Agenda packet — Oxnard City Council, May 3, 2022 (part 4 of 6)

CITY OF OXNARD LIVING WAGE REQUIREMENTS
EFFECTIVE JULY 1, 2021

43. Vendor shall compensate any employee of Vendor who provides services under this Agreement in accordance with the Living Wage Policy, attached hereto and incorporated herein by reference as Exhibit 1. While this Agreement is in effect, Vendor shall pay suc h employee no less than $16.89 per hour for each hour that such employee provides services under this Agreement. This hourly rate shall be adjusted on July 1, 2022, and each July 1 thereafter, according to the percentage change in the Consumer Price Index , all items, prepared by the Bureau of Labor Statistics for the Los Angeles area relating to all urban consumers (CPI -U), index base 1982-84=100, comparing May of the previous year to May of the current year. In addition, while this Agreement is in effect, Vendor shall provide to such employee no less than 96 hours of paid leave per calendar year.

a. Vendor agrees to post, at a location readily accessible to those employees providing services to the City, a copy of the Living Wage Policy adopted by the Oxnard City Council on July 9, 2002 and effective October 1, 2002.

b. If Vendor fails to compensate such employee pursuant to the Living Wage Policy, the City Manager or designee shall terminate this Agreement on written notice to Vendor, effective immediately.

c. In addition, if Vendor fails to comply with the Living Wage Policy in any manner, Vendor shall pay to City a fine of $500 and shall pay to any employee providing services under this Agreement a penalty of three times the amount or value of the compensation owed to such employee under the Living Wage Policy. Vendor shall pay such fine and penalty within 15 days after the City Manager or designee provides written notice to Vendor of the amount owed.

d. The foregoing requirements are restated on page 5 of the Agreement for Trade Services. 269
Agreement No. A-8453

Page 23 of 23 ends

PREVAILING WAGES EXHIBIT

1. Vendor acknowledges that the Project defined in the Agreement between Vendor and City is a “public work” as defined in Division 2, Part 7, Chapter 1 of the California Labor Code (“Chapter 1”), and that this Agreement is subject to Chapter 1 and the rules and regulations established by the Director of Industrial Relations (“DIR”) implementing such statutes. Vendor shall perform the Project as a public work. Vendor shall comply with and be bound by all the terms, rules and regulations described in Chapter 1 and the DIR’s rules and regulations as though set forth in full herein.

2. Pursuant to Labor Code Section 1773.2, copies of the prevailing rate of per diem wages for each craft, classification, or type of worker needed to perform the Agreement are on file at City Hall and will be made available to any interested party on request. Vendor acknowledges receipt of a copy of the DIR determination of such prevailing rate of per diem wages, and Vendor shall post such rates at each job site covered by this Agreement.

3. Vendor is required to post job site notices, as prescribed by regulation. See Labor Code Section 1771.4(a)(2).

4. Vendor shall comply with and be bound by the provisions of Labor Code Sections 1774 and 1775 concerning the payment of prevailing rates of wages to workers and the penalties for failure to pay prevailing wages. Vendor shall, as a penalty to City, forfeit not more than $200 for each calendar day or portion thereof for each worker paid less than the DIR’s determined prevailing rates for the work or craft in which the worker is employed pursuant to this Agreement by Vendor or any subcontractor. The Labor Commissioner shall determine the amount of the penalty as described in Section 1775.

5. Vendor shall comply with Labor Code Section 1776, which requires Vendor and each subcontractor to (1) keep accurate payroll records and verify such records in writing under penalty of perjury, (2) certify and make such payroll records available for inspection, and (3) inform City of the location of the records.

6. Vendor shall comply with Labor Code Sections 1777.5, 1777.6 and 1777.7 and California Administrative Code Title 8, Section 200 et seq. concerning the employment of apprentices on public works projects for all apprenticeable occupations.

Before commencing work under this Agreement, Vendor shall provide City with a copy of the information submitted to any applicable apprenticeship program. Within 60 days after concluding the Project, Vendor and each of its subcontractors shall submit to City a verified statement of the journeyman and apprentice hours performed under this Agreement.

7. Vendor may not be debarred or suspended throughout the Agreement Term pursuant to Labor Code Section 1777.1 or 1777.7. If he, she or it becomes debarred or suspended in the Agreement Term, Vendor must immediately notify City.

8. Vendor is not qualified to bid on, be listed in a Bid proposal, or engage in the performance of any contract for public work, as defined in Labor Code Sections 1720 through 1861, unless currently registered and qualified to perform public work pursuant to Labor Code Section 1725.5. Vendor shall continue without interruption to stay reg istered and qualified to perform public work pursuant to Section 1725.5 for the duration of the term of this Agreement. This provision does not apply to construction, alteration, demolition, installation or repair work of $25,000 or less or to maintenance work of $15,000 or less.

9. Vendor acknowledges that 8 hours labor constitutes a legal day’s work. Vendor shall comply with and be bound by Labor Code Section 1810.

10. Vendor shall comply with and be bound by Labor Code Section 1813 concerning penalties for wor kers who work excess hours. Vendor shall, as a penalty to City, forfeit $25 for each worker employed in the performance of this Agreement by Vendor or by any subcontractor for each calendar day during which such worker is required or permitted to work more than 8 hours in any calendar day and 40 hours in any one calendar week in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the Labor Code. Pursuant to Labor Code Section 1815, work performed by Vendor’s employees in excess of 8 hours per day and 40 hours per week shall be permitted upon public work upon compensation for all hours worked in excess of 8 hours per day at not less than 1 ½ times the basic rate of pay.

11. The Project listed in the Agreement is subject to compliance monitoring and enforcement by the DIR.

12. Vendor shall be responsible for each and every one of its subcontractors’ compliance with Chapter 1, the DIR’s rules and regulations, and Labor Code Sections 1860 and 3700. Vendor shall include in the written contract betw een it and each subcontractor a copy of, and a requirement that each subcontractor shall comply with, those statutory provisions. Vendor shall be required to take all actions necessary to enforce such contractual provisions and ensure subcontractors’ compl iance, including without limitation, conducting a periodic review of the certified payroll records of each subcontractor, and upon becoming aware of the failure of the subcontractor to pay its workers the specified prevailing rate of wages, Vendor shall diligently take corrective action to halt or rectify any failure.

13. To the maximum extent, Vendor shall hold harmless, defend (with counsel approved by the City Attorney) and indemnify City, its legislative bodies, and its officials, officers, employees and agents from any demand or claim for damages, compensation, fines, penalties or other amounts arising out of or incidental to any acts or omissions listed above by any person or entity (including Vendor, its subcontractors, and each of their officials, offi cers, employees and agents) in connection with any work undertaken or in connection with the Agreement, including without limitation the payment of all attorneys’ fees and other related costs. All duties of Vendor under this Section shall survive Agreement termination.

270
Agreement No. A-8454

Page 1 of 23 ends

AGREEMENT FOR TRADE SERVICES

COVER PAGE

(1) Agreement Start Date: July 1, 2022
(2) Vendor: Univar Solutions USA Inc
(3) Services: Supply and Delivery of Sodium Bisulfate 38% and Sulfuric Acid 98% to Oxnard Advanced Water Purification Facility
(4) Schedule of Services: The services must be completed through June 30, 2024, if extended (5) Agreement Ending Date: June 30, 2023 subject to renewal for up to one (1) consecutive one (1) year term upon written agreement between both parties for a maximum total contract of two (2) years (6) Total Agreement Amount: $2,750,000
(7) City’s Project Manager: Mike Love
(8) Vendor’s Project Manager: Brent Swanson
(9) Insurance Coverage: INS-I
(10) What wages are required for this Project?
☐ Living wage but not prevailing wages, in which case: Section 20(a) through (d) and the Living Wage Policy Exhibit are incorporated and are required; but Section 20(e) and the Prevailing Wage Exhibit are not incorporated and are not required.
☐ Prevailing wages but not living wage, in which case: Section 20(e) and the Prevailing Wages Exhibit are incorporated and are required; but Section 20(a) through (d) and the Living Wage Policy Exhibit are not incorporated and are not required.
☐ Both living wage and prevailing wages, in which case Section 20, the Living Wage Policy Exhibit, and the Prevailing Wages Exhibit are incorporated and required. ☐ Neither living wage nor prevailing wages, in which case Section 20, the Living Wage Policy Exhibit, and the Prevailing Wages Exhibit are not incorporated and are not required. (11) Addresses for Notice:

FOR VENDOR: FOR CITY:

Univar Solutions USA Inc City of Oxnard
Attn: Brent Swanson Attn: Mike Love
2600 S. Garfield Avenue 251 S. Hayes Ave
Commerce, CA 90040 Oxnard, CA 93030

(12) Contact Emails:

VENDOR’S PROJECT MANAGER: CITY’S PROJECT MANAGER:

[email protected] [email protected]

The Agreement for Trade Services is attached hereto and incorporated herein by this reference. The followi ng exhibits are also attached hereto and incorporated herein by this reference into the Agreement:
☐ Scope of Services Exhibit ☐ Living Wage Policy Exhibit ☐ Rates and Costs Exhibit ☐ Prevailing Wages Exhibit ☐ Iran Contracting Act Certification ☐ Insurance Exhibit (INS-I)

271
Agreement No. A-8454

Page 2 of 23 ends

AGREEMENT FOR TRADE SERVICES

THIS AGREEMENT FOR TRADE SERVICES (“Agreement”) is entered into in Ventura County, California, on the date that is written as “(1) Agreement Start Date” on the Cover Page, which is attached hereto and incorporated herein by this reference. This Agreement is entered by and between the City of Oxnard (“City”) and the person or entity listed as “(2) Vendor” on the Cover Page, subject to the following terms and conditions:

1. Scope of Services. Vendor shall provide to City the services listed as “(3) Services” on the Cover Page (the “Services”). Vendor shall provide the Services during the term of this Agreement, as set forth below, according to the schedule written as “(4) Schedule of Services” on the Cover Page, and as further explained in the Scope of Services Exhibit, which is attached hereto and incorporated herein by this reference. In the event of any conflict between the terms of this Agreement and any incorporated document(s), the terms of this Agreement shall control.

2. Term. This Agreement shall begin on the date that is written as “(1) Agreement Start Date” on the Cover Page and shall end on the date that is written as “(5) Agreement Ending Date” on the Cover Page. Time is of the essence in this Agreement.

3. Compensation. For the Services performed during the term of this Agreement, City shall pay Vendor an amount not to exceed the amount that is listed as “(6) Total Agreement Amount” on the Cover Page, at the rates listed in the Rates and Costs Exhibit, attached hereto and incorporated herein by this reference. The rates in the Rates and Costs Exhibit shall be in effect through the end of this Agreement unless otherwise stated therein.

4. Invoices. Vendor shall submit a payment request to City by the end of each calendar month listing the Services provided, costs of those Services, and total amount due for the month. Each invoice must also list the current balance on the Agreement, including that invoice, as well as the months remaining on the term of the Agreement. Invoices may be emailed to: [email protected].

5. Most Favored Nation . Throughout the term of the Agreement, in the event Vendor provides the Services having terms more favorable than this Agreement to any person or entity other than City, Vendor shall notify City within 10 calendar days of signing the other contract, or if there is no other contract, of finalizing that deal or providing any services, whichever occurs first in time. In that notice, Vendor shall offer City to amend this Agreement to reflect such more favorable terms into this Agreement without any contingency to amend any other provision of this Agreement.

6. Acceptance of Payment. Vendor’s acceptance of final payment made pursuant to this Agreement shall constitute a release of City from all claims and liabilities for compensation to Vendor for anything completed, finished or relating to the Services. City’s payment shall not constitute nor be deemed a release of the responsibility and liability of Vendor for the accuracy and competency of the information provided and/or the Services performed hereunder, nor shall such payment be deemed to be an assumption of responsibility or liability by City for any defect or error in the Services performed by Vendor and its employees, agents and subcontractors. Vendor shall provide City with a completed Request for Taxpayer I dentification Number and Certification, as issued by the Internal Revenue Service. If any sales tax is due for the Services performed by Vendor or materials or products provided to City by Vendor, Vendor shall pay the sales tax. City shall not reimburse Vendor for sales taxes paid by Vendor.

7. Non-binding Terms . Any terms and conditions that are typed, printed, or otherwise included in any Vendor invoice rendered pursuant to this Agreement shall be deemed to be solely for the convenience of the parties.

No such term or condition shall be binding upon City, and no action by City (including, without limitation, the payment of any such invoice in whole or in part) shall be construed as binding City with respect to any such term or condition, unless the specific term or condition has been previously agreed to by Vendor and City in this Agreement or in a binding amendment thereto.

8. Non-Appropriation of Funds . Payments to be made to Vendor by City for the Services performed within the current fiscal year are within the current fiscal budget and within an available, unexhausted and unencumbered appropriation of City. In the event City does not appropriate suff icient funds for payment of the Services beyond the current fiscal year, this Agreement shall cover payment for the Services only up to the 272
Agreement No. A-8454

Page 3 of 23 ends

conclusion of the last fiscal year in which City appropriated sufficient funds and shall automatically terminate at that fiscal year’s conclusion.

9. Coordination of Services . The Services shall be coordinated with the person in the position listed in “(7) City’s Project Manager” on the Cover Page, subject to the direction of the City Manager or Department Director. Vendor hereby designates the person in the position listed in “(8) Vendor’s Project Manager” on the Cover Page as the person responsible for the Services who shall coordinate with City’s Project Manager in making binding decisions in line with this Agreement on behalf of Vendor.

10. Personnel. Vendor represents that it has or shall secure at its own expense all personnel required to perform the Services. Vendor shall make reasonable efforts to maintain the continuity of Vendor’s staff who are assigned to perform th e Services. Vendor may associate with or employ associates or subcontractors in the performance of the Services, but at all times shall Vendor be responsible for its associates and subcontractors’ labor, advice or materials provided in furtherance of provi ding the Services. Should any of Vendor’s employees, assigns or subcontractors not conduct him - or herself appropriately, as determined by the City’s Project Manager, in the process of providing the Services or any portion thereof, the City’s Project Manag er may notify the Vendor’s Project Manager, who shall immediately handle the problem, as determined appropriate by him or her, such that the problem does not persist.

11. Additional Work . City may request additional specified work under this Agreement. The C ity’s Project Manager must authorize all such work in writing before commencement. Vendor shall perform such work, and City shall pay for such additional work, in accordance with the Rates and Costs Exhibit. Should the work not fall under any such listed rate or cost, Vendor shall submit a quote for all additional work, which the City’s Project Manager must approve in writing by before any such work may commence. The City shall compensate Vendor for any work that does not fall under a rate or cost listed i n the Rates and Costs Exhibit, and for which Vendor did not obtain the City’s Project Manager’s written approval before work commenced, as determined by the City’s Project Manager in his or her sole discretion.

12. Advertising and Publicity . Vendor shall not use the name of or refer to City directly or indirectly in any advertisement, news release, or professional or trade publication without prior written approval from the City Manager. This Section shall survive the termination of this Agreement.

13. Audit. City shall have the option of inspecting, auditing and/or reproducing all records and other written materials: used by Vendor in preparing its billings to City as a condition precedent to any payment to Vendor; or for other purposes relating to the Agree ment. Vendor will promptly furnish all documents requested by City. Additionally, if this Agreement is in excess of $10,000, the State Auditor may examine and audit Vendor for a period of 3 years after final payment under the Agreement. Regardless of wheth er a State audit is permitted, Vendor shall maintain and preserve all such records for a period of at least 3 years after final payment under the Agreement or until an audit has been completed and accepted by City, whichever occurs later. Vendor shall main tain all such records in City or to promptly reimburse City for all reasonable costs incurred in conducting the audit at a location other than in City, including but not limited to expenses for personnel, salaries, private auditor, travel, lodging, meals and overhead. Vendor shall include a copy of this Section in all contracts with its subcontractors, and Vendor shall be responsible for immediately obtaining those records or other written material from its subcontractors upon a request by the State Auditor and/or City.

14. Termination. City may terminate this Agreement at any time, with or without cause and without penalty, upon 15 calendar days’ prior written notice. Such termination shall be effective on the date specified in the notice, or if no date is specified, then 15 calendar days from the date of the notice. Vendor may terminate this Agreement at any time, with or without cause and without penalty, upon 30 calendar days’ prior written notice. Such termination shall be effective on the date specified in the notice, or if no date is specified, then 30 calendar days from the date of notice and only if all assignments accepted by Vendor have been completed before the date of termination. In the event of termination of this Agreement by either party due to no fault or failure of perfo rmance by Vendor, City shall pay Vendor compensation for all Services satisfactorily completed in accordance with all of the terms and provisions of this Agreement, as determined by the City, before the effective date of termination; provided, in no event shall the Vendor receive an amount exceeding that which would have been paid to Vendor for 273
Agreement No. A-8454

Page 4 of 23 ends

the full performance of the Services. If City pays for any materials, City shall be entitled to the title and possession of such.

15. Hold Harmless, Defense and Indemnity.

To the fullest extent permitted by law, Vendor shall immediately defend, indemnify, and hold harmless City, its legislative and advisory bodies, and the City’s officials, directors, officers, employees, and agents (t he “Indemnitees”) from and against all liabilities regardless of nature, type, or cause, arising out of or resulting from or in connection with Vendor’s performance of this Agreement or Vendor’s failure to comply with any of its obligations contained in th is Agreement. Liabilities subject to the duties to defend and indemnify include, without limitation, all claims, losses, damages, penalties, fines, and judgments; associated investigation and administrative expenses; defense costs, including but not limit ed to reasonable attorneys’ fees; court costs; and costs of alternative dispute resolution. Vendor’s obligation to indemnify applies unless it is adjudicated that any of the liabilities covered by this Section 15 are the result of the sole active negligen ce or sole willful misconduct of any of the Indemnitees.

a. The duty to defend is a separate and distinct obligation from Vendor’s duty to indemnify.

Vendor shall be obligated to defend in all legal, equitable, administrative, or special proceedings with counsel approved by the City Attorney immediately upon tender to Vendor of the claim in any form or at any stage of an action or proceeding, whether or not liability is established. An allegation or determination of negligence or willful misconduct by any of the Indemnitees shall not relieve Vendor from its separate and distinct obligation to defend the Indemnitees. The obligation to defend extends through final judgment, including exhaustion of any appeals. The defense obligation includes the obligation to provide independent defense counsel if Vendor asserts that liability is caused in whole or in part by the negligence or willful misconduct of the Indemnitees. If it is finally adjudicated that liability was caused by the sole active negligence or sole willful misconduct of any of the Indemnitees, Vendor may submit a claim to City for reimbursement of reasonable attorneys’ fees and defense costs.

b. The review, acceptance or approval of Vendor’s work or work product by any of the Indemnitees shall not affect, relieve or reduce Vendor’s indemnification or defense obligations. This Section 15 shall survive completion of the Services or termination of t his Agreement. The provisions of this Section 15 shall not be restricted by and do not affect the provisions of this Agreement relating to insurance.

16. Insurance. Vendor shall obtain and maintain during the performance of any services under this Agreement the insurance coverages listed within the insurance document stated in “(9) Insurance Coverage” on the Cover Page and in the Insurance Exhibit, which is attached hereto and incorporated herein by this reference, unless the Risk Manager waives, in writing, the requirement that Vendor obtain and maintain such insurance coverages.

Such insurance must be issued by a company satisfactory to the Risk Manager. Vendor shall, before performance of any Services pursuant to this Agreement, file with the Risk Manager evidence of insurance coverage as specified in “(9) Insurance Coverage” on the Cover Page and in the Insurance Exhibit. Maintenance of insurance coverages by Vendor is a material element of this Agreement. Vendor’s failure to maintain or renew insurance coverages or to provide renewal evidence may be considered a material breach of this Agreement.

17. Documents and Materials.

a. All final computations, exhibits, files, plans, correspondence, reports, drawings, designs, data, photographs, specifications, information, images, video files, media, or other deliverables prepared, created, drawn, calculated, photographed or developed by Vendor pursuant to this Agreement (“Documents and Materials”) shall be the property without restriction or limitation upon its use, duplication or dissemination by the City. All Documents and Materials shall be considered “works made for hire,” and all Do cuments and Materials and any and all intellectual property rights arising from their creation, including, but not limited to, all copyrights and other proprietary rights, shall be and remain the property of the City without restriction or limitation upon their use, duplication or dissemination by the City. Vendor shall not obtain or attempt to obtain copyright protection as to any Documents and Materials. Vendor hereby assigns to the City all ownership and any and all intellectual property rights to the Documents and Materials that are not otherwise vested in the City pursuant to this Section 17.

274
Agreement No. A-8454

Page 5 of 23 ends

b. Vendor shall deliver all Documents and Materials to City’s Project Manager upon completion of the Services or termination of this Agreement without additional c ost or expense to the City. Additionally, anytime at City’s request, City shall be entitled to possession of, and Vendor shall furnish to City’s Project Manager within 10 calendar days, any or all of the Documents and Materials without additional cost or e xpense to the City. In both situations, if Vendor prepares Documents and Materials on a computer, Vendor shall provide City with said Documents and Materials both in a printed format and in an electronic format that is acceptable to the City. Vendor may re tain copies of these Documents and Materials but must request permission from the City before use, duplication or dissemination these Documents and Materials for any purpose other than for the Services provided to the City pursuant to this Agreement.

c. Any substantive modification of the Documents and Materials by City staff or any use of the completed Documents and Materials for other City projects, or any use of uncompleted Documents and Materials, without the written consent of Vendor, shall be at City’s sole risk and without liability or legal exposure to Vendor.

d. Vendor warrants and represents that it has secured all necessary licenses, consents or approvals to use any instrumentality, thing or component as to which any intellectual property right exists, including computer software, used in the rendering of the Se rvices and the production of all Documents and Materials, and that the City has full legal title to and the right to use, duplicate or disseminate the Documents and Materials. Vendor shall defend, indemnify and hold Indemnitees harmless from any loss, clai m or liability in any way related to a claim that City’s use of any of the Documents and Materials is violating federal, state or local laws, any contractual provisions, or any laws relating to trade names, licenses, franchises, copyrights, patents or other means of protecting intellectual property rights and/or interests in products or inventions. Vendor shall bear all costs arising from the use of patented, copyrighted, trade secret or trademarked documents, materials, equipment, devices or processes in connection with its provision of the services and Documents and Materials. In the event the use of any of the Documents and Materials by the City is held to constitute an infringement and the use of any of the same is enjoined, Vendor, at its own expense, shall: secure for City the right to continue using the Documents and Materials by suspension of any injunction, or by procuring a license or licenses for City; or modify the Documents and Materials so that they become non -infringing while remaining in com pliance with the requirements of this Agreement.

e. This Section 17 shall survive the termination of this Agreement.

18. Confidentiality of Information.

a. For the purposes of this Agreement, “Confidential Information” means all information, in whatever form transmitted, relating to the past, present or future business affairs of the City, including without limitation, (i) technical information, including patent, copyright, trade secret, and other proprietary information, techniques, sketches, drawings, models, inventions, processes, apparatus, equipment, algorithms, software programs, software source documents, and formulas; or (ii) non -technical information, including without limitation finances, financial and accounting data and information, suppliers, customers, customer lists, purchasing data and any other information belonging to the City or to a third party whose information is in the City’s possession or control under obligations of confidentiality, and which is disclosed to Vendor or is developed by Vendor in whole or in part at the City’s expense.

b. All Documents and Materials shall be considered Confidential Information and shall not be reproduced, transmitted, disclosed or used by the Vendor without the written consent of the City, except as may be necessary for Vendor to fulfill its obligations to the City.

c. Notwithstanding the above, these limitations shall not apply to information that (i) is already known to Vendor at the time of that information’s disclosure or becomes publicly known through no wrongful act or omission of Vendor, (ii) is communicated to a third party with the express written consent of City and is not subject to restrictions on further use or disclosure, (iii) is independently developed by Vendor and has no relation to this Agreement, or (iv) is required by law, court order, court -issued subpoena or other legal process to be disclosed; provided, however, that before making suc h disclosure, Vendor shall immediately provide City with written notice 275
Agreement No. A-8454

Page 6 of 23 ends

and a reasonable opportunity for City to object to the disclosure or to take action to maintain the confidentiality of the information, unless such prior disclosure is legally impermissible.

d. Vendor shall use reasonable care to protect the Confidential Information. In the event of a breach or threatened breach of this Agreement, City shall be entitled to obtain an injunction prohibiting any such breach, the costs of which shall be paid by Vendor. Any relief granted shall be in addition to and not in lieu of any other legal or equitable relief, including money damages. The parties acknowledge that Confidential Information is valuable and unique and that disclosure of the Confidential Information in breach of this Agreement may result in irreparable injury to the City.

e. Other than an obligation upon the City to deal in good faith, the City makes no warranties and shall bear no liability or responsibility for errors or omissions in a ny Confidential Information disclosed under this Agreement or for any business decisions made by Vendor in reliance on any Confidential Information disclosed under this Agreement.

f. This Section 18 shall survive the termination of this Agreement.

19. Independent Contractor . Vendor is and shall at all times remain, as to City, a wholly independent contractor. Neither City nor any of its employees or agents shall have control over the conduct of Vendor or any of its employees, except as stated in this Ag reement. Vendor has and shall retain the right to exercise full control over the employment, direction, means of performance, location, compensation and discharge of all persons assisting Vendor, and it is free to dispose of all portions of its time which it is not obligated to devote to City in such a manner and to such persons, firms, or corporations as Vendor wishes except as expressly provided in this Agreement. This Agreement shall not be interpreted to prevent or preclude Vendor from rendering any ser vices for Vendor’s own account or to any other person or entity as Vendor in its sole discretion shall determine; provided, however, that performing such services shall not materially interfere with the Services Vendor shall perform for the City. Except as City’s Project Manager specifies in writing, Vendor and its employees and agents have no authority, express or implied, to act on behalf of City in any capacity, to incur any debt, obligation or liability on behalf of City, bind City in any manner, or otherwise act on behalf of City as an agent. Vendor and its employees are not employees of City. Vendor and its employees are not entitled to receive from City any of the benefits or rights afforded employees of City, including but not limited to reserve leav e, sick leave, vacation leave, holiday leave, compensatory leave, Public Employees Retirement System benefits, and health, life, dental, long -term disability and workers’ compensation insurance benefits. Vendor shall not, at any time or in any manner, repr esent that it or any of its agents or employees are in any manner agents or employees of City. Vendor agrees to pay all required taxes on amounts paid to Vendor under this Agreement, and to indemnify and hold City harmless from any and all taxes, assessments, penalties, and interest asserted against City by reason of the independent contractor relationship created by this Agreement. Vendor shall be solely responsible for, and shall save City harmless from, all matters relating to the payment of Vendor’s sub contractors, material suppliers, directors, officers, employees, agents and representatives, including compliance with social security requirements, federal and State income tax withholding, and all other regulations governing employer -employee relations, as applicable. City shall have the right to offset against the amount of any compensation due to Vendor under this Agreement any amount due to City from Vendor as a result of its failure to promptly pay to City any reimbursement or indemnification arising under this Section.

20. Wages. If the first option is selected in response to (10) on the Cover Page and, thus, the payment of living wage is required, only this paragraph and subsections (a) through (d) of this Section 20 shall apply. If the second option is selected in response to (10) on the Cover Page and, thus, the payment of prevailing wages (and related Labor Code provisions) is required, only this paragraph and subsection (e) of this Section 20 shall apply. If the third option is selected in response to (10) on the Cover Page and, thus, both the payment of living wage and prevailing wages (and related Labor Code provisions) is required, this paragraph and subsections (a) through (e) shall apply, meaning Vendor shall compensate all of its employees providing services to City in accordance with both the City’s Living Wage Policy and State -required prevailing wages. In the event of a conflict between the City’s Living Wage Policy and State -required prevailing wages, the higher of the two shall prevail. If t he fourth option is selected in response to (10) on the Cover Page and, thus, neither the payment of living wage nor prevailing wages (and related Labor Code provisions) is required, no part of this Section 20 shall apply.

276
Agreement No. A-8454

Page 7 of 23 ends

If either the first or third option is selected in response to (10) on the Cover Page, Vendor shall compensate any employee of Vendor who provides Services to the City under this Agreement in accordance with the Living Wage Policy Exhibit, which is attache d hereto and incorporated herein by this reference. While this Agreement is in effect, Vendor shall pay such employee no less than $16.89 per hour for each hour that such employee provides services under this Agreement. This hourly rate shall be adjusted on July 1, 2022, and each July 1 thereafter, according to the percentage change in the Consumer Price Index, all items, prepared by the Bureau of Labor Statistics for the Los Angeles area relating to all urban consumers (CPI -U), index base 1982- 84=100, comparing May of the previous year to May of the current year. In addition, while this Agreement is in effect, Vendor shall provide to such employee no less than 96 hours of paid leave per calendar year.

a. Vendor agrees to post, at a location readily accessi ble to those employees providing services to the City, a copy of the Living Wage Policy adopted by the Oxnard City Council on July 9, 2002, and effective October 1, 2002.

b. If Vendor fails to compensate such employee pursuant to the Living Wage Policy, the City Manager or designee shall terminate this Agreement on written notice to Vendor, effective immediately.

d. If either the second or third option is selected in respon se to (10) on the Cover Page, in accordance with Labor Code Section 1770 et seq., the Project is a “public work.” The Vendor shall pay wages in accordance with the determination of the Director of the Department of Industrial Relations (“DIR”) regarding the prevailing rate of per diem wages. Copies of those rates are on file with th e Public Works Director and are available to any interested party upon request. The Vendor shall post a copy of the DIR’s determination of the prevailing rate of per diem wages at the job site. The Vendor shall comply with all provisions of the Prevailing Wage Exhibit, which is attached hereto and incorporated herein by this reference.

21. Nondiscriminatory Employment . Vendor shall not unlawfully discriminate against any individual based on race, color, religion or religious creed, national origin, ancestry, ethnic group identification, primary language, physical disability, mental disability, medical condition, genetic information, marital status, gender, gender identity, gender expression, sex, sexual orientation, age, immigration status, citizenship or military and veteran status. Vendor understands and agrees that it is bound by and will comply with all legal nondis crimination mandates. For every subcontractor who will perform Services, Vendor shall be responsible for such subcontractor’s compliance with this Section.

22. Vendor’s Representations . Vendor represents, covenants and guarantees that: a) Vendor is licensed, qualified, and capable of furnishing the labor, materials, and expertise necessary to perform the Services in accordance with the terms and conditions set forth in this Agreement; b) there are no obligations, commitments, or impediments of any kind that wi ll limit or prevent Vendor’s full performance under this Agreement; c) to the extent required by the standard of practice, Vendor has investigated and considered the scope of Services performed, has carefully considered how the Services should be performed , and understands the facilities, difficulties and restrictions attending performance of the Services under this Agreement.

23. Compliance with Laws . In performing the Services under this Agreement, Vendor shall comply with all applicable laws, ordinances and regulations. Before performing the Services under this Agreement, Vendor shall obtain all required licenses and permits, including a City business tax certificate.

24. Conflict of Interest. If, in performing the Services set forth in this Agreement, Vendor makes, or participates in, a “governmental decision” as described in Title 2, Section 18701(a)(2) of the California Code of Regulations, or performs the same or substantially all the same duties for City that would otherwise be performed by a City employe e holding a position specified in City's conflict of interest code, Vendor shall be subject to City's 277
Agreement No. A-8454

Page 8 of 23 ends

conflict of interest code, the requirements of which include the filing of one or more statements of economic interests disclosing the relevant financial interests of Vendor’s personnel providing the Services set forth in this Agreement. Furthermore, Vendor shall not to accept any employment or representation during the term of this Agreement or within 12 months after completion of the Services which is or may likely make Vendor “financially interested,” as provided in California Government Code Sections 1090 and 87100, in any decisions made by City on any matter in connection with which Vendor has been retained pursuant to this Agreement.

25. Fictitious Name. If Vendor has a fictitious name, Vendor shall submit to City a new Fictitious Business Name Statement approved by any California county before Vendor’s prior Fictitious Business Name Statement expires if such expiration may occur during the term of this Agreement, including any term amendment.

26. Non-Assignability. Vendor shall not assign or transfer any interest in this Agreement or any part thereof, whether by assignment or novation, without City’s prior written consent, which may be withheld for any reason or for no reason at all. Any purported assignment without written consent shall be null, void, and of no effect, and Vendor shall hold harmless, defend and indemnify Indemnitees regarding all Claims arising from or relating to any unauthorized assignment.

27. Protection of Services . Vendor shall continuously maintain adequate protection of all of Vendor’s work from damage and shall protect the City’s property from any and all injury or loss arising in connection with this Agreement. Vendor shall take all necessary precaution for the safety of employees on the job and shall comply with all applicable provisions of federal, State and municipal safety laws and building codes to prevent accidents or injury to persons on, about or adjacent to any premises where the Services are being performed.

28. Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of Vendor.

29. Applicable Law; Venue . The validity, interpretation, and performance of this Agreement shall be controlled by and construed under the laws of the State of California, excluding California’s choice of law rules.

Venue for any such action relating to the Agreement shall be in the Ventura County Superior Court.

30. Titles. The titles used in this Agreement are for convenience only and shall in no way define, limit or describe the scope or intent of this Agreement or any part of it.

31. Force Majeure. Neither City nor Vendor shall be res ponsible for delays or failures in performance resulting from acts beyond the control of either party. Such acts shall include but are not be limited to acts of God, riots, acts of war, epidemics, fire, earthquakes, or other disasters.

32. Authority. Any person executing this Agreement on behalf of Vendor warrants and represents that s/he has the authority to execute this Agreement on behalf of Vendor and to bind it to the performance of these obligations.

33. Binding Agreement. The parties do not intend this Agreement to be binding upon them and shall not be held liable to its terms until it is fully executed by all required signers.

34. Cumulative Remedies. All rights and remedies of City herein shall be in addition to all other rights and remedies available at law or in equity, including, without limitation, specific performance for the enforcement of this Agreement, and temporary and permanent injunctive relief.

35. Integration; Amendment . This Agreement, including any other documents incorporated herein by specific reference, constitutes the entire and integrated agreement of City and Vendor regarding the subject matter described herein. This Agreement supersedes all prior oral or written communications, negotiations, representations, agreements and promises. This Agreement may not be modified or amended, nor any provision or breach waived, except in a writing, signed by both parties, that expressly refers to this Agreement.

278
Agreement No. A-8454

Page 9 of 23 ends

36. Construction. In the event of any asserted ambiguity in or dispute regarding the interpretation of any matter herein, the interpretation of this Agreement shall not be resolved by any rules of construction providing for interpretation against the party who causes the uncertainty to exist or who drafted the Agreement in whole or in part.

37. No Waiver . Waiver by either party of any one or more of the conditions of performance under this Agreement shall not be a waiver of any other condition of performance under this Agreement. In no event shall the making by City of any payment to Vendor constitute or be construed as a waiver by City of any breach of covenant, or any default that may then exist on the part of Vendor, and the making of any such payment by City shall in no way impair or prejudice any right or remedy available to City with regard to such breach or default.

38. Attorneys’ Fees . The prevailing party shall be entitled to recover reasonable costs, attorneys’ fees (including the reasonable value of the services rendered by the City Attorney’s Office) and expenses, including investigation fees and expert witness fees, in addition to any other relieve to which that party may be entitled, in any legal action or other proceeding, including an action for declaratory relief, f or the enforcement of this Agreement or because of an alleged dispute, breach, default or misrepresentation in connection with this Agreement.

39. Notice. Except as otherwise required by law, a notice or communication authorized or required by this Agreement shall be in writing and shall be deemed received —on (a) the day of delivery if delivered by hand or overnight courier service during City’s regular bu siness hours or (b) on the third business day following deposit in the United States mail, postage prepaid—to the addresses listed as “(11) Addresses for Notice” on the Cover Page or to such other address as one party may notify the other in writing.

40. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which, when taken together, shall be deemed to be one and the same agreement.

A signed copy of this Agreement transmitted by em ail to either of City or Vendor’s Project Managers’ emails listed in “(12) Contact Emails” on the Cover Page or by other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Agreement for all purposes.

41. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect.

42. Iran Contracting Act Certification: In accordance with Public Contract Code Section 2200 et seq., the City requires that any person that submits a bid or proposal or otherwise proposes to enter into or renew a contract with the City with respect to goods or services of one million dolla rs ($1,000,000) or more, must certify at the time an Agreement is signed or renewed, that the person is not identified on a list created pursuant to subdivision (b) of Public Contract Code Section 2203 as a person engaging in investment activities in Iran described in subdivision (a) of Public Contract Code Section 2202.5, or as a person described in subdivision (b) of Public Contract Code Section 2202.5, as applicable. The form of such Iran Contracting Certificate is included with this Agreement and must be signed and dated under penalty of perjury.

[Signatures on next page]
279
Agreement No. A-8454

Page 10 of 23 ends

I
N WITNESS WHEREOF, the parties hereto have executed the Agreement on the date that is written as “(1) Agr
eement Start Date” on the Cover Page.

CITY OF OXNARD UNIVAR SOLUTIONS USA INC
Date J oe Serna, Vice President2 Date
☐ , Purchasing Manager
☐ John C. Zaragoza, Mayor1
☐ Alexan der Nguyen, City Manager
☐ , Buyer
Noelle Perkins, Sr. Vice President Date
ATTEST:

Rose Chaparro, City Clerk Date
(only if Mayor signs)
APP
ROVED AS TO FORM:

Stephen M. Fischer, City Date
Attorney (always required)
1 The City Council must authorize and the Mayor must sign any agreement over $200,000 annually. The City Manager may authorize and sign any agreement over $100,000 but up to $200,000 annually. The Purchasing Manager may authorize and sign any agreement up to $100,000 annually. A Buyer may authorize and sign any agreement up to $25,000 annually.
2 The City requires the following for any contract:
● For a corporation, the signatures of the Board President, CEO or Vice President and of the Board Secretary, Assistant Secretary, CFO or Assistant Treasurer;
● For an LLC, the signatures of at least two managers of the LLC (company directors, not lower -level managers); or
● For a partnership, the signature of a partner. If the partnership is a limited partnership, the signer must be a general partner.

If the company has a different structure, or if the above-listed persons are not the appropriate signers, please submit to the City Attorney legally-binding documentation stating who can sign and bind your company. 280
Agreement No. A-8454

Page 11 of 23 ends

SCOPE OF SERVICES EXHIBIT

The specifications provide for chemical supply and delivery of Sodium Bisulfate 38% and Sulfuric Acid 98%to Oxnard Advanced Water Purification Facility

SUPPLIER SPECIFICATIONS & GENERAL REQUIREMENTS

1. Delivery
a. Timing: Product shall be delivered within 48 hours of agency request. All deliveries shall be made Monday through Friday between 8:00 a.m. and 4:00 p.m. b. Delivery vehicles: Shall be in good condition and operated by Supplier. Truck tractors and tank trailers shall be pneumatic-tired; conform to all applicable State and Federal regulations; and be fully equipped and maintained to safely transport and deliver specified chemical product. Tank trailers shall be specially designed to prevent leakage and resist rupture in the event of a collision, and carry all equipment necessary to respond to an accidental chemical release. c. Delivery Driver: Shall be trained and experienced in handling specified chemical product, and be specifically trained to stop chemical flow in the event of an emergency. Supplier shall provide evidence of such training and experience upon request.
d. Posted Speed Limits: Shall be observed at all times while driving on agency property.

Supplier shall be completely liable for any damage to property or personnel. e. Delivery Equipment: Shall include an appropriate compression unit and piping to permit safe transfer of the specified chemical product to stationary bulk containers. Hoses, fittings and appurtenant equipment shall be provided by Supplier and be free of leaks. f. Unloading: Unloading shall be done in accordance with the following:
i. Shall be done in a safe manner by Supplier in the presence of a plant operator. ii. Appropriate personal protective equipment (PPE) clothing shall be worn, and industry safety practices and procedures followed explicitly at all times. iii. Driver may be required to capture a sample of the product from the delivery tank in order for a plant operator to do a visual inspection.
iv. Supplier to be able to provide proof of tank and hose inspections prior to delivery demonstrate that all components are in proper working order. g. Refusal of delivery: City will refuse delivery of product at no penalty to the City if:
i. Product does match the specific gravity.
ii. If there is debris in the sample from the delivery truck. iii. Vendor is non compliant with industry standard safety practices and procedures. iv. Failure of Supplier to wear proper PPE while making chemical transfers. Supplier is to provide their staff with all required PPE.
h. Pay Quantity of Bulk Product Delivered: Shall be determined by weighing the tank trailer before and after filling at Supplier’s plant on a certified truck scale. Copies of weigh master’s certificates shall be provided with delivery.
i. Other: Agency may require Supplier to furnish an affidavit stating product complies fully with this specification, a certified analysis of the product delivered, and/or the preventative maintenance schedule of delivery truck’s unloading compressor. j. Deliver to the following locations as required:

• City of Oxnard Advanced Water Purification Facility, 5700 Perkins Road, Oxnard CA,

2. Quantity
Exact quantities may vary from the estimates given, and may be increased or decreased to meet agency’s requirements. No minimum is guaranteed.

3. Invoicing
A separate invoice shall be provided for each delivery during contract period.

4. Specification
281
Agreement No. A-8454

Page 12 of 23 ends

Supplier shall bring apparent error or omissions to City’s attention

5. Chemical Specification for the following locations:

Advanced Water Purification Facility, located at 5700 Perkins Road, Oxnard, CA 93033. a. Sodium Bisulfite 38%: Estimated annual quantity is 25,000 gallons. Solution shall meet a molecular weight of 104.06, density of g/ml (60° F) - 1.17-1.20, pH of 4.5-5.5, and technical grade solution that shall be suitable for water treatment. Delivery by bulk tank.

282
Agreement No. A-8454

Page 13 of 23 ends

RATES AND COSTS EXHIBIT

Advanced Water Purfication Facility (AWPF)
Chemical
Approximate
Annual
Quantity
(gallons)
Average #
of
Deliveries
Average
Delivery
Load
(gallons)
Unit Price
Per gallon
Price
Adjustment
Frequency
period
Max Price
adjustment
per period
Sodium
Bisulfate
38%

25,000

8 x per year 3,125 $1.795 Annual
PPI: Chlorine,
Sodium
Hydroxide,
and other
Alkalies
Sulfuric
Acid
98%
124,000 40 x per
year 3,100 $7.95 Annual
PPI: Chlorine,
Sodium
Hydroxide,
and other
Alkalies
All costs include but not limited to, freight, delivery, quality assurance costs, etc, in unit price.

Unit pricing excluded Oxnard Sales Tax (9.25%).

Annual Price adjustment based on Producer Price Index by Commodity: Chemicals and Allied Products: Chlorine, Sodium Hydroxide, and other Alkalies
Updated pricing for year two extension is required by February 1, 2023 for City review and consideration

283
Agreement No. A-8454

Page 14 of 23 ends

IRAN CONTRACTING ACT CERTIFICATION
(TO BE EXECUTED AN D SUBMITTED W ITH THE AGREEMENT)
Pursuant to Public Contract Code 2204.(a) A public entity shall require a person that is submits a bid or proposal to,or othe rwise proposes to enter into or renew a contract with, a public entity with respect to a contract for goods or services of one mill ion dollars ($1,000,000) or more to certify, at the time an Agreement is signed or renewed, that the person is not identified on a list c reated pursuant to subdivision (b) of Section 2203 as a person engaging in investment activities in Iran described in s ubdivision (a) of Section 2202.5 or as a person described in subdivision 9b) of Section 2202.5, as applicable.

To comply with this requirement, please insert your company/entity and Federal ID number (if available) and complete one of the options below. Please note, California law established penalties for providing false certifications, including civil penaltie s equal to the greater of $250,000 or twice the amount of the contract for which the false certification was made, contract termination and three -year ineligibility to bid on contract in accordance with Public Contract Code section 2205.

OPTION No.1 – CERTIFICATION
I, the official named below, certify I am duly authorized to execute this certification on behalf of the company/e ntity identified below, and the company/entity identified below is not on the current list of persons engaged in investment activities in Iran create d by DGS and is not a financial institution extending twenty million dollars ($20,000,000) or more in credi t to another person or entity, for 45 days or more, if that other person or company/entity will use the credit to provide goods or services in the energy sector in Iran an d is identified on the current list of persons engaged in investment activities in Iran created by DGS in accordance with subdivision (b) of Public Contract Code 2203.

Company Name/Financial Institution (printed): Federal ID Number (or n/a):

By (Authorized Signature):

Pr
inted Name & Title of Person Signing: Date Executed
in the State of Executed in the County of
OPTION No.2 – EXEMPTION
P
ursuant to Public Contract Code sections 2203(c) and (d), a public entity may permit a vendor/financial institution engaged in investment activities in Iran, on a case -by-case basis, to be eligible for, or to bid on, submit a proposal for, or enters into or renews, a contract for goods and services. If you have obtained an exemption from the certification requirement under the Iran Contract ing Act, please fill out the information below and attach documentation demonstrating the exemption approval.

Company Name/Financial Institution (printed): Federal ID Number (or n/a):

By (Authorized Signature):

Pr
inted Name & Title of Person Signing: Date Executed
Executed in the County of in the State of

284
Agreement No. A-8454

Page 15 of 23 ends

INSURANCE EXHIBIT

Exhibit INS-I

INSURANCE REQUIREMENTS FOR VENDORS
(WHO DELIVER, INSTALL OR MAINTAIN PRODUCTS)

1. Vendor shall obtain and maintain during the performance of any services under this Agreement the following insurance against claims for injuries to persons or damages to property which may arise from or in connection with the sale and delivery, installation or maintenance of products by vendor, its agents, representatives, or employees.

a. Commercial General Liability Insurance, including Contractual Liability, in an amount not less than $1,000,000 combined singl e limit for bodily injury and property damage f or each claimant for general liability with coverage equivalent to Insurance Services Office Commercial General Liability Coverage (Occurrence Form CG 0001). If a general aggregate limit is used, that limit shall apply separately to the project or shall be twice the occurrence amount;

b. Business Automobile Liability Insurance in an amount not less than $1,000,000 combined single limit for bodily injury and property damage for each claimant for automobile liability with coverage equivalent to Insurance Services Office Automobile Liability Coverage (Occurrence Form CA0001) covering Code No. 1, “any auto;”

c. Workers’ Compensation Insurance in compliance with the laws of the State of California, and Employer’s Liability Insurance in an amount not less than $1,000, 000 per claimant. Additionally, the workers’ compensation policy shall include a waiver of all rights of subrogation which the insurer may have against the City.

2. Vendor shall, prior to performance of any services, file with the Risk Manager certificates of insurance with original endors ements effecting coverage required by this Exhibit INS -I. The certificates and endorsements for each insurance policy are to be si gned by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements are to be on the attached forms or on other forms approved by the Risk Manager. All certificates and endorsements are to be received and approved by the Risk Manager before work commences. City reserves the right to require complete certified copies of all required insurance policies at any time. The certificates of insurance and endorsements shall be sent via email (or fax if necessary) to the Risk Manager, addressed as follows (do not send hard copies):

City of Oxnard
Insurance Compliance
Reference No.

P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007

3. Vendor agrees that all insurance coverages shall be provided by a California admitted insurance carrier with an A.M. Best rat ing of A:VII or better and shall be endorsed to state that coverage may not be suspended, voided, canceled by either party, or reduced in coverage or limits without 30 days’ prior written notice to the Risk Manager. The Risk Manager shall not approve or accept any endorseme nt if the endorsement contains “best effort” modifiers or if the insurer is relieved from the responsibility to give such notice.

4. Vendor agrees that the Commercial General Liability and Business Automobile Liability Insurance policies shall be endorsed to name City, its City Council, officers, employees and volunteers as additional insureds as respects: liability arising out of activities performed by or on behalf of vendor; products and completed operations of vendor; premises owned, occupied or used by vendor; or automobiles owned, leased, hired or borrowed by vendor. The coverage shall contain no special limita tions on the scope of protection afforded to City, its City Council, officers, employees and volunteers. The General Liability Special Endorsement Form and Automobile Liability Special Endorsement Form attached to this Exhibit INS- I or substitute forms con taining the same information and acceptable to the Risk Manager shall be used to provide the endorsements (ISO form CG 2010 11/85 or if not available, CG 2010 with an edition date prior to 01/04 and CG 2037).

5. The coverages provided to City shall be primary and not contributing to or in excess of any existing City insurance coverages (this must be endorsed) . Additionally, the workers’ compensation policy shall include a waiver of all rights of subrogation which the insurer may have against the City. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its City Council, officers, employees and volunteers. The insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.

6. Any deductibles or self -insured retentions must be declared to and approved by the Risk Manager. At the option of the Risk Manager, either the insurer shall reduce or eliminate such deductibles or self -insured retentions as respects City, its City Council, officers, employees and volunteers, or the vendor shall procure a bond guaranteeing payment of losses and related investigations, claim admini stration and defense expenses.
2/22
285
Agreement No. A-8454

Page 16 of 23 ends

INSTRUCTION FOR SUBMITTING INSURANCE CERTIFICATES AND ENDORSEMENT FORMS

Certificates of Insurance

The sample accord form on the following page is provided to facilitate your preparation and submission of certificates of insurance. You may use this or any industry form that shows coverage as broad as that shown on the attached sample. Please note the certificate holder address must be as shown on the attached sample accord form with the contract number and insurance exhibit identification information completed. Improperly addressed certificates may delay the contract start -up date because the City’s practice is to return unidentifiable insurance certificates to the insured for clarification as to the contract number. Cancellation provisions must be endorsed to the policy.

Modifying the certificate does not change coverage or obligate the carrier to provide notice of cancellation.

Endorsement Forms

Original endorsements are required for commercial general liability and business automobile liability insurance policies and must be attached to the applicable certificate of insurance. City preference is that you use the endorsement forms which are attached. Substitu te forms will be accepted, however, as long as they include provisions comparable to the attached.

INS-I.doc

286
Agreement No. A-8454

Page 17 of 23 ends

SAMPLE

ACORD CERTIFICATE OF INSURANCE ISSUE DATE (MM/DD/YY)

PRODUCER

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.

CODE SUB-CODE COMPANIES AFFORDING INSURANCE COVERAGE

INSURED COMPANY

LETTER A SPECIFY COMPANY NAMES IN THIS SPACE

COMPANY

LETTER B

COVERAGES

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY

REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

CO
LTR

TYPE OF INSURANCE

POLICY NUMBER

POLICY EFFECTIVE

DATE (MM/DD/YY)

POLICY EXPIRATION

DATE (MM/DD/YY)

LIMITS
A

GENERAL LIABILITY
[x] COMMERCIAL GENERAL LIABILITY
[x] CLAIMS MADE [x] OCCUR.
[x] OWNER'S & CONTRACTOR'S PROT.

GENERAL AGGREGATE
$1,000,000

PRODUCTS COMP/OP AGG.
$1,000,000

PERSONAL & ADV. INJURY
$1,000,000

EACH OCCURRENCE
$1,000,000

FIRE DAMAGE (Any one fire)
$
MED. EXPENSE (Any one person)
$

AUTOMOBILE LIABILITY
[x] ANY AUTO

ALL OWNED AUTOS

SCHEDULED AUTOS

HIRED AUTOS

NON-OWNED AUTOS

GARAGE LIABILITY

COMBINED SINGLE
$1,000,000

LIMIT

BODILY INJURY
$
(Per person)

BODILY INJURY
$
(Per accident)

PROPERTY DAMAGE
$

EXCESS LIABILITY

UMBRELLA FORM

OTHER THAN UMBRELLA FORM

EACH OCCURRENCE
$

AGGREGATE
$

WORKERS' COMPENSATION
AND

EMPLOYERS' LIABILITY

STATUTORY LIMITS

EACH ACCIDENT
$1,000,000

DISEASE-POLICY LIMIT
$1,000,000

DISEASE-EACH EMPLOYEE
$1,000,000

A
OTHER

DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL ITEMS

CERTIFICATE HOLDER

CITY OF OXNARD
Attn: Insurance Compliance
Reference No._______
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007

CANCELLATION

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER

NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.

AUTHORIZED REPRESENTATIVE

287
Agreement No. A-8454

Page 18 of 23 ends

GENERAL LIABILITY SPECIAL ENDORSEMENT
FOR THE CITY OF OXNARD (the “City”)

SUBMIT IN DUPLICATE
ENDORSEMENT NO.

ISSUE DATE (MM/DD/YY)
PRODUCER POLICY INFORMATION:

Insurance Company:

Policy No.:

Policy Period: (from) (to)
LOSS ADJUSTMENT EXPENSE Included in Limits
In Addition to Limits
Telephone: Deductible Self-Insured Retention (check which) of $ with an Aggregate of $ applies to
coverage. Per Occurrence Per Claim (which) NAMED INSURED

APPLICABILITY This insurance pertains to the operations, products and/or tenancy of the named insured under all written agreements and permits in force with the City unless checked here in which case only the following specific agreements and permits with the City are covered:

CITY AGREEMENTS/PERMITS

TYPE OF INSURANCE

GENERAL LIABILITY
COMMERCIAL GENERAL LIABILITY
COMPREHENSIVE GENERAL LIABILITY
OWNERS & CONTRACTORS PROTECTIVE

Claims Made
Retroactive Date
Occurrence

OTHER PROVISIONS

COVERAGES
LIABILITY LIMITS IN THOUSANDS $
EACH

OCCURRENCE AGGREGATE
GENERAL
PRODUCTS/COMPLETED OPERATIONS
PERSONAL & ADVERTISING INJURY
FIRE DAMAGE

Underwriter=s representative for claims pursuant to this insurance.

CLAIMS: Name:

Address:

Telephone: ( )
In consideration of the premium charged and notwithstanding any inconsistent statement in the policy to which this endorsemen t is attached or any endorsement now or hereafter attached thereto, insurance company agrees as follows:

1. INSURED. The City, its officers, agents, employees and volunteers are included as insureds with regard to liability and defense of sui ts arising from the operations, products and activities performed by or on behalf of the named insured.

2. CONTRIBUTION NOT REQUIRED. As respects: (a) work performed by the named insured for or on behalf of the City; or (b) products sold by the named insured to the City; or (c) premises leased by the named insured from the City, the insurance afforded by this policy shall be primary i nsurance as respects the City, its officers, agents, employees or volunteers; or stand in an unbroken chain of coverage excess of the named insured’s scheduled underlying primary coverage. In either event, any other insurance maintained by the City, its officers, agents, employees or volunteers shall be in excess of this insurance and shall not contribute with it.

3. SEVERABILITY OF INTEREST. This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to t he company’s limits of liability. The inclusion of any person or organization as an insured shall not affect any right which such person or organization would have as a claimant if not so included.

4. CANCELLATION NOTICE. With respect to the interests of the City, this insurance shall not be canceled, or materially reduced in coverage or limits except after thirty (30) days prior written notice by receipted delivery has been given to the City.

5. PROVISIONS REGARDING THE INSURED’S DUTIES. Any failure to comply with reporting provisions of the policy or breaches or violations of warranties shall not affect coverage provided to the City, its officers, agents, employees or volunteers.

6. SCOPE OF COVERAGE. This policy, if primary, affords coverage at least as broad as:
a. Insurance Services Office Commercial General Liability Coverage, “occurrence” form CG0001; or b. If excess, affords coverage which is at least as broad as the primary insurance form CG0001. Except as stated above nothing herein shall be held to waive, alter or extend any of the limits, conditions, agreements or ex clusions of the policy to which this endorsement is attached.

ENDORSEMENT HOLDER

CITY OF OXNARD
Attn: Insurance Compliance
Reference No._______
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007

AUTHORIZED REPRESENTATIVE
Broker/Agent Underwriter

I (print/type name), warrant that I have
authority to bind the above- mentioned insurance company and by my signature hereon do so bind this company to this endorsement.

Signature
(original signature required)

Telephone: ( ) Date Signed

Rev. 2/22 INS-I.doc
288
Agreement No. A-8454

Page 19 of 23 ends

AUTOMOBILE LIABILITY SPECIAL ENDORSEMENT
FOR THE CITY OF OXNARD (the “City”)

SUBMIT IN DUPLICATE
ENDORSEMENT NO.

ISSUE DATE
(MM/DD/YY)
PRODUCER POLICY INFORMATION:

Insurance Company:

Policy No.:

APPLICABILITY. This insurance pertains to the operations, products and/or tenancy of the named insured under all written agreements and permits in force with the City unless checked here in which case only the following specific agreements and permits with the City are covered:

CITY AGREEMENTS/PERMITS

TYPE OF INSURANCE OTHER PROVISIONS
COMMERCIAL AUTO POLICY
BUSINESS AUTO POLICY
OTHER
LIMIT OF LIABILITY CLAIMS: Underwriter’s representative for claims pursuant to this insurance.

Name:

Address:

Telephone: ( )

$ per accident, for bodily injury and property damage.

In consideration of the premium charged and notwithstanding any inconsistent statement in the policy to which this endorsemen t is attached or any endorsement now or hereafter attached thereto, insurance company agrees as follows:

1. INSURED. The City, its officers, agents, volunteers and employees are included as insureds with regard to liability and defense of sui ts arising from the operations, products and activities performed by or on behalf of the named insured.

6. SCOPE OF COVERAGE. This policy, if primary, affords coverage at least as broad as:
a. Insurance Services Office Automobile Liability Coverage, “occurrence” form CA0001, code ("any auto"); or b. If excess, affords coverage which is at least as broad as the primary insurance form referenced in the preceding section (1). Except as stated above nothing herein shall be held to waive, alter or extend any of the limits, conditions, agreements or ex clusions of the policy to which this endorsement is attached.

ENDORSEMENT HOLDER

CITY OF OXNARD
Attn: Insurance Compliance
Reference No._______
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007

AUTHORIZED REPRESENTATIVE
Broker/Agent Underwriter

I (print/type name), warrant that I have authority to bind the above-mentioned insurance company and by my signature hereon do so bind this company to this endorsement.

Signature
(original signature required)

Telephone: ( ) Date Signed
Rev. 2/22 INS-I.doc
289
Agreement No. A-8454

Page 20 of 23 ends

LIVING WAGE POLICY EXHIBIT

The Living Wage Policy of the City of Oxnard is hereby adopted by the City Council on July 9, 2002 to be effective October 1, 2002.

1. Pursuant to this Living Wage Policy, Vendor shall pay those employees who provide services to the City under contract:

(a) Effective October 1, 2002, at least $9.00 an hour for the time during which the employee is providing services to the City;

(b) Effective July 1, 2003, at least $9.25 an hour for the time during which the employee is providing services to the City and 32 hours of paid leave per every calendar year in which an employee provides services to the City;

(c) Effective July 1, 2004, at least $10.59 an hour for the time during which the employee is providing services to the City and 64 hours of paid leave per every calendar year in which an employee provides services to the City; and

(d) Effective July 1, 2005, at least $12.22 an hour f or the time during which the employee is providing services to the City and 96 hours of paid leave per every calendar year in which an employee provides services to the City.

2. The hourly rates established in Section 1 shall be adjusted July 1, 2006 and, each July 1 thereafter, according to the percentage change since July 1, 2005 in the Consumer Price Index prepared by the Bureau of Labor Statistics for the Los Angeles area relating to all urban consumers.

3. A service contractor executing a service contract with the City for which the City will pay the contractor $25,000 or more during the contract term shall be subject to the Living Wage Policy.

4. A service contractor executing more than one service contract with the City, and the combined monetary t otal of the payments by the City pursuant to such contracts is $25,000 or more for the combined contract terms shall be subject to the Living Wage Policy.

5. This Living Wage Policy shall not govern the following types of contracts for: (a) the purchase, rental or lease of goods, products, equipment, supplies or other personal property; (b) public works projects as defined in State or local law; and (c) professional services.

6. This Living Wage Policy shall not govern the following service contractors: (a) nonprofit entities organized under IRS Code section 501(c)(3); (b) public entities such as cities, counties, special districts, states and the federal government; a nd (c) businesses employing fewer than five persons.

7. The City Attorney is directed to include in all standard trade services contracts and all contracts involving unique trade services, the language set forth in Exhibit 1 attached hereto and incorporated herein by this reference.

8. If Vendor fails to comply with this Living Wage Policy, the City Manager is directed to terminate the subject service contract immediately and to impose appropriate fines and penalties as set forth in the service contract.

9. The City Manager and the City Attorney are responsible for the administration and en forcement, respectively, of the Living Wage Policy. If an employee of a service contractor governed by the Living Wage Policy concludes that he/she has been retaliated against for the exercise of rights under the Living Wage Policy, the employee should con tact the City Manager at 385-7430.

10. The City Manager shall reasonably cooperate with representatives of the Ventura County Living Wage Coalition to ensure the effective administration and enforcement of the Living Wage Policy.

11. This Living Wage Policy may be changed only by City Council and only after a duly noticed public hearing.

12. The City Manager is directed to ensure that the City Council will review the Living Wage Policy as part of the FY 2003 - 2004/05 budget pr ocess.
290
Agreement No. A-8454

Page 21 of 23 ends

Exhibit 1

Living Wage Policy

Pursuant to the Living Wage Policy adopted July 9, 2002 by the City Council and effective October 1, 2002, the City Manager and City Attorney are directed to include the following language in all standard trade services contracts and all unique trade services contracts governed by the Living Wage Policy.

A. Vendor shall compensate any employee of Vendor who provides services under this Agreement in accordance with the Living Wage Policy, attached hereto and incorporate d herein by reference as the Living Wage Policy Exhibit. While this Agreement is in effect, Vendor shall pay such employee no less than $16.89 per hour for each hour that such employee provides services under this Agreement. In addition, while this Agree ment is in effect, Vendor shall provide to such employee no less than 96 hours of paid leave per calendar year.

B. Vendor agrees to post, at a location readily accessible to those employees providing services to the City, a copy of the Living Wage Policy adopted by City Council on July 9, 2002 and effective October 1, 2002.

C. If Vendor fails to compensate such employee pursuant to the Living Wage Policy, the City Manager or designee shall terminate this Agreement on written notice to Vendor, effective immediately.

D. In addition, if Vendor fails to comply with the Living Wage Policy in any manner, Vendor shall pay to City a fine of $500 and shall pay to any employee providing services under this Agreement a penalty of three times the amount or value of the compensation owed to such employee under the Living Wage Policy. Vendor shall pay such fine and penalty within 15 days after the City Manager or designee provides written notice to Vendor of the amount owed. 291
Agreement No. A-8454

Page 22 of 23 ends

CITY OF OXNARD LIVING WAGE REQUIREMENTS
EFFECTIVE JULY 1, 2021

1. Vendor shall compensate any employee of Vendor who provides services under this Agreement in accordance with the Living Wage Policy, attached hereto and incorporated herein by reference as Exhibit 1. While this Agreement is in effect, Vendor shall pay suc h employee no less than $16.89 per hour for each hour that such employee provides services under this Agreement. This hourly rate shall be adjusted on July 1, 2022, and each July 1 thereafter, according to the percentage change in the Consumer Price Index , all items, prepared by the Bureau of Labor Statistics for the Los Angeles area relating to all urban consumers (CPI -U), index base 1982-84=100, comparing May of the previous year to May of the current year. In addition, while this Agreement is in effect, Vendor shall provide to such employee no less than 96 hours of paid leave per calendar year.

b. If Vendor fails to compensate such employee pursuant to the Living Wage Policy, the City Manager or designee shall terminate this Agreement on written notice to Vendor, effective immediately.

d. The foregoing requirements are restated on page 5 of the Agreement for Trade Services. 292
Agreement No. A-8454

Page 23 of 23 ends

PREVAILING WAGES EXHIBIT

3. Vendor is required to post job site notices, as prescribed by regulation. See Labor Code Section 1771.4(a)(2).

8. Vendor is not qualified to bid on, be listed in a Bid proposal, or engage in the performance of any contract for public work, as defined in Labor Code Sections 1720 through 1861, unless currently registered and qualifie d to perform public work pursuant to Labor Code Section 1725.5. Vendor shall continue without interruption to stay registered and qualified to perform public work pursuant to Section 1725.5 for the duration of the term of this Agreement. This provision doe s not apply to construction, alteration, demolition, installation or repair work of $25,000 or less or to maintenance work of $15,000 or less.

9. Vendor acknowledges that 8 hours labor constitutes a legal day’s work. Vendor shall comply with and be bound by Labor Code Section 1810.

10. Vendor shall comply with and be bound by Labor Code Section 1813 concerning penalties for workers who work excess hours. Vendor shall, as a penalty to City, forfeit $25 for each worker employed in the performance of this Agreement by Vendor or by any subcontractor for each calendar day during which such worker is required or permitted to work more than 8 hours in any calendar day and 40 hours in any one calendar week in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the Labor Code. Pursuant to Labor Code Section 1815, work performed by Vendor’s employees in excess of 8 hours per day and 40 hours per week shall be permitted upon public work upon compensation for all hours worked in excess of 8 hours per day at not less than 1 ½ times the basic rate of pay.

11. The Project listed in the Agreement is subject to compliance monitoring and enforcement by the DIR.

12. Vendor shall be responsible for each and every one of its subcontractors’ compliance with Chapter 1, the DIR’s rules and regulations, and Labor Code Sections 1860 and 3700. Vendor shall include in the written contract between it and each subcontractor a copy of, and a requirement that each subcontractor shall comply with, those statutory provisions. Vendor shall be required to take all actions necessary to enforce such contractual provisions and ensure subcontractors’ compliance, including without limitation, conducting a periodic review of the certified payroll records of each subcontractor, and upon becoming aware of the failure of the subcontractor to pay its workers the specified prevailing rate of wages, Vendor shall diligently take corrective action to halt or rectify any failure.

13. To the maximum extent, Vendor shall hold harmless, defend (with counsel approved by the City Attorney) and indemnify City, its legislative bodies, and its officials, officers, employees and agents from any demand or claim for damages, compensation, fines, penalties or other amounts arising out of or incidental to any acts or omissions listed above by any person or entity (including Vendor, its subcontractors, and each of their officials, officers, employees and agents) i n connection with any work undertaken or in connection with the Agreement, including without limitation the payment of all attorneys’ fees and other related costs. All duties of Vendor under this Section shall survive Agreement termination.

293

CITY COUNCIL AGENDA REPORT

INFORMATION/CONSENT AGENDA
AGENDA ITEM NO. J.6

DATE: May 3, 2022

TO: City Council

FROM: Stephen Fischer, City Attorney, (805) 385-7483, [email protected] Emilio Ramirez, Housing Director, (805) 385-8094, [email protected]

SUBJECT: Adoption of a Just Cause Eviction And Tenant Protection Ordinance and a Rent Stabilization Ordinance.

RECOMMENDATION

That the City Council:

1. Adopt Ordinance No. 3012 adding Article I to Chapter 27 of the Oxnard City Code that is entitled:
“AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF OXNARD ADDING ARTICLE I TO CHAPTER 27 OF THE OXNARD CITY CODE ESTABLISHING JUST CAUSE EVICTIONS AND OTHER TENANT PROTECTIONS”

2. Adopt Ordinance No. 3013 adding Article II to Chapter 27 of the Oxnard City Code that is entitled:
“AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF OXNARD ADDING ARTICLE II TO CHAPTER 27 OF THE OXNARD CITY CODE ESTABLISHING RENT STABILIZATION REGULATIONS INCLUDING

PROHIBITING RESIDENTIAL REAL PROPERTY RENTAL RATE INCREASES THAT EXCEED FOUR PERCENT (4%) ANNUALLY”

BACKGROUND

Over the past two years, the Community Services, Public Safety, and Housing & Development Committee and the City Council have heard multiple discussions regarding rent stabilization and tenant protection issues. On February 9, 2022, the Oxnard City Council considered two draft ordinances regarding rent stabilization and just cause evictions and tenant protections. City Council directed staff to finalize both ordinances and present them for City Council introduction and adoption. Specifically, at the February 9, 2022 meeting, Council directed that the following items be included in the ordinances:

1. Tenant relocation assistance for no-fault just cause evictions equal to (i) two months of the tenant’s rent that was in effect when the owner issued the notice to terminate the tenancy, or (ii) $5,000, whichever is greater.

2. Annual rent adjustment of not more than five percent;

3. Both ordinances to expire on December 31, 2030.

4. Fair Return Petition for Rent Increase shall be determined by the City Manager, not a board.

Following the February 9, 2022 hearing, City staff renumbered the code sections within the ordinances and made minor updates to the ordinances for better clarity. Staff shared the updated ordinances with stakeholders for feedback. Staff then incorporated some of the stakeholders' feedback into the ordinance introduced to the Council on April 13, 2022.

On April 13, 2022, the City Council approved the introduction for first reading by title only (and waiving further reading) 294
of the ordinances subject to the following:

1. Decreasing the annual rent adjustment from not more than five percent to not more than four percent;

2. Modifying Section 27-9 to require Owners to post notice of the existence of Chapter 27 in the following languages:

English, Purepecha, Mixteco, Otomi, Tagalog, Zapoteco, Nahuatl, and Spanish.

3. Modifying Section 27-10 to read, in part, as follows: "It is illegal for an Owner or representative to retaliate against a tenant for lawfully and peaceably exercising their legal rights, including but not limited to, the right to file a complaint with Code Compliance..."
The Council adopted the ordinances by a 6-1 vote.

STRATEGIC PRIORITIES

This agenda item supports the Quality-of-Life strategy. The purpose of the Quality-of-Life strategy is to restore and increase quality services and programs that enrich Oxnard's diverse community, promote safe neighborhoods, encourage community engagement, and support our residents in their efforts to improve their quality of life.

FINANCIAL IMPACT

If the ordinances are adopted, staff estimates an annual cost of approximately $1,200,000 required for a fully burdened staff and office operations to administer the Program, inclusive of education programs. Staff will return to City Council to establish a Program Fee(s), which will off-set the annual cost to administer the Program. In the Fiscal Year 22-23 Budget, approximately $300,000 will be requested for a staff person and contracting for marketing, education and public outreach.

COMMITTEE OUTCOME

Per the direction of the City Council on February 9, 2022 and October 19, 2021, this item is being presented directly to the City Council. The Committee previously heard public comment at their September 14, 2021 meeting.

Prepared by: Jason Zaragoza, Deputy City Attorney, Kenneth Rozell, Chief Assistant City Attorney, Emilio Ramirez, Housing Director, Ashley Golden, Assistant City Manager

ATTACHMENTS

1. Just Cause Eviction_Tenant Protection Ordinance_ FINAL

2. Rent Stabilization Ordinance_FINAL
295

Page 1 of 14 ends

ORDINANCE NO. ______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF OXNARD ADDING ARTICLE I TO CHAPTER 27 OF

THE OXNARD CITY CODE ESTABLISHING JUST CAUSE

EVICTIONS AND OTHER TENANT PROTECTIONS

THE CITY COUNCIL OF THE CITY OF OXNARD DOES ORDAIN AS
FOLLOWS:

Section 1. The City Council of Oxnard hereby finds, determines, and declares as follows:

A. At the City Council meeting s on October 19, 2021, February 9, 2022 , and April 13, 2022, the City Council discussed the City of Oxnard’s (“Oxnard” or “City”) ability to address just cause evictions and other tenant protections.

B. Housing instability threatens the public peace, health, and safety as eviction from one’s home can lead to prolonged homelessness; increased residential mobility; loss of community; strai n on household finances due to the necessity of paying rental application fees and security deposits; stress and anxiety experienced by those displaced; increased commute times and traffic impacts if displaced workers cannot find affordable housing within the city in which they work; and interruption of the education of children in the home.

C. Eviction creates particular hardships for individuals and households of limited means, given the shortage of affordable housing within Oxnard and the region generally.

D. The California State Legislature adopted the Tenant Protection Act of 2019 (“AB 1482”), codified in part in California Civil Code section 1946.2 (“section 1946.2”), which became effective by its own terms o n January 1, 2020, and, with certain exceptions, prohibits an owner of residential property from terminating a tenancy without just cause.

E. Under AB 1482, landlords are required to give tenants a reason for their eviction.

Just causes such as nonpayment of rent, nuisance to other tenants, damage to property, and illegal activity continue to be legal with zero relocation assistance.

However, tenants served “no fault” evictions (own er move -in, substantial remodel, demolishing the rental unit, etc.) receive only one month of relocation assistance from their landlords. Most landlords require first months’ rent, last months’ rent, security deposit, and application fees upon move -in. Many tenants also pay for temporary storage and other moving costs. These move -in related expenses can easily surpass available savings, without which the tenant may be forced into homelessness or displacement. One month of relocation assistance may not adequately cover these expenses, so relocation assistance must be 296

Page 2 of 14 ends

strengthened to reflect the realities of the rental market. A minimum of $5,000 in relocation assistance is the minimum needed to adequately cover most relocation and move-in costs when the relocation is at no-fault of the tenant.

F. The housing rent burden and poverty faced by many residents in Oxnard threatens the heal th, safety, and welfare of its residents, particularly when resulting in eviction and displacement. Studies have shown that evictions play an impactful role in the lives of low income renter households and can also contribute to poverty through disruptive effects such as job loss, adverse health effects, and negative consequences for children.

G. Moreover, an eviction can remain on a renter’s credit history for at least seven years, impacting one’s ability to rent and find employment opportunities.

H. AB 1482 provides that a local ordinance adopted after September 1, 2019 , requiring just cause for termination of a residential tenancy shall supersede California Civil Code section 1946.2 only if the ordinance is “more protective” than section 1946.2.

I. In accordance with California Civil Code section 1946.2(g)(1)(B), the City Council finds that the provisions of this Ordinance regulating just cause terminations or tenancies are more protective than California Civil Code section 1946.2 for the following reasons:

1. The just cause for termination of a residential tenancy under this Ordinance is consistent with California Civil Code section 1946.2.

2. This Ordinance provides additional tenant protections that are not prohibited by any other provisions of applicable law in that the ordinance triggers tenant protections after 30 days of tenancy, applies to tenants that are not covered by AB 1482, and requires a minimum of $5,000 in relocation assistance.

J. The City Council finds and determines that regulating the relations bet ween residential landlords and tenants will increase certainty and fairness within the residential rental market in the City and thereby serve the public peace, health, and safety.

K. Pursuant to the City’s police power, as granted broadly under Article XI, section 7 of the California Constitution , the Oxnard City Council has the authority to enact and enforce ordinances and regulations for the public peace, health , and welfare of the City and its residents.

L. The City Council hereby adopts these regulations in order to address the threats set forth below.

297

Page 3 of 14 ends

1. Housing, particularly affordable housing, is difficult to procure in th is region, including in Oxnard. Evictions without just cause destabilize the housing market and can result in the loss of affordable housing;

2. For the preservation of the public peace, health , and safety, the City Council finds that it is necessary to adopt an ordinance regulating just cause evictions, for all of the reasons set forth in the recitals above, which are hereby incorporated by reference;

3. Without the imposition of this Ordinance, evictions without just cause may result in the displacement of residential tenants who would be forced to find new housing in an ever -more expensive housing market, and would significantly increase the risk of residential tenants becoming homeless; and

4. There is a threat to the public peace, health, and safety of the City and its community, thereby necessitating the enactment of this Ordinance in order to ensure that tenants are not turned out of their homes without just cause.

M. The direction for this ordinance dated October 19, 2021, February 9, 2022 , and April 13, 2022, shall be incorporated herein by this reference , and together with this ordinance, any amendments or supplements, and oral testimony , shall constitute the necessary findings for this ordinance.

Section 2. The recitals and statements of fact set forth in the preamble to this ordinance are true and correct, constitute a substantive part of this ordinance, and are incorporated herein by this reference.

Section 3. A new Chapter 27 “Tenant Protection and Rent Stabilization Ordinance” is added to the City Code.

Section 4. A new Article 1 “Evictions and Tenant Protection” is added to Chapter 27 of the City Code to read as follows:

“Article I – JUST CAUSE EVICTIONS AND TENANT PROTECTION

SEC. 27-1. CITATION.

This Article shall be known as the “ Just Cause Eviction and Tenant Protection Ordinance.”

SEC. 27-2. RESTRICTIONS ON TERMINATION OF TENANCY WITHOUT JUST CAUSE.

Notwithstanding any other law, after a tenant has continuously and lawfully occupied a residential real property for thirty (30) days , the Owner of the residential real property 298

Page 4 of 14 ends

shall not terminate the T enancy without just cause, which shall be stated in t he written notice to terminate Tenancy.

For purposes of this Article, “just cause” includes either at -fault just cause or no -fault just cause.

SEC. 27-3. AT-FAULT JUST CAUSE

At-Fault Just Cause includes any of the following:

(A) Default in the payment of rent.

(B) A breach of a material term of the lease, a s described in paragraph (3) of Section 1161 of the California Code of Civil Procedure , including, but not limited to, violation of a provision of the lease after being issued a written notice to correct the violation.

A “breach of a material term” shall not include:
(1) The obligation to limit occupancy, provided that the additional occupant who joins the tenant of the residential real property thereby exceeding the limits on occu pancy set forth in the lease is dependent under age 18, or a replacement tenant who moved in after an approved tenant vacated the residential real property, so long as the addition does not exceed the Uniform Housing Code.

The Owner shall have the right to approve or deny the
prospective additional or replacement tenant, who is not a minor dependent child, provided that the Owner does not
unreasonably withhold approval. If the Owner fails to respond to the tenant in writing with a description of the reasons for the denial of the requ est within a reasonable amount of time of receipt of the tenant’s written request, the tenant’s request shall be deemed approved by the Owner if the lease is for a period of one (1) year or less.

(2) A change in the terms of the Tenancy that is not the result of an express written agreement signed by both of the parties. An Owner is not required to obtain a tenant’s written consent to a change in the terms of the Tenancy if the change in the terms of the Tenancy is authorized by this section, or if the Owner i s required to change the terms of the Tenancy pursuant to federal, State, or local law. Nothing in this subsection shall exempt an Owner from providing legally required notice of a change in the terms of the Tenancy.

299

Page 5 of 14 ends

(C) Maintaining, committing, or permitting the maintenance or commission of a nuisance as described in paragraph (4) of Section 1161 of the California Code of Civil Procedure.

(D) Committing waste as described in paragraph (4) of Section 1161 of the California Code of Civil Procedure.

(E) The tenant had a written lease that terminated on or after the effective date of this Ordinance, and after a written request or demand from the Owner, the tenant has refused to execute a written extension or renewal of the lease for an additional term of similar duration with similar provisions, provided that those terms do not violate this section or any other provision of law. If the tenant had a written lease that terminated on or after the effective date of this Ordinance, and after a written request or demand from the Owner, the tenant has refused to execute a written extension or renewal of the lease for an additional term of non-similar duration and/or with non-similar lease provisions, then the cause for eviction will be No - Fault Just Cause under City Code section 27-4 below.

(F) Criminal activity by the tenant on the residential real property, including any common areas, or any criminal activity or criminal threat, as defined in subdivision (a) of Section 422 of the California Penal Code, on or of f the residential real property, that is directed at any Owner or agent of the Owner of the residential real property or members of tenant’s household or other tenants of the residential real property. This at -fault, just cause provision shall apply if the Owner has, within a reasonable time, reported the criminal activity to law enforcement. Further, at-fault, just cause eviction of a tenant under this provision shall only apply to that tenant who committed the criminal activity described herein. If a tena nt is acquitted or found not guilty of the charges giving rise to eviction, or if charges are not filed against the tenant within the applicable statute of limitations period, the tenant shall be offered the right to restore the Tenancy only if the same residential real property is available.

(G) Assigning or subletting the premises in violation of the tenant’s lease, as described in paragraph (4) of Section 1161 of the California Code of Civil Procedure.

Notwithstanding any contrary provision in this sec tion, an Owner shall not take any action to terminate a Tenancy based on a tenant’s sublease of the residential real property if all the following requirements are met:

(1) The tenant requests permission from the Owner in writing to sublease the residential real property;

300

Page 6 of 14 ends

(2) The tenant continues to reside in the residential real property as their primary residence;

(3) The sublease replaces one or more departed tenants under the lease on a one-for-one basis; and

(4) The Owner fails to respond to the tenant in writing within a reasonable amount of time of the receipt of the tenant’s written request. If the Owner fails to respond to the tenant’s written request, the request shall be deemed approved by the Owner if the lease is for a period of one (1) year or less. An Owner’s reasonable refusal of the tenant’s written request may be based on, but is not limited to, the ground that the total number of occupants in a residential real property exceeds the maximum number of occupants as determined under Section 503(b) of the Uniform Housing Code or successor provision.

(H) The tenant’s refusal to allow the Owner to enter the residential real property as authorized by Sections 1101.5 and 1954 of the California Civil Code, and Sections 13113.7 and 17926.1 of the California H ealth and Safety Code.

(I) Using the premises for an unlawful purpose as described in paragraph (4) of Section 1161 of the California Code of Civil Procedure.

(J) The employee, agent, or licensee’s failure to vacate after their termination as an emplo yee, agent, or a licensee as described in paragraph (1) of Section 1161 of the California Code of Civil Procedure.

(K) When the tenant fails to deliver possession of the residential real property after providing the Owner written notice as provided in Se ction 1946 of the California Civil Code of the tenant’s intention to terminate the hiring of the real property, or makes a written offer to surrender that is accepted in writing by the Owner but fails to deliver possession at the time specified in that wri tten notice as described in paragraph (5) of Section 1161 of the California Code of Civil Procedure.

SEC. 27-4. NO-FAULT JUST CAUSE

No-Fault Just Cause includes any of the following:

(A) Intent to occupy the residential real property by the Owner or their spouse, domestic partner, children, grandchildren, parents, or grandparents.

For leases entered into on or after the effective date of this Ordinance, this subsection shall apply only if the tenant agrees, in writing, to the 301

Page 7 of 14 ends

termination, or if a provision of the lease allows the Owner to terminate the lease if the Owner, or their spouse, domestic partner, children, grandchildren, parents, or grandparents unilaterally decides to occupy the residential real property for a period of at least 24 month s, as affirmed by the Owner in a written affidavit submitted to the city. Addition of a provision allowing the Owner to terminate the lease as described in this clause to a new or renewed rental agreement or fixed -term lease constitutes a similar lease provision for the purposes of City Code section 27-3 (E).

(B) Withdrawal of the residential real property from the rental market under, and subject to, the provisions of the Ellis Act.

(C) The Owner complying with an order issued by a government agency or court relating to habitability that necessitates vacating the residential real property.

(1) Exception. If it is determined by any government agency or court that the tenant is at fault for the condition or conditions triggering the order or nee d to vacate, then the tenant shall not be entitled to relocation assistance as outlined in Section 27-6(C).

(D) Intent to demolish or to substantially remodel the residential real property.

For purposes of this Section, “substantially remodel” means the replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency, or the abatement of hazardous materials, including lead-based paint, mold, or asbestos, in accordance with applicable federal, State, and local laws, that cannot be reasonably accomplished in a safe manner with the tenant in place and that requires the tenant to vacate the residential real property for at least 30 days. Cosmetic improvements alone, including painting, decorating, and minor repairs, or other work that can be performed safely without having the residential real property vacated, do not qualify as a substantial remodel.

(1) The Owner shall provide 60 days advance written notice to the tenant of the ability to reoccupy the unit upon completion of the repairs, or if requested by the tenant, the right of first refusal to any comparable vacant rental unit which has been offered at comparable rent owned by the Owner; and

(2) In the event the Owner seeks to rent the remodeled unit within six (6) months following the completion of the remodeling work, the evicted tenant shall have the right of first refusal to reoccupy 302

Page 8 of 14 ends

and rent the unit, unless the Owner provides a written waiver by the tenant of their right to reoccupy the premises pursuant to this subsection.

SEC. 27-5. JUST CAUSE CURABLE LEASE VIOLATION

Before an Owner of residential real property issues a notice to terminate a T enancy for just cause that is a curable lease violation, the Owner shall first give notice of the violation to the tenant with an opportunity to cure the violation pursuant to paragraph (3) of Section 1161 of the California Code of Civil Procedure . If the violation is not cured within the time period set forth in the notice, a three -day notice to quit without an opportunity to cure may thereafter be served to terminate the Tenancy.

Any written notice to cease or correct must:

(A) Be dated and served up on the tenant, pursuant to at least one of the methods authorized under California Code of Civil Procedure Section 1162, as may be amended;

(B) Inform the tenant that failure to cure may result in the initiation of eviction proceedings;

(D) Inform the tenant of the contact number for the City; and

(E) Include a specific statement of the reasons for the written notice to cease or correct with specific facts to help the tenant d etermine the date(s), place(s), witness(es), and/or circumstance(s) that support the reason(s) for the eviction.

SEC. 27-6. NO-FAULT JUST CAUSE TENANT RELOCATION ASSISTANCE

(A) For a T enancy for which just caus e is required to terminate the T enancy under this Article, if an O wner of residential real property issues a termination notice based on a no-fault just cause as defined in section 27- 4, the O wner shall, regardless of the tenant’s income, provide a direct payment to the tenant as described in paragraph C of this Section.

(B) If an Owner issues a notice to terminate a Tenancy for no -fault just cause, the Owner shall notify the tenant of the tenant’s right to relocation assistance and all other rights pursuant to this section. 303

Page 9 of 14 ends

(C) The amount of relocation assistance shall be equal to (i) two months of the tenant’s rent that was in effect when the owner issued the notice to terminate the tenancy, or (ii) $5,0 00, whichever is greater. Any relocation assistance shall be provided within 15 calendar d ays of service of the notice.

(1) If a tenant fails to vacate after the expiration of the notice to terminate the Tenancy, the actual amount of any relocation assistance or rent waiver provided pursuant to this subdivision shall be recoverable as damages in an action to recover possession.

(2) The relocation assistance required by this section shall be credited against any other relocation assistance required by any other law.

(D) An O wner’s failure to strictly comply with this section shall render the notice of termination void.

SEC. 27-7. EXEMPTIONS

This Article shall not apply to the following types of residential real properties or residential circumstances:

(A) Transient and tourist hotel occupancy as defined in subdivis ion (b) of Section 1940 of the California Civil Code , and properties that have obtained a City of Oxnard Short Term Vacation Rental Permit and are operating in compliance with that permit and regularly remitting the required Transit Occupancy Tax demonstra ting active use as a vacation rental property.

(B) Housing accommodations in a nonprofit hospital, religious facility, extended care facility, licensed residential care facility for the elderly, as defined in Section 1569.2 of the California Health and Safety Code, or an adult residential facility, as defined in Chapter 6 of Division 6 of Title 22 of the Manual of Policies and Procedures published by the State Department of Social Services.

(C) Dormitories owned and operated by an institution of higher ed ucation or a kindergarten and grades 1 to 12, inclusive, school.

(D) Housing accommodations in which the tenant shares a bathroom or kitchen facilities with the O wner who maintains their principal residence at the residential real property.

(E) Single-family Owner-occupied residences, including a residence in which the Owner-occupant rents or leases no more than two bedrooms. 304

Page 10 of 14 ends

(F) A duplex in which the O wner oc cupied one of the units as the O wner’s principal place of res idence at the beginning of the Tena ncy, so long as the Owner continues in occupancy.

SEC. 27-8. DEFINITIONS

For the purposes of this Article, the following definitions shall apply:

(A) “Owner” and “residential real property” have the same meaning as those terms are defined in California Civil Code Section 1946.2.

(B) “Tenancy” means the lawful occupation of residential real property , including Accessory Dwelling Units, or mobile home space s that are not subject to Chapter 24, Mobile Home Parks, of the Oxnard City Code, and includes a lease or sublease, as such may be subject to local ordinance.

SEC. 27-9. NOTICES

(A) Notice of existence of this Chapter

The Owner shall post a notice providing information about the existence of this Chapter 27 of the City Code, including protections re lated to immigration or citizenship status of tenant found under California Civil Code section 1940.35 and California Code of Civil Procedure section 1161.4, as may be amended. Notice must be posted in English, Purépecha, Mixteco, Otomi, Tagalog, Zapoteco, Nahuatl, and Spanish in a conspicuous location on the property.

In addition to all other notice requirements specified elsewhere in this Article, the Owner of any residential real property is required to provide written notice to tenants of their rights under this Article as follows:

(1) The notice required by this Article must include the following information:

(a) The existence and scope of this Article of the City Code; and,

(b) The right to relocation assistance in limited circumstances pursuant to Section 27-6.

(2) The Owner must provide tenant with the notice upon serving any notice of change in terms of Tenancy.

(3) The Owner must provide the notice on or before the commencement of all Tenancies initiated after the effective date of this Chapter. 305

Page 11 of 14 ends

(B) Notice of termination of Tenancy

When terminating a T enancy either at-fault or n o-fault, an Owner must comply with all of the following:

(1) The Owner must serve a written notice in accordance with California Civil Code sections 1946 through 1946.5, to the tenant that states that, in addition to any information required by federal or State law, the Owner will terminate the Tenancy, and that indicates at least one at- fault or no-fault just cause reason; and

(2) The Owner has not accepted and will not accept rent or any other consideration in return for the continued use of the residential property beyond the term of the terminated Tenancy in compliance with California Civil Code sections 1945 through 1946.5; and

(3) The Owner qualifies the termination as at-fault or no-fault just cause; and

(4) The Owner has submitted to the city, within five (5) days after service of the notice of termination on the tenant, a true and accurate copy of the Owner's written notice of termination, and proof of such service, signed by the Owner under penalty of perjury, on the tenant. The Owner shall maintain proof of service to the city as evidence that the Owner has complied with this section.

(5) When the Owner and tenant have entered into a written lease, the Owner must provide the notice in the language used in the lease, in addition to English. When the Owner and tenant have not entered into a written lease, the Owner must provide the notice in the language that the Owner and tenant used to negotiate the terms of the Tenancy, in addition to English.

An Owner of residential real property subject to this Section shall provide notice to the tenant as follows:

(1) For any Tenancy commenced or renewed on or after the effective date of this Ordinance, as an addendum to the lease or rental agreement, or as a written notice signed by the tenant, with a copy provided to the tenant.

(2) The Owner must provide the notice in the language that the Owner and tenant used to in the lease, in addition to English.
306

Page 12 of 14 ends

(3) For a Tenancy existing prior to the effective date of this Ordinance, by written notice to the tenant no later than thirty (30) days after the effective date of this Ordinance, or as an addendum to the lease or rental agreement.

(4) The notification or lease provision shall be in no less than 12-point type, and shall include the following: “The Oxnard City Code provides that after all of the tenants have continuously and lawfully occupied the property for at least thirty (30) days, an Owner must provide a statement of cause in any notice to terminate a Tenancy. In addition, Oxnard City Code provides tenants evicted for no-fault just cause with the right to relocation payments. See Chapter 27 of the Oxnard City Code for more information.”

(5) Owners must provide the notice to tenants in writing if the application and lease are processed in writing, electronically if the application or lease are processed electronically, or both if both methods are utilized.

The provision of the notice shall be subject to California Civil Code Section 1632.

SEC. 27-10. ADDITIONAL TENANT PROTECTIONS

(A) The city manager may adopt administrative procedures and regulations to implement the provisions of this Ordinance.

(B) Once established by the City Council, all owners with rental units shall pay the tenant protection program fee, as established by city council resolution. The tenant protection program fee is to fund the city’s cost to implement and enforce the provisions of this Ordinance.

(C) It is illegal for an Owner or representative to retaliate against a tenant for lawfully and peaceably exercising their legal rights, including but not limited to, the right to file a complaint with Code Compliance. No owner may take any action increasing any rental amount, reducing any service, causing the tenant to involuntarily quit the premises, or discriminating against the tenant because of the tenant’s use of any remedy provided by this Ordinance.

(D) Any provision of a rental housing agreement that purports to waive any provision of this Ordinance is void as against public policy.

(E) An owner’s failure to comply with any requirement of this Ordinance is an affirmative defense in an unlawful detainer or other action brought by the owner to recover possession of the rental unit.

307

Page 13 of 14 ends

SEC. 27-11. VIOLATIONS

(A) It shall be unlawful for any person to violate or fail to comply with any provision of this Article. The violation of any provision of this c hapter shall first be punished through the use of a civil citation, prior to prosecution as a misdemeanor, infraction, or civil injunction as provided in Oxnard City Code section 1-10.

(B) Any person whose rights pursuant to this Ordinance have been vio lated shall have the right to file an action for injunctive relief and damages.

Whoever is found to have violated this Ordinance shall be subject to appropriate injunctive relief and shall be liable for damages, costs , and reasonable attorney fees. Treble damages shall be awarded for willful failure to comply with the Relocation Payment obligations established by this Ordinance. Any action pursuant to this Ordinance shall be a civil matter and adjudicated through civil court.

SEC. 27-12. SUNSET

This Article shall automatically sunset on December 31, 2030.”

Section 5. The City Council finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to s ections 15060(c)(2), 15060(c)(3) and 15061(b)(3) of the State CEQA Guidelines because it will not result in a direct or reasonably foreseeable indirect physical change in the environment, because there is no possibility it will have a significant effect on the environment, and it is not a "project," as defined in section 15378 of the State CEQA Guidelines.

Section 6. The city manager shall, on an annual basis and at any other time that the city manager determines to be appropriate, provide a report that documents the level of landlord compliance with this chapter and ot her related rental housing matters.

At least 60 days prior to the expiration date of this ordinance, the city manager shall provide a report to city council that addresses the status of the rental housing market, including, but not limited to, the affordability and availability of rental units.

Section 7. If any section, subsection, sentence, clause or phrase of this chapter is for any reason held by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of the remaini ng portions of this chapter. The City Council declares that it would have adopted this chapter and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more section, subsection, sentence, clause, or phrase be declared invalid. 308

Page 14 of 14 ends

Section 8. Within 15 days after passage, the City Clerk shall cause a summary of this ordinance to be published one time in a newspaper of general circulation published and circulated in the City. Ordinance No. _____ was first read on April 13, 2022, and finally adopted on ________, 2022, to become effective thirty (30) days thereafter.

Section 9. This ordinance shall become effective thirty (30) days after it is finally adopted. The foregoing Ordinance was adopted at a regular m eeting of the City Council of the City of Oxnard, State of California, held on the _________ day of ____________, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

John C. Zaragoza, Mayor
ATTEST:

Rose Chaparro, City Clerk

APPROVED AS TO FORM:

Stephen M. Fischer, City Attorney

309

Page 1 of 11 ends

ORDINANCE NO. _____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF OXNARD ADDING ARTICLE II TO CHAPTER 27 OF

THE OXNARD CITY CODE ESTABLISHING RENT

STABILIZATION REGULATIONS INCLUDING

PROHIBITING RESIDENTIAL REAL PROPERTY RENTAL
RATE INCREASES THAT EXCEED FOUR PERCENT (4%)

ANNUALLY

THE CITY COUNCIL OF THE CITY OF OXNARD DOES ORDAIN AS
FOLLOWS:

Section 1. The City Council of Oxnard hereby fin ds, determines and declares as follows:

A. At the City Council meeting s on October 19, 2021 , February 9, 2022 , and April 13, 2022, the City Council discussed the City of Oxnard’s (―Oxnard‖ or ―City‖) ability to address rent increases on residential real property.

B. The increasing housing rent burden and poverty faced by many residents in the City threatens the health, safety, and welfare of its residents by forcing them to choose between paying rent and providing food, clothing, and medical care for themselves and their families.

C. The average household in the City has a median annual income of $72,843, which is below the State median income ($80,440) and the Ventura County median income ($92 ,236). The median income in the City is also substantially lower than s ome of its neighboring cities, such as Thousand Oaks ($109,378).

The City’s housing stock consists of 51,460 units —27,631 of which are owner - occupied and 23,829 of which are renter-occupied.

D. The U.S. Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who classifies as impoverished.

According to the Census Bureau, in 2019, the City had a poverty rate of 13.8% -- a number that is higher than the national average of 12.3%.

E. Between 1996 and 2016, median home sales prices in the Southern California Association of Governments (― SCAG‖) region increased 206% from $180,870 to $552,994. During that same period the median income decreased by $3,616 (when adjusted to 2016 dollars). In Oxnard, the median home pri ce increased by

40.2% between 2013 -2019 ($323,700 to $453,900). However, during that same period, the median family income in Oxn ard grew at a disproportionate rate of 19% ($60,784 to $72,843).

310

Page 2 of 11 ends

F. The increase in the cost of housing within the City can be attributed to new developments in the past 20 years, such as new communities like Seabridge, RiverPark and Victoria Estates where a three bedroom home ranges from $700,000 to $2, 000,000. The two -bedroom average rent in the City has increased by 18% over the past three years from $1,823 to $2,155, which indicates that households with the median income of $72,843 cannot afford or would struggle to afford the average rent. A household with a median income of $72,843 living in a two bedroom unit costing $1,823 per month, would need to spend 30% of their income on housing.

G. In the City, approximately 6,839 renter-occupied households had more than one occupant per room, which meets California’s definition for overcrowding. Further, approximately 2,500 renter -occupied households had more than 1.5 occupants per room, which meets California’s definition of severe overcrowding.

H. The housing rent burden and poverty faced by many residents in Oxnard threatens the health, safety, and welfare of its residents, particularly when resulting in eviction and displacement. Studies have shown that evictions play an impactful role in the lives of low income renter households and can also contribute to poverty through disrup tive effects such as job loss, adverse health effects, and negative consequences for children.

I. Moreover, an eviction can remain on a renter’s credit history for at least seven years, impacting one’s ability to rent and find employment opportunities.

J. The Costa-Hawkins Rental Housing Act, California Civil Code section 1954.50, et seq., limits the applicability of local rent stabilization policies, including prohibiting local jurisdictions from applying rent stabilization to certain residential rental properties. This Ordinance intends to comply with the Costa -Hawkins Rental Housing Act, and all other applicable state and federal laws.

K. Increasing the number of homeless residents in Oxnard, particularly elderly residents who may be in need of medical or othe r care, could create a public health and safety risk.

L. The economic conditions and recognized housing shortage in Southern California ha ve the potential to detrimentally impact a substantial number of residents in Oxnard, and impose a particular hardship on senior citizens, persons living on fixed incomes, and other vulnerable persons living in Oxnard.

M. The Mobilehome Residency Law (―MRL‖), California Civil Code sections 798, et seq., expressly authorizes cities to regulate the setting and/or increasing of rents for the use and occupancy of a mobile home space, subject to certain exceptions.

311

Page 3 of 11 ends

N. Through City Code Chapter 24, Article I, the City previously established a rent stabilization system for mobile home parks, and the City Council desires to leave that system intact.

O. With the exception of City Code Chapter 24, Article I, the City has not previously regulated the setting and increasing of rents for residential real property. Given the concerns discussed herein , the City Council desires to evaluate rent stabilization policies protecting residents outside of mobile home parks from unreasonable rent increases, while ensuring that the owners of residential real property may earn a fair and reasonable return on their property.

P. Pursuant to the City’s police power, as granted broadly under Article XI, section 7 of the California Constitution , the City Council has the authority to enact and enforce ordinances and regulations for the public peace, health , and welfare of the City and its residents.

Q. Based on the f oregoing facts, and the facts presented to the City Council at the meetings at which this ordinance was introduced and adopted, the City Council finds that allowing owners of residential real property to have unfetter ed discretion to increase rents would pose a threat to the public health, safety , and welfare, and that a prohibition of rent increases, except as allowed herein, is therefore necessary.

R. The City Council hereby adopt s these regulations in order to address the threats set forth below.

1. Absent the adoption of this ordinance, as a result of the economic conditions and recognized housing shortage in Southern California, significant rent increases will impact a substantial number of residents in Oxnard and constitute a threat to public health, safet y, and welfare, and a particular hardship for senior citizens, persons living on fixed incomes, and other vulnerable persons living in the City;

2. For the preservation of the public peace, health, and safety, the City Council finds that it is necessary to adopt an ordinance stabilizing rents for all of the reasons set forth in the recitals above, which are hereby incorporated by reference; and

3. Certain aspects of public health, safety, and welfare are not adequately protected by the City’s existing mobile home park rent stabilization system both because of that system ’s limited scope and due to the City’s lack of rent stabilization mechanics or contro ls on residential real property generally, and it is in the interest of the City, owners, residents, and the community as a whole that the City adopt regulations to protect affordable housing within the City, including, but not limited to, rent stabilizati on regulations applicable to residential real property generally.
312

Page 4 of 11 ends

S. The direction for this ordinance dated October 19, 2021 , February 9, 2022, and April 13, 2022, shall be incorporated herein by this reference, and together with this ordinance, any amendmen ts or supplements, and oral testimony, shall constitute the necessary findings for this ordinance.

T. The City Council finds, determines and declares that the threat to the public health, safety , and welfare of th e C ity and its residents necessitates the enactment of the ordinance.

Section 3. Chapter 27, Article II, is hereby added to the City Code to read as follows:

―Article II: RENT STABILIZATION

SEC. 27–20. CITATION.

This Article shall be known as the ―Rent Stabilization Ordinance.‖

SEC. 27-21. PROHIBITED INCREASES.

Increases in rent on residential real property in the city of Oxnard in excess of four percent (4%), and more than one rent increase in any twelve (12) month period, are prohibited, unless expressly exempt under the Costa -Hawkins Rental Housing Act codified in California Civil Code section 1954.50, et seq.

SEC. 27–22. REASONABLE RATE OF RETURN.

This ordinance allows for an annual adjustment of residential real property rent of up to four percent (4%). Such an increase is found and determined to provide a just and reasonable return on a n owner’s property, and has been adopted to encourage good management, reward efficiency, and discourage the flight of capital, as well as to be commensurate with returns on comparable investments, but not so high as to defeat the purpose of curtailing excessive rents and rental increases. Notwithstanding the foregoing, however, any owner of residential real property who contends that the limit on rental increases set forth in Section 27–21 above will prevent the owner from receiving a fair and reasonable return on their property may petition for re lief from the cap set forth in section 27–21 pursuant to the procedures set forth in section 27–23.

SEC. 27–23. FAIR RETURN PETITION FOR RENT INCREASE.

313

Page 5 of 11 ends

(A) An owner of residential real property may petition for a rent increase in excess of that provided in s ection 27–21 in order to obtain a fair and reasonable return on their property (―Fair Return Petition ‖). Such Fair Return P etition shall be on an application form prescribed by the City Manager and shall be decided by the City Manager, or their designee (―City Manager‖). Owner shall provide a copy of any Fair Return Petition submitted to the city to the applicable tenant(s), and provide City with proof of completing such service to the applicable tenant(s). The tenant(s) will then have thirty (30) days from the dat e of receiving the Fair Return Petition to reply or provide additional materials to the City in response to the Fair Return Petition. The owner shall bear the burden of establishing that a rate increase in excess of that provided in section 27-21 is necessary to provide the owner with a fair and reasonable return on their property, including by providing an independent financial report and verified financial data demonstrating that without such an increase, they will not realize a fair and reasonable return on their property.

(B) Owner shall be responsible for all costs associated with the City’s review of the Fair Return Petition. Upon receipt of a Fair Return Petition , the City Manager shall determine the anticipated costs of review and if the employment of expert(s) will be necessary or appropriate for a proper analysis of the owner’s request. If the City Manager so determines, the City Manager shall also determine the anticipated costs of employing such expert(s). The resulting figure shall be commun icated to the Owner, and the Fair Return Petition shall not be processed until the owner has paid to the city the estimated cost of the complete analysis. City will provide owner with an invoice of all costs incurred after the review of the Fair Return Petition. Any unused portion of the advance payment for analysis shall be refunded to the owner. If additional funds are required, payment will be required before Owner receives the determination on the Fair Return Petition from the city.

(1) Changes in the Consumer Price Index for All Urba n Consumers in the Oxnard-Thousand Oaks -Ventura Metropolitan Area published by the Bureau of Labor Statistics.

(2) The length of time since the last determination by the City Manager on a rent increase application, or the last rent increase if no previous rent increase application has been made.

(3) The completion of any capital improvements or rehabilitation work related to the residential real property or mobile home space or spaces specified in the Fair Return Petition , and the cost thereof, including materials, labor, constru ction interest, permit fees , and other items the City Manager deems appropriate.

314

Page 6 of 11 ends

(4) Changes in property taxes or other taxes related to the subject residential real property or mobile home park.

(5) Changes in the rent paid by the owner for the lease of the residential real property or land on which the subject mobile home park is located.

6) Changes in the utility charges for the subject residential real property or mobile home park paid by the owner, and the extent, if any, of reimbursement from the tenants.

(7) Changes in reasonable operating and maintenance expenses.

(8) The need for repairs caused by circumstances other than ordinary wear and tear.

(9) The amount and quality of services provided by the owner to the affected tenant(s).

(D) A Fair Return Petition shall be decided by the City Manager within sixty (60) calendar days of the date that the application has been deemed complete , including proof of service of the Fair Return Petition on the applicable tenant(s) . The decision shall be emailed and sent by mail, with proof of mailing to the subject property owner, the owner's designated representative(s) for the Fair Return Petition , the applicable tenant(s), and the designated representative of the tenant(s), if a ny. The decision of the City Manager shall be final and not appealable.

SEC. 27–24. EXEMPTIONS.

(A) Pursuant to the Costa-Hawkins Rental Housing Act, the provisions of this ordinance regulating the amount of rent that a residential real property owner may charge shall not apply to the following: any residential real property that has a certificate of occupancy issued after February 1, 1995 ( California Civil Code section 1954.52(a)(1)); and, any other provisions of the Costa -Hawkins Rental Housing Act addressing exemptions, as applicable.

(B) Pursuant to the Tenant Protection Act of 2019, California Civil Code section 1947.12(d), the provisions of this ordinance regulating the amount of rent that a residential real property owner may charge shall not apply to the following:

(1) Housing restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the California Health and Safety Code, or subject to an agreement that provides 315

Page 7 of 11 ends

housing subsidies for affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the California Health and Safety Code or comparable federal statutes.

(2) Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school.

(3) Residential real property that is alienable separate from the title to any other dwelling unit, provided that both of the following apply:

(a) The owner is not any of the following:

i. A real estate investment trust, as defined in section 856 of the Internal Revenue Code.

ii. A corporation.

iii. A limited liability company in which at least one member is a corporation.

(b) At the time the tenancy is created:
i. The tenants have been provided written notice that the residential real property is exempt from this section using the following statement:

―This property is not subject to the rent limits imposed by Oxnard City Code Chapter 27, Article II and the
owner is not any of the following: (1) a real estate
investment trust, as defined by section 856 of the
Internal Revenue Code; (2) a corporation; or (3) a
limited liability company in which at least one member
is a corporation.‖

ii. For a tenancy existing before the effective date of this ordinance, the notice required under clause (i) may, but is not required to, be provided in the rental agreement.

iii. For a tenancy commenced or renewed on or after the effective date of this ordinance, the notice required under clause (i) must be provided in the rental agreement.

(4) A property containing two separate dwelling units within a single structure in which the owne r occupied one of the units as the owner’s principal place of residence at the beginning of the tenancy 316

Page 8 of 11 ends

so long as the owner continues in occupancy, and neither unit is an accessory dwelling unit or a junior accessory dwelling unit.

(C) The provisions of this ordinance regulating the amount of rent that a residential real property owner may charge shall not apply to the following:

(1) A unit subject to City Code Chapter 24, Article I, the City’s Mobile Home Park Rent Stabilization System.

(2) A unit in a hotel, motel, inn, tourist home, or rooming and boarding house which is rented primarily to transient guests for a period of less than 30 days; and other transient occupancies as defined in California Civil Code section 1940, subdivision (b).

(3) A unit in an institutional facility, including a hospital, medical care facility, residential care facility, asylum, group home for seniors or the disabled; a rental unit in a transitional housing program that assists h omeless persons as defined in California Civil Code section 1954.12; a convent or monastery owned and operated by a religious organization; and a fraternity or sorority house affiliate d with a college or university.

(4) A unit that the owner or the owner’s immediate family occupied as their principal place of residence at the beginning of the tenancy so long as the owner or the owner’s immediate family continues in occupancy.

SEC. 27–25. RENT INCREASE INEFFECTIVE.

No rent increase shall be effective if the owner:

(A) Fails to substantially comply with all provisions of this article, including but not limited to the failure to provide notices as required; or

(B) Fails to maintain the residential real property in compliance with California Civil Code Sections 1941.1 et seq. and California Health and Safety Code sections 17920.3 and 17920.10; or

SEC. 27–26. NOTICE REQUIREMENTS.

(A) An owner of any residential real property subject to this article shall, on or before the date of commencement of a tenancy, give the tenant a written notice in a form prescribed by the City which must include the following information:

317

Page 9 of 11 ends

(1) The existence and scope of this Chapter 27, Article II of the City Code; and

(2) The tenant’s right to respond to any Fair Return Petition filed with the City by the owner pursuant to section 27-23.

(B) As part of any notice to increase rent, an owner must include:

(1) Notice of the existence of this Chapter 27, Article II of the City Code; and

(2) The tenant’s right to respond to any Fair Return P etition filed with the City by the owner pursuant to section 27-23, unless such rent increase is pursuant to an approved Fair Return Petition.

(3) No rent increase shall take effect until the requirements of this article have been met.

(C) When the owner and tenant have entered into a written lease, the owner must give notices to the tenant in the language used in the lease. Whe n the owner and tenant have no t entered into a written lease, t he owner must give notices to the tenant in the language that the owner and tenant used to negotiate the terms of the tenancy.

SEC. 27–27. DEFINITION OF RENT.

For the purposes of this article, ―Rent‖ means all periodic payments and all nonmonetary consideration, including, but not limited to, the fair market value of goods or services rendered to or for the benefit of the owner under an agreement concerning the use or occupan cy of residential real property , including , bu t not limited to, all payment and consideration demanded or paid for parking, pets, furniture, and subletting.

SEC. 27–28. VIOLATIONS.

(a) It shall be unlawful for any person to violate or fail to comply with any provision of this article. The violati on of any provision of this article shall first be punished through the use of a civil citation, prior to prosecution as a misdemeanor , infraction, or civil injunction as provided in City Code section 1-10.

(b) Any owner who intentionally demands, accepts or retains any payment in violation of the provisions of this article shall be liable in a civil action to the tenant from whom such payment is demanded, accepted , or retained for damages in the sum of three tim es the amount by which the payment demanded, accepted, or retained exceeds the maximum amount which could be lawfully demanded, accepted, or retained together with reasonable attorneys' fees and costs as determined by the court. 318

Page 10 of 11 ends

SEC. 27–29. FEE ESTABLISHED.

Owners subject to this Ordinance shall pay the rent stabilization fee as established by city council resolution. The rent stabilization program fee is to fund the city’s cost to implement and enforce the provisions of this Ordinance.

SEC. 27–30. SUNSET.

This Article shall automatically sunset on December 31, 2030.‖

Section 4. The City Council finds that this ordinance is not s ubject to the California Environmental Quality Act (CEQA) pursuant to s ections 15060(c)(2), 15060(c)(3), and 15061(b)(3) of the State CEQA Guidelines because it will not result in a direct or reasonably foreseeable indirect physical change in the environment, because there is no possibility it will have a significant effect on the environment, and it is not a "project", as defined in section 15378 of the State CEQA Guidelines.

Section 5. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, phrase or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared invalid or unconstitutional.

Section 6. Within 15 days after passage, the City Clerk shall cause a summary of this ordinance to be published one time in a newspaper of general circulation published and circulated in the City. Ordinance No. _____ was first read on _______, 2022, and finally adopted on ________, 2022, to become effective thirty (30) days thereafter.

Section 7. This ordinance shall become effective thirty (30) days after it is finally adopted. The foregoing Ordinance was ad opted at a regular meeting of the City Council of the City of Oxnard, State of California, held on the _________ day of ____________, ______, by the following vote:

///
///
///
///
///
///
///
///
///
///
319

Page 11 of 11 ends

AYES:

NOES:

ABSENT:

ABSTAIN:

John C. Zaragoza, Mayor
ATTEST:

Rose Chaparro, City Clerk

APPROVED AS TO FORM:

Stephen M. Fischer, City Attorney
320

CITY COUNCIL AGENDA REPORT

PUBLIC HEARINGS
AGENDA ITEM NO. K.1

DATE: May 3, 2022

TO: City Council

FROM: Michael Wolfe, Public Works Director, (805) 385-8055, [email protected]

SUBJECT: Five Year Capital Improvement Program for Fiscal Years 2022-2027. (0/15/15)

RECOMMENDATION

That the City Council:

1. Hold a public hearing to receive public testimony regarding the proposed 2022-2027 City of Oxnard Five-Year Capital Improvement Program; 2. Approve and authorize the Fiscal Year 2022-23 & 2023-24 projects to be selected from the Proposed 2022-2027 City of Oxnard Five Year Capital Improvement Program; and

3. Adopt the 2022-2027 City of Oxnard Five Year Capital Improvement Program. (As of the date of this City Council agenda being posted, there is not yet an outcome from the April 26, 2022 Public Works and Transportation Committee. Staff is available to answer any questions.) Please click the following link to view the required Measure M pre-recorded presentation video: https://youtu.be/6ibQu- BEMDI

BACKGROUND

The purpose of a capital improvement program (CIP) is to provide an overview of the City’s current and reasonably anticipated construction and repair needs over the next five years. The City’s CIP contains projects to restore city facilities, and each project must have a cost of $100,000 or more, including design, environmental review, and construction. The CIP currently has approximately 140 funded projects listed over the five years, and the total cost of all projects, including prior appropriations, is approximately $700 million. This is inclusive of the approximately $26 million of American Rescue Plan Act (ARPA) funds that were appropriated to capital projects in this past year.

The CIP does not address maintenance activities, which are included in operation and maintenance budgets, or the rehabilitation of all of the City’s assets; repairs to a city’s fleet, for example, are not typically included in a CIP.

Examples of projects included in the CIP are:
Construction and major alterations of buildings
 Information technology (IT) hardware (but not software)  Pipeline replacement
 Playground structure replacement
 Street rehabilitation
 Traffic signal hardware installation
 Wastewater Treatment Plant electrical work
Planning over a five-year horizon is critical for budgeting resources – both personnel and financial. Adopting a CIP 321
allows staff to schedule projects according to anticipated revenues and workload capacity. This also makes the Council’s priorities clear to staff as grant opportunities arise.

A CIP is a five-year projection and plan. It is possible that next year there may be changes in planned projects or that new projects could be added as unforeseen circumstances arise.

Challenges
The City faces a number of challenges when it comes to maintaining our assets. Aging Infrastructure: The City of Oxnard is over 100 years old, and much of our infrastructure is old. Roads, storm drains, utilities and buildings all have a limited service life. The City’s assets have aged but sufficient funding has been limited to reinvest to keep our assets in good condition. Competing Costs: The City has grown during its lifetime and, thus, has required increases in City services, especially in the areas of public safety, and an expansion of public infrastructure. These costs compete with each other for funding.
Deferred Maintenance: Past budgets have not kept up with maintenance and replacement of the City’s physical assets. Repairs and replacement of buildings, vehicles and equipment are being addressed on an emergency basis. This is not cost effective.
Unassessed Capital Deficiencies: Many of the City’s assets have surpassed their useful lives but are still in service. An inventory will identify the physical condition of each asset and will recommend maintenance or replacement.
Unfunded Mandates: State and local regulators continue to develop and implement new requirements that often require initial capital expenditures, without providing a funding source. In order to stay in compliance with the mandates, the City must invest existing local funding into new requirements.

Project Prioritization
Since there are more needs than there is funding to meet those needs, projects must be prioritized. Staff prioritized as follows:
Priority 1 (Health and Safety): These projects are needed to maintain or improve human health or safety. An example is the Rice Avenue and Fifth Street Railroad Grade Separation project. This location has a history of vehicle versus train collisions, and this project will eliminate that potential. Certain projects that keep the Wastewater Treatment Plant from malfunctioning are related to health, as untreated sewage can lead to critical impacts. Some of the Fire and Police projects fall into this category as well. Priority 2 (Asset Preservation): These projects are needed to maintain or protect our existing assets. An example are the street paving projects. Our pavement management program aims to pave our poorest condition and arterial roads first. Waiting until the pavement fails is much more costly. Priority 3 (New or Expanded Services): These are projects that create something new, like a new park, or increase the capacity of existing facilities, like large water or sewer lines.

Within these priorities, staff also considered:
Council Priorities: On March 16, 2021 Council adopted the City’s Five-Year priorities which included various items that fall within the CIP such as restoring proper street paving cycle. As a result, Council directed staff to identify funding to reach an average pavement condition index (PCI) of 70 by September 2024 by allocating an additional $14.6 million over the subsequent three fiscal years. Grant Funding: If there is already grant funding awarded and available, there is a deadline for constructing the project. We never want to lose money, so these projects are given priority over projects for which the only funding source is General Fund.
322
Urgency: Priority 2 (Asset Preservation) is a large category, but some of these projects are more urgent than others. An example would be sewer manholes. Over time, sewer gasses like hydrogen sulfide eat away at the concrete and steel in the structure, and the manholes need to be replaced. Staff Capacity: Even if there were enough money to complete all of these projects, there would not necessarily be enough staff to manage all projects. Once projects were prioritized, the list of projects was balanced against available staff resources, also taking into consideration what contract services could be enlisted to complete each project.

The CIP Development Process
Staff navigated a rigorous process to prepare the CIP, as follows:
Departments identified necessary capital improvements and submitted those to the CIP working group. The departments clarified the requested scope of work, and Public Works staff confirmed the requested repair or change would be the right fix for the problem.
Staff reviewed projects for conformity with the General Plan and other needs assessments. For example, bicycle facility projects need to be in conformance with the Bicycle and Pedestrian Master Plan and park projects need to be in conformance with the Parks and Recreation Master Plan. Staff verified cost estimates and recommended priorities for funding. Public Works staff developed independent cost estimates to ensure the accuracy of the provided estimates. Staff updated the introductory portion of the CIP document to give a broad overview of the proposed projects in a greater context of City needs.
Staff presented the CIP projects to the Planning Commission on May 7th, 2020. In accordance with Section 65401 of the Government Code, the Planning Commission found all new CIP projects to be in conformance with both the City of Oxnard 2030 General Plan and the City of Oxnard Local Coastal Plan. The Planning Commission’s adopted resolution making this finding is attached to this staff report. Presenting to this Committee is the sixth step in this process, and if so recommended, the final step will be to present the CIP to the City Council for adoption.

DISCUSSION
The CIP explains where the City is in terms of many assets and needs, what a capital program and project are, how projects were selected and prioritized, and how projects are financed. The document highlights examples of projects by funding source, Council district and fiscal year. All projects are sorted in the appendices in the following ways:
By fiscal year, then funding source
By fiscal year, then by district
By fiscal year alone
By fiscal year, then by priority
The projects are organized into six categories: buildings, information technology (IT), parks and open space, seawalls, transportation and drainage, and utilities. Each category has a different icon on the top right of the project sheets and a related color. Within each category, the projects are listed alphabetically. The project sheets include, per project:
The project title
Location
Council district(s) impacted (or a project may have citywide benefit) Project description
Purpose and need
Relevant category and goal of the General Plan
Fiscal years the project will span
Funding source and cost estimate
Priority level
323
Name, photo and contact information for the Project Manager The task of the Public Works and Transportation Committee is to recommend, and later the Council to determine, which CIP projects should be funded in which fiscal year. Though this is a five-year CIP, only those projects that the Committee will recommend, and the Council would approve for funding, are those in fiscal years 2022-23 & 2023-24. In order to provide better project planning and more efficient use of staff time, funding allocations for a two-year CIP budget are being proposed, rather than previous years when only a single year’s allocations were provided. The projects’ identified funding for fiscal year 2022-23 will be integrated into the City’s 2022-23 budget. Projects in subsequent fiscal years beyond 2023-24 will return for funding consideration in future annual CIP documents. Projects that were previously approved by the City Council for funding in prior years that have yet to be completed, will continue and are shown in the document.

STRATEGIC PRIORITIES

This agenda item supports the Infrastructure and Natural Resources strategy. The purpose of the Infrastructure and Natural Resources strategy is to preserve and improve our roads, utilities, parks, trees, water supply and natural resources through effective planning, prioritization, and an equitable and efficient use of available funding.

FINANCIAL IMPACT

There is no direct fiscal impact with the adoption of the Proposed 2022-2027 Five-Year CIP. The CIP provides a full fiscal presentation of capital projects planned to be undertaken in the next five (5) years, provided funding is available.

The projects that the Council identify and approve to be adopted in the CIP for FY 2022-23 will be presented for adoption during the City’s budget approval process in June. Projects in subsequent fiscal years beyond 2023-24 will be included for funding consideration in future annual CIP documents. Additionally, projects approved by the City Council in prior fiscal years that have not yet been completed will have the unencumbered budgets rolled over into the FY 2022-23 budget.

COMMITTEE OUTCOME

As of the date of this City Council agenda being posted, there is not yet an outcome from the April 26, 2022 Public Works and Transportation Committee. Staff is available to answer any questions.

Prepared by: Tatiana Arnaout, City Engineer

ATTACHMENTS

1. Proposed CIP 2022-2027 Placeholder

2. List of funding requests for FY 22-23 & 23-24

3. 2022-20 CIP Planning Commission Resolution

4. Presentation
324
Five Year Capital Improvement Program for Fiscal Years 2022-2027 325
FY 22-23 & 23-24 Appropriations Summary List
CIP Page No. FY 22-23 FY 23-24
Measure O Sales Tax Fund (104)
Citywide Alleyway Resurfacing 49 ($ 2,250,000.00) ($ 2,250,000.00) Air Pollution Buydown Fee Fund (118)
Etting Road Bicycle & Pedestrian Facilities Installation 56 ($ 589,700.00) ($ - ) LMD 43 Fund (165)
Greenbelt LMD 43 Lighting Replacement 29 ($ - ) ($ 75,000.00) CFD #4-Seabridge Fund (173)
Seabridge Light Replacement 41 ($ 325,000.00) ($ - ) CFD #5-Riverpark Maint.Fd Fund (174)
Riverpark Irrigation Control System Replacement 40 ($ 300,000.00) ($ - ) RMRA Gas Tax (2032 H (2)) Fund (185)
Arterial Street Resurfacing 47 ($ 2,665,497.00) ($ 4,000,000.00) Edison Canal Bridge Rehabilitation 54 ($ 352,358.00) ($ - ) Mandalay Bay Bridge Rehabilitation 61 ($ 107,130.00) ($ - ) TCEP (189)
Rice Avenue & Fifth Street Railroad Grade Separation 70 ($ - ) ($ 75,900,000.00) Transportation Grant-State Fund (210)
4th Street Mobility Improvements 45 ($ - ) ($ 4,146,675.00) Rice Avenue & Fifth Street Railroad Grade Separation 70 ($ - ) ($ 5,000,000.00) Fed.Transport. Multiyear Grants Fund (275)
Ventura Boulevard Sidewalk - Rose Avenue to Balboa Street 81 ($ 866,489.00) ($ - ) Capital Outlay Fund (301)
City Hall HVAC & EMS 2 ($ 800,000.00) ($ - )
Fire Station Alerting System Replacement 7 ($ 150,000.00) ($ 150,000.00) Public Restroom Improvements 13 ($ 1,000,000.00) ($ 1,000,000.00) Roof Replacement - Various Facilities 16 ($ 1,000,000.00) ($ 500,000.00) South Oxnard Branch Library HVAC Renovation 21 ($ 1,550,000.00) ($ - ) WiFi in the Parks 22 ($ - ) ($ 300,000.00) Playground Replacement 36 ($ - ) ($ 4,500,000.00) Cypress Road Railroad Crossing Upgrade 52 ($ 75,000.00) ($ - ) Edison Canal Bridge Rehabilitation 54 ($ 3,327,642.00) ($ - ) Mandalay Bay Bridge Rehabilitation 61 ($ 826,870.00) ($ - ) Neighborhood Street Resurfacing 62 ($ 1,663,000.00) ($ - ) Ramona Preschool Pedestrian Crossing Enhancements 68 ($ 391,000.00) ($ - ) Stormwater Catch Basins Full Capture Devices Installation 76 ($ 100,000.00) ($ 100,000.00) Traffic Signal Modernization 78 ($ 1,000,000.00) ($ 1,000,000.00) Park Fees-Quimby Reserve Fund (351)
Via Marina Park Renovation 43 ($ 100,000.00) ($ 1,115,952.00) Storm Drain Facility Fee Fund (353)
Storm Drain Construction 73 ($ - ) ($ 1,150,000.00) Circulation Sys.Impr.Fees Fund (354)
Five Points Intersection Modernization 57 ($ 250,000.00) ($ - ) Traffic Signal Modernization 78 ($ 560,000.00) ($ 560,000.00) 326
Rice Avenue & Fifth Street Railroad Grade Separation 70 ($ 200,000.00) ($ - ) Capital Growth Fees-Resid Fund (355)
Fire Station 4 Rebuild 6 ($ 1,500,000.00) ($ 4,000,000.00) Water Operating Fund (601)
Water Distribution: Automated Meter Infrastructure Replacement122 ($ 8,000,000.00) ($ 8,000,000.00) Water Production: Blending Station 1 ATS and Panel Replacement129 ($ 75,000.00) - Water Production: Blending Station Upgrades 130 ($ 250,000.00) - Water Production: Chemical Tank Replacements 131 ($ 150,000.00) ($ 150,000.00) Security-Contam.Prev.Fund (608)
Water Campus: Security Improvements 119 ($ 444,500.00) - Water Bond Fund (609)
Water Distribution: CMWD Transmission Main 123 ($ 1,300,000.00) ($ 1,500,000.00) Water Distribution: Hobson Park East Neighborhood Cast Iron Pipe Replacement125 ($ - ) ($ 3,202,200.00) Water Distribution: Kamala Park Neighborhood Cast Iron Pipe Replacement126 ($ - ) ($ 8,711,100.00) Water Production: Desalter Upgrades and Brine Minimization 132 ($ 2,225,000.00) ($ - ) Water Production: New Wells - Water Division Headquarters 134 ($ - ) ($ 500,000.00) Water Production: System SCADA Improvements 135 ($ 1,650,000.00) ($ - ) Wastewater Collection Operating Fund (611)
Wastewater Collection: Gravity Main Improvements 97 ($ 750,000.00) ($ 750,000.00) Wastewater Collection: Lift Station Improvements 98 ($ 825,000.00) ($ 2,300,000.00) Wastewater Collection: Odor Reduction Program 99 ($ 1,200,000.00) ($ - ) Wastewater Collection: Sewer Manhole Rehabilitation and Replacement100 ($ 750,000.00) ($ - ) Wastewater Collection: UPRR Central Trunk Sewer Pipe Replacement101 ($ 2,500,000.00) ($ - ) Wastewater OWTP: Effluent Disposal Improvements 105 ($ 500,000.00) ($ 6,000,000.00) Wastewater OWTP: Headworks Variable Frequency Drives (VFD) Replacement108 ($ 1,500,000.00) ($ - ) Wastewater OWTP: Maintenance Building Expansion 110 ($ 3,000,000.00) ($ - ) Wastewater OWTP: Plant Control Center Locker Room Remodel114 ($ 100,000.00) ($ 400,000.00) Wastewater Capital Fund (617)
Wastewater OWTP: Electrical Improvements 106 ($ 6,191,000.00) ($ - ) Wastewater OWTP: Motor Control Center (MCC) Construction 111 ($ 5,350,000.00) ($ - ) Wastewater OWTP: New Maintenance Storage Building 112 ($ 2,000,000.00) ($ - ) Wastewater OWTP: Reliability Improvements 116 ($ 2,500,000.00) ($ - ) Wastewater Treatment Operating Fund (621)
Wastewater OWTP: Digester/Cogeneration Improvements 103 ($ - ) ($ 100,000.00) Wastewater OWTP: Dissolved Air Flotation Improvements 104 ($ - ) ($ 100,000.00) Wastewater OWTP: Outfall Repair 113 ($ 250,000.00) ($ 1,250,000.00) Wastewater OWTP: Primary Clarifiers and Activated Sludge Improvements115 ($ 1,250,000.00) ($ 3,000,000.00) Wastewater OWTP: System SCADA Improvements 118 ($ 4,000,000.00) ($ - ) Wastewater Sec & Contamination Fund (628)
Wastewater OWTP: Site Security Improvements 117 ($ 800,000.00) ($ - ) Solid Waste Operating Fund (631)
Environmental Resources: Roof Replacement - Del Norte Facility84 ($ 1,500,000.00) ($ - ) Golf Course Operating Fund (651)
CUPA Improvements at River Ridge Golf Course 5 ($ 150,000.00) ($ - ) River Ridge Clubhouse Roofing Replacement and Exterior Improvements14 ($ 500,000.00) ($ - ) 327
Aquatic Center Bond Fund (TBD)
Oxnard Aquatic Center 9 ($ - ) ($ 10,000,000.00) Street Bond Fund (TBD)
Arterial Street Resurfacing 47 ($ 1,900,000.00) ($ 2,000,000.00) Citywide Alleyway Resurfacing 49 ($ 7,750,000.00) ($ 6,250,000.00) Neighborhood Street Resurfacing 62 ($ 5,000,000.00) ($ 8,000,000.00) WIFIA Fund (TBD)
Recycled Water: Aquifer Storage and Recovery (ASR) Wells Construction88 ($ - ) ($ 5,300,000.00) Recycled Water: AWPF Improvements - Phase I 89 ($ 750,000.00) ($ - ) Recycled Water: AWPF Improvements - Phase II 90 ($ - ) ($ 3,000,000.00) Recycled Water: AWPF Recycled Water Storage Construction 92 ($ 600,000.00) ($ 2,400,000.00) TOTAL($87,660,186.00) ($178,660,927.00)
328
329
330
Adoption of the City of Oxnard Five-Year
Capital Improvement Program
2022-2027
Public Works and Transportation Committee
April 26, 2022
City Council
May 3, 2022
Tatiana B. Arnaout, P.E.

City Engineer
331
That the City Council approve and authorize:

1. The holding of a public hearing to receive public testimony regarding the proposed 2022-2027 City of Oxnard Five-Year Capital Improvement Program; and

2. The Fiscal Year 2022-23 & 2023-24 projects to be selected from the Proposed 2022-2027 City of Oxnard Five-Year
Capital Improvement Program; and

3. Adopt the 2022-2027 City of Oxnard Five-Year Capital Improvement Program.

RECOMMENDATION 2
332

1. Overview of the Capital
Improvement Program (CIP)

2. Summary of CIP Fiscal
Years (FY) 2022-27 New
Projects

3. Accomplishments of FY
2021-22 CIP
PURPOSE 3
333
CIP is the City’s plan - in this case for 5 years - to build or restore our facilities. The CIP does not address maintenance work. Examples of projects include:
• Construction and major alterations of buildings
• Information technology (IT) hardware
• Pipeline replacement
• Playground structure replacement
• Street rehabilitation
• Traffic signal hardware installation
• Wastewater Treatment Plant electrical work
WHAT IS A CAPITAL IMPROVEMENT PROGRAM (CIP)? 4
334
In order for a project to qualify for the CIP, it must meet the following two criteria:

It consists of construction, erection, alteration, renovation, improvement, demolition or repair work involving any City- owned facility
and
It is a project that costs at least $100,000
Note:

Studies and rolling equipment purchases do not qualify under the CIP.

WHAT PROJECTS QUALIFY? 5
335
THE CIP PROCESS 6

1.Departments identify
necessary capital
improvements

2. Staff reviews projects
for conformity with the
General Plan

3. Staff verifies cost
estimates and
recommends priority for
funding

4. Staff presents the CIP
to the Planning
Commission to
determine conformity
with the General Plan

5. Staff presents the CIP
to the Public Works &
Transportation
Committee and City
Council for approval
336
Prioritization
• Priority 1 (Health and Safety)
• Priority 2 (Asset Preservation)
• Priority 3 (New or Expanded Services)
Additional considerations:
• Council Priorities
• Grant Funding
• Urgency
• Staff Capacity
PRIORITIZATION 7
337
CIP highlights examples of projects by funding source,
Council district and fiscal year. All projects are sorted in the appendices by:
• By fiscal year, then funding source
• By fiscal year, then by district
• By fiscal year alone
• By fiscal year, then by priority
Projects are organized into six categories:
• Buildings
• Information technology (IT)
• Parks and open space
• Seawalls
• Transportation and drainage
• Utilities
CIP ORGANIZATION 8
338
The task of the Public Works and Transportation Committee is to recommend, and later the Council to determine, which CIP projects should be funded in which fiscal year
Only those projects that the Committee will recommend, and the Council would approve for funding, are those in fiscal years 2022-23 & 2023-24
In order to provide better project planning and more efficient use of staff time, funding allocations for a two-year CIP budget are being proposed, rather than previous years when only a single years’ allocations were provided
FUNDING PROJECTS 9
339
The project sheets include:

1. The project title

2. Location

3. Council district(s) impacted (or
a project may have citywide
benefit)

4. Project description

5. Purpose and need

6. Fiscal years the project will
span

7. Funding source and cost
estimate

8. Priority level

9. Name, photo and contact
information for the Project
Manager
PURPOSE 10
340
FY 2022-27 CIP NEW PROJECTS 11
Colonia Park Improvements
Oxnard Fire Stations Improvements
Wooley Road Protected Bike Lanes
341
FY 2022-27 CIP NEW PROJECTS 12
Project Title 2022-27
CIP Page
Building Structural Upgrades Appendix E
City Hall and Annex Exterior
Improvements
1 CUPA Improvements at Fleet
Services Facility
Appendix E
CUPA Improvements at River
Ridge Golf Course
5 BUILDINGS
City Hall and Annex Exterior Improvements
342
FY 2022-27 CIP NEW PROJECTS 13
Project Title 2022-27
CIP Page
Oxnard Fire Stations No. 2, 3, 5 10
River Ridge Golf Course Event
Space Upgrades
15 South Oxnard Branch Library
HVAC Renovation
21 BUILDINGS
Oxnard Fire Stations No. 2, 3, 5
343
FY 2022-27 CIP NEW PROJECTS 14
Project Title 2022-27
CIP Page
Colonia Park Improvements 25
Durley Park Improvements 28
Johnson Creek Park
Improvements
30 Olympic Skatepark in Colonia 31
Oxnard Tennis Center
Improvements
32 Park Playground Shade
Structures
34 River Ridge Playing Fields
Improvements
39 PARKS & OPEN SPACE
Durley Park Improvements
344
FY 2022-27 CIP NEW PROJECTS 15
Project Title 2022-27
CIP Page
C Street Over-Street Banners Appendix E
Citywide Sidewalk Repairs 51
Howell Road Lighting and Safety
Improvements 59
Pedestrian Bridge Improvements
at Channel Islands Bridge Appendix E
Regional Stormwater Capture
Improvements 69
Saviers Road Corridor
Improvements 72
Traffic Safety Improvements Appendix E
Wooley Road Protected Bike
Lanes 82

TRANSPORTATION & DRAINAGE
Citywide Sidewalk Repairs
345
FY 2022-27 CIP NEW PROJECTS 16
Project Title 2022-27 CIP
Page
Electric Vehicle (EV) Charging
Stations Appendix E
Riverpark Basin Recycled Water
Storage Project 94
Upgrade Citywide Radio
Infrastructure
95 Wastewater Collection: Gravity Main
Improvements 97
Wastewater OWTP:

Digester/Cogeneration
Improvements
103

UTILITIES
Wastewater OWTP: Dissolved Air
Flotation Improvements
346
FY 2022-27 CIP NEW PROJECTS 17
Project Title 2022-27 CIP
Page
Wastewater OWTP: Dissolved Air
Flotation Improvements 104
Wastewater OWTP: Interstage Pump
Station 109
Wastewater OWTP: Outfall Repair 113
Water Production: New Wells -
Blending Station 3 133
Water Production: New Wells - Water
Division Headquarters
134

UTILITIES
Water Production: New Wells -
Blending Station 3
347
CHALLENGES 18
• Limited resources across
various city departments that
affect workflow
• Increase in workload due to
Measure E & American
Rescue Plan Act (ARPA)
• Construction delays due to
material and labor shortages
• Increase in construction
costs due to inflation as well
as capital funding availability
through State and Feds
348
FY 2021-22 ACCOMPLISHMENTS 19
The following slides will highlight a few completed projects from FY 2021-22 as well as provide the full list of the completed projects.

10 Projects
(over $70M)
30 Projects
In Design Phase
19 Projects
$45M
Approx.

In Bid Phase
Completed
15 Projects
Over
$80M
In Construction
Phase
349
EXAMPLES OF FY 2021-22 COMPLETED PROJECTS 20
Project Name: Bryce Canyon/ Fremont Street Resurfacing
Description: Resurfacing streets within the Bryce Canyon North & South and Fremont North Neighborhoods

350
EXAMPLES OF FY 2021-22 COMPLETED PROJECTS 21
Project Name: Residential Street Resurfacing (On-Call)
Description: Resurfacing of various Residential Streets throughout the City utilizing the Pavement On-Call Agreement

351
EXAMPLES OF FY 2021-22 COMPLETED PROJECTS 22
Project Name: C Street Bicycle Facilities
Description: Installation of Class II Bike Lanes, Shared Roadway Markings (Sharrows), signage, and striping along the C
Street corridor

352
EXAMPLES OF FY 2021-22 COMPLETED PROJECTS 23
Project Name: Garden City Acres Park
Description: Expanded and refinished basketball courts, hardscape and walking path improvements, and landscaping

353
EXAMPLES OF FY 2021-22 COMPLETED PROJECTS 24
Project Name: La Colonia Green Alleys
Description: Alleyway improvements at the Boxing Gym, curb bulbouts, pedestrian crossing enhancements, drought-
tolerant landscaping, and stormwater capture

354
EXAMPLES OF FY 2021-22 COMPLETED PROJECTS 25
Project Name: Civic Annex 3rd Floor Tenant Improvement
Description: Tenant Improvements (TI) and ADA upgrades of the entire 3rd floor of the Civic Annex building

355
FY 2021-22 COMPLETED PROJECTS 26
The following is a list of the projects that were completed:

Category: Buildings
Project Title Project Description
Emergency Operations Center (EOC)
Renovation
Upgrade of audio and visual equipment within the
EOC.

Finance Department Remodel
Remodel third floor of the City Annex building to
accommodate new offices, a conference room and
upgrade restrooms to meet ADA requirements.

Roof Replacement - Colonia Park
Basketball Gym and Youth Center Replacement of roof for both gym and youth center.

Roof Replacement - PAL South Wing Replace roof on the south wing of the Police Activities League (PAL) Facility
356
FY 2021-22 COMPLETED PROJECTS 27
The following is a list of the projects that were completed:

Category: Parks & Open Space
Project Title Project Description
Garden City Acres Park Improvements
(Cypress)
Replace lighting infrastructure, upgrade electrical and add community cameras along Oxnard Trail from
Entrada Drive to the path adjacent to the Community
Garden
357
FY 2021-22 COMPLETED PROJECTS 28
Category: Transportation & Drainage
Project Title Project Description
Bryce Canyon South Neighborhood Street
Resurfacing
Resurface streets within Bryce Canyon South
Neighborhood
Doris Avenue Street Resurfacing* Resurface Doris Avenue from Patterson Road to A Street
Fremont North Neighborhood Street
Resurfacing
Resurface streets within the Fremont North
Neighborhood
Residential Street Resurfacing in Various
Locations
Resurface streets throughout the City with PCI less
than 35.

Second Street Resurfacing Resurface Second Street from Ventura Road to H Street
Teal Club Road Resurfacing* Resurface Teal Club Road
Wooley Road and Saviers Road Crack
Seal* Crack seal along Wooley Road and Saviers Road
*Anticipated by end of FY
358
FY 2021-22 COMPLETED PROJECTS 29
Category: Transportation & Drainage
Project Title Project Description
HERO Alleys Reconstruction* Reconstruct several alleys within the HERO boundaries
Citywide Alleys - Phase IIIA* Reconstruct several alleys throughout the City with PCI less than 25
La Colonia Green Alleys
Install Class III bicycle boulevards and green
infrastructure within two alleys connecting La Colonia
neighborhood with Cesar Chavez School, Ramona
Elementary School, Colonia Park, and downtown
Oxnard.
*Anticipated by end of FY
359
FY 2021-22 COMPLETED PROJECTS 30
Category: Utilities
Project Title Project Description
Central Trunk Sewer Manhole Replacement
- Phase I
Replace 74 deteriorating sewer manholes along the
Central Trunk sewer line starting at Fifth Street.

Hueneme Road Recycled Water Pipeline -
Phase II*
Install 3 miles of HDPE pipe along Hueneme Road
from Olds Road to Wood Road to supply recycled
water to agricultural customers.

La Colonia Neighborhood Cast Iron Pipe
Replacement*
Replace 60 year old cast iron pipe that has reached
the end of its service life with new PVC pipe
throughout La Colonia Neighborhood.

Lift Station No. 28 Demolition Lift Station No. 28 demolition includes removal of structures above grade, site civil work, and security.
*Anticipated by end of FY
360
• No direct fiscal impact with the adoption of the Proposed 2022-2027 Five-Year CIP
• CIP provides a full fiscal presentation of capital projects planned to be undertaken in next five (5) years, provided funding is available
• Projects that Council identify and approve to be adopted in the CIP for FY 2022-23 will be presented for adoption
during the City’s budget approval process in June
FINANCIAL IMPACT 31
361

QUESTIONS
32 362

CITY COUNCIL AGENDA REPORT

REPORTS
AGENDA ITEM NO. L.1

DATE: May 3, 2022

TO: City Council

FROM: Phillip Molina, City Treasurer, (805) 385-7808, [email protected]

SUBJECT: City Treasurer’s Monthly Investment Report for the Period Ending March 31, 2022.

RECOMMENDATION

That the City Council receive and file the report.

Please click the following link to view the required Measure M pre-recorded presentation video: https://youtu.be/4f51B4ByeEA

BACKGROUND

The City of Oxnard’s March 2022 investment report will be brief this reporting period. This report is submitted to the City Council pursuant to California Government Code section 53646 and the Investment Policy adopted by the City Council.

But first, I wish to give a special thanks to the City staff without whose assistance this report could not be generated. This report reflects the monthly investment information in the similar format that has been presented in previous months along with the amounts in the Bank statements as of March 31, 2022.

The following data is included in this report:

For the month of March, the investment portfolio earned an estimated $260,790 including LAIF and the Ventura County Investment Pool and $673,510.75 for the quarter.

Not in this sequence, it is our intention to show the public, the Mayor, and City Council the amounts in each city bank account so that you can see the percentage of available cash to the amount actually invested. You will notice the large buildup of cash in the bank account for the city’s general business. This is the result of the anticipated Federal payments, and it is the intent of the Treasurer to greatly increase the amount of cash invested so that once again it approaches 95% by year end. For March we have exceeded our goal.

Efficiency rating
Next, we will show you in a bar chart the amounts invested separated by their maturity date or year. This will allow you to see the ladder or spread of the investments in order to generate a higher return. Third, we explain the cash flows over the last 15 months so you can judge the management of the cash and determine whether there are periods during the year 363
when more money is available for a short period, overnight investments versus 2-, 3-, 4-, or 5-year maturities. Fourth, we will show you the daily cash position for March 30, 2022 so that you can see how the Treasurer’s department reviews our cash balances every day to assure that the city has enough liquidity to cover its obligations.

And next, we make available, upon request, the detailed list of every investment that the city currently holds as of March 31, 2022.

This information is being provided to you using both charts and graphs. The charts are presented so that the Mayor, Council and the public can begin to see the actual amounts in the city’s bank accounts at Bank of America. The graphs are created in order to show trends, and relationships that are best understood in that method of presentation. So, while this report is brief in the number of pages, we hope to respond to any question you may have.

STRATEGIC PRIORITIES

This agenda item is a routine operational item or does not relate to the five strategic priorities adopted by City Council on March 16, 2021.

FINANCIAL IMPACT

The City’s total amount invested as of March 31, 2022 at estimated market value was $342,844,959.10 purchased at a tax cost of $355,298,882.50. Because the upward movement in the GSE market interest rates produces greater earnings, it also results in an estimated net market loss if we had to sell the older lower yielding instruments in the market today.

In a market (the city’s policy requires risk free rate of return) of fixed interest rates any instrument purchased today will decrease in value as the interest rates increases and vice versa. However, with a passive portfolio, one where we intend to hold each instrument until it matures, we can expect to receive the PAR or Face value when we sell back each individual GSE(government sponsored enterprise bond) or CD, so that there would be no market loss.

Cash balances on the 31th day of March 2022 in each authorized city bank account with Bank of America totaled $21,290,828.63 in the four Bank of America accounts.
(Per Bank Statements as of March 31, 2022)
The investments have a par value of $355,185,000. Many were purchased months or years earlier and during the period of controlled GSE interest rates set by the President. To provide greater return we can try to reduce the amount invested with LAIF and spread that over the 2,3,4, and 5- year terms. Recently, LAIF was generating an average return that is now moving upward with the City’s average portfolio return. LAIF’s March average apportionment rate was .30%, which is less than the current GSE (government sponsored enterprise) rates and less than our average portfolio yield. Reducing the amount in LAIF would produce greater returns, however, doing so would also reduce the liquidity of the portfolio. 364
The portfolio’s average current earning has a yield on a 365-day basis of .88% year to date. So based on the face value of the investments using the average portfolio yield for estimating the amount of interest earnings for the month of March 2022 generates a quarterly estimated earnings of $673,000 and an estimated annual interest earnings over $2.1 million:

Now when we look back at the monthly cash flows of the recent years, we found that the month with the highest cash outflow was in 2018 with a one-month outflow of $37.4 million. And the fact that we had $75 million invested in LAIF and $31,000,000 in the Ventura County Investment Pool, which can be drawn down within one day, means there should be no normal condition that would require the Treasurer to sell investments before their maturity. Before we reveal the details, we want to know the level of efficiency in our investment team. But first we look to see how much cash is available, how much cash is invested to determine the efficiency of the team. The goal is to invest 100% of available cash, and we know that for normal operations we should retain a daily balance of $3-5 million in the bank accounts.

The daily cash report for the last working day in March shows sufficient available cash to satisfy the city’s booked short- term obligations though somewhat reduced from prior months. 365
The bar chart below, shows the maturities of City’s investment portfolio and reflects the fact that as our older instruments are being called early, we find the need to acquire shorter term notes but not unless we can guarantee a rate of .19 % or higher as explained above.

Detail of investments available upon request.

COMMITTEE OUTCOME

366
This item did not originate in Committee.

Prepared by: Phillip Molina, City Treasurer

ATTACHMENTS
None
367

CITY COUNCIL AGENDA REPORT

REPORTS
AGENDA ITEM NO. L.2

DATE: May 3, 2022

TO: City Council

FROM: Betsy George, Chief Financial Officer, (805) 200-5400, [email protected]

SUBJECT: Adopt a resolution approving Water Infrastructure Finance and Innovation Act (“WIFIA”) Loan from the U.S. Environmental Protection Agency (“EPA”). (10/5/5)

RECOMMENDATION

That the City Council adopt a resolution approving an Installment Purchase Agreement, Indenture of Trust, a WIFIA Loan Agreement, and a WIFIA Loan Term Sheet with respect to the issuance by the City of Oxnard Financing Authority of bonds in an aggregate principal amount not to exceed $55,000,000 and other matters pertaining thereto.

That the Board of Directors of the City of Oxnard Financing Authority adopt a resolution approving an Installment Purchase Agreement, Indenture of Trust, a WIFIA Loan Agreement, and a WIFIA Loan Term Sheet with respect to the issuance by the City of Oxnard Financing Authority of bonds in an aggregate principal amount not to exceed $55,000,000 and other matters pertaining thereto.
(Presentation will be live upon Consultant's request.)

BACKGROUND

The Water Infrastructure Finance and Innovation Act (“WIFIA”) program was authorized by U.S. Congress in the Water Resources Reform and Development Act of 2014. The purpose of the WIFIA program is to help finance water and wastewater infrastructure projects around the country, and the financing program provides assistance to local agencies for water infrastructure projects that would otherwise have difficulty obtaining financing. The WIFIA program is administered by the U.S. Environmental Protection Agency (“EPA”).

The City submitted a letter of interest to the EPA in October 2020 related to its Aquifer Storage and Recovery (“ASR”) project. After EPA staff reviewed the letter of interest, the City was invited to submit an application for the WIFIA financing program.

On September 7, 2021, City Council authorized the City Manager to submit the WIFIA application in an amount not to exceed $49,792,000. The application (along with the $100,000 application fee) was submitted in the Fall of 2021. The application fee will be credited against the financing costs associated with the WIFIA financing.

The application process includes evaluating both the project and financials of the City. According to the EPA, the average time from application submission to closing is approximately seven months. City staff have been in constant communication with EPA staff discussing both the engineering aspects of the project and the City’s ability to repay the obligation from water revenues. Additional discussions have involved the refinement of the financing structure, responding to due diligence information requests and providing input on the legal terms for the financing.

The project proposed to be financed by the WIFIA Loan is a major component of the City’s Groundwater Recovery Enhancement and Treatment (GREAT) program, which was initiated to secure reliable water supplies for the community 368
by focusing on water reuse as the key to a sustainable water supply portfolio. The proposed project encompasses the following components:

1. Upgrades to and expansion of the City’s Advanced Water Purification Facility (AWPF) to increase its capacity from the current 6.25 million gallons per day (mgd) to 12.5 mgd. Upgrades will include product water disinfection equipment and improved site security systems and new water storage tanks;

2. Construction of six ASR wells – one demonstration well and five full-scale wells;

3. A 20-inch diameter distribution pipeline to convey recovered groundwater from the ASR wells to three existing water blending stations (numbers 1, 3 & 6); and

4. Mechanical and electrical upgrades to those blending stations, as well as piping modifications and variable frequency drive pump replacements.

The demonstration well improvements are underway and is anticipated to be completed by July 2022 and is not a part of this WIFIA program application. We anticipate the demonstration period may last up to a year before the Division of Drinking Water approves the permit for indirect potable reuse (IPR). After we receive the permit, we plan on continuing to the next stage which is the ASR Completion Project.

The ASR Completion Project which does fall under WIFIA consists of the design and implementation of enhancements to the City’s recycled water system to increase production of advanced treated water at the AWPF, expand ASR by constructing the remaining five full-scale wells, and distribute treated water in order to augment potable water supplies for long-term water supply reliability. Project implementation will allow the City to increase production and use of recycled water treated at the City’s existing AWPF and sustainably maximize groundwater pumping from the Oxnard Groundwater Basin. This would occur by supplying AWPF effluent to agricultural users and pumping an equivalent amount of groundwater through pump-back allocations for potable demands. At the same time, ASR and IPR would be expanded to increase potable water supplies and improve blended water quality. ASR allows high quality AWPF-treated water to be injected into the local groundwater aquifer and subsequently extracted for IPR.

The WIFIA financing is unique when compared to the City’s existing water obligations.

1. The WIFIA financing provides flexible payment terms (extended final maturity and deferred payments).

Repayment is not expected to start for five years after funding or completion of the project, whichever comes first. Once repayment begins, the WIFIA financing will be amortized over a period of 35 years. Accordingly, the City’s WIFIA financing is expected to have a final maturity of June 2061 (40 years from closing).

2. The WIFIA financing will have a low, fixed interest rate based on the U.S. Treasury rate for a comparable maturity of the same weighted average life. This enables the City to secure a long-term interest rate lower than available in the capital markets. Initial estimates of the WIFIA financing include saving over $30,000,000 during the 40-year repayment term (when compared to capital markets financing terms).

3. The WIFIA financing has a flexible amortization structure. The existing Water Fund obligations are generally maturing over the next 18 years. The WIFIA financing will be structured to have most of the payments after the existing obligations are completed. The low interest rate on the WIFIA financing results in a lower overall repayment. This “wrap around” structure minimizes the impact on future water rate increases.

4. The WIFIA financing has flexible prepayment terms. While it is unlikely that the City would refinance the WIFIA financing (given the low long-term interest rate), the City maintains the option to prepay all or a portion of the WIFIA financing on any interest payment date.
369

NOTABLE WIFIA FINANCING REQUIREMENTS
WIFIA requires the City to secure matching funds to cover at least 51% of the eligible costs of the project. Eligible costs include the design, engineering, planning, construction costs, as well as construction contingency, costs of issuing the debt, capitalized interest, and reserve fund deposits. The City anticipates securing the matching funds through the issuance of water revenue bonds in fiscal year 2023-24 for the projects.

The City’s outstanding water revenue bonds have a requirement that the City maintain each year’s net water revenues equivalent to 100% of annual debt service and maintain a cash balance in the Water Fund equivalent to 25% of maximum annual debt service on all outstanding debt. The City has pledged to reduce expenses and/or raise water rates as needed to meet these covenants. The EPA has indicated that it will require the City to maintain net revenues equivalent to 110% of annual debt service (increasing the existing 100% requirement). Since the WIFIA financing is on parity with the outstanding Water obligations, this new covenant will impact future parity water obligations.

Staff believes that this requirement will not cause any debt covenant compliance concerns for the City in the immediate future given current coverage of 167% (fiscal year 2020-21).

Other than the updated coverage requirement above, the WIFIA financing will have similar legal covenants, documents, and requirements as the City’s outstanding water bonds.

STRATEGIC PRIORITIES

FINANCIAL IMPACT

This WIFIA financing is an obligation of the Water Fund and there is no financial impact to the City’s General Fund. The WIFIA financing will require an annual WIFIA administration fee, payable to the EPA. This fee is expected to range from $8,000 to $22,000 per year and will be paid along with the interest and principal payments. The WIFIA financing is expected to commence interest-only payments in fiscal year 2027-28 (approximately $1,500,000/year). The repayment of principal is anticipated to begin in fiscal year 2040-41 (final maturity 2060-61),with estimated annual payments of approximately $3,340,000/year.
370

ESTIMATED TIMING
If the City Council and Board of Directors approve the resolutions at this meeting, staff expects to close on the WIFIA financing in mid-May 2022.

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the WIFIA financing in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by the Municipal Advisor.

Principal Amount. The Municipal Advisor has informed the City that, based on the City’s purchase agreements, financing plan, and current market conditions, its good faith estimate of the aggregate principal amount of the WIFIA financing is $48,500,000 (the “Estimated Principal Amount”).

True Interest Cost of the WIFIA financing. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the WIFIA financing, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the WIFIA financing is 3.00%.

Finance Charge of the WIFIA financing. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the WIFIA financing, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the WIFIA financing, which means the sum of all fees and charges paid to third parties (or costs associated with the WIFIA financing), is $450,000.

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the WIFIA financing, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for the WIFIA financing is $44,712,356.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the WIFIA financing, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the WIFIA financing is $90,309,215, which excludes any reserves or capitalized interest paid or funded with proceeds of the WIFIA financing (which may offset such total payment amount).

The foregoing estimates constitute good faith estimates only as of March 23, 2022, and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the WIFIA financing, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual closing date of the WIFIA financing being different than the date assumed for purposes of such estimates, (b) the actual principal amount of WIFIA financing being different from the Estimated Principal Amount, (c) the actual amortization of the WIFIA financing being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of close of the WIFIA financing being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The actual closing date of the WIFIA financing and the actual principal amount of the WIFIA financing will be determined by the City based on the timing of the need for proceeds of the WIFIA financing and other factors. The actual interest rates borne by the WIFIA financing will depend on market interest rates at the time of sale thereof. The actual amortization of the WIFIA financing will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic, national, international and other factors beyond the control of the City or the Municipal Advisor.

COMMITTEE OUTCOME

The Finance and Governance Committee approved 3-0 on April 12, 2022, to approve the staff recommendation and to forward the item for Council approval.

Prepared by: NHA Advisors
371

ATTACHMENTS

1. Oxnard 2022 WIFIA Loan - Resolution of the Authority-c1

2. Oxnard 2022 WIFIA Loan - Resolution of the City-c1

3. Oxnard 2022 WIFIA Loan - Installment Purchase Agreement-c1

4. Oxnard 2022 WIFIA Loan - Indenture of Trust-c1

5. Oxnard_WIFIA_Loan_Agreement.CCAgenda.050322

6. Oxnard 2022 WIFIA Loan - Term Sheet.CCAgenda.050322

7. Estimated WIFIA Loan Amortization Schedule

8. 5.3.22 CC - Presentation on WIFIA Financing
372
60302.00018\34948562.2
1 BOARD OF DIRECTORS OF

THE CITY OF OXNARD FINANCING AUTHORITY
RESOLUTION NO. ______

RESOLUTION OF THE BOARD OF DIRECTORS OF CITY OF OXNARD FINANCING

AUTHORITY APPROVING AN INSTALLMENT PURCHASE AGREEMENT, INDENTURE

OF TRUST, A WIFIA LOAN AGREEMENT, AND A WIFIA LOAN TERM SHEET WITH

RESPECT TO THE ISSUANCE OF BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $55,000,000, APPOINTING A TRUSTEE AND OTHER MATTERS

PERTAINING THERETO
WHEREAS, City of Oxnard Financing Authority (the “Authority”) was established for the purpose of assisting the City of Oxnard (the “City”) with financing public capital improvements; and
WHEREAS, the City Council has considered financing the Aquifer Storage Recovery (ASR) Project consists of the following components: (i) expansion of the City’s Advanced Water Purification Facility capacity, (ii) construction of additional aquifer storage wells, (iii) construction of a distribution pipeline to convey recovered groundwater from the ASR wells to three existing Blending Stations, and (iv) upgrades to two of the City’s Blending Stations including mechanical and electrical upgrades as well as piping modifications and pump replacements in an amount of $48,000,000 (the “2022 Project”); and
WHEREAS, the City has determined to finance the 2022 Project through the issuance by the Authority of an aggregate principal amount of bonds in an amount not to exceed $55,000,000 (the “2022 Bonds”), pursuant to an Indenture of Trust to be entered into among the City, the Authority and Computershare Trust Company, N.A., as trustee (the “Trustee”); and WHEREAS, under the terms of an Installment Purchase Agreement between the City and the Authority (the “Installment Purchase Agreement”) the Authority will sell the 2022 Project to the City and the City will agree to make installment payments to the Authority; and WHEREAS, there has been presented to the City Council a WIFIA Loan Term Sheet (the “Term Sheet”) together with a form of WIFIA Loan Agreement (the “WIFIA Loan Agreement”) whereby the United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency (the “US EPA”) will purchase the 2022 Bonds; and
WHEREAS, Section 5852.1 of the California Government Code requires that the Board obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the 2022 Bonds, good faith estimates of (a) the true interest cost of the 2022 Bonds, (b) the sum of all fees and charges paid to third parties with respect to the 2022 Bonds, (c) the amount of proceeds of the 2022 Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the 2022 Bonds, and (d) the sum total of all debt service payments on the 2022 Bonds calculated to the final maturity of the 2022 Bonds, plus the fees and charges paid to third parties not paid with the proceeds of the 2022 Bonds; 373
60302.00018\34948562.2
2 WHEREAS, in compliance with Section 5852.1 of the California Government Code, the Board has obtained from NHA Advisors, Inc., the Authority’s municipal advisor (the “Municipal Advisor”) the required good faith estimates and such estimates are disclosed in the report presented to the Board of Directors; and
WHEREAS, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the issuance of the 2022 Bonds hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Authority is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such issuance for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY the Board of Directors of the City of Oxnard Financing Authority as follows:

Section 1. Recitals True and Correct. The foregoing recitals are true and correct and the Board of Directors so finds and determines.

Section 2. Funding 2022 Project; Approval of WIFIA Loan Term Sheet. The Board of Directors hereby approves the issuance of the 2022 Bonds for the purposes of raising new money for the 2022 Project with the proceeds of the 2022 Bonds on substantially the terms and conditions detailed in the documents presented at this meeting. The terms of the 2022 Bonds and the manner of determining the interest rate on the 2022 Bonds shall be as described in the Term Sheet, which is hereby approved, and each Authorized Representative (as defined below) is authorized and directed to execute, acknowledge and deliver said Term Sheet on behalf of the Authority in substantially the form hereby approved with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 3. Approval of Installment Purchase Agreement. The agreement entitled “Installment Purchase Agreement (Series 2022)” to be entered into by and between the City and the Authority, which provides generally for (i) the acquisition of the 2022 Project by the Authority, (ii) the purchase by the City from the Authority of the 2022 Project, and (iii) the payment by the City to the Authority of Installment Payments in amounts which will be sufficient to pay the principal of and interest owing on the 2022 Bonds until the 2022 Bonds are fully paid, is hereby approved and the Chair, Vice-Chair, the Executive Director, Chief Financial Officer and Secretary of the Board of Directors (each an “Authorized Representative”) are, and each such officer is, authorized and directed to execute, acknowledge and deliver said agreement on behalf of the Authority in substantially the form hereby approved with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 4. Approval of Indenture of Trust. The agreement entitled “Indenture of Trust” to be entered into by and among the City, the Authority and the Trustee named therein, is hereby approved and any Authorized Representative is authorized and directed to execute, acknowledge and deliver said agreement on behalf of the Authority in substantially the form hereby approved with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. 374
60302.00018\34948562.2
3 Section 5. Approval of Loan Agreement and Conditions of Approval. The form of WIFIA Loan Agreement presented at this meeting is hereby approved and any Authorized Representative is hereby authorized to accept, for and in the name of the Authority, such WIFIA Loan Agreement in substantially the form hereby approved with such changes therein as the Authorized Representative executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof, provided that the WIFIA Loan Agreement and the provisions of the Installment Purchase Agreement, shall substantially conform to the provisions of the Term Sheet.

Section 6. Appointment of Trustee. Computershare Trust Company, N.A., is appointed as Trustee pursuant to the Indenture of Trust to take any and all action provided therein to be taken by the Trustee.

Section 7. Forms of Bonds. The forms of the 2022 Bonds set forth in Indenture of Trust are approved, and the Trustee is authorized to authenticate the 2022 Bonds and to apply, deposit, invest, administer and utilize the proceeds. Any Authorized Representative is authorized to determine the final aggregate principal amount of the 2022 Bonds to be purchased by the US EPA and the final maturity date of the 2022 Bonds based on the determination of the Executive Director or Chief Financial Officer of the amount needed to finance the 2022 Project, achieve the City’s financing objectives, and to pay Costs of Issuance, as defined and specified in the Indenture of Trust.

Section 8. Other Acts. The officers of the Authority are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the issuance of the 2022 Bonds, the financing of the 2022 Project or otherwise to effectuate the purpose of this Resolution, including obtaining bond insurance or other guarantee of the 2022 Bonds, and such actions previously taken by such officers are hereby ratified and confirmed. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.] 375
60302.00018\34948562.2
4 Section 9. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption.

PASSED AND ADOPTED this ___ day of __________, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

John C. Zaragoza, Chairman
ATTEST:
_________________________
Rose Chaparro, Secretary
APPROVED AS TO FORM:
______________________________
Stephen Fischer, Authority Counsel
376
60302.00018\34948562.2
5 STATE OF CALIFORNIA )
COUNTY OF VENTURA ) ss.

CITY OF OXNARD )
I, Rose Chapparo, Secretary of the City of Oxnard Financing Authority, do hereby certify the attached to be a true and correct copy of City of Oxnard Financing Authority Resolution No. _______, adopted at the Oxnard City Council Meeting held on __________, 2022. The original resolution is on file in the City Clerk’s Office at 300 W. Third Street, Oxnard, California 93030.

DATED this ___ day of __________, 2022.
__________________________________
Rose Chapparo
Secretary
377
60302.00018\34948545.2
1 CITY COUNCIL OF THE CITY OF OXNARD
RESOLUTION NO. ______

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF OXNARD APPROVING AN

INSTALLMENT PURCHASE AGREEMENT, INDENTURE OF TRUST, A WIFIA LOAN

AGREEMENT, AND A WIFIA LOAN TERM SHEET WITH RESPECT TO THE ISSUANCE

BY THE CITY OF OXNARD FINANCING AUTHORITY OF BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $55,000,000, AND OTHER MATTERS

PERTAINING THERETO
WHEREAS, City of Oxnard Financing Authority (the “Authority”) was established for the purpose of assisting the City of Oxnard (the “City”) with financing public capital improvements; and
WHEREAS, The Aquifer Storage Recovery (ASR) Project consists of the following components: (i) expansion of the City’s Advanced Water Purification Facility capacity, (ii) construction of additional aquifer storage wells, (iii) construction of a distribution pipeline to convey recovered groundwater from the ASR wells to three existing Blending Stations, and (iv) upgrades to two of the City’s Blending Stations including mechanical and electrical upgrades as well as piping modifications and pump replacements in an amount of $48,000,000 (the “2022 Project”); and
WHEREAS, the City has determined to finance the 2022 Project through the issuance by the Authority of an aggregate principal amount of bonds in an amount not to exceed $55,000,000 (the “2022 Bonds”), pursuant to an Indenture of Trust to be entered into among the City, the Authority and Computershare Trust Company, N.A., as trustee (the “Trustee”); and WHEREAS, under the terms of an Installment Purchase Agreement between the City and the Authority (the “Installment Purchase Agreement”) the Authority will sell the 2022 Project to the City and the City will agree to make installment payments to the Authority; and WHEREAS, there has been presented to the City Council a WIFIA Loan Term Sheet (the “Term Sheet”) together with a form of WIFIA Loan Agreement (the “WIFIA Loan Agreement”) whereby the United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency will purchase the 2022 Bonds; and
WHEREAS, Section 5852.1 of the California Government Code requires that the Board obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the 2022 Bonds, good faith estimates of (a) the true interest cost of the 2022 Bonds, (b) the sum of all fees and charges paid to third parties with respect to the 2022 Bonds, (c) the amount of proceeds of the 2022 Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the 2022 Bonds, and (d) the sum total of all debt service payments on the 2022 Bonds calculated to the final maturity of the 2022 Bonds, plus the fees and charges paid to third parties not paid with the proceeds of the 2022 Bonds; 378
60302.00018\34948545.2
2 WHEREAS, in compliance with Section 5852.1 of the California Government Code, the Council has obtained from NHA Advisors, Inc., the City’s municipal advisor (the “Municipal Advisor”) the required good faith estimates and such estimates are disclosed in the report presented to the City Council; and
WHEREAS, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the issuance of the 2022 Bonds hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such issuance for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, the City Council of the City of Oxnard resolves as follows:

Section 1. Recitals True and Correct. The foregoing recitals are true and correct and the City Council so finds and determines.

Section 2. Funding 2022 Project; Approval of WIFIA Loan Term Sheet. The City Council hereby approves the issuance of the 2022 Bonds by the Authority for the purposes of raising new money for the 2022 Project with the proceeds of the 2022 Bonds on substantially the terms and conditions detailed in the documents presented at this meeting. The terms of the 2022 Bonds and the manner of determining the interest rate on the 2022 Bonds shall be as described in the Term Sheet, which is hereby approved, and each Authorized Representative (as defined below) is authorized and directed to execute, acknowledge and deliver said Term Sheet on behalf of the City in substantially the form hereby approved with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 3. Approval of Installment Purchase Agreement. The agreement entitled “Installment Purchase Agreement (Series 2022)” to be entered into by and between the City and the Authority, which provides generally for (i) the acquisition of the 2022 Project by the Authority, (ii) the purchase by the City from the Authority of the 2022 Project, and (iii) the payment by the City to the Authority of Installment Payments in amounts which will be sufficient to pay the principal of and interest owing on the 2022 Bonds until the 2022 Bonds are fully paid, is hereby approved and the Mayor, Mayor Pro Tem, the City Manager, Chief Finance Officer and City Clerk (each an “Authorized Representative”) are, and each such officer is, authorized and directed to execute, acknowledge and deliver said agreement on behalf of the City in substantially the form hereby approved with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 4. Approval of Indenture of Trust. The agreement entitled “Indenture of Trust” to be entered into by and among the City, the Authority and the Trustee named therein, is hereby approved and any Authorized Representative is authorized and directed to execute, acknowledge and deliver said agreement on behalf of the City in substantially the form hereby approved with such changes therein as the officer executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. 379
60302.00018\34948545.2
3 Section 5. Approval of Loan Agreement and Conditions of Approval. The form of WIFIA Loan Agreement presented at this meeting is hereby approved and any Authorized Representative is hereby authorized to accept, for and in the name of the City, such WIFIA Loan Agreement in substantially the form hereby approved with such changes therein as the Authorized Representative executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof, provided that the WIFIA Loan Agreement and the provisions of the Installment Purchase Agreement, shall substantially conform to the provisions of the Term Sheet.

Section 6. Other Acts and Payment of Costs. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the issuance of the 2022 Bonds, the financing of the 2022 Project or otherwise to effectuate the purpose of this Resolution, including obtaining bond insurance or other guarantee of the 2022 Bonds, and such actions previously taken by such officers are hereby ratified and confirmed. The City Council hereby authorizes and approves the payment of professionals to provide services in connection with the issuance of the Bonds and the WIFIA Loan, namely NHA Advisors, LLC and Best Best & Krieger LLP.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.] 380
60302.00018\34948545.2
4 Section 7. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption.

PASSED AND ADOPTED this ___ day of ___________, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

John C. Zaragoza, Mayor
ATTEST:

Rose Chaparro, City Clerk
APPROVED AS TO FORM:

Stephen Fischer, City Attorney
381
60302.00018\34948545.2
5 STATE OF CALIFORNIA )
COUNTY OF VENTURA ) ss.

CITY OF OXNARD )
I, Rose Chapparo, City Clerk of the City of Oxnard, do hereby certify the attached to be a true and correct copy of City of Oxnard, City Council Resolution No. _______, adopted at the Oxnard City Council Meeting held on __________, 2022. The original resolution is on file in the City Clerk’s Office at 300 W. Third Street, Oxnard, California 93030.

DATED this ___ day of __________, 2022.
__________________________________
Rose Chapparo
City Clerk
382
60302.00018\34948393.2

INSTALLMENT PURCHASE AGREEMENT
by and between

CITY OF OXNARD,
as Purchaser
and

CITY OF OXNARD FINANCING AUTHORITY,
as Seller
Dated as of _____________, 2022
Relating to
$_________________

CITY OF OXNARD FINANCING AUTHORITY

WATER REVENUE BONDS
SERIES 2022A (WIFIA LOAN)
383
60302.00018\34948393.2
1 INSTALLMENT PURCHASE AGREEMENT
This INSTALLMENT PURCHASE AGREEMENT, made and entered into as of _____________, 2022, by and between the CITY OF OXNARD, a general law city and a municipal corporation duly organized and existing under and by virtue of the laws of the State of California (the “City”), and the CITY OF OXNARD FINANCING AUTHORITY, a joint exercise of powers agency duly organized and existing under and by virtue of the laws of the State of California (the “Authority”):

W I T N E S S E T H:

WHEREAS, the City proposes to finance certain improvements to the City’s water system, as more particularly described herein (collectively, the “2022 Project”); and WHEREAS, the City desires to finance the Aquifer Storage Recovery (ASR) Project consists consisting of the following components: (i) expansion of the City’s Advanced Water Purification Facility capacity, (ii) construction of additional aquifer storage wells, (iii) construction of a distribution pipeline to convey recovered groundwater from the ASR wells to three existing Blending Stations, and (iv) upgrades to two of the city’s Blending Stations including mechanical and electrical upgrades as well as piping modifications and pump replacements (collectively, the “2022 Project”); and WHEREAS, the City and the Authority have duly authorized the execution of this Agreement; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Agreement;

NOW, THEREFORE, IN CONSIDERATION OF THESE PREMISES AND OF THE MUTUAL

AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER GOOD AND

VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:

ARTICLE I

DEFINITIONS
SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. All capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Indenture.
“Acquisition and Construction” means, with respect to the 2022 Project, the acquisition, construction, improvement, equipping, renovation, remodeling or reconstruction thereof. “Acquisition and Construction Costs” means, with respect to any of the 2022 Project, all costs of the Acquisition and Construction thereof which are paid from moneys on deposit in the Acquisition and Construction Fund, including but not limited to:
384
60302.00018\34948393.2
2 (a) all costs required to be paid to any person under the terms of any agreement for or relating to the Acquisition and Construction of the 2022 Project; (b) obligations incurred for labor and materials in connection with the Acquisition and Construction of the 2022 Project;
(c) the cost of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect in connection with the Acquisition and Construction of the 2022 Project;
(d) all costs of engineering and architectural services, including the actual out-of- pocket costs for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees, sales commissions, and for supervising construction, as well as for the performance of all other duties required by or consequent to the proper Acquisition and Construction of the 2022 Project;
(e) any sums required to reimburse the Authority or the City for advances made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the Acquisition and Construction of the 2022 Project; (f) all financing costs incurred in connection with the Acquisition and Construction of the 2022 Project, including but not limited to other costs incurred in connection with this Agreement and the financing of the 2022 Project; and
(g) the interest components of the Installment Payments during the period of Acquisition and Construction of the 2022 Project, to the extent not paid from the proceeds of the Authority Bonds deposited in the Interest Account pursuant to the Indenture. “Additional Obligations” means Obligations other than this Installment Purchase Agreement, which are either currently outstanding or issued pursuant to Section 5.03 hereof. “Agreement” or “Installment Purchase Agreement” means this Installment Purchase Agreement, dated as of _____________, 2022, by and between the City and the Authority, as originally executed and as it may from time to time be amended or supplemented in accordance herewith. “Authority” means City of Oxnard Financing Authority, a joint exercise of powers agency duly organized and existing under and by virtue of the laws of the State of California. “Authority Bonds” means the Series 2022 Bonds.
“Bond Counsel” means (a) Best Best & Krieger LLP, or (b) any other attorney or firm of attorneys appointed by or acceptable to the City of nationally recognized standing in matters pertaining to the tax- exempt nature of interest on obligations of states and their political subdivisions and duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia.
“Build America Bonds” means the bonds with which the Authority has irrevocably elected (i) to apply the provisions of Section 54AA(d) of the Code and intends that the bonds be treated as “build America bonds” within the meaning of Section 54AA(d) of the Code and (ii) to apply the provisions of Section 54AA(g) of the Code and intends that the bonds be treated as “qualified bonds” within the meaning of Section 54AA(g) of the Code, such that the bonds will bear interest that is not excluded from federal income 385
60302.00018\34948393.2
3 taxation and, as provided for in Section 54AA(b) and 6431 of the Code, the bonds are eligible to receive Interest Subsidy Payments and for which the Authority or the Authority’s authorized designated recipient has filed the requires Internal Revenue Service Forms.
“City” means the City of Oxnard, a general law city and a municipal corporation duly organized and existing under and by virtue of the laws of the State of California. “City Bonds” means all revenue bonds or notes of the City authorized, executed, issued, and delivered under and pursuant to the laws of the State of California, the payments of which are made from the Net Water System Revenues and which are on a parity with the Installment Payments. The term “City Bonds” includes, but is not limited to, obligations in the form of bonds, notes, bond anticipation notes, and commercial paper.
“Contract Payments” means Installment Payments due and payable under this Installment Purchase Agreement, installment or lease payments of interest and principal or, if there are no separate payments of interest and principal, the installment or lease payments, scheduled to be paid by the City under and pursuant to the Contracts.
“Contracts” means this Installment Purchase Agreement and all contracts or leases of the City authorized and executed by the City under and pursuant to the laws of the State of California, installment or lease payments under which are payable from the Net Water System Revenues on a parity with this Installment Purchase Agreement.
“Debt Service” means, for any Fiscal Year or other period, the sum of (i) the interest payable during such Fiscal Year or 12-month period on all outstanding City Bonds, assuming that all outstanding serial City Bonds are retired as scheduled and that all outstanding term City Bonds are redeemed or paid from sinking fund payments as scheduled (except to the extent that such interest is to be paid from the proceeds of sale of any City Bonds), (2) that portion of the principal amount of all outstanding serial City Bonds maturing on any principal payment date which falls in such Fiscal Year or 12-month period, (3) that portion of the principal amount of all outstanding term City Bonds required to be redeemed or paid on any redemption date which falls in such Fiscal Year or 12-month period, and (4) that portion of the Contract Payments required to be made in such Fiscal Year or 12-month period (except to the extent such interest is capitalized). For purposes of calculating Debt Service, the following assumptions shall be used:
provided that, as to any such City Bonds or Contract Payments bearing or comprising interest at other than a fixed rate, the rate of interest used to calculate Debt Service shall be the rate set forth in the applicable Qualified Swap, and if there is no Qualified Swap in effect with respect thereto, the greatest of (a) the actual interest rate on such City Bonds or Contract Payments on the date of calculation, or if the indebtedness is not yet outstanding, the initial interest rate (if established and binding), (b) if the City Bonds or Contracts have been outstanding for at least twelve months, the average rate over the twelve calendar months immediately preceding the date of calculation, and (c) (i) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Code, the most recently published Bond Buyer “Revenue Bond Index” (or comparable index if no longer published) plus 50 basis points, or (ii) if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities plus 50 basis points; provided, however, that for purposes of any portion of Sections 5.03 (Additional Obligations) and 6.10 (Amount of Rates and Charges) of the Installment Purchase Agreement, measuring actual debt service coverage during a test period, variable rate indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the test period; and provided further that, if any series or issue of such City Bonds or Contract Payments have twenty- five percent (25%) or more of the aggregate principal amount of such series or issue due in any one year, 386
60302.00018\34948393.2
4 Debt Service shall be determined for the Fiscal Year or other 12-month period of determination as if the principal of and interest on such series or issue of such City Bonds or Contract Payments were being paid from the date of incurrence thereof in substantially equal annual amounts over a period of twenty-five (25) years from the date of calculation; and
provided further that, as to any such City Bonds or Contract Payments or portions thereof bearing no interest but that are sold at a discount and which discount accretes with respect to such City Bonds or Contract Payments or portions thereof, such accreted discount shall be treated as interest in the calculation of Debt Service; and
provided further that, the amount on deposit in a debt service reserve fund on any date of calculation of Debt Service shall be deducted from the amount of principal due at the final maturity of the City Bonds and Contracts for which such debt service reserve fund was established and in each preceding year until such amount is exhausted; and
provided further that, Debt Service shall not include interest that is paid from investment earnings on amounts on deposit in the applicable Reserve Account and transferred to the Debt Service Fund; and provided further that, for purposes of any portion of Sections 5.03 (Additional Obligations) and

6.10 (Amount of Rates and Charges) of the Installment Purchase Agreement measuring actual debt service coverage during a test period, Debt Service with respect to all City Bonds, Contract Payments, and bonds issued by the Authority secured by such Contract Payments for which the City or the Authority is entitled to receive Interest Subsidy Payments or any similar payments from the United States Department of the Treasury shall be determined net of all such Interest Subsidy Payments or similar payments from the United States Department of the Treasury received or scheduled to be received by the City or the Authority during such test period.
“Debt Service Payment Commencement Date” means the earlier to occur of (a) December 1, 2027; or (b) the Series 2022 Installment Payment Date falling closest to, but not later than, the fifth anniversary of the first disbursement date of the WIFIA Loan (but in any event no later than five (5) years after the Substantial Completion Date of the 2022 Project).
“Default Rate” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms) of the WIFIA Loan Agreement.
“Event of Default” means an event described in Section 8.01. “Fiscal Year” means the period beginning on July 1 of each year and ending on the last day of June of the next succeeding year, or any other twelve-month period selected and designated as the official Fiscal Year of the City.
“Indenture” means the Indenture of Trust, dated as of _____________, 2022, by and among the City, the Authority and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with its terms.
“Independent Certified Public Accountant” means any certified public accountant or firm of certified public accountants appointed and paid by the Authority, and who, or each of whom:
(a) is in fact independent and not under domination of the Authority or the City; 387
60302.00018\34948393.2
5 (b) does not have any substantial interest, direct or indirect, in the Authority or the City; and
(c) is not connected with the Authority or the City as an officer or employee of the Authority or the City but who may be regularly retained to make annual or other audits of the books of or reports to the Authority or the City.
“Independent Financial Consultant” means a financial consultant or firm of such consultants appointed by the City, and who, or each of whom:
(1) is in fact independent and not under domination of the City or the Authority; (2) does not have any substantial interest, direct or indirect, with the City or the Authority; and
(3) is not connected with the City or the Authority as an officer or employee thereof, but who may be regularly retained to make reports thereto. “Installment Payment Date;” “Series 2022 Installment Payment Date” The term “Installment Payment Date” means each date on which Installment Payments are scheduled to be paid by the City under and pursuant to any Contracts. The term “Series 2022 Installment Payment Date” means the fifth day prior to each Interest Payment Date, or if said date is not a Business Day, then the preceding Business Day.
“Installment Payments;” “Series 2022 Installment Payments;” “Interest Component of Series 2022 Installment Payments;” “Principal Component of Series 2022 Installment Payments” The term “Installment Payments” means the installment payments of interest and principal scheduled to be paid by the City under and pursuant to the Contracts. The term “Series 2022 Installment Payments” means the Installment Payments scheduled to be paid by the City under and pursuant hereto, plus interest on such draws as set forth in the Indenture. The term “Interest Component of Series 2022 Installment Payment”, with respect to any Series 2022 Installment Payment, means the “Amount Attributable to Interest” in respect of such payment as reflected in Exhibit A hereto. The term “Principal Component of Series 2022 Installment Payment”, with respect to any Series 2022 Installment Payment, means the “Amount Attributable to Principal” in respect of such payment as reflected in Exhibit A hereto. “Interest Payment Date” means June 1 and December 1 in each year, as applicable, beginning the Debt Service Payment Commencement Date, and continuing so long as any Authority Bonds remain Outstanding.
“Interest Subsidy Payment” means with respect to Build America Bonds, each payment received by the Authority or the Authority’s designated recipient directly from the United States Department of the Treasury in an amount equal to 35% of the corresponding interest payable on such Build America Bonds of the Water System, as provided for in Sections 54AA(b) and 6431 of the Code. “Maintenance and Operation Costs” means (1) costs spent or incurred for maintenance and operation of the Water System calculated in accordance with generally accepted accounting principles applicable to governmental agencies, including, but not limited to, the reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Water System in good repair and working order, and including administrative costs of the City that are charged directly or apportioned to the 388
60302.00018\34948393.2
6 Water System, including, but not limited, to salaries and wages of employees, payments to the Public Employees Retirement System, overhead, insurance, taxes (if any), fees of auditors, accountants, attorneys or engineers and insurance premiums, and including all other reasonable and necessary costs of the City or charges (other than debt service payments) required to be paid by it to comply with the terms of the City Bonds, or any other Contract, other than Debt Service, or of any resolution or indenture authorizing the issuance of any City Bonds or Contracts, and (2) all payments under any contract for the purchase of water; but excluding in all cases depreciation, replacement, and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. “Maximum Annual Debt Service” means, at any point in time, with respect to City Bonds and Contracts then outstanding, the largest amount of Debt Service on the City Bonds and Contracts in the then current or any future Fiscal Year.
“Net Proceeds” means, when used with respect to any casualty insurance or condemnation award, the proceeds from such insurance or condemnation award remaining after payment of all expenses (including reasonable attorneys’ fees) incurred in the collection of such proceeds. “Net Water System Revenues” means (i) for any Fiscal Year, the Water System Revenues for such Fiscal Year less the Maintenance and Operation Costs for such Fiscal Year, or (ii) in applying the provisions of the Installment and Purchase Agreement with respect to Additional Obligations only, the Water System Revenues for the selected 12-month period less the Maintenance and Operation Costs for the same 12- month period.
“Obligations” means City Bonds and Contract Payments.
“Purchase Price” means the principal amount plus interest thereon owed by the City to the Authority under the terms hereof as provided in Section 4.01. “Qualified Swap” means any financial arrangement (i) that is entered into by the City with an entity that is a Qualified Swap Provider at the time the arrangement is entered into; (ii) that provides that the City shall pay to such entity an amount based on the interest accruing at a fixed rate on an amount equal to the principal amount of the Authority Bonds Outstanding, and that such entity shall pay to the City an amount based on the interest accruing on such principal amount at a variable rate of interest computed according to a formula set forth in such arrangement (which need not be the same as the actual rate of interest borne by the Authority Bonds) or that one shall pay to the other any net amount due under such arrangement; and (iii) that has been designated in writing to the Trustee by the City and the Authority as a Qualified Swap with respect to the Authority Bonds.
“Qualified Swap Provider” means a financial institution whose senior long term debt obligations or an insurance provider whose claims-paying ability, or whose obligations under a Qualified Swap are guaranteed by a financial institution whose senior long term debt obligations or by an insurance provider whose claims-paying ability, are rated (at the time the subject Qualified Swap is entered into) not lower than Aa3 by Moody’s and AA- by S&P, or the equivalent thereof by any successor thereto. “Revenue Fund” means the fund by that name established pursuant to Section 5.02 hereof. “Series 2022 Bonds” means the $_________________ aggregate principal amount of City Of Oxnard Financing Authority Water Revenue Bonds Series 2022A. “Substantial Completion” means, with respect to the 2022 Project, the stage at which the 2022 Project is able to perform the functions for which the 2022 Project is designed. 389
60302.00018\34948393.2
7 “Substantial Completion Date” means the date on which the City certifies to the WIFIA Lender, with evidence satisfactory to the WIFIA Lender and notice to the WIFIA Lender in accordance with Part E of Schedule V (Reporting Requirements) of the WIFIA Loan Agreement, that Substantial Completion has occurred.
“Trustee” means Computershare Trust Company, N.A., acting in its capacity as Trustee under and pursuant to the Indenture, and its successors and assigns. “Water Service” means the water distribution service provided by the City. “Water System” means the whole and each and every part of the waterworks system serving the City, whether owned or operated by the City or another party, including the portion thereof existing on the date hereof, and including all additions, betterments, extensions, and improvements to such water system or any part thereof hereafter acquired or constructed.
“Water System Revenues” means all income, rents, rates, fees, charges, and other moneys derived from the ownership of or operation of the Water System, including, without limiting the generality of the foregoing, (1) all in lieu charges and groundwater augmentation charges (including investment earnings thereon) collected by or on behalf of the City, (2) all income, rents, rates, fees, charges, business interruption insurance proceeds, or other moneys derived by the City from the sale, furnishing, and supplying of the water, drainage or other services, facilities, and commodities sold, furnished, or supplied through the facilities of or in the conduct or operation of the business of the Water System, and (3) the earnings on and income derived from the investment of such income, rents, rates, fees, charges, proceeds, or other moneys, including City reserves; but excluding in all cases (a) customers’ deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City, (b) proceeds of taxes or benefit assessments restricted by law to be used by the City to pay amounts due on bonds or other obligations hereafter incurred, and (c) connection fees and charges. “WIFIA Interest Rate” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Term) of the WIFIA Loan Agreement.
“WIFIA Lender” means the United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency.
“WIFIA Loan Agreement” means the WIFIA Loan Agreement, dated as of __________, 2022, among the City, the Authority and the WIFIA Lender.
“Written Consent of the Authority or City,” “Written Order of the Authority or City,” “Written Request of the Authority or City,” “Written Requisition of the Authority or City” The terms “Written Consent of the Authority or City,” “Written Order of the Authority or City,” “Written Request of the Authority or City,” and “Written Requisition of the Authority or City” mean, respectively, a written consent, order, request or requisition signed by or on behalf of (i) the Authority by its Chairman, Vice Chairman, or Executive Director or (ii) the City by the Mayor, Vice Mayor or City Manager or by any person who is specifically authorized by resolution of the City (a certified copy of which has been delivered to the Trustee) to sign or execute such a document on its behalf. “2022 Project” means any additions, betterments, extensions or improvements to the Water System, the design, acquisition or construction of which (together with the incidental costs and expenses related thereto) is to be financed by the proceeds of the Authority Bonds, which may include improvements to both 390
60302.00018\34948393.2
8 the water treatment (i.e. filter control replacement system, new clarifier and filter system, raw water reservoir improvements, vehicle and equipment replacement and storage tank repairs) and water distribution (i.e. water pipeline replacement, water distribution expansion and storage tank improvements).

ARTICLE II

REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations by the City. The City makes the following representations:
(a) The City is a general law city and a municipal corporation duly organized and existing under and pursuant to the laws of the State of California. (b) The City has full legal right, power and authority to enter into this Agreement and carry out its obligations hereunder, to carry out and consummate all other transactions contemplated by this Agreement, and the City has complied with the provisions of the Law in all matters relating to such transactions.
(c) By proper action, the City has duly authorized the execution, delivery and due performance of this Agreement.
(d) The City will not take or, to the extent within its power, permit any action to be taken as a consequence of which any Interest Component of Series 2022 Installment Payments would fail to be excluded pursuant to section 103(a) of the Code from the gross income of the Authority or its assigns for purposes of federal income taxation, or to fail to be exempt from State of California personal income taxes.
(e) The City has determined that it is necessary and proper for City uses and purposes within the terms of the Law that the City finance/refinance the 2022 Project in the manner provided for in this Agreement.
(f) The City affirms all of the representations and warranties made by the City under Section 13 of the WIFIA Loan Agreement.

SECTION 2.02. Representations and Warranties by the Authority. The Authority makes the following representations and warranties:
(a) The Authority is a joint exercise of powers agency duly organized and in good standing under the laws of the State of California, has full legal right, power and authority to enter into this Agreement and to carry out and consummate all transactions contemplated by this Agreement and by proper action has duly authorized the execution and delivery and due performance of this Agreement.
(b) The execution and delivery of this Agreement and the consummation of the transactions herein contemplated will not violate any provision of law, any order of any court or other agency of government, or any indenture, material agreement or other instrument to which the Authority is now a party or by which it or any of its properties or assets is bound, or be in conflict with, result in a breach of or constitute a default (with due notice or the passage of time or both) under any such indenture, agreement or other instrument, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority. 391
60302.00018\34948393.2
9 (c) The Authority affirms all of the representations and warranties made by the Authority in Section 12 of the WIFIA Loan Agreement.

ARTICLE III
ISSUANCE OF AUTHORITY BONDS; SALE AND PURCHASE OF THE PROJECT SECTION 3.01. The Authority Bonds. The Authority has authorized the issuance of the Authority Bonds pursuant to the Indenture in the aggregate principal amount of ______________________________ Dollars ($_________________) of Series 2022 Bonds. The City hereby approves the Indenture, the assignment to the Trustee of the rights of the Authority assigned under and pursuant to the Indenture, and the issuance of the Authority Bonds by the Authority under and pursuant to the Indenture. The Authority Bonds and the Series 2022 Installment Payments shall mature the earliest of (a) June 1, 2061; (b) the date on which the maturity of the WIFIA Loan has been accelerated or subject to mandatory redemption or prepayment (as the case may be); and (c) the June 1 immediately preceding the date that is thirty-five (35) years following the Substantial Completion Date.

SECTION 3.02. Appointment of City as Agent of Authority. The Authority hereby appoints the City as its agent to carry out all phases of the Acquisition and Construction of the additional 2022 Project to the Water System pursuant to and in accordance with the provisions hereof and the Indenture. The City hereby accepts such appointment and assumes all rights, liabilities, duties and responsibilities of the Authority regarding the Acquisition and Construction of the 2022 Project. The Authority, or the City as agent of the Authority hereunder, shall enter into, administer and enforce all purchase orders or other contracts relating to the Acquisition and Construction of the 2022 Project. All contracts for, and all work relating to, the Acquisition and Construction of the 2022 Project shall be subject to all applicable provisions of law relating to the acquisition, construction, improvement, and equipping of like facilities and property by the City.

SECTION 3.03. Sale and Purchase of the 2022 Project. As consideration for the proceeds of the Authority Bonds, the Authority hereby agrees to purchase, and the City hereby agrees to sell, the 2022 Project. As consideration for the City’s agreement to make Series 2022 Installment Payments in accordance with Section 4.02 hereof, the Authority hereby agrees to sell, and the City hereby agrees to purchase, the 2022 Project. All right, title and interest in the 2022 Project shall vest in the City immediately upon execution of this Agreement. Such vesting shall occur without further action by the Authority or the City; and the Authority shall, if requested by the City or if necessary to assure such automatic vesting, deliver any and all documents required to assure such vesting.

ARTICLE IV
SERIES 2022 INSTALLMENT PAYMENTS
SECTION 4.01. Purchase Price.
(a) The Purchase Price to be paid by the City hereunder to the Authority is the sum of the principal amount of the City’s obligations hereunder plus the interest to accrue on the unpaid balance of such principal amount from the effective date hereof over the term hereof, subject to prepayment as provided in Article VII.
(b) The principal amount of the payments to be made by the City hereunder on each Series 2022 Installment Payment Date is set forth in Exhibit A hereto; provided, however, the amount payable by the City to the Authority on each Series 2022 Installment Payment Date shall be reduced 392
60302.00018\34948393.2
10 by the amount, if any, on deposit in the Bond Payment Fund and available or to be available for the payment of principal of and interest on the Authority Bonds on such Interest Payment Date as a result of prepayment in accordance with Article VII.
(c) The interest to accrue on the unpaid balance of such principal amount is as specified in Section 4.02 and Exhibit A hereto, and shall be paid by the City as and constitute interest paid on the principal amount of the City’s obligations hereunder.

SECTION 4.02. Series 2022 Installment Payments. The Borrower shall pay interest on the Purchase Price outstanding at the WIFIA Interest Rate; provided, that, upon the occurrence of an Event of Default, the City shall pay interest on the Purchase Price outstanding at the Default Rate, (a) in the case of an Event of Default described in Section 8.01(1), from (and including) its due date to (but excluding) the date of actual payment of the overdue amount of the Purchase Price then outstanding and accrued interest thereon and (b) in the case of any other Event of Default, from (and including) the date of such occurrence to (but excluding) the earlier of the date on which (i) such Event of Default has been cured (if applicable) in accordance with the terms of this Agreement and the WIFIA Loan Agreement or waived by the WIFIA Lender and (ii) the remaining balance of the Purchase Price has been irrevocably paid in full in immediately available funds. Interest shall (x) accrue on the Purchase Price commencing on the date of the first disbursement of the proceeds under the WIFIA Loan Agreement , (y) be payable commencing on the Debt Service Payment Commencement Date and (z) be computed on the Purchase Price outstanding on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months. Each Series 2022 Installment Payment shall be paid to the Authority in lawful money of the United States of America. If the City fails to make any of the payments required to be made by it under this section, such payment shall continue as an obligation of the City until such amount shall have been fully paid; and the City agrees to pay the same with interest accruing thereon at the rate or rates of interest then applicable to the remaining unpaid principal balance of the Series 2022 Installment Payments if paid in accordance with their terms.

The obligation of the City to make the Series 2022 Installment Payments is absolute and unconditional, and until such time as the Purchase Price shall have been paid in full (or provision for the payment thereof shall have been made pursuant to Article IX), the City will not discontinue or suspend any Series 2022 Installment Payments required to be made by it under this section when due, whether or not the Water System or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced, curtailed or terminated in whole or in part and such payments shall not be subject to reduction whether by offset, abatement or otherwise and shall not be conditional upon the performance or nonperformance by any party to any agreement for any cause whatsoever.

SECTION 4.03. Additional Payments. In addition to the Series 2022 Installment Payments, the City shall pay when due all costs and expenses incurred by the Authority to comply with the provisions of the Indenture and the WIFIA Loan Agreement, including without limitation all costs of the City to issue the Series 2022 Bonds, and shall pay to the Trustee upon request therefor all compensation for fees due to the Trustee and all of its costs and expenses payable as a result of the performance of and compliance with its duties hereunder or under the Indenture or any related documents, together with all amounts required to indemnify the Trustee pursuant to Sections 6.13 and Section 6.14 of the Indenture, and all costs and expenses of attorneys, auditors, engineers and accountants. The rights of the Trustee and the obligations of the City under this Section 4.03 shall survive the termination of this Agreement and the resignation and removal of the Trustee.
393
60302.00018\34948393.2
11 ARTICLE V

SECURITY
SECTION 5.01. Pledge of Net Water System Revenues. All Net Water System Revenues are hereby irrevocably pledged to the payment of the Series 2022 Installment Payments as provided herein and Net Water System Revenues shall not be used for any purpose other than as permitted herein while any of the Series 2022 Installment Payments remain unpaid. This pledge shall constitute a lien on Net Water System Revenues, including Net Water System Revenues in the Revenue Fund established herein, subject to the terms hereof, for the payment of the Series 2022 Installment Payments, in accordance with the terms hereof and the Indenture, and all other Obligations in accordance with the terms hereof.

SECTION 5.02. Allocation of Net Water System Revenues. To carry out and effectuate the pledge and lien contained herein, the City agrees and covenants that all Water System Revenues shall be received by the City in trust hereunder and shall be deposited when and as received in a special fund designated as the “Revenue Fund,” which fund is hereby created and established and which fund the City agrees and covenants to maintain and to hold in trust separate and apart from other funds so long as any Obligations remain unpaid. Moneys in the Revenue Fund shall be used and applied by the City as provided in this Agreement. Investment earnings received by the Trustee from the investment of moneys on deposit in the Bond Payment Fund and the Reserve Fund are to be retained by the Trustee and applied by it as provided for in the Indenture.

The City shall, first from the moneys in the Revenue Fund, pay all Maintenance and Operation Costs (including amounts reasonably required to be set aside in contingency reserves for Maintenance and Operation Costs, the payment of which is not then immediately required) as they become due and payable.

Thereafter, all Net Water System Revenues in the Revenue Fund shall be set aside by the City at the following times for the transfer to the following respective special funds in the following order of priority; and all moneys in each of such funds shall be held in trust and shall be applied, used and withdrawn only for the purposes set forth in this Section 5.02.
(a) Bond Payment Fund. On or before each Series 2022 Installment Payment Date until the Authority Bonds have been paid or provision for their payment has been made as provided in Section 9.03 of the Indenture, the City shall, from the moneys in the Revenue Fund, transfer to the Trustee for deposit in the Bond Payment Fund the Series 2022 Installment Payment due and payable on that Series 2022 Installment Payment Date. Such deposit to the Bond Payment Fund shall be reduced to the extent amounts on deposit therein are available for application to the Series 2022 Installment Payment due and payable on such Series 2022 Installment Payment Date.

The City shall also, from the moneys in the Revenue Fund, transfer to the trustee for deposit in the respective payment fund, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, to pay any other debt service in accordance with the provisions of any Bond or Contract. (b) Reserve Fund. On or before each Series 2022 Installment Payment Date until the Authority Bonds have been paid, or provision for their payment has been made as provided in Section 10.03 of the Indenture, the City shall, from the remaining moneys in the Revenue Fund, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, transfer to the Trustee or other fiduciary for deposit in the Reserve Fund and such other reserve funds and/or accounts, if any, as may have been established in connection with City Bonds or Contracts, other than this Agreement, that sum, if any, necessary to 394
60302.00018\34948393.2
12 restore the Reserve Fund to an amount equal to the Reserve Requirement and/or such reserve funds or accounts to an amount equal to the amount required to be maintained therein.

No transfer of moneys for deposit to the Reserve Fund in connection with the Series 2022 Installment Payments need be made if the amount contained therein is at least equal to the Reserve Requirement.
(c) Surplus. Moneys on deposit in the Revenue Fund not necessary to make any of the payments required above, may be expended by the City at any time for any purpose permitted by law; provided however, for the term of the WIFIA Loan Agreement, the City shall not permit Net Water System Revenues or other assets of the Water System, or any funds in any accounts held under the Installment Purchase Agreement or in any other fund or account held by or on behalf of the City for the benefit of the Water System, to be paid or transferred or otherwise applied for purposes other than ownership, operation or maintenance of the Water System; provided that the City may transfer excess Net Water System Revenues from the Revenue Fund to the general fund of the City for the sole purpose of reimbursing to the City’s general fund amounts previously expended out of the City’s general fund to pay for costs directly related to the ownership, construction and improvement, operation or maintenance of the Water System.

SECTION 5.03. Additional Obligations. The City may at any time execute any Contract or issue any City Bonds, as the case may be, in accordance herewith, provided, however, that: (1) the City shall not issue or incur any Additional Obligations during the term of the WIFIA Loan Agreement having any priority in payment of principal or interest out of the Gross Revenues or the Net Water System Revenues senior to the Series 2022 Installment Payments; and (2) the City may not issue or incur any Additional Obligations during the term of the WIFIA Loan Agreement unless all of the following conditions are satisfied:
(a) No Event of Default shall have occurred and be continuing, and the City shall deliver a certificate to that effect to the Trustee; and (b) the City obtains or provides a certificate or certificates prepared by an Independent Financial Consultant showing that
(i) the Net Water System Revenues as shown by the books of the City for the twelve (12) calendar months ending 90 days prior to the end of the month in which such Additional Obligations are incurred (the “Look Back Period”), shall have amounted to at least the sum of (x) one hundred ten percent (110%) of Debt Service for such Look Back Period, plus (y) the amount by which the amount on deposit in the Revenue Fund on the first day of such Look Back Period was less than twenty-five percent (25%) of Maximum Annual Debt Service on all Outstanding City Bonds and Contracts calculated on the first day of such Look Back Period; for purposes of preparing the certificate or certificates described above, the Consultant or Consultants may rely upon financial statements prepared by the City for all or any part of the Look Back Period, which have not been subject to audit by an Independent Certified Public Accountant if audited financial statements for the Fiscal Year or period are not available; (ii) the estimated Net Water System Revenues for the twelve (12) calendar months following the date of incurring such Additional Obligations will be at least equal to one hundred ten percent (110%) of Maximum Annual Debt Service on all City Bonds and Contracts to be outstanding immediately after the incurring of such Additional Obligations; and
395
60302.00018\34948393.2
13 (iii) the amount on deposit in the Revenue Fund on the date of incurring such Additional Obligations is at least equal to twenty-five percent (25%) of Maximum Annual Debt Service on all Outstanding City Bonds and Contracts as of the date of incurring of such Additional Obligations.
(c) For purposes of the computations to be made as described in clause (ii) above, the determination of the Net Water System Revenues:
(i) may take into account any increases in rates and charges that relate to the Water System and shall take into account any reduction in such rates and charges that will be effective prior to or at the time of incurring such proposed Additional Obligations; (ii) may take into account an allowance for any estimated increase in such Net Water System Revenues from any revenue producing additions to or improvements or extensions of the Water System to be made with the proceeds of such Additional Obligations or with the proceeds of Obligations previously issued, as shown by a certificate of an Independent Financial Consultant; and
(iii) for the period contemplated by clause (ii) above, Maintenance and Operation Costs of the Water System shall be deemed to be the same as for the period for which a calculation is done pursuant to clause (i) above, but adjusted, if deemed necessary by the Independent Financial Consultant, for any increased Maintenance and Operation Costs of the Water System which are, in the judgment of the Independent Financial Consultant, essential to maintaining and operating the Water System, including any additions or betterments thereto to be made with the proceeds of such Additional Obligations.

The certificate or certificates described above shall not be required if the Additional Obligations being incurred are for the purpose of refunding then outstanding Obligations and at the time of the incurring of such Additional Obligations a certificate of an Authorized Official shall be delivered showing that Maximum Annual Debt Service on all Outstanding City Bonds and Contracts after the incurring of such Additional Obligations will not exceed Maximum Annual Debt Service on all Obligations outstanding prior to the incurring of such Additional Obligations.
(d) The City shall not, for the term of the WIFIA Loan Agreement, issue or incur any Obligations for the 2022 Project that are secured by a lien on any assets or property of the City other than the Net Water System Revenues.

SECTION 5.04. Investments. All moneys held by the City in the Revenue Fund shall be invested in Permitted Investments and the investment earnings thereon shall remain on deposit in such fund, except as otherwise provided herein.

ARTICLE VI

COVENANTS OF THE CITY
SECTION 6.01. Compliance with Installment Purchase Agreement and Ancillary Agreements.

The City will punctually pay the Series 2022 Installment Payments in strict conformity with the terms hereof, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein required to be observed and performed by it, and will not terminate this Agreement for 396
60302.00018\34948393.2
14 any cause including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Water System, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State of California or any political subdivision of either or any failure of the Authority to observe or perform any agreement, condition, covenant or term contained herein required to be observed and performed by it, whether express or implied, or any duty, liability or obligation arising out of or connected herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the Authority or any force majeure, including acts of God, tempest, storm, earthquake, war, rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial disputes, lock outs, lack of transportation facilities, fire, explosion, or acts or regulations of governmental authorities.

The City will faithfully observe and perform all the agreements, conditions, covenants and terms contained in the Indenture required to be observed and performed by it; and it is expressly understood and agreed by and between the parties to this Agreement that, subject to Section 11.07 hereof, each of the agreements, conditions, covenants and terms contained in each of this Agreement and the Indenture is an essential and material term of the purchase of and payment for the 2022 Project by the City pursuant to and in accordance with this Agreement.

The City will faithfully observe and perform all the agreements, conditions, covenants and terms required to be observed and performed by it pursuant to all outstanding Contracts and City Bonds as such may from time to time be executed or issued, as the case may be.

SECTION 6.02. Against Encumbrances. The City will not make any pledge of or place any lien on Net Water System Revenues or the moneys in the Revenue Fund except as provided herein. The City may at any time, or from time to time, issue evidences of indebtedness or incur other obligations for any lawful purpose that are payable from and secured by a pledge of and lien on Net Water System Revenues or any moneys in the Revenue Fund as may from time to time be deposited therein (as provided in Section

5.02), provided that such pledge and lien shall be subordinate in all respects to the pledge of and lien thereon provided herein. The City will not issue any evidences of indebtedness or incur other obligations that are payable from and secured by a pledge of and lien on Net Water System Revenues senior to the pledge of and lien on Net Water System Revenues of the Series 2022 Installment Payments.

SECTION 6.03. Against Sale or Other Disposition of Property. The City will not enter into any agreement or lease that impairs the operation of the Water System or any part thereof necessary to secure adequate Net Water System Revenues for the payment of the Series 2022 Installment Payments, or that would otherwise impair the rights of the Authority hereunder or the operation of the Water System. Any real or personal property that has become nonoperative or that is not needed for the efficient and proper operation of the Water System, or any material or equipment that has become worn out, may be sold if such sale will not impair the ability of the City to pay the Series 2022 Installment Payments and if the proceeds of such sale are deposited in the Revenue Fund.

Nothing herein shall restrict the ability of the City to sell any portion of the Water System if such portion is immediately repurchased by the City and if such arrangement cannot by its terms result in the purchaser of such portion of the Water System exercising any remedy that would deprive the City of or otherwise interfere with its right to own and operate such portion of the Water System.

SECTION 6.04. Maintenance and Operation of the Water System. The City will maintain and preserve the Water System in good repair and working order at all times and will operate the Water System in an efficient and economical manner and will pay all Maintenance and Operation Costs as they become due and payable.
397
60302.00018\34948393.2
15 SECTION 6.05. Payment of Claims. The City will pay and discharge any and all lawful claims for labor, materials or supplies that, if unpaid, might become a lien on the Net Water System Revenues or the funds or accounts created hereunder or under the Indenture or on any funds in the hands of the City pledged to pay the Series 2022 Installment Payments or to the Owners prior or superior to the lien of the Series 2022 Installment Payments or that might impair the security of the Series 2022 Installment Payments, except that if the City desires to contest any such lien it may do so. If any such lien shall be reduced to final judgment and such judgment or any process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and such stay thereafter expires, the City will forthwith pay or cause to be paid and discharged such judgment.

SECTION 6.06. Insurance.
(a) The City will procure and maintain or cause to be procured and maintained insurance relating to the Water System with responsible insurers in such amounts and against such risks (including damage to or destruction of the Water System) as are usually covered in connection with facilities similar to the Water System, so long as such insurance is available from reputable insurance companies at reasonable costs.

In the event of any damage to or destruction of the Water System caused by the perils covered by such insurance, the following shall apply; provided however, the following shall not apply, if (1) the Net Proceeds are less than $50,000, in which case the City may determine the use of such proceeds; or (2) the City certifies in a Written Order of the City delivered to the Trustee that if the damaged or destroyed portion of the Water System is not repaired or replaced, the Water System will generate Net Water System Revenues equal to at least 125% of the amount described in clause (b) of Section 6.10 for each future fiscal year that the Authority Bonds are scheduled to remain outstanding without a rate increase triggering a noticed Proposition 218 rate hearing:
(i) The Net Proceeds thereof shall be applied to the reconstruction, repair or replacement of the damaged or destroyed portion of the Water System. The City shall begin such reconstruction, repair or replacement promptly after such damage or destruction shall occur, and shall continue and properly complete such reconstruction, repair or replacement as expeditiously as possible, and shall pay out of such Net Proceeds all costs and expenses in connection with such reconstruction, repair or replacement so that the same shall be completed and the Water System shall be free and clear of all claims and liens. (ii) If such Net Proceeds are sufficient to enable the City to retire the entire obligation evidenced hereby prior to the final due date of the Series 2022 Installment Payments as well as the entire obligations evidenced by City Bonds and Contracts then remaining unpaid prior to their final respective due dates, the City may elect not to reconstruct, repair or replace the damaged or destroyed portion of the Water System, and/or not to construct other additions, betterments, extensions or improvements to the Water System; and thereupon such Net Proceeds shall be applied to the prepayment of Series 2022 Installment Payments as provided in Article VII and to the retirement of such City Bonds and Contracts.
(iii) If such Net Proceeds exceed the costs of such reconstruction, repair or replacement portion of the Water System, and/or the cost of the construction of additions, betterments, extensions or improvements to the Water System, then the excess Net Proceeds may, in the City’s discretion, be applied in part to the prepayment of Series 2022 Installment Payments as provided in Article VII and in part to such other fund or account as may be appropriate and used for the retirement of City Bonds and Contracts in the same 398
60302.00018\34948393.2
16 proportion that the aggregate unpaid principal balance of Series 2022 Installment Payments then bears to the aggregate unpaid principal amount of such City Bonds and Contracts. (b) The City will procure and maintain such other insurance as it shall deem advisable or necessary to protect its interests and the interests of the Authority, which insurance shall afford protection in such amounts and against such risks as are usually covered in connection with municipal water systems similar to the Water System.
(c) Any insurance required to be maintained by paragraph (a) above and, if the City determines to procure and maintain insurance pursuant to paragraph (b) above, such insurance, may be maintained under a self-insurance program so long as such self-insurance is maintained in the amounts and manner usually maintained in connection with water systems similar to the Water System and is, in the opinion of an accredited actuary, actuarially sound.

All policies of insurance required to be maintained herein shall provide that the Authority and the Trustee shall be given thirty (30) days written notice of any intended cancellation thereof or reduction of coverage provided thereby.

The Trustee shall not be responsible for the sufficiency or adequacy of the insurance maintained by the City.

SECTION 6.07. Accounting Records; Financial Statements and Other Records. (a) The City will keep appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Water System, which records shall be available for inspection by the Authority and the Trustee at reasonable hours and under reasonable conditions.
(b) The City will prepare and file with the Authority and, upon request of the Trustee, annually within one hundred eighty (180) days after the close of each Fiscal Year (commencing with the Fiscal Year ending June 30, 2022);
(1) financial statements of the City for the preceding Fiscal Year prepared in accordance with generally accepted accounting principles, together with a report of an Independent Certified Public Accountant thereon; and
(2) a detailed report as to all insurance policies maintained and self-insurance programs maintained by the City with respect to the Water System, as of the close of such Fiscal Year, including the names of the insurers that have issued the policies and the amounts thereof and the property or risks covered thereby and a statement that all such policies comply with Section

6.08 hereof.

The Trustee shall have no duty to review, verify or analyze the documents provided to it pursuant to this Section 6.07(b)(1) and shall hold such documents solely as a repository for the benefit of the Owners.

The Trustee shall not be deemed to have notice of any information contained therein or default or Event of Default which may be disclosed therein in any manner.

SECTION 6.08. Protection of Security and Rights of the Authority. The City will preserve and protect the security hereof and the rights of the Authority to the Series 2022 Installment Payments hereunder and will warrant and defend such rights against all claims and demands of all persons. 399
60302.00018\34948393.2
17 SECTION 6.09. Payment of Taxes and Compliance with Governmental Regulations. The City will pay and discharge all taxes, assessments and other governmental charges that may hereafter be lawfully imposed upon the Water System, or any part thereof or upon the Water System Revenues when the same shall become due. The City will duly observe and conform with all valid regulations and requirements of any governmental authority relative to the operation of the Water System, or any part thereof, but the City shall not be required to comply with any regulations or requirements so long as the validity or application thereof shall be contested in good faith.

SECTION 6.10. Amount of Rates and Charges, Operating Reserves. (i) The City shall fix, prescribe, and collect fees, rates, and charges for the Water System which will be at least sufficient to yield during each Fiscal Year Net Water System Revenues equal to the sum of (a) one hundred ten percent (110%) of the Debt Service for such Fiscal Year, plus (b) the amount by which the amount on deposit in the Revenue Fund on the last day of the immediately preceding Fiscal Year was less than twenty-five percent (25%) of Maximum Annual Debt Service as of such day. The City may make adjustments from time to time in such rates and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates and charges then in effect unless the Net Water System Revenues from such reduced rates and charges will at all times be sufficient to meet the requirements of this Section; and (ii) So long as the WIFIA Loan Agreement is in effect, if:
(A) the forecast furnished by the City in the most recent Updated Financial Model/Plan, as defined in the WIFIA Loan Agreement, delivered by the City pursuant to Part A of Schedule V (Reporting Requirements) of the WIFIA Loan Agreement demonstrates that projected Net Water System Revenues may be inadequate to satisfy paragraph (i) above for any Fiscal Year during the Forecast Period, as defined in the WIFIA Loan Agreement, then the City shall propose a remedial course of action, which plan shall demonstrate to the WIFIA Lender’s satisfaction that such plan will generate an equivalent or greater increase to the Net Water System Revenues so as to satisfy paragraph (i) above; and/or
(B) the City fails to satisfy paragraph (i) above for the most recently ended Fiscal Year, then the City shall (A) within thirty (30) days after request by the WIFIA Lender, engage the Technical and Rate Consultant, as defined in the WIFIA Loan Agreement, to review and analyze the operations of the Water System and recommend actions regarding revising the rates or changing the methods of operations, or any other actions to increase the Net Water System Revenues so as to satisfy paragraph (i) of this Section 6.10, (B) cause the Technical and Rate Consultant to issue its report, including any such recommended actions, no later than ninety (90) days following such engagement, and (C) either, within sixty (60) days following the issuance of the Technical and Rate Consultant’s report, (1) implement the Technical and Rate Consultant’s recommendations or (2) undertake an alternative course of action after demonstrating to the WIFIA Lender’s satisfaction that an alternative plan will generate an equivalent or greater increase to the Net Water System Revenues so as to satisfy paragraph (i) of this Section 6.10.

SECTION 6.11. Collection of Rates and Charges. The City will have in effect at all times rules and regulations requiring each customer to pay the rates, fees and charges applicable to the Water Services and providing for the billing thereof and for a due date and a delinquency date for each bill.

SECTION 6.12. Eminent Domain Proceeds. If all or any part of the Water System shall be taken by eminent domain proceedings, the Net Proceeds thereof shall be applied as follows; provided however, the following shall not apply, if (1) the Net Proceeds are less than $50,000, in which case the City may 400
60302.00018\34948393.2
18 determine the use of such proceeds; or (2) the City certifies in a Written Order of the City delivered to the Trustee that if the portion of the Water System taken by eminent domain is not replaced, the Water System will generate Net Water System Revenues equal to at least 125% of the amount described in clause (b) of Section 6.10 for each future fiscal year that the Authority Bonds are scheduled to remain outstanding without a rate increase triggering a noticed Proposition 218 rate hearing:
(a) If (1) the City files with the Authority and the Trustee a certificate showing (i) the estimated loss of annual Net Water System Revenues, if any, suffered or to be suffered by the City by reason of such eminent domain proceedings, (ii) a general description of the additions, betterments, extensions or improvements to the Water System proposed to be acquired and constructed by the City from such Net Proceeds, and (iii) an estimate of the additional annual Net Water System Revenues to be derived from such additions, betterments, extensions or improvements, and (2) the City, on the basis of such certificate filed with the Authority and the Trustee, determines that the estimated additional annual Net Water System Revenues will sufficiently offset the estimated loss of annual Net Water System Revenues resulting from such eminent domain proceedings so that the ability of the City to meet its obligations hereunder will not be substantially impaired (which determination shall be final and conclusive), then the City shall promptly proceed with the acquisition and construction of such additions, betterments, extensions or improvements substantially in accordance with such certificate and such Net Proceeds shall be applied for the payment of the costs of such acquisition and construction, and any balance of such Net Proceeds not required by the City for such purpose shall be deposited in the Revenue Fund.
(b) If the foregoing conditions are not met, then such Net Proceeds shall be applied by the City in part to the prepayment of Series 2022 Installment Payments as provided in Article VII and in part to such other fund or account as may be appropriate and used for the retirement of City Bonds and Contracts in the same proportion that the aggregate unpaid principal balance of Series 2022 Installment Payments then bears to the aggregate unpaid principal amount of such City Bonds and Contracts.

SECTION 6.13. Further Assurances. The City will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Authority of the rights and benefits provided to it herein.

SECTION 6.14. Continuing Disclosure. The City will comply with the continuing disclosure requirements promulgated under U.S. Securities and Exchange Commission Rule 15c2 12 and will also comply with the terms of the Continuing Disclosure Agreement.

SECTION 6.15. Access to the Water System. The City agrees that the Authority and the Trustee, and any duly authorized representative thereof, shall have the right at all reasonable times to enter upon and to examine and inspect the Water System. The City further agrees that the Authority and the Trustee, and any duly authorized representative thereof, shall have such rights of access to the Water System as may be reasonably necessary to cause the proper maintenance of the Water System in the event of failure by the City to perform its obligations hereunder.

SECTION 6.16. Covenants in WIFIA Loan Agreement. The City agrees that it will comply with all of the covenants and conditions in Sections 18 and 19 of the WIFIA Loan Agreement during the Term of the WIFIA Loan Agreement.
401
60302.00018\34948393.2
19 ARTICLE VII
PREPAYMENT OF SERIES 2022 INSTALLMENT PAYMENTS
SECTION 7.01. Prepayment. The City may exercise its option to prepay the principal components of the Series 2022 Installment Payments without penalty or premium, (i) in full on any date or (ii) in part on any Series 2022 Installment Payment Date (and, if in part, the amounts thereof to be prepaid shall be determined by the City; provided, that such prepayment shall be in principal amounts of $[1,000,000] or any integral multiple of $1.00 in excess thereof), in each case from time to time but not more than once annually. Each prepayment hereunder shall be made on such date and in such principal amount as shall be specified by the City in a Written Request of the City and delivered to the Authority, the Trustee and the WIFIA Lender not less than thirty (30) days prior to the requested date of prepayment, unless otherwise agreed by the WIFIA Lender.

SECTION 7.02. Method of Prepayment. Upon the WIFIA Lender’s receipt of confirmation that payment in full in immediately available funds of all outstanding Series 2022 Installment Payments (the entire WIFIA Loan Balance) and any unpaid interest, fees and expenses with respect thereto has occurred as a result of a prepayment, the WIFIA Lender shall surrender the WIFIA Bond to the Authority or its authorized representative, by mail in accordance with Section 35 (Notices) of the WIFIA Loan Agreement or as otherwise agreed between the parties hereto. If the City prepays only part of the unpaid balance of principal of the Series 2022 Installment Payments and WIFIA Loan, the WIFIA Lender may make a notation on the WIFIA Loan Amortization Schedule indicating the amount of principal of and interest on the WIFIA Loan then being prepaid. Absent manifest error, the WIFIA Lender’s determination of such matters as set forth on an updated WIFIA Loan Amortization Schedule shall be conclusive evidence thereof; provided, that neither the failure to make any such recordation nor any error in such recordation shall affect in any manner the City’s obligations hereunder or under any other WIFIA Loan Document. All partial prepayments of principal shall be applied to reduce the principal component of Series 2022 Installment Payments and WIFIA Loan Balance such that the remaining scheduled principal components of the Series 2022 Installment Payments due hereunder and principal payments for the WIFIA Loan set out in the WIFIA Loan Amortization Schedule are reduced in inverse order of maturity or, at the election of the City evidenced by a written request of the City filed with the WIFIA Lender at least thirty (30) days prior to the date of prepayment, on a pro rata basis (provided that, in any event, the WIFIA Debt Service following such prepayment shall be equal in time and amount to the unpaid payments due under this Installment Purchase Agreement). If such funds have not been so paid on the prepayment date, such principal components of the Series 2022 Installment Payments due hereunder and principal amount of the WIFIA Loan shall continue to bear interest until payment thereof at the rate provided for in Section 6 (Interest Rate) of the WIFIA Loan Agreement.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF THE AUTHORITY
SECTION 8.01. Events of Default and Acceleration of Maturities. If one or more of the following Events of Default shall happen, that is to say --
(1) if default shall be made in the due and punctual payment of any Series 2022 Installment Payment or any Contract or Bond when and as the same shall become due and payable; (2) if default shall be made by the City in the performance of any of the agreements or covenants required herein to be performed by it, and such default shall have continued for a period of thirty (30) days after the City shall have been given notice in writing of such default by the 402
60302.00018\34948393.2
20 Authority; provided, however, if in the reasonable opinion of the City the failure stated in the notice can be corrected, but not within such thirty (30) day period, such failure shall not constitute an Event of Default if corrective action is instituted by the City within such thirty (30) day period and the City shall thereafter diligently and in good faith cure such failure in a reasonable period of time, which period shall not extend more than one hundred eighty (180) days from the date of the default notice; or
(3) if the City shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the City seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the City or of the whole or any substantial part of its property; or (4) any Event of Default, as described in Section 21 of the WIFIA Loan Agreement and not otherwise described herein;
then and in each and every such case during the continuance of such Event of Default specified in clause (3) above, the Authority shall, and for any other such Event of Default the Authority may, by notice in writing to the City, declare the entire principal amount of the unpaid Series 2022 Installment Payments and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything contained herein to the contrary notwithstanding. This subsection however, is subject to the condition that if at any time after the entire principal amount of the unpaid Series 2022 Installment Payments and the accrued interest thereon shall have been so declared due and payable and before any judgment or decree for the payment of the moneys due shall have been obtained or entered the City shall deposit with the Authority a sum sufficient to pay the unpaid principal amount of the Series 2022 Installment Payments or the unpaid payment of any other Contract or Bond referred to in clause (1) above due prior to such declaration and the accrued interest thereon, with interest on such overdue installments, at the rate or rates applicable to the remaining unpaid principal balance of the Series 2022 Installment Payments or such Contract or Bond if paid in accordance with their terms, and the reasonable expenses of the Authority, and any and all other defaults known to the Authority (other than in the payment of the entire principal amount of the unpaid Series 2022 Installment Payments and the accrued interest thereon due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Authority or provision deemed by the Authority to be adequate shall have been made therefor, then and in every such case the Authority, by written notice to the City, may 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.

SECTION 8.02. Application of Funds Upon Acceleration. Upon the date of the declaration of acceleration as provided in Section 8.01, all Net Water System Revenues thereafter received shall be applied in the following order –
First, to the payment of the fees, costs and expenses of the Trustee, if any, in carrying out the provisions of this article and of the WIFIA Lender in enforcing its rights and remedies pursuant to the WIFIA Loan Agreement or as a third party beneficiary hereunder, including reasonable compensation to their respective accountants, advisors and legal counsel and then to the payment of the fees, costs and expenses of the Authority, if any, in carrying out the provisions of this article, including reasonable compensation to its accountants, advisors and legal counsel; and 403
60302.00018\34948393.2
21 Second, to the payment of the entire principal amount of the unpaid Series 2022 Installment Payments and the unpaid principal amount of all City Bonds and Contracts and the accrued interest thereon, with interest on the overdue installments at the rate or rates of interest applicable to the Series 2022 Installment Payments and such City Bonds and Contracts if paid in accordance with their respective terms.

SECTION 8.03. Other Remedies of the Authority. The Authority shall have the right – (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the City or any director, officer or employee thereof, and to compel the City or any such director, officer or employee to perform and carry out its or his duties under the Law and the agreements and covenants required to be performed by it or him contained herein:
(b) by suit in equity to enjoin any acts or things that are unlawful or violate the rights of the Authority or the Trustee; or
(c) by suit in equity upon the happening of an Event of Default to require the City and its directors, officers and employees to account as the trustee of an express trust.

Notwithstanding anything contained herein, the Authority shall have no security interest in or mortgage on the 2022 Project or the Water System or any other real property of the City and no default hereunder shall result in the loss of the 2022 Project or the Water System or any other real property of the City
SECTION 8.04. Non-Waiver. Nothing in this article or in any other provision hereof shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the Series 2022 Installment Payments to the Authority at the respective due dates or upon prepayment from the Net Water System Revenues, the Revenue Fund and the other funds herein pledged for such payment, or shall affect or impair the right of the Authority, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein.

A waiver of any default or breach of duty or contract by the Authority shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Authority to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Authority by the Law or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Authority.

If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Authority, the City and the Authority shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.

SECTION 8.05. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Authority or the Bond Owners, or as provided in the Indenture, is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Indenture or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law.
404
60302.00018\34948393.2
22 ARTICLE IX

DISCHARGE OF OBLIGATIONS
SECTION 9.01. Discharge of Obligations. When:
(a) all or any portion of the Series 2022 Installment Payments shall have become due and payable in accordance herewith or a written notice of the City to prepay all or any portion of the Series 2022 Installment Payments shall have been filed with the Trustee; and (b) there shall have been deposited with the Trustee at or prior to the Series 2022 Installment Payment Dates or date (or dates) specified for prepayment, in trust for the benefit of the Authority or its assigns and irrevocably appropriated and set aside to the payment of all or any portion of the Series 2022 Installment Payments, sufficient moneys and Permitted Investments, in the amounts required by Section 10.03 of the Indenture, described in paragraph (1), (2) or (3) of the definition thereof, the principal of and interest on which when due will provide money sufficient to pay all principal, prepayment premium, if any, and interest of such Series 2022 Installment Payments to their respective Series 2022 Installment Payment Dates or prepayment date or dates as the case may be; and
(c) provision shall have been made for paying all fees and expenses of the Trustee, then and in that event, the right, title and interest of the Authority herein and the obligations of the City hereunder shall, with respect to all or such portion of the Series 2022 Installment Payments as have been so provided for, thereupon cease, terminate, become void and be completely discharged and satisfied (except for the right of the Trustee and the obligation of the City to have such moneys and such Permitted Investments applied to the payment of such Series 2022 Installment Payments).

In such event, upon request of the City the Trustee shall cause an accounting for such period or periods as may be requested by the City to be prepared and filed with the City and shall execute and deliver to the City all such instruments as may be necessary or desirable to evidence such total or partial discharge and satisfaction, as the case may be, prepared by or on behalf of and at the expense of the City, and, in the event of a total discharge and satisfaction, the Trustee shall pay over to the City, after payment of all amounts due the Trustee pursuant to the Indenture and payment of all amounts due the WIFIA Lender pursuant to the WIFIA Loan Agreement, as an overpayment of Series 2022 Installment Payments, all such moneys or such Permitted Investments held by it pursuant hereto other than such moneys and such Permitted Investments as are required for the payment or prepayment of the Series 2022 Installment Payments, which moneys and Permitted Investments shall continue to be held by the Trustee in trust for the payment of the Series 2022 Installment Payments and shall be applied by the Trustee to the payment of the Series 2022 Installment Payments of the City.

ARTICLE X
[RESERVED]

ARTICLE XI

MISCELLANEOUS
SECTION 11.01. Liability of City Limited to Net Water System Revenues. Notwithstanding anything contained herein, the City shall not be required to advance any moneys derived from any source 405
60302.00018\34948393.2
23 of income other than the Net Water System Revenues, the Revenue Fund and the other funds provided herein and in the Indenture for the payment of the Series 2022 Installment Payments or for the performance of any agreements or covenants required to be performed by it contained herein. The City may, however, advance moneys for any such purpose so long as such moneys are derived from a source legally available for such purpose and may be legally used by the City for such purpose.

The obligation of the City to make the Series 2022 Installment Payments is a special obligation of the City payable solely from Net Water System Revenues, the Revenue Fund and other funds described in this Agreement and in the Indenture, and does not constitute a debt of the City or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limitation or restriction.

SECTION 11.02. Benefits of Installment Purchase Agreement Limited to Parties. Except as provided in Section 11.05 hereto, nothing contained herein, expressed or implied, is intended to give to any person other than the City or the Authority any right, remedy or claim under or pursuant hereto, and any agreement or covenant required herein to be performed by or on behalf of the City or the Authority shall be for the sole and exclusive benefit of the other party.

SECTION 11.03. Successor Is Deemed Included in all References to Predecessor. Whenever either the City or the Authority is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the City or the Authority, and all agreements and covenants required hereby to be performed by or on behalf of the City or the Authority shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.

SECTION 11.04. Waiver of Personal Liability. No director, officer or employee of the City shall be individually or personally liable for the payment of the Series 2022 Installment Payments, but nothing contained herein shall relieve any director, officer or employee of the City from the performance of any official duty provided by any applicable provisions of law or hereby.

SECTION 11.05. Third Party Beneficiary. The Trustee and the WIFIA Lender shall each be and is hereby made a third party beneficiary hereunder with all rights of a third party beneficiary and may enforce the provisions of this Agreement as if they were a party hereto.

SECTION 11.06. Article and Section Headings; Gender and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof, and words of any gender shall be deemed and construed to include all genders. All references herein to “Articles,” “Sections” and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof; and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith” and other words of similar import refer to this Agreement as a whole and not to any particular article, section, subdivision or clause hereof.

SECTION 11.07. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the City or the Authority shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. The City and the Authority hereby declare that they would have executed this Agreement, and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. 406
60302.00018\34948393.2
24 SECTION 11.08. Assignment. This Agreement and any rights hereunder may be assigned by the Authority to the Trustee, as a whole or in part, without the necessity of obtaining the prior consent of the City.

SECTION 11.09. Net Contract. This Agreement shall be deemed and construed to be a net contract, and the City shall pay absolutely net during the term hereof the Series 2022 Installment Payments and all other payments required hereunder, free of any deductions and without abatement, diminution or set-off whatsoever.

SECTION 11.10. California Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

SECTION 11.11. Notices. All written notices to be given hereunder shall be given by mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely:

If to the City: City of Oxnard
300 West Third Street
Oxnard, CA 93030
Attention: City Manager
If to the Authority: City of Oxnard Financing Authority 300 West Third Street
Oxnard, CA 93030
Attention: Executive Director
If to WIFIA Lender: Environmental Protection Agency
WJC-E 7334A
1200 Pennsylvania Avenue NW
Washington, D.C. 20460
Attention: WIFIA Director
Email: [email protected]
SECTION 11.12. Effective Date. This Agreement shall become effective upon its execution and delivery, and shall terminate when the Purchase Price shall have been fully paid (or provision for the payment thereof shall have been made to the written satisfaction of the Authority).

SECTION 11.13. Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.

SECTION 11.14. Indemnification of Authority. The City hereby agrees to indemnify and hold harmless the Authority if and to the extent permitted by law, from and against all claims, advances, damages and losses, including legal fees and expenses, arising out of or in connection with the acceptance or the performance of its duties hereunder and under the Indenture; provided that no indemnification will be made for willful misconduct, negligence or breach of an obligation hereunder or under the Indenture by the Authority.

SECTION 11.15. Amendments Permitted. (a) This Agreement and the rights and obligations of the Authority, the City, the Owners of the Authority Bonds and of the Trustee may be modified or amended at any time, by an amendment hereto that shall become binding when the written consents of the Owners 407
60302.00018\34948393.2
25 of a majority in aggregate principal amount of the Authority Bonds then Outstanding, exclusive of Authority Bonds disqualified as provided in Section 7.02 of the Indenture, shall have been filed with the Trustee. No such modification or amendment shall –
(1) extend the stated maturities of the Authority Bonds, or reduce the rate of interest represented thereby, or extend the time of payment of interest, or reduce the amount of principal represented thereby, or reduce any premium payable on the prepayment thereof, without the consent of the Owner of each Authority Bond so affected, or (2) reduce the aforesaid percentage of Owners of Authority Bonds whose consent is required for the execution of any amendment or modification of this Agreement, or (3) modify any of the rights or obligations of the Trustee or the Authority without its respective written consent thereto.
(b) This Agreement and the rights and obligations of the Authority, the City and of the Owners of the Authority Bonds may also be modified or amended at any time, by an amendment hereto that shall become binding upon adoption, without the consent of the Owners of any Authority Bonds, but only to the extent permitted by law and only for any one or more of the following purposes- (1) to add to the covenants and agreements of the Authority or the City contained in this Agreement other covenants and agreements thereafter to be observed or to surrender any right or power herein reserved to or conferred upon the Authority or the City so long as such limitation or surrender of such rights or powers shall not adversely affect the Owners of the Authority Bonds; and
(2) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Agreement, or in any other respect whatsoever as the Authority or the City may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not adversely affect the interests of the Owners of the Authority Bonds.
(c) No amendment without consent of the Owners may modify any of the rights or obligations of the Trustee without its written consent thereto.
(Signature page follows)
408
60302.00018\34948393.2
S-1
IN WITNESS WHEREOF, the parties hereto have executed and attested this Installment Purchase Agreement by their officers thereunto duly authorized as of the day and year first written above.

CITY OF OXNARD
By:

Alexander Nguyen
City Manager

CITY OF OXNARD FINANCING AUTHORITY
By:

Alexander Nguyen
Executive Director
-Signature Page-
Installment Purchase Agreement
409
60302.00018\34948393.2
A-1

EXHIBIT A

PURCHASE PRICE

1. The principal amount of payments to be made by the City hereunder is $_________________.

2. The installment payments of principal and interest are payable five days prior to each Interest Payment Date in the amounts set forth as follows:

Interest Payment
Dates
Amount
Attributable
to Principal
Amount
Attributable
to Interest Total
410
60302.00018\34948393.2

TABLE OF CONTENTS
Page
-i-

ARTICLE I

DEFINITIONS
SECTION 1.01. Definitions ...........................................................................................................1

ARTICLE II

REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations by the City .................................................................................8 SECTION 2.02. Representations and Warranties by the Authority ...............................................8

ARTICLE III
ISSUANCE OF AUTHORITY BONDS; SALE AND PURCHASE OF THE PROJECT SECTION 3.01. The Authority Bonds ...........................................................................................9 SECTION 3.02. Appointment of City as Agent of Authority ........................................................9 SECTION 3.03. Sale and Purchase of the 2022 Project.................................................................9

ARTICLE IV
SERIES 2022 INSTALLMENT PAYMENTS
SECTION 4.01. Purchase Price......................................................................................................9 SECTION 4.02. Series 2022 Installment Payments .....................................................................10 SECTION 4.03. Additional Payments..........................................................................................10

ARTICLE V

SECURITY
SECTION 5.01. Pledge of Net Water System Revenues .............................................................11 SECTION 5.02. Allocation of Net Water System Revenues .......................................................11 SECTION 5.03. Additional Obligations.......................................................................................12 SECTION 5.04. Investments ........................................................................................................13

ARTICLE VI

COVENANTS OF THE CITY
411
60302.00018\34948393.2

TABLE OF CONTENTS
(continued)
Page
-ii-
SECTION 6.01. Compliance with Installment Purchase Agreement and Ancillary Agreements....................................................................................................13 SECTION 6.02. Against Encumbrances ......................................................................................14 SECTION 6.03. Against Sale or Other Disposition of Property ..................................................14 SECTION 6.04. Maintenance and Operation of the Water System .............................................14 SECTION 6.05. Payment of Claims.............................................................................................15 SECTION 6.06. Insurance............................................................................................................15 SECTION 6.07. Accounting Records; Financial Statements and Other Records. .......................16 SECTION 6.08. Protection of Security and Rights of the Authority ...........................................16 SECTION 6.09. Payment of Taxes and Compliance with Governmental Regulations ...............17 SECTION 6.10. Amount of Rates and Charges, Operating Reserves..........................................17 SECTION 6.11. Collection of Rates and Charges........................................................................17 SECTION 6.12. Eminent Domain Proceeds.................................................................................17 SECTION 6.13. Further Assurances ............................................................................................18 SECTION 6.14. Continuing Disclosure .......................................................................................18 SECTION 6.15. Access to the Water System...............................................................................18 SECTION 6.16. Covenants in WIFIA Loan Agreement..............................................................18

ARTICLE VII
PREPAYMENT OF SERIES 2022 INSTALLMENT PAYMENTS
SECTION 7.01. Prepayment ........................................................................................................19 SECTION 7.02. Method of Prepayment.......................................................................................19

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF THE AUTHORITY
SECTION 8.01. Events of Default and Acceleration of Maturities .............................................19 SECTION 8.02. Application of Funds Upon Acceleration ..........................................................20 SECTION 8.03. Other Remedies of the Authority.......................................................................21 SECTION 8.04. Non-Waiver .......................................................................................................21 SECTION 8.05. Remedies Not Exclusive....................................................................................21 412
60302.00018\34948393.2

TABLE OF CONTENTS
(continued)
Page
-iii-

ARTICLE IX

DISCHARGE OF OBLIGATIONS
SECTION 9.01. Discharge of Obligations ...................................................................................22

ARTICLE X
[RESERVED]

ARTICLE XI

MISCELLANEOUS
SECTION 11.01. Liability of City Limited to Net Water System Revenues...............................22 SECTION 11.02. Benefits of Installment Purchase Agreement Limited to Parties.....................23 SECTION 11.03. Successor Is Deemed Included in all References to Predecessor ....................23 SECTION 11.04. Waiver of Personal Liability............................................................................23 SECTION 11.05. Third Party Beneficiary ...................................................................................23 SECTION 11.06. Article and Section Headings; Gender and References ...................................23 SECTION 11.07. Partial Invalidity ..............................................................................................23 SECTION 11.08. Assignment ......................................................................................................24 SECTION 11.09. Net Contract.....................................................................................................24 SECTION 11.10. California Law .................................................................................................24 SECTION 11.11. Notices .............................................................................................................24 SECTION 11.12. Effective Date ..................................................................................................24 SECTION 11.13. Execution in Counterparts ...............................................................................24 SECTION 11.14. Indemnification of Authority...........................................................................24 SECTION 11.15. Amendments Permitted....................................................................................24 EXHIBIT A – PURCHASE PRICE.........................................................................................................A-1 413
60302.00018\34948213.2

INDENTURE OF TRUST
by and among the

CITY OF OXNARD FINANCING AUTHORITY
and

CITY OF OXNARD
and
COMPUTERSHARE TRUST COMPANY, N.A.,
as Trustee
Dated as of __________, 2022
Relating to
$____________

CITY OF OXNARD FINANCING AUTHORITY

WATER REVENUE BONDS
SERIES 2022A (WIFIA LOAN)
414
60302.00018\34948213.2
1 INDENTURE OF TRUST
THIS INDENTURE OF TRUST, is dated as of _______________, 2022, by and among the CITY OF OXNARD FINANCING AUTHORITY, a joint exercise of powers agency organized and existing under the laws of the State of California (the “Authority”), the CITY OF OXNARD, a general law city and a municipal corporation, duly organized and existing under the laws of the State of California (the “City”), and COMPUTERSHARE TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, and being qualified to accept and administer the trusts hereby created, as Trustee (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the Authority is a joint powers authority authorized to borrow money for the purpose of financing and refinancing public capital improvements; and WHEREAS, the City owns and operates that certain water system referred to herein as the “Water System”; and
WHEREAS, the City desires to finance the Aquifer Storage Recovery (ASR) Project which consists of the following components: (i) expansion of the City’s Advanced Water Purification Facility capacity, (ii) construction of additional aquifer storage wells, (iii) construction of a distribution pipeline to convey recovered groundwater from the ASR wells to three existing Blending Stations, and (iv) upgrades to two of the city’s Blending Stations including mechanical and electrical upgrades as well as piping modifications and pump replacements (collectively, the “2022 Project”); and
WHEREAS, for the purpose of providing funds to the City to finance the 2022 Project, the Authority has determined to issue its Water Revenue Bonds, Series 2022A (the “Bonds”) in the aggregate principal amount of $________________ all pursuant to and secured by this Indenture in the manner provided herein; and
WHEREAS, the City and the Authority have determined that it is necessary and desirable to enter into an Installment Purchase Agreement, dated the date hereof (the “Installment Purchase Agreement”), pursuant to which the Authority will sell the 2022 Project to the City in consideration for Installment Payments equal in time and amount to the debt service on the Bonds; and WHEREAS, the Authority has determined that to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof and interest and premium (if any) thereon, the Authority has authorized the execution and delivery of this Indenture; and
WHEREAS, the City and the Authority have determined 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; 415
60302.00018\34948213.2
2 NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment of the principal of and the interest and premium (if any) on all Bonds at any time issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time to time of the Bonds, as follows:

ARTICLE I
DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS;

EQUAL SECURITY
SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any Supplemental Indenture and of the Bonds and of any certificate, opinion, request or other documents herein mentioned have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. In addition, all capitalized terms used herein and not otherwise defined in this Section 1.01 shall have the respective meanings given such terms in the Installment Purchase Agreement.
“Additional Payments” means the payments so designated and required to be paid by the City pursuant to Section 4.03 of the Installment Purchase Agreement. “Annual Debt Service” means, for each Bond Year with respect to the Bonds, the sum of (a) the interest payable on the Outstanding Bonds in such Bond Year, and (b) the principal amount of the Outstanding Bonds scheduled to be paid in such Bond Year. “Authority” means the City of Oxnard Financing Authority, a joint exercise of powers agency duly organized and existing under and by virtue of the laws of the State of California. “Authorized Investments” means any securities in which the City may legally invest funds subject to its control.
“Authorized Representative” means: (a) with respect to the Authority, its Chairman, Vice Chairman, Executive Director, Secretary or any other person designated as an Authorized Representative of the Authority by a Written Certificate of the Authority signed by its Chairman, Vice Chairman, Executive Director and filed with the City and the Trustee; and (b) with respect to the City, its Mayor, Mayor Pro Tem, City Manager, City Finance Director, City Clerk or any other person designated as an Authorized Representative of the City by a Written Certificate of the City signed by its Mayor, Mayor Pro Tem, City Manager, or City Clerk and filed with the Trustee. “Bond Counsel” means (a) Best Best & Krieger LLP, or (b) any other attorney or firm of attorneys appointed by or acceptable to the City of nationally recognized experience in the issuance of obligations of the City and Authority.
416
60302.00018\34948213.2
3 “Bond Law” means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State, as in existence on the Closing Date or as thereafter amended from time to time. “Bond Payment Fund” means the fund by that name established and held by the Trustee pursuant to Section 4.02(a).
“Bond Year” means any twelve-month period commencing on June 2 in a year and ending on the next succeeding June 1, both dates inclusive; except that the first Bond Year shall commence on the Closing Date and end on June 1, 20__.
“Bonds” means the City of Oxnard Financing Authority Water Revenue Bonds, Series 2022A (WIFIA Loan) issued and at any time Outstanding pursuant to the Bond Law and this Indenture.
“Business Day” means a day (other than a Saturday or a Sunday) on which banks are not required or authorized to remain closed in the city in which the Office of the Trustee is located. “City” means the City of Oxnard, California, a general law city and a municipal corporation duly organized and existing under the laws of the State of California. “Closing Date” means ______________, being the date of delivery of the Bonds to the Original Purchaser.
“Contracts” means the Installment Purchase Agreement and all contracts or leases of the City authorized and executed by the City under and pursuant to the laws of the State of California, the debt service, installment or lease payments under which are payable from the Net System Revenues on a parity with the Installment Purchase Agreement. “Debt Service Payment Commencement Date” means the earlier to occur of (a) December 1, 2027; or (b) the Interest Payment Date falling closest to, but not later than, the fifth anniversary of the first disbursement date of the WIFIA Loan (but in any event no later than five (5) years after the Substantial Completion Date of the 2022 Project).
“Default Rate” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms) of the WIFIA Loan Agreement.
“Event of Default” means any of the events described in Section 8.01. “Indenture” means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the provisions hereof.
“Independent Accountant” means any accountant or firm of such accountants appointed and paid by the City or the Authority, and who, or each of whom (a) is in fact independent and not under domination of the City or the Authority; (b) does not have any substantial interest, direct or indirect, with the City or the Authority; and (c) is not connected with the City or the Authority as 417
60302.00018\34948213.2
4 an officer or employee of the City or the Authority, but who may be regularly retained to make annual or other audits of the books of or reports to the City or the Authority. “Information Services” means Electronic Municipal Market Access System (referred to as “EMMA”), a facility of the Municipal Securities Rulemaking Board, at www.emma.msrb.org; provided, however, in accordance with then current guidelines of the Securities and Exchange Commission, Information Services shall mean such other organizations providing information with respect to called Bonds as the Authority may designate in writing to the Trustee. “Installment Payments” means the payments required to be paid by the City pursuant to Section 4.02 of the Installment Purchase Agreement, including all prepayments thereof. “Installment Purchase Agreement” means that certain Installment Purchase Agreement by and between the Authority and the City, with respect to the sale of the 2022 Project, dated as of _______________, 2022, as originally executed and as it may from time to time be supplemented, modified or amended in accordance with the terms thereof and of this Indenture. “Interest Payment Date” means December 1 and June 1 in each year, beginning the Debt Service Payment Commencement Date, and continuing so long as any Bonds remain Outstanding. “Maximum Annual Debt Service” in respect of any Bond Year means the largest of the sums obtained for that or any succeeding Bond Year after totaling the following for each such Bond Year:
(a) the principal amount of all Outstanding Bonds maturing or required to be redeemed by mandatory Sinking Fund redemption in such Bond Year; and (b) the interest that would be due during such Bond Year on the aggregate principal amount of Bonds which would be Outstanding in such Bond Year if the Bonds Outstanding on the date of such computation were to mature or be redeemed in accordance with the applicable maturity or mandatory Sinking Fund redemption schedule. At the time and for the purpose of making such computation, the amount of Bonds already retired in advance of the above mentioned schedule or schedules shall be deducted pro rata from the remaining amounts thereon.
“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the Authority. “Office” means the corporate trust office of the Trustee in Los Angeles, California, or at such other or additional offices as may be specified in writing to the Authority and the City except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the designated corporate trust office or agency of the Trustee. “Original Purchaser” means the original purchaser of the Bonds upon their delivery by the Trustee on the Closing Date.
418
60302.00018\34948213.2
5 “Outstanding,” when used as of any particular time with reference to Bonds, means 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 10.03; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture.
“Owner,” when used with respect to any Bond, means the person in whose name the ownership of such Bond shall be registered on the Registration Books, being the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (hereinafter, the “USEPA”).
“Permitted Investments” means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein (the Trustee is entitled to conclusively rely upon a Written Request of the City directing investments as a certification to the Trustee that such investments are legal investments), but only to the extent that the same are acquired at fair market value:
(1) U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series — “SLGS”)
(2) Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities.
(3) Resolution Funding Corp. (“REFCORP”) Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable.
(4) Pre-refunded municipal bonds rated “Aaa” by Moody’s and “AA+” by S&P. If however, the issue is only rated by S&P (i.e., there is no Moody’s rating), then the pre-refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or “AA+” rated pre-refunded municipals to satisfy this condition. (5) Obligations, debentures, notes or other evidence of indebtedness issued or fully and unconditionally guaranteed by any of the following: Federal Home Loan Bank System, Government National Mortgage Association, Farmer’s Home Administration, Federal Home Loan Mortgage Corporation or Federal Housing Administration; provided, that with respect to the funds and accounts established under this Indenture, such obligations shall at no time exceed an amount equal to ten percent (10%) of the aggregate principal amount of the Bonds Outstanding.
(6) Deposit accounts, including time deposits, trust accounts, demand deposits, trust funds, overnight bank deposits, interest bearing deposits, interest bearing money market accounts, certificates of deposit (including those placed by a third party pursuant to an agreement between the City and the Trustee and its affiliates) or savings accounts (i) fully insured by the Federal Deposit Insurance Corporation or (ii) with banks whose short 419
60302.00018\34948213.2
6 term obligations are rated no lower than A-1 by S&P and P-1 by Moody’s, including those of the Trustee and its affiliates.
(7) Federal funds or banker’s acceptances with a maximum term of one year of any bank that has an unsecured, uninsured and unguaranteed obligation rating of “Prime- 1” or “A3” by Moody’s and “A-l” or “A” or better by S&P (including the Trustee and its affiliates).
(8) Repurchase obligations with a term not exceeding 30 days pursuant to a written agreement between the Trustee and either a primary dealer on the Federal Reserve reporting dealer list which falls under the jurisdiction of the Securities Investor Protection Corporation (“SIPC”) or a federally chartered commercial bank whose long term debt obligations are rated A or better by S&P and Moody’s, with respect to any security described in clause (1); provided, that the securities which are the subject of such repurchase obligation (i) must be free and clear of all liens, (ii) in the case of a SIPC dealer, were not acquired pursuant to a repurchase or reverse repurchase agreement, (iii) must be deposited with the Trustee and maintained through weekly market valuations in an amount equal to 104% of the invested funds plus accrued interest; and further provided that the Trustee must have a valid first perfected security interest in such securities. (9) Taxable government money market portfolios that have a rating by S&P of Am-G or Am or better and rated in one of the three highest rating categories of Moody’s consisting of securities issued or guaranteed as to payment of principal and interest by the full faith and credit of the United States, subject to a maximum permissible limit equal to six months of principal and interest on the Bonds, including those for which the Trustee or an affiliate receives and retains a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise. (10) Tax-exempt government money market portfolios that have a rating by S&P of Am-G or Am or better and rated in one of the three highest rating categories of Moody’s consisting of securities which are rated in the highest Rating Categories of S&P and Moody’s subject to a maximum permissible limit equal to six months of principal and interest on the Bonds including those for which the Trustee or an affiliate receives and retains a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise.
(11) Money market mutual funds registered under the Investment Company Act of 1940, the shares in which are registered under the Securities Act of 1933 and that have a rating by S&P of AAAm-G or AAAm and rated in one of the two highest Rating Categories of Moody’s, including those managed or advised by the Trustee or its affiliates or for which the Trustee or an affiliate of the Trustee serves as administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives and retains a fee for services provided to the fund, (ii) the Trustee collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds, and (iii) services performed for such funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee.
420
60302.00018\34948213.2
7 (12) Commercial paper having, at the time of investment or contractual commitment to invest therein, a rating from Moody’s and S&P, of A1 and P1, respectively. (13) Repurchase and reverse repurchase agreements collateralized with securities described in clause (1) of this definition, including those of the Trustee or any of its affiliates.
(14) The Local Agency Investment Fund of the State, 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.
(15) Investment agreements, including guaranteed investment contracts (“GICs”) forward purchase agreements and reserve fund put agreements with banks or other financial institutions rated, or guaranteed by institutions rated, or with senior unsecured debt rated, by S&P or Moody’s, in one of the three highest rating categories assigned by such agencies.
(16) Any other investments which meet the criteria established by applicable published investment guidelines issued by each rating agency then rating the Bonds.

Ratings of Permitted Investments referred to herein shall be determined at the time of purchase of such Permitted Investments and without regard to rating subcategories. The Trustee shall have no responsibility to monitor the ratings of Permitted Investments after the initial purchase of such Permitted Investments or the responsibility to validate the ratings of Permitted Investments prior to the initial purchase.
“Record Date” means, with respect to any Interest Payment Date, the fifteenth (15th) calendar day of the month preceding such Interest Payment Date. “Redemption Fund” means the fund by that name established and held by the Trustee pursuant to Section 4.02(c).
“Registration Books” means the books maintained by the Trustee pursuant to Section 2.07 for the registration and transfer of ownership of the Bonds. “Reserve Fund” means the fund by that name established and held by the Trustee pursuant to Section 3.03.
“Reserve Requirement” means, as of any date of calculation by the City, the least of (i) ten percent (10%) of the original issue price of the Bonds (or, if there is less than 2% net original issue discount or premium, 10% of the original stated principal amount of the Bonds); (ii) 125% of average Annual Debt Service on the Bonds as of the Closing Date; or (iii) the Maximum Annual Debt Service on the Bonds.
“Responsible Officer” means any President, Managing Director, Vice President, Assistant Vice President, Treasurer, Assistant Treasurer, Assistant Secretary, Associate, Senior Associate or any other officer of the Trustee in the Office of the Trustee in Los Angeles, California (or any 421
60302.00018\34948213.2
8 successor corporate trust office) having regular responsibility for corporate trust matters and having direct responsibility for the administration of this Indenture. “Revenue Fund” means the fund by that name established and held by the Trustee pursuant to Section 4.02.
“Revenues” means (a) all amounts received by the Authority or the Trustee pursuant, or with respect, to the Installment Purchase 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), prepayments, insurance proceeds, and condemnation proceeds, but excluding any Additional Payments; (b) all moneys and amounts held in the funds and accounts established hereunder; and (c) investment income with respect to any moneys held by the Trustee hereunder.
“S&P” means S&P Global Ratings, a corporation organized and existing under the laws of the State of New York, its successors and assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the Authority. “Series 2022 Bonds” means the City of Oxnard Financing Authority Water Revenue Bonds, 2022 Series A (WIFIA Loan).
“State” means the State of California.
“Substantial Completion” means, with respect to the 2022 Project, the stage at which the 2022 Project is able to perform the functions for which the 2022 Project is designed. “Substantial Completion Date” means the date on which the City certifies to the WIFIA Lender, with evidence satisfactory to the WIFIA Lender and notice to the WIFIA Lender in accordance with Part E of Schedule V (Reporting Requirements) of the WIFIA Loan Agreement, that Substantial Completion has occurred.
“Supplemental Indenture” means any indenture, agreement, resolution or other instrument hereafter duly adopted or executed in accordance with the provisions of Section 7.01 of this Indenture.
“Trustee” means Computershare Trust Company, N.A., appointed by the Authority to act as trustee hereunder pursuant to Section 6.01, and its assigns or any other corporation or association which may at any time be substituted in its place, as provided in Section 6.01. “WIFIA Interest Rate” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Term) of the WIFIA Loan Agreement. “WIFIA Lender” means the United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency.
422
60302.00018\34948213.2
9 “WIFIA Loan Agreement” means the WIFIA Loan Agreement, dated as of __________, 2022, among the City, the Authority and the WIFIA Lender. “WIFIA Loan Amortization Schedule” means the loan amortization schedule reflected in Schedule VI (WIFIA Loan Amortization Schedule), as amended from time to time in accordance with Section 8(c) (Adjustments to WIFIA Loan Amortization Schedule) of the WIFIA Loan Agreement.
“2022 Project” means any additions, betterments, extensions or improvements to the Water System, the design, acquisition or construction of which (together with the incidental costs and expenses related thereto) is to be financed by the proceeds of any Bonds or any Contracts, that may include improvements to both the water treatment (i.e. filter control replacement system, new clarifier and filter system, raw water reservoir improvements, vehicle and equipment replacement and storage tank repairs) and water distribution (i.e. water pipeline replacement, water distribution expansion and storage tank improvements).
“Written Certificate”, “Written Request” and “Written Requisition” of the Authority or the City mean, respectively, a written certificate, request or requisition signed in the name of the Authority or the City by its Authorized Representative. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.

SECTION 1.02. Rules of Construction. All references in this Indenture to “Articles,” “Sections,” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; and the words “herein,” “hereof,” “hereunder,” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof.

SECTION 1.03. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the City, the Trustee and the Owners from time to time of the Bonds; and the covenants and agreements herein set forth to be performed on behalf of the Authority shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein.

ARTICLE II

AUTHORIZATION AND ISSUANCE OF BONDS
SECTION 2.01. Authorization of Bonds. The Authority has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and determines that, as of the date of issuance of the Bonds, all things, conditions, and acts required by law to exist, happen and be performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Authority is now authorized, pursuant to the Bond Law and each and every 423
60302.00018\34948213.2
10 requirement of law, to issue the Bonds in the manner and form provided in this Indenture.

Accordingly, the Authority hereby authorizes the issuance of the Bonds pursuant to the Bond Law and this Indenture.

SECTION 2.02. Terms of Bonds. (a) The Bonds authorized to be issued by the Authority under and subject to the Bond Law and the terms of this Indenture shall be designated the “City of Oxnard Financing Authority Water Revenue Bonds, Series 2022A (WIFIA Loan)” and shall be issued in the original principal amount of $__________. (b) The Series 2022 Bonds shall be issued in fully registered form without coupons in denominations of [$1,000,000] or any integral multiple of $1.00 in excess thereof, shall be dated the Closing Date, shall mature on the earliest of (a) June 1, 2061; (b) the date on which the maturity of the WIFIA Loan has been accelerated or subject to mandatory redemption or prepayment (as the case may be); or (c) the June 1 immediately preceding the date that is thirty-five (35) years following the Substantial Completion Date.
(c) Interest on the Bonds shall be payable at the WIFIA Interest Rate; provided, that, upon the occurrence of an Event of Default, the Authority shall pay interest on the Bonds Outstanding at the Default Rate, (a) in the case of an Event of Default described in Section 8.01(a) hereof, from (and including) its due date to (but excluding) the date of actual payment of the Debt Service on the Bonds then outstanding and accrued interest thereon and (b) in the case of any other Event of Default, from (and including) the date of such occurrence to (but excluding) the earlier of the date on which (i) such Event of Default has been cured (if applicable) in accordance with the terms of this Indenture and the WIFIA Loan Agreement or waived by the WIFIA Lender and (ii) the remaining Bonds Outstanding have been irrevocably paid in full in immediately available funds. Interest shall (x) accrue on the Bonds commencing on the date of the first disbursement of the proceeds under the WIFIA Loan Agreement, (y) be payable commencing on the Debt Service Payment Commencement Date and (z) be computed on the principal amount of Bonds Outstanding on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months. Interest on the Bonds shall be payable in Dollars and in immediately available funds (without counterclaim, offset or deduction) in accordance with the payment instructions provided by the WIFIA Lender prior to the relevant Interest Payment Date, as may be modified in writing from time to time by the WIFIA Lender; provided, that the failure to provide updated payment instructions shall not affect in any manner the Authority’s obligations hereunder or under any other WIFIA Loan Document.

SECTION 2.03. Redemption of Bonds.
(a) Redemption from Prepayments of Installment Payments. The Series 2022 Bonds may be redeemed without penalty or premium, (i) in full on any date or (ii) in part on any Interest Payment Date (and, if in part, the amounts thereof to be prepaid shall be determined by the City; provided, that such redemption shall be in principal amounts of $[1,000,000] or any integral multiple of $1.00 in excess thereof), in each case from time to time but not more than once annually.
(b) Mandatory Sinking Fund Redemption. The Series 2022 Bonds are also subject to redemption prior to their stated maturity, on June 1 in each year, commencing June 1, 20__, in part 424
60302.00018\34948213.2
11 by lot, from mandatory Sinking Fund payments at a redemption price equal to the principal amount thereof, plus accrued interest, if any, to the redemption date, without premium, as set forth below in the aggregate respective principal amounts and on the respective dates as set forth in the following table, which shall match the WIFIA Loan Amortization Schedule; provided, however, that if some but not all of such Series 2022 Bonds have been redeemed pursuant to redemption provisions in paragraph (b) of this Section, then the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such Series 2022 Bonds so redeemed, to be allocated among such sinking fund payments in the manner determined in subparagraph (d) hereof in integral multiples of $5,000. The City shall provide the Trustee with a revised sinking fund schedule.

Schedule of Mandatory Sinking Fund Redemptions
Redemption Date
(June 1)
Principal
Amount
______________________
(1) Maturity.
(c) Notice of Redemption. Each redemption hereunder shall be made on such date and in such principal amount as shall be specified by the City in a Written Request of the City and delivered to the Authority, the Trustee and the WIFIA Lender not less than thirty (30) days prior to the requested date of prepayment, unless otherwise agreed by the WIFIA Lender. (d) Manner of Redemption. Upon the WIFIA Lender’s receipt of confirmation that payment in full in immediately available funds of all Bonds Outstanding (the entire WIFIA Loan Balance) and any unpaid interest, fees and expenses with respect thereto has occurred as a result of a redemption, the WIFIA Lender shall surrender the Bonds to the Authority or its authorized representative, by mail in accordance with Section 35 (Notices) of the WIFIA Loan Agreement.

If the Authority redeems part of Bonds Outstanding, then the WIFIA Lender may make a notation on the WIFIA Loan Amortization Schedule indicating the amount of principal of and interest on the Bonds and the WIFIA Loan then being prepaid. Absent manifest error, the WIFIA Lender’s determination of such matters as set forth on an updated WIFIA Loan Amortization Schedule shall be conclusive evidence thereof; provided, that neither the failure to make any such recordation nor any error in such recordation shall affect in any manner the Authority’s obligations hereunder or under any other WIFIA Loan Document. All partial prepayments of principal shall be applied to reduce the Outstanding Bonds and WIFIA Loan Balance such that the remaining scheduled principal payments for the Bonds and WIFIA Loan set out in the WIFIA Loan Amortization 425
60302.00018\34948213.2
12 Schedule are reduced in inverse order of maturity or, at the election of the City evidenced by a written request of the City filed with the WIFIA Lender at least thirty (30) days prior to the date of redemption, on a pro rata basis (provided that, in any event, the Debt Service on the Bonds following such redemption shall be equal in time and amount to the unpaid payments due under the Installment Purchase Agreement). If such funds have not been so paid on the prepayment date, such principal amount of the Bonds and WIFIA Loan shall continue to bear interest until payment thereof at the rate provided for in Section 6 (Interest Rate) of the WIFIA Loan Agreement. (e) Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same series and maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed. (f) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption shall have been duly provided, such Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice.

All Bonds redeemed pursuant to this Section shall be canceled and shall be destroyed by the Trustee.

SECTION 2.04. Forms of Bonds. The Series 2022 Bonds, the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon, shall be substantially in the form set forth in Exhibit A attached to the WIFIA Loan Agreement and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture.

SECTION 2.05. Execution of Bonds. The Bonds shall be signed in the name and on behalf of the Authority with the manual or facsimile signature of its President and attested by the manual or facsimile signature of its Secretary. The Bonds shall then be delivered to the Trustee for authentication by it. In case any officer who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been authenticated or delivered by the Trustee or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though the individual who signed the same had continued to be such officer of the Authority. Also, any Bond may be signed on behalf of the Authority by any individual who on the actual date of the execution of such Bond shall be the proper officer although on the nominal date of such Bond such individual shall not have been such officer.

Only those Bonds that bear thereon a certificate of authentication in substantially the forms set forth in Exhibit A to the WIFIA Loan Agreement, manually or electronically executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture.
426
60302.00018\34948213.2
13 SECTION 2.06. Transfer and Exchange of Bonds.
(a) Transfer of Bonds. The Bonds shall not be transferable except as provided in Section 37 of the WIFIA Loan Agreement. The registration of any Bond may, in accordance with its terms, be transferred upon the Registration Books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Whenever any Bond or Bonds shall be surrendered for registration of transfer, the Trustee shall execute and deliver a new Bond or Bonds of the same series, maturity, interest rate and aggregate principal amount, in any authorized denominations.

The Authority shall pay all costs of the Trustee incurred in connection with any such transfer, except that the Trustee may require the payment by the Bond Owner of any tax or other governmental charge required to be paid with respect to such transfer. (b) Exchange of Bonds. Bonds may be exchanged at the Office of the Trustee, for a like aggregate principal amount of Bonds of other authorized denominations of the same series, interest rate and maturity. The Authority shall pay all costs of the Trustee incurred in connection with any such exchange, except that the Trustee may require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.
(c) Limitations on Transfer or Exchange. The Trustee may refuse to transfer or exchange either (i) any Bond during the period established by the Trustee for the selection of Bonds for redemption pursuant to Section 2.03, or (ii) the portion of any Bond which the Trustee has selected for redemption pursuant to the provisions of Section 2.03.

SECTION 2.07. Registration Books. The Trustee will keep or cause to be kept, at its Office, sufficient records for the registration and transfer of the Bonds, which shall at all times during normal business hours, and upon reasonable notice, be open to inspection by the City and 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 the Registration Books, Bonds as hereinbefore provided.

SECTION 2.08. Issuance in Temporary Form. The Bonds may be issued initially in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Authority and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and be registered and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds, it will execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at the Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder. 427
60302.00018\34948213.2
14 SECTION 2.09. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like series, tenor and authorized denomination in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the Authority. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and indemnity for the Authority and the Trustee satisfactory to the Trustee shall be given (subject to Section 6.14 hereof), the Authority, at the expense of the Bond Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like maturity and tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been called for redemption, instead of issuing a substitute Bond the Trustee may pay the same without surrender thereof upon receipt of indemnity for the Authority and the Trustee satisfactory to the Trustee, subject to Section 6.14 hereof). The Authority may require payment of a reasonable fee for each new Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original contractual obligation on the part of the Authority whether or not the Bond alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds secured by this Indenture.

SECTION 2.10. Designation of Owner; Limited Obligation. The Bonds shall be initially executed, authenticated and delivered in the form of a separate single fully registered Bond (which may be typewritten) for each of the maturities of the Bonds. Upon initial execution, authentication and delivery, the ownership of each such global Bond shall be registered in the name of the WIFIA Lender.

The Trustee shall pay all principal of, premium, if any, and interest on, the Bonds only to or upon the order of the respective Bond Owners, as shown in the Bond Register kept by the Trustee, or their respective attorneys duly authorized in writing, and all such payments shall be valid hereunder with respect to payment of principal of, premium, if any, and interest on, the Bonds to the extent of the sum or sums so paid. No person other than a Bond Owner, as shown in the Bond Register, shall receive a Bond evidencing the obligation to make payments of principal of, premium, if any, and interest on, such Bond pursuant to this Indenture.

ARTICLE III

ISSUANCE OF BONDS AND APPLICATION OF PROCEEDS
SECTION 3.01. Issuance of Bonds. Upon the execution and delivery of this Indenture, the Authority shall execute and deliver Series 2022 Bonds in the aggregate principal amount of $________, and shall deliver the Bonds to the Trustee for authentication and delivery to the Original Purchaser upon the Written Request of the Authority.

SECTION 3.02. [Reserved].
428
60302.00018\34948213.2
15 SECTION 3.03. Reserve Fund. (a) There is hereby created a separate fund to be known as the “Reserve Fund,” which shall be held in trust by the Trustee. An amount equal to the Reserve Requirement shall be maintained in the Reserve Fund at all times from and after the final disbursement of the WIFIA Loan, subject to the provisions of Section 4.02(b), and any deficiency therein shall be replenished from the first available Revenues pursuant to Section 4.02(b). (b) Moneys in the Reserve Fund shall be used solely for the purpose of paying the principal of and interest on the Bonds, including the redemption price of the Bonds coming due and payable by operation of mandatory sinking fund redemption pursuant to Section 2.03(c), if the moneys in the Bond Payment Fund are insufficient therefor. If the amount on deposit in the Bond Payment Fund on any date is insufficient to enable the Trustee to pay in full the aggregate amount of principal of and interest on the Bonds coming due and payable, including the redemption price of the Bonds coming due and payable by operation of mandatory sinking fund redemption pursuant to Section 2.03(c), the Trustee shall withdraw the amount of such insufficiency from the Reserve Fund and transfer such amount to the Bond Payment Fund. (c) If the amount on deposit in the Reserve Fund exceeds the Reserve Requirement on the fifteenth (15th) calendar day of the month preceding any Interest Payment Date, the amount of such excess shall be withdrawn therefrom by the Trustee and transferred to the Bond Payment Fund and credited against the Installment Payment or Installment Payments next due from the City.

SECTION 3.04. Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be affected in any way by any proceedings taken by the Authority or the Trustee with respect to or in connection with the Installment Purchase Agreement and the recital contained in the Bonds that the same are issued pursuant to the Bond Law shall be conclusive evidence of their validity and of the regularity of their issuance.

ARTICLE IV
REVENUES; FLOW OF FUNDS
SECTION 4.01. Collateral Assignment of Revenues and of the Installment Purchase Agreement. The Authority hereby assigns to the Trustee, on behalf of the Owners, as additional security for its obligations hereunder, all of the Authority’s right, title and interest to and in the Revenues and all of the right, title and interest (but none of the obligations) of the Authority in the Installment Purchase Agreement (other than the rights of the Authority under Sections 8.03 and

11.14 thereof and the Authority’s rights to give consents and approvals thereunder, including, without limitation, to amendments thereof); provided, that should the Authority well and truly pay or cause to be paid the principal of the Bonds with interest thereon in accordance with the terms thereof, and perform all other obligations of the Authority hereunder, then such assignment shall cease, determine and become void and the Trustee shall acknowledge and deliver to the Authority such instruments of satisfaction or release thereof as may reasonably be prepared and requested by or on behalf of the Authority. Subject to Section 4.03, all Revenues the Trustee collects and receives shall be applied to the payment of principal of and interest and premium (if any) on the Bonds equally, without priority for series, issue, number or date, in accordance with the terms hereof. So long as any of the Bonds are Outstanding, the Revenues and such moneys shall not be 429
60302.00018\34948213.2
16 used for any other purpose; except that a portion of the Revenues may be used for purposes as expressly permitted by Section 4.02 hereof.

The assignment under this section to the Trustee is solely in the Trustee’s capacity as Trustee under this Indenture and the duties, powers and liabilities of the Trustee in acting pursuant to such assignment shall be subject to the provisions of this Indenture, including, without limitation, the provisions of Article VI hereof. The Trustee shall not be responsible for any representations, warranties, covenants or obligations of the Authority.

SECTION 4.02. Receipt, Deposit and Application of Revenues. Except as provided in Section 4.03 hereof with regard to the deposit of earnings on investments, all of the Revenues shall be deposited by the Trustee immediately upon receipt in the Revenue Fund (which the Trustee shall establish and hold in trust hereunder) or as otherwise instructed by the City. Amounts in the Revenue Fund shall be applied solely for the uses and purposes set forth herein. The Trustee shall withdraw amounts on deposit in the Revenue Fund and apply such amounts at the times and for the purposes, and in the priority, as follows:
(a) Bond Payment Fund. On or before each Interest Payment Date, so long as any Bonds remain Outstanding hereunder, the Trustee shall withdraw from the Revenue Fund and deposit into the Bond Payment Fund (which the Trustee shall establish and hold in trust hereunder) an amount which, together with other available amounts then on deposit in the Bond Payment Fund, is at least equal to the sum of (i) the aggregate amount of principal of and interest coming due and payable on the Bonds on such Interest Payment Date, (ii) the principal amount Bonds maturing on such Interest Payment Date, and (iii) the redemption price of the Term Bonds coming due and payable on such Interest Payment Date by operation of mandatory sinking fund redemption pursuant to Section 2.03(c).

Amounts in the Bond Payment Fund shall be applied by the Trustee solely for the purpose of paying the principal of and interest on the Outstanding Bonds when and as such principal and interest becomes due and payable (including accrued interest on any Bonds purchased or redeemed pursuant hereto), and for the purpose of paying the principal of the Term Bonds at the maturity thereof or upon the mandatory sinking fund redemption thereof pursuant to Section 2.03(c).

If after all of the Bonds have been paid or deemed to have been paid, there are moneys remaining in the Bond Payment Fund, such moneys shall be transferred by the Trustee to the City, after the payment of any outstanding fees and expenses of the Trustee. (b) Reserve Fund. If the amount on deposit in the Reserve Fund at any time falls below the Reserve Requirement, the Trustee shall promptly notify the City and the Authority of such fact and, subject to Section 9.02(a) hereof, the Trustee shall promptly (i) withdraw the amount of such insufficiency from available Revenues on deposit in the Revenue Fund, and (ii) transfer such amount to the Reserve Fund. No deposit need be made in the Reserve Fund so long as the balance therein or credited thereto at least equals the Reserve Requirement. (c) Redemption Fund. The Trustee shall deposit into the Redemption Fund all amounts required to redeem any Bonds which are subject to redemption pursuant to Sections 2.03(a) and (b) when and as such amounts become available. Amounts in the Redemption Fund shall be applied 430
60302.00018\34948213.2
17 by the Trustee solely for the purpose of paying the redemption price of Bonds to be redeemed pursuant to Sections 2.03(a) and (b). Following any redemption of all of the Bonds, any moneys remaining in the Redemption Fund shall be transferred by the Trustee to the City.

SECTION 4.03. Investments. All moneys in any of the funds or accounts established with the Trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted Investments, as directed pursuant to the Written Request of the City filed with the Trustee at least two (2) Business Days in advance of the making of such investments. In the absence of any such directions from the City, the Trustee shall hold such moneys uninvested. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the fund or account from which such investment was made. 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 sponsor, principal or agent in the acquisition or disposition of any investment. The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section. The Trustee may rely conclusively upon the investment direction of the City as to the suitability and legality of the directed investments.

The Trustee may sell, or present for prepayment, any Permitted Investment so purchased by the Trustee whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any such Permitted Investment.

The Authority (and the City by its execution of the Installment Purchase Agreement) acknowledge that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority or the City the right to receive brokerage confirmations of security transactions as they occur, at no additional cost, the Authority and the City specifically waive receipt of such confirmations to the extent permitted by law. The Trustee will furnish the Authority and the City periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.

SECTION 4.04. Acquisition, Disposition and Valuation of Investments. (a) Except as otherwise provided in subsection (b) of this Section, all investments of amounts deposited in any fund or account created by or pursuant to this Indenture, or otherwise containing gross proceeds of the Bonds shall be acquired and disposed of at fair market value. (b) Except as required pursuant to Section 5.07 hereof, the fair market value of the investments held pursuant to this Indenture shall be determined as follows: “Value”, which shall be determined as of the end of each month, means that the value of any investments shall be calculated as follows: (a) as to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times); the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination; (b) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times; the average bid price at such time of determination for such investments by any two nationally recognized government 431
60302.00018\34948213.2
18 securities dealers (selected by the Trustee in its absolute discretion) at the time making a market in such investments or the bid price published by a nationally recognized pricing service; (c) as to certificates of deposit and bankers acceptances; the face amount thereof, plus accrued interest; and (d) as to any investment not specified above; the value thereof established by prior agreement between the Authority and the Trustee.

Notwithstanding anything to the contrary herein, in making any valuations of investments hereunder, the Trustee has no duty in connection with the determination of Fair Market Value other than to follow the investment directions of the Authority in any Written Certificate or Written Request of the Authority. Trustee shall be deemed to have complied with such valuation through use of its automated pricing service as reflected on its trust accounting statements.

ARTICLE V
COVENANTS OF THE AUTHORITY; SPECIAL TAX COVENANTS
SECTION 5.01. Punctual Payment; Compliance With Documents. The Authority shall punctually pay or cause to be paid the interest and principal to become due with respect to all of the Bonds in strict conformity with the terms of the Bonds and of this Indenture, and will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures.

SECTION 5.02. 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 shall not have been so extended. Nothing in this Section 5.02 shall be deemed to limit the right of the Authority to issue bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds.

SECTION 5.03. 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 is 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 5.04. Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other assets purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all times, subject to the provisions of Article VI and to the extent permitted by law, defend, preserve and 432
60302.00018\34948213.2
19 protect such 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 5.05. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate trust industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of Bonds, the Revenues, the Installment Purchase Agreement, and all funds and accounts held by the Trustee under this Indenture. Such books of record and account shall be available for inspection by the Authority, the City, and the Bond Owners during business hours and under reasonable circumstances with reasonable notice.

SECTION 5.06. No Additional Obligations. The Authority covenants that no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part, to that end, the Authority shall not without the prior written consent of the WIFIA Lender issue or incur obligations of any kind payable from, secured or supported by any of the Pledged Collateral, as defined in the WIFIA Loan Agreement, and amounts to be held in any fund or account established hereunder or the right, title and interest of the Authority in the Installment Purchase Agreement, assigned to the Trustee hereunder.

SECTION 5.07. Installment Purchase Agreement. The Trustee shall promptly collect all amounts due from the City pursuant to the Installment Purchase Agreement. Subject to the provisions of Article VI, the Trustee may 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 Purchase Agreement with respect to the timely collection of the Installment Payments.

SECTION 5.08. 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 5.09. Further Assurances. The Authority will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Trustee and Owners of the Bonds the rights and benefits provided in this Indenture.

SECTION 5.10. Reporting Requirements. The City and the Authority hereby agree to comply with each of the reporting requirements set out in Schedule V (Reporting Requirements) of the WIFIA Loan Agreement, unless otherwise agreed or waived by the WIFIA Lender in writing.
433
60302.00018\34948213.2
20 ARTICLE VI

THE TRUSTEE
SECTION 6.01. Appointment of Trustee. Computershare Trust Company, N.A., a national banking association organized and existing under and by virtue of the laws of the United States of America, is hereby appointed Trustee by the Authority for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Authority agrees that it will maintain a Trustee having a combined capital and surplus of at least One Hundred Million Dollars ($100,000,000), and subject to supervision or examination by federal or State authority, so long as any Bonds are Outstanding.

If such bank, national banking association or trust company publishes a report of condition at least annually pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this Section 6.01 the combined capital and surplus of such bank, national banking association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

SECTION 6.02. Payment of Bonds; Registration Books. The Trustee is hereby authorized to pay the Bonds when duly presented for payment at maturity, or on redemption or purchase prior to maturity, and to cancel all Bonds upon payment thereof. The Trustee shall keep accurate records of all funds administered by it and of all Bonds paid and discharged. The Trustee will keep or cause to be kept at its Office sufficient books for the registration and transfer of the Bonds, which shall at all times during regular business hours upon reasonable notice be open to inspection by the City and the Authority. Upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, as provided in this Indenture with respect to the Bonds.

SECTION 6.03. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions:
(a) The Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. Prior to the time that an Event of Default hereunder has occurred or after the curing of all Events of Default which may have occurred, the Trustee shall perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or duties shall be read into this Indenture against the Trustee. In case an Event of Default hereunder has occurred (which has not been cured or waived) the Trustee may exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
(b) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall have no liability for the actions of any such attorney, agent or receiver chosen with reasonable care, and the Trustee shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder. The Trustee shall not be liable for any action taken or not taken in reliance upon advice or opinion of such counsel.
434
60302.00018\34948213.2
21 (c) The Trustee shall not be responsible for any recital herein, or in the Bonds, or for any of the supplements thereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby and the Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, conditions or agreements on the part of the Authority hereunder. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with the City’s investment direction or as otherwise provided in this Indenture. (d) The Trustee shall not be accountable for the use of any proceeds of sale of the Bonds delivered hereunder. The Trustee may become the Owner of Bonds secured hereby with the same rights which it would have if not the Trustee; may acquire and dispose of other bonds or evidence of indebtedness of the Authority with the same rights it would have if it were not the Trustee; and may act as a depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Bonds, whether or not such committee shall represent the Owners of the majority in principal amount of the Bonds then Outstanding.
(e) In the absence of bad faith on its part, the Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram, requisition, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken or omitted to be taken by the Trustee in good faith and without negligence pursuant to this Indenture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner of any Bond, shall be conclusive and binding upon all future Owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. The Trustee shall not be bound to recognize any person as an Owner of any Bond or to take any action at his request unless the ownership of such Bond by such person shall be reflected on the Registration Books.
(f) As to the existence or non-existence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a Written Certificate of the City or a Written Certificate of the Authority as sufficient evidence of the facts therein contained and prior to the occurrence of an Event of Default hereunder of which the Trustee has been given notice or is deemed to have notice, as provided in Section 6.03(h) hereof, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same. The Trustee may accept a Written Certificate of the Authority to the effect that an authorization in the form therein set forth has been adopted by the Authority, as conclusive evidence that such authorization has been duly adopted and is in full force and effect.
(g) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct. The immunities and exceptions from liability of the Trustee shall extend to its officers, directors, employees and agents. In acting under the Installment Purchase Agreement or any other document executed in connection herewith or therewith, the Trustee shall have the same rights, protections and indemnities as afforded to it hereunder. 435
60302.00018\34948213.2
22 (h) The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default hereunder or under the Installment Purchase Agreement, except failure by the City to make any of the payments to the Trustee required to be made by the City pursuant to the Installment Purchase Agreement, or failure by the Authority to file with the Trustee any document required by this Indenture to be so filed subsequent to the issuance of the Bonds by a certain date, unless a Responsible Officer of the Trustee shall be specifically notified in writing of such default by the Owners of at least twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding and all notices or other instruments required by this Indenture or under the Installment Purchase Agreement to be delivered to the Trustee must, to be effective, be delivered at the Office of the Trustee, and in the absence of such notice so delivered the Trustee may conclusively assume there is no Event of Default hereunder or thereunder except as aforesaid. (i) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right (but not the duty) fully to inspect the Water System, all books, papers and records of the City or the Authority pertaining to the Water System and the Bonds, and to take such memoranda from and with regard thereto as may be desired but which is not privileged by statute or by law. (j) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds.
(k) Notwithstanding anything elsewhere in this Indenture with respect to the execution of any Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, as may be deemed desirable for the purpose of establishing the right of the Authority to the execution of any Bonds, or the right of the City or the Authority to the withdrawal of any cash, or the taking of any other action by the Trustee. (l) Before taking the action referred to in Section 8.03 or any other actions besides making payments of principal of and interest on the Bonds (subject, however, to Section 6.14 hereof), the Trustee may require that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or willful misconduct in connection with any such action.
(m) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received but need not be segregated from other funds except to the extent required by law. The Trustee shall not be under any liability for interest on any moneys received hereunder except such as may be agreed upon. (n) No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder.

The Trustee shall provide the Authority and the City with seven days’ notice prior to making any advance of its own funds hereunder (which it is in no event required to do), and, if the City or the 436
60302.00018\34948213.2
23 Authority does not provide moneys in the amount needed, the Trustee shall be entitled to interest on the amounts advanced at a rate equal to its prime rate then in effect; provided that no such prior notice shall need be given and such interest on amounts advanced shall accrue from the date of any such advance following the occurrence of an Event of Default hereunder. (o) The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds.
(p) The Trustee shall not be liable for any action taken or not taken by it in accordance with the direction of a majority (or other percentage provided for herein) in aggregate principal amount of the Bonds outstanding relating to the exercise of any right, power or remedy available to the Trustee.
(q) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay (“unavoidable delay”) in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, pandemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee. (r) The Trustee shall not be concerned with or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.
(s) Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate of the City, and such certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.
(t) The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. (u) The Trustee may consult with counsel, who may or may not be counsel to the City, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith.
437
60302.00018\34948213.2
24 (v) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the Authority and City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Authority and City whenever a person is to be added or deleted from the listing. If the Authority and City elect to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Authority and City understand and agree that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer.

The Authority and City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Authority and City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Authority and City. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Authority and City agree: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Authority and City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.

SECTION 6.04. Fees, Charges and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for reasonable fees for its services rendered hereunder and all reasonable advances, reasonable counsel fees (including expenses) and other expenses reasonably and necessarily made or incurred by the Trustee in connection with such services, but solely from Additional Payments made by the City under the Installment Purchase Agreement. Upon the occurrence of an Event of Default, the Trustee shall have a first lien with right of payment prior to payment of any Bond upon the amounts held hereunder for the foregoing fees, charges and expenses incurred by it respectively. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law.

SECTION 6.05. Notice to Bond Owners of Default. If an Event of Default hereunder occurs with respect to any Bonds, of which the Trustee has been given or is deemed to have notice, 438
60302.00018\34948213.2
25 as provided in Section 6.03(h), then the Trustee shall promptly give written notice thereof by first- class mail to the Owner of each such Bond, unless such Event of Default shall have been cured before the giving of such notice.

SECTION 6.06. Intervention by Trustee. In any judicial proceeding to which the Authority is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing on the interests of Owners of any of the Bonds, the Trustee may intervene on behalf of such Bond Owners, and subject to Section 6.03(l), shall do so if requested in writing by the Owners of a majority in aggregate principal amount of such Bonds then Outstanding.

SECTION 6.07. Removal of Trustee. The Owners of a majority in aggregate principal amount of the Outstanding Bonds, or the Authority (so long as no Event of Default has occurred or is continuing), may at any time upon thirty (30) days prior written notice remove the Trustee.

SECTION 6.08. Resignation by Trustee. The Trustee and any successor Trustee may at any time resign by giving written notice by registered or certified mail to the City and the Authority. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee in accordance with Section 6.09. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. Upon such acceptance, the successor Trustee shall mail notice thereof to the Bond Owners at their respective addresses set forth on the Registration Books.

SECTION 6.09. Appointment of Successor Trustee. In the event of the removal or resignation of the Trustee pursuant to Sections 6.06 or 6.07, respectively, the Authority shall promptly appoint a successor Trustee; provided that any such successor shall be a bank, national banking association or trust company meeting the requirements of Section 6.01. In the event the Authority shall for any reason whatsoever fail to appoint a successor Trustee within sixty (60) days following the delivery to the Trustee of the instrument described in Section 6.06 or within sixty (60) days following the receipt of notice by the Authority pursuant to Section 6.07, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor Trustee meeting the requirements of Section 6.01. Any such successor Trustee appointed by such court shall become the successor Trustee hereunder notwithstanding any action by the Authority purporting to appoint a successor Trustee following the expiration of such sixty (60) day period. Upon the acceptance by any successor Trustee of appointment as such, the successor Trustee shall cause notice thereof to be given by first class mail to the Bond Owners at their respective addresses set forth on the Registration Books.

SECTION 6.10. Merger or Consolidation. Any company into which the Trustee may be merged or converted or which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such company shall be eligible under Section 6.01, shall be the successor to the Trustee and vested with all of the title to the trust estate and all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
439
60302.00018\34948213.2
26 SECTION 6.11. Concerning any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority an instrument in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the Written Request of the Authority, or of its successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as the Trustee hereunder to its successor. Should any instrument in writing from the Authority be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority.

SECTION 6.12. Appointment of Co-Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction (including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional individual or institution as a separate or co-trustee. The following provisions of this Section 6.12 are adopted to these ends.

If the Trustee appoints an additional individual or institution as a separate or co-trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co-trustee but only to the extent necessary to enable such separate or co-trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co-trustee shall run to and be enforceable by either of them.

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

SECTION 6.13. Indemnification; Limited Liability of Trustee. The Authority further covenants and agrees to indemnify and save the Trustee and its officers, directors, agents and employees, harmless against any loss, costs, claims, expense (including, without limitation, legal fees and expenses), suits, actions, judgements and liabilities which it may incur arising out of or 440
60302.00018\34948213.2
27 in the exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability or enforcing its indemnification rights hereunder, but excluding any and all losses, costs, claims, expenses and liabilities which are finally determined to have been primarily caused by the negligence or willful misconduct of the Trustee, its officers, directors or employees. No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability hereunder or pursuant to the Installment Purchase Agreement. The Trustee shall not be liable for 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 Bonds Outstanding relating to the time, method and place of conducting any proceeding or remedy available to the Trustee under this Indenture. The obligations of the Authority under this paragraph shall be payable solely from Additional Payments made by the City under the Installment Purchase Agreement and shall survive the resignation or removal of the Trustee under this Indenture or any defeasance of the Bonds. The Trustee’s rights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance of the Bonds. All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee.

The Trustee shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Bonds. Before taking any action under Article VIII or this Article at the request of the Owners, the Trustee may require that a satisfactory indemnity bond be furnished by the Owners for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or willful misconduct in connection with any action so taken.

SECTION 6.14. No Indemnification by USEPA. In any circumstance in which USEPA (or any federal agency or instrumentality that may hold the Bonds from time to time) would otherwise be required to indemnify the Trustee pursuant to the terms of this Indenture, the Authority, to the extent permitted by law, shall instead indemnify the Trustee for any and all loss, cost, charge, expense (including legal fees), judgment or liability incurred by the Trustee and the Trustee shall not refuse to take any action or follow any instruction as a result of the Authority being obligated to indemnify the Trustee in lieu of USEPA or any such federal agency.

ARTICLE VII

MODIFICATION AND AMENDMENT OF THIS INDENTURE
SECTION 7.01. Amendment by Consent of Owner. This Indenture and the rights and obligations of the Authority and of the Owner may be modified or amended at any time by a Supplemental Indenture which shall become binding when the written consent of the Owner, exclusive of Bonds disqualified as provided in Section 7.02 hereof, are filed with the Trustee SECTION 7.02. Disqualified Bonds. Bonds owned or held by or for the account of the City or the Authority (but excluding Bonds held in any employees’ retirement fund) shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Bonds in this article provided for, and shall not be entitled to consent to, or take any 441
60302.00018\34948213.2
28 other action in this article provided for, unless all of the Outstanding Bonds shall be owned or held by or for the account of the City or the Authority, provided however, that the Trustee shall not be deemed to have knowledge that any Bond is owned by the Authority or the City or for the account of the Authority or the City unless the Authority or the City is a Registered Owner or the Trustee has received written notice that any other Registered Owner is the owner of a Bond for the account of the City or Authority.

SECTION 7.03. Endorsement or Replacement of Bonds After Amendment. After the effective date of any action taken as hereinabove provided, the Authority may determine that the Bonds shall bear a notation, by endorsement in form approved by the Authority, as to such action, and in that case upon demand of the Owner of the Bonds Outstanding at such effective date and presentation of the Bond for that purpose at the Office of the Trustee, a suitable notation as to such action shall be made on such Bond. If the Authority shall so determine, new Bonds so modified as, in the opinion of the Authority, shall be necessary to conform to the Owner’s action shall be prepared and executed, and in that case upon demand of the Owner of the Bond Outstanding at such effective date such new Bonds shall be exchanged at the Office of the Trustee, without cost to the Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds.

SECTION 7.04. Amendment by Mutual Consent. The provisions of this Article VII shall not prevent the Owner from accepting any amendment as to the particular Bond held by such Owner, provided that due notation thereof is made on such Bond.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
SECTION 8.01. Events of Default and Acceleration of Maturities. The following events shall be Events of Default hereunder:
(a) Default in the due and punctual payment of the principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for mandatory sinking fund redemption, by declaration or otherwise. (b) Default in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable. (c) Default by the Authority in the observance of any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, if such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the City and the Authority by the Trustee; provided, however, that if in the reasonable opinion of the Authority the default stated in the notice (other than a default in the payment of any fees and expenses owing to the Trustee) can be corrected, but not within such thirty (30) day period, such default shall not constitute an Event of Default hereunder if the Authority shall commence to cure such default within such thirty (30) day period and thereafter diligently and in good faith cure such failure in a reasonable period of time, which period shall not be longer than one hundred eighty (180) days from the date of such default notice.
442
60302.00018\34948213.2
29 (d) The filing by the Authority of a petition or answer seeking reorganization or arrangement under the Federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Authority, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Authority or of the whole or any substantial part of its property. (e) The occurrence and continuation of an Event of Default under and as defined in the Installment Purchase Agreement.
(f) The occurrence and continuation of an Event of Default under the WIFIA Loan Agreement.

Upon the occurrence and during the continuance of any Event of Default the Trustee may, and at the written direction of the Owner, the Trustee shall, 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. This 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 and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Authority shall deposit with the Trustee a sum sufficient to pay all of the principal of and interest on the Bonds having come due prior to such declaration, with interest on such overdue principal and interest calculated at the net effective rate of interest per annum then borne by the Outstanding Bonds, and the reasonable fees and expenses of the Trustee, together with interest thereon at the prime rate of the Trustee then in effect, and any and all other defaults actually known to the Trustee (other than in the payment of the principal of and interest on the Bonds having come 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 or the Owner may, by written notice to the Authority and to the Trustee, on behalf of the Owner, rescind and annul such declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.

SECTION 8.02. Application of Funds Upon Acceleration. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenture shall be applied by the Trustee in the following order upon presentation of the several Bonds, and the stamping thereon of the amount of the payment if only partially paid, or upon the surrender thereof if fully paid:

First, to the payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture; Second, to the payment of the whole amount then owing and unpaid upon the Bonds for interest and principal, with interest on such overdue amounts to the extent permitted by 443
60302.00018\34948213.2
30 law at the net effective rate of interest then borne by the Outstanding Bonds, and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such interest, principal and interest on overdue amounts without preference or priority among such interest, principal and interest on overdue amounts ratably to the aggregate of such interest, principal and interest on overdue amounts; and
Third, to any amounts owing the Owner to the extent not otherwise paid pursuant to Second above.

SECTION 8.03. Other Remedies: Rights of Bond Owner. Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy, in addition to the remedy specified in Section 8.01, at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture.

If an Event of Default shall have occurred and be continuing and if requested so to do by the Owner and indemnified as provided in Section 6.03(l), the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owner.

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

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

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

SECTION 8.04. Power of Trustee to Control Proceeding. If the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owner, it shall have full power, in the exercise of its discretion for the best interests of the Owner, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owner opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation and the Trustee has been indemnified to its satisfaction (subject 444
60302.00018\34948213.2
31 to Section 6.14 hereof). Any suit, action or proceeding which the Owner of Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of the Owner similarly situated and the Trustee is hereby appointed (and the successive respective Owner issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney-in-fact of the respective Owner for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the Owner as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact.

SECTION 8.05. Appointment of Receivers. Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Owner under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Revenues and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer.

SECTION 8.06. Non-Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Bonds, shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the Owner at the respective dates of maturity, as herein provided, out of the Revenues and other moneys herein pledged for such payment.

A waiver of any default or breach of duty or contract by the Trustee or the Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission of the Trustee or the Owner of any of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy conferred upon the Trustee or Owner by the Bond Law or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Owner, as the case may be.

SECTION 8.07. Rights and Remedies of Bond Owners. No Owner of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, or the Installment Purchase Agreement, unless (a) the Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owner shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) subject to Section 6.14 hereof, the Owner shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request (which tender of indemnity shall be deemed to have been tendered upon the date of Owner’s written notice pursuant to clause (b) above; (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee; and (e) the Trustee has not received any inconsistent direction during such 60-day period from the Owner.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by the Owner of Bonds of any remedy 445
60302.00018\34948213.2
32 hereunder; it being understood and intended that the Owner of Bonds shall not have any right in any manner whatever by his or their action to enforce any right under this Indenture or the Installment Purchase Agreement except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the benefit of the Owner.

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

SECTION 8.08. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the Authority, the Trustee and the Owner shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.

ARTICLE IX

MISCELLANEOUS
SECTION 9.01. Limited Liability of Authority. Notwithstanding anything in this Indenture contained, the Authority shall not be required to advance any moneys derived from any source of income other than the Revenues for the payment of the principal of or interest on the Bonds, or any premiums upon the redemption thereof, or for the performance of any covenants herein contained (except to the extent any such covenants are expressly payable hereunder from the Revenues or any Additional Revenues). The Authority may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose and may be used by the Authority for such purpose without incurring indebtedness.

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

SECTION 9.02. Benefits of Indenture Limited to Parties. Nothing in this Indenture, expressed or implied, is intended to give to any person other than the City, the Authority, the Trustee, and the Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and 446
60302.00018\34948213.2
33 on behalf of the Authority shall be for the sole and exclusive benefit of the Trustee and the Owners of the Bonds.

SECTION 9.03. Discharge of Indenture. If the Authority shall pay and discharge each Outstanding Bond in any one or more of the following ways – (a) by well and truly paying or causing to be paid the principal of and interest and premium (if any) on such Bonds, as and when the same become due and payable; (b) by irrevocably depositing with the Trustee, in trust, at or before maturity, money which, together with the available amounts then on deposit in the funds and accounts established pursuant to this Indenture, is fully sufficient to pay such Bonds, including all principal, interest and redemption premiums; or (c) by irrevocably depositing with the Trustee, in trust, Permitted Investments described in paragraph (1), (2) or (3) of the definition thereof in such amount as Bond Counsel or an Independent Accountant shall determine as evidenced by an opinion or report, respectively, delivered to the Trustee (the “Verification Report”) will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established pursuant to this Indenture, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been mailed pursuant to Section

2.03(d) or provision satisfactory to the Trustee shall have been made for the mailing of such notice; then, at the election of the Authority, and notwithstanding that any of such Bonds shall not have been surrendered for payment, the assignment of the Installment Purchase Agreement and pledge of the Revenues and other funds provided for in this Indenture securing its performance with respect to such Bonds, and all other pecuniary obligations of the Authority under this Indenture with respect to such Bonds, shall cease and terminate, except only the obligation of the Authority to 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. Notice of such election shall be filed with the Trustee. Any funds thereafter held by the Trustee, which are not required for said purposes, shall be paid over to the City.

SECTION 9.04. Successor Is Deemed Included in All References to Predecessor.

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

SECTION 9.05. Execution of Documents by Bond Owners. Any request, consent or other instrument required by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent writings of substantially similar tenor and may be signed or executed by such Bond Owners in person or by agent or agents duly appointed in writing. Proof of the 447
60302.00018\34948213.2
34 execution of any such request, consent or other instrument or of a writing appointing any such agent, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and of the Authority if made in the manner provided in this Section 9.05. The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such request, consent or other instrument or writing acknowledged to him the execution thereof. The ownership of Bonds shall be proved by the Registration Books. Any request, consent or vote of the Owner shall bind every future Owner with respect to the same Bond and the Owner with respect to any Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in pursuance of such request, consent or vote. In lieu of obtaining any demand, request, direction, consent or waiver in writing, the Trustee may call and hold a meeting of the Owners upon such notice and in accordance with such rules and obligations as the Trustee considers fair and reasonable for the purpose of obtaining any such action.

SECTION 9.06. Waiver of Personal Liability. No member of the Authority’s Board of Directors or, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the interest on or principal of the Bonds; but nothing herein contained shall relieve any such officer, agent or employee from the performance of any official duty provided by law.

SECTION 9.07. Partial Invalidity. If any one or more of the covenants or agreements, or portions thereof, provided in this Indenture on the part of the Authority (or of the Trustee) to be performed should be contrary to law, then such covenant or covenants, such agreement or agreements, or such portions thereof, shall be null and void and shall be deemed separable from the remaining covenants and agreements or portions thereof and shall in no way affect the validity of this Indenture or of the Bonds; but the Bond Owners shall retain all rights and benefits accorded to them under the Bond Law or any other applicable provisions of law. The Authority hereby declares that it would have entered into this Indenture and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases of this Indenture or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

SECTION 9.08. Destruction of Canceled Bonds. Whenever in this Indenture provision is made for the surrender to the Authority of any Bonds which have been paid or canceled pursuant to the provisions of this Indenture, the Trustee shall destroy such Bonds and furnish to the Authority upon the Authority’s Written Request a certificate of such destruction.

SECTION 9.09. Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Authority or the Trustee may be established and maintained in the accounting records of the Authority or the Trustee, as the case may be, either as a fund or an account, and may, for the purpose of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account. All such records with respect to all such funds and accounts held by the Authority shall at all times be maintained in accordance with generally accepted accounting principles and all such records with respect to all 448
60302.00018\34948213.2
35 such funds and accounts held by the Trustee shall be at all times maintained in accordance with corporate trust industry practices; in each case with due regard for the protection of the security of the Bonds and the rights of every Owner thereof.

SECTION 9.10. Notices. All written notices to be given under this Indenture shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time.

Notice shall be effective either (a) upon transmission by facsimile transmission or other form of telecommunication, (b) upon receipt after deposit in the United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The City, the Authority or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

If to the Authority: City of Oxnard Financing Authority 300 West Third Street
Oxnard, CA 93030
Attention: Executive Director
If to the City: City of Oxnard
300 West Third Street
Oxnard, CA 93030
Attention: City Manager
If to the Trustee: Computershare Trust Company, N.A.,
CTSO Mail Operations
Attention: Tracy Mason
MAC: N9300-070
600 South 4th Street, 7th Floor
Minneapolis, MN 55415
If to WIFIA Lender: Environmental Protection Agency
WJC-E 7334A
1200 Pennsylvania Avenue NW
Washington, D.C. 20460
Attention: WIFIA Director
Email: [email protected]
SECTION 9.11. Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of the Bonds which remain unclaimed for two (2) years after the date when such Bonds or interest thereon have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Trustee at such date, or for two (2) years after the date of deposit of such moneys if deposited with the Trustee after said date when such Bonds become due and payable, shall be repaid by the Trustee (without liability for interest) to the Authority, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the Authority for the payment of such Bonds; provided, however, that before being required to make any such payment 449
60302.00018\34948213.2
36 to the Authority, the Trustee shall, at the Written Request of the Authority (and of its expense), cause to be mailed to the Owners of all such Bonds, at their respective addresses appearing on the Registration Books, a notice that said moneys remain unclaimed and that, after a date named in said notice, which date shall not be less than thirty (30) days after the date of mailing of such notice, the balance of such moneys then unclaimed will be returned to the Authority.

SECTION 9.12. 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 9.13. Governing Law. This Indenture shall be governed by and construed in accordance with the laws of the State.
(Signature page follows)
450
60302.00018\34948213.2
S-1
IN WITNESS WHEREOF, the CITY OF OXNARD FINANCING AUTHORITY and the CITY OF OXNARD have caused this Indenture to be signed in their names by their respective authorized officers, and Computershare Trust Company, N.A., in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officer identified below, all as of the day and year first above written.

CITY OF OXNARD FINANCING

AUTHORITY
By:

Alexander Nguyen
Executive Director

CITY OF OXNARD
By:

Alexander Nguyen
City Manager

COMPUTERSHARE TRUST COMPANY,
N.A., as Trustee
By:

Authorized Officer
-Signature Page-
Indenture of Trust
451
60302.00018\34948213.2

TABLE OF CONTENTS
Page
-i-

ARTICLE I
DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS; EQUAL SECURITY SECTION 1.01. Definitions ...........................................................................................................2 SECTION 1.02. Rules of Construction ..........................................................................................9 SECTION 1.03. Equal Security......................................................................................................9

ARTICLE II

AUTHORIZATION AND ISSUANCE OF BONDS
SECTION 2.01. Authorization of Bonds........................................................................................9 SECTION 2.02. Terms of Bonds..................................................................................................10 SECTION 2.03. Redemption of Bonds. .......................................................................................10 SECTION 2.04. Forms of Bonds..................................................................................................12 SECTION 2.05. Execution of Bonds............................................................................................12 SECTION 2.06. Transfer and Exchange of Bonds.......................................................................13 SECTION 2.07. Registration Books.............................................................................................13 SECTION 2.08. Issuance in Temporary Form .............................................................................13 SECTION 2.09. Bonds Mutilated, Lost, Destroyed or Stolen......................................................14 SECTION 2.10. Designation of Owner; Limited Obligation .......................................................14

ARTICLE III

ISSUANCE OF BONDS AND APPLICATION OF PROCEEDS
SECTION 3.01. Issuance of Bonds ..............................................................................................14 SECTION 3.02. [Reserved]..........................................................................................................14 SECTION 3.03. Reserve Fund .....................................................................................................15 SECTION 3.04. Validity of Bonds...............................................................................................15

ARTICLE IV
REVENUES; FLOW OF FUNDS
SECTION 4.01. Collateral Assignment of Revenues and of the Installment Purchase Agreement .....................................................................................................15 SECTION 4.02. Receipt, Deposit and Application of Revenues .................................................16 SECTION 4.03. Investments ........................................................................................................17 SECTION 4.04. Acquisition, Disposition and Valuation of Investments. ...................................17 452
60302.00018\34948213.2

TABLE OF CONTENTS
(continued)
Page
-ii-

ARTICLE V
COVENANTS OF THE AUTHORITY; SPECIAL TAX COVENANTS
SECTION 5.01. Punctual Payment; Compliance With Documents.............................................18 SECTION 5.02. Extension of Payment of Bonds.........................................................................18 SECTION 5.03. Against Encumbrances ......................................................................................18 SECTION 5.04. Power to Issue Bonds and Make Pledge and Assignment .................................18 SECTION 5.05. Accounting Records and Financial Statements .................................................19 SECTION 5.06. No Additional Obligations.................................................................................19 SECTION 5.07. Installment Purchase Agreement .......................................................................19 SECTION 5.08. Waiver of Laws..................................................................................................19 SECTION 5.09. Further Assurances ............................................................................................19 SECTION 5.10. Reporting Requirements ....................................................................................19

ARTICLE VI

THE TRUSTEE
SECTION 6.01. Appointment of Trustee .....................................................................................20 SECTION 6.02. Payment of Bonds; Registration Books.............................................................20 SECTION 6.03. Acceptance of Trusts .........................................................................................20 SECTION 6.04. Fees, Charges and Expenses of Trustee.............................................................24 SECTION 6.05. Notice to Bond Owners of Default ....................................................................24 SECTION 6.06. Intervention by Trustee......................................................................................25 SECTION 6.07. Removal of Trustee............................................................................................25 SECTION 6.08. Resignation by Trustee ......................................................................................25 SECTION 6.09. Appointment of Successor Trustee ....................................................................25 SECTION 6.10. Merger or Consolidation....................................................................................25 SECTION 6.11. Concerning any Successor Trustee ....................................................................26 SECTION 6.12. Appointment of Co-Trustee ...............................................................................26 SECTION 6.13. Indemnification; Limited Liability of Trustee ...................................................26 SECTION 6.14. No Indemnification by USEPA .........................................................................27

ARTICLE VII

MODIFICATION AND AMENDMENT OF THIS INDENTURE
SECTION 7.01. Amendment by Consent of Owner ....................................................................27 453
60302.00018\34948213.2

TABLE OF CONTENTS
(continued)
Page
-iii-
SECTION 7.02. Disqualified Bonds ............................................................................................27 SECTION 7.03. Endorsement or Replacement of Bonds After Amendment ..............................28 SECTION 7.04. Amendment by Mutual Consent........................................................................28

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
SECTION 8.01. Events of Default and Acceleration of Maturities .............................................28 SECTION 8.02. Application of Funds Upon Acceleration ..........................................................29 SECTION 8.03. Other Remedies: Rights of Bond Owner ...........................................................30 SECTION 8.04. Power of Trustee to Control Proceeding............................................................30 SECTION 8.05. Appointment of Receivers .................................................................................31 SECTION 8.06. Non-Waiver .......................................................................................................31 SECTION 8.07. Rights and Remedies of Bond Owners ..............................................................31 SECTION 8.08. Termination of Proceedings...............................................................................32

ARTICLE IX

MISCELLANEOUS
SECTION 9.01. Limited Liability of Authority ...........................................................................32 SECTION 9.02. Benefits of Indenture Limited to Parties............................................................32 SECTION 9.03. Discharge of Indenture.......................................................................................33 SECTION 9.04. Successor Is Deemed Included in All References to Predecessor .....................33 SECTION 9.05. Execution of Documents by Bond Owners........................................................33 SECTION 9.06. Waiver of Personal Liability..............................................................................34 SECTION 9.07. Partial Invalidity ................................................................................................34 SECTION 9.08. Destruction of Canceled Bonds .........................................................................34 SECTION 9.09. Funds and Accounts...........................................................................................34 SECTION 9.10. Notices ...............................................................................................................35 SECTION 9.11. Unclaimed Moneys ............................................................................................35 SECTION 9.12. Execution in Several Counterparts ....................................................................36 SECTION 9.13. Governing Law ..................................................................................................36 EXHIBIT A – REQUISITION OF THE AUTHORITY .........................................................................A-1 454

1378234.02D-WASSR02A - MSW
Draft 04/19/2022
WIFIA CUSIP Number: [___]

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

WIFIA LOAN AGREEMENT
For Up to $48,265,202
With

THE CITY OF OXNARD
And

THE CITY OF OXNARD FINANCING AUTHORITY
For the

THE AQUIFER STORAGE RECOVERY PROJECT
(WIFIA ID – N20107CA )
Dated as of [___], 2022
455
i
1378234.02D-WASSR02A - MSW

TABLE OF CONTENTS
Page
Section 1. Definitions..........................................................................................................................................2 Section 2. Interpretation ....................................................................................................................................18 Section 3. WIFIA Loan Amount .......................................................................................................................20 Section 4. Disbursement Conditions .................................................................................................................20 Section 5. Term .................................................................................................................................................20 Section 6. Interest Rate......................................................................................................................................20 Section 7. Security and Priority; Flow of Funds. ..............................................................................................21 Section 8. Repayments ......................................................................................................................................21 Section 9. Prepayment.......................................................................................................................................23 Section 10. Fees and Expenses............................................................................................................................24 Section 11. Conditions Precedent........................................................................................................................25 Section 12. Representations and Warranties of the Borrower ............................................................................29 Section 13. Representations and Warranties of the City.....................................................................................33 Section 14. Representations and Warranties of WIFIA Lender..........................................................................37 Section 15. Affirmative Covenants of the Borrower...........................................................................................38 Section 16. Negative Covenants of the Borrower ...............................................................................................41 Section 17. Reporting Requirements...................................................................................................................43 Section 18. Affirmative Covenants of the City ...................................................................................................43 Section 19. Negative Covenants of the City .......................................................................................................48 Section 20. Reporting Requirements...................................................................................................................50 Section 21. Events of Default and Remedies ......................................................................................................50 Section 22. Disclaimer of Warranty....................................................................................................................53 Section 23. No Personal Recourse ......................................................................................................................53 Section 24. No Third-Party Rights......................................................................................................................53 Section 25. Borrower’s and City’s Authorized Representatives.........................................................................53 Section 26. WIFIA Lender’s Authorized Representative ...................................................................................53 Section 27. Servicer.............................................................................................................................................54 Section 28. Amendments, Waivers .....................................................................................................................54 Section 29. Governing Law.................................................................................................................................54 Section 30. Severability.......................................................................................................................................54 Section 31. Successors and Assigns....................................................................................................................54 Section 32. Remedies Not Exclusive ..................................................................................................................54 Section 33. Delay or Omission Not Waiver........................................................................................................55 Section 34. Counterparts .....................................................................................................................................55 Section 35. Notices..............................................................................................................................................55 Section 36. Indemnification ................................................................................................................................56 Section 37. Sale of WIFIA Loan.........................................................................................................................57 Section 38. Effectiveness ....................................................................................................................................57 Section 39. Release of Lien.................................................................................................................................57 Section 40. Survival ............................................................................................................................................57 Section 41. Integration ........................................................................................................................................57 Schedules Exhibits
SCHEDULE I – WIFIA Loan Specific Terms EXHIBIT A – Form of WIFIA Bond SCHEDULE II – Project Details EXHIBIT B – Form of Closing Certificate SCHEDULE III-A – Borrower Disclosures EXHIBIT C – Form of Public Benefits Report SCHEDULE III-B City Disclosures EXHIBIT D – Form of Requisition SCHEDULE IV – Requisition Procedures
SCHEDULE V – Reporting Requirements
EXHIBIT E – Form of Certification of Eligible Project Costs Documentation
SCHEDULE VI – WIFIA Loan Amortization Schedule EXHIBIT F – Form of Construction Monitoring Report EXHIBIT G – Form of Certificate of Substantial Completion 456
ii
1378234.02D-WASSR02A - MSW
Schedules Exhibits
EXHIBIT H-1 – Opinions Required from General Counsel to the Borrower
EXHIBIT H-2 – Opinions Required from Bond Counsel to
the Borrower
EXHIBIT H-4 – Opinions Required from General Council to the City
EXHIBIT H-5 – Opinions Required from Bond Counsel to
the City
EXHIBIT I – Form of Certificate of Trustee
457
1 1378234.02D-WASSR02A - MSW

WIFIA LOAN AGREEMENT
THIS WIFIA LOAN AGREEMENT (this “Agreement”), dated as of the Effective Date, is by and between the Borrower (as defined herein), the City (as defined herein), and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, an agency of the United States of America (“EPA”), acting by and through the Administrator of the Environmental Protection Agency (the “Administrator”), with an address at 1200 Pennsylvania Avenue NW, Washington, DC 20460 (the “WIFIA Lender”).

RECITALS:

WHEREAS, the Congress of the United States of America enacted the Water Infrastructure Finance and Innovation Act (“WIFIA”), § 5021 et seq. of Public Law 113-121 (as amended, and as may be further amended from time to time, the “Act”), which is codified as 33 U.S.C. §§ 3901-3914;
WHEREAS, the Act authorizes the WIFIA Lender to enter into agreements to provide financial assistance with one or more eligible entities to make secured loans with appropriate security features to finance a portion of the eligible costs of projects eligible for assistance; WHEREAS, the Borrower was formed for the purpose of providing for the financing of public capital improvements for the members of the Borrower, including the City; WHEREAS, the City has requested that the WIFIA Lender make the WIFIA Loan (as defined herein) to the Borrower in a principal amount not to exceed the Maximum Principal Amount (as defined herein) to be used to pay a portion of the Eligible Project Costs (as defined herein) pursuant to the Application (as defined herein); WHEREAS, pursuant to the WIFIA Term Sheet (as defined herein), the Administrator has approved WIFIA financial assistance for the Project to be provided in the form of the WIFIA Loan, subject to the terms and conditions contained herein; WHEREAS, based on the Application and the representations, warranties and covenants set forth herein, the WIFIA Lender proposes to make funding available to the Borrower for a portion of the costs of the Project through the issuance of the WIFIA Bond (as defined herein), upon the terms and conditions set forth herein;
WHEREAS, as of [_____], 2022, the Borrower has entered into the Installment Purchase Agreement (as defined herein) with the City, pursuant to which (i) the Borrower agrees to purchase the Project from the City in exchange for the provision of funds, in the amount of the WIFIA Loan, and (ii) the City agrees to purchase the Project from the Borrower in exchange for the payment of Installment Payments (as defined herein) by the City to the Borrower, such payments being secured by the Revenues (as defined herein); WHEREAS, the Borrower agrees to repay any amount due pursuant to this Agreement and the WIFIA Bond in accordance with the terms and provisions hereof and of the WIFIA Bond; and
458
2 1378234.02D-WASSR02A - MSW
WHEREAS, the WIFIA Lender has entered into this Agreement in reliance upon, among other things, the information and representations of the Borrower and the City set forth in the Application and the supporting information provided by the Borrower and the City.

NOW, THEREFORE, the premises being as stated above, and for good and valuable consideration, the receipt and sufficiency of which are acknowledged to be adequate, and intending to be legally bound hereby, it is hereby mutually agreed by and between the Borrower and the WIFIA Lender as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION
Section 1. Definitions. Capitalized terms used in this Agreement shall have the meanings set forth below in this Section 1 or as otherwise defined in this Agreement, except as otherwise expressly provided herein. Any term used in this Agreement that is defined by reference to any other agreement shall continue to have the meaning specified in such agreement, whether or not such agreement remains in effect.
“Act” has the meaning provided in the recitals hereto.
“Additional Bonds Test” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Additional Construction Contract” means, with respect to the Project, each Construction Contract entered into after the Effective Date. “Additional Obligations” means Additional Senior Obligations and Additional Subordinated Obligations.
“Additional Senior Obligations” means any Senior Obligations permitted under Section 16(a) (Indebtedness), Section 19(a) (Indebtedness), and under the Installment Purchase Agreement, which Senior Obligations are issued or incurred after the Effective Date. “Additional Subordinated Obligations” means any Subordinated Obligations permitted under Section 16(a) (Indebtedness), Section 19(a) (Indebtedness), and under the Installment Purchase Agreement, which Subordinated Obligations are issued or incurred after the Effective Date.
“Administrator” has the meaning provided in the preamble hereto. “Agreement” has the meaning provided in the preamble hereto. “Application” means the Borrower’s application for WIFIA financial assistance received by the WIFIA Lender on the Application Receipt Date.
“Application Receipt Date” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
459
3 1378234.02D-WASSR02A - MSW
“Bankruptcy Related Event” means, with respect to either the Borrower or the City, (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of either the Borrower or the City or any of its debts, or of a substantial part of the assets thereof, under any Insolvency Laws, or (ii) the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official for either the Borrower or the City or for a substantial part of the assets thereof and, in any case referred to in the foregoing subclauses (i) and (ii), such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; (b) either the Borrower or the City (other than with respect to clause (iii) below, which applies to the Borrower only) shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official therefor or for a substantial part of the assets thereof, (ii) generally not be paying its debts as they become due unless such debts are the subject of a bona fide dispute, or become unable to pay its debts generally as they become due, (iii) fail to make a payment of WIFIA Debt Service in accordance with the provisions of Section 8 (Repayments) and such failure is not cured within thirty (30) days following notification by the WIFIA Lender of failure to make such payment, (iv) make a general assignment for the benefit of creditors, (v) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition with respect to it described in clause (a) of this definition, (vi) commence a voluntary proceeding under any Insolvency Law, or file a voluntary petition seeking liquidation, reorganization, an arrangement with creditors or an order for relief, in each case under any Insolvency Law, (vii) file an answer admitting the material allegations of a petition filed against it in any proceeding referred to in the foregoing subclauses (i) through (v), inclusive, of this clause (b), or (viii) take any action for the purpose of effecting any of the foregoing; (c) (i) any Person shall commence a process pursuant to which all or a substantial part of the Pledged Collateral may be sold or otherwise disposed of in a public or private sale or disposition pursuant to a foreclosure of the Liens thereon securing the Senior Obligations, or (ii) any Person shall commence a process pursuant to which all or a substantial part of the Pledged Collateral may be sold or otherwise disposed of pursuant to a sale or disposition of such Pledged Collateral in lieu of foreclosure; or (d) any receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official shall transfer, pursuant to directions issued by the holders of the Obligations, funds on deposit in any of the Water System Accounts upon the occurrence and during the continuation of an Event of Default under this Agreement or an event of default under the Indenture Documents for application to the prepayment or repayment of any principal amount of the Senior Obligations other than in accordance with the provisions of the Indenture.
“Base Case Financial Model” means the financial model or plan, prepared by the City and delivered to the WIFIA Lender as part of the Application, forecasting the capital costs of the Water System (including the Project) and the estimated debt service coverage, rates, revenues, operating expenses and major maintenance requirements of the Water System (as may be applicable) for the Forecast Period and based upon assumptions and methodology provided by the City and acceptable to the WIFIA Lender as of the Effective Date, which model or plan shall have been provided to the WIFIA Lender as a fully functional Microsoft Excel-based financial model or such other format agreed with the WIFIA Lender. 460
4 1378234.02D-WASSR02A - MSW
“Bond Year” means any twelve-month period commencing on June 2 in a year an ending on the next succeeding June 1, both dates inclusive; except that the first Bond Year shall commence on the Effective Date and end on June 1, 20[__]. “Borrower” has the meaning ascribed to such term in Part A of Schedule I (Loan Specific Terms).
“Borrower Fiscal Year” means (a) as of the Effective Date, the Initial Borrower Fiscal Year or (b) such other fiscal year as the Borrower may hereafter adopt after giving thirty (30) days’ prior written notice to the WIFIA Lender in accordance with Part E of Schedule V (Reporting Requirements).
“Borrower’s Authorized Representative” means any Person who shall be designated as such pursuant to Section 25 (Borrower’s and City’s Authorized Representatives). “Business Day” means any day other than a Saturday, a Sunday or a day on which offices of the Federal Government or the State are authorized to be closed or on which commercial banks are authorized or required by law, regulation or executive order to be closed in New York, New York, the Trustee Location or the Project Location. “Capitalized Interest Period” has, if applicable, the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means capitalized interest shall not be applicable with respect to the WIFIA Loan hereunder.
“City” has the meaning ascribed to such term in Part A of Schedule I (Loan Specific Terms).
“City Bonds” means all revenue bonds or notes of the City authorized, executed, issued, and delivered under and pursuant to the laws of the State, the payments of which are made from the Net Water System Revenues and which are on a parity with the Installment Payments. The term “City Bonds” includes, but is not limited to, obligations in the form of bonds, notes, bond anticipation notes and commercial paper.
“City Contracts” means the Installment Purchase Agreement and all contracts or leases of the City authorized and executed by the City under and pursuant to the laws of the State, installment or lease payments under which are payable from the Net Water System Revenues on a parity with the Installment Purchase Agreement.
“City Fiscal Year” means the period beginning on July 1 of each year and ending on the last day of June of the next succeeding year, or any other twelve-month period selected and designated as the official fiscal year of the City.
“City’s Authorized Representative” means any Person who shall be designated as such pursuant to Section 25 (Borrower’s and City’s Authorized Representatives). “Closing Certificate” has the meaning provided in Section 11(a) (Conditions Precedent to Effectiveness).
461
5 1378234.02D-WASSR02A - MSW
“Construction Contract” means, with respect to the Project, any prime contract entered into by the Borrower that involves any construction activity (such as demolition, site preparation, civil works construction, installation, remediation, refurbishment, rehabilitation, or removal and replacement services) for the Project. For the avoidance of doubt, “Construction Contract” shall include each Existing Construction Contract and, upon the effectiveness thereof, each Additional Construction Contract.
“Construction Monitoring Report” means a report on the status of the Project, substantially in the form of Exhibit F (Form of Construction Monitoring Report), unless otherwise agreed to be in a different form by the WIFIA Lender.1 “Construction Period” means the period from the Effective Date through (and including) the end of the Federal Fiscal Year during which the Substantial Completion Date occurs.
“Construction Period Servicing Fee” has the meaning ascribed to such term in Part F of Schedule I (WIFIA Loan Specific Terms).
“Construction Schedule” means (a) the initial schedule or schedules on which the construction timetables for the Project are set forth, attached hereto as Part B of Schedule II (Project Details), and (b) any updates thereto included in the Construction Monitoring Report most recently submitted to the WIFIA Lender in accordance with Part C of Schedule V (Reporting Requirements).
“CPI” means the Consumer Price Index for All Urban Consumers (CPI-U) for the U.S.

City Average for All Items, 1982-84=100 (not seasonally adjusted) or its successor, published by the Bureau of Labor Statistics and located at https://www.bls.gov/news.release/cpi.t01.htm. “Debt Service” means, for any City Fiscal Year or other period, the sum of (i) the interest payable during such City Fiscal Year or 12-month period on all outstanding City Bonds, assuming that all outstanding serial City Bonds are retired as scheduled and that all outstanding term City Bonds are redeemed or paid from sinking fund payments as scheduled (except to the extent that such interest is to be paid from the proceeds of sale of any City Bonds), (ii) that portion of the principal amount of all outstanding serial City Bonds maturing on any principal payment date which falls in such City Fiscal Year or 12-month period, (iii) that portion of the principal amount of all outstanding term City Bonds required to be redeemed or paid on any redemption date which falls in such City Fiscal Year or 12-month period, and (iv) that portion of the Contract Payments (as defined in the Installment Purchase Agreement) required to be made in such City Fiscal Year or 12-month period (except to the extent such interest is capitalized).

For purposes of calculating Debt Service, the following assumptions shall be used:

Provided that, as to any such City Bonds or Contract Payments (as defined in the Installment Purchase Agreement) bearing or comprising interest at other than a fixed rate, the 1 Note to Borrower: The WIFIA Program has flexibility to accept the form of existing quarterly reports that the Borrower is already preparing, instead of the form in Exhibit F, so long as such other format provides sufficient reporting information required by the WIFIA Program.
462
6 1378234.02D-WASSR02A - MSW
rate of interest used to calculate Debt Service shall be the are set forth in the applicable Qualified Swap (as defined in the Installment Purchase Agreement) in effect with respect thereto, the greatest of (a) the annual interest rate on such City Bonds or Contract Payments (as defined in the Installment Purchase Agreement) on the date of calculation, or if the indebtedness is not yet outstanding, the initial interest rate (if established and binding), (b) if the City Bonds or City Contracts have been outstanding for at least twelve months, the average rate over the twelve calendar months immediately preceding the date of calculation, and (c) (i) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Internal Revenue Code of 1986, as amended, the most recently published Bond Buyer “Revenue Bond Index” (or comparable index if no longer published) plus 50 basis points, or (ii) if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities plus 50 basis points; provided, however, that for purposes of any portion of Section 5.03 (Additional Obligations) and 6.10 (Amount of Rates and Charges, Operating Reserves) of the Installment Purchase Agreement, measuring actual debt service coverage during a test period, variable rate indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the test period; and
Provided further that, if any series or issue of such City Bonds or Contract Payments (as defined in the Installment Purchase Agreement) have twenty-five percent (25%) or more of the aggregate principal amount of such series or issue due in any one year, Debt Service shall be determined for the City Fiscal Year or other 12-month period of determination as if the principal of and interest on such series or issue of such City Bonds or Contract Payments (as defined in the Installment Purchase Agreement) were being paid from the date of incurrence thereof in substantially equal annual amounts over a period of twenty-five (25) years from the date of calculation; and
Provided further that, as to any such City Bonds or Contract Payments (as defined in the Installment Purchase Agreement) or portions thereof bearing no interest but that are sold at a discount and which discount accretes with respect to such City Bonds or Contract Payments or portions thereof, such accreted discount shall be treated as interest in the calculation of Debt Service; and
Provided further that, the amount on deposit in a debt service reserve fund on any date of calculation of Debt Service shall be deducted from the amount of principal due at the final maturity of the City Bonds or City Contracts for which such debt service reserve fund was established and in each preceding year until such amount is exhausted; and Provided further that, Debt Service shall not include interest that is paid from investment earnings on amounts on deposit in the applicable Reserve Account (as defined in the Installment Purchase Agreement) and transferred to the Debt Service Fund (as defined in the Installment Purchase Agreement); and
Provided further that, for purposes of any portion of Sections 5.03 (Additional Obligations) and 6.10 (Amount of Rates and Charges, Operating Reserves) of the Installment Purchase Agreement measuring actual debt service coverage during a test period, Debt Service with respect to all City Bonds, Contract Payments (as defined in the Installment Purchase Agreement), and bonds issued by the Borrower secured by such Contract Payments (as defined 463
7 1378234.02D-WASSR02A - MSW
in the Installment Purchase Agreement) for which the City or the Borrower is entitled to receive Interest Subsidy Payments (as defined in the Installment Purchase Agreement) or any similar payments from the United States Department of the Treasury shall be determined net of all such Interest Subsidy Payments (as defined in the Installment Purchase Agreement) or similar payments from the United States Department of Treasury received or scheduled to be received by the City or the Borrower during such test period.
“Debt Service Payment Commencement Date” means the earlier to occur of (a) December 1, 2027; or (b) the Payment Date falling closest to, but not later than, the fifth anniversary of the first disbursement date of the WIFIA Loan (but in any event no later than five (5) years after the Substantial Completion Date of the Project). “Default” means any event or condition that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
“Development Default” means (a) the City abandons work or fails, in the reasonable judgment of the WIFIA Lender, to diligently prosecute the work related to the Project or (b) the City fails to achieve Substantial Completion of the Project by the Development Default Date, unless such failure to achieve Substantial Completion shall occur by reason of an Uncontrollable Force that is not due to the fault or gross negligence of the City (and which the City could not reasonably have avoided or mitigated), in which case the Development Default Date shall be extended by the number of days equal to the duration of such Uncontrollable Force. “Development Default Date” has the meaning ascribed to such term in Part B of Schedule I (WIFIA Loan Specific Terms).
“Disbursement” means a disbursement of WIFIA Loan proceeds, subject to and in accordance with this Agreement.
“Dollars” and “$” means the lawful currency of the U.S. “Effective Date” means the date of this Agreement, as specified in Part A of Schedule I (WIFIA Loan Specific Terms).
“Eligible Project Costs” means amounts in the Project Budget approved by the WIFIA Lender, which are paid by or for the account of the City in connection with the Project (including, as applicable, Project expenditures incurred prior to the receipt of WIFIA credit assistance), which shall arise from the following:
(a) development-phase activities, including planning, feasibility analysis (including any related analysis necessary to carry out an eligible project), revenue forecasting, environmental review, permitting, preliminary engineering and design work and other preconstruction activities;
(b) construction, reconstruction, rehabilitation, and replacement activities; 464
8 1378234.02D-WASSR02A - MSW
(c) the acquisition of real property or an interest in real property (including water rights, land relating to the Project and improvements to land), environmental mitigation (including acquisitions pursuant to 33 U.S.C. §3905(8)), construction contingencies, and acquisition of equipment; or
(d) capitalized interest (with respect to Obligations other than the WIFIA Loan) necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction; provided, that Eligible Project Costs must be consistent with all other applicable federal law, including the Act.
“Eligible Project Costs Documentation” means all supporting documentation with respect to the Eligible Project Costs, including copies of invoices and records evidencing incurred or previously paid Eligible Project Costs, which documentation should contain sufficient detail satisfactory to the WIFIA Lender (e.g. if the City (as agent of the Borrower) intends to utilize WIFIA Loan proceeds to make construction progress payments for Eligible Project Costs, the documentation should demonstrate that such progress payments are commensurate with the cost of the work that has been completed). “EMMA” means the Electronic Municipal Market Access system as described in 1934 Act Release No. 59062 and maintained by the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)1 of the Securities Exchange Act of 1934, as amended, and its successors.
“EPA” has the meaning provided in the preamble hereto.
“Event of Default” has the meaning provided in Section 21(a) (Events of Default and Remedies).
“Event of Loss” means any event or series of events that causes any portion of the Water System to be damaged, destroyed or rendered unfit for normal use for any reason whatsoever, including through a casualty, a failure of title, or any loss of such property through eminent domain.
“Existing Construction Contract” means each Construction Contract of the City in effect as of the Effective Date as set forth in Part C of Schedule II (Project Details). “Existing Indebtedness” means indebtedness of, as applicable, (i) the Borrower that has been issued or incurred prior to the Effective Date, as listed and described in Part A of Schedule III-A (Borrower Disclosures) or (ii) the City that has been issued or incurred prior to the Effective Date, as listed and described in Part A of Schedule III-B (City Disclosures). “Federal Fiscal Year” means the fiscal year of the Federal Government, which is the twelve (12) month period that ends on September 30 of the specified calendar year and begins on October 1 of the preceding calendar year.
“Federal Government” means the U.S. and its departments and agencies. 465
9 1378234.02D-WASSR02A - MSW
“FEIN” means a Federal Employer Identification Number.
“Final Disbursement Date” means the earliest of (a) the date on which the WIFIA Loan has been disbursed in full; (b) the last anticipated date of disbursement set forth in the then- current WIFIA Loan Disbursement Schedule; (c) the date as of which the Borrower has certified to the WIFIA Lender that it will not request any further disbursements under the WIFIA Loan; (d) the date on which the WIFIA Lender terminates its obligations relating to disbursements of any undisbursed amounts of the WIFIA Loan in accordance with Section 21 (Events of Default and Remedies); and (e) the date that is one (1) year after the Substantial Completion Date. “Final Maturity Date” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
“Financial Statements” has the meaning provided in Section 12(q) (Financial Statements).
“Flow of Funds” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Forecast Period” means, as of any date, the time period from and including the then- current City Fiscal Year until the later ending date of either (a) the five (5) immediately succeeding City Fiscal Years or (b) the end of the City Fiscal Year in which the City’s then- currently effective capital improvement plan for the Water System concludes. “GAAP” means generally accepted accounting principles for U.S. state and local governments, as established by the Government Accounting Standards Board (or any successor entity with responsibility for establishing accounting rules for governmental entities), in effect from time to time in the U.S.
“Governmental Approvals” means all authorizations, consents, approvals, waivers, exceptions, variances, filings, registrations, permits, orders, licenses, exemptions and declarations of or with any Governmental Authority.
“Governmental Authority” means any federal, state, provincial, county, city, town, village, municipal or other government or governmental department, commission, council, court, board, bureau, agency, authority or instrumentality (whether executive, legislative, judicial, administrative or regulatory), of or within the U.S. or its territories or possessions, including the State and its counties and municipalities, and their respective courts, agencies, instrumentalities and regulatory bodies, or any entity that acts “on behalf of” any of the foregoing, whether as an agency or authority of such body.
“Indemnitee” has the meaning provided in Section 36 (Indemnification). “Indenture” has the meaning ascribed to such term in Part E of Schedule I (WIFIA Loan Specific Terms).
466
10 1378234.02D-WASSR02A - MSW
“Indenture Documents” means the Indenture, each Supplemental Indenture, the Installment Purchase Agreement, and each other agreement, instrument and document executed and delivered pursuant to or in connection with any of the foregoing. “Initial Borrower Fiscal Year” has the meaning ascribed to such term in Part A of Schedule I (Loan Specific Terms).
“Initial Construction Period Servicing Fee” has the meaning ascribed to such term in Part F of Schedule I (WIFIA Loan Specific Terms).
“Insolvency Laws” means the U.S. Bankruptcy Code, 11 U.S.C. § 101 et seq., as from time to time amended and in effect, and any state bankruptcy, insolvency, receivership, conservatorship or similar law now or hereafter in effect. “Installment Payments” means the payments required to be paid by the City pursuant to Section 4.02 of the Installment Purchase Agreement, including all prepayments thereof. “Installment Purchase Agreement” has the meaning ascribed to such term in Part A of Schedule I (Loan Specific Terms).
“Interest Only Period” has, if applicable, the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means no interest only period shall be applicable with respect to the WIFIA Loan hereunder. “Interest Payment Date” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
“Interim Financing” means interim bond anticipation notes, commercial paper or other short-term temporary financing, in each case with a maturity not later than five (5) years following the issuance or incurrence thereof, the proceeds of which are applied to pay Eligible Project Costs.
“Investment Grade Rating” means a rating of ‘BBB-’, ‘Baa3’, ‘bbb-’, or ‘BBB (low)’, or higher, from a Nationally Recognized Rating Agency.
“Legal Entity” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“Lien” means any mortgage, pledge, hypothecation, assignment, mandatory deposit arrangement, encumbrance, attachment, lien (statutory or other), charge or other security interest, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any sale-leaseback arrangement, any conditional sale or other title retention agreement, any financing lease having substantially the same effect as any of the foregoing, and the filing of any financing statement or similar instrument under the UCC or any other applicable law.
“Loss Proceeds” means any proceeds of builders’ risk or casualty insurance (other than any proceeds from any policy of business interruption insurance insuring against loss of revenues 467
11 1378234.02D-WASSR02A - MSW
upon the occurrence of certain casualties or events covered by such policy of insurance) or proceeds of eminent domain proceedings resulting from any Event of Loss. “Maintenance and Operation Costs” has the meaning in the Installment Purchase Agreement.
“Material Adverse Effect” means a material adverse effect on (a) the Water System, the Project or the Revenues, (b) the business, operations, properties, condition (financial or otherwise) or prospects of the Borrower or the City, (c) the legality, validity or enforceability of any material provision of any Indenture Document or WIFIA Loan Document, (d) the ability of the Borrower or the City to enter into, perform or comply with any of its material obligations under any Indenture Document or WIFIA Loan Document, (e) the validity, enforceability or priority of the Liens provided under the Indenture Documents on the Pledged Collateral or (f) the WIFIA Lender’s rights or remedies available under any WIFIA Loan Document. “Maximum Annual Debt Service” means, at any point in time, with respect to City Bond and City Contracts then outstanding, the largest amount of Debt Service on the City Bonds and City Contracts in the then current or any future Borrower Fiscal Year. “Maximum Principal Amount” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
“Nationally Recognized Rating Agency” means any nationally recognized statistical rating organization registered with, and identified as such by, the Securities and Exchange Commission.
“NEPA” means the National Environmental Policy Act of 1969, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time.
“NEPA Determination” has the meaning ascribed to such term in Part B of Schedule I (WIFIA Loan Specific Terms).
“Net Water System Revenues” means, (i) for any City Fiscal Year, the Water System Revenues for such City Fiscal Year, less Maintenance and Operation Costs for such City Fiscal Year, or (ii) in applying the provision of the Installment Purchase Agreement with respect to Additional Obligations only, the Water System Revenues for the selected 12-month period less the Maintenance and Operation Costs for the same 12-month period. “Obligations” means debt of the Borrower that is secured by a pledge and lien on all or a portion of the Revenues, including the Senior Obligations and Subordinated Obligations. “Operating Period Servicing Fee” has the meaning ascribed to such term in Part F of Schedule I (WIFIA Loan Specific Terms).
“Organizational Documents” means: (a) the constitutional and statutory provisions that are the basis for the existence and authority of the Borrower or the City, including any enabling statutes, ordinances or public charters and any other organic laws establishing the Borrower or 468
12 1378234.02D-WASSR02A - MSW
the City, as applicable, and (b) the resolutions, bylaws, or other organizational documents (including any amendments, modifications or supplements thereto) of or adopted by the Borrower or the City, as applicable, by which the Borrower or the City, as applicable, the Borrower’s or the City’s, as applicable, powers, operations or procedures or the Borrower’s or the City’s, as applicable, securities, bonds, notes or other obligations are governed or from which such powers are derived.
“Other Financing Documents” means any agreement, instrument, or document (excluding the Indenture Documents and the WIFIA Loan Documents) entered into between the Borrower and a holder of Obligations providing for the issuance of Obligations secured by a pledge and lien on all or a portion of the Net Water System Revenues. “Outstanding” means (a) with respect to Obligations other than the WIFIA Loan, Obligations that have not been cancelled or legally defeased or discharged within the meaning of the Indenture, and (b) with respect to the WIFIA Loan, the (i) entire amount available to be drawn under this Agreement (including amounts drawn and amounts that remain available to be drawn), less (ii) any amount that has been irrevocably determined will not be drawn under this Agreement, less (iii) the aggregate principal amount of the WIFIA Loan Balance that has been repaid or prepaid.
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended, and all regulations promulgated thereunder.
“Payment Date” means each Interest Payment Date and each Principal Payment Date. “Payment Default” has the meaning provided in Section 21(a)(i) (Payment Default). “Permitted Debt” means:
(a) Existing Indebtedness;
(b) the WIFIA Loan;
(c) Additional Senior Obligations that satisfy the requirements of Sections 16(a) (Indebtedness) and 19(a) (Indebtedness) and the Installment Purchase Agreement; (d) Additional Subordinated Obligations that satisfy the requirements of Sections 16(a) (Indebtedness) and 19(a) (Indebtedness) and the Installment Purchase Agreement; and
(e) indebtedness incurred in respect of hedging transactions permitted under the Indenture and the WIFIA Loan Documents.
“Permitted Investments”, as applied to the Borrower, has the meaning set forth in the Indenture, and, as applied to the City, has the meaning set forth in the Installment Purchase Agreement.
469
13 1378234.02D-WASSR02A - MSW
“Permitted Liens” means:
(a) Liens imposed pursuant to the Indenture;
(b) Liens imposed pursuant to the Installment Purchase Agreement; (c) Liens on the Net Water System Revenues, including Net Water System Revenues on deposit in the Water System Revenue Fund, in favor of City Bonds and City Contracts;
(d) Liens imposed by law, including Liens for taxes that are not yet due or are being contested in compliance with Section 15(j) (Material Obligations); (e) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 15(j) (Material Obligations);
(f) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance, and other social security laws or regulations;
(g) deposits to secure the performance of trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (h) judgment Liens in respect of judgments that do not constitute an Event of Default under Section 21(a)(viii) (Material Adverse Judgment); and (i) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that, in any case, do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower.
“Person” means and includes an individual, a general or limited partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and any Governmental Authority, including in each case such Person’s successors and permitted assigns.
“Pledged Collateral” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Principal Payment Date” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
“Project” has the meaning ascribed to such term in Part B of Schedule I (WIFIA Loan Specific Terms).
470
14 1378234.02D-WASSR02A - MSW
“Project Budget” means the budget for the Project attached to this Agreement as Part A of Schedule II (Project Details) showing a summary of Total Project Costs with a breakdown of all Eligible Project Costs and the estimated sources and uses of funds for the Project. “Project Location” has the meaning ascribed to such term in Part B of Schedule I (Loan Specific Terms).
“Projected Substantial Completion Date” has the meaning ascribed to such term in Part B of Schedule I (WIFIA Loan Specific Terms).
“Public Benefits Report” means the report, in the form attached hereto as Exhibit C (Form of Public Benefits Report).
“Rate Covenant” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Related Documents” means the WIFIA Loan Documents, the Indenture Documents and the Other Financing Documents.
“Requisition” means the request for Disbursement in the form attached hereto as Exhibit D (Form of Requisition).
“Revenue Account” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Revenues” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“SAM” means the federal System for Award Management (www.SAM.gov) (or any successor system or registry).
“Sanctions Laws” means collectively, any applicable anti-drug trafficking, anti- terrorism, anti-money laundering, anti-bribery, or anti-corruption laws or regulations, as applicable, including those contained in the Bank Secrecy Act of 1970 (as amended) and the U.S.

Patriot Act.
“Senior Obligations” means (a), as applied to the City, Existing Indebtedness that ranks pari passu in right of payment and right of security with the Installment Purchase Agreement, and (b) Additional Senior Obligations, in each case, that ranks senior in right of payment and right of security to the Subordinated Obligations.
“Servicer” means such entity or entities as the WIFIA Lender shall designate from time to time to perform, or assist the WIFIA Lender in performing, certain duties hereunder. “Servicing Fee” means the Servicing Set-Up Fee and any Construction Period Servicing Fee or Operating Period Servicing Fee.
471
15 1378234.02D-WASSR02A - MSW
“Servicing Set-Up Fee” has the meaning ascribed to such term in Part F of Schedule I (WIFIA Loan Specific Terms).
“State” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“Subordinated Obligations” means, as applied to the Borrower, any Obligation that is fully subordinated to the WIFIA Loan and the WIFIA Bond in priority of payment (as to both principal and interest), voting and priority of security interest in the Pledged Collateral, including with respect to payment from revenues and reserves and payment upon default or acceleration of any such Obligations and, as applied to the City, any Obligation that is fully subordinated to the Installment Purchase Agreement in priority of payment (as to both principal and interest) and priority of security interest in the Net Water System Revenues and the Water System Revenue Fund, including with respect to payment from revenues and reserves and payment upon default or acceleration of any such Obligations.
“Substantial Completion” means, with respect to the Project, the stage at which the Project is able to perform the functions for which the Project is designed. “Substantial Completion Date” means the date on which the City certifies to the WIFIA Lender, with evidence satisfactory to the WIFIA Lender and notice to the WIFIA Lender in accordance with Part E of Schedule V (Reporting Requirements), that Substantial Completion has occurred.
“Supplemental Indenture” means a supplement to or modification of the provisions of the Indenture entered into by the Borrower and the Trustee in accordance with the terms of the Indenture, authorizing the issuance of Additional Obligations or amending the terms of the Indenture.
“Technical and Rate Consultant” means a single individual or firm, or a combination of one or more individuals or firms, not related to the Borrower and considered independent with respect to the Borrower (i.e. not an employee of the Borrower or any affiliate of the Borrower) authorized to do business in and qualified to practice in the areas required to provide the services required of the Technical and Rate Consultant, that together have expertise in the technical requirements for operation and maintenance of systems similar in size and scope to the Water System and delivering the services provided by the Water System, and establishing rates and charges for governmental water or wastewater systems similar in size and scope to the Water System, selected by the Borrower and reasonably acceptable to the WIFIA Lender. “Total Project Costs” means (a) the costs paid or incurred or to be paid or incurred by the Borrower in connection with or incidental to the acquisition, design, construction and equipping of the Project, including legal, administrative, engineering, planning, design, insurance and financing (including costs of issuance); (b) amounts, if any, required by the Indenture Documents or the WIFIA Loan Documents to be paid into any fund or account upon the incurrence of the WIFIA Loan or any other Obligations, in each case in respect of the Project; (c) payments when due (whether at the maturity of principal, the due date of interest, or upon optional or mandatory prepayment) in respect of any indebtedness of the Borrower (other than 472
16 1378234.02D-WASSR02A - MSW
the WIFIA Loan), in each case in connection with the acquisition, design, construction and equipping of the Project; and (d) costs of equipment and supplies and initial working capital and reserves required by the Borrower for the commencement of operation of the Project, including general administrative expenses and overhead of the Borrower. “Trustee” has, if applicable, the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a trustee shall not be applicable with respect to the WIFIA Loan hereunder. “Trustee Location” has, if applicable, the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a trustee location shall not be applicable with respect to the WIFIA Loan hereunder. “UEI Number” means, with respect to any Person, a number issued by the Federal Government (including through SAM.gov) as the unique entity identifier for such Person. “Uncontrollable Force” means any cause beyond the control of the City, including:
(a) a hurricane, tornado, flood or similar occurrence, landslide, earthquake, fire or other casualty, strike or labor disturbance, freight embargo, act of a public enemy, explosion, war, blockade, terrorist act, insurrection, riot, general arrest or restraint of government and people, civil disturbance or similar occurrence, sabotage, pandemic, or act of God (provided, that the City shall not be required to settle any strike or labor disturbance in which it may be involved) or (b) the order or judgment of any federal, state or local court, administrative agency or governmental officer or body, if it is not also the result of willful or negligent action or a lack of reasonable diligence of the City and the City does not control the administrative agency or governmental officer or body; provided, that the diligent contest in good faith of any such order or judgment shall not constitute or be construed as a willful or negligent action or a lack of reasonable diligence of the City.
“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code, as in effect from time to time in the State.
“Updated Financial Model/Plan” means (a) an updated Base Case Financial Model or (b) a financial plan in a format agreed with the WIFIA Lender, in each case reflecting the then- current and projected conditions for the Forecast Period, in accordance with Part A of Schedule V (Reporting Requirements).
“U.S.” means the United States of America.
“Water System” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“Water System Accounts” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Water System Revenue Fund” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
473
17 1378234.02D-WASSR02A - MSW
“Water System Revenues” means all income, rents, rates, fees, charges, and other moneys derived from the ownership of or operation of the Water System, including, without limiting the generality of the foregoing:
(a) all in lieu charges and groundwater augmentation charges (including investment earnings thereon) collected by or on behalf of the City; (b) all income, rents, rates, fees, charges, business interruption insurance proceeds, or other moneys derived by the City from the sale, furnishing, and supplying of the water, drainage or other services, facilities, and commodities sold, furnished, or supplied through the facilities of or in the conduct or operation of the business of the Water System; and
(c) the earnings on and income derived from the investment of such income, rents, rates, fees, charges, proceeds, or other moneys, including City reserves; but excluding in all cases:
(i) customers’ deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City; (ii) proceeds of taxes or benefit assessments restricted by law to be used by the City to pay amounts due on bonds or other obligations hereafter incurred; and (iii) Connection fees and charges.
“WIFIA” has the meaning provided in the recitals hereto. “WIFIA” has the meaning provided in the recitals hereto. “WIFIA Bond” has, if applicable, the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a bond as evidence of the Borrower’s Obligation shall not be applicable with respect to the WIFIA Loan hereunder.
“WIFIA CUSIP Number” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“WIFIA Debt Service” means with respect to any Payment Date occurring on or after the Debt Service Payment Commencement Date, the principal portion of the WIFIA Loan Balance and any interest payable thereon (including interest accruing after the date of any filing by the Borrower of any petition in bankruptcy or the commencement of any bankruptcy, insolvency or similar proceeding with respect to the Borrower), in each case, (a) as set forth on the WIFIA Loan Amortization Schedule and (b) due and payable on such Payment Date in accordance with the provisions of Section 8(a) (Payment of WIFIA Debt Service). “WIFIA Debt Service Account” has, if applicable, the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in 474
18 1378234.02D-WASSR02A - MSW
Schedule I, means a separate debt service account designated for the WIFIA Lender shall not be applicable with respect to the WIFIA Loan hereunder.
“WIFIA Debt Service Reserve Account” has, if applicable, the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a separate debt service reserve account designated for the WIFIA Lender shall not be applicable with respect to the WIFIA Loan hereunder. “WIFIA Debt Service Reserve Requirement” has, if applicable, the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms). “WIFIA Interest Rate” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Term).
“WIFIA Lender” has the meaning provided in the preamble hereto. “WIFIA Lender’s Authorized Representative” means the Administrator and any other Person who shall be designated as such pursuant to Section 26 (WIFIA Lender’s Authorized Representative).
“WIFIA Loan” means the secured loan made by the WIFIA Lender to the Borrower on the terms and conditions set forth herein, pursuant to the Act, in a principal amount not to exceed the Maximum Principal Amount, to be used in respect of Eligible Project Costs. “WIFIA Loan Amortization Schedule” means the loan amortization schedule reflected in Schedule VI (WIFIA Loan Amortization Schedule), as amended from time to time in accordance with Section 8(c) (Adjustments to WIFIA Loan Amortization Schedule). “WIFIA Loan Balance” means (a) the aggregate principal amount of the WIFIA Loan disbursed by the WIFIA Lender to the Borrower hereunder, plus (b) if applicable, capitalized interest added to the principal balance of the WIFIA Loan pursuant to Section 8(a)(iii) (Payments of WIFIA Debt Service), minus (c) the aggregate principal amount of the WIFIA Loan repaid or prepaid by the Borrower, as reflected from time to time in the WIFIA Loan Amortization Schedule in accordance with Section 8(c) (Adjustments to WIFIA Loan Amortization Schedule). “WIFIA Loan Disbursement Schedule” means the disbursement schedule set forth in Schedule VI (WIFIA Loan Amortization Schedule), reflecting the anticipated disbursement of proceeds of the WIFIA Loan, as such schedule may be amended from time to time pursuant to Section 4(b) (Disbursement Conditions).
“WIFIA Loan Documents” means this Agreement, the WIFIA Bond, and the other Indenture Documents.
“WIFIA Term Sheet” has the meaning ascribed to such term in Part E of Schedule I (WIFIA Loan Specific Terms).

Section 2. Interpretation. The rules of interpretation set forth below in this Section 2 shall apply to this Agreement, except as otherwise expressly provided herein. 475
19 1378234.02D-WASSR02A - MSW
(a) Unless the context shall otherwise require, the words “hereto,” “herein,” “hereof” and other words of similar import refer to this Agreement as a whole. (b) Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders and vice versa. (c) Words importing the singular number shall include the plural number and vice versa unless the context shall otherwise require.
(d) The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”
(e) Whenever the Borrower’s knowledge or the City’s knowledge is implicated in this Agreement or the phrase “to the Borrower’s knowledge” or the phrase “to the City’s knowledge” or a similar phrase is used in this Agreement, the Borrower’s knowledge or the City’s knowledge or such phrase(s) shall be interpreted to mean to the best of the Borrower’s knowledge or the best of the City’s knowledge, as applicable, after reasonable and diligent inquiry. Unless the context shall otherwise require, references to any Person shall be deemed to include such Person’s successors and permitted assigns. (f) Unless the context shall otherwise require, references to preambles, recitals, sections, subsections, clauses, schedules, exhibits, appendices and provisions are to the applicable preambles, recitals, sections, subsections, clauses, schedules, exhibits, appendices and provisions of this Agreement.
(g) The recitals, schedules and exhibits to this Agreement, and the appendices and schedules to such exhibits, are hereby incorporated by reference and made an integral part of this Agreement.
(h) The headings or titles of this Agreement and its sections, schedules or exhibits, as well as any table of contents, are for convenience of reference only and shall not define or limit its provisions.
(i) Unless the context shall otherwise require, all references to any resolution, contract, agreement, lease or other document shall be deemed to include any amendments or supplements to, or modifications or restatements or replacements of, such documents that are approved from time to time in accordance with the terms thereof and hereof. (j) Every request, order, demand, application, appointment, notice, statement, certificate, consent or similar communication or action hereunder by any party shall, unless otherwise specifically provided, be delivered in writing in accordance with Section 35 (Notices) and signed by a duly authorized representative of such party. (k) References to “disbursements of WIFIA Loan proceeds” or similar phrasing shall be construed as meaning the same thing as “paying the purchase price of the WIFIA Bond”. (l) Whenever this Agreement requires a change in principal amount, interest rate or amortization schedule of the WIFIA Loan, it is intended that such change be reflected in the 476
20 1378234.02D-WASSR02A - MSW
WIFIA Bond. Whenever there is a prepayment of the WIFIA Loan, it is intended that such prepayment be implemented through a prepayment of the WIFIA Bond. (m) Whenever this Agreement sets forth a time period for a number of days by when a deliverable must be provided or an action must be taken, such time period shall be computed on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months.

ARTICLE II

THE WIFIA LOAN
Section 3. WIFIA Loan Amount. The principal amount of the WIFIA Loan shall not exceed the Maximum Principal Amount.

Section 4. Disbursement Conditions.
(a) WIFIA Loan proceeds shall be disbursed solely in respect of Eligible Project Costs paid or incurred and approved for payment by or on behalf of the Borrower or the City in connection with the Project, including, for the avoidance of doubt, Eligible Project Costs that were initially funded with Interim Financing proceeds. Each Disbursement of the WIFIA Loan shall be made pursuant to the procedures of Schedule IV (Requisition Procedures) and subject to the requirements of this Section 4 and the conditions set forth in Section 11(b) (Conditions Precedent to Disbursements); provided, that no Disbursements shall be made after the Final Disbursement Date.
(b) Subject to this Section 4, any scheduled Disbursement (as reflected in the WIFIA Loan Disbursement Schedule) that remains undrawn as of its scheduled date shall automatically be available for the next scheduled Disbursement date, up to the Final Disbursement Date, with the effect of automatically updating the WIFIA Loan Disbursement Schedule (and the WIFIA Loan Amortization Schedule) without need for the WIFIA Lender’s approval. The Borrower may also amend the WIFIA Loan Disbursement Schedule by submitting a revised version thereof to the WIFIA Lender no later than thirty (30) days prior to the proposed effective date of such amendment, together with a detailed explanation of the reasons for such revisions. Such revised WIFIA Loan Disbursement Schedule shall become effective upon the WIFIA Lender’s approval thereof, which approval shall be deemed granted if the WIFIA Lender has not objected within thirty (30) days from receipt of the revised schedule, and which approval shall have the effect of updating the WIFIA Loan Amortization Schedule to reflect the updated WIFIA Loan Disbursement Schedule. Notwithstanding the foregoing, the date of the first Disbursement shall not be earlier than the initial date of Disbursement set out in the WIFIA Loan Amortization Schedule as of the Effective Date.

Section 5. Term. The term of the WIFIA Loan shall extend from the Effective Date to the Final Maturity Date or to such earlier date as all amounts due or to become due to the WIFIA Lender hereunder have been irrevocably paid in full in immediately available funds.

Section 6. Interest Rate. The Borrower shall pay interest on the WIFIA Loan Balance at the WIFIA Interest Rate; provided, that, upon the occurrence of an Event of Default, the Borrower shall pay interest on the WIFIA Loan Balance at the Default Rate, (a) in the case of 477
21 1378234.02D-WASSR02A - MSW
any Payment Default, from (and including) its due date to (but excluding) the date of actual payment of the overdue amount of principal of the WIFIA Loan and accrued interest thereon and (b) in the case of any other Event of Default, from (and including) the date of such occurrence to (but excluding) the earlier of the date on which (i) such Event of Default has been cured (if applicable) in accordance with the terms of this Agreement or waived by the WIFIA Lender and (ii) the WIFIA Loan Balance has been irrevocably paid in full in immediately available funds.

Interest shall (x) accrue on the WIFIA Loan commencing on the date of the first disbursement of the WIFIA Loan, (y) be payable commencing on the Debt Service Payment Commencement Date and (z) be computed on the WIFIA Loan Balance on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months.

Section 7. Security and Priority; Flow of Funds.
(a) Pursuant to the Installment Purchase Agreement, as security for the Installment Payments, the City has pledged, assigned and granted to the Borrower for its benefit, Liens on the Net Water System Revenues. The Installment Payments are and shall (i) be secured by the Liens on the Net Water System Revenues and (ii) not be subordinate in right of payment (other than with respect to Maintenance and Operation Costs) or in right of security to any Lien on the Net Water System Revenues for the benefit of any City Bond or City Contract. (b) As security for the WIFIA Bond and the WIFIA Loan, the Borrower has pledged, assigned and granted to the Trustee for the benefit of the WIFIA Lender for its benefit, a senior priority Lien on the Pledged Collateral. The Lien on the Pledged Collateral to secure the WIFIA Loan for the benefit of the WIFIA Lender is and shall be (i) on a parity in right of payment and right of security to the Lien on the Pledged Collateral in favor of the Senior Obligations and (ii) senior in right of payment and right of security to the Lien on the Pledged Collateral in favor of the Subordinate Obligations. As evidence of the Borrower’s obligation to repay the WIFIA Loan, the Borrower shall issue and deliver to the WIFIA Lender, as the registered owner, on or prior to the Effective Date, the WIFIA Bond. The WIFIA Bond shall be a Bond (as defined in the Indenture), entitled to all of the benefits of a Bond under the Indenture Documents.
(c) Amounts deposited in the Revenue Account shall be applied in the order of priority described in, and in accordance with, the Flow of Funds.

Section 8. Repayments.
(a) Payment of WIFIA Debt Service.
(i) No WIFIA Debt Service shall be due or payable prior to the Debt Service Payment Commencement Date. The Borrower shall pay (A) WIFIA Debt Service in the amounts and manner and on the Payment Dates as set forth in the WIFIA Loan Amortization Schedule, as the same may be revised pursuant to Section 8(c) (Adjustments to WIFIA Loan Amortization Schedule) and (B) payments of any other amounts on each other date on which payment thereof is required to be made hereunder; provided, that, in either case if any such date is not a Business Day, payment shall be 478
22 1378234.02D-WASSR02A - MSW
made on the next Business Day following such date. WIFIA Loan proceeds borrowed and repaid may not be reborrowed.
(ii) Notwithstanding anything herein to the contrary, the WIFIA Loan Balance and any accrued interest thereon shall be due and payable in full on the Final Maturity Date.
(iii) If a Capitalized Interest Period is applicable as set forth in Part C of Schedule I (WIFIA Loan Specific Terms), during the Capitalized Interest Period, no payment of principal or interest on the WIFIA Loan will be required to be made. On each Interest Payment Date occurring during the Capitalized Interest Period (including the day immediately following the end of the Capitalized Interest Period), interest accrued and not paid on the WIFIA Loan during each such six (6) month period shall be capitalized and added to the WIFIA Loan Balance, as set forth in the WIFIA Loan Amortization Schedule. Within thirty (30) days after the end of the Capitalized Interest Period, the WIFIA Lender shall give written notice to the Borrower stating the WIFIA Loan Balance as of the close of business on the last day of the Capitalized Interest Period, which statement thereof shall be deemed conclusive absent manifest error; provided, however, that no failure to give or delay in giving such notice shall affect any of the obligations of the Borrower hereunder or under any of the other WIFIA Loan Documents.

Notwithstanding the foregoing, the Capitalized Interest Period shall end immediately upon written notification to the Borrower by the WIFIA Lender that an Event of Default has occurred and that the WIFIA Lender is ending the Capitalized Interest Period, in which case interest shall no longer be capitalized, payments of interest shall be due and payable beginning on the next Interest Payment Date and payments of principal shall be due and payable beginning on the next Principal Payment Date, in each case in accordance with the terms hereof.
(iv) If an Interest Only Period is applicable as set forth in Part C of Schedule I (WIFIA Loan Specific Terms), during the Interest Only Period, the WIFIA Debt Service payable by the Borrower shall consist of one hundred percent (100%) of the amount of interest then due and payable on the WIFIA Loan Balance, and no payment of principal on the WIFIA Loan will be due and payable during the Interest Only Period. (v) Any defeasance of the WIFIA Loan pursuant to the Indenture and in accordance with applicable law shall not be deemed a repayment or prepayment of the WIFIA Loan in full, and the Borrower shall comply with all of its obligations hereunder and under the other WIFIA Loan Documents (other than with respect to payments of WIFIA Debt Service, which payments shall continue to be made in accordance with the WIFIA Loan Amortization Schedule by the succeeding entity assuming the Borrower’s payment obligations), unless otherwise agreed by the WIFIA Lender, until the irrevocable payment in full in immediately available funds of the WIFIA Loan Balance, together with all accrued interest, fees and expenses with respect thereto. (b) Manner of Payment. Payments under this Agreement (and the WIFIA Bond, which payments shall not be duplicative) shall be made in Dollars and in immediately available funds (without counterclaim, offset or deduction) in accordance with the payment 479
23 1378234.02D-WASSR02A - MSW
instructions provided by the WIFIA Lender prior to the relevant payment, as may be modified in writing from time to time by the WIFIA Lender; provided, that the failure to provide updated payment instructions shall not affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document.
(c) Adjustments to WIFIA Loan Amortization Schedule. The WIFIA Lender may, from time to time, modify the WIFIA Loan Amortization Schedule included in Schedule VI (WIFIA Loan Amortization Schedule) to reflect (A) any change to the WIFIA Loan Balance, (B) any change to the date and amount of any principal or interest due and payable or to become due and payable by the Borrower hereunder in accordance with this Agreement, (C) any mathematical corrections as the WIFIA Lender may determine are necessary, and (D) with the consent of the Borrower (not to be unreasonably withheld), such other information as the WIFIA Lender may determine is necessary for administering the WIFIA Loan and this Agreement. Any calculations described above shall be rounded up to the nearest whole cent. Any adjustments or revisions to the WIFIA Loan Amortization Schedule as a result of a decrease in the WIFIA Loan Balance shall be applied to reduce future payments due on the WIFIA Loan in inverse order of maturity, other than prepayments which shall be applied in accordance with Section 9(b) (General Prepayment Instructions). If the WIFIA Loan Amortization Schedule is modified pursuant to this Section 8(c), the WIFIA Lender shall provide the Borrower with a copy of such revised WIFIA Loan Amortization Schedule, but no failure to provide or delay in providing the Borrower with such copy shall affect any of the obligations of the Borrower under this Agreement or the other WIFIA Loan Documents. The WIFIA Lender may also, from time to time or when so requested by the Borrower, advise the Borrower by written notice of the amount of the WIFIA Loan Balance as of the date of such notice. Absent manifest error, the WIFIA Lender’s determination of the WIFIA Loan Balance and all matters as set forth on the WIFIA Loan Amortization Schedule shall be deemed conclusive evidence thereof absent manifest error; provided, that neither the failure to make any such determination, modification, or recordation nor any error in such determination, modification, or recordation shall affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document.

Section 9. Prepayment.
(a) Optional Prepayments. The Borrower may prepay the WIFIA Loan, without penalty or premium, (i) in full on any date or (ii) in part on any Payment Date (and, if in part, the amounts thereof to be prepaid shall be determined by the Borrower; provided, that such prepayment shall be in principal amounts of $[1,000,000] or any integral multiple of $1.00 in excess thereof), in each case from time to time but not more than once annually in accordance with 33 U.S.C. § 3908(c)(4)(A). The Borrower may make such prepayment by paying to the WIFIA Lender such principal amount of the WIFIA Loan to be prepaid, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment and all fees and expenses then due and payable to the WIFIA Lender. Each prepayment of the WIFIA Loan pursuant to this Section 9(a) shall be made on such date and in such principal amount as shall be specified by the Borrower in a written notice, signed by the Borrower’s Authorized Representative and delivered to the WIFIA Lender not less than thirty (30) days prior to the requested date of prepayment, unless otherwise agreed by the WIFIA Lender. At any time between delivery of such written notice and the applicable optional prepayment, the Borrower may, without penalty or premium, rescind its announced optional prepayment by further written 480
24 1378234.02D-WASSR02A - MSW
notice to the WIFIA Lender. Anything in this Section 9(a) to the contrary notwithstanding, the failure by the Borrower to make any optional prepayment shall not constitute a breach or default under this Agreement.
(b) General Prepayment Instructions. Upon the WIFIA Lender’s receipt of confirmation that payment in full in immediately available funds of the entire WIFIA Loan Balance and any unpaid interest, fees and expenses with respect thereto has occurred as a result of a prepayment, the WIFIA Lender shall surrender the WIFIA Bond to the Borrower or its authorized representative, by mail in accordance with Section 35 (Notices) or as otherwise agreed between the parties hereto. If the Borrower prepays only part of the unpaid balance of principal of the WIFIA Loan, the WIFIA Lender may make a notation on the WIFIA Loan Amortization Schedule indicating the amount of principal of and interest on the WIFIA Loan then being prepaid. Absent manifest error, the WIFIA Lender’s determination of such matters as set forth on an updated WIFIA Loan Amortization Schedule shall be conclusive evidence thereof; provided, that neither the failure to make any such recordation nor any error in such recordation shall affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document. All partial prepayments of principal shall be applied to reduce the WIFIA Loan Balance such that the remaining scheduled principal payments for the WIFIA Loan set out in the WIFIA Loan Amortization Schedule are reduced in inverse order of maturity or, at the election of the City evidenced by a written request of the City filed with the WIFIA Lender at least thirty (30) days prior to the date of prepayment, on a pro rata basis (provided that, in any event, the WIFIA Debt Service following such prepayment shall be equal in time and amount to the unpaid payments due under the Installment Purchase Agreement). If such funds have not been so paid on the prepayment date, such principal amount of the WIFIA Loan shall continue to bear interest until payment thereof at the rate provided for in Section 6 (Interest Rate). (c) [Reserved]
Section 10. Fees and Expenses.
(a) Fees. The Borrower shall pay to the WIFIA Lender:
(i) the Servicing Set-Up Fee, which shall be due and payable within thirty (30) days after receipt by the Borrower of an invoice from the WIFIA Lender with respect thereto (or, if earlier, the date of the first Disbursement of the WIFIA Loan); (ii) the Construction Period Servicing Fee, which shall accrue on the first Business Day of the then-current Federal Fiscal Year and shall be due and payable on or prior to each November 15 during the period beginning from the Effective Date through (and including) the end of the Federal Fiscal Year during which the Substantial Completion Date occurs; provided, that the Initial Construction Period Servicing Fee shall be due and payable within thirty (30) days after receipt by the Borrower of an invoice from the WIFIA Lender with respect thereto (or, if earlier, the date of the first Disbursement of the WIFIA Loan); and
(iii) the Operating Period Servicing Fee, which shall accrue on the first Business Day of the then-current Federal Fiscal Year and shall be due and payable on or 481
25 1378234.02D-WASSR02A - MSW
prior to each November 15, beginning with the first November 15 following the end of the Federal Fiscal Year during which the Substantial Completion Date occurs, until (and including) the Final Maturity Date; provided, that the Operating Period Servicing Fee due and payable with respect to the Federal Fiscal Year during which the Final Maturity Date occurs shall be equal to the pro-rata monthly portion of the then applicable Operating Period Servicing Fee multiplied by the number of partial or whole months remaining between October 1 and the Final Maturity Date.
(b) The amount of each Construction Period Servicing Fee (other than the initial Construction Period Servicing Fee) and each Operating Period Servicing Fee shall be adjusted in proportion to the percentage change in CPI for the calendar year immediately preceding the calendar year during which such fee is due. The WIFIA Lender shall notify the Borrower of the amount of each such fee at least thirty (30) days before payment is due, which determination shall be conclusive absent manifest error. (c) Expenses. The Borrower agrees, whether or not the transactions hereby contemplated shall be consummated, to reimburse the WIFIA Lender on demand from time to time, within thirty (30) days after receipt by the Borrower of any invoice from the WIFIA Lender, for any and all fees, costs, charges, and expenses incurred by it (including the fees, costs, and expenses of its legal counsel, financial advisors, auditors and other consultants and advisors) in connection with the negotiation, preparation, execution, delivery, and performance of this Agreement and the other WIFIA Loan Documents and the transactions hereby and thereby contemplated, including attorneys’, and engineers’ fees and professional costs, including all such fees, costs, and expenses incurred as a result of or in connection with: (i) the enforcement of or attempt to enforce, or the monitoring, protection or preservation of any right or claim under, the Liens on the Pledged Collateral or any provision of this Agreement or any of the other WIFIA Loan Documents or the rights of the WIFIA Lender thereunder; (ii) any amendment, modification, re-execution, waiver, or consent with respect to this Agreement or any other WIFIA Loan Document; and (iii) any work-out, restructuring, or similar arrangement of the obligations of the Borrower under this Agreement or the other WIFIA Loan Documents, including during the pendency of any Event of Default.
(d) The obligations of the Borrower under this Section 10 shall survive the payment or prepayment in full or transfer of the WIFIA Bond, the enforcement of any provision of this Agreement or the other WIFIA Loan Documents, any such amendments, waivers or consents, any Event of Default, and any such workout, restructuring, or similar arrangement.

ARTICLE III

CONDITIONS PRECEDENT
Section 11. Conditions Precedent.
(a) Conditions Precedent to Effectiveness. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not become effective until each of the following conditions precedent has been satisfied or waived in writing by the WIFIA Lender in its sole discretion:
482
26 1378234.02D-WASSR02A - MSW
(i) The Borrower and the City shall each have duly executed and delivered to the WIFIA Lender this Agreement, and the Borrower shall have duly executed and delivered to the WIFIA Lender the WIFIA Bond, each in form and substance satisfactory to the WIFIA Lender.
(ii) The Borrower and the City shall have delivered to the WIFIA Lender complete and fully executed copies of (A) the Indenture, together with any amendments, supplements, waivers or modifications thereto (but excluding any document that solely provides for the issuance or incurrence of Additional Obligations, hedging Obligations or Interim Financing) and (B) any Related Document with respect to which all or a portion of the proceeds or payments thereof are or will be applied to fund all or any portion of Total Project Costs, in each case that has been entered into on or prior to the Effective Date, along with a certification in the Closing Certificate that each such document is complete, fully executed and in full force and effect, and that all conditions contained in the Related Documents that are necessary to the closing of the WIFIA transaction contemplated hereby (if any) have been fulfilled. (iii) The City shall have delivered to the WIFIA Lender fully executed copies of each Existing Construction Contract, together with any amendments, waivers or modifications thereto.
(iv) Counsel to the Borrower shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit H-1 (Opinions Required from Counsel to the Borrower) and bond counsel to the Borrower shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit H-2 (Opinions Required from Bond Counsel to the Borrower)).

Counsel to the City shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit H-3 (Opinions Required from Counsel to the City) and bond counsel to the City shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit H-4 (Opinions Required from Bond Counsel to the City)).
(v) The Borrower and the City shall each have delivered to the WIFIA Lender a certificate, signed by the Borrower’s or the City’s Authorized Representative, as applicable, substantially in the form attached hereto as Exhibit B-1 (Form of Borrower Closing Certificate) and Exhibit B-2 (Form of City Closing Certificate), as applicable, (each a “Closing Certificate”), designating the Borrower’s Authorized Representative or the City’s Authorized Representative, as applicable, confirming such person’s position and incumbency, and certifying as to the satisfaction of the certain conditions precedent (and, if requested by the WIFIA Lender, has provided evidence satisfactory to the WIFIA Lender of such satisfaction), including the following:
(A) as of the Effective Date, (1) the maximum principal amount of the WIFIA Loan (excluding any interest that is capitalized in accordance with the terms hereof), together with the amount of any other 483
27 1378234.02D-WASSR02A - MSW
credit assistance provided under the Act to the Borrower and the City, does not exceed forty-nine percent (49%) of reasonably anticipated Eligible Project Costs; (2) the aggregate amount of Eligible Project Costs previously incurred prior to the Effective Date does not exceed fifty-one percent (51%) of Eligible Project Costs; and (3) the total federal assistance provided to the Project, including the maximum principal amount of the WIFIA Loan (excluding any interest that is capitalized in accordance with the terms hereof), does not exceed eighty percent (80%) of Total Project Costs;
(B) the City is in compliance with NEPA and any applicable federal, state or local environmental review and approval requirements with respect to the Project;
(C) the Borrower and the City each have (1) obtained a FEIN (as evidenced by the delivery of a copy of the Borrower’s and the City’s W-9, as applicable), (2) obtained a UEI Number, and (3) registered with, and obtained confirmation of active SAM registration status; (D) the Borrower has obtained the WIFIA CUSIP Number;
(E) the representations and warranties of the Borrower and the City set forth in this Agreement and in each other WIFIA Loan Document to which the Borrower or the City is a party are true and correct on and as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date; and
(F) no Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred or arisen since the date of the Application.
(vi) The Borrower shall have provided evidence to the WIFIA Lender’s satisfaction, prior to the Effective Date, of the assignment by at least one (1) Nationally Recognized Rating Agency of a public Investment Grade Rating on the WIFIA Loan, along with a certification in the Closing Certificate that no such rating has been reduced, withdrawn or suspended as of the Effective Date.
(vii) The Borrower and the City shall each have delivered to the WIFIA Lender the Public Benefits Report.
(viii) The Borrower shall have paid in full all invoices delivered by the WIFIA Lender to the Borrower as of the Effective Date for any applicable Servicing Fees and the fees and expenses of the WIFIA Lender’s counsel and financial advisors and any auditors or other consultants retained by the WIFIA Lender for the purposes hereof. 484
28 1378234.02D-WASSR02A - MSW
(b) Conditions Precedent to Disbursements. Notwithstanding anything in this Agreement to the contrary, the WIFIA Lender shall have no obligation to make any Disbursement of the WIFIA Loan to the Borrower (including the initial Disbursement hereunder) until each of the following conditions precedent has been satisfied or waived in writing by the WIFIA Lender in its sole discretion:
(i) The Borrower and the City shall have delivered to the WIFIA Lender a Requisition that complies with the provisions of Section 4 (Disbursement Conditions), Schedule IV (Requisition Procedures) and Exhibit D (Form of Requisition), including satisfactory Eligible Project Costs Documentation relating to such Requisition. The Borrower’s Authorized Representative shall also certify in such Requisition that:
(A) at the time of, and immediately after giving effect to, any Disbursement of WIFIA Loan proceeds then currently requested, (1) no Default or Event of Default and no event of default under any other Related Document has occurred and is continuing and (2) no event that, with the giving of notice or the passage of time or both, would constitute an event of default under any other Related Document, has occurred and is continuing;
(B) no Material Adverse Effect, or any event or condition that could reasonably be expected to result in a Material Adverse Effect, has occurred since the Effective Date;
(C) the aggregate amount of all Disbursements (including the requested Disbursement amount but excluding any interest that is capitalized in accordance with the terms hereof) does not exceed (1) the maximum principal amount of the WIFIA Loan or (2) the amount of Eligible Project Costs paid or incurred by the Borrower and the City; (D) the Eligible Project Costs for which reimbursement or payment is being requested has not been reimbursed or paid by any previous disbursement of (1) WIFIA Loan proceeds or (2) any other source of funding for the Project as identified in the Project Budget; (E) (1) the Borrower, the City, and each of the City’s
contractors and subcontractors at all tiers with respect to the Project, has complied with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141-3144, 3146, and 3147 (relating to Davis- Bacon Act requirements) (and regulations relating thereto) and 33 U.S.C. §3914 (relating to American iron and steel products); and (2) supporting documentation, such as certified payroll records and certifications for all iron and steel products used for the Project, are being maintained and are available for review upon request by the WIFIA Lender;
485
29 1378234.02D-WASSR02A - MSW
(F) the representations and warranties of the Borrower and the City set forth in this Agreement and in each other WIFIA Loan Document are true and correct as of each date on which any disbursement of the WIFIA Loan is made, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties are true and correct as of such earlier date); and
(G) the Borrower and the City each represent that they have delivered all required deliverables under and in compliance with the requirements of Schedule V (Reporting Requirements), except as has been otherwise agreed by the WIFIA Lender; and
(H) the amount being requested for Disbursement is with respect to Eligible Project Costs for which all or a portion of the Eligible Project Costs Documentation was previously submitted to and approved by the WIFIA Lender in accordance with Schedule IV (Requisition Procedures) and Schedule V (Reporting Requirements) of the WIFIA Loan Agreement, and/or the Borrower or the City has set out in the Requisition (or attached separately to the Requisition) a summary of any Eligible Project Costs that have not otherwise been previously submitted to the WIFIA Lender for approval, together with supporting Eligible Project Costs Documentation.
(ii) If applicable, to the extent necessary to make the representations and warranties in Section 12(f) (Litigation) and 12(j)(iii) (Compliance with Laws) true, correct and complete as of the date of the applicable Disbursement, the Borrower shall have delivered an updated Schedule III-A (Borrower Disclosures) and the City shall have delivered an updated Schedule III-B (City Disclosures). (iii) The Borrower or the City shall have paid in full (A) any outstanding Servicing Fees due and payable under Section 10 (Fees and Expenses) and (B) all invoices delivered by the WIFIA Lender to the Borrower or the City, for the fees and expenses of the WIFIA Lender’s counsel and financial advisors and any auditors or other consultants retained by the WIFIA Lender for the purposes hereof.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES
Section 12. Representations and Warranties of the Borrower. The Borrower hereby represents and warrants that, as of the Effective Date and, as to each of the representations and warranties below other than those contained in Section 12(b) (Officers’ Authorization) and the first sentence of Section 12(m) (Construction Contracts), as of each date on which any Disbursement of the WIFIA Loan is requested or made:
(a) Organization; Power and Authority. The Borrower is a Legal Entity duly organized and validly existing under its Organizational Documents and the laws of the State, has 486
30 1378234.02D-WASSR02A - MSW
full legal right, power and authority to do business in the State and to enter into the WIFIA Loan Documents then in existence, to execute and deliver this Agreement and the WIFIA Bond, and to carry out and consummate all transactions contemplated hereby and thereby and has duly authorized the execution, delivery and performance of this Agreement, the WIFIA Bond, and the other WIFIA Loan Documents. Other than such Organizational Documents, Resolution No. [__] of the Board of Directors of the City of Oxnard Financing Authority adopted on [__________], 2022, and the Indenture Documents, there are no additional instruments or documents necessary for the Borrower to execute and deliver, or to perform its obligations under, the WIFIA Loan Documents to which it is a party and to consummate and implement the transactions contemplated by the WIFIA Loan Documents.
(b) Officers’ Authorization. As of the Effective Date, the officers of the Borrower executing (or that previously executed) the WIFIA Loan Documents, and any certifications or instruments related thereto, to which the Borrower is a party are (or were at the time of such execution) duly and properly in office and fully authorized to execute the same. (c) Due Execution; Enforceability. Each of the WIFIA Loan Documents in effect as of any date on which this representation and warranty is made, and to which the Borrower is a party, has been duly authorized, executed and delivered by the Borrower and constitutes the legal, valid and binding agreement of the Borrower enforceable against the Borrower in accordance with its terms, except as such enforceability (i) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) is subject to general principles of equity (regardless of whether enforceability is considered in equity or at law). (d) Non-Contravention. The execution and delivery of the WIFIA Loan Documents to which the Borrower is a party, the consummation of the transactions contemplated by the WIFIA Loan Documents, and the fulfillment of or compliance with the terms and conditions of all of the WIFIA Loan Documents, do not and will not (i) conflict with the Borrower’s Organizational Documents, (ii) conflict in any material respect with, or constitute a violation, breach or default (whether immediately or after notice or the passage of time or both) by the Borrower of or under, any applicable law, administrative rule or regulation, any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the Borrower is a party or by which it or its properties or assets are otherwise subject or bound, or (iii) result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Borrower, other than Permitted Liens described in clause (a) of the definition thereof.
(e) Consents and Approvals. No consent or approval of any trustee, holder of any obligations of the Borrower, or of any other Person, and no consent, permission, authorization, order or license of, or filing or registration with, any Governmental Authority is necessary in connection with (i) the execution and delivery by the Borrower of the Related Documents to which it is a party, except as have been obtained or made and as are in full force and effect, or (ii) (A) the consummation of any transaction contemplated by any of the Related Documents to which the Borrower is a party, or (B) the fulfillment of or compliance by the Borrower with the terms and conditions of any of the Related Documents to which the Borrower 487
31 1378234.02D-WASSR02A - MSW
is a party, except as have been obtained or made and as are in full force and effect or as are ministerial in nature and can reasonably be expected to be obtained or made in the ordinary course on commercially reasonable terms and conditions when needed. The Borrower is not in default (and no event has occurred and is continuing that, with the giving of notice or the passage of time or both, could constitute a default) with respect to any Governmental Approval, which default could reasonably be expected to result in a Borrower Material Adverse Effect. (f) Litigation. Except as set forth in Part B of Schedule III-A (Borrower Disclosures), there is no action, suit, proceeding or, to the knowledge of the Borrower, any inquiry or investigation, in any case before or by any court or other Governmental Authority pending or, to the knowledge of the Borrower, threatened against the Borrower or affecting the ability of the Borrower to execute, deliver and perform its obligations under the WIFIA Loan Documents or that in any case could reasonably be expected to result in a Material Adverse Effect.
(g) Security Interests. The Indenture Documents [and the Organizational Documents together] establish and the Borrower has taken all necessary action to pledge, assign, and grant, in each case for the benefit of the WIFIA Lender, legal, valid, binding and enforceable Liens on the Pledged Collateral purported to be created, pledged, assigned, and granted pursuant to and in accordance with the Indenture Documents, irrespective of whether any Person has notice of the pledge and without the need for any physical delivery, recordation, filing, or further act, and if applicable, the security interests created in the Pledged Collateral have been duly perfected under applicable State law. Such Liens are in full force and effect and are not subordinate or junior to any other Liens in respect of the Pledged Collateral except for the Liens arising by operation of law, and not pari passu with any Liens on the Pledged Collateral. The Borrower is not in breach of any covenant set forth in Section 15(b) (Securing Liens) or in the Indenture Documents with respect to the matters described in Section 15(b) (Securing Liens). As of the Effective Date and as of each other date this representation and warranty is made, (A) all documents and instruments have been recorded or filed for record in such manner and in such places as are required and all other action as is necessary or desirable has been taken to establish a legal, valid, binding, and enforceable and, if applicable, perfected, Lien on the Pledged Collateral in favor of the Trustee (for the benefit of the WIFIA Lender) to the extent contemplated by the Indenture Documents, and (B) all taxes and filing fees that are due and payable in connection with the execution, delivery or recordation of any Indenture Documents or any instruments, certificates or financing statements in connection with the foregoing, have been paid. Neither the attachment, validity, enforceability, priority or, if applicable, perfection, of the security interest in the Pledged Collateral granted pursuant to the Indenture Documents is governed by Article 9 of the UCC. Neither the attachment, validity, enforceability or priority of the security interest in the Pledged Collateral is governed by Article 9 of the UCC. (h) No Debarment. The Borrower has fully complied with its verification obligations under 2 C.F.R. § 180.320 and confirms, based on such verification, that, to its knowledge, neither the Borrower nor any of its principals (as defined in 2 C.F.R. § 180.995 and supplemented by 2 C.F.R § 1532.995) (i) is debarred, suspended or voluntarily excluded from participation in Government contracts, procurement or non-procurement matters, (ii) is presently indicted for or otherwise criminally or civilly charged by a Governmental Authority with commission of any of the offenses listed in 2 C.F.R. § 180 or 2 C.F.R. § 1532; and (iii) have, 488
32 1378234.02D-WASSR02A - MSW
within the three (3) year period preceding the Effective Date, (x) been convicted for or had a civil judgment rendered against the Borrower for any of the offenses within such period or (y) had any public transactions (federal, state or local) terminated for cause or default. (i) No Lobbying. Pursuant to 31 U.S.C. §1352, to the best of the Borrower’s knowledge and belief, (A) no Federal appropriated funds have been paid or will be paid, by or on behalf of the Borrower, to any Person for influencing or attempting to influence an officer or employee of an agency, a member (or employee of a member), officer, or employee of the U.S.

Congress, in connection with the making of the WIFIA Loan, execution (including amendments or modifications) of the WIFIA Loan Documents, or any other federal action under 31 U.S.C. §1352(a)(2); and (B) if any funds other than Federal appropriated funds have been paid or will be paid to any Person for influencing or attempting to influence an officer or employee of any agency, a member (or employee of a member), officer, or employee of the U.S. Congress in connection with the WIFIA Loan, the Borrower has completed and submitted to the WIFIA Lender Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions.
(j) Compliance with Laws.
(i) The Borrower has complied with all applicable laws, rules, regulations and requirements.
(ii) The Borrower has complied with all applicable laws, rules, regulations and requirements.
(k) Credit Ratings. The WIFIA Loan has received a public Investment Grade Rating from at least one (1) Nationally Recognized Rating Agency, written evidence of such rating has been provided to the WIFIA Lender prior to the Effective Date, and such rating has not been reduced, withdrawn or suspended as of the Effective Date. (l) No Defaults. No Default or Event of Default, and no default or event of default by the Borrower under any other Related Document, has occurred and is continuing. (m) Information. The information furnished by, or on behalf of, the Borrower to the WIFIA Lender, when taken as a whole, is true and correct in all material respects (other than for projections and other forward-looking statements contained in the Base Case Financial Model and any Updated Financial Model/Plan which have been made in good faith and based on reasonable assumptions) and does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading as of the date made or furnished. (n) Insurance. The Borrower is in compliance with all insurance obligations required under each Related Document to which the Borrower is a party (including Section 15(f) (Insurance) hereof) as of the date on which this representation and warranty is made. To the extent the Borrower self-insures, the Borrower’s self-insurance program is actuarially sound. (o) No Prohibited Liens. Except for Permitted Liens described in clause (a) of the definition thereof, the Borrower has not created, and is not under any obligation to create, 489
33 1378234.02D-WASSR02A - MSW
and has not entered into any transaction or agreement that would result in the imposition of, any Lien on the Pledged Collateral, or the Borrower’s respective rights in the foregoing. (p) Financial Statements. Each income statement, balance sheet and statement of operations and cash flows (collectively, “Financial Statements”) delivered to the WIFIA Lender pursuant to Part B of Schedule V (Reporting Requirements) has been prepared in accordance with GAAP and presents fairly, in all material respects, the financial condition (including any liabilities or obligations that are required to be disclosed in accordance with GAAP) of the Borrower as of the respective dates of the balance sheets included therein and the results of operations of the Borrower for the respective periods covered by the statements of income included therein.
(q) Securities Laws. Under existing law, the WIFIA Bond may be issued and sold without registration under the Securities Act of 1933, as amended, and any State blue sky laws, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended.
(r) No Delinquent Taxes or Federal Debt. The Borrower has paid all applicable taxes and other material taxes and assessments payable by it that have become due (other than those taxes or assessments that it is contesting in good faith and by appropriate proceedings, for which adequate reserves have been established to the extent required by GAAP). The Borrower has no delinquent federal debt (including tax liabilities but excluding any delinquencies that have been resolved with the appropriate federal agency in accordance with the standards of the Debt Collection Improvement Act of 1996). (s) Sovereign Immunity. The Borrower either has no immunity from the jurisdiction of any court of competent jurisdiction or from any legal process therein which could be asserted in any action to enforce the obligations of the Borrower under any of the WIFIA Loan Documents to which it is a party or the transactions contemplated hereby or thereby, including the obligations of the Borrower hereunder and thereunder, or, to the extent that the Borrower has such immunity, the Borrower has waived such immunity pursuant to Section 15(m) (Immunity).
(t) Accuracy of Representations and Warranties. The representations, warranties and certifications of the Borrower set forth in this Agreement and the other WIFIA Loan Documents are true, correct, and complete, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties shall be true, correct, and complete as of such earlier date).

Section 13. Representations and Warranties of the City. The City hereby represents and warrants that, as of the Effective Date and, as to each of the representations and warranties below other than those contained in Section 12(b) (Officers’ Authorization) and the first sentence of Section 12(m) (Construction Contracts), as of each date on which any Disbursement of the WIFIA Loan is requested or made:
(a) Organization; Power and Authority. The City is a general law city and municipal corporation duly organized and validly existing under and by virtue of the laws of the 490
34 1378234.02D-WASSR02A - MSW
State, has full legal right, power and authority to do business in the State and to enter into the WIFIA Loan Documents then in existence, to execute and deliver this Agreement, and to carry out and consummate all transactions contemplated hereby and thereby and has duly authorized the execution, delivery and performance of this Agreement and the other WIFIA Loan Documents. Other than Resolution No. [__] of the City Council of the City of Oxnard adopted on [__________], 2022 and the Indenture Documents, there are no additional instruments or documents necessary for the City to execute and deliver, or to perform its obligations under, the WIFIA Loan Documents to which it is a party and to consummate and implement the transactions contemplated by the WIFIA Loan Documents.
(b) Officers’ Authorization. As of the Effective Date, the officers of the City executing (or that previously executed) the WIFIA Loan Documents, and any certifications or instruments related thereto, to which the City is a party are (or were at the time of such execution) duly and properly in office and fully authorized to execute the same. (c) Due Execution; Enforceability. Each of the WIFIA Loan Documents in effect as of any date on which this representation and warranty is made, and to which the City is a party, has been duly authorized, executed and delivered by the City and constitutes the legal, valid and binding agreement of the City enforceable against the City in accordance with its terms, except as such enforceability (i) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) is subject to general principles of equity (regardless of whether enforceability is considered in equity or at law).
(d) Non-Contravention. The execution and delivery of the WIFIA Loan Documents to which the City is a party, the consummation of the transactions contemplated by the WIFIA Loan Documents, and the fulfillment of or compliance with the terms and conditions of all of the WIFIA Loan Documents, do not and will not (i) conflict with the City’s Organizational Documents, (ii) conflict in any material respect with, or constitute a violation, breach or default (whether immediately or after notice or the passage of time or both) by the City of or under, any applicable law, administrative rule or regulation, any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the City is a party or by which it or its properties or assets are otherwise subject or bound, or (iii) result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, other than Permitted Liens.
(e) Consents and Approvals. All Governmental Approvals required as of the Effective Date and required as of any subsequent date on which this representation is made (or deemed made) for the undertaking, construction and completion by the City of the Project and the operation and maintenance of the Water System, and to execute and deliver and perform its obligations under the WIFIA Loan Documents and the Construction Contracts, have been obtained or effected and are in full force and effect. The City is not in default with respect to any Governmental Approval, which default could reasonably be expected to result in a Material Adverse Effect. No consent or approval of any trustee, holder of any indebtedness of the City or any other Person is necessary in connection with the execution, delivery, and performance by the 491
35 1378234.02D-WASSR02A - MSW
City of the WIFIA Loan Documents and the consummation of any transaction contemplated thereunder, except as have been obtained or made and as are in full force and effect. (f) Litigation. Except as set forth in Part B of Schedule III-B (Borrower Disclosures), there is no action, suit, proceeding or, to the knowledge of the City, any inquiry or investigation, in any case before or by any court or other Governmental Authority pending or, to the knowledge of the City, threatened against the City or affecting the Water System, the Project or the ability of the City to execute, deliver and perform its obligations under the WIFIA Loan Documents or that in any case could reasonably be expected to result in a Material Adverse Effect.
(g) Security Interests. The Installment Purchase Agreement establish, and the City has taken all necessary action to pledge, assign, and grant, in each case for the benefit of the Borrower, legal, valid, binding and enforceable Liens on the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, purported to be created, pledged, assigned, and granted pursuant to and in accordance with the Installment Purchase Agreement, irrespective of whether any Person has notice of the pledge and without the need for any physical delivery, recordation, filing, or further act, and if applicable, the security interests created in the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, have been duly perfected under applicable State law. Such Liens are in full force and effect and are not subordinate or junior to any other Liens in respect of the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, except for the Liens arising by operation of law, and not pari passu with any Liens other than the Liens on the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, in favor of debt service in accordance with the provisions of any City Bond or City Contract, which are pari passu with the Installment Payments. The City is not in breach of any covenant set forth in Section 19(b) (Securing Liens) or in the Indenture Documents with respect to the matters described in Section 19(b) (Securing Liens). As of the Effective Date and as of each other date this representation and warranty is made, (A) all documents and instruments have been recorded or filed for record in such manner and in such places as are required and all other action as is necessary or desirable has been taken to establish a legal, valid, binding, and enforceable and, if applicable, perfected, Lien on the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, in favor of the Borrower to the extent contemplated by the Installment Purchase Agreement, and (B) all taxes and filing fees that are due and payable in connection with the execution, delivery or recordation of any Indenture Documents or any instruments, certificates or financing statements in connection with the foregoing, have been paid. Neither the attachment, validity, enforceability, priority or, if applicable, perfection, of the security interest in the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, granted pursuant to the Installment Purchase Agreement is governed by Article 9 of the UCC.
(h) No Debarment. The City has fully complied with its verification obligations under 2 C.F.R. § 180.320 and confirms, based on such verification, that, to its knowledge, neither the City nor any of its principals (as defined in 2 C.F.R. § 180.995 and supplemented by 2 C.F.R § 1532.995) (i) is debarred, suspended or voluntarily excluded from participation in Government contracts, procurement or non-procurement matters, (ii) is presently 492
36 1378234.02D-WASSR02A - MSW
indicted for or otherwise criminally or civilly charged by a Governmental Authority with commission of any of the offenses listed in 2 C.F.R. § 180 or 2 C.F.R. § 1532; and (iii) have, within the three (3) year period preceding the Effective Date, (x) been convicted for or had a civil judgment rendered against the City for any of the offenses within such period or (y) had any public transactions (federal, state or local) terminated for cause or default. (i) No Lobbying. Pursuant to 31 U.S.C. §1352, to the best of the City’s knowledge and belief, (A) no Federal appropriated funds have been paid or will be paid, by or on behalf of the City, to any Person for influencing or attempting to influence an officer or employee of an agency, a member (or employee of a member), officer, or employee of the U.S.

Congress, in connection with the making of the WIFIA Loan, execution (including amendments or modifications) of the WIFIA Loan Documents, or any other federal action under 31 U.S.C. §1352(a)(2); and (B) if any funds other than Federal appropriated funds have been paid or will be paid to any Person for influencing or attempting to influence an officer or employee of any agency, a member (or employee of a member), officer, or employee of the U.S. Congress in connection with the WIFIA Loan, the City has completed and submitted to the WIFIA Lender Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. (j) Compliance with Laws.
(i) The City, and to the best of the City’s knowledge, each of the City’s contractors and subcontractors at all tiers with respect to the Project, has complied with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141-3144, 3146, and 3147 (relating to Davis-Bacon Act requirements) (and regulations relating thereto), 33 U.S.C. §3914 (relating to American iron and steel products), 20 C.F.R. §180.320 and 20 C.F.R. §1532 (relating to non-debarment), 31 U.S.C. §1352 and 49 C.F.R. §20.100 (relating to non-lobbying), and any applicable Sanctions Laws.
(ii) To ensure such compliance, the City has included in all contracts with respect to the Project (A) the contract clauses relating to applicable federal requirements (such as Davis-Bacon and Equal Employment Opportunity) and (B) requirements that its contractors (1) shall comply with all applicable laws, rules, regulations, and requirements set forth in this Section 12(j) and follow applicable federal guidance and (2) incorporate in all subcontracts (and cause all subcontractors to include in lower tier subcontracts) such terms and conditions as are required to be incorporated therein by any applicable laws, rules, regulations and requirements set forth in this Section 12(j).
(iii) Except as set forth in Part C of Schedule III-B (City Disclosures), the City is in compliance with all laws applicable to the Water System (including the Project) relating to environmental, health or safety matters. (k) No Defaults. No Default or Event of Default, and no default or event of default by the City under any other Related Document, has occurred and is continuing. 493
37 1378234.02D-WASSR02A - MSW
(l) Construction Contracts. Part C of Schedule II (Project Details) sets forth a list of the Existing Construction Contracts as of the Effective Date. With respect to each Construction Contract executed as of any date on which this representation and warranty is made, such Construction Contract is in full force and effect. (m) Information. The information furnished by, or on behalf of, the City to the WIFIA Lender, when taken as a whole, is true and correct in all material respects (other than for projections and other forward-looking statements contained in the Base Case Financial Model and any Updated Financial Model/Plan which have been made in good faith and based on reasonable assumptions) and does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading as of the date made or furnished. (n) Insurance. The City is in compliance with all insurance obligations required under each Related Document to which the City is a party (including Section 18(f) (Insurance) hereof) as of the date on which this representation and warranty is made. To the extent the City self-insures, the City’s self-insurance program is actuarially sound. (o) No Prohibited Liens. Except for Permitted Liens, the City has not created, and is not under any obligation to create, and has not entered into any transaction or agreement that would result in the imposition of, any Lien on the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, the Water System, the Project, the Revenues, or the City’s respective rights in any of the foregoing. (p) Financial Statements. Each income statement, balance sheet and statement of operations and cash flows (collectively, “Financial Statements”) delivered to the WIFIA Lender pursuant to Part B of Schedule V (Reporting Requirements) has been prepared in accordance with GAAP and presents fairly, in all material respects, the financial condition (including any liabilities or obligations that are required to be disclosed in accordance with GAAP) of the City as of the respective dates of the balance sheets included therein and the results of operations of the City for the respective periods covered by the statements of income included therein.
(q) No Delinquent Taxes or Federal Debt. The City has paid all applicable taxes and other material taxes and assessments payable by it that have become due (other than those taxes or assessments that it is contesting in good faith and by appropriate proceedings, for which adequate reserves have been established to the extent required by GAAP). The City has no delinquent federal debt (including tax liabilities but excluding any delinquencies that have been resolved with the appropriate federal agency in accordance with the standards of the Debt Collection Improvement Act of 1996).
(r) Sufficient Funds. The amount of the WIFIA Loan, when combined with all other funds committed for the development and construction of the Project as set forth under the various sources of funds in the Project Budget, will be sufficient to carry out the Project, pay all Total Project Costs anticipated for the development and construction of the Project and achieve Substantial Completion by the Projected Substantial Completion Date. The total federal assistance provided to the Project, including the maximum principal amount of the WIFIA Loan 494
38 1378234.02D-WASSR02A - MSW
(excluding any interest that is capitalized in accordance with the terms hereof), does not exceed eighty percent (80%) of Total Project Costs. The Updated Financial Model/Plan most recently delivered to the WIFIA Lender pursuant to Part A of Schedule V (Reporting Requirements) demonstrates that the projected Revenues are sufficient to meet the WIFIA Loan Amortization Schedule. The City has developed, and identified adequate revenues to implement, a plan for operating, maintaining, and repairing the Project over the useful life of the Project. (s) Sovereign Immunity. The City either has no immunity from the jurisdiction of any court of competent jurisdiction or from any legal process therein which could be asserted in any action to enforce the obligations of the City under any of the WIFIA Loan Documents to which it is a party or the transactions contemplated hereby or thereby, including the obligations of the City hereunder and thereunder, or, to the extent that the City has such immunity, the City has waived such immunity pursuant to Section 18(m) (Immunity). (t) Accuracy of Representations and Warranties. The representations, warranties and certifications of the City set forth in this Agreement and the other WIFIA Loan Documents are true, correct, and complete, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties shall be true, correct, and complete as of such earlier date).

Section 14. Representations and Warranties of WIFIA Lender. The WIFIA Lender represents and warrants that:
(a) Power and Authority. The WIFIA Lender has all requisite power and authority to make the WIFIA Loan and to perform all transactions contemplated by the WIFIA Loan Documents to which it is a party.
(b) Due Execution; Enforceability. The WIFIA Loan Documents to which it is a party have been duly authorized, executed and delivered by the WIFIA Lender, and are legally valid and binding agreements of the WIFIA Lender, enforceable in accordance with their terms.
(c) Officers’ Authorization. The officers of the WIFIA Lender executing each of the WIFIA Loan Documents to which the WIFIA Lender is a party are duly and properly in office and fully authorized to execute the same on behalf of the WIFIA Lender.

ARTICLE V

COVENANTS
Section 15. Affirmative Covenants of the Borrower. The Borrower covenants and agrees as follows until the date the WIFIA Bond and all of the obligations of the Borrower under this Agreement (other than contingent indemnity obligations) are irrevocably paid in full in immediately available funds and the WIFIA Lender no longer has any commitment to make Disbursements to the Borrower, unless the WIFIA Lender waives compliance in writing. (a) [Reserved].
495
39 1378234.02D-WASSR02A - MSW
(b) Securing Liens. The Borrower shall at any and all times, to the extent permitted by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable in connection with assuring, conveying, granting, assigning, securing and confirming the Liens on the Pledged Collateral (whether now existing or hereafter arising) granted to the WIFIA Lender for its benefit pursuant to the WIFIA Loan Documents, or intended so to be granted pursuant to the WIFIA Loan Documents, or which the Borrower may become bound to grant. The Borrower shall at all times maintain the Pledged Collateral free and clear of any Lien that has priority over, or equal rank with, the Liens created by the Indenture Documents, and all organizational, regulatory or other necessary action on the part of the Borrower to that end shall be duly and validly taken at all times. The Borrower shall at all times, to the extent permitted by law, defend, preserve and protect the Liens on the Pledged Collateral granted pursuant to the WIFIA Loan Documents and for the benefit of the WIFIA Lender under the WIFIA Loan Documents against all claims and demands of all Persons whomsoever. (c) Use of Proceeds. The Borrower shall use the proceeds of the WIFIA Loan solely for purposes permitted by applicable law, this Agreement and the other WIFIA Loan Documents.
(d) Verification Requirements.
(i) [Reserved]
(ii) The Borrower shall comply with Subpart C of 2 C.F.R. Part 180, as supplemented by Subpart C of 2 C.F.R. Part 1532 (relating to debarment), including the verification requirements set forth in 2 C.F.R. §§ 180.300 and 180.320, and shall include in its contracts with respect to the Project similar terms or requirements for compliance. (e) [Reserved].
(f) [Reserved]
(g) Maintain Legal Structure. The Borrower shall maintain its existence as a Legal Entity organized and existing under its Organizational Documents and the laws of the State.
(h) Water System Accounts; Permitted Investments.
(i) The Borrower shall maintain the Revenue Account in accordance with the terms hereof and the Indenture Documents. All Revenues received shall be deposited into the Revenue Account in accordance with Section 4.02(a) of the Indenture.

The Borrower shall not apply any portion of the Revenues in contravention of this Agreement or the Indenture Documents. Any funds then on deposit in the WIFIA Debt Service Account (if applicable) shall only be used for payments of WIFIA Debt Service by the Borrower (or Trustee, if applicable, as directed by the Borrower) in accordance with the WIFIA Loan Documents.
496
40 1378234.02D-WASSR02A - MSW
(ii) If a WIFIA Debt Service Reserve Requirement is applicable as set forth in Part D of Schedule I (WIFIA Loan Specific Terms), the Borrower shall maintain the WIFIA Debt Service Reserve Account in an amount equal to the WIFIA Debt Service Reserve Requirement in accordance with the provisions of the applicable Indenture Documents, including Section 3.03 of the Indenture.
(iii) Amounts on deposit in the Water System Accounts shall be held uninvested or invested in Permitted Investments. Permitted Investments must mature or be redeemable at the election of the holder at such times as may be necessary to ensure that funds will be available within the applicable account to be applied towards the purpose for which the applicable account has been established. (i) Compliance with Laws.
(i) The Borrower shall comply with all applicable laws, rules, regulations and requirements, including all applicable Sanctions Laws. (ii) To ensure such compliance, the Borrower shall include in all contracts to which it is a party with respect to the Project (A) the contract clauses relating to applicable federal requirements (such as Davis-Bacon and Equal Employment Opportunity) and (B) requirements that its contractors (1) shall comply with all applicable laws, rules, regulations, and requirements set forth in this Section 14(i) and follow applicable federal guidance and (2) incorporate in all subcontracts (and cause all subcontractors to include in lower tier subcontracts) such terms and conditions as are required to be incorporated therein by any applicable laws, rules, regulations and requirements set forth in this Section 14(i).
(j) Material Obligations.
(i) The Borrower shall pay its material obligations promptly and in accordance with their terms.
(ii) The Borrower shall pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon it or upon the Pledged Collateral, before the same become delinquent or in default; provided that such payment and discharge shall not be required with respect to any such tax, assessment, charge, levy, claim or Lien so long as the validity or amount thereof shall be contested by the Borrower in good faith by appropriate proceedings and so long as the Borrower shall have set aside adequate reserves with respect thereto in accordance with and to the extent required by GAAP, applied on a consistent basis.
(iii) The Borrower will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a Lien on the Pledged Collateral.
(k) SAM Registration and UEI Number. The Borrower shall obtain and maintain, on or prior to the Effective Date through (i) the Final Disbursement Date, an active SAM registration status and (ii) the Final Maturity Date, a UEI Number. 497
41 1378234.02D-WASSR02A - MSW
(l) [Reserved]
(m) Immunity. To the fullest extent permitted by applicable law, the Borrower agrees that it will not assert any immunity (and hereby waives any such immunity) it may have as a governmental entity from lawsuits, other actions and claims, and any judgments with respect to the enforcement of any of the obligations of the Borrower under this Agreement or any other WIFIA Loan Document.
(n) Accounting and Audit Procedures.
(i) The Borrower shall establish fiscal controls and accounting procedures sufficient to assure proper accounting for all (A) Revenues, operating expenses, capital expenses, depreciation, reserves, debt issued and outstanding and debt payments and (B) Project-related costs, Requisitions submitted, WIFIA Loan proceeds received, payments made by the Borrower with respect to the Project, and other sources of funding for the Project (including amounts paid from such sources for Project costs so that audits may be performed to ensure compliance with and enforcement of this Agreement). The Borrower shall use accounting, audit and fiscal procedures conforming to GAAP, including, with respect to the WIFIA Loan, accounting of principal and interest payments, disbursements, prepayments and calculation of interest and principal amounts Outstanding.
(ii) The Borrower shall have a single or program-specific audit conducted in accordance with 2 C.F.R. Part 200 Subpart F and 31 U.S.C. § 7502 from (and including) the first Borrower Fiscal Year in which a Disbursement is made under this Agreement and annually thereafter to the extent required by applicable law, except in all cases to the extent biennial audits are permitted for the Borrower pursuant to 2 C.F.R. § 200.504 and 31 U.S.C. § 7502(b). Upon reasonable notice, the Borrower shall cooperate fully in the conduct of any periodic or compliance audits conducted by the WIFIA Lender, or designees thereof, pursuant to 40 C.F.R. Part 35, 31 U.S.C. § 7503(b), or 31 U.S.C. § 6503(h) and shall provide full access to any books, documents, papers or other records that are pertinent to the Project or the WIFIA Loan, to the WIFIA Lender, or the designee thereof, for any such project or programmatic audit. (o) Access; Records.
(i) So long as the WIFIA Loan or any portion thereof shall remain outstanding and until five (5) years after the WIFIA Loan shall have been paid in full, the WIFIA Lender shall have the right, upon reasonable prior notice, to visit, monitor and/or inspect any portion of the Project and its operations, to examine books of account and records of the Borrower relating to the Project, to make copies and extracts therefrom at the Borrower’s expense, and to discuss the Borrower’s affairs, finances and accounts relating to the Project with, and to be advised as to the same by, its officers and employees and its independent public accountants (and by this provision the Borrower irrevocably authorizes its independent public accountants to discuss with the WIFIA Lender the affairs, finances and accounts of the Borrower, whether or not any representative of the Borrower is present, it being understood that nothing contained in 498
42 1378234.02D-WASSR02A - MSW
this Section 14(o) is intended to confer any right to exclude any such representative from such discussions), all at such reasonable times and intervals as the WIFIA Lender may request. The Borrower agrees to pay all out-of-pocket expenses incurred by the WIFIA Lender in connection with the WIFIA Lender’s exercise of its rights under this Section 14(o) at any time when an Event of Default shall have occurred and be continuing. (ii) The Borrower shall maintain and retain all pertinent files relating to the Project and the WIFIA Loan, as may be necessary for the WIFIA Lender to facilitate an effective and accurate audit and performance evaluation of the Project, until five (5) years after the later of the date on which (A) all rights and duties under this Agreement and under the WIFIA Bond (including payments) have been fulfilled and any required audits have been performed and (B) any litigation relating to the Project, the WIFIA Loan or this Agreement is finally resolved or, if the WIFIA Lender has reasonable cause to extend such date, a date to be mutually agreed upon by the WIFIA Lender and the Borrower. The Borrower shall provide to the WIFIA Lender in a timely manner all records and documentation relating to the Project that the WIFIA Lender may reasonably request from time to time.
(p) Enforcement of Remedies Under the IPA. The Borrower shall enforce its rights and remedies, including acceleration, under the Installment Purchase Agreement upon the occurrence of an Event of Default by the City under (and as defined in) the Installment Purchase Agreement unless the WIFIA Lender permits a waiver of such rights or remedies pursuant to Section 16(b) (No Lien Extinguishment or Adverse Amendments).

Section 16. Negative Covenants of the Borrower. The Borrower covenants and agrees as follows until the date the WIFIA Bond and all of the Obligations of the Borrower under this Agreement (other than contingent indemnity obligations) are irrevocably paid in full in immediately available funds and the WIFIA Lender no longer has any commitment to make Disbursements to the Borrower, unless the WIFIA Lender waives compliance in writing:
(a) Indebtedness.
(i) Program Requirements. The Borrower may not create, incur or suffer to exist any Obligations (1) the payments with respect to which are payable from Revenues or (2) secured by a Lien on the Pledged Collateral. (b) No Lien Extinguishment or Adverse Amendments. The Borrower shall not, and shall not permit any Person to, without the prior written consent of the WIFIA Lender, (i) amend, modify, terminate, assign, replace or supplement, or permit a waiver of any provision of, the Installment Purchase Agreement, (ii) amend, modify, replace or supplement any Related Document to which the Borrower is a party (other than the WIFIA Installment Purchase Agreement) or permit a waiver of any provision thereof in a manner that could adversely affect the WIFIA Lender or could reasonably be expected to result in a Material Adverse Effect, or (iii) terminate, assign or replace any Related Document to which the Borrower is a party (other than (A) the WIFIA Installment Purchase Agreement and (B) transaction documents relating to Subordinate Obligations) in a manner that could adversely affect the WIFIA Lender or could reasonably be expected to have a Material Adverse Effect. 499
43 1378234.02D-WASSR02A - MSW
(c) No Prohibited Liens. Except for Permitted Liens described in clause (a) of the definition thereof, the Borrower shall not create, incur, assume or permit to exist any Lien on the Pledged Collateral, the Revenues, or the Borrower’s respective rights in any of the foregoing and the Pledged Collateral will be free and clear of any Lien that is of equal rank with or senior to the pledge of the Borrower created under the Indenture Documents for the benefit of the WIFIA Lender.
(d) Restricted Payments and Transfers. The Borrower shall not permit Revenues or other assets of the Water System, or any funds in any accounts held under the Indenture or in any other fund or account held by or on behalf of the Borrower, to be paid or transferred or otherwise applied for purposes other than payment of WIFIA Debt Service and other amounts due and payable by the Borrower under the WIFIA Loan Documents. (e) No Prohibited Sale, Lease or Assignment. The Borrower shall not sell, lease or assign its rights in and to the Pledged Collateral. (f) Mergers and Acquisitions. The Borrower shall not, and shall not agree to, reorganize, consolidate with or merge into another Person unless (i) such reorganization, merger or consolidation is with or into another entity established by State law and such reorganization, merger or consolidation is permitted by State law, and in each case, does not adversely affect or impair to any extent or in any manner (A) the Revenues or other elements of the Pledged Collateral or (B) the availability of the Revenues for the payment and security of the obligations of the Borrower under this Agreement; and (ii) the Borrower provides to the WIFIA Lender notice of such reorganization, consolidation or merger in accordance with Part E of Schedule V (Reporting Requirements) and such other information concerning such reorganization, consolidation or merger as shall have been reasonably requested by the WIFIA Lender. (g) Hedging. Other than interest rate hedging transactions permitted under the Indenture, the Borrower shall not enter into any swap or hedging transaction, including any such transaction that is speculative or creates extraordinary leverage or risk, without the prior written consent of the WIFIA Lender.

Section 17. Reporting Requirements. The Borrower agrees to comply with each of the reporting requirements set out in Schedule V (Reporting Requirements), unless otherwise agreed or waived by the WIFIA Lender in writing.

Section 18. Affirmative Covenants of the City. The City covenants and agrees as follows until the date the WIFIA Bond and all of the obligations of the City under this Agreement (other than contingent indemnity obligations) are irrevocably paid in full in immediately available funds and the WIFIA Lender no longer has any commitment to make Disbursements to the City, unless the WIFIA Lender waives compliance in writing:
(a) Rate Covenant. (i) The City shall comply with all requirements and conditions specified in the Rate Covenant.
(ii) If:
500
44 1378234.02D-WASSR02A - MSW
(A) the forecast furnished by the City in the most recent Updated Financial Model/Plan delivered by the City pursuant to Part A of Schedule V (Reporting Requirements) demonstrates that projected Net Water System Revenues may be inadequate to satisfy the Rate Covenant for any City Fiscal Year during the Forecast Period, the City shall propose a remedial course of action, which plan shall demonstrate to the WIFIA Lender’s satisfaction that such plan will generate an equivalent or greater increase to the Net Water System Revenues so as to satisfy the Rate Covenant; and/or
(B) the City fails to satisfy the Rate Covenant for the most recently ended City Fiscal Year, the City shall (A) within thirty (30) days after request by the WIFIA Lender, engage the Technical and Rate Consultant to review and analyze the operations of the Water System and recommend actions regarding revising the rates or changing the methods of operations, or any other actions to increase the Net Water System Revenues so as to satisfy the Rate Covenant, (B) cause the Technical and Rate Consultant to issue its report, including any such recommended actions, no later than ninety (90) days following such engagement, and (C) either, within sixty (60) days following the issuance of the Technical and Rate Consultant’s report, (1) implement the Technical and Rate Consultant’s recommendations or (2) undertake an alternative course of action after demonstrating to the WIFIA Lender’s satisfaction that an alternative plan will generate an equivalent or greater increase to the Net Water System Revenues so as to satisfy the Rate Covenant. (b) Securing Liens. The City shall at any and all times, to the extent permitted by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable in connection with assuring, conveying, granting, assigning, securing and confirming the Liens on the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, (whether now existing or hereafter arising) granted to the Borrower for its benefit pursuant to the Installment Purchase Agreement, or intended so to be granted pursuant to the Installment Purchase Agreement, or which the City may become bound to grant. The City shall at all times maintain the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, free and clear of any Lien that has priority over the Liens created by the Installment Purchase Agreement, other than Permitted Liens described in clause (a) of the definition thereof, and all organizational, regulatory or other necessary action on the part of the City to that end shall be duly and validly taken at all times. The City shall at all times maintain the Net Water System Revenues, including Net Water System Revenues in the Water System Revenue Fund, free and clear of any Lien that is of equal rank with the Liens created by the Installment Purchase Agreement, other than Permitted Liens created in respect of City Bonds and City Contracts that are permitted hereunder, and all organizational, regulator or other necessary action on the part of the City to that end shall be duly and validly taken at all times.

Oxnard City CouncilMay 3, 2022

Oxnard City Council
May 3, 2022