negligence or willful misconduct of the Authority, or its membe rs, officers and employees, or of the Trustee or its officers and employees), and reasonable expenses in connection therewith, including, without limitation, reasonable counsel fees and expenses, penalties and interest arising out of or as the result of the entering into of the Property Lease, any accident in connection with the operation, use, condition or possession of the Leased Property or any portion thereof resulting in damage to property or injury to or death to any person, including without limitation any claim alleging latent and other defects, whether or not discoverable by the Authority or the City; any claim for patent, trademark or copyright infringement; any claim arising out of strict liability in tort; the presence on, under or about, or release from the Leased Property, or any portion thereof, of any substance, material or waste which is or becomes regulated or classified as hazardous or toxic under State, local or federal law and the violation of, or non - compliance with, any such laws by the City; or the exercise of the rights or duties of the Trustee under the Indenture. The indemnification arising under this section shall continue in full force and effect notwithstanding the full payment of all obligations hereunder or the termination here of for any reason. The City agrees not to withhold or abate any portion of the payments required pursuant hereto by reason of any defects, malfunctions, breakdowns or infirmities of the Leased Property. The Authority and the City mutually agree to promptly give notice to each other of any claim or liability hereby indemnified against following either’s learning thereof.

24 ARTICLE XII

SUBSTITUTION, RELEASE AND ADDITION OF LEASED PROPERTY

Section 12.01. Substitution of Leased Property.

(a) Whenever the City determines that the annual fair rental value of Substitute Leased Property is at least equal to the maximum annual Base Rental payments and Additional Rental payments yet unpaid hereunder and that the Substitute Leased Property is available for beneficial use and occupancy by the City, the City may amend Exhibit A to this Property Lease to establish the Substitute Leased Property as the Leased Property hereunder upon compliance with all of the conditions set forth in subsection (b), and after a Substitution, all or a portion of the Leased Property originally leased hereunder shall be released from the leasehold hereunder, as appropriate. The Authority and the City shall also make any amendments needed to be made to this Property Lease, and shall enter into any necessary site or ground leases in connection with such Substitution. Such amendments may be made without the consent of Bondowners.

(b) No Substitution shall take place hereunder until the City delivers to the Authority and the Trustee the following:

(1) A certificate of the City stating that: (i) the annual fair rental value of the Substitute Leased Property is no less than the maximum annual Base Rental and Additional Rental remaining unpaid hereunder at the time of Substitution; (ii) the remaining useful life of such Substitute Leased Property is at least equal to the remaining term hereof; and (iii) the City will, at the time of the Substitution, have beneficial use and occupancy of the Substitute Leased Property.

(2) An Opinion of Bond Counsel to the effect that the amendment described in paragraph (3) below has been duly authorized, executed and delivered and the Property Lease as so amended represents a valid and binding obligation of the City and the Authority and that the Substitution will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes or the exemption of interest on the Bonds from State of California personal income tax.

(3) The City shall cause to be recorded in the Office of the San Bernardino County Recorder an executed amendment to this Property Lease containing an amended Exhibit A, or a memorandum reflecting such amendment to Exhibit A.

(4) A CLTA standard form policy of title insurance in substantially the same form as delivered in connection with the issuance and delivery of the Bonds in at least the amount of the aggregate principal amount of outstanding Bonds at the time of the Substitution insuring the City ’s leasehold interest in the Substitute Leased Property hereunder, together with an endorsement thereto making such policy payab le to the Trustee for the benefit of the Owners, and also together with a certificate of the City to the effect that the exceptions, if any, contained in such policy do not interfere with the beneficial use and occupancy of the Substitute Leased Property by the City.

(5) The City shall provide written notice to each rating agency then rating the Bonds of the proposed Substitution.

25 (c) Upon receiving a written subordination from the County of its rights under the County Library Lease Agreement in a form acceptable to the City Manager in their sole discretion, the City may substitute the Hesperia Branch Library as the Substitute Leased Property for the City Hall. In connection with such substitution, the City shall not be required to comply with paragraphs (2) and (5) of Section 12.01(b).

Section 12.02. Release of Leased Property. The City shall have, and is hereby granted, the option at any time and from time to time during the term of this Property Lease to release from this Property Lease any portion of the Leased Property; provided that the City shall satisfy all of the following requirements which are hereby declared to be conditions precedent to such release:

(a) No event of default has occurred and is continuing under this Property Lease.

(b) The City shall file with the Authority and the Trustee an amended Exhibit A to this Property Lease which deletes the legal description of such Leased Property.

(c) The City shall cause to be recorded in the Office of the San Bernardino County Recorder a copy of an executed amendment to this Property Lease containing an amended Exhibit A, or a memorandum reflecting such amendment to Exhibit A.

(d) The City shall cause to be filed with the Trustee an Opinion of Bond Counsel to the effect that the amendment described in paragraph (c) above has been duly authorized, executed and delivered and the Property Lease as so amended represents a valid and binding obligation of the City and the Authority and that the release of Leased Property will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax p urposes or the exemption of interest on the Bonds from State of California personal income tax..

(e) The City shall file with the Authority and the Trustee a certificate stating that (1) the annual fair rental value of the remaining Leased Property, taking into consideration the release of the applicable portion of the Leased Property, is no less than the maximum annual Base Rental and Additional Rental remaining unpaid hereunder at the time of such release and (2) the useful life of the remaining Leased Property is at least as long as the remaining term of this Property Lease.

(f) The City shall provide written notice to each rating agency then rating the Bonds of the proposed release.

Section 12.03. Addition of Leased Property . The City may, at any time it deems it necessary or advisable, amend this Property Lease, and enter into any necessary or advisable site or ground lease, to add additional property to the property originally leased hereunde r. No such addition shall take place hereunder until the City delivers to the Authority and the Trustee the opinion set forth in Section 12.01(b)(2), provided that in such instance the opinion shall relate to the addition of Leased Property and not the substitution of Leased Property.

If the addition to the Leased Property (the “Addition”) is being done in connection with the issuance of Additional Bonds, the following requirements shall apply:

(a) A certificate of the City (with respect to clauses (i) and (ii) below) stating that: (i) the annual fair rental value of the Leased Property (including the Addition) is no

26 less than the maximum annual Base Rental and Additional Rental remaining unpaid hereunder at the time of such Addition; (ii) the remaining useful life of such Leased Property (including the Addition) is at least equal to the remaining term hereof; and (iii) the City will, at the time of the Addition, have beneficial use and occupancy of all of the Leased Property.

(b) An Opinion of Bond Counsel to the effect that the amendment hereto has been duly authorized, executed and delivered and the Property Lease as so amended represents a valid and binding obligation of the City and the Authority and that the Addition will not adversely affect the e xclusion of interest on the Bonds from gross income for federal income tax purposes or the exemption of interest on the Bonds from State of California personal income tax.

(c) The City shall cause to be recorded in the Office of the San Bernardino County Recorder an executed amendment to this Property Lease containing an amended Exhibit A, or a memorandum reflecting such amendment to Exhibit A.

(d) A CLTA standard form policy of title insurance in substantially the same form as delivered in connection with the issuance and delivery of the Bonds in at least the amount of the aggregate principal amount of outstanding Bonds at the time of the Addition insuring the City ’s leasehold interest in the Addition to the Leased Property hereunder, together with an endorsement thereto making such policy payable to the Trustee for the benefit of the Owners, and also together with an opinion of counsel to the City to the effect that the exceptions, if any, contained in such policy do not interfere with the beneficial use and occupancy of the Leased Property by the City.

(e) The City shall provide written notice to each rating agency then rating the Bonds of the proposed addition.

Section 12.04. Amendment of Site Lease. The Authority and the City shall amend the Site Lease as necessary in order to accomplish any Substitution, Addition, or any release of Leased Property pursuant to this Article XII.

27 ARTICLE XIII

DISCHARGE OF OBLIGATIONS

Section 13.01. Discharge of Obligations.Notwithstanding any other provision of this Property Lease, the City may on any date secure the payment of the Base Rental payments allocable to the Leased Property in whole or in part by depositing with the Trustee an amount of cash which, together with other available amounts on deposit in the funds and accounts established under the Indenture, is either:

(a) sufficient to pay such Base Rental payments, including the principal and interest components thereof, in accordance with the Base Rental payments schedule set forth in Appendix B, or

(b) invested in whole or in part in non-callable Defeasance Obligations in such amount as will, in the opinion of an independent certified public accountant, (which opinion must be addressed and delivered to the Trustee), together with interest to accrue thereon and together with any cash which is so deposited, be fully sufficient to pay such Base Rental payments when due, as the City instructs at the time of said deposit.

If the City makes a deposit under this Section with respect to all unpaid Base Rental payments, all obligations of the City under this Property Lease, and all security provided by this Property Lease for said Base Rental payments, will thereupon cease and terminate, excepting only the obligation of the City to make, or cause to be made all of said Base Rental payments from such deposit, and title to the Leased Property will vest in the City on the date of said deposit automatically and without further action by the City or the Authority. Said deposit constitutes a special fund for the payment of Base Rental payments in accordance with the provisions of this Property Lease.

28 ARTICLE XIV

MISCELLANEOUS

Section 14.01. Law Governing . This Property Lease shall be governed exclusively by the laws of the State of California as the same from time to time exist.

Section 14.02. Notices . All notices, statements, demands, consents, approvals, authorizations, offers, designations, requests, agreements or promises or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered personally or if mailed by United States registered mail, return receipt requested, postage prepaid, and, if to the City, the Authority or the Trustee, to the addresses set forth below, or to such other addresses as the respective parties may from time to time designate by notice in writing. A copy of any notice or other document to the City or the Authority shall also be delivered to the Trustee .

If to the City or the Authority: 9700 Seventh Ave.

Hesperia, CA 92345
Attn: City Manager

If to the Trustee: U.S. Bank Trust Company, National Association 633 West Fifth Street, 24th Floor
Los Angeles, CA 90071
Attention: Global Corporate Trust

Section 14.03. Validity and Severability. If for any reason this Property Lease shall be held by a court of competent jurisdiction to be void, voidable, or unenforceable by the Authority or by the City, or if for any reason it is held by such a court that any of the covenants and conditions of the City hereunder, including the covenant to pay rentals hereund er, is unenforceable for the full term hereof, then and in such event this Property Lease is and shall be deemed to be a Property Lease under which the rental payments due in any fiscal year of the City are subject to annual appropriation and are to be pai d by the City annually in consideration of the right of the City to possess, occupy and use the Leased Property, and all of the rental and other terms, provisions and conditions of this Property Lease, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.

Section 14.04. Net Lease. This Property Lease shall be deemed and construed to be a “net lease” and the City hereby agrees that the rentals provided for herein shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever.

Section 14.05. Taxes . The parties understand and agree that th e Leased Property constitutes public property free and exempt from all taxation; however, the Authority agrees to take whatever steps may be necessary, upon written request by the City, to contest any proposed valuation, the amount of any proposed tax or assessment, or to take steps necessary to recover any tax or assessment paid. The City agrees to reimburse the Authority for any and all costs and expenses thus incurred by the Authority.

Section 14.06. Article and Section Headings. All article and section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Property Lease.

29 Section 14.07. Execution . This Property Lease may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Property Lease. It is also agreed that separate counterpart s of this Property Lease may separately be executed by the Authority and the City, all with the same force and effect as though the same counterpart had been executed by both the Authority and the City.

Section 14.08. Third Party Beneficiary. To the extent that this Property Lease confers upon or gives or grants the Trustee any right, remedy or claim under or by reason of this Property Lease, and the Trustee are hereby explicitly recognized as being third-party beneficiar ies hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder.

Section 14.09. Amendment. The Authority and the City may at any time amend or modify any of t he provisions of this Property Lease, but only: (a) with the prior written consents of the Owners of a majority in aggregate principal amount of the Outstanding Bonds; or (b) without the consent of the Trustee or any of the Bond Owners, but only if such amendment or modification is for any one or more of the following purposes:

(i) to add to the covenants and agreements of the City contained in this Property Lease, other covenants and agreements thereafter to be observed, or to limit or surrender any right s or power herein reserved to or conferred upon the City;

(ii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein, to conform to the original intention of the City and the Authority;

(iii) to modify, amend or supplement this Property Lease in such manner as to assure that the interest on the Bonds remains excluded from gross income under the Code;

(iv) to amend the description of the Leased Property to reflect accurately the property originally intended to be included therein, or in connection with the provisions of Article XII;

(v) to obligate the City to pay additional amounts of Base Rental in connection with the issuance of Additional Bonds in accordance with the Indenture; or

(vi) in any other respect whatsoever as the Authority and the City deem necessary or desirable, if in the opinion of Bond Counsel such modifications or amendments do not materially adversely affect the interests of the Owners of the Bonds.

No such modification or amendment may (a) extend or have the effect of extending any Base Rental payment date or reducing any Base Rental payment or any premium payable upon the prepayment thereof, without the express consent of the Owners of the affected Bonds, or (b) modify any of the rights or obligations of the Trustee without its written assent thereto.

[Signature Page - Property Lease dated as of [Month of Closing Date] 1, 2023] IN WITNESS WHEREOF, the Authority and the City have caused this Property Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

HESPERIA JOINT PUBLIC FINANCE
AUTHORITY, as Lessor

Attest

By: By:

Secretary Executive Director

CITY OF HESPERIA, as Lessee

Attest

By: By:

City Clerk City Manager

[attach Notary acknowledgment]

A-1

EXHIBIT A

DESCRIPTION OF THE SITE

The land described herein is situated in the State of California, County of San Bernardino, City of Hesperia, and is described as follows:

Civic Plaza Park

Parcel 4 of Parcel Map No. 19153, in the City of Hesperia, County of San Bernardino, State of California, as per Map filed in Book 238 Pages 42 and 43 of Parcel Maps, in the office of the County Recorder of said County.

Hesperia City Hall

Parcel 5 of Parcel Map No. 19153, in the City of Hesperia, County of San Bernardino, State of California, as per Map filed in Book 238 Pages 42 and 43 of Parcel Maps, in the Office of the County Recorder of said County.

B-1

EXHIBIT B

BASE RENTAL PAYMENT SCHEDULE

2023 Bonds

Base Rental
Payment
Date*

Principal

Interest
Total
Base Rental
Payment

B-2
Base Rental
Payment
Date*

Principal

Interest
Total
Base Rental
Payment

Total $[Principal
Amount]

* The Base Rental Payment Dates are the April 15 and October 15 preceding the May 1 and November 1 dates shown above.

INDENTURE

By and Between the

HESPERIA JOINT PUBLIC FINANCE AUTHORITY

and

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee

Authorizing the Issuance of

$[Principal Amount]

HESPERIA JOINT PUBLIC FINANCE AUTHORITY
2023 Refunding Lease Revenue Bonds

Dated as of [Month of Closing] 1, 2023

Attachment 6

i

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS
SECTION 1.01. Definitions. ......................................................................................................................... 2

ARTICLE II
THE 2023 BONDS
SECTION 2.01. Designation. ..................................................................................................................... 11 SECTION 2.02. Terms of 2023 Bonds; Form. ........................................................................................... 11 SECTION 2.03. Execution and Authentication of 2023 Bonds. ................................................................. 12 SECTION 2.04. Transfer of Bonds. ........................................................................................................... 12 SECTION 2.05. Exchange of Bonds. ......................................................................................................... 13 SECTION 2.06. Bond Register. ................................................................................................................. 13 SECTION 2.07. Execution of Documents and Proof of Ownership. .......................................................... 13 SECTION 2.08. Temporary Bonds. ........................................................................................................... 14 SECTION 2.09. Bonds Mutilated, Lost, Destroyed or Stolen. ................................................................... 14 SECTION 2.10. Book-Entry; Limited Obligation of Authority. .................................................................... 15 SECTION 2.11. Representation Letter. ..................................................................................................... 15 SECTION 2.12. Transfers Outside Book-Entry System. ........................................................................... 16 SECTION 2.13. Payments and Notices to the Nominee. .......................................................................... 16 SECTION 2.14. Additional Bonds. ............................................................................................................. 16 SECTION 2.15. Proceedings for the Issuance of Additional Bonds .......................................................... 17 SECTION 2.16. Applicability to Additional Bonds ...................................................................................... 18

ARTICLE III
ISSUANCE OF 2023 BONDS
SECTION 3.01. Issuance of 2023 Bonds. ................................................................................................. 19 SECTION 3.02. Application of Proceeds of Sale of 2023 Bonds – Allocation Among Funds. .................. 19 SECTION 3.03. Establishment and Application of Refunding Fund. ......................................................... 19 SECTION 3.04. Establishment and Application of Costs of Issuance Fund. ............................................. 19

ARTICLE IV

REDEMPTION OF BONDS
SECTION 4.01. Redemption. ..................................................................................................................... 20 SECTION 4.02. Selection of Bonds for Redemption. ................................................................................ 21 SECTION 4.03. Notice of Redemption. ..................................................................................................... 21 SECTION 4.04. Partial Redemption. ......................................................................................................... 22 SECTION 4.05. Effect of Redemption. ...................................................................................................... 22

ARTICLE V

REVENUES
SECTION 5.01. Pledge of Revenues; Revenue Fund. .............................................................................. 23 SECTION 5.02. Allocation of Revenues to Special Funds. ....................................................................... 23 SECTION 5.03. Reimbursement of Rental. ............................................................................................... 24

ARTICLE VI

COVENANTS OF THE AUTHORITY
SECTION 6.01. Payment of Principal and Interest. ................................................................................... 26 SECTION 6.02. Extension or Funding of Claims for Interest. .................................................................... 26 SECTION 6.03. Maintenance of Revenues. .............................................................................................. 26 SECTION 6.04. Accounting Records and Reports. ................................................................................... 26 SECTION 6.05. Compliance with Indenture. ............................................................................................. 26 SECTION 6.06. Compliance with Property Lease. .................................................................................... 26 SECTION 6.07. Payment of Taxes. ........................................................................................................... 27 SECTION 6.08. Observance of Laws and Regulations. ............................................................................ 27 SECTION 6.09. Maintenance and Repair of Leased Property. ................................................................. 27 SECTION 6.10. Other Liens....................................................................................................................... 27 SECTION 6.11. Against Encumbrances or Sales. ..................................................................................... 28

ii
SECTION 6.12. Compliance with Contracts. ............................................................................................. 28 SECTION 6.13. Insurance. ........................................................................................................................ 28 SECTION 6.14. Prosecution and Defense of Suits. .................................................................................. 31 SECTION 6.15. Recordation and Filing. .................................................................................................... 31 SECTION 6.16. Reserved. ......................................................................................................................... 32 SECTION 6.17. Eminent Domain. ............................................................................................................. 32 SECTION 6.18. Validity of Bonds. ............................................................................................................. 33 SECTION 6.19. Further Assurances. ......................................................................................................... 33 SECTION 6.20. Tax Covenants. ................................................................................................................ 33

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES
SECTION 7.01. Events of Default and Acceleration of Maturities. ............................................................ 35 SECTION 7.02. Application of Funds Upon Acceleration. ......................................................................... 36 SECTION 7.03. Trustee to Represent Bondowners. ................................................................................. 36 SECTION 7.04. Bondowners’ Direction of Proceedings. ........................................................................... 37 SECTION 7.05. Limitation on Bondowners’ Right to Sue. ......................................................................... 37 SECTION 7.06. Non-waiver. ...................................................................................................................... 37 SECTION 7.07. Remedies Not Exclusive. ................................................................................................. 38

ARTICLE VIII

THE TRUSTEE
SECTION 8.01. Trustee; Acceptance; Removal; Resignation. .................................................................. 39 SECTION 8.02. Liability of Trustee. ........................................................................................................... 40 SECTION 8.03. Security for Deposits. ....................................................................................................... 42 SECTION 8.04. Investment of Moneys in Funds. ...................................................................................... 42 SECTION 8.05. Notice; Acceptance of Trusts. .......................................................................................... 43 SECTION 8.06. Compensation and Indemnification of Trustee. ............................................................... 44

ARTICLE IX

MODIFICATION OR AMENDMENT OF THE INDENTURE
SECTION 9.01. Amendments Permitted. .................................................................................................. 45 SECTION 9.02. Disqualified Bonds. .......................................................................................................... 46 SECTION 9.03. Effect of Supplement or Amendment. .............................................................................. 46 SECTION 9.04. Endorsement or Replacement of Bonds Issued After Amendments. .............................. 46 SECTION 9.05. Amendatory Endorsement of Bonds. ............................................................................... 46 SECTION 9.06. Notice to Rating Agencies ................................................................................................ 46

ARTICLE X

DEFEASANCE
SECTION 10.01. Discharge of Indenture. .................................................................................................. 47 SECTION 10.02. Discharge of Liability on Bonds. .................................................................................... 48 SECTION 10.03. Payment of Bonds After Discharge of Indenture. .......................................................... 48 SECTION 10.04. Amounts Remaining in Funds and Accounts. ................................................................ 48

ARTICLE XI

MISCELLANEOUS
SECTION 11.01. Liability of Authority Limited to Revenues. ..................................................................... 49 SECTION 11.02. Successor Is Deemed Included in All References to Predecessor. .............................. 49 SECTION 11.03. Limitation of Rights to Parties and Bondowners. ........................................................... 49 SECTION 11.04. Waiver of Notice. ............................................................................................................ 49 SECTION 11.05. Destruction of Bonds. ..................................................................................................... 49 SECTION 11.06. Severability of Invalid Provisions. .................................................................................. 49 SECTION 11.07. Notices. .......................................................................................................................... 50 SECTION 11.08. Article and Section Headings. ........................................................................................ 50 SECTION 11.09. Third-Party Beneficiary. ................................................................................................. 50 SECTION 11.10. Funds and Accounts. ..................................................................................................... 50 SECTION 11.11. Waiver of Personal Liability. ........................................................................................... 51 SECTION 11.12. Governing Law. .............................................................................................................. 51 SECTION 11.13. Counterparts. ................................................................................................................. 51

iii

EXHIBIT A FORM OF BONDS

INDENTURE

THIS INDENTURE, dated as of [Month of Closing] 1, 2023 , is by and between the HESPERIA JOINT PUBLIC FINANCE AUTHORITY , a public body, corporate and politic, duly organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, National Association, a national banking association organized and existing under the laws of the United States of America, as trustee (the “Trustee”).

RECITALS

WHEREAS, in order to finance acquisi tion and construction of a new Civic Plaza and related on-site improvements, the City of Hesperia (the “City”) previously caused execution and delivery of its 2005 Variable Rate Demand Certificates of Participation (Civic Plaza Financing) (the “2005 Certificates”) pursuant to a Trust Agreement, dated as of May 1, 2005, among the City, the Hesperia Public Financing Authority (the “Financing Authority”) and a corporate trustee; the 2005 Certificates represented interests in lease payments made by the City to the Financing Authority pursuant to a Lease Agreement, dated as of May 1, 2005; and

WHEREAS, for the purpose of refinancing the 2005 Certificates, the City subsequently caused the Authority to issue its 2013 Refunding Lease Revenue Bonds (Refinancing of 2 005 Civic Plaza Financing) in the aggregate principal amount of $12,445,000 (the “ 2013 Bonds”), under an Indenture dated as of October 1, 2013; the 2013 Bonds are payable from lease payments made by the City under a Property Lease dated as of October 1, 2013 (the “2013 Lease Agreement”), between the Authority as lessor and the City as lessee; and

WHEREAS, the 2013 Bonds maturing on or after October 1, 2024 are subject to optional redemption, without premium, prior to maturity on any date on or after Octobe r 1, 2023, at the option of the Authority; and

WHEREAS, in order to achieve cash flow savings, the City wishes to prepay the lease payments payable by the City under the 2013 Lease Agreement and to cause the Authority to defease and redeem the 2013 Bonds, and, for that purpose, the Authority proposes to issue the 2023 Refunding Lease Revenue Bonds (the “2023 Bonds”) under this Indenture and Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Law”); and

WHEREAS, in order to accomplish the refinancing plan, (i) the City and the Authority will enter into a Site and Facilities Lease (the “Site Lease”), under which the City will lease to the Authority certain real property and improvements of the City (the “Leased Property”) and (ii) the City and the Authority will enter into a Property Lease (the “Property Lease”), under which the Authority will sublease the Leased Property to the City; and

NOW, THEREFORE , in order to secure the payment of the 2023 Bonds and the performance and observance by the Authority of all the covenants, agreements and conditions herein and in the 2023 Bonds contained, and in consideration of the mutual covenants and agreements contained herein, the Authority and the Trustee hereby agree as follows:

2 ARTICLE I

DEFINITIONS

SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall have, for purposes of this Indenture and of any certificate, opinion or other document herein mentioned, the meanings herein specified. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in Article I of the Property Lease.

“Additional Bonds ” means Additional Bonds issued in accordance with Section 2.14 hereof.

“Agreement” means the Joint Exercise of Powers Agreement, dated as of October 2, 2012, by and between the City and the Hesperia Water District, together with any amendments thereof and supplements thereto.

“Annual Debt Service ” means, for each twelve -month period ending on each Principal Payment Date, the sum of (1) the interest falling due on the Outs tanding Bonds in such twelve- month period, assuming that the Outstanding Bonds are retired as scheduled; and (2) the principal amount of the Outstanding Bonds, if any, falling due by their terms in such twelve-month period.

“Authority” means the Hesperia Joint Public Finance Authority, a joint exercise of powers authority duly organized and existing under the laws of the State of California and the Agreement.

“Base Rental” means all amounts payable to the Authority from the City as Base Rental pursuant to Section 3.01 of the Property Lease.

“Bondowner” or “Owner” mean the person in whose name such Bond shall be registered.

“Bonds” means the Outstanding 2023 Bonds and any Outstanding Additional Bonds.

“Business Day” means any day other than (i) a Saturday or a Sunday or (ii) any other day on which commercial banks located in the city in which the Corporate Trust Office is located are authorized or required by law to close.

“Certificate” or “Certificate of the Authority ”, “Statement” or “Statement of the Authority”, “Request” or “Request of the Authority” and “Requisition” or “Requisition of the Authority” mean, respectively, a written certificate, statement, request or requisition signed in the name of the Authority by its Designated Officer, or such othe r person as may be designated in writing to the Trustee and authorized to sign for the Authority. Any such instrument and supporting opinions or representations, if any, may be, but need not be, combined in a single instrument with any other instrument, o pinion or representation, and the two or more so combined shall be read and construed as a single instrument.

Any Certificate or Statement of the Authority may be based, insofar as it relates to legal, accounting or engineering matters, upon the opinion or representation of counsel, accountants or engineers, unless the officer signing such certificate or statement knows, or in the exercise of reasonable care should have known, that the opinion or representation with respect to the matters upon which such c ertificate or statement may be based, as aforesaid, is erroneous. The same officer of the Authority, or the same counsel or accountant or engineer, as the case may be, need

3 not certify to all of the matters required to be certified under any provision of this Indenture, but different officers, counsel, accountants or engineers may certify to different facts.

“Certificate” or “Certificate of the City”, “Statement” or “Statement of the City”, “Request” or “Request of the City” and “Requisition” or “Requisition of the City” mean, respectively, a written certificate, statement, request or requisition signed in the name of the City by its Designated Officer, or such other person as may be designated in writing to the Trustee and authorized to sign for the City. Any such instrument and supporting opinions or representations, if any, may be, but need not be, combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.

Any Certificate or Statement of the City may be based, insofar as it relates to legal, accounting or engineering matters, upon the opinion or representation of counsel, accountants or engineers, unless the officer signing such certificate or statement knows, or in the exercise of reasonable care should have known, that the opinion or representation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous. The same officer of the City, or the same counsel or accountant or engineer, as the case may be, need not certify to all of the matters required to be certified under any provision of this Indenture, but different officers, counsel, accountants or engineers may certify to different facts.

“City” means the City of Hesperia, a general law city and municipal corporation duly organized and existing under the laws of the State of California.

“Code” means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable tempora ry and final regulations promulgated, and applicable official public guidance published, under the Code.

“Corporate Trust Office” means the corporate trust office of the Trustee at which office at the date hereof is located in Los Angeles, California, or such other place as designated by the Trustee except that with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted.

“Costs of Issuance ” means all items of expense directly or indirectly payable by or reimbursable to the Authority or the City and related to the authorization, issuance, sale and delivery of the Bonds, includin g but not limited to advertising and printing costs, costs of preparation and reproduction of documents, filing and recording fees, fees and charges of the Trustee, legal fees and charges, fees and disbursements of consultants and professionals, rating agency fees, and fees and charges for preparation, execution, transportation and safekeeping of the Bonds.

“Costs of Issuance Fund” means the funds created pursuant to Section 3.04 hereof.

“Defeasance Obligations” means:

(a) Cash (fully insured by the Federal Deposit Insurance Corporation or collateralized by Government Obligations); and

(b) Government Obligations.

4 “Depository” means any securities depository appointed to act as Depository under Section 2.10 hereof.

“Designated Officer” means (i) with respect to the Authority, the Chair, Executive Director, Secretary, Assistant Secretary or Treasurer of the Authority or any other person authorized by a Certificate of the Authority to perform an act or sign a document on behalf of the Aut hority for purposes of this Indenture and (ii) with respect to the City, its Mayor, City Manager, Administrative Services Director , City Clerk or Assistant City Clerk , or any other person authorized by a Certificate of the City to perform an act or sign a document on behalf of the City for purposes of this Indenture.

“Escrow Agreement” means the Escrow Deposit and Trust Agreement, dated the Closing Date, by and among the City, the Authority and U.S. Bank Trust Company, National Association, as trustee for the 2013 Bonds.

“Facilities” means the improvements located on the Site.

“Fair Market Value ” means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaran teed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security --State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled investment fund in which the Authority and related parties do not own more than a 10% beneficial interest therein if the return paid by the fund is without regard to the source of the investment. To the extent required by the applicable regulations under the Code, the term “investment” will include a hedge.

“Fiscal Year” or “fiscal year” means the period beginning July 1 of each year and ending on the next succeeding June 30.

“Fitch” means Fitch Ratings and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority or the City.

“Government Obligations” means (a) direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America (“U.S. Treasury Obligation”), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to time ly payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner

5 of the investment is the real party in interest and has the right to proceed directly and individually against the ob ligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated.

“Independent Public Accountant ” means any certified public accountant or public accountant or firm of such accountants retained and paid by the Authority or the City, and who, or each of whom:

(1) is in fact independent, and not under domination of the Authority or the City;

(2) does not have any substantial interest, direct or indirect, with the Authority or the City; and

(3) is not connected with the Authority or the City as a board member of the Authority or as a member of the City Council of the City, or as an officer or employee of the Authority or the City, but who may be regularly retained to make annual or similar audits of any of the books of the Authority or the City.

“Indenture” means this Indenture as originally executed or as it may from time to time be supplemented or amended pursuant to the provisions hereof.

“Insurance and Eminent Domain Proceeds Fund” means the fund by that name created pursuant to Section 5.02(e) hereof.

“Interest Fund” means the fund by that name created pursuant to Section 5.02(a) hereof.

“Interest Payment Date” means each May 1 and November 1, commencing on November 1, 2023.

“Law” means Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California , unless otherwise specified in a Supplemental Indenture.

“Leased Property” means the Site and the Facilities.

“Maximum Annual Debt Service” means the largest Annual Debt Service during the period from the date of such determination through the final maturity date of any Outstanding Bonds.

“Moody’s” means Moody’s Investors Service and its successors and assigns, except that if such corporation 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 Authority or the City.

“Nominee” means the nominee of the Depository as determined from time to time in accordance with Section 2.10.

“Notices” means all notices, certificates or other documentation to be provide d by any person to any other person under this Indenture, the Property Lease, the Site Lease or the Continuing Disclosure Agreement, including, without implied limitation, the annual reports and notices of material events to be provided by the City under the Continuing Disclosure Agreement

6 and notices to be provided by the Trustee to the City or the Authority regarding noncompliance with any provision of the Indenture or the Property Lease.

“Opinion of Bond Counsel” means a written opinion of an attorney-at-law, or a firm of such attorneys, of nationally recognized standing in matters pertaining to the exclusion from gross income for federal income tax purposes of interest on obligations issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any state of the United States of America.

“Outstanding”, when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 9.02) all Bonds theretofore executed, issued and delivered by the Authority under this Indenture except:

(1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation;

(2) Bonds for the payment or redemption of which funds in t he necessary amount shall have been deposited theretofore with the Trustee (whether upon or prior to the maturity or redemption date of such Bonds), provided, that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption sh all have been given as provided in Article IV or some other provision satisfactory to the Trustee shall have been made for the giving of such notice; and

(3) Bonds in lieu of or in substitution for which other Bonds shall have been executed, issued and delivered by the Authority pursuant to Section 2.09.

“Participants” means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Bonds as a securities depository.

“Permitted Encumbrances” has the meaning given that term in the Property Lease.

“Permitted Investments” means any of the following which at the time acquired or made are legal investments for the Authority, under applicable State of California laws, for the moneys held hereunder then proposed to be invested therein (provided that the Trustee shall be entitled to rely upon any investment directions from the Authority as conclusive certification to the Trustee that the investments described therein are so authorized under the laws of the State of California), but only to the extent that the same are acquired at Fair Market Value:

(a) Defeasance Obligations;

(b) Federal Housing Administration debentures;

(c) The following listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America:

(i) Federal Home Loan Mortgage Corporation (FHLMC) senior debt obligations and participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts),

7 (ii) Farm Credit System (formerly Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) consolidated system-wide bonds and notes,

(iii) Federal Home Loan Banks (FHL Banks) consolidated debt obligations, and

(iv) Federal National Mortgage Association (FNMA) senior debt obligations and mortgage -backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts);

(d) Unsecured certificates of deposit, time deposits, and bankers’ acceptances (having maturities of not more than 365 days, except for banker’s acceptances which may not have maturities of more than 180 days) of any bank the short-term obligations of which are rated “A-1+” or better by S&P and “Prime-1” by Moody’s including those of the Trustee and its affiliates.

(e) Deposits the aggregate amount of which are insured by the Federal Deposit Insurance Corporation or collateralized by Government Obligations, in banks, which may include the Trustee and its affiliates, which have capital and surplus of at least $15 million.

(f) Commercial paper (having original maturities of not more than 270 days) rated at the time of purchase “A-1+” by S&P and “Prime-1” by Moody’s.

(g) Money market funds rated “Aam” by S&P, or better and if rated by Moody’s rated “Aa2” or better including funds for which the Trustee and its affiliates provide investment advisory or other management services.

(h) “State Obligations,” which means:

(i) Direct gene ral obligations of any state of the United States of America or any subdivision of agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated at least “A3” by Moody ’s and at least “A-” by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated,

(ii) Direct general short -term obligations of any state agency or subdivision or agency thereof described in (i) above and rated “A-1” by S&P and “MIG-1” by Moody’s, and

(iii) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state or state agency described in ( ii) above and rated “AA-” or better by S&P and “Aa3” or better by Moody’s;

(i) Pre-refunded municipal obligations rated “AAA” by S&P and “Aaa” by Moody’s meeting the following requirements:

(i) the municipal obligations are (A) not subject to redemption prior to maturity or (B) the trustee for the municipal obligations has been given irrevocable

8 instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions,

(ii) the municipa l obligations are secured by cash or U.S. Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations,

(iii) the principal of and interest on the U.S. Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification Report”),

(iv) the cash or U.S. Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations,

(v) no substitution of a U.S. Treasury Obligation shall be permitted except with another U.S. Treasury Obligation and upon delivery of a new Verification Report, and

(vi) the cash or U.S. Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent.

(j) Repurchase agreements with (i) any domestic bank, or domestic branch of a foreign bank, the long term debt of which is rated at least “A-” by S&P and “A3” by Moody’s, or (ii) any broker-dealer with “retail customers” or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least “A-” by S&P and “A3” by Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation, or (iii) any other entity rated at least “A-” by S&P and “A3” Moody’s (each an “Eligible Provider”);

(k) Investment agreements: with a domestic bank or corporation the long-term debt of which, or, in the case of a guaranteed corporation the long -term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, or the guarantor is rated at least “AA-” by S&P and “Aa3” by Moody’s; and

(l) the Local Agency Investment Fund established under Section 16429.1 of the Government Code of the State of California, provided, however, that the Trustee must be allowed to make investments and withdrawals in its own name and the Trustee may restrict investments in the Local Agency I nvestment Fund if required to keep moneys available for the purposes of the Indenture.

“Principal Fund” means the fund by that name created pursuant to Section 5.02(b) hereof.

“Principal Payment Date” means any November 1 on which the principal of the Bo nds is scheduled to be paid.

“Property Lease ” means the Property Lease, made and entered into as of [Month of Closing] 1, 2023, by and between the Authority, as lessor, and the City, as lessee, providing for

9 the lease of the Leased Property from the Authority to the City, as the same may be amended or supplemented.

“Rating Agency” means Moody’s and/or S&P and/or Fitch so long as each of them, as applicable, maintain a rating on the Bonds.

“Record Date ” means the 15th day of the calendar month immediately preceding the month in which an Interest Payment Date occurs regardless of whether or not such day is a Business Day.

"Refunding Fund" means the Refunding Fund created pursuant to Section 3.03 hereof.

“Revenue Fund” means the fund by that name created pursuant to Section 5.01 hereof.

“Revenues” means (i) the Base Rentals set forth in Exhibit B to the Property Lease which are received by the Trustee for the benefit of the Owners of the Bonds and (ii) other amounts received by the Trustee for the benefit of the Owners of the Bonds.

“S&P” means Standard & Poor’s, a division of the McGraw Hill Companies, of New York, New York, its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority or the City.

“Securities Depositories ” means The Depository Trust Company, at such addresses and/or to such other securities depositories as the Authority may designate in a Request of the Authority delivered to the Trustee.

“Serial Bonds” means (i) the 2023 Bonds maturing on November 1 in each of the years _____ through ______, and (ii) any Additional Bonds identified as Serial Bonds in a Supplemental Indenture.

“Sinking Account Payment ” means the principal amount of Term Bonds required to be redeemed pursuant to Section 4.01(b)(ii) hereof on any Sinking Account Payment Date.

“Sinking Account Payment Date ” means the dates on which Sinking Account Payments are payable on the Term Bonds.

“Site” means the parcels of real property described in Exhibit A attached to the Property Lease, as such description may be modified or amended as provided in the Property Lease and the Site Lease.

“Site Lease” means the Site and Facilities Lease dated as of [Month of Closing] 1, 2023 between the City, as lessor, and the Authority, as lessee.

“Supplemental Indenture” means any indenture hereafter duly authorized and entered into between the Authority and the Trustee, supplementing, modifying or amending this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.

“Surplus Revenue Fund” means the fund by that name created pursuant to Section 5.02(d) hereof.

10 “Tax Certificate” means, with respect to the 2023 Bonds, collectively, the Certificate as to Arbitrage and the Certificate Regarding the Use of Proceeds, each dated as of the date of issuance and delivery of the 2023 Bonds, executed by the City and the Authority

“Term Bonds” means (i) the 2023 Bonds maturing on November 1, _____ and November 1, _____, and (ii) any Additional Bonds identified as such in a Supplemental Indenture.

“Trustee” means the trustee under this Indenture with the duties and powers herein prescribed, its successors and assigns and any oth er corporation or association which may at any time be substituted in its place as provided in Section 8.01.

“2013 Bonds” has the meaning given that term in the Recitals.

“2023 Bonds” means the Hesperia Joint Public Finance Authority 2023 Refunding Lease Revenue Bonds.

11 ARTICLE II

THE 2023 BONDS

SECTION 2.01. Designation. The Bonds to be issued by the Authority under and subject to the terms of this Indenture and the Law shall be designated as the “Hesperia Joint Public Finance Authority Lease Revenue Bonds”.

The 2023 Bonds to be issued by the Authority under and subject to the terms of this Indenture and the Law shall be designated as the “Hesperia Joint Public Finance Authority 2023 Refunding Lease Revenue Bonds ”, which shall be in the initial aggregate principal amount of $[Principal Amount].

SECTION 2.02. Terms of 2023 Bonds; Form.

(a) Dated Date and Maturity Dates. Each 2023 Bond shall be dated its date of original delivery and shall be issued and delivered in fully registered form numbered as the Trustee shall determine. The 2023 Bonds shall be issued and delivered in the denominations of $5,000 and any integral multiples thereof.

The 2023 Bonds shall mature on the dates, in the principal amounts, and interest with respect thereto shall be computed at the rates, as shown below:

Maturity Date
(November 1)
Principal
Amount
Interest
Rate

(T): Term Bond

(b) Calculation of Interest. Interest with respect to each 2023 Bond shall accrue from the Interest Payment Date next preceding the date of authentication thereof, unless (i) it is authenticated after a Record Date and before the close of business on the immediately following Interest Payment Date, in which event interest w ith respect thereto shall be payable from such Interest Payment Date, or (ii) it is authenticated on or before the Record Date immediately preceding the first Interest Payment Date in which event interest with respect thereto shall be

12 payable from its dated date; provided, however, that if at the time of authentication of any 2023 Bond, interest with respect thereto is in default, interest with respect thereto shall be payable from the Interest Payment Date to which interest has previously been paid or made available for payment or from its dated date if no interest has been paid or made available for payment. Interest with respect to the 2023 Bonds shall be computed on the basis of a 360 -day year composed of 12 months of 30 days each.

Interest with respect to any 2023 Bond shall be payable on each Interest Payment Date to the Owner thereof as of the close of business on the Record Date, such interest to be paid by check of the Trustee, sent on such Interest Payment Date to the Owner by first-class mail, postage prepaid, at his address as it appears on the registration book maintained by the Trustee, or, upon written request of an Owner of at least $1,000,000 in aggregate principal amount of 2023 Bonds received by the Trustee on or prior to the Record Date, by wire transfer in immediately available funds to an account with a financial institution within the continental limits of the United States of America designated by such Owner. Payments of defaulted interest shall be paid by check to the Owners as of a special record date to be fixed by the Trustee, notice of which special record date shall be given to the Owners by first class mail not less than 10 days prior thereto.

(c) Principal Provisions. Principal and premium, if any, with respect to each 2023 Bond is payable upon surrender of such 2023 Bond at the Corporate Trust Office of the Trustee upon maturity or the earlier redemption thereof. The principal of, premium, if any, and interest on the 2023 Bonds shall be payable in lawful money of the United States of America.

(d) Form. The 2023 Bonds shall be substantially in the form set forth in Exhibit A attached hereto and incorporated herein by this reference.

(e) Book-Entry. So long as the 2023 Bonds shall be in book -entry, principal of, premium, if any and interest on the 2023 Bonds shall be paid as provided in Section 2.10.

SECTION 2.03. Execution and Authentication of 2023 Bonds. The 2023 Bonds shall be executed on behalf of the Authority by the signature of its Chair, Executive Director or Treasurer, and attested on behalf of the Authority by the signature of its Secretary or Assistant Secretary. Any of the signatures of the Chair, Executive Director, Treasurer or Secretary may be by printed facsimile reproduction. If any officer whose signature appears on any 2023 Bond ceases to be such officer before delivery of the 2023 Bonds to the purchaser, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the 2023 Bonds to the purchaser. Also, any 2023 Bond may be signed and attested on behalf of the Authority by such persons as at the actual date of the execution of such 2023 Bond shall be the proper officers of the Authority although at the nominal date of such 2023 Bond any such person may not have been such officer of the Authority.

Only such of the 2023 Bonds as shall bear thereon a certificate of authentication and registration in the form herein before recited, manually signed and dated by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the 2023 Bonds have been duly authenticated, registered and delivered hereunder and are entitled to the benefits of this Indenture.

SECTION 2.04. Transfer of Bonds. Any registered Bond may, in accordance with its terms, be transferred upon the books required to be ke pt pursuant to the provisions of Section

2.06 by the person in whose name it is registered, in person or by his duly authorized attorney in

13 writing, upon surrender of such fully registered Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed.

Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds for like aggregate principal amount, maturity date and interest rate. The Trustee shall require the payment by the Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer.

No transfer of any Bond shall be required to be made during the period after the Record Date through and including the next succeeding Interest Payment Date or during the period designated for selection of Bonds for redemption, or of any Bond so selected for redemption.

SECTION 2.05. Exchange of Bond s. Bonds may be exchanged at the Principal Corporate Trust Office of the Trustee for a like aggregate principal amount of fully registered Bonds of other authorized denominations of the same maturity and interest rate. The Trustee shall require the payment by the Bondowner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. No such exchange shall be required during the period after the Recor d Date through and including the next succeeding Interest Payment Date or during the period designated for selection of Bonds for redemption, or of any Bond so selected for redemption.

SECTION 2.06. Bond Register. The Trustee will keep or cause to be kept, at its Principal Corporate Trust Office during normal business hours, sufficient books for the registration and transfer of the Bonds, which shall at all reasonable times be open to inspection by the Authority upon prior notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as hereinbefore provided.

SECTION 2. 07. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent or other instrument in writing required or permitted by this Indenture to be signed or executed by the Owners may be in any number of concurrent instruments of similar tenor, and may be signed or executed by such Owners in person or by their attorneys or agents appointed by an instrument in writing for that purpose. Proof of the execution of any such instrument, or of any instrument appointing any such attorney or agent shall be sufficient for any purpose of the Indenture (except as otherwise herein provided), if made in the following manner. The fact and date of the execution by any Owner or his attorney or agent of any such instrument, and of any instrument appointing any such attorney or agent, may be proved by a certificate, which need not be acknowledged or verified, of an officer of any bank or trust company located withi n the United States of America, or of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in such jurisdictions, that the person signing such instrument acknowledged before him the execution thereof. Where any suc h instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such certificate shall also constitute sufficient proof of his authority.

Nothing contained in this Article II shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters herein stated which it may deem sufficient. Any request or consent of the Owner of any Bond shall bind every future Owner of the same Bond in respect of anything done or suffered to be done by the Trustee in pursuance of such request or consent.

14 The ownership of Bonds, the amount, numbers and other identification thereof, and the date of holding the same, shall be proved by the bond registration books held by the Trustee.

Any request, consent or declaration of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority pursuant to such request, consent or declaration.

In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any action pursuant to this Indenture, Bonds which are disqualified as provided in Section 9.02 shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, provided, that, for the purpose of determining whether the Trustee shall be protected in relying on any such demand, request, direction, consent or waiver, only Bonds which the Trustee knows to be so disqualified shall be disregarded. Bonds so disqualified which have been pledged in good faith may be regarded as Outstanding for the purpose of this section if the pledgee shall establish to the satisfaction of the Trustee the pledgee ’s right to vote such Bonds and that the pledgee is not a person whose ownership of the Bonds would cause the Bonds to be disqualified pursuant to Section 9.02. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

SECTION 2.08. Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Authority and may contain such reference to any of the provisions of this Indenture as may be appropriate.

Every temporary Bond shall be executed by the Authority and shall be authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive fully registered Bonds. If the Authority issues temporary Bonds it will execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds may be surrendered for cancellation in exchange therefor at the Principal Corporate Trust Office of the Trustee, and th e Trustee shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive fully registered Bonds of authorized denominations of the same maturity or maturities and interest rate or rates. Until so exchanged, the tempor ary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder.

SECTION 2.09. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate, if necessary, and deliver a new Bond of like tenor in exchange and substitution for the Bond so m utilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by it and destroyed. If any Bond 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, then the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate, if necessary, and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Authority may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this section and of the expenses which may be incurred by the Authority and the Trustee in the premises.

15 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 at the direction of the Authority upon receipt of like proof, indemnity and payment of expenses.

Any such substitute Bond issued pursuant to this section shall be entitled to equal and proportionate benefits with all other Bonds issued hereunder. The Authority and the Trustee shall not be required to treat both the original Bond and any substitute 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 substitute Bond shall be treated as one and the same.

SECTION 2.10. Book -Entry; Limited Obligation of Authority. The Bonds may be issued in the form of a separate single fully registered Bond (which may be typewritten) for each maturity. The ownership of such Bond shall be registered in the registration books kept by the Trustee in the name of the Nominee as nominee of the Depository.

With respect to Bonds registered in the registration books kept by the Trustee in the name of the Nominee, the Authority and the Trustee shall have no responsibility or obligation to any such Participant or to any Person on behalf of whic h such a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the Authority and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other Person, other than as shown in the registration books kept by the Trustee, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event the Bonds are redeemed in part, or (iv) the payment to any Participant or any other Person, other than a N ominee as shown in the registration books kept by the Trustee, of any principal of, premium, if any, or interest on the Bonds. The Authority and the Trustee may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Trustee as the owner and absolute Owner of such Bond for the purpose of payment of principal, premium, if any, and interest on such Bond, for the purpose of giving notices of prepayment and other matters with respect to such Bond, for the purpo ses of registering transfers with respect to such Bond, and for all other purposes whatsoever.

The Trustee shall pay all principal, premium, if any, and interest with respect to the Bonds, only to or upon the order of the respective Owners, as shown in the registration books kept by the Trustee, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligations with respect to payment of principal, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid.

No person other than an Owner, as shown in the registration books kept by the Trustee, shall receive a Bond evidencing the obligation of the Authority to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon delivery by the Depository to the Nominee, the Trustee and the Authority of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the nomi nee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such new nominee of the Depository.

SECTION 2.11. Representation Letter. In order to qualify the Bonds for the Depository’s book-entry system, the Authority shall execute, seal, countersign and deliver to such Depository a letter from the Authority representing such matters as shall be necessary to so qualify the Bonds (the “Representation Letter”). The execution and delivery of the Representation Letter shall not

16 in any way limit the provisions of Section 2.10 hereof or in any other way impose upon the Authority or the Trustee any obligation whatsoever with respect to Persons having interests in the Bonds other than the Owners, as shown on the registration books kept by the Trustee. In the written acceptance of the Trustee, such Trustee shall agree to take all actions necessary for all representations of the Authority in the Representation Letter with respect to the Trustee to at all times be complied with. In addition to the execution and delivery of the Representation Letter, the Authority shall take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository’s book-entry system.

SECTION 2.12. Transfers Outside Book-Entry System. The Authority may by written request, at any time or for any reason, remove the Depository and appoint a successor or successors thereto. In the event (i) the Depository determines not to continue to act as securities depository for the Bonds, or (ii) the Authority determines that the Depository shall no longer so act, then the Authority will discontinue the book-entry system with the Depository. If the Authority fails to identify another qualified securities depository to replace the Depository then the Bonds shall no longer be restricted to being registered in the registration books kept by the Trustee in the name of the Nominee, but shall be registered in whatever name or names the Owners of Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 2.04.

SECTION 2.13. Payments and Notices to the Nominee. Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments of principal of, premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed in writing by the Depository.

SECTION 2.14. Additional Bonds. In addition to the 2023 Bonds authorized to be issued pursuant to Section 2.01 of this Indenture, the Authority may, by Supplemental Indenture, establish one or more other issues of Additional Bonds on a parity with the 2023 Bonds, and may issue and deliver such Additional Bonds in such principal amount as shall be determined by the Authority, but only upon compliance by the Authority with the provisions of this Section 2.14 and Section 2.15, and subject to the following specific conditions which are hereby made conditions precedent to the issuance of such Additional Bonds:

(a) Such Additional Bonds shall have been authorized to finance or refinance acquisition and/or construction of additional capital assets for the City, and the issuance thereof shall have been determined and declared by the Authority, in a Supplemental Indenture, to be necessary for that purpose.

(b) The Authority and the City shall be in compliance with all covenants and undertakings set forth in this Indenture, the Property Lease and the Site Lease.

(c) The aggregate principal amount of Bonds issued and at any time Outstanding hereunder shall not exceed any limit imposed by law, by this Indenture or by any Supplemental Indenture.

(d) Such Additional Bonds shall be equally and ratably secured by the Revenues with all other Bonds herein authorized. A series of Additional Bonds may be issued without a corresponding deposit into a debt service reserve fund.

17 (e) The Authority shall have entered into an amendment to the Property Lease, in and by which the City obligates itself in the manner provided in the Property Lease to make Base Rental payments for the lease of the Leased Property at the times and in the amounts sufficient to provide for the payment of the principal of and interest on such Additional Bonds as such principal and interest become due and to make all other payments in the manner provided in the Property Lease, and the City shall certify in writing, that such Base Rental payments, as amended, in any Lease Year shall not exceed the fair rental value of the Leased Property.

(f) If necessary to ensure that the Base Rental payable after the issuance of Additional Bonds does not exceed the fair rental value of the Leased Property in any Lease Year, the Authorit y and the City shall have amended the Property Lease pursuant to Section 12.03 thereof to add additional property to the Leased Property.

(g) In the event that the Additional Bonds are being issued to finance the construction of a to-be-built project, such project is to be part of the Leased Property prior to its completion and the City has determined that the project must be completed for the Base Rental payments after the issuance of the Additional Bonds to not exceed the fair rental value of the Leased Property in any Lease Year , the Supplemental Indenture authorizing the issuance of such Additional Bonds shall require the deposit into a separate account (the “Capitalized Interest Account”) an amount sufficient to pay interest on such Additional Bonds through a date which is not less than six months after the anticipated completion date of the project.

SECTION 2.15. Proceedings for the Issuance of Additional Bonds. Whenever the Authority shall have determined to issue Additional Bonds pursuant to Section 2.14, the Authority shall enter into a Supplemental Indenture determining that the issuance of such Additional Bonds is necessary for the purposes specified in Section 2.14, sp ecifying the principal amount of such Additional Bonds and prescribing the terms and conditions of such Additional Bonds and the funds to be established for the security and payment thereof. Before such Additional Bonds shall be issued and delivered, the Authority shall file the following documents with the Trustee:

(a) An executed copy of the Supplemental Indenture authorizing such Additional Bonds, together with a certified copy of the resolution of the Authority authorizing the issuance of such Additio nal Bonds and the execution of such Supplemental Indenture. The Authority may add a definition of “Project Costs ” in the Supplemental Indenture to identify the authorized costs to be paid from proceeds of the Additional Bonds.

(b) An Opinion of Bond Counsel stating: (i) that the execution and delivery of the Additional Bonds have been sufficiently and duly authorized by the Authority; (ii) that the issuance of the Additional Bonds is authorized by the Law and this Indenture; (iii) that the Additional Bonds when duly executed and delivered, will be valid and binding obligations of the Authority, payable from Revenues in accordance with the terms of this Indenture and the Supplemental Indenture authorizing the issuance of such Additional Bonds; (iv) that upon the delivery of the Additional Bonds the aggregate principal amount of Bonds then Outstanding will not exceed the amount at the time permitted by law or the then limits of indebtedness of the Authority, if any; (v) if the Additional Bonds are to be tax- exempt, that the interest on the Additional Bonds will be excluded from the gross income of the Owners thereof for federal income tax purposes; and (vi) that the issuance of such

18 Additional Bonds will not, of itself, cause interest on tax-exempt Bonds to bec ome includable in gross income for federal income tax purposes.

(c) A Certificate of the Authority certifying that the requirements set forth in Section 2.14 have been either met or provided for, together with a copy of the amendment to the Property Lease required by Section 2.14, together with a certified copy of the resolutions of the Authority and the City authorizing the execution of such amendment to the Property Lease.

(d) The City shall send a written notice of the issuance of the bonds to each rating agency then rating the Bonds.

SECTION 2.16. Applicability to Additional Bonds . Unless otherwise specified in the Supplemental Indenture pursuant to which an issue of Additional Bonds are issued, the provisions of the Indenture that are not exclusively applicable to the 2023 Bonds shall apply to such issue of Additional Bonds.

19 ARTICLE III

ISSUANCE OF 2023 BONDS

SECTION 3.01. Issuance of 2023 Bonds . At any time after the execution of this Indenture, the Authority may execute and the Trustee shall authenticate and, upon the Req uest of the Authority, deliver the 2023 Bonds in the aggregate principal amount of $[Principal Amount].

SECTION 3.02. Application of Proceeds of Sale of 2023 Bonds – Allocation Among Funds. Upon receipt of the net proceeds from the sale of the 2023 Bonds from the original purchaser of the 2023 Bonds, being $_________, representing the purchase price of the 2023 Bonds in the amount of $12________ (constituting the par amount of the 2023 Bonds, less a net original issue discount in the amount of $______, and less an underwriters’ discount of $______), the Trustee shall deposit the remaining proceeds as follows:

(i) The Trustee shall deposit into the Costs of Issuance Fund the amount of $_______.

(ii) The Trustee shall deposit the remainder of the proceeds, being an amount equal to $___________, into the Refunding Fund.

The Trustee, in its discretion, may establish a temporary fund or account to facilitate or properly account for the foregoing deposits.

SECTION 3.03. Establishment and Application of Refunding Fund. There is hereby created the Refunding Fund, which fund shall be held by the Trustee. Upon the issuance and delivery of the 2023 Bonds, without further direction from the Authority or the City, the Trustee shall transfer amounts on deposit in the Refunding Fund to U.S. Bank Trust Company, National Association, as trustee for the 2013 Bonds, to be applied as provided in the Escrow Agreement and the Trustee shall close the Refunding Fund.

SECTION 3.04. Establishment and Application of Costs of Issuance Fund. The Trustee shall establish, maintain and hold in trust a Costs of Issuance Fund, and the moneys in said funds shall be disbursed and applied only as hereinafter authorized.

The Trustee shall deposit proceeds of the 2023 Bonds into the Costs of Issuance Fund in accordance with Section 3.02(i) hereof . All money in the Costs of Issuance Fund shall be withdrawn and applied by the Authority to pay Costs of Issuance with respect to the 2023 Bonds upon a Requisition of the Authority filed with the Trustee . Each such Requisition shall be sequentially numbered, shall state the person to whom payment shall be made, the amount to be paid, the purpose for which such obligation was incurred, and that such payment is a proper charge against said fund. All moneys remaining in the Costs of Issuance Fund on December 1, 2023 (or such earlier date as the Authority or the City may direct the Trustee in writing) shall be transferred by the Trustee to the Interest Fund, as directed in writing by the City or the Authority.

Thereafter, the Costs of Issuance Fund shall be closed.

20 ARTICLE IV

REDEMPTION OF BONDS

SECTION 4.01. Redemption.

(a) Mandatory Redemption from Insurance or Condemnation Proceeds. The Trustee shall, on such date as is set forth in a Request of the Authority, redeem the Bonds, including the 2023 Bonds, as a whole, or in part by lot within any maturity if less than all of the Bonds of a particular maturity are to be redeemed, from proceeds of insurance or proceeds of eminent domain proceedings, upon the terms and conditions of, and as provided for in, Sections 6.13 and

6.17 hereof, respectively, at the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium.

(b) Mandatory Redemption of 2023 Bonds from Sinking Account Payments. The Term Bonds maturing on November 1, _____ shall be subject to mandatory redemption from mandatory Sinking Account Payments , in part, by lot, on November 1 , ____, and on each November 1 thereafter to and including November 1, _____, from money on hand in the Principal Fund at a redemption price equal to the principal amount of the 2023 Bonds to be redeemed, plus accrued interest on the 2023 Bonds to be redeemed to the redemption date, without premium. The principal amount of the Term Bonds to be redeemed and the redemption dates are set forth in the following schedule:

Redemption Date
(November 1)
Principal
Amount

_______________
*Maturity

The Term Bonds maturing on November 1, ____ shall be subject to mandatory redemption from mandatory Sinking Account Payments, in part, by lot, on November 1, ____, and on each November 1 thereafter to and including November 1, ___, from money on hand in the Principal Fund at a redemption price equal to the principal amount of the 2023 Bonds to be redeemed, plus accrued interest on the 2023 Bonds to be redeemed to the redemption date, without premium.

The principal amount of the Term Bonds to be redeemed and the redemption dates are set forth in the following schedule:

Redemption Date
(November 1)
Principal
Amount

_______________
*Maturity

Mandatory Sinking Account Payments shall be adjusted as directed by the Authority in the event of a partial redempt ion pursuant to Section 4.01(a) and Section

4.01(c).

21 (c) Optional Redemption. The 2023 Bonds maturing on or before November 1, _____, are not subject to optional redemption prior to maturity. The 2023 Bonds maturing on or after November 1, ____ are subject to optional redemption prior to maturity on or after November 1, ____, at the option of the Authority, as a whole or in part on any date, as set forth in a Request of Authority, from such maturities as are selected by the Authority, from amounts deposited with the Trustee by the Authority from any funds available therefor other than those described in (a) above, at a redemption price equal to the principal amount of 2023 Bonds to be redeemed, plus accrued but unpaid interest to the redemption date, without premium.

(d) Purchase In-Lieu of Redemption. In lieu of redemption of the 2023 Bonds pursuant to this Section , amounts on deposit in the Revenue Fund (to the extent not required to be deposited by the Trustee in the Interest Fund or the Principal Fund pursuant to Section 5.02 during the current Bond Year) may also be used and withdrawn by the Authority, upon the Request of the Authority delivered to the Trustee, at any time for the purchase of such Bonds at public or private sale as and when and at such prices (including brokerage and other charges and including accrued interest) as the Authority may in its discretion determine. The par amount of any of Term Bonds so purchased by the Authori ty in any twelve-month period ending on November 1 in any year shall be credited towards and shall reduce the par amount of such Term Bonds required to be redeemed pursuant to this subsection (b) on the next succeeding November 1.

SECTION 4.02. Selection of Bonds for Redemption. For purposes of selecting Bonds for redemption, Bonds shall be deemed to be composed of $5,000 portions or any integral multiple thereof. Unless otherwise directed by the Authority, whenever less than all of the Outstanding Bonds of more than one series are called for redemption at any one time, the Trustee will select the Outstanding Bonds or portions thereof to be redeemed on a pro rata basis between the series.

Whenever less than all the Outstanding Bonds of the same issue maturing on any one date are called for redempt ion pursuant to Section 4.01(a) or (c) above at any one time, the Trustee shall select the Bonds or portions thereof to be redeemed from the Outstand ing Bonds maturing on such date not previously selected for redemption, on a pro rata basis , unless otherwise directed by the Authority.

SECTION 4.03. Notice of Redemption. Notice of redemption shall be mailed by the Trustee by first class mail, not less than twenty (20) nor more than sixty (60) days prior to the redemption date to (i) the respective Owners of Bonds designated for redemption at their addresses appearing on the Bond registration books of t he Trustee, (ii) the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access website and (iii) the Securities Depositories. The Authority shall provide written notice to the Trustee of any prepayment under the Property Lease a s provided in the Property Lease and, upon the receipt of such notice or upon the receipt of a Request of the Authority to redeem Bonds as provided in Section 6.13 or Section 6.17, the Trustee shall prepare and mail notice of redemption as provided herein. Each notice of redemption shall state the date of such notice, the Bonds to be redeemed, the date of issue of such Bonds, the redemption date, the redemption price, the place or places of redemption (including the name and appropriate address or addresses and telephone number or numbers of the Trustee), the CUSIP number (if any) of the maturity or maturities, the interest rate and maturity date of each Bond to be redeemed, and, if less than all of any such maturity, the distinctive certificate numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed.

Each such notice shall also state that on said date there will become due and payable on each of such Bonds the redemption price thereof or of said specified portion of the principal amount

22 thereof in the case of a Bond to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the address or addresses of the Trustee specified in the redemption notice. Each notice relating to a redemption pursuant to Section 4.01(a) or Section 4.01(c) shall further state that such redemption may be rescinded by the Authority on or prior to the date set for redemption.

The Trustee shall mail by certified mail with return receipt requested a second notice of redemption sixty (60) days after the scheduled redemption date to Owners who failed to surrender their Bonds on such redemption date.

Failure by the Trustee to give notice pursuant to this Section 4.03 to the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access website or any one or more of the Securities Depositories or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. The failure of any Bondowner to receive any redemption notice mailed to such Bo ndowner and any defect in the notice so mailed shall not affect the sufficiency of the proceedings for redemption.

Neither the Authority nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Bond or in any re demption notice with respect thereto, and any such redemption notice may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Authority nor the Trustee shall be liable for any inaccuracy in such numbers.

The Authority shall have the right to provide a conditional redemption notice and to rescind any redemption notice pursuant to Section 4.01(a) or Section 4.01(c) by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default hereunder. The Trustee shall mail notice of rescission of redemption in the same manner notice of redemption was originally provided.

SECTION 4.04. Partial Redemption. Upon surrender of any Bond redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bond surrendered and of the same interest rate and maturity.

SECTION 4.05. Effect of Redemption. When notice of redemption has been duly given as aforesaid, and m oneys for payment of the redemption price are deposited with the Trustee, the Bonds so called for redemption shall, on the redemption date designated in such notice, become due and payable at the redemption price specified in such notice, and from and after the date so designated interest on the Bonds so called for redemption shall cease to accrue, said Bonds shall cease to be entitled to any lien, benefit or security under this Indenture, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. Subject to Section 10.03 hereof, the Trustee shall, upon surrender for payment of any of said Bonds, pay such Bonds at the redemption price aforesaid.

All Bonds redeemed pursuant to the provision s of this Article IV shall be cancelled upon surrender thereof and destroyed, and no Bonds shall be issued in place thereof.

23 ARTICLE V

REVENUES

SECTION 5.01. Pledge of Revenues; Revenue Fund. The Authority hereby pledges and assigns to the Trustee and grants to the Trustee a lien on and security interest in all right, title and interest of the Authority in and to all of the following , which lien and security interest, except as otherwise expressly set forth herein, shall be prior in right to any other pledge, lien or security interest created by the Authority therein:

(i) the Revenues,

(ii) all moneys and investments (excluding amounts required to pay rebate ) held from time to time by the Trustee under this Indenture, and

(iii) earnings on amounts included in provisions (i) and (ii) of this Section, subject to any limitations under the Code,

which pledge, assignment, grant, lie n and security interest are for the equal and proportionate benefit and security of Bonds, all of which, regardless of the time or times of their authentication and delivery or maturity, shall be, with respect to the security provided thereby, of equal ran k without preference, priority or distinction as to any Bond over any other Bond or Bonds, except as to the timing of payment of the Bonds.

The Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding, except that out of Revenues there may be apportioned and paid such sums, for such purposes, as are expressly permitted by Section 5.02.

Except as otherwise provided in Section 8.04, all Revenues to which the Authority may at any time be entitled shall be paid directly to the Trustee and all of the Revenues collected or received by the Authority shall be deemed to be held in trust and to have been collected or received by the Authority as the agent of the Trustee, and if received by the Authority at any time shall be deposi ted by the Authority with the Trustee within one Business Day after the receipt thereof, and all such Revenues shall be forthwith deposited by the Trustee upon the receipt thereof in a special fund, designated as the “Revenue Fund,” which fund is hereby created. The Revenue Fund shall be maintained by the Trustee, separate and apart from all other funds, so long as any of the Bonds remain Outstanding. All moneys at any time deposited in the Revenue Fund shall be held by the Trustee in trust for the benefi t of the Owners from time to time of the Bonds and shall be disbursed, allocated and applied solely for the uses and purposes hereinafter in this Article V set forth.

SECTION 5.02. Allocation of Revenues to Special Funds. Upon receipt thereof, the Trustee shall deposit all Revenues in the Revenue Fund. The Trustee shall thereupon deposit all moneys in the Revenue Fund in one or more of the funds set forth in this Section 5.02, each of which the Trustee shall establish, maintain and hold in trust, and the moneys in each of which shall be disbursed and applied only as hereinafter authorized. Such Revenues shall be so deposited in the following order of priority, the requirements of each such fund at the time of deposit to be satisfied before any transfer is made to any fund subsequent in priority:

(a) Interest Fund. The Trustee, on or before the Business Day next preceding each Interest Payment Date, shall deposit in the Interest Fund an amount which, together

24 with any balance then on deposit in said Fund, will be sufficient to pay the aggregate amount of interest becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date.

Any moneys in the Interest Fund not then required for the payment of interest on the next succeeding Interest Payment Date shall be carried forward and applied to the payment of interest on any subsequent Interest Payment Date. Moneys in the Interest Fund shall be used and withdraw n by the Trustee solely for the purpose of paying the interest on the Bonds when due and payable (including accrued interest on any Bonds redeemed or purchased prior to maturity), subject, however, to the provisions of Section 5.03.

(b) Principal Fund. There is hereby created a Principal Fund to be held by the Trustee. The Trustee, on or before the Business Day next preceding each Principal Payment Date and on or before each Sinking Account Payment Date, after making the deposit required on such date by subsection (a) above, shall deposit in the Principal Fund an amount which, together with any balance then on deposit in said Fund, equals the principal of the Bonds then due or required to be paid on such Principal Payment Date or Sinking Account Payment Date with respect to the Bonds in accordance with the terms of this Indenture.

Any moneys in the Principal Fund not then required for the payment of such principal on such Principal Payment Date or Sinking Account Payment Date shall be carried forward and ap plied to the payment of principal on any subsequent Principal Payment Date or Sinking Account Payment Date. Moneys in the Principal Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds when due and payable, subject, however, to the provisions of Section 5.03.

(c) Reserved.

(d) Surplus Revenue Fund . After making the deposits required by subsections (a) through (c) above, the Trustee, on or before the Business Day immediately preceding each Principa l Payment Date, shall deposit any remaining Revenues in the Surplus Revenue Fund. The Trustee shall, immediately upon making each deposit in the Surplus Revenue Fund, determine if any moneys then in the Surplus Revenue Fund shall be required for the payme nt of principal of or interest on the Bonds on such Principal Payment Date or the next succeeding Interest Payment Date or for the replenishment of a debt service reserve fund (if any) so that amounts on deposit therein are not less than the required amount, and shall hold any such moneys in the Surplus Revenue Fund for transfer to the Interest Fund, the Principal Fund or such debt service reserve fund as so needed. Except as hereinabove provided, moneys in the Surplus Revenue Fund are not pledged to the Bonds and shall be paid to, or at the direction of, the City within 60 Business Days after each Principal Payment Date.

(e) Insurance and Eminent Domain Proceeds Fund . The net proceeds resulting from any insurance claim or eminent domain proceedings and payable to the Trustee shall be deposited in the Insurance and Eminent Domain Proceeds Fund and applied as set forth in Section 6.13 and Section 6.17 hereof, as applicable.

SECTION 5.03. Reimbursement of Rental. All moneys in any of the funds established pursuant to Section 5.02 that are unavailable to be used to pay debt service on the Bonds as a

25 result of the abatement provisions of the Property Lease (if any), may be used at an y time to reimburse the City for any rental paid by the City under the Property Lease for a period of time during which the payment of rental under the Property Lease is abated pursuant to Section 3.06 thereof and for which no other moneys are available. The Trustee shall disburse any such funds to the City upon receipt of a Requisition of the Authority directing the Trustee to do so.

26 ARTICLE VI

COVENANTS OF THE AUTHORITY

SECTION 6.01. Payment of Principal and Interest. The Authority will pay the principal and the interest (and premium, if any) to become due in respect of every Bond issued hereunder at the times and places and in the manner provided herein and in the Bonds. When and as paid in full, all Bonds shall be cancelled by the Trustee, and thereafter they shall be destroyed, and the Trustee shall deliver to the Authority a certificate of destruction.

SECTION 6.02. Extension or Funding of Claims for Interest. In order to prevent any claims for interest after maturity, the Authority will not extend or assent directly or indirectly to the extension of time for the payment of any claim for interest on any of the Bonds, and will not be a party to or approve any such arrangement directly or indirectly by purchasing or funding such claims or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the Authority, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded.

SECTION 6.03. Maintenance of Revenues. The Authority will collect all rents and charges due to the Authority for the occupancy or use of the Leased Property promptly as the same become due, and will enforce its rights promptly and vigorously against any tenant or other person who does not pay such rents or charges as they become due. The Authority will maintain and enforce all of its rights under the Property Lease vigorously at all times.

SECTION 6.04. Accounting Records and Reports. The Authority shall keep (or cause to be kept) proper books of record and account 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 s hall be available for inspection by the Trustee (who shall have no duty to so inspect) at reasonable hours and under reasonable conditions. Not more than one hundred and eighty (180) days after the close of each Fiscal Year the Authority shall cause to be prepared, and shall furnish to any Bondowner who may so request, a complete financial statement covering receipts, disbursements, allocation and application of all income and Revenues for such Fiscal Year, including fund balances, accompanied by an audit report, which maybe the audit report of the City and opinion of an Independent Public Accountant to be employed by the Authority or the City. Such financial statement, audit report and opinion shall also be filed with the Trustee. The Trustee shall have n o duty to review such financial statement, audit report and opinion.

SECTION 6.05. Compliance with Indenture. The Authority will observe and perform all the covenants, conditions and requirements of this Indenture faithfully, and will not suffer or permit any default to occur hereunder, nor do or permit to be done in, upon or about the Leased Property, or any part thereof, anything that might in any way weaken, diminish or impair the security intended to be given pursuant to this Indenture.

SECTION 6.06. Compliance with Property Lease. Without allowance for any grace period which may or might exist or be allowed by law or granted pursuant to any terms or conditions of the Property Lease, the Authority will keep, perform and comply promptly and faithfully in all respects with all the terms, provisions, covenants, conditions and agreements of the Property Lease to be kept, performed and compl ied with by it. The Authority will not do or

27 permit anything to be done, or omit or refrain from doing anything, in any case where any such act done or permitted to be done, or any such omission of or refraining from action, would or might be a ground for declaring a forfeiture of the Property Lease, or would or might be a ground for cancellation or termination of the Property Lease by the lessee thereunder. Upon request of the Trustee, the Authority will deposit promptly with the Trustee (to be held by t he Trustee until the title and rights of the Trustee under this Indenture shall be released or reconveyed) any and all documentary evidence received by it showing compliance with the provisions of the Property Lease to be performed by it. The Authority, i mmediately upon its receiving or giving any notice, communication or other document in any way relating to or affecting the Property Lease, or the leasehold estate thereby created, which may or can in any manner materially affect the estate of the lessor or of the lessee in or under the Property Lease, will deliver the same, or a copy thereof, to the Trustee.

SECTION 6.07. Payment of Taxes. The Authority will pay or cause to be paid all taxes, assessments and other governmental charges, if any, that may be levied, assessed or charged upon the Leased Property or any part thereof, or upon the Revenues or any part thereof, promptly as and when the same shall become due and payable; and the Authority will keep the Trustee advised of such payments, upon request of the Trustee, from time to time. The Authority will not suffer the Leased Property, or any part thereof, to be sold for any taxes, assessments or other charges whatsoever, or to be forfeited therefor.

SECTION 6.08. Observance of Laws and Regulations. To the extent material to the issuance of and security for the Bonds, the Authority will keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on it by contract, or prescribed by any law of the United States, or of the State of California, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjo yment of any and every right, privilege or franchise now owned or hereafter acquired by the Authority, including its right to exist and carry on business as a public body, corporate and politic, to the end that such rights, privileges and franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired.

SECTION 6.09. Maintenance and Repair of Leased Property. The Authority shall maintain or cause to be maintained in good condition and keep in good repair the Leased Property and all buildings, facilities and equipment now or hereafter constituting any part of the same, and shall not commit or allow any waste with respect to the Leased Property.

SECTION 6.10. Other Liens. The Authority shall keep the Leased Property and all parts thereof free from judgments, from mechanics’ and materialmen’s liens (except those arising from the construction of add itions or improvements to the Facilities) and free from all liens, claims, demands and encumbrances of whatever nature or character (except those permitted by the Property Lease) to the end that the security provided pursuant to this Indenture may at all t imes be maintained and preserved, and the Authority shall keep the Leased Property free from any claim or liability which might embarrass or hamper the Authority in conducting its business or operating the Leased Property. The Trustee at its option (after first giving the Authority 10 days’ written notice to comply therewith and failure of the Authority to so comply within said 10 -day period) may defend against any and all actions or proceedings in which the validity of this Indenture is or might be questioned, or may pay or compromise any claim or demand asserted in any such actions or proceedings; provided, however, that, in defending against such actions or proceedings or in paying or compromising such claims or demands, the Trustee shall not in any event be deemed to have waived or released the Authority from liability for or on account of any of its covenants and warranties contained herein, or from its liability hereunder to defend the

28 validity of this Indenture and the pledge herein made and to perfor m such covenants and warranties.

SECTION 6.11. Against Encumbrances or Sales. So long as any Bonds are Outstanding, the Authority will not create or suffer to be created any mortgage, pledge, li en or charge upon the Leased Property or any part thereof or the Revenues, or upon any real or personal property essential to the operation of the Leased Property, other than the pledge, lien and charge referred to in the Property Lease or provided for in this Indenture, and other than Permitted Encumbrances. The Authority will not issue any bonds or obligations payable from Revenues or secured by a pledge, lien or charge upon Revenues, other than the Bonds and the Additional Bonds, and will not sell or ot herwise dispose of any property essential to the proper operation of the Leased Property or to the maintenance of the Revenues.

SECTION 6.12. Compliance with Contracts. The Authority shall comply with the terms, covenants and provisions, express or implied, of all contracts for the use of the Leased Property to which it is a party, and all other contracts and agreements materially affecting or involving the Leased Property.

SECTION 6.13. Insurance.

(a) Hazard and Other Insurance.

(1) The Authority shall maintain or cause to be maintained by the City, at all times while any of the Bonds are Outstanding, insurance in the amounts, form and the coverage required of the City pursuant to Article VI of the Property Lease.

(2) The net proceeds of all public liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds have been paid, and the Authority shall use commercially reasonable efforts to deliver the reports described in Section 6.13 (a)(4) within 45 days of the occurrence of the casualty event.

(3) The net proceeds of all rental income interruption insurance shall be treated as Revenues and applied as provided in Section 5.02 hereof.

(4) If all or any part of the Leased Property shall be destroyed or damaged (in whole or in part) by fire or other c asualty, the net proceeds of insurance required by Section 6.13(a)(1) hereof resulting from claims for such losses shall be deposited with the Trustee in the Insurance and Eminent Domain Proceeds Fund in trust and shall be applied and disbursed by the Trustee as follows:

(i) If the Trustee is furnished with the report specified in Section

6.13(a)(4)(iii) to the effect that such damage or destruction has not materially affected the operation of the Leased Property or the ability of the Authority to meet any of its obligations hereunder, and if such report states that such proceeds are not needed for repair or rehabilitation of the Leased Property, the Trustee shall treat such proceeds as Revenues and shall apply such proceeds as provided in Section 5.02 hereof.

(ii) If the Trustee is furnished with the report specified in Section

6.13(a)(4)(iii) to the effect that such damage or destruction has not materially

29 affected the operation of the Leased Property or, even if it has, that such damage or destruction has not materially affected the ability of the Authority to meet any of its obligations hereunder, and if such report states that such proceeds are needed for repair or rehabilitation of the Leased Property, the Trustee shall pay to the Authority, or to its order, from said proceeds such amounts as the Authority may expend for such repair or rehabilitation, upon the filing with the Trustee of Requisitions of the Authority specifying the amounts to be disbursed and certifying that such amounts have been or wil l be used to repair or rehabilitate the Leased Property.

(iii) The Trustee shall be provided a report of an engineer, insurance adjuster, risk manager or other appropriate professional, who may be an employee of the City, regarding the extent of such dama ge or destruction and its effect on the ability of the Authority to meet its obligations under this Indenture, and whether the proceeds of insurance required by Section 6.13(a)(1) are needed for the repair or rehabilitation of the Leased Property.

(iv) If less than all of the Leased Property shall have been damaged or destroyed, and if the Trustee is furnished with the report specified in Section

6.13(a)(4)(iii) to the effect that such damage or destruction has materially affected the ability of the Author ity to meet any of its obligations hereunder, the Trustee shall either apply the net proceeds of insurance (A) to the redemption of Bonds in the manner provided in Article IV, but only if the Authority determines in a Certificate provided to the Trustee that (1) the Base Rental payments thereafter to be made by the City and available to the Trustee, together with other available Revenues, will be sufficient to pay the principal of and interest on the Bonds Outstanding after such redemption when due and (2) the Base Rental payments thereafter to be made by the City and available to the Trustee will not exceed the fair rental value of the Leased Property, and otherwise (B) as provided in subparagraph (a)(4)(ii) of this Section 6.13, above. The Trustee shall a pply said proceeds as directed by the Authority pursuant to a Request of the Authority. If the Authority directs the Trustee to redeem Bonds as set forth in (A) above, it shall provide the Trustee with revised Base Rental payment schedules under the Property Lease.

(v) If all of the Leased Property shall have been damaged or destroyed and if that portion of such proceeds available to the Trustee, together with any other moneys then available or made available to the Trustee for the purpose, are sufficient to provide for the payment of the entire amount of principal then due or to become due upon the Bonds, together with the interest thereon, so as to enable the Authority to retire all of the Bonds then Outstanding by redemption or by payment at maturity, t hen the Trustee shall apply such proceeds to the payment of such interest and to such retirement, but only upon receipt by the Trustee of a Request of the Authority directing such redemption. Alternatively, if the Authority determines that such amounts are insufficient to provide moneys for the purposes specified in the preceding sentence, then the Trustee shall at the Request of the Authority, apply such proceeds in accordance with the provisions of Section 7.02 insofar as the same may be applicable. Not withstanding the above, in the event that the insurance moneys received by the Trustee in connection with damage to or destruction of all of the Leased Property are insufficient to redeem all of the

30 Bonds, then the Authority shall use such insurance moneys received under the Property Lease to repair and rehabilitate the Leased Property.

(vi) After all of the Bonds have been retired and the entire amount of principal due or to become due upon the Bonds, together with the interest thereon, have been paid in full, and all other sums required to be paid hereunder by the Authority have been paid in full, the Trustee shall pay the remainder of such proceeds to the City and the Authority in accordance with their respective interests pursuant to a Certificate of the Authority.

(b) Title Insurance.

(1) The Authority will also provide, or cause the City to provide, upon the delivery of the Bonds, a title insurance policy or policies with endorsement so as to be payable to the Trustee for the use and benefit of the Bondowners. Such policy or policies shall be in the amount of the aggregate principal amount of the Bonds initially issued pursuant to Article III hereof, and shall insure the Authority’s leasehold interest in the real property described in Exhibit A to th e Property Lease, and the City’s leasehold therein, subject only to Permitted Encumbrances.

(2) All proceeds received by the Trustee under said policy shall be deposited with the Trustee in the Insurance and Eminent Domain Proceeds Fund in trust and shall be applied and disbursed by the Trustee as follows:

(i) If the Trustee is furnished with the report of an independent professional consultant that such title defect has not materially affected the operation of the Leased Property, or that such title defe ct has not materially affected the ability of the Authority to meet any of its obligations hereunder, the Trustee shall treat such proceeds as Revenues and shall apply such proceeds as provided in Section 5.02 hereof.

(ii) If less than all of the Leased P roperty shall have been affected by such title defect, and if the Trustee is furnished with the report of an independent professional consultant to the effect that such title defect has materially affected the operation of the Leased Property or the abilit y of the Authority to meet any of its obligations hereunder, the Trustee shall apply such proceeds to the redemption of Bonds in the manner provided in Article IV or to the acquisition of real property or an interest therein so as to cure such title defect , but only upon the receipt by the Trustee of a Request of the Authority directing such redemption or acquisition.

(iii) If all of the Leased Property shall have been affected by such title defect and if such proceeds, together with any other moneys then available to the Trustee for the purpose of providing for, and are sufficient to provide for, the payment of the entire amount of principal then due or to become due upon the Bonds, together with the interest thereon, so as to enable the Authority to retire all of the Bonds then Outstanding by redemption or by payment at maturity, then the Trustee shall apply such proceeds to the payment of such interest and to such retirement, but only upon the receipt by the Trustee of a Request of the Authority directing such redemption. Alternatively, if the Authority determines that such amounts are insufficient to provide moneys for the purposes specified in the

31 preceding sentence, then the Trustee shall apply such proceeds in accordance with the provisions of Section 7.02 insofar as the same may be applicable.

(iv) After all of the Bonds have been retired and the entire amount of principal due or to become due upon the Bonds, together with the interest thereon, have been paid in full, and all other sums required to b e paid hereunder by the Authority have been paid in full, the Trustee shall pay the remainder of such proceeds to the City.

(c) The Authority shall deliver to the Trustee, in the month of August in each year a schedule setting forth the insurance policies then in force pursuant to this section, the names of the insurers which have issued the policies, the amounts thereof and the property and risks covered thereby. Such schedule shall contain a certification by the City’s Risk Manager that the insurance evidenced therein meets the requirements of the Property Lease. If so requested in writing by the Trustee, the Authority shall also deliver to the Trustee duplicate originals or certified copies of each insurance policy described in such schedule, provided that delivery to the Trustee of the insurance policies under the provisions of this section shall not confer responsibility upon the Trustee as to the sufficiency of coverage or amounts of said policies.

(d) Notwithstanding anything in this Section 6.13 t o the contrary, the City shall have the right to adopt the alternative risk management programs described in the Property Lease. (e) This Section 6.13 shall not apply to proceeds of insurance described herein if the City has established Substitute Leased P roperty in place of the Leased Property and, in such event, the Trustee shall pay all of such proceeds to the City.

SECTION 6.14. Prosecution and Defense of Suits. The Authority shall promptly, upon request of the Trustee or any Bondowner, from time to time take such action as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the Leased Property, whether now existing or hereafter developing and shall prosecute all such suits, actions and other proceedings as may be appropriate for such purpose and shall indemnify and save the Trustee and every Bondowner harmless from all loss, cost, damage and expense, including attorneys ’ fees, which they or any of th em may incur by reason of any such defect, cloud, suit, action or proceeding.

The Authority shall defend against every suit, action or proceeding at any time brought against the Trustee or any Bondowner upon any claim arising out of the receipt, applicati on or disbursement of any of the Revenues or involving the rights of the Trustee or any Bondowner under this Indenture; provided, that the Trustee or any Bondowner at its election may appear in and defend any such suit, action or proceeding. The Authority shall indemnify and hold harmless the Trustee and the Bondowners against any and all liability claimed or asserted by any person, arising out of such receipt, application or disbursement, and shall indemnify and hold harmless the Bondowners against any at torney’s fees or other expenses which any of them may incur in connection with any litigation to which any of them may become a party solely by reason of their ownership of Bonds. Notwithstanding any contrary provision hereof, this covenant shall remain in full force and effect, even though all indebtedness and obligations issued hereunder may have been fully paid and satisfied.

SECTION 6.15. Recordation and Filing. The Authority shall record and file the Property Lease and all such documents as may be required by law (together with whatever else may be necessary or be reasonably required by the Trustee), all in such manner, at such times and in

32 such places as may be required by law in order to preserve, protect and perfect fully the security of the Bondowners.

SECTION 6.16. Reserved.

SECTION 6.17. Eminent Domain. If all or any part of the Leased Property shall be taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain), the proceeds therefrom shall be deposited with the Trustee in the Insurance and Eminent Domain Proceeds Fund in trust and shall be applied and dis bursed by the Trustee as follows:

(a) (1) If the Trustee is furnished with the report specified in Section

6.17(a)(3) to the effect that such eminent domain proceedings have not materially affected the operation of the Leased Property or the ability of the Authority to meet any of its obligations hereunder, and if such report states that such proceeds are not needed for repair or such rehabilitation of the Leased Property, the Trustee shall treat proceeds as Revenues and shall apply such proceeds as provid ed in Section 5.02.

(2) If the Trustee is furnished with the report specified in Section

6.17(a)(3) to the effect that such eminent domain proceedings have not materially affected the operation of the Leased Property or, even if they have, that such proceedings have not materially affected the ability of the Authority to meet any of its obligations hereunder, and if such report states that such proceeds are needed for repair or rehabilitation of the Leased Property, the Trustee shall pay to the Authority, or to its order, from said proceeds such amounts as the Authority may expend for such repair or rehabilitation, upon the filing with the Trustee of Requisitions of the Authority specifying the amount to be disbursed and certifying that such amounts have be en or will be used to repair or rehabilitate the Leased Property.

(3) The Trustee shall be provided, at the expense of the Authority, the report of an engineer or other appropriate professional, who may be an employee of the City, regarding the extent of such eminent domain proceedings and its effect on the ability of the Authority to meet its obligations under this Indenture and whether the proceeds from the eminent domain proceedings are needed for the repair or rehabilitation of the Leased Property.

(b) If less than all of the Leased Property shall have been taken in such eminent domain proceedings, and if the Trustee is furnished a report of an independent engineer concluding that such eminent domain proceedings have materially affected the operation of the Leased Property or the ability of the Authority to meet any of its obligations hereunder, the Trustee shall apply such proceeds to the redemption of Bonds in the manner provided in Article IV, but only upon the receipt by the Trustee of a Request of the Authority directing such redemption.

(c) If all of the Leased Property shall have been taken in such eminent domain proceedings and if such proceeds, together with any other moneys then available to the Trustee for the purpose, are sufficient to pro vide for the payment of the entire amount of principal then due or to become due upon the Bonds, together with the interest thereon, so as to enable the Authority to retire all of the Bonds then Outstanding by redemption or

33 by payment at maturity, then the Trustee shall apply such proceeds to the payment of such interest and to such retirement, but only upon the receipt by the Trustee of a Request of the Authority directing such redemption. Alternatively, if the Authority determines that such amounts are i nsufficient to provide moneys for the purposes specified in the preceding sentence, then the Trustee shall apply such proceeds in accordance with the provisions of Section 7.02 to the extent that the same may be applicable.

(d) After all of the Bonds have been retired and the entire amount of principal due or to become due upon the Bonds, together with the interest thereon, has been paid in full, and all other sums required to be paid hereunder by the Authority have been paid in full, the Trustee shall pay the remainder of such proceeds to the City and the Authority in accordance with their respective interests pursuant to a Certificate of the Authority. (e) This Section 6.17 shall not apply to the proceeds of the taking by eminent domain proceedings (or the sale to a government threatening to exercise the power of eminent domain) of the Leased Property if the City has established Substitute Leased Property in place of the Leased Property that was taken by eminent domain (or sold to a government threatening to exercise the power of eminent domain) and, in such event, the Trustee shall pay all of such proceeds to the City.

SECTION 6.18. Validity of Bonds. The recital contained in the Bonds that the same are regularly issued pursuant to the Law shall be conclusive evidence of their validity and of compliance with the provisions of the Law in their issuance.

SECTION 6.19. Further Assurances. Whenever and so oft en as so requested by the Trustee, the Authority will execute and deliver or cause to be executed and delivered promptly all such other and further instruments, documents or assurances, and promptly do or cause to be done all such other and further things, as may be necessary or reasonably required in order to further and more fully vest in the Trustee and the Bondowners all rights, interest, powers, benefits, privileges and advantages conferred or intended to be conferred upon them by this Indenture.

SECTION 6.20. Tax Covenants.

(a) The Authority will not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the 2023 Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the 2023 Bonds would have caused the 2023 Bonds to be “arbitrage bonds” within the meaning of section 148 of the Code.

(b) The Authority shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause the 2023 Bonds to be “federally guaranteed” within the meaning of section 149(b) of the Code.

(c) The Authority shall assure that the proceeds o f the 2023 Bonds are not so used as to cause the 2023 Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(c) of the Code.

(d) The Authority shall take all actions necessary to assure the exclusion of interest on the 2023 Bonds from the gross income of the Owners of the 2023 Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the 2023 Bonds.

34 (e) In the event that at any time the Authority is of the opinion that for purposes of this Section 6.20 it is necessary to restrict or to limit the yield on the investment of any moneys held by the Trustee under this Indenture, the Authority shall so instruct the Trustee under this Indenture by written notice containing instructions as to the yield or yields to which such investments must be restricted. The Trustee shall take such action as may be necessary in accordance with such instructions.

(f) Notwithstanding any provisions of this Section 6.20 if the Authority shall provide to the Trustee an Opinion of Bond Counsel that any specified action required under this Section 6.20 is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest with respect to the 2023 Bonds, the Trustee and the Authority may conclusively rely on such opinion in complying with the requirements of this section, and, notwithstanding Article IX hereof, the covenants hereunder shall be deemed to be modified to that extent.

(g) The Authority shall take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the 2023 Bonds.

(h) The Authority will retain its records of all accounting and monitoring it carries out with respect to the 2023 Bonds for at least three years after the 2023 Bonds mature or are redeemed (whichever is earlier); however, if the 2023 Bonds are redeemed and refunded, the Authority will retain its records of accounting and monitoring at least three years after the earlier of the maturity or redemption of the obligations that refunded the 2023 Bonds.

(i) The Authority will comply with the provisions of the Tax Certificate with respect to the 2023 Bonds. The covenants of this Section will survive payment in full or defeasance of the Bonds.

35 ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES

SECTION 7.01. Events of Default and Acceleration of Maturities. The following shall each be an “event of default” under this Indenture:

(a) if default shall be made in the due and punctual payment of the principal of, or premium (if any) on, any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise;

(b) if default shall be made in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable;

(c) if there shall be a default under the Property Lease by reason of failure by the City to pay any rental under the Property Lease relating to or in connection with the Leased Property as and when the same becomes due and payable;

(d) if default shall be made by t he Authority in the observance of any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, and such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authority by the Trustee or by the Owners of not less than twenty- five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding, provided that such thirty (30) day period shall be extended to sixty (60) days in the event the Authority is not able to cure such default within a thirty (30) day period but commenced a good faith effort to cure immediately upon receipt of notice as described above; or

(e) if, under the provisions of any law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Authority or of the whole or any substantial part of its property, and such custody or control shall not be terminated or stayed within sixty (60) days from the date of assumption of such custody or control;

If one or more such events of default shall occur, then, and in each and every such case during the continuance of such event of default, the Trustee may, and shall, at the direction of the Owners of a majority in aggregate principal amount of the Bonds Outstanding, by written notice to the Authority, declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payab le immediately, and upon any such declaration the same shall become and shall be immediately due and payable without further action, anything in this Indenture or the Bonds to the contrary notwithstanding.

The foregoing provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, the Authority shall pay to or shall deposit with the Trustee a sum sufficient to pay all principal of the Bonds maturing prior to such declaration and all matured installments of interest (if any) upon all the Bonds, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee, or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Trustee, on behalf of the Owners of

36 all of the Bonds, shall rescind and annu l such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon; provided, however, that no such rescission and annulment shall extend to or shall affect any subsequent Event of Default, or shall impair or exhaust any right or power consequent thereon.

In addition to declaring the principal of all of the Bonds, and the interest accrued thereon, to be immediately due and payable as set forth above, the Trustee shall have the right to pursue any other remedy provided by law or in equity or otherwise after an Event of Default has occurred.

SECTION 7.02. Application of Funds Upon Acceleration. All of the Revenues and all sums in the Revenue Fund upon the date of the declaration of acceleration, as provided in Section

7.01 and all sums thereafter received by the Trustee hereunder shall be applied by the Trustee in the following order upon presentation of the several Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid:

First, to the payment of fees and expenses of the Trustee (including reasonable fees, costs and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture;

Second, to the payment of the whole amount then owing and unpaid upon the Bonds for principal and interest, with interest, to the extent permitted by law, on the overdue principal and installments of interest at the rate equal to the rate per annum on such Bonds (but such interest on overdue installments of interest shall be paid only to the extent funds are available therefor following payment of principal and interest and interest on overdue principal, as aforesaid), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then, and in compliance with the final sentence of Section 5.01 to the extent possible, to the payment of such principal and interest without preference or priority of principal over interest, or of interest over principal or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest.

Third, to the payment of fees , costs and expenses (including fees, costs and disbursements of its counsel) of the Bondowners related to such event of default.

SECTION 7.03. Trustee to Represent Bondowners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and owning the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, this Indenture, the Propert y Lease, the Law and applicable provisions of any other law.

Upon the occurrence and continuance of an event of default or other occasion giving rise to a right in the Trustee to represent the Owners of the Bonds, the Trustee in its discretion may, and upon the written request of the Owners of not less than twenty -five per cent (25%) in aggregate principal amount of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the ri ghts of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effective to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Owners under this Indenture, the Property Lease, the Law or any other law. All rights of

37 action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of this Indenture.

SECTION 7.04. Bondowners’ Direction of Proceedings. The Owners of at least fifty percent (50%) in aggregate principal amount of Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondowners not parties to such direction.

SECTION 7.05. Limitation on Bondowners’ Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Property Lease, the Law or any other applicable law with respect to such Bond, unless (1) such Owner shall have given to the Trustee written notice of the occurrence of an event of default; (2) the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (3) such Owner or said Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be i ncurred in compliance with such request; and (4) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owner of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under this Indenture, the Property Lease, the Law or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture.

SECTION 7.06. Non-waiver. Nothing in this Article VII or in any other provision of this Indenture, or in the Bonds, shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the principal of and interest (and premium, if any) on the Bonds to the respective Owners of the Bonds at the respective dates of maturity, or upon call for redemption, as herein provided, out of the Revenues herein pledged for such payments or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds. No delay or omission of the Trustee or of any Bondowner to exercise any right or power arising upon the happening of any event of default shall impair any such right or power or shall be construed to be a waiver of any such event of defa ult or an acquiescence therein, and every power and remedy given by this Article VII to the Trustee or to the Owners of Bonds may be exercised from time to time and as often as shall be deemed expedient.

38 SECTION 7.07. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of Bonds is intended to be exclusive of any other remedy, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise.

39 ARTICLE VIII

THE TRUSTEE

SECTION 8.01. Trustee; Acceptance; Removal; Resignation.

(a) The Trustee accepts and agrees to perform its duties and obligations specifically imposed upon it by this Indenture, and no implied duties shall be read into this Indenture against the Trustee. After the occurrence of an Event of Default, in performing its duties hereunder, the Trustee shall exercise the level of care that a reasonable person would exercise in the conduct of his or her affairs.

(b) The Authority agrees that it will maintain a Trustee located in or incorporated under the laws of the State of California, duly authorized to exercise trust powers and subject to supervision or examination by federal or state authority, with a combined capital and surplus, together with its parent bank holding company and other subsidiaries of at least Seventy -Five Million Dollars ($75,000,000), so long as any Bonds are Outstanding. If such bank, national banking association or trust company or parent bank holding company publishes a re port of condition at least annually pursuant to law or to the requirements of any supervising or examining authority above referred to then for the purpose of this section the combined capital and surplus of such bank, national banking association or trust company or parent bank holding company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

(c) The Trustee is hereby authorized to redeem the Bonds when duly presented for payment at maturity, or on redemption, or on purchase by the Trustee prior to maturity, and to cancel all Bonds upon payment thereof. The Trustee shall keep accurate records of all funds administered by it and of all Bonds paid and discharged. All moneys deposited un der the provisions of this Indenture with the Trustee shall be held in trust and applied only in accordance with the provisions of this Indenture.

(d) The Authority, unless the Authority is in default hereunder, may remove the Trustee initially appointed, and any successor thereto, and may appoint a bank or trust company meeting the requirements in this Section 8.01 set forth above as successor thereto. The Trustee shall also be removed at any time at the request of the Owners of the majority of aggregate principal amount of Bonds than Outstanding, for any breach of fiduciary duty arising in connection with this Indenture.

(e) The Trustee may at any time resign by giving prior written notice to the Authority.

Upon receiving such notice of resignation, t he Authority shall promptly appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by a successor Trustee acceptable to the Authority. If no successor Trustee shall have been appointed and have accepted appointment within forty-five (45) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bondowner (on behalf of himself and all other Bondowners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee.

Any successor Trustee appointed under this Indent ure, shall signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or

40 conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, power trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the Authority shall give notice of the succession of such Trustee to the trusts hereunder to the City and by mail to the Bondowners at the addresses shown on the registration books maintained by the Trustee. If the Authority fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Authority.

(f) Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of it corporate trust business, provided that such company shall meet the requirements set forth in Section 8.01, shall be the successor to the Trustee and v ested with all of the title to the trust estate and all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

SECTION 8.02. Liability of Trustee.

(a) The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the Authority, and the Trustee does not assume any responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture, the Property Lease or of the Bonds, nor shall the Trustee incur any responsibilit y in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it.

(b) The Trustee shall have no responsibility with respect to any information, statement or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds.

(c) No provision of this Trust Indenture, the Property Lease or any other document related hereto shall require the Trustee to risk or advance its own funds or otherwise incur any financial liability in the performance of its duties or the exercise of its rights hereunder.

(d) Before taking any action under Article VII hereof, the Trustee may require indemnity satisfactory to the Trustee be furnished from any expenses and to protect it against any liability it may incur hereunder except liability and expenses incurred as a result of its own negligence or willful misconduct.

(e) The indemnities and releases extended to the Trustee hereunder also extend to its directors, officers, employees and agents.

41 (f) The Trustee shall not be liable for any action taken or not taken by it in accordance with the direction of a majority (or other percentage provided for herein) in aggregate principal amount of Bonds outstanding relating to the exercise of any right, power or remedy available to the Trustee, except to the extent of its own negligence or willful misconduct.

(g) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty.

(h) The Trustee may execute any of the trusts or powers hereof and perform any of its duties through attorneys, agents and receivers.

(i) The Trustee may become the owner or pledgee of any Bonds with the same rights it would have if it were not Trustee.

(j) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay ( “unavoidable delay”) in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.

(k) The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e -mail, facsimile transmission or other similar unsecured electronic methods, provided, howe ver, that, an e-mail does not constitute a notice, request or other communication hereunder but rather the portable document format or similar attachment attached to such e-mail shall constitute a notice, request or other communication hereunder and the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling.

The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee ’s reliance upon and compliance with such instructions notwithstandin g such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.

(l) The Trustee shall not be concerned with or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.

42 (m) The Trustee shall not be deemed to have knowledge of any Event of Default (other than an Event of Default described in Section 7.01(a) or 7.01(b) unless and until the Trustee has received written notice of such an Event of Default at its Corporate Trust Office.

SECTION 8.03. Security for Deposits. Moneys allocated to any of the funds established pursuant to this Indenture may, and upon the Request of the Authority, shall be deposited by the Trustee in banks, including the Trustee, in time or demand deposits. Money so deposited shall be secured at all times, in the manner provided by law by direct obligations of the United States of America, obligations the principal of and interest on which are guaranteed by the United States of America, or bonds of the State of California or any local jurisdiction within California, with a market value at least equal to the amount required by la w, but in no event less than the amount of moneys in each of said funds to be so secured.

SECTION 8.04. Investment of Moneys in Funds.

(a) Any moneys in any of the funds established by the Tru stee pursuant to this Indenture, upon the Request of the Authority (at the written direction of the City), shall be invested in Permitted Investments (subject in each case to the limitations as to maturities hereinafter in this section set forth). The Trustee shall notify the City not less than two (2) Business Days prior to the date moneys held hereunder will be available for investment requesting that the City cause the Authority to deliver to the Trustee a Request of the Authority specifying the Permitt ed Investments to be acquired by the Trustee with such moneys. In the absence of any such written request of the City directing the investment of uninvested moneys held by the Trustee, the Trustee shall invest any such moneys in Permitted Investments descr ibed in clause (g) of the definition thereof. If no specific money market fund has been specified by the City, the Trustee shall make a request to the City for investment directions. Such moneys shall be held in cash, uninvested, until specific investment directions are provided by the City to the Trustee. The Authority, in issuing such Request, shall comply with the restrictions and instructions set forth in the Tax Certificate.

(b) Moneys in the Interest Fund (including a Capitalized Interest Account) a nd the Principal Fund may be invested in obligations that will, as nearly as practicable, mature on or before the respective Interest Payment Dates or Principal Payment Dates on which such moneys will be needed for the payment of interest or the retirement of Bonds.

(c) The Trustee may sell or present for redemption any obligations so purchased whenever it shall be necessary in order to provide moneys to meet any payment, and the Trustee shall not be liable or responsible for any loss resulting from such sale or redemption.

(d) Any interest, profit or other income on such investment of moneys in the funds or accounts created hereunder shall be deposited when received in the Revenue Fund. Any such interest, profit or other income on amounts on deposit in the Acquisition Fund shall be retained therein unless the Trustee is otherwise directed by the Authority or the City to deposit it in the Revenue Fund.

(e) Any Permitted Investment that is registrable shall be registered in the name of the Trustee for the benefit of the Owners and held by the Trustee.

(f) The Trustee shall furnish the Authority and City periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the City. Upon the Authority’s or City’s election, such party’s statements will be

43 delivered via the Trustee’s online service and upon electing such service, paper statements will be provided only upon request. The Authority waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The Authority and the City (by its execution of the Pro perty Lease) further understand that trade confirmations for securities transactions effected by the Trustee will be availab le upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.

(g) The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. The Trustee or an affiliate may act as principal or agent in the acquisition or disposition of any Permitted Investment and shall be entitled to its customary fee therefor. For investment purposes, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately.

(h) The moneys on deposit in the funds and accounts established under this Indenture shall not be deemed “surplus” under Section 53601 of the Government Code.

(i) All investments of amounts dep osited in any fund or account created by or pursuant to this Indenture, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued by the Authority (as of the date that val uation is required by this Indenture or the Code) at Fair Market Value.

Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Code shall be valued by the Authority at their present value (within the meaning of section 148 of the Code). The Trustee shall have no duty in connection with the determination of Fair Market Value other than to follow: (i) its normal practices in the purchase, sale and determining the value of Permitted Investments; and (ii) the investment directions of the Authority.

SECTION 8.05. Notice; Acceptance of Trusts.

(a) The Trustee shall be protected in acting upon any notice, resolution, requisition , request, consent, order, certificate, report, Bond, statement, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult w ith counsel, who may be counsel to the Authority, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

(b) The Trustee shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactorily established, if disputed.

(c) Whenever the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be deemed to be conclusively proved and established by a Certificate of the Authority, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture upon the faith th ereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.

44 (d) The Trustee shall not be deemed to have notice of an event of default unless it has actual notice thereof at its Corporate Trust Office.

SECTION 8.06. Compensation and Indemnification of Trustee. The Authority covenants to pay to the Trustee from time to time, and the Trustee shall be entitled to, compensation for all services rendered by it in the exercise and performance of any of the powers and duties hereunder of the Trustee, as set forth in an agreement between the Authority and the Trustee, and the Authority will pay or reimburse the Trustee upon its request, in accordance with such fee letter as may be in effect, for all expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (includin g the reasonable compensation and the expenses and disbursements of its counsel and all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or willful misconduct. The Authority, to the extent permitted by law, shall indemnify, defend and hold harmless the Trustee against any loss, damages, liability or expense incurred without negligence or willful misconduct on the part of the Trustee, arising out of or in connection with the acceptance or administration of the trusts created hereby, including reasonable costs and expenses (including attorneys ’ fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers hereunder or under the Property Lease. The rights of the Trustee and the obligations of the Authority under this Section 8.06 shall survive the discharge of the Bonds and this Indenture and the resignation or removal of the Trustee.

45 ARTICLE IX

MODIFICATION OR AMENDMENT OF THE INDENTURE

SECTION 9.01. Amendments Permitted. This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds may be modified or amended at any time by a supplement or amendment hereto which shall become effective when the written consents of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstandin g, exclusive of Bonds disqualified as provided in Section 9.02 , have been received . No such supplement or amendment shall (1) extend the fixed maturity of any Bonds or reduce the interest rate thereon or extend the time of payment of interest, or reduce t he amount of principal thereof or reduce any premium payable upon the redemption thereof, without the express consent of the Owner of such Bond, or (2) reduce the percentage of Bonds required for the affirmative vote or written consent to an amendment or modification of this Indenture, or (3) modify any of the rights or obligations of the Trustee without the written assent thereto by the Trustee.

This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds may also be modi fied or amended at any time, without the consent of any Bondowners, but only to the extent permitted by law and only for any one or more of the following purposes:

(a) to add to the covenants and agreements of the Authority in this Indenture contained, other covenants and agreements thereafter to be observed, or to surrender any right or power herein reserved to or conferred upon the Authority which in either case shall not adversely affect the interests of the Owners of the Bonds;

(b) to cure, correct or supplement any ambiguous or defective provision contained in this Indenture or in regard to questions arising under this Indenture, as the Authority may deem necessary or desirable and not inconsistent with this Indenture, and which shall not adversely affect the interests of the Owners of the Bonds;

(c) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said Act or similar federal statute, and which shall not materially adversely affect the interests of the Owners of the Bonds;

(d) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the 2023 Bonds;

(e) to maintain a rating on the Bonds;

(f) to modify any of the provisions of this Indenture in any other respect, provided that such modifications shall not have a material adverse effect on the interests of the Owners of the Bonds; or

(g) to provide for the issuance of Additional Bonds pursuant to Section 2.14 hereof.

The Authority shall deliver or cause to be delivered a draft of any Supplemental Indenture to each rating agency which then maintains a rating on the Bonds, at least 10 days prior to the effective date of such Supplemental Indenture under this Section 9.01.

46 Prior to the Trustee entering into any Supplemental Indenture here under, the Authority shall deliver to the Trustee an Opinion of Bond Counsel stating, in substance, that such Supplemental Indenture has been adopted in compliance with the requirements of this Indenture and that the adoption of such Supplemental Indenture will not, in and of itself, adversely affect the exclusion from gross income for purposes of federal income taxes of interest on the Bonds.

SECTION 9.02. Disqualified Bonds. Bonds owned or held by or for the account of the Authority or the City or by an obligor on the Bonds, or by any person directly or indirectly controlled or controlled by, or under direct or indirect common control with the Authority or the City (except any Bonds held in any pension or retirement fund) shall not be deemed Outstanding for the purpose of any vote, consent, waiver or other action or any calculation of Outstanding Bonds provided for in this Indenture, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Indenture. Upon request of the Trustee, the Authority and the City shall specify in a certificate to the Trustee those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such certificate.

SECTION 9.03. Effect of Supplement or Amendment. From and after the time any supplement or amendment to the Indenture becomes effective pursuant to this Article this Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Indenture of the Authority and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereund er subject in all respects to such modification and amendment, and all the terms and conditions of any such supplement or amendment shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

SECTION 9.04. Endorsement or Replacement of Bonds Issued After Amendments.

The Authority may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article IX shall bear a notation, by endorsement or otherwise, in form approved by the Authority, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and presentation of this Bond for the purpose at the office of the Authority or at such other office as the Authority may select and designate for that purpose, a suitable notation shall be made on such Bond. The Authority may determine that new Bonds so modified as in the opinion of the Authority necessary to conform to such Bondowners’ action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bond then Outstanding, such new Bond shall be exchanged in the Principal Corporate Trust Office of the Trustee, without cost to such Owner and at the expense of the Authority, for a Bond of the same character then outstanding, upon surrender of such Bond.

SECTION 9.05. Amendatory Endorsement of Bonds. The provisions of this Article shall not prevent any Bondowner from accepting any amendment as to the particular Bonds held by him, provided that due notification thereof is made on such Bonds.

SECTION 9.06. Notice to Rating Agencies. Copies of any amendments or supplements to this Indenture or the Property Lease shall be sent to the rating agencies that (to the knowledge of the Authority) have assigned a rating to the 2023 Bonds.

47 ARTICLE X

DEFEASANCE

SECTION 10.01. Discharge of Indenture. If the Authority shall pay and discharge the entire indebtedness on all Bonds Outstanding in any one or more of the following ways:

(a) by well and truly paying or causing to be paid the principal of (including redemption premiums, if any) and interest on all Bonds Outstanding, as and when the same become due and payable;

(b) by depositing with the Trustee, or with an independent escrow agent for the benefit of the Trustee, in trust, at or before maturity, money in the necessary amount to pay or redeem all Bonds Outstanding;

(c) by delivering to the Trustee, for cancellation by it, all Bonds Outstanding; or

(d) by depositing with the Trustee, or with an independent escrow agent for the benefit of the Trustee, in trust and pursuant to an escrow agreement, Defeasance Obligations not subject to call prior to the date they would be used to pay the Bonds hereunder in such amount as will, together with the income or increment to accrue thereon, be fully sufficient, in the opinion of an independent certified public accountant, to pay and discharge the indebtedness on all Bonds at or before their respective maturity dates, and by delivering an Opinion of Bond Counsel stating that the conditions set forth in this Section 10.01 have been met and that, assuming the sufficiency of the amounts deposited for such purposes, the pledge of the Revenues provided for in this Indenture and all other obligations of the Authority under this Indenture shall cease and terminate, except as otherwise provided in Sections 6.20, 8.06 and 10.04 hereof and except for the obligation of the Authority to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon;

and if the Authority shall also pay or cause to be paid all other sums payable hereunder by the Authority including, without limitation, all fees and expenses of the Trustee due hereunder, including reasonable attorneys ’ fees, then and in that case, at the election of the Authority (evidenced by a Certificate of the Authority signifying its intention to pay and discharge all such indebtedness and that this Indenture and all other obligations of the Authority under this Indenture shall cease and terminate, which shall be filed with the Trustee), and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Revenues provided for in this Indenture and all othe r obligations of the Authority under this Indenture shall cease and terminate, except as otherwise provided in Sections 6.20, 8.06 and 10. 04 hereof and except for the obligation of the Authority to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon. The discharge of the obligations of the Authority under this Indenture shall be without prejudice to the rights of the Trustee to charge for and be reimbursed by the Authority for any expenditures which it may th ereafter incur in connection herewith.

The Authority may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered, which the Authority may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.

48 SECTION 10.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or Government Obligations in the necessary amount to pay or redeem Outstanding Bonds (whether upon or prior to their maturity or the redemption date of such Bonds), provided that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article IV provided or provisions satisfactory to the Trustee shall have been made for the giving of such notice, all liability of the Authority in respect of such Bonds shall cease, terminate and be completely dischar ged and the Owners thereof shall thereafter be entitled only to payment out of the money or Government Obligations deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Sections 10.03 and 10.04 hereof.

SECTION 10.03. Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of this Indenture, any moneys deposited with the Trustee in trust for the payment of the princ ipal of, or interest or premium on, any Bonds and remaining unclaimed for two (2) years after the principal of all the Outstanding Bonds has become due and payable (whether at maturity or upon call for redemption or by declaration as provided in this Indenture) shall then be repaid to the Authority and the Owners of such Bonds shall thereafter be entitled to look only to the Authority for payment thereof, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee may cause to be mailed to the registered Owners of such Bonds at their addresses as they appear on the registration books of the Trustee, a notice, in such form as may be deemed appropriate by the Trustee, with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof. In the event of the repayment of any such mo neys to the Authority as aforesaid, the Owners of the Bonds in respect of which such moneys were deposited shall thereafter be deemed to be general creditors of the Authority for amounts equivalent to the respective amounts deposited for the payment of suc h Bonds and so repaid to the Authority (without interest thereon).

SECTION 10.04. Amounts Remaining in Funds and Accounts. Notwithstanding any other provision of this Indenture, it is agreed by the parties hereto that after payment in full of (i) the Bonds, or after provision for such payment shall have been made as provided in the Indenture, (ii) the fees, charges and expenses of the Trustee in accordance with the Indenture and (iii) all other amounts required to be paid under the Indenture, any amounts remaining in any fund or account held by the Trustee under the Indenture (other than amounts required to pay rebate to the federal government) shall belong to the City, and shall be pa id to the City by the Trustee.

49 ARTICLE XI

MISCELLANEOUS

SECTION 11.01. Liability of Authority Limited to Revenues. The Authority shall not be required to take any action not expressly provided for herein and its obligation with respect to the Bonds shall be limited as described herein. Notwithstanding anything in this Indenture, the Authority shall not be required to pay or advance any moneys derived from any source other than the Revenues for the payment of the principal of or interest (and premium, if any) on the Bonds, for the maintenance and operation of the Leased Property, or for any other purpose of this Indenture. Nevertheless, the Authority may advance, but shall not be required under any circumstances whatsoever, for any of the purposes hereof, any funds of the Authority which may be made available to it for such purposes.

The Bonds are special obligations of the Authority and are payable, as to interest thereon and principal thereof, exclusively from Revenues, and the Authority is not obligated to pay them except from Revenues. All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Revenues, and the Revenues constitute a trust fund for the security and payment of the interest on and the principal of the Bonds, to the extent set forth in this Indenture. The Bonds are not a debt of the Agency, the City, the State of California or any of its political subdivisions, and neither said City, said State nor any of its political subdivisions is liable therefor, nor in any event shall the Bonds be payable out of any funds or properties other than those of the Authority pledged therefor pr ovided in this Indenture. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory limitation or restriction.

SECTION 11.02. Successor Is Deemed Included in All References to Predecessor.

Whenever in this Indenture or any Supplemental Indenture either the Authority or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Authority or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

SECTION 11.03. Limit ation of Rights to Parties and Bondowners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any person other than the Authority, the Trustee, and the Owners of the Bonds issued hereunder, any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition, stipulation or provisions herein or herein contained; and all such covenants, conditions, stipulations and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the Trustee, and the Owners of the Bonds issued hereunder.

SECTION 11.04. Waiver of Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

SECTION 11.05. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee shall destroy such Bonds, and deliver a certificate of such destruction to the Authority.

SECTION 11.06. Severability of Invalid Provisions. In case any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid,

50 illegal or unenforceable in any respect, then such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority hereby declares that it would have adopted this Indenture and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Indenture may be held i llegal, invalid or unenforceable. If, by reason of the judgment of any court, the Trustee or any successor Trustee is rendered unable to perform its duties hereunder, and if no successor Trustee be then appointed, all such duties and all of the rights and powers of the Trustee hereunder shall be assumed by and vest with the Authority in trust for the benefit of the Bondowners.

SECTION 11.07. Notices.

(a) All notices or communications to be given under this Indenture shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective either ( i) upon transmission by facsimile transmission or other form of telecommunication, (ii) 48 hours after deposit in the United States mail, postage prepaid, or (iii) in the case of personal delivery to any person, upon actual receipt. The Authority, the Cit y or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

If to the City or the Authority: 9700 Seventh Ave.

Hesperia, CA 92345
Attn: City Manager

If to the Trustee: U.S. Bank Trust Company, National Association 633 West Fifth Street, 24th
Los Angeles, CA 90071
Attention: Global Corporate Trust
Email: [email protected]

SECTION 11.08. Article and Section Headings. The headings or titles of the several Articles and Sections hereof, and any table of contents appended hereto, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Indenture.

All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; and the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof.

SECTION 11.09. Third-Party Beneficiary. To the extent that this Indenture confers upon or gives or grants to the City any right, remedy or claim under or by reason of this Indenture, the City is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right or remedy or claim conferred, given or granted hereunder.

SECTION 11.10. Funds and Accounts. Any fund required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund

51 or as an account; but all such records with respect to all such funds shall at all times be maintained in accordance with corporate trust industry practices and with due regard for the protection of the security of the Bonds and the rights of every Owner thereof.

SECTION 11.11. Waiver of Personal Liability. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of or interest on the Bonds or for anything else contained in this Indenture; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.

SECTION 11.12. Governing Law. This Indenture shall be governed by and construed in accordance with the laws of the State of California.

SECTION 11.13. Counterparts. This Indenture may be signed in several counterparts, each of which will constitute an original, but all of which shall constitute one a nd the same instrument.

[Signature Page - Indenture dated as of [Month of Closing] 1, 2023] IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their officers duly authorized as of the date first above written.

HESPERIA JOINT PUBLIC FINANCE

AUTHORITY

Attest

By: By:

Secretary Executive Director

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee

By:

Authorized Officer

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EXHIBIT A

[FORM OF 2023 BOND]

No. R-_ $___________

HESPERIA JOINT PUBLIC FINANCE AUTHORITY
2023 REFUNDING LEASE REVENUE BOND

Maturity Date Interest Rate Issue Date CUSIP
November 1, ____ ______, 2023

Registered Owner: CEDE & CO.

Principal Amount: ****_______________ DOLLARS****

HESPERIA JOINT PUBLIC FINANCE AUTHORITY , a joint powers authority duly organized and existing under and pursuant to the laws of the State of California (herein called the “Authority”), for value received, hereby promises to pay (but only out of the Revenues hereinafter mentioned) the registered owner specified above, or registered assigns, on the Maturity Date specified above (subject to any right of prior redemption hereinafter menti oned) the Principal Amount specified above in lawful money of the United States of America, and to pay interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this Bond (unless this Bond is authenti cated as of an interest payment date, in which event it shall bear interest from the date of authentication hereof, or unless this Bond is authenticated after a record date and before an interest payment date, in which event it shall bear interest from the next succeeding interest payment date, or unless this Bond is authenticated on or prior to October 15, 2023 , in which event it shall bear interest from the date hereof) until payment of such Principal Amount in full as provided in the Indenture hereinafte r mentioned, at the rate of interest specified above, payable semiannually on May 1 and November 1 in each year, commencing November 1, 2023, by check mailed on the applicable interest payment date to such registered owner; provided that upon the written r equest of any owner of at least $1,000,000 in aggregate principal amount of Bonds, such payment shall be made by wire transfer in immediately available funds to an account within the continental limits of the United States designated by such owner. The principal (or redemption price) hereof is payable at the Corporate Trust Office (as defined in the Indenture hereinafter mentioned) of U.S. Bank Trust Company, National Association (herein called the “Trustee”).

This Bond is one of a duly authorized issue o f Bonds of the Authority designated as the Hesperia Joint Public Finance Authority 2023 Refunding Lease Revenue Bonds (herein called the “Bonds”), of an initial aggregate principal amount of $ _________, issued pursuant to the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (herein called the “Law”), and pursuant to an Indenture, dated as of [Month of Closing] 1, 2023 , by and between the Authority and the Trustee (herein calle d the “Indenture”), authorizing the issuance of the Bonds.

Reference is hereby made to the Indenture (a copy of which is on file at said office of the Trustee) and all Indentures supplemental thereto and to the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues,

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as that term is defined in the Indenture, and the rights thereunder of the registered owners of the Bonds and the rights, duties and immunities of the Trustee and t he rights and obligations of the Authority thereunder, to all the provisions of which Indenture the registered owner of this Bond, by acceptance hereof, assents and agrees.

The proceeds of the Bonds will be used by the Authority for the purposes and on the terms and conditions set forth in the Indenture and in the Property Lease, dated as of [Month of Closing] 1, 2023, by and between the Authority, as lessor, and the City of Hesperia (the “City”), as lessee (the “Property Lease”). This Bond and the intere st hereon and all other Bonds and the interest thereon (to the extent set forth in the Indenture) are payable from, and are secured by a pledge and assignment of, the Revenues derived from a portion of the amounts payable by the City under the Property Lea se. Except to the extent set forth in the Indenture, all such Revenues are exclusively and irrevocably pledged to and constitute a trust fund, in accordance with the terms hereof and the provisions of the Indenture and the Law, for the security and paymen t or redemption of, and for the security and payment of interest on the Bonds; but nevertheless, in accordance with the Indenture, out of Revenues certain amounts may be applied for other purposes as provided in the Indenture. As and to the extent set fort h in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest and premium (if any) on the Bonds and any Additional Bonds, which may be issued only in accordance with the terms of the Indenture.

The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the aforementioned Revenues as specified herein and in the Indenture. Neither the payment of the principal of the Bonds, nor any interest thereon, constitutes a debt, liability or obligation of the City, the Authority or the State of California. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction.

The rights and obligations of the Authority and the holders of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall (1) extend the fixed maturity of this Bond or reduce the rate of interest hereon or extend the time of payment of interest, or reduce the amount of the principal hereof or reduce any premium payable upon the redemption hereof, without the consent of the holder hereof, or (2) reduce the percentage of Bonds required for the affirmative vote or written consent to an amendment or modification, all as more fully set forth in the Indenture.

The Bonds are subject to redemption on any date witho ut premium under the circumstances prescribed and as provided in the Indenture, as a whole or in part, through the application of proceeds of insurance and eminent domain proceedings.

The Bonds maturing on or before November 1 , 2023, are not subject to optional redemption prior to maturity. The Bonds maturing on or after November 1, ______ are subject to optional redemption prior to maturity on or after November 1 , ______, at the option of the Authority, as a whole or in part on any date, from such maturities as are selected by the Authority, from amounts deposited with the Trustee by the Authority from any funds available therefor other than those described in the previous paragraph , at a redemption price equal to the principal amount of Bonds to be redeemed, plus accrued but unpaid interest to the redemption date, without premium.

The Bonds maturing on November 1, ______ (the “______ Term Bonds”) are subject to mandatory redemption from mandatory Sinking Account Payments, in part, by lot, on November

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1, ____, and on each November 1 thereafter to and including November 1, ____, from money on hand in the Principal Fund at a redemption price equal to the principal amount of the _____ Term Bonds to be redeemed, plus accrued interest on the _____ Term Bonds to be redeemed to the redemption date, without premium. The principal amount of the 2031 Term Bonds to be redeemed and the redemption dates are set forth in the following schedule:

Redemption Date
(November 1)
Principal
Amount

_______________
*Maturity

The Term Bonds maturing on November 1, _____ (the “_____ Term Bonds”) are subject to mandatory redemption from mandatory Sinking Account Payments, in part, by lot, on November 1, __________ , and on each November 1 thereafter to and including November 1, 2035, from money on hand in the Principal Fund at a redemption price equal to the principal amount of the _____ Term Bonds to be redeemed , plus accrued interest on the _____ Term Bonds to be redeemed to the redemption date, without premium. The principal amount of the _____ Term Bonds to be redeemed and the redemption dates are set forth in the following schedule:

Redemption Date
(November 1)
Principal
Amount

_______________
*Maturity

As provided in the Indenture, notice of redemption shall be mailed, by first class mail, not less than 20 nor more than 60 days prior to the redemption date, to the registered owner of Bonds designated for redemption, but neither failure to receive such no tice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption. The Authority shall have the right in certain instances to issue a conditional redemption notice, and to rescind notices of redemption as provided in the Indenture.

If this Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.

If an event of default, as defined in the Ind enture, shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture.

The Bonds are issuable only as fully registered Bonds without coupons in the denomination of $5,000 and any integral multiple thereof. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Indenture, Bonds may be exchanged for a like aggregate principal amount of fully registered Bonds of any other authorized denominations subject to the conditions and restrictions contained in the Indenture.

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This Bond is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at said office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds without coupons of authorized denomination or denominations, for the same aggregate principal amount, will be issued to the transferee in exchange herefor.

The Authority and the Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary.

It is hereby certified that all of the conditions, things and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Law and the laws of the State of California, and that the amount of t his Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.

This Bond shal l not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been manually signed by the Trustee.

Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Trustee or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is required by an authorized representative of DTC), ANY

TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

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IN WITNESS WHEREOF, the Hesperia Joint Public Finance Authority has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Executive Director and attested to by the facsimile signature of its Assistant Secretary, all as of the Original Issue Date specified above.

HESPERIA JOINT PUBLIC FINANCE

AUTHORITY

By
Executive Director
Attest:

Assistant Secretary

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[FORM OF TRUSTEE’S
CERTIFICATE OF AUTHENTICATION]

This is one of the Bonds described in the within-mentioned Indenture.

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee

By:

Authorized Signatory

DATED: ________________

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ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this Bond shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM--as tenants in common

TEN ENT--as tenants by the entireties

JT TEN--as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT-- __________ Custodian __________
(Cust) (Minor)
under Uniform Gifts to Minors Act ________
(State)

ADDITIONAL ABBREVIATIONS MAY ALSO BE USED

THOUGH NOT IN THE LIST ABOVE

[FORM OF ASSIGNMENT]

For value received the undersigned hereby sells, assigns and transfers unto

(Name, Address and Tax Identification or Social Security Number of Assignee)

the within-registered Bond and hereby irrevocably constitute(s) and appoints(s)

attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.

Dated:______________________________

Signature Guaranteed:

Note: Signature(s) must be guaranteed by
an eligible guarantor institution.

Note: This signature(s) on this Assignment must
correspond with the name(s) as written on the
face of the within Bond in every particular
without alteration or enlargement or any change
whatsoever.

ESCROW DEPOSIT AND TRUST AGREEMENT

Relating to

$12,445,000
Hesperia Joint Public Finance Authority
2013 Refunding Lease Revenue Bonds
(Refinancing of 2005 Civic Plaza Financing)

This ESCROW DEPOSIT AND TRUST AGREEMENT (this “ Agreement”), dated as of ______, 2023 , is among the CITY OF HESPERIA, a general law city and municipal corporation organized and existing under the Constitution and laws of the State of California (the “City”), the HESPERIA JOINT PUBLIC FINANCE AUTHORITY, a joint exercise of powers authority organized and existing under the Constitution and laws of the State of California (the “ Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the l aws of the United States of America, acting as escrow agent for the 2013 Bonds described below (the “Escrow Agent”) and as successor trustee (the “Prior Trustee”) for the 2013 Bonds.

B A C K G R O U N D :

1. The Authority previously issued its 2013 Refunding Lease Revenue Bonds (Refinancing of 2005 Civic Plaza Financing) in the aggregate principal amount of $12,445,000 (the “ 2013 Bonds”), under an Indenture dated as of October 1, 2013 (the “2013 Indenture”); the 2013 Bonds are payable from lease payments made by th e City under a Property Lease dated as of October 1, 2013 (the “ 2013 Lease Agreement ”), between the Authority as lessor and the City as lessee.

2. The 2013 Bonds maturing on or after October 1, 2024 are subject to optional redemption, without premium, prior to maturity on any date on or after October 1, 2023, at the option of the Authority.

3. In order to achieve cash flow savings, the City wishes to prepay the lease payments payable by the City under the 2013 Lease Agreement and to cause the Authority to defease and redeem the 2013 Bonds, and, for that purpose, the Authority is issuing the 2023 Refunding Lease Revenue Bonds(the “2023 Bonds”) under an Indenture, dated as of [Month of Closing Date ] 1, 2023 (the “ 2023 Indenture ”) and Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Law”).

4. The City and the Authority wish to appoint the Escrow Agent for the purpose of establishing an irrevocable escrow fund to be funded, invested, held and administered for the purpose of providing for the payment and redemption in full of the principal and interest and premium (if any) with respect to the outstanding 2013 Bonds, and to provide certain directions to the Prior Trustee with respect to the 2013 Bonds.

5. As a result of the deposit and investment of funds in accordance with this Agreement, the 2013 Bonds will be discharged and defeased in accordance with the Attachment 7

2 provisions of Section 10.01 of the 2013 Indenture and redeemed in accordance with the provisions of Section 4.01(c) of the 2013 Indenture.

A G R E E M E N T :

In consideration of the premises and the material covenants contained herein, the City, the Authority and U.S. Bank Trust Company, National Association, as Escrow Agent and Prior Trustee, hereby agree as follows:

SECTION 1. Appointment of Escrow Agent; Establishment of Escrow Fund . The City and the Authority hereby appoint the Escrow A gent to act as escrow agent for purposes of administering the funds required to defease and redeem the 2013 Bonds in accordance with the 2013 Indenture . The Escrow Agent is directed to establish the Hesperia Joint Public Finance Authority 2013 Refunding L ease Revenue Bonds Escrow Fund (the “ Escrow Fund”) to be held by the Escrow Agent in trust as an irrevocable escrow securing the payment of the 2013 Bonds as set forth below. All cash and securities in the Escrow Fund are hereby irrevocably pledged as a s pecial fund for the payment of the principal of and interest and premium (if any) with respect to the 2013 Bonds in accordance with the 2013 Indenture.

If at any time the Escrow Agent receives actual knowledge that the cash and securities in the Escrow Fu nd will not be sufficient to make any payment required by Section 4 in respect of the 2013 Bonds, the Escrow Agent shall notify the City of such fact and the City shall immediately cure such deficiency from any source of legally available funds. The Escrow Agent has no liability for any such insufficiency.

SECTION 2. Deposit and Investment of Amounts in Escrow Fund.

(a) Deposits into the Escrow Fund. On _______, 2023 (the “Closing Date”), the Authority, pursuant to the 2023 Indenture, will cause to be transferred to the Escrow Agent for deposit into the Escrow Fund the amount of $________ in immediately available funds, to be derived from the proceeds of the 2023 Bonds.

In addition, the Authority hereby directs the Prior Trustee to transfer to the Escrow Agent for deposit into the Escrow Fund the amount of $_______, to be derived from moneys related to the 2013 Bonds that are available as a result of the defeasance of the 2013 Bonds.

As a result, the total amount to be deposited in the Escrow Fund on the Closing Date is $____________.

(b) Investment of Amounts in the Escrow Fund. The City and the Authority hereby direct the Escrow Agent to use $_______ of the amounts deposited in the Escrow Fund pursuant to Section 2(a) to acquire in its own name, as Escrow Agent, the Government Obligations (as defined in the 2013 Indenture) described in Exhibit D attached hereto. The Escrow Agent shall hold the balance ($________) uninvested in cash.

(c) Substitution of Government Obligations. The City and the Authority may at any time direct the Escrow Agent to substitute noncallable Government Obligations for any or all of the Government Obligations then deposited in the Escrow Fund, provided that

3 any such direction and substitution shall be accompanied by a certification of an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions that the Government Obligations then to be so deposited in the Escrow Fund, together with interest to be derived therefrom, shall be in an amount at all times at least sufficient to make the payments specified in Section 3 hereof and, further, to be accompanied with an opinion of nationally recognized bond counsel that the substitution will not affect, for Federal income tax purposes, the exemption from Federal income taxes of the interest on the 2013 Bonds or the 2023 Bonds. In the event that, following any such substitution of Government Obligations pursuant to this Section 2(c), there is an amount of moneys or Government Obligations in excess of an amount sufficient to make the payments required by Section 3 hereof, such excess shall be transferred to U.S. Bank Trust Company, National Association, as trustee for the 2023 Bonds, for deposit in the Interest Fund established under the 2023 Indenture, to be applied to pay interest next coming due and payable on the 2023 Bonds.

(d) Limited Power of Escrow Agent. Except as herein otherwise expressly provided, the Escrow Agent shall have no power or duty to make substitutions of the Government Obligations , or to sell, transfer or otherwise dispose of the Government Obligations.

(e) Records. The Escrow Agent will keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocations and application of the money and Government Obligations accruing to the Escrow Agent hereunder, and such books shall be available for inspection at reasonable hours and under reasonable conditions with reasonable prior notice by the owners of the 2013 Bonds or the 2023 Bonds, as applicable.

SECTION 3. Application of Amounts in Escrow Fund. The Escrow Agent is hereby instructed to withdraw from the Escrow Fund and transfer to the Prior Trustee an amount required to pay the principal of and interest and redemption premium (if any) on the 2013 Bonds, in accordance with the schedule attached as Exhibit A hereto.

Following the payment and redemption of the 2013 Bonds in full, the Escrow Agent shall transfer any amounts remaining on deposit in the Escrow Fund to U.S. Bank Trust Company, National Association, as trustee for the 2023 Bonds, for deposit in the Interest Fund established under the 2023 Indenture, to be applied to pay interest next coming due and payable on the 2023 Bonds.

SECTION 4. Irrevocable Election to Redeem 2013 Bonds ; Redemption Notice; Defeasance Notice . The City and the Authority have irrevocably elected to pay and redeem all of the outstanding 2013 Bonds on the date set forth in Exhibit A, in accordance with the provisions of the 2013 Indenture. The City and the Authority hereby direct the Prior Trustee to give notice of the redemption of the 2013 Bonds in accordance with the requirements of the 2013 Indenture, at the expense of the City, using the form set forth in Exhibit B. The City and the Authority further hereby direct the Prior Trustee to give notice of the defeasance of the 2013 Bonds on the Closing Date, using the form set forth in Exhibit C.

SECTION 5. Compensation to Escrow Agent. The City shall pay the Escrow Agent full compensation for its services under this Agreement, including out-of-pocket costs such

4 as publication costs, redemption expenses, legal fees and other costs and expenses relating hereto and, in addition, all fees, costs and expenses relating to the purchase, substitution or withdrawal of any securities after the date hereof. Under no circumstances shall amounts deposited in or credited to the Escrow Fund be deemed to be available for said purposes. The Escrow Agent has no lien upon or right of set off against the cash and securities at any time on deposit in the Escrow Fund.

SECTION 6. Immunities and Liability of Escrow Agent . The Escrow Agent undertakes to perform only such duties as are expressly set forth in this Agreement and no implied duties, covenants or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall not have any liability hereunder except to the extent of its negligence or willful misconduct. In no event shall the Escrow Agent be liable for any special, indirect or consequential damages. The Escrow Agent shall not be liable for any loss from any investment made by it in accordance with the terms of this Agreement. The Escrow Agent may consult with legal counsel of its own choice and the Escrow Agent shall not be liable for any action taken or not taken by it in good faith in reliance upon the opinion or advice of such counsel. The Escrow Agent shall not be liable for the recitals or representations contained in this Agreement and shall not be responsible for the validity of this Agreement, the sufficiency of th e Escrow Fund or the moneys and securities to pay the principal, interest and redemption premium (if any) with respect to the 2013 Bonds.

Whenever in the administration of this Agreement the Escrow Agent deems it necessary or desirable that a matter be proved or established prior to taking or not taking any action, such matter may be deemed to be conclusively proved and established by a certificate of an authorized representative of the City and shall be full protection for any action taken or not taken by the Escrow Agent in good faith reliance thereon.

The Escrow Agent may conclusively rely as to the truth and accuracy of the statements and correctness of any opinions or calculations provided to it in connection with this Agreement and shall be protected in acting, or refraining from acting, upon any notice, instruction, request, certificate, document, opinion or other writing furnished to the Escrow Agent in connection with this Agreement and believed by the Escrow Agent to be signed by the proper party, and it need not investigate any fact or matter stated therein.

None of the provisions of this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder. The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care.

The Escrow Agent may at any time resign by giving 30 days written notice of resignation to the City. Upon receiving such notice of resignation, the City shall promptly appoint a successor and, upon the acceptance by the successor of such appointment, release the resigning Escrow Agent from its obligations hereunder by written instrument, a copy of which instrument shall be delivered to the resigning Escrow Agent and the successor. If no successor shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor.

5 Any bank, corporation or association into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any bank, corporation or association resulting from any merger, conversion or consolidation to which the Escrow Agent shall be a party, or any bank, corporation or association succeeding to all or substantially all of the corporate trust business of the Escrow Agent shall be the successor of the Escrow Agent hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except on the part of any of the parties hereto where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

The City shall indemnify, defend and hold harmless the Escrow Agent and its officers, director s, employees, representatives and agents, from and against and reimburse the Escrow Agent for any and all claims, obligations, liabilities, losses, damages, actions, suits, judgments, reasonable costs and expenses (including reasonable attorneys’ and agents’ fees and expenses) of whatever kind or nature regardless of their merit, demanded, ass erted or claimed against the Escrow Agent directly or indirectly relating to, or arising from, claims against the Escrow Agent by reason of its participation in the transactions contemplated hereby except to the extent caused by the Escrow Agent’s negligence or willful misconduct. The provisions of the foregoing sentence shall survive the termination of this Agreement or the earlier resignation or removal of the Escrow Agent.

The Escrow Agent agrees to accept and act upon instructions or directions pursuant to this Agreement sent by unsecured e-mail (provided, that for purposes of this Agreement, an e -mail does not constitute a notice, request or other communication hereunder but rather the portable document format or similar attachment attached to such e-mail shall constitute a notice, request or other communication hereunder ), facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Escrow Agent shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the City elects to give the Escrow Agent e-mail or facsimile instructions (or instructions by a similar electronic method) and the Escrow Agent in its discretion elects to act upon such instructions, the Escrow Agent ’s reasonable understanding of such instructions shall be d eemed controlling. The Escrow Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsis tent with a subsequent written instruction. The City agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Agent, including without limitation the risk of the Escrow Agent acting o n unauthorized instructions, and the risk of interception and misuse by third parties.

SECTION 7. Tax-Exempt Nature of 2013 Bonds and 2023 Bonds. The City and the Authority covenant and agree for the benefit of the owners of the 2013 Bonds and the 2023 Bonds that they will not perform or permit to be performed any thing or act in such manner as would cause interest on the 2013 Bonds or the 2023 Bonds to be included in the gross inco me of the recipients thereof for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”), and, in particular, they will not use any of the proceeds received from the sale of the 2023 Bonds, directly or indirectly, in

6 any manner which would result in such 2023 Bonds being classified as “arbitrage bonds” within the meaning of Section 148(a) of the Code.

SECTION 8. Termination of Agreement. Upon payment in full of the principal of and interest and redemption premium (if any) on the 2013 Bonds and all fees, expense and charges of the Escrow Agent as described above, this Agreement shall terminate and the Escrow Agent shall be discharged fr om any further obligation or responsibility hereunder.

SECTION 9. Execution in Counterparts . This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

7 SECTION 9. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

CITY OF HESPERIA

By:

City Manager

HESPERIA JOINT PUBLIC FINANCE

AUTHORITY

By:

Executive Director

U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, as Escrow
Agent and as Prior Trustee

By
Authorized Officer

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EXHIBIT A

ESCROW REQUIREMENTS

Payment
Date
Interest
Payment

Principal
Due

Redeemed
Principal
Total
Payment
10/1/23

B-1

EXHIBIT B

FORM OF REDEMPTION NOTICE

$12,445,000
Hesperia Joint Public Finance Authority
2013 Refunding Lease Revenue Bonds
(Refinancing of 2005 Civic Plaza Financing)
Date of issuance: October 30, 2013

NOTICE IS HEREBY GIVEN, by the Hesperia Joint Public Finance Authority (the “Authority”) that all of the captioned bonds maturing on or after October 1, 2024 (the “2013 Bonds”), have been called for redemption under and within the meaning of the Indenture, dated as of October 1, 2013 (the “2013 Indenture”), on October 1, 2023 (the “Redemption Date”), at a redemption price equal to the principal amount of the 2013 Bonds together with accrued interest thereon to the redemption date, without premium (the “Rede mption Price”).

The 2013 Bonds consist of the following:

Maturity Date
(October 1)
Initial
Principal Amount Interest Rate
CUSIP
(Base: 42806H)
2024 $500,000 3.750% BJ8
2025 535,000 4.000 BK5
2026 575,000 4.000 BL3
2027 620,000 4.250 BM1
2028 665,000 4.250 BN9
2031 (T) 2,305,000 4.750 BP4
2035 (T) 3,950,000 5.000 BQ2

T Term Bond.

On the Redemption Date, the Redemption Price will become due and payable on each of the 2013 Bonds , and interest shall cease to accrue on the 2013 Bonds on the Redemption Date.

The CUSIP number of the 2013 Bonds has been assigned by an independent service and is included in this notice solely for the convenience of the Owners and neither U.S. Bank Trust Company, National Association, as trustee for the 2013 Bonds (the “2013 Trustee”), the Authority nor the City of Hesperia shall be liable for any inaccuracies in such numbers.

Pursuant to the 2013 Indenture, the Redemption Price of the 2013 Bonds will be paid without presentation of the 2013 Bonds if presentme nt is not required and upon presentation of the 2013 Bonds if presentment is required. If presentment is required, surrender thereof can be made in the following manner:

Delivery Instructions:

U.S. Bank
Global Corporate Trust

B-2
111 Fillmore Ave E
St. Paul, MN 55107

The owners of the 2013 Bonds presenting their bonds in person for same day payment must surrender their bond(s) by 1:00 P.M. CST on the Redemption Date and a check will be available for pick up after 2:00 P.M. CST. Checks not picked up by 4:30 P.M. CST will be mailed out to the bondholder via first class mail. If payment of the Redemption Price is to be made to the registered owner of the 2013 Bond, the owner of the 2013 Bond is not required to endorse the 2013 Bond to collect the Redemption Price.

For a list of redemption requirements please visit our website at www.usbank.com/corporatetrust and click on the “Bondholder Information” link for Redemption instructions. You may also contact our Bondholder Communications team at 1 800-934-6802 Monday through Friday from 8 A.M. to 6 P.M. CST.

IMPORTANT NOTICE

Federal law requires the 2013 Trustee to withhold taxes at the applicable rate from the payment if an IRS Form W-9 or applicable IRS Form W-8 is not provided. Please visit www.irs.gov for additional information on the tax forms and instructions.

Dated: ______, 2023 U.S. Bank Trust Company,
National Association, as Trustee

C-1

EXHIBIT C

FORM OF DEFEASANCE NOTICE

$12,445,000
Hesperia Joint Public Finance Authority
2013 Refunding Lease Revenue Bonds
(Refinancing of 2005 Civic Plaza Financing)
Date of issuance: October 30, 2013

NOTICE IS HEREBY GIVEN, by the Hesperia Joint Public Finance Authority (the “Authority”) that, on the date hereof, moneys and investments have been set aside in an Escrow Fund held by U.S. Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”), pursuant to an Escrow Deposit and Trust Agreement, dated as of _______, 2023 (the "Escrow Agreement"), by and among the City of Hesperia (the “City”), the Authority and the Escrow Agent, for the purpose of paying the outstanding captioned bonds (the “2013 Bonds”).

The moneys and investments in the Escrow Fund shall be sufficient to (i) pay principal of and in terest due on the 2013 Bonds on October 1, 2023 and (ii) redeem on October 1, 2023, all of the outstanding 2013 Bonds maturing on or after October 1, 2024, at a redemption price equal to the principal amount to be redeemed, without premium.

The outstanding 2013 Bonds consist of the following:

Maturity Date
(October 1)
Initial
Principal Amount Interest Rate
CUSIP
(Base: 42806H)

2023 $460,000 4.000% BH2
2024 500,000 3.750 BJ8
2025 535,000 4.000 BK5
2026 575,000 4.000 BL3
2027 620,000 4.250 BM1
2028 665,000 4.250 BN9
2031 (T) 2,305,000 4.750 BP4
2035 (T) 3,950,000 5.000 BQ2

T Term Bond.

In accordance with the terms of the Indenture, dated as of October 1, 2013 related to the 2013 Bonds (the “2013 Indenture”) notice of redemption of the captioned Bonds to be redeemed is required to be given by U.S. Bank Trust Company, National Association, as trustee for the 2013 Bonds (the “2013 Trustee”), on a date not more th an 60 days or less than 30 days prior to the date fixed for redemption thereof.

The moneys deposited in the Escrow Fund, including the earnings derived from the investment thereof, are irrevocably pledged to the payment of principal or redemption price of and interest on the 2013 Bonds. Said moneys have been invested in certain United States Treasury Bonds State and Local Government Series issued by the United States

C-2
Treasury (“SLGS”) and which bear interest and mature on such dates as to insure the payment of all principal, premium, as applicable, and interest on the 2013 Bonds. Pursuant to the Escrow Agreement, the Authority may substitute securities for those initially allocated to the Escrow Fund and withdraw moneys from the Escrow Fund subject to the terms and conditions set forth in the Escrow Agreement.

As a consequence of the foregoing actions and in accordance with the 2013 Indenture, the pledge of the Revenues provided for in the 2013 Indenture and all other obligations of the Authority under the 2013 Indenture have ceased and terminated, except as otherwise provided in the 2013 Indenture and except for the obligation of the Authority to pay or cause to be paid to the owners of the 2013 Bonds all sums due thereon.

The CUSIP number of the 2013 Bonds has been assigned by an independent service and is included in this notice solely for the convenience of the owners of the 2013 Bonds and neither the Escrow Agent, the Authority nor the City of Hesperia shall be liable for any inaccuracies in such numbers.

Dated: ______, 2023 U.S. Bank Trust Company,
National Association, as Escrow Agent

D-1

EXHIBIT D

DESCRIPTION OF GOVERNMENT OBLIGATIONS

Type
Maturity
Date
Par
Amount

Rate

Cost

Stradling Draft of 5/10/23
1 4895-1074-7737/200356-0526
$[Principal Amount]

HESPERIA JOINT PUBLIC FINANCE AUTHORITY
2023 Refunding Lease Revenue Bonds

BOND PURCHASE AGREEMENT
June __, 2023
Hesperia Joint Public Finance Authority
9700 7th Avenue
Hesperia, California 92345
Attention: City Manager
City of Hesperia
9700 7th Avenue
Hesperia, California 92345
Attention: City Manager
Ladies and Gentlemen:

The undersigned, Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (which, together with the exhibits hereto, is referred to as the “Purchase Agreement”) with the Hesperia Joint Public Financ e Authority (the “Authority”) and the City of Hesperia, California (the “City”), which, upon the acceptance of the Authority and the City, will be binding upon the Authority, the City and the Underwriter. This offer is made subject to acceptance by the Authority and by the City by the execution of this Purchase Agreement and delivery of the same to the Underwriter prior to 11:59 P.M., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice deli vered to the Authority and the City at any time prior to the acceptance hereof by the Authority and the City. Capitalized terms that are used herein and not otherwise defined have the meanings that are set forth in the Indenture, dated as of July 1, 2023 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase from the Authority, and the Authority hereby agrees to issue, sell and deliver to the Underwriter all (but not less than all) of the Hesperia Joint Public Financ e Authority 2023 Refunding Lease Revenue Bonds in the aggregate principal amount of $________ (the “Bonds”). The Bonds will be dated as of their date of delivery. Interest on the Bonds shall be payable semiannually on November 1, 2023 and each May 1 and November 1 thereafter, and will mature, bear interest and be subject to redemption prior to maturity as set forth in Exhibit A. The purchase price of the Bonds shall be equal to $________ (being the aggregate principal amount thereof plus a [net] original issue [premium] [discount] of $________, less an underwriter’s discount of $________).

Section 2. The Bonds. The Bonds shall be secured by a pledge of revenues consisting primarily of rental payments (“Rental Payments”) to be paid by the City to the Authority pursuant to the Property Lease, dated as of July 1, 2023 (the “Property Lease”), by and between the City and the Attachment 8

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Authority, under which the Authority will sublease certain real property to the City in consideration for the City’s payment of the Rental Payments. The Authority’s right to receive the Rental Payments due under the Property Lease and to exercise remedies upon default under such Property Lease shall be assigned to the Trustee for the benefit of the owners of the Bonds pursuant to the Indenture.

The Bonds shall be as described in, and shall be secured under and pursuant to the Indenture substantially in the form previously submitted to the Underwriter with only such changes therein as shall be mutually agreed upon by the Authority, the City and the Underwriter.

The proceeds of the Bonds shall be used for the purpose of refinancing the 2013 Lease Revenue Bonds (Refinancing of 2005 Civic Plaza Financing) (the “2013 Bonds”), issued under an Indenture dated as of October 1, 2013 , by and between the Authority and U.S. Bank Trust Company, N ational Association, as successor trustee (the “2013 Trustee”) ; the 2013 Bonds are payable from lease payments made by the City under a Property Lease dated as of October 1, 2013 (the “2013 Lease Agreement”), between the Authority as lessor and the City as lessee.

The leased assets (the “Leased Property”) under the Property Lease and the Site Lease (defined below) will initially consist of the Hesperia City Hall and the Civic Plaza Park. However, the City intends to substitute the Hesperia Branch Library for the City Hall when the City has received from the County of San Bernardino (the “County”) a written subordination (the “Subordination Agreement”) of its interests under an unrecorded lease agreement (“County Library Lease Agreement”) to the Property Lease and the Site Lease. The City intends the Subordination Agreement to be executed by the City and the County, but the Authority will also be a party to the Subordination Agreement if required by the County.

The Finance Authority previously issued its 2012 Lease Revenue Bonds (Water Rights Acquisition) in the aggregate principal amount of $26,735,000 (the “2012 Bonds”), under an Indenture dated as of December 1, 2012; the 2012 Bonds are payable from lease paym ents made by the City under a Property Lease dated as of December 1, 2012 (the “2012 Property Lease”), between the Finance Authority as lessor and the City as lessee. The property leased by the City from the Finance Authority under the 2012 Property Lease includes the real property and improvements constituting the Hesperia Branch Library, the Civic Plaza Park and the Hesperia Police Station. In order to lease the Civic Plaza Park and the Hesperia Branch Library under the Property Lease, the City intends to enter into amendments of the 2012 Property Lease and a Site and Facilities Lease, dated as of December 1, 2012 (the “2012 Amendments”) providing for the release of the Civic Plaza Park and the Hesperia Branch Library as leased assets.

The Bonds, this Purchase Agreement, the Indenture, the Escrow Deposit and Trust Agreement, dated as of July 1, 2023 (the “Escrow Agreement”), by and among the City, the Authority, and U.S.

Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”) and 2013 Trustee, the Property Lease, the Site and Facilities Lease, dated as of July 1, 2023 (the “Site Lease”), by and between the Authority and the City, the 2012 Amendments, and the resolution of the Authority authorizing the issuance of the Bonds (the “Auth ority Resolution”) are collectively referred to herein as the “Authority Documents.”
This Purchase Agreement, the Escrow Agreement, the Continuing Disclosure Certificate of the City, dated the date of issuance of the Bonds (the “Continuing Disclosure Certificate”), relating to the Bonds, the Property Lease, the Site Lease , the 2012 Amendments, and the resolution of the City

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relating to the Bonds (the “City Resolution”) are collectively referred to herein as the “City Documents.”
Section 3. Public Offering and Establishment of Issue Price. (a) The Underwriter agrees to make an initial public offering of all of the Bonds at the public offering prices (or yields) set forth in Exhibit A and incorporated herein by reference.

Subsequent to the initial public offering, the Under writer reserves the right to change the public offering prices (or yields) as the Underwriter deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices.

The City and the Authority acknowledge and agree that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s -length com mercial transaction between the City and the Authority, on one hand, and the Underwriter, on the other; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 15B of The Securities Exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City or the Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City or Authority on other matters); (iv) the Underwriter has financial and other interests that differ from those of the City and the Authority; and (v) the City and Authority have consulted their own legal, financial and other advisors to the extent that they have deemed appropriate. (b) The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing (as defined below) an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form set forth in Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel (as such term is defined below), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the Authority under this section to establish the issue price of the Bonds m ay be taken on behalf of the Authority by the Authority’s municipal advisor, Fieldman, Rolapp & Associates (the “Municipal Advisor”) and any notice or report to be provided to the Authority may be provided to the Authority’s Municipal Advisor. (c) Except as otherwise set forth in Exhibit A, the Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. At o r promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Authority the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date (as defined below) has occurre d, until either: (i) the Underwriter has sold all of the Bonds of that maturity; or (ii), the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon the request of the Authority or Bond Counsel.

For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds.

4 4895-1074-7737/200356-0526
(d) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set fort h in Exhibit A, except as otherwise set forth therein.

Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has n ot been satisfied and for which the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold -the- offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(i) the close of the fifth (5th) business day after the sale date; or (ii) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter will advise the Authority promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (e) The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group, and each broker- dealer that is a party to such third-party distribution agreement, as applicable, (A) (i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter; (B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker -dealer is a sale to the public; and
(2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligatin g each dealer that is a party to a third -party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker -dealer that is a party to such third -party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or

5 4895-1074-7737/200356-0526
the dealer and (B) comply with th e hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (f) The Authority acknowledges that, in making the representations set forth in this Section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third- party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker -dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third -party distribution agreement and the related pricing wires. The Authority further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a third -party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold -the-offering-price rule, if applicable to the Bonds.
(g) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party; (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the publ ic and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third party distribution agreement participating in the initial sale of the Bonds to the public); (iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both ent ities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and (iv) “sale date” means the date of execution of this Purchase Agreement by all parties.

Section 4. The Official Statement. By their acceptance of this proposal, the Authority and the City ratify, confirm and approve of the use and distribution by the Underwriter prior to the date

6 4895-1074-7737/200356-0526
hereof of the Preliminary Official Statement relating to the Bonds dated June __, 2023 (including the cover page, all appendices and all information incorporated therein and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “Preliminary Official Statement”) that an authorized officers of the City and the Authority deemed “final” as of its date, for purposes of Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 15c2-12”), except for certain information that is permitted to be omitted therefrom by Rule 15c2-12. The Authority and the City agree to deliver or cause to be delivered to the Underwriter, within seven business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Bonds (including all information that was previously permitted to have been omitted by Rule 15c2-12), including the cover page, all appendices, all information incorporated therein and any amendments or supplements as have been approved by the Authority, the City and the Underwriter (the “Official Statement”) in such quantity as the Underwriter shall reasonably request to comply with Section (b)(4) of Rule 15c2 -12 and the rules of the Municipal Securities Rulemaking Board (the “MSRB”).

The Underwriter hereby agrees that it will not request that payment be made by any purchaser of the Bonds prior to delivery by the Underwriter to the purchaser of a copy of the Official Statement.

The Underwriter agrees: (i) to provide the Authority and the City with final pricing information on the Bonds on a timely basis; and (ii) to file a copy of the Official Statement, including any supplements prepared by the Authority or the City in accordance with MSRB rules with the MSRB at http://emma.msrb.org. The Authority and the City hereby approve of the use and distribution by the Underwriter of the Preliminary Official Statement in connection with the offer and sale of the Bonds.

The Authority and the City will cooperate with the Underwriter in the filing by the Underwriter of the Official Statement with the MSRB.

Section 5. Closing. At 8:30 a.m., Pacific Standard Time, on July __, 2023, or at such other time or date as the Authority and the Underwriter agree upon (the “Closing Date”), the Authority shall deliver or cause to be delivered to the Trustee, the Bonds, in definitive form, registered in the name of Cede & Co., as the nominee of The Depository Trust Company (“DTC”), so that the Bonds may be authenticated by the Trustee and credited to the account specified by the Underwriter under DTC’s FAST procedures. Concurrently with the delivery of the Bonds, the Authority and the City will deliver the documents hereinafter mentioned at the offices of Jones Hall, A Professional Law Corporation, San Francisco, California (“Bond Counsel”), or another place to be mutually agreed upon by the Authority, the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer in immediately available funds. This payment for and delivery of the Bonds, together with the delivery of the aforementioned documents, is herein called the “Closing.”
The Bonds shall be registered in the name of Cede & Co., as nominee of DTC in denominations of five thousand dollars ($5,000) or any integral multiple thereof. The Authority and the City acknowledge that the services of DTC will be used initially by the Underwriter in order to permit the issuance of the Bonds in book -entry fo rm, and agree to cooperate fully with the Underwriter in employing such services.

Section 6. Representations, Warranties and Covenants of the Authority. The Authority represents, warrants and covenants to the Underwriter and the City that:
(a) The Authority is a public body that is duly organized and existing under the Constitution and laws of the State of California (the “State”), including Articles 1, 2, and 4 of Chapter