1241012498-0041 7002292. 7 a0?/14114

INDENTURE OF TRUST

By and .Betvveen

MURRIETA VALLEY UNIFIED SCHOOL DISTRICT

PUBLIC FINANCING AUTHORITY

and

ZIONS FIRST NATIONAL BANK,

as'Trustee,

Dated as of June 1, 2014

MURRIETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY

SPECIAL TAX REVENUE REFUNDING BONDS $20,235,000 2014 SERIES A

TABLE OF CONTENTS

ARTICLE 1 STATUTORY AUTHORITY AND DEFINITIONS .............................................. 2 Section 1.01 Definitions ......................................... ,., ..... ,,.,.,, .. ,,, .. , ........................ ,, .... ,,. 2 Section 1.02 Rules of Constrnction ........................................... , ................................. 15 Section 1.03 Authorization and Purpose of Bonds, ..................................................... 16 Section 1.04 Equal Security .................................................................... , .................... 16

ARTICLE 2 ISSUANCE OF BONDS ....................................................................................... 16 Section 2.01 Tenns ofBonds ....................................................................................... 16 Section 2. 02 Redemption of Bonds ........................................................ , .................... 1 7 Section 2.03 Form of Bonds ........................................................................................ 22 Section 2.04 Execution of Bonds .................................................... , .............. ,, ... , ........ 22 Section 2.05 Registration, Exchange, or Transfer ....................................................... 22 Section 2.06 Temporary Bonds, ................................................................................... 23 Section 2.07 Bond Register .......................................................................................... 23 Section 2.08 Bonds Mutilated, Lost, Destroyed or Stolen ........................................... 24

· Section 2.09 No Additional Bonds, ............................................................................. 24

ARTICLE 3 DEPOSIT AND APPLICATION OF PROCEEDS ............................................... 24 Section 3.01 Issuance of Bonds ................................................................................... 24 Section 3.02 Application of Proceeds of Sale of Bonds and Funds Received

from the Districts ............. , ,: ......................................... , .................... , ..... 24 Section 3. 03 Revenue Fund ......................................................................................... 25 Section 3.04 Costs oflssuance Fund ........................................................................... 25 Section 3.05 Rebate Fund ............................................................................................ 25 Section 3.06 Surplus Fund ........................................................................................... 25 Section 3.07 Validity of Bonds .................................................................................... 25

ARTICLE 4 REVENUES; FLOW OF FUNDS ......................................................................... 26 Section 4.01 Pledge of Revenues; Assignment ofRights ............................................ 26 Section 4.02 Receipt, Deposit and Application of Revenues; Revenue Fund ............. 26 Section 4.03 Local Obligations Reserve F1md ............................................................. 28 Section 4.04 Surplus Fund .................. , .... , ................................................................... 28 Section 4.05 Investments ................... , ............... , .. ,,,, ......................... , ..... ,, ............... , .. 28 Section 4.06 Valuation and Disposition of Investments ............................................. , 29

ARTICLE 5 COVENANTS OF THE AUTHORITY ................................................................ 30 Section 5.01 Punctual Payment ......................... , .......................................................... 30 Section 5.02 Extension of Payment ofBonds .............................................................. 30 Section 5.03 Against Encumbrances ............................................................................ 30 Section 5. 04 Power to Issue Bonds and Make Pledge and Assignment. ..................... 3 0 Section 5.05 Accounting Records and Financial Statements ....................................... 30 Section 5 .06 Protection of Security Rights of Trustee and Holder .............................. 31 Section 5.07 Tax Covenants ........................................................................................ 31

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Page

Section 5 .08 Rebate Fimd ............................................................................................ 32 Section 5.09 Local Obligations .................................................................................... 33 Section 5. IO Sale of Local Obligations ........................................................................ 34 Section 5.11 Annual Reporting Requirements ............................................................. 34

ARTICLE 6 THE TRUSTEE ..................................................................................................... 35 Section 6.01 Appointment of Trustee .......................................................................... 35 Section 6.02 Acceptance ofTrusts ............................................................................... 35 Section 6.03 Fees, Charges and Expenses of Trustee .................................................. 39 Section 6.04 Notice to Bond Owners of Default. ........................................................ 39 Section 6.0 5 Intervention by Trustee ........................................................................... 3 9 Section 6.06 Removal of Trustee ................................................................................. 3 9 Section 6.07 Resignation by Trustee ........................................................................... 39 Section 6.08 Appointment of Successor Trustee ........................................................ .40 Section 6.09 Merger or Consolidation ......................................................................... 40 Section 6.10 Concerning any Successor Trustee ........................................................ .40 Section 6.11 Appointment of Co-Trustee .................................................................... 41 Section 6.12 Indemnification; Limited Liability of Trustee ....................................... .41

ARTICLE 7 MODIFICATION AND AMENDMENT OF THE INDENTURE ...................... .42 Section 7 .01 Amendment Hereof ................................................................................. 42 Section 7.02 Effect of Supplemental Indenture ........................................................... 42 Section 7.03 Endorsement or Replacement of Bonds After Amendment. .................. 42 Section 7.04 Amendment by Mutual Consent ............................................................. 43

ARTICLE 8 EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS .................... 43 Section 8.01 Events of Default. ................................................................................... 43 Section 8.02 Remedies; Rights of Bond Owners ......................................................... 44 Section 8.03 Application of Revenues and Other Fimds After Default ....................... 44 Section 8.04 Power of Trustee to Control Proceedings .............................................. .45 Section 8.05 Appointment of Receivers ...................................................................... 45 Section 8.06 Non-Waiver ............................................................................................. 46 Section 8.07 Rights and Remedies of Bond Owners ................................................... 46 Section 8.08 Termination of Proceedings .................................................................... 46

ARTICLE 9 RESERVED ........................................................................................................... 47

ARTICLE 10 MISCELLANEOUS ............................................................................................ 47 Section 10.01 Limited Liability of Authority ................................................................ 47 Section 10.02 Benefits ofindenture Limited to Parties ................................................. 47 Section I 0.03 Discharge of Indenture ............................................................................ 47 Section 10.04 Successor is Deemed Included in All References to Predecessor .......... 48 Section 10.05 Content of Certificates ........................................................................... .48 Section 10.06 Execution of Documents by Bond Owners ............................................. 49 Section I 0.07 Disqualified Bonds .................................................................................. 49 Section 10.08 Waiver of Personal Liability ................................................................... 50

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Section 10.09 Partial Invalidity ...................................................................................... 50 Section 10.10 Destruction of Cancelled Bonds ............................................................. 50 Section 10.11 Funds and Accounts ................................................................................ 50 Section 10.12 Notices .................................................................................................... 51 Section 10.13 Unclaimed Moneys ................................................................................. 52 Section 10.14 Payment Due on Other than a Business Day .......................................... 53 Section 10.15 Documents to Be delivered at Closing .................................................... 53 Section 10.16 Arms Length Transactions ...................................................................... 57

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INDENTURE OF TRUST

THIS INDENTURE OF TRUST (this "Indenture"), made and entered into as of Jtme 1, 2014, by and between the MURRIETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under tl1e laws of the State of California (the "Authority") and ZIONS FIRST NATIONAL BANK, a national banking association organized and existing tmder the laws of the United States with a corporate trust office in Los Angeles, California, and being qualified to accept and administer tl1e trnsts hereby created (fue "Tn1stee").

WITNES SETH:

WHEREAS, the Authority is a joint powers autl1ority duly organized and existing tmder and pursuant to fuat certain Joint Exercise of Powers Agreement (fue "Agreement") dated as of July 1, 2004, by and between the Murrieta Valley Unified School District ("MVUSD") and Connnunity Facilities District No. 90-1 ofMVUSD ("CFD No. 90-1"), and tmder the provisions of Articles 1 through 4 ( commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of fue Goverrm1ent Code of the State of California (the "Act"), and is aufuorized pursuant to Article 4 of the Act (the "Bond Law") to borrow money for the purpose of financing fue acquisition of bonds, notes and oilier obligations of MVUSD, CFD No. 90-1 and other local agencies in order to provide financing for public capital improvements of the District, CFD No. 90-1 and such other local agencies; and

WHEREAS, the Autholity has detern1ined to issue its Special Tax Revenue Refunding Bonds, 2014 Series A in the aggregate principal amow1t of $20,235,000 (the "Bonds") pursuant to and secured by this Indenture in fue manner provided herein the proceeds of which will refund and defease fue Authority's Special Tax Revenue Bonds 2004 Series A (the "Prior Bonds"); and

WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and to secure fue payment of the principal fuereof and interest fuereon, the Aufuority has authorized the execution and delivery of fuis Indenture pursuant to Autl1ority Resolution No, 13/14-41 adopted by the Board of Directors of the Aufuority on JW1e 26, 2014; and

WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by fue Trustee and duly issued, fue valid, binding and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for fue uses and purposes herein set forth in accordance wifu its te1ms, have been done and talcen, and the execution and delivery of the Indenture have been in all respects duly authorized;

NOW, THEREFORE, THIS INDENTURE WITNESSETH, fuat 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 tmder this Indenture, according to their tenor, and to secure tl1e 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

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consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable considerations, the receipt and sufficiency of which is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, Jor the benefit of the respective Owners from time to time of the Bonds, as follows:

ARTICLEl STATUTORY AUTHORITY AND DEFINITIONS

Section 1.01 Definitions.

Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any Supplemental Indenture and of the Bonds and of any certificate, opinion, request or other documents herein mentioned have the meanings herein specified.

"Act" means Articles I through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State, as it may hereafter be amended from time to time.

"Administrative Expenses" means the fees and expenses of the Authority, including legal fees and expenses, and the out-of-pocket expenses of the Authority, incurred in can-ying out their duties hereunder, including but not limited to the costs of all consultants and attorneys retained by or on behalf of the Authority to comply with any state or federal information reporting and disclosure requirements, and to maintain any ratings and any credit enhancement related to the Bonds.

"Administrator" means the Assistant Superintendent, Facilities/Operational Services of the Murrieta Valley Unified School District or other officer of the Murrieta Valley Unified School District as the Board of Education of Murrieta Valley Unified School District may designate.

"Agreement" means that certain Joint Exercise of Powers Agreement, dated as of July l, 2004, by and between MVUSD and CPD No. 90-1, together with any amendments thereof and supplements thereto.

"Annual Debt Service" means, for each Bond Year, the sum of (a) the interest payable on the Outstanding Bonds in such Bond Year, and (b) the principal amount of the Outstanding Bonds scheduled to be paid in such Bond Year, including from mm1datory sinking flmd payments.

"Authority" 111em1s the Murrieta Valley Unified School District Public Financing Authority, a joint powers authority duly organized and existing under the Agreement mid under m1d by virtue of the laws of the State,

''Authority Documents" mem1s this Indenture and the Escrow Agreement.

"Board" means the Board of Directors of the Authority.

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"Bond Counsel" means any attorney at law or firm of attorneys selected by the Authority; of nationally-recognized standing in matters pertaining to the federal tax exemption of interest on bonds issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America.

"Bond Law" means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of the Act (commencing with Section 6584), as it may hereafter be amended from time· to time.

"Bond Register" means the registration books for the Bonds maintained by the Trnstee in accordance with Section 2.8 hereof.

"Bonds" or "Series A Bonds" means the Series A Bonds authorized by and at any time Outstanding pursuant to the Bond Law and this Indenture.

"Bond Year" means each twelve-month period extending from September 2 in one calendar year to September 1 of the succeeding calendar year, except in the case of the initial Bond Year which shall be the period from the Closing Date to September 1, 2014, both dates inclusive.

"Business Day" means a day which is not a Saturday or Sunday or a day of the year on which banks in New York, New York, Los Angeles, California, or where the Trust Office is located, are not required or authorized to remain closed.

"Certificate of the Authority" means a certificate in writing signed by the Chairman or Treasurer of the Authority, or by any other officer of the Authority duly authorized by the Chairman for that purpose.

"Closing Date" means the date upon which there is a physical delivery of the Bonds in exchange for the purchase price therefor.

"Code" means the Internal Revenue Code of 1986, as amended, and the United States Treasury Regulations proposed or in effect with respect thereto.

"Costs of Issuance" means the costs and expenses incurred in connection with the issuance and sale of the Bonds, inclnding the acceptance and initial annual fees and expenses of the Trustee, Escrow Agent, the Original Purchaser and their cotmsel, legal fees and expenses, costs of printing the Bonds, fees of financial consultants, and other fees and expenses set forth in a Request of the Authority.

"Costs of Issuance Fund" shall mean the fund by that name established in Section 3.04.

"Date of Taxahility" means the date from and for which interest on the Bonds is subject to federal income taxation as a result ofa Determination ofTaxability.

"Default Rate" means the rate of interest then in effect with respect to the Bonds plus three percent (3%) per anmm1.

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"Determination of Taxability" means any determination, decision or decree made by the Commissioner or any District Director of the Intemal Revenue Service, or by any court of competent jurisdiction, that as a result of any actions or omissions of the Authority or any District the interest payable on the Bonds is includable in the gross income for federal income tax purposes of the Owners, provided, however, that no such Determination of Taxability shall be deemed to have occurred if the Authority or the District is contesting such determination in good faith and is diligently proceeding to prosecute such contest until the earliest of (a) a final determination for which no appeal may be talcen with respect to such determination, of (b) abandonment of such appeal by the Authority or the District, as applicable.

"District" or "Obligor" and collectively, Districts or Obligors means each of those community facilities districts listed on Exhibit B hereto and incorporated by reference herein.

"Escrow Agent" means Zions First National Bank, acting in its capacity as escrow agent under the Escrow Agreement.

"Escrow Fund" or "Escrow Funds" means the funds by that name established under each of the Escrow Agreement.

"Escrow Agreement'' means ihe Escrow Agreements, dated as of June 1, 2014, by and between each of the Authority and the Escrow Agent.

*

"Event of Default" means any of the events described in Section 8.1.

"Federal Securities" means any of the following:

(a) Cash;

(b) Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America ("U.S. Government Securities");

(c) Direct obligations* of the following federal age7ncies which are fully guaranteed by the full faith and credit of the United States of America:

(i) Export-Import Bank of the United States - Direct obligations and fully guaranteed certificates of beneficial interest

(ii) Federal Housing Administration - debentures

The following are explicitly excluded from the securities enumerated in (c) and (d): (i) All derivative obligations, including without limitation inverse floaters1 residuals 1

interest-only, principal-only and range notes; (ii) Obligations that have a possibility of returning a zero or negative yield if held to

maturity; . (iii) Obligations 1hat do not have a fixed par value or those whose terms do not promise

a fixed dollar amount at maturity or call date; and (iv) Collateralized Mortgage-Backed Obligations ("CMOs"),

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(iii) General Services Administration - participation certificates

(iv) Govemment National Mortgage Association ("GNMAs") - guaranteed mortgage-backed securities and guaranteed participation certificates

(v) Small Business Administration - guaranteed participation certificates and guaranteed pool certificates

(vi) U.S. Department of Housing & Urban Development - local authority bonds

(vii) U.S. Maritime Administration - guaranteed Title XI financings

(viii) Washington Metropolitan Area Transit Authority - guaranteed transit bonds.

( d) Direct obligations* of the following federal agencies which are not fully guaranteed by the faith and credit of the United States of America:

(i) Federal National Mortgage Association ("FNMAs") - senior debt obligations rated Aaa by Moody's Investors Service ("Moody's") and AAA by Standard & Poor' s Ratings Services ("S&P")

(ii) Federal Home Loan Mortgage Corporation ("FHLMCs") - participation certificates and senior debt obligations rated Aaa by Moody's and AAA byS&P

(iii) Federal Home Loan Banks - consolidated debt obligations

(iv) Student Loan Marketing Association - debt obligations.

(v) Resolution Funding Corporation - debt obligations.

"Fiscal Agent" means Zions First National Bank, acting in its capacity as the fiscal agent for the Local Obligations.

"Fiscal Y car" means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Authority as its official fiscal year period.

"Indenture" means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the provisions hereof.

"Independent Accountant" means any certified public accountant or fmn of such certified public accountants appointed and paid by the Authority, and who, or each of whom -

(a) Districts;

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is in fact independent and not under domination of the Authority, MVUSD or the

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(b) does not have any substantial interest, direct or indirect, in the Authority, MVUSD or the Districts; and

(c) is not an officer or employee of the Authority, MVUSD or the Districts, but who may be regularly retained to make annual or other audits of the books of or reports to the Authority, MVUSD or the Districts.

"Independent Financial Consultant" means any financial consultant or firm of such consultants experienced in the area for which such consultant is being retained by the Authority, and who, or each of whom -

(d) is in fact independent and not lmder domination of the Authority, MVUSD or the Districts;

( e) does not have any substantial interest, direct or indirect, in the Authority, MVUSD or the Districts; and

(f) is not an officer or employee of the Authority, MVUSD or the Districts, but who may be regularly retained to make annual or other audits of the books of or reports to the Authority, MVUSD or the Districts.

"Information Services" means the Municipal Securities Rulemaking Board Electronic Municipal Market Access (EMMA) system accessible at the emma.msrb.org website, and, in accordance with then current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds as the District may designate in a Written Request delivered to the Trustee.

"Interest Account" means the account by that name established and held by the Trustee pursuant to Section 3.03.

"Interest Payment Date" means March I and September l in each year, beghming March I, 2015 and continuing thereafter so long as any Bonds remain Outstanding.

"Investment Agreement" means one or more agreements for the investment of funds of the Districts complying with the criteria therefor as set forth in Subsection I of the definition of Permitted Investments herein.

"Letter of Representations" or "Investor Letter" means a letter substantially in the fonn attached hereto as Exhibit E delivered by each purchaser of the Bonds to the Authority and MVUSD to the effect, among other tirings, that such purchaser (a) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the Bonds, (b) is acquiring the Bonds for its own account for the purpose of investment and not with a view to the distribution thereof, and ( c) has no present intention of selling, negotiating, transferring, or otherwise disposing of tl1e Bonds so purchased.

"Local Obligations" means the Special Tax Bonds issued by the Districts and assigned by the Authority to the Trustee as set forth in Exhibit B hereto.

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"Local Obligation Reserve Funds" means the reserve funds established and maintained pursuant to the Fiscal Agent Agreements.

"Material Adverse Effect" means an event or occurrence which adversely affects in a material manner (a) the Authority or Districts or the business facilities, or operations of the Authority or Districts (b) the ability of the Authority or districts to meet or perform its obligations under the Indenture or Fiscal Agent Agreements on a timely basis ( c) the validity or enforceability of the Indenture or District Fiscal Agent Agreement.

"Maximum Annual Debt Service" means, as of the date of any calculation, the largest Annual Debt Service on the Bonds during the current or any future Bond Year.

"Moody's" means Moody's Investors Service, its successors and assigns.

"MVUSD" means the Murrieta Valley Unified School District.

"Original Purchaser" means with respect to the Bonds, City National Bank.

"Outstanding", when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 10.7) all Bonds theretofore executed, issued and delivered by the Authority lltlder this h1denture except -

(g) Bonds theretofore cancelled by the Trnstee or surrendered to the Trnstee for cancellation;

(h) Bonds paid or deemed to have been paid within the meaning of Section 10.03 or Bonds called for redemption as described in Section 2.02(f); and

(i) Bonds in lieu of or in substitution for which other Bonds shall have been executed, issued and delivered pursuant to this Indenture or any Supplemental Indenture.

"Owner" or "Bcmd Owner", when used with respect to any Bond, means the person in whose name the ownership of such Bond shall be registered on the Bond Register.

"Permitted Investments" me1ms 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:

A.

B.

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Pederal Securities.

Direct, general obligations of any state of the United States of America or any subdivision or agency thereof whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody's and A or better by S&P, or any obligation fully and unc011ditionally guaranteed by any state, subdivis.ion or agency whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody's and A or better by S&P.

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C, Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, P-1 by Moody's and A-1 or better by S&P.

D, Certificates of deposit, savings accounts, deposit accounts or money market deposits in amounts that are continuously and fully insured by the Federal Deposit Insurance Corporation ("FDIC"), including the Banlc Insmance Fund and the Savings Association Insurance Fund,

E. Certificates of deposit, deposit accounts, federal funds or banlcers' acceptances (in each case having maturities of not more than 365 days following the date of pmchase) of any domestic commercial banlc or United States branch office of a foreign bank, provided that such bank's short-term certificates of deposit are rated P-1 by Moody's and A-1 or better by S&P (not considering holding company ratings).

F. Investments in money-market funds rated AAAm or AAAm-G by S&P.

G. State-sponsored investment pools rated AA- or better by S&P,

H. Repurchase agreements that meet the following criteria:

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(1)

(2)

(3)

(4)

A master repurchase agreement or specific written repurchase agreement, substantially similar in form and substance to the Public Securities Association or Bond Market Association master repurchase agreement, governs the transaction.

Acceptable providers shall consist of (i) registered broker/dealers subject to Securities Investors' Protection Corporation ("SIPC") jurisdiction or commercial banks insured by the FDIC, if such broker/dealer or banlc has an uninsured, unsecured and unguaranteed rating of A3/P-l or better by Moody's and A-/A-1 or better by S&P, or (ii) domestic structured investment companies rated Aaa by Moody's and AAA by S&P.

The repurchase agreement shall require termination thereof if the counterparty' s ratings are suspended, withdrawn or fall below A3 or P-1 from Moody's, or A- or A-I from S&P. Within ten (10) days, the counterparty shall repay the principal amount plus any accrued and unpaid interest on the investments.

The repurchase agreement shall limit acceptable securities to U.S. Government Securities and to the obligations of GNMA, FNMA or FHLMC described in ( c)(iv), (d)(i) and (d)(ii) of the definition of Federal Securities. The fair market value of the securities in relation to the amotmt of the repurchase obligation, including principal and accrued interest, is equal to a collateral level of at least 104% for U.S. Government Securities and 105% for GNMAs, FNMAs or FHLMCs. The repurchase agreement shall require (i) the Trustee or the Agent (as defined below) to value the collateral securities no less frequently than weekly, (ii) the delivery of

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additional securities if the fair market value of the securities is below the required level on any valuation date, and (iii) liquidation of the repurchase securities if any deficiency in the required percentage is not restored within two (2) business days of such valuation.

(5) The repurchase .securities shall be delivered free and clear of any lien to the Trnstee or to an independent third party acting solely as agent ("Agent") for the Trustee, and such Agent is (i) a Federal Reserve Bank, or (ii) a bank which is a member of the FDIC and which has combined capital, surplus and undivided profits or, if appropriate, a net worth, of not less than $50 million, and the Trustee shall have received written confinnation from such third party that such third party holds such securities, free and clear of any lien, as agent for the Trustee.

( 6) A perfected first security interest in the repurchase securities shall be created for the benefit of the Trustee, and the Authority and the Trustee shall receive an opinion of counsel as to the perfection of the security interest in such repurchase securities and any proceeds thereof.

(7) The repurchase agreement shall have a tenn of one year or less, or shall be due on demand.

(8) The repurchase agreement shall establish the following as events of default, the occurrence of any of which shaJI require the inunediate liquidation of the repurchase securities:

(i) insolvency of the broker/dealer or commercial bank serving as the counterparty under the repurchase agreement;

(ii) failure by the counterparty to remedy any deficiency in the required collateral level or to satisfy the margin maintenance call under item H( 4) above; or

(iii) failure by the counterparty to repurchase the repurchase securities on the specified date for repurchase.

I. Investment agreements (also referred to as guaranteed investment contracts) that meet the following criteria:

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(1)

(2)

A master agreement or specific written investment agreement governs the transaction.

Acceptable providers of uncollateralized investment agreements shall consist of (i) domestic FDIC-insured commercial banks, or U.S. branches of foreign banks, rated at least Aa2 by Moody's and AA by S&P; (ii) domestic insurance companies rated Aaa by Moody's and AAA by S&P; and (iii) domestic structured investment companies rated Aaa by Moody's and AAA by S&P.

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(3) Acceptable providers of collateralized investment agreements shall consist of (i) registered broker/dealers subject to SIPC jurisdiction, if such broker/dealer has an uninsured, unsecured and unguaranteed rating of Al or better by Moody's and A+ or better by S&P; (ii) domestic FDIC­insured commercial banks, or U.S. branches of foreign banks, rated at least Al by Moody's and A+ by S&P; (iii) domestic insurance companies rated at least Al by Moody's and A+ by S&P; and (iv) domestic structured investment companies rated Aaa by Moody's and AAA by S&P. Required collateral levels shall be as set forth in 1(6) below.

(4) The investment agreement shall provide that if the provider's ratings fall below Aa3 by Moody's or AA- by S&P, the provider shall within ten (10) days either (i) repay the principal amount plus any accrued and interest on the investment; or (ii) deliver Permitted Collateral as provided below.

(5) The investment agreement must provide for termination thereof if the provider's ratings are suspended, withdrawn or fall below A3 from Moody's or A- from S&P. Within ten (10) days, the provider shall repay the principal amount plus any accrued interest on the agreement, without penalty.

(6) The investment agreement shall provide for the delivery of collateral described in (i) or (ii) below ("Permitted Collateral") which shall be maintained at the following collateralization levels at each valuation date:

(i) U.S. Government Securities at I 04% of principal plus accrued interest; or

(ii) Obligations of GNMA, FNMA or FHLMC (described in (c)(iv), (d)(i) and ( d)(ii) of the definition of Federal Securities) at 105% of principal and accrued interest.

(7) The investment agreement shall require the Trustee or Agent to determine the market value of the Permitted Collateral not less than weekly and notify the investment agreement provider on the valuation day of any deficiency. Permitted Collateral may be released by the Trustee to the provider only to the extent that there are excess amounts over the required levels. Market value, with respect to collateral, may be determined by any of the following methods:

(i)

(ii)

the last quoted "bid" price as shown in Bloomberg, Interactive Data Systems, Inc., The Wall Street Journal or Reuters;

valuation as performed by a nationally recognized pricing service, whereby the valuation method is based on a composite average of various bid prices; or

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(iii) the lower of two bid prices by nationally recognized dealers. Such dealers or their parent holding companies shall be rated investment grade and shall be market makers in the securities being valued.

(8) Securities held as Permitted Collateral shall be free and clear of all liens and claims of third parties, held in a separate custodial account and registered in the name of the Trustee or the Agent.

(9) The provider shall grant the Trustee or the Agent a perfected first security interest in any collateral delivered under an investment agreement. For investment agreements collateralized initially and in connection with the delivery of Permitted Collateral under 1(6) above, the Trustee shall receive an opinion of counsel as to the perfection of the security interest in the collateral.

(10) The investment agreement shall provide that moneys invested under the agreement must be payable and putable at par to the Trustee without condition, brealcage fee or other penalty, upon not more than two (2) business days' notice, or immediately on demand for any reason for which the funds invested may be withdrawn from the applicable fund or account established under the authorizing document, as well as the following:

(i) In the event of a deficiency in the debt service account;

(ii) Upon acceleration after an event of default;

(iii) Upon refunding of the bonds in whole or in part;

(iv) Reduction of the debt service reserve requirement for the bonds; or

(v) If a determination is later made by a nationally recognized bond counsel that investments must be yield-restricted.

Notwithstanding the foregoing, the agreement may provide for a breakage fee or other penalty that is payable in arrears and not as a condition of a draw by the Trustee if the Authority's obligation to pay such fee or penalty is subordinate to its obligation to pay debt service on the bonds.

(11) The investment agreement shall establish the following as events of default, the occurrence of any of which shall require the immediate liquidation of the investment securities, unless:

(i)

(ii)

Failure of the provider or the guarantor (if any) to mal<e a payment when due or to deliver Permitted Collateral of the character, at the times or in the amounts described above;

Insolvency of the provider or the guarantor (if any) under the investment agreement;

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(iii) Failure by the provider to remedy any deficiency with respect to required Permitted Collateral;

(iv) Failure by the provider to make a payment or observe any covenant under the agreement;

(v) The guaranty (if any) is terminated, repudiated or challenged; or

(vi) Any representation of warranty furnished to the Trustee or the issuer in collllection with the agreement is false or misleading.

(12) The investment agreement must incorporate the following general criteria:

(i) "Cure periods" for payment default shall not exceed two (2) business days;

(ii) The agreement shall provide that the provider shall remain liable for any deficiency after application of the proceeds of the sale of any collateral, including costs and expenses incurred by the Trustee;

(iii) Neither the agreement or guaranty agreement, if applicable, may be assigned ( except to a provider that would otherwise be acceptable under these guidelines) or amended;

(iv) If the investment agreement is for a debt service reserve fund, reinvestments of funds shall be required to bear interest at a rate at least equal to the original contract rate.

(v) The provider shall be required to immediately notify the Trustee of any event of default or any suspension, withdrawal or downgrade of the provider's ratings;

(vi) The agreement shall be unconditional and shall expressly disclaim m1y right of set-off or counterclaim;

J. Forward delivery agreements in which the securities delivered mature on or before each interest payment date (for debt service or debt service reserve funds) or draw down date ( construction funds) that meet the following criteria:

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(1)

(2)

A specific written investment agreement governs the transaction.

Acceptable providers shall be limited to (i) any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated A3/P-1 or better by Moody's m1d A-/A-1 or better by S&P; (ii) any commercial bank insured by the FDIC, if such ba11k has an uninsured, unsecured a11d tmguara11teed obligation rated A3/P-1 or better

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K.

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by Moody's and A-/A-1 or better by S&P; and (iii) domestic structured investment companies rated Aaa by Moody's and AAA by S&P.

(3) The forward delivery agreement shall provide for termination or assignment (to a qualified provider herem1der) of the agreement if the provider's ratings are suspended, withdrawn or fall below A3 or P-1 from Moody's or A- or A-1 from S&P. Within ten (10) days, the provider shall fulfill any obligations it may have with respect to shortfalls in market value. There shall be no breakage fee payable to the provider in such event.

( 4) Permitted securities shall include the investments listed in the definition of Federal Securities.

(5) The forward delivery agreement shall include the following provisions:

(i) The permitted securities must mature at least one (1) business day before a debt service payment date or scheduled draw, The maturity amotu1t of the permitted securities must equal or exceed the amount required to be in the applicable fund on the applicable valuation date.

(ii) The agreement shall include market standard termination provisions, including the: right to tenninate for the provider's failure to deliver qualifying securities or otherwise to perform under the agreement. There shall be no breakage fee or penalty payable to the provider in such event.

(iii) Any breakage fees shall be payable only on debt service payment dates and shall be subordinated to the payment of debt service and debt service reserve fund replenishments,

(iv) The provider must submit at closing a bankruptcy opinion to the effect that upon any bru1kruptcy, insolvency or receivership of the provider, the securities will not be considered to be a part of the provider's estate.

(v) The agreement may not be assigned (except to a provider that would otherwise be acceptable under these guidelines) or amended.

Forward delivery agreements in which the securities delivered mature after the funds may be required but provide for the right of the issuer or the Trustee to put the securities back to the provider tu1der a put, guaranty or other hedging arrangement.

Maturity of investments shall be governed by the following:

-13-

(i) Investments of monies ( other than reserve funds) shall be in securities and obligations maturing not later than the dates on which such monies will be needed to make payments.

(ii) Investments shall be considered as maturing on the first date on which they are redeemable without penalty at the option of the holder or the date on which the Trustee may require their repurchase pursuant to repurchase agreements.

(iii) Investments of monies in reserve funds not payable upon demand shall be restricted to maturities of five years or less.

"Principal Account" means the account by that name established and held by the Trustee pursuant to Section 3.03.

"Prior Bonds" mean the Authority's Special Tax Revenue Bonds, 2004 Series A.

"Rebate Fund" means the fund so designated and established pursuant to Section 5.08.

"Rebate Regulations" means the Treasury Regulations issued under Section 148(f) of the Code.

"Record Date" means, with respect to any Interest Payment Date, the fifteenth calendar day of the month preceding such Interest Payment Date, whether or not such day is a Business Day.

"Request of the Authority" means a request in writing signed by the Chairman or Treasurer of the Authority, or by any other officer of the Authority duly authorized by the Board for that purpose.

"Request of the District(s)" means a request in writing signed by the President of the governing board of a District(s) or by any other officer of such District(s) duly authorized by the Board of the District(s) for such purpose.

"Responsible Officer" means any officer of the Trustee assigned to administer the Trustee's duties under this Indenture.

"Revenue Fund" means the fund by that name established and held by the Trustee pursuant to Section 3.03.

"Revenues" means: (a) all amounts received from the Districts pursuant to any Local Obligations or held by the Fiscal Agent in any Bond Fund or Reserve Fund established pursuant to the Fiscal Agent Agreement, (b) any proceeds of the Bonds originally deposited with the Trustee and all moneys deposited and held from time to time by the Trustee in the funds and accounts established hereunder with respect to the Bonds ( other than the Surplus Fund and the Rebate Fund); and (c) investment income with respect to any moneys held by the Trustee in the funds and accounts established hereunder with respect to the Bonds ( other than the Surplus Fund and the Rebate Fund).

l 2'1/0] 2498-0041 7002292.7 a0?/14/14 -14-

"Serial Bonds" means all Bonds other than Term Bonds.

"Special Tax Bonds" means any bonds or other obligations issued by the Districts listed on Exhibit B hereto under and pursuant to the Mello-Roos Community Facilities Act of 1982, constituting Chapter 2.5 (commencing with Section 53311) of Article 1 of Division 2 of Title 5 of the Govenunent Code of the State of California, as such Act may hereafter be amended from time to time.

"Special Taxes" means the taxes authorized to be levied by the Districts on parcels witl1in the Districts which have been pledged to repay the Special Tax Bonds.

"Standard & Poor's" or "S&P" means Standard & Poor's Rating Services, its successors and assigns.

"State" means the State of California.

"Supplemental Indenture" means any indenture, agreement or other instrument hereafter duly executed by the Authority in accordance with the provisions of Article VII of this Indenture.

"Surplus Fund" means the flmd by that name established and held by the Trustee pursuant to Section 3.08.

"Taxable Rate" means the rate of interest then in effect with respect to the Bonds multiplied by 1.3 5.

"Term Bonds" means tl1e Bonds maturing on September 1, 2024, September 1, 2031 and September 1, 2037.

"Treasurer-Tax Collector" means the Treasurer-Tax Collector of the County of Riverside.

"Trust Office" means the corporate trnst office of the Trustee, currently at 550 South Hope Street, Suite 2650, Los Angeles, California 90071, or such other or additional offices as may be specified to the Authority by the Trustee in writing.

"Trustee" means Zions First National Banlc and its successors and assigns, and any other corporation or association which may at any time be substituted in its place as provided in Article VI.

"Yield" has ilie meaning given to such term in the Code, which as of the Closing Date is 3.858055% for the Bonds.

Section 1.02 Rules of Construction.

All references in this Indenture to "Articles," "Sections," and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; and the words "herein,"

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"hereof," "hereunder," and other words of similar imp011 refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof.

Section 1.03 Authorization and Purpose of Bonds.

The Authority has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and detennines, that all things, conditions and acts required by law to exist, happen and/or be perfonned precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, fonn and manner as required by law, and the Authority is now authorized under the Agreement, its Authority Resolution No. 13/14-41 and the Bond Law and each and every requirement of law, to issue the Bonds in the mallller and f01m provided in this Indenture. Accordingly, the Authority hereby authorizes the issuance of the Bonds pursuant to the Bond Law and this Indenture secured by the Local Obligations listed in Exhibit B hereto from the Districts.

Section 1.04 Equal Security.

In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the District, and the Owners from time to time of the Bonds; and the covenants and agreements herein set forth to be performed on behalf of the Authority shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds as their respective interests appear without preference, priority or distinction as to security or otherwise of any of the Bonds by reason of the mllllber or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein.

The Bonds are limited obligations of the Authority as set forth in Section 10.1 hereof.

ARTICLE2 ISSUANCE OF BONDS

Section 2.01 Terms of Bonds.

The Bonds authorized to be issued by the Authority under and subject to the Bond Law and the terms of this Indenture shall be dated the Closing Date and be designated the "Murrieta Valley Unified School District Public Financing Authority Special Tax Revenue Refunding Bonds, 2014 Series A," which shall be issued in the original aggregate principal amount of Twenty Million Two Hundred Thirty-Five Thousand Dollars ($20,235,000).

The Bonds shall be issued in fully registered form without coupons in denominations of $100,000 or any integral multiple thereof. The Bonds shall mature on September 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) at the rates, as follows:

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Maturity Date (September 1)

2024 2031 2037

SERIES A BONDS

$20,235,000

Principal Amount

$3,935,000 13,270,000 3,030,000

Interest Rate Per Annum

3.45% 3.85% 4.15%

Interest on the Bonds shall be payable on each Interest Payment Date to the person whose name appears on the Bond Register as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Trustee mailed on such Interest Payment Date by first-class mail, postage prepaid, to the Owner at the address of such Owner as it appears on the Bond Register or by wire transfer to an account in the United States of America made on such Interest Payment Date upon instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds of a Series provided to the Trustee in writing on or before the Record Date for such Interest Payment Date. Principal of and premiwn (if any) on any Bond shall be paid upon presentation and surrender thereof, at maturity or the prior redemption thereof, at the Trust Office of the Trustee. The principal of and interest and premium (if any) on the Bonds shall be payable in lawful money of the United States of America. Following a determination of tax.ability, the Bonds shall bear interest at the Taxable Rate.

Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) it is authenticated on or before September 1, 2014, in which event it shall bear interest from the Closing Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bem interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon, or from the Closing Date if no interest has been paid or made available for payment.

Section 2.02 Redemption of Bonds.

(a) (1) Optional Redemption. The Bonds maturing prior to September 1, 2019 me not subject to optional redemption. The Bonds maturing on and after September 1, 2020 may be redeemed at the option of the Authority prior to maturity on any Interest Payment Date on or after September 1, 2019 as a whole, or in part from such maturities as are selected by the Authority, and by lot within a maturity, from any source of funds made available to the Authority (other than Special Tax prepayments), at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date of redemption, plus a one percent (1 %) premium. Trustee shall adjust future sinking fund payments pro-rata at time that optional redemption or special tax redemption is made.

(2) Mandatory Redemption From Special Tax Prepayments. The Bonds are subject to mandatory redemption prior to maturity, in whole or in part, on a pro rata basis among

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maturities and by lot within a maturity, on any Interest Payment Date on or after September 1, 2014, from the proceeds of a redemption of any Local Obligation as a result of prepayment of Special Taxes, at par value together with accrued interest to the date of redemption:

(b) (i) Sinking Fund Redemption. The Series A Term Bonds maturing September 1, 2024 shall also be subject to mandatory redemption in whole, or in part by lot on September 1 in each year commencing September 1, 2015, from sinlcing fund payments made by the Authority into the Principal Account pursuant to Section 4.02, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on September 1 in the respective years as set forth in the following table, plus accrued interest thereon to the date of redemption.

SERIES A TERM BONDS MATURING SEPTEMBER 1, 2024

Sinking Fund Redemption Date (September 1)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Principal Amount to be Redeemed $285,000

380,000 390,000 390,000 415,000 435,000 450,000 470,000 355,000 365,000

In lieu of the mandatory sinking fund redemption of the Series A Term Bonds as described in (b) above, amounts on deposit in the Revenue Fund which are to be transferred to the Principal Account may also be used and withdrawn by the Authority for the purchase of the Series A Tem1 Bonds at public or private sale as and when and at such prices (which including brokerage and other charges shall not be in excess of the principal amount thereof of the Bond being purchased) as the Authority may in its discretion determine. The par amount of the Series A Term Bonds of a Series so purchased by the Authority in any twelve-month period ending on July 1 in any year shall be credited towards and shall reduce the par amount of the Tenn Bonds of such Series required to be redeemed pursuant to the mandatory sinldng fund provisions described above on September I in such year; provided that the Authority has caused to be delivered such purchased· Term Bonds to the Trustee for cancellation to the Trustee by said July 1.

(ii) Sinking Fund Redemption. The Series A Tem1 Bonds maturing September 1, 2031 shall also be subject to mandatory redemption in whole, or in part by lot on September 1 in each year commencing September 1, 2015, from sinking fund payments made by the Authority into the Principal Account pursuant to Section 4.02, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal

124/012498-0041 7002292,7 a07/14/14

amounts and on September 1 in the respective years as set forth in the following table; plus accrued interest thereon to the date of redemption.

SERIES A TERM BONDS MATURING SEPTEMBER 1, 2031

Sinldng Fund Redemption Date (September 1)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Principal Amount to be Redeemed $510,000

540,000 565)000 595,000 620,000 655,000 685,000 720,000 745,000 785,000 930,000 995,000

1,030,000 1,095,000 1,140,000 1,180,000

480,000

In lieu of the mandatory sinking fund redemption of the Series A Term Bonds as described in (b) above, amom1ts on deposit in the Revenue Fund which are to be transferred to the Series A Principal Account may also be used and withdrawn by the Authority for the purchase of the Series A Term Bonds at public or private sale as and when and at such prices (which including brokerage and other charges shall not be in excess of the principal amount thereof of the Bond being purchased) as the Authority may in its discretion determine. The par amount of the Tenn Bonds of a Series so purchased by the Authority in any twelve-month period ending on July 1 in any year shall be credited towards and shall reduce the par amount of the Term Bonds of such Series required to be redeemed pursuant to the mandatory sinldng fm1d provisions described above on September 1 in such year; provided that the Authority has caused to be delivered such purchased Tenn Bonds to the Trustee for cancellation to the Tnistee by said July 1.

(iii) Sinking Fund Redemption. The Series A Term Bonds maturing September 1, 2037 shall also be subject to mandatory redemption in whole, or in part by lot on September 1 in each year commencing September 1, 2015, from sinking fund payments made by the Authority into the Principal Account pursuant to Section 4.02, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on September 1 in the respective years as set forth in the following table, plus accrued interest thereon to the date of redemption,

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SERIES A TERM BONDS MATURING SEPTEMBER 1, 203 7

Sinking Fund Redemption Date (September 1)

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

Principal Amount to be Redeemed

$80,000 85,000 90,000 95,000

100,000 100,000 105,000 105,000 115,000 115,000 125,000 125,000

.125,000 130,000 135,000 140,000 145,000 155,000 170,000 185,000 190,000 200,000 215,000

In lieu of the mandatory sinking fund redemption of the Series A Term Bonds as described in (b) above, amounts on deposit in the Revenue Fund which are to be transfened to the Series A Principal Account may also be used and withdrawn by the Authority for the purchase of the Series A Term Bonds at public or private sale as and when and at such prices (which including brokerage and other charges shall not be in excess of the pdncipal amount thereof of the Bond being purchased) as the Authority may in its discretion determine. The par amount of the Term Bonds of a Series so purchased by the Authority in any twelve-month period ending on July 1 in any year shall be credited towards and shall reduce the par amom1t of the Term Bonds of such Series required to be redeemed pursuant to the mandatory sinking fund provisions described above on September 1 in such year; provided that the Authority has caused to be delivered such purchased Term Bonds to the Trnstee for cancellation to the Trustee by said July 1.

(c) Notice of Redemption. The Trustee on behalf and at the expense of the Authority shall mail (by first class mail, postage prepaid) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Bond Register, and to the Securities Depositories and to the Infonnation Services, at least thirty (30) but not more than sixty (60) days prior to the date fixed for redemption. Neither failure to

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receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, the Bond numbers if less than all Bonds of a maturity are to be redeemed and the maturity or maturities (in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Trust Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrne on and after the redemption date. Notice of any redemption of Bonds shall either (i) explicitly state that the proposed redemption is conditioned on tl1ere being on deposit in the applicable fund or account on the redemption date sufficient money to pay the foll redemption price of the Bonds to be redeemed, or (ii) be sent only if sufficient money to pay the full redemption price of the Bonds to be redeemed is on deposit in the applicable fund or account.

In addition to the foregoing notice, further notice shall be given by the Trustee in said form by first class mail to any Bondowner whose Bond has been called for redemption but who has failed to tender his Bond for payment by the date which is sixty days after the redemption date, but no defect in said further notice nor any failure to give all or any pmiion of such further notice shall in any manner defeat the effectiveness of a call for redemption.

Upon the payment of the redemption price of Bond being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed witl1 the proceeds of such check or other transfer.

( d) Selection of Bonds of a Maturity for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds of a matmity of a Series of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds of such maturity not previously called for redemption, by lot in any manner which the Trustee in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $100,000 authorized denominations, and such separate authorized denominations shall be treated as separate Bonds which may be separately redeemed.

(e) Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series and maturity date, and in authorized denominations in aggregate principal amount equal to the tmredeemed portion of the Bond to be redeemed.

(f) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption shall have been duly provided, such Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice, All Bonds redeemed pursuant to this Section 2.02 shall be cancelled and destroyed.

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Section 2.03 Form of Bonds.

The Bonds, the form of Trnstee's certificate of authentication, and the form of assignment to appear thereon, shall be substantially in the respective fom1s set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture.

Section 2.04 Execution of Bonds.

The Bonds shall be signed in the name and on behalf of the Authority with the manual signatures of its Chairman or Vice Chairman and attested with the manual signature of its Secretary or any assistant duly appointed by the Board, under the printed seal of the Authority, and shall be delivered to the Trnstee for authentication by it. In case any officer of the Authority who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been authenticated or delivered by the Trustee or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though the individual who signed the same had continued to be such officer of the Authority, Also, any Bond may be signed on behalf of the Authority by any individual who on the actual date of the execution of such Bond shall be the proper officer although on the nominal date of such Bond such individual shall not have been such officer.

Only such of the Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, manually executed by the Trustee, shall be valid or obligatory for any pmpose or entitled to the benefits of this Indenture, and snch certificate of the Trnstee shall be conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

Section 2.05 Registration, Exchange, or Transfer.

Subject to the limitations set forth in this Section 2.05, the registration of any Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation at the Principal Corporate Trust Office of the Trustee, accompanied by delivery of a written instrument· of transfer in a form approved by the Trustee and duly executed by the Bondowner or his or her duly authorized attorney.

The following shall apply to all sales and transfers of the Bonds after the initial sale and delivery of the Bonds.

(a) the Bonds shall be physical certificated instruments, and shall not be held in any book-entry only system unless the Authority shall so direct in writing;

(b) the Bonds shall only be sold and transferred in whole or in part to a person who has delivered to the Trnstee and the Authority an Investor Letter in the fonn attached as Exhibit E hereto; and

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( c) the Trustee shall not authenticate or register a Bond unless there shall have been delivered to the Trustee an Investor Letter executed by the proposed transferee of the Bonds.

Subject to the limitations set forth in the preceding paragraph and elsewhere in this Section 2.05, Bonds may be exchanged at the Principal Corporate Trust Office of the Trustee for a like aggregate principal amount and maturity of Bonds of other authorized denominations. The Trustee may charge the Bondowner any tax or other governmental charge required with respect to such transfer or exchange. Whenever any Bonds shall be surrendered for registration of transfer or exchange, the Authority shall execute, and the Trustee shall authenticate and deliver,

.. a new Bond, for a like aggregate principal amount and maturity, provided, that the Trustee shall · not be required to register transfers or maim exchanges of (i) Bonds for a period of 15 days next preceding the date of any selection of the Bonds to be redeemed, or (ii) any Bonds chosen for redemption; and further provided that the Trustee may agree with the Owner of any Bond that such Owner may, in lieu of surrendering the same for a new Bond, endorse on such Bond a record of partial payment of the principal of such Bond in the form set forth below (which shall be typed or printed on such Bond):

The Trustee shall maintain a record of each such partial payment made in accordance with the foregoing agreement and such record of the Trustee shall be conclusive, Such paitial payment shall be valid upon payment of the amount thereof to the Owner of Bond, and the Authority and the Trustee shall be fully released and discharged from all liability to the extent of such payment regardless of whether such endorsement sha!l or shall not have been made upon such Bond by the Owner thereof and regardless of any etTor or omission in such endorsement.

Section 2.06 Temporary Bonds.

The Bonds may be issued initially in temporary form exchat1geable for definitive Bonds when ready for delivery. The temporat·y Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Authority and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and be registered and authenticated by the Trustee upon the saine conditions and in substantially the same manner as the definitive Bonds. No Bonds selected for redemption shall be subject to transfer pursuant to this Section nor shall any Bond be subject to transfer during the fifteen days prior to the selection of Bonds for redemption. If the Authority issues temporary Bonds, it will execute and fornish definitive Bonds without delay, and thereupon the temporary Bonds may be surrendered for cancellation, in exchange therefor at the Trust Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder.

Section 2.07 Bond Register.

The Trustee will keep or cause to be kept at its Trust Office sufficient records for the registration ai1d transfer of the Bonds, which shall be the Bond Register and shall at all times dming regular business hours be open to inspection by the Authority with reasonable notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it

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may prescribe, register or transfer or cause to be registered or transferred, on said records, Bonds as hereinbefore provided. .

Section 2.08 Bonds Mutilated, Lost, Destroyed or Stolen.

If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like Series, tenor and authorized denomination in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by it and delivered to, or upon the order of, the Authority. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to it and indemnity satisfactory to it, the Autl10rity, at the expense of tl1e Bond Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like Series and tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen ( or if any such Bond shall have matured or shall have been called for redemption, instead of issuing a substitute Bond the Trustee may pay the same without surrender thereof upon receipt of indemnity satisfactory to tl1e Trustee. The Trustee may require payment of a reasonable fee for each new Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond isst1ed tmder the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original contractual obligation on the part of the Authority whether or not the Bond alleged to be lost, destroyed or stolen at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds secured by this Indenture.

Section 2.09 No Additional Bonds.

No bonds secured by the Revenues pledged hereunder, other tl1an the Bonds, shall be issued under tl1is Indenture.

ARTICLE3 DEPOSIT AND APPLICATION OF PROCE.EDS

Section 3. 01 Issuance of Bonds.

Upon the execution and delivery of this Indenture, the Authority shall execute and deliver the Bonds in ilie principal amounts set forth in Section 2.01 to the Trustee for authentication and delivery to the Original Purchaser thereof upon the Request oftl1e Autl10rity.

Section 3.02 Application of Proceeds of Sale of Bonds and Funds Received from the Districts.

Upon the receipt of payment for the Bonds on ilie Closing Date, plus $1,428,024.07 from various funds and accounts relating to ilie Prior Bonds, the Trustee shall apply the proceeds of sale thereof, as follows:

(a)

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The Trustee shall deposit $301,369.99 in the Costs oflssuance Fund.

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(b) The Trustee shall transfer $21,361,654.08 to the Escrow Fund held pursuant to the Escrow Agreement.

Section 3.03 Revenue Fund.

The Trustee shall establish and maintain a separate trust fund to be known as the "Revenue Fund" and the following separate accounts therein: Interest Account and Principal Account. Except as otherwise provided herein, the Trustee shall deposit all Revenues as described in clause (a) of the definition thereof in Section 1.01 and other amounts deposited to the Revenue Fund as provided herein received after the Closing Date to the Revenue Fund and shall apply amounts in the Revenue Fund as described in Section 4.02 below.

Section 3.04 Costs of Issuance Fund.

The Trustee shall establish and maintain a fund to be held by the Trustee known as the "Costs of Issuance Fund" into which shall be deposited the amounts set forth in Section 3.02(a) above. The moneys in the Costs of Issuance Fund shall be used to pay Costs of Issuance from time to time upon receipt of a Request of the Authority in the fom1 attached hereto as Exhibit D. On the date which is one hundred eighty (180) days following the Closing Date, or upon the earlier receipt by the Trustee of a Request of the Authority stating that all Costs of Issuance have been paid, the Trustee shall transfer all remaining amom1ts in the Costs of Issuance Fund to the Revenue Fund. Upon such transfer the Costs of Issuance Fund shall be closed. The Authority may at any time file a Request of the Authority requesting that the Trustee retain a specified amotmt in the Costs of Issuance Fund and transfer to the Revenue Fund all remaining amounts, and the Trustee shall comply with such request.

Section 3.05 Rebate Fund.

The Trustee shall establish and maintain a separate fund to be known as the "Rebate Fund" for the Bonds. The Rebate Fund shall be administered as described in Section 5.08 hereof.

Section 3.06 Surplus Fund.

The Trustee shall establish and maintain a separate fund to be known as the "Surplus Fund" which shall be administered as described in Section 4.04 hereof.

Section 3.07 Validity of Bonds.

TI1e validity of the authorization and issuance of the Bonds shall not be affected in any way by any proceedings talcen by the Authority or the Districts with respect to the application of the proceeds of the Bonds, and the recital contained in the Bonds that the sam.e are issued pursuant to the Bond Law shall be conclusive evidence of their validity and of the regularity of their issuance.

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ARTICLE4 REVENUES; FLOW OF FUNDS

Section 4.01 Pledge of Revenues; Assignment of Rights.

Subject to the provisions of Sections 6.03 and 10.03, the Bonds shall be secured by a first lien on and pledge (which shall be effected in the manner and to the extent hereinafter provided) of all of the Revenues and the Local Obligations. The Bonds shall be equally secured by a pledge, charge and lien upon the Revenues and Local Obligations without priority for any Bond over any other Bond; and the payment of the interest on and principal of the Bonds and any premiums upon the redemption of any thereof shall be and are secured by an exclusive pledge, charge and lien upon the Revenues. So long as any of the Bonds are Outstanding, the Revenues shall not be used for any purpose except as is expressly permitted by this Indenture.

The Authority hereby transfers in trust and assigns to the Trustee, for the benefit of the Owners from time to time of the Bonds, the Local Obligations and all of the Revenues and all of the right, title and interest of the Authority in the Local Obligations, subject to the terms of this Indenture. The Trustee shall be entitled to and shall collect and receive all of the Revem1es, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. The Trnstee also shall be entitled to and subject to the provisions of this Indenture, shall take all steps, actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the Distdcts tmder the Local Obligations.

Upon the deposit with the Trustee of moneys sufficient to pay all principal of, premium, if any, and interest on the Bonds and upon satisfaction of all claims against the Authority hereunder with respect to the Bonds, including all fees, charges and expenses of the Trustee, the Authority which are properly payable hereunder, or upon the maldng of adeq1iate provisions for the payment of such amounts as permitted hereby, all moneys remaining in all funds and accounts pertaining to the Bonds, except any amow1ts on deposit in the Rebate Fund and except moneys necessary to pay principal of, premhnn, if any, and interest on the Bonds, which moneys shall be held by the Trustee and paid to the Authority pursuant to Section 10.03, shall be paid to tl1e Districts in proportion to the original principal amounts [Debt Service?] of the Local Obligation free of the lien of this Indenture.

Section 4.02 Receipt, Deposit and Application of Revenues; Revenue Fund.

(a) All Revenues described in clause (a) of the definition thereof in Section 1.01 shall be promptly deposited by the Trustee upon receipt thereof in the Revenue Fw1d.

On each Interest Payment Date and date for redemption of the Bonds, the Trustee shall transfer from the Revenue Fund, and deposit into the following respective accounts for the Bonds, the following amounts in the following order of priority, the requirements of each such account (including the malcing up of any deficiencies in any such account resulting from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any accoW1t subsequent in priority:

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(1) Interest Account. On each Interest Payment Date and redemption date, the Trustee shall deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest due or becoming due and payable on such Interest Payment Date on all Outstanding Bonds or to be paid on the Bonds being redeemed on such date. No deposit need be made into the Interest Account if the amount contained therein is at least equal to the interest becoming due and payable upon all Outstanding Bonds on the next succeeding Interest Payment Date or redemption date, as applicable. All moneys in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds redeemed prior to maturity). In the event that the amounts on deposit in the Interest Account on any Interest Payment Date or redemption date, are insufficient for any reason to pay the aggregate amount of interest then coming due and payable on the Outstanding Bonds, the Trustee shall apply such amounts to the payment of interest on each of the Outstanding Bonds on a pro rata basis.

(2) Principal Account. On each Interest Payment Date and redemption date on which the principal of the Bonds shall be payable, the Trustee shall deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of, and premium (if any) on, the Bonds coming due and payable on such Interest Payment Date, or required to be redeemed on such date pursuant to Section 2.02(a) or (b ); provided, however, that no amount shall be deposited to effect an optional redemption pursuant to Section 2.02(a) unless the Trustee has first received a certificate of an Independent Accountant to the effect that such deposit to effect an optional redemption of the Bonds will not impair the ability of the Authority to make timely payment of the principal of and interest on the Bonds, assuming for such purposes that the Districts continues to malce timely payment on all Local Obligations not then in default. All moneys in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of (i) paying the principal of the Bonds at the maturity thereof, (ii) paying the principal of the Term Bonds upon the mandatory sinking fund redemption thereof pursuant to Section 2.02(b), or (iii) paying the principal of and premium (if any) on any Bonds upon the optional redemption thereof pursuant to Section 2.02(a). In the event that the amounts on deposit in the Principal Account on any Interest Payment Date or date of redemption, are insufficient for any reason to pay_ the aggregate principal amotmt of, and premium (if any) on, the Outstanding Bonds then coming due and payable (whether at maturity or upon the redemption thereof), the Trustee shall apply such an10unts in the following order of priority; (i) first, to the payment of the principal of the Outstanding Bonds which mature by their terms on such Interest Payment Date; and (ii) second, to the payment of the principal of the Outstanding Bonds to be redeemed pursuant to Section 2.02(b ), in each case on a pro rata basis.

(b) If on any Interest Payment Date the amount on deposit in the Revenue Fund is inadequate_ to malce the transfers described in (a) above as a result of a payment default on a Local Obligation, the Trustee shall immediately notify the Administrator of the am0tmt needed to malce the required deposits under (a) above. The Administrator shall transfer said amounts to the Trustee within five (5) business days. In the event that following such notice the Trustee receives additional payments from the Districts to cure such shortfall, the Trustee shall deposit such amounts to the Revenue Fund.

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(c) On each Interest Payment Date after making the transfers required under (a) and (b) above, upon receipt of a Request of the Authority to do so, the Trustee shall transfer from the Revenue Fund to the Rebate Fund for deposit in the accounts therein the amounts specified in such Request.

(d) On March 2 of each year, after making the deposits required under (a), (b) and (c) above, the Trustee shall transfer all amounts remaining on deposit in the Revenue Fund to the Surplus Fund.

(e) Notwithstanding anything herein to the contrary, so long as the Original Purchaser owns all of the outstanding Bonds, (i) the Trustee shall pay principal of and interest and redemption premium, if any, on the Bonds when due by wire transfer in immediately available funds to the Original Purchaser in accordance with such wire instructions as shall be filed by the Original Purchaser with the Trustee from time to time, and (ii) payments of principal on the Bonds shall be made without the requirement for presentation and suJTender by the Original Purchaser, provided that principal which is payable at maturity shall be made only pon presentation and surrender at the principal office of the Trustee.

Section 4.03 Local Obligation Reserve Ftmds.

(a) The Authority shall cause there to be maintained in the Local Obligation Reserve Funds for each Local Obligation the amount required by the applicable Fiscal Agent Agreement.

Section 4. 04 Surplus Fund.

Amounts in the Surplus Fund shall no longer be considered Revenues and are not pledged to repay the Bonds. So long as the Local Obligations are outstanding under the terms of the resolution of the applicable Districts pursuant to which such Local Obligations were issued, on March 2 of each year after setting aside any amotmt specified in a Request of the Authority as necessary to pay Administrative Expenses which shall be paid by the Trustee upon receipt of a Request of the Authority, the remaining balance in the Surplus Fund shall be transferred by the Trustee to the Fiscal Agent in accordance with Exhibit C attached hereto for credit to the Special Tax Funds of the Districts established and held by the Fiscal Agent. In the event that the Local Obligations have been paid or defeased such that a District is no longer obligated to levy Special Taxes to repay its Local Obligations, then such amounts in the Surplus Fund shall be disbursed only to those Districts which are still obligated to levy Special Taxes to repay Local Obligations. In the event all Districts are no longer obligated to levy Special Taxes to repay Local Obligations, then any amounts in the Surplus Fund may be used by the Authority for any lawful purpose, including, but not limited to, the payment of Administrative Expenses or any other purpose as specified in a Request of the Authority delivered to the Trustee.

Section 4. 05 Investments.

All moneys in any of the funds or accounts established with the Trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted Investments, as directed pursuant to the Request of the Authority filed with the Trustee at least two (2) Business Days in advance of the making of such inviestments. In the absence of any such Request of the Authority the Trustee shall invest any such moneys in Permitted Investments described in clause (E) of the

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definition thereof. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. Pellllitted Investments that are registrable securities shall be registered in the name of the Trnstee.

All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the fund or account from which such investment was made. For purposes of acquiring any investments hereunder, the Trnstee may commingle funds held by it hereunder upon the Request of the Authority, The Trnstee and its affiliates may act as advisor, sponsor, principal or agent in the acquisition of any investment and may make any and all investments permitted herein through its own investment department, The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section.

If at any time after investment therein an investment ceases to meet the criteria set forth in the definition of Permitted Investments and such obligation, aggregated with other non­conforming investments, exceeds ten percent (10%) of invested funds, such investment shall be sold or liquidated .

Investments purchased with funds on deposit in the Revenue Fund shall mature not later than the payment date or redemption date, as appropriate, immediately succeeding the investment.

The Authority or the Trustee, shall terminate any repurchase agreement upon a failure of the counter-party thereto to maintain the requisite collateral percentage and, if not paid by the counter-party in federal funds against transfer of the repurchased securities, liquidate the collateral.

The Authority or the Trustee shall give notice to any provider of a repurchase or investment agreement in accordance with the terms thereof so as to receive funds thereunder with no penalty or premium paid,

The Authority shall, upon actual lmowledge of a default under a repurchase or investment agreement or the withdrawal or suspension of either of the ratings of a repurchase or investment agreement provider or a drop in the ratings thereon below "AA" or "Aa", as appropriate, or "AAA" or "Aaa", as appropriate, in the case of a foreign bank, shall demand further collateralization of the agreement or termination thereof and liquidation of the collateral.

Section 4.06 Valuation and Disposition oflnvestments.

For the purpose of determining the amount in any fund or account, the value of Permitted Investments credited to such fund or account shall be valued than annually on July I of each year, commencing on July 1, 2015, and at the market value thereof (except investment agreements, excluding any accrued interest). Deficiencies in the amount on deposit in any fund or account resulting from a decline in market value shall be restored by the Authority within one year of the valuation date.

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ARTICLES COVENANTS OF THE AUTHORITY

Section 5.01 Punctual Payment.

The Authority shall punctually pay or cause to be paid the principal and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Revenues, and other assets pledged for such payment as provided in this Indenture.

Section 5.02 Extension of Payment of Bonds.

TI1e Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or tl1e time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, ,except subject to the prior payment in full of the principal of all of the applicable Series of Bonds then Outstanding and of all claims for interest thereon which shall have been so extended. Nothing in tl1is Section shall be deemed to limit the right of the Authority to issue Bonds for tl1e purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds.

Section 5 .03 Against Encumbrances.

The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues or the Local Obligation, and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, including other programs under the Bond Law, and reserves the right to issue otl1er obligations for such purposes.

Section 5.04 Power to Issue Bonds and Make Pledge and Assignment.

The Authority is duly authorized pursuant to law to issue tl1e Bonds and to enter into this Indenture and to pledge and assign the Revenues, tl1e Local Obligations and oilier assets purported to be pledged and assigned, respectively, under this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all times, to the extent permitted by law, defend, preserve and protect said pledge and assignment of ilie Revenues, the Local Obligations and other assets and all the rights of the Bond Owners tmder this Indenture against all claims and demands of all persons whomsoever.

Section 5.05 Accounting Records and Financial Statements.

TI1e Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with industry standards in which complete and accurate entries

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shall be made of transactions relating to the proceeds of Bonds, the Revenues, the Local Obligations and all ftmds and accounts established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Authority, and the Districts upon reasonable prior notice during regular business hours and wider reasonable circwnstances.

Monthly, the Trustee shall prepare and file with the Authority a statement setting forth: (i) amounts withdrawn from and deposited into each fund and account maintained by the Trustee tmder this Indenture; (ii) the balance on deposit in each fund and accotmt as of the date for which such statement is prepared; and (iii) a brief description of all obligations held as investments in each fund and account; provided, that the Trustee shall not be obligated to provide an acc0tmting for any fund or account that (a) has a balance of $0.00 and (b) has not had any activity since the last reporting date.

Section 5.06 Protection of Security Rights of Trustee and Holder. The Authority will preserve and protect the security of the Bonds and the rights of the Trustee and the Owners and will warrant and defend their rights against all claims and demands of all persons. The Bonds shall be incontestable by the Authority or the Districts.

Section 5.07 Tax Covenants,

Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds will not be adversely affected for federal income tax purposes, the Authority covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows:

(a) Private Activity. The Authority will not take or omit to take any action or make any use of the proceeds of the Bonds or of any other moneys or property which would cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the Code.

(b) Arbitrage, The Authority will make no use of the proceeds of the Bonds or of any other runotmts or property, regardless of the source, or take or omit to take any action which would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code.

(c) Federal Guarantee. The Authority will mal<e no use of the proceeds of the Bonds or talce or omit to take any action that would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code.

( d) Information Reporting. The Authority will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code.

(e) Taxable Rate. Anything contrary in this Indenture notwithstruiding, from ruid after the Date of Tax.ability following a Determination of Taxability, the Bonds shall bear interest at the Taxable Rate.

(f) Miscellaneous. The Authority will take no action inconsistent with its expectations stated in any Arbitrage Certificate executed with respect to the Bonds and will comply with the covenruits and requirements stated therein ruid incorporated by reference herein.

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This Section and the covenants set forth herein shall not be applicable to, and nothing contained herein shall be deemed to prevent the Authority from issuing Bonds the interest on which has been determined by the Board to be subject to federal income taxation.

Section 5.08 Rebate Fund.

(a) Establishment. The Trustee shall establish a Rebate Fund. Absent an opinion of Bond Com1sel that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected, the Authority shall cause to be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the Arbitrage Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for a Series shall be governed by this Section and the Arbitrage Certificate for the Bonds, unless and to the extent that the Authority delivers to the Trustee an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected if such requirements are not satisfied.

(1) Rebate Fund. The following requirements shall be satisfied with respect to the Rebate Fund:

(i) Annual Computation. Within 55 days of the end of each Bond Year, the Authority shall calculate or cause to b"' calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Arbitrage Certificate ( e.g., the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code), and taking into account whether the election pursuant to Section 148(1:)( 4)(C)(vii) of the Code (the "!-% Penalty") has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-l(b) of the Rebate Regulations (the "Rebatable Arbitrage"), The Authority shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.

(ii) Annual Transfer. Within 55 days of the end of each applicable Bond Year, upon the written Request of the Authority, an amount shall be deposited to the Rebate Fund by the Trustee from any Revenues legally available for such purpose (as specified by the Authority in the aforesaid written Request), if and to the extent required so tl1at the balance in the Rebate Fund shall equal tl1e amount of Rebatable Arbitrage so calculated in accordance with (i) of this Subsection (a)(!). In tile event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of a Rebate Fund exceeds the amount required to be on deposit therein, upon written Request of the Authority, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Revenue Fund.

(iii) Payment to tl1e Treasury. The Trustee shall pay, as directed by Request of tl1e Authority, to the United States Treasury, out of amounts in the Rebate Fund,

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(X) Not later than 60 days after the end of (A) the fifth Bond . Year, and (B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the

Rebatable Arbitrage calculated as of the end of such Bond Year; and

(Y) Not later than 60 days after the payment of all the Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(:t) of the Code.

In the event that, prior to the time of any payment required to be made from a Rebate Fund, the amount in such Rebate Fund is not sufficient to malce such payment when such payment is due, the Authority shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time. such payment is due. Each payment required to be made pursuant to this Subsection (a)(l) shall be made to the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other manner as provided under the Code.

(b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the Bonds and the payments described in Subsection (a)(iii) being made may be withdrawn by the Authority, at the Request of the Authority, and utilized in any manner by the Authority.

( c) Survival of Defeasance. Notwithstanding anything in this Section to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the Bonds.

( d) The Trustee shall be deemed to have complied with this section if it follows the written direction of the Authority and shall have no obligation or responsibility to seek direction or enforce compliance by the Authority with the terms of this Section.

Section 5.09 Local Obligations.

Subject to the provisions of this Indenture, the Authority and the Trustee shall use reasonable effo1is to collect all amounts due from the Districts pursuant to the Local Obligations and shall diligently enforce, and take all steps, actions and proceedings reasonably necessary for the enforcement of all of the rights of the Authority thereunder and for the enforcement of all of the obligations of the Districts thereunder, including without limitation, the collection of delinquent special taxes and the commencement and diligent prosecution of foreclosure actions against liens of special taxes.

The Authority, the Trustee and the Districts may at any time consent to, amend or modify any of the Local Obligations pursuant to the terms thereof, with the prior consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding,

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Section 5.10 Sale of Local Obligations.

Notwithstanding anything in this Indenture to the contrary, the Authority may cause the Trustee to sell by Request of the Authority with the consent of the majority of the holders of the Bonds, from time to time, all or a po1iion of an issue of Local Obligations, provided that the Authority shall deliver to the Trustee:

(1) a certificate of an Independent Accountant to the effect that, following the disposition of such Local Obligations, the Revenues as described in clause (a) of the definition thereof in Section 1.1 to be paid to the Trustee (assuming the timely payment of amounts due thereon with respect to any Local Obligations not then in default), together with interest and principal due on any non callable Federal Securities irrevocably pledged to the repayment of the Bonds, will be sufficient to pay the principal of and interest on the Bonds when due;

(2) if any Bonds are then rated by Moody's or Standard & Poor's, a certificate of Moody's, if Moody's then rates such Bonds, and Standard & Poor's, if Standard & Poor's then rates such Bonds, to 1he effect that such rating will not be withdrawn or reduced as a result of such sale of Local Obligations; and

(3) an opinion of Bond Counsel that such sale of Local Obligations is authorized under the provisions of this Indenture and will not adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation.

Upon compliance with the foregoing conditions, the Trustee shall disburse the proceeds of the sale of such Local Obligations to the Authority or upon the receipt of a Request of the Authority shall deposit such proceeds in the Revenue Fund.

Section 5 .11 Annual Reporting Requirements.

On or before each March 31, of each Fiscal Year, the Authority shall cause the Districts to provide to the Trustee, who shall disseminate to the Holders, the following information as it relates to each District and the Bonds: (a) the amount of Bonds Outstanding (as of January 1); (b) the balance in each fund administered by the Fiscal Agent Agreement (as of January 1); (c) a summary of special taxes levied within the Districts and an update of the assessed value within the Districts; ( d) a summary of any changes to the Rate and Method approved or submitted to the electors for approval prior to the annual report; ( e) the status of foreclosure actions being pursued by the Districts with respect to special tax delinquencies; (f) the delinquency rate for the special taxes for the preceding Fiscal Year and the identity of any property owner whose delinquent special taxes represented more than 5% of the amount levied and assessed, and the value to lien ratios of such delinquent properties; and (g) any additional information provided to California Debt and Investment Advisory Commission or any other governmental agency or required to be provided by any District pursuant to the applicable Fiscal Agent Agreement. The Authority, on its behalf and on behalf of the Districts, shall further provide to the Trustee, who shall disseminate to the Holders: (a) within three Business Days after the Districts obtains knowledge thereof, notice by telephone, promptly confirmed in writing, of any event that constitutes an "event of default" under any District Fiscal Agent Agreements, together with a statement by an Authorized Representative of the steps being taken by such District to cure such "event of

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default"; and (b) within 10 days after any District obtains knowledge thereof, written notice of any Material Adverse Effect. Any information required to be provided pursuant to this covenant may be provided directly to the Owners by the dissemination services provided through EMMA.

Section 5.12 Costs and Expenses. The Authority agrees to pay the reasonable out-of-pocket expenses and disbursements of the Owners and the necessary and reasonable fees, expenses and disbursements of counsel to the Owners in connection with (A) obtaining any waiver or consent under this Indenture (whether or not the transactions contemplated thereby shall be consummated) or any Event of Default or alleged Event of Default hereunder, (B) the preparation, execution, delivery, administration and enforcement or preservation of rights in connection with a workout, restructuring or waiver with respect to this Bonds and (C) the occurrence of an Event of Default and collection and other enforcement proceedings resulting therefrom. The obligation of the Authority to malce such payments is limited to amounts received from the enforcement of the Local Obligations, and the Authority will, to the extent pennitted by law, enforce such Local Obligations in the amount necessary to pay all amounts to be paid under this Section.

ARTICLE6 THE TRUSTEE

Section 6.01 Appointment of Trustee.

Zions First National Bartle, with its corporate trust office in Los Angeles, California, a national banking association organized and existing under and by virtue of the laws of the United States of America, is hereby appointed Trustee by the Authority 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 Authority agrees that it will maintain a Trustee doing business in the State, with a combined capital and surplus ( or in the case of a domestic branch of a foreign bank, a parent bartlc meeting such requirements) of at least Fifty Million Dollar·s ($50,000,000), and subject to supervision or examination by federal or state authority, so long as any Bonds are Outstar1ding. If such bartlc or trust company 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 as set forth in its most recent report of condition so published shall be used to determine whether the foregoing requirements of this Section 6.01 have been satisfied.

The Trustee is hereby authorized to pay the principal of and interest and redemption premium (if filly) on the Bonds when duly presented for payment at maturity, or on redemption or purchase prior to maturity, Md to cancel all Bonds upon payment thereof. The Trustee shall keep accurate records of all funds administered by it and of all Bonds paid and discharged.

Section 6.02 Acceptance ofTrnsts.

The Trustee here by accepts the trusts imposed upon it by this Indenture, and agrees to perform said trnsts, but only upon and subject to the following express terms and conditions:

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(a) The Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default hereunder has occurred (which has not been cured or waived), the Tl'Ustee may exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill and diligence in their exercise, as a reasonable person would exercise or use under the circumstances in the conduct of his own affairs.

(b) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, but shall not be responsible for the acts of any agents, attorneys or receivers appointed by it unless such appointment was the result of negligence or willful misconduct. TI1e Tl'llstee may consult with and act upon the advice of counsel (which may be counsel to the Authority) concerning all matters of trust and its duty heretmder and shall be wholly protected in reliance upon the advice or opinion of such counsel in respect of any action tal<en or omitted by it in good faith and in accordance herewith.

( c) 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 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 Authority hereunder. The Trustee shall have no responsibility, opinion, or liability with respect to any information, statement, or recital in any offering memorandum, official statement, or other disclosure material prepared or distributed with respect to the issuance of the Bonds.

( d) Except as provided in Section 3 .02, the Trustee shall not be accountable for the use of any proceeds of sale of the Bonds delivered heretmder. The Trustee may become the Owner of Bonds secured hereby with the san1e rights which it would have if not the Trustee; may acquire and dispose of other bonds or evidences of indebtedness of the Authority 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.

( e) The Trustee shall be protected in acting, in good faith and without negligence, upon any notice, request, consent, certificate, order, affidavit, Jetter, telegram or other paper or document believed by it to be genuine and correct and to have been signed or sent 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 sanie Bond and upon Bonds issued in exchange therefor or in place thereof. The Trustee shall not be bound 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 Bond Register.

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(f) As to the existence or non-existence of any fact or as to the sufficiency or validity of any instnunent, paper or proceeding, the Trnstee shall be entitled to rely upon a Certificate of the Authority as sufficient evidence of the facts therein contained and prior to the occurrence of an Event of Default hereunder of which the Trustee has been given notice or is deemed to have notice, as provided in Section 6,02(h) hereof, shall also be at liberty to accept a Certificate of the Authority to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same,

(g) The permissive right of the Trustee to do things enumerated in this Indentme shall not be constrned as a duty and it shall not be answerable for other than its negligence or willful misconduct. The immunities and exceptions from liability of the Trustee shall extend only to its officers, directors, and employees, In the event of negligence or misconduct of an agent or attorney of the Trustee, the Trnstee shall diligently pmsue all remedies of the Trustee against such agent or attorney,

(h) The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default hereunder except where a Responsible Officer has actual lmowledge of such Event of Default and except for the failure by the Authority to make any of the payments to the Trustee required to be made by the Authority pursuant hereto, including payments on the Local Obligations, or failure by the Authority to file with the Trustee any document required by this Indentme to be so filed subsequent to the issuance of the Bonds, unless a Responsible Officer shall be specifically notified in writing of such default by the Authority, or by the Owners of at least twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding and all notices or other instnm1ents required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered to a Responsible Officer 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. Delivery of a notice to the officer and address for the Trnstee set forth in Section 10.12 hereof, as updated by the Trustee from time to time, shall be deemed notice to a Responsible Officer.

(i) 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 Authority pertaining to the Bonds, and to make copies of any of such books, papers and records such as may be desired but which is not privileged by statute or by law.

G) 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.

Oc) 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 Trnstee 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 Authority to the execution of any Bonds, the withdrawal of any cash, or the taking of any other action by the Trustee.

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(I) Before taking the action referred to in Section 8.02 or 9.02, the Trustee may require that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or willful misconduct in connection with any such action.

(m) 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 be segregated from other funds.

(n) The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured email, facsimile transmission or other similarly unsecured electronic methods, provided, however, that, the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority elects to give the Trustee email or facsimile instructions ( or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee's understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.

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

(p) The Trustee shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct.

( q) The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure, The terrn "force majeure" means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include, but not be limited to, acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences.

(r) Whenever in the administratfon of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taldng or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Ce1iificate of the Authority, and such Certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.

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Section 6.03 Fees, Charges and Expenses of Trustee,

The Trustee shall be entitled to payment and reimbursement by the Authority for reasonable fees for its services rendered hereunder and all advances, 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 respectively. The Trustee's right to payment of its fees and expenses shall survive the discharge and payment or defeasance of the Bonds and termination of this Indenture, and the resignation or removal of the Trustee.

Section 6.04 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 6.02(h) hereof, then the Trustee shall within no more than 30 days of such occurrence give written notice thereof by first­class 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 Authority to mal,e 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 6.05 Intervention by Trustee,

In any judicial proceeding to which the Authority is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing on tl1e interests of Owners of any oftl1e Bonds, the Trustee may intervene on behalf of such Bond Owners, and subject to Section 6.02(1) hereof, shall do so if requested in writing by the Owners of at least twenty-five percent (25%) in aggregate principal amount of such Bonds then Outstanding,

Section 6,06 Removal of Trustee,

The Owners of a majority in aggregate principal amount of tl1e Outstanding Bonds may or the Authority may, upon 30 days' prior written notice to the Trustee, remove the Trustee initially appointed, and any successor thereto, by an instrument or concurrent instruments in writing delivered to the Trustee. Upon any such removal, the Autl1ority shall give notice of such removal to the Bond Owners and appoint a successor or successors thereto; provided that any such successor shall be a bank or trust company meeting the requirements set forth in Section 6.01. Upon such acceptance, the Authority shall cause notice thereof to be given by first class mail, postage prepaid, t!) tl1e Bond Owners at their respective addresses set forth on the Bond Register.

Section 6.07 Resignation by Trustee.

The Trustee and any successor Trustee may at any time under either one or more series of Bonds give prior written notice of its intention to resign as Trustee hereunder, such notice to be given to the Authority, and the Districts by registered or certified mail or overnight delivery

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service, Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. Upon such acceptance, the Authority 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 Register,

Section 6.08 Appointment of Successor Trustee,

In the event of the removal or resignation of 1he Trustee pursuant to Sections 6.06 or 6.07, respectively, the Authority shall promptly appoint a successor Trustee with respect to the Bonds. In the event the Authority shall for any reason whatsoever fail to appoint a successor Trustee within thirty (30) days following the delivery to 1he Trustee of the instrument described in Section 6.06 or within thirty (30) days following the receipt of notice by the Authority and the Districts pursuant to Section 6.07, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor Trustee meeting the requirements of Section 6.01 hereof. Any such successor Trustee appointed by such court shall become the successor Trustee heretmder notwithstanding any action by the Authority purporting to appoint a successor Trustee following the expiration of such thirty-day period.

Section 6.09 Merger or Consolidation.

Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which 1he 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 6.01, shall be tl1e 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 farther act, anything herein to the contrary notwithstanding.

Section 6.10 Concerning any Successor Trustee.

Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority 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 eshites, properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on tl1e Request of the Authority, 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 Authority 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 tl1e predecessor Trustee, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority,

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Section 6.11 Appointment of Co-Trustee.

It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as a 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 it 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 which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional individual or institution as a separate co-trustee. The following provisions of this Section 6.11 are adopted to these ends.

In the event that the Trustee or the Authority appoints an additional individual or institution as a separate 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 or co-trustee but only to the extent necessary to enable such separate or co-trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co-trustee shall run to and be enforceable by either of them.

Should any instrument in writing from the Authority be required by the separate trustee or co-trustee so appointed by the Trustee or the Authority 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 Autliority. In case any separate trustee or co-trustee, or a successor to either, shall become incapable of acting, resign or 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, Any co-trustee shall be bound by the standard of care, duties and obligations as the Trustee under this Indenture as if such co-trustee were the Trustee.

Section 6.12 Indemnification; Limited Liability of Trustee.

The Authority further covenants and agrees to indemnify and save the Trustee and its officers, directors, agents and employees, harmless against any loss, cost, expense and liabilities (including without limitation, fees and expenses of its attorneys) which it may incur arising out of or in the exercise and performance of its powers and duties hereunder, including the reasonable costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities which are due to the negligence or intentional misconduct of the Trustee, its officers, directors; agents 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 a majority (or any lesser amount that may direct the Trustee in accordance with the provisions of the Indenture) of

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the Owners of the 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, Such indemnification shall survive termination of this Indenture and discharge of the Bonds, resignation or removal of the Trustee.

ARTICLE7 MODIFICATION AND AMENDMENT OF THE INDENTURE

Section 7.01 Amendment Hereof.

This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Indenture which shall become binding when the written consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding are filed with the Trustee, No such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Authority to pay the principal, interest or redemption premiums at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the Owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) without written consent of the Trustee, modify any of the rights or obligations of the Trustee,

This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds may also be modified or amended at any time by a Supplemental Indenture which shall become binding upon adoption, with the written consent of the Owners of the majotity of the Bonds outstanding, to the extent permitted by law.

The Trustee may obtain an opini.on of Bond Counsel that any such Supplemental Indenture entered into by the Authority and the Trustee complies with the provisions of this Article VII and the Trustee may conclusively rely upon such opinion.

Section 7.02 Effect of Supplemental Indenture.

From and after the time any Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties hereto or thereto and all Owners of Outstanding Bonds, as the case may be, shall thereafter be detennined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the tenns and conditions of this Indenture for any and all purposes.

Section 7 .03 Endorsement or Replacement of Bonds After Amendment.

After the effective date of any action taken as hereinabove provided, the Authority may determine that any affected Bonds shall bear a notation, by endorsement in form approved by the Authority, as to such action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date and presentation of its Bond for that purpose at the Trnst Office of the Trustee, a suitable notation as to such action shall be made on such Bond. If the Authority shall so determine, new Bonds so modified as, in the opinion of the Autho1ity, shall be necessary to conform to such Bond Owners' action shall be prepared and executed, and in that

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case upon demand of the Owner of any Bond Outstanding at such effective date such new Bonds shall be exchanged at the Trust Office of the Trustee, without cost to each Bond Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds.

Section 7.04 Amendment by Mutual Consent.

The provisions of this Article VII shall not prevent any Bond Owner from accepting any amendment as to the particular Bond held by him, provided that due notation thereof is made on such Bond.

Section 7.05 Amendment of Fiscal Agent Agreement. The Authority shall not permit the amendment of any Fiscal Agent Agreement without the prior written consent of the Owners of the majority of the Bonds outstanding.

ARTICLES EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS

Section 8.01 Events of Default.

The following events shall be Events of Default hereunder.

(a) Default in the due and punctual payment of the principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise.

(b) Default in the due and punctual payment of any installment of interest on any Series A Bond when and as such interest installment shall become due and payable.

(c) Any statement, representation or warranty made or deemed to be made on behalf of the Authority or the District, in this Indenture or in any certificate, financial or other statement furnished by or on behalf of the Authority or a District, to the Owners shall provide to have been inaccurate, misleading or incomplete in any material respect when made or deemed to have been made;

( d) Default by the Authority in the observance of any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, if such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authority by the Trustee, or to the Authority and the Trustee by the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding; provided that such default (other than a default arising from nonpayment of the Trustee's fees and expenses, which must be cured within such 30-day period unless waived by the Trustee) shall not constitute an Event of Default hereunder if the Authority shall commence to cure such default 'A'ithin said thirty (3 0) day period and thereafter diligently and in good faith shall cure such default within a sixty (60) day period of time; or

(e) The filing by the Authority or any District of a petition or answer seeking reorganization or arrangement under the federal banlauptcy laws or any other applicable law of

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the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Authority, 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 Authority or of the whole or any substantial part of its property.

Section 8.02 Remedies; Rights of Bond Owners.

Upon and during the continuation of any Event of Default, the Bonds shall bear interest at the Default Rate. Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture. In the event of an Event of Default arising out of a nonpayment of Trustee's fees and expenses, the Trustee may sue the Autl1ority to seek recovery of its fees and expenses; provided, however, that such recovery may be made only from the funds of the Authority and not from Revenues,

If an Event of Default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount Outstanding of the Bonds and indemnified as provided in Section 6. 02( 1 ), the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bond Owners.

No remedy by the terms of this Indenture conferred upon or reserved to the Trustee or to the Bond Owners is intended to be exclusive of any otl1er remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or to the Bond Owners hereunder or now or hereafter existing at law or in equity.

No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein; such right or power may be exercised from time to time as often as may be deemed expedient.

Section 8.03 Application of Revenues and Other Funds After Default.

All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenturn relating to tl1e Bonds shall be applied by the Trustee in the following order 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 -

First, to the payment of the costs and expenses of the Trustee and the Owners in declaring such Event of Default and in carrying out the provisions of this Article VIII,

. including reasonable compensation to their respective agents, attorneys and counsel, and to the payment of all other outstanding fees and expenses of the Trustee;

Second, to tlie payment of the whole amount of interest (at the Default Rate) on and principal of the Bonds then due and unpaid; provided, however, that in the event such

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amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority;

( a) first to the payment of all installments of interest on the Bonds then due and unpaid, and

(b) second, to the payment of all installments of principal of the Bonds then due and unpaid;

Third, to the Authority to the extent of its Administrative Expenses.

Subject to the provisions set forth above, upon an Event of Default, any or all monies held in the funds and accounts under the Indenture shall be applied to pay the redemption prices of, or any amount due in respect of principal or interest on, the Bonds.

Section 8.04 Power of Trustee to Control Proceedings.

In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of twenty-five percent (25%) in aggregate principal amount of the Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other such litigation. Any suit, action or proceeding which any Owner of Bonds 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 of Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds issued hereunder, by taldng and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney in fact of the respective Owners of the Bonds for the purposes 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 respective Owners of the Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact.

Section 8.05 Appointment of Receivers.

Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bond Owners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Revenues and other amounts pledged hereunder, pending such proceedings, with such powers as the court maldng such appointment shall confer,

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Section 8.06 Non-Waiver.

Nothing in this Article VIII or in any other provision of this hldenture, or in the Bonds, shall affect or impair the obligation of the Authority, 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 Revenues and other moneys herein pledged for such payment.

A waiver of any default or breach of duty or contract by the Trustee or any Bond Owners 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 of the Trustee or any Owner of any of the Bonds 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 Trustee or Bond Owners by the Bond Law or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Bond Owners, as the case may be.

Section 8.07 Rights and Remedies of Bond Owners.

No Owner of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of twenty-five percent (25%) in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers herein before granted or to institute such action, suit or proceeding in its own name; ( c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; and ( d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or om1ss1on are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds.

The right of any Owner of any Bond to receive payment of the principal of and interest and premium (if any) on such Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.

Section 8.08 Termination of Proceedings.

In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or

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abandoned for any reason, or shall have been determined adversely, then and in every such case, the Authority, the Trustee and the Bond Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.

ARTICLE9 RESERVED

ARTICLE IO MISCELLANEOUS

Section 10.01 Limited Liability of Authority.

Notwithstanding anything in this Indenture contained, the Authority shall not be required to advance any moneys derived from any source of income other than the Revenues for the payment of the principal of or interest on the Bonds, or any premiums upon the redemption thereof, or for the performance of any covenants herein contained ( except to the extent any such covenants are expressly payable hereunder from the Revem1es). The Authority may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose and may be used by the Authority for such purpose without incun-ing indebtedness.

The Bonds shall be revenue bonds, payable exclusively from the Revenues, and other funds as in this Indenture provided. The general fund of the Authority is not liable, and the credit of the Authority is not pledged, for the payment of the interest and premium (if any) on or principal of the Bonds. The Owners of the Bonds shall never have the right to compel the forfeiture of any property of the Authority. The principal of and interest on the Bonds and any premiums upon the redemption of any thereof, shall not be a legal or equitable pledge, charge, lien or encumbrance upon any property of the Authority or upon any of its income, receipts or revenues except the Revenues (with respect to the Bonds) and other funds pledged to the payment thereof as in this Indenture provided.

Section 10.02 Benefits oflndenture Limited to Parties.

Nothing in this Indenture, expressed or implied, is intended to give to any person other than the Authority, the Districts, the Trustee and the Owners of the Bonds, any right, remedy or claim 1.mder or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Trustee, the Districts and the Owners of the Bonds.

Section 10.03 Discharge of Indenture.

If the Local Obligations are to be defeased and/or redeemed in accordance with the Fiscal Agent Agreement therefor, then the Authority shall pay and discharge any or all of the Outstanding Bonds related thereto in any one or more of the following ways:

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

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(b) by irrevocably depositing with the Trustee, in trust, at or before maturity, money which, together with the available amotmts then on deposit in the funds and accounts established with the Trustee pursuant to this Indenture and available for such purpose, is fully sufficient to pay such Bonds, including all principal, interest and redemption premimns; or

( c) by inevocably depositing with the Trustee or an escrow bank as fiduciary meeting the financial requirements set forth in Section 6.01 hereof, in trust, Federal Securities set forth in (a), (b) or (c) of the definition thereof, Refcorp interest strips, CATS, TIGRS, STRPS or defeased municipal bonds rated AAA by S&P or Aaa by Moody's (or any combination of the foregoing) ( each a "Defeasance Obligation") in such amount as an Independent Accotmtant shall detenuine will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established with the Trustee pursuant to this Indenture and available for such purpose, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates;

and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been mailed pursuant to Section 2.02(c) or provision satisfactory to the Trnstee shall have been made for the mailing of such notice, then, at the Request of the Authority, and notwithstanding that any of such Bonds shall not have been surrendered for payment, the pledge of the Revenues and other funds provided for in this Indenture with respect to such Bonds, and all other pecuniary obligations of the Authority under this Indenture with respect to such Bonds, shall cease and terminate, except only the obligation of the Authority to comply with the .covenants contained in Section 5.07 hereof, to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon from amounts set aside for such purpose as aforesaid, and to pay all expenses and costs of the Trustee. Any funds thereafter held by the Trustee, which are not required for said purposes, shall be paid over to the Authority or upon a Request of the Authority to the Districts.

Section 10 .04 Successor is Deemed Included in All References to Predecessor.

Whenever in this Indenture or any Supplemental Indenture either the Authority 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 Authority, that are presently vested in the Authority, and all the covenants, agreements and provisions contained in this Indenture by or on behalf of the Authority shall bind and inure to the benefit of its successors whether so expressed or not.

Section 10.05 Content of Certificates.

Every Certificate of the Au1hority with respect to compliance with a condition or covenant provided for in this Indenture ( except the certificate of destruction provided for in Section 10.10 hereof) shall include (a) a statement that the person or persons making or giving such certificate 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 are based; ( c) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation

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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 of the Authority 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 lmown 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, on information with respect to which is in the possession of the Authority, or upon the certificate or opinion of or representations by an officer or officers of the Authority, unless such cotmsel !mows 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 the exercise of reasonable care should have known that the same were erroneous.

Section I 0.06 Execution of Documents by Bond Owners.

Any request, consent or other instrument required by this Indentme to be signed and executed by Bond Owners may be in any number of concurrent writings of substantially similar tenor and may be signed or executed by such Bond Owners in person or by agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, shall be sufficient for any pm-pose of this Indentme and shall be conclusive in favor of the Trustee and of the Authority if made in the manner provided in this Section 10.06.

The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer of any jmisdiction, authorized by the laws thereof to take aclmowledgements of deeds, certifying that the person signing such request, consent or other instrument or writing acknowledged to him the execution thereof.

The ownership of Bonds shall be proved by the Bond Register. Any request, consent or vote of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of any Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in pursuance of such request, consent or vote. In lieu of obtaining any demand, request, direction, consent or waiver in writing, the Trustee may call and hold a meeting of the Bond Owners upon such notice and in accordance with such rules and obligation as the Trustee considers fair and reasonable for the purpose of obtaining any such action.

Section l 0.07 Disqualified Bonds.

In determining whether the Owners of the requisite aggregate principal amount of Bonds have concmred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Districts, or the Authority ( excluding Bonds held in any employees' or retirement fund) shall be disregarded and deemed not to be

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Outstanding for the purpose of any such determination, provided, however, that for the purpose of determining whether the Trustee shall be protected in relying on any such demand, request, direction, consent or waiver, only Bonds which the Trustee knows to be so owned or held by the Districts or the Authority shall be disregarded.

Section 10.08Waiver of Personal Liability.

No officer, agent or employee of the Authority 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 such officer, agent or employee from the performance of any official duty provided by law.

Section 10.09Partial Invalidity.

If any one or more of the covenants or agreements, or portions thereof, provided in this Indenture on the part of the Authority (or of the Trustee) to be performed should be contrary to law, then such covenant or covenants, such agreement or agreements, or such portions thereof, shall be null and void and shall be deemed separable from the remaining covenants and agreements or portions thereof and shall in no way affect the validity of this Indenture or of the Bonds; but the Bond Owners shall retain all rights and benefits accorded to them under the Bond Law or any 0th.er applicable provisions of law, The Authority hereby declares that it would have entered into this 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 or more sections, paragraphs, subdivisions, sentences, clauses or phrases of this Indenture or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

Section IO. IO Destrnction of Cancelled Bonds.

Whenever in this Indenture provision is made for the suJTender to the Authority or the Trustee of any Bonds which have been paid or cancelled pursuant to the provisions of this Indenture, the Trustee shall destroy such Bonds and furnish to the Authority a certificate of such destruction.

Section 10.11 Funds and Accounts.

Any fund or account required by this Indenture to be established and maintained by the Authority or the Trnstee n;iay be established and maintained in the accounting records of the Authority or the Trnstee, as the case may be, either as a fund or an account, and may, for the purpose of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account. All such records with respect to all such funds and accounts held by the Authority shall at all times be maintained in accordance with generally accepted accounting principles and all such records with respect to all such funds and accounts held by the Trustee shall be at all times maintained in accordance with industry practices; in each case with due regard for the protection of the security of the Bonds and the rights of every Owner thereof.

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Section 10.12Notices.

Any notice, request, complaint, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, or sent by telegram, addressed as follows:

If to the Authority:

Ifto the Districts:

If to the Districts:

If to the Districts:

If to the Districts:

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· Murrieta Valley Unified School District Public Financing Authority

c/o Murrieta Valley Unified School District 41870 McAlby Court Murrieta, California 92651 Attention: Assistant Superintendent,

Facilities/Operational Services

Community Facilities Districts No. 90-1 of the Murrieta Valley Unified School District

41870 McAlby Court Murrieta, California 92651 Attention: Assistant Superintendent,

Facilities/Operational Services

Community Facilities Districts No. 98-1 of the Murrieta Valley Unified School District

41870 McAlby Court Murrieta, California 92651 Attention: Assistant Superintendent,

Facilities/Operational Services

Community Facilities Districts No. 98-2 of the Murrieta Valley Unified School District

41870 Mc.AJby Court Murrieta, California 92651 Attention: Assistant Superintendent,

Facilities/Operational Services

Community Facilities Districts No. 98-3 of the Murrieta Valley Unified School District

41870 McAlby Cowi: Murrieta, California 92651 Attention: Assistant Superintendent,

Facilities/Operational Services

-51-

If to the Districts:

If to the Districts:

Ifto the Trustee:

If to the Original Purchaser:

Community Facilities Districts No. 2001-2 of the Murrieta Valley Unified School District

41870 McAlby Court Munieta, California 92651 Attention: Assistant Superintendent,

Facilities/Operational Services

Community Facilities Districts No. 2002-5 of the Murrieta Valley Unified School District

41870 McAlby Court Munieta, California 92651 Attention: Assistant Superintendent,

Facilities/Operational Services

Zions First National Bank 550 South Hope Street, Suite 2650 Los Angeles, California 90071 Attention: Corporate Trnst Department

City National Bank 555 South Flower St, 8th Floor Los Angeles, CA 90071 Attention: Scott Johnson, Vice President

The Authority, the Districts, and the Trustee may designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.

Section 10.13 Unclaimed Moneys.

Anything in this Indenture to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of the Bonds which remain unclaimed for two (2) years after the date when such Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Trustee at such date, or for two (2) years after the date of deposit of such moneys if deposited with the Trustee after said date when such Bonds become due and payable, shall be repai.d by the Trnstee to the Authority, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the Authority for the payment of such Bonds; provided, however, that before being required to make such payment to the Authority, the Trustee shall, at the expense of Authority, cause to be mailed to the Owners of all such Bonds, at their respective addresses appearing on the Bond Register, a notice that said moneys remain m1claimed and that, after a date in said notice, which date shall not be less than thirty (30) days after the date of mailing such notice, the balance of such moneys then unclaimed will be returned to the Authority.

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Section 10.14Payment Due on Other than a Business Day.

If the date for making any payment or the last date for perfom1ance of any act or the exercising of any right, as provided in the Indenture, is not a Business Day, such payment, with no interest accruing for the period from and after such nominal date, may be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nominal date provided in this Indenture,

Section 10.15 Documents to Be delivered at Closing.

On or prior to the Closing Date, the Trustee and the Original Purchaser shall receive each of the following documents relating to the authorization and issue of the Bonds:

(a) Final Opinion of Bond Counsel. The final opinion of Bond Counsel, dated the Closing Date, substantially in the form set forth in Exhibit F hereto, together with letters dated the Closing Date and addressed to the Original Purchaser authorizing the Original Purchaser to rely on said opinions.

(b) Defeasance Opinion of Bond Counsel. A defeasance opinion of Bond Colmsel, dated the Closing Date, with respect to the Prior Bonds.

(c) Opinion of Special Counsel to the Authority. An opinion of Special Colmsel to the Authority, dated the Closing Date and addressed to the Original Purchaser to the effect that:

(i) the Authority is a joint power authority duly organized and existing under the Constitution and laws of the State of California;

(ii) the Authority has full legal power and lawful authority to enter into this Indenture and the Bonds ( collectively "Authority Documents") and carry out the transactions contemplated under the Authority Documents;

(iii) the resolution approving the issuance of the Bonds has been duly adopted at a meeting of the Board, acting as the legislative body of the Authority, which meeting was called and held pursuant to law with all public notice required by law and at which a quorum was present and acting throughout and such resolution is in full force and effect and has not been modified, amended, or rescinded;

(iv) the Authority Documents have been duly authorized, executed, and delivered by the Authority and constitute the legal, valid, and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms, subject to banbuptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights, to the application of equitable principles where equitable remedies are sought, and to the exercise of judicial discretion in appropriate eases;

(v) to the best knowledge of such counsel, there is no action, suit, proceeding, or investigation before or by any court, public board, or body pending (notice of which has been served on the Authority) or threatened in writing wherein an unfavorable decision, ruling, or finding would: (a) affect the creation, organization, existence, or powers of the Authority or the

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titles of its members and officers to their respective offices; or (b) affect the validity of the Authority Documents or restrain or enjoin the repayment of the Bonds or in any way contest or affect the validity of the Authority Doclm1ents or contest the authority of the Authority to enter into or perform its obligations under any of the Authority Documents, or which, in any manner, questions the right of the Authority to use payments on the Local Obligations for repayment of the Bonds or affects in any manner the right or ability of the Authority to collect or pledge the payments on the Local Obligations; and

(vi) to the best knowledge of such counsel, the execution and delivery of the Authority Documents and compliance with the provisions thereof under the circumstances contemplated hereby, (a) do not in any material respect conflict with or constitute on the part of the Authority a breach of or default w1der any agreement or other instrument to which the Authority is a party or by which it is boW1d, and (b) do not and will not in any material respect constitute on the part of the Authority a violation, breach of, or default under any court order or consent decree to which the Authority is subject.

( d) Opinion of CoW1sel to Bank. An opinion of counsel to the Trustee/Escrow Bank ("Bank"), dated the Closing Date, and addressed to the Authority, and the Original Purchaser to the effect that:

(i) The Bank is a national banldng association with trust powers, duly created and lawfully existing under the laws of the United States of America;

(ii) The Battle has duly authorized by all necessary corporate action the execution, delivery and performat1ce of the Indenture and the Escrow Agreement (the "Banle Documents");

(iii) The Bank has all necessary trust powers required to carry out the trusts intended under the Bank Docmnents;

(iv) The Bank Docwnents have been duly executed and delivered by the Bank and constitutes the valid and binding agreement of the Batlle, enforceable against the Banle in accordance with its terms; and

(v) The Bonds have been validly authenticated at1d delivered by the Batlle pmsuant to the Bank Documents.

(e) Authority Certificate. A certificate of the Authority, dated the Closing Date and signed by an authorized official of the Authority, to the effect that:

(i) the Authority is a joint powers authority, duly organized and validly existing under the Constitution at1d laws of the State, with full right, power, and authority to enter into the Authority Doclm1ents, adopt the resolution authorizing the issuance of the Bonds and the entering into the Authority DocW11ents at1d to take all other actions on the part of the Authority relating thereto, issue, sell, and deliver the Bonds to the Original Purchaser, and carry out and consummate the trat1sactions on its part contemplated by the Authority Documents;

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(ii) by all necessary official action of the Board, as the legislative body of the Authority, the Authority has duly authorized and approved the execution and delivery by the Authority, of and the performance by the Authority of the obligations on its part contained in, the Authority Documents and, as of the Closing Date, such authorizations and approvals are in full force and effect and have not been an1ended, modified, or rescinded. When executed and delivered by the parties thereto, the Authority Documents will constitute the legally valid and binding obligations of the Authority enforceable upon the Authority in accordance with their respective terms, except as enforcement may be limited by banlcruptcy, insolvency, reorganization, moratorium, or similar laws or equitable principles relating to or affecting creditors' rights generally;

(iii) as of the Closing Date, the Authority is not in breach of or in default under any applicable constitutional provision, law, or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement, or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument which breach, default, or event could have an adverse effect on the Authority's ability to perform its obligations under the Authority Documents; and, as of the closing Date, the authorization, execution, and delivery of the Authority Documents and compliance by the Authority with the provisions of each of such agreements or instruments does not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law, or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, license, pem1it, trust agreement, loan agreement, bond, note, resolution, ordinance, agreement, or other instrument to which the Authority ( or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound, nor will any such authorization, execution, delivery, or compliance result in the creation or imposition of any lien, charge, or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the Authority Documents;

(iv) as of the Closing Date, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board, or body ( collectively and individually, an "Action")

(v) the Bonds, when issued, executed, and delivered in accordance with this Indenture, will be validly issued and outstanding limited obligations of the Authority, entitled to the benefits of this Indenture. This Indenture creates a valid pledge of the monies in certain funds and accounts established pursuant thereto, suQject in all cases to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein;

(vi) all authorizations, approvals, licenses, permits, consents, elections, and orders of or filings with any governmental authority, legislative body, board, agency, or commission havingjurisdiction in the matters which are required by the Closing Date for the due authorization of, or which would constitute a condition precedent to, or the absence of which

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would adversely affect the due performance by the Authority of; its obligations in connection with the Authority Documents have been duly obtained or made and are in full force and effect.

(vii) The Authority has not issued or incurred any obligations which are currently outstanding that are payable out of the Revenues.

(viii) The statement of financial position of the Authority and the Districts as of June 30, 2013, and the related statement of activities and statement of cash flows and changes in financial position for the year then ended and the auditors' reports with respect thereto, and the reports summarizing special taxes levied within the Districts, changes to the rates and methods of apportio11111ent and status of foreclosure actions pursued by the Districts, copies of which have heretofore been furnished to the Original Ptu·chaser, are complete and correct and fairly present the financial condition, changes in financial position and results of operations of the Authority and the Districts at such date and for such period, and were prepared in accordance with generally accepted accounting principles, where applicable. Since the period of such statements, there has been no (i) change which would have a Material Adverse Effect and (ii) no material increase in the indebtedness of the Authority.

(ix) Since the most current date of the information, financial or otherwise, supplied by the Authority to the Original Purchaser:

(A) There has been no change in the assets, liabilities, financial position or results of operations of the Authority that might reasonably be anticipated to cause a Material Adverse Effect.

(B) The Authority has not incurred any obligations or liabilities that might reasonably be anticipated to cause a Material Adverse Effect.

(x) All information, reports and other papers and data furnished by the Authority to the Original Purchaser were, at the time the same were so furnished, complete and accurate in all material respects and insofar as necessary to give the Original Purchaser a true and accurate knowledge of the subject matter and were provided in expectation of the Original Purchaser's reliance thereon in entering into the transactions contemplated by this Indenture. No fact is known to the Authority which has had or, so far as the Authority can now reasonably foresee, may in the future have a Material Adverse Effect, which has not been set forth in the financial statements previously furnished to the Original Purchaser or in other such information, reports, papers and data or otherwise disclosed in writing to the Original Purchaser prior to the Closing Date. Any financial, budget and other projections furnished to the Original Purchaser by the Authority or its agents were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair and reasonable in light of the conditions existing at the time of delivery of such financial, budget or other projections, m1d represented and as of the date of this representation, represent the Authority's best estimate of its future financial performance. No document furnished nor any representation, warranty or other written statement made to the Original Purchaser in connection with the negotiation, preparation or execution of the Bonds contains or will contain any untrue statement of a material fact or omits or will omit to state ( as of the date made or furnished) any material fact necessary in order to make the statements

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contained herein or therein, in light of the circumstances under which they were or will be made, not misleading.

(f) Verification Letter. A letter or report addressed to the Authority and the Districts, dated the Closing Date, from Causey Demgen & Moore, PC (the "Verification Agent"), verifying the accmacy of the mathematical computations concerning the adequacy of the monies to be deposited with the Escrow Baul, in the Escrow Acco1mts under the Escrow Agreements to pay when due pursuant to the stated maturity or call for redemption the principal of and interest and premium with respect to the Prior Bonds.

(g) Resolutions. Copies of the Resolution of Issuance, as. certified by the Secretary or Clerk of the Authority, which may be by way of a separate bring down certification, and the authorizing resolutions of the Bank;

(h) District Certificates. A certificate of each District, in form and substance reasonable acceptable to the Original Purchaser.

(i) CDIAC Statements. Copies of the statements with respect to the sale of the Bonds required to be delivered to the California Debt and Investment Advisory Committee pursuant to Sections 53583 and 8855 of the California Government Code;

G) Fonn 8038-G. Evidence that the federal tax information form 8038-G has been prepared for filing.

(k) Tax Certificate. The Tax Certificate of the Authority signed by an appropriate Authorized Representative ofthe Authority; and

(I) Additional Documents. Such additional legal opinions, certificates, instruments, and other documents as Bond Co1msel or the Original Purchaser may reasonably deem necessary.

Section 10.16 Arms Length Tra11Sactions.

In connection with all aspects of the transactions Gontemplated by this Indenture and the related documents (including in connection with any an1endment, waiver or other modification of this Indenture or of any related document), the Authority and School District acknowledge and agree that: (a)(i) any aiTanging, structuring ai1d other services regarding this Indenture and the related documents provided by the Purchaser ai·e ann's length commercial trai1sactions between the Authority and School District on the one hai1d, and the Purchaser on the other hand, (ii) the Authority and School District have consulted its own legal, accounting, regulatory ai1d tax advisors to the extent it has deemed appropriate, ai1d (iii) the Authority and School District are capable of evaluating, and understands and accepts, the te1ms, risks and conditions of the trai1sactions contemplated by this Indenture and the related documents; (b)(i) the Purchaser is and has been acting solely as a principal and has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Authority or School District or ai1y other Persons and (ii) the Purchaser has no obligation to the Authority or School District with respect to the trai1sactions contemplated by this Indenture and the related documents, except those obligations expressly set forth herein; and (c) the Purchaser may be engaged in a broad range of trai1sactions that involve

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interests that differ from those of the Authority or School District and the Purchaser has no obligation to disclose any of such interests to the Authority or School District.

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IN WITNESS WHEREOF, the MURRIETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY has caused this Indentme to be signed by its Vice Chairman and attested to by its Secretary and Zions First National Bank, in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officers identified below, aU as of the day and year first above written,

ATTEST:,_.~

By: I ~;;f~ ~'::>,, «---Patrick Kelley, Secretary ZJ

124/012498~0041 700229l.6 a07/08/14

MURRIETA VALLEY UNIFIED SCHOOL DISrf.~tUBLIC FIN. ANCING AU'l;H~jy , , 11 , By: /\ UYA) vtW:'

Robin Crist, Vice Chairman

ZIONS FIRST NATIONAL BANK, as Trustee

By; _____________ _

Authorized Officer

-59-

IN WITNESS WHEREOF, the MURRlETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY has caused this Indenture to be signed by its Vice Chairman and attested to by its Secretary and Zions First National Bank, in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officers identified below, all as of the day and year first above written.

ATTEST:

By:--------------Patrick Kelley, Secretary

MURRlETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY

By: --------------Robin Crist, Vice Chairman

Authorized Officer

124/012498-004 l 7002292.6 1107/10/14 -59-

IN WITNESS WHEREOF, the MURRJETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY has caused this Indenture to be signed by its Vice Chairman and attested to by its Secretary and Zions First National Bank, in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate nan1e by its officers identified below, all as of the day and year first above written.

ATTEST:

By:--------------Patrick Kelley, Secretary

MURRIETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY

By: _____________ _ Robin Crist, Vice Chairman

ZIONS FIRST NATIONAL BANK, as Trustee

By: _____________ _

Authorized Officer

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No,

EXHIBIT A

FORM OF SERIES A BOND

$ __ _

THE REGISTERED OWNER OF THIS BOND ACKNOWLEDGES AND AGREES THAT THIS BOND MAY ONLY BE TRANSFERRED IN AUTHORIZED DENOMINATIONS TO A QUALIFIED INSTITUTIONAL BUYER, AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED, UPON SATISFACTION OF THE REQUIREMENTS IN THE INDENTURE, INCLUDING THE DELIVERY TO THE FISCAL AGENT OF AN INVESTOR LETTER IN THE FORM REQUIRED BY THE INDENTURE. ANY TRANSFER OF THIS BOND IN VIOLATION OF THE TRANSFER RESTRICTIONS CONTAINED IN THE INDENTURE SHALL BE VOID AND OF NO EFFECT,

MURRIETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY

SPECIAL TAX REVENUE REFUNDING BOND, 2014 SERI.ES A

INTEREST RATE %

MATURITY DATE September 1, __

DATED DATE July 15, 2014

REGISTERED OWNER: CITY NATIONAL BANK

PRINCIPAL AMOUNT: THOUSAND DOLLARS

The MURRIETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the "Authority"), for value received, hereby promises to pay (but only out of the Revenues and other funds hereinafter refe1Ted to) to the Registered Owner identified above or registered assigns (the "Registered Owner"), on the Maturity Date identified above (subject to any right of prior redemption hereinafter mentioned), the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the fifteenth calendar day of the month preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to September 1, 2014, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or made available for payment), payable semiannually on September 1 and March 1 in each year, commencing March 1, 2015 (the "Interest Payment Dates") until the Maturity Date stated above or date of redemption of this Bond. The Principal Amount hereof is payable upon presentation and

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surrender hereof at the Trust Office (as defined in the Indenture) of Zions First National Bank (the "Trustee"). Interest hereon is payable by check of the Trustee mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the registration books of the Trustee as of the fifteenth calendar day of the month preceding such Interest Payment Date; provided, however, that payment of interest may be made by wire transfer to an account in the United States of America to any registered owner of Bonds in the aggregate principal amount of $1,000,000 or more upon written instructions of any such registered owner filed with the Trustee for that purpose as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date.

This Bond is a limited obligation of the Authority, payable solely from the Revenues and funds pledged under the Indenture (as defined below). This Bond is not a debt of the Murrieta Valley Unified School District or the State of California or any of its political subdivisions (except the Authority and only to the extent set forth in the Indentlu·e), and none of MmTieta Valley Unified School District, the Districts, said State or any of its political subdivisions is liable hereon. The Authority has no taxing power.

This Bond is one of a duly authorized issue of bonds of the Authority designated the "Murrieta Valley Unified School District Public Financing Authority Special Tax Revenue Refunding Bonds, 2014 Series A" (the "Bonds"), limited in principal amount to Twenty Million Two Hm1dred Twenty Thousand Dollars ($20,235,000), secured by an Indenture of Trust, dated as of Jlme !, 2014 (the "Indenture"), by and between the Authority and the Trustee. Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of the rights thereunder of the owners of the Bonds, of the nature and extent of the Revenues (as that term is defined in the Indenture), of the rights, duties and immlu:tlties of the Trustee and of the rights and obligations of the Authority therelll1der; and all of the terms of the Indenture are hereby incorporated herein and constitute a contract between the Authority and the Registered Owner hereof, and to all of the provisions of which Indenture the Registered Owner hereof, by acceptance hereof, assents and agrees.

The Bonds are authorized to be issued pursuant to the provisions of the Marks-Roos Local Bond Pooling Act of 1985, as amended, constituting Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Govenm1ent Code of the State of California (the "Act"). The Bonds are limited obligations of the Authority and, as and to the extent set forth in the Indenture, are payable solely from and secured by a first lien on and pledge of the Revenues and certain other funds held by the Trustee as provided in the Indenture. The Revenues and such other funds constitute a trust fund for the security and payment of the principal of and interest on the Bonds, except to the extent otherwise provided in the Indentln·e. The full faith and credit of the Authority is not pledged to the payment of the principal of or interest or redemption premiums (if any) on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the Authority or any of its income or receipts, except the Revenues and such other funds as provided in the Indenture,

The Bonds have been issued based upon the Revenues generated by certain obligations of the Districts (the "Local Obligations"), The Authority will take the proceeds that it receives from tl1e sale of the Bonds to refund certain outstanding indebtedness of 1he Authority, all as more particularly described in the Indenture. The obligation of the Districts to make payments of

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principal and interest on the Local Obligations is a limited obligation secured only as set forth therein.

The Bonds maturing prior to September 1,2019 are not subject to optional redemption, The Bonds maturing on or after September I, 2020 are subject to optional redemption prior to maturity as a whole, or in part from such maturities as are selected by the Authority, and by lot within a maturity, from any source of funds made available to the Authority, at the optioil of the Authority, on any date on or after September I, 2019, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

The Bonds are subject to mandatory redemption prior to maturity, in whole or in part, on a pro rata basis among maturities and by lot within a maturity, on a11y Interest Payment Date on or after September 1, 2014, from the proceeds of a redemption of any Local Obligation as a result of prepayment of Special Taxes, at par value, together with accrued interest to the date of redemption:

The Bonds maturing September 1, 2024 are subject to mandatory sinking fund redemption in whole, or in part by lot, on September I in each year commencing September 1, 2023, as provided in the Indentme.

The Bonds maturing September 1, 2031 are subject to mandatory sinking fund redemption in whole, or in part by lot, on September 1 in each yeru· commencing September 1, 2030, as provided in the Indenture.

The Bonds maturing September 1, 2037 are subject to mandatory sinldng fund redemption in whole, or in part by lot, on September 1 in each year commencing September 1, 2036, as provided in the Indenture,

TI1e Trnstee on behalf a11d at the expense of the Authority shall mail (by first class mail, postage prepaid) notice of any redemption to the respective registered owners of any Bonds designated for redemption, at their respective addresses appearing on the registration books maintained by the Trustee ru1d to the Securities Depositories and to the Information Services (as such tetn1s are defined in the Indenture), at least thirty (30) but not more than sixty (60) days prior to the redemption date; provided, however, that neither failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon,

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

The Bonds are issuable as fully registered Bonds without coupons in denominations of $100,000 or any integral multiple thereof, except that at least one Bond shall be in a denomination of $5,000. Subject to the limitations on transfer and upon payment of the charges, if ru1y, provided in the Indenture, fully registered Bonds may be exchru1ged at the Trust Office of the Tmstee for a like aggregate principal amount and maturity of fully registered Bonds of other authorized denominations,

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Any transfer of 1his Bond shall be subject to the restrictions on transfer set forth on page 1 of this Bond and in the Indenture. This Bond is transferable by the Registered Owner hereof, in person or by its attomey duly authorized in writing, at the Trust Office of the Trustee, but only in the mam1er, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount will be issued to the transferee in exchange herefor. The Trustee shall not be required to register the transfer or exchange of any Bond (i) during 15 days prior to selection of Bonds for redemption, or (ii) selected for redemption.

The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the, Trustee shall not be affected by any notice to the contrary. The Indenture and the rights and obligations of the Authority and of the owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond. or otherwise alter or impair the obligation of the Authority to pay the principal, interest or redemption premiums at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee, all as more fully set forth in the Indenture.

It is hereby certified that all things, conditions and acts required to exist, to have happened and 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 mam1er as required by the Constitution and statutes of the State of California and by the Act, and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Constitution or statutes of the State of California or by the Act.

This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for' any purpose, until the certificate of au1hentication hereon shall have been signed by the Trustee. No representation is made that this Bond has been issued in accordance with Rule 15c2-12 of the Securities Exchru1ge Act of1934, as amended.

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IN WITNESS WHEREOF, the Authority has caused this Bond to be executed in its name and on its behalf by the facsimile signatures of its Chairman and Secretary and its seal to be reproduced hereon all as of the Dated Date identified above.

(SE AL)

ATTEST:

By:--------------Secretary

MURRIETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY

By:--------------Chairman

[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

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

Date: ______ __,2014

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ZIONS FIRST NATIONAL BANK, as Trustee

By: _____________ _ Authorized Signatory

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[FORM OF ASSIGNMENT]

For value received the undersigned do(es) hereby sell, assign and transfer unto

(typewrite name, address and federal tax identification number)

the witl1in-registered Bond and hereby irrevocably constitute(s) and appoint(s)

attorney, to transfer the same on the Bond register with full power of substitution in the premises.

Dated: -----~----Signature Guaranteed:

By: Note:

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

The signature(s) on this assignment must correspond with the name(s) as written on the face of the within-registered Bond in every particular, without alteration or enlargement or any change whatsoever.

EXHIBITB

LIST OF DISTRICTS AND DISTRICT BONDS

Community Facilities District No, 90-1

Community Facilities District No, 98-1

Community Facilities District No. 98-2

Community Facilities District No. 98-3

Community Facilities District No. 2001-2

Commtmity Facilities District No. 2002-5

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$4,696,236.05 2004 Special Tax Bonds

$5,836,537.16 2004 Special Tax Bonds

$3,779,074.38 2004 Special Tax Bonds

$2,705,341.47 2004 Special Tax Bonds

$2,930,927.74 2004 Special Tax Bonds

$7,165,950.35 2004 Special Tax Bonds

EXHIBITC

SCHEDULE OF SURPLUS FUND CREDITS

Amounts in the Surplus Ftmd shall be disbursed to each of the Districts in accordance with the following schedule:

September 2, CFDNo. CFDNo. CFDNo. CFDNo. CFDNo. CFDNo. 90-1 98-1 98-2 98-3 2001-2 2002-5

2014 21.82% 21.02% 10.99% 14.23% 11.52% 20.42% 2015 21.75% 20.96% 10.96% 14.49% 11.49% 20.36% 2016 21.68% 20.89% 10.93% 14.76% 11.45% 20.29% 2017 21.61% 20.82% 10.89% 15.03% 11.41% 20.23% 2018 21.54% 20.76% 10.85% 15.31% 11.38% 20.16% 2019 21.47% 20.69% 10.82% 15.59% 11.34% 20.10% 2020 21.40% 20.62% 10.78% 15.87% 11.30% 20.03% 2021 21.32% 20.55% 10.75% 16.16% 11.26% 19.96% 2022 21.25% 20.48% 10.71% 16.45% 11.22% 19.89% 2023 14.99% 22.00% 11.5 I% 18.06% 12.06% 21.38% 2024 14.94% 21.92% 11.46% 18.37% 12.01% 21.29% 2025 25.65% 13.41% 21.96% 14.06% 24.92% 2026 25.50% 13.40% 22.32% 13.99% 24.79% 2027 25.38% 13.34% 22.69% 13.92% 24.68% 2028 25.26% 13.27% 23.06% 13.85% 24.56% 2029 25.13% 13.21 % 23.43% 13.79% 24.44% 2030 25.01% 13.14% 23.81% 13.72% 24.31 % 2031 25.67% 26.81% 47.52% 2032 100.00% 2033 100.00% 2034 100.00% 2035 100.00% 2036 100.00% 2037 100.00%

Notwithstanding the foregoing, if a District has defaulted on the payment of a Local Obligation, then the amount to be paid to such District according to the above schedule shall be reduced by the amount of such delinquency tmtil such time as the delinquency on the Local Obligation is cured.

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EXHIBITD

MURRIETA VALLEY UN[FIED SCHOOL DISTRICT PUBLIC FINANCING AUTHORITY

SPECIAL TAX REVENUE REFUNDING BONDS 2014 SERIES A

COSTS OF ISSUANCE

PAYMENT REQUEST NO. __

The Trustee is hereby requested to pay from the Costs of Issuance Fund established by the Indenture of Trust dated as of June 1, 2014 by and between the Trustee and the Murrieta Valley Unified School District Public Financing Authority, to the person or corporation designated below as Payee, the sum set forth below such designations, in payment of a portion of the Costs of Issuance described below, The amount shown below is due and payable under a purchase order or contract with respect to the Costs of Issuance described below, and has not formed the basis of any prior request for payment.

Payee:

Amount:

Description of Costs oflssuance :

Payee:

Amount:

Description of Costs oflssuance :

DATED: ~----' 2014,

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MURRIETA VALLEY UNIFIED SCHOOL DISTRICT PUBLIC FINANCING AUTEIORITY

By ______________ _

Authorized Officer

EXHIBITE

FORM LETTER OF REPRESENTATION/INVESTOR LETTER

June 30, 2014

Mltrrieta Valley Unified School District/Mlmieta Valley Unified School District Public Financing Authority 41870 McAlby Court Murrieta, California 92562

Re: Murrieta Valley Unified School District Public Financing Authority Special Tax Revenue Refunding Bonds, 2014 Series A

The undersigned, City National Bank ("Purchaser"), hereby certifies, represents, and warrants to Mmrieta Valley Unified School District Financing Authority (the "Authority") as

· follows:

(i) The Purchaser has pmchased on the date hereof the above-referenced bonds ("Bonds'.'), the outstanding principal amount of which is $20,235,000, issued pursuant to the Indentme of Trust dated as of Jlme 1, 2014 ("Indenture"), by and between the Authority and Zions First National Bank, as Trustee.

(ii) The Bonds are being acquired by the Purchaser for its own account or that of an affiliate and not with a present intent to any resale or distribution thereof, in whole or in part, to others; provided, however, that the Purchaser shall not be precluded from transferring or assigning its interest in the Bonds in accordance with the terms and conditions set forth in the Indenture. The Purchaser is not paiiicipating, directly or indirectly, in a distribution of the Bonds and will not take, or cause to be talcen, any action that would cause the Purchaser to be deemed an "underwriter" of such Bonds as defined in Section 2(11) of the Securities Act of 1933, as amended ("Secmi.ties Act"). The Purchaser m1derstands that the Authority has no obligation to register tl1e Bonds under tl1e Securities Act. The Purchaser further understands that the Bonds are being issued in a transaction that is exempt from the registration requirements of the Securities Act. The Purchaser Acknowledges that the Authority and School District will not be entering into a continuing disclosure agreement pursuant to Section 15c2-12 of the Securities Exchange Act of 1934, as amended.

(iii) The Purchaser has received ai1d carefully read all information and other items of disclosure relating to the Authority and School District ai1d fue Bonds that fue Purchaser has deemed material ("Disclosure Items").

(iv) The Purchase has had an opportunity to ask questions of, and receive satisfactory answers from, duly designated representatives of the Authority and School District concerning the terms ai1d conditions pursuant to which the offer to purchase the Bonds is being made, and ai1y request for such information has been fully complied with to the extent the Authority or School District and fue Placement Agent possesses such information or can acquire it witl1out unreasonable effort or expense.

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(v) The Purchaser is an investor who has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of loaning the Authority the bond proceeds.

(vi) The Purchaser represents that it can bear the economic risk of loss of purchasing the Bonds; it has adequate means for providing for its current needs and personal contingencies; and it has no need for liquidity with respect to the purchaser of the Bonds.

( vii) The Purchaser's overall commitment to purchase the Bonds is not disproportionate to its net worth, and its purchase of the Bonds will not cause such overall commitment to become excessive.

(viii) The Purchaser certifies that it is either a qualified institutional buyer or an "accredited investor" within the meaning of Regulation D under the Securities Act and applicable state securities laws.

(ix) No person has given any information or made an representation not contained in any Disclosure Items referred to above or otherwise provided to the Purchaser in writing by a person employed or authorized in writing by the Authority or School District . The Purchaser understands and agrees that any information or representation not contained therein must not, and will not, be relied upon and that nothing contained therein should be construed as legal or tax advice to the Purchaser.

(x) No person has made any direct or indirect representation or warranty of any kind to the Purchaser with respect to the economic return which may accrue to the Purchaser. TI1e Purchaser has consulted with its own tax counsel and other advisors with respect to an investment in the Bonds.

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[ the remainder of this page is blank]

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(xii) The signatory of this letter is a duly authorized offer of the Purchaser with the authority to sign this letter on behalf of the Purchaser, and this letter has been duly authorized, executed, and delivered by the Purchaser.

DATED: June 30, 2014.

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By:--------------Name: ______________ _ Title: ______________ _

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EXHIBITF

FORM OF BOND COUNSEL OPINION

Murrieta Valley Unified School District Public Financing Authority

418 70 McAlby Comi Murrieta, CA 92562

City National Bank 555 South Flower St, 8th Floor Los Angeles, CA 90071

Zions First National Bank 550 S. Hope Street, Suite 2650 Los Angeles, CA 90071-2616

Re: $20,235,000 Murrieta Valley Unified School District Public Financing Authority, Special Tax Revenue Refunding Bonds, 2014 Series A

Ladies and Gentlemen:

We have reviewed the Constitution and the laws of the State of California and certain proceedings taken by the Murrieta Valley Unified School District Public Financing Authority (the "Authority") in connection with the issuance by the Authority of its $2,220,000 Special Tax Revenue Refunding Bonds, 2014 Series A (the "BondsH). The Bonds are being issued under that certain Indenture of Trust, dated as of June 1, 2014, by and between Zions First National Bank (the "Trustee") and the Authority (the "Indenture"). In rendering this opinion, we have relied upon certain representations of fact and certifications made by the Authority, certain community facilities districts of the Murrieta Valley Unified School District (the "Districts"), the original purchasers of the Bonds and others, and such other information and documents as we consider necessary to render this opinion. Except as provided herein, all terms shall be as defined in the Indenture. We have not undertaken to verify through independent investigation the accuracy of the representations and certifications relied upon by us.

The Bonds have been issued pursuant to the authority contained in Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act") and an authorizing resolution adopted by the Authority on Jm1e 26, 2014 approving the Indenture. The Bonds are dated the date of delivery and mature on the dates and in the amounts set forth in the Indenture. Interest on the Bonds is payable on the dates and at the rates per annum set forth in the Indenture. The Bonds are registered Bonds in the forms set forth in the Indentw;e and are redeemable in the . amounts, at the times and in the manner set forth in the Indenture.

All terms not defined herein have the meaning ascribed to those terms in the Indenture.

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Based upon the subject to the foregoing, and in reliance thereon, we are of the following opinions:

1. The Bonds have been duly and validly authorized by the Authority and are legal, valid and binding limited obligations of the Authority. The Bonds are secured and payable solely from the Revenues (as defined in the Indenture), as and to the extent provided for in the Indenture. The Bonds are enforceable in accordance with their tenns and the terms of the Indenture, except to the extent that enforceability may be limited by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting creditors' rights generally or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases.

2. The Indenture has been duly authorized by the Authority, is valid and binding upon the Authority and is enforceable in accordance with its terms, except to the extent that enforceability may be limited by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting creditors' rights generally or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases.

3. The Indenture creates a valid pledge of that which the Indenture purports to pledge, subject to the provisions of the Indenture, except to the extent that enforceability of the Indenture may be limited by moratorium, banlauptcy, reorganization, insolvency or other similar laws affecting creditors' rights generally or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases.

4. Under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum taxable income which may affect the alternative minimum tax liability of individuals and corporations.

5, Interest on the Bonds is exempt from present State of California personal income tax.

The opinion expressed in paragraph (4) above as to the exclusion from gross income for federal income tax purposes of interest on the Bonds is subject to the condition that the Authority and the Districts comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds to assure that such interest will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest on the Bonds to be included in gross income for federal income tax purposes retro-active to the date of issuance of the Bonds. The Authority and each District has covenanted to comply with all such requirements. Except as set forth in paragraphs (4), and (5) above, we express no opinion as to any tax consequences related to the Bonds.

The opinions expressed herein may be affected by actions talcen ( or not taken) or events occurring (or not occurring) after the date hereof. We have not unde1iaken to determine, or to inform any person, whether such actions or events are taken or do occur.

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The opinions expressed herein are based upon our analysis and interpretation of existing laws, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities.

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RUTAN & TUCKER, LLP

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