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HomeMy WebLinkAboutClosing TranscriptQuint & Thimmig LLP 2/6/24 $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) SCHEDULE OF TRANSCRIPT DOCUMENTS A. BASE LEGAL DOCUMENTS List of Financing Participants. 2. Proof of Publication of Notice of Joint Public Hearing in the Tustin News on January 25, 2024, regarding Public Hearing held on February 6, 2024. 3. Tustin Public Financing Authority (the "Authority") Resolution No. 24-01, entitled "RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF WATER REVENUE BONDS TO FINANCE IMPROVEMENTS TO THE CITY OF TUSTIN'S MUNICIPAL WATER ENTERPRISE AND APPROVING RELATED DOCUMENTS AND OFFICIAL ACTIONS," adopted by the Board of Directors of the Authority on February 6, 2024, together with a Certificate Regarding Authority Resolution. 4. City of Tustin (the "City") Resolution No. 24-07, entitled "RESOLUTION APPROVING PROCEEDINGS BY THE TUSTIN PUBLIC FINANCING AUTHORITY FOR THE ISSUANCE AND SALE OF ITS TUSTIN PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) WATER REVENUE BONDS TO FINANCE IMPROVEMENTS TO THE CITY'S MUNICIPAL WATER SYSTEM APPROVING THE FORM AND AUTHORIZING EXECUTION OF RELATED DOCUMENTS AND APPROVING RELATED OFFICIAL ACTIONS," adopted by the City Council of the City on February 6, 2024, together with a Certificate Regarding City Resolution. 5. Acknowledgment No. 2024-073, of Receipt of Report of Proposed Debt Issuance (Authority) from the California Debt and Investment Advisory Commission ("CDIAC"), together with Report, and Acknowledgment No. 2024-076, of Receipt of Report of Proposed Debt Issuance (City) from CDIAC, together with Report. 6. Commitment Agreement, dated February 14, 2024 (the "Commitment Agreement"), by Capital One Public Funding LLC, as purchaser (the "Purchaser"), as accepted by the City and the Authority. 7. Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). 8. Installment Sale Agreement, dated as of February 1, 2024, by and between the Authority, as seller and the City, as purchaser. 9. Placement Agent Agreement, dated February 14, 2024, by and among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as placement agent. 10. Certificate of Delivery of Report of Final Sale to CDIAC, together with Report. B. AUTHORITY DOCUMENTS 1. Initial Notice as to Joint Powers Agreement, filed with and certified by the California Secretary of State, together with any and all amendments thereto, and with a Statement of Facts Roster Filing, as certified by the California Secretary of State. 2. Certificate Regarding Effectiveness of Joint Exercise of Powers Agreement, together with Joint Exercise of Powers Agreement and any and all amendments thereto. 3. Incumbency and Signature Certificate of the Authority. 4. Certificate as to Arbitrage. 5. Certificate of the Authority, pursuant to Section 4(e)(6) of the Commitment Agreement. 6. Written Request of the Authority to the Trustee regarding authentication and delivery of the Bonds, pursuant to Section 3.01 of the Indenture. 7. Written Requisition No. 1 of the Authority for Disbursement from the Costs of Issuance Fund, pursuant to Section 3.03 of the Indenture. 8. Form of Written Requisition of the Authority for Disbursement from the Project Fund, pursuant to Section 3.04 of the Indenture. 9. Written Request to the Trustee Regarding Investments, pursuant to Section 5.05 of the Indenture, as acknowledged by the Trustee. 10. Certificate of Mailing Information Return for Tax -Exempt Governmental Obligations, Form 8038-G, to the Internal Revenue Service Center, together with Form 8038-G. 11. Opinion of Woodruff, Spradlin & Smart, P.C., as City Attorney and General Counsel to the Authority, pursuant to Section 4(e)(4) of the Commitment Agreement. C. CITY DOCUMENTS 1. Incumbency and Signature Certificate of the City. 2. Certificate of the City, pursuant to Section 4(e)(7) of the Commitment Agreement. IPA 3. Certificate Regarding Use of Proceeds. 4. Certificate of the City Regarding Subordinate Obligations. D. TRUSTEE DOCUMENTS 1. General Signing Resolution of the Trustee, pursuant to Section 4(e)(9) of the Commitment Agreement. 2. Certificate of Trustee, pursuant to Section 4(e)(8) of the Commitment Agreement. 3. Trustee's Receipt of Bond Proceeds. 4. Opinion of Foley & Lardner LLP, as Counsel to the Trustee, pursuant to Section 4(e)(5) of the Commitment Agreement. E. PURCHASER AND CONSULTANT DOCUMENTS 1. Receipt for Bonds. 2. Specimen Bond. 3. Lender Certificate. 4. Representation Letters. F. BOND COUNSEL DOCUMENTS 1. Final Approving Legal Opinion of Quint & Thimmig LLP, as bond counsel ("Bond Counsel"). 2. Supplemental Opinion of Bond Counsel, pursuant to Section 4(e)(3) of the Commitment Agreement. 3. Reliance Letter to the Purchaser and the Trustee Regarding Final Approving Legal Opinion of Bond Counsel. G. MISCELLANEOUS DOCUMENTS 1. Final Numbers. 2. City Resolution No. 24-08, entitled "RESOLUTION APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF A FIRST AMENDMENT TO THE INDENTURE OF TRUST, DATED AS OF SEPTEMBER 1, 2016, BY AND BETWEEN THE CITY AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., RELATING TO THE $21,515,000 CITY OF TUSTIN (ORANGE COUNTY, CALIFORNIA) 2016 WATER REFUNDING REVENUE BONDS, AND A FIRST AMENDMENT TO THE INDENTURE OF TRUST, DATED AS OF FEBRUARY 1, 2020, BY AND BETWEEN THE CITY AND THE BANK OF NEW -3- YORK MELLON TRUST COMPANY, N.A., RELATING TO THE $14,910,000 CITY OF TUSTIN (ORANGE COUNTY, CALIFORNIA) TAXABLE WATER REFUNDING REVENUE BONDS, SERIES 2020," adopted by the City Council of the City on February 6, 2024, together with a Certificate Regarding City Resolution. 3. Indenture of Trust, dated as of September 1, 2016, by and between the City and the Trustee (the "2016 Indenture"). 4. First Amendment to Indenture of Trust, dated as of February 1, 2024, by and between the City and the Trustee, amending the 2016 Indenture. 5. Indenture of Trust, dated as of February 1, 2020, by and between the City and the Trustee (the "2020 Indenture"). 6. First Amendment to Indenture of Trust, dated as of February 1, 2024, by and between the City and the Trustee, amending the 2020 Indenture. 153 Quint & Thimmig LLP 1/29/24 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) AUTHORITY / CITY Ms. Jennifer King Finance Director/Treasurer Mr. Sean Tran Deputy Director -Administrative Services City of Tustin 300 Centennial Way Tustin, CA 92780 (714) 573-3079 (King) (714) 573-3078 (Tran) jking@tustinca.org stran@tustinca.org CITY ATTORNEY/AYTHORITY COUNSEL David E. Kendig, Esq. Woodruff, Spradlin & Smart, P.C. 555 Anton Boulevard, Suite 1200 Costa Mesa CA 92626 (714)415-1083 dkendig@wss-law.com MUNICIPAL ADVISOR Mr. James V. Fabian Principal Ms. Un Chu Reardon Senior Vice President Ms. Mindy Kays Associate Fieldman, Rolapp & Associates 19900 MacArthur Boulevard, Suite 1100 Irvine, CA 92612 (949) 246-2344 (Fabian) (415) 933-0968 (Reardon) (808) 342-6165 (Kays) jfabian@fieldman.com ureardon@fieldman.com mkays@fieldman.com PLACEMENT AGENT Ms. Sara Oberlies Brown Mr. Luke Czepiel Stifel, Nicolaus & Company, Incorporated One Montgomery Street, 35th Floor San Francisco, CA 94104 (415) 364-6872 (Brown) (213) 443-5012 (Czepiel) sbrown@stifel.com czepiell@stifel.com Financing Participants PLACEMENT AGENT COUNSEL Juan Galvan, Esq. Jones Hall 475 Sansome Street, Suite 1700 San Francisco, CA 94111 (415)391-5780 x229 jgalvan@joneshall.com TRUSTEE Mr. Seth Crone, CFA, CPA Senior Vice President Ms. Deborah Young Vice President Mr. Patrick A. Olan Associate, Client Service II The Bank of New York Mellon Trust Company, N.A. 333 South Hope Street, Suite 2525 Los Angeles, California 90071 (713) 483-6568 (Crone) (213) 630-6260 (young) (213) 553-4413 (Olan) seth.crone@bnymellon.com deborah.young@bnymellon.com aldrinpatrick.olan@bnymellon.com TRUSTEE'S COUNSEL Laura L. Bilas, Esq. Foley & Lardner LLP 321 North Clark Street, Suite 3000 Chicago, IL 60654-4762 (312)832-4533 lbilas@foley.com 20027.04 PURCHASER Mr. Jonathan A. Lewis President / Manager Ms. Maryann Santos Mr. Drew Scrivener Mr. John Flaherty Mr. James Mullins Ms. Catherine M. DeLuca Mr. Robert Steimel Mr. Paul Sottnik Ms. Brenda C. Barnes Mr. Jeffrey D. Sharp Senior Vice President Director of Business Development Capital One Public Funding, LLC 1307 Walt Whitman Road, 3rd Floor Melville, New York 11747 (631) 531-2824 (Lewis) (631) 776-3843 (Santos) (631) 776-3844 (Scrivener) (631) 776-3715 (Flaherty) (631) 776-3733 (Mullins) (631) 531-2802 (DeLuca) (631) 776-3847 (Steimel) (516) 272-6783 (Sottnik) (860) 422-3612 (Barnes) (505) 400-0860 (Sharp) jonathan.lewis@capitalone.com maryann.santos@capitalone.com drew.scrivener@capitalone.com john.flaherty@capitalone.com james.mullins@capitalone.com catherine.deluca@capitalone.com robert.steimel@capitalone.com paul.sottnik@capitalone.com brenda.barnes@capitalone.com jeffrey.sharp@capitalone.com PURCHASER'S COUNSEL Jonathan Cristy, Esq. Kronick, Moskovitz, Tiedemann & Girard 1331 Garden Highway, 2nd Floor Sacramento, CA 95833 (916)321-4571 jcristy@kmtg.com BOND COUNSEL Brian D. Quint, Esq. Quint & Thimmig LLP (415) 925-4200 x101 (415) 272-8100 (Cell) bquint@qtllp.com IRVINE IN--s1- WORLD NEWS TUSTINNEWS 1920 Main St. Suite 225 Irvine, California 92614 (714) 796-2209 legals@inlandnewspapers.com Quint & Thimmig LLP 900 Larkspur Landing Circle Larkspur, California 94939 Account Number: 5272431 Ad Order Number: 0011642656 Customer's Reference/PO Number: Publication: The Tustin News Publication Dates: 01/25/2024 Total Amount: $219.13 Payment Amount: $0.00 Amount Due: $219.13 Notice ID: OTylglg6WBWcnqNFpBZj Invoice Text: NOTICE OF JOINT PUBLIC HEARING CITY COUNCIL OF THE CITY OF TUSTIN and BOARD OF DIRECTORS OF THE TUSTIN PUBLIC FINANCING AUTHORITY NOTICE IS HEREBY GIVEN that the City Council of the City of Tustin (the "City") and the Board of Directors of the Tustin Public Financing Authority (the "Authority"), on Tuesday, February 6, 2024, at the hour of 7:00 p.m., in the City Council Chambers, located in the Tustin City Hall at 300 Centennial Way, Tustin, California, will hold a joint public hearing in accordance with section 6586.5(a)(2) of the California Government Code with respect to the financing of improvements by means of the issuance of revenue bonds (the "Bonds") by the Authority in an amount not to exceed $4,500,000. The improvements to be financed are located in the City and will constitute part of the municipal water enterprise of the City. Notice is further given that at said hearing all interested persons will have an opportunity to be heard with respect to the financing of the improvements with proceeds of the Bonds and the public benefits arising from the financing. Written comments may be submitted at or before the hearing to Ms. Erica N. Yasuda, City Clerk, City of Tustin, 300 Centennial Way, Tustin, CA 92780. Dated: January 25, 2024 CITY COUNCIL OF THE CITY OF TUSTIN and BOARD OF DIRECTORS OF THE TUSTIN PUBLIC FINANCING AUTHORITY Not Pub Hearing Tustin - Page 1 of 1 IRVINE INCLUDES THE WORLD NEWS TUSTINNEWS The Tustin News 1920 Main St. Suite 225 Irvine, California 92614 ryn-Zcuy 900 Larkspur Landing Circle, Suite 270 Larkspur, California 94939 AFFIDAVIT OF PUBLICATION STATE OF CALIFORNIA County of Orange County I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the above entitled matter. I am the principal clerk of the The Tustin News, a newspaper that has been adjudged to be a newspaper of general circulation by the Superior Court of the County of Orange County, State of Orange County, on August 24, 1928, Case No. A-601 in and for the City of Irvine, County of Orange County, State of California; that the notice, of which the annexed is a true printed copy, has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to wit: 0112512024 I certify (or declare) under the penalty of perjury under the laws of the State of California that the foregoing is true and correct: Executed at Anaheim, Orange County, California, on Date: Jan 25, 2024. Signature NOTICE OF JOINT PUBLIC HEARING CITY COUNCILOF THE CITY OF TUSTIN a tic] BOARD OF DI RECTORS OF THE TUSTIN PUBLIC FINANCING AUTHORITY NOTICE IS HEREBY GIVEN that the City Councll of the City of Tustin (the "City") and the Board of Directors of the Tustin Public Flnancing Authority (the "Authority"), on Tuesday, February 6, 2024, at the hourof 7:00 p.m., In the City Council Chambers, located In the Tustin City Hall at 300 Centennial Way, Tustin, California, will hold a Iolnt public hearing In accordance with section 6586.5(a) (2) of the California Government Code with respect to the financing of Improvements by means of the Issuance of revenue bonds (the 'Bonds") by the Authority In an amount not to exceed $4,500,000. The Improvements to be financed are located In the City and wlII constitute part of the munlcIpaI water enterprise of the City. Notice is further given that at said hearing all interested persons will have an opportunity to be heard with respect to the financing of the Improvements with proceeds of the Bonds and the public benefits arising from the flnancing. Written comments may be submitted at or before the hearing to Ms. Erica N. Yasuda, City Clerk, City of Tustln, 300 CentennlaI Way, Tustln, CA 92780. Dated: January 25, 2024 CITY COUNCIL OF THE CITY OF TUSTIN and BOARD OF DIRECTORS OF THE TUSTIN PUBLIC FINANCING AUTHORITY The Tustin News Published: 1/25/24 Not Pub Hearing Tustin - Page 1 of 1 Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE REGARDING AUTHORITY RESOLUTION The undersigned hereby states and certifies: 2/7/24 A3 (i) that the undersigned is the duly appointed, qualified and acting Secretary of the Tustin Public Financing Authority, a joint exercise of powers authority duly organized and existing under and by virtue of the laws of the State of California (the "Authority"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the Authority; and (ii) that attached hereto is a true, correct and complete copy of Resolution No. 24-01, entitled "RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF WATER REVENUE BONDS TO FINANCE IMPROVEMENTS TO THE CITY OF TUSTIN'S MUNICIPAL WATER ENTERPRISE AND APPROVING RELATED DOCUMENTS AND OFFICIAL ACTIONS," duly adopted by the Board of Directors of the Authority on February 6, 2024 (the "Resolution"), which Resolution has not been amended, modified, supplemented, rescinded or repealed and is in full force and effect as of the date hereof. Dated: February 14, 2024 TUSTIN PUBLIC FINANCING AUTHORITY By Eric . Yasuda, Secretary DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB TUSTIN PUBLIC FINANCING AUTHORITY RESOLUTION NO. 24-01 RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF WATER REVENUE BONDS TO FINANCE IMPROVEMENTS TO THE CITY OF TUSTIN'S MUNICIPAL WATER ENTERPRISE AND APPROVING RELATED DOCUMENTS AND OFFICIAL ACTIONS RESOLVED, by the Board of Directors (the "Board") of the Tustin Public Financing Authority (the "Authority"), as follows: WHEREAS, the City of Tustin (the "City") and the former Tustin Community Redevelopment Agency (the "Agency") have heretofore entered into a joint exercise of powers agreement (the "Agreement") establishing the Authority for the purpose, among others, of issuing its bonds to be used to provide financial assistance to the City; WHEREAS, the Successor Agency to the Tustin Community Redevelopment Agency succeeded to the Agency and the Agreement remains in effect so long as obligations of Agency remain outstanding, ending in 2040; WHEREAS, the City has determined that, due to prevailing financial market conditions, it is in the best interests of the City to finance the acquisition and construction of certain improvements and facilities (the "2024 Project") to the City's municipal water enterprise (the "Enterprise"); WHEREAS, for the purpose of raising funds necessary to provide such financial assistance to the City, the Authority proposes to authorize the issuance of its revenue bonds under the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"), designated as the Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"), all pursuant to and secured by an indenture of trust (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"); WHEREAS, in order to provide for the repayment of the Bonds, the Authority will sell the 2024 Project to the City pursuant to an installment sale agreement (the "Installment Sale Agreement"), under which the City will agree to make installment payments to the Authority payable from the net revenues of the Enterprise which will be calculated to be sufficient, in time and amount, to enable the Authority to pay the principal of and interest and premium (if any) on the Bonds when due and payable; Resolution 24-01 Page 1 of 4 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB WHEREAS, the City's obligations under the Installment Sale Agreement will be subordinate to the City's obligations with respect to the payment of debt service on its City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds and its City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020; WHEREAS, Capital One Public Funding, LLC (the "Purchaser") has proposed to purchase the Bonds and has presented to the Authority a form of bond purchase agreement for the Bonds, to be entered into among the Authority, the City and the Purchaser (the "Bond Purchase Agreement"); WHEREAS, the Board has duly considered such transactions and wishes at this time to approve said transactions in the public interests of the Authority; and WHEREAS, pursuant to section 5852.1 of the California Government Code, which became effective on January 1, 2018 by the enactment of Senate Bill 450, certain information relating to the Bonds is set forth in Exhibit A attached to this Resolution, and such information is hereby disclosed and made public; NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: Section 1. Issuance of Bonds; Approval of Indenture. The Board hereby authorizes the issuance of the Bonds under and pursuant to the Bond Law and the Indenture for the purpose of providing funds to finance the 2024 Project, so long as (a) the principal amount of Bonds does not exceed $4,125,000, (b) so long as the final maturity date of the Bonds is not later than April 1, 2044, and (c) the average interest rate on the Bonds is not higher than 4.820%. The Board hereby approves the Indenture in the form on file with the Secretary, together with such additions thereto and changes therein as the Chairperson, the Executive Director, the Assistant Executive Director or the Treasurer, or any designee thereof (the "Designated Officers") shall deem necessary, desirable or appropriate, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. The Designated Officers, each acting alone, are hereby authorized and directed to execute the final form of the Indenture for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of the Indenture. Section 2. Approval of Installment Sale Agreement. The Board hereby approves the Installment Sale Agreement in the form on file with the Secretary, together with such additions thereto and changes therein as the Designated Officers shall deem necessary, desirable or appropriate, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. The Designated Officers, each acting alone, are hereby authorized and directed to execute the final form -*of the Installment Sale Agreement for and in the name and on behalf of the Authority. Resolution 24-01 Page 2 of 4 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB The Board hereby authorizes the delivery and performance of the Installment Sale Agreement. Section 3. Approval of Placement Agent Agreement. The Board hereby approves the a placement agent agreement, by and among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as placement agent (the "Placement Agent Agreement"), in the form on file with the Secretary, together with such additions thereto and changes therein as the Designated Officers shall deem necessary, desirable or appropriate, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. The Designated Officers, each acting alone, are hereby authorized and directed to execute the final form of the Placement Agent Agreement for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of the Placement Agent Agreement. Section 4. Sale of Bonds. The Board hereby approves the sale of the Bonds by the Authority by negotiation with the Purchaser, pursuant to the Bond Purchase Agreement in the form on file with the Secretary, together with such additions thereto and changes therein as a Designated Officer shall deem necessary, desirable or appropriate, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. The Designated Officers, each acting alone, are hereby authorized and directed to execute the final form of the Bond Purchase Agreement for and in the name and on behalf of the Authority upon the submission of an offer by the Purchaser to purchase the Bonds, which offer is acceptable to a Designated Officer and consistent with the requirements of this Resolution. Section 5. Official Actions. The Chairperson, the Executive Director, the Treasurer, the Secretary and any and all other officers of the Authority are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the Bonds and the consummation of the transactions as described herein. Section 6. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. PASSED AND ADOPTED at a regular meeting of the Board of Directors of the Authority held on the 6th day of February 2024. Resolution 24-01 Page 3 of 4 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB Docu Signed by: D��° i==os�aEeaaa. . AUSTIN LUMBARD, Chair ATTEST: DS DocuSigned by: ERICA N. YASUDA, Secretary APPROVED AS TO FORM: FDocuSigned by: IGd1z' DA '�.'R MIG, Authority Counsel STATE OF CALIFORNIA. ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Erica N. Yasuda, Secretary of the Tustin Public Financing Authority, do hereby certify that the whole number of the members of the Board of Directors of the Tustin Public Financing Authority is five; that the above and foregoing Resolution No. 24-01 was duly passed and adopted at a regular meeting of the Tustin Public Financing Authority, held on the 6t" day of February 2024, by the following vote: BOARDMEMBER AYES: Lumbard, Gallagher, Gomez, Schnell (4) BOARDMEMBER NOES: (0) BOARDMEMBER ABSTAINED: (0) BOARDMEMBER ABSENT: Clark (1) BOARDMEMBER RECUSED: (0) DS DocuSigned by: ERICA N. YASUDA, Secretary Resolution 24-01 Page 4 of 4 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB LW.4;II-3ki_l GOVERNMENT CODE SECTION 5852.1 DISCLOSURE The following information consists of estimates that have been provided by Fieldman, Rolapp & Associates, the City's Municipal Advisor, which has been represented to have been provided in good faith: (A) True Interest Cost of the Bonds: 4.820% (B) Finance Charges: $125,000 (C) Net Proceeds to be Received: $4,000,000 (net of finance charges) (D) Total Payment Amount through Maturity: $6,559,029.71 The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The principal amount of the Bonds, the true interest cost of the Bonds, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the estimated amount used for purposes of such estimates, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the financing plan of the Authority and the City, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of the Bonds sold will be determined by the Authority and the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates with respect to the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the Authority and the City. Quint & Thinunig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE REGARDING CITY RESOLUTION The undersigned hereby states and certifies: 2/7/24 A4 (i) that the undersigned is the duly elected, qualified and acting City Clerk of the City of Tustin, a general law city and municipal corporation duly organized and existing under the laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the City; and (ii) that attached hereto is a true, correct and complete copy of Resolution No. 24-07, entitled "RESOLUTION OF THE CITY OF TUSTIN, CALIFORNIA, APPROVING PROCEEDINGS TO FINANCE IMPROVEMENTS TO THE CITY'S MUNICIPAL WATER SYSTEM, APPROVING THE ISSUANCE OF WATER REVENUE BONDS BY THE TUSTIN PUBLIC FINANCING AUTHORITY FOR SUCH PURPOSES AND APPROVING RELATED DOCUMENTS AND OFFICIAL ACTIONS," adopted by the City Council of the City on February 6, 2024 (the "Resolution"), which Resolution has not been amended, modified, supplemented, rescinded or repealed and is in full force and effect as of the date hereof. Dated: February 14, 2024 CITY OF TUSTIN By L # jjAA Eric N. Yasuda, ity Clerk DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB RESOLUTION NO. 24-07 RESOLUTION APPROVING PROCEEDINGS BY THE TUSTIN PUBLIC FINANCING AUTHORITY FOR THE ISSUANCE AND SALE OF ITS TUSTIN PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) WATER REVENUE BONDS TO FINANCE IMPROVEMENTS TO THE CITY'S MUNICIPAL WATER SYSTEM APPROVING THE FORM AND AUTHORIZING EXECUTION OF RELATED DOCUMENTS AND APPROVING RELATED OFFICIAL ACTIONS WHEREAS, the City of Tustin (the "City") and the former Tustin Community Redevelopment Agency (the "Agency") have heretofore entered into a joint exercise of powers agreement (the "Agreement") establishing the Tustin Public Financing Authority (the "Authority") for the purpose, among others, of issuing its bonds to be used to provide financial assistance to the City; WHEREAS, the Successor Agency to the Tustin Community Redevelopment Agency succeeded to the Agency and the Agreement remains in effect so long as obligations of Agency remain outstanding, ending in 2040; WHEREAS, the City proposes to finance the acquisition and construction of certain improvements and facilities (the "2024 Project") to the City's municipal water enterprise (the "Enterprise"); WHEREAS, for the purpose of raising funds necessary to provide such financial assistance to the City, the Authority proposes to authorize the issuance of its revenue bonds under the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"), designated as the Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"), all pursuant to and secured by an indenture of trust (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"); WHEREAS, in order to provide for the repayment of the Bonds, the Authority will sell the 2024 Project to the City pursuant to an installment sale agreement (the "Installment Sale Agreement"), under which the City will agree to make installment payments to the Authority payable from the net revenues of the Enterprise which will be calculated to be sufficient, in time and amount, to enable the Authority to pay the principal of and interest and premium (if any) on the Bonds when due and payable; WHEREAS, the City's obligations under the Installment Sale Agreement will be subordinate to the City's obligations with respect to the payment of debt service on its City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds and its Resolution 24-07 Page 1 of 5 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020; WHEREAS, Capital One Public Funding, LLC (the "Purchaser") has proposed to extend credit to the Authority and the City by purchasing the Bonds and has presented to the Authority and the City a form of commitment agreement for the Bonds, to be entered into among the Authority, the City and the Purchaser (the "Commitment Agreement"); WHEREAS, the City Council desires to make a finding of significant public benefit pursuant to section 6586.5(a)(2) of the California Government Code and to approve of the financing and the transactions contemplated by the Bonds; WHEREAS, the City Council approves all of said transactions in furtherance of the public purposes of the City, and wishes at this time to take its action approving the issuance and sale of the Bonds and the financing to be accomplished thereby; WHEREAS, the City Council has held a public hearing as required by section 6586.5 of the California Government Code; WHEREAS, issuance of the Bonds is in conformity with the City's Debt Policy; and WHEREAS, pursuant to section 5852.1 of the California Government Code, which became effective on January 1, 2018 by the enactment of Senate Bill 450, certain information relating to the Bonds is set forth in Exhibit A attached to this Resolution, and such information is hereby disclosed and made public; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OIF TUSTIN DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: Section 1. Recitals True and Correct. The City Council hereby finds and determines that the foregoing recitals are true and correct. Section 2. Findings. The finding being made is that significant public benefits will arise from the issuance of the Bonds to fund the property acquisition and other costs, including demonstrable savings in effective interest rate, bond preparation and bond issuance costs achieved by consolidating the assets being leased. Section 1. Approval of Bonds. The City Council hereby approves the issuance of the Bonds by the Authority for the purpose, among others, of providing funds to finance the 2024 Project, so long as (a) the principal amount of Bonds does not exceed $4,125,000, (b) so long as the final maturity date of the Bonds is not later than April 1, 2044, and (c) the average interest rate on the Bonds is not higher than 4.820%. Resolution 24-07 Page 2of5 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB Section 2. Approval of Installment Sale Agreement. The City Council hereby approves the Installment Sale Agreement in the form on file with the City Clerk, together with such additions thereto and changes therein as the Mayor, the City Manager or the Finance Director (the "Designated Officers") shall deem necessary, desirable or appropriate, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. The Designated Officers, each acting alone, are hereby authorized and directed to execute the final form of the Installment Sale Agreement for and in the name and on behalf of the City. The City Council hereby authorizes the delivery and performance of the Installment Sale Agreement. Section 3. Approval of Placement Agent Agreement. The City Council hereby approves the a placement agent agreement, by and among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as placement agent (the "Placement Agent Agreement"), in the form on file with the City Clerk, together with such additions thereto and changes therein as the Designated Officers shall deem necessary, desirable or appropriate, the execution of which by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes. The Designated Officers, each acting alone, are hereby authorized and directed to execute the final form of the Placement Agent Agreement for and in the name and on behalf of the City. The City Council hereby authorizes the delivery and performance of the Placement Agent Agreement. Section 4. Sale of Bonds. The City Council hereby approves the sale of the Bonds by the Authority by negotiation with the Purchaser pursuant to the Commitment Agreement in the form on file with the City Clerk, together with such additions thereto and changes therein as a Designated Officer shall deem necessary, desirable or appropriate, the execution of which by a Designated Officer shall be conclusive evidence of the approval of such additions and changes. The Designated Officers, each acting alone, are hereby authorized and directed to execute the final form of the Commitment Agreement for and in the name and on behalf of the City upon the submission of an offer by the Purchaser to purchase the Bonds, which offer is acceptable to a Designated Officer and consistent with the requirements of this Resolution. Section 5. Deposit to the Rate Stabilization Fund. Resolution No. 23-59, adopted by the City Council on December 5, 2023, adjusted the water rates provided by the City and, among other things, established and funded a rate stabilization fund in the amount of $1,063,300, being 5% of the City's expected 2024 water rate revenue. The City Council hereby authorizes the transfer from the City's Emergency Reserve Fund to the Rate Stabilization Fund such additional amount as may be required to insure that the City meets its rate covenant. Section 6. Official Actions. The Mayor, the City Manager, the Finance Director, the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and Resolution 24-07 Page 3of5 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the Bonds and the consummation of the transactions as described herein. Section 7. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. PASSED AND ADOPTED at a regular meeting of the City Council held on the 6th day of February 2024. DocuSigned by: E€eS63Erod4,4... AUSTIN LUMBARD, Mayor ATTEST: °S �DocuSigned by: Vi(& ga.Su'�,a 0 ERICA N. YASUDA, City Clerk APOPROVED AS TO FORM: DocuSigned by: DAb`ID8f3 ND I G, City Attorney Resolution 24-07 Page 4 of 5 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 24-07 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 6t" day of February 2024, by the following vote: COUNCILMEMBER AYES: Lumbard, Gallagher, Gomez, Schnell (4) COUNCILMEMBER NOES: (0) COUNCILMEMBER ABSTAINED: (0) COUNCILMEMBER ABSENT: Clark (1) COUNCILMEMBER RECUSED: (0) DS DocuSigned by: 4• `LV'iCa (�aStti�,a ERICA N. YASUDA, City Clerk Resolution 24-07 Page 5of5 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB LW.4;II-3ki_l GOVERNMENT CODE SECTION 5852.1 DISCLOSURE The following information consists of estimates that have been provided by the Fieldman, Rolapp & Associates, the City's Municipal Advisor which has been represented to have been provided in good faith: (A) True Interest Cost of the Bonds: 4.820% (B) Finance Charges: $125,000 (C) Net Proceeds to be Received: $4,000,000 (net of finance charges) (D) Total Payment Amount through Maturity: $6,559,029.71 The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The principal amount of the Bonds, the true interest cost of the Bonds, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the estimated amount used for purposes of such estimates, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the financing plan of the Authority and the City, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of the Bonds sold will be determined by the Authority and the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates with respect to the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the Authority and the City. �E STgPTgf Issuance Issuer Name: Issue Name: Project Name: REPORT OF PROPOSED DEBT ISSUANCE California Debt and Investment Advisory Commission, 915 Capitol Mall, Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Proposed Sale Date: Principal to be Sold: Is any portion of the principal to refund, redeem, paydown, or refinance outstanding debt? Issuer certifies that it has complied with Gov. Code section 8855(i) with respect to local debt policies: Marks -Roos Authority/TRAN Pool Authority: Marks -Roos Local Obligor/TRAN Participant: Issuance Authorization Authorization (1) Authorization Name: Authorization to be determined Original Authorized Amount: $4,500,000.00 Authorization Date (MM/DD/YYYY): 02/06/2024 Amount Authorization Replenished (By this $0.00 Issue): Amount Authorization Reduced (By this $4,500,000.00 Issue): Net Change (By this Issue): $4,500,000.00 Statutory Authority Will a Validation Action be Pursued? No Statutory Authorities Statute (1): Statute: GOV - (6584-6599.1) - Article 4. Marks -Roos Local Bond CDIAC # : 2024-0073 Status: Submitted 01/22/2024 Tustin Public Finance Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Water Revenue Bonds, Series 2024 (Subordinate Lien) 02/07/2024 $4,500,000.00 No Yes No Yes Page 1 of 3 �6 wTTf ,E � � T F PROPOSED DEBT ISSUANCE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Pooling Act Tax Status/Interest Under State Law: Taxable Principal Amount: Tax -Exempt Principal Amount: Under Federal Law: Taxable Principal Amount: Tax-exempt (No AMT) Principal Amount: Tax-exempt (AMT) Principal Amount: Type of Debt Instrument Public Enterprise Revenue Bond Source of Repayment Is debt repayable in non -US currency? Source of Repayment Type Local Obligations Purpose of Financing Purpose Name Water Supply, Storage, Distribution Financing Participants Role Organization ADTR Main Contact Bond Counsel Financial Advisor Percentage 100 Quint & Thimmig LLP Fieldman Rolapp & Associates Inc No Tax -Exempt $4,500,000.00 Tax Exempt, No AMT $4,500,000.00 Contact First Name Jennifer CDIAC # : 2024-0073 Status: Submitted 01/22/2024 Contact Last Name King Page 2 of 3 �6 wTTf ,E � � T F PROPOSED DEBT ISSUANCE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Filing Contact Quint & Thimmig LLP 2 Invoice Contact 1-Issuer Main Contact Placement Agent Stifel Nicolaus & Company Inc Purchaser Counsel Kronick Moskovitz Tiedemann & Girard Purchaser Capital One Public Funding LLC Trustee/Paying Agent The Bank of New York Mellon Trust Company, N.A. Placement Agent Jones Hall A Professional Law Corp Counsel Type of Sale Type: Is financing a private placement? Reason(s) for Negotiated Sale: Provided more sale timing flexibility Cost Savings expected. Provided more debt structuring flexibility. Benefit in working with participants familiar with the debt and/or issuer. Document Submittal Document Type No data available to disaplay. Document Name File Upload Date Jennifer Jennifer CDIAC # : 2024-0073 Status: Submitted 01/22/2024 King King Negotiated Yes Page 3 of 3 ,E`"'TAT`'A REPORT OF PROPOSED DEBT ISSUANCE CDIAC # : 2024-0076 c California Debt and Investment Advisory Commission, 915 Capitol Mall, Status: Submitted '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 01/22/2024 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Issuance Issuer Name: Tustin Issue Name: 2024 Installment Sale Financing Project Name: 2024 Installment Sale Financing (Water Project) Proposed Sale Date: 02/07/2024 Principal to be Sold: $4,500,000.00 Is any portion of the principal to refund, redeem, paydown, or refinance No outstanding debt? Issuer certifies that it has complied with Gov. Code section 8855(i) with Yes respect to local debt policies: Marks -Roos Authority/TRAN Pool Authority: No Marks -Roos Local Obligor/TRAN Participant: Yes CDIAC# of the related Authorities: CDIAC # 2024-0073 Issuance Authorization Authorization (1): Authorization Name: Authorization to be determined Original Authorized Amount: $4,500,000.00 Authorization Date (MM/DD/YYYY): 02/06/2024 Amount Authorization Replenished (By this Issue): $0.00 Amount Authorization Reduced (By this Issue): $4,500,000.00 Net Change (By this Issue): $-4,500,000.00 Statutory Authority Will a Validation Action be Pursued? No Statutory Authorities �6 wTTf ,E � REPORT OF PROPOSED DEBT ISSUANCE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Statute (1): Statute: 3 - (GOV 6508, 37350) -INSTALLMENT SALES (LEASE) PURCHASE/FINANCING AGREEMENTS Tax Status/Interest Under State Law: Taxable Principal Amount: Tax -Exempt Principal Amount: Under Federal Law: Taxable Principal Amount: Tax-exempt (No AMT) Principal Amount: Tax-exempt (AMT) Principal Amount: Type of Debt Instrument Marks -Roos Loan Source of Repayment Is debt repayable in non -US currency? Source of Repayment Type General Fund of Lessee Purpose of Financing Purpose Name Water Supply, Storage, Distribution Financing Participants Role ADTR Main Contact Bond Counsel Organization Quint & Thimmig LLP Percentage f11000 CDIAC # : 2024-0076 Status: Submitted 01 /22/2024 Tax -Exempt $4,500,000.00 Tax Exempt, No AMT Contact First Name Jennifer $4,500,000.00 Contact Last Name nuiy ,E`"'TAT`'A REPORT OF PROPOSED DEBT ISSUANCE CDIAC # : 2024-0076 c California Debt and Investment Advisory Commission, 915 Capitol Mall, Status: Submitted °' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 01/22/2024 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Financial Advisor Fieldman Rolapp & Associates Inc Filing Contact Quint & Thimmig LLP 2_Invoice Contact Jennifer King 1_Issuer Main Contact Jennifer King Placement Agent Stifel Nicolaus & Company Inc Purchaser Counsel Kronick Moskovitz Tiedemann & Girard Purchaser Capital One Public Funding LLC Trustee/Paying Agent The Bank of New York Mellon Trust Company, N.A. Placement Agent Jones Hall A Professional Law Corp Counsel Type of Sale Type: Negotiated Is financing a private placement? Yes Reason(s) for Negotiated Sale: No data available to display. Document Submittal Document Type Document Name File Upload Date No data available to disaplay. Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) COMMITMENT AGREEMENT February 7, 2024 Tustin Public Financing Authority 300 Centennial Way Tustin, California 92780 City of Tustin 300 Centennial Way Tustin, California 92780 Ladies and Gentlemen: 12/18/23 01/03/24 01/10/24 01/22/24 01/26/24 01/30/24 The undersigned, Capital One Public Funding, LLC, acting solely as lender and not as broker, dealer, municipal securities underwriter, municipal advisor, or fiduciary (the "Purchaser"), hereby offers to enter into this Commitment Agreement (the "Agreement") with the Tustin Public Financing Authority (the "Authority") and the City of Tustin (the "City"), which, upon the Authority's and City's acceptance hereof, will be binding upon the Authority, the City and the Purchaser. This offer is made subject to written acceptance by the Authority and the City and the delivery of such acceptance to the Purchaser at or prior to 5:00 P.M., California time, on the date hereof. If this offer is not so accepted, this offer will be subject to withdrawal by the Purchaser upon notice delivered to the Authority and the City at any time prior to acceptance by the Authority and the City. This Agreement is provided to the Authority and the City pursuant to and in reliance upon the "bank exemption" provided under the municipal advisor rules of the Securities and Exchange Commission, Rule 15Ba1-1 et seq. All capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed thereto in the Indenture (as defined herein). The Authority and the City acknowledge that: (a) The Purchaser is acting in this transaction solely for its own loan account and not as a fiduciary for the Authority or the City or in the capacity of broker, dealer, municipal securities underwriter, placement agent, or municipal advisor; (b) The Purchaser has not provided, and will not provide, financial, legal (including securities law), tax, accounting or other advice to or on behalf of the Authority or the City (including to any financial advisor or placement agent engaged by the Authority or the City) 20027.04 with respect to the structuring of the financing or the execution and delivery of the Indenture or the Installment Sale Agreement or the issuance of the Bonds; (c) The Purchaser has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934, as amended, to the Authority or the City with respect to the transactions relating to the structuring of the financing or the execution and delivery of the Indenture or the Installment Sale Agreement or the issuance of the Bonds and the discussions, undertakings, and procedures leading thereto; (d) Each of the Authority, the City, their financial advisor, and their placement agent has sought and shall seek and obtain financial, legal (including securities law), tax, accounting and other advice (including as it relates to structure, timing, terms and similar matters) with respect to the Indenture, the Installment Sale Agreement, the Bonds, and the financing transaction from its financial, legal, and other advisors (and not the Purchaser or its affiliates) to the extent that the Authority, the City, their financial advisor, or their placement agent desires to, should, or needs to obtain such advice; (e) The Purchaser has expressed no view regarding the legal sufficiency of its representations for purposes of compliance with any legal requirements applicable to any other party, including but not limited to the financial advisor or the placement agent for the Authority and the City, or the correctness of any legal interpretation made by counsel to any other party, including but not limited to counsel to the financial advisor or placement agent for the Authority and the City, with respect to any such matters; and (f) The transactions between the Authority, the City, and the Purchaser are arm's-length, commercial transactions in which the Purchaser is acting and has acted solely as a principal and for its own interest, and the Purchaser has not made recommendations to the Authority or the City with respect to the transactions relating to the Indenture, the Installment Sale Agreement, and the Bonds. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions, and in reliance upon the representations, warranties and agreements set forth herein, the Purchaser hereby agrees to extend credit to the Authority and the City by purchasing, and the Authority agrees to sell and deliver to the Purchaser, all (but not less than all) of the $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"). The Bonds shall be dated the date of delivery thereof and shall mature on such date and shall bear interest at such rate set forth in Schedule I attached hereto. Interest on the Bonds shall be payable semiannually on April 1 and October 1 of each year, commencing October 1, 2024. The aggregate purchase price for the Bonds shall be $4,125,000, being the principal amount of the Bonds. (b) The Bonds shall be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985, consisting of Article 4, Chapter 5, Division 7, Title 1 of the California Government Code (commencing with Section 6584) (the "Bond Law"), and an Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), a resolution of the governing body of the Authority adopted on February 6, 2024 (the "Authority Resolution"), and a resolution of the City Council of the City, adopted on February 6, 2024 (the "City Resolution"). The Bonds shall be substantially in the form described in, and shall be issued and secured under the provisions of, the Indenture. The Bonds shall be secured by a pledge, charge and lien upon Revenues which consist primarily of installment payments (the "Installment -2- Payments") to be made by the City to the Authority pursuant to an Installment Sale Agreement, dated as of February 1, 2024 (the "Installment Sale Agreement"), by and between the City and the Authority. The City's obligations under the Installment Sale Agreement will be subordinate to the City's obligations with respect to the payment of debt service on its City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds and its City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020. The Bonds are being issued for the purpose of providing funds to finance the acquisition and construction of certain improvements and facilities to the City's municipal water enterprise (the "Enterprise"). The Indenture, the Installment Sale Agreement and this Commitment Agreement are herein referred to as the "Financing Documents." (c) At 8:00 o'clock A.M., Pacific Standard time, on February 14, 2024, or at such other time or on such other date as mutually agreed upon by the Authority, the City and the Purchaser (such time and date herein referred to as the "Closing Date"), the Authority will, subject to the terms and conditions hereof, sell and deliver, or cause to be delivered, the Bonds to the Purchaser, in definitive form, duly executed and authenticated, together with the other documents mentioned herein, and subject to the terms and conditions hereof, the Purchaser will accept such delivery and pay the purchase price of the Bonds as set forth in subparagraph (a) above in immediately available funds (such delivery and payment being herein referred to as the "Closing") to the order of the Trustee. Sale, delivery and payment as aforesaid shall be made at the offices of Quint & Thimmig LLP ("Bond Counsel"), 900 Larkspur Landing Circle, Suite 270, Larkspur, CA 94939-1726, or such other place as shall have been mutually agreed upon by the Authority, the City and the Purchaser. 3. Representations, Warranties and Agreements of the Authority and the City. (a) The Authority hereby represents, warrants and agrees with the Purchaser as follows: (1) The Authority is, and will be on the Closing Date, a joint exercise of powers entity organized and operating pursuant to the laws of the State of California with the full power and authority to issue the Bonds pursuant to the Bond Law and to enter into the Financing Documents to which the Authority is a party; (2) By all necessary official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in, the Financing Documents to which the Authority is a party and the consummation by it of all other transactions contemplated by the Financing Documents to which the Authority is a party; (3) The Financing Documents to which the Authority is a party, when duly executed by the other party thereto, will constitute the legal, valid and binding agreements of the Authority enforceable against the Authority in accordance with their respective terms; except as enforcement of each of the Financing Documents may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance laws, laws affecting the enforcement of creditors rights, the application of equitable principles and judicial discretion, by the covenant of good faith and fair dealing which may be implied by law into contracts, and by the limitations on legal remedies against public agencies in the State of California; -3- (4) The Authority is not in breach of or default under any applicable constitutional provision, law or administrative regulation to which it is subject or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or to which the Authority or any of its property or assets is otherwise subject, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default in any material respect under any such instrument; and the issuance of the Bonds and the execution and delivery of the Financing Documents to which the Authority is a party and compliance with the provisions on the Authority's part contained herein and therein, will not in any material respect conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided in the Indenture or the Installment Sale Agreement; (5) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or, to the best knowledge of the Authority, threatened against the Authority affecting the corporate existence of the Authority or affecting or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of the Bonds or contesting or affecting the execution and delivery of the Financing Documents or the Bonds or the lien or pledge or application of any moneys or security provided thereby, or in any way contesting or affecting the validity or enforceability of the Financing Documents, the Bonds or the Authority Resolution, or the compliance by the Authority with the covenants contained in the Financing Documents, or contesting the power of the Authority to execute and deliver the Financing Documents to which the Authority is a party or the Bonds, nor to the best of the Authority's knowledge, is there any basis therefore, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds or the Financing Documents or materially impair the investment quality or value of the Bonds; (6) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations in connection with the issuance of the Bonds under the Indenture have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; and all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations under the Financing Documents to which the Authority is a party have been duly obtained; (7) Any certificate signed by any authorized official of the Authority, and delivered to the Purchaser in connection with the delivery of the Bonds, shall be deemed -4- a representation and warranty by the Authority to the Purchaser as to the statements made therein. (b) The City represents, warrants and covenants to the Purchaser that: (1) The City is and on the Closing Date will be a municipal corporation of the State of California, with the legal right, power and authority to approve the issuance of the Bonds, execute, deliver and perform its obligations under the Financing Documents to which it is a party, and to carry out its obligations as described therein; (2) The City has duly approved the Financing Documents to which it is a party, the execution and delivery of, and the performance by the City of the obligations on its part contained in the Bonds and the Financing Documents to which it is a party, and the consummation by it of all other transactions contemplated by the Financing Documents; (3) The Financing Documents to which the City is a party, when duly executed by the other party thereto, will constitute the legal, valid and binding agreements of the City enforceable against the City in accordance with their respective terms; except as enforcement of each of the Financing Documents may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance laws, laws affecting the enforcement of creditors rights, the application of equitable principles and judicial discretion, by the covenant of good faith and fair dealing which may be implied by law into contracts, and by the limitations on legal remedies against public agencies in the State of California; (4) The City is not in any material respect, in breach of or default under (i) any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or (ii) any material loan agreement, indenture, bond, note, resolution, agreement or other instrument to which it is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute an event of default under any such instrument; (5) The execution and delivery of the Bonds and the Financing Documents to which the City is a party, the consummation of the transactions herein and therein contemplated, and the fulfillment of or compliance with the terms and conditions hereof and thereof will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or, to the knowledge of the City, any indenture, mortgage, deed of trust, installment purchase agreement, lease, contract or other agreement or instrument to which it is a party, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the City's assets, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Financing Documents to which the City is a party, or the financial condition, assets, properties or operations of the City; (6) No consent or approval of any trustee or holder of any indebtedness of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except in connection with Blue Sky proceedings, if any) is necessary in connection with the execution and delivery of the Bonds or the Financing Documents to which the City is a party, or the consummation of -5- any transaction therein or herein contemplated on the part of the City, except as have been obtained or made and as are in full force and effect or, as appropriate, will be in full force and effect at the Closing; (7) There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or, to the knowledge of the City, threatened against or affecting the City which, if determined adversely to the City or the interests thereof, would (a) affect the creation, organization, existence or powers of the City or the titles of its officers or officials to their respective offices; (b) in any way question or affect the validity or enforceability of any of the Financing Documents or the City Resolution; (c) find illegal, invalid or unenforceable any of the Financing Documents or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds; (d) affect the issuance or delivery of any of the Bonds, the payment or collection of any revenues or charges of the Enterprise, the validity of the pledge of or lien on such revenues or charges for the payment of the Installment Payments payable by the City under the Installment Sale Agreement; (e) affect the power and authority of the City to establish, maintain and collect rates and charges for water collection and treatment and other services, facilities and commodities sold, furnished or supplied through the facilities of the Enterprise; or (f) affect the City's water supply; (8) The City does not and will not have outstanding any indebtedness or obligation which is secured by a pledge of or lien on the Pledged Net Revenues superior to or on a parity with the lien of the Installment Payments on the Pledged Net Revenues; (9) Between the date of this Commitment Agreement and the Closing Date, the City will not, without the prior written consent of the Purchaser, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities direct or contingent, payable from Pledged Net Revenues of the Enterprise, other than in the ordinary course of its business, nor will there be any adverse change of a material nature in the financial position, results of operations or condition, financial or otherwise, of the City; (10) The City has not in the previous five years failed to comply in any material respect, and is as of the date hereof in compliance in all material respects, with its disclosure obligations under any prior undertaking related to the Securities and Exchange Commission Rule 15c2-12 to provide annual reports or notices of material event; and (11) Any certificate signed by any authorized official of the City, and delivered to the Purchaser in connection with the delivery of the Bonds, shall be deemed a representation and warranty by the City to the Purchaser as to the statements made therein. (c) The representations, warranties and agreements herein shall survive the Closing Date and any investigation made on behalf of the Authority (with respect to subsection (a) of this Section 3), the City (with respect to subsection (b) of this Section 3) and the Purchaser of any matters described in or related the transactions hereby and by this Commitment Agreement, the Bonds and the Financing Documents to which the Authority or the City, as the case may be, is a party. 4. Conditions to the Obligations of the Purchaser. The Purchaser hereby enters into this Commitment Agreement in reliance upon the representations and warranties of the Authority lei and the City contained herein and the representations and warranties of the Authority and the City to be contained in the documents and instruments to be delivered on or prior to the Closing Date and upon the performance by the Authority and the City of their obligations both on and as of the date hereof and as of the Closing Date. Accordingly, the Purchaser's obligations under this Commitment Agreement to purchase, to accept delivery of and to pay for the Bonds shall be subject, at the option of the Purchaser, to the accuracy in all material respects of the representations and warranties of the Authority and the City contained herein as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the Authority and the City made in any certificate or other document furnished pursuant to the provisions hereof, to the performance by the Authority and the City of their obligations to be performed hereunder and under such documents and instruments at or prior to the Closing Date, and also shall be subject to the following additional conditions: (a) The representations and warranties of the Authority and the City contained herein shall be true and correct on the date hereof and on the Closing Date, as if made on and at the Closing Date; (b) As of the Closing Date, the Financing Documents shall have been duly authorized, executed and delivered by the respective parties thereto, all in substantially the forms heretofore submitted to the Purchaser, with only such changes as shall have been agreed to in writing by the Purchaser, and such Financing Documents shall be in full force and effect and shall not have been amended, modified or supplemented; and there shall be in full force and effect such resolution or resolutions of the Authority and the City as, in the opinion of Bond Counsel, shall be necessary or appropriate in connection with the transactions contemplated hereby; (d) Between the date hereof and the Closing Date, the marketability of the Bonds shall not have been materially adversely affected, in the judgment of the Purchaser (evidenced by a written notice to the Authority terminating the obligation of the Purchaser to accept delivery of and make any payment for the Bonds), by reason of any of the following: (1) an amendment to the Constitution of the United States or the State of California shall have been passed or legislation shall have been introduced in or enacted by the Congress of the United States or the legislature of any state having jurisdiction of the subject matter or legislation pending in the Congress of the United States shall have been amended or legislation shall have been recommended to the Congress of the United States or to any state having jurisdiction of the subject matter or otherwise endorsed for passage (by press release, other form of notice or otherwise) by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation shall have been proposed for consideration by either such Committee by any member thereof or presented as an option for consideration by either such Committee by the staff of such Committee or by the staff of the Joint Committee on Taxation of the Congress of the United States, or legislation shall have been favorably reported for passage to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or a decision shall have been rendered by a court of the United States or of the State of California or the Tax Court of the United States, or a ruling shall have been made or a regulation or temporary regulation shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States, the Internal Revenue Service or other federal -7- or State of California authority, with respect to federal or State of California taxation upon revenues or other income of the general character to be derived by the Authority or upon interest received on obligations of the general character of the Bonds which may have the purpose or effect, directly or indirectly, of affecting the tax status of the Authority, its property or income, its securities (including the Bonds) or the interest thereon, or any tax exemption granted or authorized by State of California legislation or materially and adversely affecting the market for the Bonds or the market price generally of obligations of the general character of the Bonds; (2) legislation enacted, introduced in the Congress or recommended for passage by the President of the United States, or a decision rendered by a court established under Article III of the Constitution of the United States or by the Tax Court of the United States, or an order, ruling, regulation (final, temporary or proposed) or official statement issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter shall have been made or issued to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended; (3) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State of California, or a decision by any court of competent jurisdiction within the State of California or any court of the United States of America shall be rendered which, in the reasonable opinion of the Purchaser, materially adversely affects the market price of the Bonds; (4) the escalation in military hostilities or declaration by the United States of a national emergency or war or other calamity or crisis; (5) the declaration of a general banking moratorium by federal, New York or California authorities, or the general suspension of trading on any national securities exchange; (6) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Purchaser; (7) an order, decree or injunction of any court of competent jurisdiction, or order, ruling, regulation or official statement by the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby, is or would be in violation of the federal securities laws as amended and then in effect; (8) any litigation shall be instituted, pending or threatened to restrain or enjoin the issuance or sale of the Bonds or in any way contesting the validity of the Bonds or the Financing Documents, or the existence or powers of the Authority or the City or having a material adverse impact on the availability of Net Revenues; M (9) the withdrawal or downgrading of any rating of the Bonds by a national rating agency; or (10) any other event shall have occurred since the date hereof that in the reasonable judgment of the Purchaser materially adversely affects the marketability or market price of the Bonds. (e) At or prior to the Closing Date, the Purchaser shall have received the following documents, in each case satisfactory in form and substance to the Purchaser: (1) Copies of each of the Financing Documents, each duly executed and delivered by the respective parties thereto; (2) The approving opinion of Bond Counsel, dated the Closing Date and addressed to the Authority and a reliance letter relating thereto addressed to the Purchaser; (3) The supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the Purchaser, to the effect that; (i) this Commitment Agreement has been duly authorized, executed and delivered by the Authority and the City, and assuming the valid execution and delivery by the Purchaser, is valid and binding upon the Authority and the City enforceable in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally; and (ii) the Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939; (4) The opinion of counsel to the Authority and the City, dated the Closing Date and addressed to the Purchaser, is substantially the form attached hereto as Exhibit A; (5) The opinion of counsel to the Trustee, dated the Closing Date and addressed to the Authority, the City and the Purchaser, to the effect that (i) the Trustee has duly authorized, executed and delivered the Indenture and duly authenticated and delivered the Bonds on the Closing Date; and (ii) the Indenture constitutes the legally valid and binding obligation of the Trustee, enforceable against the Trustee in accordance with its terms, except that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws in effect from time to time affecting the rights of creditors generally and except to the extent that the enforceability thereof may be limited by the application of general principles of equity; (6) A certificate or certificates, dated the Closing Date, signed by a duly authorized official of the Authority to the effect that (i) the representations and warranties of the Authority contained in this Commitment Agreement and in the Financing Documents to which it is a party are true, complete and correct on and as of the Closing Date; (ii) there is no action, suit, proceeding, inquiry or investigation pending or, to the best knowledge of such official, threatened (a) to restrain or enjoin the execution and delivery of any of the Bonds, (b) in any way affecting the validity of the Bonds or the Financing Documents to which the Authority is a party, or (c) in any way ME contesting the corporate existence or powers of the Authority to execute and deliver the Financing Documents to which the Authority is a party or the Bonds; (7) A certificate or certificates, dated the Closing Date, signed by a duly authorized official of the City to the effect that (i) the representations and warranties of the City contained in this Commitment Agreement and the Financing Documents to which the City is a party are true, complete and correct on and as of the Closing Date; and (ii) there is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of such official, threatened (a) to restrain or enjoin the execution and delivery of the Financing Documents to which the City is a party, (b) in any way contesting or affecting the validity of the Financing Documents to which the City is a party, (c) in any way contesting the power of the City to execute and deliver the Financing Documents to which the City is a party, or (d) seeking to prohibit, restrain or enjoin the collection of moneys from the Enterprise to pay the Installment Payments securing the Bonds, or the compliance by the City of the covenants contained in the Financing Documents to which the City is a party, or questioning the authority of the City to fix, charge and collect rates for the services provided by the Enterprise as provided in the Installment Sale Agreement, nor to the best knowledge of such official, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds or the Financing Documents to which the City is a party or materially adversely impair the City's ability to perform its obligations the Financing Documents to which the City is a party;; (8) A certificate, dated the Closing Date, signed by a duly authorized official of the Trustee, satisfactory in form and substance to the Purchaser, to the effect that: (i) the Trustee is a national banking association organized and existing under and by virtue of the laws of the United States of America, having the full power and being qualified to enter into and perform its duties under the Indenture; (ii) the Trustee is duly authorized to enter into the Indenture and to authenticate and deliver the Bonds to the Purchaser pursuant to the terms of the Indenture; (iii) the execution and delivery of the Indenture and compliance with the provisions on the Trustee's part contained therein, and the authentication and delivery of the Bonds will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Trustee is a party or is otherwise subject (except that no representation, warranty or agreement is made with respect to any federal or state securities or Blue Sky laws or regulations), nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the lien created by the Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Indenture; and (iv) there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, served on, or, to the best knowledge of such officer, threatened against, the Trustee, affecting the existence of the Trustee or the titles of its officers to their respective offices, or in any way contesting or affecting the validity or enforceability of the Indenture against the Trustee, or contesting the power of the Trustee or its authority to enter into, adopt or perform its obligations under the Indenture, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Indenture against the Trustee or the authentication and delivery of the Bonds; -10- (9) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of the Indenture; (10) A certified copy of the Authority Resolution; (11) A certified copy of the City Resolution; (12) Such additional legal opinions, certificates, proceedings, instruments, insurance policies or evidences thereof and other documents as the Purchaser, the Purchaser's counsel or Bond Counsel may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the representations of the Authority herein, and the due performance or satisfaction by the Authority and the City on or prior to the Closing Date of all agreements then to be performed and all conditions then to be satisfied by the Authority and the City in connection with the transactions contemplated hereby and the Financing Documents. If the Authority and / or the City shall be unable to satisfy the conditions to the Purchaser's obligations contained in this Commitment Agreement or if the Purchaser's obligations shall be terminated for any reason permitted herein, all obligations of the Purchaser hereunder may be terminated by the Purchaser at, or at any time prior to, the Closing Date by written notice to the Authority and neither the Purchaser nor the Authority shall have any further obligations hereunder. 5. Expenses. The Authority or the City shall pay the expenses incident to the performance of their obligations hereunder including, but not limited to: (i) the cost of preparation, printing and distribution of the Financing Documents, including a reasonable number of certified or conformed copies thereof; (ii) the cost of preparation and printing of the Bonds; (iii) the fees and disbursements of Bond Counsel; (iv) the fees and disbursements of the Purchaser's counsel; (v) the fees and disbursements of any engineers, accountants and other experts, consultants or advisors retained by the Authority or the City; (vi) reimbursement of any incidental expenses incurred by the Purchaser on behalf of the City; and (vii) fees, if any, payable to the California Debt and Investment Advisory Commission, the Municipal Securities Rulemaking Board. 6. Notices. Any notice or other communication to be given to the Authority, the City or the Purchaser under this Commitment Agreement may be given by delivering the same in writing to Authority: Tustin Public Financing Authority c / o City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: City Manager City: City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: City Manager Purchaser: Capital One Public Funding LLC 1307 Walt Whitman Road, 3rd Floor Melville, NY 11747 Attention: President -11- 7. Survival of Representations and Warranties. Representations, warranties and agreements contained in this Commitment Agreement or made in any certificate delivered by the Authority or the City hereunder shall remain operative and in full force and effect, regardless of: (i) any investigations or statements made by or on behalf of the Purchaser; and (ii) delivery of and payment for the Bonds pursuant to this Commitment Agreement. 8. Effectiveness and Counterpart Signatures. This Commitment Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by duly authorized officers of the Authority and approval by duly authorized officers of the City and shall be valid and enforceable as of the time of such acceptance and approval. This Commitment Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument_ 9. Parties in Interest. This Commitment Agreement is made solely for the benefit of the Authority, the City and the Purchaser (including the successors or assigns of the Purchaser) and no other person shall acquire or have any right hereunder or by virtue hereof. 10. Headings. The headings of the sections of this Commitment Agreement are inserted for convenience only and shall not be deemed to be a part hereof. 11. Governing Law. This Commitment Agreement shall be construed in accordance with the laws of the State of California. Accepted: TUSTIN PUBLIC FINANCING AUTHORITY 10 Treasurer CITY OF TUSTIN Finance Director -12- Very truly yours, CAPITAL ONE PUBLIC FUNDING LLC , as Purchaser By Catherine DeLuca Vice President 7. Survival of Representations and Warranties. Representations, warranties and agreements contained in this Commitment Agreement or made in any certificate delivered by the Authority or the City hereunder shall remain operative and in full force and effect, regardless of: (i) any investigations or statements made by or on behalf of the Purchaser; and (ii) delivery of and payment for the Bonds pursuant to this Commitment Agreement. 8. Effectiveness and Counterpart Signatures. This Commitment Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by duly authorized officers of the Authority and approval by duly authorized officers of the City and shall be valid and enforceable as of the time of such acceptance and approval. This Commitment Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 9. Parties in Interest. This Commitment Agreement is made solely for the benefit of the Authority, the City and the Purchaser (including the successors or assigns of the Purchaser) and no other person shall acquire or have any right hereunder or by virtue hereof. 10. Headings. The headings of the sections of this Commitment Agreement are inserted for convenience only and shall not be deemed to be a part hereof. 11. Governing Law. This Commitment Agreement shall be construed in accordance with the laws of the State of California. Accepted: TUSTIN PUBLIC FINANCING AUTHORITY By Treasurer CITY OF TUSTIN Finance Director 5VA Very truly yours, CAPITAL ONE PUBLIC FUNDING LLC , as Purchaser By Catherine DeLuca Vice President SCHEDULE I MATURITY SCHEDULE Maturity Date Principal Interest (Al2rill Amount Rate Price 2044 $4,125,000 4.820% 100.000 REDEMPTION The Bonds are subject to redemption, at the option of the City on any date on or after April 1, 2034, as a whole or in part, by such maturities as shall be determined by the City, and by lot within a maturity, from any available source of funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The Bonds are also subject to mandatory redemption from sinking account payments made by the Authority, in part by lot, on April 1, 2025, and on April 1 in each year thereafter to and including April 1, 2044, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, as set forth in the following table: t Maturity. Redemption Date (April 1) 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 Schedule I Page 1 Principal Amount $105,000 135,000 140,000 145,000 155,000 160,000 170,000 180,000 185,000 195,000 205,000 215,000 225,000 235,000 245,000 260,000 270,000 285,000 300,000 315,000 EXHIBIT A FORM OF OPINION OF CITY ATTORNEY AND AUTHORITY COUNSEL Tustin Public Financing Authority 300 Centennial Way Tustin, California 92780 City of Tustin 300 Centennial Way Tustin, California 92780 Capital One Public Funding LLC 1307 Walt Whitman Road, 3rd Floor Melville, NY 11747 Re: $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Ladies and Gentlemen: I have acted as legal counsel to the City of Tustin, California (the "City") and the Tustin Public Financing Authority (the "Authority") in connection with the issuance of the above -referenced Bonds by the Authority. In such capacity, I have examined the original, certified copies, or copies otherwise identified to my satisfaction as being true copies of such resolutions, documents, ordinances, certificates, and records as I have deemed relevant and necessary as the basis for the opinions set forth herein. Relying on such examination and applicable law, I am of the opinion that: 1. The Authority is a joint exercise of powers entity duly organized and validly existing under all applicable laws, with full legal right, power and authority to enter into and perform its obligations under the Installment Sale Agreement, dated as of February 1, 2024 (the "Installment Sale Agreement"), by and between the Authority and the City, the Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), and the Commitment Agreement, dated February 7, 2024 (the "Commitment Agreement"), by and among the Authority, the City and First Southwest Company, as Purchaser, (collectively, the "Authority Documents"). The Authority has duly authorized, executed and delivered the Authority Documents and, assuming due authorization, execution and delivery by the other parties thereto (other than the City), each of the Authority Documents constitutes a legal, valid and binding obligation of the Authority enforceable against the Authority in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency, equitable remedies and other laws affecting creditors' rights or remedies. 2. The City is a municipal corporation organized and validly existing under all applicable laws, with full legal right, power and authority to enter into and perform its obligations under the Installment Sale Agreement and the Commitment Agreement (collectively, the "City Documents"). The City has duly approved the City Documents and has duly authorized, executed and delivered the City Documents and, assuming due authorization, execution and delivery by the other parties thereto (other than the Authority), each of the City Documents constitutes a legal, valid and binding obligation of the City enforceable against the City in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency, equitable remedies and other laws affecting creditors' rights or remedies. 3. The Authority has duly and validly adopted Resolution No. approving the Authority Documents at a meeting duly called and held, and such Resolution is in full force and effect and has not been amended, modified or repealed since its adoption. Exhibit A Page 1 4. The City has duly and validly adopted Resolution No. approving the City Documents at a meeting duly called and held, and such Resolution is in full force and effect and has not been amended, modified or repealed since its adoption. 5. There is no action, suit or proceeding before or by any court, government agency, public board or body pending or, to the best of our knowledge, threatened wherein an unfavorable decision, ruling or finding would (a) affect the creation, organization, existence or powers of the Authority or the City or the titles of their respective officers or officials to their respective offices, (b) in any way question or affect the validity or enforceability of any of the Authority Documents, the City Documents, or any resolutions, (c) find illegal, invalid or unenforceable any of the Authority Documents, the City Documents, or the Ordinances or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the Authority or the City is a party, (d) affect the issuance or delivery of any of the Bonds, the payment or collection of any revenues or charges of the City's water enterprise, the validity of the pledge of or lien on such revenues or charges for the benefit of the owners of the Bonds, the exclusion of interest on the Bonds from gross income, the powers of the Authority or the City, or the authority of the Authority to issue the Bonds or the consummation of any of the transactions contemplated by the Authority Documents, the City Documents, the Ordinances or the Bonds, or (e) affect the power and authority of the City to establish, maintain and collect rates and charges for water collection and treatment and other services, facilities and commodities sold, furnished or supplied through the facilities of the City's water system. 6. The execution and delivery of the Authority Documents and the City Documents and the other instruments contemplated by any of such documents, and compliance with the provisions thereof, do not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department or agency of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, trust agreement, contract, agreement or other instrument to which the Authority or the City is subject or bound in a manner which would materially adversely affect the Authority's or the City's performance thereunder. 7. Any and all consents, authorizations, approvals and orders of or filings or registrations with any governmental authority, legislative body, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Authority or the City of its obligations under the Authority Documents or the City Documents, respectively, have been obtained and are in full force and effect. I am furnishing this opinion to you solely for your benefit. This opinion is rendered in connection with the transaction described herein, and may not be relied upon by you for any other purpose. This opinion shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without my prior written consent. Very truly yours, Exhibit A Page 2 Quint & Thimmig LLP INDENTURE OF TRUST Dated as of February 1, 2024 by and between the TUSTIN PUBLIC FINANCING AUTHORITY and 12/18/23 01/03/24 01/10/24 01/22/24 01/26/24 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) 20027.04 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS Section1.01. Definitions................................................................................................................................................................. 3 Section1.02. Interpretation..........................................................................................................................................................12 ARTICLE II 010121-10 Section2.01. Authorization of Bonds......................................................................................................................................... 14 Section2.02. Terms of the Bonds................................................................................................................................................ 14 Section2.03. Form of Bonds......................................................................................................................................................... 15 Section2.04. Execution of Bonds................................................................................................................................................. 15 Section2.05. Transfer of Bonds................................................................................................................................................... 15 Section2.06. Exchange of Bonds................................................................................................................................................. 16 Section2.07. Registration Books.................................................................................................................................................. 16 Section2.08. Temporary Bonds................................................................................................................................................... 16 Section 2.09. Bonds Mutilated, Lost, Destroyed or Stolen...................................................................................................... 16 ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS Section 3.01. Issuance of the Bonds............................................................................................................................................18 Section 3.02. Application of Proceeds of the Bonds.................................................................................................................18 Section 3.03. Establishment and Application of Costs of Issuance Fund..............................................................................18 Section 3.04. Establishment and Application of 2024 Project Fund.......................................................................................18 Section3.05. Validity of Bonds....................................................................................................................................................19 ARTICLE IV REDEMPTION OF BONDS Section4.01. Terms of Redemption............................................................................................................................................ 20 Section4.02. Notice of Redemption............................................................................................................................................ 20 Section 4.03. Partial Redemption of Bonds................................................................................................................................ 21 Section4.04. Effect of Redemption............................................................................................................................................. 21 ARTICLE V REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST Section 5.01. Pledge and Assignment; Bond Fund................................................................................................................... 22 Section 5.02. Allocation of Revenues.......................................................................................................................................... 22 Section 5.03. Application of Interest Account........................................................................................................................... 23 Section 5.04. Application of Sinking Account and Principal Account.................................................................................. 23 Section5.05. Investments............................................................................................................................................................. 23 Section 5.06. Valuation and Disposition of Investments......................................................................................................... 24 ARTICLE VI PARTICULAR COVENANTS Section6.01. Punctual Payment.................................................................................................................................................. 25 Section 6.02. No Extension of Payment of Bonds..................................................................................................................... 25 Section 6.03. Against Encumbrances.......................................................................................................................................... 25 Section 6.04. Power to Issue Bonds and Make Pledge and Assignment............................................................................... 25 Section 6.05. Accounting Records and Financial Statements.................................................................................................. 25 Section 6.06. No Additional Obligations................................................................................................................................... 25 Section6.07. Tax Covenants........................................................................................................................................................ 25 Section 6.08. Installment Sale Agreement.................................................................................................................................. 26 Section6.09. Waiver of Laws....................................................................................................................................................... 26 Section 6.10. Further Assurances................................................................................................................................................ 26 Section 6.11. Continued Existence of the Authority................................................................................................................. 26 -i- ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section7.01. Events of Default.................................................................................................................................................... 28 Section 7.02. Remedies Upon Event of Default......................................................................................................................... 28 Section 7.03. Application of Revenues and Other Funds After Default................................................................................ 29 Section 7.04. Trustee to Represent Bond Owner....................................................................................................................... 29 Section 7.05.Owner Direction of Proceedings.......................................................................................................................... 30 Section 7.06. Limitation on Owner's Right to Sue.................................................................................................................... 30 Section 7.07. Absolute Obligation of Authority ........................................................................................................................ 30 Section 7.08. Termination of Proceedings.................................................................................................................................. 30 Section 7.09. Remedies Not Exclusive........................................................................................................................................ 30 Section7.10. No Waiver of Default............................................................................................................................................. 30 Section 7.11. Parties Interested Herein....................................................................................................................................... 31 ARTICLE VIII THE TRUSTEE Section8.01. Appointment of Trustee....................................................................................................................................... Section 8.02. Acceptance of Trustee........................................................................................................................................... Section 8.03. Fees, Charges and Expenses of Trustee............................................................................................................. Section 8.04. Notice to Owner of Default.................................................................................................................................. Section 8.05. Intervention by Trustee........................................................................................................................................ Section8.06. Removal of Trustee............................................................................................................................................... Section8.07. Resignation by Trustee......................................................................................................................................... Section 8.08. Appointment of Successor Trustee..................................................................................................................... Section 8.09. Merger or Consolidation...................................................................................................................................... Section 8.10. Concerning any Successor Trustee..................................................................................................................... Section 8.11. Appointment of Co-Trustee................................................................................................................................. Section 8.12. Indemnification; Limited Liability of Trustee................................................................................................... ARTICLE IX MODIFICATION OR AMENDMENT OF THIS INDENTURE 32 32 35 35 36 36 36 36 36 37 37 37 Section9.01. Amendments Permitted........................................................................................................................................ 39 Section 9.02. Effect of Supplemental Indenture........................................................................................................................ 40 Section 9.03. Endorsement of Bonds; Preparation of New Bonds......................................................................................... 40 Section 9.04. Amendment of Particular Bonds......................................................................................................................... 40 ARTICLE X DEFEASANCE Section 10.01. Discharge of Indenture........................................................................................................................................ 41 Section 10.02. Discharge of Liability on Bonds......................................................................................................................... 41 Section 10.03. Deposit of Money or Securities with Trustee................................................................................................... 41 Section10.04. Unclaimed Funds................................................................................................................................................. 42 ARTICLE XI MISCELLANEOUS Section 11.01. Liability of Authority Limited to Revenues..................................................................................................... 43 Section 11.02. Limitation of Rights to Parties and Owner....................................................................................................... 43 Section11.03. Funds and Accounts............................................................................................................................................ 43 Section 11.04. Waiver of Notice; Requirement of Mailed Notice........................................................................................... 43 Section11.05. Destruction of Bonds........................................................................................................................................... 43 Section 11.06. Severability of Invalid Provisions...................................................................................................................... 43 Section11.07. Notices................................................................................................................................................................... 44 Section 11.08. Evidence of Rights of Owner.............................................................................................................................. 44 Section11.09. Disqualified Bonds............................................................................................................................................... 45 Section 11.10. Money Held for Particular Bonds...................................................................................................................... 45 Section 11.11. Waiver of Personal Liability ............................................................................................................................... 45 Section 11.12. Successor Is Deemed Included in All References to Predecessor................................................................. 45 Section 11.13. Execution in Several Counterparts.................................................................................................................... 45 Section11.14. Governing Law..................................................................................................................................................... 45 EXHIBIT A FORM OF BOND EXHIBIT B FORM OF PURCHASER LETTER INDENTURE OF TRUST THIS INDENTURE OF TRUST, made and entered into and dated as of February 1, 2024, is by and between the TUSTIN PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under and by virtue of the laws of the State of California (the "Authority"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America with a corporate trust office in Los Angeles, California, being qualified to accept and administer the trusts hereby created (the "Trustee"); WITNESSETH: WHEREAS, the City of Tustin (the "City") and the former Tustin Community Redevelopment Agency (the "Agency") have heretofore entered into a joint exercise of powers agreement (the "Agreement") establishing the Authority for the purpose, among others, of issuing its bonds to be used to provide financial assistance to the City; WHEREAS, the Successor Agency to the Tustin Community Redevelopment Agency succeeded to the Agency and the Agreement remains in effect so long as obligations of Agency remain outstanding, ending in 2040; WHEREAS, the Authority is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated May 1, 1995, by and between the City of Tustin (the "City") and the former Tustin Community Redevelopment Agency; WHEREAS, under Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Bond Law") the Authority is authorized to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations of, or for the purpose of making loans to, public entities including the City, and to provide financing for public capital improvements of public entities including the City; WHEREAS, the City has determined that, due to prevailing financial market conditions, it is in the best interests of the City to finance the acquisition and construction of certain improvements and facilities (the "2024 Project") which constitute part of the City's municipal water enterprise (the "Enterprise"); WHEREAS, for the purpose of raising funds necessary to provide such financial assistance to the City, the Authority proposes to authorize the issuance of its revenue bonds under the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"), designated as the Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"), all pursuant to and secured by this Indenture of Trust; WHEREAS, in order to provide for the repayment of the Bonds, the Authority will sell the 2024 Project to the City pursuant to an installment sale agreement, under which the City will agree to make installment payments to the Authority (the "Installment Payments") which will be calculated to be sufficient to enable the Authority to pay the principal of and interest on the Bonds when due and payable; WHEREAS, the City's obligation to make Installment Payments will be payable from a pledge of the net revenues of the Enterprise, in all respects, junior, subordinate and inferior to the City's obligations with respect to the payment of debt service on its City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds and its City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020; WHEREAS, the Authority has determined that in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof and interest thereon, the Authority has authorized the execution and delivery of this Indenture; and WHEREAS, the Authority hereby certifies that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee, and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture have been in all respects duly authorized; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and the interest on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows: -2- ARTICLE I DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall, for all purposes of this 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. In addition, all capitalized terms used herein and not otherwise defined in this Section 1.01 shall have the respective meanings given such terms in the Installment Sale Agreement. "Acquisition and Construction" means, with respect to any portion of the 2024 Project, the acquisition, construction, improvement, equipping, renovation, remodeling or reconstruction thereof. "Act" means Articles 1 through 4 (commencing with section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code, as in existence on the Closing Date or as thereafter amended from time to time. "Additional Payments" means the payments so designated and required to be paid by the City pursuant to Sections 4.9 and 4.10 of the Installment Sale Agreement. "Annual Debt Service" means, for each Fiscal Year, the aggregate amount (without duplication) of principal and interest with respect to the Installment Payments and all Parity Obligations. "Authority" means the Tustin Public Financing Authority, a joint powers authority duly organized and existing under the laws of the State. "Authorized Representative" means: (a) with respect to the Authority, its Chairman, Vice Chairman, Executive Director, Assistant Executive Director, Treasurer or any other person designated as an Authorized Representative of the Authority by a Written Certificate of the Authority signed by its Chairman and filed with the City and the Trustee; and (b) with respect to the City, its Mayor, City Manager, Treasurer, Finance Director or any other person designated as an Authorized Representative of the City by a Written Certificate of the City signed by its Mayor and filed with the Trustee. "Board of Directors" means the governing body of the Authority. "Bond Counsel" means (a) Quint & Thimmig LLP, or (b) any other attorney or firm of attorneys appointed by or acceptable to the Authority of nationally recognized experience in the issuance of obligations the interest on which is excludable from gross income for federal income tax purposes under the Code. "Bond Fund" means the fund by that name established and held by the Trustee pursuant to Section 5.01. "Bond Law" means the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code, as in existence on the Closing Date or as thereafter amended from time to time. -3- "Bond Year" means each twelve-month period extending from April 2 in one calendar year to April 1 of the succeeding calendar year, both dates inclusive; provided that the first Bond Year shall begin on the Closing Date and shall end on April 1, 2025. "Bonds" means the $4,125,000 aggregate principal amount of Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien), authorized by and at any time Outstanding pursuant to the Bond Law and this Indenture. "Business Day" means any day, other than a Saturday or Sunday or a day on which commercial banks in New York, New York, Los Angeles, California, or San Francisco, California, or the Trust Office, are required or authorized by law to close or a day on which the New York Stock Exchange is closed. "City" means the City of Tustin, a municipal corporation and general law city organized under the laws of the State. "Closing Date" means February 14, 2024, being the date of delivery of the Bonds to the Original Purchaser. "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated under the Code. "Completion Date" means, with respect to any component of the 2024 Project, the date on which the Authority files a Written Certificate with the City and the Trustee stating that the Acquisition and Construction of such component of the 2024 Project has been completed pursuant to Article III. "Costs of Issuance" means all expenses incurred in connection with the authorization, issuance, sale and delivery of the Bonds and the application of the proceeds of the Bonds, including but not limited to all compensation, fees and expenses (including but not limited to fees and expenses for legal counsel) of the Authority, initial fees and expenses of the Trustee and its counsel, compensation to any financial consultants or underwriters, legal fees and expenses, filing and recording costs, costs of preparation and reproduction of documents and costs of printing. "Costs of Issuance Fund" means the fund by that name established and held by the Trustee pursuant to Section 3.03. "County" means the County of Orange, a public body corporate and politic organized under the laws of the State. "Date of Taxability" means the date from and for which interest on the Bonds is subject to federal income taxation as a result of a Determination of Taxability. "Debt Service" means, during any period of computation, the amount obtained for such period by totaling the following amounts: (a) The principal components of the Installment Payments and of payments with respect to Parity Obligations coming due and payable by their terms in such period; and -4- (b) The interest component of the Installment Payments and of payments with respect to Parity Obligations which would be due during such period on the aggregate principal amount of the Installment Payments and payments with respect to Parity Obligations that would be unpaid in such period if the Installment Payments and payments with respect to Parity Obligations are retired as scheduled, but deducting and excluding from such aggregate amount the amount of Installment Payments and payments with respect to Parity Obligations no longer unpaid. "Default Rate" means the rate of 7.820% per annum. "Defeasance Obligations" means (a) cash, (b) direct non -callable obligations of the United States of America, (c) securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, to which direct obligation or guarantee the full faith and credit of the United States of America has been pledged, (d) Refcorp interest strips, (e) CATS, TIGRS, STRPS, and (f) defeased municipal bonds rated AAA by S&P or Aaa by Moody's (or any combination of the foregoing). "Determination of Taxability" means any determination, decision, or decree made by the Commissioner or any District Director of the Internal Revenue Service, or by any court of competent jurisdiction, that as a result of any actions or omissions of the Authority or the City with respect to the Bonds the interest payable on the Bonds is includable in the gross income for federal income tax purposes of the Owner, provided, however, that no such Determination of Taxability shall be deemed to have occurred if the Authority and the City are contesting such determination in good faith and is diligently proceeding to prosecute such contest until the earliest of (a) a final determination from which no appeal may be taken with respect to such determination, or (b) abandonment of such appeal by the Authority and the City. "Enterprise" means any and all facilities, properties and improvements at any time controlled or operated by the City used or pertaining to the supply of water, consisting of the entire water production and distribution enterprise of the City, including all additions, extensions, expansions, improvements and betterments thereto and equippings thereof and any necessary lands, rights of way and other real and personal property useful in connection therewith, but exclusive of any portion of the existing system not required for the continued operation thereof; provided, however, that to the extent the City is not the sole owner of an asset or property, or lessee thereof from the City, only the City's ownership interest in such asset or property or leasehold interest therein from the City, shall be considered a part of the Enterprise. "Event of Default" means, (a) with respect to the Bonds, any of the events described in Section 7.01 of this Indenture, and (b) with respect to the Installment Sale Agreement, any of the events described in Section 8.1 of the Installment Sale Agreement. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security --State and -5- Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. "Fiscal Year" means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Authority as its official fiscal year period. "Government Obligations" means, with respect to the Bonds: (a) direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ("U.S. Treasury Obligations"), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidence of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligator and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. "Gross Revenues" means all gross charges received for, and all other gross income and revenues derived by the City from, the operation of the Enterprise or otherwise arising from the Enterprise, including but not limited to (a) all fees and charges received by the City for the services of the Enterprise, (b) charges received by the City for water connections, (c) capital charges, and (d) all receipts derived from the investment of such income or revenues, but excluding customer deposits. "Gross Revenues" also include amounts transferred from the Rate Stabilization Fund to the Bond Fund during any Fiscal Year in accordance with Section 4.11 of the Installment Sale Agreement. "Gross Revenues" do not include amounts which are transferred from the Rate Stabilization Fund pursuant to Section 4.11 of the Installment Sale Agreement that are in excess of twenty percent (20%) of the amounts payable under paragraphs (b) and (c) of Section 4,.7 of the Installment Sale Agreement in such Fiscal Year. "Indenture" means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the provisions hereof. "Independent Accountant" means any certified public accountant or firm of certified public accountants, appointed and paid by the Authority or the City, and who, or each of whom (a) is in fact independent and not under domination of the Authority or the City; (b) does not have any substantial interest, direct or indirect, in the Authority or the City; and (c) is not connected with the Authority or the City as an officer or employee of the Authority or the City but who may be regularly retained to make annual or other audits of the books of or reports to the Authority or the City. "Independent Counsel" means an attorney duly admitted to the practice of law before the highest court of the state in which such attorney maintains an office and who is not an employee of the Authority, the Trustee or the City. 1.1 "Installment Payment Date" means the twenty-fifth (25th) day of each March and September during the Term of the Installment Sale Agreement, commencing September 25, 2024. "Installment Payments" means the amounts payable by the City pursuant to Section 4.4 of the Installment Sale Agreement, including any prepayments thereof pursuant to Article IX of the Installment Sale Agreement. "Installment Sale Agreement" means that certain Installment Sale Agreement by and between the Authority as seller and the City as purchaser of the 2024 Project, dated as of February 1, 2024, as originally executed and as it may from time to time be supplemented, modified or amended in accordance with the terms thereof and of this Indenture. "Interest Account" means the account by that name established in the Bond Fund pursuant to Section 5.02. "Interest Payment Date" means each April 1 and October 1, commencing October 1, 2024. "Maintenance and Operation Costs" means (a) the reasonable and necessary costs of maintaining and operating the Enterprise, calculated based upon accounting principles consistently applied, including (among other things) the reasonable expenses of management, personnel, services, equipment, repair and other expenses necessary to maintain and preserve the Enterprise in good repair and working order, and reasonable amounts for administration, overhead, insurance, taxes (if any) and other similar costs, and (b) all costs of water purchased or otherwise acquired for delivery by the Enterprise (including any interim or renewed arrangement therefor), but excluding in all cases depreciation and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. "Material Adverse Effect" means an event or occurrence which adversely affects in a material manner (a) the ability of the City to carry out its business in the manner conducted as of the date of the Installment Sale Agreement or to meet or perform its obligations under the Installment Sale Agreement on a timely basis, (b) the validity or enforceability of the Installment Sale Agreement, or (c) the exclusion of the interest component of the Installment Payments from gross income for federal income tax purposes or the exemption of such interest for state income tax purposes. "Material Litigation" means any action, suit, proceeding, inquiry or investigation against the Authority or the City in any court or before any arbitrator of any kind or before or by any Governmental Authority, (i) if determined adversely to the City, may have a Material Adverse Effect, (ii) seek to restrain or enjoin any of the transactions contemplated by the Installment Sale Agreement, or (iii) may adversely affect (A) the exclusion of the interest component of the Installment Payments from gross income for federal income tax purposes or the exemption of such interest for state income tax purposes or (B) the ability of the City to perform its obligations under the Installment Sale Agreement. "Maximum Aggregate Annual Debt Service" means, as of the date of calculation, the maximum amount of debt service for the current or any future Bond Year with respect to the Senior Obligations, the Installment Sale Agreement and all Parity Obligations outstanding. "Moody's" means Moody's Investors Service, its successors and assigns. -7- "Net Revenues" means, for any period, an amount equal to all of the Gross Revenues received during such period minus the amount required to pay all Maintenance and Operation Costs becoming payable during such period. "Original Purchaser" means Capital One Public Funding, LLC, the first purchaser of the Bonds upon their authentication and delivery by the Trustee on the Closing Date. "Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.10) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.02, including Bonds (or portions thereof) described in Section 11.10; and (c) 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 Trustee pursuant to this Indenture. "Owner," whenever used herein with respect to a Bond, means the person in whose name the ownership of such Bond is registered on the Registration Books. "Parity Obligations" means any leases, loan agreements, installment sale agreements, bonds, notes, interest rate swap agreements, currency swap agreements, forward payment agreements, futures, or contracts providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, or contracts to exchange cash flows or a series of payments, or contracts, including, without limitation, interest rate floors or caps, options, puts or calls to hedge payment, currency, rate, spread, or similar exposure (except termination payments relating thereto which shall be payable on a subordinate basis) or other obligations of the City payable from and secured by a pledge of and lien upon any of the Pledged Net Revenues on a parity with the Installment Payments, entered into or issued pursuant to and in accordance with Section 4.8(b) of the Installment Sale Agreement. "Permitted Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein, but only to the extent that the same are acquired at Fair Market Value (provided the Trustee may rely upon the Request of the Authority directing investment under the Indenture as a determination that such investment is a Permitted Investment): (a) Government Obligations. (b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): 1. U.S. Export -Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership 2. U.S. Farmers Home Administration (FmHA) Certificates of Beneficial Ownership 3. Federal Financing Bank 4. Federal Housing Administration Debentures (FHA) 0 5. General Services Administration Participation Certificates 6. Government National Mortgage Association (GNMA or Ginnie Mae) GNMA—guaranteed mortgage -backed bonds GNMA—guaranteed pass -through obligations 7. U.S. Maritime Administration Guaranteed Title XI financing 8. U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds (c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies which are not backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): 1. Federal Home Loan Bank System Senior debt obligations 2. Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) Participation Certificate Senior debt obligations 3. Federal National Mortgage Association (FNMA or Fannie Mae) Mortgage -backed securities and senior debt obligations 4. Student Loan Marketing Association (SLMA or Sallie Mae) Senior debt obligations 5. Resolution Funding Corp. (REFCORP) obligations 6. Farm Credit System Consolidated systemwide bonds and notes (d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, which invest solely in Federal Securities, if rated by S&P, having a rating at the time of investment of AAAm-G; and if rated by Moody's having a rating at the time of investment of Aaa, including such funds for which the Trustee, its affiliates or subsidiaries provide investment advisory or other management services or for which the Trustee or an affiliate of the Trustee serves as investment administrator, shareholder servicing agent, and / or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives fees from funds for services rendered, (ii) the Trustee collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds, and (iii) services performed for such funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee. W2 (e) Certificates of deposit secured at all times by collateral described in (a) and/or (b) above. Such certificates must be issued by commercial banks or savings and loan associations (including the Trustee or its affiliates). The collateral must be held by a third party and the Bondholders must have a perfected first security interest in the collateral. (f) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC or secured at all times by collateral described in (a) and / or (b) above. (g) Commercial paper rated, at the time of purchase, "Prime-1" by Moody's and "A-1" or better by S&P. (h) Federal funds or bankers acceptances with a maximum term of 180 days of any bank which has an unsecured, uninsured and unguaranteed obligation rating at the time of investment of "Prime-1" or better by Moody's and "A-1" or better by S&P. (i) The Local Agency Investment Fund of the State, created pursuant to 16429.1 of the California Government Code. (j) The County pooled investment fund. (k) Municipal obligations rated "A" or higher by S&P. (1) Other forms of investments that satisfy the City's Statement of Investment Policy as of the time of investment. "Plans and Specifications" means, with respect to the 2024 Project or any component thereof, the plans and specifications relating thereto filed by the City with the Authority pursuant to Section 3.2 of the Installment Sale Agreement, as such plans and specifications may be revised from time to time by the City pursuant to Section 3.2 of the Installment Sale Agreement. "Pledged Net Revenues" means, for any period, an amount equal to all of the Net Revenues received during such period minus the amount required to be paid with respect to the Senior Obligations during such period. "Principal Account" means the account by that name established in the Bond Fund pursuant to Section 5.02. "Rate Stabilization Fund" means the account by that name established by the City pursuant to Section 4.11 of the Installment Sale Agreement. "Record Date" means, with respect to any Interest Payment Date, the fifteenth (15th) calendar day of the month preceding such Interest Payment Date. "Registration Books" means the records maintained by the Trustee pursuant to Section 2.05 for the registration and transfer of ownership of the Bonds. "Revenues" means (a) all amounts received by the Authority or the Trustee pursuant or with respect to the Installment Sale Agreement, including, without limiting the generality of the foregoing, all of the Installment Payments (including both timely and delinquent payments, any late charges, and whether paid from any source) and prepayments, and (b) all interest, profits or -10- other income derived from the investment of amounts in any fund or account established pursuant to this Indenture; but excluding any Additional Payments. "S&P" means S&P Global Ratings, and its successors. "Senior Obligations" means, collectively, the 2016 Bonds and the 2020 Bonds. "Sinking Account" means the account by that name established in the Bond Fund pursuant to Section 5.02. "State" means the State of California. "Subordinate Obligations" means any obligations of the City payable from and secured by a pledge of and lien upon any of the Pledged Net Revenues subordinate to the City's payment obligations under the Installment Sale Agreement and any Parity Obligations. "Supplemental Indenture" means any indenture hereafter duly authorized and entered into between the Authority and the Trustee, supplementing, modifying or amending this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. "Taxable Rate" means, from and after the Date of Taxability following a Determination of Taxability, 6.350% per annum based on a 30-day month and a 360-day year for calculating interest. "Tax -Exempt Rate" means 4.820% per annum based on a 30-day month and a 360-day year for calculating interest. "Term of the Installment Sale Agreement" means the time during which the Installment Sale Agreement is in effect, as provided in Section 4.2 of the Installment Sale Agreement. "Trustee" means The Bank of New York Mellon Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, or its successor, as Trustee hereunder as provided in Section 8.01. "Trust Office" means the corporate trust office of the Trustee at 700 South Flower Street, Suite 500, Los Angeles, California 90017-4104, or at such other or additional offices as may be specified in writing to the Authority and the City, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted. "2016 Bonds" means, the City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds. "2020 Bonds" means, the City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020. "2024 Project" means the land, improvements and other property described more fully in Exhibit B attached to the Installment Sale Agreement and by this reference incorporated herein, as such description may be amended by the City from time to time pursuant to and in accordance with Section 3.2 of the Installment Sale Agreement. The precise identification of the -11- 2024 Project or any component thereof shall be determined by reference to the Plans and Specifications therefor. "2024 Project Costs" means, with respect to any 2024 Project, all costs of the Acquisition and Construction thereof, including but not limited to: (a) all costs required to be paid to any person under the terms of any agreement for or relating to the Acquisition and Construction of the 2024 Project; (b) obligations incurred for labor and materials in connection with the Acquisition and Construction of the 2024 Project; (c) the cost of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect in connection with the Acquisition and Construction of the 2024 Project; (d) all costs of engineering and architectural services, including the actual out-of-pocket costs for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees, sales commissions, and for supervising construction, as well as for the performance of all other duties required by or consequent to the proper Acquisition and Construction of the 2024 Project; (e) any sums required to reimburse the Authority or the City for advances made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the Acquisition and Construction of the 2024 Project; (f) all financing costs incurred in connection with the Acquisition and Construction of the 2024 Project, including but not limited to Costs of Issuance and other costs incurred in connection with the Installment Sale Agreement and the financing of the 2024 Project; and (g) the interest components of the Installment Payments during the period of Acquisition and Construction of the 2024 Project, to the extent not paid from the proceeds of the Bonds deposited in the Interest Account pursuant to the Indenture. "2024 Project Fund" means the fund by that name established pursuant to Section 3.04. "Water Fund" means the City's existing water enterprise fund, established and held by the City with respect to the Enterprise. "Written Certificate," "Written Request" and "Written Requisition" of the Authority or the City mean, respectively, a written certificate, request or requisition signed in the name of the Authority or the City by its Authorized Representative. 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. Section 1.02. 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 include the neuter, masculine or feminine gender, as appropriate. -12- (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 Indenture; the words "herein," "hereof," "hereby," "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. -13- ARTICLE 11 THE BONDS Section 2.01. Authorization of Bonds. The Authority hereby authorizes the issuance hereunder of the Bonds, which shall constitute special obligations of the Authority, for the purpose of providing funds to enable the City to refinance the Acquisition and Construction of the 2024 Project. The Bonds are hereby designated the "Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien)." The principal amount of Bonds initially issued and Outstanding under this Indenture shall equal four million one hundred twenty-five thousand dollars ($4,125,000). This Indenture constitutes a continuing agreement with the Trustee and the Owner from time to time of the Bonds to secure the full payment of the principal of and interest on all the Bonds, subject to the covenants, provisions and conditions herein contained. Section 2.02. Terms of the Bonds. The Bonds shall be issued as one fully registered bond, registered initially in the name of the Original Purchaser, in the principal amount of four million one hundred twenty-five thousand dollars ($4,125,000, shall bear interest at the Tax - Exempt Rate and shall mature on April 1, 2044; provided, however, that so long as an Event of Default shall have occurred and is continuing, the interest rate may, at the option of the Owner, be increased to the Default Rate, as provided in a written notice to the Trustee, the Authority and the City; provided further, however, that from and after the Date of Taxability following a Determination of Taxability, the interest rate may, at the option of the Owner, be increased to the Taxable Rate. Registered ownership of the Bonds, or any portion thereof, may not thereafter be transferred except as set forth herein. Interest on the Bonds shall be payable semi-annually calculated based on a 360-day year of twelve (12) thirty -day months on each Interest Payment Date to the person whose name appears on the Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date The Trustee shall pay principal of and interest on the Bonds when due by wire transfer (or other form of electronic payment) in immediately available funds to the Owner as of the Record Date in accordance with such wire transfer instructions as shall be filed by the Owner with the Trustee from time to time, or, with the Owner's consent, by another commercially reasonable method of payment. Payments of principal of the Bonds shall be made without the requirement for presentation and surrender of the Bonds by the Owner, provided that principal of the Bonds that is payable at final maturity shall be made only upon presentation and surrender thereof at the Trust Office. Principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Each Bond shall be dated the Closing Date and shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (b) unless it is authenticated on or before September 15, 2024, in which event it shall bear interest from the Closing Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. -14- The Bonds shall not be (a) assigned a rating by any rating agency, (b) registered with The Depository Trust Company or any other securities depository, or (c) issued pursuant to any type of offering document or official statement. Section 2.03. Form of Bonds. The Bonds, the Trustee's Certificate of Authentication, and the Assignment to appear thereon, shall be substantially in the form set forth in Exhibit A, which is attached hereto and by this reference incorporated herein, with such variations, omissions and insertions, as permitted or required by this Indenture. Section 2.04. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Authority with the facsimile or manual signature of the Chairperson of the Board of Directors and attested by the facsimile or manual signature of the Secretary of the Board of Directors. The Bonds shall then be delivered to the 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 Authority before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee or issued by the Authority such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers of the Authority and also any Bond may be signed and attested on behalf of the Authority by such persons as at the actual date of execution of such Bond shall be the proper officers of the Authority although at the nominal date of such Bond any such person shall not have been such officer of the Authority. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form set forth in Exhibit A attached hereto, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture. Section 2.05. Transfer of Bonds. (a) The Bonds may, in accordance with their terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its Trust Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Whenever any Bonds shall be surrendered for registration of transfer, the Authority shall execute and the Trustee shall deliver a new Bond or Bonds, of like interest rate, maturity and principal amount. The Trustee shall collect from the Owner any tax or other governmental charge on the transfer of any Bonds pursuant to this Section 2.05. The cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer shall be paid by the City. The Trustee may refuse to transfer, under the provisions of this Section 2.03, either (a) any Bonds during the period fifteen (15) days prior to the date established by the Trustee for the selection of Bonds for redemption, or (b) any Bonds selected by the Trustee for redemption. (b) Ownership of the Bonds may be transferred in whole only and only to a (i) an affiliate of the Owner or (ii) a bank, trust, custodian, insurance company or other financial institution or an affiliate thereof, in each case that executes and delivers to the Trustee a representation letter in substantially the form attached hereto as Exhibit B. -15- Nothing herein limits the right of the Owner to sell or assign participation interests in the Bonds, in minimum amounts of $250,000, to one or more entities listed in (i) or (ii), provided that any participation, custodial or similar agreement under which multiple ownership interests in the Bonds are created shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, owner, servicer or other fiduciary or agent acting on behalf of all of such owners (a loan servicer) to act on their behalf with respect to the rights and interests of the Owner, including with respect to the exercise of rights and remedies of the Owner on behalf of such owners upon the occurrence of an event of default under this Indenture. Prior to any transfer of the Bonds, the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under section 6045 of the Code, as amended. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information. Section 2.06. Exchange of Bonds. Any Bond may be exchanged at the Trust Office for a like aggregate principal amount of Bonds of other authorized denominations and of like maturity. The Trustee shall require the Owner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange. Section 2.07. Registration Books. The Trustee will keep or cause to be kept, at the Trust Office, sufficient records for the registration and transfer of ownership of the Bonds, which shall at all reasonable times with reasonable prior notice be open to inspection during regular business hours by the Authority, the City and the Owner; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as hereinbefore provided. Section 2.08. Temporary Bonds. The Bonds may be issued in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds it will execute and deliver definitive Bonds as promptly thereafter as practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, at the Trust Office and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder. Section 2.09. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the Authority, at the expense of the Owner of such lost, destroyed or stolen Bond, shall execute, and the Trustee shall -16- 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, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each new Bond issued under this Section 2.08 and of the expenses which may be incurred by the City, the Authority and the Trustee in the premises. Any Bond issued under the provisions of this Section 2.08 in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds secured by this Indenture. -17- ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS Section 3.01. Issuance of the Bonds. At any time after the execution of this Indenture, the Authority may execute and the Trustee shall authenticate and, upon the Written Request of the Authority, deliver Bonds in the principal amount of four million one hundred twenty-five thousand dollars ($4,125,000). Section 3.02. Application of Proceeds of the Bonds. The proceeds received from the sale of the Bonds ($4,125,000.00), being the principal amount of the Bonds, shall be deposited in trust with the Trustee or transferred as follows: (a) The Trustee shall deposit the amount of $125,000.00 in the Costs of Issuance Fund; and (b) The Trustee shall deposit the remaining balance of such proceeds ($4,000,000.00) in the 2024 Project Fund. The Trustee may, in its discretion, establish a temporary fund or account to facilitate the foregoing transfers. Section 3.03. Establishment and Application of Costs of Issuance Fund. The 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 Trustee to pay the Costs of Issuance upon submission of Written Requisitions of the Authority 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 said fund. Each Written Requisition of the Authority shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On May 14, 2024, or upon the earlier Written Request of the Authority, all amounts remaining in the Costs of Issuance Fund shall be transferred by the Trustee to the City for deposit in the 2024 Project Fund and the Costs of Issuance Fund shall be closed. Section 3.04. Establishment and Application of 2024 Project Fund. (a) The Trustee shall establish when required and maintain and hold in trust a separate fund designated as the "2024 Project Fund." The moneys in the 2024 Project Fund shall be used by the City to pay the costs of the 2024 Project, including any interest payable during the construction of such project, if applicable. Amounts deposited in the 2024 Project Fund shall be used solely for payment of 2024 Project Costs. (b) Before any payment from the 2024 Project Fund shall be made, the City shall file or cause to be filed with the Trustee a Written Requisition of the City stating (i) the name of the person to whom each such payment is due, which may be the City in the case of reimbursement for costs of the 2024 Project theretofore paid or to be paid by the City; (ii) the respective amounts to be paid; (iii) the purpose by general classification for which each obligation to be paid was incurred; and (iv) that each item thereof is a proper charge against the 2024 Project Fund and has not been previously paid from said Fund. The Trustee may conclusively rely on the accuracy of each such Written Requisition and shall have no duty or obligation to verify the content of any Written Requisition. -18- (c) When the 2024 Project has been completed, the City shall notify the Trustee of such completion. Any moneys remaining in the 2024 Project Fund upon such notification shall be transferred and applied upon the written order of the City to the Bond Fund and the 2024 Project Fund shall be closed. The City shall acquire, construct and install the 2024 Project or cause the 2024 Project to be acquired, constructed and installed and shall proceed with due diligence and use its best efforts to cause the construction and / or installation of the 2024 Project to be completed by February 14, 2027, delays beyond the reasonable control of the City only excepted. 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 Authority or the Trustee with respect to or in connection with the Installment Sale Agreement. The recital contained in the Bonds that the same are issued pursuant to the Constitution and laws of the State shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance. -19- ARTICLE IV REDEMPTION OF BONDS Section 4.01. Terms of Redemption. (a) Sinking Account Redemption. The Bonds are subject to mandatory redemption, in part, from Sinking Account payments set forth in the following schedule on April 1, 2025, and on April 1 in each year thereafter to and including April 1, 2044, at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some but not all of the Bonds have been redeemed pursuant to subsection (b) below, the total amount of Sinking Account payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the Bonds so redeemed by reducing future Sinking Account payment in inverse order of payment date. Redemption Date (April 1) 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 t Maturity. Principal Amount $105,000 135,000 140,000 145,000 155,000 160,000 170,000 180,000 185,000 195,000 205,000 215,000 225,000 235,000 245,000 260,000 270,000 285,000 300,000 315,000 (b) Optional Redemption. The Bonds are subject to redemption, at the option of the City on or after April 1, 2034, as a whole on any date or in part on any Interest Payment Date, by lot, from any available source of funds, from prepayments of the Installment Payments made at the option of the City pursuant to Section 9.2 of the Installment Sale Agreement, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. Partial redemptions shall be applied to the principal of the Bond in inverse order of sinking account payment. Section 4.02. Notice of Redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, not less than thirty (30) nor more than sixty (60) days before any redemption date, to the Owner at its address appearing on the Registration Books. Each notice of redemption shall state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the Bonds are to be redeemed and, in the case of Bonds to -20- be redeemed in part only, the portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the redemption date there will become due and payable on each of said Bonds the redemption price thereof, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered. Neither the failure to receive any notice nor any defect therein shall affect the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority. Notice of any redemption of Bonds (other than redemptions pursuant to Section 4.01(a)) shall either (i) explicitly state that the proposed redemption is conditioned on there being on deposit in the applicable fund or account on the redemption date sufficient money to pay the full redemption price of the Bonds to be redeemed, or (ii) be sent only if sufficient money to pay the full redemption price of the Bonds to be redeemed is on deposit in the applicable fund or account. Section 4.03. Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered. Section 4.04. 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 date fixed for redemption on, the Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Bonds (or portions thereof) so called for redemption shall become due and payable, 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 Indenture, and the Owner of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. All Bonds redeemed pursuant to the provisions of this Article shall be canceled by the Trustee upon surrender thereof and destroyed. -21- ARTICLE V REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST Section 5.01. Pledge and Assignment; Bond Fund. (a) Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Revenues and any other amounts (including proceeds of the sale of the Bonds) held in any fund or account established pursuant to this Indenture are hereby pledged to secure the payment of the principal of and interest on the Bonds in accordance with their terms and the provisions of this Indenture. 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 the Closing Date, without any physical delivery thereof or further act. (b) The Authority hereby transfers in trust, grants a security interest in and assigns to the Trustee, for the benefit of the Owner from time to time of the Bonds, all of the Revenues and all of the rights of the Authority in the Installment Sale Agreement (other than the rights of the Authority under Sections 4.9, 6.3 and 8.4 thereof). The Trustee shall be entitled to and shall collect and receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. The Trustee also shall be entitled to and shall, subject to the provisions of Article VIII, take all steps, actions and proceedings which the Trustee determines to be reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the City under the Installment Sale Agreement. The assignment of the Installment Sale Agreement to the Trustee is solely in its capacity as Trustee under this Indenture and the duties, powers and liabilities of the Trustee in acting thereunder shall be subject to the provisions of this Indenture, including, without limitation, the provisions of Article VIII hereof. The Trustee shall not be responsible for any representations, warranties, covenants or obligations of the Authority. (c) All Revenues shall be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the 'Bond Fund" which the Trustee shall establish, maintain and hold in trust. All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in this Indenture. (d) The Trustee shall provide written notice to the City, at least ten Business Days preceding each Interest Payment Date, of the amount of Revenues, derived from Installment Payments as required by the Installment Sale Agreement, due to the Trustee on such Interest Payment Date, taking into account any investment earnings which shall be applied as a credit against such required payment. If, on the 5th Business Day preceding each Interest Payment Date, the Trustee is not in receipt of the total amount due to the Trustee on such Interest Payment Date, the Trustee shall provide a second similar notice to the City and promptly notify the Director of Finance / City Treasurer by telephone. Notwithstanding the foregoing, the failure of the Trustee to provide either of such notices shall in no way relieve the City of its obligation to make all Installment Payments as required by the Installment Sale Agreement. Section 5.02. Allocation of Revenues. On each date on which principal of or interest on the Bonds becomes due and payable, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain -22- within the Bond Fund), the following amounts in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority: (a) The Trustee shall deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such date on all Bonds then Outstanding. (b) The Trustee shall deposit in the Sinking Account or the Principal Account an amount required to cause the aggregate amount on deposit in the Sinking Account or the Principal Account to equal the principal amount or the Sinking Account redemption of the Bonds coming due and payable on such date. Section 5.03. Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity pursuant to this Indenture). Section 5.04. Application of Sinking Account and Principal Account. All amounts in the Sinking Account and Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount or the Sinking Account redemption of the Bonds at their respective maturity dates. Section 5.05. Investments. All moneys in any of the funds or accounts established with the Trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted Investments. Such investments shall be directed by the Authority pursuant to a Written Request of the Authority filed with the Trustee at least two (2) Business Days in advance of the making of such investments. In the absence of any such directions from the Authority, the Trustee shall invest any such moneys in the money market fund set forth in the letter of authorization and direction executed by the Authority and delivered to the Trustee. If no specific money market fund had been specified by the Authority, the Trustee shall make a request to the Authority for investment directions and, if no investment directions are provided, such amount shall be held in cash, uninvested until specific investment directions are provided by the Authority to the Trustee. Permitted Investments purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. To the extent investments are registrable, such investments shall be registered in the name of the Trustee. All interest or gain derived from the investment of amounts in 2024 Project Fund shall be retained therein. All interest or gain derived from the investment of amounts in Costs of Issuance Fund shall be retained therein. All interest or gain derived from the investment of amounts in Interest Account shall be retained therein. All interest or gain derived from the investment of amounts in any other funds or accounts established hereunder shall be transferred when received to the Interest Account. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder. The Trustee or an affiliate may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section 5.05. Such investments shall be valued by the Trustee not less often than quarterly, at the market value thereof, exclusive of accrued interest. Deficiencies in the amount on deposit in any -23- fund or account resulting from a decline in market value shall be restored no later than the succeeding valuation date. The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority the right to receive brokerage confirmations of security transactions as they occur, the Authority will not receive such confirmations to the extent permitted by law. The Trustee will furnish the Authority with account transaction statements as provided herein which shall include detail for all investment transactions made by the Trustee hereunder. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. Section 5.06. Valuation and Disposition of Investments. All moneys held by the Trustee shall be held in trust, but need not be segregated from other funds unless specifically required by this Indenture. Except as specifically provided in this Indenture, the Trustee shall not be liable to pay interest on any moneys received by it, but shall be liable only to account to the Authority for earnings derived from funds that have been invested. The Authority covenants that all investments of amounts deposited in any fund or account created by or pursuant to this Indenture, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by this Indenture or the Code) at Fair Market Value. -24- ARTICLE VI PARTICULAR COVENANTS Section 6.01. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal of and interest on all the Bonds in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Revenues and other assets pledged for such payment as provided in this Indenture. Section 6.02. No Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section 6.02 shall be deemed to limit the right of the Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds. Section 6.03. Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, and reserves the right to issue other obligations for such purposes. Section 6.04. Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other assets purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all times, subject to the provisions of Article VIII 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 Owner under this Indenture against all claims and demands of all persons whomsoever. Section 6.05. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate trust industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of Bonds, the Revenues, the Installment Sale Agreement and all funds and accounts established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Authority and the City, during business hours and under reasonable circumstances. The Trustee shall deliver a monthly accounting of all funds and accounts except for any fund or account which has a balance of $0.00 and has not had any activity since the last reporting date. The Trustee shall establish such other funds and accounts as it deems necessary to carry out its duties under this Indenture. Section 6.06. No Additional Obligations. The Authority covenants that no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part. Section 6.07. Tax Covenants. -25- (a) No Arbitrage. The Authority shall not take, or permit to be taken by the Trustee, the City or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. (b) Rebate Requirement. The Authority shall cause the City to take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investments earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. (c) Private Activity Bond Limitation. The Authority shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of section 141(c) of the Code or the private loan financing test of section 141(b) of the Code. (d) Federal Guarantee Prohibition. The Authority shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code. (e) Maintenance of Tax Exemption. The Authority shall take any and all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owner to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds. (f) Small Issuer Exemption from Bank Deductibility Restriction. The Authority hereby designates the Bonds for purposes of paragraph (3) of section 265(b) of the Code and represents that not more than $10,000,000 aggregate principal amount of obligations the interest on which is excludable (under section 103(a) of the Code) from gross income for federal income tax purposes (excluding (i) private activity bonds, as defined in section 141 of the Code, except qualified 501(c)(3) bonds as defined in section 145 of the Code and (ii) current refunding obligations to the extent the amount of the refunding obligation does not exceed the outstanding amount of the refunded obligation), has been or will be issued by or on behalf of the City, including all subordinate entities of the City, during the calendar year 2024. Section 6.08. Installment Sale Agreement. The Trustee shall promptly collect all amounts due from the City pursuant to the Installment Sale Agreement. Subject to the provisions of Article VIII, the Trustee shall enforce, and take all steps, actions and proceedings as directed by the Owner for the enforcement of all of its rights thereunder as assignee of the Authority and for the enforcement of all of the obligations of the City under the Installment Sale Agreement. Section 6.09. Waiver of Laws. The Authority 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 Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law. Section 6.10. Further Assurances. The Authority will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owner of the rights and benefits provided in this Indenture. Section 6.11. Continued Existence of the Authority. The Authority will take or cause to be taken all actions reasonably necessary to continue its existence until such time as the Bonds -26- have been paid in full, including but not limited to the addition or substitution of one or more new members. -27- ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section 7.01. Events of Default. The following events shall be Events of Default hereunder: (a) Default in the due and punctual payment of the principal of any Bonds when and as the same shall become due and payable, whether at maturity as therein expressed, by acceleration, or otherwise. (b) Default in the due and punctual payment of any installment of interest on any Bonds when and as the same shall become due and payable. (c) Default by the Authority in the observance of any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, if such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authority by the Trustee; provided, however, that if in the reasonable opinion of the Authority the default stated in the notice can be corrected, but not within such thirty (30) day period, such default shall not constitute an Event of Default hereunder if the Authority shall commence to cure such default within such thirty (30) day period and thereafter diligently and in good faith cure such failure in a reasonable period of time; provided that such additional cure period may not exceed 30 days without the written consent of the Owner. (d) The occurrence and continuation of an event of default under and as defined in the Installment Sale Agreement. Section 7.02. Remedies Upon Event of Default. If any Event of Default shall occur, then, and in each and every such case during the continuance of such Event of Default, the Trustee may, and shall at the written direction of the Owner, upon notice in writing to the Authority and the City, declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding. Any such declaration 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 Authority or the City shall deposit with the Trustee a sum sufficient to pay all the principal 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 to the extent permitted by law, and the reasonable fees, charges and expenses (including those of its attorneys) of the Trustee, and any and all other Events of Default known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Owner, by written notice to the Authority, the City and the Trustee, or the Trustee if such declaration was made by the Trustee, may, on behalf of the Owner, rescind and annul such declaration and its consequences and waive such Event of Default; but no such rescission and annulment shall extend to or shall affect any subsequent Event of Default, or shall impair or exhaust any right or power consequent thereon. Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf the Owner any -28- plan of reorganization, arrangement, adjustment, or composition affecting the Bonds or the rights of the Owner, or to authorize the Trustee to vote in respect of the claim of the Owner in any such proceeding without the approval of the Owner. 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 Trustee under any of the provisions of this Indenture shall be applied by the Trustee as follows and in the following order: (a) To the payment of any expenses necessary to protect the interests of the Owner and payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture; (b) To the payment of the principal of and interest then due on the Bonds (upon presentation of the Bonds to be paid, and stamping or otherwise noting thereon of the payment if only partially paid, or surrender thereof if fully paid) in accordance with the provisions of this Indenture, as follows: 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 of any Bonds which shall have become due, whether at maturity or by acceleration, with interest on the overdue principal at the rate borne by the respective Bonds (to the extent permitted by law), and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference. Section 7.04. Trustee to Represent Bond Owner. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney -in -fact of the Owner for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owner under the provisions of the Bonds, this Indenture and applicable provisions of any law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Owner, the Trustee in its discretion may, and upon the written request of the Owner, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Owner 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 Trustee or in the Owner under the Bonds, this Indenture or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Revenues and other assets pledged under this Indenture, pending such proceedings. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or -29- proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Owner, subject to the provisions of this Indenture. Section 7.05. Owner Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owner shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that the Trustee shall have the right to decline to follow any such direction which would expose it to liability. Section 7.06. Limitation on Owner's Right to Sue. Notwithstanding any other provision hereof, the Owner shall have no right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Installment Sale Agreement or any other applicable law with respect to such Bonds, unless (a) the Owner shall have given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owner shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) the Owner shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee shall have failed to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee; and (e) no direction inconsistent with such written request shall have been given to the Trustee during such sixty (60) day period by the Owner. Section 7.07. Absolute Obligation of Authority. Nothing in Section 7.06 or in any other provision of this Indenture or in the Bonds contained shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the Owner at its date of maturity, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of the Owner, 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 Trustee or the Owner on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Owner, then in every such case the Authority, the Trustee and the Owner, 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 Authority, the Trustee and the Owner 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 Trustee or to the Owner 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 Trustee or of the Owner to exercise any right or power arising upon the occurrence of any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee or the Owner may be exercised from time to time and as often as may be deemed expedient. -30- Section 7.11. Parties Interested Herein. Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the City, the Authority or the Trustee, their officers, employees and agents, and the Owner any right, remedy or claim under or by reason of this Indenture, or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the City, the Authority or the Trustee, their officers, employees and agents, and the Owner. -31- ARTICLE VIII THE TRUSTEE Section 8.01. Appointment of Trustee. The Bank of New York Mellon Trust Company, N.A., a national banking association organized and existing under and by virtue of the laws of the United States of America, is hereby appointed Trustee by the Authority for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Authority agrees that it will maintain a Trustee having a corporate trust office in the State, with (or if a member of a bank holding company system, its parent holding company shall have) a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or State authority, so long as any Bonds are Outstanding. If such national banking association, 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 Section 8.01 the combined capital and surplus of such national banking association, 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. The Trustee is hereby authorized to pay the principal of and interest and maturity amount on the Bonds when duly presented for payment at maturity, and to cancel all Bonds upon payment thereof. The Trustee shall keep accurate records of all funds administered by it and of all Bonds paid and discharged. Section 8.02. Acceptance of Trustee. The Trustee hereby accepts the trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions: (a) The Trustee, prior to the occurrence of an Event of Default and after curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default hereunder has occurred (which has not been cured or waived), the Trustee may exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill and diligence in their exercise, as a prudent person would use in the conduct of its own affairs. (b) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder. The Trustee shall not be responsible for any willful misconduct or negligence on the part of any agent, receiver or attorney appointed with due care by it hereunder. The Trustee may conclusively rely upon an opinion of counsel as full and complete protection for any action taken or suffered by it hereunder. (c) The Trustee shall not be responsible for any recital herein, or in the Bonds, or for any of the supplements thereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby and the Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, conditions or agreements on the part of the Authority hereunder. (d) Except as provided in Section 3.02, the Trustee shall not be accountable for the use of any proceeds of sale of the Bonds delivered hereunder. The Trustee may become the Owner of secured hereby with the same rights which it would have if not the Trustee; may acquire and -32- dispose of other bonds or evidences of indebtedness of the Authority with the same rights it would have if it were not the Trustee. (e) The Trustee shall be protected in acting, in good faith and without negligence, upon any notice, request, consent, certificate, order, affidavit, letter, telegram, requisition, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken or omitted to be taken by the Trustee in good faith and without negligence pursuant to this Indenture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner, shall be conclusive and binding upon all future Owners and upon Bonds issued in exchange therefor or in place thereof. The Trustee shall not be bound to recognize any person as an Owner or to take any action at his request unless the ownership of such Bond by such person shall be reflected on the Registration Books. (f) As to the existence or non-existence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a Written Certificate of the Authority as sufficient evidence of the facts therein contained and prior to the occurrence of an Event of Default hereunder of which the Trustee has been given notice or is deemed to have notice, as provided in Section 8.02(h) hereof, shall also be at liberty to accept a Written Certificate of the Authority to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same. (g) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct. The immunities and exceptions from liability of the Trustee shall extend to its officers, directors, employees and agents. (h) The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default hereunder, under the Installment Sale Agreement, except failure by the Authority to make any of the payments to the Trustee required to be made by the Authority pursuant hereto or failure by the Authority to file with the Trustee any document required by this Indenture to be so filed subsequent to the issuance of the Bonds, unless the Trustee shall be specifically notified in writing of such default by the Authority, and all notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered at the Trust Office of the Trustee, and in the absence of such notice so delivered the Trustee may conclusively assume there is no Event of Default hereunder except as aforesaid. (i) At any and all reasonable times the Trustee and its duly authorized agents, attorneys, experts, accountants and representatives, shall have the right (but not any duty) fully to inspect all books, papers and records of the Authority pertaining to the Bonds, and to make copies of any of such books, papers and records such as may be desired but which is not privileged by statute or by law. Q) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises hereof. (k) Notwithstanding anything elsewhere in this Indenture with respect to the execution of any Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate -33- action or evidence thereof, as may be deemed desirable for the purpose of establishing the right of the Authority to the execution of any Bonds, the withdrawal of any cash, or the taking of any other action by the Trustee. (1) Before taking any action under Article VII hereof or this Article VIII at the request or direction of the Owner, the Trustee may require payment or reimbursement of its fees and expenses, including fees and expenses of counsel and receipt of an indemnity bond satisfactory to it from the Owner to protect it against all liability, except liability which is adjudicated to have resulted from its own negligence or willful misconduct in connection with any action so taken. Before being required to take any action, the Trustee may require an opinion of Independent Counsel acceptable to the Trustee, which opinion shall be made available to the other parties hereto upon request, which counsel may be counsel to any of the parties hereto, or a verified certificate of any party hereto, or both, concerning the proposed action. If it does so in good faith, the Trustee shall be absolutely protected in relying thereon. (m) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received but need not be segregated from other funds except to the extent required by law. (n) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be provided that the Trustee was negligent in ascertaining the pertinent facts. Whether or not therein expressly so provided, every provision of this Indenture, the Installment Sale Agreement relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article. The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, coupon or other paper or document. (o) The Trustee shall have no responsibility for or liability in connection with assuring that all of the procedures or conditions to closing set forth in the contract for purchase of the Bonds have been met on the closing date or, that all documents required to be delivered on the Closing Date to the parties are actually delivered, except its own responsibility to receive the proceeds of the sale, deliver the Bonds or other certificates expressly required to be delivered by it and its counsel. The Trustee may assume that parties to the contract for purchase of the Bonds have waived their rights to receive documents or to require the performance of procedures if the parties to whom such documents are to be delivered or for whom such procedures are to be performed do not require delivery or performance on or prior to the Closing Date. (p) The Trustee shall have no responsibility with respect to any information, statement or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds. (q) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay ("unavoidable delay') in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to -34- procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the 2024 Project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar even and / or occurrences beyond the control of the Trustee. (r) Whenever in the administration of the trusts imposed upon it by this Trust Agreement the 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 Authority or City, and such certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable. (s) The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Authority elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee's understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Authority agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. (t) The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. (u) The Trustee may consult with counsel, including, without limitation, counsel of or to the Authority or City, with regard to legal questions, and, shall have full and complete authorization and protection in respect of any action taken or suffered by the Trustee hereunder in accordance therewith. Section 8.03. Fees, Charges and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for reasonable fees for its services rendered hereunder and all advances, counsel fees (including expenses) and other expenses reasonably and necessarily made or incurred by the Trustee in connection with such services. Upon the occurrence of an Event of Default hereunder, but only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment of any Bond upon the amounts held hereunder for the foregoing fees, charges and expenses incurred by it respectively. Section 8.04. Notice to Owner of Default. If an Event of Default hereunder occurs with respect to any Bonds of which the Trustee has been given or is deemed to have notice, as provided in Section 8.02(h) hereof, then the Trustee shall immediately give written notice thereof, by first-class mail to the Owner, unless such Event of Default shall have been cured -35- before the giving of such notice; provided, however, that unless such Event of Default consists of the failure by the Authority to make any payment when due, the Trustee shall, within thirty (30) days of the Trustee's knowledge thereof, give such notice to the Owner unless the Trustee in good faith determines that it is in the best interests of the Owner not to give such notice. Section 8.05. Intervention by Trustee. In any judicial proceeding to which the Authority is a party which, in the opinion of the Trustee's counsel, has a substantial bearing on the interests of the Owner, the Trustee may intervene on behalf of the Owner, and subject to Section 8.02(1) hereof, shall do so if requested in writing by the Owner. Section 8.06. Removal of Trustee. The Owner may at any time, and the Authority may, so long as no Event of Default shall have occurred and then be continuing, remove the Trustee initially appointed, and any successor thereto, by an instrument or concurrent instruments in writing delivered to the Trustee, whereupon the Authority (with the written consent of the City) or the Owner, as the case may be, shall appoint a successor or successors thereto; provided that any such successor shall be a bank or trust company meeting the requirements set forth in Section 8.01. Section 8.07. Resignation by Trustee. The Trustee and any successor Trustee may at any time give written notice of its intention to resign as Trustee hereunder, such notice to be given to the Authority and the City by first class mail. Upon receiving such notice of resignation, the Authority (with the written approval of the City) shall promptly appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. Upon such acceptance, the Authority shall cause notice thereof to be given by first class mail, postage prepaid, to the Owner at its address set forth on the Registration Books. Section 8.08. Appointment of Successor Trustee. In the event of the removal or resignation of the Trustee pursuant to Sections 8.06 or 8.07, respectively, and if the Owner shall not have approved a successor Trustee, then, with the prior written consent of the City, the Authority shall promptly appoint a successor Trustee. In the event the Authority shall for any reason whatsoever fail to appoint a successor Trustee within sixty (60) days following the delivery to the Trustee of the instrument described in Section 8.06 or within sixty (60) days following the receipt of notice by the Authority pursuant to Section 8.07, the Trustee may, at the expense of the Authority, apply to a court of competent jurisdiction for the appointment of a successor Trustee meeting the requirements of Section 8.01 hereof. Any such successor Trustee appointed by such court shall become the successor Trustee hereunder notwithstanding any action by the Authority purporting to appoint a successor Trustee following the expiration of such ninety -day period. Within sixty (60) days following the appointment of a successor Trustee hereunder, the former Trustee shall deliver to such successor Trustee (a) all funds and accounts held by the former Trustee hereunder, and (b) any and all information and documentation as may be required or reasonably requested by the Authority or such successor Trustee in connection with the transfer to such successor Trustee of all the duties and functions of the Trustee hereunder. The Authority shall pay the reasonable costs and expenses of such former Trustee incurred in connection with such transfer. Section 8.09. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of it corporate trust business, provided that such company shall meet the requirements set forth in Section 8.01, shall be the successor to the -36- Trustee and vested with all of the title to the trust estate and all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding. Section 8.10. Concerning any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority an instrument in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the Request of the Authority, or of the Trustee's successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as the Trustee hereunder to its successor. Should any instrument in writing from the Authority be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor Trustee, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority. Section 8.11. Appointment of Co -Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional individual or institution as a separate co -trustee. The following provisions of this Section 8.11 are adopted to these ends. In the event that the Trustee appoints an additional individual or institution as a separate or co -trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co -trustee but only to the extent necessary to enable such separate or co - trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co -trustee shall run to and be enforceable by either of them. Should any instrument in writing from the Authority be required by the separate trustee or co -trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority. In case any separate trustee or co -trustee, or a successor to either, shall become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co -trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co - trustee. Section 8.12. Indemnification; Limited Liability of Trustee. The Authority further covenants and agrees to indemnify and save the Trustee and its officers, directors, agents and employees, harmless against any loss, expense, including legal fees and expenses, and liabilities which it may incur arising out of or in the exercise and performance of its powers and duties -37- hereunder, including the reasonable costs and expenses of defending against any claim of liability or arising out of any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading in any official statement or other disclosure utilized in connection with the sale of the Bonds, but excluding any and all losses, expenses and liabilities which are due to the negligence or willful misconduct of the Trustee, its officers, directors, agents or employees. No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability hereunder if repayment of such funds or adequate indemnity against such liability or risk is not assured to it. The Trustee shall not be liable for any action taken or omitted to be taken by it in accordance with the direction of the Owner relating to the time, method and place of exercising any trust or power or conducting any proceeding or remedy available to the Trustee under this Indenture of for any special, indirect, consequential or punitive damages. The obligations of the Authority hereunder and Section 8.03 shall survive the resignation or removal of the Trustee, or the discharge of this Indenture. -38- ARTICLE IX MODIFICATION OR AMENDMENT OF THIS INDENTURE Section 9.01. Amendments Permitted. (a) This Indenture and the rights and obligations of the Authority and of the Owner and of the Trustee may be modified or amended from time to time and at any time by an indenture or indentures supplemental thereto, which the Authority and the Trustee may enter into when the written consent of the Owner, exclusive of Bonds disqualified as provided in Section 11.09 hereof, shall have been filed with the Trustee. No such modification or amendment shall (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owner 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 Indenture prior to or on a parity with the lien created by this Indenture except as permitted herein, or deprive the Owner of the lien created by this Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owner. It shall not be necessary for the consent of the Owner to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. (b) This Indenture and the rights and obligations of the Authority, of the Trustee and the may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority and the Trustee may enter into without the consent of any Owner, if the Trustee has been furnished an opinion of counsel that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Owner, including, without limitation, for any one or more of the following purposes: (i) to add to the covenants and agreements of the Authority in this Indenture contained 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 Authority; (ii) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute; (iii) to modify, amend or supplement this Indenture in such manner as to cause interest on the Bonds to remain excludable from gross income under the Code; or (iv) to facilitate the issuance of Parity Obligations by the City pursuant to the Installment Sale Agreement. (c) The Trustee may in its discretion, but shall not be obligated to, enter into any such Supplemental Indenture authorized by subsections (a) or (b) of this Section 9.01 which materially adversely affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. -39- (d) Prior to the Trustee entering into any Supplemental Indenture hereunder, there shall be delivered to the Trustee an opinion of Bond Counsel stating, in substance, that such Supplemental Indenture has been adopted in compliance with the requirements of this Indenture and that the adoption of such Supplemental Indenture will not, in and of itself, adversely affect the exclusion from gross income for purposes of federal income taxes of interest on the Bonds. Section 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article IX, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the Trustee and the Owner 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 Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Trustee so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand on the Owner at the time of such execution and presentation of his Bonds for the purpose at the Trust Office or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand on the Owner shall be exchanged at the Trust Office, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of the same series and maturity. Section 9.04. Amendment of Particular Bonds. The provisions of this Article IX shall not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by him. -40- ARTICLE X DEFEASANCE Section 10.01. Discharge of Indenture. Any or all of the Outstanding Bonds may be paid by the Authority in any of the following ways, provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority: (a) by paying or causing to be paid the principal of and interest on such Bonds, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem such Bonds; or (c) by delivering to the Trustee, for cancellation by it, all of such Bonds. If the Authority shall also pay or cause to be paid all other sums payable hereunder by the Authority, then and in that case, at the election of the Authority (evidenced by a Written Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and this Indenture), and notwithstanding that any of such Bonds shall not have been surrendered for payment, this Indenture and the pledge of Revenues and other assets made under this Indenture with respect to such Bonds and all covenants, agreements and other obligations of the Authority under this Indenture with respect to such Bonds shall cease, terminate, become void and be completely discharged and satisfied. In such event, upon the Written Request of the Authority, the Trustee shall execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the City all moneys or securities or other property held by it pursuant to this Indenture which are not required for the payment of any of such Bonds not theretofore surrendered for such payment. Section 10.02. Discharge of Liability on Bonds. Upon the deposit with the 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 Bonds (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the Authority in respect of such Bonds shall cease, terminate and be completely discharged, and the Owners thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 10.04. The Authority may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered, which the Authority 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 Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the 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 Trustee in the funds and accounts established pursuant to this Indenture and shall be: -41- (a) 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; or (b) Defeasance Obligations, the principal of and interest on which when due will, in the written opinion of an Independent Accountant filed with the City, the Authority and the Trustee, provide money sufficient to pay the principal of and interest on the Bonds to be paid, as such principal and interest become due; provided, in each case, that (i) the Trustee shall have been irrevocably instructed (by the terms of this Indenture or by Written Request of the Authority) to apply such money to the payment of such principal and interest with respect to such Bonds, and (ii) the Authority shall have delivered to the Trustee an opinion of Bond Counsel to the effect that such Bonds have been discharged in accordance with this Indenture (which opinion may rely upon and assume the accuracy of the Independent Accountant's opinion referred to above). Section 10.04. Unclaimed Funds. Notwithstanding any provisions of this Indenture, and subject to applicable provisions of State law, any moneys held by the Trustee in trust for the payment of the principal of, or interest on, any Bonds and remaining unclaimed for a period ending on the earlier of 10 days prior to the date unclaimed funds would escheat to the state or (a) two (2) years after the principal of all of the Bonds has become due and payable (whether at maturity or by acceleration as provided in this Indenture), if such moneys were so held at such date, or (b) two (2) years 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 Authority free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the City as aforesaid, the Trustee may (at the cost of the City) first mail to the Owner, at the addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof. -42- ARTICLE XI MISCELLANEOUS Section 11.01. Liability of Authority Limited to Revenues. Notwithstanding anything in this Indenture or in the Bonds contained, the Authority shall not be required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Indenture for any of the purposes in this Indenture mentioned, whether for the payment of the principal of or interest on the Bonds or for any other purpose of this Indenture. Nevertheless, the Authority may, but shall not be required to, advance for any of the purposes hereof any funds of the Authority which may be made available to it for such purposes. Section 11.02. Limitation of Rights to Parties and Owner. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any person other than the Authority, the Trustee, the City and the Owner, any legal or equitable right, remedy or claim under or in respect of this 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 Authority, the Trustee, the City and the Owner. Section 11.03. Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with corporate trust industry standards to the extent practicable, and with due regard for the requirements of Section 6.05 and for the protection of the security of the Bonds and the rights of every Owner thereof. Section 11.04. Waiver of Notice; Requirement of Mailed Notice. Whenever in this 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. Whenever in this Indenture any notice shall be required to be given by mail, such requirement shall be satisfied by the deposit of such notice in the United States mail, postage prepaid, by first class mail. Section 11.05. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may, upon Written Request of the Authority, in lieu of such cancellation and delivery, destroy such Bonds (in the presence of an officer of the Authority, if the Authority shall so require) as may be allowed by law, and deliver a certificate of such destruction to the Authority. Section 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this 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 Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority hereby declares that it would have entered into this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, -43- paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable. Section 11.07. Notices. All written notices to be given under this Indenture shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective either (a) upon transmission by facsimile transmission or other form of telecommunication, (b) 48 hours after deposit in the United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The Authority, the City or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder. If to the Authority: Tustin Public Financing Authority c / o City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: City Manager Phone: (714) 573-3000 If to the City: City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: City Manager Phone: (714) 573-3000 If to the Trustee: The Bank of New York Mellon Trust Company, N.A. 333 South Hope Street, Suite 2525 Los Angeles, CA 90071 Attention: Corporate Trust Department Phone: (213) 630-6260 If to the Original Purchaser: Capital One Public Funding, LLC 1307 Walt Whitman Road, 3rd Floor Melville, NY 11747 Attention: President Phone: (631) 531-2824 The City, the Authority, the Trustee and the Original Purchaser, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent. Section 11.08. Evidence of Rights of Owner. Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by the Owner may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by the Owner 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 Indenture and shall be conclusive in favor of the Trustee and the Authority if made in the manner provided in this Section 11.08. 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 him the -44- 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 Registration Books. Any request, consent, or other instrument or writing of the Owner shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance thereon. Section 11.09. Disqualified Bonds. In determining whether the Owner has concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are known by the Trustee to be owned or held by or for the account of the Authority or the City, 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 Authority or the City or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section 11.09 if the pledgee shall establish to the satisfaction of the 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 with, the Authority or the City or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Authority and the City shall specify in a certificate to the Trustee those Bonds disqualified pursuant to this Section 11.09 and the Trustee may conclusively rely on such certificate. Section 11.10. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest or principal 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 by it for the Owner entitled thereto, subject, however, to the provisions of Section 10.04 hereof but without any liability for interest thereon. Section 11.11. Waiver of Personal Liability. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal 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 Indenture. Section 11.12. Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture either the Authority or the 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 Indenture contained by or on behalf of the Authority or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 11.13. Execution in Several Counterparts. This 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 Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. Section 11.14. Governing Law. This Indenture shall be governed by and construed in accordance with the laws of the State. -45- IN WITNESS WHEREOF, the TUSTIN PUBLIC FINANCING AUTHORITY has caused this Indenture to be signed in its name by its Executive Director, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written. TUSTIN PUBLIC FINANCING AUTHORITY 91 By A -4 CTZ:c Executive Director THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee By Authorized Signatory [Signature page to Indenture of Trust, dated as of February 1, 2024, by and between the Tustin Public Financing Authority and The Bank of New York Mellon Trust Company, N.A., as Trustee} -46- IN WITNESS WHEREOF, the TUSTIN PUBLIC FINANCING AUTHORITY has caused dus Indenture to be signed in its name by its Executive Director, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto dui authorized, all as of the day and year first above written.40 a M'P' TUSTIN PUBLIC FI ANCING AUTHORITY y ec"c AM %HE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee CBy=!A�' orized Signatory 40 40 [Signature page to Indenture of Trust, dated as of February 1, 024, by and between the Tustin- Public Financing Authority and he Bank of New York Mellon Trust ComUanv. N.A., as Trustee! Quint & Thimmig LLP EXHIBIT A FORM OF BOND 12/18/23 01/03/24 01/10/24 01/22/24 01/26/24 THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THIS BOND MAY BE TRANSFERRED ONLY IN WHOLE TO A TRANSFEREE PERMITTED BY SECTION 2.05 OF THE INDENTURE WHO DELIVERS TO THE TRUSTEE AND THE AUTHORITY AN EXECUTED REPRESENTATION LETTER SUBSTANTIALLY IN THE FORM SET FORTH IN THE INDENTURE. UNITED STATES OF AMERICA STATE OF CALIFORNIA ORANGE COUNTY TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bond, Series 2024 (Subordinate Lien) INTEREST RATE MATURITY DATE ORIGINAL ISSUE DATE 4.820%* April 1, 2044 February 14, 2024 REGISTERED OWNER: CAPITAL ONE PUBLIC FUNDING, LLC PRINCIPAL AMOUNT: FOUR MILLION ONE HIUNDRED TWENTY-FIVE THOUSAND DOLLARS The TUSTIN PUBLIC FINANCING AUTHORITY, a public body corporate and politic, duly organized and existing under the laws of the State of California (the "Authority"), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the "Registered Owner"), on the Maturity Date specified above, the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond unless (i) this Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth day of the month preceding such interest payment date, in which event it shall bear interest from such Interest Payment Date, or (ii) this Bond is authenticated on or before September 15, 2024, in which event it shall bear interest from the Original Issue Date specified above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from If the Default Rate or the Taxable Rate (each as defined in the Indenture) is in effect, interest will be computed by applying such alternate rate. Exhibit A 20027.04 Page 1 the Interest Payment Date to which interest has previously been paid or made available for payment on this Bond, at the Interest Rate per annum specified above, payable semiannually on April 1 and October 1 in each year, commencing October 1, 2024 (collectively, the "Interest Payment Dates'), calculated on the basis of a 360-day year composed of twelve 30-day months. The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee")shall pay principal of and interest on this Bond when due by wire transfer (or other form of electronic payment) in immediately available funds to the Registered Owner hereof as of the Record Date in accordance with such wire transfer instructions as shall be filed by the Registered Owner with the Trustee from time to time, or, with the Registered Owner's consent, by another commercially reasonable method of payment, to an account in the United States designated by the Registered Owner. Payments of principal of this Bond shall be made without the requirement for presentation and surrender of the Bond by the Registered Owner, provided that principal of the Bond that is payable at final maturity shall be made only upon presentation and surrender thereof at the corporate trust office (the "Trust Office") of the Trustee in Los Angeles, California, or such other place as designated by the Trustee.. This Bond is not a debt of the City of Tustin (the "City"), Orange County, the State of California, or any of its political subdivisions, and neither the City, said County, said State, nor any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or properties of the Authority other than the Revenues. This Bond is one of a duly authorized issue of bonds of the Authority designated as the "Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien)" (the "Bonds"), in an aggregate principal amount of four million one hundred twenty-five thousand dollars ($4,125,000), all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities or interest rates) and all issued pursuant to the provisions of Article 4 of Chapter 5 of Division 7 of Title 1 (commencing with section 6584) of the California Government Code (the "Bond Law"), and pursuant to an Indenture of Trust, dated as of February 1, 2024, by and between the Authority and the Trustee (the "Indenture"), and a resolution of the Board of Directors of the Authority adopted on February 6, 2024, authorizing the issuance of the Bonds. Reference is hereby made to the Indenture (copies of which are on file at the office of the Authority) and all supplements thereto for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees. The Bonds have been issued by the Authority to aid in financing the acquisition and construction of certain improvements and facilities (the "2024 Project") which constitute part of the water enterprise of the City, to be sold to the City by the Authority pursuant to an Installment Sale Agreement, dated as of February 1, 2024, by and between the Authority as seller and the City as purchaser (the "Installment Sale Agreement"). The City's obligations under the Installment Sale Agreement will be subordinate to the City's obligations with respect to the payment of debt service on its City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds and its City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020. This Bond and the interest hereon and all other Bonds and the interest thereon are special obligations of the Authority, and are payable from, and are secured by a charge and lien on the Revenues as defined in the Indenture, consisting primarily of installment payments to be made by the City under the Installment Sale Agreement as the purchase price for the 2024 Project. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and Exhibit A Page 2 irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest on the Bonds. The rights and obligations of the Authority and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall extend the fixed maturity of any Bonds, or reduce the amount of principal thereof, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the owner of each Bond so affected. The Bonds are subject to redemption, at the option of the City on or after April 1, 2034, as a whole on any date or in part on any Interest Payment Date, from any available source of funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The Bonds are also subject to mandatory redemption from sinking account payments made by the Authority, on April 1, 2025, and on April 1 in each year thereafter to and including April 1, 2044, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, as set forth in the following table: Redemption Date (April 1) Principal Amount 2025 $105,000 2026 135,000 2027 140,000 2028 145,000 2029 155,000 2030 160,000 2031 170,000 2032 180,000 2033 185,000 2034 195,000 2035 205,000 2036 215,000 2037 225,000 2038 235,000 2039 245,000 2040 260,000 2041 270,000 2042 285,000 2043 300,000 2044 315,000 t Maturity. As provided in the Indenture, notice of redemption shall be mailed by the Trustee by first class mail not less than thirty (30) nor more than sixty (60) days prior to the redemption date to the respective owners of any Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption or the cessation of accrual of interest thereon from and after the date fixed for redemption. Exhibit A Page 3 If this Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption. If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture. Ownership of this Bond may be transferred in whole only and only to a (i) an affiliate of the Registered Owner or (ii) a bank, trust, custodian, insurance company or other financial institution or an affiliate thereof, in each case that executes and delivers to the Trustee a representation letter in substantially the form attached to the Indenture as Exhibit B. Nothing herein limits the right of the Registered Owner to sell or assign participation interests in the Bond, in minimum amounts of $250,000, to one or more entities listed in (i) or (ii) above, provided that any participation, custodial or similar agreement under which multiple ownership interests in the Bond are created shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, owner, servicer or other fiduciary or agent acting on behalf of all of such owners (a loan servicer) to act on their behalf with respect to the rights and interests of the Registered Owner, including with respect to the exercise of rights and remedies of the Registered Owner on behalf of such owners upon the occurrence of an event of default under the Indenture. The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Bond Law and the laws of the State of California and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Bond Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been signed by the Trustee. Exhibit A Page 4 IN WITNESS WHEREOF, the Tustin Public Financing Authority has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Chair and attested to by the facsimile signature of its Secretary, all as of the Original Issue Date. Attest: TUSTIN PUBLIC FINANCING AUTHORITY Chair Secretary FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within -mentioned Indenture. Dated: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee an Exhibit A Page 5 Authorized Signatory FORM OF ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Notice: Signature guarantee shall be made by a Notice: The signature on this assignment must guarantor institution participating in the Securities correspond with the name(s) as written on the face of Transfer Agents Medallion Program or in such other the within Bond in every particular without alteration or guarantee program acceptable to the Trustee. enlargement or any change whatsoever. Exhibit A Page 6 EXHIBIT B FORM OF INVESTOR'S LETTER Tustin Public Financing Authority Tustin, California City of Tustin Tustin, California The Bank of New York Mellon Trust Company, N.A. Los Angeles, California Stifel, Nicolaus & Company, Incorporated Los Angeles, California Re: Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Ladies and Gentlemen: The undersigned (the "Purchaser"), being the purchaser of the above -referenced bonds (the "Bonds") from the previous owner thereof (the "Owner") does hereby certify, represent and warrant for the benefit of the Tustin Public Financing Authority (the "Authority"), the City of Tustin (the "City") and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee") that: (a) The Purchaser (MARK OR INDICATE APPROPRIATELY): ] is an affiliate of the Owner; or [] is a bank, trust, custodian, insurance company or other financial institution or an affiliate thereof. (b) The Purchaser understands that the Bonds have not been registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or under any state securities laws. The Purchaser agrees that it will comply with any applicable state and federal securities laws then in effect with respect to any disposition of the Bonds by it, and further acknowledges that any current exemption from registration of the Bonds does not affect or diminish such requirements. (c) The Purchaser is not now and has never been controlled by, or under common control with, the Authority or the City. Neither the Authority nor the City has ever been and is not now controlled by the Purchaser. The Purchaser has entered into no arrangements with the Authority or the City or with any affiliate in connection with the Bonds, other than as disclosed to the Authority and the City. (d) The Purchaser has authority to purchase the Bonds and to execute this letter and any other instruments and documents required to be executed by the Purchaser in connection with the purchase of the Bonds. The individual who is signing this letter on behalf of the Purchaser is a duly appointed, qualified, and acting officer of the Purchaser and is authorized to cause the Purchaser to make the certificates, representations and warranties contained herein by execution of this letter on behalf of the Purchaser. (e) The Purchaser acknowledges that it has the right to sell and transfer the Bonds, in whole, subject to compliance with the transfer restrictions set forth in Section 2.05 of the Indenture of Trust, dated as of February 1, 2024, by and between the Authority and the Trustee (the "Indenture'), including in certain circumstances the requirement for the delivery to the Authority and the Trustee of an purchaser letter in the same form as this Purchaser Letter, including this paragraph. Failure to comply with the provisions of Section 2.05 of the Indenture shall cause the purported transfer to be null and void. (f) The Bonds are not being acquired by the Purchaser for resale thereof in any manner that would result in the Purchaser being an agent of the City or an underwriter within the meaning of the Securities Act. (g) The Purchaser acknowledges that it has made its own inquiry and analysis with respect to the Bonds and security therefor, that it has received the documents executed or adopted by the Authority or the City in connection with the Bonds and other documents it has requested, and that it has either been supplied with or been given access to information, including financial statements and other financial information, to which a reasonable investor would consider important in making investment decisions, and the Purchaser has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the City and the Bonds and the security therefor so that, as a reasonable investor, the Purchaser has been able to make its decision to purchase the Bonds. The Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its prospective investment in the Bonds. (h) The Purchaser acknowledges that it may sell or assign participation interests in the Bonds, in accordance with terms and conditions of the Indenture (including sales only in minimum amounts of $250,000 and only to an affiliate of the Purchaser or one or more banks, trusts, custodians, insurance companies, or other financial institutions or their affiliates). The Purchaser acknowledges that it is solely responsible for compliance, and covenants and agrees with the City that it will comply, with the Indenture and all applicable federal or state securities laws then in effect with respect to any subsequent sale, transfer or other disposition of the Bonds, including disclosure of material information (without involving the Authority or the City in any manner). The Purchaser agrees to indemnify the Authority and the City for any liabilities or costs incurred by the Authority or the City (including attorney fees) in connection with any sale, transfer or other disposition of the Bonds in violation of such restrictions or laws. (i) Neither the Trustee nor the Authority's bond counsel, or any of their employees, counsel or agents will have any responsibility to the Purchaser for the accuracy or completeness of information obtained by the Purchaser from any source regarding the City or its financial condition, the provision for payment of the Bonds, or the sufficiency of any security therefor. The Purchaser acknowledges that, as between the Purchaser and all of such parties, the Purchaser has assumed responsibility for obtaining such information and making such review as the Purchaser deemed necessary or desirable in connection with its decision to purchase the Bonds. -2- (j) The Purchaser acknowledges that the Bonds are exempt from the requirements of Rule 15c2-12 of the Securities and Exchange Commission and that neither the Authority nor the City has undertaken to provide any continuing disclosure with respect to the Bonds, except as otherwise provided in the Indenture. (k) The Purchaser understands that the Bonds (a) are not being registered or otherwise qualified for sale under the "Blue Sky' laws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating agency, and (d) will be delivered in a form that may not be readily marketable. (1) The Purchaser acknowledges and agrees that the Placement Agent and the Issuer take no responsibility for, and make no representation to the Purchaser, or any subsequent purchaser, with regard to, a sale, transfer or other disposition of the Bonds in violation of the provisions of the Indenture, or any securities law or income tax law consequences thereof. The Purchaser also acknowledges that, with respect to the City's obligations and liabilities, the Purchaser is solely responsible for compliance with the sales restrictions on the Bonds in connection with any subsequent transfer of the Bonds made by the Purchaser. (m) The Purchaser acknowledges that the sale of the Bonds to the Purchaser is made in reliance upon the certifications, representations, and warranties herein made to the addressees hereto. (n) The interpretation of the provisions hereof shall be governed and construed in accordance with State law without regard to principles of conflicts of laws. (o) All representations of the Purchaser contained in this letter shall survive the execution and delivery of the Bonds to the Purchaser as representations of fact existing as of the date of execution and delivery of this Purchaser Letter. The Purchaser acknowledges that the sale of the Bonds to the Purchaser is made in reliance upon the certifications, representations and warranties herein by the addressees hereto. Capitalized terms used herein and not otherwise defined have the meanings given such terms in the Indenture. [PURCHASER] By Name Title -3- Quint & Thimmig LLP INSTALLMENT SALE AGREEMENT Dated as of February 1, 2024 by and between TUSTIN PUBLIC FINANCING AUTHORITY, as Seller and the CITY OF TUSTIN, as Purchaser $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) 12/18/23 O1/03/24 O1/10/24 O1/22/24 O1/26/24 20027.04 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section1.1. Definitions....................................................................................................................................................................2 ARTICLE II COVENANTS AND REPRESENTATIONS Section 2.1. Covenants and Representations of the City............................................................................................................3 Section 2.2. Covenants and Representations of the Authority..................................................................................................5 ARTICLE III ISSUANCE OF BONDS; ACQUISITION AND CONSTRUCTION OF THE 2024 PROJECT Section3.1. The Bonds.....................................................................................................................................................................6 Section 3.2. Acquisition and Construction of the 2024 Project..................................................................................................6 Section3.3. Grant of Easements.....................................................................................................................................................6 Section 3.4. Appointment of City as Agent of Authority...........................................................................................................6 ARTICLE IV SALE OF ENTERPRISE; INSTALLMENT PAYMENTS Section4.1. Sale..............................................................................................................................................................................7 Section 4.2. Term 7 Section4.3. Title..............................................................................................................................................................................7 Section4.4. Installment Payments.................................................................................................................................................7 Section 4.5. Application of Gross Revenues; Pledge and Application of Pledged Net Revenues.......................................7 Section 4.6. Special Obligation of the City; Obligations Absolute............................................................................................8 Section4.7. Rate Covenant..............................................................................................................................................................9 Section 4.8. Limitations on Future Obligations Secured by Net Revenues...........................................................................10 Section4.9. Additional Payments................................................................................................................................................11 Section 4.10. Payment of Rebatable Amounts............................................................................................................................11 Section 4.11. Rate Stabilization Fund..........................................................................................................................................12 ARTICLE V MAINTENANCE, TAXES, INSURANCE AND OTHER MATTERS Section 5.1. Maintenance, Utilities, Taxes and Assessments...................................................................................................13 Section5.2.Operation of Enterprise............................................................................................................................................13 Section5.3. Insurance....................................................................................................................................................................13 Section5.6. Eminent Domain.......................................................................................................................................................14 Section5.5. Records and Accounts..............................................................................................................................................14 Section 5.6. Against Encumbrances.............................................................................................................................................14 Section 5.7. Against Competitive Facilities................................................................................................................................14 Section5.8. Tax Covenants...........................................................................................................................................................14 Section5.9.Other Covenants........................................................................................................................................................15 ARTICLE VI DISCLAIMER OF WARRANTIES; ACCESS Section 6.1. Disclaimer of Warranties..........................................................................................................................................17 Section6.2. Access to the Enterprise...........................................................................................................................................17 Section 6.3. Release and Indemnification Covenants................................................................................................................17 Section 6.4. Non -Liability of Authority for Enterprise Obligations........................................................................................17 ARTICLE VII ASSIGNMENT, SALE AND AMENDMENT Section7.1. Assignment by the City............................................................................................................................................18 -i- Section 7.2. Sale or Other Disposition of Enterprise.................................................................................................................18 Section 7.3. Amendment of Installment Sale Agreement.........................................................................................................18 ARTICLE VIII EVENTS OF DEFAULT Section 8.1. Events of Default Defined........................................................................................................................................19 Section8.2. Remedies on Default.................................................................................................................................................19 Section8.3. No Remedy Exclusive...............................................................................................................................................20 Section 8.4. Agreement to Pay Attorneys' Fees and Expenses................................................................................................20 Section 8.5. No Additional Waiver Implied by One Waiver...................................................................................................20 Section 8.6. Trustee and Bond Owners to Exercise Rights.......................................................................................................20 Section 8.7. Rights of the Owners of Parity Obligations..........................................................................................................21 ARTICLE IX PREPAYMENT OF INSTALLMENT PAYMENTS Section9.1. Security Deposit........................................................................................................................................................22 Section9.2.Optional Prepayment...............................................................................................................................................22 Section 9.3. Credit for Amounts on Deposit...............................................................................................................................22 ARTICLE X MISCELLANEOUS Section10.1. Further Assurances.................................................................................................................................................23 Section10.2. Notices......................................................................................................................................................................23 Section 10.3. Third Party Beneficiaries........................................................................................................................................23 Section10.4. Governing Law........................................................................................................................................................23 Section10.5. Binding Effect...........................................................................................................................................................23 Section 10.6. Severability of Invalid Provisions.........................................................................................................................23 Section 10.7. Article and Section Headings and References....................................................................................................24 Section10.8. Execution of Counterparts.....................................................................................................................................24 Section 10.9. Waiver of Personal Liability..................................................................................................................................24 Section 10.10. Limitation of Rights to Parties and Bond Owners............................................................................................24 Section10.11. Captions..................................................................................................................................................................24 EXHIBIT A SCHEDULE OF INSTALLMENT PAYMENTS EXHIBIT B DESCRIPTION OF THE 2024 PROJECT Quint & Thimmig LLP INSTALLMENT SALE AGREEMENT 12/18/23 01/03/24 01/10/24 01/22/24 01/26/24 THIS INSTALLMENT SALE AGREEMENT, dated as of February 1, 2024, is by and between the TUSTIN PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California (the "Authority"), and the CITY OF TUSTIN, a general law city and municipal corporation duly organized and existing under the laws of the State of California (the "City"), WITNESSETH: WHEREAS, the City has, together with the former Tustin Community Redevelopment Agency, duly established the Authority and prescribed its purposes and powers; WHEREAS, the City has determined that, due to prevailing financial market conditions, it is in the best interests of the City to finance the acquisition and construction of certain improvements and facilities (the "2024 Project") which constitute part of the City's municipal water enterprise (the "Enterprise"); WHEREAS, for the purpose of raising funds necessary to provide such financial assistance to the City, the Authority proposes to authorize the issuance of its revenue bonds under the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"), designated as the Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"), all pursuant to and secured by that certain Indenture of Trust, dated as of February 1, 2024, by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee; WHEREAS, in order to provide for the repayment of the Bonds, the Authority will sell the 2024 Project to the City pursuant to an installment sale agreement, under which the City will agree to make installment payments to the Authority (the "Installment Payments") which will be calculated to be sufficient to enable the Authority to pay the principal of and interest on the Bonds when due and payable; WHEREAS, the City's obligation to make Installment Payments will be payable from a pledge of the net revenues of the Enterprise, in all respects, junior, subordinate and inferior to the City's obligations with respect to the payment of debt service on its City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds and its City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020; WHEREAS, the Authority and the City have duly authorized the execution and delivery of this Installment Sale Agreement; NOW, THEREFORE, for and in consideration of the premises and the material covenants hereinafter contained, the parties hereto hereby formally covenant, agree and bind themselves as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms in this Installment Sale Agreement shall have the respective meanings specified in the Indenture. -2- ARTICLE II COVENANTS AND REPRESENTATIONS Section 2.1. Covenants and Representations of the City. The City makes the following covenants and representations to the Authority that as of the Closing Date: (a) The City is a general law city and municipal corporation duly organized and validly existing under the laws of the State, has full legal right, power and authority to enter into this Installment Sale Agreement and to carry out and consummate all transactions contemplated hereby, and by proper action has duly authorized the execution and delivery of this Installment Sale Agreement. (b) The representatives of the City executing this Installment Sale Agreement are fully authorized to execute the same. (c) This Installment Sale Agreement has been duly authorized, executed and delivered by the City, and constitutes the legal, valid and binding agreement of the City, enforceable against the City in accordance with its terms. (d) The execution and delivery of this Installment Sale Agreement, the consummation of the transactions herein contemplated and the fulfillment of or compliance with the terms and conditions hereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which the Enterprise or the 2024 Project are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Installment Sale Agreement, or the financial condition, assets, improvements or operations of the Enterprise. (e) No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority, is necessary in connection with the execution and delivery of this Installment Sale Agreement or the consummation of any transaction herein contemplated, except as have been obtained or made and as are in full force and effect. (f) There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or threatened against or affecting the City or the Enterprise which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Installment Sale Agreement or upon the financial condition or operation of the Enterprise, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Installment Sale Agreement, or the financial conditions or operations of the Enterprise. -3- (g) The City has heretofore established the Water Fund into which the City deposits and will continue to deposit all Gross Revenues, and which the City will maintain throughout the Term of this Installment Sale Agreement. (h) The City reasonably believes that sufficient funds can be obtained to make all Installment Payments and all other amounts required to be paid pursuant to this Installment Sale Agreement, provided that to the extent Pledged Net Revenues is insufficient to make each Installment Payment when due, the City agrees to make such payment from any available moneys. (i) The City has never non -appropriated or defaulted under any of its payment or performance obligations or covenants, either under any of its bonds, notes, or other debt obligations. (j) During the term of this Installment Sale Agreement, the 2024 Project will be used by the City only for the purpose of performing one or more governmental or proprietary functions of the City consistent with the permissible scope of the City's authority. (k) The City has experienced no material change in its financial condition since June 30, 2023. (1) Except to the extent disclosed to the Original Purchaser, the Enterprise is free of all Hazardous Substances, and the City is in full compliance with all Applicable Environmental Laws. (m) As of the Closing Date, there are no outstanding bonds, notes, loans, leases, water installment sale agreements or other obligations which have any security interest in or claim upon the Pledged Net Revenues, which security interest or claim is superior to or on a parity with the Installment Payments. (n) The City's audited financial statements for the period ended June 30, 2023, present fairly the financial condition of the City as of the date thereof and the results of operation for the period covered thereby. Except as has been disclosed to the Original Purchaser, there has been no change in the financial condition of the City since June 30, 2023, that will in the reasonable opinion of the City materially impair its ability to perform its obligations under this Installment Purchase Agreement. (o) All information, reports and other papers and data furnished by the City to the Original Purchaser were, at the time the same were so furnished, complete and accurate in all material respects and insofar as necessary to give the Original Purchaser a true and accurate knowledge of the subject matter and were provided in expectation of the Original Purchaser's reliance thereon in entering into the transactions contemplated by this Installment Purchase Agreement. No fact is known to the City which has had or, so far as the City can now reasonably foresee, may in the future have a Material Adverse Effect, which has not been set forth in the financial statements previously furnished to the Original Purchaser or in other such information, reports, papers and data or otherwise disclosed in writing to the Original Purchaser prior to the Closing Date. Any financial, budget and other projections furnished to the Original Purchaser by the City or its or their agents were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair and reasonable in light of the conditions existing at the time of delivery of such financial, budget or other projections, and represented, and as of the date of this representation, represent the City's best estimate of its future financial performance. No document furnished nor any representation, warranty or other written statement made to the Original Purchaser in connection with the negotiation, -4- preparation or execution of this Installment Purchase Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state (as of the date made or furnished) any material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were or will be made, not misleading. (p) In connection with the City's compliance with any continuing disclosure undertakings (each, a "Continuing Disclosure Agreement") entered into by the City pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the "Rule"), the City believes it may be required to file with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access system or its successor ("EMMA") notice of its incurrence of its obligations with respect to this Installment Sale Agreement and related documents and notice of any accommodation, waiver, amendment, modification of terms or other similar events reflecting financial difficulties in connection with this Installment Sale Agreement and related documents, in each case including a full copy thereof or a description of the material terms thereof (each such posting, an "EMMA Posting"). The City agrees that it shall not file or submit or permit the filing or submission of any EMMA Posting that includes information relating to Capital One Public Funding, LLC ("COPF"), including the following: unredacted sensitive or confidential information about COPF or its affiliates in any portion of an EMMA Posting, address and account information of COPF or any affiliates, e-mail addresses, telephone numbers, fax numbers, names and signatures of officers, employees and signatories of COPF or its affiliates. The City acknowledges and agrees that COPF and its affiliates are not responsible for the City's or any other entity's (including, but not limited to, any broker -dealer's) compliance or noncompliance (or any claims, losses or liabilities arising therefrom) with the Rule, any Continuing Disclosure Agreement or any applicable securities or other laws, including but not limited to those relating to the Rule. Section 2.2. Covenants and Representations of the Authority. The Authority makes the following covenants and representations to the City that as of the Closing Date: (a) The Authority is a joint powers entity, duly organized and existing under the laws of the State. The Authority has the power to enter into the transactions contemplated by this Installment Sale Agreement and to carry out its obligations hereunder. By proper action of its governing body, the Authority has been duly authorized to execute, deliver and duly perform this Installment Sale Agreement and the Indenture. (b) To finance the 2024 Project and to pay the Costs of Issuance, the Authority will issue the Bonds, which will mature, bear interest and be subject to redemption as set forth in the Indenture. (c) The Bonds will be issued under and secured by the Indenture, and pursuant thereto, certain of the Authority's interests in this Installment Sale Agreement have been assigned to the Trustee as security for payment of the principal of and interest on the Bonds. (d) The Authority is not in default under any of the provisions of the laws of the State, which default would affect its existence or its powers referred to in subsection (a) of this Section 2.2. -5- ARTICLE III ISSUANCE OF BONDS; ACQUISITION AND CONSTRUCTION OF THE 2024 PROJECT Section 3.1. The Bonds. The Authority has authorized the issuance of the Bonds pursuant to the Indenture in the aggregate principal amount of four million one hundred twenty-five thousand dollars ($4,125,000). The Authority agrees that the proceeds of sale of the Bonds shall be paid to the Trustee on the Closing Date for deposit pursuant to the terms and conditions of the Indenture. The City hereby approves the Indenture, the assignment to the Trustee of the rights of the Authority assigned under and pursuant to the Indenture, and the issuance of the Bonds by the Authority under and pursuant to the Indenture. Section 3.2. Acquisition and Construction of the 2024 Project. The City hereby agrees with due diligence to supervise and provide for, or cause to be supervised and provided, for the Acquisition and Construction of the 2024 Project in accordance with Plans and Specifications, purchase orders, construction contracts and other documents relating thereto pursuant to all applicable requirements of law. Direct payment of the costs of the 2024 Project shall be made from amounts on deposit in the 2024 Project Fund, pursuant to Section 3.04 of the Indenture. All contracts for, and all work relating to, the Acquisition and Construction of the 2024 Project shall be subject to all applicable provisions of law relating to the acquisition and construction of public works by the City. The City shall have the right from time to time in its sole discretion to amend the description of the 2024 Project to be financed and sold by the Authority hereunder. In order to exercise such right, the City shall file with the Authority and the Trustee an amended Exhibit B hereto. Section 3.3. Grant of Easements. The City hereby grants to the Authority all necessary easements, rights of way and rights of access in and to all real property or interests therein now or hereafter acquired and owned by the City, as may be necessary or convenient to enable the Authority to acquire, construct and install the 2024 Project thereon or thereabouts. The City covenants that it will execute, deliver and record any and all additional documents as may be required to be executed, delivered and recorded to establish such easements, rights of way and rights of access. Section 3.4. Appointment of City as Agent of Authority. The Authority hereby appoints the City as its agent to carry out all phases of the Acquisition and Construction of the 2024 Project pursuant to and in accordance with the provisions hereof. The City hereby accepts such appointment and assumes all rights, liabilities, duties and responsibilities of the Authority regarding the Acquisition and Construction of the 2024 Project. The Authority, or the City as agent of the Authority hereunder, shall enter into, administer and enforce all purchase orders or other contracts relating to the Acquisition and Construction of the 2024 Project. The City shall submit Written Requisitions of the City to the Trustee from time to time pursuant to and in accordance with the provisions of Section 3.04 of the Indenture for payment, or for reimbursement to the City for payment, of all 2024 Project Costs. All contracts for, and all work relating to, the Acquisition and Construction of the 2024 Project shall be subject to all applicable provisions of law relating to the acquisition, construction, improvement, and equipping of like projects and property by joint powers authorities and by municipal corporations. ARTICLE IV SALE OF ENTERPRISE; INSTALLMENT PAYMENTS Section 4.1. Sale. The Authority hereby agrees to sell the 2024 Project to the City, and the City hereby agrees to purchase the 2024 Project from the Authority, upon the terms and conditions set forth in this Installment Sale Agreement. Section 4.2. Term. The Term of this Installment Sale Agreement shall commence on the Closing Date, and shall end on the date on which the City shall have paid all of the Installment Payments and all other amounts due and payable hereunder. The provisions of this Section 4.2 are subject in all respects to any other provisions of this Installment Sale Agreement relating to the termination hereof with respect to the 2024 Project or any portion thereof. Section 4.3. Title. Upon the Completion Date of each component of the 2024 Project, title to such component shall be deemed conveyed to and vested in the City. The Authority and the City shall execute, deliver and cause to be recorded any and all documents necessary to convey such title to the City. Section 4.4. Installment Payments. (a) Obligation to Pay. The City agrees to pay to the Authority, its successors and assigns, but solely from the Pledged Net Revenues, as the purchase price of the 2024 Project the aggregate principal amount of four million one hundred twenty-five thousand dollars ($4,125,000), together with interest on the unpaid principal balance, payable in Installment Payments coming due and payable in the respective amounts and on each Installment Payment Date specified in Exhibit A. The Installment Payments shall be paid by the City to the Trustee, as assignee of the Authority pursuant to the Indenture, in the amounts and at the times as set forth in Section 4.5(b). (b) Rate on Overdue Payments. In the event the City should fail to make any of the payments required in this Section 4.4 and Section 4.10, the payment in default shall continue as an obligation of the City until the amount in default shall have been fully paid, and the City agrees to pay the same with interest thereon, from the date of default to the date of payment, at the Default Rate. (c) Assignment. The City understands and agrees that all Installment Payments have been assigned by the Authority to the Trustee in trust, pursuant to the Indenture, for the benefit of the Owners of the Bonds, and the City hereby assents to such assignment. The Authority hereby directs the City, and the City hereby agrees, to pay to the Trustee at its Trust Office, all amounts payable by the City pursuant to this Section 4.4 and all amounts payable by the City pursuant to Article IX. Section 4.5. Application of Gross Revenues; Pledge and Application of Pledged Net Revenues. (a) Deposits Into Water Fund, Transfers to Make Installment Payments. All of the Gross Revenues shall be deposited by the City immediately upon receipt in the Water Fund. Upon receipt of Gross Revenues, the City shall segregate such amounts as shall be estimated to be required (a) to pay all Maintenance and Operation Costs and (b) to make payments due and payable on the Senior Obligations for the period beginning on such date and -7- ending on the next anticipated date of receipt of Gross Revenues. Amounts remaining on deposit in the Water Fund after payment of such Maintenance and Operation Costs and Senior Obligations and shall be the Pledged Net Revenues. The City covenants and agrees that all Pledged Net Revenues will be held by the City in the Water Fund in trust for the benefit of the Trustee (as assignee of the rights of the Authority hereunder) and the Bond Owners, and for the benefit of the owners of any Parity Obligations. (b) Pledge of Pledged Net Revenues, Transfers. All of the Pledged Net Revenues are hereby irrevocably pledged, charged and assigned to the punctual payment of the Installment Payments and all Parity Obligations and, except as otherwise provided herein, the Pledged Net Revenues shall not be used for any other purpose so long as any of the Installment Payments or payments with respect to any Parity Obligations remain unpaid. Such pledge, charge and assignment shall constitute a first lien on the Pledged Net Revenues for the payment of the Installment Payments and all Parity Obligations in accordance with the terms hereof. On or before the fifth Business Day preceding each Interest Payment Date, commencing September 25, 2024, the City shall withdraw from the Water Fund (together with similar withdrawals from the Water Fund with respect to all Parity Obligations): (i) and transfer to the Trustee for deposit in the Bond Fund, an amount (other than amounts required for payment of principal of or interest on any Bonds which have matured but which have not been presented for payment), equal to the interest component of the Installment Payment and the interest component of any outstanding Parity Obligations coming due and payable on the next succeeding Interest Payment Date, and the principal component of the Installment Payment and the principal component of any outstanding Parity Obligations coming due and payable on the next succeeding principal payment date, if any, provided that any amounts on deposit in the Bond Fund shall be credited against the City's obligation to make such deposits or transfers therein, (ii) and transfer to funds or accounts established as reserve funds with respect to Parity Obligations such amounts as are required for the replenishment thereof, the amount, if any, required to increase the amount on deposit in reserve funds with respect to Parity Obligations, the amount, if any, required to increase the amount on deposit therein to the reserve requirement of such funds or account, (iii) and pay all other amounts, including Additional Payments, when and as due and payable under this Installment Sale Agreement and under any agreements relating to Parity Obligations, and (iv) and pay all amounts when and as due and payable with respect to any Subordinate Debt. (c) Release from Lien. Following the transfers described in paragraph (b) of this Section 4.5, excess Pledged Net Revenues shall be released from the lien of this Installment Sale Agreement and shall be available for any lawful purpose of the City. Section 4.6. Special Obligation of the City; Obligations Absolute. The City's obligation to pay the Installment Payments, the Additional Payments, any other amounts coming due and payable hereunder and payments with respect to Parity Obligations shall be a special obligation of the City limited solely to the Pledged Net Revenues. Under no circumstances shall the City be required to advance moneys derived from any source of income other than the Pledged Net so Revenues and other sources specifically identified herein for the payment of the Installment Payments, the Additional Payments or payments with respect to Parity Obligations, nor shall any other funds or property of the City be liable for the payment of the Installment Payments, the Additional Payments or payments with respect to Parity Obligations and any other amounts coming due and payable hereunder. The obligations of the City to make the Installment Payments, the Additional Payments and payments with respect to Parity Obligations from the Pledged Net Revenues and to perform and observe the other agreements contained herein and under agreements with respect to Parity Obligations shall be absolute and unconditional and shall not be subject to any defense or any right of setoff, counterclaim or recoupment arising out of any breach of the City, the Authority or the Trustee of any obligation to the City or otherwise with respect to the Enterprise, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority or the Trustee. Until such time as all of the Installment Payments, all of the Additional Payments and all other amounts coming due and payable hereunder shall have been fully paid or prepaid, the City (a) will not suspend or discontinue payment of any Installment Payments, Additional Payments, payments with respect to Parity Obligations or such other amounts, (b) will perform and observe all other agreements contained in this Installment Sale Agreement, and (c) will not terminate the Term of this Installment Sale Agreement for any cause, including, without limiting the generality of the foregoing, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Enterprise, sale of the Enterprise, the taking by eminent domain of title to or temporary use of any component of the Enterprise, commercial frustration of purpose, any change in the tax law or other laws of the United States of America or the State or any political subdivision of either thereof or any failure of the Authority or the Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Indenture or this Installment Sale Agreement. Nothing contained in this Section 4.6 shall be construed to release the Authority or the Trustee from the performance of any of the agreements on its part contained herein or in the Indenture, and in the event the Authority or the Trustee shall fail to perform any such agreements, the City may institute such action against the Authority or the Trustee as the City may deem necessary to compel performance so long as such action does not abrogate the obligations of the City contained in the preceding paragraph. The City may, however, at the City's own cost and expense and in the City's own name or in the name of the Authority prosecute or defend any action or proceeding or take any other action involving third persons which the City deems reasonably necessary in order to secure or protect the City's rights hereunder, and in such event the Authority hereby agrees to cooperate fully with the City and to take such action necessary to effect the substitution of the City for the Authority in such action or proceeding if the City shall so request. Section 4.7. Rate Covenant. The City covenants to fix, prescribe, revise and collect rates, fees and charges for the Enterprise as a whole for the services and improvements furnished by the Enterprise during each Fiscal Year which are at least sufficient, after making allowances for contingencies and error in the estimates, to yield Gross Revenues that are sufficient to pay the following amounts in the following order of priority: (a) all Maintenance and Operation Costs estimated by the City to become due and payable in such Fiscal Year; (b) all payments required with respect to Senior Obligations; (c) the Installment Payments and all payments required with respect to Parity Obligations; (d) all other payments required for compliance with this Installment Sale Agreement and the instruments pursuant to which any Parity Obligations shall have been issued; and (e) all payments required to meet any other obligations of the City which are charges, liens, encumbrances upon or payable from the Gross Revenues,, including transfers to the Rate Stabilization Fund pursuant to Section 4.11, the Net Revenues or the Pledged Net Revenues. In addition, the City shall fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Enterprise during each Fiscal Year which are sufficient to yield Net Revenues, including other funds accumulated in the City's Water Fund and which are lawfully available to the City for payment, of at least one hundred twenty percent (120%) of the amounts payable under the preceding paragraphs (b) and (c) in such Fiscal Year. When calculated for purposes of this Section 4.7, Net Revenues do not include amounts which are transferred from the Rate Stabilization Fund pursuant to Section 4.11 that are in excess of twenty percent (20%) of the amounts payable under the preceding paragraphs (b) and (c) in such Fiscal Year. Section 4.8. Limitations on Future Obligations Secured by Net Revenues. (a) No Obligations Superior to Installment Payments. In order to protect further the availability of the Pledged Net Revenues and the security for the Installment Payments and any Parity Obligations, the City hereby agrees that the City shall not, so long as the Installment Payments are not fully paid or any Parity Obligations are outstanding, issue or incur any obligations superior to the Installment Payments or such Parity Obligations. (b) Parity Obligations. The City further covenants that it will not issue or incur any Parity Obligations unless Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which instrument such Parity Obligations are issued or incurred, as shown by the books of the City, plus, at the option of the City, the additional allowance described below, shall have amounted to at least 1.20 times Maximum Aggregate Annual Debt Service immediately subsequent to the incurring of such Parity Obligations; provided, however, that the City may at any time incur Parity Obligations without compliance with the foregoing conditions if the Maximum Aggregate Annual Debt Service for each Fiscal Year during which such Parity Obligations are Outstanding will not be increased by reason of the incurrence of such Parity Obligations. When calculated for purposes of this Section 4.8(b), Net Revenues do not include amounts which are transferred from the Rate Stabilization Fund pursuant to Section 4.11 that are in excess of twenty percent (20%) of the amounts payable under paragraphs (b) and (c) of Section 4.7 in such Fiscal Year. Either or both of the following items may be added to such Net Revenues for the purpose of applying the restriction contained herein: (i) An allowance for revenues from any additions to or improvements or extensions of the Enterprise to be constructed with the proceeds of such Parity Obligations, and also for Net Revenues from any such additions, improvements or extensions which have been constructed from any source of funds but which, during all or any part of such Fiscal Year, were not in service, all in an amount equal to 70% of the estimated additional average annual Net Revenues to be derived from such additions, -10- improvements and extensions to be constructed during the first 36-month period following issuance of the proposed Parity Obligations, all as shown by the certificate or opinion of a qualified independent consultant employed by the City, may be added to such Net Revenues for the purpose of applying the restriction contained in this subsection (b)(i) and/or (ii) An allowance for earnings arising from any increase in the charges made for service from the Enterprise which has become effective prior to the incurring of such Parity Obligations but which, during all or any part of such Fiscal Year or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which instrument such Parity Obligations are issued or incurred, as shown by the books of the City, plus, at the option of the City, the additional allowance, was not in effect, in an amount equal to 100% of the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year and any period prior to the incurring of such additional obligations, as shown by the certificate or opinion of a qualified independent consultant employed by the City. (c) Subordinate Debt. The City further covenants that the City shall not issue or incur any Subordinate Obligations unless Pledged Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which instrument such Subordinate Obligations are issued or incurred, as shown by the books of the City shall, after deducting all amounts required for the payment of the Bonds and any Parity Obligations, have amounted to at least 1.0 times the sum of the maximum annual debt service on all Subordinate Obligations outstanding immediately subsequent to the incurring of such additional obligations. An allowance for earnings arising from any increase in the charges made for service from the Enterprise which has become effective prior to the incurring of such additional obligations but which, during all or any part of such Fiscal Year, was not in effect, may be added in an amount equal to 100% of the amount by which the Pledged Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year and any period prior to the incurring of such additional obligations, as shown by the certificate or opinion of a qualified independent consultant employed by the City. Section 4.9. Additional Payments. In addition to the Installment Payments, the City shall pay when due all costs and expenses incurred by the Authority to comply with the provisions of the Indenture, including without limitation all Costs of Issuance (to the extent not paid from amounts on deposit in the Costs of Issuance Fund), and shall pay to the Trustee upon request therefor all compensation for fees due to the Trustee and all of its costs and expenses payable as a result of the performance of and compliance with its duties hereunder or under the Indenture or any related documents, together with all amounts required to indemnify the Trustee pursuant to Section 6.3 hereof or Section 8.12 of the Indenture, and all costs and expenses of attorneys, auditors, engineers and accountants. The rights of the Trustee and the obligations of the City under this Section 4.9 shall survive the termination of this Installment Sale Agreement and the resignation or removal of the Trustee. Section 4.10. Payment of Rebatable Amounts. The City agrees to furnish all information to, and cooperate fully with, the Authority and its officers, employees, agents and attorneys, in order to assure compliance with the provisions of Section 6.07(b) of the Indenture. In the event that the Authority shall determine, pursuant to Section 6.07(b) of the Indenture, that any amounts are due and payable to the United States of America thereunder and that neither the Authority nor the Trustee has on deposit an amount of available moneys (excluding moneys on -11- deposit in the funds and accounts established for the payment of the principal of or interest on the Bonds) to make such payment, the Authority shall promptly notify the City of such fact. Upon receipt of any such notice, the City shall promptly pay to the Trustee from any source of legally available funds, the amounts determined by the Authority to be due and payable to the United States of America under such Section 6.07(b). Section 4.11. Rate Stabilization Fund. (a) There is hereby created a separate fund to be known as the "Rate Stabilization Fund," to be held and maintained by the City. (b) From time to time, the City may deposit in the Rate Stabilization Fund from Gross Revenues such amounts as the City may determine, as set forth in Section 4.7. (c) The City may withdraw amounts from the Rate Stabilization Fund (i) for transfer to the Bond Fund for inclusion in Gross Revenues for any Fiscal Year, for calculating the rate covenant in Section 4.7, or (ii) for any other lawful purpose of the City. (d) All interest or other earnings on deposits in the Rate Stabilization Fund shall be withdrawn therefrom and accounted for as Gross Revenues. -12- ARTICLE V MAINTENANCE, TAXES, INSURANCE AND OTHER MATTERS Section 5.1. Maintenance, Utilities, Taxes and Assessments. Throughout the Term of this Installment Sale Agreement, all improvement, repair and maintenance of the Enterprise shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Enterprise, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Enterprise resulting from ordinary wear and tear. The City shall also pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Authority or the City affecting any Enterprise or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the Term of this Installment Sale Agreement as and when the same become due. The City may, at the City's expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City that, in its opinion, by nonpayment of any such items, the interest of the Authority hereunder or under the Indenture will be materially adversely affected, in which event the City shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority. Section 5.2. Operation of Enterprise. The City covenants and agrees to operate or cause to be operated the Enterprise in an efficient and economical manner and to operate, maintain and preserve or caused to be operated, maintained and preserved the Enterprise in good repair and working order. The City covenants that, in order to fully preserve and protect the priority and security of the Bonds, the City shall pay from the Gross Revenues and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the Enterprise which, if unpaid, may become a lien or charge upon the Pledged Net Revenues prior or superior to the lien granted hereunder, or which may otherwise impair the ability of the City to pay the Installment Payments in accordance herewith. Section 5.3. Insurance. The City shall maintain or cause to be maintained, throughout the Term of this Installment Sale Agreement, but only if and to the extent available at reasonable cost from reputable insurers, liability and casualty insurance in such amounts and against such risks as shall be appropriate for water systems of like size and with similar facilities as the Enterprise. Such insurance may be maintained as part of or in conjunction with any other insurance carried by the City and may be maintained in whole or in part in the form of self- insurance by the City or in the form of the participation by the City in a joint powers agency or other program providing pooled insurance. All amounts collected from insurance against accident to or destruction of any portion of the Enterprise shall be used to repair, rebuild or replace such damaged or destroyed portion of the Enterprise. The proceeds of liability insurance shall be applied toward the extinguishment or satisfaction of the liability with respect to which such proceeds shall have been paid. -13- Section 5.4. Eminent Domain. Any amounts received as awards as a result of the taking of all or any part of the Enterprise by the lawful exercise of eminent domain, at the election of the City (evidenced by a Written Certificate of the City filed with the Trustee and the Authority) shall either (a) be used for the acquisition or construction of improvements and extension of the Enterprise in replacement of the condemned portions thereof, or (b) with the prior written consent of the Owner, applied as a credit against the City's obligation to make the Installment Payments and payments with respect to any Parity Obligations in accordance with written instructions of the City filed with the Trustee. Section 5.5. Records and Accounts. The City shall keep proper books of record and accounts of the Enterprise, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the Enterprise. Said books shall, upon prior request, be subject to the reasonable inspection by the Owners of not less than ten percent (10%) in aggregate principal amount of the Outstanding Bonds, or their representatives authorized in writing. The City shall cause the books and accounts of the Enterprise to be audited annually by an Independent Accountant, not more than one hundred eighty (180) days after the close of each Fiscal Year, and shall make a copy of such report available for inspection by the Bond Owners at the office of the City. Section 5.6. Against Encumbrances. The City will not make any pledge of or place any lien on moneys in the Water Fund except as provided herein. The City may at any time, or from time to time, execute Parity Obligations or Subordinate Obligations as permitted herein or incur evidences of indebtedness or incur other obligations for any lawful purpose which are payable from and secured by a pledge of lien on Pledged Net Revenues as may from time to time be deposited therein, provided that such pledge and lien shall be subordinate in all respects to the pledge of and lien thereon provided herein. Section 5.7. Against Competitive Facilities. To the extent permitted by law, the City covenants that it will not acquire, construct, maintain or operate and will not, to the extent permitted by law and within the scope of its powers, permit any other public or private agency, corporation, city or political subdivision or any person whomsoever to acquire, construct, maintain or operate within the City any water system competitive with the Enterprise. Notwithstanding the foregoing, the City may permit competitive systems where it determines that provision of water service is either geographically, technically or economically prohibitive or where provision of such services is more readily obtained from another provider of such services. Section 5.8. Tax Covenants. (a) Private Activity Bond Limitation. The City shall assure that proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(c) of the Code. (b) Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code. (c) Rebate Requirement. The City shall take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. (d) No Arbitrage. The City shall not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been -14- reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. (e) Maintenance of Tax -Exemption. The City shall take all actions necessary to assure the exclusion of interest with respect to the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the Closing Date. Section 5.9.Other Covenants. (a) Reporting Requirements. The City hereby covenants and agrees that it will provide to the Owner: (i) the audited financial statements of the City within nine months after the end of each fiscal year, which shall include audited financial statements of the City, with a standard opinion provided by the auditor in accordance with Generally Accepted Accounting Principles including required supplemental information; (ii) will cause to be prepared annually, not more than two hundred ten (210) days after the close of each Fiscal Year an internally prepared balance sheet, and income statement showing: the assets, liabilities, reserves, revenues and expenditures of the Enterprise, together with the following additional reports: (A) Gross Revenues and the amount of all other funds collected which are required to be pledged or otherwise made available as security for payment of principal and interest with respect to this Installment Sale Agreement, the disbursements from the Gross Revenues and other funds in reasonable detail, (B) customer utilization and collection metrics, (C) independent rate analysis reports (when and if prepared and 30 days after City review), (D) capital projects underway and proposed, and (E) general narrative of the physical condition of the Enterprise; (iii) annually, within 30 days of City approval, an annual financial plan for the Enterprise with a narrative (when available) for the following year; (iv) a certification of the City (A) demonstrating the ratio of Net Revenues to scheduled debt service with respect to the Senior Obligations, this Installment Sale Agreement, any outstanding Parity Obligations and any subordinate obligations for the prior fiscal year; and (B) such additional information with respect to the City or Net Revenues as the Owner may from time to time reasonably request. Said Report to be provided by October 31 of each year; (v) immediately upon the City's knowledge thereof, notices of (A) any default on any debt obligation, (B) Material Litigation, (C) material governmental proceedings, or (D) Material Adverse Effect; and (vi) such other information regarding the operations of the Enterprise and the City's financial condition as the Owner may reasonably request, including without limitation, information regarding water rates and charges, copies of any rate studies commissioned by the City, and reports regarding the compliance of Enterprise with Applicable Environmental Laws. (b) Event of Default. The City shall immediately notify the Trustee and the Owner by telephone, promptly confirmed in writing, of any event, action or failure to take any action -15- which constitutes an event of default under any obligation or this Installment Sale Agreement, together with a detailed statement by a City Representative of the steps being taken by the City to cure the effect of such event of default. (c) Action, Suit or Proceeding. The City shall promptly notify the Owner in writing (i) of any action, suit or proceeding or any investigation, inquiry or similar proceeding by or before any court or other governmental authority, domestic or foreign, against the City which involve claims equal to or in excess of $1,000,000 or that seeks injunctive relief, any Material Litigation and the occurrence of any Material Adverse Change. (d) Costs and Expenses. The City agrees to pay the reasonable out-of-pocket expenses and disbursements of the Original Purchaser and the necessary and reasonable fees, expenses and disbursements of counsel to the Original Purchaser in connection with (A) obtaining any waiver or consent under this Installment Sale Agreement (whether or not the transactions contemplated thereby shall be consummated) or any Event of Default hereunder, (B) the preparation, execution, delivery, administration, defense and enforcement or preservation of rights in connection with a workout, restructuring or waiver with respect to this Installment Sale Agreement, and (C) the occurrence of an Event of Default and collection and other enforcement proceedings resulting therefrom. (e) Indemnification. The City covenants and agrees to indemnify and hold harmless, to the extent permitted by law, the Owner and its incorporators, members, commissioners, directors, officers, agents and employees (collectively, the "Owner Indemnified Persons') against all liability, losses, damages, all reasonable costs and charges (including reasonable fees and disbursements of attorneys, accountants, consultants and other experts), taxes, causes of action, suits, claims, demands and judgments of every conceivable kind, character and nature whatsoever, by or on behalf of any person arising in any manner from the transaction of which this Installment Sale Agreement is a part, including, but not limited to, losses, claims, damages, liabilities or reasonable expenses arising out of, resulting from or in any way connected with (i) the operation of the Enterprise; (ii) any violation of contract, agreement (including this Installment Sale Agreement) or restriction relating to the Enterprise; or (iii) the carrying out of any of the transactions contemplated by this Installment Sale Agreement -16- ARTICLE VI DISCLAIMER OF WARRANTIES; ACCESS Section 6.1. Disclaimer of Warranties. The Authority and the Trustee make no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City of the 2024 Project, or any other representation or warranty with respect to the 2024 Project. In no event shall the Authority or the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising out of this Installment Sale Agreement or the Indenture for the existence, furnishing, functioning or City's use of the 2024 Project. Section 6.2. Access to the Enterprise. The City agrees that the Authority and the Trustee, and any duly authorized representative thereof, shall have the right at all reasonable times to enter upon and to examine and inspect the Enterprise. The City further agrees that the Authority and the Trustee, and any duly authorized representative thereof, shall have such rights of access to the Enterprise as may be reasonably necessary to cause the proper maintenance of the Enterprise in the event of failure by the City to perform its obligations hereunder. Section 6.3. Release and Indemnification Covenants. The City shall and hereby agrees to indemnify and save the Authority and the Trustee and their respective officers, agents, successors and assigns harmless from and against all claims, losses and damages, including legal fees and expenses, arising out of (a) the use, maintenance, condition or management of, or from any work or thing done on the Enterprise by the City, (b) any breach or default on the part of the City in the performance of any of its obligations under this Installment Sale Agreement, (c) any negligence or willful misconduct of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Enterprise, (d) any act or negligence of any sublessee of the City with respect to the Enterprise , (e) the Acquisition and Construction of the 2024 Project or the authorization of payment of the 2024 Project Costs, (f) the performance by the Trustee of its duties and obligations under the Indenture, including any duties referred to in Section 8.12 of the Indenture, (g) the presence on, under or about, or release from, the Enterprise of any substance, material or waste which is, or which becomes, regulated or classified as hazardous or toxic under State, federal or local law, or (h) the offer, sale and issuance of the Bonds. No indemnification is made under this Section 6.3 or elsewhere in this Installment Sale Agreement for adjudicated willful misconduct or negligence by the Authority or the Trustee, or their respective officers, employees, successors or assigns. The rights of the Trustee and the obligations of the City under this Section 6.3 shall survive the termination of this Installment Sale Agreement and the resignation or removal of the Trustee. Section 6.4. Non -Liability of Authority for Enterprise Obligations. The Authority and its successor and assigns shall have no obligation and shall incur no liabilities or debts whatsoever for the obligations, liabilities and debts of the City incurred in connection with the Enterprise. -17- ARTICLE VII ASSIGNMENT, SALE AND AMENDMENT Section 7.1. Assignment by the City. The obligations of the City under this Installment Sale Agreement may not be assigned by the City. Section 7.2. Sale or Other Disposition of Enterprise. The City covenants that the Enterprise shall not be encumbered, sold, leased, pledged, any charge placed thereon, or otherwise disposed of, as a whole or substantially as a whole, without the prior consent of the Owner. Neither the Pledged Net Revenues nor any other funds pledged or otherwise made available to secure payment of the Installment Payments shall be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed or used except as authorized by the terms of this Installment Sale Agreement. The City shall not enter into any agreement which impairs the operation of the Enterprise or any part of it necessary to secure adequate Pledged Net Revenues to pay the Installment Payments, or which otherwise would impair the rights of the Bond Owners and the owners of any Parity Obligations with respect to the Pledged Net Revenues. If any substantial part of the Enterprise shall be sold, the payment therefor shall either (a) be used for the acquisition or construction of improvements, extensions or replacements to the Enterprise, or (b) to the extent not so used, with the prior written consent of the Owner, be applied to prepay Installment Payments or payments with respect to any Parity Obligations, in accordance with written instructions of the City filed with the Trustee. Section 7.3. Amendment of Installment Sale Agreement. The City and the Authority shall have the right to modify or amend this Installment Sale Agreement without the consent of any of the Bond Owners or any of the owners of Parity Obligations, but only if such amendment or modification does not cause interest represented by the Bonds to be includable in gross income for federal income tax purposes in the opinion of Bond Counsel, and only if such amendment or modification does not materially adversely affect the interests of the Owners of the Bonds in the opinion of Bond Counsel, and only if such amendment or modification is for any one or more of the following purposes: (a) to provide for the issuance of Parity Obligations pursuant to Section 4.8(b); (b) to add to the covenants and agreements of the City contained in this Installment Sale Agreement, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the City; or (c) to amend any provision thereof for the purpose of complying with the applicable requirements of the Code. -18- ARTICLE VIII EVENTS OF DEFAULT Section 8.1. Events of Default Defined. The following events shall be Events of Default hereunder: (a) Failure by the City to pay any installments of principal or interest with respect to the Senior Obligations when and as the same become due and payable. (b) Failure by the City to pay any Installment Payment when and as the same become due and payable hereunder. (c) Failure by the City to pay any Additional Payment when due and payable hereunder, and the continuation of such failure for a period of ten (10) days. (d) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in the preceding clauses (a) or (b), for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority or the Trustee; provided, however, that if the City shall notify the Authority and the Trustee that in its reasonable opinion the failure stated in the notice can be corrected, but not within such thirty (30) day period, such failure shall not constitute an Event of Default hereunder if the City shall commence to cure such failure within such thirty (30) day period and thereafter diligently and in good faith cure such failure in a reasonable period of time; provided that such additional cure period may not exceed 30 days without the written consent of the Owner. (e) The filing by the City of a voluntary petition in bankruptcy, or failure by the City promptly to lift any execution, garnishment or attachment, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of the Federal Bankruptcy Code, as amended, or under any similar acts which may hereafter be enacted. (f) The occurrence and continuation of any payment event of default under and as defined in the instruments authorizing the issuance of any Parity Obligations or any event that allows the acceleration of Parity Obligations. Section 8.2. Remedies on Default. Whenever any Event of Default shall have happened and be continuing, the Trustee as assignee of the Authority shall have the right, at its option and without any further demand or notice, but subject in all respects to the provisions of Article VII of the Indenture, to: (a) declare all principal components of the unpaid Installment Payments, together with accrued interest thereon at the net effective rate of interest per annum then borne by the Outstanding Bonds from the immediately preceding Interest Payment Date on which payment was made, to be immediately due and payable, whereupon the same shall immediately become due and payable; (b) take whatever action at law or in equity may appear necessary or desirable to collect the Installment Payments then due or thereafter to become due during the Term of this -19- Installment Sale Agreement, or enforce performance and observance of any obligation, agreement or covenant of the City under this Installment Sale Agreement; and (c) as a matter of right, in connection with the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and the Bond Owners hereunder, cause the appointment of a receiver or receivers of the Gross Revenues and all amounts pledged hereunder, with such powers as the court making such appointment shall confer. The provisions of the preceding clause (a), however, are subject to the condition that if, at any time after the principal components of the unpaid Installment Payments shall have been so declared due and payable pursuant to the preceding clause (a), and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay all principal components of the Installment Payments coming due prior to such declaration and all matured interest components (if any) of the Installment Payments, with interest on such overdue principal and interest components calculated at the net effective rate of interest per annum then borne by the Outstanding Bonds, and the reasonable expenses of the Trustee (including any fees and expenses of its attorneys), and any and all other defaults known to the Trustee (other than in the payment of the principal and interest components of the Installment Payments due and payable solely by reason of such declaration) shall have been made good, then, and in every such case, with the written consent of the Trustee, shall rescind and annul such declaration and its consequences. However, 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. As provided in Section 8.6, the Trustee shall be required to exercise the remedies provided herein in accordance with the Indenture. Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Installment Sale Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article VIII it shall not be necessary to give any notice, other than such notice as may be required in this Article VIII or by law. Section 8.4. Agreement to Pay Attorneys' Fees and Expenses. In the event either party to this Installment Sale Agreement shall default under any of the provisions hereof and the nondefaulting party, the Trustee or the Owner of any Bonds should employ attorneys or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party, the Trustee or such Owner, as the case may be, the reasonable fees of such attorneys and such other expenses so incurred. Section 8.5. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Installment Sale Agreement shall be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. Section 8.6. Trustee and Bond Owners to Exercise Rights. Such rights and remedies as are given to the Authority under this Article VIII have been assigned by the Authority to the Trustee under the Indenture, to which assignment the City hereby consents. Such rights and -20- remedies shall be exercised by Trustee and the Owners of the Bonds as provided in the Indenture. Section 8.7. Rights of the Owners of Parity Obligations. Notwithstanding anything in this Article VIII to the contrary, it is hereby acknowledged and agreed that the rights of the Trustee and the Bond Owners hereunder in and to the Pledged Net Revenues and the Enterprise shall be exercised on a parity and proportionate basis with the rights of the owners of any Parity Obligations and any fiduciary acting for the benefit of such owners. The provisions of this Article VIII, and the provisions of any instruments authorizing the issuance of any Parity Obligations, shall be construed in accordance with the foregoing sentence. -21- ARTICLE IX PREPAYMENT OF INSTALLMENT PAYMENTS Section 9.1. Security Deposit. Notwithstanding any other provision of this Installment Sale Agreement, the City may on any date secure the payment of Installment Payments in whole or in part by irrevocably depositing with the Trustee or any other fiduciary an amount of cash which, together with amounts on deposit in the Bond Fund and the accounts therein, is either (a) sufficient to pay all such Installment Payments, including the principal and interest components thereof, in accordance with the Installment Payment schedule set forth in Exhibit A, or (b) invested in whole or in part in Federal Securities in such amount as will, in the written opinion of an Independent Accountant, together with interest to accrue thereon and together with any cash which is so deposited, be fully sufficient to pay all such Installment Payments when due pursuant to Section 4.4(a) , as the City shall instruct at the time of said deposit. In the event of a security deposit pursuant to this Section 9.1 with respect to all of the Installment Payments, all obligations of the City under this Installment Sale Agreement, and all security provided by this Installment Sale Agreement for said obligations, shall cease and terminate, excepting only the obligation of the City to make, or cause to be made, all of such Installment Payments from such security deposit, and the obligation of the City to compensate and indemnify the Trustee pursuant to Sections 4.9 and 6.3. Said security deposit shall be deemed to be and shall constitute a special fund for the payment of Installment Payments in accordance with the provisions of this Installment Sale Agreement. Section 9.2. Optional Prepay. The City may exercise its option to prepay the principal components of the Installment Payments on or after March 15, 2034, in whole on any date, or in part on any Installment Payment Date, in integral multiples of $5,000, by paying a prepayment price equal to the aggregate principal components of the Installment Payments to be prepaid, together with the interest component of the Installment Payment required to be paid on or accrued to such date. Such prepayment price shall be deposited by the Trustee in the Redemption Fund or in another trustee -held fund to be applied to the redemption of Bonds pursuant to Section 4.01(b) of the Indenture. The City shall give the Trustee written notice of its intention to exercise its option not less than forty-five (45) days in advance of the date of exercise. Prepayments of Installment Payments in part shall be applied to the principal component of remaining Installment Payments in inverse order of maturity. Section 9.3. Credit for Amounts on Deposit. Upon payment in full of all Additional Payments and other amounts then due and payable hereunder, all available amounts then on deposit in the funds and accounts established under the Indenture shall be credited towards the amounts then required to be so prepaid. -22- ARTICLE X MISCELLANEOUS Section 10.1. Further Assurances. The City agrees that it will execute and deliver any and all such further agreements, instruments, financing statements or other assurances as may be reasonably necessary or requested by the Authority or the Trustee to carry out the intention or to facilitate the performance of this Installment Sale Agreement, including, without limitation, to perfect and continue the security interests herein intended to be created. Section 10.2. Notices. Any notice, request, complaint, demand or other communication under this Installment Sale Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by telecopy, telex or other form of telecommunication, at its number set forth below. Notice shall be effective either (a) upon transmission by telecopy, telex or other form of telecommunication, (b) 48 hours after deposit in the United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. If to the Authority: Tustin Public Financing Authority c / o City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: City Manager Phone: (714) 573-3000 If to the City: City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: City Manager Phone: (714) 573-3000 If to the Trustee: The Bank of New York Mellon Trust Company, N.A. 333 South Hope Street, Suite 2525 Los Angeles, CA 90071 Attention: Corporate Trust Department Phone: (213) 630-6260 The Authority, the City or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder. Section 10.3. Third Party Beneficiaries. The Trustee and the Owner shall each be and is hereby made a third party beneficiary hereunder. Section 10.4. Governing Law. This Installment Sale Agreement shall be construed in accordance with and governed by the laws of the State. Section 10.5. BindingEffect. ffect. This Installment Sale Agreement shall inure to the benefit of and shall be binding upon the Authority and the City, and their respective successors and assigns, subject, however, to the limitations contained herein. Section 10.6. Severability of Invalid Provisions. If any one or more of the provisions contained in this Installment Sale Agreement 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 -23- the remaining provisions contained in this Installment Sale Agreement and such invalidity, illegality or unenforceability shall not affect any other provision of this Installment Sale Agreement, and this Installment Sale Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority and the City each hereby declares that it would have entered into this Installment Sale Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Installment Sale Agreement may be held illegal, invalid or unenforceable. Section 10.7. Article and Section Headings and References. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Installment Sale Agreement. All references herein to "Articles," "Sections' and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Installment Sale Agreement; the words "herein," "hereof," "hereby," "hereunder" and other words of similar import refer to this Installment Sale Agreement as a whole and not to any particular Article, Section or subdivision hereof; and words of the masculine gender shall mean and include words of the feminine and neuter genders. Section 10.8. Execution of Counterparts. This Installment Sale Agreement may be executed in any number of counterparts, each of which shall for all purposes be deemed to be an original and all of which shall together constitute but one and the same instrument. Section 10.9. Waiver of Personal Liability. No member of the City Council, officer, agent or employee of the City shall be individually or personally liable for the payment of Installment Payments or Additional Payments or be subject to any personal liability or accountability by reason of this Installment Sale Agreement; but nothing herein contained shall relieve any such member of the City Council, officer, agent or employee from the performance of any official duty provided by law or by this Installment Sale Agreement. Section 10.10. Limitation of Rights to Parties and Bond Owners. Nothing in this Installment Sale Agreement expressed or implied is intended or shall be construed to give to any person other than the Authority, the Trustee, the City and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of this Installment Sale Agreement 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 Authority, the Trustee, the City and the Owners of the Bonds. Section 10.11. Captions. The captions or headings in this Installment Sale Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Section of this Installment Sale Agreement. -24- IN WITNESS WHEREOF, the Authority and the City have caused this Installment Sale Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written. TUSTIN PUBLIC FINANCING AUTHORITY, as seller By Executive Director CITY OF TUSTIN, as Purchaser By Vb cs?� City Manager [Signature page to Installment Sale Agreement, dated as of February 1, 2024, by and between the Tustin Public Financing Authority and City of Tustin} -25- EXHIBIT A SCHEDULE OF INSTALLMENT PAYMENTS Installment Payment Date 9/25/24 3/25/25 9/25/25 3/25/26 9/25/26 3/25/27 9/25/27 3/25/28 9/25/28 3/25/29 9/25/29 3/25/30 9/25/30 3/25/31 9/25/31 3/25/32 9/25/32 3/25/33 9/25/33 3/25/34 9/25/34 3/25/35 9/25/35 3/25/36 9/25/36 3/25/37 9/25/37 3/25/38 9/25/38 3/25/39 9/25/39 3/25/40 9/25/40 3/25/41 9/25/41 3/25/42 9/25/42 3/25/43 9/25/43 3/25/44 TOTALS Principal Component $105,000.00 135,000.00 140,000.00 145,000.00 155,000.00 160,000.00 170,000.00 180,000.00 185,000.00 195,000.00 205,000.00 215,000.00 225,000.00 235,000.00 245,000.00 260,000.00 270,000.00 285,000.00 300,000.00 315,000.00 $4,125,000.00 Interest Component(1) $ 125,370.21 99,412.50 96,882.00 96,882.00 93,628.50 93,628.50 90,254.50 90,254.50 86,760.00 86,760.00 83,024.50 83,024.50 79,168.50 79,168.50 75,071.50 75,071.50 70,733.50 70,733.50 66,275.00 66,275.00 61,575.50 61,575.50 56,635.00 56,635.00 51,453.50 51,453.50 46,031.00 46,031.00 40,367.50 40,367.50 34,463.00 34,463.00 28,197.00 28,197.00 21,690.00 21,690.00 14,821.50 14,821.50 7,591.50 7,591.50 $2,434,029.71 Total Installment Payment $ 125,370.21 204,412.50 96,882.00 231,882.00 93,628.50 233,628.50 90,254.50 235,254.50 86,760.00 241,760.00 83,024.50 243,024.50 79,168.50 249,168.50 75,071.50 255,071.50 70,733.50 255,733.50 66,275.00 261,275.00 61,575.50 266,575.50 56,635.00 271,635.00 51,453.50 276,453.50 46,031.00 281,031.00 40,367.50 285,367.50 34,463.00 294,463.00 28,197.00 298,197.00 21,690.00 306,690.00 14,821.50 314,821.50 7,591.50 322,591.50 $6,559,029.71 (1) The applicable interest rate is the Tax -Exempt Rate (4.820%). If the Default Rate (7.820%) or the Taxable Rate (6.350%) is in effect, interest will be computed by applying such alternate rate. Exhibit A Page 1 EXHIBIT B DESCRIPTION OF THE 2024 PROJECT Beneta Well: The Beneta Well project involves the design and construction of an additional well at the existing Beneta Well site, with a groundwater production capacity of 1,000 gallons per minute.. Well Rehab Program: Routine rehabilitation of well facilities. The following wells have been identified for rehabilitation over the next three fiscal years: FY 23-24 Vandenberg Well, FY 24-25 Main Street #3, and FY 25-26 Pasadena Well. Lyttle Reservoir: The Lyttle Reservoir project includes the evaluation of the tank's condition, implementation of safety improvements, as well as interior and exterior recoating. Tank to be inspected by a qualified contractor to determine appropriate repairs, maintenance, or improvements. Exhibit B Page 1 Execution Version PLACEMENT AGENT AGREEMENT Dated as of February 1, 2024 Tustin Public Financing Authority c/o City of Tustin 300 Centennial Way Tustin, California 92780 City of Tustin 300 Centennial Way Tustin, California 92780 Re: Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) The Tustin Public Financing Authority, a joint powers authority duly organized and existing under the laws of the State of California (the "Issuer"), proposes to issue, offer, and sell in a private placement the above -referenced bonds of the Issuer (the "Bonds") pursuant to an Indenture of Trust dated as of February 1, 2024 (the "Indenture"), by and among the Issuer, the City of Tustin (the "City") and The Bank of New York Mellon Trust Company, N.A., as trustee. The proceeds of the Bonds will be used to finance the acquisition and construction of certain improvements and facilities (the "2024 Project") which constitute part of the City's municipal water enterprise (the "Enterprise"), and to pay the costs of issuing the Bonds. In order to provide for the repayment of the Bonds, the Authority will sell the 2024 Project to the City pursuant to an Installment Sale Agreement dated as of February 1, 2024 (the "Installment Sale Agreement"), between the Issuer and the City, under which the City will agree to make installment payments to the Authority (the "Installment Payments") which will be calculated to be sufficient to enable the Authority to pay the principal of and interest on the Bonds when due and payable. The City's obligation to make Installment Payments will be payable from, and secured by a pledge of, the net revenues of the Enterprise, in all respects, junior, subordinate and inferior to the City's obligations with respect to the payment of debt service on its City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds (the "2016 Senior Bonds") and its City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020 (the "2020 Senior Bonds"). In connection with the issuance of the Bonds, the City will enter into (i) a First Amendment to Indenture of Trust dated as of February 1, 2024, between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the "2016 Trustee"), amending that certain Indenture of Trust, dated as of September 1, 2016, by and between the City and the 2016 Trustee relating to the 2016 Senior Bonds, and (ii) a First Amendment to Indenture of Trust dated as of February 1, 2024, between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the "2020 Trustee"), amending that certain Indenture of Trust, dated as of February 1, 2020, by and between the City and the 2020 Trustee relating to the 2020 Senior Bonds (collectively, the "Amendments"). The Bonds, the Indenture, the Installment Sale Agreement and the Amendments are referred to herein as the "Financing Documents." Capitalized terms used but not defined herein have the meanings given to such terms in the Indenture. This Placement Agent Agreement (this "Agreement") confirms the agreement among the Issuer, the City and Stifel, Nicolaus & Company, Incorporated (the "Placement Agent") as follows: 1. Enmement. The Issuer and the City hereby engage the Placement Agent as their exclusive agent to assist the Issuer in placing the Bonds on a best efforts basis with a purchaser (the "Purchaser") which shall be a lender that regularly extends credit to state and local governments by making loans and acquiring repayment obligations that are evidenced by obligations such as the Bonds as represented by the Purchaser in an executed certificate substantially in the form attached as Exhibit A hereto on a private placement basis (the "Placement"). Sale and delivery of the Bonds by the Issuer and purchase by the Purchaser will occur on the day of closing ("Closing Date"). The Issuer and the City acknowledge and agree that the Placement Agent's engagement hereunder is not an agreement by the Placement Agent or any of its affiliates to underwrite or purchase the Bonds or otherwise provide any financing to the Issuer or the City. The Placement Agent hereby accepts this engagement upon the terms and conditions set forth in this Agreement. 2. Fees and Expenses. (a) For its services under this Agreement, the Issuer and the City agree to pay the Placement Agent a placement fee for its services under this Agreement of $35,000 payable on the Closing Date; and (b) In the event the Issuer or the City terminates this Agreement and within twelve (12) months thereafter the Issuer sells the Bonds to an investor identified by the Placement Agent to the Issuer and the City prior to such termination, the amounts payable under (a) above shall be immediately due and payable by the Issuer. 3. Disclosure and Due Diligence. (a) With the assistance of the Placement Agent and the Issuer's municipal advisor, the Issuer and the City will prepare and provide the Placement Agent with a term sheet and/or other documents including the City's audited financial statements, unaudited financials to the extent audits are not available, current year budget information, recent rate studies and associated financial projections, reports, if any, published by Standard & Poor's pertaining to the Enterprise and other information deemed important the Placement Page 2 Agent (the "Information Package") together with the draft Financing Documents (together with all supplements, modifications, and additions thereto prior to the Closing Date, the "Placement Materials"). The Issuer and the City acknowledge and agree that they have prepared the Information Package and are solely responsible for the completeness, truth, and accuracy of the Placement Materials and that the Placement Agent and the Purchaser may rely upon, as complete, true, and accurate, the Placement Materials and all information provided by the Issuer and the City to the Placement Agent for use in connection with the Placement and that the Placement Agent does not assume any responsibility therefor. (b) The Issuer and the City will make available to the Purchaser and the Placement Agent such documents and other information which the Purchaser or the Placement Agent reasonably deems appropriate, will provide access to its officers, directors, employees, accountants, counsel and other representatives, and will provide the Purchaser and the Placement Agent the opportunity to ask questions and receive answers from knowledgeable individuals, including Bond Counsel (whose opinions each shall receive and upon which they may rely) concerning the Issuer, the City, the Bonds, and the security therefor; it being understood that the Purchaser and the Placement Agent will rely solely upon such information supplied by the Issuer, the City and their representatives without assuming any responsibility for independent investigation or verification thereof. (c) In the event that the Placement Agent is unable to complete "due diligence" in order to form a reasonable basis for recommending the Bonds to the Purchaser either (1) because of the failure of the Issuer or the City to comply with sub -paragraph (a) or (b) of this paragraph or (2) because the Placement Agent uncovers "red flags" about the Issuer and/or the City that cause the Placement Agent to be not satisfied that the Placement Agent can in good faith recommend the Bonds to the Purchaser, the Placement Agent may terminate this Agreement without further obligation on the part of the Placement Agent to proceed with the Placement and without any obligation on the part of the Placement Agent to reimburse to the Issuer or the City any monies advanced by the Issuer or the City to the Placement Agent. In such event the amounts due to the Placement Agent under paragraph 2(a) above, with respect to the reimbursement of reasonable expenses, shall be immediately due and payable. 4. Representations, Warranties, and Agreements of the Issuer and the Cam. As of the date of this Agreement, unless otherwise stated, the Issuer and the City represent, warrants, and agrees with the Placement Agent that: Page 3 (a) The Issuer and the City are duly organized and validly existing under the laws of the State of California (the "State") with the power to execute and deliver the Financing Documents to which they are a parry, perform the agreements on their part contained therein and in the agreements approved thereby and cause the issuance of the Bonds. (b) The Issuer and the City will not cause or permit any action to be taken in the placement of the Bonds in violation of the requirements for exemption from registration or qualification of the Bonds under all federal and applicable state securities laws and regulations. (c) The Issuer and the City have complied, and in all respects on the Closing Date will be in compliance, with all of the provisions of applicable law of the State. (d) The Issuer and the City have duly authorized and approved the Placement Materials and the delivery thereof to the Purchaser and the execution and delivery of this Agreement and the Financing Documents to which they are a party pursuant to resolutions adopted by their respective governing bodies (collectively, the "Resolutions"), and the performance of its obligations and the consummation by it of all other transactions contemplated thereby. (e) On the Closing Date, the Issuer and the City will have been duly authorized, executed, and delivered by this Agreement and the Financing Documents they are a parry to, and, assuming due authorization, execution and delivery by the other parties thereto, as applicable, constitute legal, valid and binding agreements of the Issuer and the City enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles if sought and by the limitations on legal remedies imposed on actions against the Issuer in the State. (f) Neither the Issuer nor the City is, and on the Closing Date will not be, in breach of or default under any applicable law or administrative regulation of the State or any department, division, agency or instrumentality thereof, or of the United States, or any applicable judgment or decree or any loan agreement, note, resolution, certificate, agreement or other instrument to which the Issuer or the City is a party or is otherwise subject, which breach or default would materially and adversely affect the Issuer or the City or its ability to perform their respective duties and obligations under the Financing Documents, and the execution and delivery of the Financing Page 4 Documents, the adoption of the Resolutions and the issuance by the Issuer of the Bonds and compliance with the provisions of each will not conflict with or constitute a breach of or default under any applicable law or administrative regulation of the State or under any certificate, agreement or other instrument to which the Issuer or the City is a party or is otherwise subject, or which breach or default would materially and adversely affect the Issuer or the City or their ability to perform their respective duties and obligations under the Financing Documents. (g) No action, suit, proceeding or investigation at law or in equity before or by any court, governmental agency, public board or body is, and on the Closing Date will not be, pending or, to the knowledge of the Issuer or the City, threatened: (i) in any way affecting the existence of the Issuer or the City or the titles of the members of their respective governing bodies to their respective offices, (ii) seeking to prohibit, restrain or enjoin the issuance, sale or delivery of the Bonds, the Financing Documents or collection or payment by the Issuer of any amounts pledged or to be pledged as security to pay the principal of and interest on Bonds, (iii) seeking to prohibit, restrain or enjoin the execution and delivery of the Financing Documents or collection or payment by the City of any amounts pledged or to be pledged as security to pay the Installment Payments under the Installment Sale Agreement, (iv) in any way contesting or affecting the validity or enforceability of, or the power or authority of the Issuer to issue or to enter into (as applicable) the Bonds or the Financing Documents, (v) in any way contesting or affecting the validity or enforceability of, or the power or authority of the City to enter into the Financing Documents, (vi) contesting in any way the completeness, truth, or accuracy of the Placement Materials, (vi) except as disclosed in the Placement Materials, wherein an unfavorable decision, ruling or finding would materially adversely affect the financial position or condition of the Issuer or the City, would result in any material adverse change in the ability of the Issuer to pledge or apply the security or source of payment of, or to pay debt service on the Bonds, or would result in any material adverse change in the ability of the City to pledge or apply the security or source of payment of, or to pay, the Installment Payments, or (vii) contesting the status of the interest on the Bonds as excludable from gross income for federal income tax purposes or as exempt from any applicable state tax. (h) Regarding information provided by the Issuer and the City to the Placement Agent: Page 5 (1) The Issuer and the City will furnish the Placement Agent and the Purchaser with the Information Package. The Issuer and the City represent and warrant that all information made available to the Placement Agent by the Issuer and the City or contained in the Information Package, when provided will be, and will be at all times thereafter during the period of the engagement of the Placement Agent hereunder, be complete, true, and accurate in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements are made; or (2) except as otherwise indicated to the contrary in the City 's Financial statements, all historical financial statements of the City provided to the Placement Agent and the Purchaser will be prepared in accordance with generally accepted accounting principles and practices then in effect in the United States and will fairly present the financial condition and operations of the entities covered thereby in all material respects; (3) any forecasted financial or market information with respect to the City or its market provided to the Placement Agent and the Purchaser by the Issuer has been or will be prepared in good faith with a reasonable basis for the assumptions and the conclusions reached therein. (i) On the Closing Date, the Issuer will deliver or cause to be delivered to the Placement Agent, in form and substance satisfactory to the Placement Agent, the following documents: (1) The opinion of Quint & Thimmig LLP, Bond Counsel to the Issuer, dated the Closing Date relating to: (i) the validity of the Bonds; (ii) exemption from registration and qualification under federal and state securities law; and (i) the tax-exempt status of the Bonds, dated the Closing Date; (2) a certificate of the Issuer, dated the Closing Date, to the effect that: (i) the representations and warranties of the Issuer contained in this Agreement are true and correct as if made on the Closing Date; Page 6 (ii) the Issuer has complied with and fully satisfied all of its agreements with and obligations to the Placement Agent under this Agreement; and (iii) as of its date and the date hereof, the information contained in the Placement Materials is complete, true, and accurate and such information does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (3) a certificate of the City, dated the Closing Date, to the effect that: (i) the representations and warranties of the City contained in this Agreement are true and correct as if made on the Closing Date; (ii) the City has complied with and fully satisfied all of its agreements with and obligations to the Placement Agent under this Agreement; and (iii) as of its date and the date hereof, the information contained in the Placement Materials is complete, true, and accurate and such information does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (4) A Purchaser Letter, in the form attached as Exhibit B to the Indenture, executed by the Purchaser and addressed to the Issuer, the City and the Placement Agent; and (5) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Placement Agent or its counsel, if any, and Bond Counsel may reasonably request to evidence compliance by the Issuer and the City with legal requirements, the truth and accuracy, as of the Closing Date, of the representations of the Issuer and the City, and the due performance or satisfaction by the Issuer and the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Issuer and the City. 5. Termination. This Agreement may be terminated by either party upon ten (10) business days' prior written notice; provided that the provisions of Paragraph 2 and obligations thereunder shall not be affected by such termination. Page 7 6. Re2ulatory Disclosure. The Issuer and the City acknowledge, in connection with the purchase and sale of the Bonds, the offering of the Bonds for sale and the discussions and negotiations relating to the terms of the Bonds pursuant to and as set forth in this Agreement, that: (a) the Placement Agent has acted at arm's length, is acting solely for its own account and is not an agent of or advisor to (including, without limitation, a Municipal Advisor (as such term is defined in Section 975(e) of the Dodd -Frank Wall Street Reform and Consumer Protection Act)), and owes no fiduciary duty to the Issuer, the City or any other person, (b) the Placement Agent's duties and obligations to the Issuer and the City shall be limited to those contractual duties and obligations set forth in this Agreement, (c) the Placement Agent may have interests that differ from those of the Issuer and the City, and (d) the Issuer and the City have consulted their legal and financial advisors to the extent they deemed appropriate in connection with the offering and sale of the Bonds. The Issuer and the City further acknowledge and agree that they are responsible for making their judgment with respect to the offering and sale of the Bonds and the process leading thereto. The Issuer and the City agree that they will not claim that the Placement Agent acted as a Municipal Advisor to the Issuer or the City or rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Issuer or the City, in connection with the offering or sale of the Bonds or the process leading thereto. 7. Survival of Certain Representations and Obligations. The respective agreements, covenants, representations, warranties and other statements of the Issuer, the City and their officers set forth in or made pursuant to this Agreement shall survive delivery of and payment for the Bonds and shall remain in full force and effect, regardless of any investigation, or statements as to the results thereof, made by or on behalf of the Placement Agent. 8. Notices. Any notice or other communication to be given to the Issuer or the City under this Agreement may be given by delivering the same in writing to the Issuer and the City at their respective address set forth above. Any notice or other communication to be given to the Placement Agent under this Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, 2121 Avenue of the Stars, Suite 2150, Los Angeles, California 90067; Attention: Sara Oberlies Brown, Public Finance. Page 8 9. No Boycott. By entering into this Agreement, the Placement Agent certifies that it and its parent company, wholly or majority -owned subsidiaries, and other affiliates, are not currently engaged in, or for the duration of this Agreement will not engage in, a boycott of goods or services from the State of Israel; companies doing business in or with Israel or authorized by, licensed by, or organized under the laws of the State of Israel; or persons or entities doing business in the State of Israel. The Placement Agent understands that "boycott" includes, but is not limited to, refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations, but does not include an action made for ordinary business purposes. 10. No Assignment. This Agreement has been made by the Issuer, the City and the Placement Agent, and no person other than the Issuer, the City and the Placement Agent, shall acquire or have any right under or by virtue of this Agreement. 11. Applicable Law. This Agreement shall be interpreted, governed and enforced in accordance with the laws of the State. 12. Effectiveness. This Agreement shall become effective upon its execution by duly authorized officials of all parties hereto and shall be valid and enforceable from and after the time of such execution. 13. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 14. Counterparts. This Agreement may be executed in several counterparts (including counterparts exchanged by email in PDF format), each of which shall be an original and all of which shall constitute but one and the same instrument. Page 9 B B r Respectfully submitted, STIFEL, NICOLAUS & COMPANY INCORPORATED ....................................................................... Sara Oberlies Brown, Managing Director ACCEPTED as of the I" day of February, 2024. TUSTIN PUBLIC FINANCING AUTHORITY B........0................ Executive Director CITY OF TUSTIN By......... ......................................... ........ City Manager S-1 EXHIBIT A (attached) FORM OF LENDER CERTIFICATE Dated: February _, 2024 ("[Lender] ") hereby certifies as follows with regard to the Water Revenue Bond, Series 2024 (Subordinate Lien) (the "Bond") in the principal amount of $ issued by the Tustin Public Financing Authority (the "Authority ") pursuant to an Indenture of Trust (the "Indenture ") between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee "), debt service with respect to which will be paid from installment payments made by the City of Tustin (the "Borrower") under an Installment Sale Agreement (together with the Bond, the "Loan Obligation "): 1. [Lender] has full power and authority to carry on its business as now conducted, deliver this Original Purchaser Certificate and make the representations and certifications contained herein. 2. [Lender] is a lender that regularly extends credit to state and local governments by making loans and acquiring repayment obligations that are evidenced by obligations such as the Loan Obligation; has knowledge and experience in financial and business matters that make it capable of evaluating the Borrower, the Loan Obligation and the risks associated with the extension of credit evidenced by the Loan Obligation; has the ability to bear the economic risk of extending the credit evidenced by the Loan Obligation; and is a limited liability company controlled by a bank engaged in the primary business of extending credit and making loans to state and local governments and non-profit entities and has total assets in excess of $1 billion. [Lender] is not acting as a broker, dealer, municipal securities underwriter, municipal advisor or fiduciary in connection with its extension of credit evidenced by the Loan Obligation. 3. [Lender] has conducted its own investigation of the financial condition of the Borrower, of the purpose for which the Loan Obligation is being executed and delivered, and of the security for the payment of the principal of and interest on the Loan Obligation and has obtained such information regarding the Loan Obligation and the Borrower and its operations, financial condition, and financial prospects as [Lender] deems necessary to make an informed lending decision with respect to its extension of credit evidenced by the Loan Obligation. 4. [Lender] extending credit to the Borrower evidenced by the Loan Obligation and is acquiring the interests in the Loan Obligation as a vehicle for making a commercial loan for its own loan account and with the present intention of holding the Loan Obligation to maturity or earlier prepayment, provided that [Lender] retains the right at any time to dispose of the Loan Obligation or any interest therein or portion thereof, but agrees that any such sale, transfer or distribution by [Lender] shall be made in accordance with applicable law and the provisions of the Loan Obligation and related documents only in whole to (a) an affiliate of [Lender] or (b) a bank, trust, custodian, insurance company, or other financial institution or an affiliate thereof. [Lender] and its assignees further retain the right to sell or assign participation interests in the Loan Obligation, in minimum amounts of $250,000, to an entity listed in (a) or (b) of this Section 4, provided that any participation, custodial, or similar agreement under which multiple ownership interests are created in the Loan Obligation shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, owner, servicer, or other fiduciary or agent acting on behalf of all of the assignees to act on their behalf with respect to the rights and interests of the registered owner of the Loan Obligation, including with respect 1 to the exercise of rights and remedies of the registered owner on behalf of such owners upon the occurrence of an event of default under the Loan Obligation. 5. [Lender] acknowledges that (a) the Loan Obligation (i) has not been registered under the Securities Act of 1933, as amended, (ii) has not been registered or otherwise qualified for sale under the securities laws of any state, and (iii) will not be listed on any securities exchange and (b) there is no established market for the Loan Obligation and that none is likely to develop. [Lender] understands and acknowledges that (a) its extension of credit evidenced by the Loan Obligation is not intended to be subject to the requirements of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended, and (b) in connection with [Lender]'s extension of credit evidenced by the Loan Obligation, the Borrower has not prepared or caused to be prepared, any official statement, private placement memorandum or other offering document. 6. [Lender] is acting solely for its own loan account and not as a fiduciary for the Borrower or in the capacity of broker, dealer, placement agent, municipal securities underwriter, municipal advisor, or fiduciary. [Lender] has not provided, and will not provide, financial, legal (including securities law), tax, accounting, or other advice to or on behalf of the Borrower (including to any municipal advisor or any placement agent engaged by the Borrower) with respect to the structuring, issuance, sale, or delivery of the Loan Obligation. [Lender] has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934, as amended, to the Borrower with respect to the transactions relating to the structuring, issuance, sale, or delivery of the Loan Obligation and the discussions, undertakings, and procedures leading thereto. Each of the Borrower, its municipal advisor, and its placement agent has sought and shall seek and obtain financial, legal (including securities law), tax, accounting, and other advice (including as it relates to structure, timing, terms, and similar matters and compliance with legal requirements applicable to such parties) with respect to the Loan Obligation from its own financial, legal, tax, and other advisors (and not from the undersigned or its affiliates) to the extent that the Borrower, its municipal advisor, or its placement agent desires to, should, or needs to obtain such advice. [Lender] expresses no view regarding the legal sufficiency of its representations for purposes of compliance with any legal requirements applicable to any other party, including but not limited to the Borrower's municipal advisor or placement agent, or the correctness of any legal interpretation made by counsel to any other party, including but not limited to counsel to the Borrower's municipal advisor or placement agent, with respect to any such matters. The transactions between the Borrower and [Lender] are arm's-length, commercial transactions in which [Lender] is acting and has acted solely as a principal and for its own interest, and [Lender] has not made recommendations to the Borrower with respect to the transactions relating to the Loan Obligation. 7. [Lender] acknowledges and agrees that the Borrower and its placement agent take no responsibility for, and make no representation to [Lender], or any subsequent purchaser, with regard to, a sale, transfer or other disposition of the Bond in violation of the provisions of the Indenture, or any securities law or income tax law consequences thereof. [Lender] also acknowledges that, with respect to the Borrower's obligations and liabilities, [Lender] is solely responsible for compliance with the restrictions on transfer of the Bond in connection with any subsequent transfer of the Bond made by [Lender]. 8. [Lender] acknowledges that the issuance of the Bond to [Lender] is made in reliance upon the certifications, representations, and warranties herein made for the benefit of the Borrower, its placement agent, the Authority, and the Trustee. 2 9. The interpretation of the provisions hereof shall be governed and construed in accordance with California law without regard to principles of conflicts of laws. 10. All representations of [Lender] contained in this letter shall survive the execution and delivery of the Bond to [Lender] as representations of fact existing as of the date of execution and delivery of this Lender Certificate. IN WITNESS WHEREOF, , has caused this Lender Certificate to be executed by its officer there -unto duly authorized, all as of the day and year first above written. By: _ Name: Title: Quint & Thimmig LLP 2/9/24 $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE OF DELIVERY TO CDIAC A10 I, Brian D. Quint, hereby state and certify that for and on behalf of the Tustin Public Financing Authority, on the date hereof, I caused to be delivered, via online submission, a Reports of Final Sale relating to the captioned financing, to the California Debt and Investment Advisory Commission, copies of which Reports are hereto attached. Dated: February 14, 2024 By &n�� 61'(-I ` `""` Bri . Quint, Quint Thimmig LLP REPORT OF FINAL SALE �Ew*Tf CDIAC # : 2024-0073 ,E � c California Debt and Investment Advisory Commission, 915 Capitol Mall, Status: Submitted '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 02/12/2024 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Issuance Issuer Name: Tustin Public Finance Authority Issue Name: Water Revenue Bonds, Series 2024 (Subordinate Lien) Project Name: Water Revenue Bonds, Series 2024 (Subordinate Lien) Principal: $4,125,000.00 Original Issue Premium: $0.00 Original Premium Discount: $0.00 Net Original Issue Premium/Discount: $0.00 Is any portion of the principal to refund, redeem, paydown, or refinance No outstanding debt? Issuer certifies that it has complied with Gov. Code section 8855(i) with Yes respect to local debt policies: Environmental / Social Impact Type Amount No Data available to display. Marks -Roos Authority/TRAN Pool Authority: Yes Marks -Roos Local Obligor/TRAN Participant: No Maturity Structure: Term Dates Proposed Sale Date: 02/07/2024 Actual Sale Date: 02/07/2024 Settlement Date: 02/14/2024 Dated Date: 02/14/2024 Final Maturity Date: 04/01/2044 First Optional Call Date: 04/01/2034 Issuance Authorization Authorization (1): �6 wTTf ,E � � REPORT F FINAL ALE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Authorization Name: Resolution No. 24- 01 Original Authorized Amount: $4,125,000.00 Authorization Date (MM/DD/YYYY): 02/06/2024 Amount Authorization Replenished (By this $0.00 Issue): Amount Authorization Reduced (By this Issue): $4,125,000.00 Net Change: $-4,125,000.00 Statutory Authority Will a Validation Action be Pursued? No Statutory Authorities Statute (1): Statute: GOV - (6584-6599.1) - Article 4. Marks -Roos Local Bond Pooling Act Credit Credit Enhancement/Guaranty: Enhancement Expiration Date Credit Rating: Standard & Poor: Fitch: Moody's: Other: Financing Participants/Costs Underwriter Management Fee: $0.00 Total Takedown Amount: $0.00 Underwriter Expense: $0.00 CDIAC # : 2024-0073 Status: Submitted 02/12/2024 None Not Rated �6 wTTf ,E � � REPORT F FINAL ALE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Bond Counsel: $30,000.00 Organization Name Contact First Name Contact Last Name Quint & Thimmig LLP Borrower Counsel: Co -Bond Counsel: Credit Enhancement: Disclosure Counsel: Financial/Municipal Advisor: Organization Name Fieldman Rolapp & Associates Inc Lender: Placement Agent: Organization Name Stifel Nicolaus & Company Inc Purchaser: Organization Name Capital One Public Funding LLC Contact First Name Contact First Name Contact First Name Credit Rating Agency: Trustee/Paying Agent: Organization Name The Bank of New York Mellon Trust Company, N.A. Other Expenses Amount: Total Additional Fees and Expenses: Total Costs of Issuance: Other Contacts: $28,500.00 Contact Last Name $35,000.00 Contact Last Name $0.00 Contact Last Name CDIAC # : 2024-0073 Status: Submitted 02/12/2024 Fee Amount $30,000.00 Fee Amount $28 ,500.00 Fee Amount $35,000.00 Fee Amount $0.00 $0.00 Contact First Name Contact Last Name Fee Amount $0.00 $31,500.00 $125 ,000.00 $125 ,000.00 �6 wTTf ,E � � REPORT F FINAL ALE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Role Organization Filing Contact Quint & Thimmig LLP 2_Invoice Contact Fieldman Rolapp & Associates Inc 1_Issuer Main Contact Purchaser Counsel Kronick Moskovitz Tiedemann & Girard Placement Agent Counsel Jones Hall A Professional Law Corp Tax Status/Interest Under State Law: State Taxable Principal Amount: State Tax -Exempt Principal Amount: Under Federal Law: Federal Taxable Principal Amount: Federal Tax-exempt (No AMT) Principal Amount: Federal Tax-exempt (AMT) Principal Amount: Net Interest Cost (NIC): True Interest Cost (TIC): Capital Appreciation Debt: Type of Debt Instrument Public Enterprise Revenue Bond CDIAC # : 2024-0073 Status: Submitted 02/12/2024 Contact First Name Contact Last Name Jennifer King Source of Repayment Source of Repayment Types: Local Obligations Is debt repayable in non -US currency? No Senior Structure: No Subordinate Structure: Yes Tax -Exempt $4,125,000.00 $4,125,000.00 4.82 4.818 No �6 wTTf ,E � � REPORT F FINAL ALE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Purpose(s) of Financing Purpose Name Percentage Water Supply, Storage, Distribution 100 Type of Sale Type: Is financing a private placement? Reason(s) for Negotiated Sale: Benefit in working with participants familiar with the debt and/or issuer. Cost Savings expected. Provided more debt structuring flexibility. Provided more sale timing flexibility Document Submittal Official Statements/Offering Memorandum: Maturity Schedule: Document Type Document Name Bond Specimen E02 SpecimenBond.pdf Indenture A07 Indenture.pdf Bond Purchase Contract A06 CommitmentAgt.pdf Resolution A03 Authority Res 24-01.pdf Negotiated Yes CDIAC # : 2024-0073 Status: Submitted 02/12/2024 None Prepared Attached File Upload Date 02/11/2024 02/11/2024 02/11/2024 02/11/2024 Quint & Thimmig, LLP Mail - Review Completed of Report of Final Sale 2/12/24, 4:13 PM Hlpt &.,[ immi III B Fleet <bfleet@gtllp.com> Review Completed of Report of Final Sale no-reply-cdiac@treasurer.ca.gov <no-reply-cdiac@treasurer.ca.gov> Mon, Feb 12, 2024 at 1:22 PM To: bfleet@gtllp.com The California Debt and Investment Advisory Commission has reviewed and accepted the following Report of Final Sale: CDIAC #: 2024-0073 Issuer: Tustin Public Finance Authority Issue Name: Water Revenue Bonds, Series 2024 (Subordinate Lien) Project/Series: Water Revenue Bonds, Series 2024 (Subordinate Lien) Principal Amount: $4,125,000.00 Actual Sale Date: 02/07/2024 Date Reviewed: 02/12/2024 This Report of Final Sale (RFS) will display a status of Reviewed in the Data Portal. Applicable annual reports may be filed for this issue beginning July 1st following the date of this notice. Any editing, updating, or revision of this Reviewed RFS must be done before any subsequent annual reports have been reviewed and accepted by CDIAC. https://mail.google.com/mail/u/1/?ik=f8fa665f79&view=pt&search=a...Cmsg-f:1790729742628938339&simpl=msg-f:1790729742628938339&mb=1 Page 1 of 1 REPORT OF FINAL SALE �Ew*Tf CDIAC # : 2024-0076 ,E � c California Debt and Investment Advisory Commission, 915 Capitol Mall, Status: Submitted '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 02/12/2024 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Issuance Issuer Name: Tustin Issue Name: 2024 Installment Sale Financing Project Name: 2024 Installment Sale Financing (Water Project) Principal: $4,125 ,000.00 Original Issue Premium: $0.00 Original Premium Discount: $0.00 Net Original Issue Premium/Discount: $0.00 Is any portion of the principal to refund, redeem, paydown, or refinance No outstanding debt? Issuer certifies that it has complied with Gov. Code section 8855(i) with respect Yes to local debt policies: Environmental / Social Impact Type Amount No Data available to display. Marks -Roos Authority/TRAN Pool Authority: No Marks -Roos Local Obligor/TRAN Participant: Yes Maturity Structure: Serial CDIAC# of the related Authorities: CDIAC # r41vz111z1vKl Dates Proposed Sale Date: 02/07/2024 Actual Sale Date: 02/07/2024 Settlement Date: 02/14/2024 Dated Date: 02/14/2024 Final Maturity Date: 04/01 /2044 First Optional Call Date: 04/01/2034 �6 wTTf ,E � � REPORT F FINAL ALE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Issuance Authorization Authorization (1): Authorization Name: Original Authorized Amount: Authorization Date (MM/DD/YYYY): Amount Authorization Replenished (By this Issue): Amount Authorization Reduced (By this Issue): Net Change: Statutory Authority Will a Validation Action be Pursued? Statutory Authorities Statute (1): Statute: 3 - (GOV 6508, 37350) -INSTALLMENT SALES (LEASE) PURCHASE/FINANCING AGREEMENTS Credit Credit Enhancement/Guaranty: Enhancement Expiration Date Credit Rating: Standard & Poor: Fitch: Moody's: Other: Financing Participants/Costs Underwriter Management Fee: Total Takedown Amount: Underwriter Expense: Resolution No. 24-07 $4,125,000.00 02/06/2024 $0.00 $4,125,000.00 $4,125,000.00 No $0.00 $0.00 $0.00 CDIAC # : 2024-0076 Status: Submitted 02/12/2024 None Not Rated �6 wTTf ,E � � REPORT F FINAL ALE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Bond Counsel: $0.00 Organization Name Contact First Name Contact Last Name Quint & Thimmig LLP Borrower Counsel: Co -Bond Counsel: Credit Enhancement: Disclosure Counsel: Financial/Municipal Advisor: Organization Name Fieldman Rolapp & Associates Inc Lender: Placement Agent: Organization Name Stifel Nicolaus & Company Inc Purchaser: Organization Name Capital One Public Funding LLC Contact First Name Contact First Name Contact First Name Credit Rating Agency: Trustee/Paying Agent: Organization Name The Bank of New York Mellon Trust Company, N.A. Other Expenses Amount: Total Additional Fees and Expenses: Total Costs of Issuance: Other Contacts: $0.00 Contact Last Name $0.00 Contact Last Name $0.00 Contact Last Name CDIAC # : 2024-0076 Status: Submitted 02/12/2024 Fee Amount $0.00 Fee Amount $0.00 Fee Amount $0.00 Fee Amount $0.00 $0.00 Contact First Name Contact Last Name Fee Amount $0.00 $0.00 $0.00 $0.00 �6 wTTf ,E � � REPORT F FINAL ALE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 CDIAC # : 2024-0076 Status: Submitted 02/12/2024 Role Organization Contact First Name Contact Last Name ADTR Main Contact Jennifer King Filing Contact Quint & Thimmig LLP 2_Invoice Contact Jennifer King 1_Issuer Main Contact Jennifer King Purchaser Counsel Kronick Moskovitz Tiedemann & Girard Placement Agent Counsel Jones Hall A Professional Law Corp Tax Status/Interest Under State Law: Tax -Exempt State Taxable Principal Amount: State Tax -Exempt Principal Amount: $4,125,000.00 Under Federal Law: Federal Taxable Principal Amount: Federal Tax-exempt (No AMT) Principal Amount: $4,125,000.00 Federal Tax-exempt (AMT) Principal Amount: Net Interest Cost (NIC): 4.82 True Interest Cost (TIC): 4.818 Capital Appreciation Debt: No Type of Debt Instrument Marks -Roos Loan Source of Repayment Source of Repayment Types: General Fund of Lessee Is debt repayable in non -US currency? No Senior Structure: No �6 wTTf ,E � � REPORT F FINAL ALE c California Debt and Investment Advisory Commission, 915 Capitol Mall, '' Room 400, Sacramento, CA 95814 P.O. Box 942809, Sacramento, CA 4M��. 94209-0001 Tel.: (916) 653-3269 Fax: (916) 654-7440 Subordinate Structure: Yes Purpose(s) of Financing Purpose Name Percentage Water Supply, Storage, Distribution 100 Type of Sale Type: Is financing a private placement? Reason(s) for Negotiated Sale: No data available to display. Document Submittal Official Statements/Offering Memorandum: Maturity Schedule: Document Type Document Name Resolution A04 City Res 24-07.pdf Installment Sales Agreement A08 InstallSaleAgt.pdf CDIAC # : 2024-0076 Status: Submitted 02/12/2024 Negotiated Yes File Upload Date 02/11/2024 02/11/2024 Enclosed Attached Quint & Thimmig, LLP Mail - Review Completed of Report of Final Sale 2/12/24, 4:14 PM Hlpt &.,[ immi III B Fleet <bfleet@gtllp.com> Review Completed of Report of Final Sale no-reply-cdiac@treasurer.ca.gov <no-reply-cdiac@treasurer.ca.gov> Mon, Feb 12, 2024 at 1:23 PM To: bfleet@gtllp.com The California Debt and Investment Advisory Commission has reviewed and accepted the following Report of Final Sale: CDIAC #: 2024-0076 Issuer: Tustin Issue Name: 2024 Installment Sale Financing Project/Series: 2024 Installment Sale Financing (Water Project) Principal Amount: $4,125,000.00 Actual Sale Date: 02/07/2024 Date Reviewed: 02/12/2024 This Report of Final Sale (RFS) will display a status of Reviewed in the Data Portal. Applicable annual reports may be filed for this issue beginning July 1st following the date of this notice. Any editing, updating, or revision of this Reviewed RFS must be done before any subsequent annual reports have been reviewed and accepted by CDIAC. https://mail.google.com/mail/u/1/?ik=f8fa665f79&view=pt&search=a...7Cmsg-f:1790729779555314189&simpl=msg-f:1790729779555314189&mb=1 Page 1 of 1 I ``tatr at tlatifarnia `4'` '\ �! , arzrrisrt� Qf §tatr ti•)Tit_: �J; .0INT POWERS ..kCREEMENI T tZM 5 or 6543 71 .- ".a =ii :c: sec:e ary of state, P.O. Box 94 ;12^ S3 Lti; r:'• ::c ^.�:� 7r x:t:chmen;s. 4;n't`asctherwise specified FILE NO - f •' -"f r _ __ ' , HUD is sedwddW&M'"ld�` ditV rda 1 .. FEB 2 6 M6 ) BI(j JQpES, I� )i Office Use Only) 1: _:n•: c:i :i::- ate —,% er en' ih created under the agreement and responsible for the adrninatmtion of - ---- ' ust.La F'wlic Financiny A+,thoritz 'I \;._. :+..,, _—_ :aN^r.zai Way, Tustin, California 92680 .. ..':C -3 ::'.0 :.`rce:�an• :: apyiicabfe• _ Joint Exercise n` poweis Agreement , . _.__."._-- _`� •�:L': of Tustin and Brie Tw;t1C Co[rratu.i:y x^ede-Clopaent AnenC�• '! ' •I I; c i ace rnMic`,. r,nt.riue un a separate sheet and attach it.to this Form. I I ;': _ ,...:i• . •Ii:. :f Ih? agreement is __May 1, 1995 �I pnr..dt a c:.:u: a statement of the agreement's purpose or the powers to be exercised_ PMy it T°r Capital i,aproyeMents for Cahforn+.a logal agencies taroaghh s•_ch public capital iTRrovemeiitsr'ari for thee' urchaseof C-lif-.-nia lc, al agencies by tb#,T4stin.>l� a F`inataciay Authority_ f -- ,'gristuie eg fiarr n ;•Ssq• -Ioden 141-1 ei1=1 :6 'tiltiie„ iicnd counsg2 •to' the Tustin ?ypep Naerie a Tit - . - •- IRT C -::!i-nia State's cAce. MAY ZOAV Date: Ja,., afte, DEBRA ROWEN. Seam" of Strife ♦ UE'i :O: �hE o. U' H w C4L IFOPN STATEMENT OF FACTS ROSTER OF PUBLIC AGENCIES FILING (Government Code section 53051) State of California Secretary of State Instructions: 1. Complete and mail to: Secretary of State, P.O. Box 942877, Sacramento, CA 94277-0001 (916) 653-3984 2. A street address must be given as the official mailing address or as the address of the presiding officer. 3. Complete addresses as required. FILED Secretary of State State of Califomia OCT 0 7 2013 (Office Use Only) 4. If you need additional space, attach information on an 8'/z" X 11" page, one sided and legible. New Filing © Update M Legal name of Public Agency: Tustin Public Financinq Authority Nature of Update: Chanqe of Board Members County: Orange Official Mailing Address: City of Tustin 300 Centennial Way, Tustin, California 92780 Name and Address of each member of the governing board: Chairman, President or other Presiding Officer (Indicate Title): Executive Director Name: Jeffrey C. Parker Address: 300 Centennial Way, Tustin, California 92780 Secretary or Clerk (Indicate Title): Secretary Name: Jeffrey C. Parker Address: 300 Centennial Way, Tustin, California 92780 Members: Name: Elwyn A. Murray, Chair Address: 300 Centennial Way, Tustin, California 92780 Name: Charles E. Puckett, Vice Chair Address: 300 Centennial Way, Tustin, California 92780 Name: John Nielsen Address: 300 Centennial Way, Tustin, California 92780 Name: Allan Bernstein Address: 300 Centennial Way, Tustin, California 92780 Name: Rebecca Gomez Address: 300 Centennial Way, Tustin, California 92780 RETURN ACKNOWLEDGMENT TO: (Type or Print) NAME r Brian D. Quint, Esq. ADDRESS Quint & Thimmig LLP 900 Larkspur Landing Circle, Suite 270 CITY/STATE/ZIP L Larkspur, CA 94939-1726 October 3, 2013 Date 1 ignature J Brian D. Quint, Esq., Bond Counsel Typed Name and Title SEC/STATE NP/SF 405 (REV 05/09) • d I hereby certify tha the foregoing a' • '� transcript of pages) e is a full, true and correct copy of the original record In the custody of the Califomle Secretary of State's office. OCT 082013 Date: AAA DEBRA BOWEN, Secretary of State Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 Subordinate Lien) CERTIFICATE REGARDING EFFECTIVENESS OF JOINT EXERCISE OF POWERS AGREEMENT The undersigned hereby states and certifies: 2/7/24 B2 (i) that the undersigned is the duly appointed, qualified and acting Secretary of the Tustin Public Financing Authority, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the "Authority"), and operating pursuant to Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code (the "Act") and pursuant to a Joint Exercise of Powers Agreement, dated as of May 1, 1995, by and between the City of Tustin and the Tustin Community Redevelopment Agency, as amended pursuant to the First Amendment to Joint Exercise of Powers Agreement, dated September 23, 2002 (collectively, the "Agreement"), and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same on behalf of the Authority; (ii) that attached hereto is a true, correct and complete copy of the Agreement, which Agreement has not been further amended (except as stated), modified or rescinded in any way and is in full force and effect as of the date hereof; and (iii) that to the best of knowledge of the undersigned after due inquiry, all required filings have been made with the Secretary of State of the State of California, and the Authority is in good standing as a joint exercise of powers agency under the Act. Dated: February 14, 2024 TUSTIN PUBLIC FINANCING AUTHORITY By Eric . Yasuda, ecretary 30047-01 n micHt" JOINT EXERCISE OF POWERS AGREEMENT May 1,1995 TUSTIN PUBLIC FINANCING AUTHORITY RnW TABLE OF CONTENTS ARTICLE I DEFINITIONS Section1.01. Definitions ...................................... ............................................................... 2 ARTICLE 11 GENERAL PROVISIONS Section201. Purpose ....................................................................................... -----.._........4 Section 202 Creation of Authority....._..........................................:......................................4 ARTICLE M BOARD OF DIRECTORS Section 3.01. Board of Directors...................................._....................................._......--••--...5 Section3.02 Powers ........................... .......................... :...................._....._......._..............5 Section 3.03. Compensation. ....................... ........................................................... . ............. 5 Section 3.04. Meetings of the Board of Directors .... _............ _........ _..__.......... __.__..._......5 ARTICLE IV OFFICERS AND EMPLOYEES Section4.01. Officers.._.._...__...._ ........................ .......... ................ _... ............. ................ 7 Section 4.02 Designation of Officers. .......... ....................................................... _.._............7 Section 4.03. Subordinate Offecem...................... _................. ................................ ............... 7 Section 4.04. Executive Director .............................. ...................................................... 8 Section 4.05. Assistant Executive Director .............. _........................................... ............ _..8 Section4.06. Secretary ........... .......... _........ ........... -................... _............. ........................... Section4.07. Treasurer ...... .................. ............................................................ _............8 Section 4.08. Officers in Charge of Records, Funds and Accounts. ................................... 8 Section4.09. Other Employees ....................................... ........................... ._._......-__. 8 Section 4.10. Assistant Officers ...... ........................... _.....................__................__............9 ARTICLE V POWERS Section5.01. General Powers....................................._..................................._...._........_....10 Section 5.02 Power to Issue Revenue Bonds .................................. .._..._............-.---....._..10 Section 5.03. Specific Powers .......................... ..... _................................ ...... _............. ........ 10 Section 5.04. Restrictions on Exercise of Powers...................................._.............................I I Section 5.05. Noe -Liability For Obligations of Authority . .................. ................................ 11 Section 5.0.6. Indemnity by Authority for Litigation Expenses of Officer, Commission Director Member or Employee........................................................... _....... I I Section 5.07. Execution of Contracts..........._......................................._................__...._....11 Section 5.08. Fiscal Year ................................... .......... ....... ...................... .................... _.... I I 4- ARTICLE VI CONTRIBUTION; ACCOUNTS AND REPORTS; FUNDS Section6.01. Conhibutions--•-•................._.............._.........................................----...........12 Section 6.02 Accounts and Reports:••---•--.........._....-....-.................-......_........_......._.....12 Section6.03. Funds ............. ...... ................. ......... ......... .............................................. ...... 12 ARTICLE VII TERM; DISSOLUTION Section7.01. Term. ........... _................................. -...._....-............................_.------.............13 Section7.02, Dissolution.-................-.-........,................................---.......•---.......................13 ARTICLE VIII MISCELLANEOUS PROVISIONS Section8.01. Notices. ...................... .............................................................................. 14 Section 8.02. Section Headings ... ................. ... ............................................................ 14 Section8.03. Consent ..................... _..... ..................................................................... 14 Section 8.04. Law Governin&................... ... .......... Section8.05. Amendments ................. ................ ................................. ....... -...................... 14 Section 8.06. Enforcement by Authority....................................................................... ....... 14 Section•8.07. Counterparts .._ ...................... -........................................................................ 14 Section 8.0& Successors. ................. ...................................... ............ . ........ ....... .......... 14 JOINT EXERCISE OF POWERS AGREEMENT THIS JOINT EXERCISE OF POWERS AGREEMENT (the "Agreement", dated as of May 1,1995, is by and between the CITY OF.TUSTIN, a municipal corporation duly organized and existingg under and by virtue of the laws of the State ofCalifornia (the "City", and the TUSTIN COM UNITY REDEVELOPMENT AGENCY, a public body corporate and politic organized and edsting under the laws of the State of California (the 'Agency"; WITNESSETii WHEREAS, agencies formed under Article I (commencing with section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code (the 'Joint Powers Law') are permitted to provide financing for any of their members or other local public agencies in the State of California in connection with the acquisition, construction and improvement of public capital improvements, working capital requirements or liability or other insurance needs of such members or other local agencies; and WHEREAS, the City and the Agency wish to form an agency under the Joint Powers Law, to be known as the Tustin Public Financing Authority, for the purpose of providing an entity which can assist in providing financing for purposes which are authorized under the Joint Powers Law; NOW, THEREFORE, in consideration of the above premises and of the mutual promises herein contained, the City and the Agency do hereby agree as follows: ARTICLE I Dffna IONS Section L' ol. Definitions Unless the context otherwise requires, the words and terms defined in this Article shall, for the purposes hereof, have the meanings herein specified. "Agency" means the Tustin Community Redevelopment Agency. "Agreement" means this Joint Exercise of Powers Agreement, as originally entered into or as amended from time to time in accordance with Section 8.05. "Authority' means the Tustin Public Financing Authority established pursuant to Section 2.02. "Board of Directors" means the Board of Directors referred to in Section 3.01, which shall be the governing body of the Authority. "Bond Law" means the Marks -Roos Local Bond Pooling Act of 1985, being Article 4 of the Joint Powers Law (commencing with section 6584), as now in effect or hereafter an -tended, Article 2 of the Joint Powers Law, as now in effect or hereafter amended, or any other law available for use by the Authority in the authorization and issuance of bonds to provide for the financing of Obligations and/or Public Capital Improvements. 'Bond Purchase Agreement" means an agreement between the Authority and a Local Agency, pursuant to which the Authority agrees to purchase Obligations from a Local Agency. "City" means the City of Tustin. "Fiscal Year" means the period from July 1 in any calendar year to and including June 30 in the succeeding calendar year. "Joint Powers Law" means Articles 1 through 4 (commencing with section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code. "Loral Agency" means the City, the Agency and any other city, county, city and county, agency, special district or other public corporation of the State of California "Obligations" has the meaning given to the term "Bonds" in section 6585(c) of the Bond Law. "Public Capital Improvements" has the meaning given such term in section 6585(g) of the Bond Law. "Revenue Bonds" means bonds,. notes or other obligations of the Authority issued pursuant to the Bond Law or pursuant to any other provision of law to finance the acquisition, construction and improvement of Public Capital improvements, Working Capital Requirements, or liability or other insurance needs of any Local Agency. "Working Capital Requirements" means the requirements of any Local Agency for funds to be used by, or on behalf of, such Local Agency for any purpose for which such Local Agency may borrow money pursuant to section 53852 of the California Government Code- -2- ARTICLE U GENERAL PROVISIONS Section 2.01. Puse. This Agreement is made pursuant to the Joint Powers Law providing for the joint exercise of powers common to the City and the Agency, and for other purposes as permitted under the Joint Powers Law, the Bond Law and as agreed by one or more of the parties hereto. The purpose of this Agreement is to provide for the financing or refinancing of Public Capital Improvements for, and Working Capital Requirements of, any Local Agency through the acquisition by the Authority of such Public Capital Improvements, the purchase by the Authority of Obligations of any Local Agency pursuant to Bond Purchase Agreements, the lending of funds by the Authority to a Local Agency or the entering into of contractual arrangements by the Authority with a Local Agency. Section 2-02. Creation of Authority. Pursuant to the Joint Powers Law, there is hereby created a public entity to be known as the 'Tustin Public Financing Authority". The Authority shall be a public entity separate and apart from the City and Agency, and shall administer this Agreement ARTfCLEIII BOARD OF DIRECTORS Section 3.01. Board of Directors. The Authority shall be administered by a Board of Directors, which shall be comprised of five members, unless and until changed by amendment of this Agreement_ Each member of the City Council shall be a member of the Board of Directors. The Board of Directors shall always consist of the persons then serving as members of the City Council, and each person who, currently or in the future, serves as a member of the City Council shall serve, during the period in which he or she serves in such capacity, as a member of the' Board of Directors. Each member shall assume membership on the Board of Directors upon his or her becoming a member of the City Council, without any further act by any person, body or entity. Each member shall hold membership on the Board of Directors until the expiration of his or her term as a member of the City Council, or until he or she resigns, is removed or for any other reason no longer serves as a member of the City Council, without any further ad by any person, body or entity. The Mayor of the City shall be Chairperson of the Board of Directors and such Chairperson shall preside at all meetings of the Board of Directors. The Mayor Pro Tem of the City shall be the Vice Chairperson of fire Board of Directors and such Vice Chairperson shall Mse at meetings of the Board' of Directors during the absence or disability of the person. Section 3.02. Powers. Subject to the limitations of this Agreement and the laws of the State of California, the powers of the Authority shall be vested in and exerrised by and its property controlled and its affairs conducted by the Board of Directors of the Authority. Section 3.03. Compensation. Members of the Board of Directors shall serve without compensation but each such member may be reimbursed his or her necessary and actual expenses, including travel incident to his or her services as member of the Board of Directors, pursuant to resolution of the Board of Directors Any member of the Board of Directors may elect however, to decline said reimbursement Section 3.04. Meetings of the Board of Directors (a) CaIL Notice and Conduct of Meetings. All meetings of the Board of Directors, including without limitation, regular, adjourned regular and special meetings, shall be called, noticed, held and conducted in accordance with the provisions of sections 54950 d seq. of the California Government Code, known as the Ralph M. Brown Act (b) Regular Meetings. Regular meetings of the Board of Directors shall be held at such time as the Board of Directors may fix by resolution from time to time, and if any day so foxed shall fallupon a IeV holiday then, upon the next succeeding business day at the same hour. No notice of any regular meeting of the Board of Directors need be given to the members of the Board of Directors. (c) SpecW Meetings. Special meetings of the Board of Directors shall be held whenever called by the Chairperson of the Board of -Directors, the Executive Director of the Authority or by a majority of the members of the Board of Directors. tdj Quorum. A majority of the members of the Board of Directors shalt constitute a . quorum for the transaction of business, except that less than a quorum may adjourn from time to time. The affirmative votes of at least a majority• of the members of the Board of Directors present at any meeting at which a quorum is present shall be required to take any action by the Board of Directors . Every act or derision done or made by a majority of the members of the Board of Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. -5- ARTICLE W OFFICERS AND EMPLOYEES Section 4.01. Officers. The officers of the Authority shall be an Executive Director, an Assistant Executive Director, a Secretary, a Treasurer and such other officers as the Board of Directors may appoint Section 4.02. Designation of Officers The City Manager of the City shall be the Executive Director of the Authority. The Executive Director of the Authority shall always be the person then serving as City Manager of the City, and each person who, currently or in the future, serves as City Manager of the City shall be, during the period in which he or she serves in such capacity, Executive Director of the Authority. A person shall become Executive Director of the Authority upon his or her becoming City Manager of the City, without any further act by any person, body or entity. A person shall serve as Executive Director of the Authority until he or she resigns, is removed or for any other reason no longer serves as City Manager of the City, without any further act by any person, body or entity. The Assistant City Manager of the City shall be the Assistant Executive Director of the Authority. The Assistant Executive Director of the Authority shall always be the person then serving as Assistant City Manager of the City, and each person who, currently or in the future, serves as Assistant City Manager of the City shall be, during the period in which he or she serves in such capacity, Assistant Executive Director of the Authority. A person shall become Assistant Executive Director of the Authority upon his or her becoming Assistant City Manager of the City, without any further act by any person, body or entity. A person shall serve as Assistant Executive Director of the Authority until he or she resigns, is removed or for any other reason no longer serves as Assistant City Manager of the City, without any further act by any person, body or entity. The City Clerk of the City shall be the Secretary of the Authority. The Secretary of the Authority shall always be the person then serving as City Clerk of the City, and each person who, currently or in the future, serves as City Clerk of the City shall be, during the period in which he or she serves in such capacity, Secretary of the Authority. A person shall become Secretary of the Authority upon his or her becoming City Clerk of the City, without any further act by any person, body or entity. A person shall serve as Secretary of the Authority until he or she resigns, is removed or for any other reason no longer serves as City Clerk of the City, without any further act by any person, body or entity. The Treasurer of the City shall be the Treasurer of the Authority. The Treasurer of the Authority shall always be the person then serving as Treasurer of the City, and each person who, currently or in the future, serves as Treasurer of the City shall be, during the period in which he or she serves in such capacity, Treasurer of the Authority. A person shall become Treasurer of the Authority upon his or her becoming Treasurer of the City, without any further act by any person, body or entity. A person shall serve as Treasurer of the Authority until he or she resigngnsS, is removed or for any other reason no longer serves as Treasurer of the City, without any fuirther act by any person, body or entity. Section 4.03. Subordinate Officers. The Board of Directors may elect or authorize the appointment of such other officers than those herein above mentioned as the business of the Authority may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in this Agreement, or as the Board of Directors from time to time may authorize or determine. Section 4.04. Executive Director. The Executive Director shall be the chief executive Officer of the Authority and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the Authority. He or she shall be an ex o fido member of all standing committees, and shall have the general powers and duties of nuu'tagement of the Authority and shall have such other powers and duties as may be prescribed by the Board of Directors or this Agreement Section 4.o5. Assistant Executive Director. In the absence or disability of the Executive Director, the Assistant Executive Director shall perform all the duties of the Executive Director and when so acting shall have all the powers of and be subject to all of the restrictions upon the Executive Director. The Assistant Executive Director shall have such other powers and perform such other duties as may from time Ao time be prescribed for him or her by the Board of Directors or this Agreement Section 4.06. Secretary The Secretary shall keep or cause to be kept a book of minutes at the principal office or at such other place as the Board of Directors may order, of all meetings of the Board of Directors, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Board of Directors meetings and the proceedings thereof. The Secretary shall give or cause to be given notice of all meetings of the Board of Directors, shall keep the Authority records in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or this Agreement Section 4.07. Treasure Subject to the applicable provisions of any indenture or resolution providing for a trustee or other Fiscal agent the Treasurer is designated as the depositary of the Authority to have custody of all the money of the Authority, from whatever source, and, as such, shall have the powers, duties and responsibilities specified in Section 65055 of the Joint Powers Law. The Treasurer is hereby designated as controller of the Authority and, as such, shall have the powers, duties and responsibilities specified in Section 6505.5 of the Joint Powers Law. The controller of the Authority shall draw checks to pay demands against the Authority when the demands have been approved by the Authority. The City shall determine the charges to be made against the Authority for the services of the Treasurer. Section 4.08. Officers in ChaMe of Records. Funds and Accounts. The Treasurer is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond in the amount of $25,000 as required by Section 6505.1 of the joint Powers Law. Such bond may be maintained as a part of or in conjunction with any other bond maintained on such person by the City, it being the intent of this Section 4.08 not to require duplicate or overlapping bonding requirements from those bonding requirements which are otherwise applicable to the City. Section 4.09. Other Employees. The Board of Directors shall have the power to appoint and employ such other consultants and independent contractors as may be necessary for the purposes of this Agreement All of the privileges and immunities from liability, exemption from laws, ordinances and rules, all pension, relief, disability, workers' compensation and other benefits which apply to the activities of officers, agents, or employees of a public agency when performing their respective fumctions shall apply to them to the same degree and extent while engaged in the performance of any of the functions and other duties under this Agreement. None of the officers, agents or employees directly employed by the Board of Directors shall be deemed, by mason of his or her employment by the Board of Directors to be employed -7- by the City or the Agency or, by reason of his or her employment by the Board of Directors, to be subject to any of the requirements of the City or the Agency. Section 410. Assistant Officers. The Board of Directors may appoint such assistants to act in the place of the Secretary, Treasurer or other officers of the Authority as the Board of Directors shall from time to time deem appropriate. -S- ARTICLE V IZ912Iy79 Section 5.0L General Powers The Authority shall exercise in the manner herein provided the powers common to the City and the Agency, or as otherwise permitted under the Joint Powers law, and necessary to the accomplishment of the purposes of this Agreement, subject to the restrictions set forth in Section 5.04. As provided in the Joint Powers law, the Authority shall be a public entity separate from the City and the Agency. The Authority shall have the power to acquire and to finance the acquisition of Public Capital Improvements necessary or convenient for the operation of any Local Agency, and to acquire Obligations of any Local Agency. Section S.OL Powei t9Issue Revenue Bonds The Authority shall have all of the powers rovided in the Joint Powers Law, including but not limited to Article 4 of the Joint Powers Law commencing with section 6S84), and including the power to issue Revenue Bonds under the Bond law. Section 5.03. Specific Powers. The Authority is hereby authorized, in its own name, to do all acts necessary for the exercise of the foregoing powers, including but not limited to, any or all of the following. (a) to make and enter into contracts; (b) to employ agents or employees; (c) to acquire, construct, manage, maintain or operate any Public Capital Improvement, including the common power of the City and the Agency to acquire any Public Capital Improvement by the power of eminent domain; (d) to sue and be sued in its own name; (e) to issue Revenue Bonds and otherwise to incur debts, liabilities or obligations, provided that no such Revenue Bond, debt, liability or obligation shall constitute a debt, liability or obligation of the City or the Agency, (f) to apply for, accept, receive and disburse grants, loans and other aids from any agency of the United States of America or of the State of California; (g) to invest any money in the treasury pursuant to. section 6505.5 of the Joint Powers Law that is not required for the immediate necessities of the Authority, as the Authority determines is advisable, in the same manner and.upon the same conditions as local agencies, puissant to section 53601 of the California Government Code; (h) to apply for letters of credit or other form of financial guarantees in order to secure the repayment of Revenue Bonds and enter into agreements in connection therewith; (i) to carry out and enforce all the provisions of this Agreement; '(j) to make and enter into Bond Purchase Agreements; (k) to purchase Obligations of any local Agency; and -9- 6) to exercise any and all other powers as maybe provided in the Joint Powers Law. Section S.00 Restrictions on ExerQse of Powers. The powers of the Authority shall be exercised in the manner provided in the joint Powers Law and in the Bond Law and, except for those powers set forth in Article 4 of the joint Powers law, shall be subject (in accordance with section 6509 of the joint Powers Law) to the restrictions upon the manner of exercising such powers that are imposed upon the City in the exercise of similar powers. Section 5.05. Non -Liability For Obligations of Authority. The debts, liabilities and obligations of the Authority shall not be the debts, liabilities and obligations of the City or the - Agency. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of or premium or interest on any obligations of the Authority or be subject to any personal liability or accountability by reason of any obligations of the Authority; 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 the instruments authorizing the issuance of any obligations of the Authority. Section 5.06. Indemnit z by Authority for Litigation RTenses of Officer. Director or EmploTee. Should any director, officer or employee of the Authority be sued, either alone or with others, because he or she is or was a director, officer or employee of the Authority, in any proceeding arising out of his or her alleged misfeasance or nonfeasance in the performance of his or her duties or out of any alleged wrongful act against the Authority or by the Authority, indemnity for such persons reasonable expenses, including attorneys' fees incurred in the defense of the proceedings, may be assessed against the Authority or its receiver by the court in the same or a separate proceeding if the person sued acted in good faith and in a manner such person reasonably believed to be in the best interests of the Authority and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful The amount of such indemnity shall equal the amount of the expenses, including attorneys' fees, incurred in the defense of the proceeding. Section 5.07. Execution of Contracts The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute any contract or execute any instrument in the name of and on behalf of the Authority and such Authority may be in general or confined to specific instances and unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the Authority by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. Section 5.08. Fiscal Year_ The Fiscal Year of the Authority shall, unless and until changed by the Board of Directors, commence on the 1st day of July of each year and shall end on the 30th day of June of the next succeeding year. -10- ARTICLE VI CONTRIBUTION; ACCOUNTS AND REPORTS; FUNDS Section .6.0L Contaibutions. The City and the Agency may in the appropriate circumstance when required.hereunder (a) make contributions from their treasuries for the purposes set forth herein, (b) make payments of public funds to defray the cost of such purposes, (c) make advances of public funds for such purposes, such advances to be repaid as provided herein,'or (d) use their personnel, equipment or property in lieu of other contributions or advances. The provisions of section 6513 of the California Government Code are hereby incorporated into this Agreement. Section 6.02- Accounts and -Reports. The Authority shall establish and maintain such funds and accounts as may be required by good accounting practice. The books and records of the Authority shall be open to inspection at all reasonable times by the City and the Agency and their representatives. The -Authority shall give an audited written report of all financial activities for each Fiscal Year to the City and the Agency within 210 days after the close of each Fiscal Year. The Treasurer, as controller of the Authority, shall either make or contract with a. certified public accountant or public accountant to make an annual audit of the accounts and records of the Authority. In each case the minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the Government Code of the State of California and shall conform to generally accepted auditing standards. When such an audit of an account and record is made by a certified public accountant or public accountant, a report thereof shall be filed as public records with the City and the Agency and with the county auditor of Orange County. Such report shall be filed within 12 months of the end of the Fiscal Year under examination. By unanimous request of the Board of Directors, the annual special audit may be replaced with an audit covering a two-year period. Any costs of the audit, including contracts with, or employment of, certified public accountants or public accountants, in making an audit pursuant to this section shall be borne by the Authority and shall be a charge against any unencumbered funds of the Authority available for the purpose Section 6.03. Funds. Subject to the applicable provisions of any instrument or agreement which the Authority may enter into, which may provide for a trustee or -other fiscal agent to receive, have custody of and disburse Authority funds, the Treasurer bf the Authority shall receive, have the custody of and disburse Authority funds as nearly as possible in accordance with generally accepted accounting practices, shall make the disbursements required by this Agreement or to carry out any of the provisions or purposes of this Agreement -11- ARTICLE VII TERM; DISSOLUTION Section 7.01. Term. This Agreement shall become effective, and the Authority shall come into existence, on the date of execution and delivery hereof, and this Agreement shall thereafter continue in full force and effect until the later of December 1, 2044 or the date on which no Revenue Bonds remain outstanding and no material contracts to which the Authority is a party remain in effect, unless earlier dissolved pursuant to Section 7.02 hereof. Section 7.02. Dissolution The Authority may, with the approval of the City and the Agency, be dissolved by majority vote of the members of the Board of Directors if at the time of such dissolution the Authority has no Revenue Bonds outstanding and is not a party to any material contract remaining in effect Upon the dissolution or termination of the Authority, and after payment or provision for payment, all debts and liabilities, the assets of the Authority shall be distributed to the City and the Agency in such manner as shall be agreed upon by the City and the Agency. -12- ARTICLE VM MISC5LLANEOUS PROVISIONS Section 8.01. Notices_ Notices hereunder shall be in writing and shall be sufficient if delivered to the address of each party hereto set forth.below or at such other address as is provided by a party hereto in writing to the other party hereto. City of Tustin 300 Centennial Way Tustin, California 92680 Attention: Treasurer/ Finance Director Tustin Community Redevelopment Agency 300 Centennial Way Tustin, California 92680 Attention: Executive Director Section 8.02. Section Headings. All section headings in this Agreement are for convenience of reference only and are not to be construed as modifying or governing the language in the section referred to or to define or limit the scope of any provision of this Agreement Section 8.03. Consent Whenever in this Agreement any consent or approval is required, the same shall not be unreasonably withheld. Section SA4. Law Govexnin¢. This Agreement is made in the State of California under the constitution and laws of the State of California, and is to be so construed. Section 8.05. Amendments. This Agreement may be amended at any time, or from time to time, except as limited by contract with the owners of Revenue Bonds issued by the Authority or the owners of certificates of participation in payments to be made by the Authority, the City, the Agency or a Local Agency or by applicable regulations or laws of any jurisdiction having authority, by one or more amendments executed by the City and the Agency either as required in order to carry out any of the provisions of this Agreement or for any other purpose - Section". Enforcement by Authority. The Authority is hereby authorized to take any or all legal or equitable actions, including but not limited to injunction and specific performance, necessary or permitted by law to enforce this Agreement. Section 8.07. Countervarts, This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same AgreemenL Section 8.08. Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors of the City and the Agency. No party hereto may assign any right or obligation hereunder without the written consent of the other party hereto. 43- IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by their proper officials thereunto duly authorized. ATTEST: Valerie Crabill, Chief Deputy City Clerk ATTEST. Mary/E. Wynn, Secretary Valerie Crabill -14- CITY OF TUS IN Jim Potts, Mayor ' T USTIN COMMUNITY RMEVELOPMENT AGENCY Potts, C Mkpesson ORIGIV,M FIRST AMENDMENT TO JOINT EXERCISE OF POWERS AGREEMENT Dated September 23, 2002 by and between the CITY OF TUSTIN and the TUSTIN COMMUNITY REDEVELOPMENT AGENCY Amending that Certain Joint Exercise of Powers Agreement Dated May 1,1995 by and between the City of Tustin and the Tustin Community Redevelopment Agency MJSTM PUBLIC FINANCING AUTHORTTI) SCANNED ,.6-%fa2— FIRST AMENDMENT TO JOINT EXERCISE OF POWERS AGREEMENT TUSTIN PUBLIC FINANCING AUTHORITY THIS FIRST AMENDMENT TO JOINT POWERS AGRfiELONT (the "Amendment"), dated September 23, 2002, is by and between the CITY OF TUSTIN (the "City") and the T US 1N COMMUNITY REDEVFL.OPMENT AGENCY (tile "Agency" and, with the City, the "Members"), each duly organized and existing under the laws of the State of Califomia, Amending that Certain Joint Exercise of Powers Agreement, dated May 1, 2995, by and between the City and the Agency (the "Agreement"); WITNESSETH: WFEEREAS, the Members have heretofore approved the Agreement under Articles I through 4 (commencing with section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code, for the purpose of establishing a vehicle which may reduce local borrowing costs and promote the greater use of existing and new financial instruments and mechanisms, and have established the Tustin Public Financing Authority (the "Authority"); VVIEWEAS, the Members have determined to amend the Agreement to provide additional powers to the Authority; NOW, THEREFORK in consideration of the above premises and of the mutual promises herein contained, the Members do hereby agree as follows. Section 1. Amendment Section 5.03 of the Agreement is hereby amended in full as follows: Section 5.03. %ngift Powers. The Authority is hereby authorized, in its own -name, to do all acts necessary for the exercise of the foregoing powers, including but not limited to, any or all of the following: (a) to make and enter into contracts, (b) to employ agents or employees; (c) to acquire, construct, manage, miaintain or operate arty Public Improvement, including the common. power of the City, the Agency and any Associate Member to acquire any Public Improvement by the power of emment domain or any other -lawful - means; (d) to sue and be sued in its own mate; (e) to issue Revenue Bonds and otherwise to incur debts, liabilities or obhgadons, provided that no such Bond, debt, liability or obligation shall constitute a debt, liability or obligation of the City or the Agency; (f) to apply for, accept, receive and disburse grants, loans and other aids from any agency of the United States of America or of the State; (g) to invest any money m the treasury pursuant to section 6505.5 of the California Government Code which is not required VAte necessities of the Authority, as the Authority determines is advisable, in the same manner and upon the same conditions as local agencies, pursuant to section 53601 of the California Government Code; • . (h) to apply for letters of credit or other form of financial guarantees in order to secure the repayment of Bonds and enter into agreements in connection therewith; (i) to carry out and enforce all the provisions of this Agreement; {1') to make and enter into Bond Purchase Agreements and any other agreements, assignments and documents of any nature whatsoever as may be necessary or convenient in the exercise of its powers hereunder or under the Act; (k) to purchase Obligations of or to make loans to the City, the Agency or any other Local Agency for the purposes hereof, or to refinance indebtedness incurred by the City, the' Agency or any other Local Agency in connection with any of the purposes hereof; 0) to establish community facilities districts under the Mello -Roos Community Facilities Act of 1987, as amended: and (m) to make loans to the City, the Agency or any other Local Agency, to the extent the City, the Agency or any other Local Agency is authorized by law to borrow moneys; (n) to secure its obligations with deeds of trust on its property; and (o) to exercise any and all other powers as may be provided in the Act or in the Bond Law". Section 2 All Other Provisions of Agreement All other provisions of the Agreement; unless affected by this Amendment shall remain m fall force and effect Section 3. Execution in Counterparts. This Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument -2- IN WITNESS WHEREOF, the parties hereto, have caused this Amendment to be executed and attested by their proper officers thereunto duly authorized and their official seals to be hereto affixed, on the day and year set opposite the name of each of the parties. CITY OF TUSI'IN By City Manager ATTEST: pxa:Q�- — City Clerk TUSTIN COMMUNITY REDEVELOPMENT AGENCY ATTEST: 6111j-- Secretary -3- Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) INCUMBENCY AND SIGNATURE CERTIFICATE — AUTHORITY The undersigned hereby state and certify: 2/7/24 B3 (i) that the undersigned are the duly elected or appointed, qualified and acting Chair and Secretary, respectively, of the Tustin Public Financing Authority, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the "Authority"), and as such, are familiar with the facts herein certified and are authorized and qualified to certify the same on behalf of the Authority; (ii) that the following are now, and have continuously been since the dates of the beginning of their respective current terms of office set forth below, the duly appointed, qualified and acting Board of Directors of the Authority, and the dates of the beginning and ending of their respective current terms of office are hereunder correctly designated opposite their names: Beginning Date Ending Date Board of Directors of Current Term of Current Term Austin Lumbard, Chair Ryan Gallagher, Vice Chair Letitia Clark Rebecca Gomez Ray Schnell December, 2022 December, 2020 December, 2020 December, 2020 December, 2022 December, 2026 December, 2024 December, 2024 December, 2024 December, 2026 (iii) that the signatures set forth opposite the names and titles of the following persons are the true and correct specimens, or are the genuine signatures of such persons, each of whom holds the position designated below: Name and Title Austin Lumbard, Chair Nicole M. Bernard, Executive Director Erica N. Yasuda, Secretary Jennifer King, Treasurer Signature (iv) that the bonds issued by the Authority designated "Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien)," in the aggregate principal amount of $4,125,000, and dated the date hereof (the 'Bonds"), have been executed by the facsimile signature of the within -named Chair, and attested to by the facsimile signature of the within -named Secretary; (v) that for and on behalf of the Authority, the within -named Executive Director has executed each of the following documents: (a) Indenture of Trust, dated as of February 1, 2024, by and between The Bank of New York Mellon Trust Company, N.A., as trustee, and the Authority, (b) Installment Sale Agreement, dated as of February 1, 2024, by and between the Authority, as seller and the City of Tustin (the "City"), as purchaser, and (c) Placement Agent Agreement, dated as of February 1, 2024, by and among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as placement agent; and (v) that for and on behalf of the Authority, the within -named Treasurer has executed the Commitment Agreement, dated February 7, 2024, by Capital One Public Funding, LLC, as purchaser, as accepted by the City and the Authority. Dated: February 14, 2024 -2- TUSTIN PUBLIC FINANCING AUTHORITY By Aus ` umbard, Chair By- L ' � au,_ Eric . Yasuda, Secretary B4 $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE AS TO ARBITRAGE I, the undersigned Treasurer of the Tustin Public Financing Authority, Orange County, California (the "Authority"), being one of the officers of the Authority duly charged (by resolution of the board of directors of the Authority), with others, with the responsibility of issuing the Authority's $4,125,000 principal amount of Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"), dated as of the dated hereof, which Bonds are being issued this date, hereby certify as follows: (1) Purpose of Bonds. The Bonds are being issued pursuant to an Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), in order to provide funds to finance the acquisition and construction of certain improvements and facilities (the "Project") to the municipal water enterprise (the "Enterprise") of the City of Tustin (the "City"), as more particularly described in the Certificate Regarding Use of Proceeds, dated the date hereof and included elsewhere in the transcript for the Bonds. (2) Status of the Authority. The Authority constitutes a joint exercise of powers entity created by City and the Tustin Community Redevelopment Agency. The City Council of the City constitutes the governing body of the Authority and, by virtue of such fact, has the inherent power to approve and to remove the governing body of the Authority. Based on the above statements, the City directly controls the Authority and indirectly controls the Authority, and the Authority thereby constitutes a controlled entity of the City and a subordinate entity of the City. The Authority possesses the sovereign power of eminent domain and by reason of such fact constitutes a political subdivision of the State of California and a governmental unit. (3) Structure of the Financing. Pursuant to an Installment Sale Agreement, dated as of February 1, 2024, between the Authority, as seller, and the City, as purchaser (the "Installment Sale Agreement"), the Authority agrees to sell the Project to the City in consideration of the payment by the City of Installment Payments having a total principal component of $4,125,000 (the "Installment Payments") and in an amount sufficient to pay debt service payments on the Bonds, which Installment Payments will be paid by the City to the Trustee, as assignee of the Authority under the Installment Sale Agreement. (4) Statement of Expectations. On the basis of the facts and estimates in existence on the date hereof, I reasonably expect the following with respect to the amount and use of gross proceeds of the Bonds: (a) Amount Received from Sale of Bonds. The Bonds were sold to Capital One Public Funding, LLC (the "Purchaser"), at their face amount. Such amount will be remitted by the Purchaser to the Trustee. Of said amount deposited with the Trustee, $125,000.00 will be deposited in the Costs of Issuance Fund and $4,000,000 will be deposited in the Project Fund. Both funds are held by the Trustee. The net proceeds of the Bonds, together with interest earnings thereon, except to the extent that said interest earnings are required to be rebated to the federal government, will not exceed the amount necessary for the governmental purposes of the Bonds, namely, the purpose set forth in paragraph (1). (b) No Aggregated Issues. No tax-exempt debt has been sold within fifteen (15) days before or after the date the Bonds were sold that will be paid from substantially the same source of funds as the Bonds (excluding guarantees from unrelated parties). (c) Costs of Issuance Fund. The amount deposited in the Costs of Issuance Fund ($125,000.00) will be used for payment of legal fees, printing costs and other costs of issuance of the Bonds and the Installment Sale Agreement and will be fully expended promptly upon receipt of invoices. Amounts deposited in the Costs of Issuance Fund, if invested, will be invested without yield restrictions. Interest earnings and gains resulting from said investment will be retained in the Costs of Issuance Fund and used for the purposes thereof. Amounts, if any, remaining in the Costs of Issuance Fund on the earlier of May 14, 2024, or payment of costs of issuance in full will be deposited in the Project Fund. (d) Use of Project Fund; Reimbursement. The proceeds of the Bonds deposited in the Project Fund will be used for the payment of costs of acquisition and construction of the Project. No portion of the proceeds of the Bonds will be used for reimbursement of expenditures paid by the Authority prior to the date hereof except for (i) expenditures paid for costs of issuance of the Bonds, (ii) preliminary capital expenditures incurred before commencement of acquisition or construction of the Project that do not exceed twenty percent (2017o) of the issue price of the Bonds (see subparagraph (n) below), and (iii) capital expenditures that (A) were paid no earlier than sixty (60) days before the date of the adoption by the Authority of a declaration of intent to reimburse such expenditures from the proceeds of obligations, and (B) are reimbursed no later than eighteen (18) months after the later of the date the expenditure was paid or the date the Project is placed in service (but no later than three (3) years after the expenditure is paid). Proceeds (if any) used for reimbursement of expenditures will be deposited in the general funds of the Authority and will not be used to replace funds of the Authority to be used to refund debt of the Authority, to create a sinking or pledged fund for such debt or the Bonds or otherwise to create replacement proceeds for such debt or for the Bonds. (e) Completion of Project; Investment of Project Fund; Capital Expenditures. The City, or an entity thereof, has entered into a contract, or will enter into a contract within six months, relating to a portion of the Project, which contract constitutes a substantial binding obligation of the City to a third party and is in excess of five percent (5%) of the "Net Sale Proceeds" of the Bonds (namely, an amount of proceeds of the Bonds equal to the issue price of the Bonds, as referenced in subparagraph (n) below, as referenced in subparagraph (a) above). The City will proceed with due diligence to complete the Project and to spend the proceeds of the Bonds. Completion is expected by February 14, 2027. All expenditures from the Project Fund will be capital expenditures. Not less than eighty-five percent (85%) of the Net Sale Proceeds will be spent within three (3) years of the date hereof. Amounts deposited in the Project Fund will be invested without yield restrictions for the period from the date hereof to the date that is three (3) years after the date hereof unless earlier expended (the "3-year Temporary Period"). Interest earnings and gains resulting from investment of the Project Fund will be retained in that fund and used for the payment of costs of the Project. Proceeds of the Bonds and interest earnings and gains on investment thereof, if any, remaining in the Project Fund following the 3-year Temporary Period will be invested at a yield not in excess of the -2- yield of the Bonds (see subparagraph (n) below) or yield reduction payments will be made to the federal government with respect to such investment after the end of the 3- year Temporary Period. Amounts, if any, remaining in the Project Fund upon completion of the Project will be deposited in the Bond Fund, used for the payment of debt service payments on the Bonds and applied as a credit against Installment Payments. (f) Pledge of Revenues; Debt Service Funds, The Authority has pledged certain revenues (the "Revenues"), consisting primarily of Installment Payments, to the payment of debt service on the Bonds. Upon receipt the Revenues will be deposited in the Bond Fund and, when required for the payment of debt service on the Bonds will be transferred to the Interest Account and the Principal Account within the Bond Fund. Prepayments of Installment Payments will be used for redemption of the Bonds prior to their maturity and will be deposited in the Redemption Fund. The Bond Fund and the Interest Account and the Principal Account within the Bond Fund and the Redemption Fund (together the "Debt Service Funds") have been established primarily to achieve a proper matching of revenues (consisting primarily of Revenues and certain interest earnings) and debt service due on the Bonds during each year that the Bonds are outstanding. Amounts deposited in the Debt Service Funds will be spent within thirteen (13) months of the date of deposit, and the Debt Service Funds will be depleted at least once a year except for a reasonable carryover amount not in excess of the greater of earnings on the Debt Service Funds durin the preceding bond year for the Bonds (see subparagraph (n) below) or one -twelfth (112th) of debt service on the Bonds during the preceding bond year for the Bonds. Amounts in the Debt Service Funds will be invested without yield restrictions. Interest earnings and gains resulting such investment will be retained or deposited in the Bonds Fund, used for the payment of debt service payments on the Bonds and applied as a credit against Installment Payments. (f) Pledge of Net Revenues. The City has pledged certain net revenues (the "Pledged Net Revenues") of the Enterprise to the payment of the Installment Payments. The City will withdraw Net Revenues from the City's existing water fund, established and held by the City with respect to the Enterprise (the "Water Fund"), with pay certain senior obligations and pay the same as Installment Payments to the Trustee on or before each date that debt service is due on the Bonds and the Trustee will deposit Installment Payments in the Bond Fund. (g) Current Revenues and Net Revenues. Deposits in the Water Fund, as well as transfers from the Water Fund to the Bond Fund and from the Bond Fund to the Interest Account, the Principal Account and the Sinking Account within the Bond Fund, will be made from current Pledged Net Revenues. Surplus Pledged Net Revenues will be expended for lawful purposes of the City related to the Enterprise. Surplus Pledged Net Revenues, if any, are not expected to be available for the payment of debt service on the Bonds in the event of financial difficulties of the City or the Authority and, if invested, will be invested without yield restrictions. (h) No Other Pledged Amounts or Investment -Type Property. Except as described herein, no amounts have been pledged to, or are reasonably expected to be used directly or indirectly to pay, principal or interest on the Bonds, nor are there any amounts that have been reserved or otherwise set aside such that there is a reasonable assurance that such amounts will be available to pay principal or interest on the Bonds. In addition, the Authority has not entered into, and does not reasonably expect to enter into, a hedge contract primarily for the purpose of reducing the Authority's risk of interest rate changes with respect to the Bonds. -3- (i) No Negative Pledges. There are no amounts held under any agreement requiring the maintenance of amounts at a particular level for the direct or indirect benefit of the owners of the Bonds or any guarantor of the Bonds, excluding for this purpose amounts in which the Authority may grant rights that are superior to the rights of the owners of the Bonds or any guarantor of the Bonds and amounts that do not exceed reasonable needs for which they are maintained and as to which the required level is tested no more frequently than every six (6) months and that may be spent without any substantial restriction other than a requirement to replenish the amount by the next testing date. (j) No Replacement Proceeds. There are no amounts that have a sufficiently direct nexus to the Bonds, the Installment Sale Agreement or to the Project to conclude that the amounts would have been used for the Project, for Installment Payments or for debt service on the Bonds if the proceeds of the Bonds were not being used for those purposes; and the term of the Bonds is not longer than reasonably necessary for the Project in that the weighted average maturity of the Bonds does not exceed one hundred twenty percent (120%) of the average reasonably expected economic life of the Project. (k) No Improper Financial Advantage. The transaction contemplated herein does not represent an exploitation of the difference between tax-exempt and taxable interest rates to obtain a material financial advantage and does not overburden the tax-exempt bond market in that the Authority is not issuing more bonds, issuing bonds earlier, or allowing bonds to remain outstanding longer than is otherwise reasonably necessary to accomplish the governmental purposes of the Bonds. (1) Bond Year for the Bonds. The Authority hereby selects each period from April 2 through April 1 of the following calendar year as the bond year for the Bonds, except that the first bond year will commence on the date hereof and the last bond year will end on the date of payment of the Bonds in full. (m) Rebate Requirement. The Authority has covenanted in the Indenture to comply with requirements for rebate of excess investment earnings to the federal government to the extent applicable and acknowledges that the first payment of excess investment earnings, if any, is required to be rebated to the federal government no later than sixty (60) days after the end of the fifth (5th) bond year for the Bonds. (n) Yield of the Bonds. The yield of the Bonds is 4.818944%, determined on the basis of regularly scheduled principal and interest payments on the Bonds, discounted to $4,125,000, representing the issue price of the Bonds (being the face amount of the Bonds). The Purchaser has represented that (i) it will hold its interest in the Bonds for its own account, (ii) it does not reasonably expect to sell or otherwise transfer its interest in the Bonds, (iii) it paid the price of $4,125,000 for the Bonds, and (iv) it will treat its interest in the Bonds as an investment for federal income tax purposes. (o) No Other Pledged Funds; No Swaps. Except as described herein, no funds have been pledged to, or are or will be available for, payment of debt service on the Bonds which have, or will be, invested, directly or indirectly, in securities, obligations, annuity contracts or other investment -type property producing a yield in excess of the yield on the Bonds, and no transaction has been, or will be, entered into, directly or indirectly, in connection with the Bonds involving the swap of fixed rate obligations for variable rate obligations or vice versa. -4- (p) No Replacement. No portion of the proceeds of the Bonds will be used as a substitute for other funds (replacement funds) which are otherwise available to be used as a source for financing for any part of the cost of the Project or for the payment of debt service on the Bonds and which have been, or will be, invested in securities, obligations, annuity contracts or other investment -type property producing a yield in excess of the yield of the Bonds. (q) No Improper Financial Advantage. The transaction contemplated herein does not represent an exploitation of the difference between tax-exempt and taxable interest rates to gain a material financial advantage and will not increase the burden on the market for tax-exempt obligations in that the Bonds are not being issued in an amount greater than otherwise necessary nor are they being issued sooner, or to be outstanding longer, than otherwise necessary. (r) Private Activity. No users of the Project, other than state or local governmental units, will use more than five percent of the Project, in the aggregate, on any basis other than the same basis as the general public; and no persons, other than a state or local governmental unit, will be users of more than five percent of the Project, in the aggregate, as a result of (i) ownership, (ii) actual or beneficial use pursuant to a lease or a management, service, incentive payment, research or output contract, or (iii) any other similar arrangement, agreement or understanding, whether written or oral. The Authority has not and will not enter into any arrangement that conveys to any person, other than a state or local government unit, special legal entitlements to any portion of the Project that is available for use by the general public. No person, other than a state or local governmental unit, is receiving or will receive any special economic benefit from use of any portion of the Project that is not available for use by the general public. The payment of more than five percent of the principal of or the interest on the Bonds will not be, directly or indirectly (i) secured by any interest in (A) property used or to be used in any activity carried on by any person other than a state or local governmental unit or (B) payments in respect of such property or (ii) on a present value basis, derived from payments (whether or not to the Authority) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. (s) No Sale of the Project. Other than as provided in the next sentence, neither the Project any portion thereof has been, is expected to be, or will be sold or otherwise disposed of, in whole or in part, prior to the earlier of (i) the last date of the reasonably expected economic life to the Authority of the property (determined on the date of issuance of the Bonds) or (ii) the last maturity date of the Bonds. The Authority may dispose of personal property in the ordinary course of an established government program prior to the earlier of (i) the last date of the reasonably expected economic life to the Authority of the property (determined on the date of issuance of the Bonds) or (ii) the last maturity of the Bonds, provided: (A) the weighted average maturity of the Bonds financing the personal property is not greater than 120 percent of the reasonably expected actual use of that property for governmental purposes; (B) the Authority reasonably expects on the issue date that the fair market value of that property on the date of disposition will be not greater than 25 percent of its cost; (C) the property is no longer suitable for its governmental purposes on the date of disposition; and (D) the Authority deposits amounts received from the disposition in a commingled fund with substantial tax or other governmental revenues and the Authority reasonably expects to -5- spend the amounts on governmental programs within six months from the date of the commingling. The Authority acknowledges that if Bond -financed property is sold or otherwise disposed of in a manner contrary to the above, such sale or disposition may constitute a "deliberate action" within the meaning of the relevant Treasury Regulations that may require remedial actions to prevent the Bonds from becoming private activity bonds. The Authority shall promptly contact Quint & Thimmig LLP or any other nationally recognized firm of attorneys experienced in the field of municipal bonds whose opinions are generally accepted by purchasers of municipal bonds if a sale or other disposition of Bond -financed property is considered by the Authority. (t) No Hedge Bonds. The Bonds do not constitute "hedge bonds" in that at least eighty-five percent (8517o) of the proceeds of the Bonds will be used to carry out the governmental purposes of the Bonds within three (3) years of the date hereof, and not more than fifty percent (5011o) of the proceeds of the Bonds, if any, are invested in investments having a substantially guaranteed yield for four (4) or more years. (u) Future Events. The Authority acknowledges that any changes in facts or expectations from those set forth herein may result in different yield restrictions or rebate requirements from those set forth herein. The Authority shall promptly contact Bond Counsel if such changes do occur. (v) Permitted Changes; Opinion of Bond Counsel. Any restriction or covenant contained herein need not be observed or may be changed if the Authority receives an opinion of Bond Counsel to the effect that such nonobservance or change will not result in the loss of any exemption for the purpose of federal income taxation to which interest on the Bonds is otherwise entitled. (5) Records. The Authority agrees to keep and retain or cause to be kept and retained sufficient records to support the continued qualification of the Bonds as tax-exempt obligations that comply with the provisions of the Indenture and the Installment Sale Agreement, to demonstrate compliance with the covenants in the Indenture and the Installment Sale Agreement. Such records shall include, but are not limited to, basic records relating to the transaction (including the Indenture, the Installment Sale Agreement, this Certificate as to Arbitrage and the Bond Counsel opinion); documentation evidencing the expenditure of Bond proceeds; documentation evidencing the use of Bond -financed property by public and private entities (i.e., copies of grant agreements, leases, management contracts and research agreements); documentation evidencing all sources of payment or security for the Bonds; and documentation pertaining to any investment of Bond proceeds (in particular information described in the next paragraph and otherwise related to the purchase and sale of securities, SLGs subscriptions, yield calculations for each class of investments, actual investment income received from the investment of proceeds, guaranteed investment contracts and documentation of any bidding procedure related thereto and any fees paid for the acquisition or management of investments and any rebate calculations). Such records shall be kept for as long as the Bonds are outstanding, plus the period ending three years after the latest of the final payment date of the Bonds or the final payment date of any obligations or series of obligations issued to refund directly or indirectly all or any portion of the Bonds. The Authority agrees to keep and retain or cause to be kept and retained for the period described below adequate records with respect to the investment of all proceeds of the Bonds and any investment earnings thereon, and with respect to the investment of any funds pledged to the payment of the Bonds (collectively, "Gross Proceeds"). Such records shall include: I on (i) purchase price; (ii) purchase date; (iii) type of investment; (iv) accrued interest paid; (v) interest rate; (vi) principal amount; (vii) maturity date; (viii) interest payment date; (ix) date of liquidation, and (x) receipt upon liquidation. If any investment becomes gross proceeds of the Bonds on a date other than the date such investment is purchased, the records required to be kept shall include the fair market value of such investment on the date it becomes gross proceeds of the Bonds. If any investment is retained after the date the last Bond is retired, the records required to be kept shall include the fair market value of such investment on the date the last Bond is retired. Amounts or investments will be segregated whenever necessary to maintain these records. (6) Monitoring of Compliance. From time to time, the chief financial officer of the Authority will review, or cause to be reviewed, the Authority's compliance with the provisions of this Certificate as to Arbitrage and with the Indenture and the Installment Sale Agreement (the tax covenants related to the Bonds), and will, if applicable, present for Authority approval and direction such actions as are necessary to remedy any noncompliance. (7) No Adverse Ruling. The Authority has not received notice that its Certificate as to Arbitrage may not be relied upon with respect to its own issues nor has it been advised that any adverse action by the Commissioner of Internal Revenue is contemplated. -7- On the basis of the foregoing, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of section 148 of the Code and applicable regulations. To the best of my knowledge, information and belief, the expectations herein expressed are reasonable and there are no facts or estimates, other than those expressed herein, that would materially affect the expectations herein expressed. IN WITNESS WHEREOF, I have hereunto set my hand this 14th day of February, 2024. �I Jennifer King, Treasurer I, the undersigned Finance Director/Treasurer of the City of Tustin, California, do hereby certify that I have read the foregoing Certificate as to Arbitrage and, to the best of my knowledge, information and belief, the expectations therein expressed are reasonable and there are no facts or estimates, other than those expressed therein, that would materially affect the expectations therein expressed. IN WITNESS WHEREOF, I have hereunto set my hand this 14th day of February, 2024. Jennifer King, Finance Director/Treasurer In Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE OF THE AUTHORITY The undersigned hereby states and certifies: 2/7/24 B5 (i) that the undersigned is the duly appointed, qualified and acting Executive Director of the Tustin Public Financing Authority, a joint powers entity duly organized and existing under the laws of the State of California (the "Authority"), and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same on behalf of the Authority; (ii) that the undersigned is a duly designated "Authorized Representative" of the Authority, as such term is defined in that certain Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee; (iii) that on February 6, 2024, the Board of Directors of the Authority duly adopted Resolution No. 24-01 (the "Resolution"), entitled "RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF WATER REVENUE BONDS TO FINANCE IMPROVEMENTS TO THE CITY OF TUSTIN'S MUNICIPAL WATER ENTERPRISE AND APPROVING RELATED DOCUMENTS AND OFFICIAL ACTIONS," which Resolution has not been amended, modified, rescinded or repealed and remains in full force and effect as of the date hereof, said date being the delivery date of the Authority's Water Revenue Bonds, Series 2024 (Subordinate Lien), in the aggregate principal amount of $4,125,000 and dated the date hereof (the "Bonds"); (iv) that by all necessary action, the Authority has duly authorized and approved the execution, delivery of and performance by the Authority of the obligations on its part contained in the following agreements (collectively referred to herein as the "Agreements"): (a) Commitment Agreement, dated February 7, 2024, by Capital One Public Funding, LLC, as purchaser, as accepted by the City of Tustin (the "City") and the Authority, (b) Indenture, (c) Installment Sale Agreement, dated as of February 1, 2024, by and between the Authority, as seller, and the City of Tustin (the "City"), as purchaser, and (d) Placement Agent Agreement, dated as of February 1, 2024 (the "Placement Agent Agreement"), by and among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as placement agent (the "Placement Agent"); (v) that the representations and warranties of the Authority contained in the Agreements are true, complete and correct on and as of the date hereof; (vi) that the Authority has complied with and fully satisfied all of its agreements with and obligations to the Placement Agent under the Placement Agent Agreement; (vii) that as of its date and the date hereof, the information contained in the Placement Materials (as defined in the Placement Agent Agreement) is complete, true, and accurate and such information does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (viii) that there is no action, suit, proceeding, inquiry or investigation pending or, to the best knowledge of such official, threatened (a) to restrain or enjoin the execution and delivery of any of the Bonds, (b) in any way affecting the validity of the Bonds or the Agreements to which the Authority is a party, or (c) in any way contesting the corporate existence or powers of the Authority to execute and deliver the Agreements to which the Authority is a party or the Bonds; (x) that the Authority's employer identification number for Federal tax purposes is 45-1505452. Dated: February 14, 2024 TUSTIN PUBLIC FINANCING AUTHORITY By A I J1, Nicole M. Bernard, Executive Director -2- Quint & Tlummig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) WRITTEN REQUEST OF THE AUTHORITY TO TRUSTEE The undersigned hereby states and certifies: 2/7/24 B6 (i) that the undersigned is the duly appointed, qualified and acting Executive Director of the Tustin Public Financing Authority, a joint powers entity duly organized and existing under the laws of the State of California (the "Authority"), and, as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the Authority; (ii) that pursuant to Section 3.01 of that certain Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), the Trustee is hereby requested to authenticate and deliver bonds, substantially in the form attached as Exhibit A to the Indenture, in the aggregate principal amount of $4,125,000 and dated the date hereof (the "Bonds"); (iii) that the Trustee is further requested to deliver the authenticated Bonds to, or upon the order of, Capital One Public Funding, LLC, as purchaser (the "Purchaser"), upon receipt from the Purchaser of $4,125,000.00, as the purchase price of the Bonds. Dated: February 14, 2024 TUSTIN PUBLIC FINANCING AUTHORITY By Nicole M. Bernard, Executive Director Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) WRITTEN REQUISITION NO. 1 OF THE AUTHORITY FOR DISBURSEMENT FROM THE COSTS OF ISSUANCE FUND The undersigned hereby states and certifies: 2/7/24 B7 (i) that the undersigned is the duly appointed, qualified and acting Treasure of the Tustin Public Financing Authority, a joint powers entity duly organized and existing under the laws of the State of California (the "Authority"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the Authority; (ii) that the undersigned is a duly designated "Authorized Representative" of the Authority, as such term is defined in that certain Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"); (iii) that pursuant to Section 3.03 of the Indenture, the undersigned, on behalf of the Authority, hereby requests the Trustee to disburse on this date from the Costs of Issuance Fund established under the Indenture (the "Costs of Issuance Fund"), to the payees designated on Exhibit A attached hereto and by this reference incorporated herein, the respective sum set forth opposite each such designation, in payment of Costs of Issuance (as such term is defined in the Indenture) upon receipt of an invoice in amount not in excess of the respective amount set forth in Exhibit A; and (iv) that each item of Costs of Issuance to be paid pursuant to this Written Requisition of the Authority has been properly incurred, is a proper charge against the Costs of Issuance Fund and has not been the basis of any previous disbursement from the Costs of Issuance Fund. Dated: February 14, 2024 TUSTIN PUBLIC FINANCING AUTHORITY By Jennifer King, Treasurer Payee Name and Address City of Tustin c / o Citizens Bank ABA No. 122234149 For Credit to City of Tustin Account No. 301100981 Invoice No. 0013070 FXHIRIT A WRITTEN REQUISITION NO.1 COSTS OF ISSUANCE FUND Purpose of Obligation Amount City Administrative Fee Woodruff, Spradlin & Smart, P.C. City Attorney Fee c/o U.S. Bank NA ABA No.: 121122676 Account No.: 158210186538 Account Name: Woodruff & Smart, APC Invoice No. 75408 Fieldman, Rolapp & Associates c/o American Business Bank ABA No. 122042807 Account No. 06472600 Account Name: Fieldman, Rolapp & Associates, Inc. Invoice No. 29051 Stifel, Nicolaus & Company, Incorporated c / o Bank of America ABA No. 0260-0959-3 For credit to Stifel, Nicolaus & Company, Incorporated Account No. 4451211211 Attn: Public Finance Invoice No. M11474-83C Quint & Thimmig LLP c / o First Republic Bank ABA No. 321081669 Account No. 80015661202 For Credit to: Quint & Thimmig LLP The Bank of New York Mellon Trust Company, N.A. [Internal transfer] Foley & Lardner LLP c/o U.S. Bank, NA ABA No.: 075000022 Acct No.: 112031389 Acct Name: Foley & Lardner LLP Invoice No. 50779645 Ref. No.: 060853-0330 Municipal Advisor Fee Placement Agent Fee Bond Counsel Fee Trustee Fees Trustee Counsel Fee $6,100.00 $5,000.00 $28,500.00 $35,000.00 $30,000.00 $2,300.00 $7,500.00 Exhibit A-1 California Debt and Investment Advisory CDIAC Fee $1,031.25 Commission c / o Bank of America ABA No. 0260-0959-3 For credit to State of CA Account No. 14992-1395 For further credit to: CDIAC Reference: CDIAC Invoice No. 32244 Exhibit A-2 DATE INVOICE NO 2/14/2024 0013070 BILL TO BNY MELLON CORPORATE TRUST COMPANY, N.A. 333 S. HOPE STREET, SUITE 2525 LOS ANGELES, CA 90071 DUE DATE 3/14/2024 DESCRIPTION QUANTITY EFFECTIVE RATE AMOUNT DISCOUNT CREDIT BALANCE PREVIOUS ACCOUNT BALANCE 0.00 Tustin staff time for the Tustin Public Financing Authority Water Revenue Bonds, Series 2024; Wire Instructions: Bank - Citizens Business Bank; Bank contract info - Irene Rocha, VP Service Manager II, (714) 967-7222; Routing number - 122234149; Account number - 301100981; Account name - City of Tustin: Miscelleanous Reimbursement 1.00 6,100.00 6,100.00 0.00 0.00 6,100.00 INVOICE TOTAL: 6,100.00 0.00 0.00 6,100.00 PLEASE DETACH BOTTOM PORTION & REMIT WITH YOUR PAYMENT For questions please contact us at (714) 573-3065 DUE DATE INVOICE NO Customer Name: BNY MELLON CORPORATE TRUST COMPANY, N.A. 3/14/2024 0013070 Customer No: 044444 Account No: 0002213 Please remit payment by the due date to: City of Tustin Invoice Total: 6,100.00 Accounts Receivable Discounts: 0.00 300 Centennial Way Credit Applied: 0.00 Tustin, CA 92780- Ending Balance: 6,100.00 INVOICE BALANCE: $6,100.00 AMOUNT PAID: DID � 4 .. • CD 00 Incoming Wire Form US BANK • Bank Name: U.S. Bank NA • Wire Transfer Routing Number: 121122676 • Account Holder Name: Woodruff & Smart, APC • Account Number: 158210186538 • Business Address: 555 Anton Blvd, Ste 1200, Costa Mesa, CA 92626 • Bank Address, with City & State (regardless of where the account is located: U.S. Bank NA 800 Nicollet Mall Minneapolis, MN 55402 United States Incoming wire transfers from foreign countries require a SWIFT or BIC code similar to a routing number. • U.S. Bank's SWIFT code is USBKUS441MT FIELDMAN I ROLAPP & ASSOCIATES To: Jennifer King Director of Finance City of Tustin 300 Centennial Way Tustin, CA 92780 Fieldman, Rolapp & Associates (TUSTIN:23194) - PO#: 8320 - Managed by (JVF) For professional services rendered pursuant to Agreement between City of Tustin and Fieldman, Rolapp & Associates, Inc. For Professional Services Rendered 2023 Water Fund Private Placement Invoice Notes: WIRE TRANSFER INSTRUCTIONS Please Wire Funds To: American Business Bank 400 S. Hope St., Ste 300 Los Angeles, CA 90071 Wire# 122042807 Account# 06472600 Account Name: Fieldman, Rolapp & Associates, Inc. cc: Brian Quint - Quint & Thimmig LLP Seth Crone - The Bank of New York Mellon Trust Company, N.A. Patrick Olan - The Bank of New York Mellon Trust Company, N.A. 19900 MacArthur Blvd., Suite 1100 Irvine, CA 92612 Tel: (949) 660-7300 Fax: (949) 474-8773 www.fieldman.com Invoice Invoice Date: Feb 9, 2024 Invoice Num: 29051 Amount: I $28,500.00 Amount Due This Invoice: 1 $28,500.00 Page 1 of 1 Stifel, Nicolaus & Company, Incorporated One Financial Plaza Accounting Department - Attn: Chelsea Renner/Angela Ocker 501 North Broadway St. Louis, MO 63102 Bill To: City of Tustin 300 Centennial Way Tustin, CA 92780 Attn: Jennifer King DESCRIPTION $4,140,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 Services as Placement Agent DATE: February 14, 2024 INVOICE # M11474-83C MuniBOND IR# 65380 FOR: Placement Agent Services Make all checks payable to Stifel, Nicolaus & Company, Incorporated If you have any questions concerning this invoice, contact: Sara Brown 2134435004 sbrown stifel.com Wire Instructions are as follows: Bank of America, New York, N.A. ABA Routing #: 026009593 Beneficiary: Stifel, Nicolaus & Company, Incorporated Acct: 4451211211 Attn: Public Finance -- M11474-83C Deal Name: Tustin PFA Water Revenue Bonds Attn: Chelsea Renner, Angela Ocker, Corporate Accounting AMOUNT $ 35,000.00 TOTAL 1 $ 35,000.00 Quint S ThimmigLLP attorneys at law February 14, 2024 Tustin Public Financing Authority 300 Centennial Way Tustin, CA 92780 City of Tustin 300 Centennial Way Tustin, CA 92780 Re: 412 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) INVOICE For Legal Services Rendered as Bond Counsel, inclusive of all out-of-pocket expenses $39 Please remit to: By mail: Quint & Thimmig LLP 900 Larkspur Landing Circle, Suite 270 Larkspur, CA 94939-1726 By wire: First Republic Bank 111 Pine Street San Francisco, CA ABA No. 321081669 Account No. 80015661202 For Credit to: Quint & Thimmig LLP Our Tax I.D. Number is 94-3263256 DOR 1 BNY MELLON INVOICE The Bank of New York Mellon Trust Company, N.A. Aldrin Patrick Olan C) Invoice Number: 333 South Hope Street, Suite 2525 C) Account Number: Los Angeles, CA 90071 O Invoice Date: Cycle Date: Administrator: Phone Number: Currency: Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Flat 252-2612125 CT2355388 15-Feb-24 14-Feb-24 Aldrin Patrick Olan USD Quantity Rate Proration Subtotal Total Trustee Fee 1,800.00 For the period: February 14, 2024 to February 13, 2025 One Time Charges Transaction Acceptance Fee 500.00 Invoice Total: 2,300.00 Satisfied To Date: 0.00 Balance Due: 2,300.00 Terms: Payable upon receipt. Please reference the invoice and account number with your remittance. Our Tax ID Number is 95-3571558. Please fax Taxpayer Certification requests to (732) 667-9576. The Bank of New York Mellon Trust Company, N.A is located at 333 South Hope Street - Suite 2525, Los Angeles, CA 90071 Check Payment Instructions: Wire and ACH Payment Instructions: The Bank of New York Mellon The Bank of New York Mellon Corporate Trust Department ABA Number: 021000018 P.O. Box 392013 Account Number: 8901245259 Pittsburgh, PA 15251-9013 Account Name: BNY Mellon - Fee Billing Wire Fees Please enclose billing stub. Please reference Invoice Number: 252-2612125 Billing Stub Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Invoice Number: 252-2612125 Account Number: CT2355388 Invoice Date: 15-Feb-24 Cycle Date: 14-Feb-24 Administrator: Aldrin Patrick Olan Phone Number: Amount: 2,300.00 USD 000000701659252D26121250000000000002300009 FOLEY FOLEY & LARDNER LLP The Bank of New York Mellon Trust Company, N.A. Attn: Ms. Fanny Chen, Vice President 400 S. Hope Street, Suite 500 Los Angeles, CA 90071 Remittance Advice Re: City of Tustin, CA Series 2024 Revenue Bonds Current Invoice: 02/12/24 - 50779645 Total Amount Due: Please mail check payments to: $7,500.00 $7,500.00 Foley & Lardner LLP's preferred payment method is ACH (CTX or CCD+ transmission) with invoice number(s) included in the addenda of the ACH. Please send electronic payment remittance advice and questions to accountsreceivable@foley.com. FOLEY & LARDNER LLP 321 NORTH CLARK STREET SUITE 3000 CHICAGO, IL 60654-4762 TELEPHONE (312) 832-4500 FACSIMILE (312) 832-4700 W W W. FOLEY.COM Date: February 12, 2024 Invoice No.: 50779645 Our Ref. No.: 060853-0330 Foley & Lardner LLP P.O. Box 78470 Milwaukee, WI 53278-8470 Foley & Lardner LLP U.S. Bank, NA 777 E. Wisconsin Ave. Milwaukee, WI 53202 ABA No.: 075000022 Acct No.: 112031389 Swift Code: USBKUS441MT (foreign wires only) :FOLEY FOLEY & LARDNER LLP The Bank of New York Mellon Trust Company, N.A. Attn: Ms. Fanny Chen, Vice President 400 S. Hope Street, Suite 500 Los Angeles, CA 90071 RE: City of Tustin, CA Series 2024 Revenue Bonds For Services as Trustee's counsel in connection with $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien). Total Amount Due: FOLEY & LARDNER LLP 321 NORTH CLARK STREET SUITE 3000 CHICAGO, IL 606544762 TELEPHONE (312) 832-4500 FACSIMILE (312) 832-4700 W W W. FOLEY.COM Date: February 12, 2024 Invoice No.: 50779645 Our Ref. No.: 060853-0330 $7,500.00 $7,500.00 Please reference your invoice number 50779645 with your remittance Federal Employer Number: payable to Foley & Lardner LLP. Payment is due promptly upon receipt 39-0473800 of our invoice. CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION P.O.BOX 942809 SACRAMENTO, CA 94209-0001 TELEPHONE.: (916) 653-3269 FAX- (9161 654-7440 Melinda Kays Fieldman Rolapp & Associates Inc 19900 MacArthur Boulevard, Ste 1100 Irvine, CA 92612 Reporting fee levied pursuant to Section 8856 of the Government Code: CDIAC Nbr: 2024-0073 Issuer: Tustin Public Finance Authority Fiona Ma, CPA State Treasurer and Chair Robert Berry, Executive Director Invoice Date: 02/06/2024 Reporting Date: 02/06/2024 Invoice Id: 32244 Issue Name: Water Revenue Bonds, Series 2024 (Subordinate Lien) Project/Issue Info: Water Revenue Bonds, Series 2024 (Subordinate Lien) Principal Amount: $4,125,000.00 Issue Date: 02/14/2024 TOTAL DUE: Principal Amount x 0.00025 (Not to exceed $5,000.00): $1,031.25 ELECTRONIC REMITTANCE INSTRUCTIONS ARE AS FOLLOWS: Bank of America Sacramento Main 555 Capitol Mall, Suite 1555 Sacramento, CA 95814 For credit to State of CA Account #14992-13957 ABA# (wire transfer) 0260-0959-3 ABA# (ACH) 121000358 For further credit to: CDIAC Reference: 5-Digit CDIAC Invoice Number mkays@fieldman.com Page 1 of 1 Quint & Thimmig LLP 1/29/24 $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) WRITTEN REQUISITION NO. OF THE AUTHORITY FOR DISBURSEMENT FROM THE PROTECT FUND The undersigned hereby states and certifies: B8 (i) that the undersigned is the duly appointed, qualified and acting Treasurer of the Tustin Public Financing Authority, a joint powers entity duly organized and existing under the laws of the State of California (the "Authority"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the Authority; (ii) that the undersigned is a duly designated "Authorized Representative" of the Authority, as such term is defined in that certain Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"); (iii) that pursuant to Section 3.04 of the Indenture, the undersigned, on behalf of the Authority, hereby requests the Trustee to disburse on this date from the Project Fund established under the Indenture (the "Project Fund"), to the payees designated on Exhibit A attached hereto and by this reference incorporated herein, the respective sum set forth opposite each such designation, in payment of Project Costs upon receipt of an invoice in amount not in excess of the respective amount set forth in Exhibit A, or to reimburse the Authority or the City for payment of Project Costs; (iv) that each obligation mentioned on Exhibit A is a proper charge against the Project Fund and has not previously been disbursed by the Trustee from amounts in the Project Fund; (v) that all conditions precedent set forth in the Lease Agreement with respect to such disbursement have been satisfied, (vi) that attached is a bill or statement of account (if any) for each obligation; and (vii) that capitalized terms used herein and not otherwise defined shall have their meanings ascribed thereto in the Indenture. Dated: TUSTIN PUBLIC FINANCING AUTHORITY Jennifer King, Treasurer EXHIBIT A WRITTEN REQUISITION NO. PROJECT FUND Payee Name and Address Purpose of Obli at�ion Amount Exhibit A Quint & Tlummig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) WRITTEN REQUEST TO THE TRUSTEE REGARDING INVESTMENTS The undersigned hereby states and certifies: 2/7/24 B9 (i) that the undersigned is the duly appointed, qualified and acting Treasurer of the Tustin Public Financing Authority, a joint powers authority duly organized and existing under the laws of the State of California (the "Authority"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the Authority; (ii) that the undersigned has read Sections 5.05 and 6.07 of the Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee") and the definitions contained in the Indenture of the capitalized terms used in said Sections; (iii) that pursuant to the Indenture, of the net proceeds of the captioned bonds (the "Bonds"), the undersigned, on behalf of the Authority, hereby directs the Trustee to invest the amounts deposited this date into the funds established pursuant to the Indenture in Permitted Investments identified on Exhibit A attached hereto and by this reference incorporated herein; (iv) that all of such investments are Permitted Investments and are comprised of securities traded on established markets and are to be acquired by the Trustee in arm's length transactions without regard to the relationship of the yield of such investments to the yield of any of the Bonds; (v) that all of said Permitted Investment Securities are comprised of securities traded on established markets and are to be acquired by the Trustee in arm's length transactions for their Fair Market Value without regard to the relationship of the yield of such investments to the yield of the Bonds; and (vi) that capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Indenture. Dated: February 14, 2024 TUSTIN PUBLIC FINANCING AUTHORITY l By- 4Q L Jennifer- King,' Treasurer Z. a� el el u o 0 v v �4L � Q Q n n N N N N u u o � � u u Q v v cn cn tt M H H U) U) Q Q 4� o 00 o ° o o0 �lz 4� 4� o 0 � o 0 a� q Quint & Thimmig LLP 2/14/24 $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE OF MAILING FORM 8038-G B10 I, Brian D. Quint, hereby state and certify that for and on behalf of the Tustin Public Financing Authority, on the date hereof, I caused to be sent by FedEx Priority Overnight Mail, an Information Return for Tax -Exempt Governmental Obligations, Form 8038-G, relating to the captioned financing, to the Internal Revenue Service Submission Processing Center, 1973 Rulon White Boulevard, Ogden, Utah 84201, a true copy of which Information Return and acknowledgment of receipt is hereto attached. Dated: February 14, 2024 By &�� 6� Br4qb. Quint, Quint Thimmig LLP Form 8038-G (Rev. October 2021) Department of the Treasury Intemal Revenue Service Information Return for Tax -Exempt Governmental Bonds ► Under Internal Revenue Code section 149(e) ► see separate instructions. OMB No.1545-0047 Caution: if the issue price is under $100,000, use Form 8038-GC. ► Go to wwwdrs.gov/F80380 for instructions and the latest information. • .. Rennrlina Authority Check box if Amended Return ► ❑ 1 Issuer's name 2 Issuer's employer id8nUIk4160n number (EIN) TUSTIN PUBLIC FINANCING AUTHORITY 45-1505452 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address) Room/suite 5 Report number (For IRS Use Only) 300 Centennial Way 131 6 City, town, or post office, state, and ZIP code 7 Date of issue Tustin, CA 92780 02/14/2024 a flame of issue 9 CUSIP number Water Revenue Bonds Series 2024 (Subordinate Lien) NA 10e Name and title of officer or other employee of the Issuer whom the IRS may call for more information 10b Telephone number of officer or other employee shown on 1 Da Jennifer King, Treasurer I714) 573-3079 LM Type of Issue (Enter the issue price.) See the instructions and attach schedule. 11 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Health and hospital . . . . . . . . . . . . . . . . . . . . . . . . . 13 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Public safety . . . . . . . . . . . . . . . . . . . . 15 Environment (including sewage bonds) . . . . . . . . . . . . . . . . . . . 16 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Other. Describe ► 19a If bonds are TANS or RANs, check only box 19a . . . . . . . . . . . . . . . ► ❑ b if bonds are BANS, check only box 19b . . . . . . . . . . . . . . . . . ► ❑ 20 If bonds are in the form of a lease or installment sale, check box . ► ❑ 11 12 13 14 15 16 17 4,125,000.00 18 rinarnrin+inn of Rr%nria r..nmrtilata fnr the Pntirn iSCiin fnr which this form is heina filed. (a) Final maturity date (b) Issue pride (c) Stated redemption price at maturity (if) Weighted average maturity a Yield { ) 21 04/01i2044 $ 4.125,000 00 $ 4. 125.000.001 12 242 years 4.818944 % U uses of IProcee[is of bona Issue tinciucting unaerwriRers- opscounaj 22 23 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . Issue price of entire issue (enter amount from line 21, column (b)) . . . . . . . . 22 0.00 23 4,125,000.00 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 125.00D,00 25 Proceeds used for credit enhancement . . . . . _ . . . . . . 25 0.00 26 Proceeds allocated to reasonably required reserve or replacement fund . 26 0.00 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V . . . 27 0.00 28 29 30 Proceeds used to refund prior taxable bonds. Complete Part V . . . . 28 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 0.00 . 29 125,000.00 30 4,000 000.00 Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . . . ► years 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded . . . . ► years 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YYYY) ► 34 Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY) For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 83773S Form 8038-G (Rev. 10-2021) Form 8038-G (Rev. 10-2021) Page `Z Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35 36a Enter the amount of gross proceeds Invested or to be invested in a guaranteed investment contract (GIC). See instructions . . . . . . . . . . . . . . . . . . . . . . . . . 36a b Enter the final maturity date of the GIC ► (MM/DD/YYYY) c Enter the name of the GIC provider ► 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . 37 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► ❑ and enter the following information: b Enter the date of the master pool bond No, (MM/DD/YYYY) c Enter the EIN of the issuer of the master pool bond No- d Enter the name of the issuer of the master pool bond ► 39 If the issuer has designated the issue under section 265(b)(3)(B)(?(III) (small issuer exception), check box . . . . ► ❑.. 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . ► ❑ 41a If the issuer has identified a hedge, check here ► ❑ and enter the following information: b Name of hedge provider ► c Type of hedge ► d Term of hedge ► 42 If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . . . ► ❑ 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box . . . . . . . . ► Z 44 if the issuer has established written procedures to monitor the requirements of section 148, check box . . . . . ► 45a If some portion of the proceeds was used to reimburse expenditures, check here ► ❑ and enter the amount of reimbursement . . . . . . . . . . . . . . ► b Enter the date the official intent was adopted ► (MM/DD/YYYY) Under penalties of perjury, I declare that 1 have examined this return and accompanying schedules and statements, and to the best of my knowledge .S!nature and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the Issuer's return information, as necessary to g process this return, to the person that 1 have authorized above. and ,�� Consent V -� 1 I -,-�-j Jennifer King, Treasurer ' Signature of issuer's authorized representative If Date ' Type or print name and title Paid Print rype preparees name s si n qDa Check ❑ it PTIN Brian D_ Quint {� f - self-employed P01076323 Preparer Pre averOnly Firm's name ► Quint & Thimmig LLP Firm's El ► 94-3263256 UseFirm's address ► 900 Larkspur Landing jUrcle. Suite 270, Larkspur, CA 94939 Phone no. (415) 925.4200 Form 8=-G (Rev. 10-2021) Dear Customer, February 15, 2024 The following is the proof -of -delivery for tracking number: 775166714146 Delivery Information: Status: Signed for by: Service type: Special Handling Shipping Information: Tracking number: Recipient: Ogden, UT, US, Reference Delivered S.SNOW FedEx Priority Overnight Deliver Weekday IrB1D-11- AEIC[y Delivered To: Shipping/Receiving Delivery Location: Ogden, UT, Delivery date: Feb 15, 2024 10:08 Ship Date: Feb 14, 2024 Weight: 0.5 LB/0.23 KG Shipper: BEL TIBURON, CA, US, 8038 Tustin 2024 H2O 20027.04 FedEx Express proof -of -delivery details appear below; however, no signature is currently available for this shipment. Please check again later for a signature. Thank you for choosing FedEx RE �ZC' -tz 0 cv qq cD P � CD, �. n (D C Qq C �. . CD :P � n N O (7, CD dq CD Z . ro e CD CD CD cn uq C7�2 Cy- CDCD C1 `fir (D .� (Jq a. y (DD s] CD o aq •S 0 CrD N CD CD CAD r�•r CD CD Q. 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CD CD L� O p UQ `C r+ C �n C Q pp s Q �� `C ¢- .� ems' � i O CD .� ,� 0 A� � sv O CD Cn n � cn r cn `Q 6 CD cn ""• n N CD O p (D Sv (D p O UQ O CD ((DD - 11) - Q C N p� `C C� CD N `C � CL CD � � � y � � � c% N O0 CD 0 � O— U(DQ CD CD - O" O 9, Uq ¢ P Q �i CL ((DD C) O O� Sv O �! Q c)~ �-t CD CDh OO .� CD O p O Cl CD CD - CD 5 _ �.D O (D O CD pcn CD �y � Q , `C , , Uq (D " to Fy (D �1 0 _ CD C O � � O� � ,� 0 Q- C) � � UQ � `C v' UQ � N c�i� S Q � cn (D w cnCD CCD r O � Oh �iCD G1- O O Q O N(D CL O rt "'. n O O CL P O Sv K CL f, (D cnQ CD N -s O `C CD `C3 -, `C tz W p p CD CD C CD �A� n, DO f_"N ZO NCL N (D C ¢� (dCD cn Yo `71 �w a¢ N U�Q tt C v Q O O O CD p o C cn `i �- - CL O CD Q. CD � t:3 - cn O � CD O O CD CD r-+t — �. P? CD 0 UQ cn CL CD (y 'CD C CD o CD CD �-h .-+ `C .-.. CD d" ,,,,t (D ~h ,-�' _ O _ CD En cn C Q C cn 01 Q3 Q N UQ ¢ CDcn + -� '� .-. (� Q -h p O n UQ > CD A`OC n CD QO ¢ `4 Q D�NCCD O :s (D�-rCD C fn CD UQ O `C CD d rn C) 'Cs c� �+, •-� O•, s O p. —.d w r* n O O QQ n r �h '`S' ``� ,' O • A) ¢ 'ham' (D A� pCL Pt CD 0 c`n • n ,� O N Q O Og. vO a s ram• N r n CODO .-• cn N -+� Q O O CDC O 0 r+ ¢ CL CV 0 CD 0 o r, 1. 0 CD CA o Cl. o o v4 co 0 CD cn O 0 V CL �t CAD Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) INCUMBENCY AND SIGNATURE CERTIFICATE — CITY The undersigned hereby state and certify: 2/7/24 C1 (i) that the undersigned are the duly elected or appointed, qualified and acting Mayor and City Clerk, respectively, of the City of Tustin, a municipal corporation and general law city duly organized and existing under the laws of the State of California (the "City"), and as such, are familiar with the facts herein certified and are authorized and qualified to certify the same on behalf of the City; (ii) that the following are now, and have continuously been since the dates of beginning of their respective current terms of office set forth below, the duly elected or appointed, qualified and acting members of the City Council of the City, and the dates of the beginning and ending of their respective current terms of office are hereunder correctly designated opposite their names: Board of Directors Austin Lumbard, Mayor Ryan Gallagher, Mayor Pro Tem Letitia Clark Rebecca Gomez Ray Schnell Beginning Date of Current Term December, 2022 December, 2020 December, 2020 December, 2020 December, 2022 Ending Date of Current Term December, 2026 December, 2024 December, 2024 December, 2024 December, 2026 (iii) that the signatures set forth opposite the names and titles of the following persons are the true and correct specimens, or are the genuine signatures of such persons, each of whom holds the position designated below: Name and Title Signature Austin Lumbard, Mayor Nicole Bernard, City Manager Erica N. Yasuda, City Clerk Jennifer King, Finance DirectorlTreasurer (v) that for and on behalf of the City, the within -named City Manager has executed each of the following documents: (a) Installment Sale Agreement, dated as of February 1, 2024, by and between the Tustin Public Financing Authority (the "Authority"), as seller and the City, as purchaser, and (b) Placement Agent Agreement, dated as of February 1, 2024, by and among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as placement agent; and (v) and, that for and on behalf of the City, the within -named Finance Director/Treasurer has executed the Commitment Agreement, dated February 7, 2024, by Capital One Public Funding, LLC, as purchaser, as accepted by the City and the Authority. Dated: February 14, 2024 CITY OF TUSTIN By Aus ` umbard, _ . Mayor By L x, Erica Ibl. Yasuda, City Clerk -2- Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE OF THE CITY The undersigned hereby states and certifies: 2/7/24 C2 (i) that the undersigned is the duly appointed, qualified and acting City Manager of the City of Tustin, a municipal corporation and general law city duly organized and existing under the laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized and qualified to certify the same on behalf of the City; (ii) that the undersigned is a duly designated "Authorized Representative" of the City, as such term is defined in that certain Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Tustin Public Financing Authority (the "Authority") and The Bank of New York Mellon Trust Company, N.A., as trustee; (iii) that on February 6, 2024, the City Council of the City duly adopted Resolution No. 24-07, entitled "A RESOLUTION APPROVING PROCEEDINGS BY THE TUSTIN PUBLIC FINANCING AUTHORITY FOR THE ISSUANCE AND SALE OF ITS TUSTIN PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) WATER REVENUE BONDS TO FINANCE IMPROVEMENTS TO THE CITY'S MUNICIPAL WATER SYSTEM APPROVING THE FORM AND AUTHORIZING EXECUTION OF RELATED DOCUMENTS AND APPROVING RELATED OFFICIAL ACTIONS," (the "Resolution") which Resolution has not been amended, modified, rescinded or repealed and remains in full force and effect as of the date hereof; (iv) that by all necessary action, the City _has duly authorized and approved the execution and delivery and the performance by the City of the obligations on its part contained in the following agreements (collectively referred to herein as the "Financing Documents"): (a) Commitment Agreement, dated February 7, 2024 (the "Purchase Agreement"), by Capital One Public Funding, LLC, as purchaser as accepted by the City and the Authority, (b) Installment Sale Agreement, dated February 1, 2024, by and between the City and the Authority, and (a) Placement Agent Agreement, dated as of February 1, 2024 (the "Placement Agent Agreement"), by and among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as placement agent (the "Placement Agent"); (v) that the representations and warranties of the City contained in the Agreements are true, complete and correct on and as of the date hereof; (vi) that the City has complied with and fully satisfied all of its agreements with and obligations to the Placement Agent under the Placement Agent Agreement; (vii) that as of its date and the date hereof, the information contained in the Placement Materials (as defined in the Placement Agent Agreement) is complete, true, and accurate and such information does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (viii) that there is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of the undersigned, threatened (a) to restrain or enjoin the execution and delivery of the Financing Documents to which the City is a party, (b) in any way contesting or affecting the validity of the Financing Documents to which the City is a party, (c) in any way contesting the power of the City to execute and deliver the Financing Documents to which the City is a party, or (d) seeking to prohibit, restrain or enjoin the collection of moneys from the Enterprise to pay the Installment Payments securing the Bonds, or the compliance by the City of the covenants contained in the Financing Documents to which the City is a party, or questioning the authority of the City to fix, charge and collect rates for the services provided by the Enterprise as provided in the Installment Sale Agreement, nor to the best knowledge of the undersigned, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds or the Financing Documents to which the City is a party or materially adversely impair the City's ability to perform its obligations under the Financing Documents to which the City is a party. Dated: February 14, 2024 CITY OF TUSTIN By ev-? Nicole M. Bernard, City Manager -2- Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE REGARDING USE OF PROCEEDS The undersigned hereby states and certifies as follows: 2/7/24 C3 (i) that the undersigned is the Finance Director/Treasurer of the City of Tustin (the "City"), is authorized to execute this certificate on behalf of the City and is knowledgeable with respect to the matters set forth herein; (ii) that pursuant to an Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee") and the Tustin Public Financing Authority (the "Authority"), the Authority is issuing on the date hereof its $4,125,000 principal amount of the Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) (the 'Bonds"); (iii) that of the proceeds of the Bonds, $4,000,000 has been deposited in the Project Fund (the "Project Fund") held by the Trustee; (iv) that the proceeds of the Bonds deposited in the Project Fund will be used to finance certain improvements (the "Project"), as more particularly described in Part I of Exhibit A hereto attached and by this reference herein incorporated; (v) that Part II of such Exhibit A describes (a) each use to be made by any person of the Project, other than use by the Authority and other non-federal governmental units and other than use by members of the public generally, and (b) payments (if any) directly or indirectly in respect of such use which are to be made after the date hereof; (vi) that no portion of the proceeds of the Bonds will be used, directly or indirectly, to make or finance a loan to any person (other than a State or local government unit) or to acquire property which will be sold to any person (other than a State or local government unit) on an installment sale basis except as referenced in Part II of Exhibit A; (vii) that the Authority expects to use the Project for the purposes referenced in Exhibit A or for other governmental purposes of the Authority for the entire term of the Bonds; (viii) that the above statements are made on the basis of the facts, estimates and circumstances in existence on the date hereof and the undersigned has exercised due diligence to assure that all material facts, estimates and circumstances relating to the above statements were made available to the undersigned and reviewed by the undersigned; (ix) that, to the best knowledge of the undersigned the above statements are reasonable and there are no other facts, estimates or circumstances, other than those set forth herein, that would materially affect the statements made herein; and (x) that the undersigned is aware that Quint & Thimmig LLP, is rendering an opinion on the date hereof substantially to the effect that the interest on the Bonds is excluded from gross income for federal income tax purposes and in rendering such opinion is relying upon the statements made herein and in Exhibit A hereto attached. IN WITNESS WHEREOF, I have hereunto set my name this 14th day of February, 2024. By Jennifer King, Finance Director/Treasurer -2- EXHIBIT A I. Description of the Project Beneta Well: Design and construct an additional well at the existing Beneta Well site that will produce 1,350 gallons of potable water daily. Well Rehab Program: Routine rehabilitation of well facilities. The following wells have been identified for rehabilitation over the next three fiscal years: FY 23-24 Vandenberg Well, FY 24-25 Main Street #3, and FY 25-26 Pasadena Well. Lyttle Reservoir: Evaluate tank condition, provide improvements to meet safety standards, replace site access stairway, and construct roadway, grading, and drainage improvements. Evaluate possible transfer/purchase of adjacent land. Complete CEQA due diligence. Tank to be inspected by a qualified contractor to determine appropriate repairs, maintenance, or improvements. II. Description of Use of Project A. Use by any Person Other than Governmental Units or Members of Public Generally h� B. Payments to be Made after Date Hereof in Respect of Above Use None Exhibit A Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) RTIFICATE REGARDING SUBORDINATE OBLIGATIONS 2/7/24 C4 I. the undersigned Finance Director/Treasurer of the City of Tustin, California (the "City"), being one of the officers of the City duly charged (by resolution of the City Council of the City), with others, with the responsibility for the execution and delivery of an installment sale agreement, dated as of February 1, 2024 (the "Installment Sale Agreement"), by and between the Tustin Public Financing Authority (the "Authority") and the City, supporting the payment of the Authority's $4,125,000 Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"), dated as of the date hereof, hereby certify as follows: (i) I have read Section 6.08(c) of that certain Indenture of Trust, dated as of February 1, 2020, as amended, by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the "2020 Indenture"), which provides that the City may issue Subordinate Obligations so long as: Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which instrument such Subordinate Obligations are issued or incurred, as shown by the books of the City shall, after deducting all amounts required for the payment of the Bonds and any Parity Obligations, have amounted to at least 1.0 times the sum of the maximum annual debt service on all Subordinate Obligations outstanding immediately subsequent to the incurring of such additional obligations. An allowance for earnings arising from any increase in the charges made for service from the Enterprise which has become effective prior to the incurring of such additional obligations but which, during all or any part of such Fiscal Year, was not in effect, may be added in an amount equal to 100% of the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year and any period prior to the incurring of such additional obligations, as shown by the certificate or opinion of a qualified independent consultant employed by the City. (ii) Attached hereto as Exhibit A is a computation that evidences compliance with said Section 6.08(c). (iii) Capitalized terms used, but not otherwise defined, herein shall have the meanings ascribed thereto in the 2020 Indenture. Dated: February 14, 2024 CITY OF TUSTIN i By ennifer King, Finance Director/Treasurer EXHIBIT A SATISFACTION OF TEST TO ISSUE SUBORDINATE OBLIGATIONS FY 2023-24 Gross Revenues Fixed Charges Consumption Charges Fire Line Charges Total Rate Revenues Operating Revenues Non -Operating Revenues Total Revenues Total Expenses Net Revenues Outstanding Bonds (Maximum Annual Debt Service) Senior Bonds (Series 2016 and 2020) Subordinate Bonds (Series 2024) Coverage Exhibit A 7,788,100 13,676,800 31,700 $21,496,600 500,000 551,000 $22,547,600 19,536,602 $3,010,998 $2,432,024 330,183 $2,762,207 1.09x rtificate ire IIIitNelf Z MRTl t CoFr. N , the undersigned Fanny Chen, Vice President of'1The Bank of New York Mellon Trust ompany, N.A., a national banking association with its office at 333 South Hope Street, Suite 2525, Los Angeles, CA 90071, DO HEREBY CERTIFY that Deborah Young is a duly appointed and, qqalified Officer of The Bank of New York Mellon Trust Company, N.A. and I FURTHER CERTIFY that Deborah Young has been granted Limited Signing Powers which authorize him/leer to sign certain documents on behalf of The Bank o ew York Mello rust Company, N.A. in, discharging or performing his duties within the A Division in ac dance with Article V g g p g ,. Section 5.3 of the By -Laws of The Bank of New York Mellon Trust Company, N.A., and that his/her genuine signature is set above his/her name below. Name Title Signature • • Deborah Young • Vice President • The Bank of New York Mellon Trust Company, N.A. y Name:. Fanny Chen . Title; Vice Presiden� THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. I, the undersigned, Jennifer L. Jablon, Secretary of The Bank of New York Mellon Trust Company, N.A., a national banking association organized under the laws of the United States (the "Association") and located in the State of California, DO HEREBY CERTIFY that the following individuals are duly appointed and qualified Officers of the Association, and that the signature appearing next to each officer listed below is a true copy of the signature of such officer: Officer Name and Title Signing Authority Signature James J. Prichard A, J, N Vice President Letha Glover A, J, N Vice President Mary Jo Wagener A, J, N +6-,' a-� Vice President Fanny Chen A, J, N Vice President Mark A. Golder A, J, N Vice President Gloria Ramirez A, J, N(� Vice President f1U.Q Gonzalo Urey A, J, N Vice President Deborah D. Young A, J, N Vice President Mietka Collins A, J, N Vice President I further certify that as of this date they have been authorized to sign on behalf of the Association in discharging or performing their duties in accordance with the limited signing powers provided under Article V, Section 5.3 of the By-laws of the Association and the paragraphs indicated above of the signing authority resolution of the Board of Directors of the Association. Page 1 of 2 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Attached hereto are true and correct copies of excerpts of the By-laws of the Association, as amended through January 18, 2018, and the signing authority resolution, which has not been amended or revised since October 15, 2009, both of which are in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the digital seal of The Bank of New York Mellon Trust Company, N.A. this 24th day of January 2023. _ SEAL = NOV. 1, 20M Jennifer L. Jahlon, Secretary Page 2 of 2 Extracts from By -Laws of The Bank of New York Mellon Trust Company, N.A. As Amended through January 18, 2018 ARTICLE V SIGNING AUTHORITIES Section 5.1 Real Property. Real property owned by the Association in its own right shall not be deeded, conveyed, mortgaged, assigned or transferred except when duly authorized by a resolution of the Board. The Board may from time -to -time authorize officers to deed, convey, mortgage, assign or transfer real property owned by the Association in its own right with such maximum values as the Board may fix in its authorizing resolution. Section 5.2. Senior Signing Powers. Subject to the exception provided in Section 5.1, the President and any Executive Vice President is authorized to accept, endorse, execute or sign any document, instrument or paper in the name of, or on behalf of, the Association in all transactions arising out of, or in connection with, the normal course of the Association's business or in any fiduciary, representative or agency capacity and, when required, to affix the seal of the Association thereto. In such instances as in the judgment of the President, or any Executive Vice President may be proper and desirable, any one of said officers may authorize in writing from time -to -time any other officer to have the powers set forth in this section applicable only to the performance or discharge of the duties of such officer within his or her particular division or function. Any officer of the Association authorized in or pursuant to Section 5.3 to have any of the powers set forth therein, other than the officer signing pursuant to this Section 5.2, is authorized to attest to the seal of the Association on any documents requiring such seal. Section 5.3. Limited Signing Powers. Subject to the exception provided in Section 5.1, in such instances as in the judgment of the President or any Executive Vice President, may be proper and desirable, any one of said officers may authorize in writing from time -to -time any other officer, employee or individual to have the limited signing powers or limited power to affix the seal of the Association to specified classes of documents set forth in a resolution of the Board applicable only to the performance or discharge of the duties of such officer, employee or individual within his or her division or function. Section 5.4. Powers of Attorney. All powers of attorney on behalf of the Association shall be executed by any officer of the Association jointly with the President, any Executive Vice President, or any Managing Director, provided that the execution by such Managing Director of said Power of Attorney shall be applicable only to the performance or discharge of the duties of said officer within his or her particular division or function. Any such power of attorney may, however, be executed by any officer or officers or person or persons who may be specifically authorized to execute the same by the Board of Directors. Section 5.5. Auditor. The Auditor or any officer designated by the Auditor is authorized to certify in the name of, or on behalf of the Association, in its own right or in a fiduciary or representative capacity, as to the accuracy and completeness of any account, schedule of assets, or other document, instrument or paper requiring such certification. SIGNING AUTHORITY RESOLUTION Pursuant to Article V, Section 5.3 of the By -Laws Adopted October 15, 2009 RESOLVED that, pursuant to Section 5.3 of the By -Laws of the Association, authority be, and hereby is, granted to the President or any Executive Vice President, in such instances as in the judgment of any one of said officers may be proper and desirable, to authorize in writing from time -to - time any other officer, employee or individual to have the limited signing authority set forth in any one or more of the following paragraphs applicable only to the performance or discharge of the duties of such officer, employee or individual within his or her division or function: (A) All signing authority set forth in paragraphs (B) through (I) below except Level C which must be specifically designated. (B1) Individuals authorized to accept, endorse, execute or sign any bill receivable; certification; contract, document or other instrument evidencing, embodying a commitment with respect to, or reflecting the terms or conditions of, a loan or an extension of credit by the Association; note; and document, instrument or paper of any type, including stock and bond powers, required for purchasing, selling, transferring, exchanging or otherwise disposing of or dealing in foreign currency, derivatives or any form of securities, including options and futures thereon; in each case in transactions arising out of, or in connection with, the normal course of the Association's business. (B2) Individuals authorized to endorse, execute or sign any certification; disclosure notice required by law; document, instrument or paper of any type required for judicial, regulatory or administrative proceedings or filings; and legal opinions. (Cl) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in excess of $500,000,000 with single authorization for all transactions. (C2) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in excess of $500,000,000*. (C3) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $500,000,000. (C4) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount in excess of $100,000,000 but not to exceed $500,000,000*. (C5) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $100,000,000. (C6) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $10,000,000. (C7) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $5,000,000. (C8) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $1,000,000. (C9) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $250,000. (C10) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $50,000. (C11) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $5,000. *Dual authorization is required by any combination of senior officer and/or Sector Head approved designee for non-exempt transactions. Single authorization required for exempt transactions. (D1) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $1,000,000. (D2) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $250,000. (W) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $50,000. (W) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $5,000. (E) Authority to accept, endorse, execute or sign any guarantee of signature to assignments of stocks, bonds or other instruments; certification required for transfers and deliveries of stocks, bonds or other instruments; and document, instrument or paper of any type required in connection with any Individual Retirement Account or Keogh Plan or similar plan. (F) Authority to accept, endorse, execute or sign any certificate of authentication as bond, unit investment trust or debenture trustee and on behalf of the Association as registrar and transfer agent. (G) Authority to accept, endorse, execute or sign any bankers acceptance; letter of credit; and bill of lading. (H) Authority to accept, endorse, execute or sign any document, instrument or paper of any type required in connection with the ownership, management or transfer of real or personal property held by the Association in trust or in connection with any transaction with respect to which the Association is acting in any fiduciary, representative or agency capacity, including the acceptance of such fiduciary, representative or agency account. (I1) Authority to effect the external movement of free delivery of securities and internal transfers resulting in changes of beneficial ownership. (I2) Authority to effect the movement of securities versus payment at market or contract value. (J) Authority to either sign on behalf of the Association or to affix the seal of the Association to any of the following classes of documents: Trust Indentures, Escrow Agreements, Pooling and Servicing Agreements, Collateral Agency Agreements, Custody Agreements, Trustee's Deeds, Executor's Deeds, Personal Representative's Deeds, Other Real Estate Deeds for property not owned by the Association in its own right, Corporate Resolutions, Mortgage Satisfactions, Mortgage Assignments, Trust Agreements, Loan Agreements, Trust and Estate Accountings, Probate Petitions, responsive pleadings in litigated matters and Petitions in Probate Court with respect to Accountings, Contracts for providing customers with Association products or services. (N) Individuals authorized to accept, endorse, execute or sign internal transactions only, (i.e., general ledger tickets); does not include the authority to authorize external money movements, internal money movements or internal free deliveries that result in changes of beneficial ownership. (Pl) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in excess of $10,000,000. (P2) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $10,000,000. (P3) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $5,000,000. (N) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $1,000,000. (P5) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $250,000. (P6) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $100,000. (P7) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $50,000. (P8) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $25,000. (P9) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $10,000. (P10) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $5,000. (P11) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $3,000. RESOLVED, that any signing authority granted pursuant to this resolution may be rescinded by the President or any Executive Vice President and such signing authority shall terminate without the necessity of any further action when the person having such authority leaves the employ of the Association. Quint & Thimmig LLP 2/7/24 $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE OF TRUSTEE The undersigned hereby states and certifies: D2 (i) that the undersigned is an authorized officer of The Bank of New York Mellon Trust Company, N.A., acting as trustee (the "Trustee") under the Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Tustin Public Financing Authority (the "Authority") and the Trustee, and as such, is familiar with the facts herein certified and is authorized and qualified to execute and deliver this certificate on behalf of the Trustee; (ii) that the Trustee is a national banking association organized and existing under and by virtue of the laws of the United States of America, having the full power and being qualified to enter into and perform its duties under the Indenture; (iii) that the Trustee is duly authorized to enter into the Indenture and to authenticate and deliver the above -captioned bonds (the "Bonds") to Capital One Public Funding, LLC, as purchaser, pursuant to the terms of the Indenture; (iv) that the execution and delivery of the Indenture and compliance with the provisions on the Trustee's part contained therein, and the authentication and delivery of the Bonds will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Trustee is a party or is otherwise subject (except that no representation, warranty or agreement is made with respect to any federal or state securities or Blue Sky laws or regulations), nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the lien created by the Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Indenture; and - - 0#I{v) that there is no action, SLIit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, served on, or, to the best knowledge of the undersigned, threatened against, the Trustee, affecting the existence of the Trustee or the titles of its officers to their respective offices, or in any way contesting or affecting the validity or enforceability of the Indenture against the Trustee, or contesting the power of the Trustee or its authority to enter into, adopt or perform its obligations under the Indenture, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Indenture against the Trustee or the authentication and *ed* of the Bonds. 4FM br iy � � THE BANK OF NEWYOR 06 TRUST CPANY, N.A., as Trusts �y D rc }h Young Vi e President Quint & Thimmig LLP 2/10/24 $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) TRUSTEE'S RECEIPT OF PROCEEDS The undersigned hereby states and certifies: D3 (i) that the undersigned is an authorized officer of The Bank of New York Mellon Trust Company, N.A., acting as trustee (the "Trustee") under that certain Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Trustee and the Tustin Public Financing Authority (the "Authority"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the Trustee; (ii) that on the date hereof, the Trustee received from Capital One Public Funding, LLC, as purchaser (the "Purchaser") of the above -captioned bonds issued by the Authority (the "Bonds"), the amount of $4,125,000, representing the purchase price of the Bonds, and has deposited such amount this date pursuant to Section 3.02 of the Indenture, as follows: $4,000,000.00 Deposited into the Project Fund 125,000.00 Deposited into the Costs of Issuance Fund $4,125,000.00 TOTAL AMOUNT DEPOSITED THIS DATE (iii) and, that capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Indenture. Dated: February 14, 2024 THE BANK OF NEW YORK MELLON TRUST COMPA , N.A., as Trustee By Deborah Youlfg, Vice President FOLEY FOLEY & LAREINER LLP February 14, 2024 Tustin Public Financing Authority The City of Tustin Tustin, California Tustin, California ATTORNEYS AT LAW 321 NORTH CLARK STREET, SUITE 3000 CHICAGO, IL 60654-4672 312.832.4500 TEL 312.832.4700 FAX WWW.FOLEY.COM CLIENT/MATTER NUMBER 060853-0322 The Bank of New York Mellon Trust Capital One Public Funding Company, N.A., as Trustee Melville, New York Los Angeles, California Re: $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Ladies and Gentlemen: We have served as counsel to The Bank of New York Mellon Trust Company, N.A. (the "Trustee"), in connection with the issuance of the $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"). In our capacity as counsel to the Trustee, we have examined and are familiar with all necessary documentation relating to the authorization, execution, and delivery of the Indenture of Trust, dated as of February 1, 2024, between the Tustin Public Financing Authority (the "Authority") and the Trustee, as amended and supplemented from time to time (the "Indenture"),. This opinion is being furnished to you pursuant to Section 4(e)(v) the Bond Purchase Agreement, dated February 7, 2024, with respect to the Bonds, between the Authority, the City of Tustin and Capital One Public Funding, LLC as purchaser of the Bonds. In rendering the opinions set forth below, we have relied upon certificates dated this date of corporate officers of the Trustee with respect to the accuracy of the material factual matters which were contained in such certificates and not independently established by us. Each opinion expressed herein is given as of the date hereof, and we undertake no responsibility to advise you of any change or matter, whether of a factual or legal nature, that may occur or come to our attention after the date hereof. We express no opinion herein as to the creation, attachment, perfection or priority of any security interest, or as to compliance by the parties with the documents which are the subject of this opinion in connection with the closing on the date hereof of the transactions contemplated thereby, including without limitation compliance with conditions precedent to authentication or delivery of the Series 2023 Bonds. We express no opinion herein as to compliance with any federal or state securities laws that may be applicable. AUSTIN DETROIT MEXICO CITY SACRAMENTO TALLAHASSEE BOSTON HOUSTON MIAMI SALT LAKE CITY TAMPA CHICAGO JACKSONVILLE MILWAUKEE SAN DIEGO WASHINGTON, D.C. DALLAS LOS ANGELES NEW YORK SAN FRANCISCO BRUSSELS DENVER MADISON ORLANDO SILICON VALLEY TOKYO 4880-0854-3396.1 :FOLEY FOLEY & LARDNER LLP San Diego County Regional Airport Authority; Jefferies LLC.; and The Bank of New York Mellon Trust Company, N.A. October 25, 2023 Page 2 Based upon and subject to the foregoing, we are of the opinion that: 1. The Trustee is a national banking association organized and existing under the laws of the United States of America, having full power and being qualified to enter, accept and administer the trust created under the Indenture and to authenticate and deliver the Bonds. 2. The Bonds have been duly authenticated by the Trustee in accordance with the Indenture, and the Indenture has been duly authorized, executed and delivered by the Trustee and, assuming due authorization, execution and delivery thereof by the Authority, the Indenture constitutes a legal, valid and binding obligation of the Trustee enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles if equitable remedies are sought. 3. No authorization, approval, consent or order of any governmental agency is required for the valid authorization, execution, and delivery of the Indenture or the authentication of the Bonds by the Trustee. This opinion is delivered to you solely for your benefit in connection with the execution and delivery of the Indenture and the authentication and delivery of the Bonds on the date hereof, and it is not to be used, relied upon, circulated, quoted or otherwise referred to for any other purpose, or to or by any other person, without our express written consent. Respectfully, 4880-0854-3396.1 LENDER CERTIFICATE Dated: February 14, 2024 Capital One Public Funding, LLC, Melville, New York ("COPF") hereby certifies as follows with regard to the Water Revenue Bond, Series 2024 (Subordinate Lien) (the "Bond") in the principal amount of $4,125,000 issued by the Tustin Public Financing Authority (the "Authority") pursuant to an Indenture of Trust (the "Indenture") between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), debt service with respect to which will be paid from installment payments made by the City of Tustin (the "Borrower") under an Installment Sale Agreement (together with the Bond, the "Loan Obligation"): I. COPF has full power and authority to carry on its business as now conducted, deliver this Original Purchaser Certificate and make the representations and certifications contained herein. 2. COPF is a lender that regularly extends credit to state and local governments by making loans and acquiring repayment obligations that are evidenced by obligations such as the Loan Obligation; has knowledge and experience in financial and business matters that make it capable of evaluating the Borrower, the Loan Obligation and the risks associated with the extension of credit evidenced by the Loan Obligation; has the ability to bear the economic risk of extending the credit evidenced by the Loan Obligation; and is a limited liability company controlled by a bank engaged in the primary business of extending credit and making loans to state and local governments and non-profit entities and has total assets in excess of $1 billion. COPF is not acting as a broker, dealer, municipal securities underwriter, municipal advisor or fiduciary in connection with its extension of credit evidenced by the Loan Obligation. 3. COPF has conducted its own investigation of the financial condition of the Borrower, of the purpose for which the Loan Obligation is being executed and delivered, and of the security for the payment of the principal of and interest on the Loan Obligation and has obtained such information regarding the Loan Obligation and the Borrower and its operations, financial condition, and financial prospects as COPF deems necessary to make an informed lending decision with respect to its extension of credit evidenced by the Loan Obligation. 4. COPF extending credit to the Borrower evidenced by the Loan Obligation and is acquiring the interests in the Loan Obligation as a vehicle for making a commercial loan for its own loan account and with the present intention of holding the Loan Obligation to maturity or earlier prepayment, provided that COPF retains the right at any time to dispose of the Loan Obligation or any interest therein or portion thereof, but agrees that any such sale, transfer or distribution by COPF shall be made in accordance with applicable law and the provisions of the Loan Obligation and related documents only in whole to (a) an affiliate of COPF or (b) a bank, trust, custodian, insurance company, or other financial institution or an affiliate thereof. COPF and its assignees further retain the right to sell or assign participation interests in the Loan Obligation, in minimum amounts of $250,000, to an entity listed in 2471894.1 11338-0o5 (a) or (b) of this Section 4, provided that any participation, custodial, or similar agreement under which multiple ownership interests are created in the Loan Obligation shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, owner, servicer, or other fiduciary or agent acting on behalf of all of the assignees to act on their behalf with respect to the rights and "interests of the registered owner of the Loan Obligation, including with respect to the exercise of rights and remedies of the registered owner on behalf of such owners upon the occurrence of an event of default under the Loan Obligation. 5. COPF acknowledges that (a) the Loan Obligation (i) has not been registered under the Securities Act of 1933, as amended, (ii) has not been registered or otherwise qualified for sale under the securities laws of any state, and (iii) will not be listed on any securities exchange and (b) there is no established market for the Loan Obligation and that none is likely to develop. COPF understands and acknowledges that (a) its extension of credit evidenced by the Loan Obligation is not intended to be subject to the requirements of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended, and (b) in connection with COPF's extension of credit evidenced by the Loan Obligation, the Borrower has not prepared or caused to be prepared, any official statement, private placement memorandum or other offering document. b. COPF is acting solely for its own loan account and not as a fiduciary for the Borrower or in the capacity of broker, dealer, placement agent, municipal securities underwriter, municipal advisor, or fiduciary. COPF has not provided, and will not provide, financial, legal (including securities law), tax, accounting, or other advice to or on behalf of the Borrower (including to any municipal advisor or any placement agent engaged by the Borrower) with respect to the structuring, issuance, sale, or delivery of the Loan Obligation. COPF has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934, as amended, to the Borrower with respect to the transactions relating to the structuring, issuance, sale, or delivery of the Loan Obligation and the discussions, undertakings, and procedures leading thereto. Each of the Borrower, its municipal advisor, and its placement agent has sought and shall seek and obtain financial, legal (including securities law), tax, accounting, and other advice (including as it relates to structure, timing, terms, and similar matters and compliance with legal requirements applicable to such parties) with respect to the Loan Obligation from its own financial, legal, tax, and other advisors (and not from the undersigned or its affiliates) to the extent that the Borrower, its municipal advisor, or its placement agent desires to, should, or needs to obtain such advice_ COPF expresses no view regarding the legal sufficiency of its representations for purposes of compliance with any legal requirements applicable to any other party, including but not limited to the Borrower's municipal advisor or placement agent, or the correctness of any legal interpretation made by counsel to any other party, including but not limited to counsel to the Borrower's municipal advisor or placement agent, with respect to any such matters. The transactions between the Borrower and COPF are arm's-length, commercial transactions in which COPE is acting and has acted solely as a principal and for its own interest, and COPF has not made recommendations to the Borrower with respect to the transactions relating to the Loan Obligation. 7. COPF acknowledges and agrees that the Borrower and its placement agent take no responsibility for, and make no representation to COPF, or any subsequent purchaser, with regard to, a sale, transfer or other disposition of the Bond in violation of 2471894.1 11338-005 2 the provisions of the Indenture, or any securities law or income tax law consequences thereof. COPF also acknowledges that, with respect to the Borrower's obligations and liabilities, COPF is solely responsible for compliance with the restrictions on transfer of the Bond in connection with any subsequent transfer of the Bond made by COPF. 8. COPF acknowledges that the issuance of the Bond to COPF is made in reliance upon the certifications, representations, and warranties herein made for the benefit of the Borrower, its placement agent, the Authority, and the Trustee. 9. The interpretation of the provisions hereof shall be governed and construed in accordance with California law without regard to principles of conflicts of laws. 10. All representations of COPF contained in this letter shall survive the execution and delivery of the Bond to COPF as representations of fact existing as of the date of execution and delivery of this Lender Certificate. IN WITNESS WHEREOF, Capital One Public Funding, LLC, has caused this Lender Certificate to be executed by its officer thereunto duly authorized, all as of the day and year first above written. CAPITAL ONE PUBLIC FUNDING, LLC By: Name: k02J U Title: 247180.1 11338-005 Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) RECEIPT FOR BONDS 2/7/24 E1 The undersigned, on behalf of Capital One Public Funding, LLC, as purchaser, hereby acknowledges receipt this date of the following described bonds issued by the Tustin Public Financing Authority: "Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien)," in the aggregate principal amount of $4,125,000 and dated February 14, 2024, issued as one fully registered bond, without coupons, and duly authenticated by The .bank of New York Mellon Trust Company, N.A., as trustee. Dated: February 14, 2024 CAPITAL ONE PUBLIC FUNDING, LLC, as Purchaser By President NUMBER R-1 ***$4,125,000*** THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THIS BOND MAY BE TRANSFERRED ONLY IN WHOLE TO A TRANSFEREE PERMITTED BY SECTION 2.05 OF THE INDENTURE WHO DELIVERS TO THE TRUSTEE AND THE AUTHORITY AN EXECUTED REPRESENTATION LETTER SUBSTANTIALLY IN THE FORM SET FORTH IN THE INDENTURE. �\ UNITED STATES OF AMERICA STATE OF CALIF��- "- ORANGE COU TUSTIN PUBLIC FINANC Water Revenue Bond (Subordinate INTEREST RATE I MATIJCT j MUG SSUE DATE 4.820% 1, 20 FebjMry 14, 2024 REGISTERED OWNER: CA4TAL ONE P C U G LLC PRINCIPAL AMOUNT: F MILLION ONARED TWENT Y-FIVE F$�T SAND DOLL4,125,000) The TUSTIN P C NC1TaW HORITY, a public body corporate and politic, duly organize xis nder N laws of the State of California (the "Authority"), for value receiv , here ro to pa �o the Registered Owner specified above or registered assigns ( ister Owner, o e Maturity Date specified above, the Principal Amount specifi bov 1 I money`` e United States of America, and to pay interest thereon in like mone m the Inte t Payment Date (as hereinafter defined) next preceding the dat f authenticati f this Bond unless (i) this Bond is authenticated on or before an Interest Pay t D aft e lose of business on the fifteenth day of the month preceding such intere n e, i 'ch event it shall bear interest from such Interest Payment Date, or (ii) this and is au en cated on or before September 15, 2024, in which event it shall bear interest from the Or inal Issue Date specified above; provided, however, that if at the time of authenticatio Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Pa ent Date to which interest has previously been paid or made available for payment on this Bond, at the Interest Rate per annum specified above, payable semiannually on April 1 and October 1 in each year, commencing October 1, 2024 (collectively, the "Interest Payment Dates"), calculated on the basis of a 360-day year composed of twelve 30-day months. The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee")shall pay If the Default Rate or the Taxable Rate (each as defined in the Indenture) is in effect, interest will be computed by applying such alternate rate. TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bond, Series 2024 (Subordinate Lien) Page 1 principal of and interest on this Bond when due by wire transfer (or other form of electronic payment) in immediately available funds to the Registered Owner hereof as of the Record Date in accordance with such wire transfer instructions as shall be filed by the Registered Owner with the Trustee from time to time, or, with the Registered Owner's consent, by another commercially reasonable method of payment, to an account in the United States designated by the Registered Owner. Payments of principal of this Bond shall be made without the requirement for presentation and surrender of the Bond by the Registered Owner, provided that principal of the Bond that is payable at final maturity shall be made only upon presentation and surrender thereof at the corporate trust office (the "Trust Office") ofX Trustee in Los Angeles, California, or such other place as designated by the Trustee.. This Bond is not a debt of the City of Tustin (the "City"), Orange Coun he State of California, or any of its political subdivisions, and neither the City, n , sai tate, nor any of its political subdivisions, is liable hereon nor in any event all le out of any funds or properties of the Authority other than the ReveAVek This Bond is one of a duly authorized issue of bonds of the Authority signated as the "Tustin Public Financing Authority Water Revenue BoAt, Series 2024 (S;Vbordi ien)" (the "Bonds"), in an aggregate principal amount of four m -- one hundred twktye thousand dollars ($4,125,000), all of like tenor and date (except suchYIE, ny, as may be required to designate varying numbers, maturities or interest rateed pursuant to the provisions of Article 4 of Chapter 5 of Di ' 'on 7 of Title 1 (coh section 6584) of the California Government Code (the "B " , and pursunture of Trust, dated as of February 1, 2024, by and be en th d t"Indenture"), and a resolution of the Board of Di of the u adapted on February 6, 2024, authorizing the issuance of the Bo Re ce is eby e to the Indenture (copies of which are on file at the office of Au on nd all s Igments thereto for a description of the terms on which the Bonds a issued, the provisions wiregard to the nature and extent of the Revenues, and the rights th eunder of the owNond, of the Bonds and the rights, duties and immunities of the Truste nd t e rights and obligs of the Authority thereunder, to all of the provisions of whic the egist ed Owner of by acceptance hereof, assents and agrees. The Bon ave uthority to aid in financing the acquisition and construction e n im ements d facilities (the "2024 Project") which constitute part of the water rprise of the to sold to the City by the Authority pursuant to an Installment Agreee_nent, of February 1, 2024, by and between the Authority as seller the a� purchaser e "Installment Sale Agreement"). The City's obligations and the stall m Sale Agree ent will be subordinate to the City's obligations with respect to payment of service on its City of Tustin (Orange County, California) 2016 Water Refu B nd its City of Tustin (Orange County, California) Taxable Water Refun 0!%eon , Series 2020. This Flond Jd the interest hereon and all other Bonds and the interest thereon are special obligatlk4oWf the Authority, and are payable from, and are secured by a charge and lien on the Revenues as defined in the Indenture, consisting primarily of installment payments to be made by the City under the Installment Sale Agreement as the purchase price for the 2024 Project. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest on the Bonds. The rights and obligations of the Authority and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in Exhibit A Page 2 the Indenture, but no such modification or amendment shall extend the fixed maturity of any Bonds, or reduce the amount of principal thereof, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the owner of each Bond so affected. The Bonds are subject to redemption, at the option of the City on or after April 1, 2034, as a whole on any date or in part on any Interest Payment Date, from any available source of funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, witho premium. The Bonds are also subject to mandatory redemption from sinking ac nt payments made by the Authority, on April 1, 2025, and on April 1 in each year thereafter to including April 1, 2044, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, out premium, as set forth in the following table: Wow Redemption Date Principal (April 1) Amount 2025 2026 2027 2028 2029 2030 2031 2032 $105,000 135,000 140,000 145,000 155,000 160,000 170,000 180,000 I As providedhe Indenture, notice of redemption shall be mailed by the Trustee by first class mail not les than thirty (30) nor more than sixty (60) days prior to the redemption date to the respective ovrhers of any Bonds designated for redemption at their addresses appearing on there .stration books of the Trustee, but neither failure to receive such notice nor any defect in the no ce so mailed shall affect the sufficiency of the proceedings for redemption or the cessatio crual of interest thereon from and after the date fixed for redemption. If this Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption. If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect Exhibit A Page 3 provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture. Ownership of this Bond may be transferred in whole only and only to a (i) an affiliate of the Registered Owner or (ii) a bank, trust, custodian, insurance company or other financial institution or an affiliate thereof, in each case that executes and delivers to the Trustee a representation letter in substantially the form attached to the Indenture as Exhibit B. Nothing herein limits the right of the Registered Owner to sell or as 'gn participation interests in the Bond, in minimum amounts of $250,000, to one or more enti ' 'sted in (i) or (ii) above, provided that any participation, custodial or similar agreement unde'NqoLhich multiple ownership interests in the Bond are created shall provide the method by which Xowners of such interests shall establish the rights and duties of a single enti servicer or other fiduciary or agent acting on behalf of all of such owners (a loan e vi r them behalf with respect to the rights and interests of the Registered Ow clud wit the exercise of rights and remedies of the Registered Owner o ehal of su owners upon the occurrence of an event of default under the Indenture. The Authority and the Trustee may treat the tere er her a4Ehe absolute owner hereof for all purposes, and the Authority andW ee 1 not b ffected by any notice to the contrary. It is hereby certified that all of the t dition an r Oixired to exist, to have happened or to have been performed p eden iss e of this Bond do exist, have happened or have been performe ue an e, f m and manner as required by the Bond Law and the laws o State of Cali is a at the amount of this Bond, together with all other indebted so e Authority, s of exceed any limit prescribed by the Bond Law or any laws of th tate of California, and is in excess of the amount of Bonds permitted to be issued under th ndenture. This Bond shall t e Y ed to an be filunder the Indenture or become valid or obligatory for any pu ose u til ertificate authentication hereon endorsed shall have been signed by the e. J Exhibit A Page 4 IN WITNESS WHEREOF, the Tustin Public Financing Authority has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Chair and attested to by the facsimile signature of its Secretary, all as of the Original Issue Date. TUSTIN PUBLIC FINANCING AUTHORITY By hair Attest: By 15i[x � Secretary Z AUTHENTICATION ,,"9� n-me dNn*r> TRUSTEE'S CERTIFICATE OF Exhibit A Page 5 NEW YORK MELLON ANY, N.A., as Trustee Authorized Signatory ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the registration books of the Trustee the premises. Dated: Signature Guaranteed: Notice: Signature guarantee shall be made by a Notice: guarantor institution participating in the Securiti resF Transfer Agents Medallion Program or in such o r guarantee program acceptable to the Trustee. e Exhibit A Page 6 in F assignment must ritten on the face of without alteration or LENDER CERTIFICATE Dated: February 14, 2024 Capital One Public Funding, LLC, Melville, New York ("COPF") hereby certifies as follows with regard to the Water Revenue Bond, Series 2024 (Subordinate Lien) (the "Bond") in the principal amount of $4,125,000 issued by the Tustin Public Financing Authority (the "Authority") pursuant to an Indenture of Trust (the "Indenture") between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), debt service with respect to which will be paid from installment payments made by the City of Tustin (the "Borrower") under an Installment Sale Agreement (together with the Bond, the "Loan Obligation"): I. COPF has full power and authority to carry on its business as now conducted, deliver this Original Purchaser Certificate and make the representations and certifications contained herein. 2. COPF is a lender that regularly extends credit to state and local governments by making loans and acquiring repayment obligations that are evidenced by obligations such as the Loan Obligation; has knowledge and experience in financial and business matters that make it capable of evaluating the Borrower, the Loan Obligation and the risks associated with the extension of credit evidenced by the Loan Obligation; has the ability to bear the economic risk of extending the credit evidenced by the Loan Obligation; and is a limited liability company controlled by a bank engaged in the primary business of extending credit and making loans to state and local governments and non-profit entities and has total assets in excess of $1 billion. COPF is not acting as a broker, dealer, municipal securities underwriter, municipal advisor or fiduciary in connection with its extension of credit evidenced by the Loan Obligation. 3. COPF has conducted its own investigation of the financial condition of the Borrower, of the purpose for which the Loan Obligation is being executed and delivered, and of the security for the payment of the principal of and interest on the Loan Obligation and has obtained such information regarding the Loan Obligation and the Borrower and its operations, financial condition, and financial prospects as COPF deems necessary to make an informed lending decision with respect to its extension of credit evidenced by the Loan Obligation. 4. COPF extending credit to the Borrower evidenced by the Loan Obligation and is acquiring the interests in the Loan Obligation as a vehicle for making a commercial loan for its own loan account and with the present intention of holding the Loan Obligation to maturity or earlier prepayment, provided that COPF retains the right at any time to dispose of the Loan Obligation or any interest therein or portion thereof, but agrees that any such sale, transfer or distribution by COPF shall be made in accordance with applicable law and the provisions of the Loan Obligation and related documents only in whole to (a) an affiliate of COPF or (b) a bank, trust, custodian, insurance company, or other financial institution or an affiliate thereof. COPF and its assignees further retain the right to sell or assign participation interests in the Loan Obligation, in minimum amounts of $250,000, to an entity listed in 2471894.1 11338-0o5 (a) or (b) of this Section 4, provided that any participation, custodial, or similar agreement under which multiple ownership interests are created in the Loan Obligation shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, owner, servicer, or other fiduciary or agent acting on behalf of all of the assignees to act on their behalf with respect to the rights and "interests of the registered owner of the Loan Obligation, including with respect to the exercise of rights and remedies of the registered owner on behalf of such owners upon the occurrence of an event of default under the Loan Obligation. 5. COPF acknowledges that (a) the Loan Obligation (i) has not been registered under the Securities Act of 1933, as amended, (ii) has not been registered or otherwise qualified for sale under the securities laws of any state, and (iii) will not be listed on any securities exchange and (b) there is no established market for the Loan Obligation and that none is likely to develop. COPF understands and acknowledges that (a) its extension of credit evidenced by the Loan Obligation is not intended to be subject to the requirements of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended, and (b) in connection with COPF's extension of credit evidenced by the Loan Obligation, the Borrower has not prepared or caused to be prepared, any official statement, private placement memorandum or other offering document. b. COPF is acting solely for its own loan account and not as a fiduciary for the Borrower or in the capacity of broker, dealer, placement agent, municipal securities underwriter, municipal advisor, or fiduciary. COPF has not provided, and will not provide, financial, legal (including securities law), tax, accounting, or other advice to or on behalf of the Borrower (including to any municipal advisor or any placement agent engaged by the Borrower) with respect to the structuring, issuance, sale, or delivery of the Loan Obligation. COPF has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934, as amended, to the Borrower with respect to the transactions relating to the structuring, issuance, sale, or delivery of the Loan Obligation and the discussions, undertakings, and procedures leading thereto. Each of the Borrower, its municipal advisor, and its placement agent has sought and shall seek and obtain financial, legal (including securities law), tax, accounting, and other advice (including as it relates to structure, timing, terms, and similar matters and compliance with legal requirements applicable to such parties) with respect to the Loan Obligation from its own financial, legal, tax, and other advisors (and not from the undersigned or its affiliates) to the extent that the Borrower, its municipal advisor, or its placement agent desires to, should, or needs to obtain such advice_ COPF expresses no view regarding the legal sufficiency of its representations for purposes of compliance with any legal requirements applicable to any other party, including but not limited to the Borrower's municipal advisor or placement agent, or the correctness of any legal interpretation made by counsel to any other party, including but not limited to counsel to the Borrower's municipal advisor or placement agent, with respect to any such matters. The transactions between the Borrower and COPF are arm's-length, commercial transactions in which COPE is acting and has acted solely as a principal and for its own interest, and COPF has not made recommendations to the Borrower with respect to the transactions relating to the Loan Obligation. 7. COPF acknowledges and agrees that the Borrower and its placement agent take no responsibility for, and make no representation to COPF, or any subsequent purchaser, with regard to, a sale, transfer or other disposition of the Bond in violation of 2471894.1 11338-005 2 the provisions of the Indenture, or any securities law or income tax law consequences thereof. COPF also acknowledges that, with respect to the Borrower's obligations and liabilities, COPF is solely responsible for compliance with the restrictions on transfer of the Bond in connection with any subsequent transfer of the Bond made by COPF. 8. COPF acknowledges that the issuance of the Bond to COPF is made in reliance upon the certifications, representations, and warranties herein made for the benefit of the Borrower, its placement agent, the Authority, and the Trustee. 9. The interpretation of the provisions hereof shall be governed and construed in accordance with California law without regard to principles of conflicts of laws. 10. All representations of COPF contained in this letter shall survive the execution and delivery of the Bond to COPF as representations of fact existing as of the date of execution and delivery of this Lender Certificate. IN WITNESS WHEREOF, Capital One Public Funding, LLC, has caused this Lender Certificate to be executed by its officer thereunto duly authorized, all as of the day and year first above written. CAPITAL ONE PUBLIC FUNDING, LLC By: Name: k02J U Title: 247180.1 11338-005 Ca ita� l � p � Public Funding January 29, 2024 City of Tustin 300 Centennial Way Tustin, CA 92780 Re: Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien), evidencing a loan to be made by Capital One Public Funding, LLC, for the benefit of the City of Tustin, California Ladies and Gentlemen: Thank you for selecting Capital One Public Funding, LLC ("COPF"), as your financing source. We are delivering this letter to describe our role in the above -referenced financing and to assist with documenting certain aspects of the transaction. COPF is not undertaking to act as a municipal advisor to you or any other person within the meaning of Section 15B of the Securities Exchange Act of 1934 and the municipal advisor rules of the Securities and Exchange Commission (Rule 1513a1-1 et seq.). We have no fiduciary duty to you or to any other person in connection with this transaction and intend only to enter into an arm's-length transaction involving extending credit to you through the direct funding of this transaction. All direct or indirect communications you have or will receive from us regarding this transaction consist solely of general information or the terms under which COPF may be willing to fund this transaction for COPF's own account. COPF is not recommending that you take an action with respect to this information, and you should discuss this information with such financial, tax, legal and other advisors as you deem appropriate. We understand that you will consult with and rely on the advice of your own municipal, financial, tax, legal and other advisors as you deem appropriate in connection with this transaction, including, in particular, Fieldman, Rolapp & Associates, Inc., an independent registered municipal advisor. Please sign and return the attached representation letter (Attachment 1) by e-mail to our counsel, Kronick, Moskovitz, Tiedemann & Girard (e-mail: jcristy@kmtg.com). In addition, we have attached hereto the form of our lender certificate (Attachment 2), which further describes our role in this transaction. We intend to execute and deliver to you a certificate in this form (or substantially similar) at closing. Your execution and delivery of the representation letter will also confirm your receipt and understanding of the disclosures regarding COPF's role in this transaction that are set out in the second paragraph of this letter and the attached form of COPF lender certificate and are required pursuant to Rule 15Ba1-1(d)(3)(vi)(C). 2470416.2 11338-005 City of Tustin January 29, 2024 Page 2 Please let us know if you, your advisors or your counsel would like to further discuss these documentation matters or if you have any questions about our role. Thank you again for doing business with us. We look forward to working with you. Sincerely, 1`17 aw--kL) J�� Senior Vice President CAPITAL ONE PUBLIC FUNDING, LLC 2470416.2 11338-005 REPRESENTATION LETTER , 2024 Capital One Public Funding, LLC 1307 Walt Whitman Road, 3rd Floor Melville, NY 11747 Attn.: Maryann Santos Re: Independent Registered Municipal Advisor Representation in connection with the Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien), evidencing a loan to be made by Capital One Public Funding, LLC, for the benefit of the City of Tustin, California Dear Ms. Santos: We are writing to provide you with certain representations pursuant to the municipal advisor rules of the Securities and Exchange Commission (Rules 1513al-1 to 1513al-8 and 15Bc4-1) (the "Municipal Advisor Rules") adopted by the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Act"), regarding our independent registered municipal advisor. Pursuant to paragraph (d)(3)(vi)(B) of Rule 1513al-1, we hereby represent to you that, with respect to the transaction described above, we are represented by, and will rely on the advice of, Fieldman, Rolapp & Associates, Inc. (the "Advisor"), regarding matters relating to the issuance of municipal securities and municipal financial products (as such terms are defined in the Municipal Advisor Rules and the Act). As used in the preceding sentence, "rely on" means that we will seek and consider, though not necessarily follow, the advice, analysis, and perspective of the Advisor. You may rely on this representation letter until such time as you receive notice from us. Sincerely, CITY OF TUSTIN Its: 2470416.2 11338-005 Attachment 1 FORM OF LENDER CERTIFICATE Dated: February _, 2024 Capital One Public Funding, LLC, Melville, New York ("COPF") hereby certifies as follows with regard to the Water Revenue Bond, Series 2024 (Subordinate Lien) (the "Bond") in the principal amount of $4,125,000 issued by the Tustin Public Financing Authority (the `Authority ") pursuant to an Indenture of Trust (the `Indenture ") between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee "), debt service with respect to which will be paid from installment payments made by the City of Tustin (the "Borrower") under an Installment Sale Agreement (together with the Bond, the "Loan Obligation "): 1. COPF has full power and authority to carry on its business as now conducted, deliver this Original Purchaser Certificate and make the representations and certifications contained herein. 2. COPF is a lender that regularly extends credit to state and local governments by making loans and acquiring repayment obligations that are evidenced by obligations such as the Loan Obligation; has knowledge and experience in financial and business matters that make it capable of evaluating the Borrower, the Loan Obligation and the risks associated with the extension of credit evidenced by the Loan Obligation; has the ability to bear the economic risk of extending the credit evidenced by the Loan Obligation; and is a limited liability company controlled by a bank engaged in the primary business of extending credit and making loans to state and local governments and non-profit entities and has total assets in excess of $1 billion. COPF is not acting as a broker, dealer, municipal securities underwriter, municipal advisor or fiduciary in connection with its extension of credit evidenced by the Loan Obligation. 3. COPF has conducted its own investigation of the financial condition of the Borrower, of the purpose for which the Loan Obligation is being executed and delivered, and of the security for the payment of the principal of and interest on the Loan Obligation and has obtained such information regarding the Loan Obligation and the Borrower and its operations, financial condition, and financial prospects as COPF deems necessary to make an informed lending decision with respect to its extension of credit evidenced by the Loan Obligation. 4. COPF extending credit to the Borrower evidenced by the Loan Obligation and is acquiring the interests in the Loan Obligation as a vehicle for making a commercial loan for its own loan account and with the present intention of holding the Loan Obligation to maturity or earlier prepayment, provided that COPF retains the right at any time to dispose of the Loan Obligation or any interest therein or portion thereof, but agrees that any such sale, transfer or distribution by COPF shall be made in accordance with applicable law and the provisions of the Loan Obligation and related documents only in whole to (a) an affiliate of COPF or (b) a bank, trust, custodian, insurance company, or other financial institution or an affiliate thereof. COPF and its assignees further retain the right to sell or assign participation interests in the Loan Obligation, in minimum amounts of $250,000, to an entity listed in (a) or (b) of this Section 4, provided that any participation, custodial, or similar agreement under which multiple ownership interests are created in the Loan Obligation shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, owner, servicer, or other fiduciary or agent acting on behalf of all of the assignees to act on their behalf with respect to the rights and interests of the registered owner of the Loan Obligation, including with respect to the exercise of 2470416.2 11338-005 1 Attachment 2 rights and remedies of the registered owner on behalf of such owners upon the occurrence of an event of default under the Loan Obligation. 5. COPF acknowledges that (a) the Loan Obligation (i) has not been registered under the Securities Act of 1933, as amended, (ii) has not been registered or otherwise qualified for sale under the securities laws of any state, and (iii) will not be listed on any securities exchange and (b) there is no established market for the Loan Obligation and that none is likely to develop. COPF understands and acknowledges that (a) its extension of credit evidenced by the Loan Obligation is not intended to be subject to the requirements of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended, and (b) in connection with COPF's extension of credit evidenced by the Loan Obligation, the Borrower has not prepared or caused to be prepared, any official statement, private placement memorandum or other offering document. 6. CON is acting solely for its own loan account and not as a fiduciary for the Borrower or in the capacity of broker, dealer, placement agent, municipal securities underwriter, municipal advisor, or fiduciary. COPF has not provided, and will not provide, financial, legal (including securities law), tax, accounting, or other advice to or on behalf of the Borrower (including to any municipal advisor or any placement agent engaged by the Borrower) with respect to the structuring, issuance, sale, or delivery of the Loan Obligation. COPF has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934, as amended, to the Borrower with respect to the transactions relating to the structuring, issuance, sale, or delivery of the Loan Obligation and the discussions, undertakings, and procedures leading thereto. Each of the Borrower, its municipal advisor, and its placement agent has sought and shall seek and obtain financial, legal (including securities law), tax, accounting, and other advice (including as it relates to structure, timing, terms, and similar matters and compliance with legal requirements applicable to such parties) with respect to the Loan Obligation from its own financial, legal, tax, and other advisors (and not from the undersigned or its affiliates) to the extent that the Borrower, its municipal advisor, or its placement agent desires to, should, or needs to obtain such advice. CON expresses no view regarding the legal sufficiency of its representations for purposes of compliance with any legal requirements applicable to any other party, including but not limited to the Borrower's municipal advisor or placement agent, or the correctness of any legal interpretation made by counsel to any other party, including but not limited to counsel to the Borrower's municipal advisor or placement agent, with respect to any such matters. The transactions between the Borrower and COPF are arm's-length, commercial transactions in which COPF is acting and has acted solely as a principal and for its own interest, and COPF has not made recommendations to the Borrower with respect to the transactions relating to the Loan Obligation. 7. COPF acknowledges and agrees that the Borrower and its placement agent take no responsibility for, and make no representation to COPF, or any subsequent purchaser, with regard to, a sale, transfer or other disposition of the Bond in violation of the provisions of the Indenture, or any securities law or income tax law consequences thereof. COPF also acknowledges that, with respect to the Borrower's obligations and liabilities, COPF is solely responsible for compliance with the restrictions on transfer of the Bond in connection with any subsequent transfer of the Bond made by COPF. 8. COPF acknowledges that the issuance of the Bond to COPF is made in reliance upon the certifications, representations, and warranties herein made for the benefit of the Borrower, its placement agent, the Authority, and the Trustee. 2470416.2 11338-005 2 9. The interpretation of the provisions hereof shall be governed and construed in accordance with California law without regard to principles of conflicts of laws. 10. All representations of COPF contained in this letter shall survive the execution and delivery of the Bond to COPF as representations of fact existing as of the date of execution and delivery of this Lender Certificate. IN WITNESS WHEREOF, Capital One Public Funding, LLC, has caused this Lender Certificate to be executed by its officer thereunto duly authorized, all as of the day and year first above written. By: _ Name: Title: CAPITAL ONE PUBLIC FUNDING, LLC 2470416.2 11338-005 Capital Q •Public Funding January 29, 2024 Fieldman, Rolapp & Associates, Inc. 1900 MacArthur Boulevard, Suite 1100 Irvine, CA 92612 Re: Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien), evidencing a loan to be made by Capital One Public Funding, LLC, for the benefit of the City of Tustin, California Ladies and Gentlemen: We are requesting that your client, the City of Tustin, disclose in the attached letter that they are represented by your firm and will "rely on" your advice (within the meaning of paragraph (d)(3)(vi)(B) of Securities and Exchange Commission Rule 15Ba1-1, the "Municipal Advisor Rules"), i.e., that they will seek and consider, though not necessarily follow, your advice, analysis, and perspective as their advisor, with respect to the above -referenced transaction in which Capital One Public Funding, LLC, is acting as lender. Please sign where indicated below and return via email to our counsel, Kronick, Moskovitz, Tiedemann & Girard (e-mail: jcristy@kmtg.com) to acknowledge that (i) your firm is registered as a municipal advisor with the SEC and the Municipal Securities Rulemaking Board and (ii) the Associated Individuals (as defined in the guidance of the SEC's Office of Municipal Securities under the Municipal Advisor Rules and the rules and regulations thereunder) for purposes of your firm's representation of the City of Tustin have not been employed by Capital One Public Funding, LLC, or its affiliates in the past two years. Sincerely, 111a7 jz�O_T Senior Vice President CAPITAL ONE PUBLIC FUNDING, LLC ACKNOWLEDGED AND AGREED TO: FIELDMAN, ROLAPP & ASSOCIATES, INC. By: --2-- �-- Authorized Representative 2470442.1 11338-005 REPRESENTATION LETTER , 2024 Capital One Public Funding, LLC 1307 Walt Whitman Road, 3rd Floor Melville, NY 11747 Attn.: Maryann Santos Re: Independent Registered Municipal Advisor Representation in connection with the Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien), evidencing a loan to be made by Capital One Public Funding, LLC, for the benefit of the City of Tustin, California Dear Ms. Santos: We are writing to provide you with certain representations pursuant to the municipal advisor rules of the Securities and Exchange Commission (Rules 15Bal-1 to 1513al-8 and 15Bc4-1) (the "Municipal Advisor Rules") adopted by the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Act"), regarding our independent registered municipal advisor. Pursuant to paragraph (d)(3)(vi)(B) of Rule 1513al-1, we hereby represent to you that, with respect to the transaction described above, we are represented by, and will rely on the advice of, Fieldman, Rolapp & Associates, Inc. (the "Advisor"), regarding matters relating to the issuance of municipal securities and municipal financial products (as such terms are defined in the Municipal Advisor Rules and the Act). As used in the preceding sentence, "rely on" means that we will seek and consider, though not necessarily follow, the advice, analysis, and perspective of the Advisor. You may rely on this representation letter until such time as you receive notice from us. Sincerely, CITY OF TUSTIN By: Its: 2470442.1 11338-005 REPRESENTATION LETTER January 30, 2024 Capital One Public Funding, LLC 1307 Walt Whitman Road, 3rd Floor Melville, NY 11747 Attn.: Maryann Santos Re: Independent Registered Municipal Advisor Representation in connection with the Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien), evidencing a loan to be made by Capital One Public Funding, LLC, for the benefit of the City of Tustin, California Dear Ms. Santos: We are writing to provide you with certain representations pursuant to the municipal advisor rules of the Securities and Exchange Commission (Rules 1513al-1 to 1513al-8 and 1513c4-1) (the "Municipal Advisor Rules ") adopted by the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Act"), regarding our independent registered municipal advisor. Pursuant to paragraph (d)(3)(vi)(B) of Rule 1513al-1, we hereby represent to you that, with respect to the transaction described above, we are represented by, and will rely on the advice of, Fieldman, Rolapp & Associates, Inc. (the "Advisor "), regarding matters relating to the issuance of municipal securities and municipal financial products (as such terms are defined in the Municipal Advisor Rules and the Act). As used in the preceding sentence, "rely on" means that we will seek and consider, though not necessarily follow, the advice, analysis, and perspective of the Advisor. You may rely on this representation letter until such time as you receive notice from us. Sincerely, CITY OF TUSTIN By: _ � 4� �% Jenr9jr King, Finance Director Quint & Thimmig attorneys at law February 14, 2024 Board of Directors of the Tustin Public Financing Authority 300 Centennial Way Tustin, California 92780 OPINION: $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Members of the Board of Directors: We have acted as bond counsel in connection with the delivery by the Tustin Public Financing Authority (the "Authority") of $4,125,000 aggregate principal amount of the bonds of the Authority designated the "Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien)" (the 'Bonds"), pursuant to the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Law"), and pursuant to an indenture of trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee, and a resolution of the governing body of the Authority adopted on February 6, 2024. The Bonds are secured by Revenues as defined in the Indenture, including installment payments (the "Installment Payments") made by the City of Tustin (the "City") under an installment sale agreement, dated as of February 1, 2024 (the "Installment Sale Agreement"), by and between the Authority, as seller, and the City, as purchaser. We have examined the Law and such certified proceedings and other papers as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the Authority and the City contained in the Indenture and the Installment Sale Agreement and in the certified proceedings, and upon other certifications furnished to us, without undertaking to verify the same by independent investigation. Based upon our examination we are of the opinion, under existing law, that: 1. The Authority is a joint exercise of powers entity and public entity duly organized and existing under the laws of the State of California, with power to enter into the Indenture, to perform the agreements on its part contained therein and to issue the Bonds. 2. The Bonds constitute legal, valid and binding special obligations of the Authority enforceable in accordance with their terms and payable solely from the sources provided therefor in the Indenture. 20027.04 Tustin Public Financing Authority February 14, 2024 Page 2 3. The Indenture has been duly authorized, executed and delivered by the Authority and constitutes a legal, valid and binding obligation of the Authority enforceable against the Authority in accordance with its terms. 4. The Indenture establishes a valid first and exclusive lien on and pledge of the Revenues (as such term is defined in the Indenture) and other funds pledged thereby for the security of the Bonds, in accordance with the terms of the Indenture. 5. The Installment Sale Agreement has been duly authorized, executed and delivered by the Authority and constitutes a legal, valid and binding obligation of the Authority enforceable against the Authority in accordance with its terms. 6. The City is a municipal corporation duly organized and existing under the laws of the State of California, with power to enter into the Installment Sale Agreement and to perform the agreements on its part contained therein. 7. The Installment Sale Agreement has been duly authorized, executed and delivered by the City and constitutes a legal, valid and binding obligation of the City enforceable against the City in accordance with its terms. 8. The Installment Sale Agreement establishes a valid first and exclusive lien on and pledge of the Pledged Net Revenues (as such term is defined in the Indenture) and other funds pledged thereby for the security of the Installment Sale Agreement, in accordance with the terms of the Installment Sale Agreement. 9. Subject to the Authority's and the City's compliance with certain covenants, interest on the Bonds is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals under the Internal Revenue Code of 1986, as amended (the "Code"). Interest on the Bonds may affect the corporate alternative minimum tax for certain corporations. Failure to comply with certain of such covenants could cause interest on the Bonds to be includable in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. It is also our opinion that the Bonds are a "qualified tax exempt obligations" under section 265(b)(3) of the Code. 10. Interest on the Bonds is exempt from personal income taxation imposed by the State of California. Ownership of the Bonds may result in other tax consequences to certain taxpayers, and we express no opinion regarding any such collateral consequences arising with respect to the Bonds. The rights of the owners of the Bonds and the enforceability of the Bonds, the Indenture and the Installment Sale Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and also may be subject to the exercise of judicial discretion in accordance with general principles of equity. Tustin Public Financing Authority February 14, 2024 Page 3 With respect to the opinions expressed herein, the enforceability of the Installment Sale Agreement is subject to the limitations on the imposition of certain fees and charges by the City related to its municipal water system under Articles XIIIC and XIIID of the California Constitution. In addition, the rights of the owners of the Bonds and the enforceability of the Bonds and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and also may be subject to the exercise of judicial discretion in accordance with general principles of equity. In rendering this opinion, we have relied upon certifications of the Authority, the City and others with respect to certain material facts. Our opinion represents our legal judgment based upon such review of the law and the facts that we deem relevant to render our opinion and is not a guarantee of a result. This opinion is given as of the date hereof and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Respectfully submitted, d+-. Quid & ThimmigLLP attorneys at law February 14, 2024 Capital One Public Funding, LLC 1307 Walt Whitman Road, 3rd Floor Melville, New York 11747 F2 SUPPLEMENTAL OPINION: $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Ladies and Gentlemen: We have acted as bond counsel to the Tustin Public Financing Authority (the "Authority") in connection with the issuance by the Authority of its Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien), in the aggregate principal amount of $4,125,000 (the 'Bonds"), issued pursuant to the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Law"), and pursuant to an Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). We have examined the Indenture; the Commitment Agreement, dated February 7, 2024 (the "Purchase Agreement"), by Capital One Public Funding, LLC, as purchaser, and as accepted by the Authority and the City of Tustin (the "City"); the Installment Sale Agreement, dated as of February 1, 2024, by and between the Authority, as seller, and the City, as purchaser; and such certified proceedings and other papers as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the Authority and the City contained in the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement. Based upon our examination we are of the opinion, under existing law, that: 1. The Purchase Agreement has been duly authorized, executed and delivered by the Authority and the City, and assuming the valid execution and delivery by the Purchaser, is valid and binding upon the Authority and the City enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally. 2. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939. Respectfully submitted, ?c,^4 4-� t-l(le Quid & Thimmig attorneys at law F3 February 14, 2024 Capital One Public Funding, LLC 1307 Walt Whitman Road, 3rd Floor Melville, NY 11747 The Bank of New York Mellon Trust Company, N.A. 300 South Hope Street, Suite 2525 Los Angeles, CA 90071 RELIANCE LETTER Regarding Final Approving Legal Opinion: $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Ladies and Gentlemen: We have this day released to the Tustin Public Financing Authority our final approving legal opinion with respect to the captioned financing. The foregoing opinion may be relied upon by Capital One Public Funding, LLC, as purchaser, and by The Bank of New York Mellon Trust Company, N.A., as trustee, to the same extent as if such opinion was addressed to them. Respectfully submitted, STIFEL SOURCES AND USES OF FUNDS Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) **************************************************************************************************** Reflects Terms from Capital One **************************************************************************************************** Dated Date 02/14/2024 Delivery Date 02/14/2024 Sources: Bond Proceeds Par Amount 4,125,000.00 4,125,000.00 Uses: Project Fund Deposits: Project Fund Delivery Date Expenses: Cost of Issuance 4,000,000.00 125,000.00 4,125, 000.00 Notes: 1. Preliminary, subject to change 2. Analysis reflects financing necessary to raise $4 million in project funds 3. Capital One provided interest rate from RFP on January 18, 2024 4. Cost of issuance provided by Fieldman on January 22, 2024 Prepared by Stifel, Nicolaus & Company, Inc. (I-C) Page 1 STIFEL BOND SUMMARY STATISTICS Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) **************************************************************************************************** Reflects Terms from Capital One **************************************************************************************************** Dated Date 02/14/2024 Delivery Date 02/14/2024 First Coupon 10/01/2024 Last Maturity 04/01/2044 Arbitrage Yield 4.818944% True Interest Cost (TIC) 4.818944% Net Interest Cost (NIC) 4.820000% All -In TIC 5.173513% Average Coupon 4.820000% Average Life (years) 12.242 Duration of Issue (years) 8.951 Par Amount 4,125,000.00 Bond Proceeds 4,125,000.00 Total Interest 2,434,029.71 Net Interest 2,434,029.71 Total Debt Service 6,559,029.71 Maximum Annual Debt Service 330,183.00 Average Annual Debt Service 325,824.58 Average Par Average Average Maturity PV of 1 by Bond Component Value Price Coupon Life Date change Term Bond 2044 4,125,000.00 100.000 4.820% 12.242 05/12/2036 5,280.00 4,125,000.00 12.242 5,280.00 Notes: 1. Preliminary, subject to change 2. Analysis reflects financing necessary to raise $4 million in project funds 3. Capital One provided interest rate from RFP on January 18, 2024 4. Cost of issuance provided by Fieldman on January 22, 2024 Prepared by Stifel, Nicolaus & Company, Inc. (LC) Page 2 STIFEL BOND DEBT SERVICE Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) **************************************************************************************************** Reflects Terms from Capital One **************************************************************************************************** Dated Date 02/14/2024 Delivery Date 02/14/2024 Period Ending Principal Interest Debt Service 04/01/2025 105,000 224,782.71 329,782.71 04/01/2026 135,000 193,764.00 328,764.00 04/01/2027 140,000 187,257.00 327,257.00 04/01/2028 145,000 180,509.00 325,509.00 04/01/2029 155,000 173,520.00 328,520.00 04/01/2030 160,000 166,049.00 326,049.00 04/01/2031 170,000 158,337.00 328,337.00 04/01 /2032 180,000 150,143.00 330,143.00 04/01/2033 185,000 141,467.00 326,467.00 04/01/2034 195,000 132,550.00 327,550.00 04/01 /2035 205,000 123,151.00 328,151.00 04/01/2036 215,000 113,270.00 328,270.00 04/01/2037 225,000 102,907.00 327,907.00 04/01/2038 235,000 92,062.00 327,062.00 04/01/2039 245,000 80,735.00 325,735.00 04/01/2040 260,000 68,926.00 328,926.00 04/01/2041 270,000 56,394.00 326,394.00 04/01/2042 285,000 43,380.00 328,380.00 04/01/2043 300,000 29,643.00 329,643.00 04/01 /2044 315,000 15,183.00 330,183.00 4,125,000 2,434,029.71 6,559,029.71 Notes: 1. Preliminary, subject to change 2. Analysis reflects financing necessary to raise $4 million in project funds 3. Capital One provided interest rate from RFP on January 18, 2024 4. Cost of issuance provided by Fieldman on January 22, 2024 Prepared by Stifel, Nicolaus & Company, Inc. (LC) Page 3 STIFEL BOND PRICING Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) **************************************************************************************************** Reflects Terms from Capital One **************************************************************************************************** Maturity Bond Component Date Amount Rate Yield Price Term Bond 2044: 04/01/2025 105,000 4.820% 4.820% 100.000 04/01/2026 135,000 4.820% 4.820% 100.000 04/01/2027 140,000 4.820% 4.820% 100.000 04/01/2028 145,000 4.820% 4.820% 100.000 04/01/2029 155,000 4.820% 4.820% 100.000 04/01/2030 160,000 4.820% 4.820% 100.000 04/01/2031 170,000 4.820% 4.820% 100.000 04/01/2032 180,000 4.820% 4.820% 100.000 04/01/2033 185,000 4.820% 4.820% 100.000 04/01/2034 195,000 4.820% 4.820% 100.000 04/01/2035 205,000 4.820% 4.820% 100.000 04/01/2036 215,000 4.820% 4.820% 100.000 04/01/2037 225,000 4.820% 4.820% 100.000 04/01/2038 235,000 4.820% 4.820% 100.000 04/01/2039 245,000 4.820% 4.820% 100.000 04/01/2040 260,000 4.820% 4.820% 100.000 04/01/2041 270,000 4.820% 4.820% 100.000 04/01/2042 285,000 4.820% 4.820% 100.000 04/01/2043 300,000 4.820% 4.820% 100.000 04/01/2044 315,000 4.820% 4.820% 100.000 4,125,000 Dated Date 02/14/2024 Delivery Date 02/14/2024 First Coupon 10/01/2024 Par Amount 4,125,000.00 Original Issue Discount Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds Notes: 1. Preliminary, subject to change 2. Analysis reflects financing necessary to raise $4 million in project funds 3. Capital One provided interest rate from RFP on January 18, 2024 4. Cost of issuance provided by Fieldman on January 22, 2024 4,125,000.00 100.000000% 4,125, 000.00 100.000000% 4,125,000.00 Prepared by Stifel, Nicolaus & Company, Inc. (LC) Page 4 STIFEL BOND SOLUTION Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) **************************************************************************************************** Reflects Terms from Capital One **************************************************************************************************** Period Ending Proposed Principal Proposed Debt Service Total Adj Debt Service Revenue Constraints Unused Revenues Debt Service Coverage 04/01 /2024 04/01/2025 105,000 329,783 329,783 366,976 37,193 111.28% 04/01/2026 135,000 328,764 328,764 366,976 38,212 111.62% 04/01/2027 140,000 327,257 327,257 366,976 39,719 112.14% 04/01/2028 145,000 325,509 325,509 366,976 41,467 112.74% 04/01/2029 155,000 328,520 328,520 366,976 38,456 111.71% 04/01/2030 160,000 326,049 326,049 366,976 40,927 112.55% 04/01/2031 170,000 328,337 328,337 366,976 38,639 111.77% 04/01/2032 180,000 330,143 330,143 366,976 36,833 111.16% 04/01/2033 185,000 326,467 326,467 366,976 40,509 112.41% 04/01/2034 195,000 327,550 327,550 366,976 39,426 112.04% 04/01/2035 205,000 328,151 328,151 366,976 38,825 111.83% 04/01/2036 215,000 328,270 328,270 366,976 38,706 111.79% 04/01/2037 225,000 327,907 327,907 366,976 39,069 111.91% 04/01/2038 235,000 327,062 327,062 366,976 39,914 112.20% 04/01/2039 245,000 325,735 325,735 366,976 41,241 112.66% 04/01/2040 260,000 328,926 328,926 366,976 38,050 111.57% 04/01/2041 270,000 326,394 326,394 366,976 40,582 112.43% 04/01/2042 285,000 328,380 328,380 366,976 38,596 111.75% 04/01/2043 300,000 329,643 329,643 366,976 37,333 111.33% 04/01/2044 315,000 330,183 330,183 366,976 36,793 111.14% 4,125,000 6,559,030 6,559,030 7,339,523 780,493 Notes: 1. Preliminary, subject to change 2. Analysis reflects financing necessary to raise $4 million in project funds 3. Capital One provided interest rate from RFP on January 18, 2024 4. Cost of issuance provided by Fieldman on January 22, 2024 Prepared by Stifel, Nicolaus & Company, Inc. (LC) Page 5 Quint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) CERTIFICATE REGARDING CITY RESOLUTION The undersigned hereby states and certifies: 2/7/24 G2 (i) that the undersigned is the duly elected, qualified and acting City Clerk of the City of Tustin, a general law city and municipal corporation duly organized and existing under the laws of the State of California (the "City"), and as such, is familiar with the facts herein certified and is authorized to certify the same on behalf of the City; and (ii) that attached hereto is a true, correct and complete copy of Resolution No. 24-08, entitled "RESOLUTION APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF A FIRST AMENDMENT TO THE INDENTURE OF TRUST, DATED AS OF SEPTEMBER 1, 2016, BY AND BETWEEN THE CITY AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., RELATING TO THE $21,515,000 CITY OF TUSTIN (ORANGE COUNTY, CALIFORNIA) 2016 WATER REFUNDING REVENUE BONDS, AND A FIRST AMENDMENT TO THE INDENTURE OF TRUST, DATED AS OF FEBRUARY 1, 2020, BY AND BETWEEN THE CITY AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., RELATING TO THE $14,910,000 CITY OF TUSTIN (ORANGE COUNTY, CALIFORNIA) TAXABLE WATER REFUNDING REVENUE BONDS, SERIES 2020," adopted by the City Council of the City on February 6, 2024 (the "Resolution"), which Resolution has not been amended, modified, supplemented, rescinded or repealed and is in full force and effect as of the date hereof. Dated: February 14, 2024 CITY OF TUSTIN By Er' N. Yasuda, City Clerk DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB RESOLUTION NO. 24-08 RESOLUTION APPROVING THE FORM AND AUTHORIZING THE EXECUTION OF A FIRST AMENDMENT TO THE INDENTURE OF TRUST, DATED AS OF SEPTEMBER 1, 2016, BY AND BETWEEN THE CITY AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., RELATING TO THE $21,515,000 CITY OF TUSTIN (ORANGE COUNTY, CALIFORNIA) 2016 WATER REFUNDING REVENUE BONDS, AND A FIRST AMENDMENT TO THE INDENTURE OF TRUST, DATED AS OF FEBRUARY 1, 2020, BY AND BETWEEN THE CITY AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., RELATING TO THE $14,910,000 CITY OF TUSTIN (ORANGE COUNTY, CALIFORNIA) TAXABLE WATER REFUNDING REVENUE BONDS, SERIES 2020 RESOLVED, by the City Council (the "Council") of the City of Tustin (the "City"), as follows: WHEREAS, the City and The Bank of New York Mellon Trust Company, N.A. (the "Trustee") have executed and delivered an indenture of trust, dated as of September 1, 2016 (the "2016 Indenture") under and pursuant to which the City issued its $21,515,000 City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds (the "2016 Bonds"); WHEREAS, the proceeds of the 2016 Bonds were used to refund the outstanding Water Revenue Bonds, 2011 Series A, proceeds of which were issued to finance the costs of the acquisition and construction of certain new additions, betterments, extensions and improvements to the municipal water system owned and operated by the City (the "Water System"); WHEREAS, it has been determined that the 2016 Indenture is defective in that Section 5.02 of the 2016 Indenture does not adequately provide for the flow of Gross Revenues required for the payment of Subordinate Debt (as such term is defined in the 2016 Indenture); and WHEREAS, Section 10.01(b) of the 2016 Indenture provides that the 2016 Inden- ture may be modified or amended from time -to -time and at any time by an indenture or indentures supplemental thereto, which the City and the Trustee may enter into without the consent of any Owners (as such term is defined in the 2016 Indenture), to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplement- ing any defective provision contained in therein, or in any other respect whatsoever as the City may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not, in the reasonable determination of the City, ma- terially adversely affect the interests of the Owners; Resolution 24-08 Page 1 of 4 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB WHEREAS, the City and Trustee also have executed and delivered an indenture of trust, dated as of February 1, 2020 (the "2020 Indenture") under and pursuant to which the City issued its $14,910,000 City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020 (the "2020 Bonds"); WHEREAS, the proceeds of the 2020 Bonds were used to refund the outstanding 2013 Water Revenue Bonds, proceeds of which were issued to finance the costs of the acquisition and construction of certain new additions, betterments, extensions and im- provements to the Water System; WHEREAS, it has been determined that the 2020 Indenture is defective in that Section 5.02 of the 2020 Indenture does not adequately provide for the flow of Gross Revenues required for the payment of Subordinate Debt (as such term is defined in the 2020 Indenture); and WHEREAS, Section 10.01(b) of the 2020 Indenture provides that the 2020 Inden- ture may be modified or amended from time -to -time and at any time by an indenture or indentures supplemental thereto, which the City and the Trustee may enter into without the consent of any Owners (as such term is defined in the 2020 Indenture), to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplement- ing any defective provision contained in therein, or in any other respect whatsoever as the City may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not, in the reasonable determination of the City, ma- terially adversely affect the interests of the Owners; NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: Section 1. Findings. The Board hereby finds that it is necessary and appropriate to amend the Original Indenture as described above. Section 2. Approval of First Amendment to 2016 Indenture. The Council hereby approves an amendment to the 2016 Indenture (the "2016 First Amendment") in the form on file with the City Clerk, together with such additions thereto and changes therein as the Mayor, the City Manager or the Finance Director (the "Designated Officers"), or any designee thereof, shall deem necessary, desirable or appropriate, the execution of which by the City shall be conclusive evidence of the approval of any such additions and changes. Any of the Designated Officers is hereby authorized and directed to execute the final form of the 2016 First Amendment for and in the name and on behalf of the City. The Council hereby authorizes the delivery and performance of the 2016 First Amendment. Section 3. Approval of First Amendment to 2020 Indenture. The Council hereby approves an amendment to the 2020 Indenture (the "2020 First Amendment") in the form on file with the City Clerk, together with such additions thereto and changes therein as any Designated Officer or any designee thereof, shall deem necessary, desirable or Resolution 24-08 Page 2 of 4 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB appropriate, the execution of which by the City shall be conclusive evidence of the ap- proval of any such additions and changes. Any of the Designated Officers is hereby au- thorized and directed to execute the final form of the 2020 First Amendment for and in the name and on behalf of the City. The Council hereby authorizes the delivery and perfor- mance of the 2020 First Amendment. Section 4. Official Actions. The Mayor, the City Manager, the Finance Director, the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, req- uisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions as described herein. Section 5. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. PASSED AND ADOPTED at a regular meeting of the City Council held on the 6th day of February 2024. LDocuSigned by: ,j°u�a.,�, a E AUSTIN LUMBARD, Mayor ATTEST: DS DocuSigned by: � ViCa qaSd & ODA76045A148460... ERICA N. YASUDA, City Clerk APOPROVED AS TO FORM: —DocuSigned by DAVO8EF3 1i4DIG, City Attorney Resolution 24-08 Page 3 of 4 DocuSign Envelope ID: 86AE512D-C7DD-42F0-81CF-589F9C6177AB STATE OF CALIFORNIA. ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 24-08 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 6th day of February 2024, by the following vote: COUNCILMEMBER AYES: Lumbard, Gallagher, Gomez, Schnell (4) COUNCILMEMBER NOES: (0) COUNCILMEMBER ABSTAINED: (0) COUNCILMEMBER ABSENT: Clark (1 ) COUNCILMEMBER RECUSED: (0) DS DocuSigned by: ERICA N. YASUDA, City Clerk Resolution 24-08 Page 4 of 4 Quint & Thimmig LLP 07/01/16 FINAL 09/09/16 INDENTURE OF TRUST by and between the CITY OF TUSTIN and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Dated as of September 1, 2016 Relating to the $21,515,000 City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds 20015.08 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION; EQUAL SECURITY Section1.01. Definitions..............................................................................................................................................3 ARTICLE II THE BONDS Section 2.01. Authorization of Bonds......................................................................................................................12 Section2.02. Terms of Bonds....................................................................................................................................12 Section2.03. Form of Bonds......................................................................................................................................13 Section2.04. Execution of Bonds..............................................................................................................................13 Section2.05. Transfer of Bonds................................................................................................................................13 Section2.06. Exchange of Bonds...........:.................................................................................................................. 13 Section2.07. Temporary Bonds................................................................................................................................14 Section 2.08. Bond Registration Books....................................................................................................................14 Section 2.09. Bonds Mutilated, Lost, Destroyed or Stolen...................................................................................14 Section2.10. Book -Entry System..............................................................................................................................14 ARTICLE III ISSUE OF BONDS; APPLICATION OF PROCEEDS; COSTS OF ISSUANCE FUND Section 3.01. Issuance of Bonds................................................................................................................................17 Section 3.02. Application of Proceeds of Bonds.....................................................................................................17 Section 3.03. Establishment and Application of Costs of Issuance Fund...........................................................17 Section3.04. Validity of Bonds.................................................................................................................................17 ARTICLE IV REDEMPTION OF BONDS Section4.01. No Redemption...................................................................................................................................19 Section 4.02. Selection of Bonds for Redemption..................................................................................................19 Section 4.03. Notice of Redemption.........................................................................................................................19 Section 4.04. Partial Redemption of Bonds.............................................................................................................20 Section4.05. Effect of Redemption..........................................................................................................................20 ARTICLE V GROSS REVENUES; NET REVENUES Section5.01. Pledge of Net Revenues.....................................................................................................................22 Section 5.02. Receipt, Deposit and Application of Gross Revenues and Net Revenues..................................22 Section 5.03. Application of Interest Account........................................................................................................23 Section 5.04. Application of Principal Account.....................................................................................................23 Section 5.05. Application of Sinking Account........................................................................................................23 Section 5.07. Investment of Moneys in Funds and Accounts..............................................................................23 ARTICLE VI COVENANTS OF THE CITY; SPECIAL TAX COVENANTS Section6.01. Punctual Payment...............................................................................................................................25 Section 6.02. Extension of Payment of Bonds........................................................................................................25 Section6.03. Discharge of Claims............................................................................................................................25 Section 6.04. Operation of Enterprise in Efficient and Economical Mariner.....................................................25 Section 6.05. Against Encumbrance.........................................................................................................................25 Section6.06. Records and Accounts........................................................................................................................26 -1- Section6.07. Rates and Charges...............................................................................................................................26 Section 6.08. Limitations on Future Obligations Secured by Net Revenues.....................................................27 Section6.09. Further Assurances.............................................................................................................................28 Section6.10. Waiver of Laws....................................................................................................................................28 Section 6.11. Private Activity Bond Limitation......................................................................................................28 Section 6.12. Private Loan Financing Limitation...................................................................................................29 Section 6.13. Federal Guarantee Prohibition..........................................................................................................29 Section6.14. Rebate Requirement............................................................................................................................29 Section6.15. No Arbitrage........................................................................................................................................29 Section 6.16. Maintenance of Tax-Exemption........................................................................................................29 Section 6.17. Continuing Disclosure........................................................................................................................29 ARTICLE VII MAINTENANCE; TAXES; INSURANCE AND CONDEMNATION Section 7.01. Maintenance and Operation of the Enterprise................................................................................30 Section 7.02. Taxes, Assessments, Other Governmental Charges and Utility Charges...................................30 Section 7.03. Public Liability and Property Damage Insurance..........................................................................30 Section7.04. Casualty Insurance..............................................................................................................................30 Section 7.05. Insurance Net Proceeds; Form of Policies.......................................................................................31 Section7.06. Eminent Domain.................................................................................................................................31 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS Section8.01. Events of Default.................................................................................................................................32 Section 8.02. Acceleration of Maturities..................................................................................................................32 Section 8.03. Application of Net Revenues and Other Funds After Default.....................................................33 Section 8.04. Trustee to Represent Bondowners....................................................................................................34 Section 8.05. Bondowners' Direction of Proceedings............................................................................................34 Section 8.06. Limitation on Bondowners' Right to Sue........................................................................................34 Section 8.07. Absolute Obligation of City...............................................................................................................35 Section 8.08. Termination of Proceedings...............................................................................................................35 Section8.09. Remedies Not Exclusive............................................................:........................................................35 Section8.10. No Waiver of Default..........................................................................................................................35 ARTICLE IX THE TRUSTEE Section 9.01. Appointment of Trustee; Duties, Immunities and Liabilities of Trustee....................................36 Section 9.02. Merger or Consolidation....................................................................................................................37 Section9.03. Liability of Trustee..............................................................................................................................37 Section 9.04. Right of Trustee to Rely on Documents...........................................................................................39 Section 9.05. Preservation and Inspection of Documents....................................................................................39 Section 9.06. Compensation of Trustee...................................................................................................................40 Section9.07. Indemnification...................................................................................................................................40 ARTICLE X MODIFICATION OR AMENDMENT OF THE INDENTURE Section10.01. Amendments Permitted...................................................................................................................41 Section 10.02. Effect of Supplemental Indenture...................................................................................................42 Section 10.03. Endorsement of Bonds; Preparation of New Bonds....................................................................42 Section 10.04. Amendment of Particular Bonds....................................................................................................42 ARTICLE XI DEFEASANCE Section 11.01. Discharge of Indenture.....................................................................................................................43 -n- Section 11.02. Discharge of Liability on Bonds......................................................................................................43 Section 11.03. Deposit of Money or Securities with Trustee................................................................................43 Section 11.04. Payment of Bonds After Discharge of Indenture.........................................................................44 ARTICLE IX MISCELLANEOUS Section 12.01. Liability of City Limited to Net Revenues.....................................................................................45 Section 12.02. Successor Is Deemed Included in All References to Predecessor..............................................45 Section 12.03. Limitation of Rights to Parties and Bondowners.........................................................................45 Section12.04. Waiver of Notice................................................................................................................................45 Section12.05. Destruction of Bonds........................................................................................................................45 Section 12.06. Severability of Invalid Provisions...................................................................................................45 Section12.07. Notices................................................................................................................................................45 Section 12.08. Evidence of Rights of Bondowners.................................................................................................46 Section12.09. Disqualified Bonds............................................................................................................................46 Section 12.10. Money Held for Particular Bonds...................................................................................................46 Section 12.11. Funds and Accounts.........................................................................................................................47 Section 12.12. Article and Section Headings and References..............................................................................47 Section 12.13. Waiver of Personal Liability............................................................................................................47 Section 12.14. Execution in Several Counterparts.................................................................................................47 Section12.15. Governing Law..................................................................................................................................47 EXHIBIT A —FORM OF BOND Dug INDENTURE OF TRUST THIS INDENTURE OF TRUST, is dated as of September 1, 2016, by and between the CITY OF TUSTIN, a municipal corporation and general law city organized and existing under the constitution and laws of the State of California (the "City"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, California, and being qualified to accept and administer the trusts hereby created (the "Trustee"); WITNESSETH: WHEREAS, the Tustin Public Financing Authority (the "Authority") has heretofore issued its $20,760,000 Tustin Public Financing Authority Water Revenue Bonds, 2011 Series A, of which $20,760,000 remains outstanding (the "2011 Bonds"), pursuant to an indenture of trust, dated as of April 1, 2011, by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), for the purpose of financing the improvement, betterment, renovation and expansion of certain facilities within the City's municipal Water enterprise (the "Enterprise"); WHEREAS, debt service on the Bonds is paid from revenues comprised of payments (the "Installment Payments") made by the City under an installment sale agreement, dated as April 1, 2011, by and between the Authority and the City; WHEREAS, Article 10 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with section 53570) of the California Government Code (the "Refunding Bond Law") authorizes the City to issue its refunding bonds for the purpose of refunding obligations of the City; WHEREAS, the City, after due investigation and deliberation, has determined that it is in the interests of the City at this time to provide for the issuance of bonds under the Refunding Bond Law to provide for the payment and prepayment of the Installment Payments and refunding of the 2011 Bonds; WHEREAS, to that end, the City has determined to issue its $21,515,000 City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds (the "Bonds"), pursuant to an indenture of trust (the "Indenture"), by and between the City and the Trustee; WHEREAS, the Bonds will be secured by a pledge of the net revenues generated by the Enterprise; WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof and premium (if any) and of the interest thereon, the City Council of the City has authorized the execution of this Indenture; WHEREAS, all Bonds issued under this Indenture will be secured by a pledge of the Net Revenues, as defined herein, and certain other moneys and securities held by the Trustee hereunder; and WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when executed by the City, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the City, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth, in accordance with its terms, have been done and taken; and the execution and delivery of this Indenture have been in all respects duly authorized. NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and premium (if any) and interest on all Bonds at any time issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the City does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows: IPA ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION; EQUAL SECURITY Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall for all purposes of this Indenture and of any Supplemental Indenture and of any certificate, opinion, request or other documents 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. "Annual Debt Service" means, for each Fiscal Year, the aggregate amount (without duplication) of principal and interest with respect to the Bonds and all Parity Obligations. "Authorized Officer" means, with respect to the City, its Mayor, City Manager, Treasurer, Finance Director or any other person designated as an Authorized Representative of the City by a Written Certificate of the City signed by its Mayor and filed with the Trustee. "Average Annual Debt Service" means, with respect to any portion of the Outstanding Parity Obligations for which the calculation is being made, the average Annual Debt Service during the period from the date of calculation through the final maturity date of all of such Outstanding Parity Obligations. "Bond Fund" means the fund by that name established pursuant to Section 5.01. "Bond Registration Books" means the books maintained by the Trustee pursuant to Section 2.08 for the registration and transfer of ownership of the Bonds. "Bonds" means the City's 2016 Water Refunding Revenue Bonds, issued and at any time Outstanding hereunder. "Bond Year" means any twelve-month period commencing on April 2 in a year and ending on the next succeeding April 1, both dates inclusive; provided, however, that the first Bond Year shall commence on the Closing Date relating to the Bonds and shall end on April 1, 2016. "Business Day" means a day of the year on which banks in Los Angeles, California, or Los Angeles, California, are not required or authorized to remain closed and on which The New York Stock Exchange is not closed. "Certificate," "Statement," "Request," "Requisition" and "Order" of the City mean, respectively, a written certificate, statement, request, requisition or order signed in the name of the City by an Authorized Officer of the City. 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. "City" means the City of Tustin, a municipal corporation and general law city organized and existing under the constitution and laws of the State, and any successor thereto. "City Council" means the City Council of the City. "Closing Date" means September 28, 2016, the date upon which there is an exchange of the Bonds for the proceeds representing the purchase of the Bonds by the Original Purchaser thereof. -3- "Code" means the Internal Revenue Code of 1986 as in effect on the Closing Date, or as it may be amended to apply to obligations issued on the Closing Date, together with applicable temporary and final regulations promulgated under the Code. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the City and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Costs of Issuance" means all items of expense directly or indirectly payable by or reimbursable to the City relating to the authorization, issuance, sale and delivery of the Bonds, including but not limited to printing expenses, operating expenses, rating agency fees, filing and recording fees, initial fees and charges and first annual administrative fee of the Trustee and fees and expenses of its counsel, fees, charges and disbursements of attorneys, financial advisors, fiscal consultants, accounting firms, consultants and other professionals, fees and charges for preparation, execution 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" means the fund so designated and established pursuant to Section 3.03. "Debt Service" means, during any period of computation, the amount obtained for such period by totaling the following amounts: (a) The principal components of the Bonds and principal payments with respect to Parity Obligations coming due and payable by their terms in such period; and (b) The interest component of the Bonds and interest payments with respect to Parity Obligations which would be due during such period on the aggregate principal amount of the Bonds and principal payments with respect to Parity Obligations that would be unpaid in such period if the Bonds and payments with respect to Parity Obligations are retired as scheduled, but deducting and excluding from such aggregate amount the amount of Bonds and payments with respect to Parity Obligations no longer unpaid. "Defeasance Obligations" means (a) cash, (b) direct non -callable obligations of the United States of America, (c) securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, to which direct obligation or guarantee the full faith and credit of the United States of America has been pledged, (d) Refcorp interest strips, (e) CATS, TIGRS, STRPS, and (f) defeased municipal bonds rated AAA by S&P or Aaa by Moody's (or any combination of the foregoing). "Enterprise" means any and all facilities, properties and improvements at any time controlled or operated by the City used or pertaining to the supply of water, consisting of the entire water production and distribution enterprise of the City, including all additions, extensions, expansions, improvements and betterments thereto and equippings thereof and any necessary lands, rights of way and other real and personal property useful in connection therewith, but exclusive of any portion of the existing system not required for the continued operation thereof; provided, however, that to the extent the City is not the sole owner of an asset or property, or lessee thereof from the City, only the City's ownership interest in such asset or property or leasehold interest therein from the City, shall be considered a part of the Enterprise. "Escrow Agreement" means that certain Escrow Agreement, dated the Closing Date, by and between the City and the Escrow Bank, providing for the defeasance of the 2011 Bonds. -4- "Escrow Bank" means The Bank of New York Mellon Trust Company, N.A., appointed by the City to act as escrow bank under the Escrow Agreement, and its assigns or any other corporation or association which may at any time be substituted in its place, as provided in the Escrow Agreement. "Escrow Fund" means the fund by that name established pursuant to the Escrow Agreement. "Event of Default" means any of the events of default described in Section 8.01. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security --State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. "Fiscal Year" means the period commencing on July 1 of each year and terminating on the next succeeding April 30. "Government Obligations" means, with respect to the Bonds: (a) direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ("U.S. Treasury Obligations"), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidence of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligator and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. "Gross Revenues" means all gross charges received for, and all other gross income and revenues derived by the City from, the operation of the Enterprise or otherwise arising from the Enterprise, including but not limited to (a) all fees and charges received by the City for the services of the Enterprise, (b) charges received by the City for water connections, (c) capital charges, and (d) all receipts derived from the investment of such income or revenues, but excluding customer deposits. "Indenture" means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the provisions hereof. -5- "Independent Accountant" means any certified public accountant or firm of such accountants appointed and paid by the City, and who, or each of whom: (a) is in fact independent and not under domination of the City; (b) does not have any substantial interest, direct or indirect, with the City; and (c) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make annual or other audits of the books of or reports to the City. "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the City, and who, or each of whom: (a) is in fact independent and not under domination of the City; (b) does not have any substantial interest, direct or indirect, with the City; (c) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to the City, and (d) is judged by the City to have experience in matters relating to the engineering matters relating to Enterprise enterprises. "Information Services" means the Electronic Municipal Market Access System (referred to as "EMMA"), a facility of the Municipal Securities Rulemaking Board (at http: / /emma.msrb.org) or, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other national information services providing information with respect to called bonds as the City may designate in a Certificate of the City delivered to the Trustee. "Insurance Consultant" means a person (which may be the City's insurance agent or broker) having experience and a favorable reputation in consulting on the insurance requirements of Water utilities in the State of the general size and character of the Enterprise, selected by the City. "Interest Account" means the account by that name in the Bond Fund established pursuant to Section 5.01. "Interest Payment Date" means April 1 and October 1 in each year, beginning April 1, 2017, and continuing so long as any Bonds remain Outstanding. "Maintenance and Operation Costs" means (a) the reasonable and necessary costs of maintaining and operating the Enterprise, calculated based upon accounting principles consistently applied, including (among other things) the reasonable expenses of management, personnel, services, equipment, repair and other expenses necessary to maintain and preserve the Enterprise in good repair and working order, and reasonable amounts for administration, overhead, insurance, taxes (if any) and other similar costs, and (b) all costs of water purchased or otherwise acquired for delivery by the Enterprise (including any interim or renewed arrangement therefor), but excluding in all cases depreciation and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. "Maximum Annual Debt Service" means, as of any date of calculation by the City, the largest Annual Debt Service during the period from the date of such calculation through the final maturity date of the Bonds and all Parity Obligations. "Moody's" means Moody's Investors Service, New York, New York, or its successors. In "Net Proceeds" means the par amount of the Bonds plus accrued interest and premium, if any, less the amount of any underwriter's and original issue discount, less the proceeds applied to pay Costs of Issuance. "Net Revenues" means, for any period, an amount equal to all of the Gross Revenues received during such period minus the amount required to pay all Maintenance and Operation Costs during such period. "Original Purchaser" means the first purchaser of the Bonds from the City. "Outstanding," when used as of any particular time with reference to Bonds, means all Bonds theretofore executed, issued and delivered by the City under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have been paid within the meaning of Section 11.01; and (c) Bonds in lieu of or in substitution for which other Bonds shall have been executed, issued and delivered by the City pursuant to this Indenture or any Supplemental Indenture. "Ozvner" or "Bond Ozvner", when used with respect to any Bond, means the person in whose name the ownership of such Bond shall be registered on the Bond Registration Books. "Parity Obligations" means any leases, loan agreements, installment sale agreements, bonds, notes, interest rate swap agreements, currency swap agreements, forward payment agreements, futures, or contracts providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, or contracts to exchange cash flows or a series of payments, or contracts, including, without limitation, interest rate floors or caps, options, puts or calls to hedge payment, currency, rate, spread, or similar exposure (except termination payments relating thereto which shall be payable on a subordinate basis) or other obligations of the City payable from and secured by a pledge of and lien upon any of the Net Revenues on a parity with the Bonds, entered into or issued pursuant to and in accordance with Section 6.08(b) hereof. For all purposes, the 2012 Installment Sale Agreement and the 2013 Installment Sale Agreement shall constitute Parity Obligations. "Participating Underwriter" shall have the meaning ascribed thereto in the Continuing Disclosure Certificate. "Permitted Investments" means: (a) Government Obligations. (b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): 1. U.S. Export -Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership 2. U.S. Farmers Home Administration (FmHA) Certificates of Beneficial Ownership -7- 3. Federal Financing Bank 4. Federal Housing Administration Debentures (FHA) 5. General Services Administration Participation Certificates 6. Government National Mortgage Association (GNMA or Ginnie Mae) GNMA—guaranteed mortgage -backed bonds GNMA—guaranteed pass -through obligations 7. U.S. Maritime Administration Guaranteed Title XI financing 8. U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds (c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies which are not backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): 1. Federal Home Loan Bank Svstem Senior debt obligations 2. Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) Participation Certificate Senior debt obligations 3. Federal National Mortgage Association (FNMA or Fannie Mae) Mortgage -backed securities and senior debt obligations 4. Student Loan Marketing Association (SLMA or Sallie Mae) Senior debt obligations 5. Resolution Funding Corp. (REFCORP) obligations 6. Farm Credit System Consolidated systemwide bonds and notes (d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, which invest solely in Federal Securities, if rated by S&P, having a rating at the time of investment of AAAm-G; and if rated by Moody's having a rating at the time of investment of Aaa, including such funds for which the Trustee, its affiliates or subsidiaries provide investment advisory or other management services or for which the Trustee or an affiliate of the Trustee serves as investment administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives and retains a fee for services provided to the fund, (ii) the Trustee collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds, and (iii) services performed for such -8- funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee. (e) Certificates of deposit secured at all times by collateral described in (a) and/or (b) above. Such certificates must be issued by commercial banks or savings and loan associations (including the Trustee or its affiliates). The collateral must be held by a third party and the Bondholders must have a perfected first security interest in the collateral. (f) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC or secured at all times by collateral described in (a) and/or (b) above. (g) Commercial paper rated, at the time of purchase, "Prime-1" by Moody's and "A-1" or better by S&P. (h) Federal funds or bankers acceptances with a maximum term of 180 days of any bank which has an unsecured, uninsured and unguaranteed obligation rating at the time of investment of "Prime-1" or better by Moody's and "A-1" or better by S&P. (i) The Local Agency Investment Fund of the State, created pursuant to 16429.1 of the California Government Code. (j) The County pooled investment fund. (k) Municipal obligations rated "A" or higher by S&P. (1) Other forms of investments that satisfy the City's Statement of Investment Policy as of the time of investment. "Priizcipal Account" means the account by that name in the Bond Fund established pursuant to Section 5.01. "Priizcipal Payment Date" means April 1 in each year, beginning April 1, 2024, and continuing so long as any Bonds remain Outstanding. "Rating Category" means, with respect to any Permitted Investment, one or more of the generic categories of rating by Moody's and/or S&P applicable to such Investment Security, without regard to any refinement or gradation of such rating category by a plus or minus sign. "Record Date" means the fifteenth (15th) calendar day of the month immediately preceding an Interest Payment Date. "Refuizdiizg Bond Law" means Article 10 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with section 53570) of the California Government Code, as in effect on the Closing Date or as thereafter amended in accordance with its terms. "S&P" means S&P Global Ratings, a Standard & Poor's Financial Services LLC business, New York, New York, or its successors. "Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, NY 10041-0099, Attention: Call Notification Department, Fax (212) 855-7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the City may designate in a Certificate of the City delivered to the Trustee. 10 "Special Record Date" means the date established by the Trustee pursuant to Section 2.02 as a record date for the payment of defaulted interest on Bonds. "State" means the State of California. "Sinking Account" means the account by that name in the Bond Fund established pursuant to Section 5.01, if required. "Subordinate Debt" means any obligations of the City payable from and secured by a pledge of and lien upon any of the Net Revenues subordinate to the Installment Payments and any Parity Obligations, entered into or issued pursuant to and in accordance with Section 6.08(c) hereof. "Supplemental Indenture" means any indenture hereafter duly authorized and entered into between the City and the Trustee, amendatory of or supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. "Trust Office" means the corporate trust office of the Trustee at 400 South Hope Street, Suite 500, Los Angeles, California 90071, or at such other or additional offices as may be specified in writing to the Authority and the City, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted. "Trustee" means The Bank of New York Mellon Trust Company, N.A., appointed by the City to act as trustee hereunder pursuant to Section 9.01, and its assigns or any other corporation or association which may at any time be substituted in its place, as provided in Section 9.01. "2011 Bonds" means the Tustin Public Financing Authority Water Revenue Bonds, 2011 Series A, of which $20,760,000 remains outstanding as of the Closing Date. "2012 Bonds" means the Tustin Public Financing Authority 2012 Water Refunding Revenue Bonds. "2012 Installment Sale Agreement" means the Installment Sale Agreement, dated as of April 1, 2012, by and between the Authority and the City, securing the 2012 Bonds. "2013 Bonds" means the Tustin Public Financing Authority 2013 Water Revenue Bonds. "2013 Installment Sale Agreement" means the Installment Sale Agreement, dated as of October 1, 2013, by and between the Authority and the City, securing the 2013 Bonds. "Water Fund" means the City's existing water enterprise fund, established and held by the City with respect to the Enterprise. Section 1.02. Rules of Construction. All references in this Indenture to "Articles," "Sections," and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; and the words "herein," "hereof," "hereunder," and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. -1n- Section 1.03. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract between the City and the Owners from time to time of the Bonds; and the covenants and agreements herein set forth to be performed on behalf of the City shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. ARTICLE II THE BONDS Section 2.01. Authorization of Bonds. At any time after the adoption, execution and delivery of this Indenture, the City may execute and the Trustee, upon Request of the City, shall authenticate and deliver Bonds in the aggregate principal amount of twenty-one million five hundred fifteen thousand dollars ($21,515,000). Section 2.02. Terms of Bonds. The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof, so long as no Bond shall have more than one maturity date. The Bonds shall be dated as of their date of delivery, shall mature on April 1 in each of the years and in the amounts, and shall bear interest at the rates, as follows: Maturity Principal Interest April Amount Rate 2024 $ 905,000 2.000% 2025 400,000 2.000 2025 525,000 3.000 2026 400,000 2.000 2026 550,000 4.000 2027 975,000 4.000 2028 1,015,000 2.500 2029 1,035,000 2.750 2030 1,065,000 4.000 2031 1,115,000 4.000 2032 1,160,000 4.000 2033 1,200,000 4.000 2034 1,250,000 4.000 2035 1,300,000 2.750 2036 1,335,000 2.750 2041 7,285,000 3.000 Interest on the Bonds shall be payable on each Interest Payment Date to the person whose name appears on the Bond Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check mailed on the Interest Payment Date or, at the option of any Owner of at least $1,000,000 aggregate principal amount of Bonds and upon written notice received by the Trustee prior to the Record Date, by wire transfer, at the Owner's address as it appears on the Bond Registration Books or to such account as shall have been identified by the Owner in the notice requesting payment by wire transfer. Interest on the Bonds shall be computed on the basis of a year consisting of 360 days and twelve 30-day months. Principal of and premium (if any) on any Bond shall be paid upon presentation and surrender thereof at the Trust Office. Both the principal of and interest and premium (if any) on the Bonds shall be payable in lawful money of the United States of America. Each Bond shall bear interest from the Interest Payment Date next preceding the authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) it is authenticated on or before March 15, 2017, in which event it shall bear interest from its date of delivery; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. -12- Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Owner 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 for the payment of such defaulted interest to be fixed by the Trustee, notice whereof being given to the Owners not less than ten (10) days prior to such Special Record Date. Section 2.03. For authentication, and the fo respective forms set forth herein, with necessary or required by this Indenture. m of Bonds. The Bonds, the form of Trustee's certificate of Section 2.04. Execution of Bonds. The Bonds shall be signed in the name and on behalf of the City with the facsimile signature of its Mayor, City Manager or Finance Director and attested by the facsimile signature of its City Clerk. The Bonds shall then be delivered to the Trustee for authentication by it. In case any officer who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been authenticated or delivered by the Trustee or issued by the 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 the individual who signed the same had continued to be such officer of the City. Also, any Bond may be signed on behalf of the City by any individual who on the actual date of the execution of such Bond shall be the proper officer although on the nominal date of such Bond such individual shall not have been such officer of the City. Only such of the Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A attached hereto, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. Section 2.05. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the Bond Registration Books, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, endorsed or accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Every Bond so surrendered to the Trustee shall be canceled by it and destroyed. Whenever any Bond shall be surrendered for transfer, the City shall execute and the Trustee shall thereupon authenticate and deliver to the transferee a new Bond or Bonds of like maturity and aggregate principal amount of authorized denominations. The Trustee shall require the Owner requesting such transfer to pay any tax or other charge required to be paid with respect to such transfer. The Trustee may refuse to transfer, under the provisions of Section 2.05, any Bonds selected by the Trustee for redemption under Article IV, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption. Section 2.06. Exchange of Bonds. Bonds may be exchanged at the Trust Office, for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity. The Trustee shall require the Owner requesting such exchange to pay any tax or other charge required to be paid with respect to such exchange. The Trustee may refuse to exchange, under the provisions of Section 2.06, any Bonds selected by the Trustee for redemption under Article W, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption. -13- Section 2.07. Temporary Bonds. The Bonds may be issued initially in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporary Bond may be printed, lithographed or typewritten, shall be of such denomination as may be determined by the City and may contain such reference to any of the provisions of this Indenture as may be appropriate. A temporary Bond may be in the form of a single 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 authenticated by the Trustee upon the same conditions and in 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 Trust Office, and the 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 Indenture as definitive Bonds authenticated and delivered hereunder. Section 2.08. Bond Registration Books. The Trustee will keep or cause to be kept at its Trust Office sufficient books for the registration and transfer of the Bonds, which shall at all times during regular business hours be open to inspection by the City upon reasonable notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as hereinbefore provided. Section 2.09. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the City shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and authorized denomination in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and destroyed and the Trustee shall provide evidence of such destruction to the City. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the City and the Trustee and, if such evidence be satisfactory to the Trustee and indemnity for the City and the Trustee satisfactory to the Trustee shall be given, the City, at the expense of the Bond Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof upon receipt of the aforementioned indemnity). The City may require payment of a reasonable fee for each new Bond issued under this Section 2.09 and of the expenses which may be incurred by the City and the Trustee in connection therewith. Any Bond issued under the provisions of this Section 2.09 in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original contractual obligation on the part of the City whether or not the Bond alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds secured by this Indenture. Section 2.10. Book-EntrySystem. Notwithstanding any provision of this Indenture to the contrary: (a) At the request of the Original Purchaser, the Bonds shall be initially issued registered in the name of "Cede & Co.," as nominee of The Depository Trust Company, the depository designated by the Original Purchaser, and shall be evidenced by one certificate maturing on each of the maturity dates set forth in Section 2.02 hereof to be in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: -14- (i) to any successor of The Depository Trust Company or its nominee, or of any substitute depository designated pursuant to paragraph (ii) of this subsection (a) ("substitute depository'); provided that any successor of The Depository Trust Company 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 in a written request of the City, upon (i) the resignation of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository or (ii) a determination by the City that The Depository Trust Company 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 Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository or (B) a determination by the City that The Depository Trust Company or its successor is no longer able to carry out its functions as depository; provided that no substitute depository which is not objected to by the City and the Trustee can be obtained. (b) In the case of any transfer pursuant to paragraph (i) or paragraph (ii) of subsection (a) of this Section 2.10, upon receipt of all Outstanding Bonds by the Trustee, together with a written request of an Authorized Officer of the City to the Trustee, a single new Bond shall be issued, authenticated and delivered for each maturity of such Bond 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 written request of an Authorized Officer of the City. In the case of any transfer pursuant to paragraph (iii) of subsection (a) of this Section 2.10, upon receipt of all Outstanding Bonds by the Trustee together with a written request of an Authorized Officer of the City, new Bonds shall be issued, authenticated and delivered in such denominations and registered in the names of such persons as are requested in a written request of the City provided the 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 written request of an Authorized Officer of the City. (c) The City and the Trustee shall be entitled to treat the person in whose name any Bond is registered as the absolute Owner thereof for all purposes of this Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the City; and the City and the Trustee shall have no responsibility for transmitting payments to, communication with, notifying or otherwise dealing with any beneficial owners of the Bonds. Neither the City nor the Trustee will have any responsibility or obligations, legal or otherwise, to the beneficial owners or to any other party including The Depository Trust Company or its successor (or substitute depository or its successor), except for the registered owner of any Bond. (d) So long as all outstanding Bonds are registered in the name of Cede & Co. or its registered assign, the City and the Trustee shall reasonably cooperate with Cede & Co., as sole registered Owner, or its registered assign in effecting payment of the principal and interest due with respect to 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. (e) So long as all Outstanding Bonds are registered in the name of Cede & Co. or its registered assigns (hereinafter, for purposes of this paragraph (e), the "Owner"): -15- (i) All notices and payments addressed to the Owners shall contain the Bonds' CUSIP number. (ii) Notices to the Owner shall be forwarded in the manner set forth in the form of blanket issuer letter of representations (prepared by The Depository Trust Company) executed by the City and received and accepted by The Depository Trust Company. ARTICLE III ISSUE OF BONDS; APPLICATION OF PROCEEDS; COSTS OF ISSUANCE FUND Section 3.01. Issuance of Bonds. At any time after the adoption, execution and delivery of this Indenture, the City may execute and the Trustee, upon Request of the City, shall authenticate and deliver Bonds in the aggregate principal amount of twenty-one million five hundred fifteen thousand dollars ($21,515,000). Section 3.02. Application of Proceeds of Bonds. Upon the receipt of payment for the Bonds on the Closing Date of $22,722,940.08, being the principal amount of the Bonds of $21,515,000.00, less an underwriter's discount of $107,179.42, plus a net original issue premium of $1,315,119.50, the Trustee shall apply the proceeds of sale thereof as follows: (a) The Trustee shall deposit to the Costs of Issuance Fund the sum of $200,219.00; and (b) The Trustee shall transfer to the Escrow Bank the sum of $22,522,721.08 for deposit in the Escrow Fund. The Trustee may establish temporary funds or accounts on its records to facilitate such transfer. Section 3.03. Establishment and Application of Costs of Issuance Fund. (a) The 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 shall be used and withdrawn by the Trustee to pay Costs of Issuance upon receipt by the Trustee of a Requisition of the City 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 said account. Each such Requisition of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. (b) At the end of three months from the Closing Date, or upon earlier receipt of a Certificate of the City stating that amounts in the Costs of Issuance Fund are no longer required for the payment of Costs of Issuance, the Costs of Issuance Fund shall be closed and any amounts then remaining in the Costs of Issuance Fund shall be transferred to the Bond Fund. Section 3.04. Validity of Bonds. (a) The City has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, happen or be performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the City is now authorized, pursuant to each and every requirement of the Refunding Bond Law to issue the Bonds in the form and manner provided in this Indenture and the Bonds shall be entitled to the benefit, protection and security of the provisions of this Indenture. (b) From and after the issuance of the Bonds, the findings and determinations of the City respecting the Bonds shall be conclusive evidence of the existence of the facts so found and determined in any action or proceeding in any court in which the validity of the Bonds is at issue, and no bona fide purchaser of any of the Bonds shall be required to see to the existence of any fact or to the performance of any condition or to the taking of any proceeding required prior to such issuance or to the application of the proceeds of sale of the Bonds. The recital contained in the Bonds that the same are issued pursuant to the Refunding Bond Law and this Indenture shall be conclusive evidence of their validity and of the regularity of their issuance and all Bonds shall be incontestable from and after their issuance. The Bonds shall be deemed to be issued, within the meaning of this Indenture, whenever the definitive Bonds (or any temporary Bonds exchangeable therefor) have been delivered to the purchaser thereof and the proceeds of sale thereof received. -18- ARTICLE IV REDEMPTION OF BONDS Section 4.01. Redemption. (a) Optional Redemption. The Bonds maturing on or after April 1, 2027, are subject to redemption prior to their respective maturity dates, at the option of the City, as a whole or in part on any date or in part, in such order of maturity as shall be selected by the City (or in inverse order of maturity if the City shall fail to select a particular order) and by lot within a maturity, on or after April 1, 2026, from any source of available funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. (b) Sinking Fund Redemption. The Bonds maturing on April 1, 2041 (the "Term Bonds") are subject to mandatory redemption, in part by lot, from Sinking Account payments set forth in the following schedule on April 1, 2037, and on each April 1 thereafter to and including April 1, 2041, at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some but not all of the Term Bonds have been redeemed pursuant to subsection (a) above, the total amount of Sinking Account payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the Term Bonds so redeemed by reducing each such future Sinking Account payment on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated pursuant to written notice filed by the City with the Trustee. Sinking Account Redemption Date Principal Amount (April 1) to be Redeemed 2037 $1,370,000 2038 1,415,000 2039 1,460,000 2040 1,500,000 2041 t 1,540,000 tMaturity Section 4.02. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds or any given portion thereof, and unless otherwise specified in Section 4.01, the Trustee shall select the Bonds to be redeemed, from all Bonds of or such given portion thereof not previously called for redemption, by lot in any manner which the Trustee in its sole discretion shall deem appropriate and fair. The Trustee shall promptly notify the City in writing of the Bonds or portions thereof so selected for redemption. Section 4.03. Notice of Redemption. (a) Written notice of redemption shall be given by the City to the Trustee at least forty- five (45) days prior to the date of redemption (unless a shorter time shall be acceptable to the Trustee in the sole determination of the Trustee). Unless waived by the Owner, notice of any such redemption shall be given by the Trustee on behalf of the City by mailing a copy of a redemption notice by first class mail, postage prepaid, at least 30 days and not more than 60 -19- days prior to the date fixed for redemption to the Owner of the Bond or Bonds to be redeemed at the address shown on the Bond Registration Books. All notices of redemption shall be dated and shall state: (i) the redemption date, (ii) the redemption price, (iii) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (iv) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (v) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the Trust Office. Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) interest with respect to such Bonds or portions of Bonds shall cease to accrue and be payable. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Trustee at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Bond or Bonds of the same maturity in the amount of the unredeemed principal. All Bonds which have been redeemed shall be canceled and destroyed by the Trustee and shall not be reissued. (b) Notice of redemption of Bonds shall be given by the Trustee, at the expense of the City, for and on behalf of the City. (c) Notwithstanding the foregoing, in the case of any optional redemption of the Bonds under Section 4.01(a), the notice of redemption may state that the redemption is conditioned upon receipt by the Trustee of sufficient moneys to redeem the Bonds to be redeemed on the anticipated redemption date, and that the optional redemption shall not occur if, by no later than the scheduled redemption date, sufficient moneys to redeem such Bonds have not been deposited with the Trustee. In the event that the Trustee does not receive sufficient funds by the scheduled optional redemption date to so redeem the Bonds to be optionally redeemed, such event shall not constitute an Event of Default; the Trustee shall send written notice to the Owners, to the effect that the redemption did not occur as anticipated, and the Bonds for which notice of optional redemption was given shall remain Outstanding for all purposes of this Indenture. Section 4.04. Partial Redemption of Bonds. Upon surrender of any Bond redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, 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. The Owner shall not be required to submit any Bond to reflect mandatory sinking account payments. 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 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 plus 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 -20- any benefit or security under this Indenture, and the Owner of said Bonds shall have no rights in respect thereof except to receive payment of said redemption price. All Bonds redeemed pursuant to the provisions of this Article IV shall be canceled upon surrender thereof and destroyed with a certificate of destruction delivered to or upon the Order of the City. -21- ARTICLE V GROSS REVENUES; NET REVENUES Section 5.01. Pledge of Net Revenues. The Bonds and any Parity Obligations shall be secured by a first pledge of all of the Net Revenues. In addition, the Bonds shall be secured by a pledge of all of the moneys in all funds and accounts held by the Trustee hereunder, including all amounts derived from the investment of such moneys. Such pledge shall constitute a lien on the Net Revenues and such other moneys for the payment of the principal of and interest and premium (if any) on the Bonds and any Parity Obligations in accordance with the terms hereof. The Bonds shall be equally secured by a pledge, charge and lien upon the Net Revenues, without priority for number or date, shall be and are secured by an exclusive pledge, charge and lien upon the Net Revenues and such moneys, except as set forth in this Section 5.01. So long as any of the Bonds or any Parity Obligations are Outstanding, the Net Revenues and such moneys shall not be used for any other purpose, except as set forth in this Section 5.01 except, that out of the Net Revenues, there may be apportioned such sums, for such purposes, as are expressly permitted by Section 5.02. In consideration of the acceptance of the Bonds by those who shall hold the same from time to time, this Indenture shall be deemed to be and shall constitute a contract between the City and the Owners from time to time of the Bonds and the covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. The Trustee shall establish and maintain the Bond Fund and, within the Bond Fund, the Interest Account, the Principal Account and the Sinking Account. Section 5.02. Receipt, Deposit and Application of Gross Revenues and Net Revenues. (a) Application of Gross Revenues. All of the Gross Revenues shall be deposited by the City immediately upon receipt in the Water Fund. All Gross Revenues shall be held in trust by the City in the Water Fund and shall be applied, transferred, used and withdrawn only for the following purposes: (i) Maintenance and Operation Costs. The City shall first pay from the moneys in the Water Fund the budgeted Maintenance and Operation Costs as such Maintenance and Operation Costs become due and payable. (ii) Payment of Debt Service. On or before the 5th Business Day preceding each Interest Payment Date, the City shall withdraw from the Water Fund and transfer to the Trustee, for deposit in the Bond Fund, an amount which, together with the balance then on deposit in the Bond Fund, the Interest Account, the Principal Account and the Sinking Account (other than amounts required for payment of principal of or interest on any Bonds which have matured but which have not been presented for payment), is equal to the aggregate amount of principal of and interest coming due and payable on the Bonds and shall withdraw from the Water Fund and transfer amounts required for the payment of debt service on any Parity Obligations. The transfers required to pay debt service on the Bonds and any Parity Obligations shall be made without preference or priority and, in the event moneys in the Water Fund are not sufficient to pay the debt service requirement for the Bonds and any Parity Obligations, the City shall pay such amounts on a pro rata basis based on the debt service requirements for the Bonds and each outstanding Parity Obligations. (iii) Surplus. As long as all of the foregoing payments, allocations and transfers are made at the times and in the manner set forth above, any moneys remaining in the Water Fund may at any time be treated as surplus and applied for any lawful purpose. (b) Application of Moneys in the Bond Fund. On or before the Business Day preceding each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain within the Bond Fund), the following amounts, in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Net Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority: First: 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: to the Principal Account, the aggregate amount of principal becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if any; and Third: to the Sinking Account, the aggregate amount of sinking fund installment becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if any. Section 5.03. Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased prior to maturity pursuant to this Indenture). Section 5.04. Application of Principal Account. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely for the purposes of paying the principal of the Bonds when due and payable. Section 5.05. Application of Sinking Account. All amounts in the Sinking Account shall be used and withdrawn by the Trustee solely for the purposes of paying the sinking fund installments of the Bonds when due and payable. Notwithstanding the foregoing, if some but not all of the Bonds have been theretofore redeemed pursuant to Sections 4.01(a), the total amount of all future mandatory Sinking Account payments shall be reduced by the aggregate principal amount of Bonds so redeemed, allocated among such mandatory Sinking Account payments on a pro rata basis in integral multiples of $5,000 as determined by the City (notice of which determination shall be given to the Trustee). In the event of a redemption pursuant to Section 4.01(a) the City shall provide the Trustee with a revised sinking fund schedule giving effect to the optional redemption so completed. Any amounts remaining in the Sinking Account when all of the Bonds are no longer Outstanding shall be withdrawn by the Trustee and transferred to the Water Fund. Section 5.07. Investment of Moneys in Funds and Accounts. All moneys in any of the funds and accounts established pursuant to this Indenture shall, upon Request of the City provided at least two Business Days prior to the date of investment, be invested by the Trustee, but solely in Permitted Investments. In the absence of any such directions from the City, the Trustee shall invest any such moneys in the money market fund set forth in the letter of authorization and direction executed by the City and delivered to the Trustee. If no specific money market fund had been specified by the City, such amount shall be held in cash, uninvested. All Permitted Investments shall be acquired subject to the limitations as to maturities hereinafter set forth in this Section 5.07 and such additional limitations or requirements consistent with the foregoing as may be established by Request of the City. Moneys in all funds and accounts shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required by the Trustee. All interest, profits and other income received from the investment of moneys in any other fund or account established pursuant to this Indenture shall be deposited when received in the Bond Fund. Notwithstanding anything to the contrary contained in this paragraph, an amount of interest received with respect to any Permitted Investment equal to the amount of accrued interest, if any, paid as part of the purchase price of such Permitted Investment shall be credited to the fund or account for the credit of which such Permitted Investment was acquired. The Trustee may commingle any of the funds or accounts established pursuant to this Indenture into a separate fund or funds for investment purposes only, provided that all funds or accounts held by the Trustee hereunder shall be accounted for separately as required by this Indenture. The Trustee or an affiliate may act as principal or agent in the making or disposing of any investment. The Trustee may sell, or present for redemption, any Permitted Investments 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 Permitted Investment is credited, and, subject to the provisions of Section 9.03, the Trustee shall not be liable or responsible for any loss resulting from such investment. The City acknowledges that, to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grants the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The Trustee shall furnish the City periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the City. Upon the City's election, such statements will be delivered via the Trustee's online service and upon electing such service, paper statements will be provided only upon request. The City waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. -24- ARTICLE VI COVENANTS OF THE CITY; SPECIAL TAX COVENANTS Section 6.01. Punctual Payment. The City shall punctually pay or cause to be paid the principal and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Net Revenues and other assets pledged for such payment as provided in this Indenture. Section 6.02. Extension of Payment of Bonds. 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 of the 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 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 6.02 shall be deemed to limit the right of the City to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of Bonds. Section 6.03. Discharge of Claims. The City covenants that in order to fully preserve and protect the priority and security of the Bonds the City shall pay from the Net Revenues and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the Enterprise which, if unpaid, may become a lien or charge upon the Net Revenues prior or superior to the lien of the Bonds and impair the security of the Bonds. The City shall also pay from the Net Revenues all taxes and assessments or other governmental charges lawfully levied or assessed upon or in respect of the Enterprise or upon any part thereof or upon any of the Net Revenues therefrom. Section 6.04. Operation of Enterprise in Efficient and Economical Manner. The City covenants and agrees to operate, or cause to be operated, the Enterprise in an efficient and economical manner and to operate, maintain and preserve the Enterprise in good repair and working order. Section 6.05. Against Encumbrance. Except as provided herein, the City covenants that the property, facilities and improvements of the Enterprise shall not be voluntarily mortgaged or otherwise encumbered, leased, pledged, any charge placed thereon, or disposed of as a whole or substantially as a whole unless: (a) the City shall cause to be filed with the Trustee written evidence from Moody's, if Moody's is rating the Bonds, and/or S&P, if S&P is rating the Bonds, that such sale or other disposition will not cause a reduction or withdrawal of the uninsured rating then assigned to the Bonds by each such rating agency; and (b) such sale or other disposition shall be so arranged as to provide for a continuance of payments into the Bond Fund sufficient in amount to permit payment therefrom of the principal of and interest on the Outstanding Bonds, and also to provide for such payments into the funds as are required under the terms of this Indenture. Notwithstanding the foregoing, the City may lease real property constituting a portion of the Enterprise; provided that the lease payments shall be considered Gross Revenues hereunder. The City further covenants that the Net Revenues or any other funds pledged or otherwise made available to secure payment of the principal of and interest on the Outstanding Bonds shall not be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, -25- or disposed of or used except as authorized by the terms of this Indenture. The City further covenants that it will not enter into any agreement which impairs the operation of the Enterprise or any part of it necessary to secure adequate Net Revenues to pay the principal and interest of the Bonds or which otherwise would impair the rights of the Bond Owners with respect to the Net Revenues. Section 6.06. Records and Accounts. The City covenants that it shall keep proper books of record and accounts of the Enterprise, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the Enterprise. Said books shall, upon reasonable request, be subject to the inspection of the Owners of not less than ten percent (10%) of the Outstanding Bonds or their representatives authorized in writing. The City covenants that it will cause the books and accounts of the Enterprise to be audited annually by an Independent Accountant and will make available for inspection by the Bond Owners at the Trust Office, upon reasonable request, a copy of the report of such Independent Accountant. Any such audit may be combined with and be a part of the general audit of the City's financial records. The City covenants that it will cause to be prepared annually, not more than one hundred eighty (180) days after the close of each Fiscal Year a summary statement showing the amount of Gross Revenues and the amount of all other funds collected which are required to be pledged or otherwise made available as security for payment of principal of and interest on the Bonds, the disbursements from the Gross Revenues and other funds in reasonable detail, and a general statement of the financial and physical condition of the Enterprise. The City shall furnish a copy of the statement to any Bond Owner upon written request. Section 6.07. Rates and Charges. (a) Covenant Regarding Gross Revenues. The City covenants to fix, prescribe, revise and collect rates, fees and charges for the Enterprise as a whole for the services and improvements furnished by the Enterprise during each Fiscal Year which are at least sufficient, after making allowances for contingencies and error in the estimates, to yield Gross Revenues that are sufficient to pay the following amounts in the following order of priority: (i) all anticipated Maintenance and Operation Costs of the Enterprise for such Fiscal Year; (ii) Debt Service payments on the Bonds and any Parity Obligations as they become due and payable during such Fiscal Year, without preference or priority, except to the extent such Debt Service payments are payable from the proceeds of the Bonds or such Parity Obligations, as applicable, or from any other source of legally available funds of the City that have been deposited with the Trustee or otherwise segregated for purposes prior to the commencement of such Fiscal Year (not including a debt service reserve fund); and (iv) all other payments required to meet any other obligations of the City which are charges, liens, encumbrances upon, or which are otherwise payable, from the Revenues during such Fiscal Year. (b) Coveizant Regarding Net Revenues. In addition, the City covenants to fix, prescribe, revise and collect, or cause to be fixed, prescribed, revised and collected, rates, fees and charges for the services and improvements furnished by the Enterprise during each Fiscal Year which are sufficient to yield Net Revenues which are at least equal to one hundred twenty percent -26- (120%) of the total Debt Service Payments on the Bonds and any debt service on Parity Obligations coming due and payable in such Fiscal Year. Section 6.08. Limitations on Future Obligations Secured by Net Revenues. (a) No Obligations Superior to Bonds. In order to protect further the availability of the Net Revenues and the security for the Bonds and any Parity Obligations, the City covenants that no additional bonds or other indebtedness that are payable out of the Net Revenues in whole or in part will be issued or incurred on a senior basis to the Bonds and any Parity Obligations. (b) Parity Obligations. Additional obligations may be issued on a parity with the Bonds and any then existing Parity Obligations subject to the following specific conditions which are hereby made conditions precedent to the issuance and delivery of such Parity Obligations, except that the City need not comply with subparagraph (ii) if the proposed Parity Obligations are incurred to prepay or post a security deposit for the payment of the Bonds or Parity Obligations: (i) The City shall be in compliance with all covenants set forth in this Indenture. (ii) The Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the instrument issuing such Parity Obligations are issued, as shown by the books of the City, plus, at the option of the City, either or both of the items hereinafter in this covenant designated (A) and (B), but excluding connection charges, shall at least equal one hundred twenty percent (120%) of the amount of Maximum Annual Debt Service on all Bonds and Parity Obligations to be Outstanding immediately subsequent to the issuance of such Parity Obligations. The items any or all of which may be added to such Net Revenues for the purpose of issuing or incurring Parity Obligations hereunder are the following: (A) An allowance for Net Revenues from any additions to or improvements or extensions of the Enterprise to be made with the proceeds of such Parity Obligations, and also for Net Revenues from any such additions, improvements or extensions which have been made from moneys from any source but in any case which, during all or any part of such Fiscal Year or such twelve (12) month period, were not in service, all in an amount equal to seventy percent (70%) of the estimated additional average annual Net Revenues to be derived from such additions, improvements and extensions for the first thirty-six (36) month period in which each addition, improvement or extension is respectively to be in operation, all as shown in the written report of an Independent Financial Consultant engaged by the City. (B) An allowance for earnings arising from any increase in the charges made for service from the Enterprise which has become effective prior to the incurring of such additional indebtedness but which, during all or any part of such Fiscal Year or such twelve (12) month period, was not in effect, in an amount equal to the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year or such twelve (12) month period, all as shown in the written report of an Independent Financial Consultant engaged by the City. (iii) The instrument providing for the issuance of such Parity Obligations shall provide that: -27- (A) The proceeds of such Parity Obligations shall be applied to the acquisition, construction, improvement, financing or refinancing of additional facilities, improvements or extensions of existing facilities within the Enterprise, or otherwise for facilities, improvements or property which the City determines are of benefit to the Enterprise, or for the purpose of refunding any Bonds or Parity Obligations in whole or in part, including all costs (including costs of issuing such Parity Obligations and including capitalized interest on such Parity Obligations during any period which the City deems necessary or advisable) relating thereto; (B) Interest on such Parity Obligations shall be payable on April 1 and October 1 in each year of the term of such Parity Obligations except the first year, during which year interest may be payable on any April 1 or October 1; and (C) The principal of such Parity Obligations shall be payable on April 1 in any year in which principal is payable. (iv) A reserve fund may, but shall not be required to, be established for such Parity Obligations. (c) Subordinate Obligations. The City further covenants that the City shall not issue or incur any Subordinate Obligations unless Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which instrument such Subordinate Obligations are issued or incurred, as shown by the books of the City shall, after deducting all amounts required for the payment of the Bonds and any Parity Obligations, have amounted to at least 1.0 times the sum of the maximum annual debt service on all Subordinate Obligations outstanding immediately subsequent to the incurring of such additional obligations. An allowance for earnings arising from any increase in the charges made for service from the Enterprise which has become effective prior to the incurring of such additional obligations but which, during all or any part of such Fiscal Year, was not in effect, may be added in an amount equal to 100% of the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year and any period prior to the incurring of such additional obligations, as shown by the certificate or opinion of a qualified independent consultant employed by the City. Section 6.09. Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture. Section 6.10. 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 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 6.11. Private Activity Bond Limitation. The City shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of Section 141(b) of the Code. IMM Section 6.12. Private Loan Financing Limitation. The City shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private loan financing test of Section 141(c) of the Code. Section 6.13. Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Section 6.14. Rebate Requirement. The City shall take any and all actions necessary to assure compliance with Section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government. Section 6.15. No Arbitrage. The City shall not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date would have caused the Bonds, to be "arbitrage bonds" within the meaning of Section 148 of the Code. Section 6.16. Maintenance of Tax -Exemption. The City shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the Closing Date. Section 6.17. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of the Indenture, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an event of default; however, any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. -29- ARTICLE VII MAINTENANCE; TAXES; INSURANCE AND CONDEMNATION Section 7.01. Maintenance and Operation of the Enterprise. The City covenants and agrees that it will operate and maintain the Enterprise in accordance with all applicable governmental laws, ordinances, approvals, rules, regulations and requirements including, without limitation, such zoning, sanitary, pollution and safety ordinances and laws and such rules and regulations thereunder as may be binding upon the City. Section 7.02. Taxes, Assessments, Other Governmental Charges and Utility Charges. The City covenants and agrees that it will pay and discharge all taxes, assessments, governmental charges of any kind whatsoever, and utility charges which may be or have been assessed or which may have become liens upon the Enterprise or the interest therein of the Trustee or of the Owners of the Bonds, and will make such payments or cause such payments to be made, respectively, in due time to prevent any delinquency thereon or any forfeiture or sale of the Enterprise or any part thereof, and upon request, will furnish to the Trustee receipts for all such payments, or other evidence satisfactory to the Trustee; provided, however, that the City shall not be required to pay any tax, assessment, rate or charge as herein provided as long as it shall in good faith contest the validity thereof, provided that the City shall have set aside adequate reserves with respect thereto. Section 7.03. Public Liability and Property Damage Insurance. The City shall maintain or cause to be maintained, so long as any Bonds or Parity Obligations remain outstanding, but only if and to the extent available at reasonable cost from reputable insurers, a standard comprehensive general insurance policy or policies in protection of the City and its members, officers, agents, assignees and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Enterprise. Said policy or policies shall provide coverage in such liability amounts and shall be subject to such deductibles as shall be customary with respect to works and property of a like character. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried by the City, and may be maintained in whole or in part in the form of self-insurance by the City, in the form of the participation by the City in a joint powers agency or other program providing pooled insurance. The proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which such proceeds have been paid. Section 7.04. Casualty Insurance. The City shall procure and maintain or cause to be procured and maintained, so long as any Bonds or Parity Obligations remain outstanding, but only in the event and to the extent available from reputable insurers at reasonable cost, casualty insurance against loss or damage to any improvements constituting any part of the Enterprise, covering such hazards as are customarily covered with respect to works and property of like character. Such insurance may be subject to deductible clauses which are customary with respect to works and property of a like character. Such insurance may be maintained as part of or in conjunction with any other casualty insurance coverage carried by the City and may be maintained, in whole or in part, in the form of self-insurance by the City, subject to the provisions of Section 7.05, or in the form of the participation by the City in a joint powers agency or other program providing pooled insurance. All amounts collected from insurance against accident to or destruction of any portion of the Enterprise shall be used to repair, rebuild or replace such damaged or destroyed portion of the Enterprise. -30- Section 7.05. Insurance Net Proceeds; Form of Policies. The City shall pay or cause to be paid when due the premiums for all insurance policies. The City shall annually, on or before April 1, deliver to the Trustee a certificate to the effect that the City has complied with the requirements of Sections 7.03 and 7.04 hereof. The Trustee shall be entitled to rely upon such Certificate of the City as to the City's compliance with Sections 7.03 and 7.04 hereof. In the event that any insurance required pursuant to Section 7.03 or 7.04 shall be provided in the form of self-insurance, the City shall file with the Trustee annually, within ninety (90) days following the close of each Fiscal Year, a statement of an independent actuarial consultant identifying the extent of such self-insurance and stating the determination that the City maintains sufficient reserves with respect thereto. In the event that any such insurance shall be provided in the form of self-insurance by the City, the City shall not be obligated to make any payment with respect to any insured event except from Net Revenues or from such reserves. Section 7.06. Eminent Domain. Any amounts received as awards as a result of the taking of all or any part of the Enterprise by the lawful exercise of eminent domain, at the election of the City (evidenced by a Written Certificate of the City filed with the Trustee and the City) shall be used for the lease, acquisition or construction of improvements or extension of the Enterprise. ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS Section 8.01. Events of Default. The following events shall be Events of Default: (a) default in the due and punctual payment of the principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise, in the amounts 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 by the City in the observance of any of the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained (other than as referred to in subsections (a) or (b) of this Section 8.01), if such default shall have continued for a period of sixty (60) consecutive days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the City by the Trustee, or to the City and the Trustee by the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding; (d) abandonment by the City of the Enterprise, or any substantial part thereof, and such abandonment shall continue for a period of sixty (60) consecutive days after written notice thereof shall have been given to the City by the Trustee, or to the City and the Trustee by the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding, unless the City shall have assumed all of the City's obligations hereunder; provided, however, that abandonment by the City shall not constitute an Event of Default if such abandonment was caused by unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market and unusually severe weather or any similar even and/or occurrences beyond the control of the City; or (e) the City's filing a petition in voluntary bankruptcy, for the composition of its affairs or for its corporate reorganization under any state or federal bankruptcy or insolvency law, or making an assignment for the benefit of creditors, or admitting in writing to its insolvency or inability to pay debts as they mature, or consenting in writing to the appointment of a trustee or receiver for itself or for the whole or any substantial part of the Enterprise. Section 8.02. Acceleration of Maturities. If an Event of Default shall occur, then, and in each and every such case during the continuance of such Event of Default, the Trustee or the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding shall be entitled, upon notice in writing to the City, to declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding. 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 shall deposit with the Trustee a sum sufficient to pay all the principal of and installments of interest on the Bonds payment of which is overdue, with -32- interest on such overdue principal at the rate borne by the respective Bonds, and the reasonable charges and expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the City and the Trustee, or the Trustee if such declaration was made by the Trustee, may, on behalf of the Owners 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. Section 8.03. Application of Net Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Net Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture (subject to Section 12.10) shall be applied by the Trustee as follows and in the following order: (a) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the Bonds and payment of reasonable charges and expenses of the Trustee (including, but not limited to, reasonable fees and disbursements of its counsel, agents and advisors) incurred in and about the performance of its powers and duties under this Indenture; (b) To the payment of the principal 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 Indenture (including Section 6.02), as follows: (i) 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 of any Bonds which shall have become due, in the order of their due dates, with interest on the overdue principal at the rate borne 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 due on such date to the persons entitled thereto, without any discrimination or preference; and (ii) 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 respective 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, -33- according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference. Section 8.04. Trustee to Represent Bondowners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney -in -fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, this Indenture, the Refunding Bond 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 Trustee to represent the Bondowners, the Trustee in its discretion may and shall upon the written request of the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding (or, if more than one such request is received, the written request executed by the Owners of the greatest percentage of Bonds then Outstanding in excess of twenty-five percent (25%)), and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Owners 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 Trustee or in such Owners under this Indenture, the Refunding Bond Law or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Net Revenues and other assets pledged under this Indenture, pending such proceedings. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the 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 Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of this Indenture (including Section 6.02). Section 8.05. Bondowners' Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondowners not parties to such direction or would expose the Trustee to liability for which it has not been indemnified to its satisfaction. Section 8.06. Limitation on Bondowners' Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Refunding Bond Law or any other applicable law with respect to such Bond, unless (1) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default; (2) the Owners of not less than twenty- five per cent (25%) in aggregate principal amount of the Bonds then Outstanding (or, if more than one such request is received, the written request executed by the Owners of the greatest percentage of Bonds then Outstanding in excess of twenty-five percent (25%)) shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (3) such Owner or said Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (4) the Trustee shall have refused or omitted to comply with such request. for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. -.�4- Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under this Indenture, the Refunding Bond Law, the California Government Code or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture (including Section 6.02). Section 8.07. Absolute Obligation of City. Nothing in Section 8.06 or in any other provision of this Indenture, or in the Bonds, contained shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the.principal of and interest on the Bonds to the respective Owners of the. Bonds at their respective dates of maturity, as herein provided, but only out of the Net Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds. Section 8.08. Termination of Proceedings. In case any proceedings taken by the Trustee or any one or more Bondowners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Bondowners, then in every such case the City, the Trustee and the Bondowners, 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 Trustee and the Bondowners shall continue as though no such proceedings had been taken. Section 8.09. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners 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 8.10. No Waiver of Default. No delay or omission of the Trustee or of any Owner 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 Indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient. -35- ARTICLE IX THE TRUSTEE Section 9.01. Appointment of Trustee; Duties, Immunities and Liabilities of Trustee. (a) The Bank of New York Mellon Trust Company, N.A. is hereby appointed to serve as Trustee under this Indenture. By execution hereof, the Trustee accepts such appointment. (b) The 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 Indenture. The 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 Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (c) The City may remove the Trustee at any time unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners 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 Trustee shall cease to be eligible in accordance with subsection (f) of this Section 9.01, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the 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 Trustee, and thereupon shall appoint a successor Trustee by an instrument in writing. (d) The Trustee may at any time resign by giving sixty days prior written notice of such resignation to the City and by giving the Bondowners notice of such resignation by mail to the addresses shown on the Bond Registration Books. Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee by an instrument in writing. (e) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within forty-five (45) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bondowner (on behalf of himself and all other Bondowners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture, shall signify its acceptance of such appointment by executing and delivering to the City and to its predecessor Trustee a written acceptance thereof, and thereupon such successor 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 Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Request of the City or the request of the successor Trustee, such predecessor 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 Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the City shall execute and deliver any and all instruments as may be reasonably -J l7- required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the City shall mail a notice of the succession of such Trustee to the trusts hereunder to the Bondowners at the addresses shown on the registration books maintained by the Trustee. If the City fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the City. (f) Any Trustee appointed under the provisions of this Section 9.01 in succession to the Trustee shall be a trust company, national banking association or bank having the powers of a trust company having a corporate trust office in the State, having a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank, national banking association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such bank, national banking association 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 Trustee shall cease to be eligible in accordance with the provisions of this subsection (f), the Trustee shall resign immediately in the manner and with the effect specified in this Section 9.01. Section 9.02. Merger or Consolidation. Any company or association into which the Trustee may be merged or converted or with which it may be consolidated or any company or association resulting from any merger, conversion or consolidation to which it shall be a party or any company or association to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company or association shall be eligible under subsection (f) of Section 9.01, shall be the successor to such Trustee, as the case may be, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. Section 9.03. Liability of Trustee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the City, and the Trustee assumes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of this Indenture or of the Bonds, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee may become the owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondowners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. (b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless the Trustee was negligent in ascertaining the pertinent facts. (c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than 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 Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. -37- (d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Bondowners, pursuant to the provisions of this Indenture, unless such Bondowners shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby. (e) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. (f) No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder if repayment of such funds or adequate indemnity against such risk or liability is not assured to it. (g) The Trustee makes no representation, express or implied as to the title, value, design, compliance with specifications or legal requirements, quality, durability, operation, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City of the Enterprise. (h) The Trustee shall not be deemed to have knowledge of an Event of Default hereunder unless and until it shall have actual knowledge thereof. (i) The Trustee shall have no responsibility with respect to any information, statement or recital in any official statement, offering memorandum or other disclosure material prepared or distributed with respect to the Bonds. (j) The immunities extended to the Trustee also extend to its directors, officers, employees and agents. (k) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty. (1) The Trustee may execute any of the trusts or powers hereof and perform any of its duties through attorneys, agents and receivers and shall not be answerable for the same if appointed by it with reasonable care. (m) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions ("Instructions") given pursuant to this Indenture and delivered using Electronic Means ("Electronic Means" shall mean the following communications methods: S.W.I.F.T., e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions ("Authorized Officers") and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee's understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized -38- Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. (n) The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term "force majeure" means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include but not be limited to acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences. (o) The Trustee's rights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance of the Bonds. (p) The Trustee shall not be responsible for or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof. Section 9.04. Right of Trustee to Rely on Documents. The Trustee shall be protected in acting upon any notice, resolution, request, requisition, consent, order, certificate, report, opinion, note 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 Trustee may consult with counsel, who may be counsel of or to the City, 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 Indenture the 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 Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 9.05. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject during regular business hours with reasonable prior notice to the inspection of the City and any Bondowner, and their agents and representatives duly authorized in writing, at the Trust Office and under reasonable conditions. -39- Section 9.06. Compensation of Trustee. The City covenants to pay to the Trustee from time to time, from available moneys of the City, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it in the exercise and performance of any of the powers and duties hereunder of the Trustee, and the City will pay or reimburse the Trustee upon its request, from available moneys of the City, for all expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. Section 9.07. Indemnification. The City covenants to indemnify the Trustee and to hold it harmless against any loss, liability, expenses or advance, including reasonable fees and expenses of counsel and other experts, incurred or made without negligence or bad faith on the part of the Trustee, in the exercise and performance of any of the powers and duties hereunder by the Trustee, including the costs and expenses of defending itself against any claim of liability arising under this Indenture. Such indemnification shall survive the termination or discharge of this Indenture and the resignation or removal of the Trustee. -40- ARTICLE X MODIFICATION OR AMENDMENT OF THE INDENTURE Section 10.01. Amendments Permitted. (a) This Indenture and the rights and obligations of the City and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time by a Supplemental Indenture, which the City and the Trustee may execute when the written consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have been filed with the Trustee; provided that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any particular maturity remain Outstanding, the consent of the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Bonds Outstanding under this Section 10.01. No such modification or amendment shall (1) extend the fixed maturity of any Bond, or reduce the amount of principal thereof, provided in this Indenture for the payment of any Bond, or reduce the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of each Bond so affected, or (2) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Net Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture, or deprive the Owners of the Bonds of the lien created by this Indenture on such Net Revenues and other assets (except as expressly provided in this Indenture), or terminate the insurance of the Bonds, without the consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent of the Bondowners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the City and the Trustee of any Supplemental Indenture pursuant to this subsection (a), the Trustee shall mail a notice, setting forth in general terms the substance of such Supplemental Indenture to the Bondowners at the addresses shown on the Bond Registration Books. 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 Indenture. (b) This Indenture and the rights and obligations of the City, of the Trustee and of the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the City and the Trustee may execute without the consent of any Bondowners, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the covenants and agreements of the City in this Indenture contained 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 Owners of the Bonds; (ii) 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 Indenture, or in regard to matters or questions arising under this Indenture, as the City may deem necessary or desirable and not inconsistent with this Indenture, and which shall not materially adversely affect the interests of the Owners of the Bonds; and -41- (iii) to make such additions, deletions or modifications as may be necessary to assure exclusion from gross income for purposes of federal income taxation of interest on the Bonds. (c) No such Supplemental Indenture shall modify any of the rights or obligations of the Trustee without its prior written consent thereto; nor shall the Trustee be required to consent to any such Supplemental Indenture which affects its rights or obligations hereunder. . In executing, or accepting the additional trusts created by, any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and complies with the terms hereof. Section 10.02. Effect of Supplemental Indenture. From and after the . time any Supplemental Indenture becomes effective pursuant to this Article. X, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the City, the Trustee and all Owners 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 Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 10.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after any Supplemental Indenture becomes effective pursuant to this Article X may, and if the Trustee so determines shall, bear a notation by endorsement or otherwise in form approved by the City and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such execution and presentation of his Bond for the purpose at the Trust Office or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such Bond. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the City and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the City and authenticated by the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall be exchanged at the Trust Office, without cost to any Bondowner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amounts of the same maturity. Section 10.04. Amendment of Particular Bonds. The provisions of this Article X shall not prevent any Bondowner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds. ARTICLE XI DEFEASANCE Section 11.01. Discharge of Indenture. Bonds may be paid by the City in any of the following ways; provided that the City also pays or causes to be paid any other sums payable hereunder by the City: (a) by paying or causing to be paid the principal of and interest on Bonds Outstanding, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money or Government Obligations in the necessary amount (as provided in Section 11.03) to pay Bonds Outstanding; or (c) by delivering to the Trustee, for cancellation by it, Bonds Outstanding. If the City shall pay all Bonds Outstanding and shall also pay or cause to be paid all other sums payable hereunder by the City, then and in that case, at the election of the City (evidenced by a Certificate of the City, filed with the Trustee, signifying the intention of the City to discharge all such indebtedness and this Indenture), and notwithstanding that any Bonds shall not have been surrendered for payment, this Indenture and the pledge of Net Revenues and other assets made under this Indenture and all covenants, agreements and other obligations of the City under this Indenture shall cease, terminate, become void and be completely discharged and satisfied, except only as provided in Section 11.02. In such event, upon Request of the City, the 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 or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the City all moneys or securities or other property held by it pursuant to this Indenture which are not required for the payment of Bonds not theretofore surrendered for such payment. Section 11.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 11.01) to pay any Outstanding Bond, provided that the provisions of Section 11.04 shall apply in all events. The City may at any time surrender to the 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 11.03. Deposit of Money or Securities with Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or Government Obligations in the necessary amount to pay any Bonds, the money or Government Obligations so to be deposited or held may include money or Government Obligations held by the Trustee in the funds and accounts established pursuant to this Indenture and shall be: (a) 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; or (b) Government Obligations the principal of and interest on which when due will provide money sufficient in the opinion of a certified public accountant to pay the principal of _i 3_ and all unpaid interest to maturity on the Bonds to be paid, as such principal and interest become due. Section 11.04. Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal or interest on, any Bonds and remaining unclaimed for two years after the principal of all of the Bonds has become due and payable (whether at maturity or by acceleration as provided in this Indenture), if such moneys were so held at such date, or two years 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 City free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the City as aforesaid, the Trustee, as the case may be, may (at the cost of the City) first mail a notice, in such form as may be deemed appropriate by the Trustee, to the Owners of the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the City of the moneys held for the payment thereof. ARTICLE XII MISCELLANEOUS Section 12.01. Liability of City Limited to Net Revenues. Notwithstanding anything contained in this Indenture or in the Bonds, the City shall not be required to advance any moneys derived from any source other than the Net Revenues and other assets pledged under this Indenture for any of the purposes mentioned in this Indenture, whether for the payment of the principal of or interest on the Bonds or for any other purpose of this Indenture. Section 12.02. Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture either the City or the 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 Indenture contained by or on behalf of the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 12.03. Limitation of Rights to Parties and Bondowners. Except as provided in Article XII hereof, nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any person other than the City, the Trustee and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of this 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 Trustee and the Owners of the Bonds. Section 12.04. Waiver of Notice. Whenever the giving of notice by mail or otherwise is required in this Indenture, 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 12.05. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the City of any Bonds, the Trustee shall destroy such Bonds and deliver a certificate of such destruction to the City. Section 12.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this 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 Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The City hereby declares that it would have adopted this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable. Section 12.07. Notices. Any notice, request, complaint, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by first class, registered or certified mail, postage prepaid, or sent by confirmed telegram, telecopy or telex, to the address (or such other address as may have been filed with the Trustee in writing) set forth below: If to the City: City of Tustin 300 Centennial Way Tustin, CA 92780 -45- Attention: City Manager Phone: (714) 573-3000 Fax: (714) 838-1602 If to the Trustee: The Bank of New York Mellon Trust Company, N.A. 400 South Hope Street, Suite 500 Los Angeles, CA 90071 Attention: Corporate Trust Department Phone: (213) 630-6249 Fax: (213) 630-6480 Any notice provided by the Trustee to the Owners shall also be provided to the City. Section 12.08. Evidence of Rights of Bondowners. Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by Bondowners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bondowners 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 Indenture and shall be conclusive in favor of the Trustee and of the City if made in the manner provided in this Section 12.08. 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 him 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 registered Bonds shall be proved by the Bond Registration Books held by the Trustee. Any request, consent, or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the City in accordance therewith or reliance thereon. Section 12.09. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the City 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 or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section 12.09 if the pledgee shall establish to the satisfaction of the 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 with, the City or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the City shall specify in a certificate to the Trustee those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such certificate. Section 12.10. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal due on any date with respect to particular Bonds shall, on and -46- after such date and pending such payment, be set aside on its books and held in trust by it without liability for interest thereon for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 11.04. Section 12.11. Funds and Accounts. Any fund required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds shall at all times be maintained in accordance with customary standards of the industry, to the extent practicable, and with due regard for the protection of the security of the Bonds and the rights of every holder thereof. Section 12.12. Article and Section Headings and References. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Indenture. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; the words "herein," "hereof," "hereby," "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof; and words of the masculine gender shall mean and include words of the feminine and neuter genders. Section 12.13. Waiver of Personal Liability. No member of the City Council, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal 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 of the City Council, officer, agent or employee from the performance of any official duty provided by law or by this Indenture. Section 12.14. Execution in Several Counterparts. This 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 Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. Section 12.15. Governing Law. This Indenture shall be construed in accordance with and governed by the Constitution and laws of the State. If this Indenture shall be the subject of litigation, venue shall reside in the federal or state courts of California. -47- IN WITNESS WHEREOF, the CITY OF TUSTIN has caused this Indenture to be signed in its name by the City Manager and attested by the City Clerk, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by one of its authorized officers, all as of the day and year first above written. Attest: Erica N. Rabe City Clerk CITY OF TUSTIN B Y Je rey C. Parker ity Manager THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee By Name Title -48- IN WITNESS WHEREOF, the CITY OF TUSTIN has caused this Indenture to be signed in its name by the City Manager and attested by the City Clerk, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by one of its authorized officers, all as of the day and year first above written. Attest: Erica N. Rabe City Clerk CITY OF TUSTIN Jeffrey C. Parker City Manager THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee By Name Title -48- EXHIBIT A FORM OF BOND United States of America State of California Orange County CITY OF TUSTIN 2016 Water Refunding Revenue Bond INTEREST RATE MATURITY DATE DATED DATE CUSIP April 1, September 28, 2016 901080 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS The CITY OF TUSTIN, a municipal corporation and general law city duly organized and existing under the laws of the State of California (the "City"), for value received, hereby promises to pay to the Registered Owner named above or registered assigns (the "Owner"), on the Maturity Date stated above, the Principal Amount stated above in lawful money of the United States of America, and to pay interest thereon in like lawful money from the April 1 or October 1 (each an "Interest Payment Date") next preceding the date of authentication hereof, unless said date of authentication is an Interest Payment Date, in which event such interest is payable from such date of authentication, and unless said date of authentication is prior to March 15, 2017, in which event such interest is payable from the Dated Date stated above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the date to which interest has previously been paid or made available for payment on this Bond in full at the Interest Rate per annum stated above, payable semiannually on each Interest Payment Date, commencing April 1, 2017. The principal amount of this Bond is payable at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), in Los Angeles, California, or at such office as the Trustee may designate, upon presentation and surrender of this Bond to the Trustee. Payment of the interest on this Bond will be made to the person whose name appears on the bond registration books of the Trustee as the Owner thereof as of the fifteenth day of the month immediately preceding an Interest Payment Date whether or not said day is a business day (the "Record Date"), such interest to be paid by check mailed on the Interest Payment Date to the Owner or, at the option of any Owner of at least $1,000,000 aggregate principal amount of Bonds and upon written notice received by the Trustee prior to the Record Date, by wire transfer, at the Owner's address as it appears on such bond registration books or to such account as shall have been identified by the Owner in the notice requesting payment by wire transfer. Capitalized terms used herein and not otherwise defined are used with the meanings ascribed to them in the Indenture of Trust (the "Indenture"), dated as of September 1, 2016, by and between the City and the Trustee. Exhibit A Page 1 This Bond is one of a series of Bonds of various maturities designated as "City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds" (the "Bonds"), issued pursuant to the provisions of Article 10 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with section 53570) of the California Government Code (the "Refunding Bond Law") in the aggregate principal amount of $21,515,000, all of like tenor (except for such variations, if any, as may be required to designate varying numbers, maturities or interest rates), issued under and pursuant to the Indenture and approved by the City by Resolution No. 16-47, adopted by the City Council of the City on August 16, 2016. A copy of the Indenture is on file at the office of the Trustee, and reference to the Indenture and any and all supplements thereto and modifications and amendments thereof and to the Refunding Bond Law is made for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the net revenues (the "Net Revenues") of the City's municipal Water enterprise (the "Enterprise"), as more particularly described in the Indenture, and the rights of the Owners of the Bonds. All the terms of the Indenture and the Refunding Bond Law are hereby incorporated herein and constitute a contract between the City and the Owners from time to time of this Bond, and to all the provisions thereof the Owner of this Bond, by his acceptance hereof, consents and agrees. Each taker and subsequent Owner hereof shall have recourse to all of the provisions of the Refunding Bond Law and the Indenture and shall be bound by all of the terms and conditions thereof. The Bonds are issued to provide for the refunding of certain outstanding obligations of the City. The Bonds are special obligations of the City and are payable, as to interest thereon and principal thereof, from the Net Revenues. All of the Bonds are equally secured by a pledge of, and charge and lien upon, that portion of the Net Revenues necessary to pay the principal of and interest on the Bonds in any Fiscal Year, and the Net Revenues constitute a trust fund for the security and payment of the principal of and interest on all of the Bonds. Additional obligations of the City payable from the Net Revenues may be issued but only on a subordinate basis to the Bonds. The principal of and interest on the Bonds are payable solely from the Net Revenues, and the City is not obligated to pay the Bonds except from the Net Revenues. The general fund of the City is not liable, and the full faith and credit or taxing power of the City is not pledged, for the payment of the principal of and interest on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or any of its income or receipts, except the Net Revenues. The City covenants that, so long as any of the Bonds are outstanding, it will fix, prescribe and collect charges so as to yield Net Revenues at least equal to the amounts thereof prescribed by the Indenture and sufficient to pay the principal of and interest on the Bonds in accordance with the provisions of the Indenture. The Bonds maturing on or after April 1, 2027, are subject to redemption prior to their respective maturity dates, at the option of the City, as a whole or in part on any date or in part, in such order of maturity as shall be selected by the City (or in inverse order of maturity if the City shall fail to select a particular order) and by lot within a maturity, on or after April 1, 2026, from any source of available funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. The Bonds maturing on April 1, 2041 (the "Term Bonds") are subject to mandatory redemption, in part by lot, from Sinking Account payments set forth in the following schedule on April 1, 2037, and on each April 1 thereafter to and including April 1, 2041, at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some but not Exhibit A Page 2 all of the Term Bonds have been redeemed pursuant to subsection (a) above, the total amount of Sinking Account payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the Term Bonds so redeemed by reducing each such future Sinking Account payment on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated pursuant to written notice filed by the City with the Trustee. Sinking Account Redemption Date Principal Amount (April 1) to be Redeemed 2037 $1,370,000 2038 1,415,000 2039 1,460,000 2040 1,500,000 2041 t 1,540,000 maturity If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and Lannulled as further provided in the Indenture. This Bond is transferable, as provided in the Indenture, only upon the books of the City kept for that purpose at the office of the Trustee, by the Owner hereof in person, or by his attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered Owner or his attorney duly authorized in writing, and thereupon a new Bond or Bonds, without coupons, and in the same aggregate principal amount and of the same maturity, shall be issued to the transferee in exchange herefor, as provided in the Indenture, and upon the payment of charges, if any, including, after the first exchange, the cost of preparing new Bonds therein prescribed. The rights and obligations of the City and of the Owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture. No such modification or amendment shall permit a change in the maturity of the principal of any outstanding Bond or of any installment of interest thereon or a reduction in the principal amount or in the rate of interest thereon without the consent of the Owner of such Bond, or shall reduce the percentages or otherwise affect the classes of Bonds, the consent of the Owners of which is required to effect any such modification or amendment, all as more fully set forth in the Indenture. It is hereby certified that all of the conditions, things and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due time, form and manner as required by law and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any limit prescribed by the Constitution or laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the issuer or its agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE Exhibit A Paves .'� BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. IN WITNESS WHEREOF, the City of Tustin has caused this Bond to be executed in its name and on its behalf with the manual or facsimile signature of its City Manager and the manual or facsimile signature of its City Clerk all as of the Dated Date stated above. Attest: CITY OF TUSTIN Jeffrey C. Parker City Manager Erica N. Rabe City Clerk TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within -mentioned Indenture, which has been authenticated and registered on THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee WM Authorized Officer Exhibit A Patty a "b" ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto whose address and social security or other tax identifying number is the within -mentioned Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the Bond registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Notice: Signature guarantee shall be made by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. Exhibit A c r a Wage i .� Quint & Thimmig LLP FIRST AMENDMENT TO INDENTURE OF TRUST Dated as of February 1, 2024 by and between the CITY OF TUSTIN and 12/21/23 01/03/24 01/10/24 01/22/24 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Amending that certain Indenture of Trust, dated as of September 1, 2016, by and between the City of Tustin and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to: $21,515,000 City of Tustin (Orange County, California) 2016 Water Revenue Refunding Bonds 20027.04 FIRST AMENDMENT TO INDENTURE OF TRUST This FIRST AMENDMENT TO INDENTURE OF TRUST (this "First Amendment"), dated as of February 1, 2024, is made between by and between the CITY OF TUSTIN, a municipal corporation and general law city organized and existing under the constitution and laws of the State of California (the "City"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, California, as trustee (the "Trustee"), amending that certain Indenture of Trust, dated as of September 1, 2016, by and between the City and the Trustee (the "Original Indenture"). WHEREAS, the City and the Trustee have executed and delivered the Original Indenture under and pursuant to which the City issued its $21,515,000 City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds (the "Bonds"); WHEREAS, the proceeds of the Bonds were used to finance the costs of the acquisition and construction of certain new additions, betterments, extensions and improvements to the municipal water system owned and operated by the City; WHEREAS, it has been determined that the Original Indenture is defective in that Section 5.02 of the Original Indenture does not adequately provide for the flow of Gross Revenues required for the payment of Subordinate Debt; and WHEREAS, Section 10.01(b) of the Original Indenture provides that the Original Indenture may be modified or amended from time -to -time and at any time by an indenture or indentures supplemental thereto, which the City and the Trustee may enter into without the consent of any Owners, to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained therein, or in any other respect whatsoever as the City may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not, in the reasonable determination of the City, materially adversely affect the interests of the Owners; NOW, THEREFORE, the parties hereto, for good and valuable consideration the receipt of which is acknowledged, and intending to be legally bound hereby, agree as follows: Section 1. Definitions. All defined terms used in this First Amendment and the Recitals hereto, unless defined elsewhere in this First Amendment, shall have the meanings given to those terms in the Original Indenture. Section 2. Amendment of Section 5.02 of the Original Indenture. Section 5.02 of the Original Indenture is hereby amended in full as follow: Section 5.02. Receipt, Deposit and Application of Gross Revenues and Net Revenues. (a) Application of Gross Revenues. All of the Gross Revenues shall be deposited by the City immediately upon receipt in the Water Fund. All Gross Revenues shall be held in trust by the City in the Water Fund and shall be applied, transferred, used and withdrawn only for the following purposes: 20027.04 (i) Maintenance and Operation Costs. The City shall first pay from the moneys in the Water Fund the budgeted Maintenance and Operation Costs as such Maintenance and Operation Costs become due and payable. (ii) Payment of Debt Service. On or before the 5th Business Day preceding each Interest Payment Date, (A) the City shall withdraw from the Water Fund and transfer to the Trustee, for deposit in the Bond Fund, an amount which, together with the balance then on deposit in the Bond Fund, the Interest Account, the Principal Account and the Sinking Account (other than amounts required for payment of principal of or interest on any Bonds which have matured but which have not been presented for payment), is equal to the aggregate amount of principal of and interest coming due and payable on the Bonds and (B) shall withdraw from the Water Fund and transfer amounts required for the payment of debt service on any Parity Obligations. The transfers required to pay debt service on the Bonds and any Parity Obligations shall be made without preference or priority and, in the event moneys in the Water Fund are not sufficient to pay the debt service requirement for the Bonds and any Parity Obligations, the City shall pay such amounts on a pro rata basis based on the debt service requirements for the Bonds and each outstanding Parity Obligations. (iii) Payment of Debt Service on Subordinate Debt. On or before the 5th Business Day preceding each interest payment date with respect to Subordinate Debt, the City shall withdraw from the Water Fund and transfer amounts required for the payment of debt service on such Subordinate Debt. (iv) Surplus. As long as all of the foregoing payments, allocations and transfers are made at the times and in the manner set forth above, any moneys remaining in the Water Fund may at any time be treated as surplus and applied for any lawful purpose. (b) Application of Moneys in the Bond Fund. On or before the Business Day preceding each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain within the Bond Fund), the following amounts, in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Net Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority: First: 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: to the Principal Account, the aggregate amount of principal becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if any; and Third: to the Sinking Account, the aggregate amount of sinking fund installment becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if any. -2- Section 3. Survival. Except as specifically provided in this First Amendment, all terms and conditions of the Original Indenture shall remain in full force and effect, unaltered and unamended hereby. Section 4. Counterparts. This First Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. Section 5. Governing Law. This First Amendment shall be governed by and construed and interpreted in accordance with the Constitution and laws of the State of California without giving effect to conflict of laws principles thereof. Section 6. Headings. Headings of Sections in this First Amendment are for reference purposes only and shall not be deemed to have any substantive effect. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] -3- IN WITNESS WHEREOF, the CITY OF TUSTIN has caused this First Amendment to be signed in its name by the City Manager and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by one of its authorized officers, all as of the day and year first above written. CITY OF TUSTIN t By 1A %-V City Manager THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Authorized Officer [Signature page to First Amendment to Indenture of Trust, dated as of February 1, 2024, by and between the Tustin Public Financing Authority and The Bank of New York Mellon Trust Company, N.A., as Trustee, Amending that certain Indenture of Trust, dated as of September 1, 2016, by and between the City of Tustin and The Bank of New York Mellon Trust Company, N.A., as Trustee] -4- !• • 0 IN WITNESS WHEREOF, the CITY OF TUSTIN has caused this First Amendment to be signed in its naive by the City Manager and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trust created hereunder, bas caused this Indenture to be signed iiz its corporate name by one of its authorized officers, all as of the day and near first above written. CITY OF TUSTIN W" MA a . T IG OF NEWORI TRUST COMPANY, N.A., as Trustee y *�L ""-A Au oxized Office 40 me 00 am aem� [Signature page to First Antendirtent to Indenture of Trust, dated as of February 1, 2024, by and between the Tustin Public Financing Authority and The Bank of New York Mellon Trust Company, N.A., as Trustee, Amending that certain Indenture of Trust, dated as of September 1, 2016, by and between the City of Tustin and The Bank of New York Mellon Trust Company, N.A., as Trustee] Quint & Thimmig LLP INDENTURE OF TRUST by and between the CITY OF TUSTIN and 11/21/19 12/17/19 01/01/20 02/11/20 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Dated as of February 1, 2020 Relating to the $14,910,000 City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020 20015.09 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION; EQUAL SECURITY Section1.01. Definitions................................................................................................................................................................. 3 ARTICLE H THE BONDS Section2.01. Authorization of Bonds.........................................................................................................................................12 Section2.02. Terms of Bonds.......................................................................................................................................................12 Section2.03. Form of Bonds.........................................................................................................................................................13 Section2.04. Execution of Bonds.................................................................................................................................................13 Section2.05. Transfer of Bonds....................................................................................................................................................13 Section2.06. Exchange of Bonds.................................................................................................................................................14 Section2.07. Temporary Bonds...................................................................................................................................................14 Section2.08. Bond Registration Books.......................................................................................................................................14 Section 2.09. Bonds Mutilated, Lost, Destroyed or Stolen.......................................................................................................14 Section2.10. Book -Entry System.................................................................................................................................................15 ARTICLE III ISSUE OF BONDS; APPLICATION OF PROCEEDS; COSTS OF ISSUANCE FUND Section3.01. Issuance of Bonds...................................................................................................................................................17 Section 3.02 Application of Proceeds of Bonds........................................................................................................................17 Section 3.03. Establishment and Application of Costs of Issuance Fund..............................................................................17 Section3.04. Validity of Bonds....................................................................................................................................................17 ARTICLE IV REDEMPTION OF BONDS Section4.01. No Redemption.......................................................................................................................................................19 Section 4.02. Selection of Bonds for Redemption...................................................................................................................... 20 Section4.03. Notice of Redemption............................................................................................................................................ 20 Section 4.04. Partial Redemption of Bonds................................................................................................................................ 21 Section4.05. Effect of Redemption.............................................................................................................................................. 21 ARTICLE V GROSS REVENUES; NET REVENUES Section5.01. Pledge of Net Revenues......................................................................................................................................... 22 Section 5.02 Receipt, Deposit and Application of Gross Revenues and Net Revenues ..................................................... 22 Section 5.03. Application of Interest Account........................................................................................................................... 23 Section 5.04. Application of Principal Account......................................................................................................................... 23 Section 5.05. Application of Sinking Account........................................................................................................................... 23 Section 5.07. Investment of Moneys in Funds and Accounts.................................................................................................. 24 ARTICLE VI COVENANTS OF THE CITY Section6.01. Punctual Payment................................................................................................................................................... 25 Section 6.02. Extension of Payment of Bonds............................................................................................................................ 25 Section6.03. Discharge of Claims............................................................................................................................................... 25 Section 6.04.Operation of Enterprise in Efficient and Economical Manner......................................................................... 25 Section 6.05. Against Encumbrance............................................................................................................................................ 25 Section 6.06. Records and Accounts........................................................................................................................................... 26 Section6.07. Rates and Charges.................................................................................................................................................. 26 Section 6.08. Limitations on Future Obligations Secured by Net Revenues......................................................................... 27 Section6.09. Further Assurances................................................................................................................................................. 28 Section6.10. Waiver of Laws....................................................................................................................................................... 28 -i- Section 6.11. Continuing Disclosure........................................................................................................................................... 29 ARTICLE VII MAINTENANCE; TAXES; INSURANCE AND CONDEMNATION Section 7.01. Maintenance and Operation of the Enterprise................................................................................................... 30 Section 7.02. Taxes, Assessments, Other Governmental Charges and Utility Charges ...................................................... 30 Section 7.03. Public Liability and Property Damage Insurance.............................................................................................. 30 Section7.04. Casualty Insurance................................................................................................................................................. 30 Section 7.05. Insurance Net Proceeds; Form of Policies........................................................................................................... 31 Section7.06. Eminent Domain..................................................................................................................................................... 31 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS Section8.01. Events of Default.................................................................................................................................................... 32 Section 8.02. Acceleration of Maturities..................................................................................................................................... 32 Section 8.03. Application of Net Revenues and Other Funds After Default........................................................................ 33 Section 8.04. Trustee to Represent Bondowners....................................................................................................................... 34 Section 8.05. Bondowners' Direction of Proceedings............................................................................................................... 34 Section 8.06. Limitation on Bondowners' Right to Sue............................................................................................................ 34 Section8.07. Absolute Obligation of City .................................................................................................................................. 35 Section 8.08. Termination of Proceedings.................................................................................................................................. 35 Section 8.09. Remedies Not Exclusive........................................................................................................................................ 35 Section8.10. No Waiver of Default............................................................................................................................................. 35 ARTICLE IX THE TRUSTEE Section 9.01. Appointment of Trustee; Duties, Immunities and Liabilities of Trustee....................................................... 36 Section 9.02. Merger or Consolidation....................................................................................................................................... 37 Section9.03. Liability of Trustee................................................................................................................................................. 37 Section 9.04. Right of Trustee to Rely on Documents.............................................................................................................. 39 Section 9.05. Preservation and Inspection of Documents........................................................................................................ 40 Section9.06. Compensation of Trustee...................................................................................................................................... 40 Section9.07. Indemnification....................................................................................................................................................... 40 ARTICLE X MODIFICATION OR AMENDMENT OF THE INDENTURE Section10.01. Amendments Permitted...................................................................................................................................... 41 Section 10.02. Effect of Supplemental Indenture...................................................................................................................... 42 Section 10.03. Endorsement of Bonds; Preparation of New Bonds........................................................................................ 42 Section 10.04. Amendment of Particular Bonds........................................................................................................................ 42 ARTICLE XI DEFEASANCE Section11.01. Discharge of Indenture........................................................................................................................................ 43 Section 11.02. Discharge of Liability on Bonds......................................................................................................................... 43 Section 11.03. Deposit of Money or Securities with Trustee................................................................................................... 43 Section 11.04. Payment of Bonds After Discharge of Indenture............................................................................................. 44 ARTICLE IX MISCELLANEOUS Section 12.01. Liability of City Limited to Net Revenues........................................................................................................ 45 Section 12.02. Successor Is Deemed Included in All References to Predecessor.................................................................. 45 Section 12.03. Limitation of Rights to Parties and Bondowners............................................................................................. 45 Section12.04. Waiver of Notice................................................................................................................................................... 45 Section12.05. Destruction of Bonds............................................................................................................................................ 45 Section 12.06. Severability of Invalid Provisions...................................................................................................................... 45 Section12.07. Notices.................................................................................................................................................................... 45 Section 12.08. Evidence of Rights of Bondowners.................................................................................................................... 46 Section12.09. Disqualified Bonds............................................................................................................................................... 46 Section 12.10. Money Held for Particular Bonds...................................................................................................................... 47 Section12.11. Funds and Accounts............................................................................................................................................. 47 Section 12.12. Article and Section Headings and References.................................................................................................. 47 Section 12.13. Waiver of Personal Liability ................................................................................................................................ 47 Section 12.14. Execution in Several Counterparts.................................................................................................................... 47 Section12.15. Governing Law..................................................................................................................................................... 47 EXHIBIT A —FORM OF BOND INDENTURE OF TRUST This INDENTURE OF TRUST, is dated as of February 1, 2020 (the "Indenture"), by and between the CITY OF TUSTIN, a municipal corporation and general law city organized and existing under the constitution and laws of the State of California (the "City"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, California, and being qualified to accept and administer the trusts hereby created (the "Trustee"); WITNESSETH: WHEREAS, the Tustin Public Financing Authority (the "Authority") has heretofore issued its $14,045,000 Tustin Public Financing Authority 2013 Water Revenue Bonds, of which $13,810,000 remains outstanding (the "2013 Bonds"), pursuant to an indenture of trust, dated as of October 1, 2013, by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), for the purpose of financing the improvement, betterment, renovation and expansion of certain facilities within the City's municipal water enterprise (the "Enterprise"); WHEREAS, debt service on the 2013 Bonds is paid from revenues comprised of payments (the "2013 Installment Payments") made by the City under an installment sale agreement, dated as October 1, 2013, by and between the Authority and the City; WHEREAS, Article 10 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with section 53570) of the California Government Code (the "Refunding Bond Law") authorizes the City to issue its refunding bonds for the purpose of refunding obligations of the City; WHEREAS, the City, after due investigation and deliberation, has determined that it is in the interests of the City at this time to provide for the issuance of bonds under the Refunding Bond Law to provide for the payment and prepayment of the 2013 Installment Payments and refunding of the 2013 Bonds; WHEREAS, to that end, the City has determined to issue its $14,910,000 City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020 (the "Bonds"), pursuant to this Indenture; WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof and premium (if any) and of the interest thereon, the City Council of the City has authorized the execution of this Indenture; WHEREAS, all Bonds issued under this Indenture will be secured by a pledge of the Net Revenues, as defined herein, and certain other moneys and securities held by the Trustee hereunder; and WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when executed by the City, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the City, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth, in accordance with its terms, have been done and taken; and the execution and delivery of this Indenture have been in all respects duly authorized. NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and premium (if any) and interest on all Bonds at any time issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the City does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows: -2- ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION; EQUAL SECURITY Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall for all purposes of this Indenture and of any Supplemental Indenture and of any certificate, opinion, request or other documents 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. "Annual Debt Service" means, for each Fiscal Year, the aggregate amount (without duplication) of principal and interest with respect to the Bonds and all Parity Obligations. "Authorized Officer" means, with respect to the City, its Mayor, City Manager, Treasurer, Finance Director or any other person designated as an Authorized Representative of the City by a Written Certificate of the City signed by its Mayor and filed with the Trustee. "Average Annual Debt Service" means, with respect to any portion of the Outstanding Bonds and Parity Obligations for which the calculation is being made, the average Annual Debt Service during the period from the date of calculation through the final maturity date of all of such Outstanding Bonds and Parity Obligations. "Bond Fund" means the fund by that name established pursuant to Section 5.01. "Bond Registration Books" means the books maintained by the Trustee pursuant to Section 2.08 for the registration and transfer of ownership of the Bonds. "Bonds" means the City's Taxable Water Refunding Revenue Bonds, Series 2020, issued and at any time Outstanding hereunder. "Bond Year" means any twelve-month period commencing on April 2 in a year and ending on the next succeeding April 1, both dates inclusive; provided, however, that the first Bond Year shall commence on the Closing Date relating to the Bonds and shall end on April 1, 2020. "Business Day" means a day of the year on which banks in Los Angeles, California, or Los Angeles, California, are not required or authorized to remain closed and on which The New York Stock Exchange is not closed. "Certificate," "Statement," "Request," "Requisition" and "Order" of the City mean, respectively, a written certificate, statement, request, requisition or order signed in the name of the City by an Authorized Officer of the City. 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. "City" means the City of Tustin, a municipal corporation and general law city organized and existing under the constitution and laws of the State, and any successor thereto. "City Council" means the City Council of the City. -3- "Closing Date" means February 27, 2020, the date upon which there is an exchange of the Bonds for the proceeds representing the purchase of the Bonds by the Original Purchaser thereof. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the City and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Costs of Issuance" means all items of expense directly or indirectly payable by or reimbursable to the City relating to the authorization, issuance, sale and delivery of the Bonds, including but not limited to printing expenses, operating expenses, rating agency fees, filing and recording fees, initial fees and charges and first annual administrative fee of the Trustee and fees and expenses of its counsel, fees, charges and disbursements of attorneys, financial advisors, fiscal consultants, accounting firms, consultants and other professionals, fees and charges for preparation, execution 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" means the fund so designated and established pursuant to Section 3.03. "Debt Service" means, during any period of computation, the amount obtained for such period by totaling the following amounts: (a) The principal components of the Bonds and principal payments with respect to Parity Obligations coming due and payable by their terms in such period; and (b) The interest component of the Bonds and interest payments with respect to Parity Obligations which would be due during such period on the aggregate principal amount of the Bonds and principal payments with respect to Parity Obligations that would be unpaid in such period if the Bonds and payments with respect to Parity Obligations are retired as scheduled, but deducting and excluding from such aggregate amount the amount of Bonds and payments with respect to Parity Obligations no longer unpaid. "Enterprise" means any and all facilities, properties and improvements at any time controlled or operated by the City used or pertaining to the supply of water, consisting of the entire water production and distribution enterprise of the City, including all additions, extensions, expansions, improvements and betterments thereto and equippings thereof and any necessary lands, rights of way and other real and personal property useful in connection therewith, but exclusive of any portion of the existing system not required for the continued operation thereof; provided, however, that to the extent the City is not the sole owner of an asset or property, or lessee thereof from the City, only the City's ownership interest in such asset or property or leasehold interest therein from the City, shall be considered a part of the Enterprise. "Escrow Agreement" means that certain Escrow Agreement, dated the Closing Date, by and between the City and the Escrow Bank, providing for the defeasance of the 2013 Installment Payments and the 2013 Bonds. "Escrow Bank" means The Bank of New York Mellon Trust Company, N.A., appointed by the City to act as escrow bank under the Escrow Agreement, and its assigns or any other corporation or association which may at any time be substituted in its place, as provided in the Escrow Agreement. "Escrow Fund" means the fund by that name established pursuant to the Escrow Agreement. "Event of Default" means any of the events of default described in Section 8.01. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security --State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. "Fiscal Year" means the period commencing on July 1 of each year and terminating on the next succeeding June 30. "Government Obligations" means, with respect to the Bonds: (a) direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ("U.S. Treasury Obligations"), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidence of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligator and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. "Gross Revenues" means all gross charges received for, and all other gross income and revenues derived by the City from, the operation of the Enterprise or otherwise arising from the Enterprise, including but not limited to (a) all fees and charges received by the City for the services of the Enterprise, (b) charges received by the City for water connections, (c) capital charges, and (d) all receipts derived from the investment of such income or revenues, but excluding customer deposits. "Indenture" means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the provisions hereof. "Independent Accountant" means any certified public accountant or firm of such accountants appointed and paid by the City, and who, or each of whom: (a) is in fact independent and not under domination of the City; -5- (b) does not have any substantial interest, direct or indirect, with the City; and (c) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make annual or other audits of the books of or reports to the City. "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the City, and who, or each of whom: (a) is in fact independent and not under domination of the City; (b) does not have any substantial interest, direct or indirect, with the City; (c) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to the City, and (d) is judged by the City to have experience in matters relating to the engineering matters relating to water enterprises. "Information Services" means the Electronic Municipal Market Access System (referred to as "EMMA"), a facility of the Municipal Securities Rulemaking Board (at http://emma.msrb.org) or, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other national information services providing information with respect to called bonds as the City may designate in a Certificate of the City delivered to the Trustee. "Insurance Consultant" means a person (which may be the City's insurance agent or broker) having experience and a favorable reputation in consulting on the insurance requirements of Water utilities in the State of the general size and character of the Enterprise, selected by the City. "Interest Account" means the account by that name in the Bond Fund established pursuant to Section 5.01. "Interest Payment Date" means April 1 and October 1 in each year, beginning October 1, 2020, and continuing so long as any Bonds remain Outstanding. "Maintenance and Operation Costs" means (a) the reasonable and necessary costs of maintaining and operating the Enterprise, calculated based upon accounting principles consistently applied, including (among other things) the reasonable expenses of management, personnel, services, equipment, repair and other expenses necessary to maintain and preserve the Enterprise in good repair and working order, and reasonable amounts for administration, overhead, insurance, taxes (if any) and other similar costs, and (b) all costs of water purchased or otherwise acquired for delivery by the Enterprise (including any interim or renewed arrangement therefor), but excluding in all cases depreciation and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. "Maximum Annual Debt Service" means, as of any date of calculation by the City, the largest Annual Debt Service during the period from the date of such calculation through the final maturity date of the Bonds and all Parity Obligations. "Moody's" means Moody's Investors Service, New York, New York, or its successors. "Net Proceeds" means the par amount of the Bonds plus accrued interest and premium, if any, less the amount of any underwriter's and original issue discount, less the proceeds applied to pay Costs of Issuance. L "Net Revenues" means, for any period, an amount equal to all of the Gross Revenues received during such period minus the amount required to pay all Maintenance and Operation Costs during such period. "Original Purchaser" means the first purchaser of the Bonds from the City. "Outstanding," when used as of any particular time with reference to Bonds, means all Bonds theretofore executed, issued and delivered by the City under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have been paid within the meaning of Section 11.01; and (c) Bonds in lieu of or in substitution for which other Bonds shall have been executed, issued and delivered by the City pursuant to this Indenture or any Supplemental Indenture. "Owner" or "Bond Owner", when used with respect to any Bond, means the person in whose name the ownership of such Bond shall be registered on the Bond Registration Books. "Parity Obligations" means any leases, loan agreements, installment sale agreements, bonds, notes, interest rate swap agreements, currency swap agreements, forward payment agreements, futures, or contracts providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, or contracts to exchange cash flows or a series of payments, or contracts, including, without limitation, interest rate floors or caps, options, puts or calls to hedge payment, currency, rate, spread, or similar exposure (except termination payments relating thereto which shall be payable on a subordinate basis) or other obligations of the City payable from and secured by a pledge of and lien upon any of the Net Revenues on a parity with the Bonds, entered into or issued pursuant to and in accordance with Section 6.08(b) hereof. For all purposes, the 2012 Installment Sale Agreement and the 2016 Bonds shall constitute Parity Obligations. "Participating Underwriter" shall have the meaning ascribed thereto in the Continuing Disclosure Certificate. "Permitted Investments" means: (a) Government Obligations. (b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): 1. U.S. Export -Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership 2. U.S. Farmers Home Administration (FmHA) Certificates of Beneficial Ownership 3. Federal Financing Bank 4. Federal Housing Administration Debentures (FHA) -7- 5. General Services Administration Participation Certificates 6. Government National Mortgage Association (GNMA or Ginnie Mae) GNMA—guaranteed mortgage -backed bonds GNMA—guaranteed pass -through obligations 7. U.S. Maritime Administration Guaranteed Title XI financing 8. U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds (c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies which are not backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): 1. Federal Home Loan Bank System Senior debt obligations 2. Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) Participation Certificate Senior debt obligations 3. Federal National Mortgage Association (FNMA or Fannie Mae) Mortgage -backed securities and senior debt obligations 4. Student Loan Marketing Association (SLMA or Sallie Mae) Senior debt obligations 5. Resolution Funding Corp. (REFCORP) obligations 6. Farm Credit System Consolidated systemwide bonds and notes (d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, which invest solely in Federal Securities, if rated by S&P, having a rating at the time of investment of AAAm-G; and if rated by Moody's having a rating at the time of investment of Aaa, including such funds for which the Trustee, its affiliates or subsidiaries provide investment advisory or other management services or for which the Trustee or an affiliate of the Trustee serves as investment administrator, shareholder servicing agent, and / or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives and retains a fee for services provided to the fund, (ii) the Trustee collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds, and (iii) services performed for such funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee. (e) Certificates of deposit secured at all times by collateral described in (a) and/or (b) above. Such certificates must be issued by commercial banks or savings and loan associations (including the Trustee or its affiliates). The collateral must be held by a third party and the Bondholders must have a perfected first security interest in the collateral. (f) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC or secured at all times by collateral described in (a) and[ r (b) above. (g) Commercial paper rated, at the time of purchase, "Prime-1" by Moody's and "A-1" or better by S&P. (h) Federal funds or bankers acceptances with a maximum term of 180 days of any bank which has an unsecured, uninsured and unguaranteed obligation rating at the time of investment of "Prime-1" or better by Moody's and "A-1" or better by S&P. (i) The Local Agency Investment Fund of the State, created pursuant to 16429.1 of the California Government Code. (j) The County pooled investment fund. (k) Municipal obligations rated "A" or higher by S&P. (1) Other forms of investments that satisfy the City's Statement of Investment Policy as of the time of investment "Principal Account" means the account by that name in the Bond Fund established pursuant to Section 5.01. "Principal Payment Date" means April 1 in each year, beginning April 1, 2021, and continuing so long as any Bonds remain Outstanding. "Rating Category" means, with respect to any Permitted Investment, one or more of the generic categories of rating by Moody's and / or S&P applicable to such Investment Security, without regard to any refinement or gradation of such rating category by a plus or minus sign. "Record Date" means the fifteenth (15th) calendar day of the month immediately preceding an Interest Payment Date. "Refunding Bond Law" means Article 10 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with section 53570) of the California Government Code, as in effect on the Closing Date or as thereafter amended in accordance with its terms. "S&P" means S&P Global Ratings, a Standard & Poor's Financial Services LLC business, New York, New York, or its successors. "Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, NY 10041-009% Attention: Call Notification Department, Fax (212) 855-7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and / or such other securities depositories as the City may designate in a Certificate of the City delivered to the Trustee. -9- "Special Record Date" means the date established by the Trustee pursuant to Section 2.02 as a record date for the payment of defaulted interest on Bonds. "State" means the State of California. "Sinking Account" means the account by that name in the Bond Fund established pursuant to Section 5.01, if required. "Subordinate Debt" means any obligations of the City payable from and secured by a pledge of and lien upon any of the Net Revenues subordinate to the Bonds and any Parity Obligations, entered into or issued pursuant to and in accordance with Section 6.08(c) hereof. "Supplemental Indenture" means any indenture hereafter duly authorized and entered into between the City and the Trustee, amendatory of or supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. "Trust Office" means the corporate trust office of the Trustee at 400 South Hope Street, Suite 500, Los Angeles, CA 90071, or at such other or additional offices as may be specified in writing to the City, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted. "Trustee" means The Bank of New York Mellon Trust Company, N.A., appointed by the City to act as trustee hereunder pursuant to Section 9.01, and its assigns or any other corporation or association which may at any time be substituted in its place, as provided in Section 9.01. "2013 Bonds" means the Tustin Public Financing Authority 2013 Water Revenue Bonds, of which $13,810,000 remains outstanding as of the Closing Date. "2012 Bonds" means the Tustin Public Financing Authority 2012 Water Refunding Revenue Bonds. "2012 Installment Sale Agreement" means the Installment Sale Agreement, dated as of April 1, 2012, by and between the Authority and the City, securing the 2012 Bonds. "2016 Bonds" means the City of Tustin (Orange County, California) 2016 Water Revenue Refunding Bonds. "Water Fund" means the City's existing water enterprise fund, established and held by the City with respect to the Enterprise. Section 1.02. Rules of Construction. All references in this Indenture to "Articles," "Sections," and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; and the words "herein," "hereof," "hereunder," and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. Section 1.03. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract between the City and the Owners from time to time of the Bonds; and the covenants and agreements herein set forth to be performed on behalf of the City shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as -10- to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. -11- ARTICLE II Mow : • MN Section 2.01. Authorization of Bonds. At any time after the adoption, execution and delivery of this Indenture, the City may execute and the Trustee, upon Request of the City, shall authenticate and deliver Bonds in the aggregate principal amount of fourteen million nine hundred ten thousand dollars ($14,910,000). Section 2.02. Terms of Bonds. The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof, so long as no Bond shall have more than one maturity date. The Bonds shall be dated as of their date of delivery, shall mature on April 1 in each of the years and in the amounts, and shall bear interest at the rates, as follows: Maturity Principal Interest April Amount Rate 2021 $ 165,000 1.567% 2022 205,000 1.587 2023 205,000 1.643 2024 440,000 1.709 2025 445,000 1.789 2026 450,000 1.909 2027 465,000 2.009 2028 475,000 2.089 2029 490,000 2.189 2030 500,000 2.239 2035 2,670,000 2.659 2043 8,400,000 3.107 Interest on the Bonds shall be payable on each Interest Payment Date to the person whose name appears on the Bond Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check mailed on the Interest Payment Date or, at the option of any Owner of at least $1,000,000 aggregate principal amount of Bonds and upon written notice received by the Trustee prior to the Record Date, by wire transfer, at the Owner's address as it appears on the Bond Registration Books or to such account as shall have been identified by the Owner in the notice requesting payment by wire transfer. Interest on the Bonds shall be computed on the basis of a year consisting of 360 days and twelve 30-day months. Principal of and premium (if any) on any Bond shall be paid upon presentation and surrender thereof at the Trust Office. Both the principal of and interest and premium (if any) on the Bonds shall be payable in lawful money of the United States of America. Each Bond shall bear interest from the Interest Payment Date next preceding the authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) it is authenticated on or before September 15, 2020, in which event it shall bear interest from its date of delivery; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. -12- Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Owner 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 for the payment of such defaulted interest to be fixed by the Trustee, notice whereof being given to the Owners not less than ten (10) days prior to such Special Record Date. Section 2.03. Form of Bonds. The Bonds, the form of Trustee's certificate of authentication, and the form of assignment to appear thereon, shall be substantially in the respective forms set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture. Section 2.04. Execution of Bonds. The Bonds shall be signed in the name and on behalf of the City with the facsimile signature of its Mayor, City Manager or Finance Director and attested by the facsimile signature of its City Clerk. The Bonds shall then be delivered to the Trustee for authentication by it. In case any officer who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been authenticated or delivered by the Trustee or issued by the 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 the individual who signed the same had continued to be such officer of the City. Also, any Bond may be signed on behalf of the City by any individual who on the actual date of the execution of such Bond shall be the proper officer although on the nominal date of such Bond such individual shall not have been such officer of the City. Only such of the Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A attached hereto, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. Section 2.05. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the Bond Registration Books, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, endorsed or accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Every Bond so surrendered to the Trustee shall be canceled by it and destroyed. Whenever any Bond shall be surrendered for transfer, the City shall execute and the Trustee shall thereupon authenticate and deliver to the transferee a new Bond or Bonds of like maturity and aggregate principal amount of authorized denominations. The Trustee shall require the Owner requesting such transfer to pay any tax or other charge required to be paid with respect to such transfer. The Trustee may refuse to transfer, under the provisions of Section 2.05, any Bonds selected by the Trustee for redemption under Article IV, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption. Prior to any transfer of the Bonds outside the book -entry system (including, but not limited to, the initial transfer outside the book -entry system) the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under section 6045 of the Internal Revenue Code of 1986, as amended. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information. -13- Section 2.06. Exchange of Bonds. Bonds may be exchanged at the Trust Office, for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity. The Trustee shall require the Owner requesting such exchange to pay any tax or other charge required to be paid with respect to such exchange. The Trustee may refuse to exchange, under the provisions of Section 2.06, any Bonds selected by the Trustee for redemption under Article IV, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption. Section 2.07. Temporary Bonds. The Bonds may be issued initially in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporary Bond may be printed, lithographed or typewritten, shall be of such denomination as may be determined by the City and may contain such reference to any of the provisions of this Indenture as may be appropriate. A temporary Bond may be in the form of a single 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 authenticated by the Trustee upon the same conditions and in 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 Trust Office, and the 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 Indenture as definitive Bonds authenticated and delivered hereunder. Section 2.08. Bond Registration Books. The Trustee will keep or cause to be kept at its Trust Office sufficient books for the registration and transfer of the Bonds, which shall at all times during regular business hours be open to inspection by the City upon reasonable notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as hereinbefore provided. Section 2.09. Bonds Mutilated Lost Destroyed or Stolen. If any Bond shall become mutilated, the City shall execute, and the Trustees all thereupon authenticate and deliver, a new Bond of like tenor and authorized denomination in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and destroyed and the Trustee shall provide evidence of such destruction to the City. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the City and the Trustee and, if such evidence be satisfactory to the Trustee and indemnity for the City and the Trustee satisfactory to the Trustee shall be given, the City, at the expense of the Bond Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof upon receipt of the aforementioned indemnity). The City may require payment of a reasonable fee for each new Bond issued under this Section 2.09 and of the expenses which may be incurred by the City and the Trustee in connection therewith. Any Bond issued under the provisions of this Section 2.09 in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original contractual obligation on the part of the City whether or not the Bond alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds secured by this Indenture. -14 Section 2.10. Book -Entry System. Notwithstanding any provision of this Indenture to the contrary: (a) At the request of the Original Purchaser, the Bonds shall be initially issued registered in the name of "Cede & Co.," as nominee of The Depository Trust Company, the depository designated by the Original Purchaser, and shall be evidenced by one certificate maturing on each of the maturity dates set forth in Section 2.02 hereof to be in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (i) to any successor of The Depository Trust Company or its nominee, or of any substitute depository designated pursuant to paragraph (ii) of this subsection (a) ("substitute depository"); provided that any successor of The Depository Trust Company or substitute depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; 01) to any substitute depository designated in a written request of the City, upon (i) the resignation of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository or (ii) a determination by the City that The Depository Trust Company 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 Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository or (B) a determination by the City that The Depository Trust Company or its successor is no longer able to carry out its functions as depository; provided that no substitute depository which is not objected to by the City and the Trustee can be obtained. (b) In the case of any transfer pursuant to paragraph (i) or paragraph (ii) of subsection (a) of this Section 2.10, upon receipt of all Outstanding Bonds by the Trustee, together with a written request of an Authorized Officer of the City to the Trustee, a single new Bond shall be issued, authenticated and delivered for each maturity of such Bond 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 written request of an Authorized Officer of the City. In the case of any transfer pursuant to paragraph (iii) of subsection (a) of this Section 2.10, upon receipt of all Outstanding Bonds by the Trustee together with a written request of an Authorized Officer of the City, new Bonds shall be issued, authenticated and delivered in such denominations and registered in the names of such persons as are requested in a written request of the City provided the 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 written request of an Authorized Officer of the City. (c) The City and the Trustee shall be entitled to treat the person in whose name any Bond is registered as the absolute Owner thereof for all purposes of this Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the City; and the City and the Trustee shall have no responsibility for transmitting payments to, communication with, notifying or otherwise dealing with any beneficial owners of the Bonds. Neither the City nor the Trustee will have any responsibility or obligations, legal or otherwise, to the beneficial owners or to any other party including The Depository Trust Company or its -15- successor (or substitute depository or its successor), except for the registered owner of any Bond. (d) So long as all outstanding Bonds are registered in the name of Cede & Co. or its registered assign, the City and the Trustee shall reasonably cooperate with Cede & Co., as sole registered Owner, or its registered assign in effecting payment of the principal and interest due with respect to 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. (e) So long as all Outstanding Bonds are registered in the name of Cede & Co. or its registered assigns (hereinafter, for purposes of this paragraph (e), the "Owner"): (i) All notices and payments addressed to the Owners shall contain the Bonds' CUSEP number. (ii) Notices to the Owner shall be forwarded in the manner set forth in the form of blanket issuer letter of representations (prepared by The Depository Trust Company) executed by the City and received and accepted by The Depository Trust Company. -16- ARTICLE III ISSUE OF BONDS; APPLICATION OF PROCEEDS; COSTS OF ISSUANCE FUND Section 3.01. Issuance of Bonds. At any time after the adoption, execution and delivery of this Indenture, the City may execute and the Trustee, upon Request of the City, shall authenticate and deliver Bonds in the aggregate principal amount of fourteen million nine hundred ten thousand dollars ($14,910,000). Section 3.02. Application of Proceeds of Bonds. Upon the receipt of payment for the Bonds on the Closing Date of $14,833,587.50, being the principal amount of the Bonds of $14,910,000.00, less an underwriter's discount of $76,412.50, the Trustee shall apply the proceeds of sale thereof as follows: (a) The Trustee shall deposit to the Costs of Issuance Fund the sum of $204,975.74; and (b) The Trustee shall transfer to the Escrow Bank the sum of $14,628,611.76 for deposit in the Escrow Fund. The Trustee may establish temporary funds or accounts on its records to facilitate such transfer. Section 3.03. Establishment and A1212lication of Costs of Issuance Fund. (a) The 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 Trustee to pay Costs of Issuance upon receipt by the Trustee of a Requisition of the City 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 said account. Each such Requisition of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. (b) At the end of three months from the Closing Date, or upon earlier receipt of a Certificate of the City stating that amounts in the Costs of Issuance Fund are no longer required for the payment of Costs of Issuance, the Costs of Issuance Fund shall be closed and any amounts then remaining in the Costs of Issuance Fund shall be transferred to the Bond Fund. Section 3.04. Validity of Bonds. (a) The City has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, happen or be performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the City is now authorized, pursuant to each and every requirement of the Refunding Bond Law to issue the Bonds in the form and manner provided in this Indenture and the Bonds shall be entitled to the benefit, protection and security of the provisions of this Indenture. (b) From and after the issuance of the Bonds, the findings and determinations of the City respecting the Bonds shall be conclusive evidence of the existence of the facts so found and determined in any action or proceeding in any court in which the validity of the Bonds is at -17- issue, and no bona fide purchaser of any of the Bonds shall be required to see to the existence of any fact or to the performance of any condition or to the taking of any proceeding required prior to such issuance or to the application of the proceeds of sale of the Bonds. The recital contained in the Bonds that the same are issued pursuant to the Refunding Bond Law and this Indenture shall be conclusive evidence of their validity and of the regularity of their issuance and all Bonds shall be incontestable from and after their issuance. The Bonds shall be deemed to be issued, within the meaning of this Indenture, whenever the definitive Bonds (or any temporary Bonds exchangeable therefor) have been delivered to the purchaser thereof and the proceeds of sale thereof received. -1& ARTICLE IV REDEMPTION OF BONDS Section 4.01. Redemption. (a) Optional Redemption. The Bonds maturing on or after April 1, 2035, are subject to redemption prior to their respective maturity dates, at the option of the City, as a whole or in part on any date or in part, in such order of maturity as shall be selected by the City (or in inverse order of maturity if the City shall fail to select a particular order) and by lot within a maturity, on or after April 1, 2030, from any source of available funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. (b) Sinking Fund Redemption. The Bonds maturing on April 1, 2035 (the "2035 Term Bonds") are subject to mandatory redemption, in part by lot, from Sinking Account payments set forth in the following schedule on April 1, 2031, and on each April 1 thereafter to and including April 1, 2035, at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some but not all of the 2035 Term Bonds have been redeemed pursuant to subsection (a) above, the total amount of Sinking Account payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the 2035 Term Bonds so redeemed by reducing each such future Sinking Account payment on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated pursuant to written notice filed by the City with the Trustee. Sinking Account Redemption Date Principal Amount (April 1) to be Redeemed 2031 $505,000 2032 515,000 2033 535,000 2034 550,000 2035t 565,000 tMaturity The Bonds maturing on April 1, 2043 (the " 2043 Term Bonds") are subject to mandatory redemption, in part by lot, from Sinking Account payments set forth in the following schedule on April 1, 2036, and on each April 1 thereafter to and including April 1, 2043, at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some but not all of the 2043 Term Bonds have been redeemed pursuant to subsection (a) above, the total amount of Sinking Account payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the 2043 Term Bonds so redeemed by reducing each such future Sinking Account payment on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated pursuant to written notice filed by the City with the Trustee. -19- Sinking Account Redemption Date (April 1) 2036 2037 2038 2039 2040 2041 2042 2043t tMaturity Principal Amount to be Redeemed $ 580,000 600,000 615,000 630,000 655,000 680,000 2,285,000 2,355,000 Section 4.02. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds or any given portion thereof, and unless otherwise specified in Section 4.01, the Trustee shall select the Bonds to be redeemed, from all Bonds of or such given portion thereof not previously called for redemption, by lot in any manner which the Trustee in its sole discretion shall deem appropriate and fair. The Trustee shall promptly notify the City in writing of the Bonds or portions thereof so selected for redemption. Section 4.03. Notice of Redemption. (a) Written notice of redemption shall be given by the City to the Trustee at least forty- five (45) days prior to the date of redemption (unless a shorter time shall be acceptable to the Trustee in the sole determination of the Trustee). Unless waived by the Owner, notice of any such redemption shall be given by the Trustee on behalf of the City by mailing a copy of a redemption notice by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to the Owner of the Bond or Bonds to be redeemed at the address shown on the Bond Registration Books. All notices of redemption shall be dated and shall state: (i) the redemption date, (ii) the redemption price, (iii) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (iv) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (v) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the Trust Office. Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) interest with respect to such Bonds or portions of Bonds shall cease to accrue and be payable. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Trustee at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Bond or Bonds of the same maturity in the amount of the unredeemed principal. All Bonds which have been redeemed shall be canceled and destroyed by the Trustee and shall not be reissued. -20- (b) Notice of redemption of Bonds shall be given by the Trustee, at the expense of the City, for and on behalf of the City. (c) Notwithstanding the foregoing, in the case of any optional redemption of the Bonds under Section 4.01(a), the notice of redemption may state that the redemption is conditioned upon receipt by the Trustee of sufficient moneys to redeem the Bonds to be redeemed on the anticipated redemption date, and that the optional redemption shall not occur if, by no later than the scheduled redemption date, sufficient moneys to redeem such Bonds have not been deposited with the Trustee. In the event that the Trustee does not receive sufficient funds by the scheduled optional redemption date to so redeem the Bonds to be optionally redeemed, such event shall not constitute an Event of Default; the Trustee shall send written notice to the Owners, to the effect that the redemption did not occur as anticipated, and the Bonds for which notice of optional redemption was given shall remain Outstanding for all purposes of this Indenture. Section 4.04. Partial Redemption of Bonds. Upon surrender of any Bond redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, 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. The Owner shall not be required to submit any Bond to reflect mandatory sinking account payments. 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 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 plus 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 Indenture, and the Owner of said Bonds shall have no rights in respect thereof except to receive payment of said redemption price. All Bonds redeemed pursuant to the provisions of this Article IV shall be canceled upon surrender thereof and destroyed with a certificate of destruction delivered to or upon the Order of the City. -21- ARTICLE V GROSS REVENUES; NET REVENUES Section 5.01. Pledge of Net Revenues. The Bonds and any Parity Obligations shall be secured by a first pledge of all of the Net Revenues. In addition, the Bonds shall be secured by a pledge of all of the moneys in all funds and accounts held by the Trustee hereunder, including all amounts derived from the investment of such moneys. Such pledge shall constitute a lien on the Net Revenues and such other moneys for the payment of the principal of and interest and premium (if any) on the Bonds and any Parity Obligations in accordance with the terms hereof. The Bonds shall be equally secured by a pledge, charge and lien upon the Net Revenues, without priority for number or date, shall be and are secured by an exclusive pledge, charge and lien upon the Net Revenues and such moneys, except as set forth in this Section 5.01. So long as any of the Bonds or any Parity Obligations are Outstanding, the Net Revenues and such moneys shall not be used for any other purpose, except as set forth in this Section 5.01 except, that out of the Net Revenues, there may be apportioned such sums, for such purposes, as are expressly permitted by Section 5.02. In consideration of the acceptance of the Bonds by those who shall hold the same from time to time, this Indenture shall be deemed to be and shall constitute a contract between the City and the Owners from time to time of the Bonds and the covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. The Trustee shall establish and maintain the Bond Fund and, within the Bond Fund, the Interest Account, the Principal Account and the Sinking Account. Section 5.02. Receipt, Deposit and Application of Gross Revenues and Net Revenues. (a) Application of Gross Revenues. All of the Gross Revenues shall be deposited by the City immediately upon receipt in the Water Fund. All Gross Revenues shall be held in trust by the City in the Water Fund and shall be applied, transferred, used and withdrawn only for the following purposes: (i) Maintenance and Operation Costs. The City shall first pay from the moneys in the Water Fund the budgeted Maintenance and Operation Costs as such Maintenance and Operation Costs become due and payable. (ii) Payment of Debt Service. On or before the 5th Business Day preceding each Interest Payment Date, the City shall withdraw from the Water Fund and transfer to the Trustee, for deposit in the Bond Fund, an amount which, together with the balance then on deposit in the Bond Fund, the Interest Account, the Principal Account and the Sinking Account (other than amounts required for payment of principal of or interest on any Bonds which have matured but which have not been presented for payment), is equal to the aggregate amount of principal of and interest coming due and payable on the Bonds and shall withdraw from the Water Fund and transfer amounts required for the payment of debt service on any Parity Obligations. The transfers required to pay debt service on the Bonds and any Parity Obligations shall be made without preference or priority and, in the event moneys in the Water Fund are not sufficient to pay the debt -99- service requirement for the Bonds and any Parity Obligations, the City shall pay such amounts on a pro rata basis based on the debt service requirements for the Bonds and each outstanding Parity Obligations. (iii) Surplus. As long as all of the foregoing payments, allocations and transfers are made at the times and in the manner set forth above, any moneys remaining in the Water Fund may at any time be treated as surplus and applied for any lawful purpose. (b) Application of Moneys in the Bond Fund. On or before the Business Day preceding each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain within the Bond Fund), the following amounts, in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Net Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority: First: 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: to the Principal Account, the aggregate amount of principal becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if any; and Third: to the Sinking Account, the aggregate amount of sinking fund installment becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if any. Section 5.03. Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased prior to maturity pursuant to this Indenture). Section 5.04. Application of Principal Account. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely for the purposes of paying the principal of the Bonds when due and payable. Section 5.05. A112lication of Sinking Account. All amounts in the Sinking Account shall be used and withdrawn by the Trustee solely for the purposes of paying the sinking fund installments of the Bonds when due and payable. Notwithstanding the foregoing, if some but not all of the Bonds have been theretofore redeemed pursuant to Sections 4.01(a), the total amount of all future mandatory Sinking Account payments shall be reduced by the aggregate principal amount of Bonds so redeemed, allocated among such mandatory Sinking Account payments on a pro rata basis in integral multiples of $5,000 as determined by the City (notice of which determination shall be given to the Trustee). In the event of a redemption pursuant to Section 4.01(a) the City shall provide the Trustee with a revised sinking fund schedule giving effect to the optional redemption so completed. Any amounts remaining in the Sinking Account when all of the Bonds are no longer Outstanding shall be withdrawn by the Trustee and transferred to the Water Fund. -23- Section 5.07. Investment of Moneys in Funds and Accounts. All moneys in any of the funds and accounts established pursuant to this Indenture shall, upon Request of the City provided at least two Business Days prior to the date of investment, be invested by the Trustee, but solely in Permitted Investments. In the absence of any such directions from the City, the Trustee shall invest any such moneys in the money market fund set forth in the letter of authorization and direction executed by the City and delivered to the Trustee. If no specific money market fund had been specified by the City, such amount shall be held in cash, uninvested. All Permitted Investments shall be acquired subject to the limitations as to maturities hereinafter set forth in this Section 5.07 and such additional limitations or requirements consistent with the foregoing as may be established by Request of the City. Moneys in all funds and accounts shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required by the Trustee. All interest, profits and other income received from the investment of moneys in any other fund or account established pursuant to this Indenture shall be deposited when received in the Bond Fund. Notwithstanding anything to the contrary contained in this paragraph, an amount of interest received with respect to any Permitted Investment equal to the amount of accrued interest, if any, paid as part of the purchase price of such Permitted Investment shall be credited to the fund or account for the credit of which such Permitted Investment was acquired. The Trustee may commingle any of the funds or accounts established pursuant to this Indenture into a separate fund or funds for investment purposes only, provided that all funds or accounts held by the Trustee hereunder shall be accounted for separately as required by this Indenture. The Trustee or an affiliate may act as principal or agent in the making or disposing of any investment. The Trustee may sell, or present for redemption, any Permitted Investments 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 Permitted Investment is credited, and, subject to the provisions of Section 9.03, the Trustee shall not be liable or responsible for any loss resulting from such investment. The City acknowledges that, to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grants the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The Trustee shall furnish the City periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the City. Upon the City's election, such statements will be delivered via the Trustee's online service and upon electing such service, paper statements will be provided only upon request. The City waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. -24- ARTICLE VI COVENANTS OF THE CITY Section 6.01. Punctual Payment. The City shall punctually pay or cause to be paid the principal and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Net Revenues and other assets pledged for such payment as provided in this Indenture. Section 6.02. Extension of Payment of Bonds. 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 of the 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 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 6.02 shall be deemed to limit the right of the City to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of Bonds. Section 6.03. Discharge of Claims. The City covenants that in order to fully preserve and protect the priority and security of the Bonds the City shall pay from the Net Revenues and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the Enterprise which, if unpaid, may become a lien or charge upon the Net Revenues prior or superior to the lien of the Bonds and impair the security of the Bonds. The City shall also pay from the Net Revenues all taxes and assessments or other governmental charges lawfully levied or assessed upon or in respect of the Enterprise or upon any part thereof or upon any of the Net Revenues therefrom. Section 6.04. Operation of Enterprise in Efficient and Economical Manner. The City covenants and agrees to operate, or cause to be operated, the Enterprise in an efficient and economical manner and to operate, maintain and preserve the Enterprise in good repair and working order. Section 6.05. Against Encumbrance. Except as provided herein, the City covenants that the property, facilities and improvements of the Enterprise shall not be voluntarily mortgaged or otherwise encumbered, leased, pledged, any charge placed thereon, or disposed of as a whole or substantially as a whole unless: (a) the City shall cause to be filed with the Trustee written evidence from Moody's, if Moody's is rating the Bonds, and/or S&P, if S&P is rating the Bonds, that such sale or other disposition will not cause a reduction or withdrawal of the uninsured rating then assigned to the Bonds by each such rating agency; and (b) such sale or other disposition shall be so arranged as to provide for a continuance of payments into the Bond Fund sufficient in amount to permit payment therefrom of the principal of and interest on the Outstanding Bonds, and also to provide for such payments into the funds as are required under the terms of this Indenture. Notwithstanding the foregoing, the City may lease real property constituting a portion of the Enterprise; provided that the lease payments shall be considered Gross Revenues hereunder. The City further covenants that the Net Revenues or any other funds pledged or otherwise made available to secure payment of the principal of and interest on the Outstanding KI Bonds shall not be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed of or used except as authorized by the terms of this Indenture. The City further covenants that it will not enter into any agreement which impairs the operation of the Enterprise or any part of it necessary to secure adequate Net Revenues to pay the principal and interest of the Bonds or which otherwise would impair the rights of the Bond Owners with respect to the Net Revenues. Section 6.06. Records and Accounts. The City covenants that it shall keep proper books of record and accounts of the Enterprise, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the Enterprise. Said books shall, upon reasonable request, be subject to the inspection of the Owners of not less than ten percent (1017o) of the Outstanding Bonds or their representatives authorized in writing. The City covenants that it will cause the books and accounts of the Enterprise to be audited annually by an Independent Accountant and will make available for inspection by the Bond Owners at the Trust Office, upon reasonable request, a copy of the report of such Independent Accountant. Any such audit may be combined with and be a part of the general audit of the City's financial records. The City covenants that it will cause to be prepared annually, not more than one hundred eighty (180) days after the close of each Fiscal Year a summary statement showing the amount of Gross Revenues and the amount of all other funds collected which are required to be pledged or otherwise made available as security for payment of principal of and interest on the Bonds, the disbursements from the Gross Revenues and other funds in reasonable detail, and a general statement of the financial and physical condition of the Enterprise. The City shall furnish a copy of the statement to any Bond Owner upon written request. Section 6.07. Rates and Char. (a) Covenant Regarding Gross Revenues. The City covenants to fix, prescribe, revise and collect rates, fees and charges for the Enterprise as a whole for the services and improvements furnished by the Enterprise during each Fiscal Year which are at least sufficient, after making allowances for contingencies and error in the estimates, to yield Gross Revenues that are sufficient to pay the following amounts in the following order of priority: (i) all anticipated Maintenance and Operation Costs of the Enterprise for such Fiscal Year; (ii) Debt Service payments on the Bonds and any Parity Obligations as they become due and payable during such Fiscal Year, without preference or priority, except to the extent such Debt Service payments are payable from the proceeds of the Bonds or such Parity Obligations, as applicable, or from any other source of legally available funds of the City that have been deposited with the Trustee or otherwise segregated for purposes prior to the commencement of such Fiscal Year (not including a debt service reserve fund); and (iv) all other payments required to meet any other obligations of the City which are charges, liens, encumbrances upon, or which are otherwise payable, from the Gross Revenues during such Fiscal Year. (b) Covenant Regarding Net Revenues. In addition, the City covenants to fix, prescribe, revise and collect, or cause to be fixed, prescribed, revised and collected, rates, fees and charges for the services and improvements furnished by the Enterprise during each Fiscal Year which -26- are sufficient to yield Net Revenues which are at least equal to one hundred twenty percent (120%) of the total Annual Debt Service on the Bonds and any debt service on Parity Obligations coming due and payable in such Fiscal Year. Section 6.08. Limitations on Future Obligations Secured by Net Revenues. (a) No Obligations Superior to Bonds. In order to protect further the availability of the Net Revenues and the security for the Bonds and any Parity Obligations, the City covenants that no additional bonds or other indebtedness that are payable out of the Net Revenues in whole or in part will be issued or incurred on a senior basis to the Bonds and any Parity Obligations. (b) Parity Obligations. Additional obligations may be issued on a parity with the Bonds and any then existing Parity Obligations subject to the following specific conditions which are hereby made conditions precedent to the issuance and delivery of such Parity Obligations, except that the City need not comply with subparagraph (ii) if the proposed Parity Obligations are incurred to prepay or post a security deposit for the payment of the Bonds or Parity Obligations: (i) The City shall be in compliance with all covenants set forth in this Indenture. (ii) The Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the instrument issuing such Parity Obligations are issued, as shown by the books of the City, plus, at the option of the City, either or both of the items hereinafter in this covenant designated (A) and (B), but excluding connection charges, shall at least equal one hundred twenty percent (120%) of the amount of Maximum Annual Debt Service on all Bonds and Parity Obligations to be Outstanding immediately subsequent to the issuance of such Parity Obligations. The items any or all of which may be added to such Net Revenues for the purpose of issuing or incurring Parity Obligations hereunder are the following (A) An allowance for Net Revenues from any additions to or improvements or extensions of the Enterprise to be made with the proceeds of such Parity Obligations, and also for Net Revenues from any such additions, improvements or extensions which have been made from moneys from an source but in any case which, during all or any part of such Fiscal Year or such twelve (12) month period, were not in service, all in an amount equal to seventy percent (70%) of the estimated additional average annual Net Revenues to be derived from such additions, improvements and extensions for the first thirty-six (36) month period in which each addition, improvement or extension is respectively to be in operation, all as shown in the written report of an Independent Financial Consultant engaged by the City. (B) An allowance for earnings arising from any increase in the charges made for service from the Enterprise which has become effective prior to the incurring of such additional indebtedness but which, during all or any part of such Fiscal Year or such twelve (12) month period, was not in effect, in an amount equal to the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year or such twelve (12) month period, all as shown in the written report of an Independent Financial Consultant engaged by the City. -27- (iii) The instrument providing for the issuance of such Parity Obligations shall provide that: (A) The proceeds of such Parity Obligations shall be applied to the acquisition, construction, improvement, financing or refinancing of additional facilities, improvements or extensions of existing facilities within the Enterprise, or otherwise for facilities, improvements or property which the City determines are of benefit to the Enterprise, or for the purpose of refunding any Bonds or Parity Obligations in whole or in part, including all costs (including costs of issuing such Parity Obligations and including capitalized interest on such Parity Obligations during any period which the City deems necessary or advisable) relating thereto; (B) Interest on such Parity Obligations shall be payable on April 1 and October 1 in each year of the term of such Parity Obligations except the first year, during which year interest may be payable on any April 1 or October 1; and (C) The principal of such Parity Obligations shall be payable on April 1 in any year in which principal is payable. (iv) A reserve fund may, but shall not be required to, be established for such Parity Obligations. (c) Subordinate Obligations. The City further covenants that the City shall not issue or incur any Subordinate Obligations unless Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which instrument such Subordinate Obligations are issued or incurred, as shown by the books of the City shall, after deducting all amounts required for the payment of the Bonds and any Parity Obligations, have amounted to at least 1.0 times the sum of the maximum annual debt service on all Subordinate Obligations outstanding immediately subsequent to the incurring of such additional obligations. An allowance for earnings arising from any increase in the charges made for service from the Enterprise which has become effective prior to the incurring of such additional obligations but which, during all or any part of such Fiscal Year, was not in effect, may be added in an amount equal to 10070 of the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year and any period prior to the incurring of such additional obligations, as shown by the certificate or opinion of a qualified independent consultant employed by the City. Section 6.09. Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture. Section 6.10. 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 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. -28- Section 6.11. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of the Indenture, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an event of default; however, any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. M ARTICLE VII MAINTENANCE; TAXES; INSURANCE AND CONDEMNATION Section 7.01. Maintenance and Operation of the Enterprise. The City covenants and agrees that it will operate and maintain the Enterprise in accordance with all applicable governmental laws, ordinances, approvals, rules, regulations and requirements including, without limitation, such zoning, sanitary, pollution and safety ordinances and laws and such rules and regulations thereunder as may be binding upon the City. Section 7.02. Taxes, Assessments, Other Governmental Charges and Utili , Charges. The City covenants and agrees that it will pay and discharge all taxes, assessments, governmental charges of any kind whatsoever, and utility charges which may be or have been assessed or which may have become liens upon the Enterprise or the interest therein of the Trustee or of the Owners of the Bonds, and will make such payments or cause such payments to be made, respectively, in due time to prevent any delinquency thereon or any forfeiture or sale of the Enterprise or any part thereof, and upon request, will furnish to the Trustee receipts for all such payments, or other evidence satisfactory to the Trustee; provided, however, that the City shall not be required to pay any tax, assessment, rate or charge as herein provided as long as it shall in good faith contest the validity thereof, provided that the City shall have set aside adequate reserves with respect thereto. Section 7.03. Public Liability and Property Damage Insurance. The City shall maintain or cause to be maintained, so long as any Bonds or Parity Obligations remain outstanding, but only if and to the extent available at reasonable cost from reputable insurers, a standard comprehensive general insurance policy or policies in protection of the City and its members, officers, agents, assignees and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Enterprise. Said policy or policies shall provide coverage in such liability amounts and shall be subject to such deductibles as shall be customary with respect to works and property of a like character. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried by the City, and may be maintained in whole or in part in the form of self-insurance by the City, in the form of the participation by the City in a joint powers agency or other program providing pooled insurance. The proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which such proceeds have been paid. Section 7.04. Casualty Insurance. The City shall procure and maintain or cause to be procured and maintained, so long as any Bonds or Parity Obligations remain outstanding, but only in the event and to the extent available from reputable insurers at reasonable cost, casualty insurance against loss or damage to any improvements constituting any part of the Enterprise, covering such hazards as are customarily covered with respect to works and property of like character. Such insurance may be subject to deductible clauses which are customary with respect to works and property of a like character. Such insurance may be maintained as part of or in conjunction with any other casualty insurance coverage carried by the City and may be maintained, in whole or in part, in the form of self-insurance by the City, subject to the provisions of Section 7.05, or in the form of the participation by the City in a joint powers agency or other program providing pooled insurance. All amounts collected from insurance against accident to or destruction of any portion of the Enterprise shall be used to repair, rebuild or replace such damaged or destroyed portion of the Enterprise. -30- Section 7.05. Insurance Net Proceeds; Form of Policies. The City shall pay or cause to be paid when due the premiums for all insurance policies. The City shall annually, on or before April 1, deliver to the Trustee a certificate to the effect that the City has complied with the requirements of Sections 7.03 and 7.04 hereof. The Trustee shall be entitled to rely upon such Certificate of the City as to the City's compliance with Sections 7.03 and 7.04 hereof. In the event that any insurance required pursuant to Section 7.03 or 7.04 shall be provided in the form of self-insurance, the City shall file with the Trustee annually, within ninety (90) days following the close of each Fiscal Year, a statement of an independent actuarial consultant identifying the extent of such self-insurance and stating the determination that the City maintains sufficient reserves with respect thereto. In the event that any such insurance shall be provided in the form of self-insurance by the City, the City shall not be obligated to make any payment with respect to any insured event except from Net Revenues or from such reserves. Section 7.06. Eminent Domain. Any amounts received as awards as a result of the taking of all or any part of the Enterprise by the lawful exercise of eminent domain, at the election of the City (evidenced by a Written Certificate of the City filed with the Trustee and the City) shall be used for the lease, acquisition or construction of improvements or extension of the Enterprise. -31- ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS Section 8.01. Events of Default. The following events shall be Events of Default: (a) default in the due and punctual payment of the principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise, in the amounts 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 by the City in the observance of any of the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained (other than as referred to in subsections (a) or (b) of this Section 8.01), if such default shall have continued for a period of sixty (60) consecutive days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the City by the Trustee, or to the City and the Trustee by the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding; (d) abandonment by the City of the Enterprise, or any substantial part thereof, and such abandonment shall continue for a period of sixty (60) consecutive days after written notice thereof shall have been given to the City by the Trustee, or to the City and the Trustee by the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding, unless the City shall have assumed all of the City's obligations hereunder; provided, however, that abandonment by the City shall not constitute an Event of Default if such abandonment was caused by unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market and unusually severe weather or any similar even and/or occurrences beyond the control of the City; or (e) the City's filing a petition in voluntary bankruptcy, for the composition of its affairs or for its corporate reorganization under any state or federal bankruptcy or insolvency law, or making an assignment for the benefit of creditors, or admitting in writing to its insolvency or inability to pay debts as they mature, or consenting in writing to the appointment of a trustee or receiver for itself or for the whole or any substantial part of the Enterprise. Section 8.02. Acceleration of Maturities. If an Event of Default shall occur, then, and in each and every such case during the continuance of such Event of Default, the Trustee or the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding shall be entitled, upon notice in writing to the City, to declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding. 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 shall deposit with the Trustee a sum sufficient to pay all the -32- principal 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 Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the City and the Trustee, or the Trustee if such declaration was made by the Trustee, may, on behalf of the Owners 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. Section 8.03. Application of Net Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Net Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture (subject to Section 12.10) shall be applied by the Trustee as follows and in the following order: (a) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the Bonds and payment of reasonable charges and expenses of the Trustee (including, but not limited to, reasonable fees and disbursements of its counsel, agents and advisors) incurred in and about the performance of its powers and duties under this Indenture; (b) To the payment of the principal 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 Indenture (including Section 6.02), as follows: (i) 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 of any Bonds which shall have become due, in the order of their due dates, with interest on the overdue principal at the rate borne 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 due on such date to the persons entitled thereto, without any discrimination or preference; and (ii) 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 respective 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 -33- 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 8.04. Trustee to Represent Bondowners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney -in -fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, this Indenture, the Refunding Bond Law and applicable previsions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Bondowners, the Trustee in its discretion may and shall upon the written request of the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding (or, if more than one such request is received, the written request executed by the Owners of the greatest percentage of Bonds then Outstanding in excess of twenty-five percent (25%)), and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Owners 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 Trustee or in such Owners under this Indenture, the Refunding Bond Law or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Net Revenues and other assets pledged under this Indenture, pending such proceedings. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the 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 Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of this Indenture (including Section 6.02). Section 8.05. Bondowners' Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondowners not parties to such direction or would expose the Trustee to liability for which it has not been indemnified to its satisfaction. Section 8.06. Limitation on Bondowners' Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Refunding Bond Law or any other applicable law with respect to such Bond, unless (1) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default; (2) the Owners of not less than twenty- five per cent (25%) in aggregate principal amount of the Bonds then Outstanding (or, if more than one such request is received, the written request executed by the Owners of the greatest percentage of Bonds then Outstanding in excess of twenty-five percent (25%)) shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (3) such Owner or said Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (4) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under this Indenture, the Refunding Bond Law, the California Government Code or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture (including Section 6.02). Section 8.07. Absolute Obligation of City. Nothing in Section 8.06 or in any other provision of this Indenture, or in the Bonds, contained shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, as herein provided, but only out of the Net Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds. Section 8.08. Termination of Proceedings. In case any proceedings taken by the Trustee or any one or more Bondowners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Bondowners, then in every such case the City, the Trustee and the Bondowners, 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 Trustee and the Bondowners shall continue as though no such proceedings had been taken. Section 8.09. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners 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 8.10. No Waiver of Default. No delay or omission of the Trustee or of any Owner 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 Indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient. -35- ARTICLE IX THE TRUSTEE Section 9.01. Appointment of Trustee; Duties, Immunities and Liabilities of Trustee. (a) The Bank of New York Mellon Trust Company, N.A. is hereby appointed to serve as Trustee under this Indenture. By execution hereof, the Trustee accepts such appointment. (b) The 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 Indenture. The 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 Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (c) The City may remove the Trustee at any time unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners 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 Trustee shall cease to be eligible in accordance with subsection (f) of this Section 9.01, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving a thirty day prior written notice of such removal to the Trustee, and thereupon shall appoint a successor Trustee by an instrument in writing. (d) The Trustee may at any time resign by giving sixty days prior written notice of such resignation to the City and by giving the Bondowners notice of such resignation by mail to the addresses shown on the Bond Registration Books. Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee by an instrument in writing. (e) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within forty-five (45) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bondowner (on behalf of himself and all other Bondowners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture, shall signify its acceptance of such appointment by executing and delivering to the City and to its predecessor Trustee a written acceptance thereof, and thereupon such successor 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 Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Request of the City or the request of the successor Trustee, such predecessor 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 Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor -36- 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 Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the City shall mail a notice of the succession of such Trustee to the trusts hereunder to the Bondowners at the addresses shown on the registration books maintained by the Trustee. If the City fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the City. (f) Any Trustee appointed under the provisions of this Section 9.01 in succession to the Trustee shall be a trust company, national banking association or bank having the powers of a trust company having a corporate trust office in the State, having a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank, national banking association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such bank, national banking association 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 Trustee shall cease to be eligible in accordance with the provisions of this subsection (f), the Trustee shall resign immediately in the manner and with the effect specified in this Section 9.01. Section 9.02. Merger or Consolidation. Any company or association into which the Trustee may be merged or converted or with which it may be consolidated or any company or association resulting from any merger, conversion or consolidation to which it shall be a party or any company or association to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company or association shall be eligible under subsection (f) of Section 9.01, shall be the successor to such Trustee, as the case may be, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. Section 9.03. Liability of Trustee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the City, and the Trustee assumes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of this Indenture or of the Bonds, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee may become the owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondowners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. (b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless the Trustee was negligent in ascertaining the pertinent facts. (c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding, relating to -37- the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Bondowners, pursuant to the provisions of this Indenture, unless such Bondowners shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby. (e) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. (f) No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder if repayment of such funds or adequate indemnity against such risk or liability is not assured to it. (g) The Trustee makes no representation, express or implied as to the title, value, design, compliance with specifications or legal requirements, quality, durability, operation, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City of the Enterprise. (h) The Trustee shall not be deemed to have knowledge of an Event of Default hereunder unless and until it shall have actual knowledge thereof. (i) The Trustee shall have no responsibility with respect to any information, statement or recital in any official statement, offering memorandum or other disclosure material prepared or distributed with respect to the Bonds. (j) The immunities extended to the Trustee also extend to its directors, officers, employees and agents. (k) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty. (1) The Trustee may execute any of the trusts or powers hereof and perform any of its duties through attorneys, agents and receivers and shall not be answerable for the same if appointed by it with reasonable care. (m) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions ("Instructions") given pursuant to this Indenture and delivered using Electronic Means ("Electronic Means" shall mean the following communications methods: e- mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions ("Authorized Officers") and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee's understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Trustee cannot determine the We-3 identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and / or authentication keys upon receipt by the City. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. (n) The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term "force majeure" means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include but not be limited to acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences. (o) The Trustee's rights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance of the Bonds. (p) The Trustee shall not be responsible for or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof. The Trustee may conclusively rely upon the City's written instructions as to both the suitability and legality of the directed investments and such written direction shall be deemed to be a certification that such directed investments constitute Permitted Investments. Section 9.04. Right of Trustee to Rely on Documents. The Trustee shall be protected in acting upon any notice, resolution, request, requisition, consent, order, certificate, report, opinion, note 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 Trustee may consult with counsel, who may be counsel of or to the City, 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 Indenture the 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 Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such -39- Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 9.05. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject during regular business hours with reasonable prior notice to the inspection of the City and any Bondowner, and their agents and representatives duly authorized in writing, at the Trust Office and under reasonable conditions. Section 9.06. Compensation of Trustee. The City covenants to pay to the Trustee from time to time, from available moneys of the City, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it in the exercise and performance of any of the powers and duties hereunder of the Trustee, and the City will pay or reimburse the Trustee upon its request, from available moneys of the City, for all expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. Section 9.07. Indemnification. The City covenants to indemnify the Trustee and to hold it harmless against any loss, liability, expenses or advance, including reasonable fees and expenses of counsel and other experts, incurred or made without negligence or bad faith on the part of the Trustee, in the exercise and performance of any of the powers and duties hereunder by the Trustee, including the costs and expenses of defending itself against any claim of liability arising under this Indenture. Such indemnification shall survive the termination or discharge of this Indenture and the resignation or removal of the Trustee. -40- ARTICLE X MODIFICATION OR AMENDMENT OF THE INDENTURE Section 10.01. Amendments Permitted. (a) This Indenture and the rights and obligations of the City and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time by a Supplemental Indenture, which the City and the Trustee may execute when the written consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have been filed with the Trustee; provided that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any particular maturity remain Outstanding, the consent of the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Bonds Outstanding under this Section 10.01. No such modification or amendment shall (1) extend the fixed maturity of any Bond, or reduce the amount of principal thereof, provided in this Indenture for the payment of any Bond, or reduce the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of each Bond so affected, or (2) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Net Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture, or deprive the Owners of the Bonds of the lien created by this Indenture on such Net Revenues and other assets (except as expressly provided in this Indenture), or terminate the insurance of the Bonds, without the consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent of the Bondowners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the City and the Trustee of any Supplemental Indenture pursuant to this subsection (a), the Trustee shall mail a notice, setting forth in general terms the substance of such Supplemental Indenture to the Bondowners at the addresses shown on the Bond Registration Books. 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 Indenture. (b) This Indenture and the rights and obligations of the City, of the Trustee and of the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the City and the Trustee may execute without the consent of any Bondowners, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the covenants and agreements of the City in this Indenture or contained 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 Owners of the Bonds; and (ii) 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 Indenture, or in regard to matters or questions arising under this Indenture, as the City may deem necessary or desirable and not inconsistent with this Indenture, and which shall not materially adversely affect the interests of the Owners of the Bonds. -41- (c) No such Supplemental Indenture shall modify any of the rights or obligations of the Trustee without its prior written consent thereto; nor shall the Trustee be required to consent to any such Supplemental Indenture which affects its rights or obligations hereunder. In executing, or accepting the additional trusts created by, any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and complies with the terms hereof. Section 10.02. Effect of Supplemental Indenture. From and after the time any Supplemental Indenture becomes effective pursuant to this Article X, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the City, the Trustee and all Owners 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 Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 10.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after any Supplemental Indenture becomes effective pursuant to this Article X may, and if the Trustee so determines shall, bear a notation by endorsement or otherwise in form approved by the City and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such execution and presentation of his Bond for the purpose at the Trust Office or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such Bond. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the City and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the City and authenticated by the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall be exchanged at the Trust Office, without cost to any Bondowner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amounts of the same maturity. Section 10.04. Amendment of Particular Bonds. The provisions of this Article X shall not prevent any Bondowner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds. -42- ARTICLE XI DEFEASANCE Section 11.01. Discharge of Indenture. Bonds may be paid by the City in any of the following ways; provided that the City also pays or causes to be paid any other sums payable hereunder by the City: (a) by paying or causing to be paid the principal of and interest on Bonds Outstanding, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money or non -callable Government Obligations in the necessary amount (as provided in Section 11.03) to pay Bonds Outstanding; or (c) by delivering to the Trustee, for cancellation by it, Bonds Outstanding. If the City shall pay all Bonds Outstanding and shall also pay or cause to be paid all other sums payable hereunder by the City, then and in that case, at the election of the City (evidenced by a Certificate of the City, filed with the Trustee, signifying the intention of the City to discharge all such indebtedness and this Indenture), and notwithstanding that any Bonds shall not have been surrendered for payment, this Indenture and the pledge of Net Revenues and other assets made under this Indenture and all covenants, agreements and other obligations of the City under this Indenture shall cease, terminate, become void and be completely discharged and satisfied, except only as provided in Section 11.02. In such event, upon Request of the City, the 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 or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the City all moneys or securities or other property held by it pursuant to this Indenture which are not required for the payment of Bonds not theretofore surrendered for such payment. Section 11.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 11.01) to pay any Outstanding Bond, provided that the provisions of Section 11.04 shall apply in all events. The City may at any time surrender to the 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 11.03. Deposit of Money or Securities with Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or Government Obligations in the necessary amount to pay any Bonds, the money or Government Obligations so to be deposited or held may include money or Government Obligations held by the Trustee in the funds and accounts established pursuant to this Indenture and shall be: (a) 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; or (b) Government Obligations the principal of and interest on which when due will provide money sufficient in the opinion of a certified public accountant to pay the principal of M and all unpaid interest to maturity on the Bonds to be paid, as such principal and interest become due. Section 11.04. Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal or interest on, any Bonds and remaining unclaimed for two years after the principal of all of the Bonds has become due and payable (whether at maturity or by acceleration as provided in this Indenture), if such moneys were so held at such date, or two years 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 City free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the City as aforesaid, the Trustee, as the case may be, may (at the cost of the City) first mail a notice, in such form as may be deemed appropriate by the Trustee, to the Owners of the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the City of the moneys held for the payment thereof. -44- ARTICLE XII MISCELLANEOUS Section 12.01. Liabili , of City Limited to Net Revenues. Notwithstanding anything contained in this Indenture or in the Bonds, the City shall not be required to advance any moneys derived from any source other than the Net Revenues and other assets pledged under this Indenture for any of the purposes mentioned in this Indenture, whether for the payment of the principal of or interest on the Bonds or for any other purpose of this Indenture. Section 12.02. Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture either the City or the 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 Indenture contained by or on behalf of the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 12.03. Limitation of Rights to Parties and Bondowners. Except as provided in Article XII hereof, nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any person other than the City, the Trustee and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of this 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 Trustee and the Owners of the Bonds. Section 12.04. Waiver of Notice. Whenever the giving of notice by mail or otherwise is required in this Indenture, 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 12.05. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the City of any Bonds, the Trustee shall destroy such Bonds and deliver a certificate of such destruction to the City. Section 12.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this 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 Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The City hereby declares that it would have adopted this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable. Section 12.07. Notices. Any notice, request, complaint, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by first class, registered or certified mail, postage prepaid, or sent by confirmed telegram, telecopy or telex, to the address (or such other address as may have been filed with the Trustee in writing) set forth below: If to the City: City of Tustin 300 Centennial Way -45- Tustin, CA 92780 Attention: City Manager Phone: (714) 573-3000 Fax: (714) 838-1602 If to the Trustee: The Bank of New York Mellon Trust Company, N.A. 400 South Hope Street, Suite 500 Los Angeles, CA 90071 Attention: Corporate Trust Department Phone: (213) 630-6260 Fax: (213) 630-6480 Any notice provided by the Trustee to the Owners shall also be provided to the City. Section 12.08. Evidence of Rights of Bondowners. Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by Bondowners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bondowners 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 Indenture and shall be conclusive in favor of the Trustee and of the City if made in the manner provided in this Section 12.08. 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 him 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 registered Bonds shall be proved by the Bond Registration Books held by the Trustee. Any request, consent, or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the City in accordance therewith or reliance thereon. Section 12.09. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the City 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 or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section 12.09 if the pledgee shall establish to the satisfaction of the 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 with, the City or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the City shall specify in a certificate to the Trustee those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such certificate. -46- Section 12.10. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal due on any date with respect to particular Bonds shall, on and after such date and pending such payment, be set aside on its books and held in trust by it without liability for interest thereon for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 11.04. Section 12.11. Funds and Accounts. Any fund required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds shall at all times be maintained in accordance with customary standards of the industry, to the extent practicable, and with due regard for the protection of the security of the Bonds and the rights of every holder thereof. Section 12.12. Article and Section Headings and References. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Indenture. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; the words "herein," "hereof," "hereby," "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof; and words of the masculine gender shall mean and include words of the feminine and neuter genders. Section 12.13. Waiver of Personal Liability. No member of the City Council, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal 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 of the City Council, officer, agent or employee from the performance of any official duty provided by law or by this Indenture. Section 12.14. Execution in Several Counterparts. This 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 Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. Section 12.15. Governing Law. This Indenture shall be construed in accordance with and governed by the Constitution and laws of the State. If this Indenture shall be the subject of litigation, venue shall reside in the federal or state courts of California. -47- IN WITNESS WHEREOF, the CITY OF TUSTIN has caused this Indenture to be signed in its name by the City Manager and attested by the City Clerk, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by one of its authorized officers, all as of the day and year first above written. Attest: Erica N Yasuda City Clerk CITY OF TUSTIN By Matthew S. West City Manager THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Authorized Officer -48- IN WITNESS WHEREOF, the CITY OF TUSTIN has caused this Indenture to be signed in its name by the City Manager and attested by the City Clerk, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by one of its authorized officers, all as of the day and year first above written. Attest: CITY OF TUSTIN Matthew S. West City Manager Erica N. Yasuda City Clerk THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee By Auth ' ed Officer EXHIBIT A FORM OF BOND United States of America State of California Orange County CITY OF TUSTIN (Orange County, California) Taxable Water Refunding Revenue Bond, Series 2020 INTEREST RATE MATURITY DATE DATED DATE CUSIP % Aril 1, February 27, 2020 901080 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS The CITY OF TUSTIN, a municipal corporation and general law city duly organized and existing under the laws of the State of California (the "City"), for value received, hereby promises to pay to the Registered Owner named above or registered assigns (the "Owner"), on the Maturity Date stated above, the Principal Amount stated above in lawful money of the United States of America, and to pay interest thereon in like lawful money from the April 1 or October 1 (each an "Interest Payment Date") next preceding the date of authentication hereof, unless said date of authentication is an Interest Payment Date, in which event such interest is payable from such date of authentication, and unless said date of authentication is prior to September 15, 2020, in which event such interest is payable from the Dated Date stated above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the date to which interest has previously been paid or made available for payment on this Bond in full at the Interest Rate per annum stated above, payable semiannually on each Interest Payment Date, commencing October 1, 2020. The principal amount of this Bond is payable at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), in Los Angeles, California, or at such office as the Trustee may designate, upon presentation and surrender of this Bond to the Trustee. Payment of the interest on this Bond will be made to the person whose name appears on the bond registration books of the Trustee as the Owner thereof as of the fifteenth day of the month immediately preceding an Interest Payment Date whether or not said day is a business day (the "Record Date"), such interest to be paid by check mailed on the Interest Payment Date to the Owner or, at the option of any Owner of at least $1,000,000 aggregate principal amount of Bonds and upon written notice received by the Trustee prior to the Record Date, by wire transfer, at the Owner's address as it appears on such bond registration books or to such account as shall have been identified by the Owner in the notice requesting payment by wire transfer. Capitalized terms used herein and not otherwise defined are used with the meanings ascribed to them in the Indenture of Trust (the "Indenture"), dated as of February 1, 2020, by and between the City and the Trustee. Exhibit A Page 1 This Bond is one of a series of Bonds of various maturities designated as "City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020" (the "Bonds"), issued pursuant to the provisions of Article 10 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with section 53570) of the California Government Code (the "Refunding Bond Law") in the aggregate principal amount of $14,910,000, all of like tenor (except for such variations, if any, as may be required to designate varying numbers, maturities or interest rates), issued under and pursuant to the Indenture and approved by the City by Resolution No. 20-07, adopted by the City Council of the City on February 4, 2020. A copy of the Indenture is on file at the office of the Trustee, and reference to the Indenture and any and all supplements thereto and modifications and amendments thereof and to the Refunding Bond Law is made for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the net revenues (the "Net Revenues") of the City's municipal Water enterprise (the "Enterprise"), as more particularly described in the Indenture, and the rights of the Owners of the Bonds. All the terms of the Indenture and the Refunding Bond Law are hereby incorporated herein and constitute a contract between the City and the Owners from time to time of this Bond, and to all the provisions thereof the Owner of this Bond, by his acceptance hereof, consents and agrees. Each taker and subsequent Owner hereof shall have recourse to all of the provisions of the Refunding Bond Law and the Indenture and shall be bound by all of the terms and conditions thereof. The Bonds are issued to provide for the refunding of certain outstanding obligations of the City. The Bonds are special obligations of the City and are payable, as to interest thereon and principal thereof, from the Net Revenues. All of the Bonds are equally secured by a pledge of, and charge and lien upon, that portion of the Net Revenues necessary to pay the principal of and interest on the Bonds in any Fiscal Year, and the Net Revenues constitute a trust fund for the security and payment of the principal of and interest on all of the Bonds. Additional obligations of the City payable from the Net Revenues on a parity with the Bonds may be issued, subject to the satisfaction of certain conditions precedent set forth in the Indenture. The principal of and interest on the Bonds are payable solely from the Net Revenues, and the City is not obligated to pay the Bonds except from the Net Revenues. The general fund of the City is not liable, and the full faith and credit or taxing power of the City is not pledged, for the payment of the principal of and interest on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or any of its income or receipts, except the Net Revenues. The City covenants that, so long as any of the Bonds are outstanding, it will fix, prescribe and collect charges so as to yield Net Revenues at least equal to the amounts thereof prescribed by the Indenture and sufficient to pay the principal of and interest on the Bonds in accordance with the provisions of the Indenture. The Bonds maturing on or after April 1, 2035, are subject to redemption prior to their respective maturity dates, at the option of the City, as a whole or in part on any date or in part, in such order of maturity as shall be selected by the City (or in inverse order of maturity if the City shall fail to select a particular order) and by lot within a maturity, on or after April 1, 2030, from any source of available funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. The Bonds maturing on April 1, 2035 (the "2035 Term Bonds") are subject to mandatory redemption, in part by lot, from Sinking Account payments set forth in the following schedule on April 1, 2031, and on each April 1 thereafter to and including April 1, 2035, at a redemption Exhibit A Page 2 price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some but not all of the 2035 Term Bonds have been optionally redeemed as described above, the total amount of Sinking Account payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the 2035 Term Bonds so redeemed by reducing each such future Sinking Account payment on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated pursuant to written notice filed by the City with the Trustee. Sinking Account Redemption Date (April 1) 2031 2032 2033 2034 2035t tMaturity Principal Amount to be Redeemed $505,000 515,000 535,000 550,000 565,000 The Bonds maturing on April 1, 2043 (the "2043 Term Bonds") are subject to mandatory redemption, in part by lot, from Sinking Account payments set forth in the following schedule on April 1, 2036, and on each April 1 thereafter to and including April 1, 2043, at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some but not all of the 2043 Term Bonds have been optionally redeemed as described above, the total amount of Sinking Account payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the 2043 Term Bonds so redeemed by reducing each such future Sinking Account payment on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as shall be designated pursuant to written notice filed by the City with the Trustee. Sinking Account Redemption Date (April 1) 2036 2037 2038 2039 2040 2041 2042 2043t Maturity Principal Amount to be Redeemed 580,000 600,000 615,000 630,000 655,000 680,000 2,285,000 2,355,000 If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture. This Bond is transferable, as provided in the Indenture, only upon the books of the City kept for that purpose at the office of the Trustee, by the Owner hereof in person, or by his attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered Owner or his Exhibit A Page 3 attorney duly authorized in writing, and thereupon a new Bond or Bonds, without coupons, and in the same aggregate principal amount and of the same maturity, shall be issued to the transferee in exchange herefor, as provided in the Indenture, and upon the payment of charges, if any, including, after the first exchange, the cost of preparing new Bonds therein prescribed. The rights and obligations of the City and of the Owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture. No such modification or amendment shall permit a change in the maturity of the principal of any outstanding Bond or of any installment of interest thereon or a reduction in the principal amount or in the rate of interest thereon without the consent of the Owner of such Bond, or shall reduce the percentages or otherwise affect the classes of Bonds, the consent of the Owners of which is required to effect any such modification or amendment, all as more fully set forth in the Indenture. It is hereby certified that all of the conditions, things and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due time, form and manner as required by law and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any limit prescribed by the Constitution or laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC), to the issuer or its agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. Exhibit A Page 4 IN WITNESS WHEREOF, the City of Tustin has caused this Bond to be executed in its name and on its behalf with the manual or facsimile signature of its City Manager and the manual or facsimile signature of its City Clerk all as of the Dated Date stated above. Attest: CITY OF TUSTIN By City Clerk City Manager TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within -mentioned Indenture, which has been authenticated and registered on THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee By Authorized Officer Exhibit A Page 5 ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto whose address and social security or other tax identifying number is the within -mentioned Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the Bond registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Notice: Signature guarantee shall be made by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. Exhibit A Page 6 Quint & Thimmig LLP FIRST AMENDMENT TO INDENTURE OF TRUST Dated as of February 1, 2024 by and between the CITY OF TUSTIN and 12/21/23 01/03/24 01/10/24 01/22/24 01/26/24' THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Amending that certain Indenture of Trust, dated as of February 1, 2020, by and between the City of Tustin and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to: $14,910,000 City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020 20027.04 FIRST AMENDMENT TO INDENTURE OF TRUST This FIRST AMENDMENT TO INDENTURE OF TRUST (this "First Amendment"), dated as of February 1, 2024, is made between by and between the CITY OF TUSTIN, a municipal corporation and general law city organized and existing under the constitution and laws of the State of California (the "City"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, California, as trustee (the "Trustee"), amending that certain Indenture of Trust, dated as of February 1, 2020, by and between the City and the Trustee (the "Original Indenture"). WHEREAS, the City and the Trustee have executed and delivered the Original Indenture under and pursuant to which the City issued its $14,910,000 City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020 (the 'Bonds"); WHEREAS, the proceeds of the Bonds were used to finance the costs of the acquisition and construction of certain new additions, betterments, extensions and improvements to the municipal water system owned and operated by the City; WHEREAS, it has been determined that the Original Indenture is defective in that Section 5.02 of the Original Indenture does not adequately provide for the flow of Gross Revenues required for the payment of Subordinate Debt; and WHEREAS, Section 10.01(b) of the Original Indenture provides that the Original Indenture may be modified or amended from time -to -time and at any time by an indenture or indentures supplemental thereto, which the City and the Trustee may enter into without the consent of any Owners, to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained therein, or in any other respect whatsoever as the City may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not, in the reasonable determination of the City, materially adversely affect the interests of the Owners; NOW, THEREFORE, the parties hereto, for good and valuable consideration the receipt of which is acknowledged, and intending to be legally bound hereby, agree as follows: Section 1. Definitions. All defined terms used in this First Amendment and the Recitals hereto, unless defined elsewhere in this First Amendment, shall have the meanings given to those terms in the Original Indenture. Section 2. Amendment of Section 5.02 of the Original Indenture. Section 5.02 of the Original Indenture is hereby amended in full as follow: Section 5.02. Receipt, Deposit and Application of Gross Revenues and Net Revenues. (a) Application of Gross Revenues. All of the Gross Revenues shall be deposited by the City immediately upon receipt in the Water Fund. All Gross Revenues shall be held in trust by the City in the Water Fund and shall be applied, transferred, used and withdrawn only for the following purposes: 20027.04 (i) Maintenance and Operation Costs. The City shall first pay from the moneys in the Water Fund the budgeted Maintenance and Operation Costs as such Maintenance and Operation Costs become due and payable. (ii) Payment of Debt Service. On or before the 5th Business Day preceding each Interest Payment Date, (A) the City shall withdraw from the Water Fund and transfer to the Trustee, for deposit in the Bond Fund, an amount which, together with the balance then on deposit in the Bond Fund, the Interest Account, the Principal Account and the Sinking Account (other than amounts required for payment of principal of or interest on any Bonds which have matured but which have not been presented for payment), is equal to the aggregate amount of principal of and interest coming due and payable on the Bonds and (B) shall withdraw from the Water Fund and transfer amounts required for the payment of debt service on any Parity Obligations. The transfers required to pay debt service on the Bonds and any Parity Obligations shall be made without preference or priority and, in the event moneys in the Water Fund are not sufficient to pay the debt service requirement for the Bonds and any Parity Obligations, the City shall pay such amounts on a pro rata basis based on the debt service requirements for the Bonds and each outstanding Parity Obligations. (iii) Payment of Debt Service on Subordinate Debt. On or before the 5th Business Day preceding each interest payment date with respect to Subordinate Debt, the City shall withdraw from the Water Fund and transfer amounts required for the payment of debt service on such Subordinate Debt. (iv) Surplus. As long as all of the foregoing payments, allocations and transfers are made at the times and in the manner set forth above, any moneys remaining in the Water Fund may at any time be treated as surplus and applied for any lawful purpose. (b) Application of Moneys in the Bond Fund. On or before the Business Day preceding each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain within the Bond Fund), the following amounts, in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Net Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority: First: 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: to the Principal Account, the aggregate amount of principal becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if any; and Third: to the Sinking Account, the aggregate amount of sinking fund installment becoming due and payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if any. -2- Section 3. Survival. Except as specifically provided in this First Amendment, all terms and conditions of the Original Indenture shall remain in full force and effect, unaltered and unamended hereby. Section 4. Counterparts. This First Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. Section 5. Governing Law. This First Amendment shall be governed by and construed and interpreted in accordance with the Constitution and laws of the State of California without giving effect to conflict of laws principles thereof. Section 6. Headings. Headings of Sections in this First Amendment are for reference purposes only and shall not be deemed to have any substantive effect. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] -3- IN WITNESS WHEREOF, the CITY OF TUSTIN has caused this First Amendment to be signed in its name by the City Manager and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by one of its authorized officers, all as of the day and year first above written. CITY OF TUSTIN By - V ZW City Manager THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee A Authorized Officer [Signature page to First Amendment to Indenture of Trust, dated as of February 1, 2024, by and between the Tustin Public Financing Authority and The Bank of New York Mellon Trust Company, N.A., as Trustee, Amending that certain Indenture of Trust, dated as of February 1, 2020, by and between the City of Tustin and The Bank of New York Mellon Trust Company, N.A., as Trustee] 152 WV 1N WITNESS WHEREOF, the CITY OF TUSTIN has caused this First Amendment to be signed in its nanre by the City Manager and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by one of its authorized officers, all as of the clay and vear first above written. ft CITY OF TUSTIN . 134� .ty&ag "13 C O NEW YORI M TRUST COMPANY, N.A., as Trustee fBy0 0 •0 Arxt orized O fice .o m M [Signature page to First Amendment to Indenture of Trust, dated as of February 1, 2024, by and between the Tustin Public Financing Authority and The Bank of New York Mellon Trust Company, N.A., as Trustee, Amending that certain Indenture of Trust, dated as of February 1, 2020, by and between the City of Tustin and The Bank of New York Mellon Trust Company, N.A., as Trustee] r