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Home My WebLink AboutRES 92-25RESOLUTION NO.92-25 A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE, A CITY LEASE, AND A BOND PURCHASE AGREEMENT;APPROVING THE EXECUTION AND DELIVERY BY CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION OF A GROUND LEASE,A CITY LEASE, A TRUST INDENTURE AND A BOND PURCHASE AGREEMENT; APPROVING AN OFFICIAL STATEMENT; APPROVING THE ISSUANCE OF $4,640,000 AGGREGATE PRINCIPAL AMOUNT OF CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION MUNICIPAL FACILITIES REVENUE BONDS, SERIES 1992;PROVIDING FOR THE TRANSFER OF CERTAIN MONEYS FOR THE PAYMENT THEREOF AND MAKING CERTAIN COVENANTS AND AGREEMENTS WITH RESPECT THERETO; AUTHORIZING THE TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION;AND DECLARING AN EMERGENCY. WHEREAS,City of Apache Junction Municipal Property Corporation,a nonprofit corporation incorporated and existing pursuant to the laws of the State of Arizona (the "Corporation"), was formed to transact any or all lawful business for which nonprofit corporations may be incorporated under the laws of the State of Arizona,including,without limiting the generality of the foregoing,any civic or charitable purpose such as financing the cost of acquiring, constructing,reconstructing or improving buildings, equipment or other real and personal properties suitable for use by and for leasing to the City of Apache Junction,Arizona (the "City"),or its agencies or instrumentalities;and WHEREAS,the City has determined that it shall be beneficial to its citizens (i)to design,acquire,construct and equip a new police facility for the City,(ii) to improve and develop certain recreation facilities of the City, (iii)to expand the library of the City,and (iv)to provide for the payment of the remaining amounts due pursuant to a Lease -Purchase Agreement,dated as of January,1992,by and between the City and PHSG Holdings,Inc.(collectively, with the foregoing purposes,the "Project");and WHEREAS,the Corporation desires to assist the City in financing the Project;and WHEREAS,in order to finance the costs of the Project,the Corporation and the City deem it necessary and desirable for the Corporation to issue its $4,640,000 aggregate principal amount of City of Apache Junction Municipal Property Corporation Municipal Facilities Revenue Bonds,Series 1992 (the "Bonds");and WHEREAS,in connection with the issuance of the Bonds, the Corporation and the City shall enter into (i)a Ground Lease,dated as of September 1,1992 (the "Ground Lease"),pursuant to which the City will lease the Real Property described on Exhibit A attached thereto (the "Real Property") to the Corporation, and (ii)a City Lease, dated as of September 2,1992 (the "City Lease"),pursuant to which (A)the Corporation shall lease the Real Property and the improvements which are part of the Project (the "Improvements")to the City,and (B)the City shall (I)lease from the Corporation the Real Property and the Improvements and RESOLUTION NO.92-25 PAGE 1 OF 5 (II)as agent for the Corporation,shall agree to provide for the Project;and WHEREAS,the Corporation has not made and does not intend to make any profit by reason of any business or venture in which it may engage or by reason of the assistance it renders the City in financing the Project,and no part of the net earnings of the Corporation,if any,shall ever inure to the benefit of any person,firm or corporation except the City;and WHEREAS,the Bonds and any additional obligations on a parity therewith shall be secured by a Trust Indenture,dated as of September 1,1992 (the "Indenture"),from the Corporation to The Bank of America,Arizona,as trustee (the "Trustee");and WHEREAS,there have been placed on file with the Clerk of the City and presented to this meeting (1)the proposed form of the Indenture,(2)the proposed form of the Ground Lease,(3)the proposed form of the City Lease,(4) the form of Bond Purchase Agreement,dated the date of adoption hereof (the "Purchase Contract"),by and among the Corporation,the City,and Peacock, Hislop,Staley & Given,Inc.(the "Purchaser")for the purchase of the Bonds and (5)the Official Statement relating to the Bonds,dated the date of adoption hereof (the "Official Statement"); NOW,THEREFORE,BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF APACHE JUNCTION,ARIZONA,THAT: Section 1.The Mayor and Council of the City hereby find and determine that the financing of the Project and the issuance of the Bonds pursuant to the terms of the City Lease and the Indenture is in furtherance of the purposes of the City and in the public interest. Section 2.The forms,terms and provisions of the Ground Lease,the City Lease,and the Purchase Contract,in the form of such documents (including the exhibits thereto)presented at this meeting are hereby approved,with such insertions,omissions and changes as shall be approved by the Mayor of the City, the execution of such documents being conclusive evidence of such approval,and the Mayor and Clerk of the City are hereby authorized and directed,for and on behalf of the City,to sign and attest the Ground Lease,the City Lease,and the Purchase Contract as well as any other documents necessary in connection therewith to provide for the issuance of the Bonds. Section 3.The forms,terms and provisions of the Indenture in the form of such documents (including exhibits thereto)presented at this meeting is hereby approved, with such insertions, omissions and changes as shall be approved by the President of the Corporation,the execution of such documents being conclusive evidence of such approval. Section 4.The Official Statement is hereby approved and confirmed,and the use of the Official Statement in connection with the sale of the Bonds is hereby approved,and of the Preliminary Official Statement,dated September 4, 1992,related to the Bonds,in such sale is hereby ratified. RESOLUTION NO.92-25 PAGE 2 OF 5 Section 5.The City hereby requests the Corporation to take any and all action necessary in connection with the issuance and sale of the Bonds. Section 6.(A)The City hereby approves the issuance and delivery of the Bonds,as hereinafter described,by the Corporation.The Bonds shall be designated "City of Apache Junction Municipal Property Corporation Municipal Facilities Revenue Bonds, Series 1992"; shall be issued in an aggregate principal amount of $4,640,000;shall be in the denomination of $5,000 or any integral multiple thereof; shall be dated September 1,1992; shall bear interest from such date payable on January 1 and July 1 of each year,commencing January 1,1993; shall be fully registered bonds without coupons as provided in the Indenture and shall bear interest at the rates per annum and mature on July 1 in the years and principal amounts as follows: Maturity Date Principal Interest (July 1)Amount Rate 1993 $70,000 3.00% 1994 75,000 3.75 1995 75,000 4.10 1996 165,000 4.30 1997 175,000 4.50 1998 180,000 4.70 1999 190,000 4.90 2000 200,000 5.10 2001 210,000 5.30 2002 220,000 5.50 2003 235,000 5.60 2004 250,000 5.70 2005 265,000 5.80 2006 280,000 5.90 2007 295,000 6.00 2012 1,755,000 6.00 (B)The form,terms and provisions of the Bonds and the provisions for the signatures,authentication,payment,registration,transfer,exchange, redemption and number shall be as set forth in the Indenture and are hereby approved. Section 7.The City hereby requests the Corporation to sell the Bonds to the Purchaser in accordance with the terms of the Purchase Contract and at the price specified therein,as submitted to the Corporation by the Purchaser. Section 8.(A)For the payment of the principal of premium,if any,and interest on the Bonds,the City shall pay and transfer to the Trustee the rental payments provided for in Article I of the City Lease and the other amounts required to be paid by the City pursuant to the provisions of the City Lease. (B)To secure the payment of the rental payments provided for in Article I of the City Lease and the other amounts required to be paid by the City pursuant to the provisions of the City Lease,the City hereby pledges for the RESOLUTION NO.92-25 PAGE 3 OF 5 payment of the rental payments thereunder all excise,transaction privilege, franchise and income taxes which it now collects,which it may collect in the future,or which are allocated or apportioned to the City by the State of Arizona,any political subdivision thereof,or any other governmental unit or agency,EXCEPT the share of the City of any excise and franchise taxes which by State of Arizona law,rule or regulation must be expended for other purposes, such as the motor vehicle fuel tax.The City intends that this pledge shall be a first lien upon such amounts of said taxes and revenues as will be sufficient to make the rental payments pursuant thereto each month,and the City shall make said rental payments from such tax receipts and revenues,except to the extent that it chooses to make such payments from other funds pursuant to Section 3.02 of the City Lease.To the extent permitted by law,the excise and franchise taxes which it presently imposes shall be Detained and maintained so that the amount of all such taxes received from such sources plus the amount of other such taxes allocated to it by any other governmental unit,all within and for the next preceding fiscal year,shall be equal to at least four (4)times the total of rental payments payable thereunder in any current fiscal year.If such receipts for any such preceding fiscal year shall not equal four (4)times the rental payment requirements of any current fiscal year,or if at any time it appears that the current receipts will not be sufficient to meet the rental payment requirements thereunder,it shall either impose new excise and franchise taxes or shall increase the rates for such taxes currently imposed in order that (i) the current receipts will be sufficient to meet all current rental payment requirements thereunder and (ii)the current year's receipts will be reasonably calculated to attain the level as required above for the succeeding fiscal year's rental payment requirements. (C)So long as any of the Bonds remain outstanding and the principal and interest thereon shall be unpaid or unprovided for,the City shall not further encumber the taxes pledged under Article III of the City Lease on a basis equal to the first lien pledge unless the taxes collected in the next preceding fiscal year shall have amounted to at least four (4) times the highest combined interest and principal requirements for any succeeding twelve (12) months' period for all Bonds then outstanding and any parity bonds or other obligations so proposed to be secured by a pledge of these taxes. (D)The obligation of the City to make the rental payments provided for in Article I of the City Lease and to make other payments due under the City Lease is limited to payment from the sources of taxes and revenues pledged therefor and the obligations of the City under the City Lease shall not constitute nor give rise to a general obligation of the City or any claim against its ad valorem taxing powers,or constitute an indebtedness within the meaning of any statutory or constitutional debt limitation applicable to the City. Section 9.The City covenants that it will do all things necessary to assist the Corporation in the issuance and delivery of the Bonds. Section 10.After any of the Bonds are delivered by the Trustee to the Purchaser thereof upon receipt of payment therefor,this Resolution shall be and remain irrepealable until the Bonds and the interest thereon shall have been RESOLUTION NO.92-25 PAGE 4 OF 5 fully paid,cancelled and discharged. Section 11.If any section,paragraph,clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable,the invalidity or unenforceability of such section,paragraph,clause or provision shall not affect any of the remaining provisions of this Resolution. Section 12.All orders and resolutions or parts thereof,inconsistent herewith,are hereby waived to the extent only of such inconsistency.This waiver shall not be construed as reviving any order or resolution or any part thereof. Section 13.The immediate operation of this Resolution is necessary for the financing on the most attractive terms available to the City of the Project and the preservation of the public health and welfare;an emergency is hereby declared to exist;this Resolution shall be in full force and effect from and after its passage and approval by the Mayor and Council of the City of Apache Junction,Arizona,as required by law and this Resolution is hereby exempt from the referendum provisions of the constitution and laws of the State of Arizona. APPROVED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION,ARIZONA,THIS 15TH DAY OF SEPTEMBER,1992. SIGNED AND ATTESTED TO THIS 16TH DAY OF SEPTEMBER ,1992. ATTEST: KATHLEEN CONNELLY City Clerk AR 4 )7AS 010r,iRM 0/1141 ,I l IblMt City Attorney RESOLUTION NO.92-25 PAGE 5 OF 5 V\,./ U.J.MAARAA111.• THOMAS DAMIANO Mayor FILE COPY,„._ez-Luyvv-e pcutwi (,e. AfterAfter recordation, please return to:DRAFT Michael Cafiso, Esq.08/01/92 Suite 1100 08/19/92 (MBIA Only) One East Camelback Road 08/24/92 Phoenix, Arizona 85012-1656 CITY LEASE CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION, as Lessor, TO CITY OF APACHE JUNCTION, ARIZONA, as Lessee This CITY LEASE, dated as of September 1, 1992 (this "City Lease), by and between CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION,a nonprofit corporation organized and existing under the laws of the State of Arizona (the "Corpora- tion"), and the CITY OF APACHE JUNCTION, ARIZONA,a municipal corporation of the State of Arizona (the "City"); N I T N E E E E T WHEREAS,the Corporation was formed to transact any or all lawful business for which nonprofit corporations may be incor- porated under the laws of the State of Arizona, including, without limiting the generality of the foregoing, any civic or charitable purpose such as financing the cost of acquiring, constructing, reconstructing or improving buildings, equipment or other real and personal properties suitable for use by and for leasing to the City or its agencies or instrumentalities; and WHEREAS, the City has determined that it will be benefi- cial to its citizens (i) to design, acquire, construct and equip a new police facility for the City (the "Police Facility"), (ii) to improve and develop certain recreation facilities of the City (the "Field Improvements"), (iii) to expand the library of the City (the "Library Expansion") and (iv) to pay the remaining amounts due pur- suant to a Lease -Purchase Agreement, dated as of 1991, by and between the City and PHSG Holdings, Inc. (collectively with the foregoing purposes, the "Project"); and WHEREAS, the Corporation desires to assist the City in financing the Project; and WHEREAS, in order to finance the costs of the Project the Corporation and the City deem it necessary and desirable for the Corporation to issue its $aggregate principal amount of City of Apache Junction Municipal Property Corporation Municipal Facilities Revenue Bonds, Series 1992 (the "Series 1992 Bonds"); and WHEREAS, in connection with the issuance of the Series 1992 Bonds, the Corporation and the City shall enter into (i) a Ground Lease, dated as of September, 1992 (the "Ground Lease"), pursuant to which the City will lease the demised premises described on Exhibit A attached thereto (the "Real Property") to the Corporation and (ii) this City Lease, pursuant to which (A) the Corporation will lease the Real Property described on Exhibit A attached hereto including the improvements which are part of the Project described on Exhibit B attached hereto situated on the Real Property designated as Parcel No. II on Exhibit A hereto and the other improvements which are part of the Project (the "Improve- ments") to the City and (B) the City shall (I) lease from the Corporation the Real Property and the Improvements and (II) as agent for the Corporation, agree to design, acquire, construct and equip, as the case may be, the Improvements; and WHEREAS, the Corporation has not made and does not intend to make any profit by reason of any business or venture in which it may engage or by reason of the assistance it renders the City in financing the Project, and no part of the net earnings of the Cor- poration, if any, shall ever inure to the benefit of any person, firm or corporation, except the City; WHEREAS, the Series 1992 Bonds and any additional obliga- tions issued on a parity herewith shall be secured by a Trust Indenture, dated as of September 1, 1992 (the "Indenture"), from the Corporation to The Valley National Bank of Arizona, as trustee (the "Trustee"); and 2 WHEREAS, the Series 1992 Bonds shall be secured by this City Lease pursuant to which the City shall pledge certain excise and franchise taxes as security for the payment of rentals coming due hereunder; NOW THEREFORE, PURSUANT TO LAW AND FOR AND IN CONSIDERA- TION OF THE MUTUAL COVENANTS HEREINAFTER CONTAINED, IT IS HEREBY AGREED AS FOLLOWS: ARTICLE I LEASE: TERMS: RENT: DESIGN. ACOUISITION. CONSTRUCTION AND EOUIPPING OF THE IMPROVEMENTS Section 1.01.The Corporation hereby leases to the City, and the City hereby leases from the Corporation, for the term com- mencing with the date hereof and continuing until July 2,or such later date as of which the Series 1992 Bonds are deemed paid and discharged under the Indenture,the Real Property and the Improvements (collectively, the "Leased Property"). Section 1.02.The City shall have the right to terminate this City Lease on written notice to the Corporation given concur- rently with, or subsequent to, the date the Indenture is released of record as a result of the payment of or provision for the entire indebtedness secured thereby, as provided in the Indenture and any supplements thereto. Upon such termination, all rights of the Cor- poration or any other entity, except the City, in and to the Lease Property shall cease and the Corporation, by appropriate instru- ments of conveyance, shall, without further consideration, convey the Leased Property to the City. Section 1.03.The City shall on the twentieth (20th) day of each month, as rental payments to the Corporation, its succes- sors or assigns, pay an amount equal to the sum of (i) commencing on 20, 1992, an amount equal to () of the amount which when added to the balance then in the Interest Fund established pursuant to the Indenture shall be equal to the interest due on the Series 1992 Bonds on 1, 1992; (ii) commencing on 1, 1992, an amount equal to one -sixth (1/6th) of the amount which when added to the balance then in the Interest Fund established pursuant to the Indenture shall be equal to interest due on the Series 1992 Bonds on the next interest pay- ment date; (iii) commencing on 20, 1992, an amount equal to one -twelfth (1/12th) of the amount which when added to the bal- ance then in the Bond Retirement Fund established pursuant to the Indenture shall be equal to the principal due on the Series 1992 Bonds on the next principal payment date;(iv) commencing on 20, 1992, an amount equal to the amount required to restore the Reserve Fund established pursuant to the Indenture to an amount equal to the Reserve Requirement (as defined in the 3 Indenture); and (v) commencing on 20, 1992, all other amounts required to be paid by the Corporation or the City to the Trustee pursuant to the Indenture.The rental payments payable hereunder shall be paid for and in consideration of the use and occupancy of the Leased Property which the City receives, and in consideration of the continued quiet use and enjoyment thereof as provided in Section 4.01 hereof.The rental payments paid by the City under this Section shall be paid directly to the Trustee for and on behalf of the Corporation.The obligation of the City for such rental payments shall be co -extensive with the debt service and other payment obligations of the Corporation pursuant to the Indenture and, when the Series 1992 Bonds and other obligations secured under the Indenture have been fully paid or provided for, the City shall, except for the obligation of the City to make payments to the Trustee pursuant to provisions of Section 7.03 of the Indenture, have no further obligation to make rental payments hereunder. Section 1.04.Such rental payments, as well as any other money required to be expended by the City pursuant to the provi- sions of this City Lease, shall be payable solely from sources referred to in Article III hereof and shall under no circumstances constitute a general obligation of the City or be payable from the proceeds of ad valorem taxes. Section 1.05.The City shall pay as additional rental payments (i) all amounts required to be paid to the United States of America pursuant to Section 148(f) of the Internal Revenue Code of 1986, as amended (the "Code"), with respect to the Series 1992 Bonds and the investment of the proceeds thereof as provided in Section 10.01 hereof, (ii) all fees and expenses of the Trustee and the registrars and paying agents under the Indenture to the extent, if any, that such fees, expenses and payments are not met by the regular rentals payments,(iii) the reasonable expenses of the Corporation approved by the City and not otherwise required to be paid by the City under the terms hereof, (iv) losses on investments made by the Trustee at the direction of the City under the terms of the Indenture, but only to the extent necessary to meet the debt service on the Series 1992 Bonds and to pay any other amounts required to be paid by the Corporation or the City under the Indenture, (v) fees for maintaining the corporate existence of the Corporation and all costs, expenses, losses or damages, including reasonable attorneys' fees, pertaining to any claim or legal action brought against the Trustee or the Corporation with respect to the legality of any defect in this City Lease, the Indenture or the Series 1992 Bonds, or questioning the legality of any action taken or to be taken pursuant thereto, and (vi) all other expenses of the Corporation incurred at the written request of the City or •the Trustee in accordance with the provisions of this City Lease or the Indenture.The City shall pay the amounts specified in clause (i) directly to the United States as required by the Code, in clause (ii) directly to the Trustee as they become due and within twenty 4 (20) days after receipt by the City of invoice therefor, except as otherwise provided in the Indenture, in clause (iii) to either the Corporation or its creditors, upon evidence that the expenses or fees have been incurred by it, and within twenty (20) days after receipt by the City of invoice therefor, in clause (iv) to the Trustee, in clause (v) to the Trustee or the Corporation, as appro- priate, upon evidence that such costs, expenses, losses or damages have been incurred, and in clause (vi) to the Corporation, upon evidence that such expenses have been incurred. Section 1.06.Each installment or other amount of rent payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Corporation and at such place as the Corporation may designate in writing.Any rental payments accruing hereunder which shall not be paid within five (5) days after its due date shall bear interest at the highest rate permitted by law, but not exceeding twelve percent (12t) per annum, from the date when the same is due hereunder until the same shall be paid. Section 1.07.Notwithstanding the provisions of Section 1.06 hereof, all rental payments for debt service on the Series 1992 Bonds and other items required to be paid by the Indenture, as well as additional rental payments payable to the Trustee under Section 1.05 hereof, shall be paid at the principal corporate trust office of the Trustee.The Corporation shall cause the Trustee to apply the rental payments made by the City in the manner and for the purposes expressed in the Indenture. Section 1.08.Unless otherwise requested by the City pursuant to Section 7.03 hereof, any money in the Revenue Fund established pursuant to the Indenture which, in the opinion of the Trustee, exceeds the amounts necessary for the current debt service on the Series 1992 Bonds then outstanding (including administrative costs and expenses) shall, at least annually, so long as the City is not in default hereunder, constitute a credit to the City on the next succeeding rental payment or payments due or coming due here- under.Likewise, earnings on the Revenue Fund established pursuant to the Indenture shall, at least annually, so long as the City is not in default hereunder, constitute a credit to the City on the next succeeding rental payment or payments due or coming due here- under. Section 1.09.The City, as agent to the Corporation, shall provide (i) the Police Facility, (ii) the Field Improvements and (iii) the Library Expansion described on Exhibit B attached hereto pursuant to the plans and specifications of the City prior to , 199_. 5 ARTICLE II TAXES, LIENS. UTILITIES. INSURANCE AND OTHER CHARGES Section 2.01.The rental payments payable under this City Lease shall be an absolute net return to the Corporation, free from any expenses and charges with respect to the Leased Property or the income therefrom. Section 2.02.The City shall pay or cause to be paid, punctually when due and payable, as additional rental payments hereunder, all property taxes, income taxes, gross receipts taxes, business and occupation taxes, occupational license taxes, water charges, sewer charges, assessments (including, but not limited to, assessments for public improvements or benefits), and all other governmental taxes and charges of every kind and nature which at any time prior to the expiration or termination of this City Lease shall be or become due and payable by the Corporation or the City and which shall be levied, charged, assessed or imposed: (i)upon or with respect to the Corporation, or which shall be or become liens upon the Leased Property or any interest of the Corporation or the City therein or under this City Lease; (ii)upon or with respect to the possession, opera- tion,management,maintenance,alteration,repair, rebuilding, use or occupancy by the City of the Leased Property, or any portion thereof; or (iii)upon this transaction or any document to which the City is a party creating or transferring an interest or an estate in or to the Leased Property. The City shall furnish to the Corporation promptly, upon request, proof of the payment of any such rental payments, tax, assessment or other governmental charge which is payable by the City under this Section.It shall not be a breach of this Section if the City fails to pay any such rental payments, tax, charge or assessment during any period or periods in which the City, in good faith, or the Corporation, shall be contesting the amount or validity of such tax, charge or assessment.The Corporation shall, if requested by the City,contest the amount or validity of any such rental payments, tax, charge or assessment, and the City shall pay the costs of the Corporation therefor. Section 2.03.The City shall pay, when due, all sums of money that may become due for or purporting to be for, any labor, services, materials, supplies or equipment alleged to have been furnished or to be furnished to or for the City in, upon or about the Leased Property and which may be secured by any mechanics', materialmen's or other lien against the Leased Property or the 6 interest of the Corporation therein, and shall cause each such lien to be fully discharged and released at the time of performance of any obligation secured by any such lien as it matures or becomes due, provided, however, that if the City desires to contest any such lien it may do so, but notwithstanding any such contest, if any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, then and in any such event the City shall forthwith pay and dis- charge said judgment. Section 2.04.The City shall pay or cause to be paid, all charges for gas, water, steam, electricity, light, heat, power, telephone or other utility service furnished to or used in connec- tion with the Leased Property.The Corporation shall not be required to furnish to the City or any other occupant of said prop- erty any gas, water, sewer, electricity, light, heat, power, tele- phone or other utility service of any kind, nor shall the Corpora- tion be required to pay for any such charges or services. Section 2.05.The City shall, at its own cost and expense,during the term of this City Lease, keep the Leased Property in good repair and condition, ordinary wear and tear excepted and shall repair, renew or replace any portion of such improvements that shall have lost its usefulness due to damage, destruction, deterioration, or obsolescence.In exchange for the rental payments herein provided, the Corporation shall provide nothing more than the Leased Property.Failure of the City to faithfully observe this covenant shall constitute a breach of this City Lease, and the Corporation shall have reasonable rights of inspection for the purpose of determining the performance by the City of its obligations under this Section. Section 2.06.The City shall cause the Leased Property to be insured against loss or damage by fire, explosion and other hazards customarily insured under extended coverage, in an amount not less than the full insurable value of such property, and main- tain other insurance on its business and properties with respect to loss, damage, liability and other claims of the kind customarily insured against by similarly situated municipal corporations.All such insurance shall be of such types and in such amounts and with such deductible provisions as are customarily carried under similar circumstances by such other municipal corporations.All such insurance shall be carried with financially sound and reputable insurance companies authorized to issue such policy or insure such risk in the State of Arizona.Each policy shall contain provi- sions, if available, that written notice of cancellation or sub- stantial modification thereof shall be given to the Corporation and the Trustee, at least thirty (30) days, or the greatest available period shorter than thirty (30), days prior to such cancellation or modification.The City may obtain blanket policies covering one or more risks if the minimum coverages required herein are met and all 7 buildings located on the Leased Property are covered to their full insurable value. ARTICLE III gOURCES OF PAYMENT AND PLEDGE Section 3.01.All rental and other payments made in accordance herewith shall be made only from excise taxes received by the City including (i) the sales and transaction privilege taxes of the City,(ii) the portion of sales, transaction privilege or income taxes of the City imposed and collected by the State of Arizona or by any other governmental unit or agency, and (iii) all other excise and franchise taxes of the City.The City shall first make all rental and other payments accruing under the City Lease out of the aforesaid sources and thereafter may use the remaining funds for any other lawful purpose, but only to the extent that, taking into account the reasonably anticipated receipts during the coming month, such sources will not be reduced to such a level that the City will be unable to make the next monthly rental payment under the Prior Lease and hereunder. Section 3.02.The City may, at the sole option of the City, make rental and other payments required hereunder from its other funds as permitted by law and as the City shall determine from time to time, but the Corporation acknowledges that it has no claim hereunder to such other funds. No part of the rental and other payments payable pursuant to this City Lease shall be payable out of any ad valorem taxes imposed by the City, from bonds or other obligations, for the payment of which the City's general tax- ing authority of the City is liable or pledged, or from its general funds, unless (i) the same shall have been duly budgeted by the City according to law, (ii) such payment or payments shall be with- in the budget or expenditure limitations of the Constitution and laws of the State of Arizona, and (iii) such payment is not in con- flict with the Constitution and laws of the State of Arizona. Section 3.03.The City hereby pledges for the payment of the rental and other payments required hereunder all excise, trans- action privilege, franchise and income taxes which it now collects, which it may collect in the future, or which are allocated or apportioned to the City by the State of Arizona, any political sub- division thereof, or any other governmental unit or agency (collec- tively, the "Excise Taxes"),EXCEPT the share of the City of any excise and franchise taxes which by State of Arizona law, rule or regulation must be expended for other purposes, such as the motor vehicle fuel tax.The City intends that this pledge shall be a first lien upon such amounts of the Excise Taxes, subordinate, how- ever, only to the pledge of such amounts to the Prior Lease, as will be sufficient to make the rental and other payments pursuant hereto each month, and the City shall make such payments from the 8 Excise Taxes, except to the extent that it chooses to make such payments from other funds pursuant to Section 3.02 hereof. Section 3.04.The Excise Taxes shall be retained and maintained so that the amount of all such taxes received from such sources plus the amount of other such taxes allocated to it by any other governmental unit, all within and for the next preceding fiscal year shall be equal to at least () times the total of rental payments payable hereunder in any current fiscal year.The City further covenants and agrees that if such receipts for any such preceding fiscal year shall not equal () times the rental payment requirements of any current fiscal year hereunder or if at any time it appears that the current receipts will not be sufficient to meet the rental payment requirements hereunder, the City shall either impose new excise and franchise taxes or increase the rates for the Excise Taxes cur- rently imposed in order that (i) the current receipts will be sufficient to meet all current requirements hereunder and (ii) the current year's receipts will be reasonably calculated to attain the level as required above for the succeeding fiscal year's rental payment requirements. Section 3.05.The City, for itself, its successors and assigns covenants and agrees with the registered owners and holders of the Series 1992 Bonds, so long as any of the Series 1992 Bonds remain outstanding and the principal and interest thereon shall be unpaid or unprovided for, that the City shall not further encumber the taxes pledged under this Article on a basis equal to this first lien pledge unless the taxes collected in the next preceding fiscal year shall have amounted to at least () times the highest combined interest and principal requirements for any succeeding twelve (12) months' period for all Series 1992 Bonds then outstanding and any parity bonds or other obligations so pro- posed to be secured by a pledge of the Excise Taxes pursuant to the Indenture. Section 3.06.In the event of any default by the City under this City Lease, the remedies of the Corporation with respect to the enforcement of the liens and pledges set forth in this Arti- cle and with respect to the covenants and agreements contained in this Article shall be as provided in Article V hereof.The Trus- tee, on behalf of the registered owners of the Series 1992 Bonds, may enforce these liens and pledges and the aforesaid covenants and agreements in place of the Corporation in accordance with the terms and conditions of the Indenture. Section 3.07.The condition set forth in Section 3.05 hereof is, at the time of the execution hereof, and shall be, at the time of the issuance of the Series 1992 Bonds, satisfied. 9 ARTICLE IV OUIET ENJOYMENT: EXPIRATION OR TERMINATION OF LEASE: SURRENDER OF LEASED PROPERTY Section 4.01.The City, by keeping and performing the covenants and agreements herein contained, shall at all times dur- ing the term hereof, peaceably and quietly, have, hold and enjoy the Leased Property, without suit, trouble or hindrance from the Corporation. Section 4.02.Except as is otherwise provided here- inafter, the City shall upon the expiration or termination of this City Lease surrender to the Corporation the Leased Property in good order and condition and in a state of repair that is consistent with prudent use and conscientious maintenance, except for reason- able wear and tear. Section 4.03.In consideration of the timely payment of all rental payments provided herein and provided that (i) the City has performed all the covenants and agreements required of it to be performed and (ii) the Series 1992 Bonds and any other bonds and obligations on a parity therewith, as to principal, interest and any premium, together with any remaining fees or expenses of the Trustee and the registrars and the paying agents under the Inden- ture, have been paid or provided for, the Corporation shall cause the Trustee to release the Leased Property from the lien of the Indenture.The City may then exercise its rights of termination under Section 1.02 hereof.Upon such termination, all rights of the Corporation or any other person or entity, except the City, in and to the Leased Property shall cease and the Corporation shall, without further consideration, execute and deliver to the City appropriate instruments of conveyance conveying title to the Leased Property to the City.The Corporation shall take any and all steps and shall execute and record any and all documents reasonably required by the City to consummate the transfer of title to the Leased Property to the City. ARTICLE V REMEDIES UPON DEFAULT. NO ABATEMENT OF RENTALS Section 5.01.Upon the nonpayment of the whole or any part of the rental payments when the same are to be paid as herein provided or violation by the City of any other covenant or provi- sion of this City Lease, and if such default has not been cured (i) in the case of nonpayment of rental payments, within five (5) days and (ii) in the case of the breach of any other covenant or provision hereof, within thirty (30) days after notice in writing from the Corporation specifying such default, then the Corporation may bring an action for the recovery of any of the rental payments 10 due (but not for rental payments accruing) or for damages for breach of this City Lease, and the Corporation may pursue any other remedy which the law affords, including the remedy of specific per- formance. Section 5.02.The Corporation, upon the bringing of a suit to collect the rental payments in default, may request en- forcement of the pledges and foreclosure of the liens set forth in Article III hereof, in which event the Corporation, as a matter of right, without notice and without giving any bond or surety to the City or anyone claiming under the City, may have a receiver ap- pointed of the Excise Taxes which are so pledged for the payment of the rental payments, with such powers as the court making such appointment shall confer and the City does hereby irrevocably con- sent to such appointment. Section 5.03.In any suit to enforce the terms of this City Lease, the Corporation shall recover its costs therein, as well as reasonable attorneys' fees, as the Court shall approve. Section 5.04.The Corporation shall in no event be in default in the performance of any of its obligations under this City Lease (other than the obligation to make the rental payments required by Section 1.03 hereof) unless the Corporation shall have failed to perform such obligations within thirty (30) days or such additional time as is reasonably required to correct any such de- fault after notice by the City to the Corporation and to the Trus- tee properly specifying wherein the Corporation has failed to per- form any such obligation.So long as any right to abate or offset the payments of rental payments to be made by the City hereunder as a result of a default by the Corporation. In the event of default by the Corporation, the Corporation agrees that specific perform- ance may be had and that the City shall not be limited to a remedy for damages. Section 5.05.Except as in this City Lease expressly provided, this City Lease shall not terminate or be affected in any manner by reason of the condemnation, destruction or damage, in whole or in part, or by reason of the unusability of, the Leased Property, and, except as in this City Lease expressly provided, the rentals, as well as all other amounts payable hereunder, shall be paid by the City in accordance with the terms,covenants and conditions of this City Lease without abatement, diminution or reduction. Section 5.06.Each right,power and remedy of the Corporation or the City provided for in this City Lease shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for herein, or, unless prohibited by the terms hereof, now or hereafter existing at law or in equity or by statute or otherwise, in any jurisdiction where such rights, powers and remedies are sought to be enforced, and the exercise or 11 beginning of the exercise by the Corporation or the City of any one or more of the rights, powers or remedies provided for herein or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by either party of any or all of such other rights,powers or remedies. Section 5.07.The failure to insist upon a strict per- formance of any of the covenants or agreements herein set forth shall not be considered or taken as a waiver or relinquishment for the future of the Corporation's or the City's rights to insist upon a strict compliance by the City or the Corporation with all the covenants and conditions hereof. ARTICLE VI ESTOPPEL CERTIFICATE Section 6.01.At any time and from time -to -time, upon not less than ten (10) days' prior request by the Corporation or the Trustee, the City shall execute, acknowledge and deliver to the Corporation and the Trustee a statement in writing certifying that this City Lease are unmodified and in full force and effect (or, if the City Lease have been modified, that they are in full force and effect except as modified, and stating the modification), and the dates to which the rentals and other amounts payable hereunder and thereunder have been paid in advance, if any. ARTICLE VII REFINANCING: REFUNDING: REDEMPTION: PURCHASE OF BONDS; ADDITIONAL BONDS Section 7.01.Upon notice to the Corporation, the City may request that the Corporation refinance or prepay, as the case may be, the outstanding bonds (including the Series 1992 Bonds and any other bonds issued pursuant to the Indenture) and other obliga- tions of the Corporation by refunding or redeeming or prepaying, as the case may be, such bonds and obligations then outstanding, sub- ject to the provisions of the Indenture and the terms of any other debt obligations, by issuing new bonds or other obligations.The Corporation shall use its best efforts to so refinance or prepay, as the case may be, its indebtedness. Section 7.02.Prior to the issuance of such bonds or other obligations for the purpose of refunding or refinancing or prepaying, as the case may be, the outstanding bonds (including the Series 1992 Bonds and any other bonds issued pursuant to the Inden- ture) and other obligations of the Corporation, the Corporation and the City shall enter into a written supplement to this City Lease 12 increasing or decreasing, as the case may be, the rental payments to be paid hereunder by an amount at least sufficient to enable the Corporation to fully pay the principal and interest, when due, on such new bonds or other obligations and all other usual and ordin- ary costs and expenses relating thereto. Section 7.03.The City shall have the right to pay installment rental payments in advance and may specify that such payments be placed in the Bond Retirement Fund established pursuant to the Indenture.In addition, if at any time the money in the Revenue Fund established pursuant to the Indenture exceeds, in the opinion of the Trustee, the amounts necessary for the current debt service on the Bonds then outstanding and the fees, charges and expenses of the Trustee and the registrars and paying agents under the Indenture, such excess shall, at the request of the City, be transferred to and paid over into the Bond Retirement Fund estab- lished pursuant to the Indenture.At the request of the City, the Corporation shall cause the amount of money contained in the Bond Retirement Fund established pursuant to the Indenture from time to time to be used on any redemption date authorized in the Indenture to retire all or any portion of the outstanding Series 1992 Bonds or other bonds issued pursuant to the Indenture, or if, before Series 1992 Bonds or other bonds issued pursuant to the Indenture are callable, they may be obtained in the open market at a cost equal to or below par, or, after Series 1992 Bonds or other bonds issued pursuant to the Indenture are callable, they may be so obtained at a price below the cost of redemption, then, upon the request of the City, the Corporation shall cause money contained in the Bond Retirement Fund established pursuant to the Indenture to be used to purchase Bonds in the open market for the purpose of cancellation.At such time or times as Series 1992 Bonds or other bonds issued pursuant to the Indenture are redeemed or purchased pursuant hereto, the rental payments to be paid by the City here- under shall be adjusted in such manner as to provide for the debt service on the remaining Series 1992 Bonds or other bonds issued pursuant to the Indenture.There shall be no accumulation of funds, or earnings thereon, in the Bond Retirement Fund established pursuant to the Indenture as would cause the Series 1992 Bonds or other bonds issued pursuant to the Indenture to be deemed "arbi- trage bonds" under the Code. Section 7.04.Upon retirement of the Series 1992 Bonds by means of redemption or purchase pursuant to Section 7.03 hereof, and payment of any remaining administrative costs and expenses, the Corporation shall cause the Trustee to release the Leased Property from the lien of the Indenture, and the City may then exercise its right to terminate this City Lease, except for the obligation of the City to make payments to the United States as described in Section 1.05(i) hereof. 13 Section 7.05.The Corporation may establish one or more issues of additional bonds or other obligations on a parity with the Series 1992 Bonds (and to which thereafter Sections 3.07 and 7.04 hereof shall apply) and may issue and deliver such additional bonds or other obligations, in such principal amount as may be determined by the Corporation, subject to the following specific conditions which are hereby made conditions precedent to the issu- ance of such additional bonds or other obligations: (i)such additional bonds or other obligations shall have been authorized to finance or refinance the cost of acquiring, constructing, reconstructing or im- proving buildings, equipment and other real and personal properties suitable for use by and for leasing to the City or its agencies or instrumentalities, or to refi- nance or refund any bonds or other obligations which have been issued for such purposes, and the issuance thereof shall have been determined and declared by the Corpora- tion, by appropriate resolution, to be necessary for that purpose; (ii)the Corporation shall be in compliance with all covenants and undertakings set forth in this City Lease and in the Indenture, as either or both may have been supplemented; (iii)the resolution authorizing issuance of such additional bonds or other obligations shall require that the proceeds of the sale of such additional bonds or other obligations shall be applied solely for one or more of the purposes set forth in (i) above and expenses and costs incidental thereto, including costs and expenses incident to the issuance and sale of such additional bonds or other obligations and the costs of any premium relating to insurance on the additional bonds or other obligations or on any debt service reserve fund therefor, and, if desired, a reasonable debt service reserve fund for the protection of the owners of the additional bonds or other obligations and interest on said additional bonds or other obligations during the actual period of any acquisition and construction of such facilities, and for a reasonable period of time thereafter; (iv)such additional bonds or other obligations shall be equally and ratably secured with the Series 1992 Bonds, without preference or priority of any of the bonds or other obligations over any other bonds or other obli- gations, except as expressly provided in the Indenture, as supplemented; 14 (v)the Corporation shall have entered into a re- vised agreement with the City, or shall have amended this City Lease, in and by which the City obligates itself in the manner therein provided to increase or decrease the rental payments or to make such payments to the Corpora- tion at the times and in amounts sufficient to provide for the payment of principal and interest on such addi- tional bonds or other obligations as such principal and interest become due; and (vi)the conditions set forth in Section 3.05 hereof shall then be satisfied. ARTICLE VIII OFFICIAL STATEMENT DISCLOSURES: INDEMNIFICATION Section 8.01.The City hereby recognizes that in the sale of the Series 1992 Bonds the Corporation shall have issued an Official Statement describing the Series 1992 Bonds and the secu- rity for the payment thereof and containing certain information about the City (the "Official Statement") which has been furnished to the Corporation by the City.Recognizing that the Corporation and its officers, directors, agents and employees have no practica- ble independent means of verifying such information, the City here- by represents and warrants to the Corporation that all material contained in the Official Statement, insofar as it relates to the City and the sources of funds or as it otherwise describes the security of this City Lease and the rights of the bondholders with respect thereto, is accurate, contains no material misrepresenta- tion of fact and does not omit any statement of fact which, in the light of the circumstances under which the Official Statement is issued, would be misleading. Section 8.02.The City shall pay, indemnify and save the Corporation and the Trustee harmless for, from and against any and all claims by or on behalf of any person, firm, corporation or gov- ernmental authority arising from the occupation, use, or possession of the Leased Property, including any liability for any violation of conditions, restrictions, laws, ordinances or regulations af- fecting the said property or the occupancy or use thereof. Section 8.03.The Corporation,its incorporators, members, directors, officers, agents and employees shall not be liable to the City or to any other person whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in or on the Leased Property or any part thereof, unless caused by the willful misconduct of the Corpora- tion, its incorporators, members, directors, officers, agents or employees.The City shall indemnify and hold such persons harmless for, from and defend them and each of them against any and all 15 claims, losses or judgments for death of, or injury to, any person, or for damage to any property whatsoever incurred in or on the adjoining streets, roads, sidewalks and passageways, unless caused by the willful misconduct of the Corporation, its incorporators, members, directors, officers, agents or employees.In the event any action or proceeding is brought against any of the persons referred to in this Section by reason of any such claim, the City, upon notice from the Corporation, shall resist or defend such action or proceeding. Section 8.04.The City shall pay and indemnify the Cor- poration for, from and against all lawful and reasonable costs and charges, including reasonable counsel fees, in enforcing any cove- nant or agreement of the City contained in this City Lease. Section 8.05.In clarification and extension of the provisions of the other sections of this Article VIII, and not in substitution therefor, the City, subject to the provisions of Sec- tion 1.04 hereof, shall indemnify and hold the Corporation and the Trustee, their respective directors, officers, agents and employ- ees, harmless for, from and against any and all claims, expenses, liens, judgments, liability or loss whatever, including reasonable legal fees and expenses relating to or in any way arising out of (i) this City Lease, the Indenture and security agreements, financ- ing statements, supplements, amendments or additions thereto or the enforcement of any of the terms thereof;(ii) the Series 1992 Bonds; (iii) any offering statement or official statement, either preliminary or final, pertaining to the Series 1992 Bonds; and (iv) the issuance and sale of the Series 1992 Bonds or the transac- tions contemplated in any of the aforementioned acts, agreements or documents; provided, however, that such indemnity shall not extend to any actions of (A) the Corporation deliberately taken by them over the objections of the City or otherwise involving the wilful misconduct or gross negligence of the Corporation, its directors, officers or agents, or (B) the Trustee involving the wilful miscon- duct or negligence of the Trustee,its directors,officers or agents.The Corporation and the Trustee shall give notice to the City of any event or condition which requires indemnification by the City hereunder, or any allegation of such event or condition, promptly upon obtaining knowledge thereof, and, to the extent that the City makes or provides for payment to the satisfaction of the Corporation or the Trustee under the indemnity provisions hereof, the City shall be subrogated to the rights of the Corporation or the Trustee with respect to such event or condition and shall have the right to determine the settlement of claims thereon.The City shall pay all amounts due hereunder promptly upon notice thereof from the Corporation or the Trustee.In case any action, suit or proceeding is brought against the Corporation or the Trustee by reason of any act or condition which requires indemnification by the City hereunder, the Corporation and the Trustee shall notify the City promptly of such action, suit or proceeding, and the City may (and will upon the request of the Corporation or the Trustee), 16 at the City's expense, resist and defend such action, suit or pro- ceeding, or cause the same to be resisted and defended, by counsel for the insurer of the liability or by counsel designated by the City and approved by the Corporation and the Trustee.If the Cor- poration or the Trustee desire to participate in the defense of such action, suit or proceeding through their own counsel, they may do so at their own expense. ARTICLE IX ACCESS AND CONTROL OF CITY Section 9.01.The Corporation, incident to the issuance and sale of the Series 1992 Bonds, shall assign [(except for the Unassigned Corporation's Rights (as such term is defined in the Indenture))) all rights and benefits hereunder to the Trustee and shall grant the Trustee a lien on its interest in this City Lease for the benefit of the bondholders.The City hereby consents to such assignment and grant of lien. Section 9.02.The City, so long as no event of default by the City under this City Lease shall have occurred and be con- tinuing, shall at all times have and retain all rights of access and control of the Leased Property.The rights and interests of the Corporation assigned, granted and set over to the Trustee under the Indenture shall, so long as no event of default by the City under this City Lease shall have occurred and be continuing, be subject and subordinate to the rights of the City under this Section. ARTICLE X FEDERAL TAX LAW PROVISIONS Section 10.01.In consideration of the purchase and acceptance of the Bonds by the registered owners thereof from time to time and of retaining the exclusion from gross income for federal income taxes of the interest income on the Bonds, and as authorized by Title 35, Chapter 3, Article 7, Arizona Revised Statutes, as amended, the City and the Corporation covenant, and the appropriate officials of the City and the Corporation are here- by directed, to take all action required, or to refrain from taking any action prohibited, by the Internal Revenue Code of 1986, as amended, and the applicable Treasury Regulations promulgated with respect to applicable sections thereof (collectively, the "Code"), which would adversely affect in any respect such exclusion, includ- ing, particularly, but not by way of limitation, (i) to cause the Bonds to not be "private activity" bonds within the meaning of the Code (Section 141(a) of the Code), (ii) to cause the Bonds to not be "arbitrage bonds" within the meaning of the Code (Section 148(a) 17 of the Code) or to not be valid "reimbursement bonds" for purposes of the Code if any proceeds of the sale of the Bonds are being used to reimburse prior expenditures (Section 1.103.18 of the Treasury Regulations),(iii) to comply with the provisions of the Code relating to rebate (Section 148(f) of the Code), (iv) to cause the Bonds not to be "federally guaranteed" within the meaning of the Code (Section 149(b) of the Code), (v) to make the required infor- mation filing pursuant to the Code (Section 149(e) of the Code), and (vi) to make the required expenditures so that the Bonds shall not be deemed to be "hedge bonds" within the meaning of the Code (Section 149(g) of the Code). Section 10.02.The City hereby represents and warrants that the City has general taxing powers, the Series 1992 Bonds are not private activity bonds within the meaning of the Code, ninety- five percent (95%) or more of the net proceeds of the Series 1992 Bonds will be used for local governmental activities of the City. ARTICLE XI GENERAL PROVISIONS Section 11.01.The City may not sell or assign its interest in this City Lease while any of the Series 1992 Bonds or other bonds issued pursuant to the Indenture are outstanding, but may sell, lease or otherwise dispose of all or any part of the Leased Property with the consent of the Corporation; provided, how- ever, that prior to any such sale, lease or other disposition, the City shall provide to the Corporation and the Trustee an opinion of nationally recognized bond counsel to the effect that such sale, lease or other disposition, shall not cause the interest on the Series 1992 Bonds or other bonds issued pursuant to the Indenture to be includable in the gross income of the owners thereof for federal income tax purposes.Notwithstanding any such sale, lease or other disposition, the City shall nevertheless remain liable for the rentals provided herein and for the performance of the other obligations of the City hereunder. Section 11.02.All rights of the Corporation hereunder [(except for the Corporation's Unassigned Rights (as such term is defined in the Indenture))) are to be assigned, pledged, mortgaged and transferred to the Trustee as security for the Bonds, but sub- ject to the rights under this City Lease of the City.The rights of the Trustee or any party or parties on behalf of whom the Trustee is acting (including, specifically, but without limitation, the right to receive the rentals to be paid hereunder), shall not be subject to any defense, setoff, counterclaim or recoupment what- soever, whether arising out of any breach of any obligation of the Corporation hereunder, or by reason of any other indebtedness or liability at any time owing by the Corporation to the City. 18 Section 11.03.All notices, consents or other communica- tions required or permitted hereunder shall be deemed sufficient if given in writing addressed and mailed by registered or certified mail, or delivered to the party for whom the same is intended, as follows: To the Corporation:City of Apache Junction Municipal Property Corporation c/o City of Apache Junction, Arizona 1001 North Idaho Road Apache Junction, Arizona 85219 Attention:President To the City:City of Apache Junction, Arizona 1001 North Idaho Road Apache Junction, Arizona 85219 Attention:City Manager To Trustee:[The Valley National Bank of Arizona P.O. Box 71 Phoenix, Arizona 85001 Attention:Corporate Trust Department (A-804)???] or to such other address as such party may hereafter designate by notice in writing addressed and mailed or delivered to the other party hereto. Section 11.04.This City Lease shall be governed exclu- sively by the provisions hereof and by the applicable laws of the State of Arizona. Section 11.05.If any term or provision of this City Lease or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this City Lease or the application of such term or provision to persons or circumstances other than those as to which it is invalid or unenforceable shall not be affected thereby and each term and provision of this City Lease shall be valid and enforceable to the fullest extent permitted by law. Section 11.06.To the extent applicable by provision of law, all parties acknowledge that this City Lease is subject to cancellation pursuant to Section 38-511, Arizona Revised Statutes, as amended, the provisions of which are incorporated herein. Section 11.07.This City Lease may be executed in several counterparts, each of which shall be an original, but all of which shall constitute but one instrument. 19 IN WITNESS WHEREOF, the Corporation and the City have caused their respective names to be signed hereto by their re- spective officers thereunto duly authorized, all as of the day and year first above written. CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION, an Arizona nonprofit corporation By Kenneth Bluntschully, President ATTEST: , Secretary -Treasurer CITY OF APACHE JUNCTION, ARIZONA, a municipal corporation By Tom Damiano, Mayor ATTEST: Kathy Connelly, City Clerk APPROVED AS TO FORM: Glenn Gimbut, Esq., City Attorney PSSO2E18/082492 20 STATE OF ARIZONA ) ) ss. COUNTY OF PINAL On this, the ..... day of September, 1992, before me, the undersigned Notary Public,personally appeared Kenneth Bluntschully, and , who acknowledged themselves to be the President and Secretary -Treasurer, respec- tively, of the CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPO- RATION, an Arizona nonprofit corporation, and that they, as such officers, being authorized so to do, executed the foregoing City Lease for the purposes therein contained by signing the name of the corporation by themselves as such officers. IN WITNESS WHEREOF, I have hereunto set my hand and offi- cial seal. Notary Public My Commission Expires: STATE OF ARIZONA ) )ss. COUNTY OF PINAL On this, the ..... day of September, 1992, before me, the undersigned Notary Public, personally appeared Tom Damiano and Kathy Connelly, who acknowledged themselves to be the Mayor and City Clerk, respectively, of the CITY OF APACHE JUNCTION, ARIZONA, a municipal corporation, and that they, as such officers, being authorized so to do, executed the foregoing City Lease for the purposes therein contained by signing the name of the municipal corporation by themselves as such officers. IN WITNESS WHEREOF, I have hereunto set my hand and offi- cial seal. My Commission Expires: Notary Public 21 EXHIBIT A DESCRIPTION OF REAL PROPERTY PARCEL NO. I Parcel Which Was The Subject Of State Land Department Land Sales Receipt No. 50-98490 (City Service Annex) THAT PART OF LOTS 2, 3 AND 4 OF SECTION 4, TOWNSHIP 1 SOUTH, RANGE 8 EAST, GILA AND SALT RIVER MERIDIAN, PINAL COUNTY, ARIZONA MORE PRECISELY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTH QUARTER CORNER OF SAID SECTION 4 FROM WHICH THE NORTHEAST SECTION CORNER OF SAID SECTION 4 BEARS DUE EAST (ASSUMED), A DISTANCE OF 2643.07 FEET; THENCE DUE EAST, A DISTANCE OF 115.52 FEET; THENCE S44°02'18"W, A DISTANCE OF 185.63 FEET; THENCE S 23°59'05"W, A DISTANCE OF 93.33 FEET; THENCE S49°27'02"W, A DISTANCE OF 273.75 FEET; THENCE S77°53'11"W, A DISTANCE OF 137.10 FEET; THENCE S44°08'49"W, A DISTANCE OF 222.76 FEET; THENCE S61°12'40"W, A DISTANCE OF 87.45 FEET; THENCE S64°00'15"W, A DISTANCE OF 149.03 FEET; THENCE S46°14'40"W, A DISTANCE OF 188.61 FEET; THENCE S82°51'41"W, A DISTANCE OF 242.10 FEET; THENCE N84°03'21"W, A DISTANCE OF 480.88 FEET; THENCE N15°32'57"W, A DISTANCE OF 45.54 FEET; THENCE N9°09'04"E,A DISTANCE OF 68.71 FEET; THENCE N32°48'00"E, A DISTANCE OF 73.54 FEET; THENCE N12°43'44"E, A DISTANCE OF 88.13 FEET; THENCE N21°22'42"E, A DISTANCE OF 72.47 FEET; THENCE N40°53'15"E, A DISTANCE OF 40.23 FEET; THENCE N14°10'10"E, A DISTANCE OF 84.58 FEET; THENCE N42°01'36"E, A DISTANCE OF 130.00 FEET; THENCE N19°16'55"E, A DISTANCE OF 91.44 FEET; THENCE N27°47'33"E, A DISTANCE OF 204.79 FEET TO A POINT ON THE NORTH LINE OF SAID SECTION 4 FROM WHICH THE NORTHEAST CORNER OF SAID SECTION BEARS DUE WEST, A DISTANCE OF 1373.22 FEET; THENCE DUE EAST ALONG SAID NORTH LINE, A DISTANCE OF 1269.85 FEET TO THE POINT OF BEGINNING CONTAINING 21.48 ACRES, MORE OR LESS A-1 PARCEL NO. II Parcel Which Was The Subject Of State Land Department Certificate Of Purchase No. 1004 (City Complex) THE WEST HALF OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER (W2SW4SW4) Section 16, in Township 1 N, Range 8E, G.&S.R.B.&M., County of Pinal, State of Arizona, containing 20.03 acres, more or less A-2 EXHIBIT B DESCRIPTION OF IMPROVEMENTS B-1. FILE COPY .DRAFT 08/01/92 08/19/92 MIA Only) 08/24/92 TRUST INDENTURE FROM CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION TO,cxn..„4,f/x VALEY NATIO,FAL\BANK 'OF MIZONA, as Trustee???] CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION MUNICIPAL FACILITIES REVENUE BONDS, SERIES 1992 Dated as of September 1, 1992 SECTION 1.01. SECTION 1.02. SECTION 1.03. SECTION 2.01. SECTION 2.02. SECTION 2.03. SECTION 2.04. SECTION 3.01. SECTION 3.02. SECTION 3.03. SECTION 3.04. SECTION 3.05. SECTION 3.06. SECTION 3.07. SECTION 3.08. SECTION 3.09. SECTION 4.01. SECTION 4.02. SECTION 4.03. SECTION 4.04. SECTION 4.05. SECTION 4.06. SECTION 4.07. SECTION 4.08. TABLE OF CONTENTS Page ARTICLE I DEFINITIONS D e f i n i t i o n s . . . . . . . . . . . . . . . . .5 Interpretation . . . . . . . . . . . . . . .14 Captions and Headings ............14 ARTICLE II AUTHORIZATION AND TERMS OF SERIES 1992 BONDS; ADDITIONAL BONDS Authorized Amount of Series 1992 Bonds . . Issuance of Series 1992 Bonds ........ Delivery of Series 1992 Bonds ........ Issuance and Delivery of Additional Bonds . ARTICLE III TERMS OF BONDS GENERALLY 16 16 17 17 Fo r m of B o nd s . .. . . . .. . . . .. . . .20 Variable Terms . . . . . . . . . . . . . . .20 Execution and Authentication of Bonds ...20 Source of Payment of Bonds . . . . . . . . .21 Payment and Ownership of Bonds . . . . . . .21 Transfer and Exchange of Bonds . . . . . . .22 Mutilated, Lost, Wrongfully Taken or Destroyed Bonds ............24 Safekeeping and Cancellation of Bonds ...25 Special Agreement With Owners ........25 ARTICLE IV REDEMPTION OR PURCHASE OF BONDS Redemption of Bonds .............27 Terms of Redemption of Series 1992 Bonds .27 Partial Redemption . . . . . . . . . . . . .28 Corporation's Election to Redeem . . . . . .28 Notice of Redemption . . . . . . . . . . . .29 Payment of Redeemed Bonds ..........29 Variation of Redemption Provisions . . . . .29 Purchase of Bonds ..............30 SECTION 5.01. SECTION 5.02. SECTION 5.03. SECTION 5.04. SECTION 5.05. SECTION 5.06. SECTION 5.07. SECTION 5.08. SECTION 5.09. SECTION 6.01. SECTION 6.02. rage ARTICLE V PROVISIONS AS TO FUNDS AND PAYMENTS Establishment of Funds . . . . . . . . . . .31 Application of Series 1992 Bond Proceeds .31 Disbursements From Acquisition and Construction Fund and Escrow Fund . . .31 Receipt of Revenues .............32 Fl o w o f F u nd s . . .. . . .. . .. . .. . .33 Investment of Funds .............34 Limitation of Investment Yield . . . . . . .34 Moneys to Be Held in Trust . . . . . . . . .35 Nonpresentment of Bonds ...........35 ARTICLE VI ENFORCEMENT OF REVENUE PLEDGE; EXCLUSIVE PLEDGE Enforcement of Revenue Pledge ........37 Exclusive Pledge . . . . . . . . . . . . . .37 ARTICLE VII THE TRUSTEE, REGISTRAR AND PAYING AGENTS SECTION 7.01. SECTION 7.02. SECTION 7.03. SECTION 7.04. SECTION 7.05. SECTION 7.06. SECTION 7.07. SECTION 7.08. SECTION 7.09. SECTION 7.10. SECTION 7.11. SECTION 7.12. Trustee's Acceptance and Responsibilities .............38 Certain Rights and Obligations of the Trustee ..............39 Fees, Charges and Expenses of Trustee, Registrar and Paying Agents . . . . . . .43 Intervention by Trustee ...........43 Successor Trustee ..............44 Appointment of Co -Trustee ..........44 Resignation by the Trustee . . . . . . . . .45 Removal of the Trustee . . . . . . . . . . .45 Appointment of Successor Trustee . . . . . .46 Adoption of Authentication . . . . . . . . .47 Registrars . . . . . . . . . . . . . . . . .47 Designation and Succession of Paying Agents . . . . . . . . . . . . . .49 SECTION 7.13.Dealing in Bonds . . . . . . . . . . . . . .50 SECTION 7.14.Representations, Agreements and Covenants of Trustee ...........50 page ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND OWNERS SECTION 8.01.Defaults; Events of Default .........51 SECTION 8.02.Notice of Default ..............52 SECTION 8.03.Remedies; Rights of Owners . . . . . . . . .52 SECTION 8.04.Right of Owners to Direct Proceedings ...53 SECTION 8.05.Application of Moneys ............53 SECTION 8.06.Remedies Vested in Trustee . . . . . . . . .55 SECTION 8.07.Rights and Remedies of Owners ........55 SECTION 8.08.Termination of Proceedings . . . . . . . . .56 SECTION 8.09.Waivers of Events of Default . . . . . . . .56 ARTICLE IX SUPPLEMENTAL INDENTURES SECTION 9.01.Supplemental Indentures Generally ......57 SECTION 9.02.Supplemental Indentures Not Requiring Consent of Owners . . . . . . . . . . . .57 SECTION 9.03.Supplemental Indentures Requiring Consent of Owners . . . . . . . . . . . .58 SECTION 9.04.Authorization to Trustee; Effect of Supplement . . . . . . . . . . . . . .60 SECTION 9.05.Opinion of Counsel . . . . . . . . . . . . .61 SECTION 9.06.Modification by Unanimous Consent ......61 ARTICLE X DEFEASANCE SECTION 10.01.Release of Indenture . . . . . . . . . . . .62 SECTION 10.02.Payment and Discharge of Bonds . . . . . . .62 SECTION 10.03.Survival of Certain Provisions . . . . . . .63 iii SECTION 11.01. SECTION 11.02. SECTION 11.03. SECTION 11.04. SECTION 11.05. SECTION 11.06. SECTION 11.07. SECTION 11.08. SECTION 11.09. SECTION 11.10. SECTION 11.11. SECTION 11.12. SECTION 11.13. SECTION 12.01. SECTION 12.02. SECTION 12.03. SECTION 12.04. SECTION 12.05. SECTION 12.06. SECTION 12.07. SECTION 12.08. SECTION 12.09. SECTION 12.10. SECTION 12.11. SECTION 12.12. SECTION 12.13. SECTION 12.14. SECTION 12.15. SECTION 12.16. EXHIBITS: Exhibit A Exhibit B - ARTICLE XI COVENANTS OF THE CORPORATION Prompt Payment . . . . . . . . . . . . . . .65 No Extension of Time for Interest Payment .65 Maintenance of Offices for Payment . . . . .65 Sufficient Revenues .............65 Records and Accounts . . . . . . . . . . . .65 Financial Statements . . . . . . . . . . . .65 Payments of Trustee, Paying Agent Fees . .66 Authority of Corporation . . . . . . . . . .66 Good Faith Compliance ............67 Maintenance of the Improvements and the Real Property, Good Title and Corporate Existence . . . . . . . . .68 Rights and Enforcement of the City Lease .69 Good Title . . . . . . . . . . . . . . . . .69 Possession . . . . . . . . . . . . . . . . .69 ARTICLE XII MISCELLANEOUS Limitation of Rights . . . . . . . . . . . .70 Severability . . . . . . . . . . . . . . . .70 N o t i c e s . . . . . . . . . . . . . . . . . . .70 Notices to Be Given to MBIA .........72 Consent of MBIA ...............72 Suspension of Mail . . . . . . . . . . . . .73 Payments Due on Saturdays, Sundays and Holidays ...............73 Instruments of Owners ............74 Copies of Amendments, Modifications and Supplements to Be Delivered to Standard & Poor's Corporation .....74 Priority of This Indenture . . . . . . . . .75 Extent of Covenants; No Personal Liability 75 Parties Interested Herein ..........75 Cancellation . . . . . . . . . . . . . . . .75 Binding Effect . . . . . . . . . . . . . . .75 Counterparts . . . . . . . . . . . . . . . .76 Governing Law ................76 Form of Series 1992 Bond ..........A-1 Form of Notice of Prepayment ........B-1 iv TRUST INDENTURE This TRUST INDENTURE, dated as of September 1, 1992, from CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION, a nonprofit corporation organized and existing under the laws of the State of Arizona (the "Corporation"), and [THE VALLEY NATIONAL BANK OF ARIZONA ???], a national banking association organized and existing under the laws of the United States of America and authorized to exercise corporate trust powers in the State of Arizona, with its principal place of business located in the City of Phoenix, Arizona, as Trustee (the "Trustee"); WHEREAS, the Corporation was formed to transact any or all lawful business for which nonprofit corporations may be incor- porated under the laws of the State of Arizona, including, without limiting the generality of the foregoing, any civic or charitable purpose such as financing the cost of acquiring, constructing, reconstructing or improving buildings, equipment or other real and personal properties suitable for use by and for leasing to the City of Apache Junction, Arizona (the "City"),or its agencies or instrumentalities; WHEREAS, the City has determined that it will be benefi- cial to its citizens (i) to design, acquire, construct and equip a new police facility for the City, (ii) to improve and develop cer- tain recreation facilities of the City, (iii) to expand the library of the City, and (iv) to pay the remaining amounts due pursuant to a Lease -Purchase Agreement, dated as of September, 1991, by and between the City and PHSG Holdings, Inc.(collectively with the foregoing purposes, the "Project"); and WHEREAS, the Corporation desires to assist the City in financing the Project; and WHEREAS, in order to finance the costs of the Project, the Corporation and the City deem it necessary and desirable for the Corporation to issue its $aggregate principal amount of City of Apache Junction Municipal Property Corporation Municipal Facilities Revenue Bonds, Series 1992 (the "Series 1992 Bonds"); and WHEREAS, in connection with the issuance of the Series 1992 Bonds, the Corporation and the City have entered into (i) a Ground Lease, dated even date herewith (the "Ground Lease"), pur- suant to which the City shall lease the demised premises described on Exhibit A, attached thereto (the "Real Property") to the Corpora- tion and (ii) a City Lease, dated even date herewith (the "City Lease"), pursuant to which (A) the Corporation shall lease the Real Property and the improvements which are a part of the Project (the "Improvements") to the City and (B) the City shall (I) lease from the Corporation the Real Property and the Improvements and (II) as agent for the Corporation, agree to design, acquire, construct and equip, as the case may be, the Improvements; and WHEREAS, the Corporation has not made and does not intend to make any profit by reason of any business or venture in which it may engage or by reason of the assistance it renders the City in financing the Project and no part of the net earnings of the Corpo- ration, if any, will ever inure to the benefit of any person, firm or corporation except the City; and WHEREAS, the Series 1992 Bonds and any Additional Bonds (as such term and all other capitalized terms hereinafter used are defined in Section 1.01 of this Indenture) shall be secured by this Indenture, and the Corporation is authorized to execute and deliver this Indenture and to do, or cause to be done, all acts provided or required herein to be performed on its part; and WHEREAS, all acts and conditions required to happen, exist and be performed precedent to and in the issuance of the Series 1992 Bonds and the execution and delivery of this Indenture have happened, exist and have been performed, or at the delivery of the Series 1992 Bonds shall exist, shall have happened and shall have been performed (i) to make the Series 1992 Bonds, when issued, delivered and authenticated, valid obligations of the Corporation in accordance with the terms thereof and hereof and (ii) to make this Indenture a valid, binding and legal trust agreement for the security of the Series 1992 Bonds in accordance with its terms; and WHEREAS, the Trustee has accepted the trusts created by this Indenture and in evidence thereof has joined in the execution hereof; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment of Bond Service Charges on the Series 1992 Bonds according to their true intent and meaning, to secure the perfor- mance and observance of all of the covenants, agreements, obliga- tions and conditions contained therein and herein, and to declare the terms and conditions upon and subject to which the Series 1992 Bonds are and are intended to be issued, held, secured and en- forced, and in consideration of the premises and the acceptance by the Trustee of the trusts created herein and of the purchase and acceptance of the Series 1992 Bonds by the Owners, and for other good and valuable consideration, the receipt of which is acknowl- edged, the Corporation has executed and delivered this Indenture and absolutely assigns hereby to the Trustee, and to its successors in trust, and its and their assigns, all right, title and interest of the Corporation in and to (i)the right, title and interest of the Corpora- tion in and to the Ground Lease, the Corporation, how- ever, to remain liable to observe and perform all of the 2 conditions and covenants in the Ground Lease provided to be observed and performed by it; (ii)the right, title and interest of the Corpora- tion in and to the City Lease, the Corporation, however, to remain liable to observe and perform all of the condi- tions and covenants in the City Lease provided to be observed and performed by it; (iii)all of the rents, issues and profits payable to or received by the Corporation from the property described in paragraph (ii) above, including without lim- itation, all of the rents and the amounts to be paid to the Corporation or the Trustee under the terms of the City Lease, except payments to the Trustee and the Cor- poration under Sections 1.03(v) and 1.05(ii), (iii), (v) and (vi) of the City Lease and the Unassigned Corpora- tion's Rights; and (iv)all property which is by the express provisions of this Indenture required to be subjected to the lien hereof and any additional property that may, from time to time hereafter, by delivery or by writing of any kind, be subjected to the lien hereof, by the Corporation or by anyone in its behalf, and the Trustee is hereby author- ized to receive the same at any time as additional secu- rity hereunder, SUBJECT, HOWEVER, to the rights of access and control in the City as reserved and granted in Section 9.02 of the City Lease; TO HAVE AND TO HOLD unto the Trustee and its successors in that trust and its and their assigns forever; hereof, BUT IN TRUST, NEVERTHELESS, and subject to the provisions (a)except as otherwise provided herein, for the equal and proportionate benefit, security and protection of all present and future Owners of the Bonds issued or to be issued under and secured by this Indenture, (b)for the enforcement of the payment of the principal of and interest and any premium on the Bonds, when payable, according to the true intent and meaning thereof and of this Indenture, and (c)to secure the performance and observance of and compliance with the covenants, agreements, obligations, terms and conditions of this Indenture, 3 in each case, without preference, priority or distinction, as to lien or otherwise, of any one Bond over any other by reason of designation,number,date of the Bonds or of authorization, issuance, sale, execution, authentication, delivery or maturity thereof, or otherwise, so that except as otherwise provided herein each Bond of a series and all Bonds of a series shall have the same right,lien and privilege under this Indenture,and shall be secured equally and ratably hereby, it being intended that the lien and security of this Indenture shall take effect from the date hereof, without regard to the date of actual issue, sale or dispo- sition of the Bonds, as though upon that date all of the Bonds were actually issued,sold and delivered to purchasers for value; provided, however,that if (i)the principal of the Bonds and the interest due or to become due thereon together with any premium re- quired by redemption of any of the Bonds prior to matu- rity, shall be well and truly paid, at all times and in the manner to which reference is made in the Bonds, according to the true intent and meaning thereof, or the outstanding Bonds shall have been paid and discharged in accordance with Article X hereof, and (ii)all of the covenants, agreements, obligations, terms and conditions of the Corporation under this Inden- ture shall have been kept, performed and observed, and there shall have been paid to the Trustee, the Registrar and the Paying Agents all sums of money due or to become due to them in accordance with the terms and provisions hereof, then, this Indenture and the rights assigned hereby shall cease, determine and be void, except as provided in Section 10.03 hereof with respect to the survival of certain provisions hereof; other- wise, this Indenture shall be and remain in full force and effect. It is declared that all Bonds issued hereunder and secured hereby are to be issued, authenticated and delivered, and that all Revenues assigned hereby are to be dealt with and disposed of under, upon and subject to, the terms, conditions, stipulations, covenants,agreements,obligations,trusts,uses and purposes provided in this Indenture.The Corporation has agreed and covenanted, and agrees and covenants with the Trustee and with each and all Owners, as follows: 4 ARTICLE I DEFINITIONS SECTION 1.01.Definitions.In addition to the words and terms defined elsewhere in this Indenture or by reference to the City Lease, unless the context or use clearly indicates another meaning or intent: "Acquisition and Construction Fund"means the Acquisition and Construction Fund established pursuant to Section 5.01 hereof. "Act"means Title 10,Chapter 5,Arizona Revised Statutes, as enacted and amended from time to time. "Additional Bonds"means bonds which may be issued under Section 2.04 of this Indenture. "Annual Debt Service Requirement"means for any fiscal year the amount to be paid in such year with respect to the Bonds for payment of principal and interest on the Bonds during such year. "Board of Directors"means the Board of Directors of the Corporation. "Bond Payment Date"means any Principal Payment Date or Interest Payment Date. "Bondowner"shall have the same meaning as "Owner" herein. "Bond Resolution"means (a) when used with reference to the Series 1992 Bonds, the resolution providing for their issuance and the approving of the Ground Lease, the City Lease, this Inden- ture and related matters; (b) when used with reference to an issue of Additional Bonds, the resolution providing for the issuance of the Additional Bonds, to the extent applicable, and the resolution providing for the issuance of the Additional Bonds and the approv- ing of any amendment or supplement to the City Lease, any Supple- mental Indenture and related matters; and (c) when used with ref- erence to Bonds when Additional Bonds are outstanding, the resolu- tion providing for the issuance of the refunding bonds and the resolution providing for the issuance of the then outstanding and the then to be issued Additional Bonds, in each case as amended or supplemented from time to time. "Bond Retirement Fund"means the Bond Retirement Fund established pursuant to Section 5.01 hereof. 5 "pond Service Charges"means, for any period or time, the principal of and interest and any premium due on the Bonds for that period or payable at that time, as the case may be. "Bonds"means the Series 1992 Bonds and any Additional Bonds. "City"means the City of Apache Junction, Arizona. "City Lease"means the City Lease, dated as of September 1, 1992, by and between the City, as lessee, and the Corporation, as lessor, as amended or supplemented from time to time. "City Representative"means the Manager or of the City, or such other persons designated by the Manager or of the City to act on behalf of the City by a certificate filed with the Trustee containing the specimen signa- ture of such person signed by the Manager or of the City. "Code"means the Internal Revenue Code of 1986,as amended.References to the Code and Sections thereof include relevant applicable regulations and proposed regulations thereunder and any successor provisions to those Sections, regulations or pro- posed regulations. "Corporation"means City of Apache Junction Municipal Property Corporation, a nonprofit corporation organized and exist- ing under the laws of the State of Arizona. "Costs of Acquisition and Construction"means all items of expense directly or indirectly relating to the cost of design- ing, acquiring, constructing and equipping of the Real Property or the Improvements, as the case may be, including, but not limited to, the following: (a)Costs previously or hereafter incurred by the City in connection with the designing, acquiring, con- structing and equipping of the Improvements. (b)Expenses incurred by the City for labor, serv- ices, materials and supplies used or furnished in design- ing,acquiring,constructing and equipping of the Improvements. (c)Fees paid by the City for legal, design, archi- tectural, engineering, construction management, consult- ing and supervisory services with respect to the Improve- ments, including, without limitation, the cost of prepar- ing or obtaining plans and specifications,working drawings,bids,appraisals,approvals,permits and inspections. 6 (d)Expenses incurred by the City in seeking to enforce any remedy against any contractor, subcontractor, materialman, vendor, supplier or surety in respect of any default under a contract relating to design, acquisition, construction and equipping of the Improvements. (e)Any sums required to reimburse the City for advances made by it for any of the above items. "Delivery Costs"means all items of expense directly or indirectly payable by or reimbursable to the Corporation or the City relating to the execution, sale and delivery of this Inden- ture, the Ground Lease, the City Lease or the Bonds, including but not limited to,filing and recording costs,settlement costs, printing costs, reproduction and binding costs, initial fees and charges of the Trustee, the Registrar, the Paying Agents, financing discounts, legal fees and charges, insurance fees and charges, financial and other professional consultant fees, costs of rating agencies for credit ratings, fees for execution, transportation and safekeeping of the Bonds and charges and fees in connection with the foregoing. "Eligible Investments"means: A.Direct obligations of the United States of America (including obligations issued or held in book -entry form on the books of the Department of the Treasury) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. B.Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America: 1.U.S. Export -Import Bank Direct obligations or fully guaranteed certificates of beneficial ownership 2.Farmers Home Administration Certificates of beneficial ownership 3.Federal Financing Bank 4.Federal Housing Administration Debentures 5.General Services Administration Participation certificates 6.Government National Mortgage Association ("GNMA") GNMA - guaranteed mortgage -backed bonds GNMA - guaranteed pass -through obligations 7 7.U.S. Maritime Administration Guaranteed Title XI financing 8.New Communities Debentures U.S. Government guaranteed debentures 9.U.S. Public Housing Notes and Bonds U.S. government guaranteed public housing notes and bonds 10.U.S. Department of Housing and Urban Development Project Notes Local Authority Bonds C.Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following U.S. government agencies (non -full faith and credit agencies): 1.Federal Home Loan Bank System Senior debt obligations 2.Federal Home Loan Mortgage Corporation Participation Certificates Senior debt obligations 3.Federal National Mortgage Association Mortgage -backed securities and senior debt obligations (excluded are stripped mortgage securities which are valued greater than par on the portion of unpaid principal) 4.Student Loan Marketing Association Senior debt obligations D.Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAm-G; AAAm; or AAm. E.Certificates of deposit secured at all times by collateral described in (A) and/or (B) above.Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks whose short term obligations are rated A-1 or better by Standard & Poor's Corporation ("S&P") and P-1 by Moody's Investors Service ("Moody's"). The collateral must be held by a third party and the Bondholders must have a perfected first security interest in the collateral. F.Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC or FSLIC. G.Investment Agreements, including GIC's, acceptable to MBIA. 8 H.Commercial paper rated, at the time of purchase, "Prime -1" by Moody's and "A-1" or better by S&P. I.Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two highest rating categories assigned by such agencies. J.Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime -1" or "A3" or better by Moody's and "A-1" or "A" or better by S&P. K.Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to the Trustee a (buyer/lender), and the transfer of cash from the Trustee to the dealer bank or securities firm with an agree- ment that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date. Repurchase Agreements must satisfy the following criteria [or be approved by MBIA ???]: 1.Repos must be between the Trustee and a dealer bank or securities firm a.Primary dealers on the Federal Reserve reporting dealer list which fall under the jurisdiction of the SIPC, or b.Banks rated "A" or above by S&P and Moody's. 2.The written repo contract must include the following: a.Securities which are acceptable for transfer are: (1)Direct U.S. Governments b.The term of the repo may be up to 30 days c.The collateral must be delivered to the Trustee (if trustee is not supplying the collateral) or third party acting as agent for the Trustee (if the Trus- tee is supplying the collateral) before/simultane- ously with payment (perfection by possession of certificated securities). d.The Trustee has a perfected first priority security interest in the collateral. 9 e.Collateral is free and clear of third -party liens and in the case of SIPC broker was not acquired pursuant to a repo or reverse repo. f.Failure to maintain the requisite collateral percentage will require the Trustee to liquidate collateral. g.Valuation of Collateral (1)The securities must be valued weekly. marked- to -market at current market price plus accrued interest (a)The value of collateral must be equal to 103% of the amount of cash transferred by the Trustee to the dealer bank or secu- rity firm under the repo plus accrued in- terest.If the value of securities held as collateral slips below 103% of the value of the cash transferred by the Trustee, then additional cash and/or ac- ceptable securities must be transferred. L.Investments with the State Treasurer in the pooled investment fund for the collective investment of public funds in the State authorized to be created by Title 35, Chapter 2, Article 2, Section 35-326, Arizona Revised Statutes as amended. "Escrow Fund"means the Escrow Fund established pursuant to Section 5.01 hereof. "Event of Bankruptcy"means the filing of a petition in bankruptcy by or against the specified Person under the United States Bankruptcy Code. "Extraordinary Services"and "Extraordinary Expenses" mean all services rendered, and all reasonable expenses properly incurred, by the Trustee under this Indenture, other than Ordinary Services and Ordinary Expenses. "Ground Lease"means the Ground Lease,dated as of September 1, 1992, by and between the City, as lessor, and the Corporation, as lessee, as amended or supplemented from time to time. "Improvements"means the improvements which are part of the Project as described in the Recitals hereto and on Exhibit B to the City Lease. 10 "Indenture"means this Trust Indenture,dated as of September 1, 1992, from the Corporation to the Trustee, as amended or supplemented from time to time. "Interest Fund"means the Interest Fund established pur- suant to Section 5.01 hereof. "Interest Payment Date"or "Interest Payment Dates" means, as to the Series 1992 Bonds, the date or dates set forth as such in the form of bond attached hereto as Exhibit A, and as to Additional Bonds, each date or dates designated as an Interest Payment Date or Dates in the form of bond for which provision is made in the applicable Supplemental Indenture or Bond Resolution. ["Insurance Policy"means the Financial Guaranty Insurance Policy issued by MBIA insuring the payment when due of the principal of and interest on the Series 1992 Bonds. ???] "Maximum Annual Debt Service"means, at the time of com- putation, the greatest Annual Debt Service Requirement for the then -current or any succeeding fiscal year. ["MBIA" means Municipal Bond Investors Assurance Corpora- tion, a stock insurance company incorporated under the laws of the State of New York. ???] "Ordinary Services"and "Ordinary Expenses"mean those services normally rendered, and those expenses normally incurred, by a trustee under instruments similar to this Indenture. "Original Purchaser"means, as to the Series 1992 Bonds, Peacock, Hislop, Staley & Given, Inc. and, as to Additional Bonds, the Person or Persons identified as the purchaser or purchasers in the applicable purchase agreement or purchase proposal. "Outstanding Bonds," "Bonds outstanding"or "outstanding" as applied to the Bonds, mean, as of the applicable date, all Bonds which have been authenticated and delivered, or which are being delivered by the Trustee under this Indenture, except: (a)Bonds cancelled upon surrender, exchange or transfer, or cancelled because of payment or redemption on or prior to that date; (b)Bonds, or the portion thereof, for the payment, redemption or purchase for cancellation of which suffi- cient moneys have been deposited and credited with the Trustee or any Paying Agents on or prior to that date for that purpose (whether upon or prior to the maturity or redemption date of those Bonds); provided, that if any of those Bonds are to be redeemed prior to their maturity, notice of that redemption shall have been given or 11 arrangements satisfactory to the Trustee shall have been made for giving notice of that redemption, or waiver by the affected Owners of that notice satisfactory in form to the Trustee shall have been filed with the Trustee; (c)Bonds, or the portion thereof, which are deemed to have been paid and discharged or caused to have been paid and discharged pursuant to the provisions of this Indenture; and (d)Bonds in lieu of which others have been authenticated under Section 3.07 of this Indenture. "Owner"or "Bondowner"or "Owner of a Bond"means the Person in whose name a bond is registered on the Register. "Paying Agent"means any bank or trust company designated as a Paying Agent by or in accordance with Section 7.12 of this Indenture. "Person"or words importing persons means firms, associ- ations, partnerships (including without limitation, general and limited partnerships), joint ventures, societies, estates, trusts, corporations, public or governmental bodies, other legal entities and natural persons. "Predecessor Bond"of any particular Bond means every previous Bond evidencing all or a portion of the same debt as that evidenced by the particular Bond.For the purposes of this defini- tion, any Bond authenticated and delivered under Section 3.07 of this Indenture in lieu of a lost, stolen or destroyed Bond shall, except as otherwise provided in Section 3.07, be deemed to evidence the same debt as the lost, stolen or destroyed Bond. "President"means the President of the Board of Directors of the Corporation. "Principal Payment Date"means, as to the Series 1992 Bonds, July 1 in the years specified in Section 2.02 hereof for the stated amount of principal to be retired at maturity, or any other date on which the principal of the Series 1992 Bonds is payable as a result of redemption, optional or mandatory. "Prior Lease"means the Lease -Purchase Agreement, dated as of , 1991, by and between PHSG Holdings, Inc. and the City. "Project"shall have the meaning provided thereto in the Recitals hereto. 12 "Oualified Surety Bond"means a surety bond issued by an insurance company rated in the highest rating category by A.M. Best & Company, S&P or Moody's. "Real Property"means the Real Property described in the Recitals hereto and on Exhibit A attached to the City Lease. "Registrar" means, as to the Series 1992 Bonds, the Trus- tee, until a successor Registrar shall have become such pursuant to applicable provisions of this Indenture and as to any series of Additional Bonds, the bank, trust company or other Person desig- nated as such by or pursuant to the applicable Bond Resolution or Supplemental Indenture. "Regular Record Date"means, with respect to any Bond, the fifteenth (15th) day of the calendar month next preceding an Interest Payment Date applicable to that Bond. "Reserve Fund"means the Reserve Fund established pursuant to Section 5.01 of this Indenture. "Reserve Requirement"means (i) as to the Series 1992 Bonds, the lesser of an amount equal to the highest principal and interest coming due on the Series 1992 Bonds in any future 12 -month period (whether at maturity or by sinking fund installment or otherwise), or ten percent (10%) of the net proceeds of the Series 1992 Bonds, and (ii) as to any Additional Bonds, the lesser of an amount equal to the Maximum Annual Debt Service on the Additional Bonds for any fiscal year (whether at maturity or by sinking fund installment or otherwise), or ten percent (10%) of the net proceeds of the Additional Bonds.The Reserve Requirement may be satisfied by cash, a Qualified Surety Bond, or a combination of these two. "Revenues"means (a) the rental payments due under the City Lease, (b) all other moneys received or to be received by the Corporation or the Trustee in respect of the City Lease, including without limitation, moneys and investments in the Bond Retirement Fund, and (c) all income and profit from the investment of the foregoing moneys. "Secretary"means the Secretary of the Board of Directors of the Corporation. "Series 1992 Bonds"means the $aggregate principal amount of City of Apache Junction Municipal Property Cor- poration Municipal Facilities Revenue Bonds, Series 1992, author- ized to be issued hereunder. "Special Record Date"means, with respect to any Bond, the date established by the Trustee in connection with the payment of overdue interest on that Bond pursuant to Section 3.05 hereof. 13 "State"means the State of Arizona. "Supplemental Indenture"means any indenture supplemental to this Indenture entered into between the Corporation and the Trustee in accordance with Article IX hereof. "Trustee"means [The Valley National Bank of Arizona???], until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean the successor Trustee. "Unassigned Corporation's Rights"means all of the rights of the Corporation to receive additional payments under Section 1.05(ii), (iv) and (v) of the City Lease, to be held harmless and indemnified under Article VIII thereof,to be reimbursed for attorneys' fees and expenses under Sections 8.04 and 8.05 thereof, to receive notice thereunder and to give or withhold consent to amendments, changes, modifications and alterations of the City Lease and its right to enforce such rights. SECTION 1.02.Interpretation. (a)Any reference herein to the Corporation, to the Board of Directors or to any member or officer of either, includes entities or officials succeeding to their respective functions, duties or responsibilities pursuant to or by operation of law or lawfully performing their functions. (b)Any reference to a section or provision of the Constitution of the State or the Act, or to a section, provision or chapter of the Arizona Revised Statutes, or to any statute of the United States of America,includes that section, provision or chapter as amended, modified, revised, supplemented or superseded from time to time; provided,that no amendment, modification, revision, supplement or superseding section, provision or chapter shall be applicable solely by reason of this provision, if it constitutes in any way an impairment of the rights or obligations of the Corporation, the Owners, the Trustee, the Registrar or the Corporation under this Indenture, the Bond Resolution, the Bonds, the Ground Lease, the City Lease or any other instrument or docu- ment entered into in connection with any of the foregoing, includ- ing without limitation, any alteration of the obligation to pay Bond Service Charges in the amount and manner, at the times, and from the sources provided in the Bond Resolution and this Inden- ture, except as permitted herein. (c)Unless the context indicates otherwise, words importing the singular number include the plural number, and vice versa; the terms "hereof," "hereby," "herein," "hereto," "here- under" and similar terms refer to this Indenture; and the term "hereafter" means after, and the term "heretofore" means before, the date of this Indenture.Words of any gender include the 14 correlative words of the other genders, unless the sense indicates otherwise. SECTION 1.03.Captions and Headings.The captions and headings in this Indenture are solely for convenience of reference and in no way define, limit or describe the scope or intent of any Articles,Sections,subsections,paragraphs,subparagraphs or clauses hereof. 15 ARTICLE II AUTHORIZATION AND TERMS OF SERIES 1992 BONDS; ADDITIONAL BONDS SECTION 2.01.Authorized Amount of Series 1992 Bonds. No Bonds may be issued under the provisions of this Indenture except in accordance with this Article.The total authorized principal amount of Series 1992 Bonds which shall be issued under the provisions of this Indenture is $. The Corporation may issue, sell and deliver one or more series of Additional Bonds for the purposes, upon satisfaction of the conditions and in the manner provided herein. SECTION 2.02.Issuance of Series 1992 Bonds. (a)It is determined to be necessary to, and the Corporation shall, issue, sell and deliver $aggregate principal amount of City of Apache Junction Municipal Property Corporation Municipal Facilities Revenue Bonds, Series 1992.The Series 1992 Bonds shall be issuable only in fully registered form, substantially as set forth in Exhibit A, to this Indenture; shall be numbered in such manner as determined by the Trustee in order to distinguish each Series 1992 Bond from any other Bond; shall be in the denominations of $5,000 and any integral multiple thereof; shall be dated as of September 1, 1992; and shall bear interest from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from their date, payable semiannually on January 1 and July 1 of each year, commencing January 1, 1993. (b)The Series 1992 Bonds shall bear interest at the rates and mature in the principal amounts on July 1 of the years as follows: Maturity Date Principal Interest (July 1)Amount Rate t 16 SECTION 2.03.Delivery of Series 1992 Bonds. (a)Upon the execution and delivery of this Inden- ture, and satisfaction of the conditions established by the Corpo- ration for delivery of the Series 1992 Bonds, the Corporation shall execute the Series 1992 Bonds and deliver them to the Trustee. Thereupon, the Trustee shall authenticate the Series 1992 Bonds and deliver them to, or on the order of, the Original Purchaser there- of, as directed by the Corporation in accordance with this Section 2.03. (b)Prior to delivery by the Trustee of any Series 1992 Bonds, there shall have been received by the Trustee a request and authorization to the Trustee on behalf of the Corporation, signed by the President or the Secretary,to authenticate and deliver the Series 1992 Bonds to, or on the order of, the Original Purchaser upon payment to the Trustee of the amounts specified therein (including without limitation, any accrued interest), which amounts shall be deposited as provided in Article V hereof. SECTION 2.04.Issuance and Delivery of Additional Bonds. (a)The Corporation may issue Additional Bonds from time to time for any purpose permitted herein. (b)Additional Bonds shall be on a parity with the Series 1992 Bonds and any Additional Bonds hereafter issued and outstanding as to the assignment to the Trustee of the Corpora- tion's right, title and interest in the City Lease and moneys in the accounts of the funds created hereby; provided, that nothing herein shall prevent payment of Bond Service Charges on any series of Additional Bonds from (i) being otherwise secured and protected from sources or by property or instruments not applicable to the Series 1992 Bonds and any one or more series of Additional Bonds or (ii) not being secured or protected from sources or by property or instruments applicable to the Series 1992 Bonds or one or more series of Additional Bonds. (c)The issuance of such Additional Bonds is sub- ject to the following specific conditions which are hereby made conditions precedent to the issuance of such Additional Bonds: (i)such Additional Bonds shall have been authorized to finance or refinance the cost of acquiring, constructing,reconstructing or improving buildings, equipment and other real and personal properties suitable for use by and for leasing to the City or its agencies or instrumentalities, or for refinancing or advance refund- ing of Bonds and the issuance thereof as shall have been determined and declared by the Corporation, by appropri- ate resolution, to be necessary for that purpose; 17 (ii)the Corporation shall be in compliance with all covenants and undertakings set forth in the City Lease and in this Indenture, as either or both may have been supplemented; (iii)the resolution authorizing issuance of such Additional Bonds shall require that the proceeds of the sale thereof shall be applied solely for one or more of the purposes set forth in clause (i) of subsection (c) and expenses and costs incidental thereto,including costs and expenses incident to the issuance and sale of such Additional Bonds and the costs of any premium relating to insurance on the Additional Bonds or on any debt service reserve fund therefor, and, if desired, a reasonable debt service reserve fund for the protection of the owners of the Additional Bonds and interest on said Additional Bonds during the actual period of any acquisition and construction of such facilities, and for a reasonable period of time thereafter; (iv)the conditions set forth in Sections 3.05 and 7.05 of the City Lease shall then be satisfied; and (v)before the Trustee shall authenticate and deliver any Additional Bonds, the following items shall have been received by the Trustee: 00 Original executed counterparts of any amendments or supplements to the City Lease and the Indenture entered into in connection with the issuance of the Additional Bonds, which are necessary or advisable, in the opinion of nationally recognized bond counsel, to provide that the Additional Bonds will be issued in compliance with the provisions of this Indenture. (B)A copy of the Bond Resolution, certified by the President or the Secretary. (C)A request and authorization to the Trustee on behalf of the Corporation, signed by the President or the Secretary,to authenticate and deliver the Additional Bonds to, or on the order of, the Original Purchaser thereof upon payment to the Trustee of the amount specified therein (including without limitation,any accrued interest and any reserve requirement,which amount shall be deposited as provided in the applicable Bond Resolution or Supplemental Indenture. 18 (D)The written opinion of counsel, who may be counsel for the Corporation, reasonably satisfactory to the Trustee,to the effect that:(1) the documents submitted to the Trustee in connection with the request then being made comply with the requirements of this Indenture;(2) the issuance of the Additional Bonds has been duly authorized; and (3) all conditions precedent to the delivery of the Additional Bonds have been fulfilled. (E)A written opinion of nationally recognized bond counsel (who also may be the counsel to which reference is made in paragraph D above),to the effect that: (1) when executed for and in the name and on behalf of the Corporation and when authenticated and delivered by the Trustee, those Additional Bonds will be valid and legal special obligations of the Corporation in accordance with their terms and will be secured hereunder equally and,except as otherwise provided in this Section and in the Supplemental Indenture authorizing such Addi- tional Bonds, on a parity with all other Bonds of any series at the time outstanding hereunder as to the assignment to the Trustee of the Corporation's right, title and interest in the City Lease and moneys in the accounts of the funds created hereby (except as to any provision made by or pursuant to Sections 4.05, 5.09 or 5.10 hereof) and the moneys and investments therein to provide for payment of Bond Service Charges on the Bonds; and (2) the issuance of the Additional Bonds will not result in the interest on the Bonds outstanding immediately prior to that issuance becoming subject to federal income taxation. (d)When (i) the documents listed above have been received by the Trustee and (ii) the Additional Bonds have been executed and authenticated, the Trustee shall deliver the Addi- tional Bonds to or on the order of the Original Purchaser thereof, but only upon payment to the Trustee of the specified amount (in- cluding without limitation, any accrued interest) set forth in the request and authorization to which reference is made in clause C of subsection (c)(v) above. 19 ARTICLE III TERNS OF BONDS GENERALLY SECTION 3.01.Form of Bonds. (a)The Series 1992 Bonds and any Additional Bonds (including the Forms of Certificate of Authentication,Legal Opinion Certificate and Assignment) shall be substantially in the form set forth in Exhibit A to this Indenture with, in the case of Additional Bonds, any omissions, insertions and variations which may be authorized or permitted by the Bond Resolution authorizing, or the Supplemental Indenture entered into in connection with, those Additional Bonds, all consistent with this Indenture. (b)All Bonds shall be in fully registered form in the denomination of $5,000 or any integral multiple thereof, and, except as provided in Section 3.05 hereof, the Owner of a Bond shall be regarded as the absolute owner thereof for all purposes of this Indenture. (c)The Bonds of one series shall bear any designa- tions which may be necessary or advisable to distinguish them from Bonds of any other series.The Bonds shall be negotiable instru- ments, and shall express the purpose for which they are issued and any other statements or legends which may be required by law. (d)Pending preparation of definitive Bonds, or by agreement with the Original Purchaser of all Bonds of any series, the Corporation may issue and, upon its request, the Trustee shall authenticate, in lieu of definitive Bonds, one or more temporary printed or typewritten Bonds substantially in the form set forth in Exhibit A hereto.Upon request of the Corporation, the Trustee shall authenticate definitive Bonds in exchange for and upon sur- render of an equal principal amount of temporary Bonds.Until so exchanged, temporary Bonds shall have the same rights, remedies and security hereunder as definitive Bonds. SECTION 3.02.Variable Terms.Subject to the provisions of this Indenture, each series of Bonds shall be dated, shall mature in the years and the amounts, shall bear interest at the rate or rates per annum, shall be payable on the dates, shall have the Registrar and Paying Agents, shall be of the denominations, shall be subject to redemption on the terms and conditions and shall have any other terms which are set forth or provided for in this Indenture in the case of the Series 1992 Bonds, and in this Indenture,the applicable Bond Resolution and the Supplemental Indenture in the case of any series of Additional Bonds. SECTION 3.03.Execution and Authentication of Bonds. (a)Unless otherwise provided in the applicable Bond Resolution or Supplemental Indenture,each Bond shall be 20 eigned by the President and the Secretary in their official capaci- ties (provided that any or all of those signatures may be facsimi- les).In case any officer whose signature or a facsimile of whose signature shall appear on any Bond shall cease to be that officer before the issuance of the Bond, his signature or the facsimile thereof nevertheless shall be valid and sufficient for all pur- poses, the same as if he had remained in office until that time. Any Bond may be executed on behalf of the Corporation by an officer who, on the date of execution is the proper officer, although on the date of the Bond that person was not the proper officer. (b)No Bond shall be valid or become obligatory for any purpose or shall be entitled to any security or benefit under this Indenture unless and until a certificate of authentication, substantially in the form set forth in Exhibit A to this Indenture, shall have been signed by the Trustee on behalf of the Trustee. The authentication by the Trustee upon any Bond shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered hereunder and is entitled to the security and benefit of this Indenture.The certificate of the Trustee may be executed by any person authorized by the Trustee, but it shall not be neces- sary that the same authorized person sign the certificates of authentication on all of the Bonds of a series. SECTION 3.04.Source of Payment of Bonds.To the extent provided in and except as otherwise permitted by this Indenture, the Bonds shall be special obligations of the Corporation and the Bond Service Charges thereon shall be payable equally and ratably solely from the Revenues; provided, that payment of Bond Service Charges on any series of Additional Bonds may be otherwise secured and protected from sources or by property or instruments not appli- cable to the Series 1992 Bonds and any one or more series of Addi- tional Bonds, or not secured and protected from sources or by prop- erty or instruments applicable to the Series 1992 Bonds or one or more series of Additional Bonds.Notwithstanding anything to the contrary in the Bond Resolution, the Bonds or this Indenture, the Bonds do not and shall not represent or constitute a debt or pledge of the faith and credit of the Corporation or the taxing power of the City or of the State or of any political subdivision, munici- pality or other local agency thereof. SECTION 3.05.Payment and Ownership of Bonds. (a)Bond Service Charges shall be payable in lawful money of the United States of America without deduction for the services of the Trustee or any Paying Agent.Subject to the provi- sions of Section 3.09 of this Indenture, (i) the principal of and any premium on any Bond shall be payable when due to an Owner upon presentation and surrender of such Bond at the principal corporate trust office of the Trustee or at the office, designated by the Trustee, of any Paying Agent and (ii) interest on any Bond shall be paid on each Interest Payment Date by check which the Trustee shall 21 cause to be sent on that date to the Person in whose name the Bond (or one or more Predecessor Bonds) is registered at the close of business on the Regular Record Date applicable to that Interest Payment Date on the Register at the address appearing therein.If and to the extent, however, that the Corporation shall fail to make payment or provision for payment of interest on any Bond on any Interest Payment Date, that interest shall cease to be payable to the Person who was the Owner of that Bond (or of one or more Predecessor Bonds) as of the applicable Regular Record Date and when moneys become available for payment of that interest, the Trustee shall, pursuant to Section 8.05, establish a Special Record Date for the payment of that interest which shall be not more than fifteen (15) nor fewer than ten (10) days prior to the date of the proposed payment and the Trustee shall cause notice of the proposed payment and of the Special Record Date to be mailed by first class mail, postage prepaid, to each Owner at its address as it appears on the Register not fewer than ten (10) days prior to the Special Record Date and, thereafter, the interest shall be payable to the Persons who are the Owners of the Bonds (or their respective Predecessor Bonds) at the close of business on the Special Record Date. (b)Subject to the foregoing, each Bond delivered under this Indenture upon transfer thereof, or in exchange for or in replacement of any other Bond, shall carry the rights to inter- est accrued and unpaid, and to accrue on that Bond, or which were carried by that Bond. (c)Except as provided in this Section and in Sec- tion 3.07(a) hereof, (i) the Owner of any Bond shall be deemed and regarded as the absolute owner thereof for all purposes of this Indenture,(ii) payment of or on account of the Bond Service Charges on any Bond shall be made only to or upon the order of that Owner or its duly authorized attorney in the manner permitted by this Indenture, and (iii) neither the Corporation, the Trustee, the Registrar nor any Paying Agent shall, to the extent permitted by law, be affected by notice to the contrary.All of those payments shall be valid and effective to satisfy and discharge the liability upon that Bond, including without limitation, the interest thereon, to the extent of the amount or amounts so paid. SECTION 3.06.Transfer and Exchange of Bonds. (a)So long as any of the Bonds remain Outstanding, the Corporation shall cause books for the registration and transfer of Bonds, as provided in this Indenture, to be maintained and kept at the designated office of the Registrar. (b)Any Bond may be transferred on the registration books for the Bonds upon presentation and surrender thereof to the Registrar, together with an assignment duly executed by the Owner or his attorney duly authorized in any form which shall be 22 satisfactory to the Registrar.No transfer of any Bond shall be effective until entered on the registration books for the Bonds. (c)In all cases upon the transfer of a Bond, the Registrar shall enter the transfer of ownership in the registration books and shall authenticate and deliver, in the name of the trans- feree or transferees, a new fully registered Bond or Bonds of the denominations of $5,000 or any whole multiple thereof (except that no Bond shall be issued which relates to more than a single princi- pal maturity) for the aggregate principal amount which the regis- tered owner is entitled to receive, at the earliest practicable time in accordance with the provisions of this Indenture. (d)The Owner of one or more Bonds may, upon re- quest, and upon the surrender to the Registrar of such Bonds, exchange such Bonds for Bonds of other authorized denominations of the same maturity, series, and interest rate together aggregating the same principal amount as the Bonds so surrendered. (e)The Corporation or the Registrar shall charge the Owner of such Bond, for every such transfer or exchange of a Bond, an amount sufficient to reimburse them for any tax, govern- mental fee or other governmental charge required to be paid with respect to such transfer, and may require that such charge be paid before any such new Bond shall be delivered.The Corporation will pay all initial registration fees on the Bonds delivered to them or upon the request of the Original Purchaser.Subsequent Bondowners shall pay all transfer fees, governmental fees, taxes or charges. The Owner of any Bond will be required to pay any expenses incurred in connection with the replacement of a mutilated, lost, stolen or destroyed Bond. (f)All Bonds issued upon any transfer or exchange of Bonds shall be the valid obligations of the Corporation, evi- dencing the same debt, and entitled to the same benefits under this Indenture, as the Bonds surrendered upon transfer or exchange. Neither the Corporation nor the Registrar shall be required to make any exchange or transfer of a Bond during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice of redemption of Bonds and ending at the close of busi- ness on the day of such mailing or to transfer or exchange any Bonds selected for redemption, in whole or in part, within ninety (90) days following such mailing. (g)In case any Bond is redeemed in part only, on or after the redemption date and upon presentation and surrender of the Bond, the Corporation, subject to the provisions of Section 3.09 hereof, shall cause execution of, and the Registrar shall authenticate and deliver, a new Bond or Bonds of the same series in authorized denominations in an aggregate principal amount equal to the unmatured and unredeemed portion of, and bearing interest at 23 purposes Destroyed the same rate and maturing on the same date or dates as, the Bond redeemed in part. (h)The designated office of the Registrar for of this Section shall be established by the Trustee. SECTION 3.07.Mutilated.Lost. Wrongfully Taken or Bonds. (a)If any Bond is mutilated, lost, wrongfully tak- en or destroyed, in the absence of written notice to the Corpora- tion or the Registrar that a lost, wrongfully taken or destroyed Bond has been acquired by a bona fide purchaser, the Corporation shall execute, and the Registrar shall authenticate and deliver, a new Bond of like date, maturity and denomination and of the same series as the Bond mutilated, lost, wrongfully taken or destroyed; provided, that (i) in the case of any mutilated Bond, the mutilated Bond first shall be surrendered to the Registrar, and (ii) in the case of any lost, wrongfully taken or destroyed Bond, there first shall be furnished to the Registrar evidence of the loss, wrongful taking or destruction satisfactory to the Corporation, the Trustee and the Registrar, together with indemnity satisfactory to the Trustee and the Registrar. (b)If any lost, wrongfully taken or destroyed Bond shall have matured, instead of issuing a new Bond, the Corporation may direct the Trustee to pay that Bond without surrender thereof upon the furnishing of satisfactory evidence and indemnity as in the case of issuance of a new Bond.The Corporation, the Registrar and the Trustee may charge the Owner of a mutilated, lost, wrong- fully taken or destroyed Bond their reasonable fees and expenses in connection with their actions pursuant to this Section. (c)Every new Bond issued and authenticated pursu- ant to this Section by reason of any Bond being mutilated, lost, wrongfully taken or destroyed (i) shall constitute, to the extent of the outstanding principal amount of the Bond lost, mutilated, taken or destroyed, an additional contractual obligation of the Corporation, regardless of whether the mutilated, lost, wrongfully taken or destroyed Bond shall be enforceable at any time by anyone, and (ii) shall be entitled to all of the benefits of this Indenture equally and proportionately with any and all other Bonds issued and outstanding hereunder. (d)All Bonds shall be held and owned on the express condition that the foregoing provisions of this Section are exclusive with respect to the replacement or payment of mutilated, lost, wrongfully taken or destroyed Bonds and, to the extent per- mitted by law, shall preclude any and all other rights and remedies with respect to the replacement or payment of negotiable instru- ments or other investment securities without their surrender, not- 24 withstanding any law or statute to the contrary now existing or enacted hereafter. SECTION 3.08.Safekeeping and Cancellation of Bonds. (a)Any Bond surrendered pursuant to this Article for the purpose of payment or retirement, or for exchange, replace- ment or transfer, shall be cancelled upon presentation and sur- render thereof to the Registrar, the Trustee or any Paying Agent. Any Bond cancelled by the Trustee or a Paying Agent shall be transmitted promptly to the Registrar by the Trustee or Paying Agent. (b)The Corporation may deliver at any time to the Registrar for cancellation any Bonds previously authenticated and delivered hereunder, which the Corporation may have acquired in any manner whatsoever.All Bonds so delivered shall be cancelled promptly by the Registrar.Certification of the surrender and cancellation shall be made to the Corporation and the Trustee by the Registrar semiannually during the term hereof, commencing in , 199 _. Unless otherwise directed by the Corporation, Bonds which have been fully paid and cancelled may be destroyed eighteen (18) months after payment and cancellation.Bonds which have been surrendered for the purpose of exchange, transfer or replacement shall be marked "Cancelled" and retained and stored by the Registrar for a period of six (6) years after their cancella- tion and may, thereafter, be returned to the Corporation or de- stroyed.Certificates of any destruction of cancelled bonds (de- scribing the manner thereof) shall be provided by the Registrar to the Corporation and the Trustee at the request of the Corporation. SECTION 3.09.Special Agreement With Owners. (a)Notwithstanding any provision of this Indenture or of any Bond to the contrary, with the approval of the Corpora- tion, the Trustee may enter into an agreement with any Owner pro- viding for making all payments to that Owner of principal of and interest and any premium on that Bond or any part thereof (other than any payment of the entire unpaid principal amount thereof) at a place and in a manner other than as provided in this Indenture and in the Bond, without presentation or surrender of the Bond, upon any conditions which shall be satisfactory to the Trustee and the Corporation; provided, that payment in any event shall be made to the Person in whose name a Bond shall be registered on the Reg- ister, with respect to payment of principal and premium, on the date such principal and premium is due, and, with respect to the payment of interest, as of the applicable Regular Record Date or Special Record Date, as the case may be. (b)The Trustee will furnish a copy of each of those agreements, certified to be correct by an officer of the Trustee, to the Registrar and the Corporation.Any payment of 25 principal, premium or interest pursuant to such an agreement shall constitute payment thereof pursuant to, and for all purposes of, this Indenture. *** 26 ARTICLE IV REDEMPTION OR PURCHASE OF BONDS SECTION 4.01.Redemption of Bonds.Under the terms of the City Lease money may be paid or credited for the purpose of redeeming Bonds when redeemable or purchasing Bonds when permitted hereunder.The Corporation covenants that any and all money received by the Corporation which, pursuant to the City Lease, is to be used to redeem or purchase a series of Bonds shall be paid to the Trustee under this Indenture, and in such event, the Trustee shall deposit the same in the Bond Retirement Fund and shall use any and all such money to prepay and redeem or purchase Bonds of the series in accordance with their terms and the provisions of this Article. SECTION 4.02.Terms of Redemption of Series 1992 Bonds. (a)Optional Redemption.The Series 1992 Bonds maturing July 1,through July 1,are not subject to redemption prior to maturity.The Series 1992 Bonds maturing on or after July 1,are subject to redemption, at the option of the Corporation, acting at the request of the City, in whole at any time, or in part on any interest payment date, in inverse order of maturity and by lot within a maturity, on or after July 1„ at the redemption prices set forth below (expressed as percentages of principal amount to be redeemed), plus accrued interest to the date fixed for redemption: Period During Which Redeemed (Both Dates Inclusive)Redemption Price July 1,through June 30,101 July 1,through June 30,1003 July 1,and thereafter 100 (b)Mandatory Redemption. (i)The Series 1992 Bonds maturing on July 1, , are subject to mandatory redemption on July 1, in the years and amounts set forth below, at a redemption price equal to the principal amount thereof plus interest accrued to the date of redemption, as follows: Year (Maturity) 27 Principal Amount (ii)Not more than forty-five (45) days nor less than thirty (30)days prior to the mandatory redemption payment date for the Series 1992 Bonds maturing on July 1„ the Trustee shall proceed to select for redemption (by lot in such manner as the Trustee may determine) from all the Series 1992 Bonds maturing on July 1,Outstanding a principal amount of the Series 1992 Bonds maturing on July 1,equal to the aggregate principal amount of the Series 1992 Bonds maturing on July 1,redeemable with the required mandatory redemption payment, and shall call such Series 1992 Bonds maturing on July 1,for redemption on the next July 1 and give notice of such call. SECTION 4.03.Partial Redemption.If fewer than all of the outstanding Bonds of a series that are stated to mature on different dates are to be redeemed at one time, those Bonds which are called shall be called in inverse order of the maturities of the Bonds of that series to be redeemed.If fewer than all of the Bonds of a single maturity of a series are to be redeemed, the selection of Bonds to be redeemed, or portions thereof in amounts of $5,000 or any integral multiple thereof, shall be made by lot by the Trustee in any manner which the Trustee may determine.In the case of a partial redemption of Bonds by lot when Bonds of denomin- ations greater than $5,000 are then outstanding, each $5,000 unit of face value of principal thereof shall be treated as though it were a separate Bond of the denomination of $5,000.If it is determined that one or more, but not all of the $5,000 units of face value represented by a Bond are to be called for redemption, then upon notice of redemption of a $5,000 unit or units, the Owner of that Bond shall surrender the Bond to the Trustee (i) for pay- ment of the redemption price of the $5,000 unit or units of face value called for redemption (including without limitation, the interest accrued to the date fixed for redemption and any premium), and (ii) for issuance, without charge to the Owner thereof, of a new Bond or Bonds of the same series, of any authorized denomina- tion or denominations in an aggregate principal amount equal to the unmatured and unredeemed portion of, and bearing interest at the same rate and maturing on the same date as, the Bond surrendered. SECTION 4.04.Corporation's Election to Redeem.Should the Corporation, at the request of the City, elect to redeem any Bonds, its Board of Directors shall adopt a resolution to redeem such Bonds and shall thereupon give written notice to the Trustee. That notice shall specify the redemption date and the series and principal amount of each maturity of Bonds to be redeemed, and shall be given at least fifty (50) days prior to the redemption date or such shorter period as shall be acceptable to the Trustee. In the event that notice of redemption shall have been given by the Trustee to the Owners as provided in Section 4.05 hereof, there shall be deposited with the Trustee prior to the redemption date, funds which, in addition to any other moneys available therefor and 28 held by the Trustee, will be sufficient to redeem at the redemption price thereof, plus interest accrued to the redemption date, all of the redeemable Bonds for which notice of redemption has been given. SECTION 4.05.Notice of Redemption.The notice of the call for redemption of Bonds shall identify (i) by designation, letters, numbers or other distinguishing marks, the Bonds or por- tions thereof to be redeemed, (ii) the redemption price to be paid, (iii) the date fixed for redemption, and (iv) the place or places where the amounts due upon redemption are payable.The notice shall be given by the Trustee on behalf of the Corporation by mail- ing a copy of the redemption notice by first class mail, postage prepaid, not more than forty-five (45) nor less than thirty (30) days prior to the date fixed for redemption, to the Owner of each Bond subject to redemption in whole or in part at the Owner's ad- dress shown on the Register on the fifteenth (15th) day preceding that mailing; provided, that failure to receive notice by mailing, or any defect in that notice, as to any Bond shall not affect the validity of the proceedings for the redemption of any Bond. SECTION 4.06.Payment of Redeemed Bonds. (a)Notice having been mailed in the manner pro- vided in Section 4.05 hereof, the Bonds and portions thereof called for redemption shall become due and payable on the redemption date, and upon presentation and surrender thereof at the place or places specified in that notice, shall be paid at the redemption price, plus interest accrued to the redemption date. (b)If moneys for the redemption of all of the Bonds and portions thereof to be redeemed, together with interest accrued thereon to the redemption date, are held by the Trustee or any Paying Agent on the redemption date, so as to be available therefor on that date and, if notice of redemption shall have been deposited in the mail as aforesaid, then from and after the redemp- tion date those Bonds and portions thereof called for redemption shall cease to bear interest and no longer shall be considered to be outstanding hereunder.If those moneys shall not be so availa- ble on the redemption date, or that notice shall not have been de- posited in the mail as aforesaid, those Bonds and portions thereof shall continue to bear interest, until they are paid, at the same rate as they would have borne had they not been called for redemp- tion. (c)All moneys deposited in the Bond Retirement Fund and held by the Trustee or a Paying Agent for the redemption of particular Bonds shall be held in trust for the account of the Owners thereof and shall be paid to them,respectively, upon presentation and surrender of those Bonds. SECTION 4.07.Variation of Redemption Provisions.The provisions of this Article IV, insofar as they apply to issuance of 29 zlny series of Additional Bonds, may be varied by the Supplemental Indenture providing for that series. SECTION 4.08.Purchase of Bonds.Notwithstanding the foregoing, if at any time there is money in the Bond Retirement Fund and any of the outstanding Bonds payable from such Fund may be purchased in the open market at a net cost to the Corporation which would be less than the cost of redeeming such Bonds under the pro- visions of this Article (or, prior to the time such Bonds may be redeemed, at a price equal to or below par), the Corporation, from time to time, at the request of the City, may cause the Trustee to purchase so many of such Bonds as the Corporation shall designate and to pay therefor from the Bond Retirement Fund, to the extent of the funds in such Fund.The Bonds so purchased shall be cancelled by the Trustee in accordance with the provisions of Section 3.08 hereof. 30 ARTICLE V PROVISIONS AS TO FUNDS AND PAYMENTS SECTION 5.01.Establishment of Funds.There are hereby ordered established by the Corporation and maintained as separate deposit accounts (except when invested as hereinafter set forth) in the custody of the Trustee, the following trust funds:(i) Revenue Fund; (ii) Interest Fund; (iii) Bond Retirement Fund; (iv) Reserve Fund; (v) Acquisition and Construction Fund; and (vi) for the bene- fit of the lessor under the Prior Lease and its assignees only, Escrow Fund. SECTION 5.02.Application of Series 1992 Bond Proceeds. The Corporation shall deposit with the Trustee all of the proceeds of the Series 1992 Bonds and upon receipt of such proceeds the Trustee shall: (i)deposit to the credit of the Interest Fund, the accrued interest on the Series 1992 Bonds from their date to the date of their delivery to the Original Purchaser, together with the amount of $ (ii)deposit to the credit of the Reserve Fund an amount equal to the Reserve Requirement; (iii)deposit to the credit of the Escrow Fund an amount equal to $; and (iv)deposit to the Credit of the Acquisition and Construction Fund, the balance of the proceeds of the Series 1992 Bonds. SECTION 5.03.Disbursements From Acquisition and Con- struction Fund and Escrow Fund. (a)(i)The Trustee shall hold the moneys in the Acquisition and Construction Fund for the benefit of the Corporation to be used to pay the Delivery Costs and to pay the Costs of Acquisition and Construction, upon writ- ten order executed and delivered to the Trustee directing such disbursements as follows: (A)In the case of payment of Delivery Costs, the Trustee shall disburse moneys in the Acqui- sition and Construction Fund only upon a requisition signed by a City Representative setting forth the amounts to be disbursed for payment or reimbursement of Delivery Costs and the person or persons to whom said amounts are to be disbursed, stating that the amounts to be disbursed 31 are for Delivery Costs properly chargeable to the Acqui- sition and Construction Fund. (B)In the case of payment of the Costs of Acquisition and Construction, the Trustee shall dis- burse moneys in the Acquisition and Construction Fund only upon a requisition signed by a City Representative for each requested disbursement stating that (1) not more than five percent (5%) of the amount of the requested disbursement is or was used for any private business use within the meaning of Section 141(b)(2) of the 1986 Code, and (2) the amounts to be disbursed are Costs of Acquisi- tion and Construction properly chargeable to the Acquisi- tion and Construction Fund. (ii)The Trustee shall be responsible for the safekeeping of the moneys held in the Acquisition and Construction Fund and the payment thereof in accordance with this Section.Upon the filing with the Trustee of a certificate of a City Representative stating that all of the Delivery Costs and Costs of Acquisition and Con- struction have been paid, the Trustee shall transfer to the Bond Retirement Fund the balance of moneys remaining in the Acquisition and Construction Fund. (b)The Trustee shall hold the moneys in the Escrow Fund which shall be an irrevocable trust fund for the benefit of the lessor under the Prior Agreement and its assignees to the used to pay on , 199_, the amounts remaining due from the City to the lessor (or its assignees) under the Prior Lease and shall cause any amounts remaining therein or from the Prior Agreement (which the City shall pay or cause to be paid to the Trustee) to be deposited in the Revenue Fund.The Trustee shall give notice to the lessor and the assignees of the Prior Agreement (who shall be provided to the Trustee by the Town) of the exercise by the City of the option granted to the City pursuant to Article VIII of the Prior Agreement in the form attached hereto as Exhibit B as soon as possible after , 1992. SECTION 5.04.Receipt of Revenues.The monthly install- ments of rental payments to be paid by the City pursuant to the terms of the City Lease have been assigned by the Corporation to the Trustee so that such moneys shall be paid by the City directly to the Trustee, and the Trustee shall credit such moneys to the Revenue Fund.If at any time the money in the Revenue Fund ex- ceeds,in the sole opinion of the Trustee, the amount necessary for the current debt service on all Bonds then outstanding, including administration costs and expenses, and the City is not then in default under the City Lease, such excess shall constitute a credit to the City on the next succeeding installments of rent due or to become due under the City Lease; provided, however, that the City may exercise its rights under Section 7.03 of the City Lease, in which event such excess funds shall be transferred to and paid over into the Bond Retirement Fund.The aforesaid credit or transfer shall be made by the Trustee no less frequently than annually. 32 SECTION 5.05.Flow of Funds.The Trustee shall transfer from the Revenue Fund the following amounts at the time and in the manner hereinafter provided for, applying money in the Revenue Fund, to the extent available, in the following order of priority, to -wit: (i)Interest Fund:One (1) business day prior to each Interest Payment Date, the Trustee shall deposit in the Interest Fund an amount equal to the amount of the interest becoming due and payable on the outstanding Bonds on the next Interest Payment Date, and each such deposit shall be made so that adequate moneys for the payment of interest will be available in such fund on each date that interest payments are to be made here- under.Money in the Interest Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it shall become due and payable. (ii)Bond Retirement Fund:One (1) business day prior to each Principal Payment Date, the Trustee shall deposit in the Bond Retirement Fund solely for the purpose of paying the principal of the Bonds as each amount shall become due and payable, on or before the following dates, the amounts specified opposite each such date: Maturity Date (July 1)Amount (iii)Reserve Fund: (A)Monthly, commencing on the twentieth (20th) day of the month following a payment made from the 33 Reserve Fund with respect to the Bonds, the Trustee shall, to the extent of legally available funds therefor, deposit into the Reserve Fund an amount equal to the amount required to restore the Reserve Fund to an amount equal to the Reserve Requirement for the Bonds.No deposit need be made into the Reserve Fund if the amount of money contained therein is at least equal to an amount equal to the Reserve Requirement for the Bonds. (B)If on July 15 of any year the amount in the Reserve Fund exceeds an amount equal to the Reserve Requirement for the Bonds and if the Corporation is not then in default under the Indenture, the Trustee shall withdraw the amount of any such excess from such fund and shall deposit such amount in the Revenue Fund. Except for such withdrawals, all money in the Reserve Fund shall be used and withdrawn solely for the purpose of paying the interest on or principal of the Bonds in the event that no other money of the Corporation is available therefor, or for the retirement of all the Bonds then outstanding. SECTION 5.06.Investment of Funds.Substantially all money in any of the funds to be established by the Trustee pursuant to this Article V of this Indenture shall, at the direction of the City, so long as the City is not in default under the City Lease, be invested and reinvested by the Trustee in Eligible Investments, or if the City fails to so direct or instruct the Trustee, the Trustee may invest and reinvest such moneys in Eligible Invest- ments.Such investments of moneys shall mature or be redeemable at the option of the Trustee at the times and in the amounts necessary to provide moneys to pay Bond Service Charges as they become due at stated maturity, by redemption or pursuant to any mandatory sinking fund requirements.Except as otherwise provided in this Article V, any interest, profit or loss on investments made pursuant to this Section 5.06 shall be credited or charged to the Fund to which such interest, profit or loss relates.It is understood, pursuant to Sections 1.05(iii) of the City Lease, that any losses on such investments are to be made up by the City to the extent necessary to meet the Bond Service Charges, and to pay the Trustee's, the Registrar's and Paying Agents' fees and expenses under this Inden- ture, and any money paid to the Trustee by the City for such pur- pose shall be deposited in the Fund or funds with respect to which, and to the extent that, such losses were incurred.At any time that the City is in default under the City Lease, substantially all money in any of the funds to be established by the Trustee pursuant to Article V of this Indenture shall be invested and reinvested by the Trustee at the direction of the Corporation in Eligible Invest- ments. SECTION 5.07.Limitation of Investment Yield.In the event the City (while it is directing investments), the Corporation 34 (while it is directing investments) or Bond Counsel is of the opinion that it is necessary to restrict or limit the yield on the investment of any money paid to or held by the Trustee hereunder in order to avoid the Bonds, or any of them, being considered "arbi- trage bonds" within the meaning of Section 148 of the Code, the City, the Corporation or Bond Counsel, as the case may be, may issue to the Trustee a written certificate or other instrument to such effect (along with appropriate instructions), in which event the Trustee will take such action as is necessary so to restrict or limit the yield on such investment in accordance with the specific instructions contained in such certificate or other instrument, irrespective of whether the Trustee shares such opinion. SECTION 5.08.Moneys to Be Held in Trust.Except where moneys have been deposited with or paid to the Trustee pursuant to an instrument restricting their application to particular Bonds, all moneys required or permitted to be deposited with or paid to the Trustee or any Paying Agent under any provision of this Inden- ture, the City Lease and any investments thereof, shall be held by the Trustee or that Paying Agent in trust.Except for (i) moneys deposited with or paid to the Trustee or any Paying Agent for the redemption of Bonds, notice of the redemption of which shall have been duly given, and (ii) moneys held by the Trustee pursuant to Section 5.09 hereof, all moneys described in the preceding sentence held by the Trustee or any Paying Agent shall be subject to the lien hereof while so held. SECTION 5.09.Nonpresentment of Bonds. (a)In the event that any Bond shall not be pre- sented for payment when the principal thereof becomes due in whole or in part, either at stated maturity, by redemption or pursuant to any mandatory sinking fund requirements, or a check or draft for interest is uncashed, if moneys sufficient to pay the principal then due of that Bond or of such check or draft shall have been made available to the Trustee for the benefit of its Owner, all liability of the Corporation to that Owner for such payment of the principal then due of the Bond or of such check or draft thereupon shall cease and be discharged completely.Thereupon, it shall be the duty of the Trustee to hold those moneys, without liability for interest thereon, in a separate account in the Bond Retirement Fund for the exclusive benefit of the Owner, who shall be restricted thereafter exclusively to those moneys for any claim of whatever nature on its part under this Indenture or on, or with respect to, the principal then due of that Bond or of such check or draft. (b)Any of those moneys which shall be so held by the Trustee, and which remain unclaimed by the Owner of a Bond not presented for payment or check or draft not cashed for a period of four (4) years after the due date thereof, shall be paid to the Corporation free of any trust or lien, upon a request in writing by the Corporation.Thereafter, the Owner of that Bond shall look 35 only to the Corporation for payment and then only to the amounts so received by the Corporation without any interest thereon, and the Trustee shall not have any responsibility with respect to those moneys. *** 36 ARTICLE VI ENFORCEMENT OF REVENUE PLEDGE; EXCLUSIVE PLEDGE SECTION 6.01.Enforcement of Revenue Pledge.As pro- vided in Section 3.06 of the City Lease, the Trustee shall have the right of specific performance of the covenants of the City as to Revenues contained in Section 3.06 of the City Lease, by appropri- ate court action,in the name of the Trustee on behalf of the Owners of the Bonds,in the name of the Corporation, or in the names of both.Nothing contained in this Section 6.01 or in Section 3.06 of the City Lease shall be deemed to create a lien of any kind upon the Real Property or the Improvements or upon any other assets or facilities of the City. SECTION 6.02.Exclusive Pledge.As further provided in Section 3.05 of the City Lease, the pledges of Revenues referred to in this Article shall be for the benefit of the Owners of the Series 1992 Bonds and the Owners of any other Additional Bonds issued by the Corporation and no other creditor of the Corporation shall have any claim thereto. 37 ARTICLE VII THE TRUSTEE, REGISTRAR AND PAYING AGENTS SECTION 7.01.Trustee's Acceptance and Responsibilities. (a)The Trustee accepts the trusts imposed upon it by this Indenture, and shall observe and perform those trusts, but only upon and subject to the terms and conditions set forth in this Article, to all of which the parties hereto and the Owners agree. (b)Prior to the occurrence of a default or an "Event of Default" (as defined in Section 8.01 hereof) of which the Trustee has been notified, as provided in paragraph (f) of Section 7.02 hereof, or of which by that paragraph the Trustee is deemed to have notice, and after the cure or waiver of all defaults or Events of Default which may have occurred, (i)the Trustee undertakes to perform only those duties and obligations which are set forth specif- ically in this Indenture, and no duties or obligations shall be implied to the Trustee; (ii)in the absence of bad faith on its part, the Trustee may rely conclusively, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Inden- ture; but in the case of any such certificates or opin- ions which by any provision hereof are required specific- ally to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (c)In case a default or an Event of Default has occurred and is continuing hereunder (of which the Trustee has been notified, or is deemed to have notice), the Trustee shall exercise those rights and powers vested in it by this Indenture and shall use the same degree of care and skill in their exercise as a prudent corporate trustee would exercise or use under the cir- cumstances in the conduct of their trust business. (d)No provision of this Indenture shall be con- strued to relieve the Trustee from liability for its own gross negligent action, its own gross negligent failure to act, or its own willful misconduct, except that, (i)this Subsection shall not be construed to affect the limitation of the Trustee's duties and obliga- tions provided in subparagraph (b)(i) of this Section or the Trustee's right to rely on the truth of statements 38 and the correctness of opinions as provided in subpara- graph (b)(ii) of this Section; (ii)the Trustee shall not be liable for any error of judgment made in good faith by any one of its officers, unless it shall be established that the Trustee was negligent in ascertaining the pertinent facts; (iii)the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in principal amount of a series of the Bonds then outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and (iv)no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability (including, without limitation, any and all environmental liability) in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (e)Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 7.02.Certain Rights and Obligations of the Trustee.Except as otherwise provided in Section 7.01 hereof: (a)The Trustee (i) may execute any of the trusts or powers hereof and perform any of its duties by or through attor- neys,agents, receivers or employees (but shall be answerable therefor only in accordance with the standard specified above), (ii) shall be entitled to the advice of counsel concerning all matters of trusts hereof and duties hereunder, and (iii) may pay reasonable compensation in all cases to all of those attorneys, agents,receivers and employees reasonably employed by it in connection with the trusts hereof.The Trustee may act upon the opinion or advice of an attorney (who may be the attorney or attorneys for the Corporation or the City) approved by the Trustee in the exercise of reasonable care.The Trustee shall not be responsible for any loss or damage resulting from any action taken or omitted to be taken in good faith in reliance upon that opinion or advice. 39 (b)Except for its certificate of authentication on the Bonds, the Trustee shall not be responsible for: (i)any recital in this Indenture, the Ground Lease, the City Lease or in the Bonds, (ii)the validity, priority, recording, re- recording, filing or ref fling of this Indenture or any Supplemental Indenture, the Ground Lease or the City Lease, (iii)any instrument or document of further assurance or collateral assignment, (iv)any financing statements,amendments thereto or continuation statements, (v)insurance of the property subject to the Ground Lease or the City Lease or collection of insurance moneys, (vi)the validity of the execution by the Corporation of this Indenture, any Supplemental Indenture or instruments or documents of further assurance, (vii)the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby, (viii)the value of or title to the interest in the Ground Lease or the City Lease, or (ix)the maintenance of the security hereof, except that, in the event that the Trustee enters into possession of a part or all of the property subject to the Ground Lease or the City Lease (pursuant to any provision of the Ground Lease or the City Lease or any other instrument or document collateral thereto), the Trustee shall use due diligence in preserving that property. The Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, agreements or obliga- tions on the part of the Corporation under the Ground Lease or the City Lease except as set forth hereinafter; but the Trustee may require of the Corporation full information and advice as to the observance or performance of those covenants, agreements and obli- gations.Except as otherwise provided in Section 8.04 hereof, the Trustee shall have no obligation to observe or perform any of the duties of the Corporation under the Ground Lease or the City Lease. (c)The Trustee shall not be accountable for the application by the Corporation or any other Person of the proceeds of any Bonds authenticated or delivered hereunder. 40 •(d)The Trustee shall be protected, in the absence of bad faith on its part, in acting upon any notice, request, con- sent, certificate, order, affidavit, letter, telegram or other paper or document reasonably believed by it to be genuine and cor- rect and to have been signed or sent by the proper Person or Per- sons.Any action taken by the Trustee pursuant to this Indenture upon the request or authority or consent of any Person who is the Owner of any Bonds at the time of making the request or giving the authority or consent, shall be conclusive and binding upon all future Owners of the same Bond and of Bonds issued in exchange therefor or in place thereof. (e)As to the existence or nonexistence of any fact for which the Corporation may be responsible or as to the suffici- ency or validity of any instrument, document, report, paper or proceeding, the Trustee, in the absence of bad faith on its part, shall be entitled to rely upon a certificate signed on behalf of the Corporation by the President or the Secretary as sufficient evidence of the facts recited therein.Prior to the occurrence of a default or Event of Default hereunder of which the Trustee has been notified, as provided in paragraph (f) of this Section, or of which by that paragraph the Trustee is deemed to have notice, the Trustee may accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedi- ent; provided, that the Trustee in its discretion may require and obtain any further evidence which it deems to be necessary or advisable; and, provided further, that the Trustee shall not be bound to secure any further evidence.The Trustee may accept a certificate of the officer, or an assistant thereto, having charge of the appropriate records, to the effect that legislation has been enacted by the Corporation in the form recited in that certificate, as conclusive evidence that the legislation has been duly adopted and is in full force and effect. (f)The Trustee shall not be required to take notice, and shall not be deemed to have notice, of any default or Event of Default hereunder, except Events of Default described in paragraphs (a) and (b) of Section 8.01 hereof, unless the Trustee shall be notified specifically of the default or Event of Default in a written instrument or document delivered to it by the Corpora- tion or by the Owners of at least ten percent (10%) of the aggre- gate principal amount of Bonds then outstanding.In the absence of delivery of a notice satisfying those requirements, the Trustee may assume conclusively that there is no default or Event of Default, except as noted above. (g)At any reasonable time, the Trustee and its duly authorized agents, attorneys, experts, engineers, accountants and representatives (i) may inspect and copy fully all books, papers and records of the Corporation pertaining to the property subject to the Ground Lease or the City Lease and the Bonds, and 41 (ii) may make any memoranda from and in regard thereto as the Trustee may desire. (h)The Trustee shall not be required to give any bond or surety with respect to the execution of these trusts and powers or otherwise in respect of the premises. (i)Notwithstanding anything contained elsewhere in this Indenture, the Trustee may demand any showings, certificates, reports, opinions, appraisals and other information, and any corpo- rate action and evidence thereof, in addition to that required by the terms hereof, as a condition to the authentication of any Bonds or the taking of any action whatsoever within the purview of this Indenture, if the Trustee deems it to be desirable for the purpose of establishing the right of the Corporation to the authentication of any Bonds or the right of any Person to the taking of any other action by the Trustee; provided, that the Trustee shall not be required to make that demand. (j)Before taking action hereunder pursuant to Sec- tion 7.04 or Article VIII hereof, the Trustee may require that a satisfactory indemnity bond or other assurances be furnished to it for the reimbursement of all expenses which it may incur and to protect it against all liability (including, without limitation, any and all environmental liability) by reason of any action so taken, except liability which is adjudicated to have resulted from its gross negligence or wilful misconduct.Without limiting the foregoing, such other assurances may include, but shall not be limited to, environmental audits or other evidence satisfactory to the Trustee that it will not incur liability by reason of any action taken pursuant to Section 7.04 or Article VIII hereof.The Trustee may, and at the request of MBIA shall, take action without an indemnity bond, but with assurances satisfactory to the Trustee to protect the Trustee against all environmental liability, and in that case, the Corporation shall reimburse the Trustee for all of the Trustee's expenses pursuant to Section 7.03 hereof. (k)Unless otherwise provided herein, all moneys received by the Trustee under this Indenture shall be held in trust for the purposes for which those moneys were received, until those moneys are used, applied or invested as provided herein; provided, that those moneys need not be segregated from other moneys, except to the extent required by this Indenture or by law.The Trustee shall not have any liability for interest on any moneys received hereunder, except to the extent expressly provided herein. (1)Any legislation by the Corporation, and any opinions, certificates and other instruments and documents for which provision is made in this Indenture, may be accepted by the Trustee, in the absence of bad faith on its part, as conclusive evidence of the facts and conclusions stated therein and shall be 42 full warrant, protection and authority to the Trustee for its actions taken hereunder. SECTION 7.03.Fees. Charges and Expoenses of Trustee. Registrar and Paying Agents. (a)The Trustee,the Registrar and any Paying Agents shall be entitled to payment or reimbursement by the Corpo- ration, for reasonable fees for its Ordinary Services rendered hereunder and for all advances, counsel fees and other Ordinary Expenses reasonably and necessarily paid or incurred by them in connection with the provision of Ordinary Services.For purposes hereof, fees for Ordinary Services provided for by their respective standard fee schedule shall be considered reasonable.In the event that it should become necessary for any of them to perform Extraor- dinary Services, they shall be entitled to reasonable extra compen- sation therefor and to reimbursement for reasonable and necessary Extraordinary Expenses incurred in connection therewith. (b)Without creating a default or an Event of Default hereunder, however, the Corporation may contest in good faith the necessity for any Extraordinary Service and Extraordinary Expense and the reasonableness of any fee, charge or expense. (c)The Trustee,the Registrar and any Paying Agents shall not be entitled to compensation or reimbursement for Extraordinary Services or Extraordinary Expenses occasioned by their gross negligence or willful misconduct.The reasonable fees for their respective Ordinary Services and charges of the foregoing shall be entitled to payment and reimbursement only from (i) the Revenue Fund or (ii) from other moneys available therefor. Any amounts payable to the Trustee, the Registrar or any Paying Agent pursuant to this Section 7.03 shall be payable upon demand and shall bear interest from the date of demand therefor at a rate not to exceed twelve percent (12%) per annum.The fees of the Trustee and the fees, charges and expenses of the Trustee, the Registrar or any Paying Agents to which reference is made above, may be paid by the Trustee from the Revenue Fund as and when those fees, charges and expenses become due. SECTION 7.04.Intervention by Trustee.The Trustee may intervene on behalf of the Owners, and shall intervene if requested to do so in writing by [MBIA or ???] the Owners of at least twenty- five percent (25%) of the aggregate principal amount of a series of Bonds then outstanding, in any judicial proceeding to which the Corporation or the City is a party and which in the opinion of the Trustee and its counsel has a substantial bearing on the interests of Owners of the Bonds.The rights and obligations of the Trustee under this Section are subject to the approval of that intervention by a court of competent jurisdiction.The Trustee may require that a satisfactory indemnity bond be provided to it in accordance with Sections 7.01 and 7.02 hereof before it takes action hereunder. 43 SECTION 7.05.Successor Trustee. (a)Anything herein to the contrary notwithstand- ing, (i) any corporation or association (A) into which the Trustee may be converted or merged, (B) with which the Trustee or any suc- cessor to it may be consolidated, or (C) to which it may sell or transfer its assets and trust business as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, merger, consolidation, sale or transfer,ipso facto,shall be and become successor Trustee hereunder and shall be vested with all of the title to the whole property or trust estate hereunder;(ii) that corporation or association shall be vested further, as was its predecessor, with each and every trust, prop- erty, remedy, power, right, duty, obligation, discretion, privi- lege, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by, vested in or conveyed to the Trustee, without the execution or filing of any instrument or document or any further act on the part of any of the parties hereto. (b)Any successor Trustee, however, (i) shall be a trust company or a bank having the powers of a trust company, (ii) shall be in good standing within the State,(iii) shall be duly authorized to exercise trust powers within the State, (iv) shall have a reported capital and surplus of not less than $50,000,000 [and (v)shall be acceptable to MBIA. ???] SECTION 7.06.Appointment of Co -Trustee. (a)It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including without limitation, the laws of the State) denying or restricting the right of banks or trust companies to transact business as trus- tees in that jurisdiction.It is recognized that, (i) if there is litigation under this Indenture or other instruments or documents relating to the Bonds and the property subject to the City Lease, and in particular, in case of the enforcement hereof or thereof upon a default or an Event of Default, or (ii) if the Trustee should deem that, by reason of any present or future law of any jurisdiction, it may not (A) exercise any of the powers, rights or remedies granted herein to the Trustee, (B) hold title to the prop- erties, in trust, as granted herein, or (C) take any action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an individual or additional institution as a co -Trustee.The following provisions of this Section are adapted to these ends. (b)In the event that the Trustee appoints an indi- vidual or additional institution as a co -Trustee, each and every trust, property, remedy, power, right, duty, obligation,discre- tion, privilege, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to 44 be exercised by, vested in or conveyed to the Trustee shall be exercisable by, vest in and be conveyed to that co -Trustee, but only to the extent necessary for it to be so vested and conveyed and to enable that co -Trustee to exercise it.Every covenant, agreement and obligation necessary to the exercise thereof by that co -Trustee shall run to and be enforceable by it. (c)Should any instrument or document in writing from the Corporation reasonably be required by the co -Trustee so appointed by the Trustee for vesting and conveying more fully and certainly in and to that co -Trustee those trusts, properties, reme- dies, powers, rights, duties, obligations, discretions, privileges, claims, demands, causes of action, immunities, estates, titles, interests and liens, that instrument or document shall be executed, acknowledged and delivered, but not prepared, by the Corporation. In case any co -Trustee or a successor to it shall die, become incapable of acting, resign or be removed, all of the trusts, prop- erties, remedies, powers, rights, duties, obligations, discretions, privileges, claims, demands, causes of action, immunities, estates, titles, interests and liens of the co -Trustee shall be exercised by, vest in and be conveyed to the Trustee, to the extent permitted by law, until the appointment of a successor to the co -Trustee. SECTION 7.07.Resignation by the Trustee.The Trustee may resign at any time from the trusts created hereby by giving written notice of the resignation to the Corporation, the City, the Registrar, any Paying Agents, [MBIA ???] and the Original Purchaser of each series of Bonds then outstanding, by mailing written notice of the resignation to such parties and to the Owners as their names and addresses appear on the Register at the close of business fifteen (15) days prior to the mailing.The resignation shall take effect upon the appointment of a successor Trustee. SECTION 7.08.Removal of the Trustee. (a)The Trustee may be removed at any time by an instrument or document or concurrent instruments or documents in writing delivered to the Trustee, with copies thereof mailed to the Corporation, the Registrar, any Paying Agents and MBIA, and signed by or on behalf of the Owners of not less than a majority in aggre- gate principal amount of the Bonds then outstanding. (b)The Trustee also may be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provision of this Indenture with respect to the duties and obligations of the Trustee by a court of competent jurisdiction upon the application of the Corporation,[MBIA ???] or the Owners of not less than twenty percent (20%) in aggregate principal amount of the Bonds then outstanding under this Indenture. 45 SECTION 7.09.Appointment of Successor Trustee. (a)If (i) the Trustee shall resign,shall be removed, shall be dissolved, or shall become otherwise incapable of acting hereunder, (ii) the Trustee shall be taken under control of any public officer or officers, or (iii) a receiver shall be ap- pointed for the Trustee by a court, then a successor Trustee shall be appointed by the Corporation; provided, that if a successor Trustee is not so appointed within ten (10) days after (A) a notice of resignation or an instrument or document of removal is received by the Corporation, as provided in Sections 7.07 and 7.08 hereof, respectively, or (B) the Trustee is dissolved, taken under control, becomes otherwise incapable of acting or a receiver is appointed, in each case, as provided above, then, so long as the Corporation shall not have appointed a successor Trustee, the Owners of a majo- rity in aggregate principal amount of each series of Bonds then outstanding may designate a successor Trustee by an instrument or document or concurrent instruments or documents in writing signed by or on behalf of those Owners.If no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section, the Owner of any Bond outstanding hereunder or any retir- ing Trustee may apply to any court of competent jurisdiction to appoint a successor Trustee.Such court may thereupon, after such notice,if any,as such court may deem proper and prescribe, appoint a successor Trustee. (b)Every successor Trustee appointed pursuant to this Section (i) shall be a trust company or a bank having the powers of a trust company, (ii) shall be in good standing within the State, (iii) shall be duly authorized to exercise trust powers within the State, (iv) shall have a reported capital and surplus of not less than $50,000,000, (v) shall be willing to accept the trus- teeship under the terms and conditions of this Indenture,[and (vi) shall be acceptable to MBIA. ???] (c)Every successor Trustee appointed hereunder shall execute and acknowledge, and shall deliver to its predecessor and the Corporation, an instrument in writing accepting the appoint- ment.Thereupon, without any further act, the successor shall become vested with all of the trusts, properties, remedies, powers, rights,duties,obligations,discretions,privileges,claims, demands, causes of action, immunities, estates, titles, interests and liens of its predecessor.Upon the written request of its successor or the Corporation, the predecessor Trustee (i) shall execute and deliver an instrument or document transferring to its successor all of the trusts, properties, remedies, powers, rights, duties,obligations,discretions,privileges,claims,demands, cause of action, immunities, estates, titles, interests and liens of the predecessor Trustee hereunder, and (ii) shall take any other action necessary to duly assign, transfer and deliver to its suc- cessor all property (including without limitation, all securities and moneys) held by it as Trustee.Notwithstanding the foregoing, 46 the predecessor Trustee shall not be required to transfer to its successor any rights of indemnity to the predecessor Trustee for acts during the time the predecessor Trustee was acting as Trustee under this Indenture.Should any instrument or document in writing from the Corporation be requested by any successor Trustee for vesting and conveying more fully and certainly in and to that suc- cessor the trusts, properties, remedies, rights, duties, obliga- tions, discretions, privileges, claims, demands, causes of action, immunities, estates, titles, interests and liens vested or conveyed or intended to be vested or conveyed hereby in or to the predeces- sor Trustee, the Corporation shall execute, acknowledge and deliver that instrument or document. (d)In the event of a change in the Trustee, the predecessor Trustee shall cease to be custodian of any moneys which it may hold pursuant to this Indenture and shall cease to be Regis- trar and Paying Agent for any of the Bonds, to the extent it served in any of those capacities, and the successor Trustee shall become custodian and, if applicable, Registrar and Paying Agent. SECTION 7.10.Adoption of Authentication.In case any of the Bonds shall have been authenticated, but shall not have been delivered, any successor Trustee or Registrar may adopt the certif- icate of authentication of any predecessor Trustee or Registrar and may deliver those bonds so authenticated as provided herein.In case any Bonds shall not have been authenticated, any successor Trustee or Registrar may authenticate those Bonds either in the name of any predecessor or in its own name.In all cases, the cer- tificate of authentication shall have the same force and effect as provided in the Bonds or in this Indenture with respect to the cer- tificate of authentication of the predecessor Trustee or Registrar. SECTION 7.11.Registrars. (a)Anything herein to the contrary notwithstand- ing, any corporation or association (i) into which a Registrar may be converted or merged, (ii) with which a Registrar or any succes- sor to it may be consolidated or (iii) to which it may sell or transfer its assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, merger, consolidation, sale or transfer,ipso facto,shall be and become successor Registrar to that Registrar hereunder and shall be vested with each and every power, right, duty, obligation, discre- tion and privilege expressed or intended by this Indenture to be exercised by or vested in the predecessor Registrar, without the execution or filing of any instrument or document or any further act on the part of any of the parties hereto. (b)A Registrar may resign at any time by giving written notice of its resignation to the Corporation, the City, the Trustee,the Original Purchaser of each series of Bonds then outstanding for which it is Registrar, and to each Paying Agent for 47 those series of Bonds, at least sixty (60) days before the resigna- tion is to take effect.The resignation shall take effect immedi- ately, however, upon the appointment of a successor Registrar, if the successor Registrar is appointed and accepts that appointment before the time stated in the notice. (c)The Registrar may be removed at any time by an instrument or document or concurrent instruments or documents in writing delivered to the Registrar, with copies thereof mailed to the Corporation, the City and the Trustee, and signed by or on behalf of the Owners of not less than a majority in aggregate principal amount of the Bonds then outstanding. (d)If (i) a Registrar shall resign,shall be removed, shall be dissolved, or shall become otherwise completely incapable of acting hereunder,(ii) a Registrar shall be taken under the control of any public officer or officers,(iii) a receiver shall be appointed for a Registrar by a court, or (iv) a Registrar shall have an order for relief entered in any case com- menced by or against it under the federal bankruptcy laws, commence a proceeding under any federal or state bankruptcy, insolvency, reorganization or similar law, or have such a proceeding commenced against it and either have an order of insolvency or reorganization entered against it or have the proceeding remain undismissed and unstayed for ninety (90) days, then a successor Registrar shall be appointed by the President, with the written consent of the Corpo- ration and the Trustee; provided, that if a successor Registrar is not so appointed within ten (10) days after (v) a notice of resig- nation or an instrument or document of removal is received by the Corporation, as provided above, or (vi) the Registrar is dissolved, taken under control, becomes otherwise incapable of acting or a receiver is appointed, in each case, as provided above, then, if the President or the Secretary shall not have appointed a successor Registrar, the Trustee or the Owners of a majority in aggregate principal amount of Bonds then outstanding may designate a successor Registrar by an instrument or document or concurrent instruments or documents in writing signed by the Trustee, or in the case of the Owners, by or on behalf of those Owners. (e)Every successor Registrar appointed hereunder shall execute and acknowledge, and shall deliver to its predeces- sor, the Corporation and the Trustee, an instrument or document in writing accepting the appointment.Thereupon, without any further act, the successor shall become vested with all of the properties, remedies, powers, rights, duties, obligations, discretions, privi- leges, claims, demands, causes of action, immunities, titles and interests of its predecessor.Upon the written request of its successor or the Corporation, a predecessor Registrar (i) shall execute and deliver an instrument or document transferring to its successor all of the properties, remedies, powers, rights, duties, obligations, discretions, privileges, claims, demands, causes of action,immunities,titles and interests of it as predecessor 48 Registrar hereunder, and (ii) shall take any other action necessary to duly assign, transfer and deliver to its successor all property and records (including without limitation, the Register and any cancelled Bonds) held by it as Registrar.Should any instrument or document in writing from the Corporation be requested by any suc- cessor Registrar for vesting and conveying more fully and certainly in and to that successor the properties, remedies, powers, rights, duties,obligations,discretions,privileges,claims,demands, causes of action, immunities, titles and interests vested or con- veyed or intended to be vested or conveyed hereby in or to a prede- cessor Registrar, the Corporation shall execute, acknowledge and deliver that instrument or document. SECTION 7.12.Designation and Succession of Paying Agents. (a)The Trustee shall be Paying Agent for the Bonds, and, with the consent of the Corporation, the Trustee may appoint a Paying Agent or Agents with power to act on its behalf and subject to its direction in the payment of Bond Service Charges on any series of Bonds.It is the responsibility of the Trustee to establish the duties and responsibilities of any Paying Agent for any purposes of this Indenture, to the extent not specified herein. (b)Any corporation or association with or into which any Paying Agent may be merged or converted or with which it may be consolidated, or any corporation or association resulting from any merger, consolidation or conversion to which any Paying Agent shall be a party, or any corporation or association suc- ceeding to the trust business of any Paying Agent, shall be the successor of the Paying Agent hereunder, if that successor cor- poration or association is otherwise eligible hereunder, without the execution or filing of any paper or any further act on the part of the parties hereto or the Paying Agent or that successor corpo- ration or association. (c)Any Paying Agent may at any time resign by giving written notice of resignation to the Trustee,to the Registrar, to the Corporation and to the City.The Trustee may at any time terminate the agency of any Paying Agent by giving written notice of termination to such Paying Agent, to the Registrar, to the Corporation and to the City.Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Paying Agent shall cease to be eligible under this Section, the Trustee may appoint a successor Paying Agent. The Trustee shall give written notice of appointment of a successor Paying Agent to the Corporation, the City and the Registrar and shall mail, within ten (10) days after that appointment, notice thereof to all Owners as their names and addresses appear on the Register on the date of that appointment. 49 (d)The Trustee shall pay to any Paying Agent from time to time reasonable compensation as authorized in Section 7.03 hereof for its services, and the Trustee shall be entitled to be reimbursed for such payments, subject to Section 7.03 hereof. (e)The provisions of Sections 3.05 and 7.02(d) hereof shall be applicable to any Paying Agent. SECTION 7.13.Dealing in Bonds.The Trustee, a Regis- trar and a Paying Agent, their affiliates, and any directors, officers, employees or agents thereof may become the owners of Bonds secured hereby with the same rights which it or they would have hereunder if the Trustee, the Registrar or Paying Agents did not serve in those capacities. SECTION 7.14.Representations, Agreements and Covenants of Trustee.The Trustee hereby represents that it is a national banking association organized and existing under the laws of the United States of America and authorized to exercise corporate trust powers in the State, is in good standing, and that it has an unim- paired reported capital and surplus of not less than $50,000,000. The Trustee covenants that it will take such action, if any, as is necessary to remain in good standing and duly authorized to exercise corporate trust powers in the State, and that it will maintain an unimpaired reported capital and surplus of not less than $50,000,000.The Trustee shall observe and perform the duties and obligations of the Trustee to which reference is made in this Indenture and any other instrument or document providing security for any of the Bonds. 50 ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND OWNERS SECTION 8.01.Defaults: Events of Default. (a)The occurrence of any of the following events is defined as and declared to be and to constitute an Event of Default hereunder: (i)Payment of any interest on any Bond shall not be made when and as that interest shall become due and payable; (ii)Payment of the principal of or any premium on any Bond shall not be made when and as that principal or premium shall become due and payable, whether at stated maturity, by redemption, or otherwise; (iii)Failure by the Corporation to observe or perform any other covenant, agreement or obligation on its part to be observed or performed contained in this Indenture or in the Bonds, which failure shall have con- tinued for a period of sixty (60) days after written notice of such failure, by registered or certified mail, shall have been given to the Corporation and the City, requiring that it be remedied, which notice may be given by the Trustee in its discretion and shall be given by the Trustee at the written request of the Owners of not less than twenty-five percent (251) in aggregate princi- pal amount of any series of Bonds then outstanding; (iv)The occurrence and continuance of any default as defined in the Ground Lease or the City Lease; (v)The occurrence of an Event of Bankruptcy as to the Corporation or the Corporation shall:00 com- mence a proceeding under any federal or state insolvency, reorganization or similar law, or have such a proceeding commenced against it and either have an order of insolv- ency or reorganization entered against it or have the proceeding remain undismissed and unstayed for ninety (90) days; or (B) have a receiver, conservator, liquida- tor or trustee appointed for it or for the whole or any substantial part of its property.The declaration of an Event of Default under this subsection and the exercise of remedies upon any such declaration shall be subject to any applicable limitations of federal or State law af- fecting or precluding such declaration or exercise during 51 the pendency of or immediately following any liquidation or reorganization proceedings. (b)The term "default" or "failure" as used in this Article means a default or failure by the Corporation in the ob- servance or performance of any of the covenants, agreements or obligations on its part to be observed or performed contained in this Indenture or in the Bonds, exclusive of any period of grace or notice required to constitute a default or failure an Event of Default, as provided above. SECTION 8.02.Notice of Default.If an Event of Default shall occur, the Trustee shall give written notice of the Event of Default, by registered or certified mail, to the Corporation, the City, the Registrar or any Paying Agent, MBIA and the Original Purchaser of each series of Bonds, within five (5) days after the Trustee has notice of the Event of Default.If an Event of Default occurs of which the Trustee has notice pursuant to this Indenture the Trustee shall give written notice thereof, promptly after the Trustee's receipt of notice of its occurrence, to MBIA and to the Owners of all Bonds then outstanding as shown by the Register at the close of business fifteen (15) days prior to the mailing of that notice; provided that, except in the case of a default in the payment of the principal of or any premium or interest on any Bond or the occurrence of an Event of Bankruptcy as to the Corporation, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or responsible officers of the Trustee in good faith determine that the withholding of notice to [MBIA ???] and to the Owners is in the interests of [MBIA ???] and of the Owners. SECTION 8.03.Remedies: Rights of Owners. (a)Upon the occurrence and continuance of an Event of Default, the Trustee may, and at the request of MBIA shall, pursue any available remedy to enforce the payment of Bond Service Charges or the observance and performance of any other covenant, agreement or obligation under this Indenture, the City Lease or any other instrument providing security, directly or indirectly, for the Bonds. (b)If, upon the occurrence and continuance of an Event of Default, the Trustee is requested so to do by [MBIA and ???] by the Owners of at least twenty-five percent (25%) in aggre- gate principal amount of each series of Bonds outstanding, the Trustee (subject to the provisions of Sections 7.01 and 7.02 here- of,particularly subsections 7.01(d)(iv)and 7.02(d)of those Sections), shall exercise any rights and powers conferred by this Section. 52 (c)No remedy conferred upon or reserved to the Trustee (or to the Owners) by this Indenture is intended to be exclusive of any other remedy.Each remedy shall be cumulative and shall be in addition to every other remedy given hereunder or otherwise to the Trustee or to the Owners or now or hereafter existing. (d)No delay in exercising or omission to exercise any remedy, right or power accruing upon any default or Event of Default shall impair that remedy, right or power or shall be con- strued to be a waiver of any default or Event of Default or acqui- escence therein.Every remedy, right and power may be exercised from time to time and as often as may be deemed to be expedient. (e)No waiver of any default or Event of Default hereunder, whether by the Trustee or by the Owners, shall extend to or shall affect any subsequent default or Event of Default or shall impair any remedy, right or power consequent thereon. (f)As the assignee of all right, title and inter- est of the Corporation in and to the Ground Lease and the City Lease (except for the Unassigned Corporation's Rights), the Trus- tee is empowered to enforce each remedy, right and power granted to the Corporation under the Ground Lease and the City Lease.In exercising any remedy, right or power thereunder or hereunder, the Trustee shall take any action which would best serve the interests of the Owners in the judgment of the Trustee, applying the stand- ards described in, and subject to the provisions of, Sections 7.01 and 7.02 hereof. SECTION 8.04.Right of Owners to Direct Proceedings. Anything to the contrary in this Indenture notwithstanding, [MBIA 22?), so long as the Insurance Policy is in effect, and the Owners of a majority in aggregate principal amount of each series of Bonds then outstanding if the Insurance Policy is not then in effect, shall have the right at any time to direct, by an instrument or document or instruments or documents in writing executed and deliv- ered to the Trustee, the method and place of conducting all pro- ceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture or any other proceedings hereunder; provided, that (i) any direction shall not be other than in accordance with the provisions of law and of this Indenture, (ii) the Trustee shall be indemnified as provided in Sections 7.01 and 7.02 hereof, and (iii) the Trustee may take any other action which it deems to be proper and which is not inconsistent with the direction. SECTION 8.05.Application of Moneys. (a)After payment of any costs, expenses, liabil- ities and advances paid, incurred or made by the Trustee in the collection of moneys pursuant to any right given or action taken 53 under the provisions of this Article or the provisions of the Ground Lease or the City Lease (including without limitation, reasonable attorneys' fees and expenses, except as limited by law or judicial order or decision entered in any action taken under this Article VIII), all moneys received by the Trustee shall be deposited in the Bond Retirement Fund and shall be applied as follows, subject to Section 3.05 hereof and any provision made pursuant to Sections 5.08 or 5.09 hereof: First -- To the payment to the Owners entitled thereto of all installments of interest then due on the Bonds, in the order of the dates of maturity of the installments of that interest, beginning with the earliest date of maturity and, if the amount available is not sufficient to pay in full any particular installment, then to the payment thereof ratably, according to the amounts due on that installment, to the Owners entitled thereto, without any discrim- ination or privilege, except as to any differ- ence in the respective rates of interest spec- ified in the Bonds; and Second -- To the payment to the Owners enti- tled thereto of the unpaid principal of any of the Bonds which shall have become due (other than Bonds previously called for redemption for the payment of which moneys are held pur- suant to the provisions of this Indenture), whether at stated maturity, by redemption or pursuant to any mandatory sinking fund re- quirements, in the order of their due dates, beginning with the earliest due date, with interest on those Bonds from the respective dates upon which they became due at the rates specified in those Bonds, and if the amount available is not sufficient to pay in full all Bonds due on any particular date together with that interest,then to the payment thereof ratably, according to the amounts of principal due on that date,to the Owners entitled thereto, without any discrimination or privilege, except as to any difference in the respective rates of interest specified in the Bonds. (b)Whenever moneys are to be applied pursuant to the provisions of this Section, those moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of moneys available for application and the likelihood of additional moneys becoming available for application in the future.Whenever the Trustee shall direct the 54 application of those moneys, it shall fix the date upon which the application is to be made, and upon that date, interest shall cease to accrue on the amounts of principal, if any, to be paid on that date, provided the moneys are available therefor.The Trustee shall give notice of the deposit with it of any moneys and of the fixing of that date, all consistent with the requirements of Sec- tion 3.05 hereof for the establishment of, and for giving notice with respect to, a Special Record Date for the payment of overdue interest.The Trustee shall not be required to make payment of principal of and any premium on a Bond to the Owner thereof, until the Bond shall be presented to the Trustee for appropriate endorse- ment or for cancellation if it is paid fully. SECTION 8.06.Remedies Vested in Trustee.All rights of action (including without limitation, the right to file proof of claims) under this Indenture or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding relating thereto.Any suit or proceeding instituted by the Trustee shall be brought in its name as Trustee without the necessity of joining any Owners as plaintiffs or defendants. Any recovery of judgment shall be for the benefit of the Owners of the outstanding Bonds, subject to the provisions of this Indenture. SECTION 8.07.Rights and Remedies of Owners. (a)An Owner shall not have any right to institute any suit, action or proceeding for the enforcement of this Inden- ture, for the execution of any trust hereof, or for the exercise of any other remedy hereunder, unless: (i)there has Event of Default of which as provided in paragraph of which it is deemed paragraph; occurred and is continuing an the Trustee has been notified, (f) of Section 7.02 hereof, or to have notice under that (ii)the Owners of at least twenty-five percent (25%) in aggregate principal amount of a series of Bonds then outstanding shall have made written request to the Trustee and shall have afforded the Trustee reasonable opportunity to proceed to exercise the remedies, rights and powers granted herein or to institute the suit, ac- tion or proceeding in its own name, and shall have of- fered indemnity to the Trustee as provided in Sections 7.01 and 7.02 hereof; and (iii)the Trustee thereafter shall have failed or refused to exercise the remedies, rights and powers granted herein or to institute the suit, action or pro- ceeding in its own name. 55 At the option of the Trustee, that notification (or notice), request, opportunity and offer of indemnity are conditions prece- dent, in every case, to the institution of any suit, action or proceeding described above. (b)No one or more Owners of the Bonds shall have any right to affect, disturb or prejudice in any manner whatsoever the security or benefit of this Indenture by its or their action, or to enforce, except in the manner provided herein, any remedy, right or power hereunder. Any suit, action or proceedings shall be instituted, had and maintained in the manner provided herein for the benefit of the Owners of all Bonds then outstanding.Nothing in this Indenture shall affect or impair, however, the right of any Owner to enforce the payment of the Bond Service Charges on any Bond owned by that Owner at and after the maturity thereof, at the place, from the sources and in the manner expressed in that Bond. SECTION 8.08.Termination of Proceedings.In case the Trustee shall have proceeded to enforce any remedy, right or power under this Indenture in any suit, action or proceedings, and the suit, action or proceedings shall have been discontinued or aband- oned for any reason, or shall have been determined adversely to the Trustee, the Corporation, the Trustee and the Owners shall be restored to their former positions and rights hereunder, respec- tively, and all rights, remedies and powers of the Trustee shall continue as if no suit, action or proceedings had been taken. SECTION 8.09.Waivers of Events of Default. (a)Except as hereinafter provided, at any time, in its discretion,the Trustee may waive any Event of Default hereunder and its consequences.The Trustee shall do so upon the written request of [MBIA or ???] the Owners of: (i)at least a majority in aggregate principal amount of all Bonds then outstanding in respect of which an Event of Default in the payment of Bond Service Charges exists; or (ii)at least twenty-five percent (25%)in aggregate principal amount of each series of Bonds then outstanding, in the case of any other Event of Default. (b)There shall not be so waived, however, any Event of Default described in Section 8.01(a), (b) or (e) hereof. In the case of the waiver or in case any suit, action or proceed- ings taken by the Trustee on account of any Event of Default shall have been discontinued, abandoned or determined adversely to it, the Corporation, the Trustee, [MBIA ???] and the Owners shall be restored to their former positions and rights hereunder, respec- tively.No waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon. 56 ARTICLE IX SUPPLEMENTAL INDENTURES SECTION 9.01.Supplemental Indentures Generally.The Corporation and the Trustee may enter into indentures supplemental to this Indenture, as provided in this Article and pursuant to the other provisions therefor in this Indenture. SECTION 9.02.Supplemental Indentures Not Requiring Consent of Owners.Without the consent of, or notice to, any of the Owners, the Corporation and the Trustee may enter into inden- tures supplemental to this Indenture which shall not,in the opinion of the Corporation and the Trustee, be inconsistent with the terms and provisions hereof for any one or more of the follow- ing purposes: (i)to cure any ambiguity, inconsistency or formal defect or omission in this Indenture; (ii)to grant to or confer upon the Trustee for the benefit of the Owners any additional rights, reme- dies, powers or authority that lawfully may be granted to or conferred upon the Owners or the Trustee; (iii)to assign additional revenues under this Indenture; (iv)to accept additional security and instru- ments and documents of further assurance with respect to the Bonds and to release all or any portion of the Im- provements or the Real Property from the City Lease and the lien of this Indenture in accordance with the provi- sions of the City Lease; (v)to add to the covenants, agreements and obligations of the Corporation under this Indenture, other covenants,agreements and obligations to be observed for the protection of the Owners, or to sur- render or limit any right, power or authority reserved to or conferred upon the Corporation in this Indenture, including without limitation, the limitation of rights of redemption so that in certain instances Bonds of differ- ent series will be redeemed in some prescribed relation- ship to one another for the protection of the Owners of a particular series of Bonds; (vi)to evidence any succession to the Corpora- tion and the assumption by its successor of the cove- nants,agreements and obligations of the Corporation under this Indenture, the Ground Lease, the City Lease and the Bonds; 57 (vii)to make necessary or advisable amendments or additions in connection with the issuance of Addi- tional Bonds in accordance with Section 2.04 hereof as do not adversely affect the interests of Owners of outstand- ing Bonds; (viii)to permit the use of a book entry system to identify the owner of an interest in an obligation issued by the Corporation under this Indenture, whether that obligation was formerly, or could be, evidenced by a tangible security; (ix)to permit the Trustee to comply with any obligations imposed upon it by law; (x)to specify further the duties and respon- sibilities of, and to define further the relationship among, the Trustee, the Registrar and any Paying Agents; (xi)to achieve compliance of this Indenture with any applicable federal securities or tax law; (xii)to permit the use of a Qualified Surety Bond to satisfy all or a portion of the Reserve Require- ment; and (xiii)to permit any other amendment which, in the judgment of the Trustee, is not to the prejudice of the Trustee or the Owners. The provisions of Subsections 9.02(ix) and (xi) shall not be deemed to constitute a waiver by the Trustee, the Registrar, the Corpora- tion or any Owner of any right which it may have in the absence of those provisions to contest the application of any change in law to this Indenture or the Bonds. of Owners. SECTION 9.03.Supplemental Indentures Requiring Consent (a)Exclusive of Supplemental Indentures to which reference is made in Section 9.02 hereof and subject to the terms, provisions and limitations contained in this Section, and not otherwise, with the consent of [MBIA and ???] the Owners of not less than a majority in aggregate principal amount of each series of Bonds at the time outstanding, evidenced as provided in this Indenture, the Corporation and the Trustee may execute and deliver Supplemental Indentures adding any provisions to, changing in any manner or eliminating any of the provisions of this Indenture or any Supplemental Indenture or restricting in any manner the rights of the Owners.Nothing in this Section or Section 9.02 hereof shall permit, however, or be construed as permitting: 58 (i)without the consent of the Owner of each Bond so affected, (A) an extension of the maturity of the principal of or the interest on any Bond, (B) a reduction in the principal amount of any Bond or the rate of inter- est or premium thereon, or (C) a reduction in the amount or extension of the time of payment of any mandatory redemption requirements, or (ii)without the consent of the Owners of all Bonds then outstanding, (A) the creation of a privilege or priority of any Bond or Bonds over any other Bond or Bonds or (B) a reduction in the aggregate principal amount of the Bonds required for consent to a Supplemen- tal Indenture. (b)If the Corporation shall request that the Trustee execute and deliver any Supplemental Indenture for any of the purposes of this Section, upon being satisfactorily indemnified with respect to its expenses in connection therewith, the Trustee shall cause notice of the proposed execution and delivery of the Supplemental Indenture to be mailed by first class mail, postage prepaid, to MBIA and to all Owners of Bonds then outstanding at their addresses as they appear on the Register at the close of business on the fifteenth (15th) day preceding that mailing. (c)The Trustee shall not be subject to any liabil- ity to any Owner by reason of the Trustee's failure to mail, or the failure of any Owner to receive, the notice required by this Sec- tion.Any failure of that nature shall not affect the validity of the Supplemental Indenture when there has been consent thereto as provided in this Section.The notice shall set forth briefly the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal corporate trust office of the Trustee for inspection by all Owners. (d)If the Trustee shall receive, within a period prescribed by the Corporation, of not less than sixty (60) days, but not exceeding one (1) year,following the mailing of the notice, an instrument or document or instruments or documents, in form to which the Trustee does not reasonably object, purporting to be executed by the Owners of not less than a majority in aggregate principal amount of each series of Bonds then outstanding (which instrument or document or instruments or documents shall refer to the proposed Supplemental Indenture in the form described in the notice and specifically shall consent to the Supplemental Indenture in substantially that form),the Trustee shall, but shall not otherwise, execute and deliver the Supplemental Indenture in sub- stantially the form to which reference is made in the notice as being on file with the Trustee, without liability or responsibility to any Owner, regardless of whether that Owner shall have consented thereto. 59 (e)Any consent shall be binding upon the Owner of the Bond giving the consent and, anything herein to the contrary notwithstanding, upon any subsequent Owner of that Bond and of any Bond issued in exchange therefor (regardless of whether the subse- quent Owner has notice of the consent to the Supplemental Inden- ture).A consent may be revoked in writing, however, by the Owner who gave the consent or by a subsequent Owner of the Bond by a revocation of such consent received by the Trustee prior to the execution and delivery by the Trustee of the Supplemental Inden- ture.At any time after the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Inden- ture, the Trustee shall make and file with the Corporation a written statement that the Owners of the required percentage of Bonds have filed those consents.That written statement shall be conclusive evidence that the consents have been so filed. (f)If the Owners of the required percentage in aggregate principal amount of Bonds outstanding shall have con- sented to the Supplemental Indenture, as provided in this Section, no Owner shall have any right (i) to object to (A) the execution or delivery of the Supplemental Indenture, (B) any of the terms and provisions contained therein, or (C) the operation thereof, (ii) to question the propriety of the execution and delivery thereof, or (iii) to enjoin or restrain the Trustee or the Corporation from that execution or delivery or from taking any action pursuant to the provisions thereof. SECTION 9.04.Authorization to Trustee:Effect of Supplement. (a)The Trustee is authorized to join with the Cor- poration in the execution and delivery of any Supplemental Indenture in accordance with this Article and to make the further agreements and stipulations which may be contained therein. Thereafter, (i)That Supplemental Indenture shall form a part of this Indenture; (ii)All terms and conditions contained in that Supplemental Indenture as to any provision authorized to be contained therein shall be deemed to be a part of the terms and conditions of this Indenture for any and all purposes; (iii)This Indenture shall be deemed to be modified and amended in accordance with the Supplemental Indenture; and (iv)The respective rights, duties and obliga- tions under this Indenture of the Corporation, the Trus- tee, the Registrar, the Paying Agents and all Owners of 60 Bonds then outstanding shall be determined, exercised and enforced hereunder in a manner which is subject in all respects to those modifications and amendments made by the Supplemental Indenture. (b)Express reference to any executed and delivered Supplemental Indenture may be made in the text of any Bonds issued thereafter, if that reference is deemed necessary or desirable by the Trustee or the Corporation.A copy of any Supplemental Inden- ture for which provision is made in this Article, except a Supple- mental Indenture described in clause (g) of Section 9.02 hereof, shall be mailed by the Trustee to MBIA, the Registrar, each Paying Agent and the Original Purchaser of each series of Bonds affected thereby.The Trustee shall not be required to execute any supple- mental indenture containing provisions adverse to the Trustee. SECTION 9.05.Opinion of Counsel.The Trustee shall be entitled to receive, and shall be fully protected in relying upon, the opinion of any counsel approved by it as conclusive evidence that (i) any proposed Supplemental Indenture complies with the provisions of this Indenture and (ii) it is proper for the Trustee to join in the execution of that Supplemental Indenture under the provisions of this Article.That counsel may be counsel for the Corporation. SECTION 9.06.Modification by Unanimous Consent.Not- withstanding anything contained elsewhere in this Indenture, the rights and obligations of the Corporation [and of MBIA ???] and the Owners, and the terms and provisions of the Bonds and this Inden- ture or any Supplemental Indenture, may be modified or altered in any respect with the consent of (i) the Corporation[, (ii) MBIA, ???] (iii) the Owners of all of the Bonds then outstanding and (iv) the Trustee. 61 ARTICLE X DEFEASANCE SECTION 10.01.Release of Indenture. (a)If (i) the Corporation shall pay all of the outstanding Bonds, or shall cause them to be paid and discharged, or if there otherwise shall be paid to the Owners of the outstand- ing Bonds, all Bond Service Charges due or to become due thereon, and (ii) provision also shall be made for the payment of all other sums payable hereunder or under the City Lease, then this Indenture shall cease, determine and become null and void (except for those provisions surviving by reason of Section 10.03 hereof in the event the Bonds are deemed paid and discharged pursuant to Section 10.02 hereof), and the covenants, agreements and obligations of the Cor- poration hereunder shall be released, discharged and satisfied. (b)Thereupon, and subject to the provisions of Section 10.03 hereof, if applicable: (i)the Trustee shall release this Indenture (except for those provisions surviving by reason of Section 10.03 hereof in the event the Bonds are deemed paid and discharged pursuant to Section 10.02 hereof), and shall execute and deliver to the Corporation any instruments or documents in writing as shall be requisite to evidence that release and discharge or as reasonably may be requested by the Corporation; and (ii)the Trustee and any other Paying Agents shall assign and deliver to the Corporation any property subject at the time to the lien of this Indenture which then may be in their possession, except amounts in the Bond Retirement Fund required to be held by the Trustee and the Paying Agents under Sections 5.08 and 5.09 hereof or otherwise for the payment of Bond Service Charges. SECTION 10.02.Payment and Discharge of Bonds. (a)All or any part of the Bonds shall be deemed to have been paid and discharged within the meaning of this Indenture, including without limitation, Section 10.01 hereof, if: (i)the Trustee as Paying Agent and any Paying Agents shall have received, in trust for and irrevocably committed thereto, sufficient moneys, or (ii)the Trustee shall have received, in trust for and irrevocably committed thereto, noncallable direct obligations of the United States of America which are certified by an independent public accounting firm of 62 national reputation to be of such maturities or redemp- tion dates and interest payment dates, and to bear such interest, as will be sufficient together with any moneys to which reference is made in subparagraph (i) above, without further investment or reinvestment of either the principal amount thereof or the interest earnings there- from (which earnings are to be held likewise in trust and so committed, except as provided herein) , for the payment of all Bond Service Charges on those Bonds, at their maturity or redemption dates, as the case may be, or if a default in payment shall have occurred on any maturity or redemption date, then for the payment of all Bond Service Charges thereon to the date of the tender of payment; provided, that if any of those Bonds are to be redeemed prior to the maturity thereof, notice of that redemption shall have been duly given or irrevocable provision satisfactory to the Trustee shall have been duly made for the giving of that notice. (b)Any moneys held by the Trustee in accordance with the provisions of this Section may be invested by the Trustee only in noncallable direct obligations of the United States of America having maturity dates, or having redemption dates which, at the option of the owner of those obligations, shall be not later than the date or dates at which moneys will be required for the purposes described above.To the extent that any income or inter- est earned by, or increment to, the investments held under this Section is determined from time to time by the Trustee to be in excess of the amount required to be held by the Trustee for the purposes of this Section, that income, interest or increment shall be transferred at the time of that determination in the manner provided in Section 5.04 hereof for transfers of amounts remaining in the Bond Retirement Fund. (c)If any Bonds shall be deemed paid and dis- charged pursuant to this Section 10.02, then within fifteen (15) days after such Bonds are so deemed paid and discharged the Trustee shall cause a written notice to be given to each Owner as shown on the Register on the date on which such Bonds are deemed paid and discharged.Such notice shall state the numbers of the Bonds deemed paid and discharged or state that all Bonds of a particular series are deemed paid and discharged, set forth a description of the obligations held pursuant to subparagraph (ii) of the first paragraph of this Section 10.02 and specify any date or dates on which any of the Bonds are to be called for redemption pursuant to notice of redemption given or irrevocable provisions made for such notice pursuant to the first paragraph of this Section 10.02. SECTION 10.03.Survival of Certain Provisions.Not- withstanding the foregoing, any provisions of the Bond Resolution and this Indenture which relate to the maturity of Bonds, interest payments and dates thereof, optional and mandatory redemption pro- 63 visions, exchange, transfer and registration of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non -presentment of Bonds, the holding of moneys in trust and the duties of the Trustee, the Registrar and the Paying Agents, the payment or reimbursement for fees, charges and advances owed to, Trustee, the Registrar and the Paying Agents in connection with all the foregoing,and indemnities to the Trustee, the Registrar and the Paying Agents shall remain in effect and be binding upon the Trustee, the Registrar, the Paying Agents, the Corporation and the Owners notwithstanding the release and discharge of this Indenture.The provisions of this Article shall survive the release, discharge and satisfaction of this Indenture. 64 ARTICLE XI COVENANTS OF THE CORPORATION SECTION 11.01.Prompt Payment.The Corporation cove- nants that it will promptly pay or cause to be paid the principal of and the interest on every Bond issued under the provisions of this Indenture at the place, on the dates and in the manner pro- vided herein and in said Bonds. SECTION 11.02.No Extension of Time for Interest Pay- ment.In order to prevent any accumulation of interest payments after maturity, the Corporation covenants that it will not, direct- ly or indirectly, extend or assent to the extension of the time for the payment of any claim for interest in any of the Bonds, and will not, directly or indirectly, be a party to or approve of any such arrangement. SECTION 11.03.Maintenance of Offices for Payment.The Corporation covenants that so long as the Bonds or any of them shall be outstanding it will cause offices or agencies where the Bonds may be presented for payment to be maintained in the City of Phoenix, Arizona or at the office of the Trustee as provided in the form of the Bond. SECTION 11.04.Sufficient Revenues.The Corporation covenants that, while any Bonds are outstanding hereunder, money received by it as rentals under the City Lease will, in the aggre- gate, produce revenues which will be sufficient to make all pay- ments which the Trustee is obligated to set aside in the various funds established hereunder. SECTION 11.05.Records and Accounts.The Corporation covenants and agrees to keep or cause to be kept proper books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocation and application of the revenues accruing to the trust and the amounts thereof forwarded to the Trustee, and such books shall be available for inspection by the Owner of any of the Bonds at reasonable hours and under reasonable conditions. SECTION 11.06.Financial Statements.Not later than three (3) months after the close of each fiscal year of the Cor- poration, the Corporation agrees to furnish to each Owner of any of the Bonds, who may so request, a complete financial statement covering receipts, disbursements, allocation and application of revenues for such fiscal year accruing to the trust and the dates and amounts thereof forwarded to the Trustee for such fiscal year, certified by an officer of the Corporation, or, if so requested in writing by the Owners of not less than forty percent (40%) of a series of the Bonds then outstanding, certified by an independent public or municipal accountant of their selection.Such financial 65 statement shall be filed with the Trustee.Notwithstanding the foregoing, as long as the City Lease is in effect, the Trustee (a) shall keep the financial records of the Corporation pertaining to the payments made by the City pursuant to City Lease and pay- ments made on the Bonds; (b) shall make such records available for inspection by the Owners of any of the Bonds at reasonable hours and under reasonable conditions; (c) shall prepare an annual finan- cial statement covering receipts, disbursements, allocations and application of revenues for such fiscal year accruing to the trust; and (d) shall furnish a copy of each such statement to each Owner of any of the Bonds who may so request. SECTION 11.07.Payments of Trustee. Payina Agent Fees. The Corporation covenants that, except as otherwise provided for in Sections 3.06 and 3.07, all charges made by the Trustee, the Regis- trar and any Paying Agents for services rendered and for payment of principal of and interest on the Bonds (not paid by the City), will be paid by the Corporation from revenues of the trust estate and will not be required to be paid by the Owners of the Bonds. SECTION 11.08.Authority of Corporation. (a)The Corporation covenants that it is, at the date of the execution and delivery of this Indenture, or will be, possessed of the trust estate, that the City Lease is, at the date of the delivery of this Indenture, a valid and subsisting agreement for the leasing to the City of the property which it purports to lease, that the City Lease was lawfully made by the City and the Corporation, that the covenants contained in the City Lease are binding, that the Corporation has good right, full power and lawful authority to grant, bargain and assign, and to transfer in trust, convey and pledge the trust estate in the manner and form herein provided, and that the Corporation forever will warrant and defend the title to the same to the Trustee against the claims of all persons whomsoever,subject to rights of the City referred to hereinabove. (b)The Corporation further covenants that it will not, without the written consent of the Trustee [and of MBIA ???], alter, modify or cancel, or agree or consent to alter, modify or cancel the Ground Lease or the City Lease or any other agreements heretofore or hereafter entered into by the Corporation which relate to or affect the security of the Bonds issued hereunder. With the written consent of the Trustee [and MBIA ???], the Corpo- ration may consent to alterations and modifications thereof, pro- vided that no such alterations or modifications will decrease the amounts available for payment of the Bonds or will render the income of the Corporation or the interest on the Bonds taxable to the recipient, and provided further that prior to giving its con- sent with respect to an alteration or modification of the Ground Lease or the City Lease, the Trustee shall obtain an opinion of counsel or financial consultant selected by the Trustee that the 66 proposed alteration or modification will not be materially adverse to the interests of the Bondowners, will not decrease the amounts available for payment of the Bonds and will not render the income of the Corporation or the interest on the Bonds taxable under the income tax laws of the United States of America.Additional Bonds or other obligations secured by Revenues within the limitations of Section 3.05 of the City Lease shall not be deemed to have decreased the amounts available for payment of the Bonds, nor shall agreements supplemental to or independent of the Ground Lease or the City Lease, under which such Additional Bonds or obligations are to be issued, be deemed alterations or modifications of the Ground Lease or the City Lease so as to require consent of the Trustee.The Corporation further covenants that it will comply with all the terms and provisions of said documents, and that it will not engage in any activities or take any action which might result in the income of the Corporation becoming taxable to it, or any interest payment on the Bonds becoming taxable to the recipient thereof, under the income tax laws of the United States. SECTION 11.09.Good Faith Compliance.The Corporation covenants that it will in all respects promptly and faithfully keep, perform and comply with all the terms, provisions, covenants, conditions and agreements of the Ground Lease and the City Lease to be kept, performed and complied with by it.The Corporation fur- ther covenants that it will not do or permit anything to be done, or omit or refrain from doing anything, in any case where any such act done or permitted to be done, or any such omission of or re- fraining from action, would or might be a ground for declaring such leases in default; that upon request of the Trustee, the Corpora- tion will promptly deposit with the Trustee (to be held by the Trustee until title and rights of the Trustee under this Indenture shall be released and/or reconveyed) any and all documentary evi- dence received by it showing compliance with the provisions of such leases to be performed by it; that the Corporation, immediately upon its receiving or giving any notice, communication, or other document in any way relating to or affecting such leases, thereby created, will deliver the same, or a copy thereof, to the Trustee and the City; that the Corporation will pay (or cause the City to pay) all taxes, assessments and other charges, if any, that may be levied, assessed or charged upon the trust estate, or any part thereof, promptly as and when the same shall become due and paya- ble, but it shall not be a breach of this covenant if the Corpo- ration fails to pay any such tax, assessment or charge during any period in which the Corporation or the City, in good faith, shall be contesting the amount or validity of such tax, assessment or charge; that the Corporation will, upon request of the Trustee, from time to time, keep the Trustee advised of such payments, and deliver such evidence thereof as the Trustee may reasonably re- quire; and that the Corporation will not suffer said trust estate hereby conveyed and transferred in trust, or any part thereof, to be sold for any taxes, assessments or other charges whatsoever, or to be forfeited therefor, nor do or permit to be done, in, upon or 67 about said trust estate, or any part thereof, anything that might in any way weaken, diminish, or impair the security intended to be given by or under this Indenture, nor suffer any portion of the trust estate to be sold under any mechanics' or materialmen's lien or other proceedings. SECTION 11.10.Maintenance of the Improvements and the Real Property. Good Title and Corporate Existence.The Corporation further covenants and agrees as follows: First:To cause the Improvements and the Real Property to be maintained in good repair and condition,ordinary wear and tear ex- cepted, and not to commit or allow any waste. Second:Whenever and so often as re- quested so to do by the Trustee or any Bond- owner,to promptly execute and deliver or cause to be executed and delivered all such other and further instruments, documents or assurances, and to promptly do or cause to be done all such other and further things, as may - be necessary or reasonably required in order to further and more fully vest in the Trustee and the Bondowners all rights,interest, powers, benefits, privileges and advantages conferred or intended to be conferred upon them by this Indenture. Third:To promptly, upon the request of the Trustee or any Bondowner,from time to time take such actions as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the trust estate or any part thereof,whether now existing or hereafter developing,and to prosecute all such suits, actions and other proceedings as may be appropriate for such purpose and to indemnify and save the Trustee and every such Bondowner harmless from all loss, cost, damage and expense, including attorneys' fees, which they or either of them may incur by reason of any such defect, cloud, suit, action or pro- ceedings. Fourth:To maintain its existence as a nonprofit corporation organized and existing under the laws of the State. Fifth:That it will not be or become a party to any merger or consolidation. 68 SECTION 11.11.Rights and Enforcement of the City Lease. The Trustee may enforce, in its name or in the name of the Corpora- tion, all rights of the Corporation for and on behalf of the Own- ers, except for Unassigned Corporation's Rights, and may enforce all covenants, agreements and obligations of the Corporation under and pursuant to the Ground Lease and the City Lease, regardless of whether the Corporation is in default in the pursuit or enforcement of those rights, covenants, agreements or obligations.The Corpo- ration, however, will do all things and take all actions on its part necessary to comply with covenants, agreements, obligations, duties and responsibilities on its part to be observed or performed under the Ground Lease and the City Lease, and will take all ac- tions within its authority to keep the Ground Lease and the City Lease in effect in accordance with the terms thereof. SECTION 11.12.Good Title.The Corporation covenants that it has or will acquire and, so long as any Bonds are outstand- ing hereunder, will retain good title to the trust estate. SECTION 11.13.Possession.The Corporation covenants that there shall be no default hereunder, but until default shall be made by the Corporation, as provided for herein, the Corporation shall, subject to the Ground Lease and the City Lease, be entitled to possess, manage, operate, use and enjoy the property herein encumbered. 69 ARTICLE XII MISCELLANEOUS SECTION 12.01.Limitation of Rights.With the exception of rights conferred expressly in this Indenture, nothing expressed or mentioned in or to be implied from this Indenture or the Bonds is intended or shall be construed to give any Person other than the parties hereto, the City, the Registrar, the Paying Agents and the Owners of the Bonds any legal or equitable right, remedy, power or claim under or with respect to this Indenture or any covenants, agreements,conditions and provisions contained herein.This Indenture and all of those covenants, agreements, conditions and provisions are intended to be, and are, for the sole and exclusive benefit of the parties hereto, the Registrar, the Paying Agents, the City and the Owners of the Bonds, as provided herein. SECTION 12.02.Severability. (a)In case any section or provision of this Inden- ture, or any covenant, agreement, stipulation, obligation, act or action, or part thereof, made, assumed, entered into or taken under this Indenture, or any application thereof, is held to be illegal or invalid for any reason, or is inoperable at any time, that ille- gality, invalidity or inoperability shall not affect the remainder thereof or any other section or provision of this Indenture or any other covenant, agreement, stipulation, obligation, act or action, or part thereof, made, assumed, entered into or taken under this Indenture, all of which shall be construed and enforced at the time as if the illegal, invalid or inoperable portion were not contained therein. (b)Any illegality,invalidity or inoperability shall not affect any legal, valid and operable section, action, covenant, agreement, stipulation, obligation, act, provision, part or application, all of which shall be deemed to be effective, operative, made, assumed, entered into or taken in the manner and to the full extent permitted by law from time to time. SECTION 12.03.Notices. (a)Except as provided in Section 8.02 hereof, it shall be sufficient service or giving of any notice, request, complaint, demand or other instrument or document, if it is duly mailed by first class mail.Notices to the Corporation, the City, the Trustee [and MBIA ???] shall be addressed as follows: 70 (i)If to the Corporation: City of Apache Junction Municipal Property Corporation c/o City of Apache Junction, Arizona 1001 North Idaho Road Apache Junction, Arizona 85219 Attention:President (ii)If to the City: City of Apache Junction, Arizona 1001 North Idaho Road Apache Junction, Arizona 85219 Attention:City Manager (iii)Except as provided in Section 7.02(f) hereof, if to the Trustee: [The Valley National Bank of Arizona P.O. Box 71 Phoenix, Arizona 85001 Attention:Corporate Trust Department (A-804)???] (iv)If to the Original Purchaser: Peacock, Hislop, Staley & Given, Inc. 100 Concord Place 2999 North 44th Street Phoenix, Arizona 85018 Attention:Public Finance Department [(v) If to MBIA: Municipal Bond Investors Assurance Corporation 113 King Street Armonk, New York 10504 Attention:Surveillance Department ???] Duplicate copies of each notice, request, complaint, demand or other instrument or document given hereunder by the Corporation, the City, the Trustee, the Original Purchaser or MBIA to one or either of the others also shall be given to the others.The fore- going parties may designate, by notice given hereunder, any further or different addresses to which any subsequent notice, request, complaint, demand or other instrument or document shall be sent. The Trustee shall designate, by notice to the Corporation, the City, the Original Purchaser [and MBIA ???], the addresses to which 71 notices or copies thereof shall be sent to the Registrar and the Paying Agents. (b)In connection with any notice mailed pursuant to the provisions of this Indenture, a certificate of the Trustee, the Corporation, the City, the Registrar, the Original Purchaser, MBIA or the Owners of the Bonds, whichever or whoever mailed that notice, that the notice was so mailed shall be conclusive evidence of the proper mailing of the notice. [SECTION 12.04.Notices to Be Given to MBIA. (a)While the Insurance Policy is in effect, the Corporation or the Trustee, as appropriate, shall furnish to MBIA: (i) as soon as practicable after the filing thereof, a copy of any financial statement of the Corporation and a copy of any audit and annual report of the Corporation; (ii) a copy of any notice to be given to the Owners of the Bonds and any certificate rendered pur- suant to this Indenture relating to the security for the Bonds; and (iii) such additional information as it may reasonably request. The Trustee shall notify MBIA of any failure of the Corporation to provide relevant notices, certificates, etc. (b)The Corporation will permit MBIA to discuss the affairs, finances and accounts of the Corporation or any informa- tion MBIA may reasonably request regarding the security for the Bonds with appropriate officers of the Corporation. The Trustee or Corporation, as appropriate, will permit MBIA to have access to the Project and have access to and to make copies of all books and records relating to the Bonds at any reasonable time. (c)MBIA shall have the right to direct an account- ing at the Corporation's expense, and the Corporation's failure to comply with such direction within thirty (30) days after receipt of written notice of the direction from MBIA shall be deemed a default hereunder; provided, however, that if compliance cannot occur with- in such period, then such period will be extended so long as com- pliance is begun within such period and diligently pursued, but only if such extension would not materially adversely affect the interests of any Owner of the Bonds. (d)Notwithstanding any other provision of this Indenture, the Trustee shall immediately notify MBIA if at any time there are insufficient moneys to make any payments of principal and/or interest as required and immediately upon the occurrence of any Event of Default hereunder.???] [SECTION 12.05.Consent of MBIA. (a)Any provision of this Indenture expressly recognizing or granting rights in or to MBIA may not be amended in 72 any manner which affects the rights of MBIA hereunder without the prior written consent of MBIA. (b)Unless otherwise provided in this Section, MBIA's consent shall be required in addition to Bondholder consent, when required, for the following purposes: (i) execution and deliv- ery of any Supplemental Indenture or any amendment, supplement or change to or modification of the Ground Lease or the City Lease; (ii) removal of the Trustee and selection and appointment of any successor trustee; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires Bondholder con- sent. (c)Anything in this Indenture to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default as defined herein, MBIA shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders or the Trustee for the benefit of the Bondholders under this Indenture,including, without limitation, approval of all waivers of Events of Default. ???] SECTION 12.06.Suspension of Mail.If because of the suspension of delivery of first class mail or, for any other rea- son, the Trustee shall be unable to mail by the required class of mail any notice required to be mailed by the provisions of this Indenture, the Trustee shall give such notice in such other manner as in the judgment of the Trustee shall most effectively approxi- mate mailing thereof, and the giving of that notice in that manner for all purposes of this Indenture shall be deemed to be in compli- ance with the requirement for the mailing thereof.Except as otherwise provided herein, the mailing of any notice shall be deemed complete upon deposit of that notice in the mail and the giving of any notice by any other means of delivery shall be deemed complete upon receipt of the notice by the delivery service. SECTION 12.07.Payments Due on Saturdays.. Sundays and Holidays.If any Interest Payment Date, date of maturity of the principal of any Bonds, or date fixed for redemption of any Bonds is a Saturday, Sunday or a day on which (i) the Trustee is re- quired, or authorized or not prohibited, by law (including without limitation, executive orders) to close and is closed, then payment of interest, principal and any redemption premium need not be made by the Trustee or any Paying Agent on that date, but that payment may be made on the next succeeding business day on which the Trustee and the Paying Agent are open for business with the same force and effect as if that payment were made on the Interest Payment Date, date of maturity or date fixed for redemption, and no interest shall accrue for the period after that date, or (ii) a Paying Agent is required, or authorized or not prohibited, by law (including without limitation, executive orders) to close and is closed, then payment of interest, principal and any redemption premium need not be made by that Paying Agent on that date, but 73 that payment may be made on the next succeeding business day on which that Paying Agent is open for business with the same force and effect as if that payment were made on the Interest Payment Date, date of maturity or date fixed for redemption and no interest shall accrue for the period after that date; provided, that if the Trustee is open for business on the applicable Interest Payment Date, date of maturity or date fixed for redemption, it shall make any payment required hereunder with respect to payment of interest on outstanding Bonds and payment of principal of and premium on Bonds presented to it for payment, regardless of whether any Paying Agent shall be open for business or closed on the applicable In- terest Payment Date, date of maturity or date fixed for redemption. SECTION 12.08.Instruments of Owners. (a)Any writing, including without limitation, any consent, request, direction, approval, objection or other instru- ment or document, required under this Indenture to be executed by any Owner may be in any number of concurrent writings of similar tenor and may be executed by that Owner in person or by an agent or attorney appointed in writing.Proof of (i) the execution of any writing,including without limitation,any consent,request, direction, approval, objection or other instrument or document, (ii) the execution of any writing appointing any agent or attorney, and (iii) the ownership of Bonds, shall be sufficient for any of the purposes of this Indenture, if made in the following manner, and if so made, shall be conclusive in favor of the Trustee with regard to any action taken thereunder, namely: (A)The fact and date of the execution by any person of any writing may be proved by the certifi- cate of any officer in any jurisdiction, who has power by law to take acknowledgments within that jurisdiction, that the person signing the writing acknowledged that execution before that officer, or by affidavit of any witness to that execution; and (B)The fact of ownership of Bonds shall be proved by the Register maintained by the Registrar. (b)Nothing contained herein shall be construed to limit the Trustee to the foregoing proof, and the Trustee may accept any other evidence of the matters stated therein which it deems to be sufficient. Any writing, including without limitation, any consent,request,direction,approval,objection or other instrument or document, of the Owner of any Bond shall bind every future Owner of the same Bond, with respect to anything done or suffered to be done by the Corporation, the Trustee, the Registrar or any Paying Agent pursuant to that writing. 74 SECTION 12.09.Conies of Amendments. Modifications and Supplements to Be Delivered to Standard & Poor's Corporation.The Corporation and the Trustee covenant and agree that a copy of any amendment, modification or supplement to this Indenture, the Ground Lease or the City Lease shall be promptly delivered to Standard & Poor's Corporation, 25 Broadway, New York, New York 10004. SECTION 12.10.Priority of This Indenture.This Inden- ture shall be superior to any liens which may be placed upon the Revenues or any other funds created pursuant to this Indenture. SECTION 12.11.Extent of Covenants; No Personal Liabil- ity.All covenants, stipulations, obligations and agreements of the Corporation contained in this Indenture are and shall be deemed to be covenants, stipulations, obligations and agreements of the Corporation to the full extent authorized by the Act and permitted by the Constitution and laws of the State. No covenant, stipula- tion, obligation or agreement of the Corporation contained in this Indenture shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, officer, agent or employee of the Corporation or the Board of Directors in other than that person's official capacity.Neither the members of the Board of Directors nor any official executing the Bonds, this Indenture, the City Lease or any amendment or supplement hereto or thereto shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance or execution hereof or thereof. SECTION 12.12.Parties Interested Herein.Nothing in this Indenture expressed or implied is intended or shall be con- strued to confer upon, or to give to, any person or entity, other than the City, the Corporation, the Trustee, the Paying Agent, the Registrar,[MBIA, ???) the Owners of the Bonds, and the lessor under the Prior Lease and its assignees, any right, remedy or claim under or by reason of this Indenture, or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Cor- poration shall be for the sole and exclusive benefit of the City, the Corporation, the Trustee, the Paying Agent, the Registrar, [MBIA, ???) the Owners of the Bonds, and the lessor under the Prior Lease and its assignees. SECTION 12.13.Cancellation.To the extent applicable by provision of law, all parties acknowledge that this Indenture is subject to cancellation pursuant to Section 38-511, Arizona Revised Statutes, as amended, the provisions of which are incorporated herein. SECTION 12.14.Binding Effect.This Indenture shall inure to the benefit of and shall be binding upon the Corporation and the Trustee and their respective successors and assigns, sub- ject, however, to the limitations contained herein. 75 SECTION 12.15.Counterparts.This Indenture may be executed in any number of counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same instrument. SECTION 12.16.Governing Law.This Indenture and the Bonds shall be deemed to be contracts made under the laws of the State and for all purposes shall be governed by and construed in accordance with the laws of the State. 76 IN WITNESS WHEREOF,the Corporation has caused this Indenture to be executed and delivered for it and in its name and on its behalf by its duly authorized officers; in token of its acceptance of the trusts created hereunder, the Trustee has caused this Indenture to be executed and delivered for it and in its name and on its behalf by its duly authorized officer; and in token of its acceptance of the duties and obligations of the Registrar hereunder, the Registrar has caused this Indenture to be executed and delivered for it and in its name and on its behalf by its duly authorized officer, all as of the day and year first above written. CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION By ATTEST: , Secretary -Treasurer PSSO2E22/082492 Kenneth Bluntschully, President [THE VALLEY NATIONAL BANK OF ARIZONA ???], as Trustee and Registrar By Trust Officer 77 REGISTERED NO. R- EXHIBIT A [FORM OF SERIES 1992 BOND] (Face of Bond) REGISTERED UNITED STATES OF AMERICA STATE OF ARIZONA CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION MUNICIPAL FACILITIES REVENUE BOND, Series 1992 Original ,Interest Rate:Maturity Date:Issue Date: ...t per annum July 1, ....September 1, 1992 Registered Owner:.............................. Principal Amount-..............................DOLLARS CLEIP: ••• City of Apache Junction Municipal Property Corporation, a nonprofit corporation organized and existing under and by virtue of the laws of the State of Arizona (hereinafter referred to as the "Corporation"), for value received, hereby promises to pay to the Registered Owner (named above), or registered assigns, the Prin- cipal Amount (stated above) on the aforesaid Maturity Date, unless this Bond is called for redemption prior to its maturity date and payment provided therefor, and to pay interest on the principal amount at the aforesaid Interest Rate on January 1 and July 1 of each year, commencing July 1, 1992 (the "interest payment date") from the date of this Bond to its maturity, or until redeemed if called for redemption prior to maturity.The principal of and premium, if any, on this Bond (and any interest due as of the principal maturity or redemption date) are payable upon presenta- tion and surrender hereof at the principal corporate trust office of ..................................., Phoenix, Arizona, as trus- tee (the "Trustee").Interest on this Bond other than that due on a principal maturity or redemption date is payable ey check or draft mailed to the registered owner hereof, as shown on the regis- tration books for this series maintained by the Trustee, at the address appearing therein at the close of business on the 15th day of the calendar month next preceding that interest payment date (the "regular record date").Any interest which is not timely paid or duly provided for shall cease to be payable to the registered owner hereof (or of one or more predecessor Bonds)as of the regular record date, but shall be payable to the registered owner hereof (or of one or more predecessor Bonds)at the close of business on a special record date to be fixed by the Trustee for the payment of that overdue interest.The special record date shall be fixed by the Trustee whenever moneys became available for A-1 ' payment of the overdue interest, and notice of the special record date shall be given to registered owners of the Bonds not less than 10 days prior thereto.The principal, premium, if any, and inter- est on this Bond are payable in lawful money of the United States of America, without deduction for the services of the Trustee. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF.THOSE PROVISIONS SHALL HAVE THE SAME EFFECT FOR ALL PURPOSES AS IF SET FORTH ON THE FACE HEREOF. It is hereby certified and recited that all conditions, acts and things required by the Constitution and laws of the State of Arizona to exist, to occur and to be performed precedent to and in the issuance of this Bond do exist, have occurred and have been performed.Neither this Bond nor the series of Bonds of which this Bond is one, is a general obligation of the Corporation or the City of Apache Junction, Arizona (the "City") but is payable solely from the sources and in the manner set forth herein. IN WITNESS WHEREOF, the President and Secretary of the Corporation have caused this Bond to be executed in the name of the Corporation by the facsimile signature of said President and by the facsimile signature of said Secretary, all as of the date written above. ATTEST: Facsimile Secretary CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION President (Fapsimil_e) [FORM OF CERTIFICATE OF AUTHENTICATION] CERTIFICATE OF AUTHENTICATION This Bond is one of City of Apache Junction Municipal Property Corporation Municipal Facilities Subordinate Lien Revenue Bonds, Series 1992. Date of Authentication: as Registrar By Authorized Signatory (Reverse of Bond) This Bond is one of a duly authorized issue of Bonds of the Corporation known as its Municipal Facilities Revenue Bonds, Series 1992 (herein called the "Series 1992 Bonds"), in an aggre- gate principal amount of $issued for the purpose of providing funds for the City of Apache Junction, Arizona (the "City") (i) to design, acquire, construct and equip a new police facility for the City,(ii)to improve and develop certain recreation facilities of the City, (iii) to expand the library of the City and (iv) to pay the remaining amounts due pursuant to a Lease -Purchase Agreement, dated as of , 1991, by and between the City and PSHG Holdings, Inc. for the City.All of the Series 1992 Bonds are special obligations of the Corporation issued under and equally and ratably secured, both as to principal and interest, by a Trust Indenture, dated as of September 1, 1992 (hereinafter referred to as the "Indenture"), from the Corporation to the Trustee.Reference is hereby made to the Indenture for the nature and extent of the security, a statement of the terms and conditions upon which the Series 1992 Bonds are issued and secured, the rights of the registered owners hereof and the terms under which bonds on a parity with the Series 1992 Bonds may be issued. The Corporation is the lessee of certain real property leased by the City.Pursuant to a City Lease,dated as of September 1, 1992 (the "City Lease"), between the Corporation and the City, the Corporation has leased such real property and certain personal property to the City.The rental payments to be paid by the City to the Corporation pursuant to the City Lease have been assigned to the Trustee as security for the payment of the Series 1992 Bonds. Under the terms of the City Lease, the City has agreed to pay as rental payments sums sufficient to pay, among other things, A-3 the principal of and interest on the Series 1992 Bonds as the same come due, and all charges and expenses of the Trustee.In order to secure the payment of the rental payments, the City has pledged all of its excise and franchise taxes collected by or on behalf of the City (except those taxes required by State law to be expended for specific purposes, such as the motor vehicle fuel tax), and other amounts provided for in the City Lease.The City Lease does not constitute a general obligation of the City nor any indebtedness of the City within the meaning of the Constitution or laws of the State of Arizona. This Bond and all Bonds of this series are payable solely from amounts received by the Corporation under the City Lease and all supplements thereto. As provided in, and to the extent permitted by the Inden- ture, or any indenture supplemental thereto, the rights and obliga- tions of the Corporation and the registered owners of the Series 1992 Bonds may be modified by the Corporation with the written consent of the registered owners of a majority of the principal amount of the Series 1992 Bonds outstanding, provided, however, that no such modification shall effect the reduction of, or the extension of the stated time of payment of the principal hereof, or of the interest hereon, or permit the creation of any lien on the trust estate prior to or on a parity with the lien of said Inden- ture (except parity bonds or other obligations under the conditions set forth in the Indenture) or deprive the registered owner hereof of the lien created by said Indenture. The City, for itself, its successors and assigns, has covenanted and agreed with the registered owners of the Series 1992 Bonds that, so long as any of the Series 1992 Bonds remain out- standing and any of the principal and interest thereon shall be un- paid or unprovided for, it will not further encumber the taxes pledged under the City Lease on a basis equal to its first lien pledge therein unless the taxes collected in the next preceding fiscal year shall have amounted to at least two and one-fourth times the highest combined interest and principal requirements for any succeeding 12 months/ period for all Series 1992 Bonds then outstanding and all other outstanding parity obligations and any parity bonds or other obligations so proposed to be secured by a pledge of those taxes. Optional Redemption.The Series 1992 Bonds maturing July 1,through July 1,are not subject to redemption prior to maturity.The Series 1992 Bonds maturing on or after July 1, are subject to redemption, at the option of the Corporation, whole at any time, or in part on any interest payment date, in inverse order of maturity and by lot within a maturity, on or after July 1,, at the redemption prices set forth below (expressed as percentages of principal amount to be redeemed),plus accrued interest to the date fixed for redemption: A-4 Period During Which Redeemed (Both Dates Inclusive)Redemption Price July 1,through June 30,101 % July 1,through June 30,100i July 1,and thereafter 100 Mandatory Redemption.The Series 1992 Bonds maturing on July 1, 2009 are subject to mandatory redemption on July 1, in the years and amounts set forth below, at a redemption price equal to the principal amount thereof plus interest accrued to the date of redemption, as follows: Year Principal Amounts A remaining principal amount of $of Series 1992 Bonds will mature on July 1,. Notice of redemption of the Series 1992 Bonds shall be mailed by first class mail, postage prepaid, not more than 45 nor less than 30 days prior to the date fixed for redemption, to the registered owner of each Bond to be redeemed in whole or in part at the registered owner's address shown on the Register on the 15th day preceding that mailing.Failure to mail notice to any regis- tered owner of series 1992 Bonds shall not affect the validity of the proceeding for the redemption of Bonds with respect to regis- tered owners of other Series 1992 Bonds. The Registrar, initially the Trustee, will maintain the books of the Corporation for the registration of ownership of each Series 1992 Bond as provided in the Indenture. This Bond may be transferred on the registration books upon delivery hereof to the Registrar, accompanied by a written instrument of transfer in form and with guaranty of signature satisfactory to the Registrar, duly executed by the registered owner of this Bond, or his attorney -in -fact or legal representa- tive, containing written instructions as to the details of the transfer.No transfer of this Bond shall be effective until entered on the registration books. In all cases upon the transfer of a Series 1992 Bond, the Registrar will enter the transfer of ownership in the registration books and will authenticate and deliver, in the name of the trans- A -5 free or transferees, a new fully registered Bond or Bonds of the denominations of $5,000 or any whole multiple thereof (except that no Bond shall be issued which relates to more than a single princi- pal maturity) for the aggregate principal amount which the regis- tered owner is entitled to receive at the earliest practicable time in accordance with the provisions of the Indenture. The registered owner of one or more Bonds may, upon re- quest, and upon the surrender to the Registrar of such Bonds, exchange such Bonds for Bonds of other authorized denomination of the same maturity, series, and interest rate together aggregating the same principal amount as the Bonds so surrendered. The Corporation or the Registrar will charge the reg- istered owner of such Bond, for every such transfer or exchange of a Bond, an amount sufficient to reimburse it for any tax, govern- mental fee or other governmental charge required to be paid with respect to such transfer, and may require that such charge be paid before any such new Bond shall be delivered.The Corporation will pay all initial registration fees on the Bonds.Subsequent bond- owners shall pay all transfer fees including governmental fees, taxes or charges.The registered owner of any Bond will be required to pay any expenses incurred in connection with the replacement of a mutilated, lost, stolen or destroyed Bond. The Corporation and the Registrar will not be required (a) to issue or transfer any Bonds during a period beginning with the opening of business on the 15th business day next preceding the date of mailing of notice of Bonds to be redeemed and ending with the close of business on the day on which the applicable notice of redemption is mailed or (b) to transfer any Bonds which have been selected or called for redemption in whole or in part. This Bond shall not be entitled to any security or benefit under the Indenture or be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Registrar. This Bond is not a general obligation of the Corporation and no incorporator, member, director, officer or agent, as such, past, present or future, of the Corporation shall be personally liable for the payment hereof. [FORM OF LEGAL OPINION CERTIFICATE] LEGAL OPINION CERTIFICATION The following is a true copy of the opinion rendered by O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, P.A. in connection with the issuance of, and dated as of and premised on facts and law in effect on the date of the original delivery of the Series 1992 Bonds.An executed copy is on file in the office of the Corporation. (Facsimile) Secretary, City of Apache Junction Municipal Property Corporation [Form of Legal Opinion] [FORM OF ASSIGNMENT] ASSIGNMENT For value received, the undersigned sells, assigns and transfers unto .....................................the within bond and irrevocably constitutes and appoints ................... ................ attorney to transfer that bond on the books kept for registration thereof, with full power of substitution in the premises. Dated ......................... Signature Guaranteed: (Commercial Bank, Trust Company or Member of a National Securi- ties Exchange) Notice:The assignor's sig- nature to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, without alteration or any change whatever. [INSERT APPROPRIATE ABBREVIATIONS] A-7 EXHIBIT B [FORM OF NOTICE OF PREPAYMENT] Notice of Prepayment Notice is hereby given to PHSG Holdings, Inc. ("PHSG") and the assignees of the Lease -Purchase Agreement, dated as of ,1, 1991 (the "Prior Agreement"), by and between the City of Apache Junction, Arizona, and PHSG that payment of the Prior Agreement has been provided for by the establishment of an irrevocable trust with [The Valley National Bank of Arizona???], as escrow agent, by the deposit of cash (which shall not be reinvested) in such trust.The Prior Agreement shall be prepaid as provided in Article VIII thereof on 1 , 1992, at the Prepayment Price (as such term is defined in the Prior Agreement).From and after 1, 1992, no interest will accrue or be payable with respect to amounts due pursuant to the Prior Agreement. CITY OF APACHE JUNCTION, ARIZONA By:[The Valley National Bank of Arizona, as Trustee ???] By: Authorized Representative MAILING REQUIREMENTS: First-class mail, postage prepaid to PHSG Holdings, Inc. and the assignee of the Prior Agreement as provided by the Town as soon as possible after , 1992. B-1 FILE COPY (72-- -- After recordation, please return to: Michael Cafiso, Esq. Suite 1100, One East Camelback Road Phoenix, Arizona 85012 DRAFT 08/01/92 08/19/92 (MBIA Only) 08/24/92 GROUND LEASE CITY OF APACHE JUNCTION, ARIZONA, as Lessor, TO CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION as Lessee This GROUND LEASE, dated as of September 1, 1992 (this "Ground Lease"), by and between the CITY OF APACHE JUNCTION, ARI- ZONA, a municipal corporation of the State of Arizona (the "City"), and CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION, a nonprofit corporation organized and existing under the laws of the State of Arizona (the "Corporation"); W I I N E E R E l l i : WHEREAS, the City desires to lease the parcels of real property described on Exhibit A attached hereto to the Corporation in connection with the issuance by the Corporation of its City of Apache Junction Municipal Property Corporation Municipal Facilities Revenue Bonds, Series 1992 (the "Series 1992 Bonds"), in the aggre- gate principal amount of $ NOW, THEREFORE, PURSUANT TO LAW AND FOR AND IN CONSIDERA- TION OF THE MUTUAL COVENANTS HEREINAFTER CONTAINED, IT IS AGREED AS FOLLOWS: Section 1.The City hereby leases to the Corporation, and the Corporation hereby leases from the City, for the period commencing with the date hereof and continuing until July 2, or such later date as of which the City Lease described in Section 2 hereof shall be terminated, those certain parcels of real prop- erty (the "Demised Premises") located in or near the City of Apache Junction, Pinal County, State of Arizona, described on Exhibit A attached hereto.This Ground Lease shall be subject to earlier termination in accordance with Section 6 hereof. Section 2.Prior to the time either of the parties here- to execute this Ground Lease, their respective governing bodies shall authorize the execution of a City Lease (the "City Lease") to be entered into by the parties hereto, under the terms of which the Corporation shall lease the Demised Premises and certain other property to the City.Immediately following the execution of this Ground Lease by both of the parties hereto, the parties shall enter into the City Lease. Section 3.The Corporation shall pay to the City, as rental for the Demised Premises pursuant to this Ground Lease, $10 for the entire term, together with other good and valuable consid- eration as provided herein, such rental to be paid upon the execu- tion and delivery of this Ground Lease. Section 4.The Corporation, as of the date hereof, shall assign all rights and benefits hereunder to The Valley National Bank of Arizona, Phoenix, Arizona, as trustee (the "Trustee") under the Trust Indenture, dated as of September 1, 1992 (the "Inden- ture"), relating to the Series 1992 Bonds and shall grant the Trus- tee a lien on its interest in this Ground Lease for the benefit of the holders of the Series 1992 Bonds, being issued pursuant to the Indenture.The City hereby consents to such assignment and grant of lien.The Trustee shall have no obligations hereunder except as otherwise provided in the Indenture. Section 5.Notwithstanding this Ground Lease, the City, so long as no event of default by the City under this Ground Lease or the City Lease shall have occurred and be continuing, shall at all times have and retain all rights of access and control of the Demised Premises. Section 6.The City shall have the right to terminate this Ground Lease upon written notice to the Corporation given con- currently with or subsequent to the date the lien granted to the Trustee is released of record as a result of the payment of or provision for the payment of the entire indebtedness secured by such lien as provided in the Indenture.The Corporation shall not 2 at any time increase the amount of its indebtedness secured by the such lien except (i) to the extent it may be necessary in connec- tion with any refinancing or refunding which, by reason of a default by the City in the payment of rental payments due under the City Lease, may then be required for the Corporation to meet its obligations to the then holders of indebtedness secured by such lien or (ii) in accordance with Sections 7.05 of the City Lease, relating to additional financing or for refunding bonds issued for such purposes.So long as the City and the Corporation have entered into the City Lease and the City Lease has not been termi- nated, the City shall have no right to terminate this Ground Lease for any reason except the nonpayment of the rent required to be paid under the provisions of Section 3 hereof. Section 7.Upon the expiration or termination of this Ground Lease, the Corporation shall surrender to the City the Demised Premises, together with any improvements thereon.At the time of such surrender, the Demised Premises shall be free and clear of all liens and encumbrances other than (i) conditions, reservations, exceptions, rights of way and easements of record on the date of the commencement of the term of the City Lease or (ii) liens or encumbrances imposed as a result of an act or failure to act by the City. Section 8.If any term or provision of this Ground Lease or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Ground Lease or the application of such term or provision to per- sons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Ground Lease shall be valid and enforceable to the fullest extent permitted by law. Section 9. To the extent applicable by provision of law, all parties acknowledge that this Ground Lease is subject to can- cellation pursuant to Section 38-511, Arizona Revised Statutes, as amended, the provisions of which are incorporated herein. 3 IN WITNESS WHEREOF, the City and the Corporation have caused their respective names to be signed hereto by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF APACHE JUNCTION, ARIZONA, a municipal corporation By Tom Damiano, Mayor ATTEST: Kathy Connelly, City Clerk APPROVED AS TO FORM: Glenn Gimbet, Esq., City Attorney ATTEST: PSSO2E4A/082492 CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION, an Arizona nonprofit corporation By Kenneth Bluntschully, President , Secretary -Treasurer 4 STATE OF ARIZONA ) ) ss. COUNTY OF PINAL On this, the .... day of September, 1992, before me, the undersigned Notary Public, personally appeared Tom Damiano and Kathy Connelly, who acknowledged themselves to be the Mayor and City Clerk, respectively, of the CITY OF APACHE JUNCTION, ARIZONA, a municipal corporation, and that they, as such officers, being duly authorized so to do, executed the foregoing Ground Lease for the purposes therein contained by signing the name of the municipal corporation by themselves as such officers. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. Notary Public My Commission Expires: STATE OF ARIZONA ) )BB. COUNTY OF PINAL On this, the .... day of September, 1992, before me, the undersigned Notary Public, personally appeared Kenneth Bluntschully and , who acknowledged themselves to be the President and Secretary -Treasurer, respectively, of CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION, an Arizona nonprofit cor- poration, and that they, as such officers, being duly authorized so to do,executed the foregoing Ground Lease for the purposes therein contained by signing the name of the corporation by them- selves as such officers. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. My Commission Expires: Notary Public 5 EXHIBIT A DESCRIPTION OF DEMISED PREMISES PARCEL NO. I Parcel Which Was The Subject Of State Land Department Land Sales Receipt No. 50-98490 (City Service Annex) THAT PART OF LOTS 2, 3 AND 4 OF SECTION 4, TOWNSHIP 1 SOUTH, RANGE 8 EAST, GILA AND SALT RIVER MERIDIAN, PINAL COUNTY, ARIZONA MORE PRECISELY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTH QUARTER CORNER OF SAID SECTION 4 FROM WHICH THE NORTHEAST SECTION CORNER OF SAID SECTION 4 BEARS DUE EAST (ASSUMED), A DISTANCE OF 2643.07 FEET; THENCE DUE EAST, A DISTANCE OF 115.52 FEET; THENCE S44°02'18"W, A DISTANCE OF 185.63 FEET; THENCE S 23°59'05"W, A DISTANCE OF 93.33 FEET; THENCE S49°27'02"W, A DISTANCE OF 273.75 FEET; THENCE S77°53'11"W, A DISTANCE OF 137.10 FEET; THENCE S44°08'49"W, A DISTANCE OF 222.76 FEET; THENCE S61°12'40"W, A DISTANCE OF 87.45 FEET; THENCE S64°00'15"W, A DISTANCE OF 149.03 FEET; THENCE S46°14'40"W, A DISTANCE OF 188.61 FEET; THENCE S82°51'41"W, A DISTANCE OF 242.10 FEET; THENCE N84°03'21"W, A DISTANCE OF 480.88 FEET; THENCE N15°32'57"W,A DISTANCE OF 45.54 FEET; THENCE N9°09'04"E,A DISTANCE OF 68.71 FEET; THENCE N32°48'00"E, A DISTANCE OF 73.54 FEET; THENCE N12°43'44"E, A DISTANCE OF 88.13 FEET; THENCE N21°22'42"E, A DISTANCE OF 72.47 FEET; THENCE N40°53'15"E, A DISTANCE OF 40.23 FEET; THENCE N14°10'10"E, A DISTANCE OF 84.58 FEET; THENCE N42°01'36 0E, A DISTANCE OF 130.00 FEET; THENCE N19°16'55"E, A DISTANCE OF 91.44 FEET; THENCE N27°47'33"E, A DISTANCE OF 204.79 FEET TO A POINT ON THE NORTH LINE OF SAID SECTION 4 FROM WHICH THE NORTHEAST CORNER OF SAID SECTION BEARS DUE WEST, A DISTANCE OF 1373.22 FEET; THENCE DUE EAST ALONG SAID NORTH LINE, A DISTANCE OF 1269.85 FEET TO THE POINT OF BEGINNING CONTAINING 21.48 ACRES, MORE OR LESS A-1 PARCEL NO. II Parcel Which Was The Subject Of State Land Department Certificate Of Purchase No. 1004 (City Complex) THE WEST HALF OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER (W2SW4SW4) Section 16, in Township 1 N, Range 8E, G.&S.R.B.01., County of Pinal, State of Arizona, containing 20.03 acres, more or less A-2 CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION MUNICIPAL FACILITIES REVENUE BONDS, SERIES 1992 BOND PURCHASE AGREEMENT Septemher 15,1992 City of Apache Junction Municipal A.Erstptemty_Corporation Mayor and City Council City of Apache Junction, Arizona Ladies and Gentlemen: Peacock,AFiclop.Staley & Given, Inc. (the "Underwriter") hereby offers to enter into this Bond Purchase Agreement with the City of Apache Junction Municipal Property Corporation (the "Corporation") and the City of Apache Junction, Arizona (the "City") for the sale by the Corporation, and the purchase by the Underwriter, of the bonds described below.This offer is made subject to your,acceptance of this Bond Purchase Agreement prior to 11:59 p.m., Phoenix, Arizona time, on September 15.1992.Upon acceptance, as evidenced by the execution hereof by authorized officers of the Corporation and the City, in the spaces provided below, this Bond Purchase Agreement shall be in full force and effect in accordance with its terms and shall be binding upon the City, the Corporation and the Underwriter.At any time prior to such acceptance and approval, this offer is subject to withdrawal by the Underwriter upon written notice delivered to the Corporation and the City as herein provided.Any financial advisory relationship between the Underwriter and the Corporation (if such relationship has existed or now exists) with respect to the hereinafter -described bonds is hereby terminated, and the Corporation hereby expressly consents to the acquisition or participation in the purchase thereof on a negotiated basis by the Underwriter.If a financial advisory relationship exists, there may be a conflict of interest in the Aanderwriter changing from the capacity of financial advisor to Agnderwriter, and the Corporation hereby expressly acknowledges •such circumstances. 1.Purchase and Sale of the Bonds.Upon the terms and conditions, and upon the basis of the warranties, represen- tations and covenants herein set forth, the Underwriter hereby agrees to purchase from the Corporation, and the Corporation hereby agrees to sell and deliver to the Underwriter, all (but not less than all) of the $principal amount of the City of Apache Junction Municipal Property Corporation A bpa00041 SWR:jb 091192.1 Municipal Facilities Revenue Bonds, Series 1992 (the "Bonds"), to be dated September 1, 1992 at the purchase price of $ consisting of the par amount of the Bonds less the .Underwriter's discount of $) plus interest accrued thereon from September 1, 1992 to the date of Closing referred to in Section 2 hereof. The Bonds shall bear interest at the rates and mature on the dates and in the principal amounts set forth in Exhibit A hereto.The Bonds shall have such terms,mandatory redemption provision.and other provisions as described in and tt secured under and pursuant to the Trust Indenture, dated as of September 1, 1992 (the "Indenture") and to be entered into between The Valley National Bank of Arizona (the "Trustee") and the Corporation, substantially in the form previously submitted to the Underwriter with only such changes therein as shall be mutually agreed upon among the Underwriter, the City and the Corporation. The Bonds shall be offered for sale pursuant to an official statement, dated as of the date hereof (the "Official Statement"), prepared by or on behalf of the Corporation and the City.The Underwriter agrees to make a public offering of the Bonds at the initial offering prices or yields set forth in the Official Statement, reserving, however, the right to change such initial offering prices as necessary, in the sole discretion of the Underwriter, in connection with the marketing of the Bonds. The Corporation and the City hereby ratify, approve and authorize the use of copies of the preliminary form of the Official State- ment (the "Preliminary Official Statement") and the final form of the Official Statement, respectively in connection with the public offering and sale of the Bonds. The Corporation and the City will deliver, or cause to be delivered to the Underwriter promptly after the acceptance of this offer by the Corporation and the City (a) two fully -executed counterparts of this Bond Purchase Agreement and (b) two fully- executed counterparts of the Official Statement. 2.Delivery of the Bonds.At 8:00 a.m., Phoenix, Arizona time, on , 1992, or at such other time and date as may be mutually agreed upon (the "Closing"), the Corpora- tion will deliver or cause to be delivered to the Underwriter at The Depository Trust Corporation, New York, New York ("DTC"), or at such other place as may be mutually agreed upon, the Bonds in definitive form (all of the Bonds to be printed, duly executed, in authorized denominations requested by the Underwriter, and bearing CUSIP numbers (provided, however, that lack of said CUSIP numbers shall not relieve the Underwriter from its obligations under this Bond Purchase Agreement to purchase the Bonds)), together with the other documents hereinafter mentioned.The Underwriter will accept such delivery and pay the purchase price -2- immediately available funds on the date of the Closing payable to the Corporation.The Bonds will be made available for checking and packaging at DTC or some other mutually agreeable place two Business Days prior to the Closing and will be delivered as registered Bonds in such names and authorized denominations as requested by written notice of the Underwriter not later than seven Business Days prior to the Closing.In the event that temporary Bonds are delivered, the temporary Bonds will be made available for checking and packaging at some mutually agreeable place not later than 12:00 noon two Business Days prior to the Closing.In such event, the Trustee will deliver definitive Bonds to the Underwriter as soon after the Closing as it is reasonably possible, but in no event later than 15 days thereafter. 3.Representations, Warranties and Covenants of the Corporation.The Corporation represents and warrants to, and covenants with, the Underwriter that: (a)The Corporation is a nonprofit corporation duly organized and existing under the laws of the State of Arizona, and has, and at the date of the Closing will have, fullA legal right, power and authority to:(i) enter into the Ground Lease dated as of September 1, 1992 (the "Ground Lease"), between the City and the Corporation, the City Lease dated as of September 1, 1992 (the "City Lease"), between the Corporation and the City, the Indenture, and this Bond Purchase Agreement; (ii) adopt the Resolution of its BoardA of Directors, dated September 15,1992, authorizing, among other things, the issuance and sale of the Bonds (the "Bond Resolution"); (iii) issue, sell and deliver the Bonds to the Underwriter as provided herein; and (iv) carry out and consummate the transactions contemplated by this Bonds Purchase Agreement, the Ground Lease, the City Lease, the Indenture, the Bond Resolution, and the Official Statement. (b)The Board of Directors has duly adopted the Bond Resolution, duly authorized and approved the Preliminary Official Statement and the Official Statement and the lawful distribution thereof in connection with the offering for sale of the Bonds, duly authorized and approved the execution and delivery of, and the performance of its obligations under the Bonds, the Ground Lease, the City Lease, the Indenture, the Official Statement and this Bond Purchase Agreement and has duly authorized and approved the consummation of all other transactions contemplated by the Ground Lease, the City Lease, the Indenture, the Bond Resolution, this Bond Purchase Agreement, and the Official Statement. (c)As of the date of the Closing,/.this Bond Purchase Agreement, the Indenture, the Ground Lease and the City Lease will have been duly executed and delivered by the Corpo- ration and will be legal, valid and binding agreements-of the Corporation enforceable in accordance with their terms, subject as to enforcement of remedies to applicable bankruptcy, insol- vency, reorganization, moratorium and similar laws in effect from time to time affecting the rights of creditors generally and subject to the availability of equitable relief, and, in the case of this Bond Purchase Agreement, applicable securities laws. (d)The consummation of the transactions contemplated in the Ground Lease, the City Lease, the Indenture, the Bond Resolution, the Official Statement, and this Bond Purchase Agreement will not conflict with or constitute a breach of or default under any provision of applicable law or adminis- trative regulation of the State of Arizona or the United States of America or any department, division, agency or instrumentality thereof or any applicable judgment or decree or any loan agree- ment, bond, note, resolution, ordinance, indenture, agreement or other instrument to which the Corporation is a party or may be otherwise subject.The Corporation is not in breach of or default under any such provision, and no event has occurred and is continuing which constitutes, or which with the passage of time or the giving of notice or both would constitute, a breach of or a default under any such provisions.There are no such provisions which, either in any single case or in the aggregate, materially adversely affect or in the future might (so far as can reasonably be foreseen) materially affect the Corporation's condition, financial or otherwise, or materially affect the Corporation's ability to fulfill its obligations under or carry out the transactions contemplated by the Indenture, the Ground Lease, the City Lease, the Bond Resolution, the Official Statement or this Bond Purchase Agreement. (e)The Bonds will conform to the Indenture and when issued, executed, authenticated and delivered in accordance with the Indenture, and sold to the Underwriter as provided herein, will be valid and binding obligations of the Corporation. (f)At the time of the Corporation's acceptance hereof and as of the date of the Closing, the Preliminary Official Statement and the Official Statement, insofar as they relate to information supplied by the Corporation,the City Lease,the Indenture and the Ground Lease,A did not and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and if between the date of this Bond Purchase Agreement and the dateA2.5.days following the Closing Date the Corporation receives notice of the occurrence of an event affecting the Corporation, the City, the Trustee or any transaction contemplated hereby or by the documents referred to herein, which could cause the Official Statement to contain an untrue statement of a material fact or to omit to state a material fact which is necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Corporation shall notify the Underwriter; provided, however, that if such event shall occur on or prior to the Closing Date, the Underwriter in its sole discretion shall have the right to terminate the Underwriter's obligations hereunder by written notice to the Corporation and the City, and the Underwriter will be under no obligation to purchase and pay for the Bonds. (g)Between the date of this Bond Purchase Agreement and the Closing, the Corporation will not, without providing prior written notice to the Underwriter, issue any bonds, notes or other obligations for borrowed money, and, subsequent to the respective dates as of which information is given in the Official Statement up to and including the date of the Closing, the Corporation will immediately provide written notice to the Underwriter of any material liabilities, direct or contingent, except those liabilities arising in the normal course of business. (h)There is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to the knowledge of the Corpo- ration, threatened (i) in any way affecting the Corporation's powers or the existence of the Corporation, (ii) seeking to restrain or enjoin the issuance, sale or delivery of the Bonds, or the collection of the excise, transaction, franchise, privilege and business taxes, state -shared sales and income taxes, fees for licenses ad permits and state revenue -sharing (the "Excise Taxes") imposed or levied or to be imposed or levied to pay the principal of and interest on the Bonds as provided for in the City Lease,or the imposition or levy thereof, (iii) in any way contesting or affecting the validity or enforceability of the Bonds, the Bond Resolution, the Indenture, the Ground Lease, the City Lease, this Bond Purchase Agreement, or any agreement entered into in connection therewith, (iv) contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, (v) which may adversely affect the Corporation or its properties, or (vi) questioning the tax-exempt status of the Bonds. (i)The Corporation will furnish such infor- mation, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regu- lations of such states and other jurisdictions of the United States as the Underwriter may designate and (ii) to determine the eligibility of the Bonds for investment under the laws of the AatatesAgad.other jurisdictions of the United States,and use its best efforts to continue such qualification in effect so long as required for the initial offer, sale and distribution of Bonds; provided that the Corporation shall not be required to consent to service of process in any other state or jurisdiction or be required to qualify as a foreign corporation or other foreign entity. (j)The Corporation has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certificate may not be relied upon. (k)The Corporation will apply the proceeds of the Bonds in accordance with the Indenture. (1)The Corporation has made all required filings with and has obtained all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to conformance by the Corporation of its obligations hereunder and under the Bond Resolution. (m)Any certification required to be delivered hereunder signed by an authorized officer of the Corporation or such other officer of the Corporation as may be designated in 'written directions from time to time by the Corporation delivered to the Underwriter shall be deemed the representation and warranty of the Corporation to the Underwriter as to the statements made therein. 4.Representation, Warranties and Covenants of the City.The City represents and warrants to, and covenants with, the Underwriter that: (a)The City is a municipal corporation duly organized and validly existing under the Constitution and laws of the State of Arizona. (b)The City has full power and authority (i) to enter into the Ground Lease, the City Lease and this Bond Purchase Agreement and (ii) to carry out and consummate all other transactions contemplated by the Ground Lease, the City Lease, the City Resolution (as defined hereafter), the Indenture, the Official Statement, and this Bond Purchase Agreement. (c)The Mayor and the City ouncil..have adopted a Resolution, dated Sept-mber 15,1992 (the "City Resolution"), approving and authorizing the execution and delivery of and the due performance of its obligations under, the Ground Lease, the City Lease and this Bond Purchase Agreement and the consummation of the transactions contemplated in the Ground Lease, the City Lease and the Preliminary Official Statement, the Official Statement, andAtALI Bond Purchase Agreement. (d)This Bond Purchase Agreement, the Ground Lease and the City Lease have been duly executed and delivered by the City and are legal, valid and binding agreements of the City enforceable in accordance with their terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws in effect from time to time affecting the rights of creditors generally and subject to the availability of equitable relief, and, in the case of this Bond Purchase Agreement, applicable securities laws. (e)The consummation of the transactions contemplated in the Ground Lease, the City Lease, the Indenture, the City Resolution, the Official Statement, and this Bond Purchase Agreement will not conflict with or constitute a breach of or default under any provision of applicable law or adminis- trative regulation of the State of Arizona or United States of America or any department, division, agency or instrumentality thereof or any applicable judgment or decree or any loan agree- ment, bond, note, resolution, ordinance, indenture, agreement or other instrument to which the City is a party or may be otherwise subject.There are no provisions which, either in any single case or in the aggregate, materially adversely affect or in the future might (so far as can reasonably be foreseen) materially affect the City's business, affairs, position, results of operation or condition, financial or otherwise, or materially affect the city's ability to fulfill its obligations or carry out the transactions contemplated by the City Resolution, the Ground Lease, the City Lease, the Official Statement or this Bond Purchase Agreement. (f)At the time of the City's acceptance hereof and as of the date of Closing, as to information contained therein with respect to the City and supplied by the City f the Preliminary Official Statement and the Official Statement did not and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and if between the date of this Bond Purchase Agreement and the dateA;1 days following the Closing Date the City receives notice of an event affecting the City, the Corporation, the Trustee or any transaction contemplated hereby or by the documents referred to herein, which could cause the Preliminary Official Statement or the Official Statement to contain an untrue statement of a material fact or to omit to state a material fact which is necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. the City shall notify the Underwriter, and if in the opinion of the City or the Underwriter such event requires an amendment or supplement to such Preliminary Official Statement or the Official Statement, the City will amend or supplement the Preliminary Official Statement or the Official Statement in a form and in a manner acceptable to the Underwriter; provided, however, that if -7- such event shall occur on or prior to the Closing Date, the Underwriter in its sole discretion shall have the right to terminate the Underwriter's obligations hereunder by written notice to the City, and the Underwriter will be under no obligation to purchase and pay for the Bonds. (g)There is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to the knowledge of the City, threatened (i) in any way affecting the City's power, (ii) seeking to restrain or enjoin the issuance, sale or delivery of the Bonds, or the collection of the Excise Taxes imposed or levied or to be imposed or levied to pay the principal of and interest on the Bonds, or the imposition thereof, (iii) in any way contesting or affecting the validity or enforceability of the Bonds, the Ground Lease, the City Lease, the City Resolution or this Bond Purchase Agreement, or any agreements entered into in connection therewith, (iv) contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, (v) which may adversely affect the City or its properties, or (vi) questioning the tax-exempt status of the Bonds. (h)The City will furnish such information, execute such instruments and take such other action in cooper- ation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the blue sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and (ii) to determine the eligibility of the Bonds for investment under the laws of theAatatesp,and other jurisdictions of the United States,and use its best efforts to continue such qualification in effect so long as required for the initial offer, sale and distribution of Bonds; provided that the Corporation shall not be required to consent to service of process in any other state or jurisdiction or be required to qualify as a foreign corporation or other foreign entity. (i)The financial statements of the City contained in the Preliminary Official Statement and to be contained in the Official Statement fairly present the financial position and results of operations and. changes in fund balances of the City as of the dates and for the periods therein set forth and the City has no reason to believe that such financial statements have not been prepared in accordance with generally accepted accounting principles for municipalities consistently applied.Since June 30, 1991, the City, to the best of its knowledge, has not incurred any material liabilities, direct or contingent, nor, to the best of its knowledge, has there been any material adverse change in the result of operations or financial condition of the City that is not described in the Preliminary Official Statement, whether or not arising from transactions in ordinary course of business. (j)The City has not been notifiedAof any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. 5.Conditions to Underwriter's Obligations.The Underwriter has entered into this Bond Purchase Agreement in reliance upon the warranties, representations and covenants herein of the Corporation and the City.The Underwriter's obligations underAthis_ Bond Purchase Agreement are and shall be subject to the following additional conditionsiA (a)At the time of Closing, (1)the Official Statement, the Bond Resolution, the City Resolution, the Ground Lease, the City Lease, the Indenture and this Bond Purchase Agreement shall be in full force and effect and shall not have been amended, modified, supplemented, repealed or revoked in any respect except as may have been agreed to in writing by the Underwriter; (2)the representations and warranties of the Corporation and the City contained herein will be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of Closing; (3)the Bonds shall be delivered to the Underwriter as provided herein; (4)the proceeds from the sale of the Bonds shall be applied as described in the Indenture and the Official Statement; and (5)the Corporation and the City shall have duly adopted and there shall be in full force and effect such other resolutions as, in the opinion of O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, P.A., Phoenix, Arizona ("Bond Counsel"), and Gust Rosenfeld, counsel to the Underwriter, shall be necessary in connection with the transactions contemplated hereby and by the Official Statement. (b)The Underwriter shall have the right to cancel its obligation to purchase the Bonds if between the date hereof and the Closing (regardless of whether or not any of the following statements of fact were in existence on the date of this Bond Purchase Agreement): (1)legislation shall have been enacted or be proposed or actively considered or endorsed for passage (by press release or otherwise) by the President or Congress of the United States of America or the State of Arizona or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or a decision shall have been rendered by a Federal Court, a court of the State of Arizona, or the Tax Court of the United States of America, or an order, regu- lation or ruling shall have been made or a regulation shall have been proposed or made by the Treasury Department, the Internal Revenue Service or other Federal or Arizona authority (final or temporary), that in the opinion of the Underwriter materially and adversely affects the market for or market- ability of the Bonds, or the market price generally of obligations of the general character of the Bonds; or (2)there shall exist any event or circumstance, whether presently existing or hereafter occurring, which in the Under- writer's judgment either (i) makes untrue or incorrect in any material respect any statement or information contained in the Official Statement, (ii) is omitted from the Official Statement but should be stated or set forth therein in order to make the state- ments and information contained therein not misleading in any material respect or (iii) materially adversely affects the market price or marketability of the Bonds; or (3)there shall have occurred any war, outbreak of hostilities or other national international calamity or crisis subsequent to the date hereof, the effect of such war, outbreak, calamity or crisis on the financial markets of the United States of America being such as, in the judgment of the Underwriter, would materially and adversely affect the ability of the Underwriter to market the Bonds; or (4)the New York Stock Exchange or other national securities exchange or the Securities and Exchange Commission (the "Commission") or any other governmental authority imposes (i) any material restric- tions with respect to the Bonds or obliga- tions of the general character of the Bonds, or securities generally, (ii) any material increase in any such restrictions now in force (including those relating to the extension of credit by, or charge to net capital requirements of, underwriters), or (iii) any minimum or maximum prices for trading of the Bonds, obligations of the general character of the Bonds, or securities generally; or (5)a general banking moratorium shall have been declared by either Federal, New York or Arizona authorities having juris- diction, and shall be in force; or (6)legislation shall be enacted or be proposed or actively considered for enactment, a decision by a court of the United States of America shall be rendered, or a ruling or regulation by or on behalf of • the Commission or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that the Bonds or any securities of the Corporation or any securities similar to the Bonds (exclusive of private activity bonds as defined in Section 141 of the Internal Revenue Code of 1986, as amended) are not exempt from the registra- tion, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, or to the effect that the Trust Agreement is not exempt from the qual- ification or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; or (7)an order, decree, injunc- tion, ruling or regulation of any court or any governmental agency or body shall have been issued, or a proceeding by a court or governmental agency or body shall have been commenced or threatened, or legislation shall have been enacted, having the purpose or effect, directly or indirectly, or materially and adversely affecting the execution, deliv- ery, offer or sale of the Bonds as contem- plated hereby or by the Official Statement; or (8)the rating of the Bonds shall have been downgraded or withdrawn by a national rating service, which downgrade or withdrawal, in the opinion of the Under- writer, materially and adversely affects the market price or marketability of the Bonds; or (9)any state blue sky or secu- rities commission shall have withheld regis- tration, exemption, or clearance of the offering of the Bonds and, in the judgment of the Underwriter, the market for the Bonds is materially and adversely affected thereby; or (10)a supplement or amendment shall have been made to the Official State- ment subsequent to the date hereof which describes any material adverse change in the affairs of the Corporation or the City not disclosed in the Official Statement, which, in the judgment of the Underwriter, materially and adversely affects the market price or marketability of the Bonds. (c)At or prior to the Closing, the Underwriter shall receive the following opinions, certificates and documents: (1)the approving opinion of Bond Counsel, in form and substance satisfactory to the Underwriter, dated as of the date of the Closing; (2)A supplemental letter or opinions of Bond Counsel, dated the date of the Closing and addressed to the Underwriter, to the effect that: (i)the opinion referred to in the preceding subparagraph (1) may be relied upon by the Underwriter to the same extent as if such opinion were addressed to it;and A A(ii)the statements contained in the Official StatementA under the captions "THE BONDS," "DEFINITIONS OF CERTAIN TERMS," "SUMMARY OF CERTAIN PROVISIONS OF THE GROUND LEASE," "SUMMARY OF CERTAIN PROVISIONS OF THE CITY LEASE," "SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE," and "TAX EXEMPTION,"Ainsofar as such information purports to summarize certain provisions of federal or state law or if the Bonds, fairly summarize the information which it purports to summarize, in light of the circumstances under which it was provided; (3)the opinion of Gust . Rosenfeld, Phoenix, Arizona, as counsel to the Underwriter, dated the date of the Closing, addressed and in form and substance acceptable to the Underwriter; (4)a certificate, dated the date of the Closing, signed on behalf of the Corporation by the President and by the Secretary, in form and substance satisfactory to the Underwriter, to the effect that, to the best knowledge of such officers: (i)the represen- tations and warranties of the Corporation contained herein are true and correct in all material respect on and as of the date of the Closing as if made on the date of the Closing; (ii)Athere is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to the knowledge of the Corporation, threatened (A) in any way affecting the Corporation's powers or the existence of the Corporation, (B) seeking to restrain or enjoin the issuance, sale or delivery of the Bonds, or collection of the Excise Taxes imposed or levied or to be levied to pay the principal of and interest on the Bonds, or the imposition or levy thereof, (C) in any way contesting or affecting the validity or enforceability of the Bonds, the Bond Resolution, the Indenture, the Ground Lease, the City Lease, this Bond Purchase Agreement, or any agreement entered into in connection therewith, (D) contesting in any way the complete- ness or accuracy of the Preliminary Official Statement or of the Official Statement, (E) which may adversely affect the Corporation or its properties, or (F) questioning the tax-exempt status of the Bonds; (iii) p the Corporation has complied with all agreements, covenants and arrangements and satisfied all conditions on its part to be complied with or satisfied at or prior to the Closing; and (iv)Ano event affect- ing the Corporation has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein with respect to the Corporation in order to make the information therein in the light of the circumstances under which they were made or set forth not misleading in any material respect; (5)a certificate, dated the date of the Closing, signed on behalf of the City by the Mayor and by the Clerk of the City, in form and substance satisfactory to the Underwriter, to the effect that,to the best knowledge of such officials: (i)the representa- tions and warranties of the City contained herein are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing; (ii)Athere is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to the knowledge of the City, threatened (A) in any way affecting the City's powers or the existence of the City, (B) seeking to restrain or enjoin the issuance, sale or delivery of the Bonds, or collec- tion of the Excise Taxes imposed or levied or to be imposed or levied to pay the principal of and inter- est on the Bonds, or the imposition or levy thereof, (C) in any way contesting or affecting the valid- ity or enforceability of the Bonds, the City Resolution, the Indenture, the Ground Lease, the City Lease, this Bond Purchase Agreement, or any agreement entered into in connection therewith, (D) contest- ing in any way the completeness or accuracy of the Preliminary Official Statement or of the Official Statement, (E) which may adversely affect the city or its properties, or (F) questioning the tax-exempt status of the Bonds; (iii)Athe City has complied with all agreements, covenants and arrangements, and satisfied all conditions on its part to be complied with or satisfied at or prior to the Closing; and (iv) A no event affect- ing the City has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein with respect to the City in order to make the information therein in the light of the circumstances under which they were made or set forth not misleading in any material respect; that: (6)an opinion of the City Attorney (i)the City is duly organized and validly existing as a municipal corporation under the Constitution and laws of the State of Arizona, and has all requisite power and authority thereunder and under the laws of the State of Arizona, to enter into and perform its covenants and agreements under the Ground Lease, the City Lease and this Bond Purchase Agreement; (ii)the Ground Lease, the City Lease and this Bond Purchase Agreement have been duly authorized, validly executed and delivered by the City, and consti- tute the legal, valid and binding obligations of the City enforceable in accordance with their respective terms, except as limited by appli- cable bankruptcy, insolvency/ reorganization, moratorium or similar laws, and equitable prin- ciples affecting the enforceability of creditors' rights generally; (iii)the authoriza- tion, approval and execution of the Ground Lease, the City Lease and this Bond Purchase Agreement and all other proceedings of the City relating to the transactions contemplated thereby have been performed in accordance with all applicable open meeting and other laws, resolutions and ordinances of the City and the State of Arizona; (iv)to the best of his knowledge, information and belief, the Official Statement issued in connection with the Bonds did not on the date of sale and does not on the date of delivery of the Bonds contain any untrue statement of a material fact or omit any statement of a material fact necessary to make the state- ments therein contained with respect to the City, in light of the circumstances under which they were made, not misleading; and (v)except as described in the Official Statement, there is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to his knowledge threatened (A) in any way affecting the City's powers, the existence of the City or the title to office of any of the officials of the City, (B) seeking to restrain or enjoin the issuance, sale or delivery of the Bonds, or the collection of the Excise Taxes to be levied to pay the principal of and interest on the Bonds, or delivery thereof, (C) in any way contesting or affecting the valid-- ity or enforceability of the Bonds, the City Resolution, the Ground Lease, the City Lease, this Bond Purchase Agreement, or any agree- ments entered into in connection therewith, (D) contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, (E) which may adversely affect the City or its properties, or (F) question- ing the tax-exempt status of the Bonds; nor, to the best knowledge of such counsel, is there any reasonable basis therefor; (7)executed counterparts or copies of the Bond Resolution and a certifi- cation by the Secretary of the Corporation that such counterparts or copies are true, correct and complete and that the Bond Resolution is in full force and effect as of the date of closing and has not been amended, modified, supplemented, revoked or repealed; (8)executed counterparts or copies of the City Resolution and a certifi- cation by the clerk of the City that such counterparts or copies are true, correct and complete and that Athe City Resolution is in full force and effect as of the date of closing and has not been amended, modified, supplemented, revoked or repealed; (9)an executed counterpart of a certificate of authentication certifying to the authentication of the Bonds by the Trustee, as registrar, in a form acceptable to counsel to the Underwriter; (10)executed counterparts of the Indenture, the Ground Lease and the City Lease; (11)arbitrage certifications by the City and the Corporation in form and substance acceptable to Bond Counsel and counsel to the Underwriter; (12)a specimen copy of the Bonds; (13)such information and instru- ments as the Underwriter may reasonably request in order to qualify the Bonds for offering and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States of America as the Underwriter may designate, provided, however, that neither the Corpora- tion nor the City shall be required to submit to any service of process in any jurisdiction as a condition to the offering and sale of the Bonds by the Underwriter/4 (14)if the Bonds are offered and sold by the Underwriter as insured, An exe- cuted bond insurance policy from an insurer (the "Bond Insurer") reasonably acceptable to the Underwriter; (15)if the Bonds are offered and sold by the Underwriter as insured, an opinion of general counsel of the Bond Insurer that the Bond Insurer is duly incor- porated and validly existing and in good standing in the state of its incorporation, the policy relating to the Bonds is enforce- able in accordance with its terms, and any information regarding either the Bond Insurer or its policy does not contain any untrue statement of a material fact or intentionally omit a material fact required to be stated therein necessary to make the statements therein not misleading; (16)written evidence that Standard & Poor's Corporation has issued a rating of "A-" for the Bonds and such rating is in effect on the date of Closing; and • (17)such additional legal opinions, certificates proceedings, instru- ments and other documents as the Underwriter, counsel to the Underwriter or Bond Counsel may reasonably request to evidence compliance by the Corporation or the City with legal requirements, the truth and accuracy, as of the time of the Closing, of the representa- tions herein and in the Official Statement and the due performance or satisfaction by the Corporation or the city at or prior to such time of all agreements and legal requirements then to be satisfied by the Corporation or the City. All of the opinions, letters, certificates, instruments and other documents mentioned in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions of this Bond Purchase Agreement if, but only if, they are in form and substance satisfactory to the Underwriter and its counsel.To the extent any of the above -described opinions, certificates, letters or documents is required to be delivered and to be satisfactory or acceptable to the Underwriter as a condition of closing, the Underwriter's delivery of payment for the Bonds shall evidence such satisfaction or acceptance, or the waiver of such requirement, as the case may be. If there is any failure to satisfy the conditions to the Underwriter's obligations contained in this Bond Purchase Agreement or if the Underwriter's obligations are terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and the Underwriter, the Corporation and the City shall not have any further obligation hereunder. 6.Compliance with Rule 15c2-12; Circumstances Affecting Disclosure Arising Before or After the Closing. (a)The Corporation hereby deems the Preliminary Official Statement as final as of its date for purposes of paragraph (b)(1) of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), subject to completion with certain information to be established at the time of the sale of the Bonds as permitted by the Rule. (b)As soon as practicable after the date hereof, and in any event within seven business days of the date hereof, the Corporation shall deliver to the Underwriter copies of the Official Statement dated the date hereof in substantially the form of the Preliminary Official Statement, with only such changes therein as shall have been approved by the Corporation and the Underwriter (the delivery of the Official Statement by the Corporation to the Underwriter and the acceptance thereof by the Underwriter to constitute in all events such approval), executed on behalf of the Corporation by its President.The Official Statement shall be provided to the Underwriter for distribution is such quantity as shall be reasonable requested by the Underwriter in order to permit the Underwriter to comply with the provisions of the Rule and the applicable rules of the Municipal Securities Rulemaking State Board. (c)Neither the Corporation nor the City will adopt any amendment of or supplement to the Official Statement to which, after having been furnished with a copy, the Underwriter shall object in writing or which shall be disapproved by Bond Counsel or counsel to the Underwriter. (d)After the date hereof and until 25 days after the end of the underwriting period, if any event shall occur as a result of which it is necessary, in the opinion of the Under- writer, to amend or supplement the Official Statement in order to make the statements therein, in the light of the circumstances under which they are made, no misleading, in the opinion of the Underwriter, the Corporation shall cause to be prepared and furnished a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Underwriter and counsel to the Underwriter) which will amend or supplement the Official Statement so that it will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the state- ments and information therein, in light of the circumstances, not misleading in any material respect.The expense of preparing any such amendment or supplement shall be paid by the Corporation. (e)For the purposes of this Section 6, the Corporation and the City will furnish such information with respect to the Corporation and the City, as the Underwriter may, within 25 days of filing the Official Statement with a nationally recognized municipal securities information repository (as such term is used in the Rule), reasonably request. (f)The Corporation and the City represent and warrant that, at the time of the acceptance hereof by the Corporation and the City and (unless an event occurs in the nature described in subparagraph (d) of this Section (6)) at all times subsequent thereto during the period up to and including 25 days subsequent to the end of the underwriting period, the Official Statement to the extent of the information supplied by each does not and will not contain any untrue statement of a 'material fact or omit to state any material fact necessary in order to make the statements and information therein, in light of the circumstances, not misleading in any material respect. (g)The Corporation and the City represent and warrant to the extent of the information succlied by each that, if the Official Statement is supplemented or amended pursuant to subparagraph (d) of this Section 6 as to such information,at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subparagraph) at all times subsequent thereto during the period up to and including 25 days subsequent to the end of the under- writing period, the Official Statement as to supplemented or amended will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading,. (h)The "end of the underwriting period" as used in this Bond Purchase Agreement shall mean the date of the Closing unless the Underwriter gives written notice otherwise to the Corporation prior to the date of the Closing.In the event such notice is given in writing by the Underwriter, the Under- writer agrees to notify the Corporation in writing promptly following the occurrence of the "end of the underwriting period" as defined in the Rule. 7.Payment of Expenses.(a)Whether or not the transactions contemplated by this Bond Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the Corporation shall pay from the proceeds of the Bonds Aonly,all expenses and costs of the City and the Corporation incident to their respective obligations in connection with the authorization, execution and delivery of Bonds to the Under- writer, including, without limitation:fees and expenses of Bond Counsel, City Counsel, Counsel to the Corporation, counsel to the Underwriter and all other professional advisers; costs of prepa- ration, signing, transportation, delivery and safekeeping of the Bonds; printing of the Preliminary Official Statement and the Official Statement; fees and expenses of the Trustee, the Corpo- ration and the City; the fees and expenses of rating agencies; and, if the Bonds are offered and sold by the Underwriter as insured, the premium on the policy of insurance and all related expenses. (b)The Underwriter will pay the cost of preparation and printing of this Bond Purchase Agreement, all advertising expenses in connection with the public offering of the Bonds, and all other expenses incurred by it in connection with its public offering and distribution of the Bonds. 8.Notices.Any notice to be given under this Bond Purchase Agreement may be given by mailing or delivering the same in writing as follows: City or Corporation: A1001 North Idaho Road Apache Junction, Arizona 85219 A Attn:City Manager Underwriter:Peacock, Hislop, Staley & Given, Inc. 2999 North 44th Street Phoenix, Arizona 85018 Attn:Mr. Mark Reader 9.Parties in Interest.This Bond Purchase Agreement is made solely for the benefit of the Corporation, the City and the Underwriter (including the successors or assigns of the Underwriter), and no other person, partnership, association or corporation shall acquire or have any right hereunder or by virtue hereof.All agreements of the Corporation and the City in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter and shall survive the delivery of and payment for the Bonds. 10.Effect of Other Contract.Nothing in this Bond Purchase Agreement shall be construed as altering, terminating or otherwise modifying any existing contracts between the Corporation, the City and the Underwriter. 11.Notice Concerning Cancellation of Contracts.To the extent applicable by provision of law, the parties acknowledge that this Bond Purchase Agreement is subject to cancellation pursuant to A.R.S. S Section 38-511, as amended, the provisions of which are incorporated herein. 12.Counterparts.This Bond Purchase Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one instrument. PEACOCK, HISLOP, STALEY &ACCEPTED BY THE CITY OF APACHE GIVEN, INC.JUNCTION MUNICIPAL PROPERTY CORPORATION By By Its Its ATTEST: By Clerk, City of Apache Junction, Arizona ACCEPTED BY THE CITY OF APACHE JUNCTION, ARIZONA Its EXHIBIT A A CITY OF APACHE JUNCTION MUNICIPAL PROPERTY CORPORATION MUNICIPAL FACILITIES REVENUE BONDS SERIES 1992 July 1 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2012* Amount Interest Rate *Bonds maturing on July 1, 2012, are subject to mandatory redemption prior to their stated maturity, by lot, as may be selected by the paying agent, at a redemption price of par plus interest accrued to the date of redemption, but without premium on the following dates and in the following principal amounts: Year Principal July 1 Amount 2008 2009 2010 2011 2012 (maturity)