HomeMy WebLinkAbout10 Attachment 12 Water Trust Agreement Truckee Donner PUD 2022 Water COPsStradling Yocca Carlson & Rauth
Draft of 5110122
TRUST AGREEMENT
by and among
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Trustee
and
TRUCKEE DONNER PUBLIC UTILITY DISTRICT FINANCING CORPORATION
as Corporation
and
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
as District
Dated as of July 1, 2022
Relating to
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
WATER SYSTEM REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2022A
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Table of Contents
Page
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; CONTENTS OF CERTIFICATES AND
OPINIONS; RECITALS
Section1.1. Definitions..................................................................................................................... I
Section 1.2. Rules of Construction................................................................................................... 7
Section 1.3. Content of Statements and Opinions............................................................................. 8
Section1.4. Recitals.......................................................................................................................... 8
ARTICLE II
CERTIFICATES; TERMS AND PROVISIONS
Section 2.1. Preparation of Certificates.................................................................................
Section 2.2. Denominations; Forms and Numbers; Medium and Place of Payment; Dating
Section 2.3. Respect to Certificates.......................................................................................
Section 2.4. Form of Certificates...........................................................................................
Section2.5. Execution...........................................................................................................
Section 2.6. Transfer of Certificates......................................................................................
Section 2.7. Exchange of Certificates....................................................................................
Section 2.8. Certificate Registration Books...........................................................................
Section 2.9. Certificates Mutilated, Lost, Destroyed or Stolen ..............................................
Section2.10. Book -Entry System............................................................................................
Section2.11. CUSIP Numbers.................................................................................................
ARTICLE III
DELIVERY OF CERTIFICATES
Section 3.1. Delivery of Certificates...............................................................................................15
Section 3.2. Application of Proceeds of Certificates......................................................................15
Section 3.3. Validity of Certificates................................................................................................16
Section3.4. Delivery Cost Fund.....................................................................................................16
ARTICLE IV
PREPAYMENT OF CERTIFICATES
Section 4.1.
Terms of Prepayment..................................................................................................16
Section 4.2.
Selection of Certificates for Prepayment....................................................................17
Section 4.3.
Notice of Prepayment.................................................................................................17
Section 4.4.
Partial Prepayment of Certificate................................................................................18
Section 4.5.
Effect of Prepayment..................................................................................................18
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Table of Contents
(Continued)
Page
ARTICLE V
INSTALLMENT PAYMENTS
Section 5.1.
Pledge and Deposit of Installment Payments..............................................................18
Section 5.2.
Certificate Payment Fund...........................................................................................18
Section 5.3.
Investment of Moneys in Special Funds.....................................................................19
Section 5.4.
Pledge of Moneys in Funds.........................................................................................
20
Section5.5.
Rebate Fund................................................................................................................
20
ARTICLE VI
COVENANTS
Section 6.1.
Corporation and District to Perform Installment Purchase Agreement ......................
22
Section6.2.
[Reserved]...................................................................................................................
22
Section 6.3.
Tax Covenants............................................................................................................22
Section 6.4.
Accounting Records and Reports................................................................................
23
Section 6.5.
Compliance with Trust Agreement.............................................................................23
Section 6.6.
Observance of Laws and Regulations.........................................................................
24
Section 6.7.
Compliance with Contracts.........................................................................................24
Section 6.8.
Prosecution and Defense of Suits...............................................................................
24
Section 6.9.
Recordation and Filing................................................................................................
24
Section6.10.
Eminent Domain.........................................................................................................
25
Section 6.11.
Further Assurances......................................................................................................25
Section 6.12.
Continuing Disclosure................................................................................................
25
ARTICLE VII
DEFAULT AND LIMITATION OF LIABILITY
Section 7.1.
Notice of Non-Payment..............................................................................................
25
Section 7.2.
Action on Default or Termination...............................................................................
25
Section 7.3.
Other Remedies of the Trustee....................................................................................
26
Section7.4.
Non-Waiver.................................................................................................................
26
Section 7.5.
Remedies Not Exclusive.............................................................................................
26
Section 7.6.
No Obligation by the District to Owners....................................................................
26
Section 7.7.
Trustee Appointed Agent for Certificate Owners; Direction of Proceedings .............
27
Section 7.8.
Power of Trustee to Control Proceedings...................................................................
27
Section 7.9.
Limitation on Certificate Owners' Right to Sue .........................................................
27
Section 7.10.
No Obligation with Respect to Performance by Trustee ............................................
28
Section 7.11.
No Liability to Owners for Payment...........................................................................
28
Section 7.12.
No Responsibility for Sufficiency..............................................................................
28
Section 7.13.
Indemnification of Trustee..........................................................................................
28
Section 7.14.
Senior Claim of Trustee..............................................................................................
28
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Table of Contents
(Continued)
ARTICLE VIII
THE TRUSTEE
Section 8.1.
Employment of Trustee ..............................................
Section 8.2.
Acceptance of Employment .......................................
Section 8.3.
Trustee; Duties, Removal and Resignation ................
Section 8.4.
Compensation of the Trustee .....................................
Section 8.5.
Protection of the Trustee ............................................
Section 8.6.
Merger or Consolidation ............................................
ARTICLE IX
AMENDMENT OF TRUST AGREEMENT
Section 9.1. Amendments Permitted....................................................................
Section 9.2. Endorsement or Replacement of Certificates After Amendment or
Supplement......................................................................................
Section 9.3. Amendment of Particular Certificates ..............................................
Section 9.4. Execution of Amendments...............................................................
ARTICLE X
DEFEASANCE
Section 10.1. Discharge of Trust Agreement........................................................
Section 10.2. Deposit of Money or Securities with Trustee .................................
Section 10.3. Unclaimed Moneys.........................................................................
ARTICLE XI
MISCELLANEOUS
Section 11.1.
Benefits of Trust Agreement Limited to Parties .............................
Section 11.2.
Successor Deemed Included in all References to Predecessor .......
Section 11.3.
Execution of Documents by Owners ..............................................
Section 11.4.
Disqualified Certificates.................................................................
Section 11.5.
Waiver of Personal Liability...........................................................
Section 11.6.
Destruction of Certificates..............................................................
Section11.7.
Headings.........................................................................................
Section 11.8.
Funds and Accounts........................................................................
Section 11.9.
Partial Invalidity..............................................................................
Section 11.10.
California Law................................................................................
Section11.11.
Notices............................................................................................
Section 11.12.
Execution in Counterparts...............................................................
Section 11.13.
Force Majeure.................................................................................
Section 11.14.
U.S.A. Patriot Act...........................................................................
Section 11.15.
OFAC Compliance..........................................................................
Page
33
34
34
34
34
35
36
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Table of Contents
(Continued)
Page
EXHIBIT A Form of Certificate A-1
EXHIBIT B Form of Requisition from Delivery Cost Fund B-1
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TRUST AGREEMENT
THIS TRUST AGREEMENT is made and entered into and dated as of July 1, 2022 (the
"Agreement"), by and among THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
acting solely in its capacity as trustee (the "Trustee"), and not individually, a national banking
association that is authorized to exercise trust powers, duly organized and existing under the laws of
the United States of America, TRUCKEE DONNER PUBLIC UTILITY DISTRICT FINANCING
CORPORATION, a nonprofit public benefit corporation that is duly organized and existing under the
laws of the State of California (the "Corporation"), and TRUCKEE DONNER PUBLIC UTILITY
DISTRICT, a public utility district that is duly organized and existing under the laws of the State of
California (the "District").
RECITALS
In consideration of the mutual covenants herein contained and for other valuable
consideration, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; CONTENTS
OF CERTIFICATES AND OPINIONS; RECITALS
Section 1.1. Definitions. Unless the context otherwise requires, the terms defined in this
section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any
report or other document mentioned herein or therein have the meanings defined herein, the
following definitions to be equally applicable to both the singular and plural forms of any of the
terms defined herein. All capitalized terms which are used herein and not defined herein shall have
the meanings ascribed thereto in the Installment Purchase Agreement.
Accountant's Report. The term "Accountant's Report" means a report signed by an
Independent Certified Public Accountant.
Agreement. The term "Agreement" means this Trust Agreement, as originally executed or as
it may from time to time be amended or supplemented as provided for herein.
Assignment Agreement. The term "Assignment Agreement" means that certain Assignment
Agreement, dated as of July 1, 2022, by and between the Corporation and the Trustee, as originally
executed or as it may from time to time be amended or supplemented in accordance with its terms.
Beneficial Owner. The term "Beneficial Owner" means with respect to any Certificate while
in book -entry form, as provided in Section 2.10 of this Agreement, the person who is the beneficial
owner of such Certificate, according to the records of the Securities Depository or its agent, and with
respect to any Certificate not in book -entry form, the Owner thereof.
Business Day. The term "Business Day" means any day of the year other than Saturday or
Sunday on which banks in [Los Angeles], California, are not authorized or obligated by law or
executive order to close and on which the New York Stock Exchange is not closed.
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Certificate Payment Fund. The term "Certificate Payment Fund" means the fund by that
name established and held by the Trustee pursuant to the terms of Section 5.2 hereof
Certificates. The term "Certificates" means the Truckee Donner Public Utility District Water
System Revenue Certificates of Participation, Series 2022A executed and delivered by the Trustee
pursuant to this Agreement.
Code. The term "Code" means the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder, as the same may be amended from time to time, and any
successor provisions of law. Reference to a particular section of the Code shall be deemed to be a
reference to any successor to any such section.
Continuing Disclosure Certificate. The term "Continuing Disclosure Certificate" means the
Continuing Disclosure Certificate relating to the Certificates, dated the date of execution and delivery
of the Certificates, executed by the District.
Delivery Cost Fund. The term "Delivery Cost Fund" means the fund by that name
established by Section 3.4 hereof.
Delivery Costs. The term "Delivery Costs" means all items of expense directly or indirectly
payable by or reimbursable to the District and related to the authorization, execution, sale and
delivery of the Certificates, including but not limited to costs of preparation and reproduction of
documents, printing expenses, filing and recording fees, initial fees and charges of the Trustee and
counsel to the Trustee, legal fees and charges, fees and disbursements of consultants and
professionals, rating agency fees, title insurance premiums, letter of credit fees and bond insurance
premiums (if any), fees and charges for preparation, execution and safekeeping of the Certificates
and any other cost, charge or fee in connection with the original execution and delivery of the
Certificates.
DTC. The term "DTC" means The Depository Trust Company, New York, New York, a
limited purpose trust company organized under the laws of the State of New York in its capacity as
securities depository for the Certificates.
Information Services. The term "Information Services" means the Municipal Securities
Rulemaking Board; and, in accordance with then current guidelines of the Securities and Exchange
Commission, such other addresses and/or such other services providing information with respect to
called bonds as the District may designate in a Written Request of the District delivered to the
Trustee.
Installment Payments. The term "Installment Payments" means the installment payments
payable by the District pursuant to the Installment Purchase Agreement and in the amounts and at the
times set forth in the Installment Purchase Agreement.
Installment Payment Date. The term "Installment Payment Date" means each date on which
Installment Payments are scheduled to be paid by the District pursuant to the Installment Purchase
Agreement.
Installment Purchase Agreement. The term "Installment Purchase Agreement" means the
Installment Purchase Agreement, dated as of July 1, 2022, by and between the District and the
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Corporation, as originally executed or as it may from time to time be amended in accordance with its
terms.
Interest Fund. The term "Interest Fund" means the fund by that name established by
Section 5.2 hereof.
Investment Agreement. The term "Investment Agreement" means an investment agreement
supported by an opinion of counsel as to the enforceability of the Investment Agreement against the
provider thereof, provided that the guarantor thereof is rated at least "AA" and "Aa" by S&P and
Moody's, respectively, at the time of investment, and as further described in the definition of
"Permitted Investments."
Letter of Representations. The term "Letter of Representations" means the letter of the
District delivered to and accepted by DTC on or prior to delivery of the Certificates as book -entry
certificates setting forth the basis on which DTC serves as depository for such book -entry
certificates, as originally executed or as it may be supplemented or revised or replaced by a letter
from the District delivered to and accepted by DTC.
Nominee. The term "Nominee" means the nominee of DTC, which may be DTC, as
determined from time to time pursuant to Section 2.10 hereof.
Outstandinl?. The term "Outstanding," when used as of any particular time with reference to
Certificates, means (subject to the provisions of Section 11.4) all Certificates except: (1) Certificates
cancelled by the Trustee or delivered to the Trustee for cancellation; (2) Certificates paid or deemed
to have been paid within the meaning of Section 10.1; and (3) Certificates in lieu of or in substitution
for which other Certificates shall have been executed and delivered by the Trustee pursuant to
Section 2.9 and Certificates paid pursuant to the last sentence of Section 2.9.
Owner. The term "Owner" or "Certificate Owner" or "Owner of Certificates" or any similar
term, when used with respect to the Certificates, means any person who shall be the registered owner
of any Outstanding Certificate.
Participants. The term "Participants" means those broker -dealers, banks and other financial
institutions from time to time for which DTC holds book -entry certificates as securities depository.
Payment Dates; Payment Date. The term "Payment Dates" means: (i) 15, 202 and
each May 15 and November 15 thereafter; and (ii) any date on which the unpaid Installment
Payments are declared to be due and payable immediately, provided that such declaration is not
rescinded or annulled, all in accordance with Section 8.1 of the Installment Purchase Agreement.
Permitted Investments. The term "Permitted Investments" means any of the following
obligations if and to the extent that they are permissible investments of funds of the District
(provided that the Trustee shall be entitled to rely upon any investment directions from the District as
conclusive certification to the Trustee that the investments described therein are permissible
investment of funds of the District):
(a) Direct obligations of the United States (including obligations issued or held in book -
entry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the
principal of and interest on which are unconditionally guaranteed by the United States.
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(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 (stripped securities are only permitted if they have been stripped by the
agency itself):
1. U.S. Export -Import Bank ("Bximbank") Direct obligations or fully
guaranteed certificates of beneficial ownership
ownership
2. Farmers Home Administration ("FmHA") Certificates of beneficial
3. Federal Financing Bank
4. Federal Housing Administration Debentures ("FHA")
5. General Services Administration Participation certificates
6. Government National Mortgage Association ("GNMA") GNMA - guaranteed
mortgage -backed bonds and GNMA - guaranteed pass -through obligations (not acceptable for certain
cash -flow sensitive issues)
7. United States Maritime Administration Guaranteed Title XI financing
8. United States Department of Housing and Urban Development ("HUD")
Project Notes, Local Authority Bonds, New Communities Debentures, United States government
guaranteed debentures, United States Public Housing Notes and Bonds and United States government
guaranteed public housing notes and bonds
(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by
any of the following non -full faith and credit United States government agencies (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") Participation
Certificates and Senior debt obligations
3. Federal National Mortgage Association ("FNMA") Mortgage -backed
securities and senior debt obligations
4. Student Loan Marketing Association ("SLMA") Senior debt obligations
5. Resolution Funding Corporation obligations
6. Farm Credit System Consolidated system -wide 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, and having a rating by S&P of
"AAAm G," "AAA m" or "AA-m" and if rated by Moody's rated "Aaa," "AaI" or "Aa2," including
such funds for which the Trustee, its affiliates or subsidiaries provide investment advisory or other
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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.
(e) Certificates of deposit secured at all times by collateral described in clauses (a) and/or
(b) above. Such certificates must be issued by commercial banks (including affiliates of the Trustee),
savings and loan associations or mutual savings banks. 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
(including those of the Trustee and its affiliates) which are fully insured by FDIC, or secured at all
times by collateral described in clauses (a) and/or (b) above.
(g) Investment Agreements, including guaranteed investment contracts, forward purchase
agreements and reserve fund put agreements.
(h) Commercial paper rated, at the time of purchase, "Prime-1" by Moody's and "A-1"
or better by S&P.
(i) Bonds or notes issued by any state or municipality which are rated by Moody's and
S&P in one of the two highest Rating Categories assigned by such agencies.
0) Federal funds or bankers acceptances with a maximum term of one year of any bank
(including those of the Trustee and its affiliates) which has an unsecured, uninsured and
unguaranteed obligation rating of "Prime 1" or "AY or better by Moody's and "A-l" or "A" or
better by S&P.
(k) Repurchase agreements for 30 days or less must follow the following criteria.
Repurchase agreements which provide for the transfer of securities from a dealer bank or securities
firm (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal
entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm
will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified
date; and:
Repurchase agreements must be between the municipal entity and a dealer
bank or securities firm;
A. Primary dealers on the Federal Reserve reporting dealer list which are
rated "A" or better by S&P and Moody's; or
B. Banks rated "A" or above by S&P and Moody's.
2. The written repurchase agreements contract must include the following:
4881-6375-7847/022925-0110
A. Securities which are acceptable for transfer are: (1) Direct United
States governments, or (2) Federal agencies backed by the full faith and credit of the United States
government (and FNMA & FHLMC)
B. The term of a repurchase agreement may be up to 30 days
C. The collateral must be delivered to the municipal entity, trustee (if
trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is
supplying the collateral) before/simultaneous with payment (perfection by possession of certificated
securities).
D. Valuation of Collateral
(1) The securities must be valued weekly, marked to market at
current market price plus accrued interest.
(2) The value of collateral must be equal to 104% of the amount
of cash transferred by the municipal entity to the dealer bank or security firm under the repo plus
accrued interest. If the value of securities held as collateral slips below 104% of the value of the cash
transferred by municipality, then additional cash and/or acceptable securities must be transferred. If,
however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must
equal 105%.
(3) A legal opinion must be delivered to the municipal entity to
the effect that the repurchase agreement meets guidelines under state law for legal investment of
public funds.
(1) The California Asset Management Program.
(m) Any state administered pooled investment fund in which the District is statutorily
permitted or required to invest will be deemed a permitted investment, including, but not limited to
the Local Agency Investment Fund in the treasury of the State.
Prepayment Fund. The term "Prepayment Fund" means the fund by that name established by
Section 5.2 hereof.
Prepayment Price. The term "Prepayment Price" means, with respect to any Certificate (or
portion thereof), the principal amount with respect to such Certificate (or portion thereof) plus the
applicable premium, if any, payable upon prepayment thereof pursuant to the provisions of such
Certificate and this Agreement.
Principal Fund. The term "Principal Fund" means the fund by that name established by
Section 5.2 hereof.
Rebate Fund. The term "Rebate Fund" means the fund by that name described in Section 5.5
hereof.
Record Date. The term "Record Date" means, with respect to any Payment Date relating to
the Certificates, the first day of the calendar month in which such Payment Date falls.
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Securities Depository. The term "Securities Depository" means The Depository Trust
Company, a New York banking corporation, its successors and assigns, or if. (i) the then -serving
Securities Depository resigns from its functions as depository of the Certificates; or (ii) the District
discontinues the use of the Securities Depository pursuant to Section 2.10, any other securities
depository which agrees to follow the procedures required to be followed by a securities depository
in connection with the Certificates.
Special Counsel. The term "Special Counsel" means an attorney at law or a firm of attorneys
selected by the District of nationally recognized standing in matters pertaining to the tax-exempt
nature of interest on bonds and certificates of participation issued by states and their political
subdivisions duly admitted to the practice of law before the highest court of California.
State. The term "State" means the State of California.
Statement of the Corporation or District. The term "Statement of the Corporation or District"
means: (i) a statement signed by or on behalf of the Corporation by its Chair or Vice Chair; or (ii) by
the District by the President of its Board of Directors and by the Secretary of its Board of Directors
or by any two persons (whether or not officers of the Board of Directors of the District) who are
specifically authorized by resolution of the District to sign or execute such a document on its behalf.
If and to the extent required by the provisions of Section 1.3, each Statement of the Corporation or
District shall include the statements provided for in Section 1.3.
Tax Certificate. The term "Tax Certificate" means the Tax Certificate dated the date of the
initial execution and delivery of the Certificates, concerning certain matters pertaining to the use and
investment of proceeds of the Certificates executed by and delivered to the District, including any
and all exhibits attached thereto.
Trustee. The term "Trustee" means The Bank of New York Mellon Trust Company, N.A., a
national banking association duly organized and existing under and by virtue of the laws of the
United States of America having a designated corporate trust office in [Los Angeles], California,
acting as trustee under this Agreement (not individually), or its successor or assignee as Trustee
hereunder.
Written Consent of the Corporation or District; Written Requisition of the Corporation or
District; Written Order of the Corporation or District; Written Request of the Corporation or District.
The terms "Written Consent of the Corporation or District," "Written Order of the Corporation or
District," "Written Request of the Corporation or District," and "Written Requisition of the
Corporation or District" mean, respectively, a written consent, order, request or requisition signed by
or on behalf of. (i) the Corporation by its Chair, Vice Chair, Secretary or Treasurer; or (ii) the
District by the Chairperson, the Vice Chairperson, the General Manager or by any two persons
(whether or not officers of the Board of Directors of the District) who are specifically authorized by
resolution of the District to sign or execute such a document on its behalf.
Section 1.2. Rules of Construction. Words of any gender shall be deemed and construed
to include all genders, and words importing persons shall include corporations and associations,
including public bodies, as well as natural persons. Unless the context otherwise indicates, words
importing the singular number shall include the plural number and vice versa.
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Section 1.3. Content of Statements and Opinions. Every statement or opinion with respect
to compliance with a condition or covenant provided for in this Agreement, including each Statement
of the Corporation or the District, shall include: (a) a statement that the person or persons making or
giving such statement or opinion have read such covenant or condition and the definitions herein
relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such statement or opinion are based; (c) a
statement that, in the opinion of the signers, they have made or caused to be made such examination
or investigation as is necessary to enable them to express an informed opinion as to whether or not
such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion
of the signers, such condition or covenant has been complied with.
Any such statement or opinion made or given by an officer of the Corporation or the District
may be based, insofar as it relates to legal or accounting matters, upon a statement or opinion of or
representations by counsel or accountants, unless such officer knows, or in the exercise of reasonable
care should have known, that the statement or opinion or representations with respect to the matters
upon which his statement or opinion may be based, as aforesaid, are erroneous. Any such statement
or opinion made or given by counsel or accountants may be based, insofar as it relates to factual
matters, upon information which is in the possession of the Corporation or the District, or upon the
statement or opinion of or representations by an officer or officers of the Corporation or the District,
unless such counsel, accountant or consultant knows, or in the exercise of reasonable care should
have known, that the statement or opinion or representations with respect to the matters upon which
his or her opinion may be based as aforesaid are erroneous.
Section 1.4. Recitals.
(a) Installment Purchase Agreement. The Corporation and the District have
entered into the Installment Purchase Agreement whereby the Corporation has agreed to sell to the
District the 2022 Project, and the District has agreed to purchase the 2022 Project from the
Corporation, in order to finance the 2022 Project.
(b) Installment Payments. Under the Installment Purchase Agreement, the
District is obligated to pay to the Corporation or its assigns Installment Payments for the purchase of
the 2022 Project.
(c) Assignment Agreement. For the purpose of obtaining the moneys required to
be deposited by the Corporation with the Trustee, and for the purpose of securing the obligations of
the Corporation hereunder, the Corporation has assigned and transferred certain of its rights under the
Installment Purchase Agreement to the Trustee pursuant to the Assignment Agreement; and in
consideration of such assignment and the execution of this Agreement, the Trustee has agreed to
execute and deliver certificates of participation, each evidencing an interest in the Installment
Payments in an aggregate amount equal to the aggregate principal amount of certificates of
participation so executed and delivered.
(d) Conditions Precedent Satisfied. The District and the Corporation hereby
certify that all acts, conditions and things required by law to exist, happen and be performed
precedent to and in connection with the execution and entering into of this Agreement have happened
and have been performed in regular and due time, form and manner as required by law, and the
parties hereto are now duly empowered to execute and enter into this Agreement.
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(e) Limited Recourses. The Certificates represent participation interests in, and
are payable solely from and secured solely by, the Installment Payments in accordance with the terms
of this Agreement, and any recourse for payment of the Certificates shall be limited to the Installment
Payments payable by the District pursuant to the Installment Purchase Agreement and in the amounts
and at the times set forth in the Installment Purchase Agreement as provided in this Agreement.
Without limiting the foregoing and notwithstanding any term herein to the contrary, the Certificates
do not represent and do not constitute obligations of the Trustee in its individual capacity, and there
shall be no recourse against the Trustee individually, or against any of its assets or properties, for
payment of the Certificates or any of the obligations of the District under the Installment Purchase
Agreement.
ARTICLE II
CERTIFICATES; TERMS AND PROVISIONS
Section 2.1. Preparation of Certificates. The Trustee is hereby authorized to execute
certificates of participation, to be denominated "Water System Revenue Certificates of Participation,
Series 2022A" in an aggregate principal amount of MILLION HUNDRED
THOUSAND DOLLARS ($), evidencing undivided interests in Installment Payments to be
paid by the District under the Installment Purchase Agreement.
Section 2.2. Denominations; Forms and Numbers; Medium and Place of Payment; Dating.
The Certificates shall be delivered in the form of fully registered Certificates in denominations of
$5,000 each or any integral multiple thereof, provided that no Certificate shall have principal
represented thereby maturing in more than one year. The Certificates shall be substantially in the
form attached hereto as Exhibit A.
The principal and Prepayment Price with respect to all Certificates shall be payable in lawful
money of the United States of America upon presentation and surrender thereof at the designated
corporate trust office of the Trustee. Interest with respect to Certificates shall be payable by check of
the Trustee mailed by first class mail on the Payment Dates of such Certificates to the respective
Certificate Owners of record thereof as of the close of business on the Record Date at the addresses
shown on the books required to be kept pursuant to Section 2.8 or, upon the written request received
by the Trustee of an Owner of at least $1,000,000 in aggregate principal amount of Certificates, by
wire transfer of immediately available funds to an account in the United States designated by such
Owner prior to the applicable Record Date, except in each case, that, if and to the extent that there
shall be a default in the payment of the interest due on such Payment Date, such defaulted interest
shall be paid to the Owners in whose names any such Certificates are registered at the close of
business on a special record date as determined by the Trustee.
The Certificates shall be dated the date of initial execution and delivery. Interest with respect
to the Certificates shall be payable from the Payment Date preceding their date of execution, unless
such date shall be after a Record Date and on or before the succeeding Payment Date, in which case
interest shall be payable from such Payment Date or unless such date shall be on or before the first
Record Date, in which case interest shall be payable from the date of initial execution and delivery,
provided, however, that if, as shown by the records of the Trustee, interest with respect to the
Certificates shall be in default, Certificates executed in exchange for Certificates surrendered for
transfer or exchange shall represent interest from the last date to which interest has been paid in full
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or duly provided for with respect to the Certificates, or, if no interest has been paid or duly provided
for with respect to the Certificates, from the date of initial execution and delivery.
Section 2.3. Respect to Certificates. Certificates in the aggregate principal amount of
$ shall become payable on November 15 in the years and in the amounts and with an interest
component as provided below. Interest with respect to the Certificates shall be calculated on the
basis of a 360-day year of twelve 30-day months.
Maturity (November 15) Principal Amount Interest Rate
20 $ %
Section 2.4. Form of Certificates. The Certificates and the form of assignment to appear
thereon shall be in substantially the form set forth in Exhibit A with necessary or appropriate
variations, omissions and insertions as permitted or required by this Agreement.
Section 2.5. Execution. The Certificates shall be executed by and in the name of the
Trustee, solely as trustee under this Agreement (and not individually), by the manual signature of an
authorized officer or signatory of the Trustee.
Section 2.6. Transfer of Certificates. Any Certificate may, in accordance with its terms,
be transferred, upon the books required to be kept pursuant to the provisions of Section 2.8, by the
person in whose name it is registered, in person or by such person's duly authorized attorney, upon
surrender of such Certificate for cancellation at the corporate trust office of the Trustee, accompanied
by delivery of a duly executed written instrument of transfer in a form approved by the Trustee.
Whenever any Certificate or Certificates shall be surrendered for transfer, the Trustee shall
execute and deliver a new Certificate or Certificates of the same series and maturity, for a like
aggregate principal amount, and of authorized denomination or denominations. The Trustee may
charge a sum for each new Certificate executed and delivered upon any transfer. The Trustee may
require the payment by any Certificate Owner requesting any such transfer of any tax or other
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governmental charge required to be paid with respect to such transfer. Following any transfer of
Certificates, the Trustee shall cancel and destroy the Certificates it has received in accordance with
its customary procedures.
The transferor shall also 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. The Trustee
may rely on the information provided to it and shall have no responsibility to verify or ensure the
accuracy of such information.
Section 2.7. Exchange of Certificates. Certificates may be exchanged at the corporate
trust office of the Trustee, for a like aggregate principal amount of Certificates of other authorized
denominations of the same series and maturity. The Trustee may charge a sum for each new
Certificate executed and delivered upon any exchange except in the case of any exchange of
temporary Certificates for definitive Certificates. The Trustee may require the payment by the
Owner requesting such exchange of any tax or other governmental charge required to be paid with
respect to such exchange. Following any exchange of Certificates, the Trustee shall cancel and
destroy the Certificates it has received in accordance with its customary procedures.
The Trustee shall not be required to register the exchange or transfer pursuant to Section 2.6
or Section 2.7 hereof, of any Certificate: (a) within 15 days preceding selection of Certificates for
prepayment; or (b) selected for prepayment (except for any non -prepaid portion thereof).
Section 2.8. Certificate Registration Books. The Trustee will keep or cause to be kept, at
its corporate trust office, sufficient books for the registration and transfer of the Certificates, which
shall upon reasonable prior notice and at all reasonable times be open to inspection by the
Corporation or the District; 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, Certificates as hereinbefore provided.
The person in whose name any Certificate shall be registered shall be deemed the Owner
thereof for all purposes hereof, and payment of or on account of the interest with respect to and
principal of, Prepayment Price represented by such Certificate shall be made only to or upon the
order in writing of such registered owner, which payments shall be valid and effectual to satisfy and
discharge liability upon such Certificate to the extent of the sum or sums so paid.
Section 2.9. Certificates Mutilated, Lost, Destroyed or Stolen. If any Certificate shall
become mutilated, the Trustee shall execute and deliver a new Certificate of like tenor, series,
maturity, and principal amount, in exchange and substitution for the Certificate so mutilated, but only
upon surrender to the Trustee of the Certificate so mutilated.
Every mutilated Certificate so surrendered to the Trustee shall be canceled by it and
destroyed. If any Certificate shall be lost, destroyed or stolen, evidence of such loss, destruction or
theft may be submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and
indemnity satisfactory to the Trustee shall be given indemnifying the Trustee, the Corporation and
the District, the Trustee, at the expense of the Certificate Owner, shall execute and deliver a new
Certificate of like tenor, series and maturity, and numbered as the Trustee shall determine, in lieu of
and in substitution for the Certificate so lost, destroyed or stolen. The Trustee may require payment
of a sum not exceeding the actual cost of preparing each new Certificate executed under this Section
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and of the expenses which may be incurred by the Trustee under this Section. Any Certificate
executed under the provisions of this Section in lieu of any Certificate alleged to be lost, destroyed or
stolen shall be equally and proportionately entitled to the benefits of this Agreement with all other
Certificates secured by this Agreement. The Trustee shall not be required to treat both the original
Certificate and any replacement Certificate as being Outstanding for the purpose of determining the
principal amount of Certificates which may be executed hereunder or for the purpose of determining
any percentage of Certificates Outstanding hereunder, but both the original and replacement
Certificate shall be treated as one and the same. Notwithstanding any other provision of this Section,
in lieu of delivering a new Certificate for a Certificate which has been mutilated, lost, destroyed or
stolen and which has matured or has been selected for prepayment, the Trustee may, at the direction
of the District, make payment of such Certificate upon receipt of indemnity satisfactory to the
Trustee.
Section 2.10. Book -Entry System.
(a) Except as otherwise provided in this Section, each Certificate shall be
executed and delivered in the form of one global certificate for each maturity of each series
registered in the name of the Securities Depository or its nominee, and ownership thereof shall be
maintained in book -entry form by the Securities Depository for the account of the Participants
thereof. "Securities Depository" means: (i) The Depository Trust Company, appointed as Securities
Depository herein, and its successors and assigns; or (ii) if the then Securities Depository resigns
from its functions as depository of the Certificates or if the District discontinues the use of the
Securities Depository pursuant to subsection (c) of this Section, any other securities depository which
agrees to follow the procedures required to be followed by a securities depository in connection with
the Certificates and which is appointed by the District. "Participant" means a member of, or
participant in, the Securities Depository.
Initially, the Certificates shall be registered in the name of Cede & Co., as the nominee of
The Depository Trust Company. Except as provided in subsection (c) of this Section, the Certificates
may be transferred, in whole but not in part, only to the Securities Depository or a nominee of the
Securities Depository, or to a successor Securities Depository appointed or approved by the District
or to a nominee of such successor. Each global certificate shall bear a legend substantially to the
following effect: "Except as otherwise provided in the Trust Agreement this global certificate may be
transferred, in whole but not in part, only to another nominee of the Securities Depository (as defined
in the Trust Agreement) or to a successor Securities Depository or to a nominee of a successor
Securities Depository."
With respect to book -entry Certificates, the District and the Trustee shall have no
responsibility or obligation to any Participant or to any person on behalf of which such a Participant
holds an interest in such book -entry Certificates. Without limiting the immediately preceding
sentence, the District and the Trustee shall have no responsibility or obligation with respect to: (i) the
accuracy of the records of DTC, the Nominee, or any Participant with respect to any ownership
interest in book -entry Certificates; (ii) the delivery to any Participant, Beneficial Owner or any other
person, other than the Securities Depository, of any notice with respect to book -entry Certificates,
including any notice of prepayment; (iii) the selection by DTC and its Participants of the beneficial
interests in book -entry Certificates to be prepaid in the event the District prepays the Certificates in
part; (iv) the payment, to any Participant, Beneficial Owner of Certificates or other person, other than
the Securities Depository, of any amount of principal of, premium, if any, or interest with respect to
book -entry Certificates; or (v) any consent given by the Securities Depository as Owner of any
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Certificates. The District and the Trustee may treat and consider the person in whose name each
book -entry Certificate is registered in the registration books as the absolute owner of such book -entry
Certificate for all purposes, whatsoever, including without limitation, payment of principal of,
Prepayment Price or interest with respect to such Certificate, giving notices of prepayment and other
matters with respect to such Certificate and registering transfers with respect to such Certificate. The
Trustee shall pay all principal of, Prepayment Price or interest with respect to the Certificates only to
or upon the order of the respective Owner, as shown in the registration books, or his respective
attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy
and discharge the District's obligations with respect to payment of principal of, Prepayment Price or
interest with respect to the Certificates to the extent of the sum or sums so paid. No person other
than an Owner, as shown in the registration books, shall receive a Certificate evidencing the
obligation to make payments of principal of, Prepayment Price or interest with respect to the
Certificates. Upon delivery by DTC to the Owner and the Trustee, of written notice to the effect that
DTC has determined to substitute a new nominee in place of the Nominee, and subject to the
provisions herein with respect to Record Dates, the word Nominee in this Agreement shall refer to
such nominee of DTC.
The District and the Trustee shall be entitled to treat the person in whose name any
Certificate is registered as the Owner thereof for all purposes of this Agreement and any applicable
laws, notwithstanding any notice to the contrary received by the Trustee or the District; and the
District and the Trustee shall not have responsibility for transmitting payments to, communicating
with, notifying, or otherwise dealing with any Beneficial Owners of the Certificates. Neither the
District nor the Trustee shall have any responsibility or obligation, legal or otherwise, to any such
Beneficial Owners or to any other party, including DTC or its successor (or Substitute Depository or
its successor), except to the Owner of any Certificates, and the Trustee may rely conclusively on its
records as to the identity of the Owners of the Certificates.
(b) In order to qualify the book -entry Certificates for DTC's book -entry system,
the District shall execute and deliver to DTC a Letter of Representations. The execution and delivery
of a Letter of Representations shall not in any way impose upon the District or the Trustee any
obligation whatsoever with respect to persons having interests in such book -entry Certificates other
than the Owners, as shown on the Certificate registration books. In addition to the execution and
delivery of a Letter of Representations, the District shall take such other actions, not inconsistent
with this Agreement, as are reasonably necessary to qualify book -entry Certificates for DTC's book -
entry program.
(c) If at any time the Securities Depository notifies the Trustee and the District
that it is unwilling or unable to continue as Securities Depository with respect to any or all series of
the Certificates or if at any time the Securities Depository shall no longer be registered or in good
standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation and a successor Securities Depository is not appointed by the District within 90 days after
the District receives notice or becomes aware of such condition, or if the Securities Depository
ceases to function as the Securities Depository without prior notice, as the case may be,
subsections (a) and (b) of this Section shall no longer be applicable and the Trustee shall execute and
deliver certificates representing the Certificates so affected as provided below, provided that the
Trustee shall not be required to deliver such new Certificates within a period of less than sixty (60)
days from the date of receipt of such Written Request from the District. In addition, the District may
determine at any time that the Certificates shall no longer be represented by global certificates and
that the provisions of subsections (a) and (b) of this Section shall no longer apply to such
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Certificates. In such event, the Trustee shall execute and deliver, in exchange for a global certificate,
certificates representing the Certificates registered in such names and authorized denominations as
the Securities Depository, pursuant to instructions from the Participants or otherwise, shall instruct
the Trustee, provided that the Trustee shall not be required to deliver such new Certificates within a
period of less than sixty (60) days from the date of receipt of such Written Request from the District.
The Trustee shall deliver such certificates representing the Certificates to the persons in whose names
the Certificates are so registered.
(d) In the case of a partial prepayment or an advance refunding of any
Certificates evidencing a portion of the principal maturing in a particular year, DTC or its successor
(or any Substitute Depository or its successor) shall make an appropriate notation on such
Certificates indicating the date and amounts of such reduction in principal, in form acceptable to the
Trustee, all in accordance with the Letter of Representations. The Trustee shall not be liable for such
Depository's failure to make such notations or errors in making such notations.
(e) Notwithstanding any other provision of this Agreement to the contrary, so
long as any Certificate is registered in the name of Cede & Co., as nominee of The Depository Trust
Company, all payments with respect to the principal of, Prepayment Price or interest with respect to
such Certificate and all notices with respect thereto shall be made and given, respectively, to The
Depository Trust Company as provided in the applicable Letter of Representations of the District
addressed to The Depository Trust Company with respect thereto notwithstanding any inconsistent
provisions herein.
(fl
(i) The Certificates shall be initially executed and delivered as provided
in Section 2.1 hereof. Registered ownership of such Certificates, or any portions thereof, may not
thereafter be transferred except:
(A) to any successor of DTC or its nominee, or of any substitute
depository designated pursuant to clause (B) of subsection (i) of this Section 2.10(f) ("Substitute
Depository"); provided that any successor of DTC or Substitute Depository shall be qualified under
any applicable laws to provide the service proposed to be provided by it;
(B) to any Substitute Depository, upon: (1) the resignation of
DTC or its successor (or any Substitute Depository or its successor) from its functions as depository;
or (2) a determination by the District that DTC (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
(C) to any person as provided below, upon: (1) the resignation of
DTC or its successor (or any Substitute Depository or its successor) from its functions as depository;
or (2) a determination by the District that DTC or its successor (or Substitute Depository or its
successor) is no longer able to carry out its functions as depository.
(ii) In the case of any transfer pursuant to clause (A) or clause (B) of
subsection (i) of this Section 2.10(f), upon receipt of all Outstanding Certificates by the Trustee,
together with a written request of the District to the Trustee designating the Substitute Depository, a
single new Certificate, which the District shall prepare or cause to be prepared, shall be executed and
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delivered for each maturity of each series of Certificates 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 the District. In the case of any transfer pursuant to clause (C) of
subsection (i) of this Section 2.10(f), upon receipt of all Outstanding Certificates by the Trustee,
together with a written request of the District to the Trustee, new Certificates, which the District shall
prepare or cause to be prepared, shall be executed and delivered in such denominations and
registered in the names of such persons as are requested in such written request of the District,
subject to the limitations of Section 2.1 hereof, provided that the Trustee shall not be required to
deliver such new Certificates within a period of less than sixty (60) days from the date of receipt of
such written request from the District.
(iii) In the case of a partial prepayment or an advance refunding of any
Certificates evidencing a portion of the principal maturing in a particular year, DTC or its successor
(or any Substitute Depository or its successor) shall make an appropriate notation on such
Certificates indicating the date and amounts of such reduction in principal, in form acceptable to the
Trustee, all in accordance with the Letter of Representations. The Trustee shall not be liable for such
Depository's failure to make such notations or errors in making such notations.
(iv) The District and the Trustee shall be entitled to treat the person in
whose name any Certificate is registered as the Owner thereof for all purposes of this Agreement and
any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the
District; and the District and the Trustee shall not have responsibility for transmitting payments to,
communicating with, notifying, or otherwise dealing with any Beneficial Owners of the Certificates.
Neither the District nor the Trustee shall have any responsibility or obligation, legal or otherwise, to
any such Beneficial Owners or to any other party, including DTC or its successor (or Substitute
Depository or its successor), except to the Owner of any Certificates, and the Trustee may rely
conclusively on its records as to the identity of the Owners of the Certificates.
Section 2.11. CUSIP Numbers. The District in causing the execution and delivery of the
Certificates may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of prepayment as a convenience to Owners; provided that the Trustee
shall have no liability for any defect in the "CUSIP" numbers as they appear on any Certificate,
notice or elsewhere; and provided further that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Certificates or as contained in any
notice of a prepayment and that reliance may be placed only on the other identification numbers
printed on the Certificates, and any such prepayment shall not be affected by any defect in or
omission of such numbers. The District will promptly notify the Trustee in writing of any change in
the "CUSIP" numbers.
ARTICLE III
DELIVERY OF CERTIFICATES
Section 3.1. Delivery of Certificates. The Trustee is hereby authorized to execute and
deliver Certificates in an aggregate principal amount of $ upon the Written Order of the
District.
Section 3.2. Application of Proceeds of Certificates. The proceeds derived from the sale
of the Certificates in the amount of $ shall be deposited with the Trustee, who shall: (i) deposit
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$ , representing costs of issuance, in the Delivery Cost Fund; and (ii) transfer $ to the
District for deposit in the Acquisition Fund. The Trustee may establish temporary funds and
accounts to facilitate such transfers.
Section 3.3. Validity of Certificates. The validity of the execution and delivery of the
Certificates is not dependent on and shall not be affected in any way by any proceedings taken by the
District, the Corporation or the Trustee with respect to or in connection with the Installment Purchase
Agreement. The recital contained in the Certificates that all acts, conditions and things required by
the Constitution and statutes of the State of California and this Agreement to exist, to have happened
and to have been performed precedent to and in the delivery thereof do exist, have happened and
have been performed in due time, form and manner as required by law shall be conclusive evidence
of their validity and of compliance with the provisions of law in their delivery.
Section 3.4. Delivery Cost Fund. There is hereby established with the Trustee the
Delivery Cost Fund, which fund the Trustee shall establish and maintain and hold in trust separate
and apart from other funds held by it. The moneys in the Delivery Cost Fund shall be used and
withdrawn by the Trustee to pay Delivery Costs of the Certificates upon submission of Written
Requisitions of the District in substantially the form set forth in Exhibit B stating the person to whom
payment is to be made, the amount to be paid, the purpose for which the obligation was incurred, that
such payment is a proper charge against said fund and that payment for such charge has not
previously been made. On the six month anniversary of the initial execution and delivery of the
Certificates or upon the earlier Written Request of the District, all amounts remaining in the Delivery
Cost Fund shall be transferred by the Trustee to the Certificate Payment Fund and the Delivery Cost
Fund shall be closed.
ARTICLE IV
PREPAYMENT OF CERTIFICATES
Section 4.1. Terms of Prepayment.
(a) The Certificates maturing on or after November 15, 20 are subject to
optional prepayment prior to their respective stated maturities, as a whole or in part on 15,
20_ or any date thereafter in the order of maturity as directed by the District in a written request to
the Trustee at least 60 days (or such lesser number of days acceptable to the Trustee) prior to such
date and by lot within each maturity, in integral multiples of $5,000 from amounts prepaid by the
District pursuant to the Installment Purchase Agreement at a Prepayment Price equal to the principal
amount of the Certificates to be prepaid, plus accrued interest represented thereby to the date fixed
for prepayment, without premium.
(b) The Certificates with stated maturities on November 15, 20 are subject to
mandatory sinking fund prepayment in part (by lot) on November 15, 20 and each November 15
thereafter, in integral multiples of $5,000 at a Prepayment Price of the principal amount thereof plus
accrued interest to the date fixed for prepayment, without premium, in accordance with the following
schedule:
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Prepayment Date Principal
(November 15) Amount
20 $
* Maturity
If some but not all of the Certificates maturing on November 15, 20_ are prepaid pursuant to
subsection (a), the principal amount of the applicable Certificates to be prepaid pursuant to this
subsection (b) on any subsequent November 1 will be reduced, by $5,000 or an integral multiple
thereof, as designated by the District in a Written Order of the District filed with the Trustee;
provided, however, that the aggregate amount of such reductions shall not exceed the aggregate
amount of the applicable Certificates prepaid pursuant to subsection (a).
Section 4.2. Selection of Certificates for Prepayment. Whenever less than all of the
Certificates are called for prepayment, the Trustee shall select the Certificates or portions thereof to
be prepaid from the Outstanding Certificates in accordance with Section 4.1 hereof (subject to
applicable procedures of any Securities Depository serving as depository of the Certificates). The
Trustee shall promptly notify the District in writing of the numbers of the Certificates or portions
thereof so selected for prepayment.
Section 4.3. Notice of Prepayment. Notice of prepayment shall be mailed, first class
postage prepaid, to the respective Owners of any Certificates designated for prepayment at their
addresses appearing on the Certificate registration books and to the Information Services and by
registered or certified or overnight mail or electronically to the Securities Depository at least 20 days
but not more than 60 days prior to the prepayment date.
Each such notice of prepayment shall state the date of notice, the prepayment date, the place
or places of prepayment and the Prepayment Price, shall designate the maturities, CUSIP numbers, if
any, and, if less than all of any such maturity is to be prepaid, the respective portions of the principal
amount thereof to be prepaid. Each such notice shall also state that on said date there will become
due and payable on each of said Certificates the Prepayment Price thereof or of said specified portion
of the principal represented thereby in the case of a Certificate to be prepaid in part only, together
with interest accrued with respect thereto to the prepayment date, and that (provided that moneys for
prepayment have been deposited with the Trustee) from and after such prepayment date interest with
respect thereto shall cease to accrue, and shall require that such Certificate be then surrendered to the
Trustee. Any defect in the notice or the mailing will not affect the validity of the prepayment of any
Certificate. Notice of prepayment of Certificates shall be given by the Trustee on behalf of and at the
expense of the District.
With respect to any notice of optional prepayment of Certificates, such notice may state that
such prepayment shall be conditional upon the receipt by the Trustee on or prior to the date fixed for
such prepayment of moneys that are sufficient to pay the principal of, premium, if any, and interest
with respect to such Certificates to be prepaid and that, if such moneys shall not have been so
received, said notice shall be of no force and effect and the Trustee shall not be required to prepay
such Certificates. In the event that such notice of prepayment contains such a condition and such
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moneys are not so received, the prepayment shall not be made, and the Trustee shall within a
reasonable time thereafter give notice, in the manner in which the notice of prepayment was given,
that such moneys were not so received.
Section 4.4. Partial Prepayment of Certificate. Upon surrender of any Certificate prepaid
in part only, the Trustee shall execute and deliver to the Owner thereof, at the expense of the District,
a new Certificate or Certificates of authorized denominations equal in aggregate principal amount to
the unprepaid portion of the Certificate surrendered and of the same series, interest rate and maturity.
Section 4.5. Effect of Prepayment. When notice of prepayment has been duly given as
aforesaid, and moneys for payment of the Prepayment Price of, together with interest accrued to the
prepayment date with respect to, the Certificates (or portions thereof) so called for prepayment are
held by the Trustee, the Certificates (or portions thereof) so called for prepayment shall, on the
prepayment date designated in such notice, become due and payable at the Prepayment Price
specified in such notice and interest accrued thereon to the prepayment date; and from and after the
prepayment date interest represented by the Certificates so called for prepayment shall cease to
accrue, said Certificates (or portions thereof) shall cease to be entitled to any benefit or security
under this Agreement, and the Owners of said Certificates shall have no rights in respect thereof
except to receive payment of said Prepayment Price and accrued interest.
All Certificates prepaid pursuant to the provisions of this Article shall be cancelled upon
surrender thereof and destroyed by the Trustee in accordance with its customary procedures.
ARTICLE V
INSTALLMENT PAYMENTS
Section 5.1. Pledge and Deposit of Installment Payments. The Installment Payments are
hereby irrevocably pledged to, and shall be used for, the punctual payment of the Certificates, and the
Installment Payments shall not be used for any other purpose while any of the Certificates remain
Outstanding, and such pledge shall constitute a first and exclusive lien on the Installment Payments
in accordance with the terms hereof (subject in each case to Section 7.14).
All Installment Payments to which the Corporation may at any time be entitled (including
income or profit from investments pursuant to Section 5.3) shall be paid directly to the Trustee
pursuant to the terms of the Assignment Agreement, and if received by the Corporation at any time
shall be deposited by the Corporation with the Trustee within one Business Day after the receipt
thereof, and the Trustee shall deposit all Installment Payments as and when received in the
Certificate Payment Fund. All moneys at any time deposited in the Certificate Payment Fund shall
be held by the Trustee in trust for the benefit of the Owners from time to time of the Certificates, but
shall nevertheless be disbursed, allocated and applied solely for the uses and purposes herein set
forth.
Section 5.2. Certificate Payment Fund. There is hereby established with the Trustee the
Certificate Payment Fund, which the Trustee covenants to maintain and hold in trust separate and
apart from other funds held by it so long as any Installment Payments remain unpaid. The Trustee
shall transfer from the Certificate Payment Fund the following amounts at the times and in the
manner hereinafter provided, and shall deposit such amounts in one or more of the following
respective funds, each of which the Trustee shall establish and maintain and hold in trust separate and
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apart from other funds held by it, and each of which shall be disbursed and applied only as
hereinafter authorized. Such amounts shall be so transferred to and deposited in the following
respective funds in the following order of priority, the requirements of each such fund at the time of
deposit to be satisfied before any transfer is made to any fund subsequent in priority:
(a) Interest Fund. The Trustee shall, on each Installment Payment Date
(commencing on the Installment Payment Date preceding 15, 20), deposit in the Interest
Fund from available amounts in the Certificate Payment Fund an amount representing the portion of
the Installment Payments designated as interest coming due on the next succeeding May 15 and
November 15, as the case may be. No deposit need be made into the Interest Fund so long as there
shall be in such fund moneys sufficient to pay the interest portion of all Certificates then Outstanding
on the next May 15 or November 15, as the case may be.
Except as hereinafter provided, moneys in the Interest Fund shall be used and withdrawn by
the Trustee solely for the purpose of paying the interest with respect to the Certificates when due and
payable (including accrued interest with respect to any Certificates prepaid prior to maturity pursuant
to this Agreement).
(b) Principal Fund. The Trustee shall, on the Installment Payment Date prior to
each November 15 (commencing on the Installment Payment Date preceding 15, 20),
deposit in the Principal Fund from available amounts in the Certificate Payment Fund an amount
equal to the principal coming due with respect to the Certificates on the next succeeding November
15. No deposit need be made into the Principal Fund so long as there shall be in such fund moneys
sufficient to pay the portion of all Certificates then Outstanding designated as principal and coming
due on the next succeeding November 15.
Except as hereinafter provided, moneys in the Principal Fund shall be used and withdrawn by
the Trustee solely for the purpose of paying the principal with respect to the Certificates when due
and payable.
(c) Prepayment Fund. Moneys to be used for prepayment pursuant to Section 4.1
hereof and paid by the District pursuant to Section 7.1 of the Installment Purchase Agreement shall
be transferred by the Trustee from the Certificate Payment Fund and deposited in the Prepayment
Fund on the prepayment date specified in the Written Request of the District filed with the Trustee
pursuant to Section 7.2 of the Installment Purchase Agreement. Said moneys shall be set aside in the
Prepayment Fund solely for the purpose of prepaying the Certificates in advance of their respective
stated maturities and shall be applied on or after the date specified for prepayment pursuant to
Section 4.1 hereof to the payment of the Prepayment Price with respect to the Certificates to be
prepaid upon presentation and surrender of such Certificates.
Section 5.3. Investment of Moneys in Special Funds. Any moneys in the Certificate
Payment Fund, the Interest Fund, the Principal Fund, the Delivery Cost Fund and the Prepayment
Fund shall be invested by the District or, upon the Written Request of the District, by the Trustee, in
Permitted Investments which will mature on or before the dates when such moneys are scheduled to
be needed for payment from such fund and in accordance with the limitations set forth in Section 6.3.
Securities acquired as an investment of moneys in a fund shall be credited to such fund. The Trustee
shall not be responsible for any investment loss on any such Permitted Investments made by or at the
direction of the District.
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In the absence of written investment direction from the District, the Trustee shall hold
moneys uninvested.
Any interest, profit or other income on such investments shall be deposited by the Trustee in
the Certificate Payment Fund.
Subject to the further provisions of Section 6.3 hereof, the Trustee may sell or present for
prepayment any obligations so purchased at the direction of the District whenever it shall be
necessary in order to provide moneys to meet any payment, and the Trustee shall not be liable or
responsible for any loss, tax, fee or other charge resulting from such investment, reinvestment or
liquidation of an investment. The Trustee may act as principal or agent in the acquisition or
disposition of any investment. The Trustee may commingle any of the funds or accounts established
pursuant to this Agreement into a separate fund or funds for investment purposes only; provided,
however, that all funds or accounts held by the Trustee hereunder shall be accounted for separately
notwithstanding such commingling.
The District acknowledges that to the extent that regulations of the Comptroller of the
Currency or other applicable regulatory entity grant the District the right to receive brokerage
confirmations of security transactions as they occur, the District will not receive such confirmations
to the extent permitted by law. The Trustee will furnish the District with periodic cash transaction
statements which include detail for all investment transactions made by the Trustee hereunder. The
District and the Corporation further understand 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 may make any investments
hereunder through its own bond or investment department or trust investment department, or those of
its parent or any affiliate. 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 5.4. Pledge of Moneys in Funds. All amounts on deposit in the Certificate
Payment Fund, the Interest Fund, the Principal Fund and the Prepayment Fund are hereby
irrevocably pledged to the Owners of the Certificates as provided herein. This pledge shall constitute
a first and exclusive lien on the Certificate Payment Fund, the Interest Fund, the Principal Fund and
the Prepayment Fund for the benefit of the Owners of the Certificates in accordance with the terms
hereof and of the Installment Purchase Agreement (subject to the terms of Section 7.14 hereof).
Amounts deposited in the Delivery Cost Fund and the Rebate Fund are not pledged to the Owners of
the Certificates.
Section 5.5. Rebate Fund.
(a) Establishment. The Trustee shall, when necessary to receive and hold
amounts delivered by the District for deposit therein, establish a fund for the Certificates designated
the "Rebate Fund." Absent an opinion of Special Counsel that the exclusion from gross income for
federal income tax purposes of interest with respect to the Certificates will not be adversely affected,
the District shall cause to be deposited in the Rebate Fund such amounts as are required to be
deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited
in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury.
All amounts on deposit in the Rebate Fund shall be governed by this Section and the Tax Certificate,
unless and to the extent that the District delivers to the Trustee an opinion of Special Counsel that the
exclusion from gross income for federal income tax purposes of interest with respect to the
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Certificates will not be adversely affected if such requirements are not satisfied. The Trustee shall be
deemed conclusively to have complied with the provisions of this Section and the Tax Certificate if
the Trustee follows the directions of the District and the Trustee shall have no independent
responsibility to or liability resulting from failure of the Trustee to enforce compliance by the District
with the Tax Certificate or the provisions of this Section.
(i) Computation. Within 55 days of the end of each fifth Certificate Year
(as such term is defined in the Tax Certificate), the District shall calculate or cause to be calculated
the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section
1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to
the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the
temporary investments exceptions of Section 148(f)(4)(B) and the construction expenditures
exception of Section 148(f)(4)(C) of the Code), and taking into account whether the election pursuant
to Section 148(f)(4)(C)(vii) of the Code (the "1V2% Penalty") has been made), for this purpose
treating the last day of the applicable Certificate Year as a computation date, within the meaning of
Section 1.148-1(b) of the Treasury Regulations (the "Rebatable Arbitrage"). The District shall
obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Transfer. Within 55 days of the end of each fifth Certificate Year,
upon the Written Request of the District, an amount shall be deposited to the Rebate Fund from
amounts received by the Trustee for such purpose from any Revenues determined by the District to
be legally available for such purpose (as specified by the District in the aforesaid Written Request), if
and to the extent required so that the balance in the Rebate Fund shall equal the amount of Rebatable
Arbitrage calculated by the District in accordance with (i) of this Subsection (a) (and specified in the
aforesaid Written Request). In the event that immediately following the transfer required by the
previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount
required to be on deposit therein, upon written Request of the District, the Trustee shall withdraw the
excess from the Rebate Fund and then credit the excess to the Certificate Payment Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed by
Request of the District, to the United States Treasury, out of amounts in the Rebate Fund:
(A) Not later than 60 days after the end of. (X) the fifth Certificate
Year; and (Y) each applicable fifth Certificate Year thereafter, an amount equal to at least 90% of the
Rebatable Arbitrage calculated by the District as of the end of such Certificate Year; and
(B) Not later than 60 days after the payment of all the Certificates,
an amount equal to 100% of the Rebatable Arbitrage calculated by the District as of the end of such
applicable Certificate Year, and any income attributable to the Rebatable Arbitrage, computed in
accordance with Section 148(f) of the Code and Section 1.148-3 of the Treasury Regulations.
In the event that, prior to the time of any payment required to be made from the Rebate Fund,
the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the
District shall calculate or cause to be calculated the amount of such deficiency and deposit an amount
received from any legally available source equal to such deficiency prior to the time such payment is
due. Each payment required to be made pursuant to this Subsection (a) shall be made to the Internal
Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due,
and shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other
manner as provided under the Code.
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(b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund
after prepayment and payment of the Certificates and the payments described in Subsection (a) above
being made may be withdrawn by the District and utilized in any manner by the District.
(c) Survival of Defeasance. Notwithstanding anything in this Section to the
contrary, the obligation to comply with the requirements of this Section shall survive the defeasance
or payment in full of the Certificates.
ARTICLE VI
COVENANTS
Section 6.1. Corporation and District to Perform Installment Purchase Agreement. The
Corporation and District covenant and agree with the Owners of the Certificates and the Trustee to
perform all obligations and duties imposed on them under the Installment Purchase Agreement and,
together with the Trustee, to enforce such Installment Purchase Agreement against the other party
thereto in accordance with its terms.
The Corporation and the District will in all respects promptly and faithfully keep, perform
and comply with all the terms, provisions, covenants, conditions and agreements of the Installment
Purchase Agreement to be kept, performed and complied with by them.
The Corporation and the District agree not to do or permit anything to be done, or omit or
refrain from doing anything, in any case where any such act done or permitted to be done, or any
such omission of or refraining from action, would or might be a ground for cancellation or
termination of the Installment Purchase Agreement.
Section 6.2. Reserved .
Section 6.3. Tax Covenants. Notwithstanding any other provision of this Agreement,
absent an opinion of Special Counsel that the exclusion from gross income of interest with respect to
the Certificates will not be adversely affected for federal income tax purposes, the District and the
Corporation covenant to comply with all applicable requirements of the Code necessary to preserve
such exclusion from gross income with respect to the Certificates and specifically covenant, without
limiting the generality of the foregoing, as follows:
(a) Private Activity. The District and the Corporation will not take or omit to
take any action or make any use of the proceeds of the Certificates or of any other moneys or
property which would cause the Certificates to be "private activity bonds" within the meaning of
Section 141 of the Code.
(b) Arbitrage. The District and the Corporation will make no use of the proceeds
of the Certificates or of any other amounts or property, regardless of the source, or take or omit to
take any action which would cause the Certificates to be "arbitrage bonds" within the meaning of
Section 148 of the Code.
(c) Federal Guarantee. The District and the Corporation will make no use of the
proceeds of the Certificates or take or omit to take any action that would cause the Certificates to be
"federally guaranteed" within the meaning of Section 149(b) of the Code.
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(d) Information Reporting. The District and the Corporation will take or cause to
be taken all necessary action to comply with the informational reporting requirement of Section
149(e) of the Code necessary to preserve the exclusion of interest with respect to the Certificates
pursuant to Section 103(a) of the Code.
(e) Hedge Bonds. The District and the Corporation will make no use of the
proceeds of the Certificates or any other amounts or property, regardless of the source, or take any
action or refrain from taking any action that would cause the Certificates to be considered "hedge
bonds" within the meaning of Section 149(g) of the Code unless the District and the Corporation take
all necessary action to assure compliance with the requirements of Section 149(g) of the Code to
maintain the exclusion from gross income of interest for federal income tax purposes with respect to
the Certificates.
(f) Miscellaneous. The District and the Corporation will take no action, or omit
to take any action, inconsistent with its expectations stated in any Tax Certificate executed with
respect to the Certificates and will comply with the covenants and requirements stated therein and
incorporated by reference herein.
This Section and the covenants set forth herein shall not be applicable to, and nothing
contained herein shall be deemed to prevent the District from issuing Bonds or executing and
delivering Contracts, the interest with respect to which has been determined by Special Counsel to be
subject to federal income taxation.
Section 6.4. Accounting Records and Reports. 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 the Certificates and all funds and accounts established by it pursuant to
this Agreement. Such books of record and account shall be available for inspection by the District
upon reasonable prior notice during business hours and under reasonable circumstances.
The District will keep appropriate accounting records in which complete and correct entries
shall be made of all transactions relating to the Water System, which records shall be available for
inspection by the Trustee (which shall have no duty to inspect such records) at reasonable hours and
under reasonable conditions.
The District will prepare and file with the Trustee annually within two hundred seventy (270)
days of each Fiscal Year (commencing with the Fiscal Year ending June 30, 2022) financial
statements of the District for the preceding Fiscal Year prepared in accordance with generally
accepted accounting principles, together with an Accountant's Report thereon. The Trustee shall
have no duty to review, analyze or verify such financial statements or Accountant's Report, and shall
retain such statements solely as a repository for the Owners of the Certificates.
Section 6.5. Compliance with Trust Agreement. The Trustee will not execute, or permit
to be executed, any Certificates in any manner other than in accordance with the provisions of this
Agreement, and each of the District and the Corporation agree not to suffer or permit any default by
it to occur under this Agreement, but will faithfully observe and perform all of the covenants,
conditions and requirements hereof.
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Section 6.6. Observance of Laws and Regulations. To the extent necessary to assure their
performance hereunder, the Corporation and the District will well and truly keep, observe and
perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract,
or prescribed by any law of the United States of America, or of the State, or by any officer, board or
commission having jurisdiction or control, as a condition of the continued enjoyment of any and
every right, privilege or franchise now owned or hereafter acquired by the Corporation or the
District, respectively, including its right to exist and carry on its business, to the end that such
contracts, rights and franchises shall be maintained and preserved, and shall not become abandoned,
forfeited or in any manner impaired.
Section 6.7. Compliance with Contracts. The District shall comply with the terms,
covenants and provisions, express or implied, of all contracts for the use of the 2022 Project by the
District, and all other contracts and agreements affecting or involving the Water System to the extent
that the District is a party thereto.
Section 6.8. Prosecution and Defense of Suits. The District shall promptly, upon request
of the Trustee or any Certificate Owner, from time to time take such action as may be necessary or
proper to remedy or cure any defect in or cloud upon the title to the Water System or any part
thereof, whether now existing or hereafter developing, shall prosecute all such suits, actions and
other proceedings as may be appropriate for such purpose and shall indemnify and save the Trustee,
the Corporation and every Certificate Owner harmless from all loss, cost, damage and expense,
including attorneys' fees, which they or any of them may incur by reason of any such defect, cloud,
suit, action or proceeding.
The District shall defend against every suit, action or proceeding at any time brought against
the Trustee, the Corporation or any Certificate Owner upon any claim arising out of the receipt,
application or disbursement of any of the Installment Payments or involving the rights of the Trustee,
the Corporation or any Certificate Owner under this Agreement; provided that the Trustee, the
Corporation or any Certificate Owner at such parry's election may appear in and defend any such
suit, action or proceeding. The District shall indemnify and hold harmless the Trustee, the
Corporation and the Certificate Owners against any and all liability claimed or asserted by any
person, arising out of such receipt, application or disbursement, and shall indemnify and hold
harmless the Certificate Owners against any attorneys' fees and expenses which any of them may
incur in connection with any litigation to which any of them may become a party by reason of
ownership of Certificates. The District shall promptly reimburse the Corporation, the Trustee or any
Certificate Owner in the full amount of any attorneys' fees and expenses which the Corporation or
such Owner may incur in litigation or otherwise in order to enforce such parry's rights under this
Agreement or the Certificates.
Section 6.9. Recordation and Filing. The District shall record, register, file, renew, refile
and re-record all such documents, including financing statements, on a timely basis, as may be
required by law in order to maintain the security interest and pledge granted in this Agreement
pursuant to Sections 5.1 and 5.4, and the pledge of Revenues and amounts on deposit in the Revenue
Fund and the Rate Stabilization Fund pursuant to Section 5.1 of the Installment Purchase Agreement,
and as provided in the Assignment Agreement, all in such manner, at such times and in such places
as may be required by, and to the extent permitted by law in order fully to preserve, protect and
perfect the security of the Certificate Owners and the rights and security interests of the Trustee. The
Trustee, upon written direction of the District and at its expense, shall (subject to Article VIII) take
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such other actions as may reasonably be so directed by the District and necessary or reasonably
required in order to perfect and continue the lien of this Agreement and the Assignment Agreement.
Notwithstanding anything to the contrary above, the Trustee shall have no duty or liability
whatsoever to monitor or notify any party with respect to the timeliness, sufficiency or validity of
any such recording, re-recording, filing, filing of continuation statements and the like with respect to
this Agreement; it being expressly understood and agreed that the Trustee's duties under this section
shall be exclusively limited to following the express written filing or recording instructions of the
District, from time to time with respect to the above described actions so long as the District shall
supply said recording or filing instruments.
Section 6.10. Eminent Domain. If all or any part of the Water System shall be taken by
eminent domain proceedings (or sold to a government threatening to exercise the power of eminent
domain), the Net Proceeds therefrom shall be applied in the manner specified in Section 6.15 of the
Installment Purchase Agreement.
Section 6.11. Further Assurances. Whenever and so often as requested so to do by the
Trustee or any Certificate Owner, the Corporation and the District will promptly execute and deliver
or cause to be executed and delivered all such other and further instruments, documents or
assurances, and promptly do or cause to be done all such other and further things, as may be
necessary or reasonably required in order to further and more fully vest in the Trustee and the
Certificate Owners all rights, interest, powers, benefits, privileges and advantages conferred or
intended to be conferred upon them by this Agreement.
Section 6.12. Continuing Disclosure. The District hereby covenants and agrees that it will
comply with and carry out all of its obligations under the Continuing Disclosure Certificate to be
executed and delivered by the District in connection with the execution and delivery of the
Certificates. Notwithstanding any other provision of this Agreement, failure of the District to
comply with the Continuing Disclosure Certificate shall not be considered an Event of Default;
however, any Owner or Beneficial Owner may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order, to cause the District
to comply with its obligations under this Section. For purposes of this Section, "Beneficial Owner"
means any person which has or shares the power, directly or indirectly, to make investment decisions
concerning ownership of any Certificates (including persons holding Certificates through nominees,
depositories or other intermediaries).
ARTICLE VII
DEFAULT AND LIMITATION OF LIABILITY
Section 7.1. Notice of Non -Payment. In the event of delinquency in the payment of any
Installment Payments due by the District pursuant to the Installment Purchase Agreement, the
Trustee shall, after one Business Day following the date upon which such delinquent Installment
Payment was due, immediately give written notice of the delinquency and the amount of the
delinquency to the District and the Corporation.
Section 7.2. Action on Default or Termination. Upon the occurrence of an Event of
Default (as that term is defined in the Installment Purchase Agreement, and which event shall
constitute an Event of Default hereunder), and in each and every such case during the continuance of
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such Event of Default, the Trustee or the Owners of not less than a majority in aggregate principal
amount of Certificates at the time Outstanding shall be entitled, upon notice in writing to the District,
to exercise the remedies provided to the Corporation in the Installment Purchase Agreement.
Upon declaration of the entire principal amount of the unpaid Installment Payments and the
accrued interest thereon to be due and payable immediately, and provided that such declaration is not
rescinded or annulled, all in accordance with Section 8.1 of the Installment Purchase Agreement, the
Trustee may apply all moneys received as Installment Payments and all moneys held in any fund or
account hereunder (other than the Rebate Fund) to the payment of the entire principal amount of the
Certificates and the accrued interest with respect thereto, with interest with respect to the overdue
Certificates at the rate or rates of interest applicable to the Certificates if paid in accordance with
their terms.
Section 7.3. Other Remedies of the Trustee. The Trustee shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to
enforce its rights against the District or any director, officer or employee thereof, and to compel the
District or any such director, officer or employee to perform or carry out its or his duties under law
and the agreements and covenants required to be performed by it or him contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Trustee; or
(c) by suit in equity upon the happening of any default hereunder to require the
District and its directors, officers and employees to account as the trustee of an express trust.
Section 7.4. Non -Waiver. A waiver of any default or breach of duty or contract by the
Trustee shall not affect any subsequent default or breach of duty or contract or impair any rights or
remedies on any such subsequent default or breach of duty or contract. No delay or omission by the
Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall
impair any such right or remedy or shall be construed to be a waiver of any such default or breach of
duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by
law or by this article may be enforced and exercised from time to time and as often as shall be
deemed expedient by the Trustee.
If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned
or determined adversely to the Trustee, the Trustee and the District shall be restored to their former
positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
Section 7.5. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now or hereafter
existing in law or in equity or by statute or otherwise and may be exercised without exhausting and
without regard to any other remedy conferred by any law.
Section 7.6. No Obligation by the District to Owners. Except for the payment of
Installment Payments when due in accordance with the Installment Purchase Agreement and the
performance of the other covenants and agreements of the District contained in said Installment
Purchase Agreement and herein, the District shall have no obligation or liability to the Owners of the
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Certificates with respect to this Agreement or the execution, delivery or transfer of the Certificates,
or the disbursement of Installment Payments to the Owners by the Trustee; provided however that
nothing contained in this Section shall affect the rights, duties or obligations of the Trustee expressly
set forth herein.
Section 7.7. Trustee Appointed Agent for Certificate Owners; Direction of Proceedings.
The Trustee is hereby appointed the agent and attorney of the Owners of all Certificates outstanding
hereunder for the purpose of filing any claims relating to the Certificates. The Owners of a majority
in aggregate principal amount of the Certificates Outstanding hereunder shall, upon tender to the
Trustee of reasonable indemnity against the costs, expenses and liabilities to be incurred in
compliance with such direction, have the right to direct the method and place of conducting all
remedial proceedings by the Trustee, provided that such direction shall be in accordance with law
and the provisions of this Agreement 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 Certificate
Owners not parties to such a direction.
Section 7.8. Power of Trustee to Control Proceedin;?s. In the event that the Trustee, upon
the happening of an Event of Default, shall have taken any action, by judicial proceedings or
otherwise, pursuant to its duties hereunder, upon the request of the Owners of a majority in aggregate
principal amount of the Certificates then outstanding pursuant to Section 7.7 hereof, it shall have full
power, in the exercise of its reasonable judgment for the best interests of the Owners of the
Certificates, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or
other disposal of such action; provided, however, that the Trustee shall not, unless there no longer
continues an Event of Default hereunder, discontinue, withdraw, compromise or settle, or otherwise
dispose of, any litigation pending at law or in equity, if at the time there has been filed with it a
written request signed by the Owners of at least a majority in principal amount of the Certificates
Outstanding hereunder opposing such discontinuance, withdrawal, compromise, settlement or other
disposal of such litigation.
Section 7.9. Limitation on Certificate Owners' Right to Sue. No Owner of any Certificate
executed and delivered hereunder shall have the right to institute any suit, action or proceeding at law
or in equity, for any remedy under or upon this Agreement, unless: (a) such Owner shall have
previously given to the Trustee written notice of the occurrence of an Event of Default hereunder;
(b) the Owners of at least a majority in aggregate principal amount of all the Certificates then
Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have
tendered to the Trustee indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or
omitted to comply with such request for a period of sixty (60) days after such written request shall
have been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender or indemnity and refusal or omission are hereby declared,
in every case, to be conditions precedent to the exercise by any Owner of Certificates of any remedy
hereunder; it being understood and intended that no one or more Owners of Certificates shall have
any right in any manner whatever by his or their action to enforce any right under this Agreement,
except in the manner herein provided, and that all proceedings at law or in equity to enforce any
provision of this Agreement shall be instituted, had and maintained in the manner herein provided
and for the equal benefit of all Owners of the Outstanding Certificates.
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The right of any Owner of any Certificate to receive payment of the principal of (and
premium, if any) and interest with respect to such Certificate, as herein provided, on and after the
respective due dates expressed in such Certificate, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected without the consent of
such Owner (it being understood that the Trustee does not have an affirmative duty to ascertain
whether or not such actions or forbearances are unduly prejudicial to such Owners), notwithstanding
the foregoing provisions of this section or Section 7.10 or any other provision of this Agreement.
Section 7.10. No Obligation with Respect to Performance by Trustee. Neither the District
nor the Corporation shall have any obligation or liability to any of the other parties hereto or to the
Owners of the Certificates with respect to the performance by the Trustee of any duty imposed upon
it under this Agreement.
Section 7.11. No Liability to Owners for Payment. The Corporation shall not have any
obligation or liability to the Owners of the Certificates with respect to the payment of the Installment
Payments by the District when due, or with respect to the performance by the District of any other
covenant made by it in the Installment Purchase Agreement or herein. Except as provided in this
Agreement, the Trustee shall not have any obligation or liability to the Owners of the Certificates
with respect to the payment of the Installment Payments by the District when due, or with respect to
the performance by the District of any other covenant made by it in the Installment Purchase
Agreement or herein.
Section 7.12. No Responsibility for SufficiencX. The Trustee shall not be responsible for
the sufficiency of this Agreement, the Installment Purchase Agreement, or of the assignment made to
it by the Assignment Agreement of rights to receive Installment Payments pursuant to the Installment
Purchase Agreement, or the value of or title to the 2022 Project. The Trustee shall not be responsible
or liable for selection or liquidation of investments or any loss suffered in connection with any
investment of funds made by it under the terms of and in accordance with this Agreement.
Section 7.13. Indemnification of Trustee. The District shall indemnify the Trustee and hold
it harmless against any loss, liability, claim, expenses or advances, including but not limited to fees
and expenses of counsel and other experts, incurred or made without negligence or willful
misconduct on the part of the Trustee: (a) in the administration of the trusts and funds established
hereunder, and/or the acceptance, exercise and performance of any of the powers, rights and duties
hereunder, under the Installment Purchase Agreement and/or under the Assignment Agreement by
the Trustee; (b) relating to or arising out of the 2022 Project, or the conditions, occupancy, use,
possession, conduct or management of, or work done in or about, or from the planning, design,
acquisition, installation or construction of the Project or any part thereof; or (c) arising out of or
relating to 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 offering
circular utilized in connection with the sale of the Certificates, including the costs and expenses of
defending itself against any claim of liability arising under this Agreement. Such indemnity shall
survive payment of the Certificates and discharge of this Agreement or resignation or removal of the
Trustee.
Section 7.14. Senior Claim of Trustee. Notwithstanding any term herein or elsewhere to
the contrary, following occurrence and during the continuance of an Event of Default any and all
amounts and funds held or received by the Trustee hereunder (other than the Rebate Fund) (i) shall
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be subject to a senior claim in favor of the Trustee, and the Trustee shall have and is hereby granted a
senior lien thereon and upon all other property held or collected or realized upon by the Trustee in
the enforcement of rights or remedies hereunder or under or pursuant to the Installment Purchase
Agreement, for the payment of fees, costs, expenses and other amounts owing to the Trustee
hereunder, including without limitation pursuant to Sections 6.8, 7.13 and 8.4 hereof and costs and
expenses incurred in the exercise or enforcement of any such rights and remedies (collectively,
"Trustee Fees and Expenses"); and (ii) shall be applied first to the payment of such Trustee Fees
and Expenses prior to any other application or distribution pursuant to and in accordance with the
terms of this Agreement.
ARTICLE VIII
THE TRUSTEE
Section 8.1. Employment of Trustee. In consideration of the recitals hereinabove set forth
and for other valuable consideration, the District hereby agrees to employ the Trustee to receive,
hold, invest and disburse the moneys received pursuant to the Installment Purchase Agreement for
credit to the various funds and accounts established by this Agreement; to execute, deliver and
transfer the Certificates; and to apply and disburse the Installment Payments received from the
District to the Owners of Certificates; and to perform certain other functions; all as herein provided
and subject to the terms and conditions of this Agreement.
Section 8.2. Acceptance of Employment. In consideration of the compensation herein
provided for, the Trustee accepts the employment above referred to subject to the terms and
conditions of this Agreement. The Trustee shall be responsible for the performance of the duties
specifically set forth herein, and no implied duties or obligations shall be read into this Agreement
against the Trustee.
Section 8.3. Trustee; Duties, Removal and Resignation. By executing and delivering this
Agreement, the Trustee accepts the duties and obligations of the Trustee provided in this Agreement,
but only upon the terms and conditions set forth in this Agreement.
The District, or, if the District is in default under the Installment Purchase Agreement, the
Owners of a majority in aggregate principal amount of all Certificates outstanding, may by Written
Request to the Trustee, upon thirty (30) days' notice to the Trustee, remove the Trustee initially a
party to this Agreement, and any successor thereto, and may appoint a successor Trustee, but any
such successor shall be a corporation, association or federally chartered savings institution,
authorized to exercise corporate trust powers, doing business and having a corporate trust office in
California, which has (or the parent holding company of which has) a combined capital (exclusive of
borrowed capital) and surplus of at least fifty million dollars ($50,000,000) and subject to
supervision or examination by federal or state authorities. If such corporation, association or
institution 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 purposes of this section the
combined capital and surplus of such corporation, association or institution shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published.
The Trustee may at any time resign by giving written notice to the District and by giving to
the Certificate Owners notice of such resignation by mail at the addresses shown on the registration
books maintained by the Trustee. Upon receiving such notice of resignation, the District shall
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promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the
event that the District does not appoint a successor Trustee within thirty (30) days following receipt
of such notice of resignation, the resigning Trustee may at the expense of the District petition the
appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective upon written acceptance
of appointment by the successor Trustee.
Section 8.4. Compensation of the Trustee. The District shall from time to time, subject to
any agreement in effect with the Trustee, pay to the Trustee compensation previously agreed upon in
writing for its services and shall reimburse the Trustee for all its advances, costs and expenditures,
including but not limited to advances to and fees and expenses of independent appraisers,
accountants, consultants, counsel, agents and attorneys -at -law or other experts employed by it in the
exercise and performance of its powers and duties hereunder. Such compensation and
reimbursement shall be paid by the District and amounts owing therefor shall constitute a charge on
the moneys in the Revenue Fund and payable by the District; provided, however, that the Trustee
shall not otherwise have any claims, except in accordance with Section 7.13 hereof, or lien, except as
provided in Section 7.14 hereof, for payment of compensation for its services against any other
moneys held by it in the funds or accounts established hereunder but may take whatever legal actions
are lawfully available to it directly against the District. The obligation to pay such compensation
shall survive payment of the Certificates and discharge of this Agreement or resignation or removal
of the Trustee.
Section 8.5. Protection of the Trustee. The Trustee shall be protected and shall incur no
liability in acting or proceeding in good faith upon any resolution, notice, telegram, request, consent,
waiver, certificate, statement, affidavit, voucher, bond, requisition or other paper or document which
it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the
proper parry or pursuant to any of the provisions of this Agreement, and the Trustee shall be under no
duty to make any investigation or inquiry as to any statements contained or matters referred to in any
such instrument, but may accept and rely upon the same as conclusive evidence of the truth and
accuracy of such statements. The Trustee shall not be bound to recognize any person as an Owner of
any Certificate or to take any action at the written request of any such person unless such Certificate
shall be deposited with the Trustee or satisfactory evidence of the ownership of such Certificate shall
be furnished to the Trustee and such ownership is recorded in the Trustee's books required to be
maintained pursuant to Section 2.8 of this Agreement. The Trustee may consult with counsel
selected by the Trustee with regard to legal questions, and the opinion of such counsel shall be full
and complete authorization and protection in respect of any action taken or suffered by it hereunder
in good faith in accordance therewith.
Whenever in the administration of its duties under this 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)
shall be deemed to be conclusively proved and established by a certificate of the Corporation or the
District and such certificate shall be full warranty to the Trustee for any action taken or suffered
under the provisions of this Agreement upon the faith thereof, but the Trustee may (but shall have no
duty), in lieu thereof, accept other evidence of such matter or may require such additional evidence
as to it may seem reasonable.
The Trustee may buy, sell, own, hold and deal in any of the Certificates provided pursuant to
this Agreement, and may join in any action which any Owner may be entitled to take with like effect
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as if the Trustee were not a parry to this Agreement. The Trustee, either as principal or agent, may
also engage in or be interested in any financial or other transaction with the District or the
Corporation, and may act as depositary, trustee, or agent for any committee or body of Owners of
Certificates or of obligations of the Corporation or the District as freely as if it were not Trustee
hereunder.
The Trustee may, to the extent reasonably necessary, 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 duties hereunder, and
the Trustee shall not be answerable for the default or misconduct of any such attorney, agent or
receiver selected by it with reasonable care. The Trustee shall not be answerable for the exercise of
any power under this Agreement or for anything whatever in connection with the funds and accounts
established hereunder, except only for its own willful misconduct or negligence.
The recitals, statements and representations by the District or the Corporation contained in
this Agreement or in the Certificates shall be taken and construed as made by and on the part of the
District or Corporation and not by the Trustee and the Trustee does not assume, and shall not have,
any responsibility or obligations for the correctness of any thereof.
No provision in this Agreement shall require the Trustee to risk, advance or expend its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder. The
Trustee shall be entitled to interest on all amounts advanced by it hereunder at the maximum rate
permitted by law.
In accepting the trust hereby created, the Trustee acts solely as Trustee for the Owners and
not in its individual capacity and all persons, including without limitation the Owners and the District
or the Corporation, having any claim against the Trustee arising from this Agreement shall look only
to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided
herein. Under no circumstances shall the Trustee be liable in its individual capacity for the
obligations evidenced by the Certificates.
The Trustee makes no representation or warranty, 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 District or the Corporation of the 2022 Project. In no event shall the Trustee be liable for
incidental, indirect, special, punitive or consequential damages in connection with or arising from the
Installment Purchase Agreement or this Agreement for the existence, furnishing or use of the 2022
Project.
The Trustee shall not be deemed to have knowledge of any Event of Default hereunder or
under the Installment Purchase Agreement unless and until a responsible officer at its corporate trust
office at the address set forth in Section 11.11 has actual knowledge thereof or has received written
notice thereof.
The Trustee shall not be accountable for the use or application by the District, or the
Corporation or any other party of any funds which the Trustee has released in accordance with the
terms of this Agreement.
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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 Certificates.
Before taking any action under Article VII hereof or pursuant to the Installment Purchase
Agreement or the Assignment Agreement, the Trustee may require indemnity satisfactory to the
Trustee be furnished from any and all expenses and to protect it against any and all liability it may
incur hereunder.
The immunities extended to the Trustee also extend to its directors, officers, employees and
agents.
The Trustee shall not be liable for any action taken or not taken by it in accordance with the
direction of a majority (or other percentage provided for herein) in aggregate principal amount of
Certificates outstanding relating to the exercise of any right, power or remedy available to the
Trustee. The permissive right of the Trustee to do things enumerated in this Agreement shall not be
construed as a duty. The Trustee shall not be liable for any error of judgment made in good faith
unless it shall be proven that the Trustee was negligent in ascertaining the relevant facts.
The Trustee is authorized and directed to execute the Assignment Agreement in its capacity
as Trustee hereunder.
(a) The Trustee shall have the right to accept and act upon instructions, including
funds transfer instructions ("Instructions") given pursuant to this Agreement and delivered using
Electronic Means ("Electronic Means"), which 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 District and the Corporation 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 District or the Corporation whenever a person is to be added or deleted from the
listing. If the District and the Corporation elect to give the Trustee Instructions using Electronic
Means and the Trustee acts upon such Instructions, the Trustee's understanding of such Instructions
shall be deemed controlling. The District and the Corporation understand and agree that the Trustee
cannot determine the identity of the actual sender of such Instructions and that the Trustee shall
conclusively presume that directions that purport to have been sent by an Authorized Officer listed
on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer.
The District and the Corporation shall be responsible for ensuring that only Authorized Officers
transmit such Instructions to the Trustee and that the District, the Corporation and all Authorized
Officers are solely responsible to safeguard the use and confidentiality of applicable user and
authorization codes, passwords and/or authentication keys upon receipt by the Authority. The
Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the
Trustee's reliance upon and compliance with such Instructions notwithstanding the fact that such
directions conflict or are inconsistent with a subsequent written instruction. The District and the
Corporation agree: (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 they are fully informed
of the protections and risks associated with the various methods of transmitting Instructions to the
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Trustee and that there may be more secure methods of transmitting Instructions than the method(s)
selected by the District and the Corporation; (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 procedure.
Section 8.6. 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 parry or any company to which the Trustee
may sell or transfer all or substantially all of its corporate trust business (provided that such company
is eligible under Section 8.3 hereof), shall be the successor to the Trustee without the execution or
filing of any paper or further act, anything herein to the contrary notwithstanding.
ARTICLE IX
AMENDMENT OF TRUST AGREEMENT
Section 9.1. Amendments Permitted.
(a) This Agreement and the rights and obligations of the District and of the
Owners of the Certificates and of the Trustee may be modified or amended at any time by an
amendment hereto which shall become binding when the written consents of the Owners of a
majority in aggregate principal amount of the Certificates then Outstanding, exclusive of Certificates
disqualified as provided in Section 11.4 hereof, shall have been filed with the Trustee. Notice of
proposed execution of any amendment shall be prepared by the District. Notwithstanding the
foregoing, no such modification or amendment shall:
(1) extend the stated maturities of the Certificates, or reduce the rate of
interest represented thereby, or extend the time of payment of interest, or reduce the amount of
principal represented thereby, or reduce any premium payable on the prepayment thereof, without the
prior consent of the Owner of each Certificate so affected;
(2) reduce the aforesaid percentage of Owners of Certificates whose
consent is required for the execution of any amendment or modification of this Agreement; or
(3) modify any of the rights or obligations of the Trustee or the
Corporation without its prior written consent thereto.
(b) This Agreement and the rights and obligations of the Corporation and the
District and of the Owners of the Certificates may also be modified or amended at any time by an
amendment hereto which shall become binding upon adoption, without the consent of the Owners of
any Certificates, but only to the extent permitted by law and only for any one or more of the
following purposes:
(1) to add to the covenants and agreements of the Corporation or the
District contained in this Agreement other covenants and agreements thereafter to be observed or to
surrender any right or power herein reserved to or conferred upon the Corporation or the District, and
which shall not materially adversely affect the interests of the Owners of the Certificates;
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(2) to cure, correct or supplement any ambiguous or defective provision
contained in this Agreement or in regard to questions arising under this Agreement, as the
Corporation or the District may deem necessary or desirable and which shall not materially adversely
affect the interests of the Owners of the Certificates;
(3) to make such other amendments or modifications as may be in the
best interests of the Owners of the Certificates; and
(4) to make any amendments or supplements necessary or appropriate to
preserve or protect the exclusion of interest with respect to the Certificates from gross income for
federal income tax purposes under the Code or the exemption of interest with respect to the
Certificates from State personal income taxes.
No amendment may modify any of the rights or obligations of the Trustee without the written
consent of the Trustee thereto.
Section 9.2. Endorsement or Replacement of Certificates After Amendment or
Supplement. After the effective date of any action taken as hereinabove provided, the Trustee may
determine that the Certificates may bear a notation by endorsement in form approved by the Trustee
as to such action, and in that case upon demand of the Trustee to the Owner of any Outstanding
Certificate and presentation of such Owner's Certificate for such purpose at the designated corporate
trust office of the Trustee a suitable notation as to such action shall be made on such Certificate. If
the Trustee shall so determine, new Certificates so modified as in the opinion of the Trustee shall be
necessary to conform to such action shall be prepared, and in that case upon demand of the Trustee to
the Owner of any Outstanding Certificates such new Certificates shall be exchanged at the corporate
trust office of the Trustee without cost to each Owner for Certificates then Outstanding upon
surrender of such Outstanding Certificates.
Section 9.3. Amendment of Particular Certificates. The provisions of this article shall not
prevent any Owner from accepting any amendments to the particular Certificates held by him or her,
provided that due notation thereof is made on such Certificates.
Section 9.4. Execution of Amendments. In executing or accepting any amendment
pursuant to this Article IX, the Trustee shall be entitled to receive, and shall be fully protected in
relying upon, (i) an opinion of counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and all conditions precedent under this Agreement applicable to such
amendment have been satisfied, and (ii) in the case of any amendment pursuant to Section 9.1(b)(1)
or (2), also an opinion of counsel as to whether the interests of any Owner of the Certificates would
be materially and adversely affected. Any such opinion may be supported as to factual and business
matters by any relevant certificates and other documents deemed necessary or advisable in the
judgment of counsel delivering the opinion.
ARTICLE X
DEFEASANCE
Section 10.1. Discharge of Trust Agreement. When the obligations of the District under the
Installment Purchase Agreement shall cease pursuant to Article IX of the Installment Purchase
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Agreement (except for the right of the Trustee and the obligation of the District to have the money
and Permitted Investments mentioned therein applied to the payment of Installment Payments as
therein set forth and the obligation to apply moneys on deposit in the Rebate Fund as provided in
Section 5.5), then in that case the obligations created by this Agreement shall thereupon cease,
terminate and become void, except for the obligation of the District to direct the Trustee to apply
money on deposit in the Rebate Fund as provided herein, which shall continue until such moneys are
so applied, and the right of the Owners to have applied and the obligation of the Trustee to apply
such moneys and Permitted Investments to the payment of the Certificates as herein set forth (except
for obligations under Section 7.13 and 8.4 hereof that survive in accordance with their terms) and,
subject to application of moneys on deposit in the Rebate Fund as provided in Section 5.5, the
Trustee shall turn over to the District, after provision for payment of amounts due the Trustee
hereunder, as an overpayment of Installment Payments, any surplus in the Certificate Payment Fund
and all balances remaining in any other funds or accounts other than moneys and Permitted
Investments held for the payment of the Certificates at maturity or on prepayment, which moneys
and Permitted Investments shall continue to be held by the Trustee in trust for the benefit of the
Owners and shall be applied by the Trustee to the payment, when due, of the principal and interest
and premium, if any, represented by the Certificates, and after such payment, this Agreement shall
become void.
If moneys or non -callable securities described in clauses (a) or (b) of the definition of
Permitted Investments are deposited with and held by the Trustee as hereinabove provided, the
Trustee shall within ten (10) days after such moneys or Permitted Investments shall have been
deposited with it, mail a notice, first class postage prepaid, to the Owners at the addresses listed on
the registration books kept by the Trustee pursuant to Section 2.8, setting forth: (a) the date fixed for
prepayment of the Certificates; (b) a description of the moneys or securities described in clauses (a)
or (b) of the definition of Permitted Investments so held by it; and (c) that this Agreement has been
discharged and released in accordance with the provisions of this Section.
Section 10.2. Deposit of Money or Securities with Trustee. Whenever in this Agreement or
the Installment Purchase Agreement 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 prepay any Certificates,
the money or securities to be so deposited or held may include money or securities held by the
Trustee in the funds and accounts established pursuant to this Agreement and shall be:
(a) lawful money of the United States of America in an amount equal to the
principal amount and all unpaid interest represented by such Certificates to maturity, except that, in
the case of Certificates which are to be prepaid prior to maturity and in respect of which notice of
such prepayment shall have been given as in Article IV provided or provision satisfactory to the
Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall
be the principal amount or Prepayment Price and all unpaid interest to such date of prepayment, if
any, represented by such Certificates; or
(b) non -callable securities described in clauses (a) or (b) of the definition of
Permitted Investments which will provide money sufficient to pay the principal at maturity or upon
prepayment plus all accrued interest to maturity or to the prepayment date, as the case may be,
represented by such Certificates to be paid or prepaid, as such amounts become due, be the principal
amount or Prepayment Price and all unpaid interest to such date of prepayment, if any, represented
by such Certificates, provided that, in the case of Certificates which are to be prepaid prior to the
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maturity thereof, notice of such prepayment shall have been given as in Article IV provided or
provision satisfactory to the Trustee shall have been made for the giving of such notice;
provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms of this
Agreement and the Installment Purchase Agreement or by Written Request of the District) to apply
such money or securities to the payment of such principal, Prepayment Price and interest represented
by such Certificates.
In addition to the foregoing, no deposit described in Section 10.2(b) shall be deemed a
payment of said Certificate until the District has delivered to the Trustee a report of an Independent
Certified Public Accountant verifying the sufficiency of the amounts, if any, described in Section
10.2(b) to ensure payment of such Certificate.
Section 10.3. Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of the
interest or principal or Prepayment Price represented by any of the Certificates which remain
unclaimed for two years after the date of deposit of such moneys if deposited with the Trustee after
the date when the interest, principal, or Prepayment Price represented by such Certificates have
become payable, shall at the Written Request of the District be repaid by the Trustee to the District as
its absolute property free from trust, and the Trustee shall thereupon be released and discharged with
respect thereto and the Owners shall look only to the District for the payment of the interest and
principal or Prepayment Price represented by such Certificates; provided, however, that before being
required to make any such payment to the District, the Trustee shall, at the written request and
expense of the District, first mail a notice to the Owners of the Certificates so payable that such
moneys remain unclaimed and that after a date named in such notice, which date shall not be less
than thirty (30) days after the date of the mailing of such notice, the balance of such moneys then
unclaimed will be returned to the District.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Benefits of Trust Agreement Limited to Parties. Nothing contained herein,
expressed or implied, is intended to give to any person other than the District, the Trustee, the
Corporation and the Owners any claim, remedy or right under or pursuant hereto, and any agreement,
condition, covenant or term required herein to be observed or performed by or on behalf of the
District shall be for the sole and exclusive benefit of the Trustee, the Corporation and the Owners.
Section 11.2. Successor Deemed Included in all References to Predecessor. Whenever
either the District, the Corporation or the Trustee or any officer thereof is named or referred to
herein, such reference shall be deemed to include the successor to the powers, duties and functions
that are presently vested in the District, the Corporation or the Trustee or such officer, and all
agreements, conditions, covenants and terms required hereby to be observed or performed by or on
behalf of the District, the Corporation or the Trustee or any officer thereof shall bind and inure to the
benefit of the respective successors thereof whether so expressed or not.
Section 11.3. Execution of Documents by Owners. Any declaration, consent, request or
other instrument which is permitted or required hereby to be executed by Owners may be in one or
more instruments of similar tenor and may be executed by Owners in person or by their attorneys
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appointed in writing. The fact and date of the execution by any Owner or such Owner's attorney of
any declaration, consent, request or other instrument or of any writing appointing such attorney may
be proved by the certificate of any notary public or other officer authorized to take acknowledgments
of deeds to be recorded in the state or territory in which he or she purports to act that the person
signing such declaration, request or other instrument or writing acknowledged to him or her the
execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary
public or other officer, or by such other proof as the Trustee may accept which it may deem
sufficient.
The ownership of any Certificates and the amount, Payment Date, number and date of
owning the same may be proved by the books required to be kept by the Trustee pursuant to the
provisions of Section 2.8.
Any declaration, consent, request or other instrument in writing of the Owner of any
Certificate shall bind all future Owners of such Certificate with respect to anything done or suffered
to be done by the District or the Trustee in good faith and in accordance therewith.
Section 11.4. Disqualified Certificates. Certificates owned or held by or for the account of
the Corporation or the District (but excluding Certificates held in any pension or retirement fund)
shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of
Outstanding Certificates provided for in this Agreement, and shall not be entitled to consent to or
take any other action provided for in this Agreement.
The Trustee may adopt appropriate regulations to require each Owner of Certificates, before
his or her consent provided for in this Agreement shall be deemed effective, to reveal if the
Certificates as to which such consent is given are disqualified as provided in this Section.
Section 11.5. Waiver of Personal Liability. No director, officer or employee of the District
or the Corporation shall be individually or personally liable for the payment of the interest, principal
or Prepayment Price represented by the Certificates, but nothing contained herein shall relieve any
director, officer or employee of the District or Corporation from the performance of any official duty
provided by any applicable provisions of law or by the Installment Purchase Agreement or hereby.
Section 11.6. Destruction of Certificates. Whenever in this Agreement provision is made
for the cancellation by the Trustee of any Certificates, the Trustee shall destroy such Certificates in
accordance with its customary procedures and upon written request deliver a certificate of such
destruction to the District.
Section 11.7. Headings. Headings preceding the text of the several Articles and Sections
hereof, and the table of contents hereto, are solely for convenience of reference and shall not
constitute a part of this Agreement or affect its meaning, construction or effect.
All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Agreement; and the words "herein,"
"hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not
to any particular Article, Section or subdivision hereof.
Section 11.8. Funds and Accounts. Any fund required by this Agreement to be established
and maintained by the Trustee may be established and maintained in the accounting records of the
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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 sound
industry practices and with due regard for the protection of the security of the Certificates and the
rights of every Owner thereof.
Section 11.9. Partial Invalidity. If any one or more of the agreements, conditions,
covenants or terms required herein to be observed or performed by or on the part of the District, the
Corporation or the Trustee shall be contrary to law, then such agreement or agreements, such
condition or conditions, such covenant or covenants or such term or terms shall be null and void and
shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof
and shall in no way affect the validity hereof or of the Certificates, and the Owners shall retain all the
benefit, protection and security afforded to them under any applicable provisions of law. The
District, the Corporation and the Trustee hereby declare that they would have executed this
Agreement, and each and every other article, section, paragraph, subdivision, sentence, clause and
phrase hereof and would have authorized the execution and delivery of the Certificates pursuant
hereto irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions,
sentences, clauses or phrases hereof or the application thereof to any person or circumstances may be
held to be unconstitutional, unenforceable or invalid.
Section 11.10. California Law. THIS AGREEMENT SHALL BE CONSTRUED AND
GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
Section 11.11. Notices. All written notices to be given under this Agreement to the parties
hereto shall be given by mail, electronic transmission or personal delivery to the party entitled thereto
at its address set forth below, or at such address as the parry may provide to the other parties in
writing from time to time.
If to the District: Truckee Donner Public Utility District
11570 Donner Pass Road
Truckee, California 96161
Attention: General Manager
If to the Corporation: Truckee Donner Public Utility District
Financing Corporation
11570 Donner Pass Road
Truckee, California 96161
Attention: Chair
If to the Trustee: The Bank of New York Mellon Trust Company, N.A.
333 South Hope Street, Suite 2525
[Los Angeles, California 90071]
Attention: Corporate Trust
Reference: Truckee Donner Public Utility District 2022A
Certificates
Section 11.12. Execution in Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of which shall constitute but one and
the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile
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or PDF transmission, or by any electronic signature complying with the U.S. federal ESIGN Act of
2000 (including without limitation Orbit, Adobe Sign, DocuSign, or any other similar platform), shall
constitute effective execution and delivery of this Agreement as to the parties hereto and may be used
in lieu of the original Agreement and signature pages for all purposes.
Section 11.13. Force Majeure. In no event shall the Trustee be responsible or liable for any
failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or
indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents,
acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God,
and interruptions, loss or malfunctions of utilities, communications or computer (software and
hardware) services; it being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.
Section 11.14. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with
Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help
fight the funding of terrorism and money laundering, is required to obtain, verify, and record
information that identifies each person or legal entity that establishes a relationship or opens an
account with the Trustee. The parties to this Agreement agree that they will provide the Trustee with
such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A.
Patriot Act.
Section 11.15. OFAC Compliance. Each of the Corporation and the District covenants and
represents that neither it nor any of its affiliates, subsidiaries, directors or officers are the target or
subject of any sanctions enforced by the U.S. Government (including the Office of Foreign Assets
Control of the U.S. Department of the Treasury ("OFAC")), the United Nations Security Council, the
European Union, HM Treasury, or other relevant sanctions authority (collectively "Sanctions").
Each of the Corporation and the District covenants and represents that neither it nor any of its
affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Trust
Agreement (i) to fund or facilitate any activities of or business with any person who, at the time of
such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities
of or business with any country or territory that is the target or subject of Sanctions, or (iii) in any
other manner that will result in a violation of Sanctions by any person.
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4881-6375-7847/022925-0110
IN WITNESS WHEREOF, the parties have executed and attested this Agreement by their
officers thereunto duly authorized as of the date and year first written above.
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., solely as Trustee (and not
individually)
Authorized Officer
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
FINANCING CORPORATION
itz
Attest:
Secretary
Chairperson
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Un
(S E A L)
Attest:
Secretary of the Board of Directors
Chairperson of the Board of Directors
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4881-6375-7847/022925-0110
EXHIBIT A
[FORM OF CERTIFICATE OF PARTICIPATION]
WATER SYSTEM REVENUE CERTIFICATE OF PARTICIPATION, SERIES 2022A
Evidencing an Interest of the Owner Hereof
in Installment Payments to be Made by
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
INTEREST CERTIFICATE
RATE PAYMENT DATE
% November 15, 20
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
DATED DATE CUSIP
, 2022
DOLLARS
THIS IS TO CERTIFY that the Registered Owner (specified above) of this Water System
Revenue Certificate of Participation, Series 2022A (herein called the "Certificate") is the Owner of
an undivided interest in the right to receive certain Installment Payments (as that term is defined in
the Trust Agreement hereinafter mentioned) under that certain Installment Purchase Agreement,
dated as of July 1, 2022 (the "Installment Purchase Agreement"), by and between Truckee Donner
Public Utility District Financing Corporation (the "Corporation") and the Truckee Donner Public
Utility District (the "District"), the Installment Payments to be made thereunder having been
assigned to The Bank of New York Mellon Trust Company, N.A., in its capacity as trustee under the
Trust Agreement (the "Trustee"), and not individually, having a corporate trust office in [Los
Angeles], California. The Trustee has executed and delivered $ aggregate principal amount of
Certificates.
The Registered Owner of this Certificate is entitled to receive, subject to the terms of the
Installment Purchase Agreement and the Trust Agreement, on the Certificate Payment Date
(specified above) the Principal Amount (specified above) representing a portion of the Installment
Payments designated as principal coming due on the Certificate Payment Date, and to receive an
interest component on such principal component at the interest rate per annum specified above, from
the Interest Payment Date (as hereinafter defined) preceding the date of execution hereof by the
Trustee, unless such date is after a Record Date (as hereinafter defined) and on or before the
succeeding Interest Payment Date, in which case interest shall be payable from such Interest Payment
Date or unless such date of execution is on or before the first Record Date, in which case interest
shall be payable from the Dated Date; provided, however, that if, as shown by the records of the
Trustee, interest with respect to this Certificate shall be in default, Certificates executed in exchange
for this Certificate surrendered for transfer or exchange shall represent interest from the last date to
which interest has been paid in full or duly provided for with respect to this Certificate, or, if no
interest has been paid or duly provided for with respect to this Certificate, from the date of initial
delivery. Interest with respect to this Certificate shall be paid on 15, 202_ and each May 15
and November 15 thereafter (each, an "Interest Payment Date"), and continuing to and including the
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4881-6375-7847/022925-0110
Certificate Payment Date or the date of prior prepayment hereof, whichever is earlier. The principal
of and Prepayment Price with respect to this Certificate are payable in lawful money of the United
States of America upon presentation and surrender at the designated corporate trust office of the
Trustee. Interest with respect hereto is payable by check of the Trustee mailed by first class mail on
the Interest Payment Dates of this Certificate to the Registered Owner hereof as of the close of
business on the on the first day of the calendar month in which such Interest Payment Date falls (the
"Record Date") at the addresses shown on the books required to be kept pursuant to Trustee or, upon
the written request received by the Trustee of a Registered Owner of at least $1,000,000 in aggregate
principal amount of Certificates, by wire transfer of immediately available funds to an account in the
United States designated by such Registered Owner prior to the applicable Record Date, except in
each case, that, if and to the extent that there shall be a default in the payment of the interest due on
such Interest Payment Date, such defaulted interest shall be paid to the Registered Owner in whose
name this Certificate is registered at the close of business on a special record date as determined by
the Trustee.
This Certificate has been executed by the Trustee pursuant to the terms of a Trust Agreement,
dated as of July 1, 2022, by and among the Trustee, the Corporation and the District (the "Trust
Agreement"). Copies of the Trust Agreement and the Installment Purchase Agreement are on file at
the corporate trust office of the Trustee in [Los Angeles], California, and reference is made to the
Trust Agreement and the Installment Purchase Agreement and any and all amendments thereto for a
description of the pledges and covenants securing the Certificates, the nature, extent and manner of
enforcement of such pledges, the rights and remedies of the Registered Owners of the Certificates
with respect thereto and the other terms and conditions upon which the Certificates are delivered
thereunder.
The Certificates are payable solely from Installment Payments payable by the District and
other amounts on deposit in certain funds and accounts held under the Trust Agreement, all in
accordance therewith. All Revenues and all amounts on deposit in the Revenue Fund (as such term
is defined in the Installment Purchase Agreement) are irrevocably pledged to the payment of
Installment Payments, and the Revenues shall not be used for any other purpose while any of the
Installment Payments remain unpaid; provided that out of the Revenues and amounts on deposit in
the Revenue Fund there may be apportioned such sums for such purposes as are expressly permitted
in the Installment Purchase Agreement. Such pledge, together with the pledge created by all other
Contracts and Bonds (as such terms are defined in the Installment Purchase Agreement), constitutes a
first lien on Revenues, the Revenue Fund and all amounts on deposit therein as permitted by the
Installment Purchase Agreement, subject to application of Revenues in accordance with the terms of
the Installment Purchase Agreement. The obligation of the District to make the Installment
Payments is a special obligation of the District payable solely from Net Revenues (as defined in the
Installment Purchase Agreement) and other funds described in the Installment Purchase Agreement,
and does not constitute a debt of the District or the State of California or any political subdivision
thereof in contravention of any constitutional or statutory debt limitation or restriction.
The District may at any time execute any Contract the installment payments under which, or
issue any Bonds the payments of which, as the case may be, are on a parity with the Installment
Payments and which are secured by a pledge of and lien on the Revenues, and are payable from Net
Revenues, in accordance with the Installment Purchase Agreement.
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4881-6375-7847/022925-0110
The Certificates are authorized to be executed and delivered in the form of fully registered
Certificates in denominations of $5,000 each or any integral multiple thereof; provided that no
Certificate shall have principal represented thereby maturing payable in more than one year.
This Certificate may be exchanged at the corporate trust office of the Trustee, for a like
aggregate principal amount of Certificates of other authorized denominations of the same series and
maturity. The Trustee may charge a sum for each new Certificate executed and delivered upon any
exchange except in the case of any exchange of temporary Certificates for definitive Certificates.
The Trustee may require the payment by the Registered Owner requesting such exchange of any tax
or other governmental charge required to be paid with respect to such exchange. Following any
exchange of Certificates the Trustee shall cancel and destroy the Certificates it has received in
accordance with its customary procedures.
This Certificate may, in accordance with its terms, be transferred, upon the books required to
be kept pursuant to the provisions of the Trust Agreement, by the person in whose name it is
registered, in person or by such person's duly authorized attorney, upon surrender of this Certificate
for cancellation at the corporate trust office of the Trustee, accompanied by delivery of a duly
executed written instrument of transfer in a form approved by the Trustee.
Whenever any Certificate shall be surrendered for transfer, the Trustee shall execute and
deliver a new Certificate of the same series and maturity, for a like aggregate principal amount, and
of authorized denomination or denominations. The Trustee may charge a sum for each new
Certificate executed and delivered upon any transfer. The Trustee may require the payment by any
Registered Owner requesting any such transfer of any tax or other governmental charge required to
be paid with respect to such transfer. Following any transfer of Certificates the Trustee shall cancel
and destroy the Certificates it has received in accordance with its customary procedures.
The Trustee shall not be required to register the exchange or transfer of any Certificate:
(i) within 15 days preceding selection of Certificates for prepayment; or (ii) selected for prepayment
(except for any non -prepaid portion hereof).
The Certificates maturing on or after November 15, 20 are subject to optional prepayment
prior to their respective stated maturities, as a whole or in part on May 15, 20 or any date thereafter
in the order of maturity as directed by the District in a written request to the Trustee at least 60 days
(or such lesser number of days acceptable to the Trustee) prior to such date and by lot within each
maturity, in integral multiples of $5,000 from amounts prepaid by the District pursuant to the
Installment Purchase Agreement at a Prepayment Price equal to the principal amount of the
Certificates to be prepaid, plus accrued interest represented thereby to the date fixed for prepayment,
without premium.
The Certificates with stated maturities on November 15, 20 are subject to mandatory
sinking fund prepayment in part (by lot) on November 15, 20 and each November 15 thereafter, in
integral multiples of $5,000 at a Prepayment Price of the principal amount thereof plus accrued
interest to the date fixed for prepayment, without premium, in accordance with the following
schedule:
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4881-6375-7847/022925-0110
Prepayment Date Principal
(November 15) Amount
20 $
* Maturity
As provided in the Trust Agreement, notice of prepayment hereof shall be mailed, first class
postage prepaid, not less than 20 nor more than 60 days prior to the prepayment date, to the
Registered Owner of this Certificate. If this Certificate is called for prepayment and payment is duly
provided therefor as, specified in the Trust Agreement, interest represented hereby shall cease to
accrue from and after the date fixed for prepayment. Any defect in the notice or the mailing will not
affect the validity of the prepayment of this Certificate.
To the extent and in the manner permitted by the terms of the Trust Agreement and the
Installment Purchase Agreement, as the case may be, the Trust Agreement and the rights and
obligations of the District and of the Registered Owners of the Certificates and of the Trustee or the
Installment Purchase Agreement and the rights and obligations of the Corporation and the District
and the Registered Owners of the Certificates and the Trustee, respectively, may be modified or
amended at any time with the written consents of the Registered Owners of a majority in aggregate
principal amount of the Certificates then outstanding, exclusive of Certificates disqualified as
provided in the Trust Agreement, but no such modification or amendment shall: (1) extend the stated
maturities of the Certificates, or reduce the rate of interest represented thereby, or extend the time of
payment of interest, or reduce the amount of principal represented thereby, or reduce any premium
payable on the prepayment thereof, without the prior consent of the Registered Owner of each
Certificate so affected; (2) reduce the aforesaid percentage of Registered Owners of Certificates
whose consent is required for the execution of any amendment or modification of the Trust
Agreement or the Installment Purchase Agreement; or (3) modify any of the rights or obligations of
the Trustee or the Corporation without its written consent thereto.
To the extent and in the manner permitted by the terms of the Trust Agreement and the
Installment Purchase Agreement, as the case may be, the Trust Agreement and the rights and
obligations of the Corporation and the District and of the Registered Owners of the Certificates or the
Installment Purchase Agreement and the rights and obligations of the Corporation and the District
and the Registered Owners of the Certificates, respectively, may also be modified or amended,
without the consent of the Registered Owners of any Certificates, but only to the extent permitted by
law and only for any one or more of the following purposes:
(1) to add to the covenants and agreements of the Corporation or the District
contained in the Trust Agreement or the Installment Purchase Agreement other covenants and
agreements thereafter to be observed or to surrender any right or power in the Trust Agreement or the
Installment Purchase Agreement reserved to or conferred upon the Corporation or the District, and
which shall not materially adversely affect the interests of the Registered Owners of the Certificates;
(2) to cure, correct or supplement any ambiguous or defective provision
contained in the Trust Agreement or the Installment Purchase Agreement or in regard to questions
A-4
4881-6375-7847/022925-0110
arising under the Trust Agreement or the Installment Purchase Agreement, as the Corporation or the
District may deem necessary or desirable and which shall not materially adversely affect the interests
of the Registered Owners of the Certificates;
(3) to make such other amendments or modifications as may be in the best
interests of the Registered Owners of the Certificates; and
(4) to make any amendments or supplements necessary or appropriate to preserve
or protect the exclusion of interest with respect to the Certificates from gross income for federal
income tax purposes under the Code or the exemption of such interest from State personal income
taxes.
Upon declaration of the entire principal amount of the unpaid Installment Payments and the
accrued interest thereon to be due and payable immediately and provided that such declaration is not
rescinded or annulled, all in accordance with the Installment Purchase Agreement, the Trustee may
apply all moneys received as Installment Payments and all moneys held in any fund or account under
the Trust Agreement (other than the Rebate Fund) to the payment of the entire principal amount of
the Certificates and the accrued interest with respect thereto, with interest with respect to the overdue
Certificates at the rate or rates of interest applicable to the Certificates if paid in accordance with
their terms.
The Trustee has no obligation or liability to the Registered Owners of the Certificates for the
payment of interest, principal, or Prepayment Price with respect to the Certificates out of the
Trustee's own funds; the Trustee's sole obligations are those described in the Trust Agreement. The
recitals of facts herein shall be taken as statements of the District and the Corporation and the Trustee
does not have any responsibility for the accuracy thereof.
The District has certified that all acts, conditions and things required by the Constitution and
statutes of the State of California and the Trust Agreement to exist, to have happened and to have
been performed precedent to and in the delivery of this Certificate, do exist, have happened and have
been performed in due time, form and manner as required by law.
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4881-6375-7847/022925-0110
IN WITNESS WHEREOF, this Certificate has been executed by the manual signature of an
authorized signatory of the Trustee, all as of the date set forth below.
Execution date: 2022 THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., solely as Trustee (and not
individually)
LIN
Authorized Officer
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4881-6375-7847/022925-0110
FORM OF ASSIGNMENT
ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto
the within -mentioned Certificate and hereby irrevocably
constitute(s) and appoint(s) attorney, to transfer
the same on the Certificate register of the Trustee with full power of substitution in the premises.
Dated:
Note: The signature(s) to this Assignment must
correspond with the name(s) as written on
the face of the within Certificate in every
particular, without alteration or enlargement
or any change whatsoever.
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an eligible guarantor institution meeting the requirements
of membership or participation in the Security Transfer Agent Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined in substitution for STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
A-7
4881-6375-7847/022925-0110
EXHIBIT B
FORM OF REQUISITION FROM DELIVERY COST FUND
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
WATER SYSTEM REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2022A
REQUISITION NO. _ FOR DISBURSEMENT FROM
DELIVERY COST FUND
The undersigned hereby states and certifies:
(i) that s/he is the duly appointed, qualified and acting General Manager of the Truckee
Donner Public Utility District, a public utility district that is organized and existing under the
Constitution and laws of the State of California (the "District"), and as such, is familiar with the facts
herein certified and is authorized to certify the same;
(ii) that, pursuant to Section 3.4 of that certain Trust Agreement, dated as of July 1, 2022
(the "Trust Agreement"), by and among The Bank of New York Mellon Trust Company, N.A., as
trustee (the "Trustee"), the District and the Truckee Donner Public Utility District Financing
Corporation, the undersigned hereby requests the Trustee to disburse this date the following amounts
from the Delivery Cost Fund established under the Trust Agreement to the payees designated on the
attached Exhibit 1;
(iii) that such payments shall be made by check or wire transfer in accordance with the
payment instructions set forth in the attached invoices submitted in accordance herewith and the
Trustee shall rely on such payment instructions as though given by the District with no duty to
investigate or inquire as to the authenticity of the invoice or the payment instructions contained
therein or the authority under which they were given;
(iv) that each obligation mentioned herein has been incurred by the District and is a
proper charge against the Delivery Cost Fund; and
(v) that there has not been filed with or served upon the District notice of any lien, right
to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys
payable to any of the payees named on the attached Exhibit 1, which has not been released or will not
be released simultaneously with the payment of such obligation, other than materialmen's or
mechanics' liens accruing by mere operation of law.
Dated: , 20 TRUCKEE DONNER PUBLIC UTILITY DISTRICT
By:
Its:
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4881-6375-7847/022925-0110
General Manager
I*114011:311El
DELIVERY COST FUND DISBURSEMENTS
Item
Number Payee Name and Address Purpose of'Obligation Amount
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4881-6375-7847/022925-0110