Hanford City Council
October 6, 2026

23 Source: City of Hanford Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2025.

Contributions. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.

Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. For the year ended June 30, 2025, the employer contributions to the Safety Plan were $2,496,401.

Pension Expense. For the measurement period ended June 30, 2024, the City recognized pension expense of $1,484,807 for the Safety Plan.

Changes in Net Pension Liability are subject to various assumption and are sensitive to changes in the discount rate for the Miscellaneous Plan, Safety Plan, among other things. For additional details on the Miscellaneous Plan, Safety Plan and related matters, see Note 7 to the City’s audited financial statements for the fiscal year ending June 30, 2025, attached hereto as Appendix B.

Potential Impacts on Future Required Contributions. The CalPERS Board of Administration has adjusted and may in the future further adjust certain assumptions used in the CalPERS actuarial valuations, which adjustments may increase the City’s required contributions to CalPERS in future years. Accordingly, the City cannot provide any assurances that the City’s required contributions to CalPERS in future years will not significantly increase (or otherwise vary) from any past or current projected levels of contributions.

Change in Assumptions/Discount Rate. The prescribed discount rate assumption, confirmed by the CalPERS board on November 17, 2021, is 6.8% compounded annually (net of investment and administrative expenses) as of June 30, 2026. On April 16, 2024, the CalPERS board took action to modify the Funding Risk Mitigation Policy to remove the automatic change to the discount rate when the investment return exceeds various thresholds. Rather than an automatic change to the discount rate, a CalPERS board discussion would be placed on the calendar.

On November 19, 2025, the CalPERS Board accepted the findings of the 2025 Asset Liability Management ("ALM") Study. As a result of the 2025 ALM Study, the assumed life expectancy for a healthy 55-year-old retiree increased slightly to approximately age 85.1 for men and 87.4 for women, from 85.0 and 87.3 under the prior 2021 study. The wage growth assumption increased from 2.80% to 3.00% per year. The Board also raised the price inflation assumption from 2.30% to 2.50%, kept the discount rate at 6.8%, and adopted a new Total Portfolio Approach investment model effective July 1, 2026.

Investment Performance. CalPERS earnings reports for Fiscal Years 2013 through 2025 report investment gains of approximately 12.5%, 18.4%, 2.4%, 0.6%, 11.2%, 8.6%, 6.7%, 4.7%,

21.3%, -6.1%, 5.8%, 9.3%, and 11.6% respectively. The CalPERS Fiscal Year 2023-24 investment gain of 9.3% is not included in the numbers included herein. Future earnings

24 performance may increase or decrease future contribution rates for plan participants, including the City. CalPERS has preliminarily reported a 14.8% investment return for Fiscal Year 2025-26.

The CalPERS website contains the most recent actuarial valuation reports for the City’s Miscellaneous Plan and Safety Plan and other information that concerns benefits and other matters. The Comprehensive Annual financial reports of CalPERS are also available on CalPERS’ Internet website at www.calpers.ca.gov. The textual reference to such Internet website is provided for convenience only. None of the information on such Internet website is incorporated by reference herein. Neither the City nor the Underwriter guarantee the accuracy of such information.

See “APPENDIX B – COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025 – Note (7)” for additional information regarding the Plans, including a description of the actuarial methods and assumptions used to measure the City’s net pension liability as of the June 30, 2024 measurement date.

Other Post-Employment Benefits (OPEB). The City’s Other Post Employment Benefit Plan is a single-employer defined benefit OPEB plan. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Governmental Accounting Standards Board Statement No.

75. The City provides postretirement health care benefits to employees who retire in good standing from the City after attaining the age of 50 and to certain employees who retire due to disability. As of the June 30, 2025 actuarial valuation, there were 42 inactive employees or beneficiaries currently receiving these health care benefits.

Benefits Provided. In order to qualify for postemployment medical and dental benefits, an employee must retire from the City under CalPERS (having attained age 50 with at least 5 years of State or public agency service, or through an approved disability retirement) and maintain enrollment in one of the City’s eligible health plans. The City participates in the CalPERS medical program under the Public Employees’ Medical and Hospital Care Act (PEMHCA) and has selected the equal contribution method, under which it contributes the same amount toward retiree medical coverage as it contributes for active employees, currently the minimum employer contribution (MEC) of $119 per month for 2025. Dental insurance is available to retired employees, with the full cost of coverage paid by the retiree, and dental coverage ends at age 65.

As of January 1, 2016, the City terminated its CalPERS healthcare contract for future retirees, and no employee retiring after that date is eligible for City-funded retiree healthcare coverage.

For the fiscal year ended June 30, 2025, the City paid approximately $47,600 for benefits provided to 34 retirees or their beneficiaries.

Employees Covered by Benefit Terms. Membership in the plan consisted of the following at the June 30, 2025 actuarial valuation date:

Employees June 30, 2025
Active Employees 297
Inactive employees or beneficiaries currently receiving benefit payments 42 Inactive employees or beneficiaries entitled but not yet receiving benefit payments 13 Total 352
Total OPEB Liability. As of the June 30, 2025 measurement date, the City recognized total OPEB liability of $2,890,451.

OPEB Expense. For the measurement period ended June 30, 2025, the City recognized OPEB expense of $501,021.

25 See APPENDIX B Note 7 and Note 8 for additional details regarding the City’s pension and other employee benefits, including as relates to its CalPERS Plan and OPEB.

City Investments
The investment of the City’s funds is performed in accordance with the adopted Investment Policy, which was most recently adopted by the City Council in 2026.

The Investment Policy sets forth the policies and procedures that are applicable to the investment of City funds and designates eligible investments. The Investment Policy also sets forth the following investment objectives:
• Safety;
• Liquidity;
• Yield; and
• Public Trust.

The City Council has delegated the authority to invest City funds to the City Treasurer.

The Investment Policy provides a number of permitted investment categories, including (1) United States Treasury Bills, Bonds and Notes, (2) Federal agency or United States governmentsponsored enterprise obligations, (3) California State and local agency obligations meeting specified rating criteria, (4) LAIF, and (5) various other investments as detailed therein. The City’s investments are reported quarterly to the City Council.

For additional information relating to the Investment Policy, see Note 3 to the City’s audited financial statements for Fiscal Year 2024-25 set forth in Appendix B.

City Insurance
The City participates in a public entity risk pool for workers’ compensation and general liability insurance above our self-insured retention limits. For workers’ compensation, the City is individually liable for claims up to $250,000 per occurrence. Coverage in excess of the City’s selfinsured retention is then obtained through Public Risk Innovation, Solutions, and Management (PRISM) excess workers’ compensation program up to the statutory limits. The City participates in a risk pool for general liability claims through PRISM above the City’s self-insured retention of $100,000 up to $25,000,000 per occurrence, subject to certain exclusions. For both excess workers’ compensation and general liability covered occurrences, PRISM coordinates reimbursement of costs incurred for covered actions in excess of each member’s self-insured retention. While there were no reductions in excess coverage from the prior year and there were no settlements that exceeded excess pool layer of coverage for the past three fiscal years, given marketing challenges in California, additional coverage exclusions continue to apply.

The City participates in a number of supplemental insurance programs through Alliant.

Alliant Property Insurance Program (APIP) is for city owned buildings and structures. In 2022 a city-wide site inspection was conducted to appraise city owned buildings and structures. The APIP deductible is $10,000 per covered occurrence. APIP insurance includes elected coverage for Boiler & Machinery, Cyber Security, and Pollution Coverage. Claim reporting timeframe limitations apply to both Cyber Coverage and Pollution Coverage policies.

26 The City participates in Alliant’s Motor Vehicle Program (AMVP) in an effort to reduce the cost of replacement values for approximately 90 City owned vehicles and equipment.

Worker’s compensation and general liability claims incurred prior to July 1, 2012 were covered through the City’s participation in the Central San Joaquin Valley Risk Management Authority (CSJVRMA), a public entity risk pool. See Note 9 to the City’s audited financial statements for Fiscal Year 2024-25 set forth in Appendix B.

27 THE WASTEWATER SYSTEM
General
The Wastewater System is owned by the City and is managed, operated and maintained by the City's Utilities and Engineering Department. Management of the Wastewater System involves physical facilities planning; financial planning and budgeting; development of operating systems and procedures; and billing and collection activities. Operation of the Wastewater System involves cleaning, inspecting and repairing approximately 231 miles of sewer collection and transmission lines, 24 active sewer lift stations and over 160 acres of ponding basins for percolation, evaporation and holding of treated effluent. The Wastewater System serves an area of approximately 15 square miles. There are over 18,000 active sewer service accounts, and average wastewater flow from the Wastewater System to the Wastewater Treatment Plant is currently approximately 5.8 million gallons per day. The average flow rate over the past five years was 5.5 million gallons per day. The Wastewater Treatment Facility (“WWTF”) received an expansion upgrade in 2004, which increased the rated treatment capacity from 5.5 MGD to 8.0 MGD, however, the WWTF can currently only handle approximately 7 MGD, pending the completion of the Project, which will restore the WWTF’s functional treatment capacity to 8.0 MGD.

Wastewater Treatment Facility
The WWTF is owned by the City and is managed, operated and maintained by the City's Utilities and Engineering Department. Department staff are responsible for the treatment and recycling of Wastewater in an environmentally safe manner to ensure its reuse for irrigation purposes will not endanger health or degrade groundwater quality. The WWTF is a sophisticated, multimillion-dollar facility responsible for the treatment of approximately 1.76 billion gallons of sewage each year. WWTF staff conduct over 84,000 laboratory tests each year to monitor the performance of the plant.

Staff also manages reclaimed water usage to ensure compliance with the requirements of State Reclamation Discharge Permits; administers the Industrial Pre-Treatment Program; and monitors Industrial User Compliance through daily observation and weekly analysis of discharge.

WWTF operations are funded by user fees charged to customers for Sanitary Sewer Service.

Management
The City's Utilities and Engineering Department is responsible for the management and operation of the Wastewater System and the City's municipal water system. Employees are cross trained and licensed to work in both systems. The Utilities and Engineering Director is the Department Head for the systems and oversees the financial operation of the systems. The Wastewater Manager is the staff person with direct management and financial oversight of the Treatment Plant. Engineering staff is responsible for capital project development and strategic planning. The Treatment Plant is staffed from 6:00 am to 4:00 pm, five days a week (Monday through Friday) and operators are assigned shifts from 7:00 am to 3:30 pm on the weekends. A Treatment Plant operator is on call for all other times. Critical operations are monitored and alarmed through a SCADA system and electronic means. If an alarm condition occurs during off duty hours, the on-call operator is dispatched.

28 In addition, there are eight WWTF staff members who are certified Grades I through V by the State Water Resources Control Board, along with seven members of collection staff, two pretreatment and environmental staff, and a shared administrative staff. .

Brief biographies of key members of City staff involved in management of the Wastewater System and its finances are set forth below:

Christopher Tavarez, City Manager. Mr. Tavarez has served as City Manager since February 2026, after serving as deputy city manager and interim city manager. Mr. Tavarez also previously served as the City’s Finance Director. He has nearly two decades of experience in municipal government roles in Tulare and Kings counties, including administrative services manager for the City of Visalia and finance director for the City of Exeter. Mr. Tavarez has a bachelor’s degree in accounting from Fresno Pacific University.

Destiny Borba, Finance Director. Ms. Borba has served as Finance Director since February 2026, after serving as Finance Manager in the City’s Finance Department since 2022.

Ms. Borba has over a decade of experience working in municipal government, and has a bachelor’s degree in accounting from California State University, Fresno.

Frank Senteno, Utilities and Engineering Director. Mr. Senteno has served as the Utilities and Engineering Director since February 2024, and has over two decades of public sector experience. Prior to joining the City, Mr. Senteno served as city engineer or director of public works in other cities in California, including most recently the city of Visalia. Mr. Senteno also has extensive private sector experience. Mr. Senteno is a professional civil engineer registered in the State of California and has a bachelor’s degree in civil engineering and a graduate degree in public administration from California State University, Long Beach.

Jason Rodrigues, Wastewater Treatment Plant Manager. Mr. Rodrigues has served as the Wastewater Manager since December 2020, and has over 26 years of wastewater experience. Prior to joining the city, Mr. Rodrigues served the City of Visalia Wastewater Facility in various capacities for 12 years, Wastewater Facility Superintendent, Wastewater Facility Supervisor and Wastewater Facility Senior Operator. Mr. Rodrigues is a Grade V Operator certified with the State of California State Water Resource Control Board.

Regulatory Requirements
Because the City discharges wastewater to the WWTF for treatment and disposal, the City’s wastewater operations are subject to many regulatory requirements. These requirements are contained in the Federal Water Pollution Control Act, as amended, (the “Clean Water Act”), and in the State of California Porter Cologne Water Quality Control Act of 1969, as amended.

Both federal and State regulations are administered through the California State Water Resources Control Board (“SWRCB”), and generally deal with the quality of effluent discharged from the sewer treatment facilities, the disposal of sludge from the wastewater treatment plant, the discharge of pollutants into the groundwater and the nature of waste material (particularly industrial waste) discharged into the collection system. There were grant related requirements regarding planning methodologies, design criteria, construction activities, and the operation, maintenance and financing of facilities. The City believes it is in compliance with all applicable regulatory requirements related to the Wastewater System.

29 Because the WWTF does not discharge into any “waters of the United States”, it is not subject to NPDES permit requirements. The WWTF is subject to the Water Discharge Requirements Orders (“WDRs”) issued by the California Regional Water Quality Board (“CRWQB”), which apply to discharges which could affect state groundwater or surface waters which fall outside of the federal Clean Water Act. The City’s WDRs do not have stated expiration dates but are subject to revision by the CRWQB at any time. The City expects that the completion of the Project will result in revision of its current WDRs, but does not anticipate any material changes to the costs or operations of the WWTF resulting from such revisions.

The WWTF also operates under CRWQB-issued Master Reclamation Permits, which permit the WWTF to partner with the Lakeside Ditch Company to use the discharged water for certain agricultural irrigation on over 10,000 acres, which is utilized by the Lakeside Irrigation District. The City currently pays the Lakeside Ditch Company $30 per acre-foot, and over the five year period of 2020 through 2024, the Lakeside Irrigation District used on average 3,157 acre feet of effluent from the City.The City does not anticipate any material changes to this arrangement that would impact revenues or the operation of the Wastewater System.

Wastewater Service Connections
The following table shows the number of service connections for the Wastewater System for the past five fiscal years. As shown in the table, for Fiscal Year 2024-25, approximately 95.3% of the total wastewater service connections are residential connections (single-family and multifamily).

Table 1
Hanford Wastewater System
Number and Type of Service Connections
Fiscal Years 2021-22 through 2025-26
(1)
Fiscal Year
SingleFamilyMultiFamilyCommercial/
Industrial Other Total
%
Change
2021-22 15,603 559 853 24 17,039 N/A
2022-23 16,019 544 848 34 17,445 2.38%
2023-24 16,334 540 879 47 17,800 2.03
2024-25 16,682 548 812 46 18,088 1.62
2025-26 16,952 529 856 46 18,383 1.63
_________________
(1) Includes connections to vacant properties and City accounts.

Source: City of Hanford.
-
22-

30 Sources of Wastewater System Revenue
Service Charges. The following table shows service charges for the Wastewater System for the most recent fiscal year, broken-out between residential and non-residential customers of the Wastewater System within the City, and does not include revenues from the Interjurisdictional Agreements.

Table 2
Hanford Wastewater System
Break-Down of Services Charges
Fiscal Year Ended June 30, 2026
Customer Type Charges for Services % of Total
Single Family Residential $6,289,509 59.54%
Multiple Family Residential 1,279,270 12.11
Commercial/Industrial 2,610,238 24.71
Other 384,807 3.64
Total $10,563,824 100.00%
Source: City of Hanford.

Impact Fee Charges. The City requires the payment of Wastewater Impact Fees as a condition of approval of development projects to defray the costs of infrastructure and other facilities needed as a result of new development projects. The following table shows Wastewater Impact Fee amounts in effect for Fiscal Year 2026-27.

Table 3
Hanford Wastewater System
Impact Fee Charges
Fiscal Year 2026-27
Use Impact Fee
Low Density Residential (per unit) $3,014.48
Medium Density Residential (per unit) 1,685.14
High Density Residential (per unit) 1,020.26
Neighborhood Commercial (per sq. ft.) 1.28
Regional Commercial (per sq. ft.) 1.13
Service Commercial (per sq. ft.) 1.55
Highway Commercial (per sq. ft.) 1.28
Office Residential (per sq. ft.) 1.39
Office (per sq. ft.) 0.89
Neighborhood Mixed Use (per sq. ft.) 1.61
Corridor Mixed Use (per sq. ft.) 1.45
Downtown Mixed Use (per sq. ft.) 0.31
Light Industrial (per sq. ft.) 1.81
Heavy Industrial (per sq. ft.) 1.84
Public Facilities (per sq. ft.) 1.55
Educational Facilities (per sq. ft.) 0.81
Source: City of Hanford.

31 Largest Customers
The following table sets forth the Wastewater System’s top ten customers and their associated revenues for the most recent fiscal year.

Table 4
Hanford Wastewater System
Top Ten Customers by Total Revenue
Fiscal Year 2025-26
No. Account Name(1) Type of Use Revenues
% of
Revenues(2)
1 Marquez Brothers International Cheese Manufacturing $861,704 8.19% 2 Tessenderlo Kerley, Inc Industrial $297,509 2.83
3 County of Kings Public Agency $155,255 1.48
4 Edgewater Isle Multifamily Housing $103,097 0.98
5 Hood Packaging Industrial $97,325 0.93
6 Mister Car Wash Service $74,882 0.71
7 River Oaks Condo Multifamily Housing $61,022 0.58
8 Judicial Council of CA Public Agency $63,331 0.60
9 Lacey West Apartments Multifamily Housing $51,548 0.49 10 Simon & Son Pumping & Backhoe Service $42,783 0.41
Top Ten Total $1,808,456 17.19%
(1) Customers ranked on basis of Wastewater billings for Fiscal Year 2025-26. (2) Based on total wastewater system Charges for Services of $10,520,174.

Source: City of Hanford.

Marquez Brothers International. Marquez Brothers International is a major cheese manufacturer with a large production facility in the City. Their facility performs some limited pretreatment processes before its wastewater is discharged into the Wastewater System. In 2024, the company announced plans to build a 50-acre plant within the City, but subsequently purchased a manufacturing site in the nearby city of Tulare to support a new product line, which could impact any expansion plans within the City.

The City is unaware of any pending changes would reduce the facility’s usage of the Wastewater System.

Wastewater Rates and Charges
General. The City is not subject by statute to the jurisdiction of, or regulation by, the California Public Utilities Commission or any other regulatory body with respect to rates and charges of the Wastewater System. For information concerning Proposition 218 which may affect the City’s ability to increase sewer fees and charges, see “BOND OWNERS’ RISKS” herein. 2023 Utility Rate Study and 2026 Update. A rate study was prepared for the City by Lechowicz & Tseng (“L&T”) in November 2023 (the “2023 Rate Study”). The 2023 Rate Study provides a financial plan for funding the operating costs of each of the Water System, the Wastewater System and the Stormwater System, which included a revenue requirement analysis (RSA) over a five-year projection period, cost-of-service analysis (COSA) and rate structure analysis. The 2023 Rate Study was based on various assumptions and models regarding revenues and expenses, as indicated therein. The City Council adopted Wastewater rate increases in March 2024 following the recommendations of the 2023 Rate Study.

32 In July 2026, L&T completed a rate study update for the wastewater system (the “2026 Rate Study Update”), reflecting updated operational and infrastructure needs that are significantly greater than what was funded through the rates proposed in the 2023 Rate Study, primarily due to proposed significant investment in infrastructure repairs and improvements to the Wastewater System, including the energy efficiency upgrades to the WWTF discussed above.

Current and Projected Wastewater Service Rates. Following the 2026 Rate Study Update, the City Council adopted additional rate increases which first become effective on September 2, 2026, with additional annual increases effective as of July 1 of each fiscal year through Fiscal Year 2030-2031.

The monthly rate for each customer varies based on customer class. Residential customers pay a flat monthly charge on a per dwelling unit basis. The charge per dwelling unit for multi-family customers is lower than the charge per dwelling unit for single family customers, reflecting lower average sewer flows per unit.

Commercial customers are billed a volume rate based on metered monthly water use.

There are four subcategories of commercial customers grouped according to strength of wastewater flow. Customers with higher strength wastewater flow such as restaurants are billed at a higher rate. Because sewer flow is not typically metered, water consumption is used as an approximation for sewer flow. It is assumed that any outdoor irrigation water use that does not flow into the sewer is separately metered through an irrigation-only connection that is not billed for sewer service.

Table 5
Hanford Wastewater System
Adopted Wastewater Service Rates
Fiscal Years 2026-27 through 2030-31
Customer Class 2026/27 2027/28 2028/29 2029/30 2030/31
RESIDENTIAL (Per dwelling unit)
Single Family $39.00 $46.80 $53.82 $57.59 $60.47
Multi-Family/Duplex 29.26 35.11 40.38 43.21 45.37

NON-RESIDENTIAL
Metered Water (Per CCF)(1)
Group A: Domestic 4.86 5.83 6.70 7.17 7.53
Group B: Low Strength 4.45 5.34 6.14 6.57 6.90
Group C: Medium Strength 6.24 7.49 8.61 9.21 9.67
Group D: High Strength 8.45 10.14 11.66 12.48 13.10
Schools (per student ADA)(2) 1.18 1.42 1.63 1.74 1.83
Septage (per 1,000 gallons) 55.37 66.44 76.41 81.76 85.85 Industrial
Flow (per mg) 3,946.88 4,736.26 5,446.70 5,827.97 6,119.37 BOD (per lb) 0.880 1.056 1.214 1.299 1.364
SS (per lb) 0.882 1.058 1.217 1.302 1.367
(1) CCF = hundred cubic feet, one CCF = 748 gallons.
(2) ADA = average daily attendance.

Source: City of Hanford.

33 Comparison to Surrounding Communities. Set forth in the following table is the City’s monthly wastewater service charges for as of July 1, 2026 for single-family residential users, and a comparison to surrounding communities.

Table 6
Hanford Wastewater System
Comparative Monthly Flat Rate User Fees
As of July 1, 2026(1) (2)
City Monthly Sewer Bill
Tulare $53.90
Porterville $43.60
Hanford(2) $39.00
Lemoore $27.70
Visalia $26.45
Coalinga $24.71
(1) For single-family residence.
(2) City of Hanford rate effective as of September 2, 2026 Source: City of Hanford.

Billing and Collection
Wastewater service charges for residential and commercial users are billed monthly. The Finance Department prepares a bill covering charges for water, wastewater and refuse. A separate bill is sent for the Industrial Waste Fee.

A billing summary is sent to the Finance Department monthly, at which time accounts receivable are created and revenue is credited to the Wastewater Fund. When the actual monies are received, the accounts receivable is reduced accordingly. Payments received by the Finance Department are credited to the billed accounts in the following order: water base, water usage, sewer, storm drain, refuse. Payments received are credited first to the accounts in arrears and then to the current amounts for each utility in the order stated above.

If an account is not paid within 15 days of billing due date or when a new bill is generated, a late fee in the amount of $35 per month is added to the amount owed. In addition, the City may discontinue service on accounts that are at least 60 days delinquent. A City employee hand delivers a disconnection packet with SB998 information, and customers have at least 7 business days to pay the full balance or set up a payment plan to avoid disconnection.

The amount delinquent (greater than 30 days outstanding) for the Wastewater System as of June 30, 2026 was approximately equal to 3.7% of total charges for services for Fiscal Year 2025-26. This includes customers on a payment plan. Of this amount, the City typically expects to write off 0.6% annually.

34 Historical Wastewater Flow
Historical Wastewater Flow. The following tables set forth the volume of wastewater collected by the Wastewater System and pumped to the WWTF for the years shown. Although wastewater flow remains fairly stable throughout the year, there is typically a slight increase in flows sent to the WWTF during wet weather months due to infiltration and inflow.

Table 7
Hanford Wastewater System
Historical Wastewater System Usage
Calendar Years 2021-22 through 2025-26
Calendar
Year
Daily Average Flow
(MGD)
Peak Flow
(MGD)
2022 4.655 8.5
2023 5.103 7.1
2024 5.395 6.2
2025 5.725 8.2
2026 5.780 8.3
Source: City of Hanford.

Current and Future Indebtedness
Parity Debt. As noted above, the Prior Bonds are currently outstanding in the amount of $5,770,000. If economic, the Prior Bonds will be refunded with a portion of the proceeds of the 2026 Bonds. If not economic, the Prior Bonds will remain outstanding on a parity basis with the Installment Payments securing the 2026 Bonds.

Under the Installment Sale Agreement, the City has the ability to incur additional Parity Debt subject to the conditions therein. See “SECURITY FOR THE 2026 BONDS – Parity Debt.” Subordinate Debt. The City has also issued or incurred debt which will be subordinated to the pledge on Net Revenues securing the 2026 Bonds and any Parity Debt or which is not secured by any pledge on Net Revenues, as described below:
2002 IBank Loan. In May 2002, the City of Hanford obtained a loan from the California Infrastructure and Economic Development Bank in the amount of $10,000,000. The term of the agreement is thirty (30) years with a maturity date of February 1, 2034, and an annual interest rate of 3.50%. Prior to the Bond Date, there is a .26% reduction in the interest rate, resulting in an initial rate of 3.24%. Interest on the loan is payable semi-annually on each February 1 and August 1, commencing August 1, 2003. As of October 2, 2026, the balance outstanding was $2,555,693. This loan is secured by a subordinate pledge on Net Revenues. 2011 BofA Equipment Lease. In November 2011, the City entered into a finance purchase arrangement with Bank of America to design and construct an energy efficient tracker system for the City’s wastewater treatment plant. The purchase price of this project was $4,325,556, with annual payments in varying amounts including interest at 3.33% commencing on July 8, 2012 with a final payment in July, 2026. This loan was paid off on July 8, 2026. This loan is secured by the equipment purchased under the lease, not by a pledge of Net Revenues.

35 2026 Solar Equipment Lease. In January 2026, the city entered into an equipment lease/purchase agreement with Bank of America to design and construct the Solar Photovoltaic System. The purchase price of the project was $3,740,000, with a fixed interest rate through final maturity on October 1, 2045. As of October 2, 2026, there is $3,720,116 outstanding. This loan is secured by the equipment purchased under the lease, not by a pledge of Net Revenues.

Reserves
The City maintains two wastewater reserve funds: (1) a Wastewater Operations and Capital Fund and (2) a Wastewater Impact Fees reserve. As of the end of fiscal year 2025-26, the City had Wastewater Operations & Capital Fund cash balance of approximately $2.7 million and Wastewater Impact Fees cash balance of approximately $6.5 million. The City plans to contribute approximately $2,000,000 of the current Wastewater Impact Fees fund balance towards the project.

36 Capital Improvement Program (CIP)
The 2026 Rate Study Update includes comprehensive 5-year plan for capital improvement projects (“CIP”) for the Wastewater System, which was developed by City staff following an effort to fund the most critical capital needs of the Wastewater System. The CIP includes approximately $25.8 million (in current dollars) of pay-go capital improvement projects. The table below shows both paygo CIP along with the Project to be financed with the proceeds of the 2026 Bonds. The following contains estimated projects and project costs, which may vary considerably from actual results, which may also change the funding mix of the CIP.

Table 8
Hanford Wastewater System
Wastewater Projects and Available Fund Sources
Fiscal Years 2026-27 through 2030-31
Fiscal Year
2026-27 2027-28 2028-29 2029-30 2030-31 Total 5-Year
Pay-Go CIP
Additional Contingency for WWTF ECM Project $2,500,000 $0 $0 $0 $0 $2,500,000 Rehabilitate Lift Station 12-LS2 $185,500 $650,000 $0 $0 $0 $835,500 Rehabilitate Lift Station 11-LS1 $117,653 $0 $410,000 $0 $0 $527,653 IND-FM5 Force Main Replace $0 $0 $0 $115,352 $403,688 $519,040 Rehabilitate Lift Station IND-LS5 $0 $0 $111,132 $388,719 $0 $499,851 China Alley - Utility Replacement /Reconstruction (Multi-Funded) $30,000 $345,000 $0 $0 $0 $375,000 Lacey Blvd Widen/Reconst Magna Carta To 13th (Multi-Funded) $0 $0 $400,000 $0 $0 $400,000 Annual Sewer Maint. Improvement Project $0 $3,100,000 $378,000 $3,250,000 $396,900 $7,124,900 Wastewater Facility Building Roof Repair $0 $300,000 $0 $0 $0 $300,000 Vacuum Truck $0 $0 $0 $0 $1,040,000 $1,040,000
Sludge Drying Bed Lining $0 $661,500 $695,500 $728,900 $764,500 $2,850,400 Sanitary Sewer Manhole Recoating $105,000 $110,000 $115,500 $121,500 $127,500 $579,500 Lift Station Rehabilitation $390,000 $181,500 $429,975 $200,000 $677,211 $1,878,686 Internal Lift Pump Tube #2 $0 $0 $1,500,000 $0 $0 $1,500,000 Internal Lift Pump Tube #1 $1,050,000 $0 $0 $0 $0 $1,050,000 Cctv Inspection Services $63,000 $66,200 $69,500 $72,900 $76,600 $348,200 Opterra Solar Array Maintenance $150,000 $50,000 $0 $0 $150,000 $350,000 Other Pay-Go CIP(1) $135,350 $973,202 $159,575 $329,256 $259,553 $1,856,936

37 Pay-Go Contingency (5%) $236,325 $321,870 $213,459 $260,331 $194,798 $1,226,783 Total Pay-GO CIP $4,962,828 $6,759,272 $4,482,641 $5,466,958 $4,090,750 $25,762,449 Financed CIP
WWTF Improvements Project(2) $22,974,663 $30,448,454 $2,884,632 $0 $0 $56,307,749 Total Financed CIP(3) $22,974,663 $30,448,454 $2,884,632 $0 $0 $56,307,749 Total Capital Improvement Plans $27,937,491 $37,207,726 $7,367,273 $5,466,958 $4,090,750 $82,070,198 (1) Other Pay-Go CIP is all projects with a project cost under $300,000 and includes approximately 20 projects with costs ranging from $10,000 up to $250,000 (2) WWTF Improvements Project cost anticipated to be funded primarily with the 2026 Bonds, with remaining costs funded with City cash. (3) City is evaluating additional Wastewater Fund capital projects, including a potential future plant upgrade to tertiary treatment. Such project would likely be financed and would occur outside the forecast window in this table.

Source: City of Hanford.

38 Historical and Projected Debt Service Coverage
The tables below provide a historical statement of debt service coverage for Fiscal Years 2021-22 through 2025-26 and projected debt service coverage for Fiscal Years 2026-27 through 2030-31, based on the definitions of Gross Revenues and Maintenance and Operation Costs set forth in the legal documents governing the 2026 Bonds (which excludes depreciation and other non-cash items).

Table 9
Wastewater System
Historical Operating Results and Debt Service Coverage
Fiscal Years 2021-22 through 2025-26
Fiscal Year
2021-22 2022-23 2023-24 2024-25 2025-26
Gross Revenues
Charges for Services(1) $5,835,517 $5,784,561 $6,721,978 $9,559,836 $10,520,174 Other revenues 1,079,119 793,881 900,946 1,133,792 664,158 Interest income(2) 219,927 253,777 339,502 471,958 394,155 Impact Fees(3) 916,017 769,297 851,634 1,135,203 660,509 Total Gross Revenues $8,050,580 $7,601,516 $8,814,060 $12,300,789 $12,238,996 Maintenance and Operation Costs
Personnel Services(4) $2,203,023 $1,496,246 $1,812,821 $1,972,978 $2,103,562 Services and supplies 2,547,018 2,922,381 3,698,443 4,019,794 3,819,870 Pension Bond Related Costs(5)- 112,786 245,821 236,241 230,614 Total M&O Costs $4,750,041 $4,531,413 $5,757,085 $6,229,013 $6,154,047 Net Revenues $3,300,539 $3,070,103 $3,056,975 $6,071,776 $6,084,949 Debt Service
2015 Bonds $292,275 $291,350 $290,275 $293,975 $292,450 2012 Bonds 933,456 932,259 925,263 922,963 926,375
Total Debt Service $1,225,731 $1,223,609 $1,215,538 $1,216,938 $1,218,825 Debt Service Coverage Ratio 2.69x 2.51x 2.51x 4.99x 4.99x (1) Increase in Charges for service in FY 2023-24, FY 2024-25, and FY 2025-26 are due to rate increases effective February 2024, July 2024, and July 2025, respectively. (2) Interest income reflects cash earnings, excluding unrealized gain (loss) on investments. FY 2025-26 amount is a combination of the Wastewater Fund and the Wastewater Impact Fee Fund.
(3) The City is pledging Wastewater Impact Fee revenues to repayment of the 2026 Bonds; historical debt service coverage table has been re-stated from prior years' reporting on the 2012 and 2015 Bonds to include these revenues. (4) Personnel Services amounts in FY 2022-23 onward excludes non-cash GASB adjustments related to pension and OPEB. (5) Reflects Wastewater System’s 7.93% allocable share of the City's 2022 Pension Obligation Bonds annual debt service.

Source: City of Hanford.

39 Table 10
Wastewater System
Projected Operating Results and Debt Service Coverage
Fiscal Years 2026-27 through 2030-31
Fiscal Year
2026-27 2027-28 2028-29 2029-30 2030-31
Gross Revenues
Charges for Services(1) $12,887,213 $15,464,656 $17,784,355 $19,029,259 $19,980,722 Other revenues(2) 664,158 664,158 664,158 664,158 664,158 Interest income(3) 170,000 170,000 170,000 170,000 170,000 Impact Fees(4) 300,000 300,000 300,000 300,000 300,000
Total Gross Revenues $14,021,371 $16,598,814 $18,918,513 $20,163,417 $21,114,880 Maintenance and Operation
Personnel Services(5) $2,208,741 $2,319,178 $2,435,137 $2,556,893 $2,684,738 Services and supplies(6) 3,827,941 3,826,293 3,813,883 3,789,581 3,752,169 Pension Bond Related Costs (7) 223,698 223,715 191,665 189,212 186,875 Total M&O Costs $6,260,379 $6,369,186 $6,440,684 $6,535,686 $6,623,782 Net Revenues $7,760,992 $10,229,628 $12,477,828 $13,627,732 $14,491,099 Debt Service
2015 Bonds(8) $259,575 $- $- $- $-
2012 Bonds(8) 844,344 - - - -
2026 Bonds 1,401,461 4,284,500 4,254,500 5,266,750 4,971,625 Total Debt Service* $2,505,380 $4,284,500 $4,254,500 $5,266,750 $4,971,625 Debt Service Coverage Ratio* 3.10x 2.39x 2.932x 2.59x 2.91x * Preliminary; subject to change for projection period. (1) Projected growth in charges for services revenues based on approved schedule of rate increases through FYE 2032, including an increase effective July 1, 2030. (2) Projected Other revenues based on FY 2025-26 amounts, assumes no growth. (3) Projected Interest income based on 50% of the five-year historical average of Interest income. Combined interest earnings of Wastewater Fund and Wastewater Impact Fee Fund.
(4) Projected Impact Fee revenues based on 35% of the 5-year historical average of these revenues. (5) Projected Personnel services amounts based on FY 2025-26 estimated amounts, growing at 5% annually in line with 2026 Rate Study Update. (6) Projected Services and supplies amounts grow at 5% annually off FY 2025-26 levels, but also reflect $183,000 to $227,000 estimated annual energy cost savings related a 2026 Solar Panel project at the WWTP facility. While the City expects additional, future operational cost savings associated with the Project, those have not been included in this projection.
(7) Reflects Wastewater System’s 7.93% allocable share of the City's 2022 Pension Obligation Bonds annual debt service. (8) Reflects scheduled October 1, 2026 payments only; assumes refunding of 2012 and 2015 Bonds as part of the 2026 Bond issuance.

Source: City of Hanford.

BOND OWNERS’ RISKS
The following describes certain special considerations and risk factors affecting the payment of and security for the 2026 Bonds. The following discussion is not meant to be an exhaustive list of the risks associated with the purchase of any 2026 Bonds and the order presented does not necessarily reflect the relative importance of the various risks. Potential investors in the 2026 Bonds are advised to consider the following special factors along with all other information in this Official Statement in evaluating the 2026 Bonds. There can be no assurance that other considerations will not materialize in the future.

Revenues; Rate Covenant
The Revenues securing the 2026 Bonds consist primarily of Installment Payments payable by the City, which, in turn, are secured by the Net Revenues of the Wastewater System. Net Revenues are dependent upon the demand for water usage and resulting wastewater service, which can be affected by population factors and more stringent water regulations. There can be no assurance that wastewater service demand will be consistent with the levels contemplated in this Official Statement. A decrease in the demand for wastewater could require an increase in rates or charges in order to comply with the rate covenants contained in the Installment Sale

40 Agreement. The City’s ability to meet its rate covenants is dependent upon its capacity to increase rates without driving down demand to a level insufficient to meet debt service on the Installment Payments and Parity Debt.

Increased Maintenance and Operation Costs
There can be no assurance that expenses of the Wastewater System will be consistent with the levels contemplated in this Official Statement. Changes in technology, changes in environmental quality standards (see “– Environmental Regulation” below), and increases in the cost of operation or other expenses could require substantial increases in rates or charges in order to comply with the rate covenants in the Installment Sale Agreement. Until such rates can be implemented, Net Revenues may be reduced, increasing the possibility of nonpayment of the Installment Payments and, in turn, the 2026 Bonds. See “– Proposition 218,” below, for additional details on the process that must be undertaken by the City to increase rates and charges.

Limitations on Remedies Available to Bond Owners
The ability of the City to comply with its covenants under the Installment Sale Agreement and to generate Net Revenues sufficient to pay principal of and interest on the Installment Payments and Parity Debt may be adversely affected by actions and events outside of the control of the City, and may be adversely affected by actions taken (or not taken) by voters, property owners, taxpayers or payers of assessments, fees and charges. Furthermore, any remedies available to the owners of the 2026 Bonds upon the occurrence of an event of default under the Indenture are in many respects dependent upon judicial actions, which are often subject to discretion and delay and could prove both expensive and time consuming to obtain.

In addition to the limitations on Bondholder remedies contained in the Indenture, the rights and obligations of the Authority under the Indenture may be subject to the following: the United States Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the Owners of the 2026 Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation or modification of their rights.

Seismic and other Natural Disasters
Like all of California, land in the City may be subject to unpredictable seismic activity.

Although not located in the highest risk areas of the State, if there were to be an occurrence of severe seismic activity in the area of the City, there could be an interruption in the service provided by the Wastewater System, resulting in a temporary reduction in the amount of Net Revenues available to timely pay the Installment Payments.

Other natural disasters, such as flooding, landslides or wildfires, could also affect or interrupt the service provided by the Wastewater System, resulting in a temporary reduction in the amount of Net Revenues available to timely pay the Installment Payments and/or lead to

41 improper discharges from the Wastewater System that may result in regulatory fines payable by the Wastewater System.

California is subject to droughts from time-to-time. During past drought conditions, the State has implemented mandatory water reductions in cities and towns across California to reduce water usage, which in many cases led to declines in wastewater flows as well. Drought conditions may inhibit or slow-down the current pace of growth of homebuilding activities in the City, and accordingly Wastewater Impact Fees, which is a significant source of revenues to the Wastewater System.

The City has not experienced any service interruptions as a result of wildfires in or within the vicinity of the Wastewater System’s service area. In addition, land in and surrounding the City is not located within a High or Very High Fire Hazard Severity Zone as defined by maps prepared by Cal Fire. Nevertheless, no assurance can be given that a wildfire in the future would not materially adversely impact the Wastewater System and its finances.

Loss of Tax-Exemption
As discussed under the caption “TAX MATTERS,” interest on the 2026 Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the 2026 Bonds were issued, as a result of future acts or omissions of the Authority or City in violation of its covenants in the Installment Sale Agreement and Indenture. Should such an event of taxability occur, the 2026 Bonds are not subject to special redemption and will remain outstanding until maturity or until redeemed under other provisions set forth in the Indenture.

Proposition 218
General. On November 5, 1996, California voters approved Proposition 218, the so-called “Right to Vote on Taxes Act.” Proposition 218 added Articles XIIIC and XIIID to the State Constitution, which affect the ability of local governments to levy and collect both existing and future taxes, assessments, and property-related fees and charges. Proposition 218, which generally became effective on November 6, 1996, limited local governments’ authority to impose or increase property-related “fee” or “charge,” which is defined as “any levy other than an ad valorem tax, a special tax or an assessment, imposed by a local government upon a parcel or upon a person as an incident of property ownership, including user fees or charges for a property related service” (and referred to in this section as a “property-related fee or charge”).

Specifically, under Article XIIID, before a municipality may impose or increase any property-related fee or charge, the entity must give written notice to the record owner of each parcel of land affected by that fee or charge. The municipality must then hold a hearing upon the proposed imposition or increase at least 45 days after the written notice is mailed, and, if a majority of the property owners of the identified parcels present written protests against the proposal, the municipality may not impose or increase the property-related fee or charge.

Further, under Article XIIID, revenues derived from a property-related fee or charge may not exceed the funds required to provide the “property-related service” and the entity may not use such fee or charge for any purpose other than that for which it imposed the fee or charge. The amount of a property-related fee or charge may not exceed the proportional cost of the service attributable to the parcel, and no property-related fee or charge may be imposed for a service unless that service is actually used by, or is immediately available to, the owner of the property in question.

42 In addition, Article XIIIC states that “the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. The power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments and neither the Legislature nor any local government charter shall impose a signature requirement higher than that applicable to statewide statutory initiatives.” Judicial Interpretation of Proposition 218. After Proposition 218 was enacted in 1996, appellate court cases and an Attorney General’s opinion initially indicated that fees and charges for water and wastewater services, which are based on the amount of services consumed, would not be considered property-related fees and charges, and thus not subject to the requirements of Article XIIID. However, numerous subsequent court cases have held that certain types of water and wastewater charges could be subject to the requirements of Proposition 218. These cases include, for example, Capistrano Taxpayers Assoc., Inc. v. City of San Juan Capistrano (186 Cal.

Rptr. 3d 362 (Cal. App. 4th Distr. 2015)), Bighorn-Desert View Water Agency v. Verjil (46 Cal.

Rptr. 3d 73 (Cal. 2006)), and Howard Jarvis Taxpayers Assoc. v. City of Fresno (26 Cal. Rptr. 3d 153 (Cal. App. 5th Distr. 2005)).

Under the Bighorn case, for example, the court held that under Article XIIIC, local voters could adopt an initiative measure that could reduce or repeal a local agency’s rates and charges, though it is not clear whether (and California courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonds or other indebtedness, as is the case with respect to the Installment Payments securing the 2026 Bonds.

Under the City of San Juan Capistrano case, the court held that tiered or inclined rates that go up progressively in relation to usage must correspond to the actual cost of providing water service at each tier (level of usage), and accordingly the pricing for any tier cannot exceed the cost of service to that tier.

City’s Current Practice Regarding Rates and Charges. The City’s practice in implementing increases in wastewater rates and charges has been to comply with the requirements of Article XIIID, including the practice of providing property owners with a 45-day mailed notice and public hearing before the City Council approves rate increases.

Conclusion. It is not possible to predict how courts will further interpret Article XIIIC and Article XIIID in future judicial decisions, and what, if any, further implementing legislation will be enacted. As noted above, under the Bighorn case, local voters could adopt an initiative measure that reduces or repeals the City’s rates and charges, though it is not clear whether (and California courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonds or other indebtedness, as is the case with respect to the Installment Payments securing the 2026 Bonds.

There can be no assurance that the courts will not further interpret, or the voters will not amend, Article XIIIC and Article XIIID to limit the ability of local agencies to impose, levy, charge and collect increased fees and charges for wastewater, or to call into question previously adopted wastewater rate increases.

Environmental Regulation
The kind and degree of wastewater treatment is regulated, to a large extent, by the federal government and the State. Treatment standards set forth in federal and State law control the

43 operations of the Wastewater System and the WWTF and mandate its use of technology. If the federal government, acting through the Environmental Protection Agency, or the State, acting through the Department of Health Services, or additional federal or State legislation, should impose stricter standards upon the Wastewater System and the WWTF, the City’s expenses related to the Wastewater System could increase accordingly and rates and charges would have to be increased to offset those expenses. See “– Increased Maintenance and Operation Costs” above.

It is not possible to predict the direction which federal or State regulation will take with respect to wastewater standards, although it is likely that both will impose more stringent standards with attendant higher costs.

Cybersecurity
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City or the Wastewater System, or the administration of the 2026 Bonds.

The City is also reliant on other entities and service providers in connection with the operation of the Wastewater System and the administration of the 2026 Bonds, including without limitation, the Trustee and the dissemination agent. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the 2026 Bond owners.

Pandemic Diseases
In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. Pandemic diseases arising in the future could have significant adverse health and financial impacts throughout the world, leading to loss of jobs and personal financial hardships, and/or actions by federal, State and local governmental authorities to contain or mitigate the effects of an outbreak.

Taxpayer assistance measures may include deferral of due dates of utility rates (including Wastewater System rates and charges), which was an assistance program during the COVID-19 pandemic, and with or without a deferral some ratepayers may be unable to make their payments.

No assurance can be given that the Wastewater System payment dates will not be deferred in the future, which may cause a delay in the receipt of rate revenues.

Secondary Market for 2026 Bonds
There can be no guarantee that there will be a secondary market for the 2026 Bonds or, if a secondary market exists, that any 2026 Bonds can be sold for any particular price.

Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is

44 being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price.

Future Parity Debt
As described in “SECURITY FOR THE 2026 BONDS – Parity Debt” above, the Installment Sale Agreement permits the City to issue Parity Debt in the future that is payable on a parity with the payment of the Installment Payments securing the 2026 Bonds. In the event of a decline in Net Revenues available to pay the Installment Payments securing the 2026 Bonds, the existence of additional Parity Debt could adversely affect the City’s ability to timely pay the Installment Payments securing the 2026 Bonds.

TAX MATTERS
Federal Tax Status. In the opinion of Jones Hall LLP, as Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the 2026 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2026 Bonds may be subject to the corporate alternative minimum tax.

The opinions set forth in the preceding paragraph are subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax Code”) that must be satisfied subsequent to the issuance of the 2026 Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Authority and City have made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the 2026 Bonds.

Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a 2026 Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a 2026 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium” for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium are disregarded.

Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the 2026 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such 2026 Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such 2026 Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the 2026 Bonds who purchase the 2026 Bonds after the initial offering of a substantial amount of such maturity. Owners of such 2026 Bonds should consult their own

45 tax advisors with respect to the tax consequences of ownership of 2026 Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering to the public at the first price at which a substantial amount of such 2026 Bonds is sold to the public.

Under the Tax Code, original issue premium is amortized on an annual basis over the term of the 2026 Bond (said term being the shorter of the 2026 Bond's maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the 2026 Bond for purposes of determining taxable gain or loss upon disposition.

The amount of original issue premium on a 2026 Bond is amortized each year over the term to maturity of the 2026 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates).

Amortized bond premium is not deductible for federal income tax purposes. Owners of premium 2026 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such 2026 Bonds.

California Tax Status. In the further opinion of Bond Counsel, interest on the 2026 Bonds is exempt from California personal income taxes.

Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the 2026 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the 2026 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to enactment.

The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the 2026 Bonds, or as to the consequences of owning or receiving interest on the 2026 Bonds, as of any future date. Prospective purchasers of the 2026 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

Owners of the 2026 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2026 Bonds may have federal or state tax consequences other than as described above. Other than as expressly described above, Bond Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the 2026 Bonds, the ownership, sale or disposition of the 2026 Bonds, or the amount, accrual or receipt of interest on the 2026 Bonds.

CERTAIN LEGAL MATTERS
Jones Hall LLP, as Bond Counsel, will render an opinion with respect to the validity of the 2026 Bonds, the form of which opinion is set forth in APPENDIX E. Certain legal matters will also be passed upon for the City by Jones Hall LLP, as Disclosure Counsel and by the City Attorney.

Certain legal matters will be passed upon for the Underwriter by its counsel, Stradling Yocca

46 Carlson & Rauth LLP. The fees of Bond Counsel, Disclosure Counsel and Underwriter’s counsel are contingent on the sale and closing of the 2026 Bonds.

NO LITIGATION
No litigation is pending or threatened concerning the validity of the 2026 Bonds. Neither the Authority nor the City is aware of any litigation pending or threatened questioning the political existence of the Authority or the City or contesting the City’s power to fix wastewater rates and charges, or the power of the governing body of the Authority or the City Council or in any way questioning or affecting: (i) the proceedings under which the 2026 Bonds are to be issued; (ii) the validity of any provision of the 2026 Bonds, the Installment Sale Agreement or the Indenture; (iii) the pledge of Net Revenues under the Installment Sale Agreement or the pledge of Revenues under the Indenture; or (iv) the titles of the present members of the governing body of the Authority or the City Council.

There are a number of suits and claims pending against the City, which may include personal injury, wrongful death and other suits and claims against which the City may self-insure.

The aggregate amount of the self-insured liabilities of the City which may result from such suits and claims will not, in the opinion of the City, materially impair the ability of the City to pay the Installment Payments securing the 2026 Bonds as they become due.

RATING[S]
S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (“S&P”) is anticipated to assign its municipal bond rating of “___” to the 2026 Bonds with the understanding that the Insurer will deliver its Insurance Policy with respect to the 2026 Bonds.

S&P has also assigned an underlying municipal bond rating of “___” to the 2026 Bonds.

This rating reflects only the views of S&P, and an explanation of the significance of this rating, and any outlook assigned to or associated with this rating, should be obtained from S&P.

Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. The Authority has provided certain additional information and materials to S&P (some of which does not appear in this Official Statement).

There is no assurance that this rating will continue for any given period of time or that this rating will not be revised downward or withdrawn entirely by S&P, if in the judgment of S&P, circumstances so warrant. Any such downward revision or withdrawal of any rating on the 2026 Bonds may have an adverse effect on the market price or marketability of the 2026 Bonds.

CONTINUING DISCLOSURE
The City will covenant for the benefit of owners of the 2026 Bonds to provide certain financial information and operating data by not later than nine months after the end of the City’s fiscal year, or April 1 of each year (based on the City’s current fiscal year-end of June 30), commencing April 1, 2027, with the report for 2025-26 fiscal year (the “Annual Report”) and to provide notices of the occurrence of certain listed events.

These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). The specific nature of the

47 information to be contained in the Annual Report or the notices of listed events by the City is set forth in “APPENDIX C – Form of Continuing Disclosure Certificate.” A review of the City’s compliance with prior continuing disclosure undertakings in the last five years indicates that the City did not timely file notice of a rating upgrade of the Prior Bonds that occurred in April 2022. The City filed the notice in October 2022.

The City has retained NHA Advisors, LLC to assist with its continuing disclosure undertakings, and City staff has undergone continuing disclosure training to ensure ongoing future compliance.

UNDERWRITING
Oppenheimer & Co. Inc., as underwriter of the 2026 Bonds (the “Underwriter”), has agreed to purchase the 2026 Bonds from the Authority at a purchase price of $______________ which represents the aggregate principal amount of the 2026 Bonds, plus/less [net] original issue premium/discount of $___________, less underwriter’s discount of $_________.

The purchase contract under which the Underwriter is purchasing the 2026 Bonds provides that the Underwriter will purchase all of the 2026 Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to certain terms and conditions set forth in the purchase contract.

The public offering prices of the 2026 Bonds may be changed from time to time by the Underwriter. The Underwriter may offer and sell the 2026 Bonds to certain dealers and others at a price lower than the offering price stated on the cover page of this Official Statement.

MUNICIPAL ADVISOR
The Authority has retained NHA Advisors, LLC, as its municipal advisor (the “Municipal Advisor”) in connection with the authorization and delivery of the 2026 Bonds. The Municipal Advisor assumes no responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the 2026 Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. The fees of the Municipal Advisor are contingent on the sale and closing of the 2026 Bonds.

48 EXECUTION
The execution of this Official Statement and its delivery have been authorized by the governing body of the Authority and the City Council of the City.

HANFORD FINANCING AUTHORITY
By:

Executive Director

CITY OF HANFORD
By:

City Manager

APPENDIX A

SUMMARY OF PRINCIPAL LEGAL DOCUMENTS

APPENDIX B

AUDITED FINANCIAL STATEMENTS OF THE CITY
FOR FISCAL YEAR ENDED JUNE 30, 2025

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APPENDIX C

FORM OF CONTINUING DISCLOSURE CERTIFICATE
$__________
Hanford Financing Authority
2026 Wastewater Revenue Bonds
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of Hanford (the “City”) in connection with the issuance of the abovecaptioned bonds (the “2026 Bonds”). The 2026 Bonds are being issued by the Hanford Financing Authority (the “Authority”) under an Indenture of Trust dated as of October 1, 2026 (the “Indenture”) by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The City covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the 2026 Bonds and in order to assist the Participating Underwriter in complying with the Rule (defined herein).

Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4.
“Annual Report Date” means the date that is nine months after the end of the City’s fiscal year (currently April 1 based on the City’s fiscal year end of June 30). “Dissemination Agent” means, initially, NHA Advisors, LLC, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a). “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement executed by the Authority and the City in connection with the issuance of the 2026 Bonds. “Participating Underwriter” means any original underwriter of the 2026 Bonds required to comply with the Rule in connection with offering of the 2026 Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.

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Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2027, with the report for the 2025-26 fiscal year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City).

If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(a).

The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) to the MSRB, in a timely manner as required by the Rule, in an electronic format as prescribed by the MSRB, a notice to such effect.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) Audited Financial Statements of the City prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.

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(b) To the extent not contained in the audited financial statements filed under the preceding clause (a), the Annual Report shall contain information of the type set forth in the tables in the Official Statement:
(i) Number and type of service connections for the most recently ended fiscal year, in substantially the form of Table 1;
(ii) Wastewater System top ten customers by revenue for the most recently ended fiscal year, in substantially the form of Table 4; (iii) A schedule of wastewater rates in effect as of the close of the preceding fiscal year, in substantially the form of Table 5; and
(iv) A table showing Gross Revenues, Maintenance and Operation Costs, Net Revenues and debt service coverage for the most recently ended fiscal year, in substantially the form of Table 9 (actuals only; no projections);
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the 2026 Bonds in a timely manner not to exceed 10 business days after the occurrence of the Listed Event:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. (7) Modifications to rights of security holders, if material.

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(8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City.

Note: For the purposes of the event identified in subparagraph (12), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (13) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.
(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material (for definition of “financial obligation,” see clause (c)). (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties (for definition of “financial obligation,” see clause (c)).
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, and, if the Listed Event is described in subsections (a)(2), (a)(6), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) above, the City determines that knowledge of the occurrence of that Listed Event would be material under applicable Federal securities law, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above need not be given under this subsection

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any earlier than the notice (if any) of the underlying event is given to holders of affected 2026 Bonds under the Indenture.
(c) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.

Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.

Section 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the 2026 Bonds. If such termination occurs prior to the final maturity of the 2026 Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(a).

Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the City. The initial Dissemination Agent shall be NHA Advisors, LLC.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that all of the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the City with respect to the 2026 Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the 2026 Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the 2026 Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the 2026 Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

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If an amendment is made to this Disclosure Certificate modifying the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Listed Event under Section 5(a).

Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 11. Default. If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the 2026 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent (if other than the City), the Participating Underwriter and the holders and beneficial owners from time to time of the 2026 Bonds, and shall create no rights in any other person or entity.

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Section 13. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

Date: __________, 2026

CITY OF HANFORD
By
Name:_____________
Title:_____________
ACCEPTED AND AGREED:

NHA Advisors, LLC,
As Dissemination Agent
By
Authorized Representative

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APPENDIX D

GENERAL INFORMATION ABOUT THE CITY OF HANFORD

AND KINGS COUNTY
The following information concerning the City of Hanford (the “City”) and Kings County (the “County”) and is included only for the purpose of supplying general information regarding the area of the City and County. The 2026 Bonds are not a debt of the City, the County, the State of California (the “State”) or any of its political subdivisions, and neither the City, the County, the State nor any of its political subdivisions is liable therefor.

General
The City. Incorporated in 1891, the City is situated in the south central portion of California’s San Joaquin Valley, 28 miles south-southeast of the City of Fresno and 18 miles west of the City of Visalia. The City is 249 feet above sea level and is an important commercial and cultural center in the south central San Joaquin Valley. The City is a general law city with CouncilManager form of government and is governed by a five-member City Council elected by district and serve four-year staggered terms.

The County. The County is located in the south central San Joaquin Valley. The County is home to the Lemoore Naval Air Station and three California State Correctional facilities, two in Corcoran and one in Avenal. The County has four incorporated communities: Lemoore, Hanford, Avenal, and Corcoran.

The County, which covers an area of 1,396 square miles in central California, has its County seat in the City. The population of the County is an estimated 153,754, located in the four incorporated cities and in unincorporated parts of the County. The major employers of the County are the Avenal State Prison, the Corcoran State Prison and the Lemoore Naval Air Station.

Agriculture is the major industry in the County with approximately 761,266 acres out of a total of 893,440 total Kings County acreage, dedicated or available for farming. The Santa Fe Railroad, Southern Pacific Railroad, and San Joaquin Railroad serve the County.

Population
The following table lists population estimates for the City, the County, and other major cities in the County, as of January 1 each year for the last five calendar years.

KINGS COUNTY
Population Estimates
Calendar Years 2022 through 2026
2022 2023 2024 2025 2026
Avenal 13,152 13,386 14,056 13,309 13,142
Corcoran 21,990 21,419 21,735 21,585 21,504
Hanford 58,212 58,949 59,722 61,113 60,837
Lemoore 26,965 26,892 27,062 27,637 27,216
Balance of County 31,281 30,797 30,916 30,189 31,055
Kings County Total 151,600 151,443 153,491 153,833 153,754 Source: State Department of Finance estimates (as of January 1).

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Industry and Employment
The City is included in the Hanford-Corcoran Metropolitan Statistical Area (“MSA”). The unemployment rate the County was 8.6% in July 2026, up from a revised 8.5% in June 2026, and below the year-ago estimate of 9.2%. This compares with an unadjusted unemployment rate of

5.3% for the State and 4.4% for the nation during the same period.

The table below provides information about employment by industry type for the County for calendar years 2021 through 2025.

HANFORD-CORCORAN MSA
(Kings County)
Annual Average Civilian Labor Force, Employment and Unemployment, Unemployment by Industry
(March 2025 Benchmark)
2021 2022 2023 2024 2025
Civilian Labor Force (1) 54,300 55,100 57,300 59,900 60,400 Employment 48,800 51,000 52,500 54,700 54,800
Unemployment 5,500 4,100 4,800 5,200 5,600
Unemployment Rate 10.0% 7.4% 8.4% 8.7% 9.3%
Wage and Salary Employment: (2)
Agriculture 9,600 9,500 9,700 9,600 9,100
Mining, Logging, and Construction 1,000 1,200 1,200 1,200 1,200 Manufacturing 4,500 4,700 4,700 4,600 4,300
Wholesale Trade 600 600 600 700 700
Retail Trade 4,400 4,400 4,400 4,300 4,500
Trans., Warehousing, Utilities 1,600 1,600 1,500 1,400 1,400 Information 200 200 200 200 200
Financial Activities 900 900 800 800 800
Professional and Business Services 1,300 1,700 1,700 2,000 2,000 Educational and Health Services 6,500 6,800 7,600 8,100 8,600 Leisure and Hospitality 3,900 4,200 4,100 4,100 4,100
Other Services 700 800 700 700 700
Federal Government 1,200 1,200 1,100 1,100 1,200
State Government 5,300 5,200 5,400 5,600 5,400
Local Government 7,500 8,000 8,500 8,700 8,800
Total All Industries (3) 49,100 51,000 52,300 53,000 52,800 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.

Source: State of California Employment Development Department.

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Principal Employers
The following table lists principal employers within the City as of June 30, 2025.

CITY OF HANFORD
Principal Employers
Business Name Employees
% of Total
City Employment
Adventist Health Hanford Hospital 1,713 6.72%
Central Valley Meat Co 822 3.22
Del Monte Foods Co* 750 2.94
Hanford Elementary School District 734 2.88
Hanford Joint Union High School District 472 1.85
Walmart Supercenter 412 1.62
City of Hanford 306 1.20
Costco Wholesale 255 1.00
Marquez Brothers International 230 0.90
College of the Sequoias 183 0.72
TOTAL 5,877 23.05%
* Del Monte Foods Co shut down operations 9/26/2025.

Source: City of Hanford Annual Comprehensive Financial Report for the year ended June 30, 2025.

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Major Employers
The following table lists the twenty-five largest employers within the County as of September 2026, being the most current date for which such information is available.

KINGS COUNTY
Major Employers
(As of September 2026)
Employer Location Industry
Adventist Health Hanford Hanford Hospitals
Badasci & Wood Transport Lemoore Trucking
California State Prison Corcoran Government Offices-State California State Prison Corcoran State Govt-Correctional Institutions Central Valley Meat Co Inc Hanford Meat Packers (mfrs)
Costco Wholesale Hanford Wholesale Clubs
JG Boswell Co Corcoran Manufacturers
Keller Ford Hanford Automobile Dealers-New Cars
Kings County Admin Hanford Government Offices-County
Kings County Sheriff's Office Hanford Government Offices-County Lemoore High School Lemoore Schools
Lemoore Main Navy Exchange Lemoore General Merchandise-Retail Leprino Foods Co Lemoore Cheese Processors (mfrs)
Marquez Brothers Intl Inc Hanford Mexican Food Products-Wholesale Naval Air Station Lemoore Lemoore Military Bases
Naval Health Clinic Lemoore Lemoore Clinics
Nichols Farms Inc Hanford Farms
Olam Spices & Vegetables Hanford Food Products & Manufacturers Pioneer Union Elementary Sch Hanford Schools
Tachi Palace Hotel & Casino Lemoore Restaurants
TC Transcontinental Packaging Hanford Packaging Materials-Manufacturers Walmart Supercenter Hanford Department Stores
Warmerdam Packing Hanford Fruits & Vegetables-Harvesting West Hills College Lemoore Lemoore Junior-Community College-Tech Institutes Zepeda's Farm Labor Svc Corcoran Labor Contractors
Source: State of California Employment Development Department, extracted from The America's Labor Market Information System (ALMIS) Employer Database, 2026 2nd Edition.

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Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance).

Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the estimated total effective buying income and estimated median household effective buying income for the City, the County, the State and the United States for the period 2023 through 2027.

CITY OF HANFORD, KINGS COUNTY
STATE OF CALIFORNIA and UNITED STATES

ESTIMATED EFFECTIVE BUYING INCOME
As of January 1, 2023 through 2027
Year Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective
Buying Income
2023 City of Hanford $1,420,551 $61,351
Kings County 3,156,416 58,505
California 1,461,799,662 77,175
United States 11,454,846,397 65,326
2024 City of Hanford $1,519,471 $66,136
Kings County 3,343,794 62,819
California 1,510,708,521 80,973
United States 11,987,185,826 67,876
2025 City of Hanford $1,582,688 $66,259
Kings County 3,426,196 62,753
California 1,557,429,767 82,725
United States 12,525,577,707 69,687
2026 City of Hanford $1,649,370 $66,384
Kings County 3,604,387 64,553
California 1,730,654,738 90,403
United States 13,932,177,817 75,433
2027 City of Hanford $2,035,266 $77,778
Kings County 4,277,106 72,550
California 1,777,381,182 91,733
United States 14,288,950,563 76,807
Source: Claritas, LLC.

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Commercial Activity
Summaries of historic taxable sales within the City, and the County during the past five years for which data are available are shown in the following tables.

During the first quarter of calendar year 2026, total taxable transactions in the City were reported to be $301,269,494, representing a 1.6% increase over the total taxable transactions of $296,575,258 that were reported in the City during the first quarter of calendar year 2025.

CITY OF HANFORD
Taxable Transactions
(Dollars in Thousands)
Year
Retail Permits
on July 1
Retail Stores
Taxable
Transactions
Total Permits
on July 1
Total Outlets
Taxable
Transactions
2021 912 $1,128,477 1,392 $1,265,601
2022 945 1,151,268 1,459 1,298,626
2023 910 1,114,926 1,421 1,277,228
2024 929 1,113,049 1,423 1,425,409
2025 931 1,106,055 1,442 1,285,175
Source: State Department of Tax and Fee Administration.

During the first quarter of calendar year 2026, total taxable transactions in the County were reported to be $596,241,437, representing a 7.8% increase over the total taxable transactions of $552,855,100 that were reported in the County during the first quarter of calendar year 2025.

KINGS COUNTY
Taxable Transactions
(Dollars in Thousands)
Year
Retail Permits
on July 1
Retail Stores
Taxable
Transactions
Total Permits
on July 1
Total Outlets
Taxable
Transactions
2021 1,652 $1,743,794 2,685 $2,467,534
2022 1,703 1,769,714 2,789 2,608,548
2023 1,599 1,697,956 2,663 2,544,221
2024 1,610 1,692,963 2,657 2,655,267
2025 1,617 1,711,925 2,700 2,488,631
Source: State Department of Tax and Fee Administration.

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APPENDIX E

FORM OF OPINION OF BOND COUNSEL
[Closing Date]
Hanford Financing Authority
315 North Douty Street
Hanford, CA 93230
OPINION: $___________ Hanford Financing Authority
2026 Wastewater Revenue Bonds
Members of the Authority:

We have acted as bond counsel to the Hanford Financing Authority (the “Authority”) in connection with the issuance by the Authority of its Hanford Financing Authority 2026 Wastewater Revenue Bonds in the aggregate principal amount of $___________ (the “2026 Bonds”), under an Indenture of Trust dated as of October 1, 2026 (the “Indenture”), between the Authority and U.S. Bank Trust Company, National Association, as trustee, and under the provisions of Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, commencing with Section 6584 of said Code (the “Bond Law”). The 2026 Bonds are secured by Revenues as such term is defined in the Indenture, including installment payments (the “Installment Payments”) made by the City of Hanford (the “City”) under an Installment Sale Agreement dated as of October 1, 2026 (the “Installment Sale Agreement”) between the Authority and the City.

We have examined such certified proceedings and other papers as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the Authority and the City contained in the Indenture, the Installment Sale Agreement and in the certified proceedings, and upon other certifications furnished to us, without undertaking to verify the same by independent investigation.

Based upon our examination we are of the opinion, under existing law, that:

1. The Authority is a joint powers agency duly organized and existing under the laws of the State of California, with power to enter into the Indenture, to perform the agreements on its part contained therein and to issue the 2026 Bonds.

2. The 2026 Bonds have been duly issued by the Authority and constitute legal, valid and binding special obligations of the Authority enforceable in accordance with their terms.

3. The Indenture and the Installment Sale Agreement have been duly authorized, executed and delivered by the Authority and constitute legal, valid and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms.

4. The Indenture establishes a valid lien on and security interest in the Revenues and other funds pledged thereby for the security of the 2026 Bonds, in accordance with the terms of the Indenture.

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5. The City is a municipal corporation duly organized and existing under the laws of the State of California, with power to enter into the Installment Sale Agreement and to perform the agreements on its part contained therein. The Installment Sale Agreement has been duly approved by the City and constitutes a legal, valid and binding obligation of the City enforceable against the City in accordance with its terms. The Installment Sale Agreement establishes a valid lien on and security interest in the Net Revenues of the Wastewater System and other funds pledged thereby for the security of the Installment Payments, in accordance with the terms of the Installment Sale Agreement.

6. Interest on the 2026 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax.

The opinions set forth in the preceding sentence are subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended, which must be satisfied subsequent to the issuance of the 2026 Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Authority and the City have covenanted in the Indenture, the Installment Sale Agreement and in other instruments relating to the 2026 Bonds to comply with each of such requirements, and the Authority and the City have full legal authority to make and comply with such covenants. Failure to comply with certain of such requirements may cause the inclusion of interest on the 2026 Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the 2026 Bonds. We express no opinion regarding other federal tax consequences arising with respect to the ownership, sale or disposition of the 2026 Bonds, or the amount, accrual or receipt of interest on the 2026 Bonds.

7. Interest on the 2026 Bonds is exempt from California personal income taxation.

Interest on the 2026 Bonds may be subject to the corporate alternative minimum tax. We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the 2026 Bonds.

The rights of the owners of the 2026 Bonds and the enforceability of the 2026 Bonds, the Indenture and the Installment Sale Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in accordance with principles of equity or otherwise in appropriate cases.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Moreover, our opinions are not a guarantee of a particular result, and are not binding on the Internal Revenue Service or any court; rather, our opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations, opinions, and covenants referenced above. Our engagement with respect to this matter has terminated as of the date hereof.

Respectfully submitted,

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APPENDIX F

DTC AND THE BOOK-ENTRY ONLY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the 2026 Bonds, payment of principal, interest and other payments on the 2026 Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the 2026 Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be, and neither the City nor the Underwriter take responsibility for the accuracy thereof.

Neither the issuer of the 2026 Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the 2026 Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the 2026 Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the 2026 Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the 2026 Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

1. The Depository Trust Company (“DTC”) will act as securities depository for the 2026 Bonds (hereinafter, the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.

Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust

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companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of ___. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information contained on this Internet site is not incorporated herein by reference.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI

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Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

10. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.

11. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.

Jones Hall Draft 9.23.26

INDENTURE OF TRUST
Dated as of October 1, 2026
between the

HANFORD FINANCING AUTHORITY
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Authorizing the Issuance of
$__________
Hanford Financing Authority
2026 Wastewater Revenue Bonds

-iTABLE OF CONTENTS

ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions...........................................................................................................2 SECTION 1.02. Authorization.....................................................................................................10 SECTION 1.03. Interpretation.....................................................................................................11

ARTICLE II
THE SERIES 2026 BONDS
SECTION 2.01. Authorization of Series 2026 Bonds ..................................................................12 SECTION 2.02. Terms of the Series 2026 Bonds.......................................................................12 SECTION 2.03. Form and Execution of Series 2026 Bonds .......................................................13 SECTION 2.04. Transfer and Exchange of Bonds......................................................................14 SECTION 2.05. Book-Entry System ...........................................................................................14 SECTION 2.06. Bond Registration Books...................................................................................16 SECTION 2.07. Bonds Mutilated, Lost, Destroyed or Stolen ......................................................16 SECTION 2.08. Applicability to Additional Bonds ..........................Error! Bookmark not defined.

ARTICLE III
ISSUANCE OF SERIES 2026 BONDS; APPLICATION OF PROCEEDS
SECTION 3.01. Issuance of the Series 2026 Bonds...................................................................17 SECTION 3.02. Application of Proceeds of Sale of the Series 2026 Bonds................................17 SECTION 3.03. Establishment and Application of Costs of Issuance Fund ................................17 SECTION 3.04. Project Fund .....................................................................................................17 SECTION 3.05. Validity of Series 2026 Bonds ...........................................................................18 SECTION 3.06. Additional Bonds...............................................................................................18

ARTICLE IV

REDEMPTION OF BONDS
SECTION 4.01. Terms of Redemption........................................................................................20 SECTION 4.02. Selection of Bonds for Redemption...................................................................21 SECTION 4.03. Notice of Redemption........................................................................................21 SECTION 4.04. Execution of New Bonds Upon Partial Redemption of Bonds............................22 SECTION 4.05. Effect of Redemption ........................................................................................22

ARTICLE V
REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF

PRINCIPAL AND INTEREST
SECTION 5.01. Security for the Bonds; Bond Fund....................................................................23 SECTION 5.02. Allocation of Revenues .....................................................................................23 SECTION 5.03. Application of Interest Account..........................................................................24 SECTION 5.04. Application of Principal Account........................................................................24 SECTION 5.05. Application of Reserve Account ........................................................................24 SECTION 5.06. Application of Redemption Fund .......................................................................24 SECTION 5.07. Investments ......................................................................................................25 SECTION 5.08. Valuation and Disposition of Investments..........................................................25

-iiARTICLE VI

COVENANTS OF THE AGENCY
SECTION 6.01. Punctual Payment.............................................................................................27 SECTION 6.02. Extension of Payment of Bonds ........................................................................27 SECTION 6.03. Against Encumbrances .....................................................................................27 SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment ................................27 SECTION 6.05. Accounting Records..........................................................................................27 SECTION 6.06. Limitation on Additional Obligations ..................................................................27 SECTION 6.07. Tax Covenants..................................................................................................28 SECTION 6.08. Enforcement of Lease.......................................................................................28 SECTION 6.09. Waiver of Laws .................................................................................................28 SECTION 6.10. Maintenance of Existence.................................................................................29 SECTION 6.11. Further Assurances...........................................................................................29

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES
SECTION 7.01. Events of Default...............................................................................................30 SECTION 7.02. Acceleration; Other Remedies. .........................................................................30 SECTION 7.03. Application of Revenues and Other Funds After Default ...................................31 SECTION 7.04. Trustee to Represent Bond Owners..................................................................31 SECTION 7.05. Limitation on Bond Owners’ Right to Sue..........................................................32 SECTION 7.06. Absolute Obligation of Agency ..........................................................................32 SECTION 7.07. Termination of Proceedings ..............................................................................32 SECTION 7.08. Remedies Not Exclusive ...................................................................................32 SECTION 7.09. No Waiver of Default.........................................................................................33

ARTICLE VIII

THE TRUSTEE
SECTION 8.01. Appointment of Trustee.....................................................................................34 SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee .............................34 SECTION 8.03. Merger or Consolidation....................................................................................35 SECTION 8.04. Liability of Trustee.............................................................................................35 SECTION 8.05. Right to Rely on Documents..............................................................................37 SECTION 8.06. Preservation and Inspection of Documents.......................................................38 SECTION 8.07. Compensation and Indemnification ...................................................................38

ARTICLE IX

MODIFICATION OR AMENDMENT HEREOF
SECTION 9.01. Amendments Permitted.....................................................................................39 SECTION 9.02. Effect of Supplemental Indenture ......................................................................40 SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds ..........................................40 SECTION 9.04. Amendment of Particular Bonds........................................................................40

ARTICLE X

DEFEASANCE
SECTION 10.01. Discharge of Indenture....................................................................................41 SECTION 10.02. Unclaimed Funds ............................................................................................41

ARTICLE XI

MISCELLANEOUS
SECTION 11.01. Liability of Authority Limited to Revenues........................................................42

-iiiSECTION 11.02. Limitation of Rights to Parties and Bond Owners ............................................42 SECTION 11.03. Funds and Accounts .......................................................................................42 SECTION 11.04. Waiver of Notice; Requirement of Mailed Notice .............................................42 SECTION 11.05. Destruction of Bonds.......................................................................................42 SECTION 11.06. Severability of Invalid Provisions.....................................................................42 SECTION 11.07. Notices............................................................................................................43 SECTION 11.08. Evidence of Rights of Bond Owners................................................................43 SECTION 11.09. Disqualified Bonds ..........................................................................................43 SECTION 11.10. Money Held for Particular Bonds.....................................................................44 SECTION 11.11. Waiver of Personal Liability.............................................................................44 SECTION 11.12. Successor Is Deemed Included in All References to Predecessor ..................44 SECTION 11.13. Execution in Several Counterparts..................................................................44 SECTION 11.14. Payment on Non-Business Day ......................................................................44 SECTION 11.15. Governing Law................................................................................................44 APPENDIX A FORM OF 2026 BOND

APPENDIX B PROJECT FUND WRITTEN REQUISITION

APPENDIX C COST OF ISSUANCE REQUISITION FORM
[APPENDIX D RESERVE INSURANCE PROVISIONS]
[APPENDIX E BOND INSURANCE PROVISIONS]

INDENTURE OF TRUST
This INDENTURE OF TRUST (this “Indenture”), dated as of October 1, 2026, is between the HANFORD FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in San Francisco, California, being qualified to accept and administer the trusts hereby created (the “Trustee”).

BACKGROUND:

1. The City of Hanford (the “City”) owns and operates a wastewater and sewage collection, treatment and disposal system (as further defined herein, the “Wastewater System”).

2. The City wishes to finance the cost of certain capital improvements to the Wastewater System, which projects are described in Appendix B to the hereinafter defined Installment Sale Agreement (collectively, the “2026 Wastewater Project”).

3. The Authority has been organized for the purpose of assisting the City in its public purposes, and to that end the Authority is authorized to assist the City in financing and refinancing the costs of the 2026 Wastewater Project by entering into the Installment Sale Agreement dated as of October 1, 2026 (the Installment Sale Agreement”) with the City.

4. For accomplish the foregoing, the Authority has authorized the issuance of its Hanford Financing Authority 2026 Wastewater Revenue Bonds (the “2026 Bonds”), in the aggregate principal amount of $___________ under this Indenture and under the provisions of Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, commencing with Section 6584 of said Code (the “Bond Law”).

5. The debt service on the 2026 Bonds will be payable from Installment Payments made under the Installment Sale Agreement, and the Installment Payments shall be secured by a pledge of the Net Revenues of the Wastewater System, on a parity with the pledge in favor of the holders of Parity Debt (as such terms are defined herein).

6. To provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and to secure the payment of the principal thereof, premium (if any) and interest thereon, the Authority has authorized the execution and delivery of this Indenture.

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

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AGREEMENT:

In order to secure the payment of the principal of and the interest and redemption premium (if any) on all the Outstanding Bonds under this Indenture according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable considerations, the receipt of which is hereby acknowledged, the Authority and the Trustee do hereby covenant and agree with one another, for the benefit of the respective Owners from time to time of the Bonds, as follows:

ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms set forth in this Indenture shall have the meanings assigned to them in this Section 1.01.
“2012 Bonds” means the City of Hanford Wastewater Revenue Refunding Bonds Series 2012.
“2015 Bonds” means the City of Hanford Wastewater Revenue Refunding Bonds Series 2015.
“2026 Bonds” means the Hanford Financing Authority 2026 Wastewater Revenue Bonds, issued in the original principal amount of $_________.
“2026 Term Bonds” means the 2026 Bonds maturing October 1, _____ and October 1, _____.
“2026 Wastewater Project” means the facilities, improvements and other property described more fully in Appendix B of the Installment Sale Agreement, as that Appendix may be amended from time to time in accordance with the Installment Sale Agreement. “Additional Bonds” means all bonds ranking on a parity with the 2026 Bonds originally issued hereunder, issued in accordance with Section 3.06. “Additional Payments” means the amounts payable by the City under Section 4.7 of the Installment Sale Agreement.
“Agreement” shall mean that certain Joint Exercise of Powers Agreement, dated as of September 3, 2026, by and between the City and the California Statewide Communities Development Authority, creating the Authority, together with any amendments thereof and supplements thereto.
“Authority” means the Hanford Financing Authority, a joint exercise of powers authority duly organized and existing under the laws of the State of California and the Agreement.

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“Authorized Investments” means any of the following, but only to the extent that the same are acquired at Fair Market Value, which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein:
(a) Federal Securities;
(b) (i) obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including: Export-Import Bank, Farm Credit System Financial Assistance Corporation, Rural Economic Community Development Administration (formerly Farmers Home Administration), General Services Administration, U.S.

Maritime Administration, Small Business Administration, Government National Mortgage Association, U.S. Department of Housing & Urban Development, Federal Housing Administration and Federal Financing Bank. and (ii) direct obligations for any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: senior debt obligations rated “Aaa” by Moody’s and “AAA” by S&P issued by Fannie Mae or Federal Home Loan Mortgage Corporation (FHLMC); obligations of the Resolution Funding Corporation (REFCORP); senior debt obligations of the Federal Home Loan Bank System; and senior debt obligations of other Government Sponsored Agencies; (c) U.S. dollar denominated deposit accounts federal funds and banker’s acceptances with domestic commercial banks, which may include the Trustee, its parent holding company, if any, and their affiliates, which have a rating on their short term certificates of deposit on the date of purchase of “P-1” by Moody’s and “A-1” or “A-1+” by S&P or are collateralized by Federal Securities and maturing no more than 360 days after the date of purchase, provided that ratings on holding companies are not considered as the rating of the bank; (d) commercial paper which is rated at the time of purchase in the single highest classification, “P-1” by Moody’s and “A-1+” by S&P, and which matures not more than 270 calendar days after the date of purchase;
(e) investments in a money market fund, including those of an affiliate of the Trustee, rated “AAAm” or “AAAm-G” or better by S&P, including funds for which the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee or such holding company provide investment advisory or other management services; (f) pre-refunded municipal obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) which are rated, based upon an irrevocable escrow account or fund, in the highest rating category of Moody’s and S&P or any successors thereto; or (ii)(A) subject to the approval of S&P, which are fully secured as to principal and interest and prepayment premium, if any, by an escrow consisting only of Federal Securities, which escrow may be applied only to the payment of such principal of and interest and prepayment premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified prepayment date or dates pursuant to such irrevocable instructions, as appropriate, and (B) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and prepayment premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates thereof or on the prepayment date or dates specified in the irrevocable instructions referred to above, as appropriate; and

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(g) the Local Agency Investment Fund of the State of California, created pursuant to Section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name.
“Authorized Official” means: (a) with respect to the Authority, its Chief Administrative Officer, Authority Treasurer or any other person designated as an Authorized Official of the Authority by a Written Certificate of the Authority signed by its Executive Director or Treasurer and filed with the City and the Trustee; and (b) with respect to the City, its City Manager, Finance Director, or any other person designated as an Authorized Official of the City by a Written Certificate of the City signed by its City Manager or Finance Director and filed with the Authority and the Trustee.
“Balloon Indebtedness” means, with respect to any Parity Debt 25% or more of the principal or other face amount of which matures or becomes due on the same date or within a 12- month period (with mandatory sinking fund payments deemed to be payments of matured principal), that portion of such Parity Debt which matures or becomes due on such date or within such 12-month period.
“Bond Counsel” means (a) Jones Hall LLP, or (b) any other attorney or firm of attorneys appointed by or acceptable to the Authority of nationally-recognized experience in the issuance of obligations the interest on which is excluded from gross income for federal income tax purposes under the Tax Code.
“Bond Fund” means the fund by that name established and held by the Trustee under Section 5.01.
“Bond Law” means the provisions of Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, commencing with Section 6584 of said Code, as in effect on the Closing Date or as thereafter amended in accordance with its terms. “Bond Registration Books” means the records maintained by the Trustee under Section

2.06 for the registration and transfer of ownership of the Bonds. “Bond Year” means the twelve-month period beginning on October 2 in each year and ending on October 1 in the following year except that (i) the first Bond Year with respect to the 2026 Bonds shall begin on the Closing Date, and (ii) the last Bond Year with respect to the 2026 Bonds may end on a redemption date prior to maturity of the 2026 Bonds or the final maturity date of the 2026 Bonds.
“Bonds” means the Outstanding 2026 Bonds and any Outstanding Additional Bonds. “Business Day” means any day other than a Saturday, Sunday or a day on which the Trustee is authorized by law to remain closed.
“City” means the City of Hanford, a municipal corporation duly organized and existing under the laws of the State of California.
“Closing Date” means, with respect to the 2026 Bonds, the date of delivery of the Bonds to the Original Purchaser of the 2026 Bonds.

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“Continuing Disclosure Certificate” means, with respect to each series of Bonds, that certain Continuing Disclosure Certificate executed by the City and dated the date of original execution and delivery of such Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof.
“Costs of Issuance” means all expenses incurred in connection with the authorization, issuance, sale and delivery of any Bonds, including but not limited to compensation, fees and expenses of the City, Authority and the Trustee and their respective counsel, compensation to any financial consultants and underwriters, legal fees and expenses, municipal bond insurance or surety bond premiums, filing and recording costs, rating agency fees, costs of preparation and reproduction of documents and costs of printing.
“Costs of Issuance Fund” means the fund by that name established and held by the Trustee under Section 3.03.
“Council” means the City Council of the City or any other legislative body of the City hereafter provided for pursuant to law.
“Debt Service” means, for any period, the sum of (i) the interest due on the Outstanding Bonds in such period, assuming that the Outstanding Bonds are retired as scheduled, and (ii) the principal amount of the Outstanding Bonds due in such period. “Defeasance Obligations” means the Federal Securities listed in clause (a) of the definition thereof.
“Depository” means (a) initially, DTC, and (b) any other Securities Depositories acting as Depository under Section 2.05.
“Depository System Participant” means any participant in the Depository’s book-entry system.
“DTC” means The Depository Trust Company, and its successors and assigns. “Event of Default” means any of the events specified in Section 7.01. “Excess Investment Earnings” means an amount required to be rebated to the United States of America under Section 148(f) of the Tax Code due to investment of gross proceeds of the Bonds at a yield in excess of the yield on the Bonds. “Federal Securities” means, with respect to the Bonds: (a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), for which the full faith and credit of the United States of America are pledged; or (b) obligations of any agency, department or instrumentality of the United States of America, the timely payment of principal and interest on which are directly or indirectly secured or guaranteed by the full faith and credit of the United States of America; specifically:

U.S. treasury Obligations,
all direct or fully guaranteed obligations,
Farmers Home Administration,
General Services Administration,

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Guaranteed Title IX financing,
Government National Mortgage Association (GNMA), and
State and Local Government Series.
“Fiscal Year” means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Authority as its official fiscal year period. “Gross Revenues” means all gross income and revenues of any kind, howsoever derived, from the funds, services and facilities of the Wastewater System, including all fees, rates, late payment charges and other charges received or receivable for the wastewater and/or sewage collection, treatment and disposal service furnished by the Wastewater System and all gross revenues of all extensions of the Wastewater System hereafter acquired or constructed, including all capacity charges, connection or impact fees and other amounts charged for the Wastewater System, together with any interest earned thereon, excluding refundable deposits made to establish credit.
“Indenture” means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture under the provisions hereof.
“Independent Certified Public Accountant” means any certified public accountant or firm of such accountants appointed and paid by the City, and who, or each of whom- (a) is in fact independent and not under domination of the City; (b) does not have any substantial identity of interest, direct or indirect, with the City; and
(c) is not and no member of which is connected with the City as an officer or employee of the City, but who may be regularly retained to make annual or other audits of the books of or reports to the City.
“Independent Consultant” means any financial or engineering consultant (including without limitation any Independent Certified Public Accountant) with an established reputation in the field of municipal finance or firm of such consultants appointed and paid by the City, and who, or each of whom-
(a) is in fact independent and not under domination of the City; (b) does not have any substantial identity of interest, direct or indirect, with the City; and
(c) is not and no member of which is connected with the City as an officer or employee of the City, but who may be regularly retained to make annual or other audits of the books of or reports to the City.
“Information Services” means in accordance with then-current guidelines of the Securities and Exchange Commission, the Electronic Municipal Market Access System (referred to as “EMMA”), a facility of the Municipal Securities Rulemaking Board (at http://emma.msrb.org), or such service or services as the Authority may designate in a certificate delivered to the Trustee.

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“Installment Payment Date” means, with respect to any Interest Payment Date, the 3rd Business Day immediately preceding such Interest Payment Date. “Installment Payments” means all payments required to be paid by the City on any date under Section 4.4 of the Installment Sale Agreement, including any amounts payable upon delinquent installments and including any prepayment thereof under Section 7.2 or 7.3 of the Installment Sale Agreement, but does not include Additional Payments. “Installment Sale Agreement” means the Installment Sale Agreement dated as of October 1, 2026, between the City and the Authority, together with any duly authorized and executed amendments thereto.
“Interest Account” means the account by that name established and held by the Trustee in the Bond Fund under Section 5.02.
“Interest Payment Dates” means, with respect to the 2026 Bonds, April 1 and October 1 in each year, commencing April 1, 2027.
“Insurance Policy” means the municipal bond insurance policy guaranteeing the payment of principal and interest on the 2026 Bonds, issued by the Insurer. “Insurer” means ___________, as the issuer of the Insurance Policy and the Reserve Insurance Policy, and its successors and assigns.
“Maintenance and Operation Costs” means the reasonable and necessary costs spent or incurred by the City for maintaining and operating the Wastewater System, calculated in accordance with generally accepted accounting principles, including (among other things) costs and expenses paid or incurred for the collection, treatment and disposal of wastewater and sewage by the Wastewater System and costs and expenses of management and repair of the Wastewater System and costs and expenses necessary to maintain and preserve the Wastewater System in good condition and working order and costs and expenses for administration, overhead, insurance, taxes (if any), and other similar items; provided, however, “Maintenance and Operation Costs” shall not include (i) depreciation and obsolescence charges or reserves therefor, (ii) amortization of intangibles or other bookkeeping entries of a similar nature, including related to pension or OPEB, (iii) charges for Installment Payments or the payment of and interest on the Bonds and any Parity Debt, and (iv) capital improvement expenses. “Moody’s” means Moody’s Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors or assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority or the City. “Net Revenues” means, for any period of computation, the amount of the Gross Revenues during such period, less the amount of Maintenance and Operation Costs during such period. “Nominee” means (a) initially, Cede & Co. as nominee of DTC, and (b) any other nominee of the Depository designated under Section 2.04(a).

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“Original Purchaser” means, with respect to the 2026 Bonds, Oppenheimer & Co., Inc. “Outstanding”, when used as of any particular time with reference to Bonds, means, subject to the last paragraph of Section 10.01 of the Indenture, all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section

10.02, including Bonds (or portions thereof) described in Section 11.09; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee under this Indenture. “Overdue Rate” means the highest rate of interest on any of the Outstanding Bonds. “Owner”, whenever used herein with respect to a Bond, means the person in whose name the ownership of such Bond is registered on the Bond Registration Books. “Parity Debt” means the Installment Payments, [the 2012 Bonds, the 2015 Bonds and] any bonds, notes, leases, installment sale agreements or other obligations of the City payable from and secured by a pledge of and lien upon any of the Net Revenues on a parity with the Installment Payments.
“Parity Debt Instrument” means the resolution, trust indenture, lease, loan or installment sale agreement adopted, entered into or executed and delivered by the City, and under which Parity Debt are issued.
“Principal Account” means the account by that name established and held by the Trustee in the Bond Fund under Section 5.02.
“Principal Corporate Trust Office” means such corporate trust office of the Trustee as may be designated from time to time by written notice from the Trustee to the City. Except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the corporate trust office of U.S. Bank Trust Company, National Association in St. Paul, Minnesota or such other office or agency of the Trustee at which at any particular time, its corporate trust agency or operations shall be conducted. “Project Costs” means, with respect to the 2026 Wastewater Project, all costs of the acquisition, construction and installation thereof which are (or were) paid related thereto, including but not limited to:
(a) all costs required to be paid to any person under the terms of any agreement for or relating to the acquisition, construction and installation of the 2026 Wastewater Project;
(b) obligations incurred for labor and materials in connection with the acquisition, construction and installation of the 2026 Wastewater Project; (c) the cost of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect in connection with the acquisition, construction and installation of the 2026 Wastewater Project;

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(d) all costs of engineering and architectural services, including the actual out-of-pocket costs for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees, sales commissions, and for supervising construction, as well as for the performance of all other duties required by or consequent to the proper acquisition, construction and installation of the 2026 Wastewater Project;
(e) any sums required to reimburse the City for advances made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the acquisition, construction and installation of the 2026 Wastewater Project;
(f) all financing costs incurred in connection with the acquisition, construction and installation of the 2026 Wastewater Project; and (g) the interest components of the Installment Payments allocable to the 2026 Wastewater Project, which come due during the period of acquisition, construction and installation of the 2026 Wastewater Project. “Project Fund” means the fund by that name established and held by the Trustee under Section 3.04.
“Rate Stabilization Fund” means the fund by that name established and held by the City under Section 5.12 of the Installment Sale Agreement.
“Record Date” means, with respect to any Interest Payment Date, the 15th calendar day of the month preceding such Interest Payment Date, whether or not such day is a Business Day. “Redemption Fund” means the fund by that name established and held by the Trustee under Section 5.05.
“Reserve Account” means the account by that name established and held by the Trustee in the Bond Fund under Section 5.02.
“Reserve Insurance Policy” means the reserve fund insurance policy delivered by the Insurer in the amount of the Reserve Requirement for the 2026 Bonds.

Reserve Requirement” means, with respect to the 2026 Bonds, $__________, being the lesser of (i) maximum annual Debt Service on the 2026 Bonds, (ii) 125% of average annual Debt Service on the 2026 Bonds, and (iii) 10% of the original principal amount (within the meaning of Section 148 of the Code) of the 2026 Bonds, as calculated at the time of issuance of the 2026 Bonds and not subject to increase or decrease thereafter. “Revenues” means: (a) all amounts received by the Authority or the Trustee pursuant or with respect to the Installment Sale Agreement, including, without limiting the generality of the foregoing, all of the Installment Payments (including both timely and delinquent payments, any late charges, and whether paid from any source, but excluding any Additional Payments), prepayments, insurance proceeds, condemnation proceeds, and (b) all interest, profits or other income derived from the investment of amounts in any fund or account established pursuant to this Indenture.

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“Securities Depositories” means DTC; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority designates in written notice filed with the Trustee. “S&P” means S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC, and its successors or assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the City. “Supplemental Indenture” means any indenture hereafter duly authorized and entered into between the Authority and the Trustee, supplementing, modifying or amending this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. “Tax Code” means the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under said Code. “Term” means, when used with respect to the Installment Sale Agreement, the time during which the Installment Sale Agreement is in effect, as provided in Section 4.2 thereof. “Trustee” means U.S. Bank Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America, or its successor or successors, as Trustee hereunder as provided in Article VIII. “Wastewater Fund” means the fund by that name previously established and held by the City pursuant to Section 4.5 of the Installment Sale Agreement. “Wastewater System” means the whole and each and every part of the wastewater and sewage collection, treatment and disposal system of the City, including the portion thereof existing on the date hereof and including all additions, betterments, extensions and improvements to such wastewater and sewer system or any part thereof hereafter acquired or constructed; provided, that to the extent the City is not the sole owner of an asset or property or to the extent that an asset or property is used in part for the above-described sewer and wastewater system purposes, only the City’s ownership interest in such asset or property or only the part of the asset or property so used for sewer system purposes shall be considered to be part of the Wastewater System. “Written Certificate,” “Written Request” and “Written Requisition” of the Authority or the City mean, respectively, a written certificate, request or requisition signed in the name of the Authority or the City by its Authorized Official. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.

SECTION 1.02. Authorization. Each of the parties hereby represents and warrants that it has full legal authority and is duly empowered to enter into this Indenture, and has taken all actions necessary to authorize the execution hereof by the officers and persons signing it.

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SECTION 1.03. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include the neuter, masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.
(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof.

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ARTICLE II
THE 2026 BONDS
SECTION 2.01. Authorization of 2026 Bonds. The Authority has reviewed all proceedings heretofore taken and has found, as a result of such review, and hereby finds and determines that all things, conditions and acts required by law to exist, happen or be performed precedent to and in connection with the issuance of the 2026 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Authority is now duly empowered, under each and every requirement of law, to issue the 2026 Bonds in the manner and form provided in this Indenture.

The Authority hereby authorizes the issuance of the 2026 Bonds in the aggregate principal amount of $___________ under the Bond Law for the purposes of providing funds to enable the City to finance the 2026 Wastewater Project. The Bonds are authorized and issued under, and are subject to the terms of, this Indenture and the Bond Law. The Bonds are designated the “Hanford Financing Authority 2026 Wastewater Revenue Bonds.” SECTION 2.02. Terms of the 2026 Bonds.
(a) Payment Provisions. The 2026 Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. The 2026 Bonds shall mature on October 1 in each of the years and in the amounts, and bear interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rates, as follows:

Maturity Principal Interest CUSIP†
(October 1) Amount Rate (_______)

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Interest on the 2026 Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless:
(a) a 2026 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it will bear interest from such Interest Payment Date,
(b) a 2026 Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or (c) interest on any 2026 Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date.

Interest is payable on each Interest Payment Date to the persons in whose names the ownership of the 2026 Bonds is registered on the Bond Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest on any 2026 Bond which is not punctually paid or duly provided for on any Interest Payment Date is payable to the person in whose name the ownership of such 2026 Bond is registered on the Bond Registration Books at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee, notice of which is given to such Owner by first-class mail not less than 10 days prior to such special record date.

The Trustee will pay interest on the 2026 Bonds by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owners of the 2026 Bonds at their respective addresses shown on the Bond Registration Books as of the close of business on the preceding Record Date. At the written request of the Owner of 2026 Bonds in an aggregate principal amount of at least $1,000,000, which written request is on file with the Trustee as of any Record Date, the Trustee will pay interest on such 2026 Bonds on each succeeding Interest Payment Date by wire transfer at the address of such Owner as it appears on the Bond Registration Books. The Trustee will pay principal of the 2026 Bonds in lawful money of the United States of America by check of the Trustee upon presentation and surrender thereof at the Principal Corporate Trust Office of the Trustee.

SECTION 2.03. Form and Execution of 2026 Bonds. The 2026 Bonds, the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon, are set forth in Appendix A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture.

The Chair, the Executive Director or the Treasurer of the Authority shall execute, and the Secretary of the Authority shall attest, each 2026 Bond. Either or both of such signatures may be made manually or may be affixed by facsimile thereof. If any officer whose signature appears on any 2026 Bond ceases to be such officer before the Closing Date, such signature will nevertheless be as effective as if the officer had remained in office until the Closing Date. Any 2026 Bond may be signed and attested on behalf of the Authority by such persons as at the actual date of the execution of such 2026 Bond are the proper officers of the Authority, duly authorized to execute debt instruments on behalf of the Authority, although on the date of such 2026 Bond any such person was not an officer of the Authority.

Only those 2026 Bonds bearing a certificate of authentication in the form set forth in Appendix A, manually executed and dated by the Trustee, are valid or obligatory for any purpose

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or entitled to the benefits of this Indenture, and such certificate of the Trustee is conclusive evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

SECTION 2.04. Transfer and Exchange of 2026 Bonds.
(a) Transfer. Any 2026 Bond may, in accordance with its terms, be transferred, upon the Bond Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such 2026 Bond to the Trustee at its Principal Corporate Trust Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. The Trustee shall collect any tax or other governmental charge on the transfer of any 2026 Bonds under this Section. Whenever any 2026 Bond or 2026 Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver to the transferee a new 2026 Bond or 2026 Bonds of like series, interest rate, maturity and aggregate principal amount. The Authority shall pay the cost of printing 2026 Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer of 2026 Bonds.
(b) Exchange. The 2026 Bonds may be exchanged at the Principal Corporate Trust Office of the Trustee for a like aggregate principal amount of 2026 Bonds of other authorized denominations and of the same series, interest rate and maturity. The Trustee shall collect any tax or other governmental charge on the exchange of any 2026 Bonds under this subsection (b).

The Authority shall pay the cost of printing 2026 Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange of 2026 Bonds. (c) Limitations. The Trustee may refuse to transfer or exchange, under the provisions of this Section, any 2026 Bonds selected by the Trustee for redemption under Article IV, or any 2026 Bonds during the period established by the Trustee for the selection of 2026 Bonds for redemption.

SECTION 2.05. Book-Entry System.
(a) Original Delivery. The 2026 Bonds will be initially delivered in the form of a separate single fully registered bond (which may be typewritten) for each maturity of the 2026 Bonds. Upon initial delivery, the Trustee shall register the ownership of each 2026 Bond on the Bond Registration Books in the name of the Nominee. Except as provided in subsection (c), the ownership of all of the Outstanding 2026 Bonds shall be registered in the name of the Nominee on the Bond Registration Books.

With respect to 2026 Bonds the ownership of which shall be registered in the name of the Nominee, the Authority and the Trustee has no responsibility or obligation to any Depository System Participant or to any person on behalf of which the Nominee holds an interest in the 2026 Bonds. Without limiting the generality of the immediately preceding sentence, the Authority and the Trustee has no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Depository System Participant with respect to any ownership interest in the 2026 Bonds, (ii) the delivery to any Depository System Participant or any other person, other than a 2026 Bond Owner as shown in the Bond Registration Books, of any notice with respect to the 2026 Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the 2026 Bonds to be redeemed if the Authority elects to redeem the 2026 Bonds in part, (iv) the payment to any Depository System Participant or any other person, other than a 2026 Bond Owner as shown in the Bond Registration Books, of any

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amount with respect to principal, premium, if any, or interest on the 2026 Bonds or (v) any consent given or other action taken by the Depository as Owner of the 2026 Bonds. The Authority and the Trustee may treat and consider the person in whose name each 2026 Bond is registered as the absolute owner of such 2026 Bond for the purpose of payment of principal of and premium, if any, and interest on such 2026 Bond, for the purpose of giving notices of redemption and other matters with respect to such 2026 Bond, for the purpose of registering transfers of ownership of such 2026 Bond, and for all other purposes whatsoever. The Trustee shall pay the principal of and the interest and premium, if any, on the 2026 Bonds only to the respective Owners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of principal of and interest and premium, if any, on the 2026 Bonds to the extent of the sum or sums so paid. No person other than a 2026 Bond Owner shall receive a 2026 Bond evidencing the obligation of the Authority to make payments of principal, interest and premium, if any, under this Indenture. Upon delivery by the Depository to the Authority of written notice to the effect that the Depository has determined to substitute a new Nominee in its place, and subject to the provisions herein with respect to Record Dates, such new nominee shall become the Nominee hereunder for all purposes; and upon receipt of such a notice the Authority shall promptly deliver a copy of the same to the Trustee.
(b) Representation Letter. In order to qualify the 2026 Bonds for the Depository’s book-entry system, the Authority shall execute and deliver to such Depository a letter representing such matters as shall be necessary to so qualify the 2026 Bonds. The execution and delivery of such letter shall not in any way limit the provisions of subsection (a) above or in any other way impose upon the Authority or the Trustee any obligation whatsoever with respect to persons having interests in the 2026 Bonds other than the 2026 Bond Owners. Upon the written acceptance by the Trustee, the Trustee shall agree to take all action reasonably necessary for all representations of the Trustee in such letter with respect to the Trustee to at all times be complied with. In addition to the execution and delivery of such letter, the Authority may take any other actions, not inconsistent with this Indenture, to qualify the 2026 Bonds for the Depository’s bookentry program. (c) Transfers Outside Book-Entry System. If either (i) the Depository determines not to continue to act as Depository for the 2026 Bonds, or (ii) the Authority determines to terminate the Depository as such, then the Authority shall thereupon discontinue the book-entry system with such Depository. In such event, the Depository shall cooperate with the Authority and the Trustee in the issuance of replacement 2026 Bonds by providing the Trustee with a list showing the interests of the Depository System Participants in the 2026 Bonds, and by surrendering the 2026 Bonds, registered in the name of the Nominee, to the Trustee on or before the date such replacement 2026 Bonds are to be issued. The Depository, by accepting delivery of the 2026 Bonds, agrees to be bound by the provisions of this subsection (c). If, prior to the termination of the Depository acting as such, the Authority fails to identify another Securities Depository to replace the Depository, then the 2026 Bonds shall no longer be required to be registered in the 2026 Bond Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging 2026 Bonds shall designate, in accordance with the provisions hereof.

If the Authority determines that it is in the best interests of the beneficial owners of the 2026 Bonds that they be able to obtain certificated 2026 Bonds, the Authority may notify the Depository System Participants of the availability of such certificated 2026 Bonds through the Depository. In such event, the Trustee will authenticate, transfer and exchange 2026 Bonds as required by the Depository and others in appropriate amounts; and whenever the Depository

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requests, the Trustee and the Authority shall cooperate with the Depository in taking appropriate action (y) to make available one or more separate certificates evidencing the 2026 Bonds to any Depository System Participant having 2026 Bonds credited to its account with the Depository, or (z) to arrange for another Securities Depository to maintain custody of a single certificate evidencing such 2026 Bonds, all at the Authority’s expense. (d) Payments to the Nominee. Notwithstanding any other provision of this Indenture to the contrary, so long as any 2026 Bond is registered in the name of the Nominee, all payments with respect to principal of and interest and premium, if any, on such 2026 Bond and all notices with respect to such 2026 Bond shall be made and given, respectively, as provided in the letter described in subsection (b) of this Section or as otherwise instructed by the Depository.

SECTION 2.06. Bond Registration Books. The Trustee will keep or cause to be kept, at the Principal Corporate Trust Office of the Trustee, sufficient records for the registration and transfer of ownership of the 2026 Bonds, which shall upon reasonable notice as agreed to by the Trustee, be open to inspection during regular business hours by the Authority; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the 2026 Bonds as hereinbefore provided.

SECTION 2.07. Bonds Mutilated, Lost, Destroyed or Stolen. If any 2026 Bond is mutilated, the Authority, at the expense of the Owner of such 2026 Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new 2026 Bond of like tenor in exchange and substitution for the 2026 Bond so mutilated, but only upon surrender to the Trustee of the 2026 Bond so mutilated. The Trustee shall cancel every mutilated 2026 Bond surrendered to it and deliver such mutilated 2026 Bond to, or upon the order of, the Authority. If any 2026 Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory and if indemnity satisfactory to the Trustee is given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new 2026 Bond of like tenor in lieu of and in substitution for the 2026 Bond so lost, destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new 2026 Bond issued under this Section and of the expenses which may be incurred by the Trustee in connection therewith. Any 2026 Bond issued under the provisions of this Section in lieu of any 2026 Bond alleged to be lost, destroyed or stolen will constitute an original additional contractual obligation on the part of the Authority whether or not the 2026 Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other 2026 Bonds issued under this Indenture.

Notwithstanding any other provision of this Section, in lieu of delivering a new 2026 Bond for which principal has become due for a 2026 Bond which has been mutilated, lost, destroyed or stolen, the Trustee may make payment of such 2026 Bond in accordance with its terms upon receipt of indemnity satisfactory to the Trustee.

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ARTICLE III
ISSUANCE OF 2026 BONDS; APPLICATION OF PROCEEDS
SECTION 3.01. Issuance of 2026 Bonds. At any time after the execution of this Indenture, the Authority may execute and the Trustee shall authenticate and, upon the Written Request of the Authority, deliver the 2026 Bonds to the Original Purchaser.

SECTION 3.02. Application of Proceeds of Sale of 2026 Bonds. Upon the receipt of payment for the 2026 Bonds on the Closing Date, the Trustee shall receive the net proceeds of sale thereof, being $_____________, calculated as the par amount of the Bonds, plus net original issue premium of $_____________, [less any payments to the Insurer related to an Insurance Policy and Reserve Policy, if applicable,] and less an Underwriter’s discount of $_____________, which the Trustee shall apply as follows:
(a) The Trustee shall deposit the amount of $_____________ in the Project Fund.
(b) The Trustee shall deposit the amount of $_____________ in the Costs of Issuance Fund.
[The Trustee shall deposit the Reserve Insurance Policy in the Reserve Account in satisfaction of the Reserve Requirement for the 2026 Bonds.] The Trustee may establish and maintain a temporary account or fund to facilitate and record such deposits.

SECTION 3.03. Establishment and Application of Costs of Issuance Fund. The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Costs of Issuance Fund” into which the Trustee shall deposit a portion of the proceeds of sale of the 2026 Bonds under Section 3.02(b). The Trustee shall disburse amounts in the Costs of Issuance Fund from time to time to pay the Costs of Issuance upon submission of a Written Requisition of the Authority, substantially in the form attached hereto as Appendix C, stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund. The Trustee may conclusively rely on such Written Requisitions and shall be fully protected in relying thereon. Within six months of the Closing Date, or upon the earlier Written Request of the Authority, the Trustee shall transfer all amounts remaining in the Costs of Issuance Fund to the Project Fund, and shall thereupon close the Costs of Issuance Fund.

SECTION 3.04. Project Fund. The Trustee will establish and maintain a separate fund to be known as the “Project Fund” into which the Trustee shall deposit a portion of the proceeds of sale of the 2026 Bonds under Section 3.02(c). Except as otherwise provided herein, moneys in the Project Fund will be used solely for the payment of the Project Costs. The Trustee will disburse moneys in the Project Fund from time to time to pay Project Costs (or to reimburse the City for payment of Project Costs) in accordance with Written Requisitions, substantially in the form attached hereto as Appendix B, filed by the City with the Trustee. Each such Written Requisition must state, with respect to each payment to be made thereby, (i) the name and address of the firm or corporation to whom payment is to be made, (ii) the amount and purpose of the payment and (iii) that each payment constitutes a Project Cost. Each Written Requisition must be accompanied by an invoice or statement evidencing each payment to be made thereunder. The Trustee has no responsibility for payments made in accordance with this Section.

The City shall maintain accurate records showing all disbursements from the Project Fund.

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Upon the receipt by the Trustee of a Written Certificate of the City under Section 3.6 of the Installment Sale Agreement, stating that the 2026 Wastewater Project has been completed, the Trustee shall withdraw from the Project Fund and deposit in the Interest Account all amounts remaining on deposit in the Project Fund, other than amounts estimated by the City (as identified in such Written Certificate) to be required to pay future Project Costs. Upon the filing with the Trustee of a Written Certificate of the City stating that no further amounts are intended to be requisitioned from the Project Fund, the Trustee shall thereupon close the Project Fund and transfer all remaining amounts therein to the Interest Account for payment of interest on the 2026 Bonds.

SECTION 3.05. Validity of 2026 Bonds. The recital contained in the 2026 Bonds that the same are issued under the Constitution and laws of the State of California shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance.

SECTION 3.06. Additional Bonds.
(A) In addition to the 2026 Bonds authorized to be issued under this Indenture, the Authority, may, by Supplemental Indenture, issue one or more series of Additional Bonds secured by Revenues on a parity with the 2026 Bonds, and may issue and deliver such Additional Bonds in such principal amount as shall be determined by the Authority, but only upon compliance by the Authority with the provisions of this Section, including the following specific conditions which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) The parties to this Indenture shall have executed a Supplemental Indenture which sets forth the terms and provisions of such Additional Bonds, including the establishment of such funds and accounts, which may be separate and apart from the funds and accounts established hereunder for the 2026 Bonds, as shall be necessary or appropriate;
(b) The Installment Sale Agreement shall have been supplemented or amended, if necessary, to (i) increase or adjust the Installment Payments due and payable on each Installment Payment Date to an amount sufficient to pay the principal, premium (if any) and interest payable with respect to all Outstanding Bonds, including all Additional Bonds as and when, if any, the same mature or become due and payable (except to the extent such principal, premium and interest may be payable out of moneys then on deposit with the Trustee in accordance with this Indenture), (ii) if appropriate, identify the additions, betterments, extensions, improvements or replacements to the Wastewater System, or such other real or personal property, to be financed, acquired or constructed or otherwise made subject to the Installment Sale Agreement, by the preparation, execution and delivery of such Additional Bonds, and (iii) make such other revisions to the Installment Sale Agreement as are necessitated by the issuance of such Additional Bonds (provided, however, that such other revisions shall not prejudice the rights of the Owners of Outstanding Bonds as granted them under the terms of this Indenture); and
(c) The Trustee shall have received a Written Certificate of the City that the requirements of Section 5.8 of the Installment Sale Agreement have been satisfied.

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(B) Upon delivery to the Trustee of the foregoing instruments, the Trustee shall authenticate Additional Bonds representing the aggregate principal amount specified in such Supplemental Indenture, and such Additional Bonds shall be equally and ratably secured with all Bonds, including any Additional Bonds, theretofore prepared, executed and delivered, all without preference, priority or distinction (other than with respect to maturity, payment, prepayment or sinking fund payment (if any)) of any one Bond, including Additional Bonds, over any other; provided, however, that no provision of this Indenture shall require the City to consent to or otherwise permit the preparation, execution and delivery of Additional Bonds, it being understood and agreed that any such consent or other action of the City to permit the preparation, execution and delivery of Additional Bonds, or lack thereof, shall be in the sole discretion of the City. (C) Whenever the Authority shall have determined to issue Additional Bonds pursuant to this Section 3.06, the Authority shall adopt a Supplemental Indenture determining that the issuance of such Additional Bonds is necessary for the purposes specified herein, specifying the principal amount of such Additional Bonds and prescribing the terms and conditions of such Additional Bonds and the funds to be established for the security and payment thereof. Before such Additional Bonds shall be issued and delivered, the Authority shall file with the Trustee a Written Certificate of the Authority certifying that the requirements set forth in Section 3.06 have been either met or provided for, together with a copy of the amendment to the Installment Sale Agreement required hereby.
(D) Nothing contained in this Section 3.06 shall restrict the ability of the City to issue Parity Debt that do not constitute Additional Bonds under this Section 3.06.

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ARTICLE IV
REDEMPTION OF 2026 BONDS
SECTION 4.01. Terms of Redemption.
(a) Optional Redemption from any Source of Available Funds. The 2026 Bonds maturing on or before October 1, _____, are not subject to optional redemption prior to their respective stated maturity dates. The 2026 Bonds maturing on or after December 1, _____, are subject to redemption in whole, or in part at the Written Request of the Authority among maturities on such basis as the Authority may designate and by lot within a maturity, at the option of the Authority, on any date on or after October 1, _____, from any available source of funds, at a redemption price equal to the principal amount of the 2026 Bonds to be redeemed, plus accrued interest to the date of redemption, without premium.

The Authority must give the Trustee written notice of its intention to redeem 2026 Bonds under this subsection (a), and the manner of selecting such 2026 Bonds for redemption from among the maturities thereof, at least 45 days prior to the redemption date, to allow sufficient time to enable the Trustee to give notice of such redemption in accordance with Section 4.03. (b) Redemption From Proceeds of Insurance, Sale and Condemnation. The 2026 Bonds are subject to mandatory redemption, on any date, in whole, or in part among maturities selected by the Authority, from the net proceeds of insurance, sale or condemnation credited towards the prepayment of the Installment Payments by the City under Section 7.3 of the Installment Sale Agreement at a redemption price equal to the principal amount of the 2026 Bonds to be redeemed, plus accrued interest to the date of redemption, without premium. (c) Mandatory Sinking Fund Redemption. The 2026 Term Bonds shall also be subject to redemption, by lot, on December 1 in each of the years as set forth in the following table, from deposits made for such purpose pursuant to Section 5.02(b), at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, or in lieu thereof may be purchased pursuant to the succeeding paragraph of this subsection (c), in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that if some but not all of the 2026 Term Bonds have been redeemed pursuant to subsections (a) or (b) above, the total amount of all future payments pursuant to this subsection (c) with respect to such 2026 Term Bonds shall be reduced by the aggregate principal amount of such 2026 Term Bonds so redeemed, to be allocated among such payments in integral multiples of $5,000 as determined by the Authority (written notice of which determination shall be given by the Authority to the Trustee).

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2026 Term Bonds Maturing October 1, ______
Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed
(maturity)
2026 Term Bonds Maturing October 1, ______
Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed
(maturity)
In lieu of redemption of the 2026 Term Bonds pursuant to the preceding paragraph, amounts on deposit in the Bond Fund (to the extent not required to be deposited by the Trustee in the Interest Account or the Principal Account pursuant to Section 5.02 during the current Bond Year) may also be used and withdrawn by the Authority, upon the Written Request of the Authority delivered to the Trustee, at any time for the purchase of such 2026 Term Bonds at public or private sale as and when and at such prices (including brokerage and other charges and including accrued interest) as the Authority may in its discretion determine. The par amount of any of such 2026 Term Bonds so purchased by the Authority in any twelve-month period ending on April 1 in any year shall be credited towards and shall reduce the par amount of such 2026 Term Bonds required to be redeemed pursuant to this subsection (c) on the next succeeding October 1.

SECTION 4.02. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds of a single maturity of the same issue, the Trustee shall select the Bonds of that maturity to be redeemed by lot in any manner which the Trustee in its sole discretion deems appropriate. For purposes of such selection, the Trustee shall treat each Bond as consisting of separate $5,000 portions and each such portion shall be subject to redemption as if such portion were a separate Bond.

SECTION 4.03. Notice of Redemption. The Trustee shall mail notice of redemption of the Bonds by first class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Bond Registration Books and to one or more Securities Depositories and to the Information Services. Each notice of redemption shall state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the Bonds (or all Bonds of a single maturity) are to be redeemed, the CUSIP numbers and (in the event that not all Bonds within a maturity are called for redemption) Bond numbers of the Bonds to be redeemed

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and the maturity or maturities of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed.

Each such notice shall also state that on the redemption date there will become due and payable on each of said Bonds the redemption price thereof, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered.

Each notice relating to a redemption pursuant to Section 4.01(a) or Section 4.01(b) shall further state that such redemption may be rescinded by the Authority on or prior to the date set for redemption. Neither the failure to receive any notice nor any defect therein shall affect the sufficiency of the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.

The Authority shall have the right to rescind any redemption pursuant to Section 4.01(a) or Section 4.01(b) by written notice to the Trustee on or prior to the date fixed for redemption.

Any notice of redemption shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default hereunder. The Trustee shall mail notice of rescission of redemption in the same manner notice of redemption was originally provided.

SECTION 4.04. Execution of New Bonds Upon Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered.

SECTION 4.05. Effect of Redemption. Notice of redemption having been duly given as aforesaid, and moneys for payment of the redemption price of, together with interest accrued to the date fixed for redemption on, including any applicable premium, the Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Bonds (or portions thereof) so called for redemption shall become due and payable, interest on the Bonds so called for redemption shall cease to accrue, said Bonds (or portions thereof) shall cease to be entitled to any benefit or security under this Indenture, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof.

All Bonds redeemed under the provisions of this Article shall be canceled by the Trustee upon surrender thereof and destroyed in accordance with the retention policy of the Trustee then in effect.

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ARTICLE V
REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND

INTEREST
SECTION 5.01. Security for the Bonds; Bond Fund.
(a) Pledge of Revenues and Other Amounts. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Revenues and all amounts held in any fund or account established under this Indenture (other than the Project Fund and Cost of Issuance Fund) are hereby pledged to secure the payment of the principal of and interest and premium (if any) on the Bonds in accordance with their terms and the provisions of this Indenture. Said pledge constitutes a lien on and security interest in the Revenues and such amounts and shall attach, be perfected and be valid and binding from and after the Closing Date, without the need for any physical delivery thereof or further act.
(b) Assignment to Trustee. The Authority hereby irrevocably transfers, assigns and sets over to the Trustee, without recourse to the Authority, all of its rights in the Installment Sale Agreement (excepting only the Authority’s rights under Sections 4.7, 5.2 and 6.4 thereof), including but not limited to all of the Authority’s rights to receive and collect all of the Installment Payments, and the Trustee hereby accepts such assignment. The Trustee is entitled to collect and receive all of the Installment Payments, and any Installment Payments collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee.

The Trustee is also entitled to and shall, subject to the provisions of Article VIII, take all steps, actions and proceedings which the Trustee determines to be reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the City under the Installment Sale Agreement. (c) Deposit of Revenues in Bond Fund. All Revenues shall be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the “Bond Fund” which the Trustee shall establish, maintain and hold in trust; except that all moneys received by the Trustee and required hereunder or under the Installment Sale Agreement to be deposited in the Redemption Fund shall be promptly deposited in such fund. All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in this Indenture. Any surplus remaining in the Bond Fund, after payment in full of (i) the principal of and interest on the Bonds or provision therefore under Article X, (ii) repay any draws on the Reserve Insurance Policy, and (ii) any applicable fees and expenses of the Trustee, shall be withdrawn by the Trustee and remitted to the City.

SECTION 5.02. Allocation of Revenues. On or before each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain within the Bond Fund), the following amounts in the following order of priority:
(a) Deposit to Interest Account. The Trustee shall deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such Interest Payment Date on all Bonds then Outstanding.

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(b) Deposit to Principal Account. The Trustee shall deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds coming due and payable on each October 1, including the aggregate principal amount of the Term Bonds (if any) which are subject to mandatory sinking fund redemption on such October 1 pursuant to Section 4.01(c) or any analogous provision in a Supplemental Indenture.
(c) Deposit to, or Replenishment of, Reserve Account. If required due to any draw thereon, the Trustee shall pay amounts owed to the Insurer pursuant to the Reserve Insurance Policy.

SECTION 5.03. Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it comes due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity).

SECTION 5.04. Application of Principal Account. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the Bonds on their respective maturity dates, including the aggregate principal amount of the Term Bonds (if any) which are subject to mandatory sinking fund redemption on such October 1 pursuant to Section 4.01(c) or any analogous provision in a Supplemental Indenture.

Section 5.05. Application of Reserve Account. All amounts in the Reserve Account shall be used and withdrawn by the Trustee solely to pay the principal of, and interest, on the 2026 Bonds (and if a parity reserve fund is established under a Supplemental Indenture, all Bonds covered by such parity reserve fund), including the aggregate principal amount of the Term Bonds (if any), as it comes due and payable. In satisfaction of the Reserve Requirement for the 2026 Bonds, the Trustee shall deposit the Reserve Insurance Policy into the Reserve Account on the Closing Date for the 2026 Bonds. The Authority and the Trustee shall comply with the provisions of the Reserve Insurance Policy set forth in Appendix D.

SECTION 5.06. Application of Redemption Fund. The Trustee shall establish and maintain the Redemption Fund, into which the Trustee shall deposit a portion of the Revenues received representing optional prepayments of the Installment Payments under Section 7.2 of the Installment Sale Agreement or mandatory prepayments of the Installment Payments under Section 7.3 of the Installment Sale Agreement, in accordance with a Written Request of the Authority. Amounts on deposit in the Redemption Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal and premium (if any) of the Bonds to be redeemed under Sections 4.01(a) or (b); provided, however, that at any time prior to the selection of Bonds for redemption, the Trustee may apply such amounts to the purchase of Bonds at public or private sale, when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed under a Written Request of the Authority, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to the Bonds. All Bonds purchased under the provisions of this Section shall be canceled by the Trustee upon surrender thereof and destroyed in accordance with the retention policy of the Trustee then in effect. The Trustee shall be entitled to conclusively rely on any Written Request of the Authority received under this Section, and shall be fully protected in relying thereon.

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SECTION 5.07. Investments. All moneys in any of the funds or accounts established with the Trustee under this Indenture shall be invested by the Trustee solely in Authorized Investments. Such investments shall be directed by the Authority under a Written Request of the Authority filed with the Trustee at least 2 Business Days in advance of the making of such investments. In the absence of any such directions from the Authority, the Trustee shall hold the moneys uninvested. Authorized Investments purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. To the extent Authorized Investments are registrable, such Authorized Investments must be registered in the name of the Trustee.

All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the Bond Fund, provided that interest earnings on amounts on deposit in the Project Fund shall be retained therein unless the Authority otherwise directs in writing. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder. The Trustee or any of its affiliates may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made under this Section.

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. The Trustee is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or is dealing as a principal for its own account.

The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority the right to receive brokerage confirmations of security transactions as they occur, the Authority will not receive such confirmations to the extent permitted by law. The Trustee will furnish the Authority periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder. Upon the Authority’s election (as set forth in writing), such statements will be delivered via the Trustee’s online service and upon electing such service, paper statements will be provided only upon request.

The moneys on deposit in the funds and accounts established under this Indenture shall not be deemed “surplus” under Section 53601 of the Government Code.

SECTION 5.08. Valuation and Disposition of Investments. (a) Except as otherwise provided in subsection (b) of this Section, the Authority covenants that all investments of amounts deposited in any fund or account created by or under this Indenture, or otherwise containing gross proceeds of the Bonds (within the meaning of Section 148 of the Tax Code) shall be acquired, disposed of and valued at the Fair Market Value thereof as such term is defined in subsection (d) below. The Trustee shall have no duty in connection with the determination of Fair Market Value other than to follow the investment directions of the Authority in any Written Request of the Authority. (b) Except as provided in the preceding subsection (a), for the purpose of determining the amount in any fund or account established hereunder, the value of Authorized Investments credited to such fund shall be valued by the Trustee at least annually on or before October 1. The

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Trustee may sell or present for redemption, any Authorized Investment so purchased by the Trustee whenever it shall be necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Authorized Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any such Authorized Investment.
(d) For purposes of this Section, the term “Fair Market Value” means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Tax Code) and, otherwise, the term “Fair Market Value” means the acquisition price in a bona fide arm’s length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Tax Code, or (iii) the investment is a United States Treasury Security -- State and Local Government Series which is acquired in accordance with applicable regulations of the United States Bureau of Public Debt. (e) To the extent of any valuations made by the Trustee hereunder, the Trustee may utilize and rely upon computerized securities pricing services that may be available to it, including those available through its regular accounting system.

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ARTICLE VI

COVENANTS OF THE AUTHORITY
SECTION 6.01. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal of and interest and premium (if any) on all the Bonds in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of the Revenues and other amounts pledged for such payment as provided in this Indenture.

SECTION 6.02. Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which have not been so extended. Nothing in this Section limits the right of the Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance does not constitute an extension of maturity of the Bonds.

SECTION 6.03. Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, and reserves the right to issue other obligations for such purposes.

SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized under law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other amounts purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all times, subject to the provisions of Article VIII and to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the Bond Owners under this Indenture against all claims and demands of all persons whomsoever.

SECTION 6.05. Accounting Records. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate trust industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of Bonds and all funds and accounts established under this Indenture.

The Trustee shall make such books of record and account available for inspection by the Authority and the City during business hours, upon reasonable notice, and under reasonable circumstances.

SECTION 6.06. Limitation on Additional Obligations. The Authority covenants that no additional bonds, notes or other indebtedness, other than Additional Bonds issued pursuant to Section 3.06, shall be issued or incurred which are payable out of the Revenues in whole or in part.

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SECTION 6.07. Tax Covenants.
(a) Private Business Use Limitation. The Authority shall assure that the proceeds of the 2026 Bonds are not used in a manner which would cause the 2026 Bonds to satisfy the private business tests of Section 141(b) of the Tax Code or the private loan financing test of Section 141(c) of the Tax Code.
(b) Federal Guarantee Prohibition. The Authority may not take any action or permit or suffer any action to be taken if the result of the same would be to cause the 2026 Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Tax Code. (c) No Arbitrage. The Authority may not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the 2026 Bonds or of any other obligations which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date, would have caused the 2026 Bonds to be “arbitrage bonds” within the meaning of Section 148(a) of the Tax Code. (d) Maintenance of Tax Exemption. The Authority shall take all actions necessary to assure the exclusion of interest on the 2026 Bonds from the gross income of the Owners of the 2026 Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the Closing Date.
(e) Rebate of Excess Investment Earnings to United States. The Authority shall calculate or cause to be calculated all amounts of excess investment earnings with respect to the 2026 Bonds which are required to be rebated to the United States of America under Section 148(f) of the Tax Code, at the times and in the manner required under the Tax Code. The Authority shall pay when due an amount equal to excess investment earnings to the United States of America in such amounts, at such times and in such manner as may be required under the Tax Code, such payments to be made from any source of legally available funds of the Authority. The Authority shall keep or cause to be kept, and retain or cause to be retained for a period of 6 years following the retirement of the 2026 Bonds, records of the determinations made under this subsection (e).

SECTION 6.08. Enforcement of Installment Sale Agreement. The Trustee shall promptly collect all amounts (to the extent any such amounts are available for collection) due from the City under the Installment Sale Agreement. Subject to the provisions of Article VIII, the Trustee shall enforce, and take all steps, actions and proceedings which the Trustee determines to be reasonably necessary for the enforcement of all of its rights thereunder as assignee of the Authority and for the enforcement of all of the obligations of the City under the Installment Sale Agreement.

SECTION 6.09. Waiver of Laws. The Authority shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law.

SECTION 6.10. Maintenance of Existence. The Authority shall ensure the maintenance of its existence for so long as any of the Bonds are Outstanding. This includes, without limitation, substituting in as a member of the Authority any new member to the extent required following the

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dissolution of the Successor Agency to the Hanford Redevelopment Agency (as successor to the Hanford Redevelopment Agency), if required to maintain the Authority’s existence.

SECTION 6.11. Further Assurances. The Authority will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture.

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ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES
SECTION 7.01. Events of Default. The following events constitute Events of Default hereunder:
(a) Failure to pay any installment of the principal of any Bonds when due, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise.
(b) Failure to pay any installment of interest on the Bonds when due. (c) Failure by the Authority to observe and perform any of the other covenants, agreements or conditions on its part contained in this Indenture or in the Bonds, if such failure has continued for a period of 60 days after written notice thereof, specifying such failure and requiring the same to be remedied, has been given to the Authority by the Trustee provided, however, if in the reasonable opinion of the Authority the failure stated in the notice can be corrected, but not within such 60 day period, such failure shall not constitute an Event of Default if the Authority institutes corrective action within such 60 day period and thereafter diligently and in good faith cures the failure in a reasonable period of time. (d) The commencement by the Authority of a voluntary case under Title 11 of the United States Code or any substitute or successor statute. (e) The occurrence and continuation of an event of default under and as defined in the Installment Sale Agreement.

SECTION 7.02. Acceleration; Other Remedies. If any Event of Default occurs, then, and in each and every such case during the continuance of such Event of Default, the Trustee may, and shall, at the written direction of the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding shall, in each case, upon receipt of indemnification satisfactory to Trustee against the costs, expenses and liabilities to be incurred in connection with such action, upon notice in writing to the Authority, declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding.

The foregoing provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, the Authority shall pay to or shall deposit with the Trustee a sum sufficient to pay all principal of the Bonds maturing prior to such declaration and all matured installments of interest (if any) upon all the Bonds, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee, or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Trustee, on behalf of the Owners of all of the Bonds, shall rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon; provided, however, that no such rescission and

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annulment shall extend to or shall affect any subsequent Event of Default, or shall impair or exhaust any right or power consequent thereon.

In addition to declaring the principal of all of the Bonds, and the interest accrued thereon, to be immediately due and payable as set forth above, the Trustee shall have the right to pursue any other remedy provided by law or in equity or otherwise after an Event of Default has occurred.

SECTION 7.03. Application of Revenues and Other Funds After Default. If an Event of Default occurs and is continuing, all Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee in the following order of priority:
(a) To the payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its legal counsel including outside counsel and the allocated costs of internal attorneys) incurred in and about the performance of its powers and duties under this Indenture; and (b) To the payment of the principal of and interest then due on the Bonds (upon presentation of the Bonds to be paid, and stamping or otherwise noting thereon of the payment if only partially paid, or surrender thereof if fully paid) in accordance with the provisions of this Indenture, as follows:

First: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; and Second: To the payment to the persons entitled thereto of the unpaid principal of any Bonds which shall have become due, whether at maturity or by acceleration or redemption, with interest on the overdue principal at the rate borne by the respective Bonds (to the extent permitted by law), and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference.

SECTION 7.04. Trustee to Represent Bond Owners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, this Indenture and applicable provisions of any law. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of this Indenture.

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SECTION 7.05. Limitation on Bond Owners’ Right to Sue. Notwithstanding any other provision hereof, no Owner of any Bonds has the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Installment Sale Agreement or any other applicable law with respect to such Bonds, unless (a) such Owner has given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of the Bonds then Outstanding have requested the Trustee in writing to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) such Owner or Owners have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee has failed to comply with such request for a period of 60 days after such written request has been received by, and said tender of indemnity has been made to, the Trustee; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60 day period by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Bonds, this Indenture, the Installment Sale Agreement or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture.

SECTION 7.06. Absolute Obligation of Authority. Nothing in Section 7.06 or in any other provision of this Indenture or in the Bonds contained affects or impairs the obligation of the Authority, which is absolute and unconditional, to pay the principal of and interest and premium (if any) on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, or upon acceleration or call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.

SECTION 7.07. Termination of Proceedings. In case any proceedings taken by the Trustee or by any one or more Bond Owners on account of any Event of Default have been discontinued or abandoned for any reason or have been determined adversely to the Trustee or the Bond Owners, then in every such case the Authority, the Trustee, and the Bond Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the Authority, the Trustee and the Bond Owners shall continue as though no such proceedings had been taken.

SECTION 7.08. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.

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SECTION 7.09. No Waiver of Default. No delay or omission of the Trustee or any Owner of the Bonds to exercise any right or power arising upon the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient by the Trustee or the Bond Owners.

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ARTICLE VIII

THE TRUSTEE
SECTION 8.01. Appointment of Trustee. U.S. Bank Trust Company, National Association is hereby appointed Trustee by the Authority for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Authority will maintain a Trustee which is qualified under the provisions of the foregoing provisions of this Article VIII so long as any Bonds are Outstanding.

SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee. The Trustee hereby accepts the express trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions:
(a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture and no implied duties or covenants shall be read into this Indenture against the Trustee.
(b) The Authority may remove the Trustee at any time, unless an Event of Default has occurred and is then continuing, and shall remove the Trustee (a) if at any time requested to do so by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or (b) if at any time the Trustee ceases to be eligible in accordance with Section 8.02, or becomes incapable of acting, or is adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property is appointed, or any public officer takes control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. (c) The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City, and by giving the Bond Owners notice of such resignation by mail at the addresses shown on the Bond Registration Books. (d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee has been appointed and accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the Authority, upon its own direction or the direction of the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture, must signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance thereof, and after payment by the Authority of all unpaid fees and expenses of the predecessor Trustee, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein. At the Written Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall pay over, transfer, assign and deliver to the successor

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Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the Authority shall promptly mail or cause the successor trustee to mail a notice of the succession of such Trustee to the trusts hereunder to each rating agency which is then rating the Bonds and to the Bond Owners at the addresses shown on the Bond Registration Books. If the Authority fails to mail such notice within 15 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Authority. (e) Any Trustee appointed under this Indenture shall be a corporation or association organized and doing business under the laws of any state or the United States of America or the District of Columbia, shall be authorized under such laws to exercise corporate trust powers, shall have (or, in the case of a corporation or association that is a member of a bank holding company system, the related bank holding company has) a combined capital and surplus of at least $50,000,000, and shall be subject to supervision or examination by a federal or state agency, so long as any Bonds are Outstanding. If such corporation or association publishes a report of condition at least annually under law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this subsection (e), the combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If the Trustee at any time ceases to be eligible in accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section.

SECTION 8.03. Merger or Consolidation. Any bank, federal savings association, or trust company into which the Trustee may be merged or converted or with which it may be consolidated or any bank, federal savings association, or trust company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, federal savings association, or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank, federal savings association, or trust company shall be eligible under subsection (e) of Section 8.02 shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

SECTION 8.04. Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture, the Bonds or the Installment Sale Agreement, nor shall the Trustee incur any responsibility in respect thereof, other than as expressly stated herein in connection with the respective duties or obligations of Trustee herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depository for

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and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bond Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding.
(b) The Trustee is not liable for any error of judgment made by a responsible officer, unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts. (c) The Trustee is not liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture or assigned to it hereunder. (d) The Trustee is not liable for any action taken by it and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. (e) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder, or any other event which, with the passage of time, the giving of notice, or both, would constitute an Event of Default hereunder unless and until it shall have actual knowledge thereof, or a corporate trust officer shall have received written notice thereof at its Principal Corporate Trust Office from the City, the Authority or the Owners of at least 25% in aggregate principal amount of the Outstanding Bonds. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance by the Authority or the City of any of the terms, conditions, covenants or agreements herein, under the Installment Sale Agreement or the Bonds or of any of the documents executed in connection with the Bonds, or as to the existence of a default or an Event of Default or an event which would, with the giving of notice, the passage of time, or both, constitute an Event of Default. The Trustee is not responsible for the validity, effectiveness or priority of any collateral given to or held by it. Without limiting the generality of the foregoing, the Trustee shall not be required to ascertain or inquire as to the performance or observance by the City or the Authority of the terms, conditions, covenants or agreements set forth in the Installment Sale Agreement, other than the covenants of the City to make Installment Payments to the Trustee when due and to file with the Trustee when due, such reports and certifications as the City is required to file with the Trustee thereunder. (f) No provision of this Indenture requires the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers.
(g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or through agents, receivers or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, receiver or attorney appointed with due care by it hereunder.
(h) The Trustee has no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of the Bond Owners under this Indenture, unless the such Owners have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities (including but not limited to fees and expenses of its attorneys) which might be incurred by it in compliance with such request or direction. No permissive power, right or remedy conferred upon the Trustee hereunder shall be construed to impose a duty to exercise such power, right or remedy.

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(i) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to the provisions of Section 8.02(a), this Section 8.04 and Section 8.05, and shall be applicable to the assignment of any rights to the Trustee hereunder. (j) The Trustee is not accountable to anyone for the subsequent use or application of any moneys which are released or withdrawn in accordance with the provisions hereof. (k) The Trustee makes no representation or warranty, expressed 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 for the use contemplated by the Authority or the City of the 2026 Wastewater Project. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from the Installment Sale Agreement or this Indenture for the existence, furnishing or use of the 2026 Wastewater Project.
(l) The Trustee has no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds.
(m) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources or energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.
(n) The Trustee agrees to accept and act upon facsimile transmission of written instructions and/or directions pursuant to this Indenture of Trust, provided, however, that: (a) subsequent to such facsimile transmission of written instructions and/or directions the Trustee shall forthwith receive the originally executed instructions and/or directions, (b) such originally executed instructions and/or directions shall be signed by a person as may be designated and authorized to sign for the party signing such instructions and/or directions, and (c) the Trustee shall have received a current incumbency certificate containing the specimen signature of such designated person.

SECTION 8.05. Right to Rely on Documents. The Trustee shall be protected and shall incur no liability in acting or refraining from acting in reliance upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds, requisition, facsimile transmission, electronic mail or other paper or document believed by them to be genuine and to have been signed or presented by the proper party or parties. The Trustee is under no duty to make any investigation or inquiry as to any statements contained or matter referred to in any paper or document but may accept and conclusively rely upon the same as conclusive evidence of the truth and accuracy of any such statement or matter and shall be fully protected in relying thereon. The Trustee may consult with counsel, who may be counsel of or to the Authority, with regard to legal questions,

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and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

The Trustee may treat the Owners of the Bonds appearing in the Bond Registration Books as the absolute owners of the Bonds for all purposes and the Trustee shall not be affected by any notice to the contrary.

Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate, Written Request or Written Requisition of the Authority or the City, and such Written Certificate, Written Request or Written Requisition shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture in reliance upon such Written Certificate, Written Request or Written Requisition, and the Trustee shall be fully protected in relying thereon, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable.

SECTION 8.06. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its respective possession and in accordance with its retention policy then in effect and shall, upon reasonable notice to Trustee, be subject to the inspection of the Authority, the City, and any Bond Owner, and their agents and representatives duly authorized in writing, during business hours and under reasonable conditions as agreed to by the Trustee.

SECTION 8.07. Compensation and Indemnification. The Authority shall pay to the Trustee from time to time, on demand, the compensation for all services rendered under this Indenture and also all reasonable expenses, advances (including any interest on advances), charges, legal (including outside counsel and the allocated costs of internal attorneys) and consulting fees and other disbursements, incurred in and about the performance of its powers and duties under this Indenture.

The Authority shall indemnify the Trustee, its officers, directors, employees and agents against any cost, loss, liability or expense whatsoever (including but not limited to fees and expenses of its attorneys) incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this trust and this Indenture, including costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers hereunder or under the Installment Sale Agreement. As security for the performance of the obligations of the Authority under this Section, the Trustee shall have a lien prior to the lien of the Bonds upon all property and funds held or collected by the Trustee as such. The rights of the Trustee and the obligations of the Authority under this Section shall survive the resignation or removal of the Trustee or the discharge of the Bonds and this Indenture and the Installment Sale Agreement.

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ARTICLE IX

MODIFICATION OR AMENDMENT HEREOF
SECTION 9.01. Amendments Permitted.
(a) Amendments With Bond Owner Consent. This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time by Supplemental Indenture, which the Authority and the Trustee may enter into when the written consents of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding are filed with the Trustee. No such modification or amendment may (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture except as permitted herein, or deprive the Owners of the Bonds of the lien created by this Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstanding. It is not necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it is sufficient if such consent approves the substance thereof.
(b) Amendments Without Owner Consent. This Indenture and the rights and obligations of the Authority, of the Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority and the Trustee may enter into without the consent of any Bond Owners if the Trustee has been furnished an opinion of counsel that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Owners of the Bonds, including, without limitation, for any one or more of the following purposes:
(i) to add to the covenants and agreements of the Authority in this Indenture contained, other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority; (ii) to cure any ambiguity, inconsistency or omission, or to cure or correct any defective provision, contained in this Indenture, or in regard to matters or questions arising under this Indenture, as the Authority deems necessary or desirable, provided that such modification or amendment does not materially adversely affect the interests of the Bond Owners;
(iii) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute;

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(iv) to modify, amend or supplement this Indenture in such manner as to assure that the interest on the Bonds remains excluded from gross income under the Tax Code; or
(v) to provide for the issuance of Additional Bonds pursuant to Section

3.06 hereof.
(c) Limitation. The Trustee is not obligated to enter into any Supplemental Indenture authorized by subsections (a) or (b) of this Section which materially adversely affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise. (d) Notice of Amendments. The Authority shall deliver or cause to be delivered a draft of any Supplemental Indenture to each rating agency which then maintains a rating on the Bonds, at least 10 days prior to the effective date of such Supplemental Indenture under this Section.

SECTION 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture under this Article IX, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the Trustee, and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Indenture under this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand on the Owner of any Bonds Outstanding at the time of such execution and presentation of his Bonds for the purpose at the Principal Corporate Trust Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand on the Owners of any Bonds then Outstanding shall be exchanged at the Principal Corporate Trust Office of the Trustee, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of the same maturity.

SECTION 9.04. Amendment of Particular Bonds. The provisions of this Article IX do not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such Owner.

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ARTICLE X

DEFEASANCE
SECTION 10.01. Discharge of Indenture. If the Authority shall pay and discharge any or all of the Outstanding Bonds in any one or more of the following ways:
(a) by well and truly paying or causing to be paid the principal of and interest and premium (if any) on such Bonds, as and when the same become due and payable; (b) by depositing with the Trustee, irrevocably, at or before maturity, money which, together with the available amounts then on deposit in the funds and accounts established pursuant to this Indenture, is fully sufficient to pay such Bonds, including all principal, interest and redemption premiums; or
(c) by depositing with a qualified escrow holder, in escrow, Defeasance Obligations in such amount as the Authority (verified by an Independent Certified Public Accountant) shall determine will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established pursuant to this Indenture and/or the Installment Sale Agreement, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums, if any) at or before their respective maturity dates;
and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption has been mailed pursuant to Section 4.03 or provision satisfactory to the Trustee has been made for the mailing of such notice, then, at the election of the Authority, and notwithstanding that any of such Bonds have not been surrendered for payment, the pledge of the Revenues and other funds provided for in this Indenture with respect to such Bonds, and all other pecuniary obligations of the Authority under this Indenture with respect to all such Bonds, shall cease and terminate, except only the obligation of the Authority to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon from amounts set aside for such purpose as aforesaid, and all expenses and costs of the Trustee. Any funds thereafter held by the Trustee, which are not required for said purposes, shall be paid over to the Authority or the City.

SECTION 10.02. Unclaimed Funds. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal of, or interest on, any Bonds and remaining unclaimed for 2 years after the principal of all of the Bonds has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in this Indenture), if such moneys were so held at such date, or 2 years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be repaid to the Authority free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee shall (at the cost of the Authority) first mail to the Owners of Bonds which have not yet been paid, at the addresses shown on the Bond Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof.

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ARTICLE XI

MISCELLANEOUS
SECTION 11.01. Liability of Authority Limited to Revenues. Notwithstanding anything in this Indenture or in the Bonds contained, the Authority is not required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Indenture for any of the purposes in this Indenture mentioned, whether for the payment of the principal of or interest on the Bonds or for any other purpose of this Indenture. Nevertheless, the Authority may, but is not required to, advance for any of the purposes hereof any funds of the Authority which may be made available to it for such purposes.

SECTION 11.02. Limitation of Rights to Parties and Bond Owners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any person other than the Authority, the Trustee, the City and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the Trustee, the City and the Owners of the Bonds.

SECTION 11.03. Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with corporate trust industry standards to the extent practicable, and with due regard for the requirements of Section 6.05 and for the protection of the security of the Bonds and the rights of every Owner thereof. The Trustee may establish such funds and accounts as it deems necessary or appropriate to perform its obligations under this Indenture.

SECTION 11.04. Waiver of Notice; Requirement of Mailed Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Whenever in this Indenture any notice is required to be given by mail, such requirement may be satisfied by the deposit of such notice in the United States mail, postage prepaid, by first class mail.

SECTION 11.05. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee, and the delivery to the Authority, of any Bonds, the Trustee may, in lieu of such cancellation and delivery, destroy such Bonds as may be allowed by law, and at the written request of the Authority the Trustee shall deliver a certificate of such destruction to the Authority.

SECTION 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein.

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The Authority hereby declares that it would have entered into this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable.

SECTION 11.07. Notices. All notices or communications to be given under this Indenture shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective either (a) 48 hours after deposit in the United States mail, postage prepaid, or (b) in the case of personal delivery to any person, upon actual receipt. The Authority, the City or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

If to the City
or the Authority:

If to the Trustee:

City of Hanford
315 North Douty St
Hanford, CA 93230
Attention: Finance Director
U.S. Bank Trust Company, National Association
One California Street, Suite 1000
San Francisco, California 94111
Attention: Global Corporate Trust
SECTION 11.08. Evidence of Rights of Bond Owners. Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bond Owners in person or by an agent or agents duly appointed in writing.

Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any person of Bonds transferable by delivery, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and the Authority if made in the manner provided in this Section.

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

The ownership of Bonds shall be proved by the Bond Registration Books.

Any request, consent, or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance thereon.

SECTION 11.09. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any other obligor on the Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with,

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the Authority or the City or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City or any other obligor on the Bonds.

In case of a dispute as to such right, the Trustee shall be entitled to rely upon the advice of counsel in any decision by Trustee and shall be fully protected in relying thereon.

Upon request, the Authority shall specify to the Trustee those Bonds disqualified under this Section.

SECTION 11.10. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, premium, if any, or principal due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04 but without any liability for interest thereon.

SECTION 11.11. Waiver of Personal Liability. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of or interest or premium (if any) on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by this Indenture.

SECTION 11.12. Successor Is Deemed Included in All References to Predecessor.

Whenever in this Indenture either the Authority, the City or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Authority, the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

SECTION 11.13. Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.

SECTION 11.14. Payment on Non-Business Day. In the event any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and with the same effect as if made on such preceding nonBusiness Day.

SECTION 11.15. Governing Law. This Indenture shall be governed by and construed in accordance with the laws of the State of California.

[Signature Page to Indenture of Trust dated as of October 1, 2026] IN WITNESS WHEREOF, the HANFORD FINANCING AUTHORITY has caused this Indenture to be signed in its name by its Treasurer and attested to by its Secretary, and U.S.

BANK TRUST COMPANY, NATIONAL ASSOCIATION, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.

HANFORD FINANCING AUTHORITY
By:

Treasurer
ATTEST:

By:

Secretary
U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Trustee
By:

Authorized Officer

A-1

APPENDIX A

BOND FORM
NO. R- ***$__________***

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

HANFORD FINANCING AUTHORITY
2026 WASTEWATER REVENUE BONDS
INTEREST RATE: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP:
______% October 1, ____ ________, 2026 ________
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: *** ***
The HANFORD FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the “Registered Owner”), on the Maturity Date specified above (subject to any right of prior redemption hereinafter provided for), the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond unless (i) this Bond is authenticated on or before an Interest Payment Date and after the close of business on the 15th day of the month preceding such interest payment date, in which event it shall bear interest from such Interest Payment Date, or (ii) this Bond is authenticated on or before September 15, 2027, in which event it shall bear interest from the Original Issue Date specified above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on this Bond, at the Interest Rate per annum specified above, payable semiannually on June 1 and December 1 in each year, commencing April 1, 2027 (the “Interest Payment Dates”), calculated on the basis of a 360-day year composed of twelve 30-day months.

Principal hereof and premium, if any, upon early redemption hereof are payable upon presentation and surrender hereof at the corporate trust office of U.S. Bank Trust Company, National Association, in St. Paul, Minneapolis, (the “Trust Office”), as trustee (the “Trustee”).

Interest hereon is payable by check of the Trustee mailed to the Registered Owner hereof at the Registered Owner’s address as it appears on the registration books of the Trustee as of the close of business on the fifteenth day of the month preceding each Interest Payment Date (a “Record Date”), or, upon written request filed with the Trustee as of such Record Date by a registered

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owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available funds to an account in the United States designated by such registered owner in such written request.

This Bond is not a debt of the City of Hanford (the “City”), the County of Kings, the State of California, or any of its political subdivisions, and neither the City, said County, said State, nor any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or properties of the Authority other than the Revenues.

This Bond is one of a duly authorized issue of bonds of the Authority designated as the “Hanford Financing Authority 2026 Wastewater Revenue Bonds (the “Bonds”), in an aggregate principal amount of $__________, all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions) and all issued pursuant to the provisions of Articles 4 of Chapter 5, Division 7, Title 1 of the California Government Code, commencing with Section 6584 of said Code, and under an Indenture of Trust dated as of October 1, 2026 (the “Indenture”), between the Authority and the Trustee, and a resolution of the Authority adopted on ____________, 2026, authorizing the issuance of the Bonds. Reference is hereby made to the Indenture (copies of which are on file at the office of the Authority) and all supplements thereto for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees.

The Bonds have been issued by the Authority to finance certain improvement to the City’s Wastewater System. This Bond and the interest and premium, if any, hereon are special obligations of the Authority, payable from the Revenues, and secured by a charge and lien on the Revenues as defined in the Indenture, consisting principally of installment payments made by the City under an Installment Sale Agreement dated as of October 1, 2026, between the Authority and the City (the “Installment Sale Agreement”), which installment payments are secured by the Net Revenues of the Wastewater System of the City. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest and premium (if any) on the Bonds and any Additional Bonds, which may be issued only in accordance with the terms of the Indenture.

The rights and obligations of the Authority and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the owner of each Bond so affected.

The Bonds maturing on or before October 1, _____, are not subject to optional redemption prior to their respective stated maturity dates. The Bonds maturing on or after October 1, _____, are subject to redemption in whole, or in part at the Written Request of the Authority among maturities on such basis as the Authority may designate and by lot within a maturity, at the option of the Authority, on any Interest Payment Date on or after October 1, _____, from any available source of funds, at a redemption price equal the principal amount of the Bonds to be redeemed, plus accrued interest to the date of redemption, without premium.

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The Bonds are subject to mandatory redemption, on any date, in whole or in part among maturities selected by the Authority, from the net proceeds of insurance, sale or condemnation credited towards the prepayment of the Installment Payments by the City under the Installment Sale Agreement, at a redemption price equal to the principal amount to be redeemed, plus accrued interest to the date of redemption, without premium.

The Bonds maturing October 1, _____ and October 1, _____ (the “Term Bonds”) shall also be subject to redemption in whole, or in part by lot, on December 1 in each of the years as set forth in the following table, from deposits made for such purpose pursuant to the Indenture, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, or in lieu thereof shall be purchased pursuant to the Indenture, in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that if some but not all of the Term Bonds have been redeemed pursuant to the optional or mandatory redemption provisions described above, the total amount of all future payments with respect to such Term Bonds shall be reduced by the aggregate principal amount of such Term Bonds so redeemed, to be allocated among such payments on a pro rata basis in integral multiples of $5,000 as determined by the Authority (written notice of which determination shall be given by the Authority to the Trustee).

Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed
(maturity)
Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed
(maturity)
As provided in the Indenture, notice of redemption will be mailed by the Trustee by first class mail not less than 20 nor more than 60 days prior to the redemption date to the respective owners of any Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption or the cessation of accrual of interest thereon from and after the date fixed for redemption.

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

A-4
This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Trust Office, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon registration of such transfer, a new Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. This Bond may be exchanged at the Trust Office for Bonds of the same tenor, aggregate principal amount, interest rate and maturity, of other authorized denominations.

The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary.

Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Authority or the Trustee for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.

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

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

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IN WITNESS WHEREOF, the Hanford Financing Authority has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Treasurer and attested to by the facsimile signature of its Secretary, all as of the Original Issue Date specified above.

HANFORD FINANCING AUTHORITY
By:

Treasurer
ATTEST:

By:

Secretary

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

Dated:

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Signatory

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FORM OF ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto __________________________________ whose address and social security or other tax identifying number is ____________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ________________________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.

Dated:

Signature Guaranteed:

Note: Signature(s) must be guaranteed by an eligible
guarantor institution.

Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of the within Bond in every particular without alteration or
enlargement or any change whatsoever.

B-1

APPENDIX B

FORM OF

PROJECT FUND WRITTEN REQUISITION
WRITTEN REQUISITION NO.: _______
U.S. Bank Trust Company, National Association
One California Street, Suite 1000
San Francisco, California 94111
Attention: Global Corporate Trust
Re: $___________ Hanford Financing Authority
2026 Wastewater Revenue Bonds
Ladies and Gentlemen:

In accordance with the terms of an Indenture, dated as of October 1, 2026 (the “Indenture”), by and between you and the Hanford Financing Authority, you are hereby authorized and requested to make immediate disbursement of funds held by you in the Project Fund for Project Costs (as defined in the Indenture) pursuant to Section 3.04 of the Indenture.

You are hereby requested to pay from the Project Fund established by the Indenture, to the person(s), corporation(s) or other entity(ies) designated on Schedule A attached hereto, in payment of all or a portion of the Project Costs, as described on said Schedule.

The undersigned hereby certifies that (i) no part of the amount requested herein has been included in any other request previously filed with you; (ii) to the knowledge of the undersigned, there has not been filed with or served upon the City any notice of any lien or attachment upon or claim (except for any preliminary notice of lien as may be filed in accordance with law) affecting the right of the person, corporation or other entity stated below to receive payment of the amount stated below, which lien has not been released or will not be released simultaneously with the payment requested hereunder; and (iii) the labor, services and/or materials covered hereby have been performed upon or furnished relating to the Project Costs and the payment requested herein is due and payable under a purchase order, contract or other authorization; Dated: __________, 20__.

CITY OF HANFORD
By:

Authorized Official

B-2

SCHEDULE A

PROJECT FUND DISBURSEMENTS
Payee Name and Address Description of Costs Amount

C-1

APPENDIX C

COST OF ISSUANCE REQUISITION FORM
$________
Hanford Financing Authority
2026 Wastewater Revenue Bonds
REQUISITION NO. __ OF THE AUTHORITY FOR

DISBURSEMENT FROM THE COSTS OF ISSUANCE FUND
The undersigned hereby states and certifies that:
(i) I am the duly appointed, qualified and acting _______ of the Hanford Financing Authority, a joint exercise of powers authority, duly organized and existing under and by virtue of the laws of the State of California (the “Authority”), and as such, I am familiar with the facts herein certified and am authorized to certify the same;
(ii) I am an “Authorized Official” of the Authority, as such term is defined in that certain Indenture of Trust, dated as of October 1, 2026 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); (iii) pursuant to Section 3.03 of the Indenture, the Trustee is hereby requested to disburse this date, from the Costs of Issuance Fund established under the Indenture, upon receipt of an invoice from each of the payees designated on Exhibit A attached hereto and by this reference incorporated herein, the amount set forth in such invoice but no more than the amount set forth opposite each such payee, in payment of Costs of Issuance described on said Exhibit A, and all such payments shall be made by check or wire transfer in accordance with payment instructions contained in Exhibit A or the invoice submitted in accordance therewith and the Trustee shall have no duty or obligation to authenticate such payment instructions or the authorization thereof;
(iv) each obligation identified on the attached Exhibit A has been properly incurred, is a proper charge against the Costs of Issuance Fund and has not been the basis of any previous disbursement; and
(v) attached hereto is an invoice or other evidence supporting the amounts due as identified on Exhibit A.

Capitalized terms used herein and not otherwise defined have the meanings given them in the Indenture.

Dated: _______, 20__ HANFORD FINANCING AUTHORITY
By:
________
______________________

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EXHIBIT A

COSTS OF ISSUANCE DISBURSEMENTS
Payee Name and Address Purpose of Obligation Amount*
Total:

Amount of Original Deposit:

Amount Remaining after Initial
Disbursements:
* Not to exceed amount; payment to be made only upon submission of an invoice.

D-1

APPENDIX D

RESERVE INSURANCE PROVISIONS
[to come if applicable]

E-1

APPENDIX E

BOND INSURANCE PROVISIONS
[to come if applicable]

Stradling Draft of September 9, 2026
4913-9527-4190v2/200721-0055
$___________

HANFORD FINANCING AUTHORITY
2026 WASTEWATER REVENUE BONDS

BOND PURCHASE AGREEMENT
______________, 2026
Hanford Financing Authority
c/o City of Hanford
315 North Douty Street
Hanford, California 93230
Attention: Executive Director
City of Hanford
[315-321] North Douty Street
Hanford, California 93230
Attention: City Manager
Ladies and Gentlemen:

Oppenheimer & Co. Inc. (the “Underwriter”), acting on behalf of itself and not as an agent or fiduciary for you, offers to enter into this Bond Purchase Agreement (this “Purchase Contract”) with the Hanford Financing Authority (the “Authority”) and the City of Hanford (the “City”) with regard to the Bonds described below, which Purchase Contract, upon the acceptance hereof by the Authority and the City, will be binding upon the Authority, the City and the Underwriter. This offer is made subject to the written acceptance of this Purchase Contract by the Authority and the City and the delivery of such acceptance to the Underwriter at or prior to 11:59 p.m., Pacific time, on the date hereof, and, if it is not so accepted, such offer may be withdrawn by the Underwriter upon written notice to the Authority and the City by the Underwriter at any time before its acceptance.

Each of the Authority and the City acknowledges and agrees that (i) the purchase and sale of the Bonds (as defined below) pursuant to this Purchase Contract is an arm’s-length commercial transaction between the Authority, the City and the Underwriter, (ii) in connection therewith and with the discussions, undertakings, and procedures leading up to the consummation of such transaction, the Underwriter is acting solely as a principal and not as an agent or fiduciary of the Authority or the City, (iii) the Underwriter has not assumed an advisory or a fiduciary responsibility in favor of the Authority or the City with respect to the offering contemplated hereby or the discussions, undertakings, and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Authority or the City on other matters) and the Underwriter has no obligation to the Authority or the City with respect to the offering contemplated hereby except the obligations expressly set forth in this Purchase Contract, and (iv) the Authority and the City have consulted their own legal, financial, and other advisors to the extent they have deemed appropriate.

1. Upon the terms and conditions and upon the basis of the representations, warranties, and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the Authority for

4913-9527-4190v2/200721-0055 2
reoffering to the public, and the Authority hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the $______________ aggregate principal amount of the Hanford Financing Authority 2026 Wastewater Revenue Bonds (the “Bonds”). The purchase price of the Bonds shall be $_____________ (representing the par amount of the Bonds, plus [net] original issue premium of $_____________, and less an Underwriter’s discount of $_____________). The Preliminary Official Statement with respect to the Bonds, dated ___________, 2026 (the “Preliminary Official Statement”), as amended to conform to the terms of this Purchase Contract, and dated the date hereof, and with such changes and amendments as are mutually agreed to by the Authority, the City and the Underwriter, including the cover page, the appendices, and all information incorporated therein by reference, is herein collectively referred to as the “Official Statement.” The Authority and the City represent that they have deemed the Preliminary Official Statement to be final as of its date, except for either revision or addition of the offering price(s), yield(s) to maturity, selling compensation, aggregate denominational amount and maturity value, denominational amount and maturity value per maturity, delivery date, rating(s), and other terms of the Bonds that depend upon the foregoing as provided in and pursuant to Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Rule”), by delivering a certificate to the Underwriter substantially in the form of Exhibit B attached hereto. The Authority and the City acknowledge that the Underwriter may deliver the Preliminary Official Statement and a final Official Statement electronically over the internet and in printed paper form. [The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in above less $________________ representing the premiums with respect to the municipal bond insurance policy (the “Policy”) and the debt service reserve policy (the “Reserve Policy”) which shall be wired directly to _________________ (the “Insurer”) by the Underwriter.]

2. The Bonds shall mature on the dates and in the amounts, and will bear interest at the rates, set forth in Exhibit A attached hereto and as further described in the Official Statement. The Bonds shall be issued under and pursuant to the Indenture of Trust, dated as of [October] 1, 2026 (the “Indenture”), between the Authority and U.S. Bank Trust Company, National Association (“U.S.

Bank”), as trustee. Capitalized terms used herein without definition shall have the meanings given to such terms in the Indenture.

The Bonds are being issued to provide funds to (i) finance certain improvements to the Wastewater System of the City, (ii) if economic, refinance certain outstanding parity obligations of the Wastewater System, and (iii) pay the costs of issuing the Bonds

3. Public Offering and Establishment of Issue Price.
(a) The Underwriter agrees to make a bona fide public offering of the Bonds at the initial public offering price or prices set forth on the inside cover page of the Official Statement and in Exhibit A attached hereto and subject to Sections 3(c) and 3(d) hereof, the Underwriter reserves the right to change such initial public offering prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, and to sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices set forth in the Official Statement. A “bona fide public offering” shall include an offering to institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold.

4913-9527-4190v2/200721-0055 3
(b) The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing (defined below) an “issue price” or similar certificate, together with copies of supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit C, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel (as defined herein) to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the Authority under this section to establish the issue price of the Bonds may be taken on behalf of the Authority by the Authority’s municipal advisor, NHA Advisors, LLC. (the “Municipal Advisor”) and any notice or report to be provided to the Authority may be provided to the Municipal Advisor. (c) Except as otherwise set forth in Exhibit A attached hereto, the Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Contract, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Authority the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Authority or Bond Counsel. For purposes of this section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (d) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Contract at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Contract, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following. (1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter will advise the Authority promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

4913-9527-4190v2/200721-0055 4
(e) The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(i) (1) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (2) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter,
(ii) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and
(iii) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-theoffering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (f) The Authority acknowledges that, in making the representations set forth in this section, the Underwriter may solely rely on (1) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (2) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited