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Home My WebLink AboutSupplemental Information - Item W (Tax Allocation, Refunding Bonds for Redevelopment Agency)RICHARDS, WATSON & GERSHON 11 ATTORNEYS AT LAW A PROFESSIONAL CORPORATION SUSAN Y. CRIS85 THIRTY-EIGHTH FLOOR OFFICES IN scRISaSQRwcuw.COn 933 SOUTH HOPE STREET LOS ANGELES, CALIFORNIA 90071-1469 LOS ANGELES (213) 626-8484 SAN FRANCISCO FACSIMILE (213) 626-0078 ORANGE COUNTY December S, 2000 VIA FEDEX Joanne Yeo, City Clerk City of Seal Beach 211 Eighth Street Seal Beach, CA 90740 Re: Uniform Facsimile Filing Redevelopment Agency of the City of Seal Beach Dear Joanne: Per to our conversation yesterday, enclosed are the necessary fomes and attachments to be filed with the Secretary of State pursuant to the Uniform Facsimile Signatures of Public Officials Act (California Government Code Section 5500, et seq.). Please have your signature as well as Paul Yost's signature notarized and submit the enclosed letters and fomes that me attached to this letter, to the Secretary of State in the enclosed Federal Express package. We will also need the your specimen signature for printing. Therefore, please sign your name in black ink three tones (about 15-20 lines apart) on a blank sheet of white paper. I have enclosed a second Federal Express envelope for transmittal of the signed pieces of paper to our office. Thank you very much for your assistance. Please do not hesitate to contact me if you have any questions. Very truly yours, Susan Y. Cribbs Secretary to William Kramer Enclosures REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH and BNY WESTERN TRUST COMPANY as Trustee INDENTURE Dated as of December 1, 2000 Relating to S Redevelopment Agency of the City of Seal Beach Tax Allocation Refunding Bonds, 2000 Series A (Riverfront Redevelopment Project) S7284\0001\634642.3 DRAFT 12/5/00 TABLE OF CONTENTS Page INDENTURE....................................................................... 1 RECITALS......................................................................... 1 ARTICLE I DEFINITIONS; EQUAL SECURITY ..................................... 2 SECTION 1.01. Definitions ..................................................... 2 SECTION 1.02. Equal Security ................................................. 13 ARTICLE lI THE BONDS; SERIES 2000 A BOND PROVISIONS ....................... 13 SECTION 2.01. Authorization................................................. 13 SECTION 2.02. Terms of Series 2000 A Bonds .................................... 13 SECTION 2.03. Form of Series 2000 A Bonds ..................................... 14 SECTION 2.04. Redemption of Series 2000 A Bonds; Selection of Bonds; Purchase in 23 SECTION 5.04. Lieu of Redemption; Notice ...................................... 15 SECTION 2.05. Execution of Bonds ............................................. 17 SECTION 2.06. Transfer and Registration of Bonds ..........:..................... 17 SECTION 2.07. Exchange of Bonds ............................................. 17 SECTION 2.08. Bond Registration Books ........................................ I8 SECTION 2.09. Mutilated, Destroyed, Stolen or Lost Bonds .......................... 18 SECTION 2.10. Temporary Bonds .............................................. 18 SECTION 2.11. Validity of Bonds .............................................. 18 SECTION 2.12. Book -Entry System ............................................. 18 ARTICLE III ISSUANCE OF SERIES 2000 BONDS; APPLICATION OF PROCEEDS OF SALE.............................................................. 20 SECTION 3.01. Issuance of Series 2000 A Bonds .................................. 20 SECTION 3.02. Sale of Series 2000 A Bonds — Allocation of Proceeds Among Funds andAccounts........................................................ 20 ARTICLE IV ISSUANCE OF ADDITIONAL BONDS .................................. 20 SECTION 4.01. Conditions for the Issuance of Additional Bonds ...................... 20 SECTION 4.02. Procedure for the Issuance of Additional Bonds ...................... 22 ARTICLE V TAX REVENUES; CREATION OF FUNDS ... I ........................... 22 SECTION 5.01. Pledge of Tax Revenues ......................................... 22 SECTION 5.02. Special Fund; Receipt and Deposit of Tax Revenues; Debt Service 26 SECTION 6.03. Fund........................................................ 23 SECTION 5.03. Establishment of Other Funds ..................................... 23 SECTION 5.04. Redevelopment Fund; Housing Fund ............................... 23 SECTION 5.05. Expense Fund ................................................. 24 SECTION 5.06. Establishment and Maintenance of Accounts for Use of Moneys in the 27 SECTION 6.08. Debt Service Fund ............................................. 24 SECTION 5.07. Investment of Moneys in Funds and Accounts ........................ 26 ARTICLE VI COVENANTS OF THE AGENCY ...................................... 26 SECTION 6.01. Punctual Payment .............................................. 26 SECTION 6.02. Against Encumbrances .......................................... 26 SECTION 6.03. Extension or Funding of Claims for Interest .......................... 27 SECTION 6.04. Management and Operation of Properties ........................... 27 SECTION 6.05. Payment of Claims ............................................. 27 SECTION 6.06. Records and Accounts; Financial and Project Statements ............... 27 SECTION 6.07. Protection of Security and Rights of Owners ......................... 27 SECTION 6.08. Payment of Taxes and Other Charges ............................... 27 SECTION 6.09. Financing the Project ........................................... 27 SECTION 6.10. Taxation of Leased Property ...................................... 28 S7284\0001\639692.3 -1' DR"T 12/5/00 SECTION 6.11. Disposition of Property in Project Area SECTION 7.01. SECTION 6.12. Amendment of Redevelopment Pl............................. Pin 28 SECTION 6.13. ................................ Tax Revenues ....... 28 SECTION 6.14. . Further Assurances ....... " " " " "' SECTION 6.I5. ...................... Tax Covenants; Rebate Fund 28 SECTION 6.16. ...... . Agreements with Taxing Agencies " " ' ' ' ... 28 SECTION 6.17. .......... Annual Review of Tax Revenues """' 29 SECTION 6.18. Housing Fund .`........"""""""' ....... 29 ............ Appointment of Successor Tmstee ARTICLE VII THE TRUSTEE .......... SECTION 7.01. . Appointment of Trustee 30 SECTION 7.02. ........•••••""'"""' Acceptance of Trusts 30 SECTION 7.03. ............................................ .... Fees, Charges and Expenses of Tmstee "' . • • 30 SECTION 7.04. .......... ' ' Notice to Bond Owners of Default ' ' ' ' . . • 32 SECTION 7.05. ............ Intervention by Trustee • ...stee "". 32 SECTION 7.06. ........... ........................ Removal of Trustee ' • . . • 32 SECTION 7.07. Resignation by Trustee..................... .......... ' • • .. • • .. "' 32 SECTION 7.08. ............ Appointment of Successor Tmstee ................................ Consolidation 32 SECTION 7.10. ..... 4 .... Concerning any Successor Trustee "' . • 33 SECTION 7.11. ............... Appointment of Co -Trustee ""' • ..• • . • • • . • • • 33 SECTION 7.12. Indemnification; Limited Liability of Trustee ....... 44 . • ""' • • 33 ARTICLE VIII AMENDMENT OF THE INDENTURE SECTION 8.01. ............. 4 ........ 4 ... 4 ........ Amendment by Consent of Owners 34 SECTION 8.02. ...................... 4 ......... Disqualified Bonds 34 SECTION 8.03. .......... Endorsement or Replacement of Bonds After Amendment .. 35 SECTION 8.04. ......... Opinion of Counsel . ............................................. 35 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES OF OWNERS SECTION 9.01. ................... Events of Default and Acceleration of Maturities ..................... 35 35 SECTION 9.02. Application of Funds Upon Acceleration ..................... 36 SECTION 9.03. 4 Other Remedies of Owners ........... 4 ... 4 ... ...... 36 SECTION 9.04. 4 ................... Non -Waiver SECTION 9.05. .......... 4 ... 4 ... 4 . Actions by Trustee as Attomey-in-Fact ....... • • • • . 37 37 SECTION 9.06. Remedies Not Exclusive ........ 4 ......"' '' ' • • . 37 SECTION 9.07. Owners' Direction of Proceedings......... . • "' " ... • • ... 37 SECTION 9.08. Limitation on Owners' Right to e........ ' • • ' • .. ........................ • • • 37 ARTICLE X DEFEASANCE SECTION 10.01. .................... .................. Discharge of Indebtedness ... 4 .......... 4 ... 38 38 SECTION 10.02. Unclaimed Moneys ................. 4 ............ • ... " "' • " . • 39 ARTICLE XI MUNICIPAL BOND INSURANCE ................................ 4 ..... 39 ARTICLE XII MISCELLANEOUS SECTION 12.01. ............... . Liability of Agency Limited to Tax Revenues ........ . • . . . . . 39 39 SECTION 12.02. ............... Benefits of Indenture Limited to Parties ............................ 40 SECTION 12.03. Successor Is Deemed Included in All References to Predecessor sor 40 SECTION 12.04. ........ Execution of Documents by Owners. SECTION 12.05. .................. Waiver of Personal Liability ..................... .................. ... 40 40 SECTION 12.06. Acquisition of Bonds by Agency ............................. ... 40 SECTION 12.07. Content of Certificates and Reports ............................... .... 40 SECTION 12.08. Notice to Bond Insurer ......................................... 41 SECTION 12.09. Funds and Accounts ....... 4l SECTION 12.10. Article and Section Headings and References ...... .... 41 SECTION 12.11. . Partial Invalidity ......... ' • "' • • • • • • • ... SECTION 12.12. Execution in Several Counterparts ........... 4 .. .... q1 SECTION 12.13. Business Days .......................................... 4 .... S7284\0001\634642.3 -ii- DRAFT 12/5/00 SECTION 12.14. Governing Law ............................................... 42 SECTION 12.15. Notices ..................................................... 42 APPENDIX A [Form of Series 2000 A Bond] ........................................... 1 APPENDIX B [Form of Expense Fund Requisition] ...................................... 1 S7284\0001\634642.3 -iii- DR " 12/5/00 INDENTURE This Indenture (the "Indenture") is made and entered into as of December I, 2000, by and between the Redevelopment Agency of the City of Seal Beach, a public body, corporate and politic, organized and existing under and by virtue of the laws of the State of California (the "Agency"), and BNY Western Trust Company, a state banking corporation duly organized and existing under the laws of the State of California, as trustee (the "Trustee"). RECITALS: The Agency is a redevelopment agency, a public body, corporate and politic, duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Community Redevelopment Law (Part I of Division 24 of the Health and Safety Code of the State of California and referred to herein as the "Law") and the powers of such agency include the power to issue bonds for any of its corporate purposes. A. A redevelopment plan for a redevelopment project known and designated as the "Riverfront Redevelopment Project" (the "Project Area") has been adopted and approved and all requirements of law for, and precedent to, the adoption and approval of said plan have been duly complied with. B. The plan contemplates that the Agency will issue its bonds to finance a portion of the cost of such redevelopment. C. The Agency has heretofore issued its Redevelopment Agency of the City of Seal Beach, Riverfront Redevelopment Project, Tax Allocation Bonds, Issue of 1986, of which $1,380,000 remain outstanding (the "1986 Bonds"), and its Redevelopment Agency of the City of Seal Beach (Riverfront Redevelopment Project) 1991 Subordinate Lien Tax Allocation Bonds, Series A, of which $3,715,000 remain outstanding (the "1991 Bonds" and, together with the 1986 Bonds, the "Refunded Bonds"). D. The Agency, by Resolution No. 00- , adopted December 11, 2000, authorized the issuance of its Redevelopment Agency of the City of Seal Beach, Tax Allocation Refunding Bonds, 2000 Series A (Riverfront Redevelopment Project) and its Redevelopment Agency of the City of Seal Beach, Subordinate Tax Allocation Bonds, 2000 Series B (Riverfront Redevelopment Project) for the purpose of refunding and defeasing the Refunded Bonds, and for the purpose of financing additional costs of the Project. E. The Agency has determined to issue the Series 2000 A Bonds pursuant to this Indenture and to secure the Series 2000 A Bonds in the manner provided herein. F. The Agency has determined that all things necessary to cause the Series 2000 A Bonds, when authenticated by the Trustee and issued as in this Indenture provided, to be legal, special obligations of the Agency, enforceable in accordance with their terms, and to constitute this Indenture a valid agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the creation, execution and delivery of this Indenture and the creation, execution and issuance of the Series 2000 A Bonds, subject to the terns hereof, have in all respects been duly authorized. NOW THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, and the interest and premium, if any, on, all Bonds at any time issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by Owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the Agency does hereby covenant and agree with the Trustee, for the benefit of the respective holders from time to time of the Bonds, as follows: S1284\0001\634642.3 -t- DRAFT 12/5/00 ARTICLE I DEFINITIONS; EQUAL SECURITY SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of the Bonds and of any certificate, opinion, report, request or other document herein or therein mentioned have the meanings herein specified. Accreted Value The term "Accreted Value" means, with respect to any Capital Appreciation Bonds, as of any date of calculation, the sum of the initial amount thereof and the interest accrued and compounded thereon, as determined in accordance with the provisions of the Supplemental Indenture authorizing issuance of such Bonds, to such date of calculation. Additional Allowance The term "Additional Allowance" means, as of the date of calculation, the amount of Tax Revenues which, as shown in a Consultant's Report, are estimated to be receivable by the Agency in the next Fiscal Year as a result of increases in the assessed valuation of taxable property in the project Area due to either (i) construction which has been completed but has not yet been reflected on the tax roll, or (ii) transfer of ownership or any other interest in real property, which is not then reflected on the tax roll. Aaencv The tern "Agency" means the Redevelopment Agency of the City of Seal Beach, a public body, corporate and politic, duly organized and existing under and pursuant to the Law. Annual Debt Service, Average Annual Debt Service, Maximum Annual Debt Service The term "Annual Debt Service" means, for each Bond Year, the sum of (1) the interest falling due on all Outstanding Bonds in such Bond Year, assuming that all Outstanding Serial Bonds are retired as scheduled and that all Outstanding Term Bonds, if any, are redeemed from the Sinking Account, as may be scheduled (except to the extent that such interest is to be paid from the proceeds of sale of any Bonds), (2) the principal amount of the Outstanding Serial Bonds, if any, maturing by their terms in such Bond Year, and (3) the minimum amount of such Outstanding Term Bonds required to be paid or called and redeemed in such Bond Year. With respect to Capital Appreciation Bonds, the Accreted Value payment shall be deemed due on the scheduled redemption or payment date of such Capital Appreciation Bonds. If any Bonds bear interest payable pursuant to a variable interest rate formula, the interest rate on such Bonds for periods when the actual interest rate cannot yet be determined shall be assumed to be equal to the greater of (a) the most recently published Bond Buyer 25 Bond Revenue Index (or comparable index if such 25 Bond Revenue Index is no longer published) or (b) the average variable rate of interest borne by such Bonds during the preceding 36 months or, if such Bonds were not outstanding during all of the preceding 36 months, the highest interest rate home by variable interest rate debt for which the interest rate is computed by reference to a variable interest rate formula comparable to that utilized for such Bonds. "Annual Debt Service" shall not include (a) interest on Bonds which is to be paid from amounts constituting capitalized interest or (b) principal and interest allocable to that portion of the proceeds of any Bonds required to remain unexpended and to be held in escrow pursuant to the terms of a Supplemental Indenture, provided that (i) projected interest earnings on such amounts, if any, deposited by the Agency in the Interest Account, are sufficient to pay the interest due on such portion of the Bonds m long as it is required to be held in escrow and (ii) the conditions for the release of such proceeds from escrow, insofar as they relate to Tax Revenue coverage and satisfaction of the Reserve Account Requirement, are substantially the same as those for the issuance of Additional Bonds. S?284\0001\639692.3 -2- DRAFT 12/5/00 all Bond Years. The term "Average Annual Debt Service" means the average Annual Debt Service over The term "Maximum Annual Debt Service" means the largest Annual Debt Service during the period from the date of calculation through the final maturity date of any Outstanding Bonds. Authorized Investments The term "Authorized Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to he invested therein, as certified by the Agency to the Trustee: A. Federal Securities; B. Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: - Export -Import Bank - Farm Credit System Financial Assistance Corporation - Rural Economic Community Development Administration - General Services Administration - U.S. Maritime Administration - Small Business Administration - Government National Mortgage Association (GNMA) - U.S. Department of Housing & Urban Development (PHA's) - Federal Housing Administration - Federal Financing Bank; C. Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: Senior debt obligations rated "Am" by Moody's or "AAA" by Fitch issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC) Obligations of the Resolution Funding Corporation (REFCORP) Senior debt obligations of the Federal Home Loan Bank System Senior debt obligations of other Government Sponsored Agencies approved by the Bond Insurer; D. U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks (including the Trustee and its affiliates) which have a rating on their short term certificates of deposit on the date of purchase of "A -l" or A -I+" by S&P and "P-1" by Moody's or the equivalent rating by Fitch and maturing no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank.); E. Commercial paper which is rated at the time of purchase in the single highest classification, "A-1+" by S&P and "P -I" by Moody's or the equivalent rating by Fitch and which matures not more than 270 days after the date of purchase; F. Investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P, including funds for which the Trustee and its affiliates provide investment advisory or other management services; G. Pre -refunded Municipal Obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and 57284\0001\634642.3 -3- DRAFT 12/5/00 (1) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of S&P and Moody's or Fitch or any successors thereto; or (2) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph A above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; H. General obligations of states with a rating of at least "A2/A" or higher by Moody's, S&P or Fitch; I. Investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) 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, of the guarantor is rated at least "AA" by S&P and "Aa" by Moody's; provided that, by the terms of the investment agreement: a. interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service (or, if the investment agreement is for the Redevelopment Fund, construction draws) on the Bonds; b. the invested funds are available for withdrawal without penalty or premium, at any time upon not more than four Business Days prior notice; the Agency and the Trustee agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; C. the investment agreement shall state that is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; d. the Agency or the Trustee receives the opinion of domestic counsel (which opinion shall be addressed to the Agency and the Insurer) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the Bond Insurer; e. the investment agreement shall provide that if during its term (1) the provider's rating by either S&P or Moody's falls below "AA-" or "Aa3" respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (i) collatemlize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider's books) to the Agency, the Trustee or a third party acting solely as agent therefor (the "Holder of the Collateral") collateral free and clear of any third -party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S & P and Moody's to maintain an "A" rating in an "A" rated structured financing (with a market value approach); or (ii) repay the principal of and accrued but unpaid interest on the investment, and (2) the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below "A-" or "A3", respectively, the provider must, at the direction of the Agency or the Trustee (who shall give such direction if so directed by the Bond Insurer), within 10 days of receipt 57284\0001\634642.3 -4- DRAFT 12/5/00 of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Agency or Trustee, and f the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); g. the investment agreement must provide that if during its term (1) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the Agency or the Trustee (who shall give such direction if so directed by the Bond Insurer), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Agency or Trustee, as appropriate, and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. ("event of insolvency"), the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Agency or Trustee, as appropriate. Book Entry Bonds The term "Book -Entry Bonds" means Bonds of any Series registered in the name of the Nominee of a Depository as the Owner thereof pursuant to the terms and provisions of Section 2.12 hereof. Bonds. Series 2000 A Bonds. Series 2000 B Bonds Additional Bonds Capital Appreciation Bonds Serial Bonds, Term Bonds The term "Bonds" means the Series 2000 A Bonds and all Additional Bonds. The term "Series 2000 A Bonds" means the Redevelopment Agency of the City of Seal Beach, Tax Allocation Bonds, 2000 Series A (Riverfront Redevelopment Project). The term "Series 2000 B Bonds" means the Redevelopment Agency of the City of Seal Beach, Subordinate Tax Allocation Bonds, 2000 Series B (Riverfront Redevelopment Project). The term "Additional Bonds" means all tax allocation bonds of the Agency authorized and executed pursuant to the Indenture and issued and delivered in accordance with Article N. The term "Capital Appreciation Bonds" means any Additional Bonds described as such when issued. The tern "Serial Bonds" means Bonds for which no mandatory sinking account payments are provided. The term "Term Bonds" means Bonds which are payable on or before their specified maturity dates from mandatory sinking account payments established for that purpose and calculated to retire such Bonds on or before their specified maturity dates. Bond Insurance Policy The term "Bond Insurance Policy" means the municipal bond insurance policy, if any, issued by the applicable Bond Insurer and guaranteeing, in whole or in part, the payment of principal of and interest on a Series of Bonds. 57284\0001\634642.3 - 5 - DRAFT 12/5/00 Bond Insurer The term "Bond Insurer" means the issuer or issuers of a policy or policies of municipal bond insurance (other than a Qualified Reserve Account Credit Instrument) obtained by the Agency to insure the payment of principal of and interest on a Series of Bonds issued under the Indenture, when due otherwise than by acceleration, and which, in fact, are at any time insuring such Series of Bonds. [With respect to the Series 2000 A Bonds, the term "Bond Insurer" means . For the purposes of this definition, all consents, approvals or actions required by the Bond Insurer shall be unanimous action of all Bond Insurers if there is more than a single Bond Insurer.] Bond Year The term "Bond Year" means each twelve-month period extending from September 2 in one calendar year to September I of the succeeding calendar year, both dates inclusive; except that the first Bond Year shall extend from the Closing Date to September 1, 2001 _ Business Dav The term "Business Day" means a day other than a Saturday, a Sunday or a day on which banks located in the city where the corporate trust office of the Trustee is located are required or authorized to remain closed. Certificate of the Agenc The term "Certificate of the Agency" means an instrument in writing signed by the Chairman or the Executive Director of the Agency, or by any other officer of the Agency duly authorized by the Agency for that purpose. City The term "City" means the City of Seal Beach, California Closing Dale The term "Closing Date" means the date of delivery of a Series of Bonds to the original purchaser thereof. The Closing Date for the Series 2000 A Bonds is December _, 2000. Code The term "Code" means the Internal Revenue Code of 1986, and any regulations promulgated thereunder. Consultant's Reoort The term "Consultant's Report" means a report signed by an Independent Financial Consultant or an Independent Redevelopment Consultant, as may be appropriate to the subject of the report, and including: (1) a statement that the person or firm making or giving such report has read the pertinent provisions of this Indenture to which such report relates; (2) a brief statement as to the nature and scope of the examination or investigation upon which the report is based; (3) a statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said Independent Financial Consultant or Independent Redevelopment Consultant to express an informed opinion with respect to the subject matter referred to in the report. 57284\0001\634642.3 -6- DR 12/5/00 County The term "County" means the County of Orange, California Debt Service Fund to Section 5.02. The tern "Debt Service Fund" means the fund by that name held by the Trustee pursuant Depository The term "Depository" means any securities depository acting as Depository pursuant to Section 2.12 hereof. DTC The tern "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. Expense Fund The term "Expense Fund" means the fund by that name held by the Trustee pursuant to Section 5.05. Federal Securities The term "Federal Securities" means (a) United States Treasury notes, bonds, bills or certificates of indebtedness, or other evidences of indebtedness secured by the full faith and credit of the United States of America and any other securities now or hereafter authorized both the interest on and principal of which are guaranteed directly by the full faith and credit of the United States of America; (b) pre -refunded municipal obligations rated "AAA" by S&P or the equivalent rating by Moody's or Fitch; and (c) obligations of [specified federal agencies] as and to the extent that such securities are eligible for the legal investment of Agency funds. Final Compounded Amount The term "Final Compounded Amount" means the Accreted Value of a Capital Appreciation Bond at maturity. Fiscal Year The term "Fiscal Year" means the period commencing on July 1 of each year and terminating on the next succeeding June 30, or any other annual accounting period hereafter selected and designated by the Agency as its Fiscal Year in accordance with the Law and identified in writing to the Trustee. Fitch The term "Fitch" means Fitch, Inc., its successors and assigns Housing Fund The term "Housing Fund" means the Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the Law and held by the Agency. 87284\0001\634642.3 -7- DR"T 12/5/00 Indenture The tern "Indenture" means this Indenture and all Supplemental Indentures. Independent Certified Public Accountant The term "Independent Certified Public Accountant" means any certified public accountant or firm of such accountants duly licensed and entitled to practice and practicing as such under the laws of the State of California, appointed and paid by the Agency, and who, or each of whom: (1) is in fact independent and not under the domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as a member, officer or employee of the Agency, but who may be regularly retained to make annual or other audits of the books of or reports to the Agency. Independent Financial Consultant The term "Independent Financial Consultant" means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the Agency and who, or each of whom: (1) is in fact independent and not under the domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as a member, officer or employee of the Agency, but who may be regularly retained to make annual or other reports to the Agency. Independent Redevelopment Consultant The term "Independent Redevelopment Consultant" means a consultant or firm of such consultants generally recognized to be well qualified in the field of consulting relating to tax allocation bond financing by California redevelopment agencies, appointed and paid by the Agency, and who, or each of whom: (1) is in fact independent and not under the domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as a member, officer or employee of the Agency, but who may be regularly retained to make annual or other reports to the Agency. Information Services The term "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond Service," 65 Broadway, 16th Floor, New York, New York 10006; Moody's "Municipal and Government," 99 Church Street, 8th Floor, New York, New York 10007, Attention: Municipal News Reports; and Standard and Poor's "Called Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; or to such other addresses and/or such other services providing information with respect to called bonds as the Agency may designate to the Trustee in writing. 57284\0001\634642.3 -8- DM9T 12/5/00 Interest Account The term "Interest Account" means the account by that name within the Debt Service Fund held by the Trustee pursuant to Section 5.06(a). Interest Payment Date The term "Interest Payment Date" means each March 1 or September 1 on which interest on any Series of Bonds is scheduled to be paid, commencing March 1, 2001. Law The term "Law" means the Community Redevelopment Law of the State of California (being Part I of Division 24 of the Health and Safety Code of the State of California, as amended), and all laws amendatory thereof or supplemental thereto. Letter of Representations The term "Letter of Representations" means the letter of the Agency and the Trustee delivered to and accepted by the Depository on or prior to the issuance of a Series of Book -Entry Bonds setting forth the basis on which the Depository serves as depository for such Book -Entry Bonds, as originally executed or as it may be supplemented or revised or replaced by a letter to a substitute depository. Moodv's The term "Moody's" means Moody's Investors Service, its successors and assigns 1986 Bonds The term "1986 Bonds" means the outstanding Redevelopment Agency of the City of the Seal Beach, Riverfront Redevelopment Project, Tax Allocation Bonds, Issue of 1986. 1986 Bond Resolution The term "1986 Bond Resolution" means Agency Resolution No. 86-11, as amended and supplemented by Agency Resolutions No. 86.12 and No. 86-15. 1991 Bonds The term "1991 Bonds" means the outstanding Redevelopment Agency of the City of Seal Beach (Riverfront Redevelopment Project) 1991 Subordinate Lien Tax Allocation Bonds, Series A. 1991 Indenture The term "1991 Indenture" means the Indenture of Trust dated as of October 15, 1991 by and between the Agency and Bank of America National Trust and Savings Association, as trustee. Nominee The term "Nominee" means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.12 hereof. Outstanding The term "Outstanding" when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 8.02) all Bonds except -- S7284\0001\634642.3 -9- DRAT 12/5/00 (1) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds paid or deemed to have been paid within the meaning of Section 10.01; and (3) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Agency pursuant to the Indenture. Owner The term "Owner" means the registered owner of any Outstanding Bond according to the registration books held by the Trustee pursuant to Section 2.08. Participants The term "Participants" means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Book -Entry Bonds as securities depository. Plan Limitations The term "Plan Limitations" means the limitations contained or incorporated in the Redevelopment Plan on the aggregate amount of taxes which may be divided and allocated to the Agency pursuant to the Redevelopment Plan. Principal Account The term "Principal Account" means the account by that name within the Debt Service Fund held by the Trustee pursuant to Section 5.06(6). Principal Payment Date The term "Principal Payment Date" means any date on which principal of any Series of Bonds is scheduled to be paid, which dates shall be as set forth in Section 2.02 hereof for the Series 2000 A Bonds. Project The term "Project" means the undertaking of the Agency pursuant to the Redevelopment Plan and the Law for the redevelopment of the Project Area. Project Area The term "Project Area" means the project area described in the Redevelopment Plan, known as Riverfront Redevelopment Project. Qualified Reserve Account Credit Instrument The term "Qualified Reserve Account Credit Instrument" means an irrevocable standby or direct -pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Trustee pursuant to Section 5.06(d), provided that all of the following requirements are met: (i) at the time of issuance of the instrument, the long-term credit rating of such bank is within the highest rating category of Moody's Investors Service and Standard & Poor's, or the claims paying ability of such insurance company is rated within the highest rating category of A.M. Best & Company and Standard & Poor's Ratings Group; (ii) such letter of credit or surety bond has a term of at least 12 months; (iii) such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve Account Requirement with respect to which funds are proposed to be released pursuant to Section 5.06(d); and (iv) the Trustee is authorized pursuant to the terms of such letter of credit or surety 57284\0001\634642.3 -10- DRAFT 12/5/00 bond to draw thereunder amounts necessary to carry out the purposes specified in Section 5.06(d), including the replenishment of the Interest Account, the Principal Account or the Sinking Account. Record Date The term "Record Date" means with respect to any Interest Payment Date, the fifteenth calendar day of the month immediately preceding such Interest Payment Date, whether or not such day is a Business Day. Redevelopment Fund The term "Redevelopment Fund" means the Riverfront Redevelopment Project Redevelopment Fund held by the Agency pursuant to Section 5.03. Redevelopment Plan The term "Redevelopment Plan" means the Redevelopment Plan for the Project Area, adopted and approved as the official Redevelopment Plan for the Project Area by Ordinance No. 780 adopted by the City Council of the City on March 3, 1969, together with all amendments thereof or supplements thereto heretofore or hereafter made in accordance with the Law. Refunded Bonds The term "Refunded Bonds" means the 1986 Bonds and the 1991 Bonds Reserve Account The term "Reserve Account" means the account by that time within the Debt Service Fund held by the Trustee pursuant to Section 5.06(d). Reserve Account Requirement The term "Reserve Account Requirement" (to be confirmed by the Agency to the Trustee upon the Trustee's request) means, as of any calculation date, with respect to each Series of Bonds, an amount equal to the least of (i) ten percent (10%) of the proceeds (within the meaning of Section 148 of the Code) of that portion of such Series of Bonds Outstanding with respect to which Annual Debt Service is calculated, (ii) 125% of Average Annual Debt Service of such Series or (iii) Maximum Annual Debt Service of such Series. S&P The term "S&P" means Standard & Prices, its successors and assigns Securities Depositories The term "Securities Depositories" means: The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax{516) 277-4039 or 4190; Midwest Securities Trust Company, Capital Structures -Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax -(312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex{215) 496-5058; or such other addresses and/or such other securities depositories as the Agency may designate to the Trustee in writing. Series The term "Series", when used with reference to the Bonds, means all of the Bonds authenticated and delivered on original issuance and identified pursuant to the Indenture or a S72a4\0001\634642.3 -11- DiUk" 12/5/00 Supplemental Indenture authorizing such Bonds as a separate Series of Bonds, and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the Indenture. Series 2000 B Indenture The term "Series 2000 B Indenture" means the Indenture dated as of December 1, 2000 by and between the Agency and the Series 2000 B Trustee, authorizing the issuance of the Series 2000 B Bonds, together with all amendments thereof and supplemented thereto entered into in accordance with the provisions thereof. Series 2000 B Trustee B Indenture. The term "Series 2000 B Trustee" means the trustee acting as such under the Series 2000 Sinkin¢ Account The term "Sinking Account" means the account by that name within the Debt Service Fund held by the Trustee pursuant to Section 5.06(c), Sinking Account Installment The term "Sinking Account Installment" means the amount of money required by or pursuant to this Indenture to be paid by the Agency on any single date toward the retirement of any particular Tenn Bonds of any particular Series on or prior to their respective stated maturities. Sinking Account Pavment Date The term "Sinking Account Payment Date' means any date on which Sinking Account Installments on any Series of Bonds are scheduled to be paid. Special Fund The term "Special Fund' means the Riverfrom Redevelopment Project Special Fund held by the Agency pursuant to Section 5.02. Supplemental Indenture The term "Supplemental Indenture' means any indenture then in full force and effect which has been entered into by the Agency and the Trustee, amendatory of or supplemental to this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. Tax Certificate The term "Tax Certificate' means the Tax Certificate dated the date of the original delivery of each Series of Bonds (except any Series of Bonds which the Agency shall certify to the Trustee is not intended to meet the requirements for tax exemption under the Code) relating to the requirements of certain provisions of the Code, as each such certificate may from time to time be modified or supplemented in accordance with the terms thereof. Tax Revenues The term "Tax Revenues" means, for each Bond Year, the taxes (including all payments, reimbursements and subventions, if any, specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations) eligible for allocation to the Agency pursuant to the Law in connection with the Project Area (excluding amounts, if any, received by the Agency pursuant to Section 16111 of the Government Code). "Tax Revenues" include amounts deposited by the Agency in the S7284\0001\634642.3 -12- paAFi 12/s/00 Housing Fund pursuant to Section 33334.2 or Section 33334.6 of the Law, as provided in the Redevelopment Plan, but only to the extent such amounts are used to pay principal or interest or other financing charges with respect to bonds or other obligations issued to increase, improve or preserve the supply of low and moderate income housing within or of benefit to the Project Area. Total Maturity Amount The term "Total Maturity Amount' means with respect to any Outstanding Bond other than a Capital Appreciation Bond, the aggregate principal amount thereof and, with respect to any Outstanding Capital Appreciation Bond, the Final Compounded Amount thereof. Trust Office The term 'Trust Office' means the corporate trust office of the Trustee at the address set forth in Section 12.15 or such other offices as may be specified to the Agency by the Trustee in writing. 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 business shall be conducted. Trustee The term 'Trustee' means such trustee as may be appointed by the Agency, and its successors and assigns, or any other corporation or association which may at any time be substituted in its place, as provided in Section 7.01. Written Reauest The term "Written Request' means an instrument in writing signed by the Chairman or the Executive Director of the Agency or the Authority or by any other officer of the Agency or the Authority duly authorized for that purpose. SECTION 1.02. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, the Indenture shall be deemed to be and shall constitute a contract between the Agency and the Trustee for the benefit of Owners from time to time of all Bonds issued hereunder and then Outstanding to secure the full and final payment of the interest on and principal of and redemption premiums, if any, on all Bonds authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions herein contained; and the agreements and covenants herein set forth to be performed on behalf of the Agency shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any Bonds over any other Bonds. ARTICLE B THE BONDS; SERIES 2000 A BOND PROVISIONS SECTION 2.01. Authorization. Bonds in unlimited amount may be issued at any time under and subject to the terms of this Indenture. The Agency has reviewed all proceedings heretofore taken relative to the authorization of the Series 2000 A Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, happen or be performed precedent to and in connection with the issuance of the Series 2000 A Bonds do exist, have happened and have been performed in due time, forth and manner as required by law, and the Agency is now duly authorized pursuant to each and every requirement of law, to issue the Series 2000 A Bonds in the manner and form provided in this Indenture. Accordingly, the Agency hereby authorizes the issuance of the Series 2000 A Bonds for the purpose of providing funds to aid in financing and refinancing the Project. SECTION 2.02. Terms of Series 2000 A Bonds. The Series 2000 A Bonds shall be dated as of the Closing Date, shall mature on September I in each of the years and in the amounts, and 57284\0001\634642.3 -13- DRAFT 12/5/00 shall bear interest (calculated on the basis of a 360 -day year of twelve 30 -day months) in the amounts, as follows: YearPrincipal Interest Year Principal Interest (September Il Amount Date (September 11 Amount Date (to come) The Series 2000 A Bonds shall be delivered in fully registered form, in the denominations of $5,000 or any integral multiple thereof, numbered from one upwards in consecutive numerical order. Each Series 2000 A Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (i) it is authenticated during the period from the day after the Record Date for an Interest Payment Date to and including such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated on or prior to the Record Date for the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if, at the time of authentication of any Series 2000 A Bond interest with respect to such Series 2000 A Bond is in default, such Series 2000 A Bond shall bear interest from the Interest Payment Date to which interest has been paid or made available for payment with respect to such Series 2000 A Bond. Interest with respect to any Series 2000 A Bond shall be payable in lawful money of the United States of America 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, mailed by first class mail on the Interest Payment Date to the Owner at his address as it appears, on such Record Date, on the bond registration books maintained by the Trustee; provided, however, that at the written request of the Owner of Series 2000 A Bonds in the aggregate principal amount of $1,000,000 qr more filed with the Trustee prior to any Record Date, principal of and interest on such Series 2000 A Bonds shall be paid to such Owner on each succeeding Interest Payment Date (unless such request has been revoked in writing) by transfer of immediately available funds to an account in the United States designated in such written request. Payments of defaulted interest with respect to the Series 2000 A Bonds shall be paid by check to the registered Owners of the Bonds as of a special record date to be fixed by the Trustee, notice of which special record date shall be given to the registered Owners of the Series 2000 A Bonds not less than ten days prior thereto. Except as set forth above, the principal of and premium, if any, on the Series 2000 A Bonds are payable when due at the Trust Office in lawful money of the United States of America. SECTION 2.03. Form of Series 2000 A Bonds. The Series 2000 A Bonds, the authentication and registration endorsement and the assignment to appear thereon shall be substantially in the forms attached hereto as Appendix A, with necessary or appropriate variations, omissions and insertions as permitted or required by this Indenture. 37284\0001\634642.3 -14- DRAFT 12/5/00 SECTION 2.04. Redemption of Series 2000 A Bonds: Selection of Bonds Purchase in Lieu of Redemption: Notice. (a) Optional Redemption. The Series 2000 A Bonds maturing on or after September 1, 2008 shall be subject to redemption as a whole or in part, by such maturities as the Agency shall designate (which designation shall be in writing and shall be delivered to the Trustee no later than 45 days prior to the redemption date), prior to their respective maturities at the option of the Agency on any date on or after September 1, 2007, from funds derived by the Agency from any source, at the following redemption prices (expressed as percentages of the principal amount of Series 2000 A Bonds called for redemption), together with interest accrued thereon to the date fixed for redemption: Redemption Dates Redemption Price September 1, 2007 through August 31, 2008 102% September 1, 2008 through August 31, 2009 101 September 1, 2009 and thereafter 100 (b) Mandatory Sinking Fund Redemption. The Series 2000 A Bonds maturing on September 1, _, September 1, and September 1, _are also subject to redemption prior to fro their stated maturity, in part by lot, m Sinking Account Installments deposited in the Sinking Account, at the principal amount thereof and interest accrued thereon to the date fixed for redemption, without premium, according to the following schedules: Term Bonds Maturing September 1, _ Redemption Date Principal Amount _(September 1) Redeemed Term Bonds Maturing September 1,_ Redemption Date Principal Amount (September l) Redeemed Term Bonds Maturing September 1,_ Redemption Date Principal Amount Redemption Date Principal Amount (September 1) Redeemed (Sentember 1) Redeemed 57284\0001\634642.3 -15• DRAFT 12/5/00 (c) General Redemption Provisions (1) Selection of Bonds. Whenever less than all the Outstanding Bonds maturing on any one date are called for redemption at any one time, the Trustee shall select the Bonds to be redeemed, from the Outstanding Bonds maturing on such date not previously selected for redemption, by lot; provided, however, that if less than all the Outstanding Term Bonds of any maturity are called for redemption at any one time, the Agency shall specify in writing to the Trustee the reduction in any Sinking Account Installment payments required to be made with respect to such Bonds (in an amount equal to the amount of Outstanding Term Bonds to be redeemed) which, to the extent practicable, results in approximately equal Annual Debt Service on the Bonds Outstanding following such redemption. (2) Purchase in Lieu of Redemption. In lieu of redemption of any Term Bond, amounts on deposit in the Special Fund or in the Sinking Account therein may also be used and withdrawn by the Trustee at any time, upon the Written Request of the Agency, for the purchase of such Term Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as the Agency may in its discretion determine, but not in excess of the principal amount thereof plus accrued interest to the purchase date; provided, however, that no Bonds shall be purchased by the Trustee under this subsection (c)(2) with a settlement date more than 60 days prior to the redemption date. The principal amount of any Term Bonds so purchased by the Trustee in any twelve-month period ending 30 days prior to any Principal Payment Date in any year shall be credited towards and shall reduce the principal amount of such Term Bonds required to be redeemed on such Principal Payment Date in such year, (3) Notice. Notice of redemption shall be mailed by first class mail by the Trustee, on behalf and at the expense of the Agency, not less than 30 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 the Trustee, (ii) one or more Information Services designated in writing to the Trustee by the Agency and (iii) the Securities Depositories. 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 time and appropriate address or addresses), the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity are to be redeemed, 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 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. If, at the time of mailing of the notice of redemption, there shall not have been deposited with the Trustee monies sufficient to redeem all the Bonds called for redemption, such notice may state that it is conditional, that is, subject to the deposit of the redemption monies with the Trustee not later than the opening of business on the redemption date. Failure by the Trustee to give notice pursuant to this Section to any one or more of the Information Services or Securities Depositories, or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. The failure of any Owner to receive any redemption notice mailed to such Owner and any defect in the notice so mailed shall not affect the sufficiency of the proceedings for redemption. S7294\0001\634642.3 -16- DRAFT 12/5/00 (4) Partial Redemption. Upon surrender of any Bond redeemed in part only, the Agency shall execute (manually or by facsimile) and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Agency, 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 series, interest rate and the same maturity. (5) Effect of Redemption. From and after the date fixed for redemption, if notice of such redemption shall have been duly given and funds available for the payment of such redemption price of the Bonds so called for redemption shall have been duly provided, no interest shall accrue on such Bonds from and after the redemption date specified in such notice. All Bonds redeemed pursuant to the provisions of this section shall be canceled by the Trustee and the Trustee shall upon Written Request of the Agency deliver a certificate of destruction to the Agency. SECTION 2.05. Execution of Bonds. The Chairman of the Agency is hereby authorized and directed to execute each of the Bonds on behalf of the Agency and the Secretary of the Agency is hereby authorized and directed to attest each of the Bonds on behalf of the Agency and to imprint by facsimile the official seal of the Agency thereon. Any of the signatures of the Chairman or the Secretary may be by printed, lithographed or engraved facsimile reproduction. In case any officer whose signature appears on the Bonds shall cease to be such officer before the delivery of the Bonds to the purchaser thereof, such signature shall nevertheless be valid and sufficient for all purposes the same as though such officer had remained in office until such delivery of the Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication and registration in the form set forth in Appendix A hereto, executed manually and dated by the Trustee, shall be entitled to any benefits under the Indenture or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evidence that the Bonds so registered have been duly issued and delivered hereunder and are entitled to the benefits of the Indenture. SECTION 2.06. Transfer and Registration of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.089 by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer in substantially the form set forth in Appendix A hereto, duly executed. Whenever any Bond or Bonds shall be surrendered for transfer, the Agency shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds of like series, tenor, maturity and Total Maturity Amount. The cost of printing any Bonds and any services rendered or expenses incurred by the Trustee in connection with any such transfer shall be paid by the Agency, except that 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. The Agency shall not be required to register the transfer of or exchange any Bond during the fifteen (15) days preceding any date established by the Trustee for selection of Bonds for redemption or any Bonds which have matured or been selected for redemption. SECTION 2.07. Exchan¢e of Bonds. Bonds may be exchanged at the Trust Office for the same aggregate Total Maturity Amount of Bonds of the same series and maturity of other authorized denominations. The cost of printing any Bonds and any services rendered or expenses incurred by the Trustee in connection with any such exchange shall be paid by the Agency, except that the Trustee shall require the payment by the Owner 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 to be made during S7284\0001\634642.3 -17- DRAHT 12/5/00 the fifteen (15) days preceding any date established by the Trustee for selection of Bonds for redemption or any Bonds which have matured or been selected for redemption. SECTION 2.08. Bond Iteeistration Books. The Trustee will keep at the Trust Office sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection by the Agency during regular business hours with reasonable prior notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the Bonds on said books as hereinbefore provided. SECTION 2.09. Mutilated, Destroyed. Stolen or Lost Bonds. In case any Bond shall become mutilated in respect of the body of such Bond, or shall be believed by the Agency to have been destroyed, stolen or lost, upon proof of ownership satisfactory to the Trustee, and upon the surrender of such mutilated Bond at the Trust Office, or upon the receipt of evidence satisfactory to the Trustee of such destruction, theft or loss, and upon receipt also of indemnity satisfactory to the Trustee, and upon payment of all expenses incurred by the Agency and the Trustee in the premises, the Agency shall execute (manually or by facsimile) and the Trustee shall authenticate and deliver at the Trust Office a new Bond or Bonds of the same series and maturity and for the same Total Maturity Amount, of like tenor and date, with such notations as the Agency shall determine, in exchange and substitution for and upon cancellation of the mutilated Bond, or in lieu of and in substitution for the Bond so destroyed, stolen or lost. If any such destroyed, stolen or lost Bond shall have matured or shall have been called for redemption, payment of the amount due thereon may be made by the Trustee upon receipt by the Trustee and the Agency of like proof, indemnity and payment of expenses. Any such replacement Bonds issued pursuant to this section shall be entitled to equal and proportionate benefits with all other Bonds issued hereunder. The Agency and the Trustee shall not be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated w one and the same. SECTION 2.10. Temporary Bonds. Until definitive Bonds shall be prepared, the Agency may cause to be executed and delivered in lieu of such definitive Bonds and subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds, except that they may be in any denominations authorized by the Agency, one or more temporary typed, printed, lithographed or engraved Bonds in fully registered form, as may be authorized by the Agency, substantially of the same tenor and, until exchanged for definitive Bonds, entitled and subject to the same benefits and provisions of the Indenture as definitive Bonds. If the Agency issues temporary Bonds it will execute and furnish definitive Bonds without unnecessary delay and thereupon the temporary Bonds shall be surrendered to the Trustee at the Trust Office, without expense to the Owner in exchange for such definitive Bonds. All temporary Bonds so surrendered shall be canceled by the Trustee and shall not be reissued. SECTION 2.11. Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be affected in any way by any proceedings taken by the Agency for the financing or refinancing of the Project, or by any contracts made by the Agency in connection therewith, and shall not be dependent upon the completion of the financing or refinancing of the Project or upon the performance by any person of his obligation with respect to the Project, and the recital contained in the Bonds that the same are issued pursuant to the Law shall be conclusive evidence of their validity and of the regularity of their issuance. SECTION 2.12. Book-Entry System. Prior to the issuance of any Series of Bonds issued hereunder, the Agency may provide that such Series of Bonds shall be initially issued as Book-Entry Bonds, and in such event, each maturity of such Series shall be in the form of a separate single fully registered Bond (which may be typewritten). Upon initial issuance, the ownership of each such Bond shall be registered in the bond register in the name of the Nominee, as nominee of the Depository. S7284\0001\634642.3 -18- DR"T 12/5/00 With respect to Book -Entry Bonds, the Agency and the Trustee shall have no responsibility or obligation to any Participant or to any person on behalf of which such a Participant holds an interest in such Book -Entry Bonds. Without limiting the immediately preceding sentence, the Agency 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 Book -Entry Bonds, (ii) the delivery to any Participant or any other person, other than an Owner as shown in the bond register, of any notice with respect to Book -Entry Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in Book -Entry Bonds to be redeemed in the event the Agency redeems such in part, or (iv) the payment of any Participant or any other person, other than an Owner as shown in the bond register, of any amount with respect to principal of, premium, if any, or interest on Book -Entry Bonds. The Agency and the Trustee may treat and consider the person in whose name each Book -Entry Bond is registered in the bond register as the absolute Owner of such Book -Entry Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owner, as shown in the bond register, and all such payments shall be valid and effective to fully satisfy and discharge the Agency's obligations with respect to payment of principal of, 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 bond register, shall receive a Bond evidencing the obligation of the Agency to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon delivery by the Depository to the Trustee and Agency of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to record dates, the word Nominee in this Indenture shall refer to such nominee of the Depository. In order to qualify the Book -Entry Bonds for the Depository's book -entry system, the Agency and the Trustee shall execute, if necessary, and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Agency or the Trustee any obligation whatsoever with respect to persons having interests in such Book -Entry Bonds other than the Owners, as shown on the bond register. In addition to the execution and delivery of a Letter of Representations, the Agency and the Trustee, at the Written Request of the Agency, shall take such other actions, not inconsistent with this Indenture, as are reasonably necessary to qualify Book -Entry Bands for the Depository's book -entry program. In the event (i) the Depository determines not to continue to act as securities depository for any Series of Book -Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Trustee and the Agency of such determination, then the Agency will discontinue the book -entry system with the Depository. If the Agency determines to replace the Depository with another qualified securities depository, the Agency shall prepare or direct the preparation of a new single, separate, fully registered Bond for each of the maturities of such Book -Entry Bonds, registered in the time of such successor or substitute qualified securities depository or its nominee. If the Agency fails to identify another qualified securities depository to replace the Depository, then the Bonds shall no longer be restricted to being registered in such bond register in the time of the Nominee, but shall be registered in whatever name or names Owners transferring or exchanging such Bonds shall designate, in accordance with the provisions of Sections 2.06 and 2.07. Notwithstanding any other provision of this Indenture to the contrary, so long as any Book -Entry Bond is registered in the name of the Nominee, all payments with respect to 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 Letter of Representations or as otherwise instructed by the Depository. 57284\0001\634642.3 -19- DRAW 12/5/00 ARTICLE IB ISSUANCE OF SERIES 2000 BONDS; APPLICATION OF PROCEEDS OF SALE SECTION 3.01. Issuance of Series 2000 A Bonds. The Agency may at any time execute and deliver the Series 2000 A Bonds authorized to be issued hereunder and upon the Written Request of the Agency the Trustee shall authenticate and deliver the Series 2000 A Bonds. SECTION 3.02. Sale of Series 2000 A Bonds -- Allocation of Proceeds Among Funds and Accounts. Upon receipt of payment for the Series 2000 A Bonds, the Trustee shall set aside and deposit the proceeds received from such sale (except the sum of $ . which shall be paid directly by the purchaser of the Series 2000 A Bonds to the Bond Insurer) as follows: (a) The Trustee shall deposit in the Series 2000 A Subaccount of the Reserve Account the amount of $ , which constitutes the Reserve Requirement. (b) The Trustee shall deposit in the Series 2000 A Expense Account within the Expense Fund the amount of $ to pay the costs incurred or to be incurred by the Agency in connection with the issuance of the Series 2000 A Bonds. (c) The Trustee shall deposit the amount of $ in a fund hereby created called the "Refunding Account,' to be transferred to the fiscal agent and trustee for the Refunded Bonds to be applied, in accordance with the 1986 Bond Resolution and the 1991 Indenture and pursuant to a Written Request of the Agency, to redeem and defense the Refunded Bonds. Upon the transfer of all such amounts, the Refunding Account shall be closed. (d) The Trustee shall transfer the balance of $ to the Agency for deposit in the Series 2000 A Project Account within the Redevelopment Fund. For record keeping purposes the Trustee may establish such accounts as may be necessary to reflect such transfer of proceeds. ARTICLE IV ISSUANCE OF ADDITIONAL BONDS SECTION 4.0 L Conditions for the Issuance of Additional Bonds. The Agency may m any time after the issuance and delivery of the Series 2000 A Bonds hereunder issue Additional Bonds payable from the Tax Revenues and secured by a lien and charge upon the Tax Revenues equal to and on a parity with the lien and charge securing the Outstanding Bonds theretofore issued under the Indenture, but only subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such Additional Bonds: (a) The Agency shall be in compliance with all covenants set forth in this Indenture and any Supplemental Indentures, and a Certificate of the Agency to that effect shall have been filed with the Trustee. (b) The issuance of such Additional Bonds shall have been duly authorized pursuant to the Law and all applicable laws, and the issuance of such Additional Bonds shall have been provided for by a Supplemental Indenture duly adopted by the Agency which shall specify the following: (1) The purpose for which such Additional Bonds are to be issued and the fund or funds into which the proceeds thereof are to be deposited including a provision requiring the proceeds of such Additional Bonds to be applied solely for (i) the purpose of aiding in financing the Project, including payment of all costs incidental to or connected with such financing, and/or (ii) the purpose of refunding any Bonds or other indebtedness related to the Project, including payment of all costs incidental to or connected with such refunding; (2) The authorized principal amount of such Additional Bonds; 57284\0001\634642.3 -20- MDPT 12/5/00 (3) The date and the maturity date or dates of such Additional Bonds; provided that (i) Principal and Sinking Account Payment Dates may occur only on Interest Payment Dates, (ii) all such Additional Bonds of like maturity shall be identical in all respects, except as to number, and (iii) fixed serial maturities or mandatory Sinking Account Installments, or any combination thereof, shall be established to provide for the retirement of all such Additional Bonds on or before their respective maturity dates; (4) The Interest Payment Dates, which shall be on the same semiannual dates as the Interest Payment Dates for the Series 2000 A Bonds; provided, that such Additional Bonds may provide for compounding of interest in lieu of payment of interest on such dates; (5) The denomination and method of numbering of such Additional Bonds; such Additional Bonds; (6) The redemption premiums, if any, and the redemption terns, if any, for (7) The amount and due date of each mandatory Sinking Account Installment, if any, for such Additional Bonds; (8) The amount, if any, to be deposited from the proceeds of such Additional Bonds in the Interest Account; (9) The amount, if any, to be deposited from the proceeds of such Additional Bonds into the Reserve Account; provided that the amount on deposit in the Reserve Account shall be increased at or prior to the time such Additional Bonds become Outstanding to an amount at least equal to the Reserve Account Requirement on all then Outstanding Bonds and such Additional Bonds, which amount shall be maintained in the Reserve Account; (10) The form of such Additional Bonds; and (11) Such other provisions as are necessary or appropriate and not inconsistent with the Indenture. (c) Tax Revenues (excluding any unsubordinated payments to taxing agencies pursuant to the law) based upon the assessed valuation of taxable property in the Project Area as shown on the most recently equalized assessment roll preceding the date of the Agency's adoption of the Supplemental Indenture providing for the issuance of such Additional Bonds plus, at the option of the Agency, the Additional Allowance shall be in an amount equal to at least one hundred twenty percent (120%) of Maximum Annual Debt Service following the issuance of such Additional Bonds, as evidenced by a Consultant's Report. (d) Surplus Tax Revenues ( as defined in the Series 2000 B Indenture) shall be in an amount equal to at least one hundred percent (100%) of maximum annual debt service as defined in the Series 2000 B Indenture following the issuance of such Additional Bonds, as evidenced by a Consultant's Report. For purposes of calculating Tax Revenues, a tax rate of $1.00 per $100 of assessed valuation shall be assumed. For purposes of this Section 4.01, the amount of Tax Revenues will be the amount received in the most recent Fiscal Year (which may be the current Fiscal Year) for which records are available from the County establishing the assessed valuations of property in the Project Area. For the purposes of the issuance of Additional Bonds, Outstanding Bonds shall not include any Bonds the proceeds of which are deposited in an escrow fund held by the Trustee or an escrow agent ("Escrow Bonds"), provided that the Supplemental Indenture authorizing issuance of such Escrow Bonds shall provide that: (i) such proceeds shall be invested in Federal Securities which mature within three months of the escrow expiration date and which bear interest at a rate which, together with amounts made available by the Agency from bond proceeds or otherwise, is at least sufficient to pay S7284\0001\634642.3 -21- DRAFT 12/5/00 Annual Debt Service on the Escrow Bonds; (ii) moneys may be transferred from said escrow fund only if Tax Revenues (as calculated using the criteria set forth above) for the then current Fiscal Year plus, at the option of the Agency, the Additional Allowance shall be at least equal to 1.25 times Maximum Annual Debt Service, less a principal amount of Bonds which is equal to moneys on deposit in such escrow fund after each such transfer; and (iii) such Escrow Bonds shall be redeemed at par from moneys remaining on deposit in such escrow fund at the expiration of the specified escrow period. In addition, the Agency shall obtain an opinion of nationally recognized bond counsel on the delivery date of such Escrow Bonds to the effect that such escrow of proceeds will not affect the exclusion of the interest on any Outstanding Bonds from gross income for federal income tax purposes. In the event such Additional Bonds are to be issued solely for the purpose of refunding and retiring any Outstanding Bonds, interest and principal payments on the Outstanding Bonds to be so refunded and retired from the proceeds of such Additional Bonds being issued shall be excluded from the foregoing computation of Maximum Annual Debt Service. Nothing contained in the Indenture shall limit the issuance of any tax allocation bonds of the Agency payable from the Tax Revenues and secured by a lien and charge on the Tax Revenues if, after the issuance and delivery of such tax allocation bonds, none of the Bonds theretofore issued hereunder will be Outstanding nor shall anything contained in this Indenture prohibit the issuance of any tax allocation bonds or other indebtedness by the Agency secured by a pledge of tax increment revenues (including Tax Revenues) subordinate to the pledge of Tax Revenues securing the Bonds; provided, however, that no such issuance shall cause the Agency to exceed any tax increment limit applicable to it under the Redevelopment Plan or the Law. SECTION 4.02. Procedure for the Issuance of Additional Bonds. All of the Additional Bonds shall be executed by the Agency for issuance under the Indenture and delivered to the Trustee and thereupon shall be delivered by the Trustee upon the Written Request of the Agency, but only upon receipt by the Trustee of the following documents or money or securities: Additional Bonds; (1) A certified copy of the Supplemental Indenture authorizing the issuance of such (2) A Written Request of the Agency as to the delivery of such Additional Bonds; (3) An opinion of counsel of recognized standing in the field of law relating to municipal bonds substantially to the effect that (a) the Agency has the right and power under the Law to execute and deliver the Indenture and all Supplemental Indentures thereto, and the Indenture and all such Supplemental Indentures have been duly executed and delivered by the Agency, are in full force and effect and are valid and binding upon the Agency and enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights and similar qualifications); and (b) such Additional Bonds are valid and binding special obligations of the Agency, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights) and are subject to the terms of the Indenture and all Supplemental Indentures thereto and entitled to the benefits of the Indenture and all such Supplemental Indentures and the Law, and such Additional Bonds have been duly and validly issued in accordance with the Law and the Indenture and all such Supplemental Indentures; (4) A Certificate of the Agency containing such statements as may be reasonably necessary to show compliance with the requirements of the Indenture; and (5) Such further documents, money and securities as are required by the provisions of the Indenture and the Supplemental Indenture providing for the issuance of such Additional Bonds. ARTICLE V TAX REVENUES; CREATION OF FUNDS SECTION 5.01. Pledge of Tax Revenues. All the Tax Revenues and all money in the Special Fund and in the funds or accounts so specified and provided for in this Indenture, whether held by the Agency or the Trustee (except the Rebate Fund), are hereby irrevocably pledged to the punctual payment of the interest on and principal of and redemption premiums, if any, on the Bonds, and the Tax 57284\0001\634642.3 -22- DRAFT 12/5/00 Revenues and such other money shall not be used for any other purpose while any of the Bonds remain Outstanding, subject to the provisions of this Indenture permitting application thereof for the purposes and on the terms and conditions set forth herein. This pledge shall constitute a first lien on the Tax Revenues and such other money for the payment of the Bonds in accordance with the terms thereof. SECTION 5.02. Special Fund: Receipt and Deposit of Tax Revenues Debt Service Fund. (a) There has heretofore been established a special fund known as the "Riverfront Redevelopment Project Special Fund" (herein the "Special Fund') held by the Agency. The Agency shall deposit all of the Tax Revenues received in any Bond Year in the Special Fund promptly upon receipt thereof by the Agency, until such time (if any) during such Bond Year as the amounts on deposit in the Special Fund equal the aggregate amounts required to be transferred to the Trustee pursuant to this Section 5.02 and Section 5.06 for such Bond Year, plus the aggregate amounts required to be set aside by the Series 2000 B Trustee pursuant to Section 5.06 of the Series 2000 B Indenture. (b) There is hereby established a fund known as the "Riverfront Redevelopment Project Debt Service Fund," to be held by the Trustee. On or before the fifth Business Day immediately preceding any Interest Payment Date, the Agency shall withdraw from the Special Fund and deposit with the Trustee the amount of money necessary to make the deposits required in Sections 5.06(a), (b) and (c) plus an amount equal to the amount necessary for the Series 2000 B Trustee to make the deposits required by Sections 5.06(a), (b) and (c) of the Series B Indenture. After the deposits required by Sections 5.06(x), (b) and (c) have been made and upon notice from the Trustee, the Agency shall withdraw from the Special Fund and deposit with the Trustee the amount of money necessary to make any deposit required by Section 5.06(d). (c) All Tax Revenues received by the Agency at any time during any Bond Year in excess of the amount required to be transferred to the Trustee during such Bond Year pursuant to subsection (b) of this Section shall be released from the pledge and lien hereunder and the Agency may apply such excess Tax Revenues for any lawful purpose of the Agency. So long as any Bonds are outstanding, the Agency shall not have any beneficial right or interest in the moneys on deposit in the Special Fund or the Debt Service Fund, except as may be provided in this Indenture. SECTION 5.03. Establishment of Other Funds. There have heretofore been established a fund held by the Agency called the "Riverfront Redevelopment Project Redevelopment Fund' (the 'Redevelopment Fund') and a fund held by the Agency called the "Riverfront Redevelopment Project Low and Moderate Income Housing Fund' (the "Housing Fund'). There is hereby established a special trust fund held by the Trustee called the "Riverfront Redevelopment Project Expense Fund' (the "Expense Fund'). So long as any of the Bonds herein authorized, or any interest thereon, remains unpaid, the moneys in the foregoing funds shall be used for no purpose other than those required or permitted by this Indenture and the Law. Pursuant to the Tax Certificate, the funds and accounts established herein may be divided by the Agency or by the Trustee upon the Written Request of the Agency into sub -accounts for each Series of Bonds issued hereunder, in order to perform the necessary rebate calculations. SECTION 5.04. Redevelopment Fund, Housing Fund. Moneys in the Redevelopment Fund shall be used for the purpose of aiding io financing the Project (or for making reimbursements to the Agency for such costs theretofore paid by it), including payment of all costs incidental to or connected with such financing. Any balance of money remaining in the Redevelopment Fund after the date of completion of the financing of the Project shall be transferred by the Agency to the Special Fund. The Agency shall pay moneys from the Redevelopment Fund upon receipt of a requisition drawn thereon and signed by at least one duly authorized officer or member of the Agency. The Agency warrants that each withdrawal from the Redevelopment Fund shall be made in the manner provided by law for the purpose of aiding in financing the Project or for making reimbursements to the Agency for such costs theretofore paid by the Agency. The Treasurer of the Agency shall establish and maintain an account within the Redevelopment Fund for each Series of Bonds issued hereunder known as the "Series _ Project Account" and all proceeds of each such Series of Bonds deposited in the S7284\0001\634642.3 -23- DRAFT 12/5/00 Redevelopment Fund shall be held in the account established for such Series and shall be accounted for separately from all other amounts in the Redevelopment Fund. Amounts in each such account shall be used for the purposes authorized for use of amounts in the Redevelopment Fund. Moneys in the Housing Fund shall be used for the purpose of increasing, improving or preserving the supply of low and moderate income housing within or of benefit to the Project Area. The Agency warrants that each withdrawal from the Housing Fund shall be made in the manner provided by law for the purpose set forth above or for making reimbursements to the Agency for such costs theretofore paid by the Agency. SECTION 5.05. Expense Fund. All moneys in the Expense Fund shall be applied to the payment of costs and expenses incurred by the Agency in connection with the authorization, issuance and sale of the Bonds and shall be disbursed by the Trustee upon delivery to the Trustee of a requisition, substantially in the form attached hereto as Appendix B, executed by an officer of the Agency. Each such requisition shall be sequentially numbered and state the name and address of the person, firm or corporation to whom payment is due, the amount to be disbursed, the purposes for such disbursement and that such obligation has beenproperly incurred and is a proper charge against the Expense Fund. Upon the earlier of the payment in full of such costs and expenses (or the making of adequate provision for the payment thereof, evidenced by a Certificate of the Agency to the Trustee) or 180 days after delivery of the Bonds to the original purchaser thereof, any balance remaining in such Expense Fund shall be transferred to the Redevelopment Fund, and pending such transfer and application, the moneys in such Expense Fund may be invested as permitted by Section 5.07; provided, however, that investment income resulting from any such investment shall be retained in the Expense Fund. The Trustee shall establish and maintain an account within the Expense Fund for each Series of Bonds issued hereunder known as the "Series Expense Account" and all proceeds of each such Series of Bonds deposited in the Expense Fund shall be held in the account established for such Series and shall be accounted for separately from all other amounts in the Expense Fund. Amounts in each such account shall be used for the purposes authorized for use of amounts in the Expense Fund. SECTION 5.06. Establishment and Maintenance of Accounts for Use of Moneys in the Debt Service Fund. All moneys in the Debt Service Fund shall be set aside by the Trustee in each Bond Year when and as received in the following respective special accounts within the Debt Service Fund (each of which is hereby created and each of which the Trustee hereby agrees to cause to be maintained), in the following order of priority: (a) Interest Account; (b) Principal Account; (c) Sinking Account; and (d) Reserve Account. All moneys in each of such accounts shall be held in trust by the Trustee and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this Section 5.06. (a) Interest Account. On or before each Interest Payment Date, the Trustee shall set aside from the Debt Service Fund and deposit in the Interest Account an amount of money which, together with any money contained therein, is equal to the aggregate amount of the interest becoming due and payable on all Outstanding Bonds on such Interest Payment Date. No deposit need be made into the Interest Account if the amount contained therein is at least equal to the aggregate amount of the interest becoming due and payable on all Outstanding Bonds on the Interest Payment Dates in such Bond Year. All moneys in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity). (b) Principal Account. On or before each Principal Payment Date, the Trustee shall set aside from the Debt Service Fund and deposit in the Principal Account an amount of money which, together with any money contained therein, is equal to the aggregate amount of the principal becoming 87284\0001\634642.3 -24- DRAFT 12/5/00 due and payable on all Outstanding Serial Bonds on such Principal Payment Date. In the event that there shall be insufficient money in the Debt Service Fund to make in full all such principal payments and Sinking Account Installments required to be made pursuant to Section 5.06(c) hereof in such Bond Year, then the money available in the Debt Service Fund shall be applied pro rata to the making of such principal payments and such Sinking Account Installments in the proportion which all such principal payments and Sinking Account Installments bear to each other. No deposit need be made into the Principal Account if the amount contained therein is at least equal to the aggregate amount of the principal of all Outstanding Serial Bonds becoming due and payable on the upcoming Principal Payment Date. All money in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying the principal and redemption premium, if any, of the Serial Bonds as they shall become due and payable. (c) Sinking Account. On or before each Principal Payment Date, the Trustee shall set aside from the Debt Service Fund and deposit in the Sinking Account an amount of money equal to the Sinking Account Installment, if any, payable on the Sinking Account Payment Date in such Bond Year. All moneys in the Sinking Account shall be used by the Trustee to redeem Term Bonds. (d) Reserve Account. (1) On or before each Interest Payment Date, the Trustee shall set aside from the Debt Service Fund and deposit in the Reserve Account such amount of money (or other authorized deposit of security, as contemplated by the following paragraph) as shall be required to restore the balance in the Reserve Account to an amount equal to the Reserve Account Requirement for each Series of Bonds then Outstanding. No deposit need be made in the Reserve Account so long as there shall be on deposit therein an amount equal to the Reserve Account Requirement for each Series of Bonds then Outstanding. The Trustee shall establish and maintain a subaccount within the Reserve Account for each Series of Bonds issued hereunder known as the "Series Subaccount of the Reserve Account," and each subaccount shall be available only for payment of the Series of Bonds to which it relates. All money in (or available to) the Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of replenishing the Interest Account, the Principal Account or the Sinking Account in such order, in the event of any deficiency at any time in any of such accounts, or for the purpose of paying the interest on or principal of the Series of Bonds to which such subaccount of the Reserve Account relates in the event that no other money of the Agency is lawfully available therefor, or for the retirement of all Bonds then Outstanding. So long as the Agency is not in default hereunder, any amount in the Reserve Account in excess of the Reserve Account Requirement may, upon Written Request of the Agency, be withdrawn from the Reserve Account by the Trustee and transferred to the Agency; provided that so long as any Series 2000 B Bonds, or any bonds issued on a parity therewith pursuant to the Series 2000 B Indenture, remain outstanding, the Trustee shall transfer any such excess to the Series 2000 B Trustee. Concurrently with such transfer, the Trustee shall notify the Series 2000 B Trustee in writing of the fact that the funds so transferred to it are derived from excess amounts then on deposit in the Reserve Account for the Series 2000 A Bonds and that such funds are required to be applied in accordance with Section 4.02 of the Series 2000 B Indenture. In the event that there shall be insufficient money in the Debt Service Fund to make in full all required deposits to the subaccounts in the Reserve Account, then the money available in the Debt Service Fund shall be applied pro rata to such subaccounts in the proportion which all the Reserve Account Requirements for each Series bear to each other. (2) With the written consent of the Bond Insurer, if any, the Reserve Account Requirement may be satisfied by crediting to the Reserve Account moneys or a Qualified Reserve Account Credit Instrument or any combination thereof, which in the aggregate make funds available in the Reserve Account in an amount equal to the Reserve Account Requirement. Upon the deposit with the Trustee of such Qualified Reserve Account Credit Instrument, the Trustee shall release moneys then on hand in the Reserve Account to the Agency, to be used for any lawful purpose relating to the Project Area, in an amount equal to the face amount of the Qualified Reserve Account Credit Instrument. (e) Surolus. After making the deposits referred to in paragraphs (a) through (d) above in any Bond Year, the Trustee shall transfer any amount remaining on deposit in the Debt Service Fund to the Agency to be used for any lawful purpose of the Agency; provided, that so long as any Series 2000 B 57284\0001\634642.3 -25- DRAFT 12/5/00 Bonds, or any bonds issued on a parity therewith pursuant to the Series 2000 B Indenture, remain outstanding, the Trustee shall transfer all such amounts remaining in the Debt Service Fund to the Series 2000 B Trustee. Concurrently with such transfer, the Trustee shall notify the Series 2000 B Trustee in writing of the fact that the funds so transferred to it are derived from excess amounts then on deposit in the Debt Service Fund for the Series 2000 A Bonds and that such funds are required to be applied in accordance with Section 4.02 of the Series 2000 B Indenture. SECTION 5.07. Investment of Moneys in Funds and Accounts. Upon the Written Request of the Agency received by the Trustee at least two Business Days prior to the date of such investment, moneys in the Debt Service Fund, the Interest Account, the Principal Account, the Sinking Account, the Reserve Account, the Expense Fund (and any account therein) or the Rebate Fund shall be invested by the Trustee in Authorized Investments. In the absence of such instructions the Trustee shall invest in the investments described in clause F of the definition of "Authorized Investments" set forth in Section 1.01. The obligations in which moneys in the Debt Service Fund, the Interest Account, the Principal Account or any Sinking Account are so invested shall mature prior to the date on which such moneys are estimated to be required to be paid out hereunder. The obligations in which moneys in the Reserve Account are so invested shall mature no later than the earlier of (a) five years from the date of purchase by the Trustee or (b) the final maturity date of the Bonds; provided, however, that (i) an obligation which may be redeemed at par at the option of the Trustee on the Business Day prior to each Interest Payment Date during which such obligation is outstanding and (ii) an investment agreement which permits the Trustee to withdraw invested amounts, on any Business Day, on no more than five Business Days' notice, without penalty, to be used as required by Section 5.06(d), may have any maturity. Any interest, income or profits from the deposits or investments of all funds (except the Expense Fund and Rebate Fund) and accounts shall be deposited in the Debt Service Fund. For purposes of determining the amount on deposit in any fund or account held hereunder, all Authorized Investments credited to such fund or account shall be valued monthly at the lower of cost or market value (excluding accrued interest and brokerage commissions, if any). Except as otherwise provided in this Section, Authorized Investments representing an investment of moneys attributable to any fund or account and all investment profits or losses thereon shall be deemed at all times to be a par of said fund or account. Absent negligence or willful misconduct by the Trustee, the Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with this Section. The Agency acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Agency the right to receive brokerage confirmations of security transactions as they occur, the Agency will not receive such confirmations to the extent permitted by law. The Trustee will furnish the Agency periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder. The Trustee may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate. The Trustee or any of its affiliates may act as a sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. For investment purposes the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately. Amounts deposited in the Special Fund, the Redevelopment Fund (and any account therein) and the Housing Fund may be invested in any obligations in which the Agency may lawfully invest its funds. ARTICLE VI COVENANTS OF THE AGENCY SECTION 6.01. Punctual Payment. The Agency will punctually pay the interest on and principal of and redemption premiums, if any, to become due with respect to the Bonds, but only from Tax Revenues, in strict conformity with the terms of the Bonds and of the Indenture and will faithfully satisfy, observe and perform all conditions, covenants and requirements of the Bonds and of the Indenture. SECTION 6.02. Against Encumbrances. The Agency will not mortgage or otherwise encumber, pledge or place any charge upon any of the Tax Revenues, except as provided in the S7284\0001\634642.3 -26- DRAFT 12/5/00 Indenture, and will not issue any obligation or security superior to or on a parity with the Bonds payable in whole or in part from the Tax Revenues. SECTION 6.03. Extension or Fundin¢ of Claims for Interest. In order to prevent any claims for interest after maturity, the Agency will not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any Bonds and will not, directly or indirectly, be a party to or approve any such arrangements by purchasing or funding said claims for interest 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 Agency, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of the 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 6.04. Management and Operation of Properties. The Agency will manage and operate all properties owned by the Agency and comprising any part of the Project in a sound and business -like manner and in conformity with all valid requirements of any governments[ authority relative to the Project or any part thereof, and will keep such properties insured at all times in conformity with sound business practice. SECTION 6.05. Payment of Claims. The Agency will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the properties owned by the Agency or upon the In Revenues or any part thereof, or upon any funds in the hands of the Trustee, or which might impair the security of the Bonds; provided that nothing herein contained shall require the Agency to make any such payments so long as the Agency in good faith shall contest the validity of any such claims. SECTION 6.06. Records and Accounts: Financial and Proiect Statements. The Agency will keep proper books of record and accounts, separate from all other records and accounts of the Agency, in which complete and correct entries shall be made of all transactions relating to the Project. Such books of record and accounts shall at all times during business hours be subject to the inspection of the Trustee or of the Owners of not less than ten per cent (10%) of the aggregate principal amount of the Bonds then Outstanding or their representatives authorized in writing. The Agency will prepare and file with the Trustee annually as soon as practicable, but in any event not later than two hundred seventy (270) days after the close of each Fiscal Year, so long as any Bonds are Outstanding, an audited financial statement in reasonable detail relating to the Tax Revenues and all funds or accounts established pursuant to the Indenture for the preceding Fiscal Year along with the related opinion of an Independent Certified Public Accountant. The Trustee shall have no duty to review such financial statement. The Agency will fumish a copy of such audited financial statement to any Owner upon written request and will distribute a reasonable number of copies thereof as may be required to investment bankers, security dealers and others interested in the Bonds. The Trustee shall provide such statements with regard to any funds held by the Trustee hereunder to the Agency as the Agency may reasonably require to comply with the terms of this Section 6.06. SECTION 6.07. Protection of Security and Rights of Owners. The Agency will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the sale and delivery of any Bonds by the Agency, such Bonds shall be incontestable by the Agency. SECTION 6.08. Payment of Taxes and Other Charges. The Agency will pay and discharge all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the Agency or any properties owned by the Agency in the Project Area, or upon the revenues therefrom, when the same shall become due; provided that nothing herein contained shall require the Agency to make any such payments so long as the Agency in good faith shall contest the validity of any such taxes, service charges, assessments or other governments] charges. SECTION 6.09. Financing the Proiect. The Agency will continue the financing of the Project to be aided with the proceeds of the Bonds with all practicable dispatch, and such financing will 57294\0001\634642.3 -27- DRAPT 12/5/00 be accomplished and completed in a sound, economical and expeditious manner and in conformity with the Redevelopment Plan and the Law. SECTION 6.10. Taxation of Leased Pro2ertv. Whenever any property in the Project is redeveloped by the Agency and thereafter is leased by the Agency to any person or persons, or whenever the Agency leases any real property in the Project to any person or persons for redevelopment, the property shall be assessed and taxed in the same manner as privately -owned property (in accordance with the Law), and the lease shall provide (1) that the lessee shall pay taxes upon the assessed value of the entire property and not merely upon the assessed value of the leasehold interest, and (2) that if for any reason the taxes paid by the lessee on such property in any year during the term of the lease shall be less than the taxes that would have been payable upon the entire property if the property were assessed and taxed in the same manner as privately -owned property, the lessee shall pay such difference to the Agency within thirty (30) days after the taxes for such year become payable, and in any event prior to the delinquency date of such taxes established by law, which such payments shall be treated as Tax Revenues and shall be deposited by the Agency in the Special Fund. SECTION 6.11. Disposition of Property in Project Area. Without the prior written consent of the Bond Insurer, the Agency will not participate in the disposition of any land or real property in the Project Area which will result in such property becoming exempt from taxation because of public ownership or use or otherwise (except property dedicated for public right-of-way) if such disposition, when taken together with other such dispositions, would either (a) aggregate more than 10 percent of the assessed valuation of the property in the Project Area, or (b) cause the amount of Tax Revenues to be received in the succeeding Bond Year to fall below 120 percent of Maximum Annual Debt Service. SECTION 6.12. Amendment of Redevelopment Plan. If the Agency proposes to amend the Redevelopment Plan, it shall cause to be filed with the Trustee a Consultant's Report on the effect of such proposed amendment. The Independent Financial Consultant or Independent Redevelopment Consultant preparing such Consultant's Report must be acceptable to the Bond Insurer. If the Consultant's Report concludes that Tax Revenues will not be materially reduced by such proposed amendment, the Agency may approve such amendment. If the Consultant's Report concludes that Tax Revenues will be materially reduced by such proposed amendment, the Agency shall not approve such proposed amendment. The Trustee shall be entitled to rely upon any said Report and shall have no duty to verify the information or statements set forth therein. SECTION 6.13. Tax Revenues. The Agency shall comply with all requirements of the Law to insure the allocation and payment to it of the Tax Revenues, including without limitation the timely filing of any necessary statements of indebtedness with appropriate officials of the County. SECTION 6.14. Further Assurances. The Agency shall adopt, make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Indenture, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in the Indenture. SECTION 6.15. Tax Covenants, Rebate Fund. (a) In addition to the accounts created pursuant to Article V, the Trustee shall establish and maintain with respect to each Series of Bonds issued hereunder (other than any Series of Bonds exempt from the requirements of Section 148 of the Code related to rebate of arbitrage earnings as shall be specified in writing to the Trustee by the Agency) a fund separate from any other fund or account established and maintained hereunder designated as the "Series Rebate Fund" hereinafter in this Section referred to as the "Rebate Fund." The provisions of this Section shall apply separately to each Rebate Fund established for each Series of Bonds. Upon the written direction of the Agency, there shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement (as defined in the Tax Certificate), for payment to the United States of America. Notwithstanding the provisions of Sections 5.01, 5.02, 5.07 and 10.01 relating to the pledge of Tax Revenues, the allocation of money in the Special Fund, the investments of S7284\0001\634642.3 -28- DRAFT 12/5/00 money in any fund or account and the defeasance of Outstanding Bonds, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section 6.15 and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions if it follows the Written Request of the Agency, and shall have no liability or responsibility to enforce compliance by the Agency with the terms of the Tax Certificate. (b) The Agency shall not use or permit the use of any proceeds of Bonds or any funds of the Agency, directly or indirectly, to acquire any securities or obligations, and shall not take or permit to be taken any other action or actions, which would cause any Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code or "federally guaranteed" within the meaning of Section 149(b) of the Code and any such applicable requirements promulgated from time to time thereunder and under Section 103(c) of the Internal Revenue Code of 1954, as amended. The Agency shall observe and not violate the requirements of Section 148 of the Code and any such applicable regulations. The Agency shall comply with all requirements of Sections 148 and 149(d) of the Code to the extent applicable to the Bonds. In the event that at any time the Agency is of the opinion that for purposes of this Section 6.15(b) it is necessary to restrict or to limit the yield on the investment of any moneys held by the Trustee under this Indenture, the Agency shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. The Agency shall not use or permit the use of any proceeds of the Bonds or any funds of the Agency, directly or indirectly, in any manner, and shall not take or omit to take any action that would cause any of the Bonds to be treated as an obligation not described in Section 103(a) of the Code. (c) Notwithstanding any provisions of this Section 6.15 if the Agency shall provide to the Trustee an opinion of nationally recognized bond counsel that any specified action required under this Section 6.15 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 Bonds, the Trustee and the Agency may conclusively rely on such opinion in complying with the requirements of this section, and, notwithstanding Article VIII hereof, the covenants hereunder shall be deemed to be modified to that extent. (d) The provisions of this Section 6.15 shall not apply to any Series of Bonds not intended to comply with the requirements of the Code necessary to make interest on such Series of Bonds excludable from gross income for federal tax purposes, as shall be specified to the Trustee by the Agency. SECTION 6.16. Agreements with Taxing Agencies: Other Agreements. So long as any Bonds are Outstanding, the Agency shall not (a) enter into any new agreement, or amend any existing agreement, with any taxing agency entered into (i) pursuant to Section 33401 of the Law or (ii) which operates as a waiver of the Agency's right to receive Tax Revenues under the Redevelopment Plan, or (b) enter into any disposition, development, owner participation or other agreement, or amend any existing agreement, which requires the Agency to make payments from Tax Revenues, unless the Agency's obligations under such agreement are made expressly subordinate andjunior to the Agency's obligations under this Indenture and the Bonds. SECTION 6.17. Annual Review of Tax Revenues. The Agency hereby covenants that it will annually review the total amount of Tax Revenues remaining available to be received by the Agency under the Redevelopment Plan's cumulative tax increment limitation, as well as future cumulative Annual Debt Service. The Agency will not accept Tax Revenues greater than Annual Debt Service, in any year, if such acceptance will cause the amount remaining under the tax increment limit to fall below remaining cumulative Annual Debt Service, except for the purpose of depositing such revenues in escrow for the payment of interest on and principal of and redemption premiums, if any, on the Bonds. SECTION 6.18. Housing Fund, The Agency covenants and agrees to use the moneys in the Housing Fund in accordance with Sections 33334.2, 33334.3, and 33334.6 of the Law, and further covenants and agrees to disburse, expend or encumber any "excess surplus" (as defined in Section 33334.12 of the Law) in the Housing Fund at such times and in such manner that the Agency shall not be subject to sanctions pursuant to subdivision (e) of said Section 33334.12. 57284\0001\634642.3 -29- DRAFT 12/5/00 ARTICLE VH THE TRUSTEE SECTION 7.01. Appointment of Trustee. BNY Western Trust Company, a state banking corporation duly organized and existing under and by virtue of the laws of the State of California, is hereby appointed Trustee by the Agency for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Agency agrees that it will maintain a Trustee which has (or which is a wholly-owned subsidiary of a corporation which has) a combined capital and surplus of at least $50,000,000, and which is subject to supervision or examination by Federal or State authority, so long as any Bonds are Outstanding. If such bank or trust company or such parent corporation publishes a report 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 6.01 the combined capital and surplus of such bank or trust company or such parent corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee is hereby authorized to pay the principal of and interest and redemption premium (if any) on the Bonds when duly presented for payment at maturity, or on redemption prior to maturity, and to cancel all Bonds upon payment thereof. The Trustee shall keep accurate records of all funds and accounts administered by it and of all Bonds paid and discharged. SECTION 7.02. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions: (a) The Trustee shall not be liable for any error ofjudgment made in good faith by a responsible officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. (b) Whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, rely upon a Certificate of the Agency. (c) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Owners pursuant to this Indenture, unless such Owners shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. (d) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order bond or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. (e) The Trustee, prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no covenants of or against the Trustee shall be implied in this Indenture. In case an Event of Default hereunder has occurred (which has not been cured or waived), the Trustee may exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill in the exercise of such rights and powers m a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (f) The Trustee may execute any of the trusts or powers hereunder and perform the duties required of it hereunder either directly or by or through attorneys or agents, shall not be liable for the acts or omissions of such attorneys or agents appointed with due care, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder. The Trustee may conclusively rely on an opinion of counsel as full and complete authorization and protection for any action taken, suffered or omitted by it hereunder. S7284\0001\634642.3 -30- DRAFT 12/5/00 (g) The Trustee shall not be responsible for any recital herein or in the Bonds, or for any of the supplements thereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby and makes no representation as to the validity or sufficiency of the Bonds or this Indenture. The Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, conditions or agreements on the part of the Agency hereunder. The Trustee shall not be responsible for the application by the Agency of the proceeds of the Bonds. (h) The Trustee may become the Owner or pledgee of Bonds secured hereby with the same rights it would have if not the Trustee; may acquire and dispose of other bonds or evidences of indebtedness of the Agency with the same rights it would have if it were not the Trustee; and may act as a depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Bonds, whether or not such committee shall represent the Owners of the majority in aggregate principal amount of the Bonds then Outstanding. (i) The Trustee may rely and shall be protected in acting or refraining from acting, in good faith and without negligence, upon any notice, resolution, opinion, report, direction, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed by it to be genuine and to have been signed or presented by the proper person or persons. Any action taken or omitted to be taken by the Trustee in good faith and without negligence pursuant to this Indenture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner of any Bond, shall be conclusive and binding upon all future Owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. The Trustee shall not be hound to recognize any person as an Owner of any Bond or to take any action at his request unless the ownership of such Bond by such person shall be reflected on the Registration Books. Q) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful default. The immunities and exceptions from liability of the Trustee shall extend to its officers, directors, employees and agents. (k) The Trustee shall not be required to take notice or be deemed to have notice of an Event of Default hereunder except failure by the Agency to make any of the payments to the Trustee require to be made by the Agency pursuant hereto or failure by the Agency to file with the Trustee any document required by this Indenture to be so filed subsequent to the issuance of the Bonds, unless the Trustee shall be specifically notified in writing of such default by the Agency or by the Owners of at least 25% in aggregate principal amount of the Bonds then Outstanding and all notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered at the Trust Office of the Trustee, and in the absence of such notice sD delivered the Trustee may conclusively assume there is no Event of Default hereunder except as aforesaid. (1) At any and all reasonable times the Trustee and its duly authorized agents, attorneys, experts, accountants and representatives, shall have the right fully to inspect all books, papers and records of the Agency pertaining to the Bonds, and to make copies of any of such books, papers and records which are not privileged by statute or by law. (m) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises hereof. (n) Notwithstanding anything elsewhere in this Indenture with respect to the execution of any Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, as may be deemed desirable for the purpose of establishing the right of the Agency to the execution of any Bonds, the withdrawal of any cash or the taking of any other action by the Trustee. S7284\0001\634642.3 -31- DRAFT 12/5/00 (o) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received but need not he segregated from other funds except to the extent required by law. (p) Whether or not expressly provided therein, every provision of this Indenture relating to the conduct or affecting the liability of the Trustee shall be subject to the provisions of this Section 7.02. (q) The Trustee shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. (r) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. SECTION 7.03. Fees. Charges and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for reasonable fees for its services rendered hereunder and all advances (with interest on such advances at the maximum rate allowed by law), counsel fees (including expenses) and other expenses reasonably and necessarily made or incurred by the Trustee in connection with such services. Upon the occurrence of an Event of Default hereunder, but only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment of any Band upon the amounts held hereunder for the foregoing fees charges and expenses incurred by it. SECTION 7.04. Notice to Bond Owners of Default. If an Event of Default hereunder occurs with respect to any Bonds of which the Trustee has been given or is deemed to have notice, as provided in Section 7.02(k) hereof, then the Trustee shall, within 30 days of the receipt of such notice, give written notice thereof by first class mail to the Owner of each such Bond, unless such Event of Default shall have been cured before the giving of such notice; provided, however, that unless such Event of Default consists of the failure by the Agency to make any payment when due, the Trustee may elect not to give such notice if and so long as the Trustee in good faith determines that it is in the best interests of the Bond Owners not to give such notice. SECTION 7.05. Intervention by Trustee. In any judicial proceeding to which the Agency is a party that, in the opinion of the Trustee and its counsel, has a substantial bearing on the interests of Owners of any of the Bonds, the Trustee may intervene on behalf of such Bond Owners, and subject to Section 7.02(c), shall do so if requested in writing by the Owners of at least 25% in aggregate principal amount of such Bonds then Outstanding. SECTION 7.06. Removal of Trustee. The Trustee may be removed at any time by an instrument or concurrent instruments in writing, filed with the Trustee and signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds. The Agency may also remove the Trustee at any time upon 30 days notice, except during the existence of an Event of Default. The Trustee may be removed at any time for any breach of the Trustee's duties set forth herein. SECTION 7.07. Resignation by Trustee. The Trustee and any successor Trustee may at any time give written notice of its intention to resign as Trustee hereunder, such notice to be given to the Agency by registered or certified mail. Upon receiving such notice of resignation, the Agency shall promptly appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. Upon such acceptance, the shall cause notice thereof to be given by first class mail, postage prepaid, to the Bond Owners at their respective addresses set forth on the Bond registration books. SECTION 7.08. Appointment of Successor Trustee. In the event of the removal or resignation of the Trustee pursuant to Sections 7.06 or 7.07, respectively, the Agency shall promptly appoint a successor Trustee. In the event the Agency shall for any reason whatsoever fail to appoint a successor Trustee within 90 days following the delivery to the Trustee of the instrument described in Section 7.06 or within 90 days following the receipt of notice by the Agency pursuant to Section 6.07, S7284\0001\634642.3 -32- DRAFT 12/5/00 the Trustee may, at the expense of the Agency, apply to a court of competentjurisdiction for the appointment of a successor Trustee meeting the requirements of Section 6.01. Any such successor Trustee appointed by such court shall become the successor Trustee hereunder notwithstanding any action by the Agency purporting to appoint a successor Trustee following the expiration of such 90 -day period. SECTION 7.09. Mercer or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such company shall meet the requirements set forth in Section 7.0 1, shall be the successor to the Trustee and vested 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 7.10. Concerning any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Agency an instrument in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, vests, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the Written Request of the Agency, or of the Trustee's successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as the Trustee hereunder to its successor. Should any instrument in writing from the Agency be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor Trustee, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Agency. SECTION 7.11. A000intment of Co -Trustee. It is the purpose of this Indenture that there shall be no violation of any law of anyjurisdiction (including particularly the law of the State of California) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction in may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action that may be desirable or necessary in connection therewith, it may be necessary that the Trustee or the Agency appoint an additional individual or institution as a separate trustee or co -trustee. The following provisions of this Section 7.11 are adopted to these ends. In the event that the Trustee or the Agency appoints an additional individual or institution as a separate trustee or co -trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate trustee or co -trustee but only to the extent necessary to enable such separate trustee or cotrustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate trustee or co -trustee shall run to and be enforceable by either of them. Should any instrument in writing from the be required by the separate trustee or co - trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Agency. In case any separate trustee or co - trustee, or a successor to either, shall become incapable of acting, shall resign or shall be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co -trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co -trustee. SECTION 7.12. Indemnification: Limited Liability of Trustee. The Agency further covenants and agrees, to the extent permitted by law, to indemnify, and save the Trustee and its officers, directors, agents and employees, harmless against any loss, expense and liabilities arising out of or in the 57289\0001\639692.3 -33- MUFT 12/5/00 exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities that are due to the negligence or willful default of the Trustee, its officers, directors or employees. No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability hereunder if it shall have reasonable grounds for believing repayment of such funds or adequate indemnity against such liability or risk is not assured to it. The Trustee shall not be liable for any action taken or omitted to be taken by it in accordance with the direction of the Owners of at least 25% in aggregate principal amount of Bonds Outstanding relating to the time, method and place of conducting any proceeding or remedy available to the Trustee under this Indenture or exercising any power conferred upon the Trustee under this Indenture. The obligations of the Agency under this Section shall survive the final payment or defeasance of the Bonds or the resignation or removal of the Trustee under this Indenture. ARTICLE VIII AMENDMENT OF THE INDENTURE SECTION 8.01. Amendment by Consent of Owners. The Indenture and the rights and obligations of the Agency and of the Owners may be amended at any time by a Supplemental Indenture which shall become binding when the written consents of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.02, and the written consent of the Bond Insurer, if any, are filed with the Trustee. No such amendment shall (1) extend the maturity of or reduce the interest rate on, or otherwise alter or impair the obligation of the Agency to pay the interest or principal or redemption premium, if any, at the time and place and at the rate and in the currency provided herein of any Bond, without the express written consent of the Owner of such Bond, or (2) permit the creation by the Agency of any mortgage, pledge or lien upon the Tax Revenues superior to or on a parity with the pledge and lien created in the Indenture for the benefit of the Bonds, or (3) reduce the percentage of Bonds required for the written consent to any such amendment, or (4) modify the rights or obligations of the Trustee without its prior written assent thereto. The Indenture and the rights and obligations of the Agency and of the Owners may also be amended at any time by a Supplemental Indenture which shall become binding upon execution, without the consent of any Owners, 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 Agency in the Indenture contained, other covenants and agreements thereafter to be observed, or to surrender any right or power herein reserved to or conferred upon the Agency; (b) To make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Indenture, or in regard to questions arising under the Indenture, a; the Agency may deem necessary or desirable and not inconsistent with the Indenture, and which shall not materially adversely affect the interest of the Owners; (c) To provide for the issuance of any Additional Bonds, and to provide the terns and conditions under which such Additional Bonds may be issued, subject to and in accordance with the provisions of Article IV; (d) 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; (e) To maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes (except with respect to any Bonds which the Agency certifies to the Trustee are not intended to qualify for such exclusion); S?284\0001\634642.3 -34- DRAFT 12/5/00 (f) To the extent necessary to obtain a Bond Insurance Policy, to obtain a rating on the Bonds or in connection with satisfying all or a portion of the Reserve Account Requirement by crediting a letter of credit or Bond Insurance Policy to the Reserve Account; or (g) For any other purpose that does not materially adversely affect the interests of the Owners. SECTION 8.02. Disqualified Bonds. Bonds owned or held by or for the account of the Agency or the City shall not be deemed Outstanding for the purpose of any consent or other action in this Indenture provided for, and shall not be entitled to consent to, or take any other action in this Indenture provided for; provided, however, that for purposes 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 owned or held will be disregarded. SECTION 8.03. Endorsement or Replacement of Bonds After Amendment. After the effective date of any action taken as hereinabove provided, the Agency may determine that the Bonds may bear a notation, by endorsement in form approved by the Agency, as to such action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for such purpose at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation as to such action shall be made on such Bond. If the Agency shall so determine, new Bonds so modified as, in the opinion of the Agency, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Bond Outstanding at such effective date such new Bonds shall be exchanged at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, without cost to each Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds. SECTION 8.04. Opinion of Counsel. The Trustee may conclusively accept an opinion of nationally recognized bond counsel to the Agency that an amendment of the Indenmre is in conformity with the provisions of this Article. ARTICLE DC EVENTS OF DEFAULT AND REMEDIES OF OWNERS SECTION 9.01. Events of Default and Acceleration of Maturities. If one or more of the following events (herein called "Events of Default") shall happen, that is to say: (a) If default shall be made in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) If default shall be made in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; (c) If default shall be made by the Agency in the observance of any of the other agreements, conditions or covenants on its part in the Indenture or in the Bonds contained, and such default shall have continued for a period of 60 days after the Agency shall have been given notice in writing of such default by the Trustee; provided, however, that such default shall not constitute an Event of Default hereunder if the Agency shall commence to cure such default within said 60 -day period and thereafter diligently and in good faith proceed to cure such default within a reasonable period of time; or (d) If the Agency shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property; 57284\0001\634642.3 -35- DRAFT 12/5/00 then, and in each and every such case during the continuance of such Event of Default, the Trustee may, and upon the written request of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, shall, by notice in writing to the Agency, declare the principal of all of the'Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in the Indenture or in the Bonds contained to the contrary notwithstanding; provided, however, that any such declaration shall be subject to the prior written consent of the Bond Insurer, if any. This 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, and before any judgment or decree for the payment of the money due shall have been obtained or entered, the Agency shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest at the rate of interest which would have been paid on such overdue principal on such overdue installments of principal and interest, and the fees and expenses of the Trustee, including attomeys fees, 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 Tmstee or provision deemed by the Tmstee to be adequate shall have been made therefor, then, and in every such case, the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Agency and to the Tmstee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences; provided, however, that no such rescission or annulment shall occur without the prior written consent of the Bond Insurer, if any. 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. SECTION 9.02. AAnDlication of Funds Upon Acceleration All money in the funds and accounts provided for in the Indenture (other than the Rebate Fund) upon the date of the declaration of acceleration by the Trustee as provided in Section 9.01, and all Tax Revenues thereafter received by the Agency hereunder, shall be transmitted to the Tmstee and shall be applied by the Trustee in the following order: First to the payment of the fees, costs and expenses of the Tmstee, if any, in carrying out the provisions of this article, including reasonable compensation to its agents and counsel, to the payment of any other amounts then due and payable to the Tmstee, including any predecessor trustee, with respect to or in connection with this Indenture, whether as compensation, reimbursement, indemnification or otherwise, and, thereafter, to the payment of the costs and expenses of the Owners in providing for the declaration of such Event of Default, including reasonable compensation to their agents and counsel; Second, upon presentation of the sevemlBonds, and the stamping thereon of the amount of the payment if only partially paid, or upon the surrender thereof if fully paid, to the payment of the whole amount then owing and unpaid upon the Bonds for interest and principal, with interest on the overdue interest and principal at the rate of ten percent (10%) per annum, and in case such money shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such interest, principal and interest on overdue interest and principal without preference or priority among such interest, principal and interest on overdue interest and principal, ratably to the aggregate of such interest, principal and interest on overdue interest and principal. SECTION 9.03. Other Remedies of Owners. Any Owner shall have the right, subject to the provisions of Section 9.08, for the equal benefit and protection of all Owners similarly situated: (a) By mandamus or other suit or proceeding at law or in equity to enforce his rights against the Agency and any of the members, officers and employees of the Agency, and to compel the Agency or any such members, officers or employees to perform and carry out their duties under the Law and their agreements with the Owners as provided in the Indenture; (b) By suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Owners; or 51284\0001\634642.3 -36- DRAFT 12/5/00 (c) Upon the happening of an Event of Default (as defined in Section 9.01), by a suit in equity to require the Agency and its members, officers and employees to account as the trustee of an express trust. SECTION 9.04. Non -Waiver. A waiver of any default or breach of duty or contract by any Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner or the Trustee to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Law or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the Trustee, the Agency and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. SECTION 9.05. Actions by Trustee as Attomev-in-Fac[. Any suit, action or proceeding which any Owner shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners, and the Trustee is hereby appointed (and the successive respective Owners of the Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attomey-in-fact of the Owners for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the Owners as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attomey-in-fact; provided, however, the Trustee shall have no duty or obligation to enforce any right or remedy unless it has been indemnified by the Owners from any liability or expense including without limitation fees and expenses of its attorneys. SECTION 9.06. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. 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, and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law, subject to the provisions of Section 9.08. SECTION 9.07. Owners' Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, with the written consent of the Bond Insurer, if any, by an instrument or concurrent instruments in writing executed and delivered to the Trustee and upon furnishing the Trustee with indemnification satisfactory to it, 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, that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, 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 Owners not parties to such direction. SECTION 9.08. Limitation on Owners' 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 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 time; (3) such Owner or said Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (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; and (5) the Trustee shall not have received contrary directions from the Owners of a majority in aggregate principal amount of the Bonds then Outstanding. 57284\0001\634642.3 -37- DRAFT 12/5/00 Such notification, request, tender or indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder or under law; it being understood and intended that no one or more Owners 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, or to enforce any right under this Indenture, the Law or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law 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. Nothing in this Section or in any other provision of the Indenture, or in the Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners of the Bonds at the respective dates of maturity, as herein provided, out of the Tax Revenues pledged for such payment, or affect or impair the right of action, which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in the Indenture. ARTICLE X DEFEASANCE SECTION 10.01. Discharge of Indebtedness. If the Agency shall pay or cause to be paid, or there shall otherwise be paid, to the Owners of all Outstanding Bonds the interest due thereon and the principal thereof, at the times and in the manner stipulated therein and in the Indenture, then the Owners of such Bonds shall cease to be entitled to the pledge of Tax Revenues, and all covenants, agreements and other obligations of the Agency to the Owners of such Bonds under the Indenture shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute at the Written Request of the Agency, and at the expense of the Agency, and deliver to the Agency all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall, after payment of amounts due the Trustee hereunder, pay over or deliver to the Agency all money or securities held by it pursuant to the Indenture which are not required for the payment of the interest due on and the principal of and premium, if any, due on such Bonds other than the moneys, if any, in the Rebate Fund. Bonds for the payment of which money shall have been set aside (through deposit by the Agency or otherwise) to be held in trust by the Trustee for such payment at the maturity or redemption date thereof shall be deemed, as of the date of such setting aside, to have been paid within the meaning and with the effect expressed in the first paragraph of this section. Any Outstanding Bonds shall prior to the maturity date thereof be deemed to have been paid within the meaning and with the effect expressed in the first paragraph of this section if (1) there shall have been deposited with the Trustee, or another fiduciary or escrow agent, either money in an amount which shall be sufficient, or Federal Securities (including any Federal Securities issued or held in book -entry form on the books of the Department of the Treasury of the United States of America) the principal of and the interest on which when paid willprovide money which, together with the money, if any, deposited with the Trustee at the same time, shall be sufficient to pay when due the interest due and to become due on such Bonds on and prior to the maturity date thereof or such earlier redemption date as shall be irrevocably established, and the principal of and redemption premium, if any, on such Bonds (the sufficiency of such amounts to be appropriately verified by an Independent Certified Public Accountant) and (2) the Agency shall have given the Trustee in form satisfactory to it irrevocable instructions to mail, as soon as practicable, a notice to the Owners of such Bonds that the deposit required by (1) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with this section and stating the maturity date or earlier redemption date upon which money is to be available for the payment of the principal of such Bonds. Neither Federal Securities nor money deposited with the Trustee pursuant to this section nor interest or principal payments on any such Federal Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the interest on and principal of such Bonds; provided that any cash received from such interest or principal payments on such Federal S?284\0001\634542.3 -38- DRAFT 12/5/00 Securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested at the written direction of the Agency in Federal Securities maturing at times and in amounts sufficient to pay when due the interest on and principal of such Bonds on and prior to such maturity date thereof, and interest earned from such reinvestments shall be deposited in the Special Fund. For the purposes of this section, Federal Securities shall mean and include only such securities as are not subject to redemption prior to their maturity. In the event that the principal and/or interest due on the Bonds shall be paid by the Bond Insurer pursuant to the Bond Insurance Policy, the Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Agency and the covenants, agreements and other obligations of the Agency to the Owners shall continue to exist and shall tun to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of such Owners. SECTION 10.02. Unclaimed Moneys. Anything in the Indenture to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Bonds or interest thereon which remain unclaimed for two (2) years after the date when such Bonds or interest thereon have become due and payable, if such money was held by the Trustee at such date, or for two (2) years after the date of deposit of such money if deposited with the Tmstee after the said date when such Bonds or interest thereon become due and payable, shall be repaid by the Trustee to the Agency, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Agency for the payment of such Bonds; provided, however, that before being required to make any such payment to the Agency, the Trustee shall, at the Written Request of the Agency and at the expense of the Agency, 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 that said money remains unclaimed and that, after a date named in said notice, which date shall not be less than thirty (30) days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the Agency. Any money held by the Trustee in trust for the payment and discharge of any Bonds shall not bear interest or be otherwise invested from and after such maturity or redemption date. ARTICLE XI MUNICIPAL BOND INSURANCE (to come) ARTICLE XII MISCELLANEOUS SECTION 12.01. Liability of Acencv Limited to Tax Revenues. Notwithstanding anything in the Indenture contained, the Agency shall not be required to advance any money derived from any source of income other than the Tax Revenues for the payment of the interest on or the principal of the Bonds. The Agency may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose. The Agency's obligation to pay the Rebate Requirement to the United States of America pursuant to Section 6.15 hereof shall be considered the general obligation of the Agency and shall be payable from any available funds of the Agency. The Bonds are limited obligations of the Agency and are payable, as to interest thereon and principal thereof, exclusively from the Tax Revenues, and the Agency is not obligated to pay them except from the Tax Revenues. All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Tax Revenues, and the Tax Revenues constitute a trust fund for the security and payment of the interest on and the principal of the Bonds. The Bonds are not a debt of the City of Seal Beach, 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 Agency. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory limitation or restriction, and neither the members of the 57284\0001\634642.3 -39- DRAFT 12/5/00 Agency nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance. SECTION 12.02. Benefits of Indenture Limited to Parties. Nothing in the Indenture, expressed or implied, is intended to give to any person other than the Agency, the Trustee and the Owners any right, remedy or claim under or by reason of the Indenture. Any covenants, stipulations, promises or agreements in the Indenture contained by and on behalf of the Agency or any member, officer or employee thereof shall be for the sole and exclusive benefit of the Trustee and the Owners. SECTION 12.03. Successor Is Deemed Included in All References to Predecessor. Whenever in the Indenture either the Agency or any member, officer or employee thereof is named or referred to, such reference shall be deemed to include the successor to the powers, duties and functions, with respect to the management, administration and control of the affairs of the Agency, that are presently vested in the Agency or such member, officer or employee, and all the agreements, covenants and provisions contained in the Indenture by or on behalf of the Agency or any member, officer or employee thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. SECTION 12.04. Execution of Documents by Owners. Any request, consent, declaration or other instrument which the Indenture may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, consent, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act, that the person signing such request, consent, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly swom to before such notary public or other officer. Except as otherwise herein expressly provided, the amount of Bonds transferable by delivery held by any person executing such request, consent, declaration or other instrument or writing as a Owner, and the numbers thereof, and the date of his holding such Bonds, may be proved by a certificate, which need not be acknowledged or verified, satisfactory to the Trustee, executed by a trust company, bank or other depositary wherever situated, showing that at the date therein mentioned such person had on deposit with such depositary the Bonds described in such certificate. The Trustee may nevertheless in its discretion require further or other proof in cases where it deems the same desirable. The ownership of Bonds and the amount, maturity, number and date of holding the same shall be proved by the registry books provided for in Section 2.08. Any request, consent declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Agency or the Trustee in good faith and in accordance therewith. SECTION 12.05. Waiver of Personal Liability. No member, officer or employee of the Agency shall be individually or personally liable for the payment of the interest on or principal of the Bonds; but nothing herein contained shall relieve any member, officer or employee of the Agency from the performance of any official duty provided by law. SECTION 12.06. Acquisition of Bonds by ARencv. All Bonds acquired by the Agency, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. SECTION 12.07. Content of Certificates and Reoorts. Every certificate or report of the Agency with respect to compliance with a condition or covenant provided for in the Indenture shall include (a) a statement that the person or persons making or giving such certificate or report have read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or report are based; (c) a statement that in the opinion of the signers, they have made or 57284\0001\634642.3 -40- DRAFT 12/5/00 caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of the signers, such condition or covenant has been complied with. Any such certificate made or given by an officer of the Agency may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his Certificate may be based, as aforesaid, are erroneous, or in the exercise of reasonable care should have known that the same were erroneous. Any such certificate or opinion or representation made or given by counsel may be based, insofar as it relates to factual matters or information with respect to which is in the possession of the Agency, upon the certificate or opinion of or representations by an officer or officers of the Agency, unless such counsel knows that the certificate or opinion or representations with respect to the matters upon which his certificate, opinion or representation may be based, as aforesaid, are erroneous, or in exercise of reasonable care should have known that the same were erroneous. SECTION 12.08. Notice to Bond Insurer. Whenever any notice, authorization, request or demand is required or permitted to be given to any party pursuant to this Indenture, such notice, authorization, request or demand shall also be given in writing to the Bond Insurer, if any, by first class mail at the address specified by such Bond Insurer. SECTION 12.09. Funds and Accounts. Any fund or account required by the Indenture to be established and maintained by the Agency or the Trustee may be established and maintained in the accounting records of the Agency or 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 or As an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with sound corporate trust accounting practices and with due regard for the protection of the security of the Bonds and the rights of the Owners. SECTION 12.10. Article and Section Headin¢s and References. The headings or titles of the several articles and sections hereof, and the table of contents appended hereto, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of the Indenture. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding articles, sections or subdivisions of the Indenture; and the words "herein," "hereof," "hereunder" and other words of similar import refer to the Indenture as a whole and not to any particular article, section or subdivision hereof. SECTION 12.11. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof provided in the Indenture to be performed on the part of the Agency (or of the Trustee) should be contrary to law, then such agreement or agreements, such covenant or covenants, or such portions thereof, shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity of the Indenture or of the Bonds; but the Owners shall retain all the rights and benefits accorded to them under the Law or any other applicable provisions of law. The Agency hereby declares that it would have adopted the Indenture and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases of the Indenture or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. SECTION 12.12. Execution in Several Counterparts. This Indenture may be executed in any number of counterpart each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or As many of them as the Agency and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 12.13. Business Days. When any action is provided for herein to be done on a day named or within a specified time period, and the day or the last day of the period falls on a day other than a Business Day, such action may be performed on the next ensuing Business Day with the same effect as though performed on the appointed day or within the specified period. S7284\0001\634642.3 -41- DRAFT 12/5/00 SECTION 12.14. Governing Law. This Indenture shall be governed and construed in accordance with the laws of the State of California. SECTION 12.15. Notices. Whenever any notice is required to be given hereunder, such notice shall be mailed, first-class it, postage prepaid, to the following parties at the following addresses: If to the Agency: Redevelopment Agency of the City of Seal Beach 211 8th Street Seal Beach, California 90740 Attention: Executive Director Fax: (562) 4314067 If to the Trustee: BNY Western Trust Company 700 South Flower Street, Fifth Floor Los Angeles, California 90017-4104 Attention: Corporate Trust Division Fax: (213)630-6210 If to the Insurer: [to come] IN WITNESS WHEREOF, the Redevelopment Agency of the City of Seal Beach has caused this Indenture to be signed in its name by its duly authorized officer and BNY Western Trust Company in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the date and year first above written. SEAL BEACH REDEVELOPMENT AGENCY By Executive Director BNY WESTERN TRUST COMPANY, as Trustee Authorized Officer S7284\0001\634642.3 -42- DRAFT 12/5/00 APPENDIX A [Form of Series 2000 A Bond] EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.12 OF THE INDENTURE DESCRIBED HEREIN, THIS GLOBAL CERTIFICATE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE DEPOSITORY (AS DEFINED IN SAID INDENTURE) OR TO A SUCCESSOR DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR DEPOSITORY. No. _ $_ SEAL BEACH REDEVELOPMENT AGENCY TAX ALLOCATION REFUNDING BOND, 2000 SERIES A (RIVERFRONT REDEVELOPMENT PROJECT) RATE OF INTEREST: MATURITY DATE: DATED DATE: CUSIP: September I, _ REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS The Redevelopment Agency of the City of Seal Beach, a public body, corporate and politic, duly organized and existing under and pursuant to the laws of the State of California (the "Agency"), for value received hereby promises to pay to the registered owner specified above, or registered assigns, on the Maturity Date specified above the Principal Amount specified above, together with interest thereon from the interest payment date next preceding the date of authentication of this Bond (unless this Bond is authenticated during the period from the 16th day of the month next preceding an interest payment date to and including such interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated on or before the fifteenth day of the month next preceding the first interest payment date, in which event it shall bear interest from the dated date shown above) until the principal hereof shall have been paid, at the Rate of Interest specified above, payable on March 1, 2001, and semiannually thereafter on September 1 and March I in each year. Both the interest hereon and principal hereof are payable in lawful money of the United States of America. The principal (or redemption price) hereof is payable upon surrender hereof at maturity or the earlier redemption hereof at the corporate trust office of BNY Western Trust Company (the "Trustee") in Los Angeles, California, or at such other office as the Trustee may designate (the "Trust Office"). Interest hereon is payable by check mailed on each interest payment date by first class mail to the person in whose time this Bond is registered at the close of business on the 15th day of the month next preceding the applicable interest payment date at such person's address as it appears on the registration books of the Trustee, or upon written request received by the Trustee prior to the fifteenth day of the month preceding an interest payment date of an Owner of all of the outstanding Bonds, by transfer in immediately available funds to an account within the continental United States designated by such Owner. This Bond is one of a duly authorized issue of bond of the Agency designated "Redevelopment Agency of the City of Seal Beach Tax Allocation Refunding Bonds, 2000 Series A (Riverfront Redevelopment Project)" (the "Bonds"), limited in aggregate principal amount to $ _, issued under the provisions of the Community Redevelopment Law of the State of California, as supplemented and amended (the "Law"), and pursuant to the provisions of an Indenture, dated as of December 1, 2000 (the "Indenture"), between the Agency and the Trustee. All Bonds are equally and ratably secured in accordance with the terms and conditions of the Indenture, and reference is hereby made to the Indenture, to any indentures supplemental thereto and to the Law for a description of the terms on which the Bonds are issued, for the provisions with regard to the nature and extent of the security provided for the Bonds and of the nature, extent and manner of enforcement of such security, and for a statement of the rights of the registered owners of the Bonds; and all the terms of the Indenture and the Law are hereby incorporated herein and constitute a contract between the Agency and the registered owner from time to time of this Bond, and to all the provisions thereof the registered owner of S7284\0001\634642.3 A-1 DHAPT 12/5/00 this Bond, by his acceptance hereof, consents and agrees. Each registered owner hereof shall have recourse to all the provisions of the Law and the Indenture and shall be bound by all the terms and conditions thereof. The Bonds are issued to provide funds to aid in the financing and refinancing of the Riverfront Redevelopment Project, a duly adopted redevelopment project in Seal Beach, California, as more particularly described in the Indenture. The Bonds are special obligations of the Agency and are payable, as to interest thereon, principal thereof and any premiums upon the redemption thereof, exclusively from the Tax Revenues (as that term is defined in the Indenture and herein called the 'Tax Revenues") and certain other funds, and the Agency is not obligated to pay them except from the Tax Revenues and such other funds. The Bonds are equally secured by a pledge of, and charge and lien upon, the Tax Revenues, and the Tax Revenues constitute a trust fund for the security and payment of the interest on and principal of and redemption premiums, if any, on the Bonds. Additional tax allocation bonds payable from the Tax Revenues may be issued which will rank equally as to security with the Bonds, but only subject to the terms and conditions set forth in the Indenture. The Agency hereby covenants and warrants that, for the payment of the interest on and principal of and redemption premium, if any, on this Bond and all other Bonds issued under the Indenture when due, there has been created and will be maintained by the Trustee a special fund into which all Tax Revenues shall be deposited, and m an irrevocable charge the Agency has allocated the Tax Revenues to the payment of the interest on and principal of and redemption premiums, if any, on the Bonds, and the Agency will pay promptly when due the interest on and principal of and redemption premium, if any, on this Bond and all other Bonds of this issue and all additional tax allocation bonds authorized by the Indenture out of said special fund, all in accordance with the terms and provisions set forth in the Indenture. The Bonds maturing on or after September 1, 2008 shall be subject to redemption as a whole or in part, by such maturities as the Agency shall designate (which designation shall be in writing and shall be delivered to the Trustee no later than 45 days prior to the redemption date) prior to their maturity at the option of the Agency on any date on or after September 1, 2007, from funds derived by the Agency from any source, at the following redemption prices (expressed as percentages of the principal amount of Bonds called for redemption), together with interest accrued thereon to the date fixed for redemption: Redemption Dates Redemption Price September 1, 2007 through August 31, 2008 102% September 1, 2008 through August 31, 2009 101 September I, 2009 and thereafter 100 The Bonds maturing on September 1, _, September 1, _ and September 1, _ shall be subject to mandatory sinking fund redemption by lot, at a redemption price equal to the principal amount thereof to be redeemed, without premium, on September 1 of each year commencing September I, _, September 1, _, and September 1, _, respectively, in the aggregate respective principal amounts set forth in the Indenture. As provided in the Indenture, notice of redemption of this Bond shall be mailed by first class mail not less than thirty (30) days before the redemption date to the registered owner hereof, but failure to receive such notice shall not affect the sufficiency of such proceedings for redemption. If notice of redemption has been duly given as aforesaid and money for payment of the above-described redemption price is held by the Trustee, then such Bonds shall, on the redemption date designated in such notice, become due and payable at the above-described redemption price; and from and after the date so designated interest on the Bonds so called for redemption shall cease to accrue and registered owners of such Bonds shall have no rights in respect thereof except to receive payment of such redemption price thereof. If an event of default, as defined in the Indenture, 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; except that the Indenture provides that in certain events such declaration and its consequences S7284\0001\634642.3 A-2 DNAPT 12/5/00 may be rescinded by the registered owners of at least a majority in aggregate principal amount of the Bonds then outstanding. The owner of any Bond or Bonds may surrender the same at the Trust Office in exchange for an equal aggregate principal amount of fully registered Bonds of any other authorized denominations, in the manner, subject to the conditions and upon the payment of the charges provided in the Indenture. This Bond is transferable, as provided in the Indenture, only upon a register to be kept for that purpose at the Trust Office by the registered owner hereof in person, or by his duly authorized attorney, upon surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new fully registered Bond or Bonds, in the same aggregate principal amount, shall be issued to the transferee in exchange therefor as provided in the Indenture, and upon payment of the charges therein prescribed. The Agency and the Trustee may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the interest hereon and principal hereof and redemption premium, if any, hereon and for all other purposes. The Trustee shall not be required to register the transfer or exchange of any Bond during the period in which the Trustee is selecting Bonds for redemption or any Bond selected for redemption. The rights and obligations of the Agency and of the registered owners of the Bonds may be amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such amendment shall (1) extend the maturity of this Bond, or reduce the interest rate hereon, or otherwise alter or impair the obligation of the Agency to pay the interest hereon or principal hereof or any premium payable on the redemption hereof at the time and place and at the rate and in the currency provided herein, without the express written consent of the registered owner of this Bond, or (2) permit the creation by the Agency of any mortgage, pledge or lien upon the Tax Revenues superior to or on a parity with the pledge and lien created in the Indenture for the benefit of the Bonds and all additional tax allocation bonds authorized by the Indenture or (3) reduce the percentage of Bonds required for the written consent to an amendment of the Indenture, or (4) modify any rights or obligations of the Trustee without its prior written assent thereto; all as more fully set forth in the Indenture. This Bond is not a debt of the City of Seal Beach, the State of California or any of its political subdivisions, and neither said City, said State nor any of its political subdivisions is liable hereon, nor in any event shall this Bond or any interest hereon or any redemption premium hereon be payable out of any funds or properties other than those of the Agency. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction, and neither the members of the Agency nor any persons executing the Bonds shall be personally liable on the Bonds by reason of their issuance. This Bond shall not be entitled to any benefits 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. It is hereby certified that all of the acts, conditions and things required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law and that the amount of this Bond, together with all other indebtedness of the Agency, does not exceed any limit prescribed by the Constitution or laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. S7289\0001\639692.3 A-3 DAAPT 12/5/00 IN WITNESS WHEREOF, the Redevelopment Agency of the City of Seal Beach has caused this Bond to be executed in its name and on its behalf by its Chairman and attested by its Secretary, and has caused its seal to be reproduced hereon, and has caused this Bond to be dated December- 2000. (Seal) Attest: Secretary SEAL BEACH REDEVELOPMENT AGENCY By Chairman S72B4\0001\634642.3 A-4 DRAFT 12/5/00 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION[ This is one of the Bonds described in the within -mentioned Indenture and registered on the Bond registration books. Date: BNY WESTERN TRUST COMPANY, as Trustee By Authorized Signatory [FORM OF ASSIGNMENT[ For value received the undersigned doles) hereby sell, assign and transfer unto whose tax identification number is , the within -mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s) attorney to transfer the same on the books of the Trustee with full power of substitution in the premises. Dated: Signature guaranteed: NOTE: The signature(s) on this Assignment must correspond with the Daniels) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. NOTICE: Signature must be guaranteed by a member of an institution which is a participant in the Securities Transfer Agent Medallion Program (STAMP) or other similar program. S9284\0001\634642.3 A-5 DRAFT 12/5/00 STATEMENT OF INSURANCE (to come) S7284\0001\634642.3 A-6 DF 12/5/00 APPENDIX B [Form of Expense Fund Requisition] REQUISITION NO. with reference to Redevelopment Agency of the City of Seal Beach Tax Allocation [Refunding) Bonds, _ Series (Riverfront Redevelopment Project) I. The Redevelopment Agency of the City of Seal Beach (the "Agency") hereby requests BNY Western Trust Company, as trustee (the 'Trusted') pursuant to that certain Indenture dated as of December I, 2000 (the "Indenture") between the Agency and the Trustee, under the terms of which the Agency has issued the above -captioned Bonds to pay from the moneys in the Expense Fund established pursuant to Section 5.03 of the Indenture (the "Expense Fund"), the amounts shown on Schedule I attached hereto to the parties indicated in Schedule I. II. The payees, the purposes for which the costs have been incurred, and the amount of the disbursements requested are itemized on Schedule I hereto. IB. Each obligation mentioned in Schedule I hereto has been properly incurred and is a proper charge against the Expense Fund. None of the items for which payment is requested has been reimbursed previously from the Expense Fund. DATED: SEAL BEACH REDEVELOPMENT AGENCY By: Executive Director 57284\0001\634642.3 B-1 MWT 12/5/00 REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH and BNY WESTERN TRUST COMPANY as Trustee INDENTURE Dated as of December 1, 2000 Relating to Redevelopment Agency of the City of Seal Beach Subordinate Tax Allocation Bonds, 2000 Series B (Riverfront Redevelopment Project) S7284\0001\635693.2 DRAFT 12/5/00 TABLE OF CONTENTS Page INDENTURE....................................................................... 1 RECITALS......................................................................... 1 ARTICLE I DEFINITIONS; EQUAL SECURITY ..................................... 2 SECTION 1.01. Definitions..................................................... 2 SECTION 1.02. Equal Security ................................................. 13 ARTICLE 11 THE BONDS; SERIES 2000 B BOND PROVISIONS ....................... 13 SECTION 2.01. Authorization................................................. 13 SECTION 2.02. Terns of Series 2000 B Bonds ................................. 4 — 13 SECTION 2.03. Form of Series 2000 B Bonds .........................4.4...4..4.. 14 SECTION 2.04. Redemption of Series 2000 B Bonds; Selection of Bonds; Purchase in SECTION 6.03. Extension or Funding of Claims for Interest .......................... Lieu of Redemption; Notice ...................................... 14 SECTION 2.05. Execution of Bonds....................4..444................... 16 SECTION 2.06. Transfer and Registration of Bonds ..... 4 .......................... 17 SECTION 2.07. Exchange of Bonds ............................................. 17 SECTION 2.08. Bond Registration Books ........................................ 17 SECTION 2.09. Mutilated, Destroyed, Stolen or Lost Bonds .......................... 17 SECTION 2.10. Temporary Bonds .............................................. 18 SECTION 2.11. Validity of Bonds .......................................... 4 ... 18 SECTION 2.12. Book -Entry System ..................................... 4....... 18 ARTICLE IB ISSUANCE OF SERIES 2000 BONDS; APPLICATION OF PROCEEDS OF SALE.............................................................. 19 SECTION 3.01. Issuance of Series 2000 B Bonds .................................. 19 SECTION 3.02. Sale of Series 2000 B Bonds — Allocation of Proceeds Among Funds and Accounts ................................................. 19 ARTICLE IV ISSUANCE OF ADDITIONAL BONDS .................................. 20 SECTION 4.01. Conditions for the Issuance of Additional Bonds ...................... 20 SECTION 4.02. Procedure for the Issuance of Additional Bonds ...................... 21 ARTICLE V SURPLUS TAX REVENUES; CREATION OF FUNDS SECTION 5.01. Pledge of Surplus Tax Revenues .................................. SECTION 5.02. Debt Service Fund; Receipt and Deposit of Surplus Tax Revenues ........ SECTION 5.03. Establishment of Other Funds ..................................... SECTION 5.04. Redevelopment Fund; Housing Fund ............................... SECTION 5.05. Expense Fund ................................................. SECTION 5.06. Establishment and Maintenance of Accounts for Use of Moneys in the Debt Service Fund ............................................. SECTION 5.07. Investment of Moneys in Funds and Accounts ........................ ARTICLE VI COVENANTS OF THE AGENCY ...................................... SECTION 6.01. Punctual Payment .............................................. SECTION 6.02. Against Encumbrances .......................................... SECTION 6.03. Extension or Funding of Claims for Interest .......................... SECTION 6.04. Management and Operation of Properties ........................... SECTION 6.05. Payment of Claims ........... ......... :........................ SECTION 6.06. Records and Accounts; Financial and Project Statements ............... SECTION 6.07. Protection of Security and Rights of Owners ......................... SECTION 6.08. Payment of Taxes and Other Charges ............................... SECTION 6.09. Financing the Project ........................................... SECTION 6.10. Taxation of Leased Property ...................................... SECTION 6.11. Disposition of Property in Project Area ............................. 22 22 22 22 22 23 23 24 25 25 25 25 26 26 26 26 26 26 26 27 57284\0001\635693.2 -t- DRAFT 12/5/00 SECTION 6.12. Amendment of Redevelopment Plan ................................ 27 SECTION 6.13. Tax Revenues ................................................. 27 SECTION 6.14. Further Assurances .................. . .......................... 27 SECTION 6.15. Tax Covenants; Rebate Fund ..................................... 27 SECTION 6.16. Agreements with Taxing Agencies ................................. 28 SECTION 6.17. Annual Review of Tax Revenues .................................. 28 SECTION 6.18. Housing Fund ................................................. 28 ARTICLE VII THE TRUSTEE ...................................................... 28 SECTION 7.01. Appointment of Trustee ......................................... 28 SECTION 7.02. Acceptance of Trusts ............................................ 29 SECTION 7.03. Fees, Charges and Expenses of Trustee ............................. 31 SECTION 7.04. Notice to Bond Owners of Default ................................. 31 SECTION 7.05. Intervention by Trustee .......................................... 31 SECTION 7.06. Removal of Trustee ............................................. 31 SECTION 7.07. Resignation by Trustee .......................................... 31 SECTION 7.08. Appointment of Successor Trustee ................................. 31 SECTION 7.09. Merger or Consolidation ......................................... 31 SECTION 7.10. Concerning any Successor Trustee ................................. 32 SECTION 7.11. Appointment of Co -Trustee ...................................... 32 SECTION 7.12. Indemnification; Limited Liability of Trustee ........................ 32 ARTICLE VIII AMENDMENT OF THE INDENTURE ................................... 33 SECTION 8.01. Amendment by Consent of Owners ................................ 33 SECTION 8.02. Disqualified Bonds ............................................. 33 SECTION 8.03. Endorsement or Replacement of Bonds After Amendment .............. 34 SECTION 8.04. Opinion of Counsel ............................................. 34 ARTICLE LX EVENTS OF DEFAULT AND REMEDIES OF OWNERS ................... 34 SECTION 9.01. Events of Default and Acceleration of Maturities ..................... 34 SECTION 9.02. Application of Funds Upon Acceleration ............................ 35 SECTION 9.03. Other Remedies of Owners ....................................... 35 SECTION 9.04. Non -Waiver ................................................... 35 SECTION 9.05. Actions by Trustee as Attomey-in-Fact ............................. 36 SECTION 9.06. Remedies Not Exclusive ......................................... 36 SECTION 9.07. Owners' Direction of Proceedings .................................. 36 SECTION 9.08. Limitation on Owners' Right to Sue ................................ 36 ARTICLE X DEFEASANCE...................................................... 37 SECTION 10.01. Discharge of Indebtedness ...................................... 37 SECTION 10.02. Unclaimed Moneys ............................................ 38 ARTICLE XI MISCELLANEOUS.................................................. 38 SECTION 11.01. Liability of Agency Limited to Tax Revenues ....................... 38 SECTION 11.02. Benefits of Indenture Limited to Parties ............................ 38 SECTION 11.03. Successor Is Deemed Included in All References to Predecessor ........ 38 SECTION 11.04. Execution of Documents by Owners ............................... 38 SECTION 11.05. Waiver of Personal Liability ..................................... 39 SECTION 11.06. Acquisition of Bonds by Agency ................................. 39 SECTION 11.07. Content of Certificates and Reports ............................... 39 SECTION 11.08. Notice to Bond Insurer ......................................... 39 SECTION 11.09. Funds and Accounts ........................................... 40 SECTION 11.10. Article and Section Headings and References ....................... 40 SECTION 11.11. Partial Invalidity .............................................. 40 SECTION 11.12. Execution in Several Counterparts ................................ 40 57284\0001\635693.2 -ii- DRAFT 12/5/00 SECTION 11. 13. Business Days ................................................ 40 SECTION 11.14. Governing Law ............................................... 40 SECTION 11.15. Notices .................................................... 40 APPENDIX A [Form of Series 2000 B Bond] ........................................... I APPENDIX B [Form of Expense Fund Requisition] ...................................... I S7284\0001\635693.2 -iii- DRAFT 12/5/00 1111174111O1711 This Indenture (the "Indenture') is made and entered into as of December I, 2000, by and between the Redevelopment Agency of the City of Seal Beach, a public body, corporate and politic, organized and existing under and by virtue of the laws of the State of California (the "Agency"), and BNY Western Trust Company, a state banking corporation duly organized and existing under the laws of the State of California, as trustee (the "Trustee'). RECITALS: The Agency is a redevelopment agency, a public body, corporate and politic, duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Community Redevelopment Law (Part I of Division 24 of the Health and Safety Code of the State of California and referred to herein as the "Law") and the powers of such agency include the power to issue bonds for any of its corporate purposes. A. A redevelopment plan for a redevelopment project known and designated as the "Riverfront Redevelopment Project" (the "Project Area") has been adopted and approved and all requirements of law for, and precedent to, the adoption and approval of said plan have been duly complied with. B. The plan contemplates that the Agency will issue its bonds to finance a portion of the cost of such redevelopment. C. The Agency, by Resolution No. 00-_, adopted December 11, 2000, authorized the issuance of its Redevelopment Agency of the City of Seal Beach, Tax Allocation Refunding Bonds, 2000 Series A (Riverfront Redevelopment Project) and its Redevelopment Agency of the City of Seal Beach, Subordinate Tax Allocation Bonds, 2000 Series B (Riverfront Redevelopment Project) for the purpose of refunding and defeasing the Refunded Bonds, and for the purpose of financing additional costs of the Project. D. The Agency has determined to issue the Series 2000 B Bonds pursuant to this Indenture and to secure the Series 2000 B Bonds in the manner provided herein. E. The Agency has determined that all things necessary to cause the Series 2000 B Bonds, when authenticated by the Trustee and issued as in this Indenture provided, to be legal, special obligations of the Agency, enforceable in accordance with their terms, and to constitute this Indenture a valid agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the creation, execution and delivery of this Indenture and the creation, execution and issuance of the Series 2000 B Bonds, subject to the terms hereof, have in all respects been duly authorized. NOW THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, and the interest and premium, if any, on, all Bonds at any time issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terns and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by Owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the Agency does hereby covenant and agree with the Trustee, for the benefit of the respective holders from time to time of the Bonds, as follows: S7284\0001\635693.2 - I - DIrAPT 12/5/00 ARTICLE I DEFINITIONS; EQUAL SECURITY SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of the Bonds and of any certificate, opinion, report, request or other document herein or therein mentioned have the meanings herein specified. Accreted Value The term "Accreted Value" means, with respect to any Capital Appreciation Bonds, as of any date of calculation, the sum of the initial amount thereof and the interest seemed and compounded thereon, as determined in accordance with the provisions of the Supplemental Indenture authorizing issuance of such Bonds, to such date of calculation. Additional Allowanc The term "Additional Allowance" means, as of the date of calculation, the amount of Tax Revenues which, as shown in a Consultant's Report, are estimated to be receivable by the Agency in the next Fiscal Year m a result of increases in the assessed valuation of taxable property in the Project Area due to either (i) construction which has been completed but has not yet been reflected on the tax roll, or (ii) transfer of ownership or any other interest in real property, which is not then reflected on the tax roll. Aaencv The term "Agency" means the Redevelopment Agency of the City of Seal Beach, a public body, corporate and politic, duly organized and existing under and pursuant to the Law. Annual Debt Service, Averaae Annual Debt Service: Maximum Annual Debt Service; Combined Maximum Annual Debt Service The term "Annual Debt Service" means, for each Bond Year, the sum of (1) the interest falling due on all Outstanding Bonds in such Bond Year, assuming that all Outstanding Serial Bonds are retired as scheduled and that all Outstanding Term Bonds, if any, are redeemed from the Sinking Account, as may be scheduled (except to the extent that such interest is to be paid from the proceeds of sale of any Bonds), (2) the principal amount of the Outstanding Serial Bonds, if any, maturing by their terms in such Bond Year, and (3) the minimum amount of such Outstanding Term Bonds required to be paid or called and redeemed in such Bond Year. With respect to Capital Appreciation Bonds, the Accreted Value payment shall be deemed due on the scheduled redemption or payment date of such Capital Appreciation Bonds. If any Bonds bear interest payable pursuant to a variable interest rate formula, the interest rate on such Bonds for periods when the actual interest rate cannot yet be determined shall be assumed to be equal to the greater of (a) the most recently published Bond Buyer 25 Bond Revenue Index (or comparable index if such 25 Bond Revenue Index is no longer published) or (b) the average variable rate of interest home by such Bonds during the preceding 36 months or, if such Bonds were not outstanding during all of the preceding 36 months, the highest interest rate home by variable interest rate debt for which the interest rate is computed by reference to a variable interest rate formula comparable to that utilized for such Bonds. "Annual Debt Service" shall not include (a) interest on Bonds which is to be paid from amounts constituting capitalized interest or (b) principal and interest allocable to that porion of the proceeds of any Bonds required to remain unexpended and to be held in escrow pursuant to the terms of a Supplemental Indenture, provided that (i) projected interest earnings on such amounts, if any, deposited by the Agency in the Interest Account, are sufficient to pay the interest due on such portion of the Bonds so long as it is required to be held in escrow and (ii) the conditions for the release of such proceeds from escrow, insofar as they relate to Tax Revenue coverage and satisfaction of the Reserve Account Requirement, are substantially the same as those for the issuance of Additional Bonds. S7284\0001\635693.2 -2- DRAM 12/5/00 all Bond Years. The term "Average Annual Debt Service" means the average Annual Debt Service over The term "Maximum Annual Debt Service" means the largest Annual Debt Service during the period from the date of calculation through the final maturity date of any Outstanding Bonds. The term "Combined Maximum Annual Debt Service" means the largest sum in any Bond Year of (i) Annual Debt Service plus (ii) Annual Debt Service as defined in the Senior Bond Indenture during the period from the date of calculation through the final maturity date of any Outstanding Bonds. Authorized Investments The term "Authorized Investments" means any of the following. which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein, as certified by the Agency to the Trustee: A. Federal Securities; B. Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: - Export -Import Bank - Farm Credit System Financial Assistance Corporation - Rural Economic Community Development Administration - General Services Administration - U.S. Maritime Administration - Small Business Administration - Government National Mortgage Association (GNMA) - U.S. Department of Housing & Urban Development (PHA's) - Federal Housing Administration - Federal Financing Bank; C. Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: Senior debt obligations rated "An" by Moody's or "AAA" by Fitch issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC) Obligations of the Resolution Funding Corporation (REFCORP) Senior debt obligations of the Federal Home Loan Bank System Senior debt obligations of other Government Sponsored Agencies approved by the Bond Insurer; D. U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks (including the Trustee and its affiliates) which have a rating on their short term certificates of deposit on the date of purchase of "A-1" or A-1+" by S&P and "P -I" by Moody's or the equivalent rating by Fitch and maturing no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank.); E. Commercial paper which is rated at the time of purchase in the single highest classification, "A -W' by S&P and "P-1" by Moody's or the equivalent rating by Fitch and which matures not more than 270 days after the date of purchase; F. Investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P, including funds for which the Trustee and its affiliates provide investment advisory or other management services; 57284\0001\635693.2 -3- DRAFT 12/5/00 G. Pre -refunded Municipal Obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (1) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of S&P and Moody's or Fitch or any successors thereto; or (2) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph A above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; H. General obligations of states with a rating of at least "A2/A" or higher by Moody's, S&P or Fitch; I. Investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) 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, of the guarantor is rated at least "AA" by S&P and "Aa" by Moody's; provided that, by the terms of the investment agreement: a. interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service (or, if the investment agreement is for the Redevelopment Fund, construction draws) on the Bonds; b. the invested funds are available for withdrawal without penalty or premium, at any time upon not more than four Business Days prior notice; the Agency and the Trustee agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; c. the investment agreement shall state that is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pan passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; d. the Agency or the Trustee receives the opinion of domestic counsel (which opinion shall be addressed to the Agency and the Insurer) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the Bond Insurer; e. the investment agreement shall provide that if during its term (1) the provider's rating by either S&P or Moody's falls below "AA-" or "AaY respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider's books) to the Agency, the Trustee or a third party acting solely as agent therefor (the "Holder of the Collateral") collateral free and clear of any third -party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S & P and Moody's to maintain S7284\0001\635693.2 -4- DRAFT 12/5/00 an "A" rating in an "A" rated structured financing (with a market value approach); or (ii) repay the principal of and accrued but unpaid interest on the investment, and (2) the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below "A-" or "A3", respectively, the provider must, at the direction of the Agency or the Trustee (who shall give such direction if so directed by the Bond Insurer), within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Agency or Trustee, and f the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); g. the investment agreement must provide that if during its term (1) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the Agency or the Trustee (who shall give such direction if so directed by the Bond Insurer), be accelerated and Amounts invested and accrued but unpaid interest thereon shall be repaid to the Agency or Trustee, as appropriate, and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. ("event of insolvency"), the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Agency or Trustee, as appropriate. Book Entry Bonds The term "Book -Entry Bonds" means Bonds of any Series registered in the name of the Nominee of a Depository as the Owner thereof pursuant to the terms and provisions of Section 2.12 hereof. Bonds. Senior Bonds, Series 2000 B Bonds, Additional Bonds, Capital Appreciation Bonds, Serial Bonds. Term Bonds The term "Bonds" means the Series 2000 B Bonds and all Additional Bonds. The term "Senior Bonds" means the Redevelopment Agency of the City of Seal Beach, Tax Allocation Refunding Bonds, 2000 Series A (Riverfront Redevelopment Project) and any bonds issued on a parity therewith pursuant to the Senior Bond Indenture. The term "Series 2000 B Bonds" means the Redevelopment Agency of the City of Seal Beach, Subordinate Tax Allocation Bonds, 2000 Series B (Riverfront Redevelopment Project). The term "Additional Bonds" means all tax allocation bonds of the Agency authorized and executed pursuant to the Indenture and issued and delivered in accordance with Article IV. The term "Capital Appreciation Bonds" means any Additional Bonds described as such when issued. The term "Serial Bonds" means Bonds for which no mandatory sinking account payments are provided. The term "Term Bonds" means Bonds which are payable on or before their specified maturity dates from mandatory sinking account payments established for that purpose and calculated to retire such Bonds on or before their specified maturity dates. S7264\0001\635693.2 -5- DINPT 12/5/00 Bond Insurance Polic The term "Bond Insurance Policy" means the municipal bond insurance policy, if any, issued by the applicable Bond Insurer and guaranteeing, in whole or in part, the payment of principal of and interest on a Series of Bonds. Bond Insurer The term "Bond Insurer" means the issuer or issuers of a policy or policies of municipal bond insurance (other than a Qualified Reserve Account Credit Instrument) obtained by the Agency to insure the payment of principal of and interest on a Series of Bonds issued under the Indenture, when due otherwise than by acceleration, and which, in fact, are at any time insuring such Series of Bonds. For the purposes of this definition, all consents, approvals or actions required by the Bond Insurer shall be unanimous action of all Bond Insurers if there is more than a single Bond Insurer. Bond Year The term "Bond Year" means each twelve-month period extending from October 2 in one calendar year to October 1 of the succeeding calendar year, both dates inclusive; except that the first Bond Year shall extend from the Closing Date to October 1, 2001. Business Dav The term "Business Day" means a day other than a Saturday, a Sunday or a day on which banks located in the city where the corporate trust office of the Trustee is located are required or authorized to remain closed. Certificate of the Auencv The term "Certificate of the Agency" means an instrument in writing signed by the Chairman or the Executive Director of the Agency, or by any other officer of the Agency duly authorized by the Agency for that purpose. CitV The term "City" means the City of Seal Beach, California. Closing Date The term "Closing Date" means the date of delivery of a Series of Bonds to the original purchaser thereof. The Closing Date for the Series 2000 B Bonds is December _, 2000. Code The term "Code" means the Internal Revenue Code of 1986, and any regulations promulgated thereunder. Consultant's Report The term "Consultant's Report" means a report signed by an Independent Financial Consultant or an Independent Redevelopment Consultant, as may be appropriate to the subject of the report, and including: (1) a statement that the person or firm making or giving such report has read the pertinent provisions of this Indenture to which such report relates; (2) a brief statement as to the nature and scope of the examination or investigation upon which the report is based; S7284\0001\635693.2 -6- mix" 12/5/00 (3) a statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said Independent Financial Consultant or Independent Redevelopment Consultant to express an informed opinion with respect to the subject matter referred to in the report. Coun The term "County" means the County of Orange, California. Debt Service Fund The term "Debt Service Fund" means the fund by that name held by the Trustee pursuant to Section 5.02. Deoository The tern "Depository" means any securities depository acting as Depository pursuant to Section 2.12 hereof. DTC The term "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. Expense Fund The term "Expense Fund" means the fund by that name held by the Trustee pursuant to Section 5.05. Federal Securities The term "Federal Securities" means (a) United States Treasury notes, bonds, bills or certificates of indebtedness, or other evidences of indebtedness secured by the full faith and credit of the United States of America and any other securities now or hereafter authorized both the interest on and principal of which are guaranteed directly by the full faith and credit of the United States of America; (b) pre -refunded municipal obligations rated "AAA" by S&P or the equivalent rating by Moody's or Fitch; and (c) obligations of [specified federal agencies] m and to the extent that such securities are eligible for the legal investment of Agency funds. Final Compounded Amount The term "Final Compounded Amount" means the Accreted Value of a Capital Appreciation Bond at maturity. Fiscal Year The tern "Fiscal Year" means the period commencing on July 1 of each year and terminating on the next succeeding June 30, or any other annual accounting period hereafter selected and designated by the Agency as its Fiscal Year in accordance with the Law and identified in writing to the Trustee. Fitch The term "Fitch" means Fitch, Inc., its successors and assigns 57284\0001\635693.2 -7- paAFT 12/5/00 Housin¢ Fund The term "Housing Fund" means the Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the Law and held by the Agency. Indenture The term "Indenture" means this Indenture and all Supplemental Indentures. Independent Certified Public Accountant The term "Independent Certified Public Accountant" means any certified public accountant or firth of such accountants duly licensed and entitled to practice and practicing as such under the laws of the State of California, appointed and paid by the Agency, and who, or each of whom: (1) is in fact independent and not under the domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as a member, officer or employee of the Agency, but who may be regularly retained to make annual or other audits of the books of or reports to the Agency. Independent Financial Consultant The term "Independent Financial Consultant" means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the Agency and who, or each of whom: (1) is in fact independent and not under the domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as a member, officer or employee of the Agency, but who may be regularly retained to make annual or other reports to the Agency. Independent Redevelopment Consultant The term "Independent Redevelopment Consultant" means a consultant or firth of such consultants generally recognized to be well qualified in the field of consulting relating to tax allocation bond financing by California redevelopment agencies, appointed and paid by the Agency, and who, or each of whom: (1) is in fact independent and not under the domination of the Agency; (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as a member, officer or employee of the Agency, but who may be regularly retained to make annual or other reports to the Agency. Information Services The term "Information Services" means Financial Information, Inds "Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services—Called Bond Service," 65 Broadway, 16th Floor, New York, New York 10006; Moody's "Municipal and Government," 99 Church Street, gth Floor, New York, New York 10007, Attention: Municipal News Reports; and Standard and Poor's "Called Bond Record," 25 Broadway, 3rd S7284\0001\635693.2 - 8- DnABT 12/5/00 Floor, New York, New York 10004; or to such other addresses and/or such other services providing information with respect to called bonds as the Agency may designate to the Trustee in writing. Interest Account The term "Interest Account" means the account by that name within the Debt Service Fund held by the Trustee pursuant to Section 5.06(a). Interest Payment Date The tern "Interest Payment Date" means each April 1 or October I on which interest on any Series of Bonds is scheduled to be paid, commencing April 1, 2001. Law The term "Law" means the Community Redevelopment Law of the State of California (being Part 1 of Division 24 of the Health and Safety Code of the State of California, as amended), and all laws amendatory thereof or supplemental thereto. Letter of Representations The term "Letter of Representations" means the letter of the Agency and the Trustee delivered to and accepted by the Depository on or prior to the issuance of a Series of Book-Entry Bonds setting forth the basis on which the Depository serves as depository for such Book-Entry Bonds, as originally executed or as it may be supplemented or revised or replaced by a letter to a substitute depository. Moodv's The term "Moody's" means Moody's Investors Service, its successors and assigns. Nominee The term 'Nominee" means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.12 hereof. Outstandine The term "Outstanding" when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 8.02) all Bonds except — (1) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds paid or deemed to have been paid within the meaning of Section 10.01; and (3) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Agency pursuant to the Indenture. Owner The term "Owner" means the registered owner of any Outstanding Bond according to the registration books held by the Trustee pursuant to Section 2.08. Participants The term "Participants" means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Book-Entry Bonds as securities depository. S7264\0001\635693.2 -9- DRAFT 12/5/00 Plan Limitations The term "Plan Limitations" means the limitations contained or incorporated in the Redevelopment Plan on the aggregate amount of taxes which may be divided and allocated to the Agency pursuant to the Redevelopment Plan. Principal Account The term "Principal Account" means the account by that time within the Debt Service Fund held by the Trustee pursuant to Section 5.06(b). Principal Payment Date The term "Principal Payment Date" means any date on which principal of any Series of Bonds is scheduled to be paid, which dates shall be as set forth in Section 2.02 hereof for the Series 2000 B Bonds. Proiect The term "Project" means the undertaking of the Agency pursuant to the Redevelopment Plan and the Law for the redevelopment of the Project Area. Project Area The term "Project Area" means the project area described in the Redevelopment Plan, known as Riverfront Redevelopment Project. Oualified Reserve Account Credit Instrument The term "Qualified Reserve Account Credit Instrument" means an irrevocable standby or direct -pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Trustee pursuant to Section 5.06(d), provided that all of the following requirements are met: (i) at the time of issuance of the instrument, the long-term credit rating of such bank is within the highest rating category of Moody's Investors Service and Standard & Poor's, or the claims paying ability of such insurance company is rated within the highest rating category of A.M. Best & Company and Standard & Pooes Ratings Group; (ii) such letter of credit or surety bond has a term of at least 12 months; (iii) such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve Account Requirement with respect to which funds are proposed to be released pursuant to Section 5.06(d); and (iv) the Trustee is authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder amounts necessary to carry out the purposes specified in Section 5.06(d), including the replenishment of the Interest Account, the Principal Account or the Sinking Account. Record Date The term "Record Date" means with respect to any Interest Payment Date, the fifteenth calendar day of the month immediately preceding such Interest Payment Date, whether or not such day is a Business Day. Redevelopment Fund The term "Redevelopment Fund" means the Riverfront Redevelopment Project Redevelopment Fund held by the Agency pursuant to Section 5.03. Redevelopment Plan The term "Redevelopment Plan" means the Redevelopment Plan for the Project Area, adopted and approved as the official Redevelopment Plan for the Project Area by Ordinance No. 780 57264\0001\635693.2 -10- DRAFT 12/5/00 adopted by the City Council of the City on March 3, 1969, together with all amendments thereof or supplements thereto heretofore or hereafter made in accordance with the Law. Reserve Account The term "Reserve Account" means the account by that name within the Debt Service Fund held by the Trustee pursuant to Section 5.06(d). Reserve Account Requirement The term "Reserve Account Requirement" (to be confirmed by the Agency to the Trustee upon the Trustee's request) means, as of any calculation date, with respect to each Series of Bonds, an amount equal to the least of (i) ten percent (10%) of the proceeds (within the meaning of Section 148 of the Code) of that portion of such Series of Bonds Outstanding with respect to which Annual Debt Service is calculated, (ii) 125% of Average Annual Debt Service of such Series or (iii) Maximum Annual Debt Service of such Series. S&P The term "S&P" means Standard & Poor's, its successors and assigns. Securities Depositories The term "Securities Depositories" means: The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax -(516) 277-4039 or 4190; Midwest Securities Trust Company, Capital Structures -Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax -(312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex{215) 496-5058; or such other addresses and/or such other securities depositories as the Agency may designate to the Trustee in writing. Senior Bond Indenture The term "Senior Bond Indenture" means the Indenture dated as of December 1, 2000 by and between the Agency and the Senior Bond Trustee, authorizing the issuance of the Senior Bonds, together with all amendments thereof and supplements thereto entered into in accordance with the provisions thereof. Senior Bond Trustee The term "Senior Bond Trustee" means the trustee acting as such under the Senior Bond Indenture. Series The term "Series", when used with reference to the Bonds, means all of the Bonds authenticated and delivered on original issuance and identified pursuant to the Indenture or a Supplemental Indenture authorizing such Bonds as a separate Series of Bonds, and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to the Indenture. Sinking Account The tern "Sinking Account" means the account by that name within the Debt Service Fund held by the Trustee pursuant to Section 5.06(c). 87284\0001\635693.2 -It- DaAH 12/5/00 Sinking Account Installmen The term 'Sinking Account Installment" means the amount of money required by or pursuant to this Indenture to be paid by the Agency on any single date toward the retirement of any particular Term Bonds of any particular Series on or prior to their respective stated maturities. Sinking Account Payment Date The term 'Sinking Account Payment Date" means any date on which Sinking Account Installments on any Series of Bonds are scheduled to be paid. Snecial Fund The term 'Special Fund' means the Riverfront Redevelopment Project Special Fund held by the Agency pursuant to Section 5.02. Supplemental Indenture The term "Supplemental Indenture" means any indenture then in full force and effect which has been entered into by the Agency and the Trustee, amendatory of or supplemental to this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. Surplus Tax Revenues The term "Surplus Tax Revenues" means all amounts which are paid to the Trustee by the Senior Bond Trustee pursuant to Section 5.06 (d) or Section 5.06(e) of the Senior Bond Indenture. Tax Certificate The term "Tax Certificate" means the Tax Certificate dated the date of the original delivery of each Series of Bonds (except any Series of Bonds which the Agency shall certify to the Trustee is not intended to meet the requirements for tax exemption under the Code) relating to the requirements of certain provisions of the Code, as each such certificate may from time to time be modified or supplemented in accordance with the terms thereof. Tax Revenues The tern "Tax Revenues" has the meaning set forth in the Senior Bond Indenture Total Maturitv Amount The term "Total Maturity Amount" means with respect to any Outstanding Bond other than a Capital Appreciation Bond, the aggregate principal amount thereof and, with respect to any Outstanding Capital Appreciation Bond, the Final Compounded Amount thereof. Trust Office The term "Trust Office" means the corporate trust office of the Trustee at the address set forth in Section 11.15 or such other offices n may be specified to the Agency by the Trustee in writing. 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 business shall be conducted. S7284\0001\635693.2 -12- DRABT 12/5/00 Trustee The term "Trusted' means such trustee as may be appointed by the Agency, and its successors and assigns, or any other corporation or association which may at any time be substituted in its place, as provided in Section 7.01. Written Reauest The term "Written Request' means an instrument in writing signed by the Chairman or the Executive Director of the Agency or the Authority or by any other officer of the Agency or the Authority duly authorized for that purpose. SECTION 1.02. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, the Indenture shall be deemed to be and shall constitute a contract between the Agency and the Trustee for the benefit of Owners from time to time of all Bonds issued hereunder and then Outstanding to secure the full and final payment of the interest on and principal of and redemption premiums, if any, on all Bonds authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions herein contained; and the agreements and covenants herein set forth to be performed on behalf of the Agency shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any Bonds over any other Bonds. ARTICLE B THE BONDS; SERIES 2000 B BOND PROVISIONS SECTION 2.01. Authorization. Bonds in unlimited amount may be issued at any time under and subject to the terms of this Indenture. The Agency has reviewed all proceedings heretofore taken relative to the authorization of the Series 2000 B Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, happen or be performed precedent to and in connection with the issuance of the Series 2000 B Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Agency is now duly authorized pursuant to each and every requirement of law, to issue the Series 2000 B Bonds in the manner and form provided in this Indenture. Accordingly, the Agency hereby authorizes the issuance of the Series 2000 B Bonds for the purpose of providing funds to aid in financing and refinancing the Project. SECTION 2.02. Terms of Series 2000 B Bonds. The Series 2000 B Bonds shall be dated as of the Closing Date, shall mature on October 1 in each of the years and in the amounts, and shall bear interest (calculated on the basis of a 360 -day year of twelve 30 -day months) in the amounts, as follows: Year Principal (October 1) Amount Interest Year Principal Interest Date (October I) Amount Date (to come) 57284\0001\635693.2 -13- DRAFT 12/5/00 The Series 2000 B Bonds shall be delivered in fully registered form, in the denominations of $5,000 or any integral multiple thereof, numbered from one upwards in consecutive numerical order. Each Series 2000 B Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (i) it is authenticated during the period from the day after the Record Date for an Interest Payment Date to and including such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated on or prior to the Record Date for the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if, at the time of authentication of any Series 2000 B Bond interest with respect to such Series 2000 B Bond is in default, such Series 2000 B Bond shall bear interest from the Interest Payment Date to which interest has been paid or made available for payment with respect to such Series 2000 B Bond. Interest with respect to any Series 2000 B Bond shall be payable in lawful money of the United States of America 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, mailed by first class mail on the Interest Payment Date to the Owner at his address as it appears, on such Record Date, on the bond registration books maintained by the Trustee; provided, however, that at the written request of the Owner of Series 2000 B Bonds in the aggregate principal amount of $1,000,000 or more filed with the Trustee prior to any Record Date, principal of and interest on such Series 2000 B Bonds shall be paid to such Owner on each succeeding Interest Payment Date (unless such request has been revoked in writing) by transfer of immediately available funds to an account in the United States designated in such written request. Payments of defaulted interest with respect to the Series 2000 B Bonds shall be paid by check to the registered Owners of the Bonds m of a special record date to be fixed by the Trustee, notice of which special record date shall be given to the registered Owners of the Series 2000 B Bonds not less than ten days prior thereto. Except as set forth above, the principal of and premium, if any, on the Series 2000 B Bonds are payable when due at the Trust Office in lawful money of the United States of America. SECTION 2.03. Foran of Series 2000 B Bonds. The Series 2000 B Bonds, the authentication and registration endorsement and the assignment to appear thereon shall be substantially in the forms attached hereto as Appendix A, with necessary or appropriate variations, omissions and insertions as permitted or required by this Indenture. SECTION 2.04. Redemption of Series 2000 B Bonds: Selection of Bonds: Purchase in Lieu of Redemption: Notice. (a) Optional Redemption. The Series 2000 B Bonds maturing on or after October 1, 2008 shall be subject to redemption as a whole or in part, by such maturities as the Agency shall designate (which designation shall be in writing and shall be delivered to the Trustee no later than 45 days prior to the redemption date), prior to their respective maturities at the option of the Agency on any date on or after October 1, 2007, from funds derived by the Agency from any source, at the following redemption prices (expressed as percentages of the principal amount of Series 2000 B Bonds called for redemption), together with interest accrued thereon to the date fixed for redemption: Redemption Dates Redemption Price October 1, 2007 through September 30, 2008 102% October 1, 2008 through September 30, 2009 101 October 1, 2009 and thereafter 100 (b) Mandatory Sinking Fund Redemption. The Series 2000 B Bonds maturing on October 1, _, October 1, _ and October 1, _ are also subject to redemption prior to their stated maturity, in part by lot, from Sinking Account Installments deposited in the Sinking Account, at the principal amount thereof and interest accrued thereon to the date fixed for redemption, without premium, according to the following schedules: S7284\0001\635693.2 -14- DRAFT 12/5/00 Term Bonds Maturing October 1, Redemption Date Principal Amount (October I) Redeemed Term Bonds Maturing October 1,_ Redemption Date Principal Amount (October 1) Redeemed Term Bonds Maturing October 1,_ Redemption Date Principal Amount Redemption Date Principal Amount (October 1) Redeemed (October 1) Redeemed (c) General Redemption Provisions (1) Selection of Bonds. Whenever less than all the Outstanding Bonds maturing on any one date are called for redemption at any one time, the Trustee shall select the Bonds to be redeemed, from the Outstanding Bonds maturing on such date not previously selected for redemption, by lot; provided, however, that if less than all the Outstanding Tenn Bonds of any maturity are called for redemption at any one time, the Agency shall specify in writing to the Trustee the reduction in any Sinking Account Installment payments required to be made with respect to such Bonds (in an amount equal to the amount of Outstanding Tenn Bonds to be redeemed) which, to the extent practicable, results in approximately equal Annual Debt Service on the Bonds Outstanding following such redemption. (2) Purchase in Lieu of Redemption. In lieu of redemption of any Term Bond, amounts on deposit in the Special Fund or in the Sinking Account therein may also be used and withdrawn by the Trustee at any time, upon the Written Request of the Agency, for the purchase of such Term Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as the Agency may in its discretion determine, but not in excess of the principal amount thereof plus seemed interest to the purchase date; provided, however, that no Bonds shall be purchased by the Trustee under this subsection (c)(2) with a settlement date more than 60 days prior to the redemption date. The principal amount of any Term Bonds so purchased by the Trustee in any twelve-month period ending 30 days prior to any Principal Payment Date in any year shall be 57289\0001\635693.2 -15- DRLPT 12/5/00 credited towards and shall reduce the principal amount of such Term Bonds required to be redeemed on such Principal Payment Date in such year. (3) Notice. Notice of redemption shall be mailed by first class mail by the Trustee, on behalf and at the expense of the Agency, not less than 30 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 the Trustee, (ii) one or more Information Services designated in writing to the Trustee by the Agency and (iii) the Securities Depositories. 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), the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity are to be redeemed, 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 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. If, at the time of mailing of the notice of redemption, there shall not have been deposited with the Trustee monies sufficient to redeem all the Bonds called for redemption, such notice may state that it is conditional, that is, subject to the deposit of the redemption monies with the Trustee not later than the opening of business on the redemption date. Failure by the Trustee to give notice pursuant to this Section to any one or more of the Information Services or Securities Depositories, or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. The failure of any Owner to receive any redemption notice mailed to such Owner and any defect in the notice so mailed shall not affect the sufficiency of the proceedings for redemption. (4) Partial Redemption. Upon surrender of any Bond redeemed in part only, the Agency shall execute (manually or by facsimile) and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Agency, 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 series, interest rate and the same maturity. (5) Effect of Redemption. From and after the date fixed for redemption, if notice of such redemption shall have been duly given and funds available for the payment of such redemption price of the Bonds so called for redemption shall have been duly provided, no interest shall accrue on such Bonds from and after the redemption date specified in such notice. All Bonds redeemed pursuant to the provisions of this section shall be canceled by the Trustee and the Trustee shall upon Written Request of the Agency deliver a certificate of destruction to the Agency. SECTION 2.05. Executionof Bonds. The Chairman of the Agency is hereby authorized and directed to execute each of the Bonds on behalf of the Agency and the Secretary of the Agency is hereby authorized and directed to attest each of the Bonds on behalf of the Agency and to imprint by facsimile the official seal of the Agency thereon. Any of the signatures of the Chairman or the Secretary may be by printed, lithographed or engraved facsimile reproduction. In case any officer whose signature appears on the Bonds shall cease to be such officer before the delivery of the Bonds to the purchaser 57284\0001\635693.2 -16- DRAFT 12/5/00 thereof, such signature shall nevertheless be valid and sufficient for all purposes the same as though such officer had remained in office until such delivery of the Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication and registration in the form set forth in Appendix A hereto, executed manually and dated by the Trustee, shall be entitled to any benefits under the Indenture or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evidence that the Bonds so registered have been duly issued and delivered hereunder and are entitled to the benefits of the Indenture. SECTION 2.06. Transfer and Re¢istration of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.08, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer in substantially the form set forth in Appendix A hereto, duly executed. Whenever any Bond or Bonds shall be surrendered for transfer, the Agency shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds of like series, tenor, maturity and Total Maturity Amount. The cost of printing any Bonds and any services rendered or expenses incurred by the Trustee in connection with any such transfer shall be paid by the Agency, except that 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. The Agency shall not be required to register the transfer of or exchange any Bond during the fifteen (15) days preceding any date established by the Trustee for selection of Bonds for redemption or any Bonds which have matured or been selected for redemption. SECTION 2.07. Exchange of Bonds. Bonds may be exchanged at the Trust Office for the same aggregate Total Maturity Amount of Bonds of the same series and maturity of other authorized denominations. The cost of printing any Bonds and any services rendered or expenses incurred by the Trustee in connection with any such exchange shall be paid by the Agency, except that the Trustee shall require the payment by the Owner 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 to be made during the fifteen (15) days preceding any date established by the Trustee for selection of Bonds for redemption or any Bonds which have matured or been selected for redemption. SECTION 2.08. Bond Registration Books. The Trustee will keep at the Trust Office sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection by the Agency during regular business hours with reasonable prior notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the Bonds on said books as hereinbefore provided. SECTION 2.09. Mutilated Destroyed Stolen or Lost Bonds. In case any Bond shall become mutilated in respect of the body of such Bond, or shall be believed by the Agency to have been destroyed, stolen or lost, upon proof of ownership satisfactory to the Trustee, and upon the surrender of such mutilated Bond at the Trust Office, or upon the receipt of evidence satisfactory to the Trustee of such destruction, theft or loss, and upon receipt also of indemnity satisfactory to the Trustee, and upon payment of all expenses incurred by the Agency and the Trustee in the premises, the Agency shall execute (manually or by facsimile) and the Trustee shall authenticate and deliver at the Trust Office a new Bond or Bonds of the same series and maturity and for the same Total Maturity Amount, of like tenor and date, with such notations as the Agency shall determine, in exchange and substitution for and upon cancellation of the mutilated Bond, or in lieu of and in substitution for the Bond so destroyed, stolen or lost. If any such destroyed, stolen or lost Bond shall have matured or shall have been called for redemption, payment of the amount due thereon may be made by the Trustee upon receipt by the Trustee and the Agency of like proof, indemnity and payment of expenses. 57284\0001\635693.2 -17- DRAFT 12/5/00 Any such replacement Bonds issued pursuant to this section shall be entitled to equal and proportionate benefits with all other Bonds issued hereunder. The Agency and the Trustee shall not be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same. SECTION 2.10. Temuorary Bonds. Until definitive Bonds shall be prepared, the Agency may cause to be executed and delivered in lieu of such definitive Bonds and subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds, except that they may be in any denominations authorized by the Agency, one or more temporary typed, printed, lithographed or engraved Bonds in fully registered form, as may be authorized by the Agency, substantially of the same tenor and, until exchanged for definitive Bonds, entitled and subject to the same benefits and provisions of the Indenture as definitive Bonds. If the Agency issues temporary Bonds it will execute and furnish definitive Bonds without unnecessary delay and thereupon the temporary Bonds shall be surrendered to the Trustee at the Trust Office, without expense to the Owner in exchange for such definitive Bonds. All temporary Bonds so surrendered shall be canceled by the Trustee and shall not be reissued. SECTION 2.11. Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be affected in any way by any proceedings taken by the Agency for the financing or refinancing of the Project, or by any contracts made by the Agency in connection therewith, and shall not be dependent upon the completion of the financing or refinancing of the Project or upon the performance by any person of his obligation with respect to the Project, and the recital contained in the Bonds that the same are issued pursuant to the Caw shall be conclusive evidence of their validity and of the regularity of their issuance. SECTION 2.12. Book -Entry System. Prior to the issuance of any Series of Bonds issued hereunder, the Agency may provide that such Series of Bonds shall be initially issued as Book -Entry Bonds, and in such event,. each maturity of such Series shall be in the form of a separate single fully registered Bond (which may be typewritten). Upon initial issuance, the ownership of each such Bond shall be registered in the bond register in the time of the Nominee, as nominee of the Depository. With respect to Book -Entry Bonds, the Agency and the Trustee shall have no responsibility or obligation to any Participant or to any person on behalf of which such a Participant holds an interest in such Book -Entry Bonds. Without limiting the immediately preceding sentence, the Agency 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 Book -Entry Bonds, (ii) the delivery to any Participant or any other person, other than an Owner as shown in the bond register, of any notice with respect to Book -Entry Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in Book -Entry Bonds to be redeemed in the event the Agency redeems such in part, or (iv) the payment of any Participant or any other person, other than an Owner as shown in the bond register, of any amount with respect to principal of, premium, if any, or interest on Book -Entry Bonds. The Agency and the Trustee may treat and consider the person in whose time each Book -Entry Bond is registered in the bond register as the absolute Owner of such Book -Entry Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owner, as shown in the bond register, and all such payments shall be valid and effective to fully satisfy and discharge the Agency's obligations with respect to payment of principal of, 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 bond register, shall receive a Bond evidencing the obligation of the Agency to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon delivery by the Depository to the Trustee and Agency of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to record dates, the word Nominee in this Indenture shall refer to such nominee of the Depository. 57284\0001\635693.2 -38- DRAFT 12/5/00 In order to qualify the Book -Entry Bonds for the Depository's book -entry system, the Agency and the Trustee shall execute, if necessary, and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Agency or the Trustee any obligation whatsoever with respect to persons having interests in such Book -Entry Bonds other than the Owners, as shown on the bond register. In addition to the execution and delivery of a Letter of Representations, the Agency and the Trustee, at the Written Request of the Agency, shall take such other actions, not inconsistent with this Indenture, as are reasonably necessary to qualify Book -Entry Bonds for the Depository's book -entry program. In the event (i) the Depository determines not to continue to act as securities depository for any Series of Book -Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Trustee and the Agency of such determination, then the Agency will discontinue the book -entry system with the Depository. If the Agency determines to replace the Depository with another qualified securities depository, the Agency shall prepare or direct the preparation of a new single, separate, fully registered Bond for each of the maturities of such Book -Entry Bonds, registered in the time of such successor or substitute qualified securities depository or its nominee. If the Agency fails to identify another qualified securities depository to replace the Depository, then the Bonds shall no longer be restricted to being registered in such bond register in the time of the Nominee, but shall be registered in whatever name or names Owners transferring or exchanging such Bonds shall designate, in accordance with the provisions of Sections 2.06 and 2.07. Notwithstanding any other provision of this Indenture to the contrary, so long as any Book -Entry Bond is registered in the time of the Nominee, all payments with respect to 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 Letter of Representations or as otherwise instructed by the Depository. ARTICLE IB ISSUANCE OF SERIES 2000 BONDS; APPLICATION OFA PROCEEDS OF SALE SECTION 3.01. Issuance of Series 2000 B Bonds. The Agency may at any time execute and deliver the Series 2000 B Bonds authorized to be issued hereunder and upon the Written Request of the Agency the Trustee shall authenticate and deliver the Series 2000 B Bonds. SECTION 3.02. Sale of Series 2000 B Bonds -- Allocation of Proceeds Among Funds and Accounts. Upon receipt of payment for the Series 2000 B Bonds, the Trustee shall set aside and deposit the proceeds received from such sale (except the sum of $ which shall be paid directly by the purchaser of the Series 2000 B Bonds to the Bond Insurer) as follows: (a) The Trustee shall deposit in the Series 2000 B Subaccount of the Reserve Account the amount of $ , which constitutes the Reserve Requirement. (b) The Trustee shall deposit in the Series 2000 B Expense Account within the Expense Fund the amount of $ to pay the costs incurred or to be incurred by the Agency in connection with the issuance of the Series 2000 B Bonds. (c) The Trustee shall transfer the balance of $ to the Agency for deposit in the Series 2000 B Project Account within the Redevelopment Fund. For record keeping purposes the Trustee may establish such accounts as may be necessary to reflect such transfer of proceeds. 57284\0001\635693.2 -19- DIUFT 12/5/00 ARTICLE IV ISSUANCE OF ADDITIONAL BONDS SECTION 4.01. Conditions for the Issuance of Additional Bonds. The Agency may at any time after the issuance and delivery of the Series 2000 B Bonds hereunder issue Additional Bonds payable from the Tax Revenues and secured by a lien and charge upon the Tax Revenues equal to and on a parity with the lien and charge securing the Outstanding Bonds theretofore issued under the Indenture, but only subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such Additional Bonds: (a) The Agency shall be in compliance with all covenants set forth in this Indenture and any Supplemental Indentures, and a Certificate of the Agency to that effect shall have been filed with the Trustee. (b) The issuance of such Additional Bonds shall have been duly authorized pursuant to the Law and all applicable laws, and the issuance of such Additional Bonds shall have been provided for by a Supplemental Indenture duly adopted by the Agency which shall specify the following: (1) The purpose for which such Additional Bonds are to be issued and the fund or funds into which the proceeds thereof are to be deposited, including a provision requiring the proceeds of such Additional Bonds to be applied solely for (i) the purpose of aiding in financing the Project, including payment of all costs incidental to or connected with such financing, and/or (ii) the purpose of refunding any Bonds or other indebtedness related to the Prcjecl, including payment of all costs incidental to or connected with such refunding; (2) The authorized principal amount of such Additional Bonds; (3) The date and the maturity date or dates of such Additional Bonds; provided that (i) Principal and Sinking Account Payment Dates may occur only on Interest Payment Dates, (ii) all such Additional Bonds of like maturity shall be identical in all respects, except as to number, and (iii) fixed serial maturities or mandatory Sinking Account Installments, or any combination thereof, shall be established to provide for the retirement of all such Additional Bonds on or before their respective maturity dates; (4) The Interest Payment Dates, which shall be on the same semiannual dates as the Interest Payment Dates for the Series 2000 B Bonds; provided, that such Additional Bonds may provide for compounding of interest in lieu of payment of interest on such dates; (5) The denomination and method of numbering of such Additional Bonds; (6) The redemption premiums, if any, and the redemption terms, if any, for such Additional Bonds; (7) The amount and due date of each mandatory Sinking Account Installment, if any, for such Additional Bonds; (8) The amount, if any, to be deposited from the proceeds of such Additional Bonds in the Interest Account; (9) The amount, if any, to be deposited from the proceeds of such Additional Bonds into the Reserve Account; provided that the amount on deposit in the Reserve Account shall be increased at or prior to the time such Additional Bonds become Outstanding to an amount at least equal to the Reserve Account Requirement on all then Outstanding Bonds and such Additional Bonds, which amount shall be maintained in the Reserve Account; (10) The form of such Additional Bonds; and (11) Such other provisions as are necessary or appropriate and not inconsistent with the Indenture. 57284\0001\635693.2 -20- DRAFT 12/5/00 (c) Tax Revenues (excluding any unsubordinated payments to taxing agencies pursuant to the Law) based upon the assessed valuation of taxable property in the Project Area as shown on the most recently equalized assessment roll preceding the date of the Agency's adoption of the Supplemental Indenture providing for the issuance of such Additional Bonds plus, at the option of the Agency, the Additional Allowance shall be in an amount equal to at least one hundred five percent (105%) of Combined Maximum Annual Debt Service following the issuance of such Additional Bonds, as evidenced by a Consultant's Report. For purposes of calculating Tax Revenues, a tax rate of $1.00 per $100 of assessed valuation shall be assumed. For purposes of this Section 4.01, the amount of Tax Revenues will be the amount received in the most recent Fiscal Year (which may be the current Fiscal Year) for which records are available from the County establishing the assessed valuations of property in the Project Area. For the purposes of the issuance of Additional Bonds, Outstanding Bonds shall not include any Bonds the proceeds of which are deposited in an escrow fund held by the Trustee or an escrow agent ("Escrow Bonds"), provided that the Supplemental Indenture authorizing issuance of such Escrow Bonds shall provide that: (i) such proceeds shall be invested in Federal Securities which mature within three months of the escrow expiration date and which bear interest at a rate which, together with amounts made available by the Agency from bond proceeds or otherwise, is at least sufficient to pay Annual Debt Service on the Escrow Bonds; (ii) moneys may be transferred from said escrow fund only if Tax Revenues (as calculated using the criteria set forth above) for the then current Fiscal Year plus, at the option of the Agency, the Additional Allowance shall be at least equal to 1.05 times Combined Maximum Annual Debt Service, less a principal amount of Bonds which is equal to moneys on deposit in such escrow fund after each such transfer; and (iii) such Escrow Bonds shall be redeemed at par from moneys remaining on deposit in such escrow fund at the expiration of the specified escrow period. In addition, the Agency shall obtain an opinion of nationally recognized bond counsel on the delivery date of such Escrow Bonds to the effect that such escrow of proceeds will not affect the exclusion of the interest on any Outstanding Bonds from gross income for federal income tax purposes. In the event such Additional Bonds are to be issued solely for the purpose of refunding and retiring any Outstanding Bonds, interest and principal payments on the Outstanding Bonds to be so refunded and retired from the proceeds of such Additional Bonds being issued shall be excluded from the foregoing computation of Maximum Annual Debt Service. Nothing contained in the Indenture shall limit the issuance of any tax allocation bonds of the Agency payable from the Surplus Tax Revenues and secured by a lien and charge on the Surplus Tax Revenues if, after the issuance and delivery of such tax allocation bonds, none of the Bonds theretofore issued hereunder will be Outstanding nor shall anything contained in this Indenture prohibit the issuance of any tax allocation bonds or other indebtedness by the Agency secured by a pledge of tax increment revenues (including Surplus Tax Revenues) subordinate to the pledge of Surplus Tax Revenues securing the Bonds; provided, however, that no such issuance shall cause the Agency to exceed any tax increment limit applicable to it under the Redevelopment Plan or the Law. SECTION 4.02. Procedure for the Issuance of Additional Bonds. All of the Additional Bonds shall be executed by the Agency for issuance under the Indenture and delivered to the Trustee and thereupon shall be delivered by the Trustee upon the Written Request of the Agency, but only upon receipt by the Trustee of the following documents or money or securities: (1) A certified copy of the Supplemental Indenture authorizing the issuance of such Additional Bonds; (2) A Written Request of the Agency as to the delivery of such Additional Bonds; (3) An opinion of counsel of recognized standing in the field of law relating to municipal bonds substantially to the effect that (a) the Agency has the right and power under the Law to execute and deliver the Indenture and all Supplemental Indentures thereto, and the Indenture and all such Supplemental Indentures have been duly executed and delivered by the Agency, are in full force and effect and are valid and binding upon the Agency and enforceable in accordance with their terms (except S7284\0001\635693.2 -21- DRAFT 12/5/00 as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights and similar qualifications); and (b) such Additional Bonds are valid and binding special obligations of the Agency, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights) and are subject to the terns of the Indenture and all Supplemental Indentures thereto and entitled to the benefits of the Indenture and all such Supplemental Indentures and the Law, and such Additional Bonds have been duly and validly issued in accordance with the Law and the Indenture and all such Supplemental Indentures; (4) A Certificate of the Agency containing such statements as may be reasonably necessary to show compliance with the requirements of the Indenture; and (5) Such further documents, money and securities as are required by the provisions of the Indenture and the Supplemental Indenture providing for the issuance of such Additional Bonds. ARTICLE V SURPLUS TAX REVENUES; CREATION OF FUNDS SECTION 5.01. Pledge of Surplus Tax Revenues. All the Surplus Tax Revenues and all money in the Debt Service Fund and in the funds or accounts so specified and provided for in this Indenture, whether held by the Agency or the Trustee (except the Rebate Fund), are hereby irrevocably pledged to the punctual payment of the interest on and principal of and redemption premiums, if any, on the Bonds, and the Surplus Tax Revenues and such other money shall not be used for any other purpose while any of the Bonds remain Outstanding, subject to the provisions of this Indenture permitting application thereof for the purposes and on the terms and conditions set forth herein. This pledge shall constitute a first lien on the Surplus Tax Revenues and such other money for the payment of the Bonds in accordance with the terms thereof. SECTION 5.02. Debt Service Fu d- Recei t and De sit of Surplus Tax Revenue . There is hereby established a special fund to be known as the "7rR—iverfront Redevelopment Project Subordinate Tax Allocation Bonds Debt Service Fund" (herein the "Debt Service Fund") which shall be held by the Trustee. The Trustee shall deposit all Surplus Tax Revenues in the Debt Service Fund, to be allocated in accordance with Section 5.06. SECTION 5.03. Establishment of Other Funds. There have heretofore been established a fund held by the Agency called the "Riverfront Redevelopment Project Redevelopment Fund" (the "Redevelopment Fund") and a fund held by the Agency called the "Riverfront Redevelopment Project Low and Moderate Income Housing Fund" (the "Housing Fund"). There is hereby established a special trust fund held by the Trustee called the "Riverfront Redevelopment Project Subordinate Bonds Expense Fund" (the "Expense Fund"). So long as any of the Bonds herein authorized, or any interest thereon, remains unpaid, the moneys in the foregoing funds shall be used for no purpose other than those required or permitted by this Indenture and the Law. Pursuant to the Tax Certificate, the funds and accounts established herein may be divided by the Agency or by the Trustee upon the Written Request of the Agency into sub -accounts for each Series of Bonds issued hereunder, in order to perform the necessary rebate calculations. SECTION 5.04. Redevelopment Fund, Housing Fund. Moneys in the Redevelopment Fund shall be used for the purpose of aiding in financing the Project (or for making reimbursements to the Agency for such costs theretofore paid by it), including payment of all costs incidental to or connected with such financing. Any balance of money remaining in the Redevelopment Fund after the date of completion of the financing of the Project shall be transferred by the Agency to the Special Fund. The Agency shall pay moneys from the Redevelopment Fund upon receipt of a requisition drawn thereon and signed by at least one duly authorized officer or member of the Agency. The Agency warrants that each withdrawal from the Redevelopment Fund shall be made in the manner provided by law for the purpose of aiding in financing the Project or for making reimbursements to the S?289\0001\635693.2 -22- DRAFT 12/5/00 Agency for such costs theretofore paid by the Agency. The Treasurer of the Agency shall establish and maintain an account within the Redevelopment Fund for each Series of Bonds issued hereunder known as the "Series Project Account" and all proceeds of each such Series of Bonds deposited in the Redevelopment Fund shall be held in the account established for such Series and shall be accounted for separately from all other amounts in the Redevelopment Fund. Amounts in each such account shall be used for the purposes authorized for use of amounts in the Redevelopment Fund. Moneys in the Housing Fund shall be used for the purpose of increasing, improving or preserving the supply of low and moderate income housing within or of benefit to the Project Area. The Agency warrants that each withdrawal from the Housing Fund shall be made in the manner provided by law for the purpose set forth above or for making reimbursements to the Agency for such costs theretofore paid by the Agency. SECTION 5.05. Expense Fund. All moneys in the Expense Fund shall be applied to the payment of costs and expenses incurred by the Agency in connection with the authorization, issuance and sale of the Bonds and shall be disbursed by the Trustee upon delivery to the Trustee of a requisition, substantially in the form attached hereto as Appendix B, executed by an officer of the Agency. Each such requisition shall be sequentially numbered and state the time and address of the person, firm or corporation to whom payment is due, the amount to be disbursed, the purposes for such disbursement and that such obligation has been properly incurred and is a proper charge against the Expense Fund. Upon the earlier of the payment in full of such costs and expenses (or the making of adequate provision for the payment thereof, evidenced by a Certificate of the Agency to the Trustee) or ISO days after delivery of the Bonds to the original purchaser thereof, any balance remaining in such Expense Fund shall be transferred to the Redevelopment Fund, and pending such transfer and application, the moneys in such Expense Fund may be invested as permitted by Section 5.07; provided, however, that investment income resulting from any such investment shall be retained in the Expense Fund. The Trustee shall establish and maintain an account within the Expense Fund for each Series of Bonds issued hereunder known as the "Series _ Expense Account' and all proceeds of each such Series of Bonds deposited in the Expense Fund shall be held in the account established for such Series and shall be accounted for separately from all other amounts in the Expense Fund. Amounts in each such account shall be used for the purposes authorized for use of amounts in the Expense Fund. SECTION 5.06. Establishment and Maintenance of Accounts for Use of Moneys in the Debt Service Fund. All moneys in the Debt Service Fund shall be set aside by the Trustee in each Bond Year when and as received in the following respective special accounts within the Debt Service Fund (each of which is hereby created and each of which the Trustee hereby agrees to cause to be maintained), in the following order of priority: (a) Interest Account; (b) Principal Account; (c) Sinking Account; and (d) Reserve Account. All moneys in each of such accounts shall be held in trust by the Trustee and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this Section 5.06. (a) Interest Account. On or before each Interest Payment Date, the Trustee shall set aside from the Debt Service Fund and deposit in the Interest Account an amount of money which, together with any money contained therein, is equal to the aggregate amount of the interest becoming due and payable on all Outstanding Bonds on such Interest Payment Date. No deposit need be made into the Interest Account if the amount contained therein is at least equal to the aggregate amount of the interest becoming due and payable on all Outstanding Bonds on the Interest Payment Dates in such Bond Year. All moneys in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds m it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity). S7284\0001\635693.2 -23- DRAFT 12/5/00 (b) Principal Account. On or before each Principal Payment Date, the Trustee shall set aside from the Debt Service Fund and deposit in the Principal Account an amount of money which, together with any money contained therein, is equal to the aggregate amount of the principal becoming due and payable on all Outstanding Serial Bonds on such Principal Payment Date. In the event that there shall be insufficient money in the Debt Service Fund to make in full all such principal payments and Sinking Account Installments required to be made pursuant to Section 5.06(c) hereof in such Bond Year, then the money available in the Debt Service Fund shall be applied pro ram to the making of such principal payments and such Sinking Account Installments in the proportion which all such principal payments and Sinking Account Installments bear to each other. No deposit need be made into the Principal Account if the amount contained therein is at least equal to the aggregate amount of the principal of all Outstanding Serial Bonds becoming due and payable on the upcoming Principal Payment Date. All money in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying the principal and redemption premium, if any, of the Serial Bonds as they shall become due and payable. (c) Sinking Account. On or before each Principal Payment Date, the Trustee shall set aside from the Debt Service Fund and deposit in the Sinking Account an amount of money equal to the Sinking Account Installment, if any, payable on the Sinking Account Payment Date in such Bond Year. All moneys in the Sinking Account shall be used by the Trustee to redeem Term Bonds. (d) Reserve Account. (1) On or before each Interest Payment Date, the Trustee shall set aside from the Debt Service Fund and deposit in the Reserve Account such amount of money (or other authorized deposit of security, as contemplated by the following paragraph) as shall be required to restore the balance in the Reserve Account to an amount equal to the Reserve Account Requirement for each Series of Bonds then Outstanding. No deposit need be made in the Reserve Account so long as there shall be on deposit therein an amount equal to the Reserve Account Requirement for each Series of Bonds then Outstanding. The Trustee shall establish and maintain a subaccount within the Reserve Account for each Series of Bonds issued hereunder known as the "Series Subaccount of the Reserve Account" and each subaccount shall be available only for payment of the Series of Bonds to which it relates. All money in (or available to) the Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of replenishing the Interest Account, the Principal Account or the Sinking Account in such order, in the event of any deficiency at any time in any of such accounts, or for the purpose of paying the interest on or principal of the Series of Bonds to which such subaccount of the Reserve Account relates in the event that no other money of the Agency is lawfully available therefor, or for the retirement of all Bonds then Outstanding, except that for so long as the Agency is not in default hereunder, any amount in the Reserve Account in excess of the Reserve Account Requirement may, upon Written Request of the Agency, be withdrawn from the Reserve Account by the Trustee and transferred to the Agency. In the event that there shall be insufficient money in the Debt Service Fund to make in full all required deposits to the subaccounts in the Reserve Account, then the money available in the Debt Service Fund shall be applied pro rata to such subaccounts in the proportion which all the Reserve Account Requirements for each Series bear to each other. (2) With the written consent of the Bond Insurer, if any, the Reserve Account Requirement may be satisfied by crediting to the Reserve Account moneys or a Qualified Reserve Account Credit Instrument or any combination thereof, which in the aggregate make funds available in the Reserve Account in an amount equal to the Reserve Account Requirement. Upon the deposit with the Trustee of such Qualified Reserve Account Credit Instrument, the Trustee shall release moneys then on hand in the Reserve Account to the Agency, to be used for any lawful purpose relating to the Project Area, in an amount equal to the face amount of the Qualified Reserve Account Credit Instrument. (e) Surplus. After making the deposits referred to in paragraphs (a) through (d) above in any Bond Year, the Trustee shall transfer any amount remaining on deposit in the Debt Service Fund to the Agency to be used for any lawful purpose of the Agency. SECTION 5.07. Investment of Moneys in Funds and Accounts. Upon the Written Request of the Agency received by the Trustee at least two Business Days prior to the dam of such S7284\0001\635693.2 -24- MWT 12/5/00 investment, moneys in the Debt Service Fund, the Interest Account, the Principal Account, the Sinking Account, the Reserve Account, the Expense Fund (and any account therein) or the Rebate Fund shall be invested by the Trustee in Authorized Investments. In the absence of such instructions the Trustee shall invest in the investments described in clause F of the definition of "Authorized Investments" set forth in Section 1.01. The obligations in which moneys in the Debt Service Fund, the Interest Account, the Principal Account or any Sinking Account are so invested shall mature prior to the date on which such moneys are estimated to be required to be paid out hereunder. The obligations in which moneys in the Reserve Account are so invested shall mature no later than the earlier of (a) five years from the date of purchase by the Trustee or (b) the final maturity date of the Bonds; provided, however, that (i) an obligation which may be redeemed at par at the option of the Trustee on the Business Day prior to each Interest Payment Date during which such obligation is outstanding and (ii) an investment agreement which permits the Trustee to withdraw invested amounts, on any Business Day, on no more than five Business Days' notice, without penalty, to be used as required by Section 5.06(d), may have any maturity. Any interest, income or profits from the deposits or investments of all funds (except the Expense Fund and Rebate Fund) and accounts shall be deposited in the Debt Service Fund. For purposes of determining the amount on deposit in any fund or account held hereunder, all Authorized Investments credited to such fund or account shall be valued monthly at the lower of cost or market value (excluding accrued interest and brokerage commissions, if any). Except as otherwise provided in this Section, Authorized Investments representing an investment of moneys attributable to any fund or account and all investment profits or losses thereon shall be deemed at all times to be a part of said fund or account. Absent negligence or willful misconduct by the Trustee, the Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with this Section. The Agency acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Agency the right to receive brokerage confirmations of security transactions as they occur, the Agency will not receive such confirmations to the extent permitted by law. The Trustee will furnish the Agency periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder. The Trustee may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate. The Trustee or any of its affiliates may act as a sponsor, advisor or manager to connection with any investments made by the Trustee hereunder. For investment purposes the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately. As provided in the Senior Bond Indenture, amounts deposited in the Special Fund, the Redevelopment Fund (and any account therein) and the Housing Fund may be invested in any obligations in which the Agency may lawfully invest its funds. ARTICLE VI COVENANTS OF THE AGENCY SECTION 6.01. Punctual Payment. The Agency will punctually pay the interest on and principal of and redemption premiums, if any, to become due with respect to the Bonds, but only from Surplus Tax Revenues, in strict conformity with the terms of the Bonds and of the Indenture and will faithfully satisfy, observe and perform all conditions, covenants and requirements of the Bonds and of the Indenture. SECTION 6.02. Against Encumbrances. The Agency will not mortgage or otherwise encumber, pledge or place any charge upon any of the Surplus Tax Revenues, except as provided in the Indenture, and will not issue any obligation or security superior to or on a parity with the Bonds payable in whole or in part from the Surplus Tax Revenues. SECTION 6.03. Ex ion or Funding of Claims for Interest. In order to prevent any claims for interest after maturity, the Agency will not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any Bonds and will not, directly or indirectly, be a parry to or approve any such arrangements by purchasing or funding said claims for interest 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 Agency, such claim for interest so extended or funded shall not be entitled, S7289\0001\635693.2 -25- DRAFT 12/5/00 in case of default hereunder, to the benefits of the 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 6.04. Management and Operation of Properties. The Agency will manage and operate all properties owned by the Agency and comprising any part of the Project in a sound and business -like manner and in conformity with all valid requirements of any governmental authority relative to the Project or any part thereof, and will keep such properties insured at all times in conformity with sound business practice. SECTION 6.05. Payment of Claims. The Agency will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the properties owned by the Agency or upon the Surplus Tax Revenues or any part thereof, or upon any funds in the hands of the Trustee, or which might impair the security of the Bonds; provided that nothing herein contained shall require the Agency to make any such payments so long as the Agency in good faith shall contest the validity of any such claims. SECTION 6.06. Records and Accounts• Financial and Project Statements. The Agency will keep proper books of record and accounts, separate from all other records and accounts of the Agency, in which complete and correct entries shall be made of all transactions relating to the Project. Such books of record and accounts shall at all times during business hours be subject to the inspection of the Trustee or of the Owners of not less than ten per cent (10%) of the aggregate principal amount of the Bonds then Outstanding or their representatives authorized in writing. The Agency will prepare and file with the Trustee annually as soon as practicable, but in any event not later than two hundred seventy (270) days after the close of each Fiscal Year, so long as any Bonds are Outstanding, an audited financial statement in reasonable detail relating to the Tax Revenues and all funds or accounts established pursuant to the Indenture for the preceding Fiscal Year along with the related opinion of an Independent Certified Public Accountant. The Trustee shall have no duty to review such financial statement. The Agency will furnish a copy of such audited financial statement to any Owner upon written request and will distribute a reasonable number of copies thereof as may be required to investment bankers, security dealers and others interested in the Bonds. The Trustee shall provide such statements with regard to any funds held by the Trustee hereunder to the Agency as the Agency may reasonably require to comply with the terms of this Section 6.06. SECTION 6.07. Protection of Security and Rights of Owners. The Agency will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the sale and delivery of any Bonds by the Agency, such Bonds shall be incontestable by the Agency. SECTION 6.08. Pa in of Taxes and Other Charges. The Agency will pay and discharge all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the Agency or any properties owned by the Agency in the Project Area, or upon the revenues therefrom, when the same shall become due; provided that nothing herein contained shall require the Agency to make any such payments so long as the Agency in good faith shall contest the validity of any such taxes, service charges, assessments or other governmental charges. SECTION 6.09. Financing the Project. The Agency will continue the financing of the Project to be aided with the proceeds of the Bonds with all practicable dispatch, and such financing will be accomplished and completed in a sound, economical and expeditious manner and in conformity with the Redevelopment Plan and the Law. SECTION 6.10. Taxation of Leased Property. Whenever any property in the Project is redeveloped by the Agency and thereafter is leased by the Agency to any person or persons, or whenever the Agency leases any real property in the Project to any person or persons for redevelopment, the property shall be assessed and taxed to the same manner as privately -owned property (in accordance with the Law), and the lease shall provide (1) that the lessee shall pay taxes upon the assessed value of the entire property and not merely upon the assessed value of the leasehold interest, and (2) that if for any reason the taxes paid by the lessee on such property in any year during the tern of the lease shall be less 57284\0001\635693.2 -26- DRAFT 12/5/00 than the taxes that would have been payable upon the entire property if the property were assessed and taxed in the same manner as privately -owned property, the lessee shall pay such difference to the Agency within thirty (30) days after the taxes for such year become payable, and in any event prior to the delinquency date of such taxes established by law, which such payments shall be treated as Tax Revenues and shall be deposited by the Agency in the Special Fund. SECTION 6.11. Di position of Prooerty in Proiect Area. Without the prior written consent of the Bond Insurer, if any, the Agency will not participate in the disposition of any land or real property in the Project Area which will result in such property becoming exempt from taxation because of public ownership or use or otherwise (except property dedicated for public right-of-way) if such disposition, when taken together with other such dispositions, would either (a) aggregate more than 10 percent of the assessed valuation of the property in the Project Area, or (b) cause the amount of Tax Revenues to be received in the succeeding Bond Year to fall below 120 percent of Maximum Annual Debt Service. SECTION 6.12. Amendment of Redevelopment Plan. If the Agency proposes to amend the Redevelopment Plan, it shall cause to be filed with the Trustee a Consultant's Report on the effect of such proposed amendment. If the Consultant's Report concludes that Tax Revenues will not be materially reduced by such proposed amendment, the Agency may approve such amendment. If the Consultant's Report concludes that Tax Revenues will be materially reduced by such proposed amendment, the Agency shall not approve such proposed amendment. The Trustee shall be entitled to rely upon any said Report and shall have no duty to verify the information or statements set forth therein. SECTION 6.13. Tax Revenues. The Agency shall comply with all requirements of the Law to insure the allocation and payment to it of the Tax Revenues, including without limitation the timely filing of any necessary statements of indebtedness with appropriate officials of the County. SECTION 6.14. Further Assurances. The Agency shall adopt, make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Indenture, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in the Indenture. SECTION 6.15. Tax Covenants Rebate Fund. (a) In addition to the accounts created pursuant to Article V, the Trustee shall establish and maintain with respect to each Series of Bonds issued hereunder (other than any Series of Bonds exempt from the requirements of Section 148 of the Code related to rebate of arbitrage earnings as shall be specified in writing to the Trustee by the Agency) a fund separate from any other fund or account established and maintained hereunder designated as the "Series Rebate Fund" hereinafter in this Section referred to as the "Rebate Fund." The provisions of this Section shall apply separately to each Rebate Fund established for each Series of Bonds. Upon the written direction of the Agency, there shall be deposited in the Rebate Fund such amounts as are required tobe deposited therein pursuant to the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement (as defined in the Tax Certificate), for payment to the United States of America. Notwithstanding the provisions of Sections 5.01, 5.02, 5.07 and 10.01 relating to the pledge of Surplus Tax Revenues, the allocation of money in the Special Fund, the investments of money in any fund or account and the defeasance of Outstanding Bonds, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section 6.15 and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions if it follows the Written Request of the Agency, and shall have no liability or responsibility to enforce compliance by the Agency with the terms of the Tax Certificate. (b) The Agency shall not use or permit the use of any proceeds of Bonds or any funds of the Agency, directly or indirectly, to acquire any securities or obligations, and shall not take or permit to be taken any other action or actions, which would cause any Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code or "federally guaranteed" within the meaning of Section 149(b) of the Code and any such applicable requirements promulgated from time to time thereunder and under 57284\0001\635693.2 -27- DRAFT 12/5/00 Section 103(c) of the Internal Revenue Code of 1954, as amended. The Agency shall observe and not violate the requirements of Section 148 of the Code and any such applicable regulations. The Agency shall comply with all requirements of Sections 148 and 149(d) of the Code to the extent applicable to the Bonds. In the event that at any time the Agency is of the opinion that for purposes of this Section 6.15(b) it is necessary to restrict or to limit the yield on the investment of any moneys held by the Trustee under this Indenture, the Agency shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. The Agency shall not use or permit the useof any proceeds of the Bonds or any funds of the Agency, directly or indirectly, in any manner, and shall not take or omit to take any action that would cause any of the Bonds to be treated as an obligation not described in Section 103(a) of the Code. (c) Notwithstanding any provisions of this Section 6.15 if the Agency shall provide to the Trustee an opinion of nationally recognized bond counsel that any specified action required under this Section 6.15 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 Bonds, the Trustee and the Agency may conclusively rely on such opinion in complying with the requirements of this section, and, notwithstanding Article VIII hereof, the covenants hereunder shall be deemed to be modified to that extent. (d) The provisions of this Section 6.15 shall not apply to any Series of Bonds not intended to comply with the requirements of the Code necessary to make interest on such Series of Bonds excludable from gross income for federal tax purposes, as shall be specified to the Trustee by the Agency. SECTION 6.16. Agreements with Taxing Agencies: Other Aareements. So long as any Bonds are Outstanding, the Agency shall not (a) enter into any new agreement, or amend any existing agreement, with any taxing agency entered into (i) pursuant to Section 33401 of the Law or (u) which operates as a waiver of the Agency's right to receive Tax Revenues under the Redevelopment Plan, or (b) enter into any disposition, development, owner participation or other agreement, or amend any existing agreement, which requires the Agency to make payments from Tax Revenues, unless the Agency's obligations under such agreement are made expressly subordinate and junior to the Agency's obligations under this Indenture and the Bonds. SECTION 6.17. Annual Review of Tax Revenues, The Agency hereby covenants that it will annually review the total amount of Tax Revenues remaining available to be received by the Agency under the Redevelopment Plan's cumulative tax increment limitation, as well as future cumulative Annual Debt Service. The Agency will not accept Tax Revenues greater than Annual Debt Service, in any year, if such acceptance will cause the amount remaining under the tax increment limit to fall below remaining cumulative Annual Debt Service, except for the purpose of depositing such revenues in escrow for the payment of interest on and principal of and redemption premiums, if any, on the Bonds. SECTION 6.18. Housing Fund. The Agency covenants and agrees to use the moneys in the Housing Fund in accordance with Sections 33334.2, 33334.3, and 33334.6 of the Law, and further covenants and agrees to disburse, expend or encumber any "excess surplus" (as defined in Section 33334.12 of the Law) in the Housing Fund at such times and in such manner that the Agency shall not be subject to sanctions pursuant to subdivision (e) of said Section 33334.12. ARTICLE VII THE TRUSTEE SECTION 7.01. Appointment of Trustee. BNY Western Trust Company, a state banking corporation duly organized and existing under and by virtue of the laws of the State of California, is hereby appointed Trustee by the Agency for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Agency agrees that it will maintain a Trustee which has (or which is a wholly-owned subsidiary of a corporation which has) a combined capital and surplus of at least $50,000,000, and which is subject to supervision or examination by Federal or State authority, so long as any Bonds are Outstanding. If such bank or trust company or such parent corporation publishes a report of condition at 5/284\0001\635693.2 -28- DRAFT 12/5/00 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 6.01 the combined capital and surplus of such bank or trust company or such parent corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee is hereby authorized to pay the principal of and interest and redemption premium (if any) on the Bonds when duly presented for payment at maturity, or on redemption prior to maturity, and to cancel all Bonds upon payment thereof. The Trustee shall keep accurate records of all funds and accounts administered by it and of all Bonds paid and discharged. SECTION 7.02. Acceomnce of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions: (a) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. (b) Whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, rely upon a Certificate of the Agency. (c) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Owners pursuant to this Indenture, unless such Owners shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. (d) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order bond or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. (e) The Trustee, prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default that may have occurred, undertakes to perform such duties and only such duties m are specifically set forth in this Indenture and no covenants of or against the Trustee shall be implied in this Indenture. In case an Event of Default hereunder has occurred (which has not been cured or waived), the Trustee may exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill in the exercise of such rights and powers as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (f) The Trustee may execute any of the trusts or powers hereunder and perform the duties required of it hereunder either directly or by or through attorneys or agents, shall not be liable for the acts or omissions of such attorneys or agents appointed with due care, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder. The Trustee may conclusively rely on an opinion of counsel as full and complete authorization and protection for any action taken, suffered or omitted by it hereunder. (g) The Trustee shall not be responsible for any recital herein or in the Bonds, or for any of the supplements thereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby and makes no representation m to the validity or sufficiency of the Bonds or this Indenture. The Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, conditions or agreements on the part of the Agency hereunder. The Trustee shall not be responsible for the application by the Agency of the proceeds of the Bonds. (h) The Trustee may become the Owner or pledgee of Bonds secured hereby with the same rights it would have if not the Trustee; may acquire and dispose of other bonds or evidences of indebtedness of the Agency with the same rights it would have if it were not the Trustee; and may act as S7284\0001\635693.2 -29- DRAFT 12/5/00 a depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Bonds, whether or not such committee shall represent the Owners of the majority in aggregate principal amount of the Bonds then Outstanding. (i) The Trustee may rely and shall be protected in acting or refraining from acting, in good faith and without negligence, upon any notice, resolution, opinion, report, direction, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed by it to be genuine and to have been signed or presented by the proper person or persons. Any action taken or omitted to be taken by the Trustee in good faith and without negligence pursuant to this Indenture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner of any Bond, shall be conclusive and binding upon all future Owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. The Trustee shall not be hound to recognize any person as an Owner of any Bond or to take any action at his request unless the ownership of such Bond by such person shall be reflected on the Registration Books. Q) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful default. The immunities and exceptions from liability of the Trustee shall extend to its officers, directors, employees and agents. (k) The Trustee shall not be required to take notice or be deemed to have notice of an Event of Default hereunder except failure by the Agency to make any of the payments to the Trustee require to be made by the Agency pursuant hereto or failure by the Agency to file with the Trustee any document required by this Indenture to be so filed subsequent to the issuance of the Bonds, unless the Trustee shall be specifically notified in writing of such default by the Agency or by the Owners of at least 25% in aggregate principal amount of the Bonds then Outstanding and all notices or other instmments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered at the Trust Office of the Trustee, and in the absence of such notice so delivered the Trustee may conclusively assume there is no Event of Default hereunder except as aforesaid. (1) At any and all reasonable times the Trustee and its duly authorized agents, attorneys, experts, accountants and representatives, shall have the right fully to inspect all books, papers and records of the Agency pertaining to the Bonds, and to make copies of any of such books, papers and records which are not privileged by statute or by law. (m) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises hereof. (n) Notwithstanding anything elsewhere in this Indenture with respect to the execution of any Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, as may be deemed desirable for the purpose of establishing the right of the Agency to the execution of any Bonds, the withdrawal of any cash or the taking of any other action by the Trustee. (o) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received but need not he segregated from other funds except to the extent required by law. (p) Whether or not expressly provided therein, every provision of this Indenture relating to the conduct or affecting the liability of the Trustee shall be subject to the provisions of this Section 7.02. (q) The Trustee shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. 57284\0001\635693.2 -30- mnAP 12/5/00 (r) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. SECTION 7.03. Fees. Charges and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for reasonable fees for its services rendered Hereunder and all advances (with interest on such advances at the maximum rate allowed by law), counsel fees (including expenses) and other expenses reasonably and necessarily made or incurred by the Trustee in connection with such services. Upon the occurrence of an Event of Default hereunder, but only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment of any Bond upon the amounts held hereunder for the foregoing fees charges and expenses incurred by it. SECTION 7.04. Notice to Bond Owners of Default. If an Event of Default hereunder occurs with respect to any Bonds of which the Trustee has been given or is deemed to have notice, as provided in Section 7.02(k) hereof, then the Trustee shall, within 30 days of the receipt of such notice, give written notice thereof by first class mail to the Owner of each such Bond, unless such Event of Default shall have been cured before the giving of such notice; provided, however, that unless such Event of Default consists of the failure by the Agency to make any payment when due, the Trustee may elect not to give such notice if and so long as the Trustee in good faith determines that it is in the best interests of the Bond Owners not to give such notice. SECTION 7.05. Intervention by Trustee. In anyjudicial proceeding to which the Agency is a party that, in the opinion of the Trustee and its counsel, has a substantial hearing on the interests of Owners of any of the Bonds, the Trustee may intervene on behalf of such Bond Owners, and subject to Section 7.02(c), shall do so if requested in writing by the Owners of at least 25% in aggregate principal amount of such Bonds then Outstanding. SECTION 7.06. Removal of Trustee. The Trustee may be removed at any time by an instrument or concurrent instruments in writing, filed with the Trustee and signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds. The Agency may also remove the Trustee at any time upon 30 days notice, except during the existence of an Event of Default. The Trustee may be removed at any time for any breach of the Trustee's duties set forth herein. SECTION 7.07. Resignation by Trustee. The Trustee and any successor Trustee may at any time give written notice of its intention to resign as Trustee hereunder, such notice to be given to the Agency by registered or certified mail. Upon receiving such notice of resignation, the Agency shall promptly appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. Upon such acceptance, the shall cause notice thereof to be given by first class mail, postage prepaid, to the Bond Owners at their respective addresses set forth on the Bond registration books. SECTION 7.09. Appointment of Successor Trustee. In the event of the removal or resignation of the Trustee pursuant to Sections 7.06 or 7.07, respectively, the Agency shall promptly appoint a successor Trustee. In the event the Agency shall for any reason whatsoever fail to appoint a successor Trustee within 90 days following the delivery to the Trustee of the instrument described in Section 7.06 or within 90 days following the receipt of notice by the Agency pursuant to Section 6.07, the Trustee may, at the expense of the Agency, apply to a court of competentjurisdiction for the appointment of a successor Trustee meeting the requirements of Section 6.01. Any such successor Trustee appointed by such court shall become the successor Trustee hereunder notwithstanding any action by the Agency purporting to appoint a successor Trustee following the expiration of such 90 -day period. SECTION 7.09. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it maybe consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such company shall, meet the requirements set forth in Section 7.0 1, shall be the successor to the Tmstee and vested with all of the title to the trust estate and all of the trusts, powers, discretions, immunities, privileges and all other matters as S7284\0001\635693.2 -31- DRAFT 12/5/00 was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding. SECTION 7.10. Concerning any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Agency an instrument in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the Written Request of the Agency, or of the Trustee's successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as the Trustee hereunder to its successor. Should any instrument in writing from the Agency be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor Trustee, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Agency. SECTION 7.11. Appointment of Co -Trustee. It is the purpose of this Indenture that there shall be no violation of any law of anyjurisdiction (including particularly the law of the State of California) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction in may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action that may be desirable or necessary in connection therewith, it may be necessary that the Trustee or the Agency appoint an additional individual or institution as a separate trustee or co -trustee. The following provisions of this Section 7.11 are adopted to these ends. In the event that the Trustee or the Agency appoints an additional individual or institution as a separate trustee or co -trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate trustee or co -trustee but only to the extent necessary to enable such separate trustee or cotrustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate trustee or co -trustee shall run to and be enforceable by either of them. Should any instrument in writing from the be required by the separate trustee or co - trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Agency. In case any separate trustee or co - trustee, or a successor to either, shall become incapable of acting, shall resign or shall be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co -trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co -trustee. SECTION 7.12. Indemnification, Limited Liability of Trustee. The Agency further covenants and agrees, to the extent permitted by law, to indemnify, and save the Trustee and its officers, directors, agents and employees, harmless against any loss, expense and liabilities arising out of or in the exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities that are due to the negligence or willful default of the Trustee, its officers, directors or employees. No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability hereunder if it shall have reasonable grounds for believing repayment of such funds or adequate indemnity against such liability or risk is not assured to it. The Trustee shall not be liable for any action taken or omitted to be taken by it in accordance with the direction of the Owners of at least 25% in aggregate principal amount of Bonds Outstanding relating to the time, method and place of conducting any proceeding or remedy available to the Trustee under this Indenture or exercising any power conferred upon the Trustee under this Indenture. The obligations of the Agency under this Section shall survive the final payment or defeasance of the Bonds or the resignation or removal of the Trustee under this Indenture. S7284\0001\635693.2 -32- DRA" 12/5/00 ARTICLE VIII AMENDMENT OF THE INDENTURE SECTION 8.01. Amendment by Consent of Owners. The Indenture and the rights and obligations of the Agency and of the Owners may be amended at any time by a Supplemental Indenture which shall become binding when the written consents of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.02, and the written consent of the Bond Insurer, if any, are filed with the Trustee. No such amendment shall (1) extend the maturity of or reduce the interest rate on, or otherwise alter or impair the obligation of the Agency to pay the interest or principal or redemption premium, if any, at the time and place and at the rate and in the currency provided herein of any Bond, without the express written consent of the Owner of such Bond, or (2) permit the creation by the Agency of any mortgage, pledge or lien upon the Surplus Tax Revenues superior to or on a parity with the pledge and lien created in the Indenture for the benefit of the Bonds, or (3) reduce the percentage of Bonds required for the written consent to any such amendment, or (4) modify the rights or obligations of the Trustee without its prior written assent thereto. The Indenture and the rights and obligations of the Agency and of the Owners may also be amended at any time by a Supplemental Indenture which shall become binding upon execution, without the consent of any Owners, 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 Agency in the Indenture contained, other covenants and agreements thereafter to be observed, or to surrender any right or power herein reserved to or conferred upon the Agency; (b) To make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Indenture, or in regard to questions arising under the Indenture, as the Agency may deem necessary or desirable and not inconsistent with the Indenture, and which shall not materially adversely affect the interest of the Owners; (c) To provide for the issuance of any Additional Bonds, and to provide the terms and conditions under which such Additional Bonds may be issued, subject to and in accordance with the provisions of Article IV; (d) 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; (e) To maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes (except with respect to any Bonds which the Agency certifies to the Trustee are not intended to qualify for such exclusion); (f) To the extent necessary to obtain a Bond Insurance Policy, to obtain a rating on the Bonds or in connection with satisfying all or a portion of the Reserve Account Requirement by crediting a letter of credit or Bond Insurance Policy to the Reserve Account; or (g) For any other purpose that does not materially adversely affect the interests of the Owners. SECTION 8.02. Disqualified Bonds. Bonds owned or held by or for the account of the Agency or the City shall not be deemed Outstanding for the purpose of any consent or other action in this Indenture provided for, and shall not be entitled to consent to, or take any other action in this Indenture provided for; provided, however, that for purposes 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 owned or held will be disregarded. 57289\0001\635693.2 -33- DRAFT 12/5/00 SECTION 8.03. Endorsement or Replacement of Bonds After Amendment. After the effective date of any action taken as hereinabove provided, the Agency may determine that the Bonds may bear a notation, by endorsement in form approved by the Agency, as to such action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for such purpose at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation as to such action shall be made on such Bond. If the Agency shall so determine, new Bonds so modified as, in the opinion of the Agency, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Bond Outstanding at such effective date such new Bonds shall be exchanged at the office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, without cost to each Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds. SECTION 8.04. Opinion of Counsel. The Trustee may conclusively accept an opinion of nationally recognized bond counsel to the Agency that an amendment of the Indenture is in conformity with the provisions of this Article. ARTICLE IX EVENTS OF DEFAULT AND REMEDIES OF OWNERS SECTION 9.01. Events of Default and Acceleration of Maturities. If one or more of the following events (herein called "Events of Default") shall happen, that is to say: (a) If default shall be made in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) If default shall be made in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; (c) If default shall be made by the Agency in the observance of any of the other agreements, conditions or covenants on its part in the Indenture or in the Bonds contained, and other such default shall have continued for a period of 60 days after the Agency shall have been given notice in writing of such default by the Trustee; provided, however, that such default shall not constitute an Event of Default hereunder if the Agency shall commence to cure such default within said 60 -day period and thereafter diligently and in good faith proceed to cure such default within a reasonable period of time; or (d) If the Agency shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competentjurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property; then, and in each and every such case during the continuance of such Event of Default, the Trustee may, and upon the written request of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, shall, by notice in writing to the Agency, declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in the Indenture or in the Bonds contained to the contrary notwithstanding; provided, however, that any such declaration shall be subject to the prior written consent of the Bond Insurer, if any. This 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, and before anyjudgment or decree for the payment of the money due shall have been obtained or entered, the Agency shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest at the rate of interest which would have S7284\0001\635693.2 -34- D5XrT 12/5/00 been paid on such overdue principal on such overdue installments of principal and interest, and the fees and expenses of the Trustee, including attorneys fees, 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 Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Agency and to the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences; provided, however, that no such rescission or annulment shall occur without the prior written consent of the Bond Insurer, if any. 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. SECTION 9.02. Application of Funds Upon Acceleration. All money in the funds and accounts provided for in the Indenture (other than the Rebate Fund) upon the date of the declaration of acceleration by the Trustee as provided in Section 9.0 1, and all Tax Revenues thereafter received by the Agency hereunder, shall be transmitted to the Trustee and shall be applied by the Trustee in the following order: First, to the payment of the fees, costs and expenses of the Trustee, if any, in carrying out the provisions of this article, including reasonable compensation to its agents and counsel, to the payment of any other amounts then due and payable to the Trustee, including any predecessor trustee, with respect to or in connection with this Indenture, whether as compensation, reimbursement, indemnification or otherwise, and, thereafter, to the payment of the costs and expenses of the Owners in providing for the declaration of such Event of Default, including reasonable compensation to their agents and counsel; Second • upon presentation of the several Bonds, and the stamping thereon of the amount of the payment if only partially paid, or upon the surrender thereof if fully paid, to the payment of the whole amount then owing and unpaid upon the Bonds for interest and principal, with interest on the overdue interest and principal at the rate of ten percent (10%) per annum, and in case such money shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such interest, principal and interest on overdue interest and principal without preference or priority among such interest, principal and interest on overdue interest and principal, ratably to the aggregate of such interest, principal and interest on overdue interest and principal. SECTION 9.03. Other Remedies of Owners. Any Owner shall have the right, subject to the provisions of Section 9.08, for the equal benefit and protection of all Owners similarly situated: (a) By mandamus or other suit or proceeding at law or in equity to enforce his rights against the Agency and any of the members, officers and employees of the Agency, and to compel the Agency or any such members, officers or employees to perform and carry out their duties under the Law and their agreements with the Owners as provided in the Indenture; (b) By suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Owners; or (c) Upon the happening of an Event of Default (as defined in Section 9.01), by a suit in equity to require the Agency and its members, officers and employees to account as the trustee of an express trust. SECTION 9.04. Non -Waiver. A waiver of any default or breach of duty or contract by any Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner or the Trustee to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Law or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the Trustee, the Agency and the Owners shall be S7284\0001\635693.2 -35- DRAFT 12/5/00 restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. SECTION 9.05. Actions by Trustee as Attorney -in -Fact. Any suit, action or proceeding which any Owner shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners, and the Trustee is hereby appointed (and the successive respective Owners of the Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attomey-in-fact of the Owners for thepurpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the Owners as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attomey-in-fact; provided, however, the Trustee shall have no duty or obligation to enforce any right or remedy unless it has been indemnified by the Owners from any liability or expense including without limitation fees and expenses of its attorneys. SECTION 9.06. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. 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, and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law, subject to the provisions of Section 9.08. SECTION 9.07. Owners' Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, with the written consent of the Bond Insurer, if any, by an instrument or concurrent instruments in writing executed and delivered to the Trustee and upon furnishing the Trustee with indemnification satisfactory to it, 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, that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, 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 Owners not parties to such direction. SECTION 9.08. Limitation on Owners' 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 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 (250/*) 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 incurred in compliance with such request; (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; and (5) the Trustee shall not have received contrary directions from the Owners of a majority in aggregate principal amount of the Bonds then Outstanding. Such notification, request, tender or indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder or under law; it being understood and intended that no one or more Owners 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, or to enforce any right under this Indenture, the Law or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law 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. Nothing in this Section or in any other provision of the Indenture, or in the Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners of the Bonds at the respective dates of maturity, as herein provided, out of the Tax Revenues pledged for such payment, or affect or impair the right of 57284\0001\635693.2 -36- DFWT 12/5/00 action, which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in the Indenture. ARTICLE X DEFEASANCE SECTION 10.01. Discharge of Indebtedness. If the Agency shall pay or cause to be paid, or there shall otherwise be paid, to the Owners of all Outstanding Bonds the interest due thereon and the principal thereof, at the times and in the manner stipulated therein and in the Indenture, then the Owners of such Bonds shall cease to be entitled to the pledge of Surplus Tax Revenues, and all covenants, agreements and other obligations of the Agency to the Owners of such Bonds under the Indenture shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute at the Written Request of the Agency, and at the expense of the Agency, and deliver to the Agency all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall, after payment of amounts due the Trustee hereunder, pay over or deliver to the Agency all money or securities held by it pursuant to the Indenture which are not required for the payment of the interest due on and the principal of and premium, if any, due on such Bonds other than the moneys, if any, in the Rebate Fund. Bonds for the payment of which money shall have been set aside (through deposit by the Agency or otherwise) to be held in trust by the Trustee for such payment at the maturity or redemption date thereof shall be deemed, as of the date of such setting aside, to have been paid within the meaning and with the effect expressed in the first paragraph of this section. Any Outstanding Bonds shall prior to the maturity date thereof be deemed to have been paid within the meaning and with the effect expressed in the first paragraph of this section if (1) there shall have been deposited with the Trustee, or another fiduciary or escrow agent, either money in an amount which shall be sufficient, or Federal Securities (including any Federal Securities issued or held in book -entry form on the books of the Department of the Treasury of the United States of America) the principal of and the interest on which when paid will provide money which, together with the money, if any, deposited with the Trustee at the same time, shall be sufficient to pay when due the interest due and to become due on such Bonds on and prior to the maturity date thereof or such earlier redemption date as shall be irrevocably established, and the principal of and redemption premium, if any, on such Bonds (the sufficiency of such amounts to be appropriately verified by an Independent Certified Public Accountant) and (2) the Agency shall have given the Trustee in form satisfactory to it irrevocable instructions to mail, as soon as practicable, a notice to the Owners of such Bonds that the deposit required by (1) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with this section and stating the maturity date or earlier redemption date upon which money is to be available for the payment of the principal of such Bonds. Neither Federal Securities nor money deposited with the Trustee pursuant to this section nor interest or principal payments on any such Federal Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the interest on and principal of such Bonds; provided that any cash received from such interest or principal payments on such Federal Securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested at the written direction of the Agency in Federal Securities maturing at times and in amounts sufficient to pay when due the interest on and principal of such Bonds on and prior to such maturity date thereof, and interest earned from such reinvestments shall be deposited in the Special Fund. For the purposes of this section, Federal Securities shall mean and include only such securities as are not subject to redemption prior to their maturity. In the event that the principal and/or interest due on the Bonds shall be paid by the Bond Insurer pursuant to the Bond Insurance Policy, the Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Agency and the covenants, agreements and other obligations of the Agency to the Owners shall continue to exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of such Owners. S7294\0001\635693.2 -37- DRAFT 12/5/00 SECTION 10.02. Unclaimed Moneys. Anything in the Indenture to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Bonds or interest thereon which remain unclaimed for two (2) years after the date when such Bonds or interest thereon have become due and payable, if such money was held by the Trustee at such date, or for two (2) years after the date of deposit of such money if deposited with the Trustee after the said date when such Bonds or interest thereon become due and payable, shall be repaid by the Trustee to the Agency, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Agency for the payment of such Bonds; provided, however, that before being required to make any such payment to the Agency, the Trustee shall, at the Written Request of the Agency and at the expense of the Agency, 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 that said money remains unclaimed and that, after a date named in said notice, which date shall not be less than thirty (30) days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the Agency. Any money held by the Trustee in trust for the payment and discharge of any Bonds shall not bear interest or be otherwise invested from and after such maturity or redemption date. ARTICLE XI MISCELLANEOUS SECTION 11.01. Liability of Agency Limited to Tax Revenues. Notwithstanding anything in the Indenture contained, the Agency shall not be required to advance any money derived from any source of income other than the Surplus Tax Revenues for the payment of the interest on or the principal of the Bonds. The Agency may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose. The Agency's obligation to pay the Rebate Requirement to the United States of America pursuant to Section 6.15 hereof shall be considered the general obligation of the Agency and shall be payable from any available funds of the Agency. The Bonds are limited obligations of the Agency and are payable, as to interest thereon and principal thereof, exclusively from the Surplus Tax Revenues, and the Agency is not obligated to pay them except from the Surplus Tax Revenues. All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Surplus Tax Revenues, and the Surplus Tax Revenues constitute a trust fund for the security and payment of the interest on and the principal of the Bonds. The Bonds are not a debt of the City of Seal Beach, 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 Agency. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory limitation or restriction, and neither the members of the Agency nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance. SECTION 11.02. Benefits of Indenture Limited to Parties. Nothing in the Indenture, expressed or implied, is intended to give to any person other than the Agency, the Trustee and the Owners any right, remedy or claim under or by reason of the Indenture. Any covenants, stipulations, promises or agreements in the Indenture contained by and on behalf of the Agency or any member, officer or employee thereof shall be for the sole and exclusive benefit of the Trustee and the Owners. SECTION 11.03. Successor Is Deemed Included in All References to Predecessor. Whenever in the Indenture either the Agency or any member, officer or employee thereof is named or referred to, such reference shall be deemed to include the successor to the powers, duties and functions, with respect to the management, administration and control of the affairs of the Agency, that are presently vested in the Agency or such member, officer or employee, and all the agreements, covenants and provisions contained in the Indenture by or on behalf of the Agency or any member, officer or employee thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. SECTION 11.04. Execution of Documents by Owners. Any request, consent, declaration or other instrument which the Indenture may require or permit to be executed by Owners may S7284\0001\635693.2 -38- Dit"T 12/5/00 be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, consent, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act, that the person signing such request, consent, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly swom to before such notary public or other officer. Except as otherwise herein expressly provided, the amount of Bonds transferable by delivery held by any person executing such request, consent, declaration or other instrument or writing as a Owner, and the numbers thereof, and the date of his holding such Bonds, may be proved by a certificate, which need not he acknowledged or verified, satisfactory to the Trustee, executed by a cost company, bank or other depositary wherever situated, showing that at the date therein mentioned such person had on deposit with such depositary the Bonds described in such certificate. The Trustee may nevertheless in its discretion require further or other proof in cases where it deems the same desirable. The ownership of Bonds and the amount, maturity, number and date of holding the same shall be proved by the registry books provided for in Section 2.08. Any request, consent, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Agency or the Trustee in good faith and in accordance therewith. SECTION 11.05. Waiver of Personal Liability. No member, officer or employee of the Agency shall be individually or personally liable for the payment of the interest on or principal of the Bonds; but nothing herein contained shall relieve any member, officer or employee of the Agency from the performance of any official duty provided by law. SECTION 11.06. AAc uisition of Bonds by Agency. All Bonds acquired by the Agency, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. SECTION 11.07. Content of Certificates and Reports. Every certificate or report of the Agency with respect to compliance with a condition or covenant provided for in the Indenture shall include (a) a statement that the person or persons making or giving such certificate or report have read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or report are based; (c) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of the signers, such condition or covenant has been complied with. Any such certificate made or given by an officer of the Agency may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his Certificate may be based, as aforesaid, are erroneous, or in the exercise of reasonable care should have known that the same were erroneous. Any such certificate or opinion or representation made or given by counsel may be based, insofar as it relates to factual matters or information with respect to which is in the possession of the Agency, upon the certificate or opinion of or representations by an officer or officers of the Agency, unless such counsel knows that the certificate or opinion or representations with respect to the matters upon which his certificate, opinion or representation may be based, as aforesaid, are erroneous, or in exercise of reasonable care should have known that the same were erroneous. SECTION 11.08. Notice to Bond Insurer. Whenever any notice, authorization, request or demand is required or permitted to be given to any party pursuant to this Indenture, such notice, authorization, request or demand shall also be given in writing to the Bond Insurer, if any, by first class mail at the address specified by such Bond Insurer. S7284\0001\635693.2 -39- DRAFT 12/5/00 SECTION 11.09. Funds and Accounts. Any fund or account required by the Indenture to be established and maintained by the Agency or the Trustee may be established and maintained in the accounting records of the Agency or the Tmstee 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 or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with sound corporate trust accounting practices and with due regard for the protection of the security of the Bonds and the rights of the Owners. SECTION 11.10. Article and Section Headings and References. The headings or titles of the several articles and sections hereof, and the table of contents appended hereto, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of the Indenture. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding articles, sections or subdivisions of the Indenture; and the words "herein," "hereof," "hereunder" and other words of similar import refer to the Indenmre as a whole and not to any particular article, section or subdivision hereof. SECTION 11.11. Partial Invalidilv. If any one or more of the agreements or covenants or portions thereof provided in the Indenture to be performed on the part of the Agency (or of the Trustee) should be contrary to law, then such agreement or agreements, such covenant or covenants, or such portions thereof, shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity of the Indenture or of the Bonds; but the Owners shall retain all the rights and benefits accorded to them under the Law or any other applicable provisions of law. The Agency hereby declares that it would have adopted the Indenture and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases of the Indenture or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.. SECTION 11.12. Execution in Several Counteroarts. This Indenture may be executed in any number of counterpart each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of mem as the Agency and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 11.13. Business Days. When any action is provided for herein to be done on a day named or within a specified time period, and the day or the last day of the period falls on a day other than a Business Day, such action may be performed on the next ensuing Business Day with the same effect as though performed on the appointed day or within the specified period. SECTION 11.14. Goveming Law. This Indenture shall be governed and construed in accordance with the laws of the State of California. SECTION 11. 15. Notices. Whenever any notice is required to be given hereunder, such notice shall be mailed, first-class mail, postage prepaid, to the following parties at the following addresses: If to the Agency: Redevelopment Agency of the City of Seal Beach 211 8th Street Seal Beach, California 90740 Attention: Executive Director Fax: (562) 431-4067 If to the Trustee: BNY Western Tmst Company 700 South Flower Street, Fifth Floor Los Angeles, California 900174104 Attention: Corporate Trust Division Fax: (213)630-6210 S7204\0001\635693.2 -40- DRAFT 12/5/00 IN WITNESS WHEREOF, the Redevelopment Agency of the City of Seal Beach has caused this Indenture to be signed in its name by its duly authorized officer and BNY Western Trust Company in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the date and year first above written. SEAL BEACH REDEVELOPMENT AGENCY Executive Director BNY WESTERN TRUST COMPANY, as Trustee By Authorized Officer S7284\0001\635693.2 -41- DAAPT 12/5/00 APPENDIX A [Form of Series 2000 B Bond] EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.12 OF THE INDENTURE DESCRIBED HEREIN, THIS GLOBAL CERTIFICATE MAY BE TRANSFERRED, IN WHOLE.BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE DEPOSITORY (AS DEFINED IN SAID INDENTURE) OR TO A SUCCESSOR DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR DEPOSITORY. No. _ $_ SEAL BEACH REDEVELOPMENT AGENCY SUBORDINATE TAX ALLOCATION BOND, 2000 SERIES B (RIVERFRONT REDEVELOPMENT PROJECT) RATE OF INTEREST: MATURITY DATE: DATED DATE: CUSIP: October 1, REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS The Redevelopment Agency of the City of Seal Beach, a public body, corporate and politic, duly organized and existing under and pursuant to the laws of the State of California (the Agency"), for value received hereby promises to pay to the registered owner specified above, or registered assigns, on the Maturity Date specified above the Principal Amount specified above, together with interest thereon from the interest payment date next preceding the date of authentication of this Bond (unless this Bond is authenticated during the period from the 16th day of the month next preceding an interest payment date to and including such interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated on or before the fifteenth day of the month next preceding the first interest payment date, in which event it shall bear interest from the dated date shown above) until the principal hereof shall have been paid, at the Rate of Interest specified above, payable on April 1, 2001, and semiannually thereafter on October 1 and April 1 in each year. Both the interest hereon and principal hereof are payable in lawful money of the United States of America. The principal (or redemption price) hereof is payable upon surrender hereof at maturity or the earlier redemption hereof at the corporate trust office of BNY Western Trust Company (the "Trustee") in Los Angeles, California, or at such other office as the Trustee may designate (the "Trust Office"). Interest hereon is payable by check mailed on each interest payment date by first class mail to the person in whose time this Bond is registered at the close of business on the 15th day of the month next preceding the applicable interest payment date at such person's address as it appears on the registration books of the Trustee, or upon written request received by the Trustee prior to the fifteenth day of the month preceding an interest payment date of an Owner of all of the outstanding Bonds, by transfer in immediately available funds to an account within the continental United States designated by such Owner. This Bond is one of a duly authorized issue of bond of the Agency designated "Redevelopment Agency of the City of Seal Beach Subordinate Tax Allocation Bonds, 2000 Series B (Riverfront Redevelopment Project)" (the "Bonds"), limited in aggregate principal amount to $ issued under the provisions of the Community Redevelopment Law of the State of California, as supplemented and amended (the "Law"), and pursuant to the provisions of an Indenture, dated as of December 1, 2000 (the "Indenture"), between the Agency and the Trustee. All Bonds are equally and ratably secured in accordance with the terms and conditions of the Indenture, and reference is hereby made to the Indenture, to any indentures supplemental thereto and to the Law for a description of the terms on which the Bonds are issued, for the provisions with regard to the nature and extent of the security provided for the Bonds and of the nature, extent and manner of enforcement of such security, and for a statement of the rights of the registered owners of the Bonds; and all the terms of the Indenture and the Law are hereby incorporated herein and constitute a contract between the Agency and the registered owner from time to time of this Bond, and to all the provisions thereof the registered owner of S7289\0001\635693.2 A-1 DRAFT 12/5/00 this Bond, by his acceptance hereof, consents and agrees. Each registered owner hereof shall have recourse to all the provisions of the Law and the Indenture and shall be bound by all the terms and conditions thereof. The Bonds are issued to provide funds to aid in the financing and refinancing of the Riverfront Redevelopment Project, a duly adopted redevelopment project in Seal Beach, California, as more particularly described in the Indenture. The Bonds are special obligations of the Agency and are payable, as to interest thereon, principal thereof and any premiums upon the redemption thereof, exclusively from the Surplus Tax Revenues (as that term is defined in the Indenture and herein called the "Surplus Tax Revenues") and certain other funds, and the Agency is not obligated to pay them except from the Surplus Tax Revenues and such other funds. The Bonds are equally secured by a pledge of, and charge and lien upon, the Surplus Tax Revenues, and the Surplus Tax Revenues constitute a trust fund for the security and payment of the interest on and principal of and redemption premiums, if any, on the Bonds. Additional tax allocation bonds payable from the Surplus Tax Revenues may be issued which will rank equally as to security with the Bonds, but only subject to the terms and conditions set forth in the Indenture. The Agency hereby covenants and warrants that, for the payment of the interest on and principal of and redemption premium, if any, on this Bond and all other Bonds issued under the Indenture when due, there has been created and will be maintained by the Trustee a special fund into which all Surplus Tax Revenues shall be deposited, and as an irrevocable charge the Agency has allocated the Surplus Tax Revenues to the payment of the interest on and principal of and redemption premiums, if any, on the Bonds, and the Agency will pay promptly when due the interest on and principal of and redemption premium, if any, on this Bond and all other Bonds of this issue and all additional tax allocation bonds authorized by the Indenture out of said special fund, all in accordance with the terms and provisions set forth in the Indenture. . The Bonds maturing on or after October 1, 2008 shall be subject to redemption as a whole or in part, by such maturities as the Agency shall designate (which designation shall be in writing and shall be delivered to the Trustee no later than 45 days prior to the redemption date) prior to their maturity at the option of the Agency on any date on or after October 1, 2007, from funds derived by the Agency from any source, at the following redemption prices (expressed as percentages of the principal amount of Bonds called for redemption), together with interest accrued thereon to the date fixed for redemption: Redemption Dates Redemption Price October 1, 2007 through September 30, 2008 102% October I, 2008 through September 30, 2009 101 October 1, 2009 and thereafter 100 The Bonds maturing on October 1, _, October 1, _ and October 1, _ shall be subject to mandatory sinking fund redemption by lot, at a redemption price equal to the principal amount thereof to be redeemed, without premium, on October I of each year commencing October 1, _, October 1, _, and October 1, _, respectively, in the aggregate respective principal amounts set forth in the Indenture. As provided in the Indenture, notice of redemption of this Bond shall be mailed by first class mail not less than thirty (30) days before the redemption date to the registered owner hereof, but failure to receive such notice shall not affect the sufficiency of such proceedings for redemption. If notice of redemption has been duly given w aforesaid and money for payment of the above-described redemption price is held by the Trustee, then such Bonds shall, on the redemption date designated in such notice, become due and payable at the above-described redemption price; and from and after the date so designated interest on the Bonds so called for redemption shall cease to accrue and registered owners of such Bonds shall have no rights in respect thereof except to receive payment of such redemption price thereof. If an event of default, as defined in the Indenture, 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 57284\0001\635693.2 A-2 DRAFT 12/5/00 Indenture; except that the Indenture provides that in certain events such declaration and its consequences may be rescinded by the registered owners of at least a majority in aggregate principal amount of the Bonds then outstanding. The owner of any Bond or Bonds may surrender the same at the Trust Office in exchange for an equal aggregate principal amount of fully registered Bonds of any other authorized denominations, in the manner, subject to the conditions and upon the payment of the charges provided in the Indenture. This Bond is transferable, as provided in the Indenture, only upon a register to be kept for that purpose at the Trust Office by the registered owner hereof in person, or by his duly authorized attorney, upon surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new fully registered Bond or Bonds, in the same aggregate principal amount, shall be issued to the transferee in exchange therefor as provided in the Indenture, and upon payment of the charges therein prescribed. The Agency and the Trustee may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the interest hereon and principal hereof and redemption premium, if any, hereon and for all other purposes. The Trustee shall not be required to register the transfer or exchange of any Bond during the period in which the Trustee is selecting Bonds for redemption or any Bond selected for redemption. The rights and obligations of the Agency and of the registered owners of the Bonds may be amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such amendment shall (1) extend the maturity of this Bond, or reduce the interest rate hereon, or otherwise alter or impair the obligation of the Agency to pay the interest hereon or principal hereof or any premium payable on the redemption hereof at the time and place and at the rate and in the currency provided herein, without the express written consent of the registered owner of this Bond, or (2) permit the creation by the Agency of any mortgage, pledge or lien upon the Surplus Tax Revenues superior to or on a parity with the pledge and lien created in the Indenture for the benefit of the Bonds and all additional in allocation bonds authorized by the Indenture or (3) reduce the percentage of Bonds required for the written consent to an amendment of the Indenture, or (4) modify any rights or obligations of the Trustee without its prior written assent thereto; all as more fully set forth in the Indenture. This Bond is not a debt of the City of Seal Beach, the State of California or any of its political subdivisions, and neither said City, said State nor any of its political subdivisions is liable hereon, nor in any event shall this Bond or any interest hereon or any redemption premium hereon he payable out of any funds or properties other than those of the Agency. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction, and neither the members of the Agency nor any persons executing the Bonds shall be personally liable on the Bonds by reason of their issuance. This Bond shall not be entitled to any benefits 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. It is hereby certified that all of the acts, conditions and things required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law and that the amount of this Bond, together with all other indebtedness of the Agency, does not exceed any limit prescribed by the Constitution or laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. 57289\0001\635693.2 A-3 DRAFT 12/5/00 IN WITNESS WHEREOF, the Redevelopment Agency of the City of Seal Beach has caused this Bond to be executed in its name and on its behalf by its Chairman and attested by its Secretary, and has caused its seal to be reproduced hereon, and has caused this Bond to be dated December _ 2000. SEAL BEACH REDEVELOPMENT AGENCY By (Seal) chairman Attest: Secretary S7284\0001\635693.2 AA DRA" 12/5/00 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Bonds described in the within -mentioned Indenture and registered on the Bond registration books. Date: BNY WESTERN TRUST COMPANY, as Trustee By Authorized Signatory [FORM OF ASSIGNMENT] For value received the undersigned do(es) hereby sell, assign and transfer unto whose tax identification number is the within -mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s) attorney to transfer the same on the books of the Trustee with full power of substitution in the premises. Dated: Signature guaranteed: NOTE: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. NOTICE: Signature must be guaranteed by a member of an institution which is a participant in the Securities Transfer Agent Medallion Program (STAMP) or other similar program. S7284\0001\635693.2 A-5 DRAFT 12/5/00 APPENDIX B [Form of Expense Fund Requisition] REQUISITION NO. with reference to Redevelopment Agency�City of Seal Beach Subordinate Tax Allocation [Refunding] Bonds,_ Series _ (Riverfrom Redevelopment Project) 1. The Redevelopment Agency of the City of Seal Beach (the "Agency") hereby requests BNY Western Trust Company, as trustee (the "Trustee") pursuant to that certain Indenture dated as of December 1, 2000 (the "Indenture") between the Agency and the Trustee, under the terns of which the Agency has issued the above -captioned Bonds to pay from the moneys in the Expense Fund established pursuant to Section 5.03 of the Indenture (the "Expense Fund'), the amounts shown on Schedule I attached hereto to the parties indicated in Schedule 1. B. The payees, the purposes for which the costs have been incurred, and the amount of the disbursements requested are itemized on Schedule I hereto. BI. Each obligation mentioned in Schedule I hereto has been properly incurred and is a proper charge against the Expense Fund. None of the items for which payment is requested has been reimbursed previously from the Expense Fund. DATED: SEAL BEACH REDEVELOPMENT AGENCY By: Executive Director S7284\0001\635693.2 13-1 DRAFT 12/5/00