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HomeMy WebLinkAbout16 - Bond Indenture Series ACITY OF NEWPORT BEACH more WELLS FARGO BANK, NATIONAL ASSOCIATION, as Bond Trustee BONDINDENTURE Dated as of June 1, 2009 $[2009A PAR] CITY OF NEWPORT BEACH REVENUE BONDS (HOAG MEMORIAL HOSPITAL PRESBYTERIAN) SERIES 2009A OHS West:260645718.4 OH &S DRAFT 05/05/09 This BOND INDENTURE, made and entered into as of June 1, 2009, by and between the CITY OF NEWPORT BEACH, a municipal corporation and charter city duly organized and existing under a freeholder's charter under the Constitution and the laws of the State of California (the "City "), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, being qualified to accept and administer the trusts hereby created (the "Bond Trustee "); WITNESSETH: WHEREAS, the City is a municipal corporation and charter city duly organized and existing under a freeholder's charter under the Constitution and the laws of the State of California, and pursuant to the Charter of the City (as it may from time to time be amended, hereinafter called the "Charter ") has the right and power to make and enforce all laws and regulations in respect to municipal affairs and certain other matters in accordance with and as more particularly provided in Sections 3, 5 and 7 of Article XI of the Constitution of the State of California and Section 200 of Article II of the Charter, and pursuant to such right and power the City Council of the City adopted Ordinance No. 85 -23 and 84 -4 (said Ordinances, as the same may from time to time be amended, being hereafter called the "Law "); WHEREAS, the City is authorized under the Law to issue its bonds for the purpose of making secured or unsecured loans to any participating health institution (as defined in the Law) for the cost (as defined in the Law) of acquiring, constructing, rehabilitating or improving a health facility (as defined in the Law) or financing thereof or working capital therefor, including reimbursement of costs already expended for such purpose, and for refinancing outstanding obligations of such participating health institution incurred to finance the cost of acquiring, constructing, rehabilitating or improving a health facility or financing working capital for such health facility, all for the purposes set forth in the Law; WHEREAS, Hoag Memorial Hospital Presbyterian, a California nonprofit public benefit corporation (the "Corporation "), has requested the assistance of the City in the financing and refinancing of the acquisition, construction and equipping of health facilities located within the City; WHEREAS, the City has previously provided such assistance through the issuance of its Insured Revenue Bonds (Hoag Memorial Hospital Presbyterian) Series 2007D (the "2007 Prior Bonds "), and its Refunding Revenue Bonds (Hoag Memorial Hospital Presbyterian) Series 2008A and Series 2008B (the "2008 Prior Bonds" and together with the 2007 Prior Bonds, the "Prior Bonds "); WHEREAS, the Corporation has requested the assistance of the City in the refunding of the outstanding Prior Bonds; WHEREAS, the Corporation has also requested the assistance of the City in the acquisition, construction, and equipping of health facilities located within the City; WHEREAS, after due investigation and deliberation, the City has approved said request and authorized the issuance of its Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series 2009A (the "Bonds ") in the aggregate principal amount of [principal OHS West:260645718.4 amount in words] dollars ($[2009A PAR]), together with its Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series 2009B, 2009C, 2009D and 2009E, in the aggregate principal amount of dollars ($), to provide such assistance to the Corporation in accordance with the Law; WHEREAS, the City has duly entered into a loan agreement, dated as of June 1, 2009, with the Corporation specifying the terms and conditions of a loan by the City to the Corporation of the proceeds of the Bonds and of the payment by the Corporation to the City of amounts sufficient for the payment of the principal of and interest and premium, if any, on the Bonds and certain related expenses; WHEREAS, pursuant to a master trust indenture, dated as of May 1, 2007 (the "Master Indenture "), between the Corporation, Newport Health Care Center LLC, a California limited liability company ( "NHC "), the sole corporate member for which is the Corporation, and Wells Fargo Bank, National Association, as master trustee (the "Master Trustee "), and a Supplemental Master Indenture for Obligation No. [x], dated as of June 1, 2009, between the Corporation and the Master Trustee ( "Supplement No. [x] "), the Corporation has issued its Obligation No. [x] to evidence the joint and several obligation of the Members to make all payments required of the Corporation under the Loan Agreement, including amounts sufficient to pay the principal of and premium, if any, and interest on the Bonds; WHEREAS, 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 secured and to secure the payment of the principal (or Redemption Price) thereof and interest thereon, the City has authorized the execution and delivery of this Bond Indenture; and WHEREAS, the Bonds, and the Bond Trustee's certificate of authentication and assignment to appear thereon, shall be in substantially the forms attached hereto as Exhibit A, and incorporated into this Indenture by this reference, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture; and WHEREAS, the City has determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the City, authenticated and delivered by the Bond Trustee and duly issued, the valid, binding and legal limited obligations of the City, and to constitute this Bond 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 this Bond Indenture have been in all respects duly authorized; NOW, THEREFORE, THIS BOND INDENTURE WITNESSETH, that to secure the payment of the principal of and the interest on all Bonds at any time issued and outstanding under this Bond 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 Holders thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the City does hereby covenant and agree with the Bond Trustee, for the respective benefit of the Holders from time to time of the Bonds, as follows: OHS WesC260645718.4 2 ARTICLE I DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Bond Indenture and of any indenture supplemental hereto and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Unless otherwise defined in this Bond Indenture, all terms used herein shall have the meanings assigned to such terms in the Law. 2007 Prior Bonds "2007 Prior Bonds" means the outstanding City of Newport Beach Insured Revenue Bonds (Hoag Memorial Hospital Presbyterian) Series 2007D. 2008 Prior Bonds "2008 Prior Bonds" means the outstanding City of Newport Beach Refunding Revenue Bonds (Hoag Memorial Hospital Presbyterian) Series 2008A and Series 2008B. Additional Payments "Additional Payments" means the payments so designated and required to be made by the Corporation pursuant to Section 3.2 of the Loan Agreement. Administrative Fees and Expenses "Administrative Fees and Expenses" means any application, commitment, financing or similar fee charged, or reimbursement for administrative or other expenses incurred, by the City or the Bond Trustee, including Additional Payments. Authorized Representative "Authorized Representative" means with respect to the Corporation in whatever capacity it may then be acting, the chairman of its governing body, its chief executive officer, its chief financial officer or any other person designated as an Authorized Representative of the Corporation by a Certificate of the Corporation signed by the chairman of its governing body, its chief executive officer, its chief financial officer, and filed with the Bond Trustee. Beneficial Owner `Beneficial Owner" means any Person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any of the Bonds (including any Person holding Bonds through nominees, depositories or other intermediaries). OHS Wesk26W5718.4 3 Bond Counsel "Bond Counsel" means Orrick, Herrington & Sutcliffe LLP or another attorney- at-law, or firm of such attorneys, of nationally recognized standing in matters pertaining to the tax- exempt nature of interest on obligations issued by states and their political subdivisions and acceptable to the City and the Bond Trustee. Bond Indenture "Bond Indenture" means this Bond Indenture, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Bond Indenture. Bond Trustee "Bond Trustee" means Wells Fargo Bank, National Association, a national banking association organized and existing under and by virtue of the laws of the United States of America, or its successor, as Bond Trustee hereunder as provided in Section 8.01. Bonds; Term Bonds "Bonds" means the City of Newport Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series 2009A, authorized by, and at any time Outstanding pursuant to, this Bond Indenture. "Term Bonds" mean the Bonds payable at or before their specified maturity date or dates from Mandatory Sinking Account Payments established for the purpose and calculated to retire such Bonds or on before their specified maturity date or dates. Business Day "Business Day" means a day that is not a Saturday, Sunday or legal holiday on which banking institutions in the State of California, the State of New York or in any state in which the office of the Master Trustee or the Bond Trustee is located are authorized to remain closed or a day on which the New York Stock Exchange is closed. Certificate, Statement. Request or Requisition of the City or the Corporation "Certificate," "Statement," "Request" and "Requisition" of the City or the Corporation mean, respectively, a written certificate, statement, request or requisition signed in the name of the City by its Mayor, City Clerk or such other person as may be designated and authorized to sign for the City in writing to the Bond Trustee, or in the name of the Corporation by an Authorized Representative of the Corporation. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. If and to the extent required by Section 1.02, each such instrument shall include the statements provided for in Section 1.02. OHS Wesk260645718.4 citv "City" means the City of Newport Beach, a municipal corporation and charter city duly organized and existing under a freeholder's charter under the Constitution and the laws of the State of California. "Code" means the Internal Revenue Code of 1986, as amended, or any successor statute thereto, and any regulations promulgated thereunder. Continuing Disclosure Certificate "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate, dated the Date of Issuance, executed by the Corporation with respect to the Bonds pursuant to Section 5.7 of the Loan Agreement, as originally executed and as it may be amended in accordance with its terms. Corporate Trust Office "Corporate Trust Office" means the office of the Bond Trustee, which as of the date hereof is located at 707 Wilshire Boulevard, 17th Floor, Los Angeles, California 90017, Attention: Corporate Trust Services, or such other or additional offices as shall be specified by the Bond Trustee in writing delivered to the City and the Corporation. Corporation "Corporation" means Hoag Memorial Hospital Presbyterian, a California nonprofit public benefit corporation duly organized and existing under the laws of the State of California, or any corporation which is the surviving, resulting or transferee corporation in any merger, consolidation or transfer of, all or substantially all, assets as permitted under the Master Indenture. Costs of Issuance "Costs of Issuance" means all items of expense directly or indirectly payable by or reimbursable to the City or the Corporation and related to the authorization, issuance, sale and delivery of the Bonds, including but not limited to advertising and printing costs, costs of preparation and reproduction of documents, filing and recording fees, initial fees and charges of the Bond Trustee and the Master Trustee, initial and ongoing fees and charges of the City, legal fees and charges, fees and disbursements of consultants and professionals, Rating Agency fees, fees and charges for preparation, execution, transportation and safekeeping of the Bonds, and any other cost, charge or fee in connection with the original issuance of the Bonds. Costs of Issuance Fund "Costs of Issuance Fund" means the fund by that name established pursuant to Section 3.03. OHS West:260645718.4 Credit Group Representative "Credit Group Representative" shall have the meaning given such term in the Master Indenture. Date of Issuance "Date of Issuance" means June 1, 2009, Environmental Laws "Environmental Laws" means any federal, state or local law, statute, code, ordinance, regulation, requirement or rule relating to dangerous, toxic or hazardous pollutants, Hazardous Materials, chemical waste, materials or substances. Electronic Means "Electronic Means" means facsimile transmission, email transmission or other similar electronic means of communication providing evidence of transmission, including a telephone communication confirmed by any other method set forth in this definition. Event of Default "Event of Default" means any of the events specified in Section 7.01. Favorable Opinion of Bond Counsel "Favorable Opinion of Bond Counsel" means an opinion of Bond Counsel, addressed to the City, the Corporation and the Bond Trustee, to the effect that the action proposed to be taken is authorized or permitted by this Bond Indenture and will not result in the inclusion of interest on the Bonds in gross income for federal income tax purposes. Governing Board "Governing Board" means the board of directors, board of trustees or other board or group of individuals in which the power of the corporation or other entity is vested, except for those powers reserved to the corporate membership by the articles of incorporation or bylaws of such corporation or entity. Hazardous Materials "Hazardous Materials" means dangerous, toxic or hazardous pollutants, contaminants, chemicals, waste, materials or substances (as defined in Environmental Laws), and also any urea formaldehyde, polychlorinated biphenyls, asbestos, asbestos containing materials, nuclear fuel or waste, radioactive materials, explosives, carcinogens and petroleum products, or any other waste, material, substance, pollutant or contaminant the improper storage, disposal or release of which would subject the person so storing, disposing or releasing (or the owner of the OHS West:260645718.4 property on which such action occurs) to any damages, penalties or liabilities under any applicable law, regulation, requirement or rule. Holder or Bondholder "Holder" or "Bondholder," whenever used herein with respect to a Bond, means the Person in whose name such Bond is registered. Interest Account "Interest Account' means the account by that name established in the Revenue Fund pursuant to Section 5.02. Interest Payment Date "Interest Payment Date" means June 1 and December 1 of each year, commencing December 1, 2009. Investment Securities "Investment Securities" means any of the following: (A) United States Government Obligations; (B) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America: (i) Export-Import Bank; (ii) Rural Economic Community Development Administration; (iii) U.S. Maritime Administration; (iv) Small Business Administration; (v) U.S. Department of Housing & Urban Development (PHAs); (vi) Federal Housing Administration; and (vii) Federal Financing Bank. (C) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: (i) Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC); (ii) Obligations of the Resolution Funding Corporation (REFCORP); Otis Wes1:260645718.4 7 (iii) Senior debt obligations of the Federal Home Loan Bank System; and (iv) Senior debt obligations of other government sponsored agencies approved by the Credit Facility Providers (if any). (D) U.S. dollar denominated deposit accounts, federal fund and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P -1" by Moody's and "A -1" or "A -1 +" by S &P and maturing not more than 360 calendar days after the date of purchase; (E) Commercial paper which is rated at the time of purchase in the single highest classification, "P -1" by Moody's and "A -1" or "A -1 +" by S &P and which matures not more than 360 calendar days after the date of purchase; (F) Investments in money market funds rated "AAAm" or "AAm -G" or better by S &P; (G) Pre - refunded Municipal Obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) which are rated, based on irrevocable escrow account or fund (the "escrow "), in the highest Rating Category of Moody's or S &P or any successors thereto; or (ii) (a) which are fully secured as to principal, interest and redemption premium, if any, by an escrow consisting only of cash or United States Government Obligations, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (b) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate. (H) Municipal obligations rated "Aaa/AAA" or general obligations of States with a rating of "AVA" or higher by both Moody's and S &P; (I) Investment agreements approved in writing by the Credit Facility Provider or Credit Facility Providers (if any) (supported by appropriate opinions of counsel); and (J) Other forms of investments (including repurchase agreements) approved in writing by the Credit Facility Provider or Credit Facility Providers (if any). OHS West:260645718.4 The value of the above investments shall be determined as follows: (K) For the purpose of determining the amount in any fund, all Investment Securities credited to such fund shall be valued at fair market value. The Bond Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. Accepted industry providers shall include but are not limited to pricing services provided by Financial Times Interactive Data Corporation, Merrill Lynch, Citigroup Global Markets Inc. or Lehman Brothers; and (L) As to certificates of deposit and bankers' acceptances, the face amount thereof, plus accrued interest thereon. Law "Law" means Ordinance No. 85 -23 and 84 -4 of the City, as now in effect and as it may from time to time be amended or supplemented. Loan Agreement "Loan Agreement" means that certain loan agreement by and between the City and the Corporation, dated as of June 1, 2009, as originally executed and as it may from time to time be supplemented, modified or amended in accordance with the terns thereof and of this Bond Indenture. Loan Default Event "Loan Default Event" means any of the events specified in Section 6.1 of the Loan Agreement. Loan Repayments "Loan Repayments" means the payments so designated and required to be made by the Corporation pursuant to Section 3.1 of the Loan Agreement. Mandatory Sinking Account Payment "Mandatory Sinking Account Payment" means the amount required by Section 5.04 to be paid on any single date for the retirement of Bonds. Master Indenture "Master Indenture" means that certain master trust indenture, dated as of May 1, 2007, between the Corporation, Newport Healthcare Center LLC, a California limited liability company, the sole corporate member of which is the Corporation, and the Master Trustee as supplemented, modified and amended as of the date hereof and as it may from time to time be further supplemented, modified or amended in accordance with the terms thereof. OHS West260645718.4 Master Trustee "Master Trustee" means Wells Fargo Bank, National Association, a national banking association duly organized and existing under the laws of the United States of America, or its successor, as successor master trustee under the Master Indenture. Members "Members" means each Person that is then obligated under the Master Indenture. Moodv's " Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the Corporation by notice in writing to the City and the Bond Trustee. Obligated Group "Obligated Group" means all the Members. Obligation No. fX "Obligation No. [X]" means the obligation issued under the Master Indenture and Supplement No. [X]. Opinion of Counsel "Opinion of Counsel" means a written opinion of counsel (who may be counsel for the City, the Bond Trustee or the Corporation) selected by the Corporation and not objected to by the City or the Bond Trustee. If and to the extent required by the provisions of Section 1.02, each Opinion of Counsel shall include the statements provided for in Section 1.02. Optional Redemption Account "Optional Redemption Account" means the account by that name in the Redemption Fund established pursuant to Section 5.05. Outstanding "Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.09) all Bonds theretofore, or thereupon being, authenticated and delivered by the Bond Trustee under this Bond Indenture except: (1) Bonds theretofore cancelled by the Bond Trustee or surrendered to the Bond Trustee for cancellation; (2) Bonds with respect to which all liability of the City shall have been discharged in accordance with Section 10.02, including Bonds (or portions of Bonds) referred to in Section 11.10; and (3) OHS West260645718.4 10 Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Bond Trustee pursuant to this Bond Indenture. Person "Person" means an individual, corporation, firm, association, partnership, trust or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. Principal Account "Principal Account" means the account by that name established in the Revenue Fund pursuant to Section 5.02. Principal Payment Date "Principal Payment Date" means, with respect to a Bond, the date on which principal evidenced by such Bond becomes due and payable, whether at maturity, upon redemption, by declaration of acceleration or otherwise. Program "Program" means the City's program of making loans under the Law. Proiect "Project" means the acquisition, construction, improvement, equipping, renovation, rehabilitation, remodeling and other capital projects [owned by the Corporation and] located on and about the hospital campus at One Hoag Drive and on and about the healthcare facility located at 500 -540 Superior Avenue, each in Newport Beach, California. Project Fund "Project Fund" means the fund by that name established pursuant to Section 3.04. Ratin¢ Agency "Rating Agency" means S &P and/or Moody's, as the context requires, if then rating the Bonds at the request of the Corporation. Rating Categorry "Rating Category" means a generic securities rating category, without regard to any refinement or gradation of such rating category by a numerical modifier or otherwise. Rebate Fund "Rebate Fund" means the fund by that name established pursuant to Section 5.06. OHS West:260645718.4 11 Record Date "Record Date" means the fifteenth (15th) day (whether or not a Business Day) of the calendar month preceding the calendar month in which such Interest Payment Date falls. Redemption Fund "Redemption Fund" means the fund by that name established pursuant to Section 5.05. Redemption Price "Redemption Price" means, with respect to any Bond (or portion thereof), the principal amount of such Bond (or portion) plus the applicable premium, if any, payable upon redemption thereof pursuant to the provisions of such Bond and this Bond Indenture. Revenue Fund "Revenue Fund" means the fund by that name established pursuant to Section 5.01. Revenues "Revenues" means all amounts received by the City or the Bond Trustee for the account of the City pursuant or with respect to the Loan Agreement or Obligation No. [X], including, without limiting the generality of the foregoing, Loan Repayments (including both timely and delinquent payments, any late charges, and whether paid from any source), prepayments, insurance proceeds, condemnation proceeds, and all interest, profits or other income derived from the investment of amounts in any fund or account established pursuant to this Bond Indenture, but not including any Administrative Fees and Expenses or any moneys required to be deposited to the Rebate Fund. S &P "S &P" means Standard & Poor's, a division of The McGraw -Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the Corporation by notice in writing to the City and the Bond Trustee. Securities Depository "Securities Depository" means The Depository Trust Company and its successors and assigns, or any other Securities Depository selected as set forth in Section 2.09. OHS WesC260645718.4 12 Sinking. Account "Sinking Account" means each subaccount in the Principal Account so designated and established pursuant to Section 5.04(B). Special Record Date "Special Record Date" means the date established by the Bond Trustee pursuant to Section 2.02 as a record date for the payment of defaulted interest on the Bonds. Special Redemption Account "Special Redemption Account" means the account by that name in the Redemption Fund established pursuant to Section 5.05. State "State" means the State of California. Supplemental Bond Indenture "Supplemental Bond Indenture" means any indenture hereafter duly authorized and entered into between the City and the Bond Trustee, supplementing, modifying or amending this Bond Indenture; but only if and to the extent that such Supplemental Bond Indenture is specifically authorized hereunder. Supplement No. X "Supplement No. [X]" means that certain supplemental master indenture, dated as of June 1, 2009, between the Corporation and the Master Trustee pursuant to which Obligation No. [x] is issued, as originally executed and as amended or supplemented from time to time in accordance with the terms of the Master Indenture. Tax Agreement "Tax Agreement" means the Tax Certificate and Agreement delivered by the City and the Corporation at the time of issuance and delivery of the Bonds, as the same may be amended or supplemented in accordance with its terms. United States Government Obligations "United States Government Obligations" means: (1) noncallable direct obligations of the United States of America (including obligations issued or held in book -entry form on the books of the Department of the Treasury of the United States of America) or obligations the timely payment of which are fully guaranteed by the United States of America; OHS West:260645718.4 13 (2) certificates or other instruments that evidence direct ownership of future principal and /or interest on obligations described in clause (1), provided that such obligations are held in the custody of a bank or trust company in a special account separate from the general assets of such custodian; and (3) obligations (a) the interest on which is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Code, (b) the timely payment of the principal of and interest on which is fully provided for by the deposit in trust or escrow of cash or obligations described in clauses (1) or (2), and (c) that are rated in the highest Rating Category by each Rating Agency then rating both the Bonds and such obligations (but in all cases by at least one Rating Agency then rating the Bonds). SECTION 1.02. Content of Certificates and Opinions. Every certificate or opinion provided for in this Bond Indenture with respect to compliance with any provision hereof shall include (1) a statement that the Person making or giving such certificate or opinion has read such provision and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the certificate or opinion is based; (3) a statement that, in the opinion of such Person, he has made or caused to be made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed; and (4) a statement as to whether, in the opinion of such Person, such provision has been complied with. Any such certificate or opinion made or given by an officer of the City or the Corporation may be based, insofar as it relates to legal, accounting or health care matters, upon a certificate or opinion of or representation by counsel, an accountant or a management consultant, unless such officer knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel, an accountant or a management consultant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the City or the Corporation, as the case may be) upon a certificate or opinion of or representation by an officer of the City or the Corporation, unless such counsel, accountant or management consultant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such Person's certificate or opinion or representation may be based, as aforesaid, is erroneous. The same officer of the City or the Corporation, or the same counsel or accountant or management consultant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Bond Indenture, but different officers, counsel, accountants or management consultants may certify to different matters, respectively. SECTION 1.03. Interpretation. (A) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to mean and include the neuter, masculine or feminine gender, as appropriate. OHS West:260645718.4 14 (B) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof. (C) All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Bond Indenture; the words "herein," "hereof," "hereby," "hereunder" and other words of similar import refer to this Bond Indenture as a whole and not to any particular Article, Section or subdivision hereof. ARTICLE II THE BONDS SECTION 2.01. Authorization of Bonds. There is hereby created one series of Bonds to be issued hereunder to obtain moneys to carry out the purposes of the Program, for the benefit of the City and the Corporation. The Bonds are to be designated as "City of Newport Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series 2009A." The aggregate principal amount of Bonds that may be issued and Outstanding under this Bond Indenture shall not exceed [PRINCIPAL AMOUNT IN WORDS] dollars ($[2009A PAR]). This Bond Indenture constitutes a continuing agreement with the Holders from time to time of the Bonds to secure the full payment of the principal of and interest on all such Bonds subject to the covenants, provisions and conditions herein contained. SECTION 2.02. Terms of the Bonds. The Bonds shall be issued as fully registered Bonds in denominations of $5,000 or any integral multiple thereof. The Bonds shall be initially registered in the name of Cede & Co., as nominee of the Securities Depository, or any successor thereto. Registered ownership of the Bonds, or any portion thereof, may not thereafter be transferred except as set forth in Section 2.04. The Bonds shall be dated the Date of Issuance. The Bonds shall mature on the following dates in the following amounts (subject to the right of prior redemption set forth in Article IV) and shall bear interest at the following rates per annum: Maturity Date Principal Interest (December 1) Amount Rate $ The principal or Redemption Price of the Bonds shall be payable in lawful money of the United States of America at the Corporate Trust Office of the Bond Trustee upon surrender of the Bonds to the Bond Trustee for cancellation. Payment of the interest on any Bond shall be made on each Interest Payment Date to the Holder thereof as of the Record Date for each Interest Payment Date by check mailed by first -class mail on each Interest Payment Date to such Holder at his address as it appears on the registration books maintained by the Bond Trustee or, upon the written request of any Holder of at least $1,000,000 in principal amount of Bonds, submitted to the Bond Trustee at least one Business Day prior to the Record Date (which request includes written wire transfer instructions), by wire transfer in immediately available funds to an account within the United States of America designated by such Bondholder. OHS West:260645718.4 15 The Bonds shall be numbered in consecutive numerical order from R -1 upwards, and each such Bond shall bear interest from the Date of Issuance. Interest shall be calculated on a three hundred sixty- (360) -day year basis of twelve (12) thirty- (30) -day months. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Record Date and shall be paid to the Person in whose name the Bond is registered at the close of business on a special record date ( "Special Record Date ") for the payment of such defaulted interest to be fixed by the Bond Trustee, notice of which shall be given to the Holders by first -class mail not less than ten (10) days prior to such Special Record Date. The Bonds shall be subject to redemption as provided in Article IV. SECTION 2.03. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the City with the manual or facsimile signature of its Mayor, under its seal and attested by the manual or facsimile signature of its City Clerk. Such seal may be in the form of a facsimile of the City's seal and may be reproduced, imprinted or impressed on the Bonds. The Bonds shall then be delivered to the Bond Trustee for authentication by it. In case any of the officers who shall have signed or attested any of the Bonds shall cease to be such officer or officers of the City before the Bonds so signed or attested shall have been authenticated or delivered by the Bond Trustee or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the City as though those who signed and attested the same had continued to be such officers of the City, and also any Bond may be signed and attested on behalf of the City by such persons as at the actual date of execution of such Bond shall be the proper officers of the City although at the nominal date of such Bond any such person shall not have been such officer of the City. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form attached hereto as part of Exhibit A, manually executed by an authorized signatory of the Bond Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Bond Indenture, and such certificate of the Bond Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Bond Indenture. SECTION 2.04. Transfer of Bonds. Subject to the provisions of Section 2.09, any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.06, by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Bond Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Bond Trustee shall authenticate and deliver a new Bond or Bonds, of the same maturity and for a like aggregate principal amount of authorized denominations. The Bond Trustee shall require the Bondholder requesting such transfer to pay any tax or other OHS Wesk260645718.4 16 governmental charge or charge imposed by the Bond Trustee required to be paid with respect to such transfer. SECTION 2.05. Exchange of Bonds. Bonds may be exchanged at the Corporate Trust Office of the Bond Trustee for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity. The Bond Trustee shall require the Bondholder requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange and the Bond Trustee may also require the Bondholder requesting such exchange to pay a reasonable sum to cover expenses incurred by the Bond Trustee or the City in connection with such exchange. SECTION 2.06. Bond Register. The Bond Trustee will keep or cause to be kept sufficient books for the registration and transfer of the Bonds, which shall at all times (during regular business hours at the location where such books are kept) be open to inspection by any Bondholder or such Bondholder's agent duly authorized in writing, the City, or the Corporation; and, upon presentation for such purpose, the Bond Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such books, Bonds as hereinbefore provided. SECTION 2.07. Temnorary Bonds. The Bonds may be issued in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporary Bond may be printed, lithographed or typewritten, shall be of such authorized denominations as may be determined by the City, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Bond Indenture as may be appropriate. A temporary Bond may be in the form of a single fully registered Bond payable in installments, each on the date, in the amount and at the rate of interest established for the Bonds maturing on such date. Every temporary Bond shall be executed by the City and be authenticated by the Bond Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds it will execute and deliver definitive Bonds as promptly thereafter as practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at the Corporate Trust Office of the Bond Trustee, and the Bond Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations of the same maturity or maturities. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Bond Indenture as definitive Bonds authenticated and delivered hereunder. SECTION 2.08. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the City, at the expense of the Holder of said Bond, shall execute, and the Bond Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but only upon surrender to the Bond Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Bond Trustee shall be cancelled by it. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the City and the Bond Trustee and, if such evidence be satisfactory and indemnity satisfactory to both the Bond Trustee and the City shall be given, the City, at the expense of the Holder, shall execute, and the Bond 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 be about to mature, instead of issuing a substitute Bond, the OHS West260645718.4 17 Bond Trustee may pay the same without surrender thereof upon receipt of the above- mentioned indemnity). The Bond Trustee may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the City and the Bond Trustee in complying with this Section. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall replace the Bond alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Bond Indenture as an original contractual obligation on the part of the City with all other Bonds secured by this Bond Indenture. SECTION 2.09. Use of Securities Denository. (A) The Bonds shall be initially issued as provided in Section 2.02. Registered ownership of the Bonds, or any portion thereof, may not thereafter be transferred except: (B) (i) To any successor of the Securities Depository or its nominee, or to any substitute depository designated pursuant to clause (ii) of this subsection (A) ( "substitute depository"); provided that any successor of the Securities Depository or substitute depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii) To any substitute depository designated by the City (pursuant to a Request of the Corporation) upon (a) the resignation of the Securities Depository or its successor (or any substitute depository or its successor) from its functions as depository or (b) a determination by the City (pursuant to a Request of the Corporation) that the Securities Depository or its successor (or any substitute depository or its successor) is no longer able to carry out its functions as depository; provided that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) To any Person as provided below, upon (a) the resignation of the Securities Depository or its successor (or substitute depository or its successor) from its functions as depository; provided that no substitute depository can be obtained or (b) a determination by the City that it is in the best interests of the City to remove the Securities Depository or its successor (or any substitute depository or its successor) from its functions as depository. (C) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (A), upon receipt of the Outstanding Bonds by the Bond Trustee, together with a Certificate of the City to the Bond Trustee, a single new Bond shall be executed and delivered in the aggregate principal amount of the Bonds then Outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such Certificate of the City. In the case of any transfer pursuant to clause (iii) of subsection (A), upon receipt of the Outstanding Bonds by the Bond Trustee together with a Certificate of the City to the Bond Trustee, new Bonds shall be executed and delivered in such authorized denominations and registered in the names of such Persons as are requested in such a Certificate of the City, subject to the limitations of Section 2.02, provided the Bond Trustee shall not be required to deliver such new Bonds within a period less than sixty (60) days from the date of receipt of such a Certificate of the City. OHS West260645718.4 18 (D) In the case of partial redemption or an advance refunding of the Bonds evidencing all or a portion of such principal amount Outstanding, the Securities Depository shall make an appropriate notation on such Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Bond Trustee. (E) The City and the Bond Trustee shall be entitled to treat the Person in whose name any Bond is registered as the Bondholder thereof for all purposes of this Bond Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Bond Trustee or the City; and the City and the Bond Trustee shall have no responsibility for transmitting payments to, communicating with, notifying or otherwise dealing with any beneficial owners of the Bonds. None of the City or the Bond Trustee will have any responsibility or obligations, legal or otherwise, to the beneficial owners or to any other party including the Securities Depository or its successor (or substitute depository or its successor), except for the Holder of any Bond. (F) So long as the Outstanding Bonds are registered in the name of Cede & Co. or its registered assign, the City and the Bond Trustee shall cooperate with Cede & Co., as sole registered Bondholder, and its registered assigns in effecting payment of the principal of and redemption premium, if any, and interest on the Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due. (G) The Corporation may, with the consent of the City and the Bond Trustee, determine not to continue with the Securities Depository or the book -entry-only system in accordance with the provisions of this Bond Indenture. In such event, the Corporation shall use its best efforts to identify another qualified Securities Depository. ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS SECTION 3.01. Issuance of Bonds. At any time after the execution of this Bond Indenture, the City may execute and the Bond Trustee shall authenticate and, upon Request of the City, deliver the Bonds in the aggregate principal amount of [PRINCIPAL AMOUNT IN WORDS] dollars ($[2009A PAR]). SECTION 3.02. Application of Proceeds of Bonds. The proceeds received from the sale of the Bonds ($ , consisting of the par amount of the Bonds of $[2009A PAR] [less /plus] $ equal to [net original issue discount/premium]), shall be deposited in trust with the Bond Trustee, who shall forthwith deposit or transfer such proceeds as follows: (A) The Bond Trustee shall deposit the sum of $ in the Costs of Issuance Fund. (B) The Bond Trustee shall transfer the sum of $ to the trustee for the 2007 Prior Bonds pursuant to a Request of the Corporation to be delivered to the Bond Trustee simultaneously with the issuance of the Bonds.. OHS West260645718.4 19 (C) The Bond Trustee shall transfer the sum of $ to the trustee for the 2008 Prior Bonds pursuant to a Request of the Corporation to be delivered to the Bond Trustee simultaneously with the issuance of the Bonds. (D) The Bond Trustee shall deposit the sum of $ in the Project Fund. (E) The Bond Trustee may, in its discretion, establish one or more temporary funds or accounts in its books and records to facilitate such deposits and transfers. SECTION 3.03. Establishment and Application of Costs of Issuance Fund. The Bond Trustee shall establish, maintain and hold in trust a separate fund designated as the "Costs of Issuance Fund." The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Bond Trustee to pay the Costs of Issuance upon Requisition of the Corporation substantially in the form attached hereto as Exhibit B, stating the Person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against the Costs of Issuance Fund. On the date no later than 180 days after the Date of Issuance, or upon the earlier Request of the Corporation, amounts, if any, remaining in the Costs of Issuance Fund shall be transferred to the Project Fund and the Costs of Issuance Fund shall be closed. SECTION 3.04. Establishment and Application of Project Fund. (A) The Bond Trustee shall establish, maintain and hold in trust a separate fund designated as the "Project Fund." The moneys in the Project Fund shall be used and withdrawn by the Bond Trustee to pay the capital costs of the Project. No moneys in the Project Fund shall be used to pay Costs of Issuance. (B) Before any payment from the Project Fund shall be made, the Corporation shall file or cause to be filed with the Bond Trustee a Requisition, in substantially the form attached hereto as Exhibit C, stating: (1) the item number of such payment; (2) the name of the Person to whom each such payment is due, which may be the Corporation in the case of reimbursement for Project costs theretofore paid by the Corporation; (3) the respective amounts to be paid; (4) the purpose by general classification for which each obligation to be paid was incurred; and (5) that obligations in the stated amounts have been incurred by the Corporation and are presently due and payable and that each item thereof is a proper charge against the Project Fund and has not been previously paid from the Project Fund and is only made with respect to elements of the Project for which all approvals, if any, required under the California Environmental Quality Act have been previously finalized OHS W� t:26o645n8.4 20 and none of the payments requested will result in a breach of the representations and agreements in the Tax Agreement. (C) Upon receipt of such a Requisition, the Bond Trustee shall pay the amount set forth in such Requisition as directed by the terms thereof out of the Project Fund. The Bond Trustee shall not make any such payment if it has received any written notice of claim of lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the monies to be so paid, that has not been released or will not be released simultaneously with such payment. Each such Requisition shall be sufficient evidence to the Bond Trustee of the facts stated therein and the Bond Trustee shall have no duty to confirm the accuracy of such facts. (D) When the Project (or any discrete portion of the Project as determined by the Corporation at its option) shall have been completed, there shall be delivered to the Bond Trustee a Certificate of the Corporation stating (i) the fact of such completion, (ii) if moneys remain on deposit in the Project Fund, (iii) date of such completion and (iv) that all of the costs thereof have been determined and paid (or that all of such costs have been paid less specified claims that are subject to dispute and for which a retention in the Project Fund is to be maintained in the full amount of such claims until such dispute is resolved). Upon the receipt of such Certificate, the Bond Trustee shall, as directed by said Certificate, transfer any remaining balance in the Project Fund (or, if completion is only as to a discrete portion of the Project as described above, the remaining balance in the Project Fund allocable to such discrete portion of the Project, as specified by the Corporation at its option in said Certificate) to the Optional Redemption Account. Upon transfer of all moneys remaining on deposit in the Project Fund to the Optional Redemption Account, the Project Fund shall be closed. SECTION 3.05. Validity of Bonds. The validity of the authorization and issuance of the Bonds is not dependent on and shall not be affected in any way by any proceedings taken by the City or the Bond Trustee with respect to or in connection with the Loan Agreement. The recital contained in the Bonds that the same are issued pursuant to the Law and the Constitution and laws of the State of California shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance. ARTICLE IV REDEMPTION OF BONDS SECTION 4.01. Terms of Redemption. (A) The Bonds [maturing on December 1, _ 1 are subject to redemption prior to their stated maturity in part, by lot, from Mandatory Sinking Account Payments established in Section 5.04(C) on any December 1, on or after December 1, 20—, at the principal amount thereof together with interest accrued thereon to the date fixed for redemption, without premium. [BDV NOTE: REVISE IF MULTIPLE TERM BONDS]. (B) The Bonds are subject to redemption prior to their stated maturity, at the option of the City (which option shall be exercised upon Request of the Corporation given to the Bond Trustee (unless waived by the Bond Trustee) at least two Business Days prior to the date OHS West260645718.4 21 notice of redemption is required to be given pursuant to Section 4.03), from any source of available funds, as a whole or in part on any date on or after [December 1, 20_], by lot, at a Redemption Price equal to 100% of the principal amount of Bonds called for redemption, together with interest accrued thereon to the date fixed for redemption. (C) The Bonds are subject to redemption prior to their stated maturity, at the option of the City (which option shall be exercised upon Request of the Corporation given to the Bond Trustee (unless waived by the Bond Trustee) at least two Business Days prior to the date notice of redemption is required to be given pursuant to Section 4.03) in whole or in part (in such amounts as may be specified by the Corporation and by lot on any date, from hazard insurance or condemnation proceeds received with respect to the facilities of any of the Members and deposited in the Special Redemption Account pursuant to Section 3.4 of the Loan Agreement, at a Redemption Price equal to the principal amount thereof, without premium. (D) The Bonds are also subject to redemption prior to their stated maturity at the option of the City (which option shall be exercised upon Request of the Corporation given to the Bond Trustee (unless waived by the Bond Trustee) at least two Business Days prior to the date notice of redemption is required to be given pursuant to Section 4.03) as a whole (but not in part) on any date at the principal amount thereof and interest accrued thereon (if any) to the date fixed for redemption, without premium, from amounts deposited in the Special Redemption Account pursuant to Section 3.4 of the Loan Agreement, if as a result of any changes in the Constitution of the United States of America or any state, or legislative or administrative action or inaction by the United States of America or any state, or any agency or political subdivision thereof, or by reason of any judicial decisions there is a good faith determination by the Credit Group Representative that (a) the Master Indenture has become void or unenforceable or impossible to perform, or (b) unreasonable burdens or excessive liabilities have been imposed any Member, including without limitation, federal, state or other ad valorem property, income or other taxes being then imposed which were not being imposed on the Date of Issuance. SECTION 4.02. Selection of Bonds for Redemption. Whenever provision is made in this Bond Indenture for the redemption of less than all of the Bonds or any given portion thereof, the Bond Trustee shall select the Bonds to be redeemed, from all Bonds subject to redemption or such given portion thereof not previously called for redemption, by lot; provided, however that in such instances as provided for herein where the Corporation is to specify the maturities of Bonds to be redeemed, the Bond Trustee shall redeem Bonds in accordance with any such specification. SECTION 4.03. Notice of Redemption. (A) Notice of redemption shall be mailed by the Bond Trustee, not less than thirty (30) days nor more than sixty (60) days prior to the stated redemption date, to the Holders of Bonds called for redemption at their addresses appearing on the bond registration books of the Bond Trustee and to the Master Trustee, with a copy to the City. The Bond Trustee shall also give notice of redemption by overnight mail or courier service to such securities depositories and/or securities information services as shall be designated in a Certificate of the Corporation. For any redemption in whole, the Bond Trustee shall also mail notice of such redemption to S &P and Moody's. Each notice of redemption shall state the date of such notice and the date of issue OHS We t:260645718.4 22 of the Bonds, the redemption date, the Redemption Price, the place or places of redemption (including the name and appropriate address or addresses of the Bond Trustee), the maturity, the CUSIP numbers, if any, and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that, subject to prior rescission as provided in Section 4.03(B), on said date there will become due and payable on each of said Bonds the Redemption Price thereof or of said specified portion of the principal amount thereof in the case of a Bond to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered. Each notice shall also state that redemption is conditioned upon receipt by the Bond Trustee of sufficient funds to pay the Redemption Price of the Bonds so redeemed. (B) Any notice of optional redemption given pursuant to this Section 4.03 may be rescinded by written notice given to the Bond Trustee by the Corporation no later than two (2) Business Days prior to the date specified for redemption. The Bond Trustee shall give notice of such rescission as soon thereafter as practicable in the same manner, and to the same Persons, as notice of such redemption was given pursuant to Section 4.03 (A). (C) Failure by the Bond Trustee to give notice pursuant to this Section 4.03 to the City, the Master Trustee or any one or more of the securities information services or depositories designated by the Corporation, or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. Failure by the Bond Trustee to mail notice of redemption (or failure by any such Holder or Holders to receive said notice) pursuant to this Section 4.03 to any one or more of the respective Holders of any Bonds designated for redemption shall not affect the sufficiency of the proceedings for redemption with respect to the Holders to whom such notice was mailed. (D) Notice of redemption of Bonds shall be given by the Bond Trustee, at the expense of the Corporation, for and on behalf of the City. SECTION 4.04. Partial Redemption of Bonds. Upon surrender of any Bond redeemed in part only, the City shall execute (but need to prepare) and the Bond Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Corporation, a new Bond or Bonds of authorized denominations, and of the same maturity, equal in aggregate principal amount to the unredeemed portion of the Bond surrendered. SECTION 4.05. Effect of Redemption. Notice of redemption having been duly given as aforesaid, and moneys for payment of the Redemption Price of, together with interest accrued to the redemption date on, the Bonds (or portions thereof) so called for redemption being held by the Bond Trustee, on the redemption date designated in such notice, the Bonds (or portions thereof) so called for redemption shall become due and payable at the Redemption Price specified in such notice and interest accrued thereon to the redemption date, interest on the Bonds so called for redemption shall cease to accrue, said Bonds (or portions thereof) shall cease to be entitled to any benefit or security under this Bond Indenture, and the Holders of said Bonds shall have no rights in respect thereof except to receive payment of said Redemption Price and accrued interest to the date fixed for redemption from funds held by the Bond Trustee for such payment. OHS West260645718.4 23 All Bonds redeemed pursuant to the provisions of this Article shall be cancelled upon surrender thereof. SECTION 4.06. Purchase in Lieu of Optional Redemption. Each Holder or Beneficial Owner, by purchase and acceptance of any Bond, irrevocably grants to the Corporation the option to purchase such Bond at any time such Bond is subject to optional redemption as described in Section 4.01(B) and Section 4.01(C) of this Bond Indenture. Such Bond is to be purchased at a purchase price equal to the then applicable Redemption Price of such Bond, plus accrued interest. The Corporation may only exercise such option, after the Corporation shall have delivered a Favorable Opinion of Bond Counsel to the Bond Trustee, and shall have directed the Bond Trustee to provide notice of mandatory purchase, such notice to be provided, as and to the extent applicable, in accordance with Section 4.03 of this Bond Indenture. Bonds to be so purchased shall be selected by the Bond Trustee in the same manner as Bonds called for redemption pursuant to this Bond Indenture. On the date fixed for purchase of any Bond in lieu of redemption as described in this Section, the Corporation shall pay the purchase price of such Bond to the Bond Trustee in immediately available funds, and the Bond Trustee shall pay the same to the Holders of the Bonds being purchased against delivery thereof. No purchase of any Bond in lieu of redemption as described in this Section shall operate to extinguish the indebtedness of the City evidenced by such Bond. No Holder or Beneficial Owner may elect to retain a Bond subject to mandatory purchase in lieu of redemption ARTICLE V REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST SECTION 5.01. Pledge and Assignment Revenue Fund. (A) Subject only to the provisions of this Bond Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, there are hereby pledged to secure the payment of the principal (and Redemption Price) of and interest on the Bonds in accordance with their terms and the provisions of this Bond Indenture, all of the Revenues and any other amounts held in any fund or account established pursuant to this Bond Indenture, excepting only moneys on deposit in the Rebate Fund. Said pledge shall constitute a lien on and security interest in such assets and shall attach, be perfected and be valid and binding from and after delivery by the Bond Trustee of the Bonds, without any physical delivery thereof or further act. (B) The City hereby transfers in trust, grants a security interest in and assigns to the Bond Trustee, for the benefit of the Holders from time to time of the Bonds, all of the Revenues and other assets pledged in subsection (A) of this Section and all of the right, title and interest of the City in the Loan Agreement (except for (i) the right to receive any Administrative Fees and Expenses to the extent payable by the Corporation to the City, (ii) any rights of the City to indemnification, (iii) the obligation of the Corporation to make deposits pursuant to the Tax Agreement) and (iv) as otherwise expressly set forth in the Loan Agreement) and Obligation No. [x]. The Bond Trustee shall be entitled to and shall collect and receive all of the Revenues, and any Revenues collected or received by the City shall be deemed to be held, and to have been OHS West:2606457t8.4 24 collected or received, by the City as the agent of the Bond Trustee and shall forthwith be paid by the City to the Bond Trustee. The Bond Trustee also shall be entitled to and shall take all steps, actions and proceedings reasonably necessary in its judgment to enforce all of the rights of the City and all of the obligations of the Corporation under the Loan Agreement and of the Members under Obligation No. [x]. (C) All Revenues shall be promptly deposited by the Bond Trustee upon receipt thereof in a special fund designated as the "Revenue Fund" which the Bond Trustee shall establish, maintain and hold in trust, except as otherwise provided in Sections 5.06 and 5.07 and except that all moneys received by the Bond Trustee and required by the Loan Agreement or Obligation No. [x] to be deposited in the Redemption Fund shall be promptly deposited in the Redemption Fund. All Revenues deposited with the Bond Trustee shall be held, disbursed, allocated and applied by the Bond Trustee only as provided in this Bond Indenture. SECTION 5.02. Allocation of Revenues. On or before the following dates, the Bond Trustee shall transfer from the Revenue Fund and deposit into the following respective accounts (each of which the Bond Trustee shall establish and maintain within the Revenue Fund) and then to the Rebate Fund, the following amounts, in the following order of priority, the requirements of each such account or fund (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 or fund subsequent in priority: First: on the Business Day immediately preceding each Interest Payment Date, to the Interest Account, the aggregate amount of interest becoming due and payable on the next succeeding Interest Payment Date on all Bonds then Outstanding; Second: on the Business Day immediately preceding each Principal Payment Date, to the Principal Account, the aggregate amount of principal becoming due and payable on such Principal Payment Date and the aggregate amount of Mandatory Sinking Account Payments required to be paid into each Sinking Account for Outstanding Term Bonds at the next ensuing principal payment date and; Third: on each date specified in the Tax Agreement, to the Rebate Fund, such amounts as are required to be deposited therein by the Tax Agreement. Any moneys remaining in the Revenue Fund after the foregoing transfers shall be transferred to the Corporation as an overpayment of Loan Repayments. SECTION 5.03. Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Bond Trustee solely for the purpose of paying interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity pursuant to this Bond Indenture). SECTION 5.04. Application of Principal Account. (A) All amounts in the Principal Account shall be used and withdrawn by the Bond Trustee solely for the purpose of paying the principal of the Bonds when due and payable, OHS WesC260645718.4 25 except that all amounts in a Sinking Account shall be used and withdrawn by the Bond Trustee to purchase or redeem or pay at maturity Term Bonds, as provided herein. (B) The Bond Trustee shall establish and maintain within the Principal Account separate subaccounts for each maturity of Tenn Bonds designated as the " Sinking Account" With respect to each Sinking Account, on each Mandatory Sinking Account Payment date established for such Sinking Account, the Bond Trustee shall transfer the amount deposited in the Principal Account pursuant to Section 5.02 for the purpose of making a Mandatory Sinking Account Payment from the Principal Account to the applicable Sinking Account. On each Mandatory Sinking Account Payment date, the Bond Trustee shall apply the Mandatory Sinking Account Payment required on that date to the redemption (or payment at maturity, as the case may be) of Bonds of the maturity for which such Sinking Account was established, upon the notice and in the manner provided in Article IV; provided that, at any time prior to giving such notice of such redemption, the Bond Trustee shall apply such moneys to the purchase of Bonds of such maturity at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as the Corporation may direct, in writing, except that the purchase price (excluding accrued interest) shall not exceed the par amount of such Bonds. If, during the twelve -month period immediately preceding said Mandatory Sinking Account Payment date, the Bond Trustee has purchased Bonds of the maturity for which such Sinking Account was established with moneys in the Sinking Account, or, during said period and prior to giving said notice of redemption, the Corporation has deposited Bonds of such maturity with the Bond Trustee, or Bonds of such maturity were at any time purchased or redeemed by the Bond Trustee from the Redemption Fund and allocable to said Mandatory Sinking Account Payment, such Bonds so purchased or deposited or redeemed shall be applied, to the extent of the full principal amount thereof, to reduce said Mandatory Sinking Account Payment. All Bonds purchased or deposited pursuant to this subsection shall be delivered to the Bond Trustee and cancelled. Any amounts remaining in the Sinking Account when all of the Bonds of the maturity for which such Sinking Account was established are no longer Outstanding shall be withdrawn by the Bond Trustee and transferred to the Revenue Fund. All Bonds purchased from the Sinking Account or deposited by the Corporation with the Bond Trustee shall be allocated first to the next succeeding Mandatory Sinking Account Payment, then to the remaining Mandatory Sinking Account Payments as the Corporation directs. (C) Subject to the terms and conditions set forth in this Section and in Section 4.01(A), the Bonds shall be redeemed (or paid at maturity, as the case may be) by application of Mandatory Sinking Account Payments in the following amounts and on the following dates: Mandatory Sinking Account Payment Dates Mandatory Sinking (December 15) Account Payments * * Maturity OHS WesC260645718.4 26 SECTION 5.05. Application of Redemption Fund. The Bond Trustee shall establish, maintain and hold in trust a fund separate from any other fund established and maintained hereunder designated as the "Redemption Fund" and within the Redemption Fund a separate Optional Redemption Account and a separate Special Redemption Account and shall accept all moneys deposited for redemption and shall deposit such moneys into said Accounts, as applicable. All amounts deposited in the Optional Redemption Account and in the Special Redemption Account shall be accepted and used and withdrawn by the Bond Trustee solely for the purpose of redeeming Bonds, in the manner and upon the terms and conditions specified in Article IV, at the next succeeding date of redemption for which notice has not been given and at the Redemption Prices then applicable to redemptions from the Optional Redemption Account and the Special Redemption Account, respectively; provided that, at any time prior to giving such notice of redemption, the Bond Trustee shall, upon written direction of the Corporation, apply such amounts to the purchase of Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as the Corporation may direct, except that the purchase price (exclusive of accrued interest) may not exceed the Redemption Price then applicable to such Bonds (or, if such Bonds are not then subject to redemption, the par value of such Bonds); and provided further that in the case of the Optional Redemption Account, in lieu of redemption at such next succeeding date of redemption, or in combination therewith, amounts in such account may be transferred to the Revenue Fund and credited against Loan Repayments in order of their due date as set forth in a Request of the Corporation. All Bonds purchased or redeemed from the Redemption Fund shall be allocated to applicable Mandatory Sinking Account Payments (in accordance with the Tax Agreement) designated in a Certificate of the Corporation delivered to the Bond Trustee, provided, however, if the Corporation fails to deliver such a Certificate, in inverse order of maturity. SECTION 5.06. Rebate Fund. (A) The Bond Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the Rebate Fund. Within the Rebate Fund, the Bond Trustee shall maintain such accounts as shall be necessary to comply with instructions of the Corporation given pursuant to the terms and conditions of the Tax Agreement. Subject to the transfer provisions provided in subsection (E) below, all money at any time deposited in the Rebate Fund shall be held by the Bond Trustee in trust, to the extent required to satisfy the Rebate Requirement (as defined in the Tax Agreement), for payment to the federal government of the United States of America. Neither the City, the Corporation nor the Holder of any Bonds shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section, by Section 6.06 and by the Tax Agreement (which is incorporated herein by reference). The Bond Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Corporation including supplying all necessary information in the manner provided in the Tax Agreement, and shall have no liability or responsibility to enforce compliance by the Corporation or the City with the terms of the Tax Agreement. The City shall be deemed conclusively to have complied with the provisions of this Section if it takes such actions as may reasonably be requested by the Corporation pursuant to the Tax Agreement. OHS West:260645718.4 27 (B) Upon the Corporation's written direction, an amount shall be deposited to the Rebate Fund by the Bond Trustee from deposits by the Corporation or from available investment earnings on amounts held in the Revenue Fund, if and to the extent required, so that the balance in the Rebate Fund shall equal the Rebate Requirement. Computations of the Rebate Requirement shall be furnished to the Bond Trustee by or on behalf of the Corporation in accordance with the Tax Agreement. (C) The Bond Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section, other than from moneys held in the funds and accounts created under this Bond Indenture or from other moneys provided to it by the Corporation. (D) At the written direction of the Corporation, the Bond Trustee shall invest all amounts held in the Rebate Fund in Investment Securities, subject to the restrictions set forth in the Tax Agreement. Neither the City nor the Bond Trustee shall be liable for any consequences arising from such investment. Moneys shall not be transferred from the Rebate Fund except as provided in subsection (E) below. (E) Upon receipt of the Corporation's written directions, the Bond Trustee shall remit part or all of the balances in the Rebate Fund to the United States of America, as so directed. In addition, if the Corporation so directs in writing and certifies that such action is in accordance with the Tax Agreement, the Bond Trustee will deposit money into or transfer money out of the Rebate Fund from or into such accounts or funds as directed by the Corporation's written directions. Any funds remaining in the Rebate Fund, redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Requirement, or provision made therefor satisfactory to the Bond Trustee, shall be withdrawn and remitted to the Corporation. (F) Notwithstanding any other provision of this Bond Indenture, including in particular Article X, the obligation to remit the Rebate Requirement to the United States of America and to comply with all other requirements of this Section, Section 6.06 and the Tax Agreement shall survive the defeasance or payment in full of the Bonds. SECTION 5.07. Investment of Moneys in Funds and Accounts. (A) All moneys in any of the funds and accounts established pursuant to this Bond Indenture shall be invested by the Bond Trustee, upon the written direction of the Corporation, solely in Investment Securities. Investment Securities shall be purchased at such prices and on such terms as the Corporation may direct . The directions of the Corporation shall be subject to the limitations set forth in Section 6.06. All Investment Securities shall be acquired subject to the limitations as to maturities hereinafter in this Section set forth and such additional limitations or requirements consistent with the foregoing as may be established by Request of the Corporation. No Request of the Corporation shall impose any duty on the Bond Trustee inconsistent with its fiduciary responsibilities. In the absence of directions from the Corporation, the Bond Trustee shall invest in Investment Securities specified in subsection (f) of the definition thereof in Section 1.01_ (B) Moneys in all other funds and accounts shall be invested in Investment Securities maturing not later than the date on which it is estimated that such moneys will be OHS West:260645718.4 28 required for the purposes specified in this Bond Indenture. Investment Securities purchased under a repurchase agreement or investment contract may be deemed to mature on the date or dates on which the Bond Trustee may deliver such Investment Securities for repurchase under such agreement. (C) All interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Bond Indenture shall be deposited when received in the fund or account from which the moneys were invested. Notwithstanding anything to the contrary contained in this paragraph, an amount of interest received with respect to any Investment Security equal to the amount of accrued interest, if any, paid as part of the purchase price of such Investment Security shall be credited to the fund or account for the credit of which such Investment Security was acquired. (D) Investment Securities acquired as an investment of moneys in any fund or account established under this Bond Indenture shall be credited to such fund or account. For the purpose of determining the amount in any such fund or account all Investment Securities credited to such fund or account shall be valued at the lower of cost (exclusive of accrued interest after the first payment of interest following acquisition) or par value (plus, prior to the first payment of interest following acquisition, the amount of interest paid as part of the purchase price). (E) The Bond Trustee may commingle any of the amounts on deposit in the funds or accounts established pursuant to this Bond Indenture (other than the Rebate Fund) into a separate fund or funds for investment purposes only, provided that all funds or accounts held by the Bond Trustee hereunder shall be accounted for separately as required by this Bond Indenture. The Bond Trustee may act as principal or agent in the making or disposing of any investment. The Bond Trustee may sell at the best price reasonably obtainable, or present for redemption, any Investment Securities so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Investment Security is credited, and, subject to the provisions of Section 8.03 with respect to the Bond Trustee, neither the City nor the Bond Trustee shall be liable or responsible for any loss resulting from any investment made in accordance with the provisions of this Section 5.07. (F) The City (and the Corporation by its execution of the Loan Agreement) acknowledges that, to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City or the Corporation the right to receive brokerage confirmations of security transactions as they occur, the City and the Corporation will not receive such confirmations to the extent permitted by law. The Bond Trustee will furnish the City and the Corporation periodic cash transaction statements as provided herein which include detail for all investment transactions made by the Bond Trustee hereunder. ARTICLE VI PARTICULAR COVENANTS SECTION 6.01. Punctual Payment. The City shall punctually cause to be paid the principal of and Redemption Price and interest to become due in respect of all the Bonds, in OHS West:260645718.4 29 strict conformity with the terms of the Bonds and of this Bond 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 Bond Indenture. SECTION 6.02. Extension of Payment of Bonds. Except as set forth in Section 9.01, the City 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 or funding of such Bonds or claims for interest 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 Bond 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 not have been so extended. Nothing in this Section shall be deemed to limit the right of the City to issue obligations for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of Bonds. SECTION 6.03. Against Encumbrances. The City shall not create any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Bond Indenture while any of the Bonds are Outstanding, except the pledges and assignments created by this Bond Indenture, and will assist the Bond Trustee in contesting any such pledge, lien, charge or other encumbrance which may be created. Subject to this limitation, the City expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, including other programs under the Law, and reserves the right to issue other obligations for such purposes. SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment. The City is duly authorized pursuant to law to issue the Bonds and to enter into this Bond Indenture and to pledge and assign the Revenues and other assets purported to be pledged and assigned, respectively, under this Bond Indenture in the manner and to the extent provided in this Bond Indenture. The Bonds and the provisions of this Bond Indenture are and will be the legal, valid and binding limited obligations of the City in accordance with their terms, and the City and Bond Trustee shall at all times, subject to the provisions of this Bond Indenture and to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the Bondholders under this Bond Indenture against all claims and demands of all Persons whomsoever. SECTION 6.05. Accounting Records and Financial Statements. (A) The Bond Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with trust accounting standards, in which complete and accurate entries shall be made of all transactions made by or on behalf of the Bond Trustee relating to the receipt, investment, disbursement, allocation and application of the proceeds of the Bonds, the Revenues, the Loan Agreement, Obligation No. [X] and all funds and accounts established pursuant to this Bond Indenture. Such books of record and account shall be available for inspection by the City, the Corporation and any Bondholder, or the agent or representative of any of them duly authorized in writing during the Bond Trustee's business hours on days when the Bond Trustee is open for business. OHS West: 260645718.4 30 (B) The Bond Trustee shall file and furnish on or before the 15th day of each month to the Corporation and to each Bondholder who shall have filed such Bondholder's name and address with the Bond Trustee for such purpose, and to the City if requested in writing, a complete financial statement (which need not be audited) covering receipts, disbursements, allocation and application of Revenues and any other moneys (including proceeds of Bonds) in any of the funds and accounts established pursuant to this Bond Indenture for the preceding month. (C) The Trustee shall fumish to any Bondholder (upon such Bondholder's request), and the City if requested in writing a statement of the aggregate principal amount of Bonds Outstanding and the redemption history of the Bonds (i.e., the dates, amounts, sources of funds, and distribution of calls to the maturities of any previously occurring redemptions). SECTION 6.06. Tax Covenants. The City shall at all times do and perform all acts and things permitted by law and this Bond Indenture which are necessary or desirable to assure that interest paid on the Bonds (or any of them) will be excluded from gross income for federal income tax purposes and shall take no action that would result in such interest not being so excluded. Without limiting the generality of the foregoing, the City agrees to comply with the provisions of the Tax Agreement. This covenant shall survive payment in full or defeasance of the Bonds. SECTION 6.07. Enforcement of Loan Agreement and Obligation No. fXl. The Bond Trustee shall promptly collect all amounts due from the Corporation pursuant to the Loan Agreement and from the Obligated Group pursuant to Obligation No. [X], shall perform all duties imposed upon it pursuant to the Loan Agreement and shall enforce, and take all steps, actions and proceedings reasonably necessary for the enforcement of all of the rights of the City and all of the obligations of the Corporation and the other Members. SECTION 6.08. Amendment of Loan Agreement. (A) Except as provided in Section 6.08(B), the City shall not amend, modify or terminate any of the terms of the Loan Agreement, or consent to any such amendment, modification or termination unless the written consent of the Holders of a majority in principal amount of the Bonds then Outstanding to such amendment, modification or termination is filed with the Bond Trustee, provided that no such amendment, modification or termination shall reduce the amount of Loan Repayments to be made to the City or the Bond Trustee by the Corporation pursuant to the Loan Agreement, or extend the time for making such payments, without the written consent of all of the Holders of the Bonds then Outstanding. (B) Notwithstanding the provisions of Section 6.08(A), the terms of the Loan Agreement may also be modified or amended from time to time and at any time by the City without the necessity of obtaining the consent of or any Bondholders, only to the extent permitted by law and only for any one or more of the following purposes: (1) to add to the covenants and agreements of the City or the Corporation contained in the Loan Agreement other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any OHS West260645718.4 31 right or power therein reserved to or conferred upon the City or the Corporation, provided, that no such covenant, agreement, pledge, assignment or surrender shall materially adversely affect the interests of the Holders of the Bonds; (2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, contained in the Loan Agreement, or in regard to matters or questions arising under the Loan Agreement, as the City may deem necessary or desirable and not inconsistent with the Loan Agreement or this Bond Indenture, and which shall not materially adversely affect the interests of the Holders of the Bonds; (3) to maintain the exclusion from gross income for federal income tax purposes of interest payable with respect to the Bonds; or (4) to make any modification or amendment that, if it was a change made to or under the Indenture, would not require consent of Bondholders. (C) In executing or consenting to any amendment to the Loan Agreement permitted by this Section, the City and the Bond Trustee shall receive, and shall be fully protected in relying upon, an Opinion of Bond Counsel addressed to the City and the Bond Trustee stating that the execution of such amendment is authorized or permitted by the Loan Agreement and this Bond Indenture and applicable law, will upon the execution and delivery thereof be valid and binding obligations of the parties thereto, and that the execution and delivery thereof will not adversely affect the exclusion from federal gross income of interest on the Bonds. SECTION 6.09. Waiver of Laws. The City shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Bond Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the City to the extent permitted by law. SECTION 6.10. Further Assurances. The City will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to cant' out the intention or to facilitate the performance of this Bond Indenture and for the better assuring and confirming unto the Holders of the Bonds of the rights and benefits provided in this Bond Indenture. SECTION 6.11. Continuing Disclosure. Pursuant to Section 5.7 of the Loan Agreement, the Corporation has undertaken all responsibility for compliance with continuing disclosure requirements to the extent set forth therein, and the City shall have no liability to the Holders of the Bonds or any other Person with respect to S.E.C. Rule 15c2 -12. Notwithstanding any other provision of this Bond Indenture, failure of the Corporation or the Dissemination Agent (as defined in the Continuing Disclosure Certificate) to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default; however, the Bond Trustee may (and, at the request of any Participating Underwriter (as defined in the Continuing Disclosure Certificate) or the Holders of at least 25% aggregate principal amount of Outstanding OHS West:260645718.4 32 Bonds, shall) or any Bondholder 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 Corporation to comply with its obligations under Section 5.9 of the Loan Agreement or to cause the Bond Trustee to comply with its obligations under this Section 6.11. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS SECTION 7.01. Events of Default. The following events shall be Events of Default: (A) default in the due and punctual payment of the principal or Redemption Price of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by acceleration or otherwise or default in the redemption of any Bonds from Mandatory Sinking Account Payments in the amount and at the times provided therefor; (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 in any material respect by the City in the observance of any of the other covenants, agreements or conditions on its part in this Bond Indenture or in the Bonds contained, if such default shall have continued for a period of sixty (60) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the City and the Corporation by the Bond Trustee, or to the City, the Corporation and the Bond Trustee by Holders of not less than twenty -five per cent (25 %) in aggregate principal amount of the Bonds at the time Outstanding; or (D) a Loan Default Event. Upon actual knowledge of the existence of any Event of Default, the Bond Trustee and the City shall notify the Corporation, the City, the Master Trustee and the Bond Trustee in writing as soon as practicable (but no later than 30 days after obtaining actual knowledge thereof); provided, however, that the Bond Trustee or City need not provide notice of any Loan Default Event if the Corporation has expressly acknowledged the existence of such Loan Default Event in a writing delivered to the Bond Trustee, the City. SECTION 7.02. Acceleration of Maturities. Whenever any Event of Default referred to in Section 7.01 hereof shall have happened and be continuing, the Bond Trustee may take the following remedial steps: (A) In the case of an Event of Default described in Section 7.01 (A) or (B) of this Bond Indenture, the Bond Trustee may notify the City and the Master Trustee of such Event of Default, may make a demand for payment under Obligation No. [X] and request the Master Trustee in writing to give notice to the Credit Group Representative pursuant to Section 4.02 of the Master Indenture declaring the principal of all obligations issued under the Master Indenture then outstanding to be due and immediately payable. Upon such declaration by the Master OHS West260645718.4 - 33 Trustee, the Bond Trustee shall declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable (and interest shall cease to accrue as of the date of such declaration unless such declaration is rescinded in accordance herewith), anything in this Bond Indenture to the contrary notwithstanding. In addition, the Bond Trustee and the City may take whatever action at law or in equity is necessary or desirable to collect the payments due under Obligation No. [X]; (B) In the case of an Event of Default described in Section 7.01(C) of this Bond Indenture, the Bond Trustee may take whatever action at law or in equity is necessary or desirable to enforce the performance, observance or compliance by the City with any covenant, condition or agreement by the City under this Bond Indenture; and (C) In the case of an Event of Default described in Section 7.01(D) of this Bond Indenture, the Bond Trustee may take whatever action the City would be entitled to take, and shall take whatever action the City would be required to take, pursuant to the Loan Agreement to remedy the Loan Default Event. Any such declaration, however, is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the City or the Corporation shall deposit with the Bond Trustee a sum sufficient to pay all the principal, Mandatory Sinking Amount Payments or Redemption Price of and installments of interest on the Bonds, payment of which is overdue, with interest on such overdue principal at the rate borne by the respective Bonds, and the reasonable charges and expenses of the Bond Trustee, and if the Bond Trustee has received notification from the Master Trustee that the declaration of acceleration of Obligation No. [X] has been annulled pursuant to the Master Indenture and any and all other defaults known to the Bond Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Bond Trustee or provision deemed by the Bond Trustee to be adequate shall have been made therefor, then, and in every such case, the Bond Trustee shall, on behalf of the Holders of all of the Bonds, rescind and annul such declaration and its consequences and waive such default; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. Immediately after any acceleration hereunder, the Bond Trustee, to the extent it has not already done so, shall notify in writing the City of the occurrence of such acceleration. Nothing contained herein, however, shall require the Bond Trustee to exercise any remedies in connection with an Event of Default unless the Bond Trustee shall have actual knowledge or shall have received written notice of such Event of Default. SECTION 7.03. Application of Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Revenues and any other funds then held or thereafter received by the Bond Trustee under any of the provisions of this Bond Indenture (subject to Section 11.10 and other than moneys required to be deposited in the Rebate Fund) shall be applied by the Bond Trustee as follows and in the following order: OHS West260645718.4 34 (A) To the payment of any expenses necessary in the opinion of the Bond Trustee to protect the interests of the Holders of the Bonds and payment of reasonable fees, charges and expenses of the Bond Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Bond Indenture; and (B) To the payment of the principal or Redemption Price of and interest then due on the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of this Bond Indenture (including Section 6.02), as follows: (1) Unless the principal of all of the Bonds shall have become or have been declared due and payable, First: To the payment to the Persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; and Second: To the payment to the Persons entitled thereto of the unpaid principal (including Mandatory Sinking Account Payments) or Redemption Price of any Bonds which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, with interest on the overdue principal at the rate bome by the respective Bonds, and, if the amount available shall not be sufficient to pay in full all the Bonds due on any date, together with such interest, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date to the Persons entitled thereto, without any discrimination or preference. (2) If the principal of all of the Bonds shall have become or have been declared due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds, with interest on the overdue principal at the rate borne by the Bonds, and, if the amount available shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, according to the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference. SECTION 7.04. Bond Trustee to Represent Bondholders. The Bond Trustee is hereby irrevocably appointed (and the successive respective Holders of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Bond Trustee) as trustee and true and lawful attorney -in -fact of the Holders of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Holders under the provisions of the Bonds, this Bond Indenture, the Loan Agreement, Obligation OHS West:260645718.4 35 No. [X], the Law and applicable provisions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Bond Trustee to represent the Bondholders, the Bond Trustee in its discretion may, and upon the written request of the Holders of not less than twenty -five percent (25 %) in aggregate principal amount of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Holders by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Bond Trustee or in such Holders under this Bond Indenture, the Loan Agreement, Obligation No. [X], the Law or any other law; and upon instituting such proceeding, the Bond Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Revenues and other amounts and assets pledged under this Bond Indenture, pending such proceedings. If more than one such request is received by the Bond Trustee from the Holders, the Bond Trustee shall follow the written request executed by the Holders of the greater percentage of Bonds then Outstanding in excess of twenty -five percent (25 %). All rights of action under this Bond Indenture or the Bonds or otherwise may be prosecuted and enforced by the Bond Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Bond Trustee shall be brought in the name of the Bond Trustee for the benefit and protection of all the Holders of such Bonds, subject to the provisions of this Bond Indenture (including Section 6.02). SECTION 7.05. Bondholders' Direction of Proceedings. Anything in this Bond Indenture to the contrary notwithstanding, the Holders of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent, instruments in writing executed and delivered to the Bond Trustee, and upon indemnifying the Bond Trustee to its satisfaction therefor, to direct the method of conducting all remedial proceedings taken by the Bond Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Bond Indenture, and that the Bond Trustee shall have the right to decline to follow any such direction which in the opinion of the Bond Trustee would be unjustly prejudicial to Bondholders not parties to such direction. SECTION 7.06. Limitation on Bondholders' Right to Sue. No Holder of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Bond Indenture, the Loan Agreement, Obligation No. [x], the Law or any other applicable law with respect to such Bond, unless (1) such Holder shall have given to the Bond Trustee written notice of the occurrence of an Event of Default; (2) the Holders of not less than twenty -five per cent (25 %) in aggregate principal amount of the Bonds then Outstanding shall have made written request upon the Bond Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; provided, however, that if more than one such request is received by the Bond Trustee from the Holders, the Bond Trustee shall follow the written request executed by the Holders of the greater percentage of Bonds then Outstanding in excess of twenty -five percent (25 %); (3) such Holder or said Holders shall have tendered to the Bond Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request upon the Bond Trustee to exercise the powers hereinbefore granted or to institute such OHS wesc260645718.4 36 suit, action or proceeding in its own name; (3) such Holder or said Holders shall have tendered to the Bond Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (4) the Bond 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 Bond 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 Holder of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Holders of Bonds shall have any right in any manner whatever by such Holder's or Holders' action to affect, disturb or prejudice the security of this Bond Indenture or the rights of any other Holders of Bonds, or to enforce any right under this Bond Indenture, the Loan Agreement, Obligation No. [x], the Law or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Holders of the Outstanding Bonds, subject to the provisions of this Bond Indenture (including Section 6.02).. SECTION 7.07. Absolute Obligation of City. Nothing contained in Section 7.06 or in any other provision of this Bond Indenture or in the Bonds shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the principal or Redemption Price of and interest on the Bonds to the respective Holders of the Bonds at their respective dates of maturity, or upon call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of such Holders, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds. SECTION 7.08. Termination of Proceedings. In case any proceedings taken by the Bond Trustee or any one or more Bondholders on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Bond Trustee or the Bondholders, then in every such case the City, the Bond Trustee and the Bondholders, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the City, the Bond Trustee and the Bondholders shall continue as though no such proceedings had been taken. SECTION 7.09. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Bond Trustee or to the Holders of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise. SECTION 7.10. No Waiver of Default. No delay or omission of the Bond Trustee or of any Holder of the Bonds to exercise any right or power arising upon the occurrence of 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 given by this Bond OHS West:260645718.4 37 Indenture to the Bond Trustee or the Holders of the Bonds may be exercised from time to time and as often as may be deemed expedient. ARTICLE VIII THE BOND TRUSTEE SECTION 8.01. Appointment, Duties, Immunities and Liabilities of Bond Trustee. (A) The City (at the request of the Corporation) hereby appoints Wells Fargo Bank, National Association, as bond trustee. The Bond Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Bond Indenture, and, except to the extent required by law, no implied covenants or obligations shall be read into this Bond Indenture against the Bond Trustee. The Bond Trustee shall, during the existence of any Event of Default (which has not been cured or waived), exercise such of the rights and powers vested in it by this Bond Indenture, and use the same degree of care and skill in their exercise, as a prudent person that customarily engages in activities essentially similar to those provided for the Bond Trustee hereunder would exercise or use under the circumstances in the conduct of such person's own affairs. (B) The City may, and upon written request of the Corporation shall, remove the Bond Trustee at any time unless an Event of Default shall have occurred and then be continuing, and shall remove the Bond Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Bond Trustee shall cease to be eligible in accordance with subsection (E) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Bond Trustee or its property shall be appointed, or any public officer shall take control or charge of the Bond Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Bond Trustee, and thereupon shall appoint, with the written consent of the Corporation, a successor Bond Trustee by an instrument in writing. The City, the Corporation or any Holder may at any time petition any court of competent jurisdiction for the removal for cause of the Bond Trustee. (C) The Bond Trustee may at any time resign by giving written notice of such resignation to the City and the Corporation and by giving the Bondholders notice of such resignation by mail at the addresses shown on the registration books maintained by the Bond Trustee. Upon receiving such notice of resignation, the City shall promptly appoint, with the written consent of the Corporation and the Credit Facility Provider (if any), a successor Bond Trustee by an instrument in writing. The Bond Trustee shall not be relieved of its duties until such successor Bond Trustee has accepted appointment. If the Bond Trustee has or shall acquire any conflicting interest, as defined in the Trust Indenture Act of 1939, as amended, it shall, within 90 days after ascertaining that it has a conflicting interest, or within 30 days after receiving written notice from the City or the Corporation (so long as the Corporation is not in OHS West260645718.4 38 default under the Loan Agreement) that it has a conflicting interest, either eliminate such conflicting interest or resign in the manner and with the effect specified in this Subsection (C). (D) Any removal or resignation of the Bond Trustee and appointment of a successor Bond Trustee shall only become effective upon acceptance of appointment by the successor Bond Trustee. If no successor Bond Trustee shall have been appointed and have accepted appointment within thirty (30) days of giving notice of removal or notice of resignation as aforesaid, the resigning Bond Trustee or any Bondholder (on behalf of such Bondholder and all other Bondholders) may petition any court of competent jurisdiction for the appointment of a successor Bond Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Bond Trustee. Any successor Bond Trustee appointed under this Bond Indenture shall signify its acceptance of such appointment by executing and delivering to the City and to its predecessor Bond Trustee a written acceptance thereof, and thereupon such successor Bond Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Bond Trustee, with like effect as if originally named Bond Trustee herein; but, nevertheless at the request of the City or the request of the successor Bond Trustee, such predecessor Bond Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Bond Trustee all the right, title and interest of such predecessor Bond Trustee in and to any property held by it under this Bond Indenture and shall pay over, transfer, assign and deliver to the successor Bond Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Bond Trustee, the City shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Bond Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Bond Trustee as provided in this subsection, the successor Bond Trustee shall mail a notice of the succession of such Bond Trustee to the trusts hereunder to the Bondholders at the addresses shown on the registration books maintained by the Bond Trustee. (E) The Bond Trustee and any successor Bond Trustee shall be a trust company or bank having a combined capital and surplus of at least seventy -five million dollars ($75,000,000) (or providing a guarantee of the full and prompt performance by the Bond Trustee of its obligations under this Bond Indenture by a guarantor with such combined capital and surplus), duly authorized to exercise trust powers and subject to supervision or examination by federal or state authority. If such bank 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 subsection the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Bond Trustee shall cease to be eligible in accordance with the provisions of this subsection (E), the Bond Trustee shall resign immediately in the manner and with the effect specified in this Section. SECTION 8.02. Mercer or Consolidation. Any company into which the Bond 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 Bond Trustee may sell or transfer all or substantially all of its corporate OHS West260645718.4 39 trust business, provided such company shall be eligible under subsection (E) of Section 8.01, shall be the successor to such Bond Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. SECTION 8.03. Liability of Bond Trustee. (A) The recitals of facts herein and in the Bonds contained shall be taken as statements of the City, and the Bond Trustee assumes no responsibility for the correctness of the same, makes no representations as to the validity or sufficiency of this Bond Indenture, of the Loan Agreement, of the Remarketing Agreement, of Obligation No. [x], or of the Bonds, and shall incur no responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it except for any recital or representation specifically relating to the Bond Trustee or its powers. The Bond Trustee assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed in connection with the issuance of the Bonds. The Bond Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Bond Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Bond Trustee may become the owner of Bonds with the same rights it would have if it were not Bond Trustee, and, to the extent permitted by law, may act as depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders, whether or not such committee shall represent the Holders of a majority in principal amount of the Bonds then Outstanding. (B) The Bond Trustee shall not be liable for any error of judgment made in good faith by any of its officers, employees, agents or representatives, unless it shall be proved that the Bond Trustee was negligent. (C) The Bond Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than twenty -five percent (25 %) in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Bond Trustee, or exercising any trust or power conferred upon the Bond Trustee under this Bond Indenture. (D) The Bond Trustee shall be under no obligation to exercise any of the rights or powers vested in it by Section 7.02 of this Bond Indenture (except for declaring an acceleration of the Bonds in accordance with the terms thereof) at the request, order or direction of any of the Bondholders pursuant to the provisions of this Bond Indenture unless such Bondholders shall have offered to the Bond Trustee reasonable security or indemnity, satisfactory to the Bond Trustee, against the costs, expenses and liabilities which may be incurred therein or thereby. The Bond Trustee has no obligation or liability to the Holders for the payment of interest on, principal of or redemption premium, if any, with respect to the Bonds from its own funds; but rather the Bond Trustee's obligations shall be limited to the performance of its duties hereunder. OHS West260645718.4 40 (E) Except with respect to Events of Default specified in Section 7.01(A) or (B), the Bond Trustee shall not be deemed to have knowledge of any Event of Default unless and until an officer at the Corporate Trust Office responsible for the administration of its duties hereunder shall have actual knowledge thereof or the Bond Trustee shall have received written notice thereof at the Corporate Trust Office. The Bond Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of a default or Event of Default thereunder. The Bond Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. (F) The Bond Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through attorneys -in -fact, agents, receivers, officers, employees or representatives, and shall not be answerable for the negligence or misconduct of any such attorney -in -fact, agent, receiver, officer, employee or representative selected by it with due care. The Bond Trustee shall be entitled to advice of counsel and other professionals concerning all matters of trust and its duty hereunder, but the Bond Trustee shall not be answerable for the professional malpractice of any counsel or other professional (including without limiting the generality of the foregoing, attorneys -in -law or certified public accountants) in connection with the rendering of such counsel's or other professionals' advice in accordance with the terms of this Bond Indenture, if such counsel or other professional was selected by the Bond Trustee with due care. (G) The Bond Trustee shall not be concerned with or accountable to anyone for the subsequent use or application of any moneys that shall be released or withdrawn in accordance with the provisions hereof. (H) Whether or not therein expressly so provided, every provision of this Bond Indenture, the Loan Agreement, Obligation No. [x] or related documents relating to the conduct or affecting the liability of or affording protection to the Bond Trustee shall be subject to the provisions of this Article. SECTION 8.04. Right of Bond Trustee to Rely on Documents. The Bond Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Bond Trustee may consult with counsel, who may be counsel of or to the City and/or counsel selected by the Bond Trustee, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. Whenever in the administration of the trusts imposed upon it by this Bond Indenture the Bond Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate of the City, and such Certificate shall be full warrant to the Bond Trustee for any action taken or suffered in good faith under the provisions of this Bond Indenture in reliance upon such Certificate, but in its discretion the Bond Trustee may, in lieu thereof, OHS West260645718.4 41 accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. SECTION 8.05. Preservation and Inspection of Documents. All documents received by the Bond Trustee under the provisions of this Bond Indenture shall be retained in its possession and shall be subject at all reasonable times to the inspection of the City, the Corporation, and any Bondholder, and their agents and representatives duly authorized in writing, during the Bond Trustee's business hours on days when the Bond Trustee is open for business.. SECTION 8.06.Compensation and Indemnification. The Corporation shall pay to the Bond Trustee from time to time reasonable compensation for all services rendered under this Bond Indenture, and also all reasonable expenses, charges, legal and consulting fees and other disbursements and those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties under this Bond Indenture. No provision of this Bond Indenture shall require the Bond Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers, if it has not received the agreed compensation for such services or, in cases where the Bond Trustee has a right to reimbursement or indemnification for such performance or exercise, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. SECTION 8.07.Bond Trustee's Relationship to City. (A) The Bond Trustee acknowledges that the Bonds are payable solely from Revenues, including payments to be made by the Corporation pursuant to the Loan Agreement and the Bonds, that the City is a passive conduit for the payments to be made by the Corporation pursuant to the Loan Agreement and the Bonds and that the Bonds are not general obligations of the City. The Bond Trustee, by execution of this Bond Indenture, has accepted the assignment by the City to the Bond Trustee of the payments to be made by the Corporation pursuant to the Loan Agreement and the Bonds and of certain of the rights of the City under the Loan Agreement and the Bonds and, to the extent permitted by law and subject to the limiting provisions contained herein, has assumed any and all responsibilities of the City (other than the right of the City to indemnification under the Loan Agreement and administration expense and fees under the Loan Agreement and as otherwise set forth therein) under the Loan Agreement and the Bonds to enforce those rights. The Bond Trustee will notify the City of any default known to the Bond Trustee under the Loan Agreement or the Bonds, and will at the expense of the Corporation and upon receipt of a Request of the City provide the City with any information reasonably available to the Bond Trustee which the City may reasonably request regarding any events of default. (B) The Bond Trustee agrees to provide the City at the expense of the Corporation and within a reasonable time after the receipt of a Request of the City any financial or other information it may reasonably request relating to the Corporation or to this Bond OHS West:260645718.4 42 Indenture or the Loan Agreement and the Bonds which the City finds necessary or desirable and which is reasonably available to the Bond Trustee. ARTICLE IX MODIFICATION OR AMENDMENT OF THIS INDENTURE SECTION 9.01. Amendments Permitted. (A) This Bond Indenture and the rights and obligations of the City, of the Bond Trustee and of the Holders of the Bonds may be modified or amended from time to time and at any time by indenture or indentures supplemental hereto, which the City and the Bond Trustee may enter into with the written consent of the Corporation when the written consent the Holders of a majority in aggregate principal amount of the Bonds then Outstanding, shall have been filed with the Bond Trustee. No such modification or amendment shall (1) extend the fixed maturity of any Bond, or reduce the amount of principal thereof, or extend the time of payment or reduce the amount of any Mandatory Sinking Account Payment, or reduce the rate of interest thereon, or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the Holder of each Bond so affected, or (2) reduce the aforesaid percentage of Bonds the consent of the Holders of which is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under this Bond Indenture prior to or on a parity with the lien created by this Bond Indenture, or deprive the Holders of the Bonds of the lien created by this Bond Indenture on such Revenues and other assets (except as expressly provided in this Bond Indenture), without the consent of the Holders of all Bonds then Outstanding. It shall not be necessary for the consent of the Bondholders to approve the particular form of any Supplemental Bond Indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the City and the Bond Trustee of any Supplemental Bond Indenture pursuant to this subsection (A), the Bond Trustee shall mail a notice, setting forth in general terms the substance of such Supplemental Bond Indenture to the Bondholders at the addresses shown on the registration books maintained by the Bond Trustee. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Bond Indenture. (B) This Bond Indenture and the rights and obligations of the City, of the Bond Trustee and of the Holders of the Bonds may also be modified or amended from time to time and at any time by an indenture or indentures supplemental hereto, which the City and the Bond Trustee may enter into without the consent of any Bondholders, but with the written consent of the Corporation, but only to the extent permitted by law and only for any one or more of the following purposes: (1) to add to the covenants and agreements of the City contained in this Bond Indenture other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the City, provided, that no such covenant, agreement, pledge, assignment or surrender shall materially adversely affect the interests of the Holders of the Bonds; OHS West:260645718.4 43 (2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, contained in this Bond Indenture, or in regard to matters or questions arising under this Bond Indenture, as the City or the Bond Trustee may deem necessary or desirable and not inconsistent with this Bond Indenture, and which shall not materially adversely affect the interests of the Holders of the Bonds; (3) to modify, amend or supplement this Bond Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Holders of the Bonds; (4) to provide any additional procedures, covenants or agreements to maintain the exclusion from gross income for federal income tax purposes of the interest on the Bonds, including the amendment of any Tax Agreement; (5) to facilitate (i) the transfer of Bonds from one Securities Depository to another in the succession of Securities Depositories, or (ii) the withdrawal from a Securities Depository of Bonds held in a Book -Entry System and the issuance of replacement Bonds in fully registered form to Persons other than a Securities Depository; or (6) to make any other changes which will not materially adversely affect the interests of the Holders of the Bonds. (C) The Bond Trustee may in its discretion, but shall not be obligated to, enter into any such Supplemental Bond Indenture authorized by subsections (A) or (B) of this Section which materially adversely affects the Bond Trustee's own rights, duties or immunities under this Bond Indenture or otherwise. (D) In executing, or accepting the additional trusts created by, any Supplemental Bond Indenture permitted by this Article or the modification thereby of the trusts created by this Bond Indenture, the Bond Trustee and the City shall receive, and shall be fully protected in relying upon, a Favorable Opinion of Bond Counsel addressed and delivered to the Bond Trustee and the City stating that the execution of such Supplemental Bond Indenture is permitted by and in compliance with this Bond Indenture, and that the execution and delivery thereof will not adversely affect the exclusion from federal gross income of interest on the Bonds. (E) The Bond Trustee shall provide written notice and a copy of any amendment to this Bond Indenture or the Loan Agreement to S &P and Moody's at least fifteen (15) days in advance (unless S &P and Moody's waives or reduces such time period) of the execution of any amendment to such documents. SECTION 9.02. Effect of Sumlemental Bond Indenture. Upon the execution of any Supplemental Bond Indenture pursuant to this Article, this Bond Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and OHS wesc260645718.4 44 obligations under this Bond Indenture of the City, the Bond Trustee and all Holders of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Bond Indenture shall be deemed to be part of the terms and conditions of this Bond Indenture for any and all purposes. SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Bond Indenture pursuant to this Article may, and if the City so determines shall, bear a notation by endorsement or otherwise in form approved by the City and the Bond Trustee as to any modification or amendment provided for in such Supplemental Bond Indenture, and, in that case, upon demand of the Holder of any Bond Outstanding at the time of such execution and presentation of such Holder's Bond for the purpose at the Corporate Trust Office of the Bond Trustee or at such additional offices as the Bond Trustee may select and designate for that purpose, a suitable notation shall be made on such Bond. If the Supplemental Bond Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the City and the Bond Trustee, to any modification or amendment contained in such Supplemental Bond Indenture, shall be prepared by the Bond Trustee at the expense of the Corporation, executed by the City and authenticated by the Bond Trustee, and upon demand of the Holders of any Bonds then Outstanding shall be exchanged at the Corporate Trust Office of the Bond Trustee, without cost to any Bondholder, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amounts of the same maturity. SECTION 9.04. Amendment of Particular Bonds. The provisions of this Article shall not prevent any Bondholder from accepting any amendment as to the particular Bonds held by such Bondholder, provided that due notation thereof is made on such Bonds. ARTICLE X DEFEASANCE SECTION 10.01. Discharge of Bond Indenture. (A) The Bonds may be paid by the City or the Bond Trustee on behalf of the City in any of the following ways: (i) by paying or causing to be paid the principal or Redemption Price of and interest on all Bonds Outstanding, as and when the same become due and payable; (ii) by depositing with the Bond Trustee, in trust, at or before maturity, moneys or securities in the necessary amount (as provided in Section 10.03) to pay when due or redeem all Bonds then Outstanding; or (iii) by delivering to the Bond Trustee, for cancellation by it, all Bonds then Outstanding. (B) If the City shall also pay or cause to be paid all other sums payable hereunder by the City and the Corporation shall have paid all Administrative Fees and Expenses OHS West260645718.4 45 payable to the City pursuant to the Loan Agreement, then and in that case at the election of the City (evidenced by a Certificate of the City filed with the Bond Trustee signifying the intention of the City to discharge all such indebtedness and this Bond Indenture), and notwithstanding that any Bonds shall not have been surrendered for payment, this Bond Indenture and the pledge of Revenues and other assets made under this Bond Indenture and all covenants, agreements and other obligations of the City under this Bond Indenture (except as otherwise provided in Section 5.06) shall cease, terminate, become void and be completely discharged and satisfied. In such event, upon the request of the City, the Bond Trustee shall cause an accounting for such period or periods as may be requested by the City to be prepared and filed with the City and shall execute and deliver to the City all such instruments as may be necessary to evidence such discharge and satisfaction, and the Bond Trustee shall pay over, transfer, assign or deliver to the Corporation all moneys or securities or other property held by it pursuant to this Bond Indenture which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption; provided that in all events moneys in the Rebate Fund shall be subject to the provisions of Section 5.06. SECTION 10.02. Discharge of Liability on Bonds. (A) Upon the deposit with the Bond Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem any Outstanding Bond (whether upon or prior to its maturity or the redemption date of such Bond), provided that, if such Bond is to be redeemed prior to maturity, notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the Bond Trustee shall have been made for the giving of such notice, then all liability of the City in respect of such Bond shall cease, terminate and be completely discharged, except only that thereafter the Holder thereof shall be entitled to payment of the principal of and interest on such Bond by the City, and the City shall remain liable for such payments, but only out of such money or securities deposited with the Bond Trustee as aforesaid for their payment, subject, however, to the provisions of Section 10.04. (B) The City may at any time surrender to the Bond Trustee for cancellation by it any Bonds previously issued and delivered, which the City may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired. SECTION 10.03. Deposit of Money or Securities with Bond Trustee. (A) Whenever in this Bond Indenture it is provided or permitted that there be deposited with or held in trust by the Bond Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or securities so to be deposited or held may include money or securities held by the Bond Trustee in the funds and accounts established pursuant to this Bond Indenture (other than the Rebate Fund) and shall be: (i) lawful money of the United States of America in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the OHS West:260645718.4 46 Bond Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount or Redemption Price of such Bonds and all unpaid interest thereon to the redemption date; or (ii) United States Government Obligations (not callable by the issuer thereof prior to maturity), the principal of and interest on which when due (without any income from the reinvestment thereof) will provide money sufficient to pay the principal or Redemption Price of and all unpaid interest to maturity, or to the redemption date, as the case may be, on the Bonds to be paid or redeemed, as such principal or Redemption Price and interest become due; provided that, in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the Bond Trustee shall have been made for the giving of such notice; provided, in each case, that the Bond Trustee shall have been irrevocably instructed (by the terms of this Bond Indenture or by Request of the City) to apply such money to the payment of such principal or Redemption Price and interest with respect to such Bonds, and provided further, if the Bonds are then rated by S &P, the Bond Trustee shall have received written confirmation from S &P that the rating on the Bonds will not be reduced or withdrawn solely as a result of the defeasance; and provided further, that with respect to the deposit of United States Government Obligations pursuant to subsection (B) in connection with an advance refunding, the Bond Trustee shall have received a verification report from a firm of independent accountants or other qualified verifier, addressed to the City and the Bond Trustee, acceptable in form and substance to the Bond Trustee, to the effect that the amount deposited is sufficient to make the payments specified therein. SECTION 10.04. Payment of Bonds After Discharge of Bond Indenture. Notwithstanding any provisions of this Bond Indenture, any moneys held by the Bond Trustee in trust for the payment of the principal of or premium, if any, or interest on, any Bonds and remaining unclaimed for three years (or, if shorter, one day before such moneys would escheat to the State of California under then applicable California law) after such principal or interest, as the case may be, has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in this Bond Indenture), if such moneys were so held at such date, or three years (or, if shorter, one day before such moneys would escheat to the State of California under then applicable California law) after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be repaid to the Corporation free from the trusts created by this Bond Indenture upon receipt of an indemnification agreement acceptable to the City and the Bond Trustee indemnifying the City and the Bond Trustee with respect to claims of Holders of Bonds which have not yet been paid and containing the agreement of the Corporation to remain liable for the amount so repaid to the Corporation, and all liability of the City and the Bond Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Corporation as aforesaid, the Bond Trustee may (at the cost of the Corporation) first mail to the Holders of Bonds which have not yet been paid, at the addresses shown on the registration books maintained by the Bond Trustee, a notice, in such form as may be deemed appropriate by the Bond Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Corporation of the moneys held for the payment thereof. OHS West:260645718.4 47 ARTICLE XI MISCELLANEOUS SECTION 11.01.Limited Liability of City. Notwithstanding anything in this Bond Indenture or in the Bonds contained, the City shall not be required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Bond Indenture for any of the purposes in this Bond Indenture mentioned, whether for the payment of the principal or Redemption Price of or interest on the Bonds or for any other purpose of this Bond Indenture. SECTION 11.02. Successor is Deemed Included in All References to Predecessor. Whenever in this Bond Indenture either the City or the Bond Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Bond Indenture contained by or on behalf of the City or the Bond Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. SECTION 11.03. Limitation of Rights to Parties, Corporation and Bondholders. Nothing in this Bond Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the City, the Bond Trustee, the Corporation and the Holders of the Bonds, any legal or equitable right, remedy or claim under or in respect of this Bond Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the City, the Bond Trustee, the Corporation and the Holders of the Bonds. SECTION 11.04. Waiver of Notice. Whenever in this Bond Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the Person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 11.05. Destruction of Bonds. Whenever in this Bond Indenture provision is made for the cancellation by the Bond Trustee and the delivery to the City of any Bonds, the Bond Trustee shall, in lieu of such cancellation and delivery, destroy such Bonds, and deliver a certificate of such destruction to the City. SECTION 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this Bond Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Bond Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Bond Indenture, and this Bond Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. SECTION 11.07. Notices. Subject to Section 11.04, any notice or request to or demand upon the Bond Trustee shall be in writing and may be served or presented, and such OHS West:260645718.4 48 demand may be made, at the Corporate Trust Office of the Bond Trustee or at such other address as may have been filed in writing by the Bond Trustee with the City. Any notice to or demand upon the City and the Corporation shall be deemed to have been sufficiently given or served for all purposes by being delivered or sent by Electronic Means receipt confirmed or by being mailed by first -class mail, postage prepaid, addressed as follows: (1) to the City at: City of Newport Beach 3300 Newport Boulevard P.O. Box 1768 Newport Beach, California 92658 Attention: Treasurer Telephone: (949) 644 -3123 Facsimile: (949) 644 -3339 E -mail: (2) to the Corporation at: Hoag Memorial Hospital Presbyterian One Hoag Drive P.O. Box 6100 Newport Beach, California 92658 -6100 Attention: Chief Financial Officer Telephone: (949) 764 -4411 Facsimile: (949) 764 -4416 E -mail: (3) to the Bond Trustee at: Wells Fargo Bank, National Association 707 Wilshire Boulevard, 17th Floor Los Angeles, CA 90017 Attention: Corporate Trust Services Telephone: (213) 614 -3350 Facsimile: (213) 614 -3355 E -mail: (or in each case at such other or additional addresses as may have been filed in writing with the Bond Trustee). (b) S &P and Moody's shall be entitled to written notice (in the same fashion as is specified for notices in subsection (A) above) to the following address, as applicable (or such other address as may be filed in writing with the Bond Trustee upon the occurrence of each of the following events: (1) redemption of the Bonds in whole; (2) acceleration of the Bonds and (3) an amendment or modification of the Loan Agreement or Bond Indenture. Standard & Poor's OHS West260645718.4 49 55 Water Street, 38th Floor New York, NY 10041 Attn: Municipal Structured Surveillance Telephone: (212) 438 -2021 Facsimile: (212) 438 -2151 Moody's Investor Service 99 Church Street New York, NY 10007 SECTION 11.08. Evidence of Rights of Bondholders. Any request, consent or other instrument required or permitted by this Bond Indenture to be signed and executed by Bondholders may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bondholders in person or by an 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, or of the holding by any person of Bonds transferable by delivery, shall be sufficient for any purpose of this Bond Indenture and shall be conclusive in favor of the Bond Trustee and of the City if made in the manner provided in this Section. 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 certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the Person signing such request, consent or other instrument acknowledged to such notary public or officer the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer. The ownership of Bonds shall be proved by the bond registration books held by the Bond Trustee. Any request, consent, or other instrument or writing of the Holder of any Bond shall bind every future Holder of the same Bond and the Holder of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Bond Trustee or the City in accordance therewith or reliance thereon. SECTION 11.09. Disqualified Bonds. In determining whether the Holders of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Bond Indenture, Bonds which are owned or held by or for the account of the City, the Corporation or any of the other Members or by any other obligor on the Bonds, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the City, the Corporation or any of the other Members or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, but only to the extent the Bond Trustee has actual knowledge of such ownership. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Bond Trustee the pledgee's right to vote such Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control OHS WesC260645718.4 50 with, the City, the Corporation or any of the other Members or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Bond Trustee taken upon an Opinion of Counsel shall be full protection to the Bond Trustee, SECTION 11.10. Money Held for Particular Bonds. The money held by the Bond Trustee for the payment of the interest, principal or Redemption Price due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust uninvested by it for the Holders of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04. SECTION 11.11. Funds and Accounts. The Bond Trustee may establish such funds and accounts as it deems necessary or appropriate to fulfill its obligations under this Bond Indenture. Any fund required by this Bond Indenture to be established and maintained by the Bond Trustee may be established and maintained in the accounting records of the Bond Trustee either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds shall at all times be maintained in accordance with customary standards of the corporate trust industry, to the extent practicable, and with due regard for the requirements of Section 6.06 and for the protection of the security of the Bonds and the rights of every Holder thereof. SECTION 11.12. Waiver of Personal Liability. No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal (or Redemption Price) of or interest on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by this Bond Indenture. SECTION 11.13. Business Days. If any date specified herein shall not be a Business Day, any action required on such date may be made on the next succeeding Business Day with the same effect as if made on such date. SECTION 11.14. Affiliates Not Liable. No organization with whom the Corporation is affiliated in any manner, other than the Members, is liable under this Bond Indenture, the Master Indenture, Obligation No. Lx] or the Loan Agreement for the commitments of the Corporation or any of the Members. SECTION 11.15. Governing Law and Venue. This Bond Indenture and the Bonds are contracts made under the laws of the State of California, and shall be governed by and construed in accordance with the Constitution and such laws applicable to contracts made and performed in said State. SECTION 11.16. Execution in Several Counterparts. This Bond Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the City and the Bond Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. OHS West:260645718.4 51 IN WITNESS WHEREOF, CITY OF NEWPORT BEACH has caused this Bond Indenture to be signed in its name by its Mayor and its seal to be hereunto affixed and attested by its City Clerk, and WELLS FARGO BANK, NATIONAL ASSOCIATION, in token of its acceptance of the trusts created hereunder, has caused this Bond Indenture to be signed in its corporate name by its duly authorized officer, all as of the day and year first above written. [SEAL] Attest: : City Clerk OHS West260645718.4 CITY OF NEWPORT BEACH Un Mayor WELLS FARGO BANK, NATIONAL ASSOCIATION, as Bond Trustee Authorized Officer NUMBER R -1 Iu�4411:3YII.1 FORM OF BOND [NOT YET FULLY UPDATED OR REVIEWED] CITY OF NEWPORT BEACH REVENUE BONDS (HOAG MEMORIAL HOSPITAL PRESBYTERIAN) SERIES 2009A INTEREST MATURITY DATED RATE DATE DATE _% June 1, 2009 REGISTERED HOLDER: Cede & Co. AMOUNT $[2009A PAR] CUSIP NUMBER PRINCIPAL AMOUNT: [PRINCIPAL AMOUNT IN WORDS] DOLLARS CITY OF NEWPORT BEACH, a public entity of the State of California (herein called the "City "), for value received, hereby promises to pay (but only out of the Revenues and other assets pledged therefor as hereinafter mentioned) to the registered holder stated above, or registered assigns, on the maturity date specified above (subject to any right of prior redemption hereinafter mentioned), the principal amount stated above in lawful money of the United States of America; and to pay interest thereon (but only from said Revenues and other assets pledged therefor) in like lawful money from the date hereof until payment of such principal sum shall be discharged as provided in the Bond Indenture hereinafter mentioned, at the rate per annum stated above, payable on June 1 and December 1 of each year, commencing December 1, 2009. The principal (or redemption price) hereof is payable upon surrender at the Corporate Trust Office (as defined in the Bond Indenture) of Wells Fargo Bank, National Association (herein called the "Bond Trustee "). Interest hereon is payable by check mailed by first class mail on each interest payment date (except with respect to defaulted interest) to the person whose name appears on the bond registration books of the Bond Trustee as the registered holder hereof on the fifteenth (15th) day (whether or not a Business Day as defined in the Bond Indenture hereinafter defined) of the calendar month preceding the calendar month in which such related Interest Payment Date falls (the "Record Date ") at the address appearing on the bond registration books maintained by the Bond Trustee, or by wire transfer to an account within the United States of America to any registered holder of at least $1,000,000 in principal amount of Bonds if such registered holder has submitted a written request for such wire transfer to the Bond Trustee at least one Business Day prior to the Record Date. Interest shall be calculated on a three hundred sixty (360) day year basis of twelve (12) thirty (30) day months. OHS West:260645718.4 A -1 This Bond is one of a duly authorized issue of bonds of the City designated as "City of Newport Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series 2009x" (herein called the "Bonds "), limited in aggregate principal amount to forty-seven million three hundred twenty -five thousand dollars ($[2009A PAR]). The Bonds are issued pursuant to a bond indenture, dated as of June 1, 2009, between the City and the Bond Trustee (herein called the "Bond Indenture "). The Bonds are issued for the purpose of making a loan to Hoag Memorial Hospital Presbyterian (herein called the "Corporation "), pursuant to a loan agreement, dated as of June 1, 2009 (herein called the "Loan Agreement "), between the City and the Corporation, for the purposes and on the terms and conditions set forth therein. The Bonds are further secured by an assignment of the right, title and interest of the City in the Loan Agreement (to the extent and as more particularly described in the Bond Indenture) and in Obligation No. [X], dated as of June 1, 2009 (herein called "Obligation No. [X] "), and issued by the Corporation, pursuant to the terms of a master trust indenture, dated as of May 1, 2007 (the "Master Indenture "), between the Corporation, Newport Health Care Center LLC, a California limited liability company ( "NHC "), the sole corporate member for which is the Corporation, and Wells Fargo Bank, National Association, as master trustee (the "Master Trustee ") and a supplemental master indenture, dated as of June 1, 2009, between the Corporation and the Master Trustee. Reference is hereby made to the Bond Indenture (a copy of which is on file at said Corporate Trust Office of the Bond Trustee) and all indentures supplemental thereto and, to the Loan Agreement (a copy of which is on file at said Corporate Trust Office of the Bond Trustee) for a description of the rights thereunder of the registered holders of the Bonds, of the nature and extent of the security, of the rights, duties and immunities of the Bond Trustee and of the rights and obligations of the City thereunder, to all the provisions of which Bond Indenture and Loan Agreement the registered holder of this Bond, by acceptance hereof, assents and agrees. All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Bond Indenture. The Bonds and the interest thereon are payable from Revenues and, from certain funds and accounts established and maintained under the Bond Indenture, and are secured by a pledge and assignment of said Revenues and of amounts held in the funds and accounts established pursuant to the Bond Indenture (including proceeds of the sale of the Bonds but excluding amounts held in the Rebate Fund), subject only to the provisions of the Bond Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Bond Indenture. The Bonds are further secured by an assignment of the right, title and interest of the City in the Loan Agreement and in Obligation No. [X] (to the extent and as more particularly described in the Bond Indenture). THE BONDS DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF, OTHER THAN THE AUTHORITY, BUT SHALL BE PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR. THE AUTHORITY SHALL NOT BE OBLIGATED TO PAY THE PRINCIPAL OF THE BONDS, OR THE REDEMPTION PREMIUM, IF ANY, OR INTEREST THEREON, EXCEPT FROM THE FUNDS PROVIDED UNDER THIS INDENTURE AND THE LOAN AGREEMENT AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY, IS PLEDGED TO THE PAYMENT OF THE OHS West260645718.4 A -2 PRINCIPAL OF OR THE REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY OR TO PLEDGE ANY FORM OF TAXATION OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. THE AUTHORITY HAS NO TAXING POWER. The Bonds are subject to redemption prior to their maturity in part, by lot, from Mandatory Sinking Account Payments, as provided in the Bond Indenture, on any December 1, on or after December 1, 20 , at the principal amount thereof together with interest accrued thereon to the date fixed for redemption, without premium. The Bonds are subject to redemption prior to their stated maturity, at the option of the City (which option shall be exercised upon Request of the Corporation given (unless waived by the Bond Trustee) at least forty -five (45) days prior to such redemption date), from any source of available funds, as a whole or in part on any date on or after December 1, 20_, by lot, at a Redemption Price equal to 100% of the principal amount of Bonds called for redemption, together with interest accrued thereon to the date fixed for redemption. The Bonds are subject to redemption prior to their stated maturity, at the option of the City (which option shall be exercised upon Request of the Corporation given to the Bond Trustee (unless waived by the Bond Trustee) at least forty -five (45) days prior to the date fixed for redemption) in whole or in part in such amounts and maturities as may be specified by the Corporation, by lot, on any date, from hazard insurance or condemnation proceeds received with respect to the facilities of any of the Members and deposited in the Special Redemption Account, at a Redemption Price equal to the principal amount thereof, without premium. Notice of redemption shall be mailed by the Bond Trustee, not less than thirty (30) days, and not more than sixty (60) days prior to the redemption date, to the respective holders of any Bonds designated for redemption at their addresses appearing on the bond registration books of the Bond Trustee. If this Bond is called for redemption and payment is duly provided therefor as specified in the Bond Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption. Any notice of redemption may be rescinded by written notice delivered in the same manner as the initial redemption notice up through ten day prior to the proposed redemption date. If an Event of Default shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Bond Indenture. The Bond Indenture provides that in certain events such declaration and its consequences may be rescinded by the holders of not less than a majority in aggregate principal amount of the Bonds then outstanding or by the Bond Trustee. The Bonds are issuable only as fully registered Bonds 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 Bond Indenture, Bonds may be exchanged, at the Corporate Trust Office of the Bond Trustee, for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity. OHS West:260645718.4 A -3 This Bond is transferable by the registered holder hereof, in person or by his attorney duly authorized in writing, at the Corporate Trust Office of the Bond Trustee, but only in the manner, subject to the limitations and upon payment of the charges, if any, provided in the Bond Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a Bond or Bonds, of authorized denomination or denominations, of the same maturity and for the same aggregate principal amount, will be issued to the transferee in exchange herefor. The City and the Bond Trustee may treat the registered holder hereof as the absolute owner hereof for all purposes, and the City and the Bond Trustee shall not be affected by any notice to the contrary. The Bond Indenture and the rights and obligations of the City and of the registered holders of the Bonds and of the Bond 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 Bond Indenture; provided that no such modification or amendment shall (i) extend the fixed maturity of this Bond, or reduce the amount of principal hereof, or extend the time of payment or reduce the amount of any Mandatory Sinking Account Payment provided in the Bond Indenture for the payment of the Bonds, or reduce the rate of interest hereon, or change the method of determining the rate of interest thereon, or extend the time of payment of interest hereon, or reduce any premium payable upon the redemption hereof, without the consent of the registered holder hereof, or (ii) reduce the percentage of Bonds the consent of the registered holders of which is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under the Bond Indenture prior to or on a parity with the lien created by the Bond Indenture, or deprive the registered holders of the Bonds of the lien created by the Bond Indenture on such Revenues and other assets (except as expressly provided in the Bond Indenture), without the consent of the registered holders of all Bonds then outstanding, all as more fully set forth in the Bond Indenture. It is hereby certified and recited that any and all act, conditions and things 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 by the Constitution and laws of the State of California, and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any limit prescribed by the Constitution and laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Bond Indenture. This Bond shall not be entitled to any benefit under the Bond Indenture, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been signed by the Bond Trustee. OHS West:260645718.4 A -4 IN WITNESS WHEREOF, CITY OF NEWPORT BEACH has caused this Bond to be executed in its name and on its behalf by the facsimile signature of its Mayor and its seal to be reproduced hereon by facsimile and attested by the facsimile signature of its City Clerk, all as of the date set forth above. 14Tr'LO7MeL�li�/Y�]:711 go (Seal) Attest: L-3 City Clerk OHS West260645718.4 A -5 Mayor [FORM OF BOND TRUSTEE'S CERTIFICATE OF AUTHENTICATION AND REGISTRATION] This is one of the Bonds described in the within mentioned Bond Indenture, which has been authenticated on the date set forth below. Dated: , 2009. WELLS FARGO BANK, NATIONAL ASSOCIATION, as Bond Trustee Authorized Signatory OHS West26W5718.4 A -6 [FORM OF ASSIGNMENT] For value received, the undersigned do(es) hereby sell, assign and transfer unto the within- mentioned Bond and hereby irrevocably constitute(s) and appoint(s) , attorney, to transfer the same on the books of the within - named Bond Trustee, with full power of substitution in the premises. Dated: NOTICE: Signature must be guaranteed by a qualified guarantor institution. OHS West:260645718.4 A -7 EXHIBIT B FORM OF REQUISITION — COSTS OF ISSUANCE FUND REQUISITION NO. _ - COSTS OF ISSUANCE FUND Re: City of Newport Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series 2009A Hoag Memorial Hospital Presbyterian (the "Corporation ") hereby requests Wells Fargo Bank, National Association (the "Bond Trustee "), as Bond Trustee under the bond indenture between the City of Newport Beach (the "City ") and the Bond Trustee, dated as of June 1, 2009, relating to the City of Newport Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series 2009A (the "Bonds "), to pay to the following Persons the following amounts for the following purposes from the Costs of Issuance Fund: ITEM NO. TO AMOUNT PURPOSE OHS West260645718.4 B -1 The Corporation hereby certifies that obligations in the amounts stated above have been incurred by the Corporation and are presently due and payable, and that each item is a proper charge against the Costs of Issuance Fund and has not been previously paid from said fund or from the proceeds of the Bonds. Dated: 20 . HOAG MEMORIAL HOSPITAL PRESBYTERIAN LE Authorized Representative OHS West260645718.4 B -2 EXHIBIT B FORM OF REQUISITION - PROJECT FUND REQUISITION NO. _ - PROJECT FUND To: Wells Fargo Bank, National Association 707 Wilshire Boulevard Los Angeles, California Attn: Corporate Trust Services Re: City of Newport Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series 2009A (the "Bonds ") The undersigned, on behalf of Hoag Memorial Hospital Presbyterian (the "Corporation "), hereby requests payment, from the Project Fund (as defined in the Indenture executed and delivered in connection with the Bonds, the "Indenture "), the total amount shown below to the order of the payee or payees named below, as payment or reimbursement for costs incurred or expenditures made in connection with the Project (as defined in the Indenture). The item number of payment, payee(s), the purpose by serial classification and the amount of the disbursement requested are as follows: SEE SCHEDULE I ATTACHED HERETO The Corporation hereby certifies as follows: That each obligation mentioned herein is relating to the Project, has been properly incurred by the Corporation and is presently due and payable and is a proper charge against the Project Fund, and each item for which payment is requested is or was necessary in connection with the acquisition, construction, installation, or rehabilitation of the Project. None of the items for which payment is requested has been paid previously from the Project Fund and is only made with respect to elements of the Project for which all approvals, if any, required under the California Environmental Quality Act have been previously finalized, none of the payments herein requested will result in a breach of the representations and agreements in the Tax Agreement (as defined in the Indenture) relating to the Project. Dated: HOAG MEMORIAL HOSPITAL PRESBYTERIAN Authorized Representative OHS West260645718.4 C -1 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS SECTION1.01. Definitions ........................................................................ ..............................3 SECTION 1.02. Content of Certificates and Opinions .............................. .............................14 SECTION 1.03. Interpretation ................................................................... .............................14 ARTICLE II SECTION 2.01. Authorization of Bonds ................................................... .............................15 SECTION SECTION 2.02. Terms of the Bonds ......................................................... .............................15 4.02. SECTION 2.03. Execution of Bonds ......................................................... .............................16 20 SECTION 2.04. Transfer of Bonds ............................................................ .............................16 SECTION SECTION 2.05. Exchange of Bonds ......................................................... .............................17 21 SECTION 2.06. Bond Register .................................................................. .............................17 SECTION 2.07. Temporary Bonds ............................................................ .............................17 SECTION 2.08. Bonds Mutilated, Lost, Destroyed or Stolen ................... .............................17 SECTION 2.09. Use of Securities Depository ........................................... .............................18 ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS SECTION 3.01. Issuance of Bonds ........................................................... .............................19 SECTION SECTION 3.02. Application of Proceeds of Bonds ................................... .............................19 4.02. SECTION 3.03. Establishment and Application of Costs of issuance Fund .......................... 20 SECTION 3.04. Establishment and Application of Project Fund .............. .............................20 SECTION SECTION 3.05. Validity of Bonds .......................................................... ............................... 21 ARTICLE IV ARTICLE V REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST SECTION 5.01. Pledge and Assignment; Revenue Fund ........................ ............................... 24 SECTION 5.02. Allocation of Revenues ................................................. ............................... 25 OHS Wes1:260645718.4 _i_ REDEMPTION OF BONDS SECTION 4.01. Terms of Redemption ... ............................... SECTION 4.02. Selection of Bonds for Redemption ............ SECTION 4.03. Notice of Redemption .. ............................... SECTION 4.04. Partial Redemption of Bonds ...................... SECTION 4.05. Effect of Redemption ... ............................... SECTION 4.06. Purchase in Lieu of Optional Redemption.. ARTICLE V REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST SECTION 5.01. Pledge and Assignment; Revenue Fund ........................ ............................... 24 SECTION 5.02. Allocation of Revenues ................................................. ............................... 25 OHS Wes1:260645718.4 _i_ TABLE OF CONTENTS (continued) Page SECTION 5.03. Application of Interest Account .................................... ............................... 25 SECTION 5.04. Application of Principal Account .................................. ............................... 25 SECTION 5.05. Application of Redemption Fund .................................. ............................... 27 SECTION 5.06. Rebate Fund .................................................................. ............................... 27 SECTION 5.07. Investment of Moneys in Funds and Accounts ............. ............................... 28 ARTICLE VI PARTICULAR COVENANTS SECTION 6.01. Punctual Payment ............................................................ .............................29 38 SECTION 6.02. Extension of Payment of Bonds .................................... ............................... 30 SECTION 6.03. Against Encumbrances .................................................... .............................30 34 SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment ........................... 30 SECTION 6.05. Accounting Records and Financial Statements ............... .............................30 36 SECTION 6.06. Tax Covenants ............................................................... ............................... 31 SECTION 6.07. Enforcement of Loan Agreement and Obligation No. [X] ........................... 31 SECTION 6.08. Amendment of Loan Agreement ................................... ............................... 31 SECTION 6.09. Waiver of Laws ............................................................... .............................32 37 SECTION 6.10. Further Assurances ........................................................ ............................... 32 SECTION 6.11. Continuing Disclosure ..................................................... .............................32 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS SECTION 7.01. Events of Default ............................................................. .............................33 38 SECTION 7.02. Acceleration of Maturities ............................................. ............................... 33 SECTION 7.03. Application of Revenues and Other Funds After Default ............................ 34 SECTION 7.04. Bond Trustee to Represent Bondholders ....................... ............................... 35 SECTION 7.05. Bondholders' Direction of Proceedings ........................ ............................... 36 SECTION 7.06. Limitation on Bondholders' Right to Sue ..................... ............................... 36 SECTION 7.07. Absolute Obligation of City .......................................... ............................... 37 SECTION 7.08. Termination of Proceedings .......................................... ............................... 37 SECTION 7.09. Remedies Not Exclusive ............................................... ............................... 37 SECTION 7.10. No Waiver of Default .................................................... ............................... 37 ARTICLE VIII THE BOND TRUSTEE SECTION 8.01. Appointment, Duties, Immunities and Liabilities of Bond Trustee ............. 38 SECTION 8.02. Merger or Consolidation ............................................... ............................... 39 SECTION 8.03. Liability of Bond Trustee .............................................. ............................... 40 SECTION 8.04. Right of Bond Trustee to Rely on Documents .............. ............................... 41 SECTION 8.05. Preservation and Inspection of Documents ................... ............................... 42 OHS We t260645718.4 -ii- TABLE OF CONTENTS (continued) Page SECTION 8.06. Compensation and Indemnification .............................. ............................... 42 SECTION 8.07. Bond Trustee's Relationship to City ............................. ............................... 42 ARTICLE IX MODIFICATION OR AMENDMENT OF THIS INDENTURE SECTION 9.01. Amendments Permitted ................................................... .............................43 45 SECTION 9.02. Effect of Supplemental Bond Indenture .......................... .............................44 46 SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds ..... ............................... 45 SECTION 9.04. Amendment of Particular Bonds ..................................... .............................45 47 ARTICLE X DEFEASANCE SECTION 10.01. Discharge of Bond Indenture ........................................ ............................... 45 SECTION 10.02. Discharge of Liability on Bonds ................................... ............................... 46 SECTION 10.03. Deposit of Money or Securities with Bond Trustee ...... ............................... 46 SECTION 10.04. Payment of Bonds After Discharge of Bond Indenture ............................... 47 ARTICLE XI MISCELLANEOUS SECTION 11.01. Limited Liability of City ............................................... ............................... 48 SECTION 11.02. Successor is Deemed Included in All References to Predecessor ................ 48 SECTION 11.03. Limitation of Rights to Parties, Corporation and Bondholders .................... 48 SECTION 11.04. Waiver of Notice ........................................................... ............................... 48 SECTION 11.05. Destruction of Bonds ..................................................... ............................... 48 SECTION 11.06. Severability of Invalid Provisions ................................... .............................48 SECTION 11.07. Notices ............................................................................. .............................48 SECTION 11.08. Evidence of Rights of Bondholders .............................. ............................... 50 SECTION 11.09. Disqualified Bonds ........................................................ ............................... 50 SECTION 11.10. Money Held for Particular Bonds ................................. ............................... 51 SECTION 11.11. Funds and Accounts ...................................................... ............................... 51 SECTION 11.12. Waiver of Personal Liability ......................................... ............................... 51 SECTION 11.13. Business Days ............................................................... ............................... 51 SECTION 11.14. Affiliates Not Liable ..................................................... ............................... 51 SECTION 11.15. Governing Law and Venue ........................................... ............................... 51 SECTION 11.16. Execution in Several Counterparts ................................ ............................... 51 EXHIBIT A FORM OF BOND ............................................................ ............................A -1 EXHIBIT B FORM OF REQUISITION — COSTS OF ISSUANCE FUND ................... B -1 OHS West:260645718.4 -iii-