Stradling Yocca Carlson & Rauth

Draft dated 5/5/21

INDENTURE OF TRUST

by and between

BEAUMONT PUBLIC IMPROVEMENT AUTHORITY

and

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Trustee

Dated as of ________ 1, 2021

$__________
BEAUMONT PUBLIC IMPROVEMENT AUTHORITY
LOCAL AGENCY REFUNDING BONDS
SERIES 2021A
(FEDERALLY TAXABLE)

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 TABLE OF CONTENTS
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ARTICLE I

DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS; EQUAL SECURITY

Section 1.1 Definitions.................................................................................................................. 2

Section 1.2 Rules of Construction............................................................................................... 14
Section 1.3 Authorization and Purpose of Bonds ....................................................................... 14
Section 1.4 Equal Security .......................................................................................................... 14

ARTICLE II

ISSUANCE OF BONDS

Section 2.1 Terms of Bonds ........................................................................................................ 15

Section 2.2 Redemption of Bonds............................................................................................... 16
Section 2.3 Form of Bonds ......................................................................................................... 18
Section 2.4 Execution of Bonds .................................................................................................. 18
Section 2.5 Transfer of Bonds..................................................................................................... 18
Section 2.6 Exchange of Bonds .................................................................................................. 19
Section 2.7 Temporary Bonds ..................................................................................................... 19
Section 2.8 Bond Register........................................................................................................... 19
Section 2.9 Bonds Mutilated, Lost, Destroyed or Stolen ............................................................ 19
Section 2.10 Book-Entry System .................................................................................................. 20

ARTICLE III

DEPOSIT AND APPLICATION OF PROCEEDS

Section 3.1 Issuance of Bonds .................................................................................................... 21

Section 3.2 Application of Proceeds of Sale of Bonds and Funds Received from the
City and Community Facilities District ................................................................... 22
Section 3.3 Revenue Fund .......................................................................................................... 22
Section 3.4 Costs of Issuance Fund ............................................................................................ 22
Section 3.5 Purchase Fund .......................................................................................................... 22
Section 3.6 Reserve Fund ........................................................................................................... 22
Section 3.7 Surplus Fund ............................................................................................................ 23
Section 3.8 Administrative Expense Fund .................................................................................. 23
Section 3.9 Additional Funds and Accounts ............................................................................... 23
Section 3.10 Validity of Bonds ..................................................................................................... 23

ARTICLE IV

REVENUES; FLOW OF FUNDS

Section 4.1 Pledge of Revenues; Assignment of Rights ............................................................. 23

Section 4.2 Receipt, Deposit and Application of Revenues; Revenue Fund .............................. 24
Section 4.3 Reserve Fund ........................................................................................................... 25
Section 4.4 Surplus Fund ............................................................................................................ 28

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Section 4.5 Investments .............................................................................................................. 29

Section 4.6 Valuation and Disposition of Investments ............................................................... 30

ARTICLE V

COVENANTS OF THE AUTHORITY

Section 5.1 Punctual Payment ..................................................................................................... 30

Section 5.2 Extension of Payment of Bonds ............................................................................... 30
Section 5.3 Against Encumbrances............................................................................................. 30
Section 5.4 Power to Issue Bonds and Make Pledge and Assignment ....................................... 30
Section 5.5 Accounting Records and Financial Statements ........................................................ 31
Section 5.6 Conditions to Issuance of Additional Obligations ................................................... 31
Section 5.7 Local Obligations ..................................................................................................... 32
Section 5.8 Sale of Local Obligations ......................................................................................... 33
Section 5.9 Continuing Disclosure Agreement ........................................................................... 33
Section 5.10 Further Assurances................................................................................................... 33
Section 5.11 Pledged Revenues .................................................................................................... 33

ARTICLE VI

THE TRUSTEE

Section 6.1 Appointment of Trustee ........................................................................................... 34

Section 6.2 Acceptance of Trusts................................................................................................ 34
Section 6.3 Fees, Charges and Expenses of Trustee ................................................................... 38
Section 6.4 Notice to Bond Owners of Default .......................................................................... 38
Section 6.5 Intervention by Trustee ............................................................................................ 38
Section 6.6 Removal of Trustee .................................................................................................. 38
Section 6.7 Resignation by Trustee............................................................................................. 38
Section 6.8 Appointment of Successor Trustee .......................................................................... 38
Section 6.9 Merger or Consolidation .......................................................................................... 39
Section 6.10 Concerning any Successor Trustee .......................................................................... 39
Section 6.11 Appointment of Co-Trustee ..................................................................................... 39
Section 6.12 Indemnification; Limited Liability of Trustee ......................................................... 40

ARTICLE VII

MODIFICATION AND AMENDMENT OF THE INDENTURE

Section 7.1 Amendment Hereof .................................................................................................. 40

Section 7.2 Effect of Supplemental Indenture ............................................................................ 41
Section 7.3 Endorsement or Replacement of Bonds After Amendment ..................................... 41
Section 7.4 Amendment by Mutual Consent .............................................................................. 42

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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS

Section 8.1 Events of Default ..................................................................................................... 42

Section 8.2 Remedies; Rights of Bond Owners .......................................................................... 42
Section 8.3 Application of Revenues and Other Funds After Event of Default ......................... 43
Section 8.4 Power of Trustee to Control Proceedings ................................................................ 44
Section 8.5 Appointment of Receivers ....................................................................................... 44
Section 8.6 Non Waiver .............................................................................................................. 44
Section 8.7 Rights and Remedies of Bond Owners .................................................................... 45
Section 8.8 Termination of Proceedings ..................................................................................... 45

ARTICLE IX

MISCELLANEOUS

Section 9.1 Limited Liability of Authority ................................................................................. 45

Section 9.2 Benefits of Indenture Limited to Parties .................................................................. 46
Section 9.3 Discharge of Indenture ............................................................................................. 46
Section 9.4 Successor is Deemed Included in All References to Predecessor ............................ 47
Section 9.5 Content of Certificates ............................................................................................. 47
Section 9.6 Execution of Documents by Bond Owners .............................................................. 47
Section 9.7 Disqualified Bonds................................................................................................... 48
Section 9.8 Waiver of Personal Liability .................................................................................... 48
Section 9.9 Entire Agreement; Partial Invalidity ........................................................................ 48
Section 9.10 Destruction of Cancelled Bonds .............................................................................. 49
Section 9.11 Funds and Accounts ................................................................................................. 49
Section 9.12 Notices ..................................................................................................................... 49
Section 9.13 Unclaimed Moneys .................................................................................................. 50
Section 9.14 Payment Due on Other than a Business Day ........................................................... 50
Section 9.15 Governing Law ........................................................................................................ 50

ARTICLE X

MUNICIPAL BOND INSURANCE POLICY AND RESERVE POLICY

Section 10.1 Rights of the Insurer ................................................................................................. 50

Section 10.2 Payments under the Insurance Policy ...................................................................... 51
Section 10.3 Amounts Paid by Insurer.......................................................................................... 53
Section 10.4 Reimbursement of Insurer Fees ............................................................................... 53
Section 10.5 Provision of Information to Insurer ......................................................................... 53
Section 10.6 Discussion of and Access to Information ................................................................ 54
Section 10.7 Notice to Insurer by Trustee..................................................................................... 54
Section 10.8 Effect of Insurance Policy ........................................................................................ 54
Section 10.9 Impairment of Insurer’s Rights ................................................................................ 54

Signatures ................................................................................................................................ S-1

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Exhibit A Form of Bonds ....................................................................................................... A-1

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 INDENTURE OF TRUST

THIS INDENTURE OF TRUST (this “Indenture”), dated as of __________ 1, 2021, by and

between the BEAUMONT PUBLIC IMPROVEMENT AUTHORITY, a joint powers authority
organized and existing under the laws of the State of California (the “Authority”) and
WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association organized
and existing under the laws of the United States of America (the “Trustee”);

WITNESSETH:

WHEREAS, the Beaumont Public Improvement Authority (the “Authority”) is a joint

exercise of powers authority duly organized and existing under the provisions of Articles 1 through 4
(commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of
the State of California (the “Act”), and is authorized pursuant to Article 4 of the Act to borrow
money for the purpose of financing the acquisition of bonds, notes and other obligations to provide
financing and refinancing for capital improvements of member entities of the Authority and other
local agencies; and

WHEREAS, the City of Beaumont Community Facilities District No. 93-1 (“CFD No. 93-1”)
has previously issued bonds (collectively, the “Prior Bonds”) to finance the acquisition of certain
public improvements; and

WHEREAS, the Authority has determined to issue its Local Agency Refunding Bonds,
Series 2021A (Federally Taxable) (the “Bonds”) in the aggregate principal amount of $__________
for the primary purpose of acquiring special tax refunding bonds of CFD No. 93-1, the proceeds of
which will be utilized to defease and refund the Prior Bonds pursuant to and secured by this
Indenture in the manner provided herein; and

WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish
and declare the terms and conditions upon which the Bonds are to be issued and to secure the
payment of the principal thereof and interest thereon, the Authority has authorized the execution and
delivery of this Indenture; and

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

NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the

payment of the principal of and the interest and premium (if any) on all Bonds at any time issued and
Outstanding under this Indenture, according to their tenor, and to secure the performance and
observance of all the covenants and conditions therein and herein set forth, and to declare the terms
and conditions upon and subject to which the Bonds are to be issued and received, and in
consideration of the premises and of the mutual covenants herein contained and of the purchase and
acceptance of the Bonds by the Owners thereof, and for other valuable considerations, the receipt and

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sufficiency of which is hereby acknowledged, the Authority does hereby covenant and agree with the
Trustee, for the benefit of the respective Owners from time to time of the Bonds, as follows:

ARTICLE I

DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS; EQUAL SECURITY

Section 1.1 Definitions. Unless the context otherwise requires, the terms defined in this
Section shall for all purposes of this Indenture and of any Supplemental Indenture and of the Bonds
and of any certificate, opinion, request or other documents herein mentioned have the meanings
herein specified.

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

“Additional Bonds” means additional bonds issued pursuant to Section 5.6 and secured on a
parity with the Bonds.

“Administrative Expense Fund” means the fund by that name established and maintained
pursuant to this Indenture.

“Annual Debt Service” means, for each Bond Year, the sum of (a) the interest payable on the
Outstanding Bonds in such Bond Year, and (b) the principal amount of the Outstanding Bonds
scheduled to be paid in such Bond Year.

“Authority” means the Beaumont Public Improvement Authority, a joint exercise of powers
agency established pursuant to the laws of the State, whose members as of the date hereof are the
City and the Beaumont Parking Authority, until a successor organization shall have become such,
and thereafter “Authority” shall mean such successor organization.

“Authority Administrative Expenses” means the fees and expenses of the Trustee, including
legal fees and expenses (including fees and expenses of outside counsel and the allocated costs of
internal attorneys) and the out of pocket expenses incurred by the Trustee, the City and the Authority
in carrying out their duties hereunder including payment of amounts payable to the United States
pursuant to Sections 5.7 and 5.8 hereof.

“Authorized Officer” means the Chair, Vice-Chair, Executive Director or Treasurer of the
Authority or any other Person authorized by the Authority to perform an act or sign a document on
behalf of the Authority for purposes of this Indenture.

“Authority” means the Beaumont Public Improvement Authority, a joint exercise of powers
agency established pursuant to the laws of the State, whose members as of the date hereof are the
City and Beaumont Parking Authority.

“Beneficial Owners” means the actual purchasers of the Bonds whose ownership interests are
recorded on the books of the DTC Participants.

“Bond Counsel” means any attorney at law or firm of attorneys selected by the Authority, of
nationally recognized standing in matters pertaining to the federal tax exemption of interest on bonds

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issued by states and political subdivisions, and duly admitted to practice law before the highest court
of any state of the United States of America.

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

“Bond Register” means the registration books for the Bonds maintained by the Trustee in
accordance with Section 2.8 hereof.

“Bonds” means the Authority’s Local Agency Refunding Bonds, Series 2021A authorized by
and at any time Outstanding pursuant to the Bond Law and this Indenture.

“Bond Year” means each twelve month period extending from September 2 in one calendar
year to September 1 of the succeeding calendar year, except in the case of the initial Bond Year
which shall be the period from the Closing Date of the Bonds to September 1, 2021, both dates
inclusive.

“Business Day” means a day which is not a Saturday or Sunday or a day of the year on which
the New York Stock Exchange or banks in New York, New York, Wilmington, Delaware or Los
Angeles, California, or where the Trust Office is located, are not required or authorized by law,
regulation or executive order to close or remain closed.

“Certificate of the Authority” means a certificate in writing signed by the Executive Director
or Treasurer of the Authority, or by any other officer of the Authority duly authorized in writing by
the Board of Directors of the Authority for that purpose.

“CFD Act” means the Mello-Roos Community Facilities Act of 1982, constituting
Chapter 2.5 (commencing with Section 53311), Article 1 of Division 2 of Title 5 of the Government
Code of that State of California, as amended from time to time.

“City” means the City of Beaumont, a general law city duly organized and existing under and
by virtue of the laws of the State of California.

“Closing Date” means the date on which the Bonds were executed and delivered to the
Original Purchaser thereof.

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

“Community Facilities District” or “Community Facilities District No. 93-1” or “CFD

No. 93-1” means the City of Beaumont Community Facilities District No. 93-1, a community
facilities district formed pursuant to the CFD Act.

“Costs of Issuance” means the costs and expenses incurred in connection with the issuance
and sale of the Bonds, the Local Obligations, and the acquisition of the Local Obligations by the
Authority, including the acceptance and initial annual fees and expenses (including legal fees and
expenses) of the Trustee, legal fees and expenses, costs of printing the Bonds and the preliminary and
final Official Statements, fees of financial consultants, the Underwriter’s discount, the premiums
with respect to the Insurance Policy and the Reserve Policy, and other fees and expenses set forth in a
Request of the Authority.

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 “Costs of Issuance Fund” means the fund by that name established in Section 3.4.

“Dated Date” means the date on which the Bonds are issued and authenticated by the Trustee.

“Defeasance Securities” means: (a) non-callable direct obligations of the United States of
America (“Treasuries”), (b) evidences of ownership of proportionate interests in future interest and
principal payments on Treasuries held by a bank or trust company as custodian, under which the
owner of the investment is the real party in interest and has the right to proceed directly and
individually against the obligor and the underlying Treasuries are not available to any person
claiming through the custodian or to whom the custodian may be obligated, (c) subject to the prior
written consent of the Insurer (so long as the Insurer has not defaulted on any obligation under the
Insurance Policy), pre-refunded municipal obligations rated “AAA” and “Aaa” by S&P and
Moody’s, respectively, and (d) subject to the prior written consent of the Insurer (so long as the
Insurer has not defaulted on any obligation under the Insurance Policy), securities eligible for “AAA”
defeasance under then existing criteria of S&P.

“District Trustee” means the Trustees under the Local Obligation Bond Indentures.

“DTC” means The Depository Trust Company, New York, New York, and its successors and
assigns.

“DTC Participants” means securities brokers and dealers, banks, trust companies, clearing
corporations and other organizations maintaining accounts with DTC.

“Event of Default” means any of the events described in Section 8.1 hereof.

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

“Improvement Area No. 7B” means Improvement Area No. 7B of CFD No. 93-1.

“Improvement Area No. 7C” means Improvement Area No. 7C of CFD No. 93-1.

“Improvement Area No. 17A” means Improvement Area No. 17A of CFD No. 93-1.

“Improvement Area No. 19C” means Improvement Area No. 19C of CFD No. 93-1.

“Improvement Area No. 20” means Improvement Area No. 20 of CFD No. 93-1.

“Improvement Areas” means Improvement Area No. 7B, Improvement Area No. 7C,
Improvement Area No. 17A, Improvement Area No. 19C and Improvement Area No. 20.

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

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 “Independent Accountant” means any accountant or firm of such accountants appointed and
paid by the Authority, and who, or each of whom –

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

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

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

“Independent Financial Consultant” means any financial consultant or firm of such

consultants appointed and paid by the Authority, and who, or each of whom –

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

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

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

“Information Services” means such services providing information with respect to called
bonds in accordance with then current guidelines of the Securities and Exchange Commission, such
as the Authority may select in its sole discretion currently the Electronic Municipal Market Access
System of the Municipal Securities Rulemaking Board, maintained on the Internet at
http://emma.msrb.org/.

“Insurance Policy” or “Policy” means the insurance policy issued by the Insurer guaranteeing
the scheduled payment of principal of and interest on the Bonds when due.

“Insurer” means [__________________], or any successor thereto or assignee thereof.

“Interest Account” means the account by that name established and held by the Trustee
pursuant to Sections 3.3 and 4.2(a) hereof.

“Interest Payment Date” means March 1 and September 1 in each year, beginning March 1,
2022, and continuing thereafter so long as any Bonds remain Outstanding.

“Late Payment Rate” means the lesser of: (1) the greater of: (A) the per annum rate of
interest, publicly announced from time to time by JP Morgan Chase Bank at its principal office in the
City of New York, as its prime or base lending rate (“Prime Rate”) (any change in such Prime Rate
to be effective on the date such change is announced by JP Morgan Chase Bank) plus 3%; and
(B) the then applicable highest rate of interest on the Bonds; and (2) the maximum rate permissible
under applicable usury or similar laws limiting interest rates. In the event that JP Morgan Chase
Bank ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced prime
or base lending rate of such national bank as the Insurer shall specify. Interest at the Late Payment

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Rate on any amount owing to the Insurer shall be computed on the basis of the actual number of days
elapsed in a year of 360 days.

“Local Obligations” means collectively, the following:

(a) City of Beaumont Community Facilities District No. 93-1 2021 Special Tax
Refunding Bonds (Improvement Area No. 7B);

(b) City of Beaumont Community Facilities District No. 93-1 2021 Special Tax
Refunding Bonds (Improvement Area No. 7C);

(c) City of Beaumont Community Facilities District No. 93-1 2021 Special Tax
Refunding Bonds (Improvement Area No. 17A);

(d) City of Beaumont Community Facilities District No. 93-1 2021 Special Tax
Refunding Bonds (Improvement Area No. 19C); and

(e) City of Beaumont Community Facilities District No. 93-1 2021 Special Tax
Refunding Bonds (Improvement Area No. 20)

“Local Obligations Delinquency Revenues” means Revenues received by the Trustee from
the District Trustee for a Series of the Local Obligations representing the payment of delinquent debt
service on such Local Obligations.

“Local Obligation Indentures” means the bond indentures executed in connection with the
issuance of the Local Obligations.

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

“Moody’s” means Moody’s Investor’s Service, Inc., its successors and assigns.

“Original Purchaser” means Stifel, Nicolaus & Company, Incorporated, and, with respect to
the Bonds of any other Series, the entity or entities that purchase such Bonds from the Authority on
the date of issuance thereof.

“Outstanding” when used as of any particular time with reference to Bonds, means (subject
to the provisions of Section 9.7 hereof) all Bonds theretofore executed and issued by the Authority
and authenticated and delivered by the Trustee under this Indenture except –

(a) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for
cancellation pursuant to Section 2.9 hereof;

(b) Bonds paid or deemed to have been paid within the meaning of Section 9.3
hereof or Bonds called for redemption for which funds have been provided as described in
Section 2.2(g) hereof; and

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

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

“Permitted Investments” means any of the following which at the time of investment are
legal investments under the laws of the State for the moneys proposed to be invested therein:

(1) (A) Direct obligations (other than an obligation subject to variation in

principal repayment) of the United States of America (“United States Treasury Obligations”);
(B) obligations fully and unconditionally guaranteed as to timely payment of principal and
interest by the United States of America; (C) obligations fully and unconditionally
guaranteed as to timely payment of principal and interest by any agency or instrumentality of
the United States of America when such obligations are backed by the full faith and credit of
the United States of America; or (D) evidences of ownership of proportionate interests in
future interest and principal payments on obligations described above held by a bank or trust
company as custodian, under which the owner of the investment is the real party in interest
and has the right to proceed directly and individually against the obligor and the underlying
government obligations are not available to any person claiming through the custodian or to
whom the custodian may be obligated.

(2) Federal Housing Administration debentures.

(3) The listed obligations of government-sponsored agencies which are not

backed by the full faith and credit of the United States of America:

- Federal Home Loan Mortgage Corporation (FHLMC)

Participation certificates (excluded are stripped mortgage securities which are

purchased at prices exceeding their principal amounts)

Senior Debt obligations

- Farm Credit Banks (formerly: Federal Land Banks, Federal

Intermediate Credit Banks and Banks for Cooperatives)

Consolidated system-wide bonds and notes

- Federal Home Loan Banks (FHL Banks)

Consolidated debt obligations

- Federal National Mortgage Association (FNMA)

Senior debt obligations

Mortgage-backed securities (excluded are stripped mortgage securities which

are purchased at prices exceeding their principal amounts)

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 - Student Loan Marketing Association (SLMA)

Senior debt obligations (excluded are securities that do not have a fixed par
value and/or whose terms do not promise a fixed dollar amount at maturity or
call date)

- Financing Corporation (FIRCO)

Debt obligations

- Resolution Funding Corporation (REFCORP)

Debt obligations

(4) Unsecured certificates of deposit, time deposits, and bankers’ acceptances

(having maturities of not more than 30 days) of any bank (including the Trustee and any
affiliate) the short-term obligations of which are rated “A-1” or better by Standard & Poor’s.

(5) Deposits the aggregate amount of which are fully insured by the Federal
Deposit Insurance Corporation (FDIC), in banks (including the Trustee and any affiliate)
which have capital and surplus of at least $5 million.

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

(7) Money market funds rated “AAm” or “AAm-G” by Standard & Poor’s, or
better (including such funds for which the Trustee, its affiliates or subsidiaries provide
investment advisory or other management services or for which the Trustee or an affiliate of
the Trustee serves as investment administrator, shareholder servicing agent, and/or custodian
or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives
fees from funds for services rendered, (ii) the Trustee collects fees for services rendered
pursuant to this Indenture, which fees are separate from the fees received from such funds,
and (iii) services performed for such funds and pursuant to this Indenture may at times
duplicate those provided to such funds by the Trustee or an affiliate of the Trustee).

(8) “State Obligations,” which means:

(A) Direct general obligations of any state of the United States of

America or any subdivision or agency thereof to which is pledged the full faith and
credit of a state the unsecured general obligation debt of which is rated “A3” by
Moody’s and “A” by Standard & Poor’s, or better, or any obligation fully and
unconditionally guaranteed by any state, subdivision or agency whose unsecured
general obligation debt is so rated.

(B) Direct general short-term obligations of any state agency or

subdivision or agency thereof described in (A) above and rated “A-1+” by
Standard & Poor’s and “Prime-l” by Moody’s.

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 (C) Special Revenue Bonds (as defined in the United States Bankruptcy
Code) of any state, state agency or subdivision described in (A) above and rated
“AA” or better by Standard & Poor’s and “Aa” or better by Moody’s.

(9) Pre-refunded municipal obligations rated “AAA” by S & P and “Aaa” by

Moody’s meeting the following requirements:

(A) the municipal obligations are (1) not subject to redemption prior to
maturity or (2) the trustee for the municipal obligations has been given irrevocable
instructions concerning their call and redemption and the issuer of the municipal
obligations has covenanted not to redeem such municipal obligations other than as set
forth in such instructions;

(B) the municipal obligations are secured by cash or United States

Treasury Obligations which may be applied only to payment of the principal of,
interest and premium on such municipal obligations;

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

(D) the cash or United States Treasury Obligations serving as security for
the municipal obligations are held by an escrow agent or trustee in trust for owners of
the municipal obligations;

(E) no substitution of a United States Treasury Obligation shall be

permitted except with another United States Treasury Obligation and upon delivery
of a new Verification; and

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

(10) Repurchase agreements:

(A) With (1) any domestic bank, or domestic branch of a foreign bank, the
long term debt of which is rated at least “A” by Standard & Poor’s and Moody’s; or
(2) any broker-dealer with “retail customers” or a related affiliate thereof which
broker-dealer has, or the parent company (which guarantees the provider) of which
has, long-term debt rated at least “A” by Standard & Poor’s and Moody’s, which
broker-dealer falls under the jurisdiction of the Securities Investors Protection
Corporation; or (3) any other entity rated “A” or better by Standard & Poor’s and
Moody’s, provided that:

(a) The market value of the collateral is maintained at levels

equal to 104% of the amount of cash transferred by the Trustee to the
provider of the repurchase agreement plus accrued interest with the collateral

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 being valued weekly and marked-to-market at one current market price plus
accrued interest;

(b) The Trustee or a third party acting solely as agent therefor or

for the District (the “Holder of the Collateral”) has possession of the
collateral or the collateral has been transferred to the Holder of the Collateral
in accordance with applicable state and federal laws (other than by means of
entries on the transferor’s books);

(c) The repurchase agreement shall state and an opinion of

counsel shall be rendered at the time such collateral is delivered that the
Holder of the Collateral has a perfected first priority security interest in the
collateral, any substituted collateral and all proceeds thereof (in the case of
bearer securities, this means the Holder of the Collateral is in possession);

(d) The repurchase agreement shall provide that if during its term
the provider’s rating by either Moody’s or Standard & Poor’s is withdrawn or
suspended or falls below “A-“ by Standard & Poor’s or “A3” by Moody’s, as
appropriate, the provider must, at the direction of the District or the Trustee,
within 10 days of receipt of such direction, repurchase all collateral and
terminate the agreement, with no penalty or premium to the District or
Trustee.

(B) Notwithstanding the above, if a repurchase agreement has a term of

270 days or less (with no evergreen provision), collateral levels need not be as
specified in (a) above, so long as such collateral levels are 103% or better and the
provider is rated at least “A” by Standard & Poor’s and Moody’s, respectively.

(11) Investment agreements with a domestic or foreign bank or corporation (other

than a life or property casualty insurance company) the long-term debt of which or, in the
case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial
guaranty insurance company, claims paying ability, of the guarantor is rated at least “AA” by
Standard & Poor’s and “Aa” by Moody’s; provided that, by the terms of the investment
agreement:

(A) interest payments are to be made to the Trustee at times and in

amounts as necessary to pay debt service on the Bonds;

(B) the invested funds are available for withdrawal without penalty or
premium, at any time upon not more than seven days’ prior notice; the District and
the Trustee hereby agree to give or cause to be given notice in accordance with the
terms of the investment agreement so as to receive funds thereunder with no penalty
or premium paid;

(C) the investment agreement shall state that is the unconditional and
general obligation of, and is not subordinated to any other obligation of, the provider
thereof, or, in the case of a bank, that the obligation of the bank to make payments
under the agreement ranks pari passu with the obligations of the bank to its other
depositors and its other unsecured and unsubordinated creditors;

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 (D) the District and the Trustee receives the opinion of domestic counsel
(which opinion shall be addressed to the District and the Trustee) that such
investment agreement is legal, valid, binding and enforceable upon the provider in
accordance with its terms and of foreign counsel (if applicable) in form and substance
acceptable, and addressed to, the District;

(E) the investment agreement shall provide that if during its term.

(1) the provider’s rating by either Standard & Poor’s or Moody’s

falls below “AA-” or “Aa3”, respectively, the provider shall, at its option,
within 10 days of receipt of publication of such downgrade, either
(i) collateralize the investment agreement by delivering or transferring in
accordance with applicable state and federal laws (other than by means of
entries on the provider’s books) to the District, the Trustee or a third party
acting solely as agent therefor (the “Holder of the Collateral”) collateral free
and clear of any third-party liens or claims the market value of which
collateral is maintained at levels and upon such conditions as would be
acceptable to Standard & Poor’s and Moody’s to maintain an “A” rating in an
“A” rated structured financing (with a market value approach); or (ii) repay
the principal of and accrued but unpaid interest on the investment; and

(2) the provider’s rating by either Standard & Poor’s or Moody’s

is withdrawn or suspended or falls below “A-” or “A3”, respectively, the
provider must, at the direction of the District or the District Trustee, within 10
days of receipt of such direction, repay the principal of and accrued but
unpaid interest on the investment, in either case with no penalty or premium
to the District or Trustee; and

(F) The investment agreement shall state and an opinion of counsel shall
be rendered, in the event collateral is required to be pledged by the provider under the
terms of the investment agreement at the time such collateral is delivered, that the
Holder of the Collateral has a perfected first priority security interest in the collateral,
any substituted collateral and all proceeds thereof (in the case of bearer securities, this
means the Holder of the Collateral is in possession); and

(G) the investment agreement must provide that if during its term

(1) the provider shall default in its payment obligations, the

provider’s obligations under the investment agreement shall, at the direction
of the District or the Trustee, be accelerated and amounts invested and
accrued but unpaid interest thereon shall be repaid to the District or Trustee,
as appropriate, and

(2) the provider shall become insolvent, not pay its debts as they
become due, be declared or petition to be declared bankrupt, etc. (“event of
insolvency”), the provider’s obligations shall automatically be accelerated
and amounts invested and accrued but unpaid interest thereon shall be repaid
to the District or Trustee, as appropriate.

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 (12) The State of California Local Agency Investment Fund; provided that the
Trustee may restrict investments in such Fund to the extent necessary to keep monies
available for the purposes of this Indenture.

“Principal Account” means the account by that name established and held by the Trustee
pursuant to Sections 3.3 and 4.2(a) hereof.

“Proportionate Share” means, as of the date of calculation for any issue of the Local
Obligations, the ratio derived by dividing the outstanding principal amount of such Local Obligations
by the principal amount of the Outstanding Bonds.

“Purchase Fund” means the fund by that name established and held by the Trustee pursuant
to Section 3.5 hereof.

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

“Redemption Fund” means the fund by that name established with respect to any Local
Obligation.

“Request of the Authority” means a written request executed by an Authorized Officer.

“Request of the City” means a written request executed by the Mayor of the City Council of
the City, its City Manager, its Assistant City Manager, its Finance Director or any other officer of the
City duly authorized by the City Council of the City to sign documents on its behalf with respect to
the matters referred to therein.

“Representation Letter” means the representation letter dated as of the Closing Date among
the Authority, the Trustee and DTC.

“Reserve Credit Facility” means (i) the Reserve Policy, or (ii) a policy of insurance, a surety
bond, a letter of credit or other comparable credit facility, permitting draws thereunder in accordance
with Section 4.3 hereof to the final date of maturity of the Bonds or Parity Bonds, so long as (a) the
provider of any such policy of insurance, surety bond, letter of credit or other comparable credit
facility is rated in at the time of delivery to the Trustee not less than the rating on the Bonds from
Standard & Poor’s or another rating agency requested by the Authority to rate the Bonds, and (b) so
long as the Reserve Policy remains in effect, the Insurer has consented to the delivery of such
Reserve Credit Facility.

“Reserve Fund” means the fund by that name established and held by the Trustee pursuant to
Section 3.6 hereof.

“Reserve Policy” means the municipal bond debt service reserve insurance policy relating to
the Bonds issued by the Insurer.

“Reserve Requirement” means an amount equal to the lowest of (i) 10% of the initial
principal amount of the Bonds, (ii) Maximum Annual Debt Service on the Outstanding Bonds, or
(iii) 125% of average Annual Debt Service on the Outstanding Bonds; provided, however, that the
Reserve Requirement shall never be greater than the initial Reserve Requirement, and, as of any date

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of calculation, shall not be greater than the Reserve Requirement calculated for the previous Bond
Year. As applied to individual accounts of the Reserve Fund, the Reserve Requirement shall initially
be allocated as set forth in Section 4.3(a) hereof.

“Responsible Officer” means, when used with respect to the Trustee, the president, any vice
president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, any senior associate, any associate or any other officer of the Trustee within the
Trust Office (or any successor corporate trust office) customarily performing functions similar to
those performed by the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred at the Trust Office because of such person’s knowledge of and
familiarity with the particular subject and having direct responsibility for the administration of this
Indenture.

“Revenue Fund” means the fund by that name established and held by the Trustee pursuant to
Sections 3.3 and 4.2 hereof.

“Revenues” means: (a) all amounts received from the Local Obligations; (b) any proceeds of
the Bonds originally deposited with the Trustee and all moneys deposited and held from time to time
by the Trustee in the funds and accounts established hereunder with respect to the Bonds (other than
the Surplus Fund); and (c) investment income with respect to any moneys held by the Trustee in the
funds and accounts established hereunder with respect to the Bonds (other than investment income
on moneys held in the Surplus Fund).

“Securities Depositories” means The Depository Trust Company, 55 Water Street,

50th Floor, New York, NY 10041-0099 Attn. Call Notification Department, Fax (212) 855-7232;
and, in accordance with then current guidelines of the securities and Exchange Commission, such
other addresses and/or such other securities depositories as the Authority may designate in a
Certificate of the Authority delivered to the Trustee.

“Security Documents” means this Indenture, the Local Obligation Indentures and/or any
additional or supplemental document executed in connection with the Bonds.

“Series of Local Obligations” means each of the Local Obligations issued pursuant to the
Local Obligation Indentures.

“Six Month Period” shall mean the period of time beginning on the Closing Date and ending
six months thereafter, and each six month period thereafter until the latest maturity date of the Bonds.

“Special Taxes” means the taxes authorized to be levied by CFD No. 93-1 on parcels within
each Improvement Area, which have been pledged to repay the applicable Local Obligations
pursuant to the CFD Act.

“Standard & Poor’s” means S&P Global Ratings, a Standard & Poor’s Financial Services,
LLC business, its successors and assigns.

“State” means the State of California.

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

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 “Surplus Fund” means the fund by that name established pursuant to Section 3.8 hereof.

“Tax Certificate” means any certificate by that name to be executed by the Authority in
connection with the issuance of Additional Bonds to establish certain facts and expectations and
which contains certain covenants relevant to compliance with the Code.

“Term Bonds” means the Bonds maturing on September 1, 20__.

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

“Trustee” means Wilmington Trust, National Association, a national banking association

duly organized and existing under the laws of the United States of America, with a corporate trust
office in Costa Mesa, California, and its successors and assigns, and any other corporation or
association which may at any time be substituted in its place as provided in Article VI hereof.

Section 1.2 Rules of Construction. All references in this Indenture to “Articles,”

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

Section 1.3 Authorization and Purpose of Bonds. The Authority has reviewed all
proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of
such review, and hereby finds and determines, that all things, conditions and acts required by law to
exist, happen and/or be performed precedent to and in the issuance of the Bonds do exist, have
happened and have been performed in due time, form and manner as required by law, and the
Authority is now authorized under the Bond Law and each and every other requirement of law, to
issue the Bonds in the manner and form provided in this Indenture. Accordingly, the Authority
hereby authorizes the issuance of the Bonds pursuant to the Bond Law and this Indenture for the
primary purpose of providing funds to acquire the Local Obligations.

Section 1.4 Equal Security. In consideration of the acceptance of the Bonds by the
Owners thereof, this Indenture shall be deemed to be and shall constitute a contract between the
Authority and the Owners from time to time of the Bonds; and the covenants and agreements herein
set forth to be performed on behalf of the Authority shall be for the equal and proportionate benefit,
security and protection of all Owners of the Bonds and for the equal and proportionate benefit,
security and protection of all Owners of the Bonds as their respective interests appear without
preference, priority or distinction as to security or otherwise of any of the Bonds over other Bonds or
any of the Bonds over any other Bonds by reason of the number or date thereof or the time of sale,
execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided
therein or herein.

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 ARTICLE II

ISSUANCE OF BONDS

Section 2.1 Terms of Bonds. The Bonds authorized to be issued by the Authority under
and subject to the Bond Law and the terms of this Indenture shall be dated as of their Closing Date
and be designated the “Beaumont Public Improvement Authority Local Agency Refunding Bonds,
Series 2021A (Federally Taxable),” which shall be issued in the original aggregate principal amount
of _____________ ($__________).

The Bonds shall be issued in fully registered form without coupons in denominations of
$5,000 or any integral multiple thereof, so long as no Bond shall have more than one maturity date.
The Bonds shall mature on September 1 in each of the years and in the amounts, and shall bear
interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rates, as follows:

Maturity Date
(September 1) Principal Amount Interest Rate Per Annum

Interest on the Bonds shall be payable on each Interest Payment Date to the person whose
name appears on the Bond Register as the Owner thereof as of the Record Date immediately
preceding each such Interest Payment Date, such interest to be paid by check of the Trustee mailed
on such Interest Payment Date by first class mail, postage prepaid, to the Owner at the address of
such Owner as it appears on the Bond Register or by wire transfer to an account in the United States
of America made on such Interest Payment Date upon written instructions of any Owner of
$1,000,000 or more in aggregate principal amount of Bonds provided to the Trustee in writing at
least five (5) Business Days before the Record Date for such Interest Payment Date. Principal of and
premium (if any) on any Bond shall be paid upon presentation and surrender thereof, at maturity or
the prior redemption thereof, at the Trust Office of the Trustee. The principal of and interest and
premium (if any) on the Bonds shall be payable in lawful money of the United States of America.

Each Bond shall bear interest from the Interest Payment Date next preceding the date of
authentication thereof, unless (a) it is authenticated after a Record Date and on or before the
following Interest Payment Date, in which event it shall bear interest from such Interest Payment
Date; or (b) it is authenticated on or before the first Record Date, in which event it shall bear interest
from the Dated Date; provided, however, that if, as of the date of authentication of any Bond, interest
thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest

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has previously been paid or made available for payment thereon, or from the Dated Date if no
interest has been paid or made available for payment.

Section 2.2 Redemption of Bonds.

(a) Optional Redemption. The Bonds maturing on or before September 1, 20__

are not subject to optional call and redemption prior to maturity. The Bonds maturing on and after
September 1, 20__ may be redeemed at the option of the Authority, from any source of available
funds, prior to maturity on any date on or after September 1, 20__ as a whole, or in part from
maturities of the Local Obligations simultaneously redeemed, if any redemption of Local
Obligations is being made in conjunction with such optional redemption, and otherwise from such
maturities as are selected by the Authority, by lot within a maturity, at a redemption price equal to
the principal amount to be redeemed, together with accrued interest to the date of redemption,
without premium.

Prior to consenting to the optional redemption of any Local Obligation which it has
purchased and is held under this Indenture, the Authority shall deliver to the Trustee a certificate of
an Independent Accountant verifying that, following such optional redemption of the Local
Obligations and redemption of Bonds, the principal and interest generated from the remaining Local
Obligations is adequate to make the timely payment of principal and interest due on the Bonds
remaining Outstanding following such optional redemption. The Authority shall be required to give
the Trustee written notice of its intention to redeem Bonds under this Section (a) at least forty-five
(45) days prior to the date fixed for redemption (or such lesser number of days as shall be acceptable
to the Trustee and which would allow the Trustee to comply with the requirements of Section 2.2(d),
in the sole determination of the Trustee, such notice intended for the convenience of the Trustee).

(b) Special Redemption. The Bonds are subject to special redemption on any
Interest Payment Date from proceeds of early redemption of Local Obligations from prepayments of
Special Taxes within an Improvement Area, in whole or in part, from maturities corresponding
proportionately to the maturities of the Local Obligations simultaneously redeemed, at the principal
amount thereof, plus a premium expressed below as a percentage of the principal amount so
redeemed, plus accrued interest to the date of redemption thereof:

Redemption Dates Premium

Any Interest Payment Date through and including March 1, 20__
September 1, 20__ and March 1, 20__
September 1, 20__ and March 1, 20__
September 1, 20__ and any Interest Payment Date thereafter

(c) Mandatory Sinking Fund Redemption. The Term Bonds maturing on

September 1, 20__ are subject to mandatory sinking fund redemption prior to maturity, in part, on
September 1, 20__, and on each September 1 thereafter by lot, from sinking fund payments at a
redemption price equal to the principal amount of Term Bonds to be redeemed, together with
accrued interest to the date of redemption, without premium, as follows:

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 Redemption Date Redemption
(September 1) Amount

In the event that the Term Bonds are redeemed pursuant to Section 2.2(a) or (b)
hereof, the sinking fund payments for the Term Bonds will be reduced as nearly as practicable on a
proportionate basis in integral multiples of $5,000.

(d) Notice of Redemption. The Trustee on behalf, and at the expense, of the
Authority shall send notice of any redemption to the respective Owners of any Bonds designated for
redemption at their respective addresses appearing on the Bond Register, and to the Securities
Depositories and to the Information Services, at least thirty (30) but not more than sixty (60) days
prior to the date fixed for redemption. Neither failure to receive any such notice so sent nor any
defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the
cessation of the accrual of interest thereon. Such notice shall state the date of the notice, the
redemption date, the redemption place and the redemption price and shall designate the CUSIP
numbers, Bond numbers and the maturity or maturities (in the event of redemption of all of the
Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that
such Bonds be then surrendered at the Trust Office of the Trustee for redemption at the redemption
price, giving notice also that further interest on such Bonds will not accrue from and after the
redemption date. Such redemption notices may state that no representation is made as to the
accuracy or correctness of the CUSIP numbers printed therein or on the Bonds.

In the case of an optional or special redemption of Bonds, such notice may state that
such redemption is subject to receipt by the Trustee, on or before the date fixed for redemption, of
moneys sufficient to pay the redemption price of the Bonds to be redeemed.

Unless funds for the optional or special redemption of any Bonds are irrevocably
deposited with the Trustee prior to rendering notice of redemption to the Bondowners, such notice
shall state that such redemption is subject to the deposit of funds by the Authority. Any notice of
optional or special redemption shall be cancelled and annulled if for any reason funds will not be or
are not available on the date fixed for redemption for the payment in full of the Bonds then called for
redemption, and such cancellation shall not constitute an Event of Default under this Indenture. The
Authority and the Trustee shall have no liability to the Owners or any other party related to or arising
from such rescission of redemption. The Trustee shall send notice of such rescission of redemption
in the same manner as the original notice of redemption was sent.

Upon the payment by the Trustee from the applicable account in the Revenue Fund of
the redemption price of the Bond being redeemed, each check or other transfer of funds issued for
such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and
maturity, the Bonds being redeemed with the proceeds of such check or other transfer.

(e) Selection of Bonds of a Maturity for Redemption. Unless otherwise provided

hereunder, whenever provision is made in this Indenture or in the applicable Supplemental Indenture
for the redemption of less than all of the Bonds of a maturity, the Trustee shall select the Bonds to be

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redeemed from all Bonds of such maturity not previously called for redemption, by lot in any
manner which the Trustee in its sole discretion shall deem appropriate and fair. For purposes of
such selection, all Bonds shall be deemed to be comprised of separate $5,000 authorized
denominations, and such separate authorized denominations shall be treated as separate Bonds
which may be separately redeemed.

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

(g) Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the principal of and interest (and premium, if any) on the Bonds so
called for redemption shall have been duly provided, such Bonds so called shall cease to be entitled
to any benefit under this Indenture other than the right to receive payment of the redemption price,
and no interest shall accrue thereon from and after the redemption date specified in such notice. All
Bonds redeemed pursuant to this Section 2.2 shall be cancelled and destroyed.

Section 2.3 Form of Bonds. The Bonds, the form of Trustee’s certificate of
authentication, and the form of assignment to appear thereon, shall be substantially in the form set
forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or
appropriate variations, omissions and insertions, as permitted or required by this Indenture.

Section 2.4 Execution of Bonds. All the Bonds shall, from time to time, be executed on
behalf of the Authority by, or bear the manual or facsimile signature of, one of the members of the
Board of Directors of the Authority and be attested by the manual or facsimile signature of the
Secretary or by any deputy thereof. If any of the directors or officers who shall have signed or sealed
any of the Bonds or whose facsimile signature shall be upon the Bonds shall cease to be such officer
of the Authority before the Bond so signed and sealed shall have been actually authenticated by the
Trustee or delivered, such Bonds nevertheless may be authenticated, issued and delivered with the
same force and effect as though the person or persons who signed or sealed such Bonds or whose
facsimile signature shall be upon the Bonds had not ceased to be such officer of the Authority; and
any such Bond may be signed and sealed on behalf of the Authority by those persons who, at the
actual date of the execution of such Bonds, shall be the proper officers of the Authority, although at
the date of such Bond any such person shall not have been such officer of the Authority.

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

Section 2.5 Transfer of Bonds. Subject to Section 2.10, any Bond may in accordance
with its terms, be transferred, upon the Bond Register, by the person in whose name it is registered,
in person or by his duly authorized attorney, upon surrender of such Bond for cancellation,
accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly
executed. Whenever any Bond shall be surrendered for transfer, the Authority shall execute and the
Trustee shall thereupon authenticate and deliver to the transferee a new Bond or Bonds of like tenor,

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maturity and aggregate principal amount. No Bonds selected for redemption shall be subject to
transfer pursuant to this Section nor shall any Bond be subject to transfer during the fifteen days prior
to the selection of Bonds for redemption.

The cost of printing any Bonds and any services rendered or any expenses incurred by the
Trustee in connection with any transfer or exchange shall be paid by the Authority. However, the
Owners of the Bonds shall be required to pay any tax or other governmental charge required to be
paid for any exchange or registration of transfer and the Owners of the Bonds shall be required to pay
the reasonable fees and expenses of the Trustee and Authority in connection with the replacement of
any mutilated, lost or stolen Bonds.

Section 2.6 Exchange of Bonds. Subject to Section 2.10, Bonds may be exchanged at
the Trust Office of the Trustee for Bonds of the same tenor and maturity and of other authorized
denominations. No Bonds selected for redemption shall be subject to exchange pursuant to this
Section, nor shall any Bond be subject to exchange during the fifteen days prior to the selection of
Bonds for redemption. The cost of printing Bonds and any services rendered or expenses incurred by
the Trustee in connection with any transfer or exchange shall be paid by the Authority.

Section 2.7 Temporary Bonds. The Bonds may be issued initially in temporary form
exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed,
lithographed or typewritten, shall be of such denominations as may be determined by the Authority
and may contain such reference to any of the provisions of this Indenture as may be appropriate.
Every temporary Bond shall be executed by the Authority and be registered and authenticated by the
Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If
the Authority issues temporary Bonds, it will execute and furnish definitive Bonds without delay, and
thereupon the temporary Bonds may be surrendered for cancellation, in exchange therefor at the
Trust Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such
temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under
this Indenture as definitive Bonds authenticated and delivered hereunder.

Section 2.8 Bond Register. The Trustee will keep or cause to be kept at its Trust Office
sufficient records for the registration and transfer of the Bonds, which shall be the Bond Register and
shall at all times during regular business hours be open to inspection by the Authority upon
reasonable notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable
regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said
records, Bonds as hereinbefore provided.

The Authority and the Trustee may treat and consider the person in whose name each Bond is
registered in the Bond Register as the holder and absolute owner of such Bond for the purpose of
payment of principal, premium, if any, and interest on such Bond, for the purpose of giving notices
of redemption and other matters with respect to such Bond, for the purpose of registering transfers
with respect to such Bond, and for all other purposes whatsoever.

Section 2.9 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee
shall thereupon authenticate and deliver, a new Bond of like tenor and authorized denomination in
exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the
Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by it and

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

Section 2.10 Book-Entry System.

(a) All Bonds shall be initially issued in the form of a separate single certificated
fully registered Bond for each maturity date of the Bonds. Upon initial issuance, the ownership of
each Bond shall be registered in the Bond Register in the name of Cede & Co., as nominee of DTC.
Except as provided in Section 2.10(d) hereof, all Outstanding Bonds shall be registered in the Bond
Register in the name of Cede & Co., as nominee of DTC.

(b) With respect to Bonds registered in the Bond Register in the name of Cede &
Co., as nominee of DTC, the Authority and the Trustee shall have no responsibility or obligation
with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with
respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other
person, other than an Owner, as shown in the Bond Register, of any notice with respect to the Bonds,
including any notice of redemption, or (iii) the payment to any DTC Participant or any other person,
other than an Owner, as shown in the Bond Register, of any amount with respect to principal of,
premium, if any, or interest on the Bonds. The Authority and the Trustee may treat and consider the
person in whose name each Bond is registered in the Bond Register as the holder and absolute owner
of such Bond for the purpose of payment of principal, premium, if any, and interest on such Bond,
for the purpose of giving notices of redemption and other matters with respect to such Bond, for the
purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever.
The Trustee shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the
order of the respective Owners, as shown in the Bond Register, as provided in Section 2.8 hereof, or
their respective attorneys duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge the Authority’s obligations with respect to payment of
principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No
person other than an Owner, as shown in the Bond Register, shall receive a certificated Bond
evidencing the obligation of the Authority to make payments of principal, premium, if any, and
interest pursuant to this Indenture. Upon delivery by DTC to the Trustee of written notice to the
effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to
the provisions herein with respect to record dates, the word “Cede & Co.” in this Indenture shall
refer to such new nominee of DTC.

(c) The delivery of the Representation Letter and the Trustee shall not in any way
limit the provisions of Section 2.10(b) hereof or in any other way impose upon the Authority or the

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Trustee any obligation whatsoever with respect to persons having interests in the Bonds other than
the Owners, as shown on the Bond Register. The Trustee shall take all action necessary for all
representations in the Representation Letter with respect to the Trustee to be complied with at all
times.

(d) (i) DTC may determine to discontinue providing its services with respect
to the Bonds at any time by giving written notice to the Authority and the Trustee and discharging its
responsibilities with respect thereto under applicable law.

(ii) The Authority, in its sole discretion and without the consent of any
other person, may terminate the services of DTC with respect to the Bonds if the Authority
determines that:

(A) DTC is unable to discharge its responsibilities with respect to

the Bonds, or

(B) a continuation of the requirement that all Outstanding Bonds

be registered in the Bond Register in the name of Cede & Co., or any other nominee of DTC, is not
in the best interest of the beneficial owners of such Bonds.

(iii) Upon the termination of the services of DTC with respect to the
Bonds pursuant to subsection 2.10(d)(ii)(B) hereof, or upon the discontinuance or termination of the
services of DTC with respect to the Bonds pursuant to subsection 2.10(d)(i) or
subsection 2.10(d)(ii)(A) hereof after which no substitute securities depository willing to undertake
the functions of DTC hereunder can be found which, in the opinion of the Authority, is willing and
able to undertake such functions upon reasonable and customary terms, the Authority is obligated to
deliver Bond certificates, as described in this Indenture and the Bonds shall no longer be restricted to
being registered in the Bond Register in the name of Cede & Co. as nominee of DTC, but may be
registered in whatever name or names DTC shall designate to the Trustee in writing, in accordance
with the provisions of this Indenture.

(e) Notwithstanding any other provisions of this Indenture to the contrary, as

long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with
respect to principal or, premium, if any, and interest on such Bond and all notices with respect to
such Bond shall be made and given, respectively, in the manner provided in the Representation
Letter.

ARTICLE III

DEPOSIT AND APPLICATION OF PROCEEDS

Section 3.1 Issuance of Bonds. Upon the execution and delivery of this Indenture, the
Authority shall execute and deliver the Bonds in the principal amounts set forth in Section 2.1 hereof
to the Trustee for authentication and delivery to the Original Purchaser thereof upon the Request of
the Authority.

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 Section 3.2 Application of Proceeds of Sale of Bonds and Funds Received from the
City and Community Facilities District.

(a) Upon the receipt by the Trustee of payment for the Bonds in the amount of
$____________ (which is comprised of the par amount of the Bonds, less Underwriter’s discount of
$____________ and less moneys wired by the Original Purchaser to the Insurer in the amount of
$_____________), such proceeds of the Bonds shall be deposited in the Purchase Fund for the
acquisition of the Local Obligations in accordance with Section 3.5 hereof.

(b) $___________ of proceeds of the Local Obligations received by the Trustee

from the District Trustees for deposit in the Costs of Issuance Fund, shall be deposited in the Costs
of Issuance Fund for the payment of Costs of Issuance in accordance with Section 3.4 hereof.

Section 3.3 Revenue Fund. The Trustee shall establish and maintain a separate fund to
be known as the “Revenue Fund” and the following separate accounts therein: Interest Account and
Principal Account. Except as otherwise provided herein, the Trustee shall deposit all Revenues
received after the Closing Date to the Revenue Fund and shall apply amounts in the Revenue Fund as
described in Section 4.2 below.

Section 3.4 Costs of Issuance Fund. The Trustee shall establish and maintain a fund
known as the “Costs of Issuance Fund” into which shall be deposited the amounts set forth in
Section 3.2(b) above. The moneys in the Costs of Issuance Fund shall be used to pay Costs of
Issuance from time to time upon receipt by the Trustee of a Request of the Authority. Each such
Request of the Authority shall be sufficient evidence to the Trustee of the facts stated therein and the
Trustee shall have no duty to confirm the accuracy of such facts. On the date which is one hundred
twenty (120) days following the Closing Date, or upon the earlier receipt by the Trustee of a Request
of the Authority stating that all Costs of Issuance have been paid, the Trustee shall transfer all
remaining amounts in the Costs of Issuance Fund to the Revenue Fund. Upon such transfer, the
Costs of Issuance Fund shall be closed and the Trustee shall no longer be obligated to make
payments for Costs of Issuance. The Authority may at any time file a Request of the Authority
requesting that the Trustee retain a specified amount in the Costs of Issuance Fund and transfer to the
Revenue Fund all remaining amounts, and upon receipt of such request by the Trustee, the Trustee
shall comply with such request.

Section 3.5 Purchase Fund. The Trustee shall establish and maintain a separate fund to
be known as the “Purchase Fund” into which shall be deposited a portion of the proceeds of sale of
the Bonds pursuant to Section 3.2(a) hereof. The Trustee shall use the proceeds of the Bonds to
purchase Local Obligations on the Closing Date; provided, however, that such Local Obligations
may be purchased only if the Trustee has received a certificate of the Original Purchaser of the Bonds
or an Independent Financial Consultant stating that the Revenues to be available to the Trustee,
assuming timely payment of the Local Obligations, will be sufficient to permit the timely payment of
the principal of and interest on all Outstanding Bonds.

Section 3.6 Reserve Fund. The Trustee shall establish and maintain a separate fund to
be known as the “Reserve Fund” and within such fund, accounts to be known as the “Improvement
Area No. 7B Reserve Account,” the “Improvement Area No. 7C Reserve Account,” the
“Improvement Area No. 17A Reserve Account,” the “Improvement Area No. 19C Reserve Account”
and the “Improvement Area No. 20 Reserve Account,” respectively, which shall be administered as
provided in Section 4.3(a) hereof.

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 Section 3.7 Surplus Fund. The Trustee shall establish and maintain a separate fund,
when needed, to be known as the “Surplus Fund” which shall be administered as described in
Section 4.4 hereof.

Section 3.8 Administrative Expense Fund. The Trustee shall establish and maintain a
separate fund to be held by the Trustee and known as the “Administrative Expense Fund” into which
shall be deposited the amounts specified in Section 4.2(d). The moneys in the Administrative
Expense Fund shall be used to pay Authority Administrative Expenses or shall be transferred to the
Surplus Fund, in either case, upon receipt of a Requisition of the Authority.

Section 3.9 Additional Funds and Accounts. The Trustee may establish such additional
funds and accounts as it may determine from time to time are advisable to effectuate the purposes of
the Indenture.

Section 3.10 Validity of Bonds. The validity of the authorization and issuance of the
Bonds shall not be affected in any way by any proceedings taken by the Authority or the City with
respect to the application of the proceeds of the Bonds, and the recital contained in the Bonds that the
same are issued pursuant to the Bond Law shall be conclusive evidence of their validity and of the
regularity of their issuance.

ARTICLE IV

REVENUES; FLOW OF FUNDS

Section 4.1 Pledge of Revenues; Assignment of Rights. Subject to the provisions of

Sections 6.3 and 9.3 hereof, the Bonds shall be secured by a first lien on and pledge (which shall be
effected in the manner and to the extent hereinafter provided) of all of the Revenues. The Bonds
shall be equally secured by a pledge, charge and lien upon the Revenues without priority for any
Bond over any other Bond; and the payment of the interest on and principal of the Bonds and any
premiums upon the redemption of any Bonds shall be and are secured by an exclusive pledge, charge
and lien upon the Revenues. So long as any of the Bonds are Outstanding, the Revenues shall not be
used for any purpose except as is expressly permitted by this Indenture.

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

Upon the deposit with the Trustee of moneys sufficient to pay all principal of, premium, if
any, and interest on the Bonds, and upon satisfaction of all claims against the Authority hereunder,
including all fees, charges and expenses of the Trustee and the Authority which are properly payable
hereunder, and upon reimbursement to the Insurer for any amounts owed under the Insurance Policy

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pursuant to Sections 10.2 and 10.4 hereof and the Reserve Policy pursuant to 4.3(e) hereof, or upon
the making of adequate provisions for the payment of such amounts as permitted hereby, all moneys
remaining in all funds and accounts pertaining to such Bonds (except moneys necessary to pay
principal of, premium, if any, and interest on the Bonds, which moneys shall be held by the Trustee
pursuant to Section 9.3), shall no longer be considered Revenues and are not pledged to repay the
Bonds. Such amounts shall be transferred to the trustee for each Series of Local Obligations then
outstanding proportionately based on their respective Proportionate Share. In the event that the Local
Obligations have been paid or defeased, then any such amounts shall be paid by the Trustee to the
Authority to be used by the Authority for any lawful purpose.

Section 4.2 Receipt, Deposit and Application of Revenues; Revenue Fund. Subject to
Section 4.2(a)(iv) below, all Revenues described in clause (a) of the definition thereof in Section 1.1
shall be promptly deposited by the Trustee upon receipt thereof in the Revenue Fund.

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

(i) Interest Account. On each Interest Payment Date, the Trustee shall
deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the
Interest Account to equal the amount of interest becoming due and payable on such Interest Payment
Date on all Outstanding Bonds on such date. All moneys in the Interest Account shall be used and
withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it shall become
due and payable (including accrued interest on any Bonds redeemed prior to maturity). In the event
that the amounts on deposit in the Interest Account on any Interest Payment Date, after any transfers
from the Reserve Fund pursuant to Section 4.3(a) hereof, are insufficient for any reason to pay the
aggregate amount of interest then coming due and payable on the Outstanding Bonds, the Trustee
shall apply such amounts to the payment of interest on each of the Outstanding Bonds on a pro rata
basis.

(ii) Principal Account. On each September 1 on which principal (or

sinking fund payments) of the Bonds shall be payable, the Trustee shall deposit in the Principal
Account an amount required to cause the aggregate amount on deposit in the Principal Account to
equal the principal amount of, and premium (if any) on, the Bonds coming due and payable on such
date, or required to be redeemed on such date pursuant to Section 2.2 hereof; provided, however, that
no amount shall be deposited to effect a redemption pursuant to Section 2.2(a) hereof unless the
Trustee has first received a certificate of an Independent Accountant certifying that such deposit to
effect an optional redemption of the Bonds will not impair the ability of the Authority to make timely
payment of the principal of and interest on the Bonds, assuming for such purposes that the
Community Facilities District continues to make timely payments on all Local Obligations not then
in default. All moneys in the Principal Account shall be used and withdrawn by the Trustee solely
for the purpose of (i) paying the principal of the Bonds at the maturity thereof, (ii) paying the sinking
fund payments with respect to the Bonds, or (iii) paying the principal of and premium (if any) on any
Bonds upon the redemption thereof pursuant to Section 2.2 hereof.

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 (iii) Reserve Fund. On each Interest Payment Date on which the balance
in the Reserve Fund is less than the Reserve Requirement, or amounts are due to an insurer under a
Reserve Credit Facility, after making deposits required under (i) and (ii) above, the Trustee shall
transfer from the Revenue Fund (A) first, an amount sufficient to reimburse an insurer for amounts
owed under a Reserve Credit Facility by depositing the amount necessary to reimburse such insurer
for amounts owed under the applicable Reserve Credit Facility; and (B) second, an amount sufficient
to increase the balance in the Reserve Fund to the Reserve Requirement, by depositing the amount
necessary to make the various accounts therein combined total the Reserve Requirement from the
applicable Improvement Area.

(iv) Local Obligations Delinquency Revenues. The Trustee shall disburse

or transfer all Revenues representing Local Obligations Delinquency Revenues in the following order
of priority:

First, to make payments required pursuant to Section 8.3 upon the occurrence of an
Event of Default as described in Section 8.1(a) and 8.1(b),

Second, to the Reserve Fund to replenish the amount on deposit therein to the
Reserve Requirement as set forth in Section 4.3, or to reimburse the Insurer for amounts owed under
the Reserve Policy, and

Third, to make the deposits specified in Section 4.2(a)(i) and (ii)above.

(b) If on any Interest Payment Date or date for redemption the amount on deposit
in the Revenue Fund is inadequate to make the transfers described in subsection (a) above as a result
of a payment default on an issue of Local Obligations, the Trustee shall immediately notify the
issuer of such Local Obligations of the amount needed to make the required deposits under
subsection (a) above. In the event that following such notice the Trustee receives additional
payments from the issuer of such Local Obligation to cure such shortfall, the Trustee shall deposit
such amounts to the Revenue Fund for application in accordance with subsection (a) above.

(c) On September 1 of each year, after making the deposits required under
subsections (a) and (b) above, and upon reimbursement to the Insurer for any amounts owed under
the Insurance Policy pursuant to Sections 10.2 and 10.4 hereof, the Trustee shall transfer all amounts
remaining on deposit in the Revenue Fund to the Administrative Expense Fund unless the Trustee
has received a Request of the Authority directing it to transfer all or a portion of the said amounts to
the Surplus Fund, in which case the Trustee shall make the transfer to the Surplus Fund so specified.

Section 4.3 Reserve Fund.

(a) There shall be maintained in the Reserve Fund an amount equal to the
Reserve Requirement. The Trustee shall deposit the Reserve Policy into the Reserve Fund with a
stated amount of $__________, of which $_______ shall be initially credited in the Improvement
Area No. 7B Reserve Account, $______ shall be initially credited in the Improvement Area No. 7C
Reserve Account, $______ shall be initially credited in the Improvement Area No. 17A Reserve
Account, $______ shall initially be credited in the Improvement Area No. 19C Reserve Account and
$_______ shall be initially credited in the Improvement Area No. 20 Reserve Account. In the event
that the amount of the Reserve Requirement for the Bonds is changed as determined by the

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Authority, the Trustee shall, upon receipt of a Request of the Authority, adjust the Reserve
Requirement accordingly.

(b) All amounts deposited in the Reserve Fund shall be used solely for the
purposes set forth in this Section 4.3. Subject to the limitations set forth in the following paragraph,
amounts in the Reserve Fund may be applied to pay the principal of and interest on the Bonds when
the moneys in the Interest Account and the Principal Account of the Revenue Fund are insufficient
therefor. In addition, amounts in the Reserve Fund may be applied (i) in connection with an optional
redemption of Bonds pursuant to Section 2.2 or a defeasance pursuant to Section 9.3, (ii) when the
balance therein equals the principal and interest due on the Bonds to and including maturity,
(iii) credited to an Improvement Area as a result of a reduction in the Reserve Requirement resulting
from the redemption of the Local Obligations of such Improvement Area and the Bonds so
redeemed in connection therewith, or (iv) when the amount in an account of the Reserve Fund is
transferred to the Interest Account and the Principal Account as a credit against the payments due on
the Local Obligations secured by such account on the transfer dates specified in subsection (d)
below.

(c) Except as otherwise provided herein, all amounts in the Reserve Fund and the
Reserve Accounts therein shall be used and withdrawn by the Trustee solely for the purpose of
making transfers as described in this Section 4.3. If the amounts in the Interest Account or the
Principal Account are insufficient to pay the principal of or interest on the Bonds when due or
mandatory sinking fund payments on the Bonds when due, the Trustee shall withdraw from the
applicable Reserve Account or Reserve Accounts an amount equal to the deficiency resulting from
the delinquency in the payment of scheduled debt service on the applicable Series of Local
Obligations and transfer such amount to the Interest Account, the Principal Account or both, as
applicable. If there are insufficient funds on deposit in a Reserve Account to cover a deficiency
resulting from the delinquency in the payment of scheduled debt service on the applicable Series of
Local Obligations, the Trustee shall withdraw from each of the other Reserve Accounts an amount
based upon the Proportionate Share applicable to each such Reserve Account of such remaining
deficiency and transfer such amounts to the Interest Account, the Principal Account or both, as
applicable. The Trustee shall notify the Authority immediately following any withdrawal made
pursuant to this Section 4.3.

Upon the transfer by the Trustee to the Reserve Fund of Local Obligations Delinquency
Revenues, such Revenues shall be allocated to the Reserve Accounts as follows:

First, to the Insurer to reimburse it for all Policy Costs (as defined in Section 4.3(e)(iii)
below) due as a result of a draw on the Reserve Policy and reimbursement of amounts with respect to
any other Reserve Credit Facility due as a result of delinquencies on the Local Obligations with
respect to such Improvement Area.

Second, to the Reserve Account for any Series of Local Obligations, other than the Reserve
Account to which such Local Obligations Delinquency Revenues relate, that amount necessary to
increase the amount on deposit in such account to the Reserve Requirement on a Proportionate Share
basis if the deficiency in the amount on deposit in such account resulted from draws on such account
due to delinquencies in the payment of scheduled debt service on that Series of Local Obligations
from which the Local Obligations Delinquency Revenues were received. In the event that such
Local Obligations Delinquency Revenues are insufficient to increase the amount on deposit in each

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of the applicable Reserve Accounts to the Reserve Requirement, a Proportionate Share of such Local
Obligations Delinquency Revenues shall be deposited in each such Reserve Account.

Third, after increasing the amount on deposit in each applicable Reserve Account to the
Reserve Requirement pursuant to the second step above, to the Reserve Account for the Series of
Local Obligations from which the Local Obligations Delinquency Revenues were received that
amount necessary to replenish the amount on deposit in such Reserve Account to the applicable
Reserve Requirement.

Fourth, after making all deposits pursuant to the three steps above, the remaining Local
Obligations Delinquency Revenues, if any, shall be transferred to the Revenue Fund.

(d) When amounts in an account of the Reserve Fund are sufficient to repay the
remaining principal and interest due on the related Local Obligations that will be applied to the
Bonds, such amounts will be transferred to the Interest Account and the Principal Account as a
credit against the payments due on such Local Obligations, with the amount transferred from an
account being deposited first to the Interest Account as a credit on the interest due on such Local
Obligations on such date and the balance being deposited to the Principal Account as a credit on the
principal due on such Local Obligations on such date.

(e) As long as the Reserve Policy shall be in full force and effect, the Authority
and the Trustee agree to comply with the following provisions notwithstanding anything herein to
the contrary:

(i) The Authority shall repay any draws under the Reserve Policy and
pay all related reasonable expenses incurred by the Insurer. Interest shall accrue and be payable on
such draws and expenses from the date of payment by the Insurer at the Late Payment Rate. If the
interest provisions of this Section 4.3(e) shall result in an effective rate of interest which, for any
period, exceeds the limit of the usury or any other laws applicable to the indebtedness created herein,
then all sums in excess of those lawfully collectible as interest for the period in question shall,
without further agreement or notice between or by any party hereto, be applied as additional interest
for any later periods of time when amounts are outstanding hereunder to the extent that interest
otherwise due hereunder for such periods plus such additional interest would not exceed the limit of
the usury or such other laws, and any excess shall be applied upon principal immediately upon
receipt of such moneys by the Insurer, with the same force and effect as if the Authority had
specifically designated such extra sums to be so applied and the Insurer had agreed to accept such
extra payment(s) as additional interest for such later periods. In no event shall any agreed-to or
actual exaction as consideration for the indebtedness created herein exceed the limits imposed or
provided by the law applicable to this transaction for the use or detention of money or for
forbearance in seeking its collection.

(ii) Repayment of draws and payment of expenses and accrued interest

thereon at the Late Payment Rate (collectively, “Policy Costs”) shall commence in the first month
following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of
the aggregate of Policy Costs related to such draw.

(iii) Amounts in respect of Policy Costs paid to the Insurer shall be

credited first to interest due, then to the expenses due and then to principal due. As and to the extent
that payments are made to the Insurer on account of principal due, the coverage under the Reserve

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Policy will be increased by a like amount, subject to the terms of the Reserve Policy. The obligation
to pay Policy Costs shall be secured by a valid lien on all Revenues (subject only to the priority of
payment provisions set forth hereunder).

(iv) All cash and investments in the Reserve Fund or an Account therein
shall be transferred to the Revenue Fund for payment of the principal of and interest on the Bonds
before any drawing may be made on the Reserve Policy or any other Reserve Credit Facility credited
to such Account of the Reserve Fund in lieu of cash. Payment of any Policy Costs shall be made
prior to replenishment of any such cash amounts. Draws on the Reserve Policy and any other
Reserve Credit Facility on which there is available coverage shall be made on a pro-rata basis
(calculated by reference to the coverage then available thereunder) after applying all available cash
and investments in the Reserve Fund or an Account therein. Payment of Policy Costs and
reimbursement of amounts with respect to any other Reserve Credit Facility shall be made on a pro-
rata basis prior to replenishment of any cash drawn from the Reserve Fund or an Account therein.
For the avoidance of doubt, “available coverage” means the coverage then available for disbursement
pursuant to the terms of the applicable alternative credit instrument without regard to the legal or
financial ability or willingness of the provider of such instrument to honor a claim or draw thereon or
the failure of such provider to honor any such claim or draw.

(v) If the Authority shall fail to pay any Policy Costs in accordance with
the requirements of Section 4.3 hereof, the Insurer shall be entitled to exercise any and all legal and
equitable remedies available to it, including those provided under this Indenture other than:
(i) acceleration of the maturity of the payments of principal of and interest on the Bonds; or
(ii) remedies which would adversely affect Owners of the Bonds

(vi) The Trustee shall ascertain the necessity for a claim upon the Reserve
Policy in accordance with the provisions of Section 4.3(e) hereof and provide notice to the Insurer in
accordance with the terms of the Reserve Policy at least five (5) Business Days prior to an Interest
Payment Date. Where deposits are required to be made by the Authority with the Trustee to the
Revenue Fund for the payment of principal of and interest on the Bonds more often than semi-
annually, the Trustee shall be instructed to give notice to the Insurer of any failure of the Authority to
make timely payment in full of such deposits within two Business Days of the date due.

Section 4.4 Surplus Fund. Any amounts transferred to the Surplus Fund pursuant to
subsection 4.2 hereof shall no longer be considered Revenues and are not pledged to repay the
Bonds. So long as Local Obligations are outstanding, on September 1 of each year, the remaining
balance, if any, in the Surplus Fund shall in a Request of the City (i) be transferred by the Trustee to
the City Treasurer for credit to the special tax fund of the Community Facilities District, and each
Community Facilities District shall be credited a percentage of the total amount available on each
September 1 that is equal to the percentage which its outstanding Local Obligation represents of all
outstanding Local Obligations held by the Trustee as of the date of disbursement or (ii) as set forth in
a Request of the City be applied to the redemption of Local Obligations pursuant to the terms of the
Local Obligations Indenture with each Community Facilities District to be credited a percentage of
the total amount available on each September 1 that is equal to the percentage which its outstanding
Local Obligations represents of all outstanding Local Obligations held by the Trustee as of the date
of disbursement. In the event that the Local Obligations have been prepaid or defeased in whole or
in part, then such credit shall be applied to the Community Facilities District based on a Certificate of
an Independent Financial Consultant prepared at the direction of the Authorized Representative of
the City. In the event the Community Facilities District is no longer obligated to levy Special Taxes

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to repay Local Obligations, then any amounts in the Surplus Fund may be used by the Authority for
any lawful purpose, including, but not limited to, the payment of expenses of the Authority, the City
or the Community Facilities District relating to the Bonds, the Local Obligations, the Community
Facilities District, or any other purpose as specified in a Request of the Authority delivered to the
Trustee.

On September 1 of the year preceding the year of the final maturity of the Bonds, the
remaining balance in the Surplus Fund shall be credited by the Trustee to the District Trustee on a
proportionate basis, to each special tax fund established with respect to Local Obligations. Such
amounts shall be applied to reduce debt service payments on Local Obligations

Section 4.5 Investments. All moneys in any of the funds or accounts established with
the Trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted
Investments, as directed pursuant to the Request of the Authority filed with the Trustee at least two
(2) Business Days in advance of the making of such investments. The Trustee shall be entitled to
conclusively rely on any such Request of the Authority as to the suitability and legality of the
directed investments and shall be fully protected in relying thereon. In the absence of any such
Request of the Authority the Trustee shall hold such moneys uninvested. Permitted Investments
purchased as an investment of moneys in any fund or account established pursuant to this Indenture
shall be deemed to be part of such fund or account.

All interest or gain derived from the investment of amounts in any of the funds or accounts
established hereunder shall be deposited in the fund or account from which such investment was
made; provided, however, that all interest or gain derived from the investment of amounts in the
accounts of the Reserve Fund shall, to the extent the balance in any account thereof exceeds, on
February 15 of each year, the Proportionate Share of the Reserve Requirement applicable to such
Local Obligation, be withdrawn by the Trustee on such February 15, commencing February 15,
2022, and deposited to the special tax fund of the corresponding Community Facilities District to be
applied to the payment of debt service on the applicable Local Obligations on the next Interest
Payment Date.

For purposes of acquiring any investments hereunder, the Trustee may commingle moneys
held by it in any of the funds and accounts held by it hereunder. The Trustee and its affiliates may
act as advisor, sponsor, principal or agent in the acquisition or disposition of any investment and may
impose its customary charges therefor. The Trustee and its affiliates may make any and all
investments permitted herein through its own investment department. The Trustee shall incur no
liability for losses arising from any investments made pursuant to this Section 4.5. Ratings of
Permitted Investments shall be determined at the time of purchase of such Permitted Investments and
without regard to ratings subcategory.

The Authority acknowledges that to the extent regulations of the Comptroller of the Currency
or other applicable regulatory entity grant the Authority the right to receive brokerage confirmations
of security transactions effected by the Trustee as they occur at no additional cost, the Authority
specifically waives receipt of such confirmations to the extent permitted by law. The Authority
further understands that trade confirmations for securities transactions effected by the Trustee will be
available upon request and at no additional cost and other trade confirmations may be obtained from
the applicable broker. The Trustee will furnish the Authority periodic cash transaction statements
which include detail for all investment transactions made by the Trustee hereunder or brokers
selected by the Authority. Upon the Authority’s election, such statements will be delivered via the

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Trustee’s online service and upon electing such service, paper statements will be provided only upon
request.

Section 4.6 Valuation and Disposition of Investments. For the purpose of determining
the amount in any fund or account, the value of Permitted Investments credited to such fund or
account shall be valued at the original cost thereof (excluding any brokerage commissions and
excluding any accrued interest) provided that the investment of any funds held in the Reserve Fund,
shall be valued by the Trustee every February 15th at fair market value and marked to market at least
quarterly by the Authority. In determining market value of Permitted Investments, the Trustee may
use and rely conclusively and without liability upon any generally recognized pricing information
service (including brokers and dealers in securities) available to it.

ARTICLE V

COVENANTS OF THE AUTHORITY

Section 5.1 Punctual Payment. The Authority shall punctually pay or cause to be paid
the principal and interest and premium (if any) to become due in respect of all the Bonds, in strict
conformity with the terms of the Bonds and of this Indenture, according to the true intent and
meaning thereof, but only out of Revenues, and other assets pledged for such payment as provided in
this Indenture.

Section 5.2 Extension of Payment of Bonds. The Authority shall not directly or
indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of
payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and
in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall
be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder,
to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of
the Bonds then Outstanding and of all claims for interest thereon which shall have been so extended.
Nothing in this Section shall be deemed to limit the right of the Authority to issue Bonds for the
purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an
extension of maturity of the Bonds.

Section 5.3 Against Encumbrances. The Authority shall not create, or permit the
creation of, any pledge, lien, charge or other encumbrance upon the Revenues, and other assets
pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge
and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves
the right to enter into one or more other indentures for any of its corporate purposes, including other
programs under the Bond Law, and reserves the right to issue other obligations for such purposes.

Section 5.4 Power to Issue Bonds and Make Pledge and Assignment. The Authority is
duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge and
assign the Revenues, the Local Obligations and other assets purported to be pledged and assigned,
respectively, under this Indenture. The Bonds and the provisions of this Indenture are and will be the
legal, valid and binding limited, special obligations of the Authority in accordance with their terms,
and the Authority and the Trustee shall at all times, subject to the provisions of Article VI hereof and
to the extent permitted by law, defend, preserve and protect said pledge and assignment of the
Revenues, the Local Obligations and other assets and all the rights of the Bond Owners under this
Indenture against all claims and demands of all persons whomsoever.

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 Section 5.5 Accounting Records and Financial Statements. The Trustee shall at all
times keep, or cause to be kept, proper books of record and account, prepared in accordance with
corporate trust industry standards in which complete and accurate entries shall be made of
transactions made by it relating to the proceeds of Bonds, the Revenues, the Local Obligations and
all funds and accounts established pursuant to this Indenture. Such books of record and account shall
be available for inspection by the Authority and the City upon reasonable prior notice during regular
business hours and under reasonable circumstances, in each case as agreed to by the Trustee.

Not later than 45 days following each Interest Payment Date, the Trustee shall prepare and
file with the Authority a report setting forth: (i) amounts withdrawn from and deposited into each
fund and account maintained by the Trustee under this Indenture; (ii) the balance on deposit in each
fund and account as of the date for which such report is prepared; and (iii) a brief description of all
obligations held as investments in each fund and account. Copies of such reports may be mailed to
any Owner upon the Owner’s written request to the Trustee at the expense of such Owner at a cost
not to exceed the Trustee’s actual costs of duplication and mailing.

Section 5.6 Conditions to Issuance of Additional Obligations. Except as set forth in

this Section 5.6, the Authority covenants that no additional bonds, notes or other indebtedness shall
be issued or incurred which are payable out of Revenues in whole or in part.

The Authority may issue Additional Bonds in such principal amount as shall be determined
by the Authority, pursuant to a Supplemental Indenture adopted or entered into by the Authority.
Such Additional Bonds may be issued subject to the following conditions precedent:

(a) The Authority shall be in compliance with all covenants set forth in this
Indenture and all Supplemental Indentures;

(b) The proceeds of such Additional Bonds shall be applied to accomplish a

refunding of all or a portion of the Bonds or any Additional Bonds Outstanding. The issuance of
Additional Bonds to refund a portion of the Bonds or any Additional Bonds Outstanding shall
require the prior written consent of the Insurer.

(c) The Supplemental Indenture providing for the issuance of such Additional
Bonds shall provide that interest thereon shall be payable on September 1 and March 1, and
principal thereof shall be payable on September 1 in any year in which principal is payable.

(d) Prior to the delivery of any Additional Bonds, a written certificate must be
provided to the Authority and the Trustee by an Independent Financial Consultant which certifies
that the Annual Debt Service in each Bond Year on the Additional Bonds does not exceed the
Annual Debt Service in each Bond Year on the Bonds defeased or redeemed with the proceeds of
such Additional Bonds.

(e) The Supplemental Indenture providing for the issuance of such Additional
Bonds may provide for the establishment of separate funds and accounts.

(f) No Event of Default (or any event which, once all notice or grace periods
have passed, would constitute an Event of Default) shall have occurred and be continuing with
respect to the Bonds or any of the Local Obligations unless such Event of Default shall be cured
upon the issuance of the Additional Bonds.

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 (g) The Authority shall deliver to the Trustee a written Certificate of the
Authority certifying that the conditions precedent to the issuance of such Additional Bonds set forth
in subsections (a), (b), (c), (d) and (f) of this Section 5.6 above have been satisfied and that, upon the
issuance of such Additional Bonds an amount equal to the Reserve Requirement, as adjusted (if
necessary) to reflect the issuance of such Additional Bonds will be on deposit in the Reserve Fund.

Section 5.7 Local Obligations. Subject to the provisions of this Indenture (including
Article VI), the Authority and the Trustee, shall use reasonable efforts to collect all amounts due
from the Community Facilities District pursuant to the Local Obligations and shall enforce, and take
all steps, actions and proceedings which the Authority and Trustee determine to be reasonably
necessary for the enforcement of all of the rights of the Authority thereunder and for the enforcement
of all of the obligations and covenants of the City and CFD No. 93-1 thereunder. The Authority shall
instruct CFD No. 93-1 to authenticate and deliver to the Trustee the Local Obligations registered in
the name of the Trustee.

The Authority, the Trustee and CFD No. 93-1 may at any time consent to, amend or modify
any of the Local Obligations Indentures of CFD No. 93-1 pursuant to the terms thereof, (a) with the
prior consent of the Insurer, or (b) without the consent of any of the Owners, if such amendment or
modification is for any one or more of the following purposes; provided, however, that any such
amendment or modification which adversely affects the rights and interests of the Insurer shall
require the prior written consent of the Insurer:

(a) to add to the covenants and agreements of CFD No. 93-1 contained in such
Local Obligations Indentures, other covenants and agreements thereafter to be observed, or to limit
or surrender any rights or power therein reserved to or conferred upon CFD No. 93-1; or

(b) to make such provisions for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision contained in such Local Obligations
Indentures, or in any other respect whatsoever as CFD No. 93-1 may deem necessary or desirable,
provided under any circumstances that such modifications or amendments shall not materially
adversely affect the interests of the Owners of the Bonds in the opinion of Bond Counsel filed with
the Trustee; or

(c) to amend any provision thereof to the extent necessary to comply with the
Code, but only if and to the extent such amendment will not, in and of itself, adversely affect the
exclusion from gross income of the interest on any of Additional Bonds for federal income tax
purposes under the Code, in the opinion of Bond Counsel filed with the Trustee.

Prior to executing any such amendment or modification to a Local Obligations Indenture, the
Trustee shall be entitled to receive and rely upon an opinion of Bond Counsel to the effect that such
amendment or modification is authorized or permitted hereunder and complies with the terms
hereunder.

Except as otherwise set forth in this Section 5.9, and Section 5.10 and Article VIII hereof, to
the extent that the Trustee is the holder of a Local Obligation under a Local Obligations Indenture in
its capacity as Trustee hereunder, the Trustee shall not be required to take any action under the Local
Obligations Indentures as a Local Obligation holder, including, without limitation, exercising voting
or consent rights, without receiving the written direction of the Insurer.

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 Section 5.8 Sale of Local Obligations. Notwithstanding anything in this Indenture to the
contrary, though subject to the prior consent of the Insurer, the Authority may cause the Trustee to
sell, from time to time, all or a portion of a Series of Local Obligations, provided that the Authority
shall deliver to the Trustee:

(a) a certificate of an Independent Accountant certifying that, following the sale

of such Local Obligations and the Revenues to be paid to the Authority (assuming the timely
payment of amounts due thereon with respect to any Local Obligations not then in default), together
with interest and principal due on any Defeasance Securities pledged to the repayment of the Bonds
and the Revenues then on deposit in the funds and accounts established hereunder (valuing any
Permitted Investments held hereunder at the then fair market value thereof), will be sufficient to pay
the principal of and interest on the Bonds when due; and

(b) an opinion of Bond Counsel that such sale of Local Obligations is authorized
under the provisions of this Indenture and will not adversely affect the exclusion of interest on any
Additional Bonds issued on a tax-exempt basis from gross income for purposes of federal income
taxation.

Upon compliance with the foregoing conditions by the Authority, the Trustee shall sell such
Local Obligations in accordance with the Request of the Authority and disburse the proceeds of the
sale of such Local Obligations to the Authority or upon the receipt of a Request of the Authority shall
deposit such proceeds in the Revenue Fund, in each case such proceeds to be used to discharge all of
the Authority’s obligations on the portion of the Bonds represented by such Local Obligations in the
event of a defeasance as set forth in Section 9.3 hereof.

Section 5.9 Continuing Disclosure Agreement. The Authority hereby covenants and
agrees that it will comply with and carry out all of its obligations under the Continuing Disclosure
Agreement to be executed and delivered by the Authority and Webb Municipal Finance, LLC, as
dissemination agent, in connection with the issuance of the Bonds. Notwithstanding any other
provision of this Indenture, failure of the Authority to comply with the Continuing Disclosure
Agreement shall not be considered an Event of Default; however, any Owner or Beneficial Owner
may take such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the Authority to comply with its obligations under this
Section 5.11. For purposes of this Section, “Beneficial Owner” means any person which has or
shares the power, directly or indirectly, to make investment decisions concerning ownership of any
Bonds (including persons holding Bonds through nominees, depositories and other intermediaries).

Section 5.10 Further Assurances. The Authority will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance of this Indenture, and for the better
assuring and confirming unto the Owners of the Bonds the rights and benefits provided in this
Indenture.

Section 5.11 Pledged Revenues. The Authority represents it has not heretofore made a
pledge of, granted a lien on or security interest in, or made an assignment or sale of the Revenues that
ranks on a parity with or prior to the pledge granted under this Indenture. The Authority shall not
hereafter make any pledge or assignment of, lien on, or security interest in the Revenues payable
senior to or on a parity with the pledge of Revenues established under this Indenture.

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 ARTICLE VI

THE TRUSTEE

Section 6.1 Appointment of Trustee. Wilmington Trust, National Association, with a

corporate trust office presently located in Costa Mesa, California, a national banking association
organized and existing under and by virtue of the laws of the United States of America, is hereby
appointed Trustee by the Authority for the purpose of receiving all moneys required to be deposited
with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The
Authority agrees that it will maintain a Trustee which is a trust company, association or bank of good
standing located in or incorporated under the laws of the State, duly authorized to exercise trust
powers, with a combined capital and surplus of at least Seventy-Five Million Dollars ($75,000,000),
subject to supervision or examination by federal or state authority, or otherwise approved by the
Insurer in writing, so long as any Bonds are Outstanding. If such bank, association or trust company
publishes a report of condition at least annually pursuant to law or to the requirements of any
supervising or examining authority above referred to, then for the purpose of this Section 6.1, the
combined capital and surplus shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.

The Trustee is hereby authorized to pay the principal of and interest and redemption premium
(if any) on the Bonds when duly presented for payment at maturity, or on redemption prior to
maturity, to make regularly scheduled interest payments, and to cancel any Bond upon payment
thereof.

Section 6.2 Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it
by this Indenture, and agrees to perform said trusts, but only upon and subject to the following
express terms and conditions:

(a) The Trustee undertakes to perform such duties and only such duties as are
specifically and expressly set forth in this Indenture. These duties shall be deemed purely
ministerial in nature, and the Trustee shall not be liable except for the performance of such duties,
and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case
an Event of Default hereunder has occurred (which has not been cured or waived), the Trustee may
exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of
care and skill and diligence in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.

(b) The Trustee may execute any of the trusts or powers hereof and perform the
duties required of it hereunder by or through attorneys, agents, or receivers, but shall not be
responsible for the acts of any agents, attorneys or receivers appointed by it with due care. The
Trustee may consult with and act upon the advice of counsel (which may be counsel to the
Authority) concerning all matters of trust and its duty hereunder and shall be wholly protected in
reliance upon the advice or opinion of such counsel in respect of any action taken or omitted by it in
good faith and in accordance herewith.

(c) The Trustee shall not be responsible for any recital herein, or in the Tax
Certificate or the Bonds, or for any of the supplements thereto or instruments of further assurance, or
for the validity, effectiveness or the sufficiency of the security for the Bonds issued hereunder or
intended to be secured hereby and the Trustee shall not be bound to ascertain or inquire as to the

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observance or performance of any covenants, conditions or agreements on the part of the Authority
hereunder or under the Tax Certificate. The Trustee shall have no responsibility, opinion, or liability
with respect to any information, statement, or recital in any offering memorandum, official
statement, or other disclosure material prepared or distributed with respect to the issuance of the
Bonds. Notwithstanding anything to the contrary herein, the Trustee shall have no duty to prepare or
file any Federal or state tax report or return with respect to any funds held pursuant to this Indenture
or any income earned thereon, except for the delivery and filing of tax information reporting forms
required to be delivered and filed with the Internal Revenue Service.

(d) Except as provided in Section 3.2 hereof, the Trustee shall not be accountable
for the use of any proceeds of sale of the Bonds delivered hereunder. The Trustee may become the
Owner of Bonds secured hereby with the same rights which it would have if not the Trustee; may
acquire and dispose of other bonds or evidences of indebtedness of the Authority with the same
rights it would have if it were not the Trustee; and may act as a depository for and permit any of its
officers or directors to act as a member of, or in any other capacity with respect to, any committee
formed to protect the rights of Owners of Bonds, whether or not such committee shall represent the
Owners of the majority in aggregate principal amount of the Bonds then Outstanding.

(e) The Trustee shall be protected and shall incur no liability in acting, or
refraining from acting in good faith and without negligence, in reliance upon any notice, request,
consent, certificate, order, affidavit, letter, telegram, facsimile or other paper or document believed
by it to be genuine and correct and to have been signed or sent by the proper person or persons. Any
action taken or omitted to be taken by the Trustee without negligence pursuant to this Indenture
upon the written direction, request or authority or consent of any person who at the time of making
such request or giving such authority or consent is the Owner of any Bond, shall be conclusive and
binding upon all future Owners of the same Bond and upon Bonds issued in exchange therefor or in
place thereof. The Trustee shall not be bound to recognize any person as an Owner of any Bond or
to take any action at such person’s request unless the ownership of such Bond by such person shall
be reflected on the Bond Register.

(f) As to the existence or non-existence of any fact or as to the sufficiency or

validity of any instrument, paper or proceeding, the Trustee shall be entitled to request and rely upon
a Certificate of the Authority or opinion of counsel, in its sole and exclusive discretion, as sufficient
evidence of the facts therein contained and prior to the occurrence of an Event of Default hereunder
of which the Trustee has been given notice or is deemed to have notice, as provided in Section 6.2(h)
hereof, shall also be at liberty to accept a Certificate of the Authority or opinion of counsel, in its
sole and exclusive discretion, to the effect that any particular dealing, transaction or action is
necessary or expedient, and shall be fully protected in relying thereon, but may at its discretion
secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound
to secure the same.

(g) The permissive right of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty and notwithstanding any other provision of this Indenture, the
Trustee shall not be answerable for other than its negligence or willful misconduct. The immunities
and exceptions from liability of the Trustee shall extend to its officers, directors, employees and
agents. In no event shall the Trustee be responsible or liable for special, indirect, punitive, incidental
or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.

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 (h) The Trustee shall not be required to take notice or be deemed to have notice
of any Event of Default hereunder except where a Responsible Officer has actual knowledge of such
Event of Default and except for the failure by the Authority to make any of the payments to the
Trustee required to be made by the Authority pursuant hereto, including payments on the Local
Obligations, or failure by the Authority to file with the Trustee any document required by this
Indenture to be so filed on a date certain subsequent to the issuance of the Bonds, unless a
Responsible Officer shall be specifically notified in writing of such default by the Authority or by
the Owners of at least twenty five percent (25%) in aggregate principal amount of the Outstanding
Bonds and all notices or other instruments required by this Indenture to be delivered to the Trustee
must, in order to be effective, be delivered to a Responsible Officer at the Trust Office of the
Trustee, and in the absence of such notice so delivered the Trustee may conclusively assume there is
no Event of Default hereunder except as aforesaid. Delivery of a notice to the officer and address
for the Trustee set forth in Section 9.12 hereof, as updated by the Trustee from time to time, shall be
deemed notice to a Responsible Officer.

(i) At any and all reasonable times the Trustee, and its duly authorized agents,
attorneys, experts, accountants and representatives, shall have the right fully to inspect all books,
papers and records of the Authority pertaining to the Bonds, and to make copies of any of such
books, papers and records such as may be desired but which is not privileged by statute or by law.

(j) The Trustee shall not be required to give any bond or surety in respect of the
execution of the said trusts and powers or otherwise in respect of the performance of its duties
hereunder.

(k) Notwithstanding anything elsewhere in this Indenture with respect to the

execution of any Bonds, the withdrawal of any cash, the release of any property, or any action
whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be
required, to demand any showings, certificates, opinions, appraisals or other information, or
corporate action or evidence thereof, as may be deemed desirable by the Trustee in its sole discretion
for the purpose of establishing the right of the Authority to the execution of any Bonds, the
withdrawal of any cash, or the taking of any other action by the Trustee.

(l) Before taking any action referred to in Sections 6.5, Article VIII, or this
Article, the Trustee may require that an indemnity bond satisfactory to it be furnished for the
reimbursement of all expenses to which it may be put and to protect it against all liability, except
liability which is adjudicated to have resulted from its negligence or willful misconduct in
connection with any such action.

(m) All moneys received by the Trustee shall, until used or applied or invested as
herein provided, be held in trust for the purposes for which they were received but need not be
segregated from other funds.

(n) Whether or not 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 Article VI.

(o) The Trustee shall not be considered in breach of or in default in its

obligations hereunder or progress in respect thereto in the event of enforced delay (“unavoidable
delay”) in the performance of such obligations due to unforeseeable causes beyond its control and

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without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or
terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine
restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to
procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material
or supplies in the open market, litigation or arbitration involving a party or others relating to zoning
or other governmental action or inaction pertaining to the project, malicious mischief,
condemnation, and unusually severe weather or delays of supplies or subcontractors due to such
causes or any similar event and/or occurrences beyond the control of the Trustee.

(p) The Trustee shall have the right to accept and act upon instructions, including
funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using
Electronic Means (“Electronic Means” means the following communications methods: e-mail,
facsimile transmission, secure electronic transmission containing applicable authorization codes,
passwords and/or authentication keys issued by the Trustee, or another method or system specified
by the Trustee as available for use in connection with its services hereunder); provided, however,
that the Authority shall provide to the Trustee an incumbency certificate listing officers with the
authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of
such Authorized Officers, which incumbency certificate shall be amended by the Authority,
whenever a person is to be added or deleted from the listing. If the Authority elects to give the
Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such
Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The
Authority understands and agrees that the Trustee cannot determine the identity of the actual sender
of such Instructions and that the Trustee shall conclusively presume that directions that purport to
have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee
have been sent by such Authorized Officer. The Authority shall be responsible for ensuring that
only Authorized Officers transmit such Instructions to the Trustee and that the Authority and all
Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user
and authorization codes, passwords and/or authentication keys upon receipt by the Authority. The
Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the
Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions
conflict or are inconsistent with a subsequent written instruction. The Authority agrees: (i) to
assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee,
including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk
of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks
associated with the various methods of transmitting Instructions to the Trustee and that there may be
more secure methods of transmitting Instructions than the method(s) selected by the Authority; (iii)
that the security procedures (if any) to be followed in connection with its transmission of
Instructions provide to it a commercially reasonable degree of protection in light of its particular
needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any
compromise or unauthorized use of the security procedures.

Notwithstanding the effective date of this Indenture or anything to the contrary in this
Indenture, the Trustee shall have no liability or responsibility for any act or event relating to this
Indenture which occurs prior to the date the Trustee formally executes this Indenture and commences
acting as Trustee hereunder.

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

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 Section 6.3 Fees, Charges and Expenses of Trustee. The Trustee shall be entitled to
payment and reimbursement by the Authority for reasonable fees for its services rendered hereunder
and all advances (including any interest on advances), counsel fees and expenses (including fees and
expenses of outside counsel and the allocated costs of internal attorneys) and other expenses
reasonably and necessarily made or incurred by the Trustee in connection with such services. Upon
the occurrence of an Event of Default hereunder, but only upon an Event of Default, the Trustee shall
have a first lien with right of payment prior to payment of any Bond upon the amounts held in Funds
and accounts hereunder for the foregoing fees, charges and expenses incurred by it respectively. The
Trustee’s right to payment of its fees and expenses shall survive the discharge and payment or
defeasance of the Bonds and termination of this Indenture, and the resignation or removal of the
Trustee. When the Trustee incurs expenses or renders services after the occurrence of an Event of
Default, such expenses and the compensation for such services are intended to constitute expenses of
administration under any federal or state bankruptcy, insolvency, arrangement, moratorium,
reorganization or other debtor relief law.

Section 6.4 Notice to Bond Owners of Default. If an Event of Default hereunder occurs
with respect to any Bonds of which the Trustee has been given, or is deemed to have notice, as
provided in Section 6.2(h) hereof, then the Trustee shall promptly give written notice thereof by first
class mail to the Owner of each such Bond unless such Event of Default shall have been cured before
the giving of such notice.

Section 6.5 Intervention by Trustee. In any judicial proceeding to which the Authority
is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing on the
interests of Owners of any of the Bonds, the Trustee may intervene on behalf of such Bond Owners,
and subject to Section 6.2(1) hereof, shall do so if requested in writing by the Owners of at least
twenty five percent (25%) in aggregate principal amount of such Bonds then Outstanding.

Section 6.6 Removal of Trustee. With the consent of the Insurer, the Owners of a
majority in aggregate principal amount of the Outstanding Bonds may and the Authority may, so
long as no Event of Default then exists, upon 30 days’ prior written notice to the Trustee and the
Insurer, remove the Trustee initially appointed, and any successor thereto, by an instrument or
concurrent instruments in writing delivered to the Trustee and the Insurer. Upon any such removal,
the Authority shall appoint a successor or successors thereto; provided that any such successor shall
be a bank, association or trust company meeting the requirements set forth in Section 6.1 hereof.

Section 6.7 Resignation by Trustee. The Trustee and any successor Trustee may resign
and be discharged from its duties and obligations hereunder at any time by giving no less than thirty
(30) calendar days’ written notice of such resignation, such notice to be given to the Authority, the
Community Facilities District, the Insurer and the City by registered or certified mail. Upon
receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee to
which the Insurer consents. Any resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon acceptance of appointment by the successor
Trustee. Upon such acceptance, the Authority shall cause notice thereof to be sent to the Insurer and
the Bond Owners at their respective addresses set forth on the Bond Register.

Section 6.8 Appointment of Successor Trustee. In the event of the removal or

resignation of the Trustee pursuant to Sections 6.6 or 6.7, respectively, the Authority shall promptly
appoint a successor Trustee. In the event the Authority shall for any reason whatsoever fail to
appoint a successor Trustee within thirty (30) calendar days following the delivery to the Trustee of

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the instrument described in Section 6.6 or within thirty (30) calendar days following the receipt of
notice by the Authority, the Community Facilities District, the Insurer and the City pursuant to
Section 6.7, the Trustee may petition any court of competent jurisdiction for the appointment of a
successor Trustee meeting the requirements of Section 6.1 hereof, or for other appropriate relief.
Any such successor Trustee appointed by such court shall become the successor Trustee hereunder
notwithstanding any action by the Authority purporting to appoint a successor Trustee following the
expiration of such thirty calendar day period.

Section 6.9 Merger or Consolidation. Any company into which the Trustee may be
merged or converted or with which it may be consolidated or any company resulting from any
merger, conversion or consolidation to which it shall be a party or any company to which the Trustee
may sell or transfer all or substantially all of its corporate trust business, provided that such company
shall meet the requirements set forth in Section 6.1 hereof, shall be the successor to the Trustee and
vested with all of the title to the trust estate and all of the trusts, powers, discretions, immunities,
privileges and all other matters as was its predecessor, without the execution or filing of any paper or
further act, anything herein to the contrary notwithstanding. The Trustee may assign its rights, duties
and obligations hereunder in whole or in part, to an affiliate or subsidiary thereof, provided such
Corporation, affiliate or subsidiary shall meet the requirements set forth in Section 6.1 hereof.

Section 6.10 Concerning any Successor Trustee. Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority an
instrument in writing accepting such appointment hereunder and to the predecessor Trustee an
instrument indemnifying the predecessor Trustee for any costs or claims arising during the time the
successor Trustee serves as Trustee hereunder and thereupon such successor, without any further act,
deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts,
duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the Request of
the Authority, or of the Trustee’s successor, execute and deliver an instrument transferring to such
successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and
every predecessor Trustee shall deliver all securities and moneys held by it as the Trustee hereunder
to its successor. Should any instrument in writing from the Authority be required by any successor
Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties
hereby vested or intended to be vested in the predecessor Trustee, any and all such instruments in
writing shall, on request, be executed, acknowledged and delivered by the Authority.

Section 6.11 Appointment of Co-Trustee. It is the purpose of this Indenture that there
shall be no violation of any law of any jurisdiction (including particularly the law of the State)
denying or restricting the right of banking corporations or associations to transact business as a
trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in
particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee
deems that by reason of any present or future law of any jurisdiction it may not exercise any of the
powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as
herein granted, or take any other action which may be desirable or necessary in connection therewith,
it may be necessary that the Trustee appoint an additional individual or institution as a separate
co-trustee. The following provisions of this Section 6.11 are adopted to these ends.

In the event that the Trustee or the Authority appoints an additional individual or institution
as a separate or co-trustee, each and every remedy, power, right, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or
vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such

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separate or co-trustee but only to the extent necessary to enable such separate or co-trustee to
exercise such powers, rights and remedies, and every covenant and obligation necessary to the
exercise thereof by such separate or co-trustee shall run to and be enforceable by either of the Trustee
or separate or co-Trustee.

Should any instrument in writing from the Authority be required by the separate trustee or
co-trustee so appointed by the Trustee or the Authority for more fully and certainly vesting in and
confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such
instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority.
In case any separate trustee or co-trustee, or a successor to either, shall become incapable of acting,
resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such
separate trustee or co-trustee, so far as permitted by law, shall vest in and be exercised by the Trustee
until the appointment of a new trustee or successor to such separate trustee or co-trustee.

Section 6.12 Indemnification; Limited Liability of Trustee. The Authority further

covenants and agrees to indemnify and save the Trustee and its officers, officials, directors, agents
and employees, harmless from and against any loss, cost, claim, suit, judgment, damages, expense,
including legal fees and expenses, and liabilities which it may incur arising out of or in the exercise
and performance of its powers and duties hereunder and any transactions or documents in connection
herewith, including the costs and expenses of defending against any claim of liability, but excluding
any and all losses, expenses and liabilities which are due to the negligence or intentional misconduct
of the Trustee, its officers, directors, agents or employees. No provision in this Indenture shall
require the Trustee to risk or expend its own funds or otherwise incur any financial liability
hereunder unless indemnity reasonably satisfactory to it against such liability or risk is provided to it.
The Trustee shall not be liable for any action taken or omitted to be taken by it in accordance with
the direction of a majority (or any lesser amount that may direct the Trustee in accordance with the
provisions of the Indenture) of the Owners of the principal amount of Bonds Outstanding or the
Insurer relating to the time, method and place of conducting any proceeding or remedy available to
the Trustee under this Indenture. The Trustee shall not be liable for any error of judgment made in
good faith by a responsible officer, unless it shall be proved that the Trustee was negligent or
engaged in willful misconduct in ascertaining the pertinent facts. The rights of the Trustee and the
obligations of the Authority under this Section 6.12 shall survive termination of this Indenture,
discharge of the Bonds and resignation or removal of the Trustee.

ARTICLE VII

MODIFICATION AND AMENDMENT OF THE INDENTURE

Section 7.1 Amendment Hereof. This Indenture and the rights and obligations of the
Authority and of the Owners of the Bonds may be modified or amended at any time by a
Supplemental Indenture which shall become binding when the written consent of the Insurer and the
Owners a majority in aggregate principal amount of the Bonds then Outstanding are filed with the
Trustee. No such modification or amendment shall (a) extend the maturity of or reduce the interest
rate on any Bond or otherwise alter or impair the obligation of the Authority to pay the principal,
interest or redemption premiums at the time and place and at the rate and in the currency provided
therein of any Bond without the express written consent of the Insurer and the Owner of such Bond,
(b) reduce the percentage of Bonds required for the written consent to any such amendment or
modification, or (c) without written consent of the Trustee, modify any of the rights or obligations of
the Trustee.

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 This Indenture and the rights and obligations of the Authority, the Insurer and of the Owners
of the Bonds may also be modified or amended at any time by a Supplemental Indenture which shall
become binding upon adoption, without consent of the Insurer and any Bond Owners (except as
otherwise provided in this Section 7.1), to the extent permitted by law and with prior written notice to
the Insurer, but only for any one or more of the following purposes:

(a) to add to the covenants and agreements of the Authority contained in this
Indenture, other covenants and agreements thereafter to be observed, or to limit or surrender any
rights or powers herein reserved to or conferred upon the Authority so long as such addition,
limitation or surrender of such rights or powers shall not materially adversely affect the Owners of
the Bonds, as evidenced by the approval of Bond Counsel delivered pursuant to this Section 7.1; or

(b) to make such provisions for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision contained in this Indenture, or in any
other respect whatsoever as the Authority may deem necessary or desirable, provided under any
circumstances that such modifications or amendments shall not materially adversely affect the
interests of the Owners of the Bonds, as evidenced by the approval of Bond Counsel delivered
pursuant to this Section 7.1; or

(c) to amend any provision hereof relating to the Code as may be necessary or
appropriate to assure compliance with the Code and the exclusion from gross income of interest on
the Additional Bonds, including, but not limited to, amending the procedures set forth in Section 5.8
hereof with respect to the calculation of Rebatable Arbitrage; or

(d) to amend or clarify any provision hereof to provide for the issuance of any
Additional Bonds (which may be issued for refunding purposes only) on a parity with the Bonds for
all purposes of this Indenture, including, but not limited to, for the purpose of exercising all rights
and remedies hereunder; or

(e) to amend the provisions of Section 4.4 hereof.

The Trustee and the Insurer shall be furnished, at the expense of the Authority, an opinion of
Bond Counsel that any such Supplemental Indenture entered into by the Authority and the Trustee is
authorized or permitted hereunder and complies with the provisions of this Article VII and the
Trustee may conclusively rely upon such opinion and shall be fully protected in relying thereon.

Section 7.2 Effect of Supplemental Indenture. From and after the time any
Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be
deemed to be modified and amended in accordance therewith, the respective rights, duties and
obligations of the parties hereto or thereto and all Owners of Outstanding Bonds, as the case may be,
shall thereafter be determined, exercised and enforced hereunder subject in all respects to such
modification and amendment, and all the terms and conditions of this Indenture for any and all
purposes.

Section 7.3 Endorsement or Replacement of Bonds After Amendment. After the

effective date of any action taken as hereinabove provided, the Authority may determine that any
affected Bonds shall bear a notation, by endorsement in form approved by the Authority, as to such
action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date
and presentation of its Bond for that purpose at the Trust Office of the Trustee, a suitable notation as

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to such action shall be made on such Bond. If the Authority shall so determine, new Bonds so
modified as, in the opinion of the Authority, shall be necessary to conform to such Bond Owners’
action shall be prepared and executed, and in that case upon demand of the Owner of any Bond
Outstanding at such effective date such new Bonds shall be exchanged at the Trust Office of the
Trustee, without cost to each Bond Owner, for Bonds then Outstanding, upon surrender of such
Outstanding Bonds.

Section 7.4 Amendment by Mutual Consent. The provisions of this Article VII shall
not prevent any Bond Owner, with the Insurer’s consent, from accepting any amendment as to the
particular Bond held by such Owner, provided that due notation thereof is made on such Bond.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS

Section 8.1 Events of Default. The following events shall be Events of Default
hereunder.

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

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

(c) Default by the Authority in the observance of any of the other covenants,
agreements or conditions on its part in this Indenture or in the Bonds contained, if such default shall
have continued for a period of thirty (30) days after written notice thereof, specifying such default
and requiring the same to be remedied, shall have been given to the Authority by the Trustee, or to
the Authority and the Trustee by the Owners of not less than twenty five percent (25%) in aggregate
principal amount of the Bonds at the time Outstanding, provided that such default (other than a
default arising from nonpayment of the Trustee’s fees and expenses, which must be cured within
such 30 day period) shall not constitute an Event of Default hereunder if the Authority shall with the
written approval of the Insurer (so long as the Insurer has not defaulted on any obligation under the
Insurance Policy), commence to cure such default within said thirty (30) day period and thereafter
diligently and in good faith shall cure such default within a reasonable period of time; or

(d) The filing by the Authority, the City or CFD No. 93-1 of a petition or answer
seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law
of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed
with or without the consent of the Authority, the City or CFD No. 93-1, as applicable, seeking
reorganization under the federal bankruptcy laws or any other applicable law of the United States of
America, or if, under the provisions of any other law for the relief or aid of debtors, any court of
competent jurisdiction shall assume custody or control of the Authority or of the whole or any
substantial part of its property.

Section 8.2 Remedies; Rights of Bond Owners. Upon the occurrence of an Event of
Default, the Trustee may pursue any available remedy at law or in equity to enforce the payment of
the principal of, premium, if any, and interest on the Outstanding Bonds, and to enforce any rights of

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the Trustee under or with respect to this Indenture. Subject to Section 8.3, in the event of an Event of
Default arising out of a nonpayment of Trustee’s fees and expenses, the Trustee may sue the
Authority to seek recovery of its fees and expenses, provided, however, that such recovery may be
made only from the funds of the Authority and not from Revenues.

Subject to Section 10.1 hereof, if an Event of Default shall have occurred and be continuing
and if requested to do so by the Owners of at least twenty-five percent (25%) in aggregate principal
amount of Outstanding Bonds, and, in each case, if indemnified as provided in Section 6.2(1), the
Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this
Article VIII and, as applicable, under the Local Obligations, as shall be deemed most expedient in the
interests of the Bond Owners.

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

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

In no event shall the principal of the Bonds be accelerated.

Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment, or
composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to
vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners
so affected.

Section 8.3 Application of Revenues and Other Funds After Event of Default. All
amounts received by the Trustee with respect to the Bonds pursuant to any right given or action taken
by the Trustee under the provisions of this Indenture relating to the Bonds and any other amounts
held by the Trustee hereunder shall be applied by the Trustee in the following order upon
presentation of the several Bonds, and the stamping thereon of the amount of the payment if only
partially paid, or upon the surrender thereof if fully paid –

First, to the payment of the costs and expenses of the Trustee in declaring such Event of
Default and in carrying out the provisions of this Article VIII, including reasonable compensation to
its agents, attorneys and counsel (including outside counsel and the allocated costs of internal
attorneys), and to the payment of all other outstanding fees and expenses of the Trustee; and

Second, to the payment of the whole amount of interest on and principal of the Bonds then
due and unpaid, with interest on overdue installments of principal and interest to the extent permitted
by law at the net effective rate of interest then borne by the Outstanding Bonds; provided, however,
that in the event such amounts shall be insufficient to pay in full the full amount of such interest and
principal, then such amounts shall be applied in the following order of priority;

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

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

(c) third, to the payment of interest on overdue installments of principal and

interest on Bonds.

Third, to the payment of any amounts due and owing to the Insurer under the Insurance
Policy or the Reserve Policy.

Section 8.4 Power of Trustee to Control Proceedings. Subject to Section 10.1 hereof,
in the event that the Trustee, upon the happening of an Event of Default, shall have taken any action,
by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own
discretion or upon the request of the Owners of a majority in aggregate principal amount of the
Bonds then Outstanding, it may, in the exercise of its discretion for the best interests of the Owners
of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or
other disposal of such action; provided, however, that the Trustee shall not, unless there no longer
continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of
any litigation pending at law or in equity, if at the time there has been filed with it a written request
signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds issued
hereunder opposing such discontinuance, withdrawal, compromise, settlement or other such litigation
and provided further that the Trustee shall have the right to decline to comply with such written
request unless indemnification satisfactory to it has been provided. Any suit, action or proceeding
which any Owner of Bonds shall have the right to bring to enforce any right or remedy hereunder
may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds similarly
situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds
issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed
it) the true and lawful attorney in fact of the respective Owners of the Bonds for the purposes of
bringing any such suit, action or proceeding and to do and perform any and all acts and things for and
on behalf of the respective Owners of the Bonds as a class or classes, as may be necessary or
advisable in the opinion of the Trustee as such attorney in fact.

Section 8.5 Appointment of Receivers. Upon the occurrence of an Event of Default

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

Section 8.6 Non Waiver. Nothing in this Article VIII or in any other provision of this
Indenture, or in the Bonds, shall affect or impair the obligation of the Authority, which is absolute
and unconditional, to pay the interest on and principal of the Bonds to the respective Owners of the
Bonds at the respective dates of maturity, as herein provided, out of the Revenues and other moneys
herein pledged for such payment.

A waiver of any default or breach of duty or contract by the Trustee or any Bond Owners
shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies

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on any such subsequent default or breach. No delay or omission of the Trustee or any Owner of any
of the Bonds to exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver of any such default or an acquiescence therein; and every
power and remedy conferred upon the Trustee or Bond Owners by the Bond Law or by this
Article VIII may be enforced and exercised from time to time and as often as shall be deemed
expedient by the Trustee or the Bond Owners, as the case may be.

Section 8.7 Rights and Remedies of Bond Owners. No Owner of any Bond issued
hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any
remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the
Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in
aggregate principal amount of all the Bonds then Outstanding shall have made written request upon
the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding
in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable
to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such
request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of
sixty (60) days after such written request shall have been received by, and said tender of indemnity
shall have been made to, the Trustee.

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

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

Section 8.8 Termination of Proceedings. In case the Trustee shall have proceeded to
enforce any right under this Indenture by the appointment of a receiver or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely, then and in every such case, the Authority, the Trustee and the Bond Owners
shall be restored to their former positions and rights hereunder, respectively, with regard to the
property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as
if no such proceedings had been taken.

ARTICLE IX

MISCELLANEOUS

Section 9.1 Limited Liability of Authority. Notwithstanding anything in this Indenture

contained, the Authority shall not be required to advance any moneys derived from any source of
income other than the Revenues or for the payment of the principal of or interest on the Bonds, or
any premiums upon the redemption thereof, or for the performance of any covenants herein
contained (except to the extent any such covenants are expressly payable hereunder from the

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Revenues). The Authority may, however, advance funds for any such purpose, provided that such
funds are derived from a source legally available for such purpose and may be used by the Authority
for such purpose without incurring indebtedness.

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

Section 9.2 Benefits of Indenture Limited to Parties. Nothing in this Indenture,

expressed or implied, is intended to give to any person other than the Authority, the Trustee, the
Insurer and the Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture.
Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of
the Authority shall be for the sole and exclusive benefit of the Trustee, the Insurer and the Owners of
Bonds.

Section 9.3 Discharge of Indenture. The Authority may pay and discharge any or all of
the Outstanding Bonds in any one or more of the following ways:

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

(b) by irrevocably depositing with the Trustee, in trust, at or before maturity,

money which, together with the available amounts then on deposit in the funds and accounts
established with the Trustee pursuant to this Indenture and available for such purpose, is fully
sufficient to pay such Bonds, including all principal, interest and redemption premiums; or

(c) by irrevocably depositing with the Trustee or any other fiduciary, in trust,
Defeasance Securities in such amount as an Independent Accountant shall determine will, together
with the interest to accrue thereon and available moneys then on deposit in the funds and accounts
established with the Trustee pursuant to this Indenture and available for such purpose, be fully
sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and
redemption premiums) at or before their respective maturity dates.

Any Outstanding Bond or Bonds shall be deemed to have been paid and discharged under
(c) above if (i) in the case of Bonds to be redeemed prior to the maturity thereof, notice of such
redemption shall have been provided pursuant to Section 2.2(d) hereof or provision satisfactory to the
Trustee shall have been made for the provisions of such notice, (ii) the Authority shall have delivered
an escrow agreement with respect to the deposits under (c) above (which shall be acceptable in form
and substance to the Insurer, so long as the Insurer has not defaulted on any obligation under the
Insurance Policy); (iii) an opinion of Bond Counsel shall be delivered to the Trustee and the Insurer
to the effect that the requirements of this Indenture have been satisfied with respect to the discharge
of such Bond or Bonds; and (iv) the Trustee shall have delivered a certificate of discharge with
respect to such Bond or Bonds. The Insurer shall be provided with final drafts of the above-
referenced documentation not less than five Business Days prior to the funding of the escrow. Upon

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a discharge of one or more Bonds as described above, and notwithstanding that any of such Bonds
shall not have been surrendered for payment, the pledge of the Revenues, and other funds provided
for in this Indenture with respect to such Bonds, as applicable, and all other pecuniary obligations of
the Authority under this Indenture with respect to such Bonds, shall cease and terminate, except only
the obligation of the Authority to comply with the covenants contained in Sections 5.7 and 6.12
hereof, to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all sums
due thereon from amounts set aside for such purpose, to pay all expenses and costs of the Trustee and
to comply with the covenants contained in Section 5.7 hereof. Any funds thereafter held by the
Trustee, which are not required for said purposes, shall be paid over to the Authority or upon a
Request of the Authority to the City or the Community Facilities District, as applicable.

This Indenture shall not be discharged until all amounts due or to become due to the Insurer
shall have been paid in full in accordance with Section 9.3. The Authority’s obligation to pay such
amounts shall expressly survive payment in full of the payments of principal of and interest on the
Bonds.

Section 9.4 Successor is Deemed Included in All References to Predecessor.

Whenever in this Indenture or any Supplemental Indenture either the Authority is named or referred
to, such reference shall be deemed to include the successor to the powers, duties and functions, with
respect to the management, administration and control of the affairs of the Authority, that are
presently vested in the Authority, and all the covenants, agreements and provisions contained in this
Indenture by or on behalf of the Authority shall bind and inure to the benefit of its successors
whether so expressed or not.

Section 9.5 Content of Certificates. Every certificate by or on behalf of the Authority

with respect to compliance with a condition or covenant provided for in this Indenture shall include
(a) a statement that the person or persons making or giving such certificate have read such covenant
or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions contained in such
certificate are based; (c) a statement that, in the opinion of the signers, they have made or caused to
be made such examination or investigation as is necessary to enable them to express an informed
opinion as to whether or not such covenant or condition has been complied with; and (d) a statement
as to whether, in the opinion of the signers, such condition or covenant has been complied with.

Any such certificate made or given by an officer of the Authority may be based, insofar as it
relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such
officer knows that the certificate or opinion or representations with respect to the matters upon which
his certificate may be based, as aforesaid, are erroneous, or in the exercise of reasonable care should
have known that the same were erroneous. Any such certificate or opinion or representation made or
given by counsel may be based, insofar as it relates to factual matters, on information with respect to
which is in the possession of the Authority, or upon the certificate or opinion of or representations by
an officer or officers of the Authority, unless such counsel knows that the certificate or opinion or
representations with respect to the matters upon which his certificate, opinion or representation may
be based, as aforesaid, are erroneous, or in the exercise of reasonable care should have known that
the same were erroneous.

Section 9.6 Execution of Documents by Bond Owners. Any request, consent or other
instrument required by this Indenture to be signed and executed by Bond Owners may be in any
number of concurrent writings of substantially similar tenor and may be signed or executed by such

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Bond Owners in person or by agent or agents duly appointed in writing. Proof of the execution of
any such request, consent or other instrument or of a writing appointing any such agent, shall be
sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and of the
Authority if made in the manner provided in this Section 9.6.

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

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

Section 9.7 Disqualified Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or
waiver under this Indenture, Bonds which are owned or held by or for the account of the Authority,
the City or the Community Facilities District (but excluding Bonds held in any employees’ or
retirement fund) shall be disregarded and deemed not to be Outstanding for the purpose of any such
determination, provided, however, that for the purpose of determining whether the Trustee shall be
protected in relying on any such demand, request, direction, consent or waiver, only Bonds which a
Responsible Officer of the Trustee actually knows to be so owned or held shall be disregarded unless
all Bonds are so owned, in which case such Bonds shall be considered Outstanding for the purposes
of such determination. Upon request, the Authority shall specify to the Trustee those Bonds
disqualified pursuant to this Section 9.7 and the Trustee may conclusively rely upon such certificate.

Section 9.8 Waiver of Personal Liability. No officer, agent or employee of the

Authority shall be individually or personally liable for the payment of the interest on or principal of
the Bonds; but nothing herein contained shall relieve any such officer, agent or employee from the
performance of any official duty provided by law.

Section 9.9 Entire Agreement; Partial Invalidity. This Indenture and the exhibits
hereto set forth the entire agreement and understanding of the parties related to this transaction and
supersedes all prior agreements and understandings, oral or written. If any one or more of the
covenants or agreements, or portions thereof, provided in this Indenture on the part of the Authority
(or of the Trustee) to be performed should be contrary to law, then such covenant or covenants, such
agreement or agreements, or such portions thereof, shall be null and void and shall be deemed
separable from the remaining covenants and agreements or portions thereof and shall in no way
affect the validity of this Indenture or of the Bonds; but the Bond Owners shall retain all rights and
benefits accorded to them under the Bond Law or any other applicable provisions of law. The
Authority hereby declares that it would have entered into this Indenture and each and every other
section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the
issuance of the Bonds pursuant hereto irrespective of the fact that any or more sections, paragraphs,

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subdivisions, sentences, clauses or phrases of this Indenture or the application thereof to any person
or circumstance may be held to be unconstitutional, unenforceable or invalid.

Section 9.10 Destruction of Cancelled Bonds. Whenever in this Indenture provision is

made for the surrender to the Authority or the Trustee of any Bonds which have been paid or
cancelled pursuant to the provisions of this Indenture, the Trustee shall destroy such Bonds in
accordance with the retention policy of the Trustee then in effect.

Section 9.11 Funds and Accounts. Any fund or account required by this Indenture to be
established and maintained by the Authority or the Trustee may be established and maintained in the
accounting records of the Authority or the Trustee, as the case may be, either as a fund or an account,
and may, for the purpose of such records, any audits thereof and any reports or statements with
respect thereto, be treated either as a fund or as an account. All such records with respect to all such
funds and accounts held by the Authority shall at all times be maintained in accordance with
generally accepted accounting principles and all such records with respect to all such funds and
accounts held by the Trustee shall be at all times maintained in accordance with corporate trust
industry practices; in each case with due regard for the protection of the security of the Bonds and the
rights of every Owner thereof.

Section 9.12 Notices. Any notice, request, complaint, demand, communication or other
paper shall be sufficiently given and shall be deemed given when delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, or sent by facsimile or other electronic
transmission, addressed as follows:

If to the Authority: Beaumont Public Improvement Authority

c/o City of Beaumont
550 East 6th Street
Beaumont, CA 92223
Attention: Executive Director

If to CFD No. 93-1: CFD No. 93-1

c/o City of Beaumont
550 East 6th Street
Beaumont, CA 92223
Attention: City Manager

If to the Trustee: Wilmington Trust, National Association

650 Town Center Drive, Suite 800
Costa Mesa, CA 92626
Attention: Corporate Trust Department

If to the Insurer:
]

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

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 In each case in which notice or other communication to the Insurer refers to an Event of
Default, then a copy of such notice or other communication shall also be sent to the attention of the
General Counsel, and shall be marked to indicate “URGENT MATERIAL ENCLOSED.”

Section 9.13 Unclaimed Moneys. Anything in this Indenture to the contrary

notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of the
Bonds which remain unclaimed for two (2) years after the date when such Bonds have become due
and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys
were held by the Trustee at such date, or for two (2) years after the date of deposit of such moneys if
deposited with the Trustee after said date when such Bonds become due and payable, shall be repaid
(without liability for interest) by the Trustee to the Authority, as its absolute property and free from
trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bond
Owners shall look only to the Authority for the payment of such Bonds; provided, however, that
before being required to make such payment to the Authority, the Trustee shall, at the expense of
Authority, cause to be mailed to the Owners of all such Bonds, at their respective addresses
appearing on the Bond Register, a notice that said moneys remain unclaimed and that, after a date in
said notice, which date shall not be less than thirty (30) days after the date of mailing such notice, the
balance of such moneys then unclaimed will be returned to the Authority.

Section 9.14 Payment Due on Other than a Business Day. If the date for making any
payment or the last date for performance of any act or the exercising of any right, as provided in the
Indenture, is not a Business Day, such payment, with no interest accruing for the period after such
nominal date, may be made or act performed or right exercised on the next succeeding Business Day
with the same force and effect as if done on the nominal date provided in this Indenture.

Section 9.15 Governing Law. This Indenture shall be governed by the laws of the State of
California.

ARTICLE X

MUNICIPAL BOND INSURANCE POLICY AND RESERVE POLICY

Section 10.1 Rights of the Insurer. As long as the Insurance Policy is in full force and
effect, the Authority and the Trustee agree to comply with the following provisions, notwithstanding
anything in this Indenture to the contrary.

(a) The prior written consent of the Insurer shall be a condition precedent to the
deposit of any Reserve Credit Facility, other than the Reserve Policy, provided in lieu of a cash
deposit into the Reserve Fund. Amounts on deposit in the Reserve Fund shall be applied solely to the
payment of debt service due on Outstanding Bonds, and the Trustee shall draw on the Accounts of
the Reserve Fund to pay debt service and exhaust amounts on deposit or otherwise available therein
prior to making any claim on the Insurance Policy.

(b) The Insurer shall be deemed to be the sole holder of the Bonds for the
purpose of exercising any voting right or privilege or giving any consent or direction or taking any
other action that the Owners of the Bonds are entitled to take pursuant to this Indenture pertaining to
(i) defaults and remedies and (ii) the duties and obligations of the Trustee. In furtherance thereof and
as a term of this Indenture and each Bond, the Trustee (solely with respect to the Bonds) and each
Owner of an Bond appoint the Insurer as their agent and attorney-in-fact and agree that the Insurer

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may at any time during the continuation of any proceeding by or against the Authority or the
Community Facilities District under the United States Bankruptcy Code or any other applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (an “Insolvency Proceeding”)
direct all matters relating to such Insolvency Proceeding, including without limitation, (A) all matters
relating to any claim or enforcement proceeding in connection with an Insolvency Proceeding (a
“Claim”), (B) the direction of any appeal of any order relating to any Claim, (C) the posting of any
surety, supersedeas or performance bond pending any such appeal, and (D) the right to vote to accept
or reject any plan of adjustment. In addition, the Trustee (solely with respect to the Bonds) and each
Owner of an Bond delegate and assign to the Insurer, to the fullest extent permitted by law, the rights
of the Trustee and each Owner of an Bond in the conduct of any Insolvency Proceeding, including,
without limitation, all rights of any party to an adversary proceeding or action with respect to any
court order issued in connection with any such Insolvency Proceeding. Remedies granted to the
Owners of Bonds shall expressly include mandamus.

(c) Upon the occurrence of an optional redemption of Bonds in part, the selection
of such Bonds to be redeemed shall be subject to the approval of the Insurer; provided, however, that
with respect to an optional redemption of Bonds in part resulting from the redemption of all
outstanding maturities of a series of Local Obligations, such approval of the Insurer shall not be
required. The exercise of any provision of this Indenture which permits the purchase of Bonds in
lieu of redemption shall require the prior written approval of the Insurer if any Bond so purchased is
not cancelled upon purchase.

(d) The rights granted to the Insurer under this Indenture or under the Local
Obligation Indentures to request, consent to or direct any action are rights granted to the Insurer in
consideration of its issuance of the Insurance Policy. Any exercise by the Insurer of such rights is
merely an exercise of the Insurer’s contractual rights and shall not be construed or deemed to be
taken for the benefit, or on behalf, of the Owners of the Bonds and such action does not evidence any
position of the Insurer, affirmative or negative, as to whether the consent of the Owners of the Bonds
or any other person is required in addition to the consent of the Insurer.

(e) Each of the Authority and the Trustee, to the extent directed by the Authority,
at the expense of the Authority, covenants and agrees to take such action (including, as applicable,
filing of UCC financing statements and continuations thereof) as is necessary from time to time to
preserve the priority of the pledge of the Revenues under applicable law.

(f) The Insurer is hereby deemed a third party beneficiary to this Indenture.

Section 10.2 Payments under the Insurance Policy.

(a) If, on the third Business Day prior to the related scheduled interest payment
date or principal payment date (“Payment Date”) there is not on deposit with the Trustee, after
making all transfers and deposits required under this Indenture, moneys sufficient to pay the principal
of and interest on the Bonds due on such Payment Date, the Trustee shall give notice to the Insurer
and to its designated agent (if any) (the “Insurer’s Fiscal Agent”) by telephone or telecopy of the
amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the
second Business Day prior to the related Payment Date, there continues to be a deficiency in the
amount available to pay the principal of and interest on the Bonds due on such Payment Date, the
Trustee shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer’s
Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such

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deficiency between the amount required to pay interest on the Bonds and the amount required to pay
principal of the Bonds, confirmed in writing to the Insurer and the Insurer’s Fiscal Agent by 12:00
noon, New York City time, on such second Business Day by filling in the form of Notice of Claim
and Certificate delivered with the Insurance Policy.

(b) The Trustee shall designate any portion of payment of principal on Bonds
paid by the Insurer, whether by virtue of maturity or other advancement of maturity, on its books as a
reduction in the principal amount of Bonds registered to the then current Owners of the Bonds,
whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer,
registered in the name of [_______________] in a principal amount equal to the amount of principal
so paid (without regard to authorized denominations); provided that the Trustee’s failure to so
designate any payment or issue any replacement Bond shall have no effect on the amount of principal
or interest payable by the Authority on any Bond or the subrogation rights of the Insurer.

(c) The Trustee shall keep a complete and accurate record of all funds deposited
by the Insurer into the Policy Payments Account (defined below) and the allocation of such funds to
payment of interest on and principal of any Bond. The Insurer shall have the right to inspect such
records at reasonable times upon reasonable notice to the Trustee.

(d) Upon payment of a claim under the Insurance Policy, the Trustee shall
establish a separate special purpose trust account for the benefit of Owners of the Bonds referred to
herein as the “Policy Payments Account” and over which the Trustee shall have exclusive control
and sole right of withdrawal. The Trustee shall receive any amount paid under the Insurance Policy
in trust on behalf of Owners of the Bonds and shall deposit any such amount in the Policy Payments
Account and distribute such amount only for purposes of making the payments for which a claim was
made. Such amounts shall be disbursed by the Trustee to Owners of the Bonds in the same manner as
principal and interest payments are to be made with respect to the Bonds under the sections hereof
regarding payment of Bonds. It shall not be necessary for such payments to be made by checks or
wire transfers separate from the check or wire transfer used to pay debt service with other funds
available to make such payments. Notwithstanding anything herein to the contrary, the Authority
agrees to pay to the Insurer (i) a sum equal to the total of all amounts paid by the Insurer under the
Insurance Policy (the “Insurer Advances”); and (ii) interest on such Insurer Advances from the date
paid by the Insurer until payment thereof in full, payable to the Insurer at the Late Payment Rate per
annum (collectively, the “Insurer Reimbursement Amounts”). For purposes of this Section 10.2,
“Late Payment Rate” means the lesser of (a) the greater of (i) the per annum rate of interest, publicly
announced from time to time by JPMorgan Chase Bank at its principal office in The City of New
York, as its prime or base lending rate (any change in such rate of interest to be effective on the date
such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the rate of interest on the
Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest
rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed
over a year of 360 days. The Authority hereby covenants and agrees that the Insurer Reimbursement
Amounts are secured by a lien on and pledge of the Revenues and payable from such Revenues on a
parity with debt service due on Outstanding Bonds.

(e) Funds held in the Policy Payments Account shall not be invested by the
Trustee and may not be applied to satisfy any costs, expenses or liabilities of the Trustee. Any funds
remaining in the Policy Payments Account following an Interest Payment Date shall promptly be
remitted to the Insurer.

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 (f) The Insurer shall, to the extent it makes any payment of principal of or
interest on the Bonds, become subrogated to the rights of the recipients of such payments in
accordance with the terms of the Insurance Policy (which subrogation rights shall also include the
rights of any such recipients in connection with any Insolvency Proceeding). Each obligation of the
Authority to the Insurer under this Indenture, the Bonds, the Local Obligations and the Local
Obligation Indentures (collectively, the “Transaction Documents”) shall survive discharge or
termination of such Transaction Documents.

(g) After payment of reasonable expenses of the Trustee, the application of funds
realized upon default shall be applied to the payment of expenses of the Authority or rebate only after
the payment of past due and current debt service on the Bonds and amounts required to restore the
Reserve Fund to the Reserve Requirement.

(h) The Insurer shall be entitled to pay principal or interest on the Bonds that
shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Authority (as
such terms are defined in the Insurance Policy) whether or not the Insurer has received a notice of
Nonpayment or a claim upon the Insurance Policy.

Section 10.3 Amounts Paid by Insurer. Amounts paid by the Insurer under the Insurance
Policy and the Reserve Policy shall not be deemed paid for purposes of this Indenture and the Bonds
relating to such payments shall remain Outstanding and continue to be due and owing until paid by
the Authority in accordance with this Indenture. This Indenture shall not be discharged unless all
amounts due or to become due to the Insurer have been paid in full or duly provided for.

Section 10.4 Reimbursement of Insurer Fees. The Authority shall pay or reimburse the
Insurer from Revenues any and all charges, fees, costs and expenses that the Insurer may reasonably
pay or incur in connection with (i) the administration, enforcement, defense or preservation of any
rights or security in any Transaction Document; (ii) the pursuit of any remedies under this Indenture
or any other Transaction Document or otherwise afforded by law or equity, (iii) any amendment,
waiver or other action with respect to, or related to, this Indenture or any other Transaction
Document whether or not executed or completed, or (iv) any litigation or other dispute in connection
with this Indenture or any other Transaction Document or the transactions contemplated thereby,
other than costs resulting from the failure of the Insurer to honor its obligations under the Insurance
Policy. The Insurer reserves the right to charge a reasonable fee as a condition to executing any
amendment, waiver or consent proposed in respect of this Indenture or any other Transaction
Document.

Section 10.5 Provision of Information to Insurer. The Insurer shall be provided with the
following information by the Authority or the Trustee, as the case may be:

(a) Annual audited financial statements of the City within 270 days after the end
of the City’s fiscal year and the City’s annual budgets within 30 days after the approval thereof. On
request by the Insurer, Authority will provide a certificate that the Authority is not aware of any
Event of Default under this Indenture and will provide such information, data or reports as the
Insurer shall reasonably request from time to time;

(b) Notice of any draw upon the Reserve Fund within two Business Days after
knowledge thereof other than (i) withdrawals of amounts in excess of the Reserve Requirement and
(ii) withdrawals in connection with a refunding of Bonds;

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 (c) Notice of any default known to the Trustee or the Authority within five
Business Days after knowledge thereof;

(d) Prior notice of the redemption of any of the Bonds or the Local Obligations,
including the principal amount, maturities and CUSIP numbers thereof;

(e) Notice of the resignation or removal of the Trustee and the appointment of,
and acceptance of duties by, any successor thereto;

(f) Notice of the commencement of any Insolvency Proceeding by or against the

Authority or the Community Facilities District;

(g) Notice of the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest
on, the Bonds;

(h) A full original transcript of all proceedings relating to the execution of any
amendment, supplement, or waiver to the Transaction Documents;

(i) All reports, notices and correspondence to be delivered to Bond Owners

under the terms of the Transaction Documents; and

(j) All information furnished to Bond Owners pursuant to the Continuing

Disclosure Agreement shall also be provided to the Insurer, simultaneously with the furnishing of
such information.

In addition, the Insurer shall have the right to receive such additional information as it may
reasonably request.

Section 10.6 Discussion of and Access to Information. The Authority shall permit the
Insurer to discuss the affairs, finances and accounts of the Authority or any information the Insurer
may reasonably request regarding the security for the Bonds with appropriate officers of the
Authority and will use commercially reasonable efforts to enable the Insurer to have access to the
facilities, books and records of the Authority on any Business Day upon reasonable prior notice.

Section 10.7 Notice to Insurer by Trustee. The Trustee shall notify the Insurer of any
failure of the Authority or the Community Facilities District to provide notices, certificates and other
information under the Transaction Documents of which the Trustee has actual knowledge.

Section 10.8 Effect of Insurance Policy. In determining whether any amendment,

consent, waiver or other action to be taken, or any failure to take action, under this Indenture would
adversely affect the security for the Bonds or the rights of the Owners of the Bonds, the Trustee shall
consider the effect of any such amendment, consent, waiver, action or inaction as if there were no
Insurance Policy.

Section 10.9 Impairment of Insurer’s Rights. No contract shall be entered into or any
action taken by which the rights of the Insurer or security for or sources of payment of the Bonds
may be impaired or prejudiced in any material respect except upon obtaining the prior written
consent of the Insurer.

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 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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 IN WITNESS WHEREOF, the Authority has caused this Indenture to be executed by the
Executive Director of the Authority, attested by its Secretary, and the Trustee has caused this
Indenture to be executed by one of its authorized officers, all as of the day and year first above
written.

BEAUMONT PUBLIC IMPROVEMENT

AUTHORITY

By:
Executive Director

ATTEST:

Secretary

WILMINGTON TRUST, NATIONAL

ASSOCIATION, as Trustee

By:
Authorized Officer

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 EXHIBIT A

FORM OF BOND

R-__ $__________

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE
AUTHORITY OR THE TRUSTEE FOR REGISTRATION OR TRANSFER,
EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST
HEREIN.

UNITED STATES OF AMERICA

STATE OF CALIFORNIA
COUNTY OF RIVERSIDE

BEAUMONT PUBLIC IMPROVEMENT AUTHORITY

LOCAL AGENCY REFUNDING BOND
SERIES 2021A
(FEDERALLY TAXABLE)

INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP NUMBER:

____% September 1, 20__ _______, 2021

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT:
AND NO/100 DOLLARS

The BEAUMONT PUBLIC IMPROVEMENT AUTHORITY, a joint powers authority

organized and existing under the laws of the State of California (the “Authority”), for value received,
hereby promises to pay (but only out of the Revenues and other funds hereinafter referred to) to the
Registered Owner identified above or registered assigns (the “Registered Owner”), on the Maturity
Date identified above (subject to any right of prior redemption hereinafter mentioned), the Principal
Amount identified above in lawful money of the United States of America; and to pay interest
thereon at the Interest Rate identified above in like money from the Interest Payment Date (as
hereinafter defined) next preceding the date of authentication of this Bond (unless this Bond is
authenticated on or before an Interest Payment Date and after the fifteenth calendar day of the month
preceding the month in which such Interest Payment Date occurs, in which event it shall bear interest
from such Interest Payment Date, or unless this Bond is authenticated on or prior to February 15,

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2022, in which event it shall bear interest from the Dated Date identified above; provided, however,
that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall
bear interest from the Interest Payment Date to which interest hereon has previously been paid or
made available for payment), payable semiannually on March 1 and September 1 in each year,
commencing March 1, 2022 (each, an “Interest Payment Date”) until the Maturity Date stated above
or date of redemption of this Bond. The Principal Amount hereof is payable upon presentation and
surrender hereof at the Trust Office (as defined in the Indenture) of Wilmington Trust, National
Association (the “Trustee”). Interest hereon is payable by check of the Trustee mailed by first class
mail, postage prepaid, on each Interest Payment Date to the Registered Owner hereof at the address
of the Registered Owner as it appears on the registration books of the Trustee as of the fifteenth
calendar day of the month preceding the month in which such Interest Payment Date occurs;
provided, however, that payment of interest may be made by wire transfer to an account in the United
States of America to any registered owner of Bonds in the aggregate principal amount of $1,000,000
or more upon written instructions of any such registered owner filed with the Trustee in writing at
least five (5) Business Days before the Record Date for such Interest Payment Date.

This Bond is one of a duly authorized Series of bonds of the Authority designated the
“Beaumont Public Improvement Authority Local Agency Refunding Bonds” (the “Bonds”), limited
in principal amount to ________________ Dollars ($__________), secured by an Indenture of Trust
dated as of _______ 1, 2021 (the “Indenture”), by and between the Authority and the Trustee.
Reference is hereby made to the Indenture and all indentures supplemental thereto for a description
of the rights thereunder of the owners of the Bonds, of the nature and extent of the Revenues (as that
term is defined in the Indenture), of the rights, duties and immunities of the Trustee and of the rights
and obligations of the Authority thereunder; and all of the terms of the Indenture are hereby
incorporated herein and constitute a contract between the Authority and the Registered Owner
hereof, and to all of the provisions of which Indenture the Registered Owner hereof, by acceptance
hereof, assents and agrees.

This Bond is a limited obligation of the Authority, payable solely from the Revenues and
funds pledged under the Indenture. This Bond is not a debt of the City of Beaumont (the “City”) or
the State of California (the “State”) or any of its political subdivisions (except the Authority and only
to the extent set forth in the Indenture), and none of said City, the State or any of its political
subdivisions is liable hereon. The Authority has no taxing power.

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

The Bonds have been issued to provide funds to purchase certain obligations of the City of
Beaumont Community Facilities District No. 93-1 (the “Community Facilities District”) as identified

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in the Indenture (collectively, the “Local Obligations”). The Community Facilities District or the
City, as applicable, in turn, will take the proceeds that it receives from the sale of the Local
Obligations to the Authority to refund certain outstanding indebtedness of the Community Facilities
District, all as more particularly described in the Indenture. The obligations of the Community
Facilities District to make payments of principal and interest on the Local Obligations are limited
obligations secured only as set forth therein.

The Bonds maturing on or before September 1, 20__ are not subject to optional call and
redemption prior to maturity. The Bonds maturing on and after September 1, 20__ may be redeemed
at the option of the Authority, from any source of available funds, prior to maturity on any date on or
after September 1, 20__ as a whole, or in part from maturities of the Local Obligations
simultaneously redeemed, if any redemption of Local Obligations is being made in conjunction with
such optional redemption, and otherwise from such maturities as are selected by the Authority, by lot
within a maturity, at a redemption price equal to the principal amount to be redeemed, together with
accrued interest to the date of redemption, without premium.

The Bonds are subject to special redemption on any Interest Payment Date from proceeds of
early redemption of Local Obligations from the prepayment of Special Taxes within an Improvement
Area (as such terms are defined in the Indenture), in whole or in part, from maturities corresponding
proportionately to the maturities of the Local Obligations simultaneously redeemed at the principal
amount thereof, plus a premium expressed below as a percentage of the principal amount so
redeemed, plus accrued interest to the date of redemption thereof:

Redemption Dates Premium

Any Interest Payment Date through and including March 1, 20__
September 1, 20__ and March 1, 20__
September 1, 20__ and March 1, 20__
September 1, 20__ and any Interest Payment Date thereafter

The Term Bonds maturing on September 1, 20__ are subject to mandatory sinking fund
redemption prior to maturity, in part, on September 1, 20__, and on each September 1 thereafter by
lot, from sinking fund payments at a redemption price equal to the principal amount of Term Bonds
to be redeemed, together with accrued interest to the date of redemption, without premium, as
follows:

Redemption Date Redemption

(September 1) Amount

In the event that the Term Bonds are redeemed pursuant to the optional or special redemption
provisions in the Indenture, the sinking fund payments for the Term Bonds will be reduced as nearly
as practicable on a proportionate basis in integral multiples of $5,000.

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 The Trustee on behalf, and at the expense of, the Authority shall send notice of any
redemption (other than mandatory sinking fund redemption) to the respective owners of any Bonds
designated for redemption, at their respective addresses appearing on the registration books
maintained by the Trustee and to the Securities Depositories and to the Information Services (as such
terms are defined in the Indenture), at least thirty (30) but not more than sixty (60) days prior to the
redemption date; provided, however, that neither failure to receive any such notice so mailed nor any
defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the
cessation of the accrual of interest thereon.

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

The Bonds are issuable as fully registered Bonds without coupons in denominations of
$5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the charges,
if any, provided in the Indenture, fully registered Bonds may be exchanged at the Trust Office of the
Trustee for a like aggregate principal amount and maturity of fully registered Bonds of other
authorized denominations.

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

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

It is hereby certified by the Authority that all things, conditions and acts required to exist, to
have happened and to have been performed precedent to and in the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required by the
Constitution and statutes of the State of California and by the Act, and that the amount of this Bond,
together with all other indebtedness of the Authority, does not exceed any limit prescribed by the
Constitution or statutes of the State of California or by the Act.

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

IN WITNESS WHEREOF, the BEAUMONT PUBLIC IMPROVEMENT AUTHORITY has

caused this Bond to be executed in its name and on its behalf by the facsimile signature of its Chair
and attested by the facsimile signature of its Secretary, all as of the date set forth above.

BEAUMONT PUBLIC IMPROVEMENT

AUTHORITY

By:
Chair
Attest:

Secretary

[FORM OF CERTIFICATE OF AUTHENTICATION]

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

Date: __________________ WILMINGTON TRUST, NATIONAL

ASSOCIATION, as Trustee

By:
Authorized Signatory

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 [FORM OF LEGAL OPINION]

The attached is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, a
Professional Corporation, Newport Beach, California, in connection with the issuance of, and dated
as of the date of the original delivery of, the Bonds. A signed copy is on file in my office.

Secretary of the Board of Directors of Beaumont

Public Improvement Authority

[FORM OF STATEMENT OF INSURANCE]

[TO COME]

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 [FORM OF ASSIGNMENT]

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

whose tax identification number is ,

the within mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s)

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

Dated: _______________

Signature guaranteed:

NOTE: Signature guarantee shall be made by NOTE: The signatures(s) on this Assignment
a guarantor institution participating in the must correspond with the name(s) as written on
Securities Transfer Agents Medallion Program the face of the within Bond in every particular
or in such other guarantee program acceptable without alteration or enlargement or any
to the Trustee. change whatsoever

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