Installment Sale Agreement — San Jacinto City Council, April 1, 2025

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INSTALLMENT PURCHASE AGREEMENT
Dated as of April 1, 2025
by and between

CITY OF SAN JACINTO PUBLIC FINANCING AUTHORITY
and

CITY OF SAN JACINTO
Relating To

CITY OF SAN JACINTO
$9,097,000
2025 INSTALLMENT FINANCING
(WATER SYSTEM IMPROVEMENTS)
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TABLE OF CONTENTS
Page
-iARTICLE 1

DEFINITIONS AND EXHIBITS
Section 1.1. Definitions.............................................................................................................. 1 Section 1.2. Liability of City Limited to Net Revenues ............................................................ 7 Section 1.3. Benefits of Installment Purchase Agreement Limited to Parties........................... 7 Section 1.4. Successor Is Deemed Included in all References to Predecessor .......................... 8 Section 1.5. Waiver of Personal Liability.................................................................................. 8 Section 1.6. Article and Section Headings, Gender and References......................................... 8 Section 1.7. Partial Invalidity..................................................................................................... 8 Section 1.8. Exhibits.................................................................................................................. 8 ARTICLE 2

REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations, Covenants and Warranties of the City........................................ 8 Section 2.2. Representations, Covenants and Warranties of the Authority ............................. 12 ARTICLE 3

TERMS OF AGREEMENT
Section 3.1. Purchase of Project and City; Risk of Loss. ........................................................ 12 Section 3.2. Security Interest ................................................................................................... 14 Section 3.3. Repayment of the Project by the City; Event of Taxability................................. 14 Section 3.4. Substitution of the Project.................................................................................... 15 Section 3.5. Term..................................................................................................................... 15 Section 3.6. Payments Generally ............................................................................................. 15 Section 3.7. Taxes.................................................................................................................... 16 Section 3.8. Conditions Precedent. .......................................................................................... 16 Section 3.9. Nature of City’s Obligations................................................................................ 17 Section 3.10. Revenue Fund; Pledge of Net Revenues.............................................................. 20 Section 3.11. Project Fund......................................................................................................... 21 ARTICLE 4

COVENANTS OF THE CITY
Section 4.1. Reports and Notices. ............................................................................................ 21 Section 4.2. Existence as City.................................................................................................. 22 Section 4.3. Change in Business.............................................................................................. 22 Section 4.4. Liens against the System...................................................................................... 22 Section 4.5. Insurance .............................................................................................................. 23 Section 4.6. System Maintenance ............................................................................................ 24 Section 4.7. Against Sale or Other Disposition of the System ................................................ 24 Section 4.8. Eminent Domain Proceeds................................................................................... 24 Section 4.9. Amounts of Rates, Fees and Charges; Financial Covenants................................ 25 Section 4.10. Enforcement of and Performance Under Parity Obligations............................... 26 24438.70027\43315153.4

TABLE OF CONTENTS
(continued)
Page
-iiSection 4.11. Collection of Charges, Fees and Rates ................................................................ 26 Section 4.12. Against Encumbrances......................................................................................... 26 Section 4.13. Execution of Parity Obligations........................................................................... 27 Section 4.14. Conditions for Entering into Parity Obligations.................................................. 27 Section 4.15. Tax Covenants. .................................................................................................... 28 Section 4.16. Reconstruction of System; Application of Insurance Proceeds........................... 28 Section 4.17. Records and Accounts.......................................................................................... 29 Section 4.18. Collection of Charges .......................................................................................... 29 Section 4.19. Against Competing Utility................................................................................... 29 Section 4.20. Compliance with this Installment Purchase Agreement ...................................... 29 Section 4.21. Observance of Laws and Regulations.................................................................. 30 Section 4.22. Budget.................................................................................................................. 30 Section 4.23. Inspection............................................................................................................. 30 Section 4.24. Further Assurances and Other Information.......................................................... 30 Section 4.25. Delivery of Original Documents.......................................................................... 30 Section 4.26. No Public Registration......................................................................................... 30 Section 4.27. Indemnity for Taxes............................................................................................. 31 Section 4.28. ERISA.................................................................................................................. 31 ARTICLE 5

EVENTS OF DEFAULT AND REMEDIES
Section 5.1. Events of Default and Acceleration of Installment Purchase Agreement............ 31 Section 5.2. Application of Funds Upon Acceleration or Event.............................................. 34 Section 5.3. Other Remedies of the Authority......................................................................... 36 Section 5.4. No Remedy Exclusive.......................................................................................... 36 Section 5.5. Agreement to Pay Attorneys’ Fees and Expenses ............................................... 36 Section 5.6. No Additional Waiver Implied by One Waiver................................................... 36 Section 5.7. Prosecution and Defense of Suits ........................................................................ 37 ARTICLE 6

PREPAYMENT OF AGREEMENT
Section 6.1. Optional Prepayment ........................................................................................... 37 Section 6.2. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain................................................................................................................. 37 Section 6.3. Effect of Prepayment ........................................................................................... 38 ARTICLE 7

MISCELLANEOUS
Section 7.1. Notices ................................................................................................................. 38 Section 7.2. Assignment by the Authority............................................................................... 39 Section 7.3. Assignment by the City........................................................................................ 40 Section 7.4. Amendment of this Installment Purchase Agreement ......................................... 40 24438.70027\43315153.4

TABLE OF CONTENTS
(continued)
Page
-iiiSection 7.5. Binding Effect...................................................................................................... 40 Section 7.6. Severability .......................................................................................................... 41 Section 7.7. Net-Net-Net Parity Obligation............................................................................. 41 Section 7.8. Further Assurances and Corrective Instruments.................................................. 41 Section 7.9. Execution in Counterparts.................................................................................... 41 Section 7.10. Applicable Law and Venue.................................................................................. 41 Section 7.11. Captions............................................................................................................... 41 Section 7.12. USA Patriot Act Notice ....................................................................................... 41 Section 7.13. Costs and Expenses.............................................................................................. 42 Section 7.14. Indemnification .................................................................................................... 42 Section 7.15. Waiver of Jury Trial............................................................................................. 42 EXHIBIT A – Description of Project ........................................................................................A-1 EXHIBIT B – Schedule of Installment Payments .....................................................................B-1 EXHIBIT C – Form of Investor Letter ......................................................................................C-1 EXHIBIT D – Form of Final Acceptance Certificate................................................................D-1 EXHIBIT E – Form of Notice of Acknowledgment of Assignment ............................................... 24438.70027\43315153.4
1 INSTALLMENT PURCHASE AGREEMENT
THIS INSTALLMENT PURCHASE AGREEMENT (this “Installment Purchase Agreement”), dated for convenience as of April 1, 2025, is by and between City of San Jacinto Public Financing Authority, a joint powers authority duly organized and existing under the laws of the State of California (the “Authority”), and the City of San Jacinto (the “City”), a municipal corporation duly organized and existing under the laws of the State of California; WITNESSETH:

WHEREAS, the City desires to enter into this Installment Purchase Agreement for the purpose of financing the acquisition, design and construction of certain improvements to the City’s water system (the “System”) as identified in Exhibit A attached hereto and incorporated herein by reference (the “Project”); and
WHEREAS, in order to finance the Project, the Authority has agreed to sell the Project to the City as provided herein for $9,097,000 and the City will acquire the Project from the Authority and obligate itself to make installment payments in the amounts and on the dates set forth in Exhibit B attached hereto (the “Installment Payments”); and
NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS AND EXHIBITS
SECTION 1.1. Definitions. All capitalized terms used in this Section 1.1 shall for all purposes of this Installment Purchase Agreement have the meanings herein specified or as hereinafter defined.
“2015 Installment Sale Contract” means the Installment Purchase Contract dated as of July 7, 2015 by and between the City and Municipal Finance Corporation, as such agreement was originally executed and as it may from time to time be amended or supplemented. “Acquisition Amount” means $9,097,000.
“Acquisition Period” means the period ending five (5) business days prior to May 1, 2028, (or such later date as may be mutually agreed upon by the Assignee and the City). “Annual Debt Service” means, for any Fiscal Year, the sum of (1) the Installment Payments coming due in such Fiscal Year, and (2) the principal and interest coming due and payable in such Fiscal Year on any Parity Obligations, including the principal amount coming due and payable by operation of mandatory sinking fund redemption. There shall be excluded from such calculation any principal of and interest on the Installment Payments and any Parity Obligations which have 24438.70027\43315153.4
2 been defeased or discharged, or for the payment of which a security deposit has been posted. In determining the debt service on Parity Obligations for which interest is calculated at a variable interest rates, such Parity Obligation shall be assumed to bear interest at a fixed interest rate equal to the highest variable rate borne over the preceding 24 months by outstanding variable rate debt of the City, or, if no such variable rate debt is at the time outstanding, by variable rate debt for which the interest rate is computed by reference to an index comparable to that to be utilized in determining the interest rate for the Parity Obligation proposed to be issued. With respect to any Parity Obligation that is a tax incentive bond (such as a Build America Bond), such interest shall be equal to the net interest paid by the City after taking into account any anticipated payments to be received by or on behalf of the City from the United States of America. “Assignee” means Banc of America Public Capital Corp, and its successors and assigns. “Assignment Agreement” means the Assignment Agreement dated April 1, 2025 by and between the Authority and the Assignee, as supplemented, amended, modified or restated from time to time.
“Authorized Investments” means any of the following, but only to the extent that the same are acquired at fair market value, which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein:
(a) direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America; (b) obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including: (i) Export-Import Authority; (ii) Farm Credit System Financial Assistance Corporation, (iii) Farmers Home Administration; (iv) General Services Administration; (v) U.S. Maritime Administration; (vi) Small Business Administration; (vii) Government National Mortgage Association (GNMA); (viii) U.S. Department of Housing & Urban Development (PHA’s); (ix) Federal Housing Administration and (x) Federal Financing Authority; (c) senior debt obligations rated “Aaa” by Moody’s and “AAA” by S&P issued by the Federal National Mortgage Association or the Federal Home Financing Mortgage Corporation, senior debt obligations of other government-sponsored agencies, obligations of the Resolution Funding Corporation (REFCORP) and senior debt obligations of other government sponsored agencies;
(d) U.S. dollar denominated deposit accounts, federal funds and banker’s acceptances with domestic commercial banks (including the Authority and its affiliates) which have a rating on their short term certificates of deposit on the date of purchase of “P-1” by Moody’s and “A-1” or “A-1+” by S&P and maturing no more than 360 days after the date of purchase, provided that ratings on holding companies are not considered as the rating of the bank;
(e) commercial paper which is rated at the time of purchase in the single highest classification, “P-1” by Moody’s and “A-1+” by S&P, and which matures not more than 270 days after the date of purchase;
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3 (f) pre-refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) which are rated, based upon an irrevocable escrow account or fund (the “escrow”), in the highest rating category of Moody’s and S&P or any successors thereto; or (ii)(A) which are fully secured as to principal and interest and prepayment premium or redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (a) above, which escrow may be applied only to the payment of such principal of and interest and prepayment premium or redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified prepayment date or redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (B) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and prepayment premium or redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates thereof or on the prepayment date or redemption date or dates specified in the irrevocable instructions referred to above, as appropriate;
(g) the Local Agency Investment Fund maintained by the State of California; and
(h) the California Asset Management Program.
“Business Day” means any day other than a Saturday or Sunday or a day on which (i) banks located in Denver, Colorado or Los Angeles, California are not required or authorized to remain closed, and (ii) the New York Stock Exchange is not closed; and (iii) the Authority and Federal Reserve Banks are not closed.
“City” means City of San Jacinto, a municipal corporation duly organized and existing under the laws of the State of California.
“Closing Date” means April 10, 2025.
“Contract(s)” means any instrument pursuant to which a Parity Obligation is issued. “Contract Payment Date” means any date on which Contract Payments are scheduled to be paid by the City under and pursuant to the Parity Obligations and includes each Installment Payment Date under this Installment Purchase Agreement.. “Contract Payments” means the payments scheduled to be paid by the City under and Contract and pursuant to the Parity Obligations, which payments are secured by a pledge of Net Revenues on a parity with this Installment Purchase Agreement. “Contract Rate” means the rate identified as such in the Schedule of Installment Payments. “Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City and related to the authorization, execution, sale and delivery of this 24438.70027\43315153.4
4 Installment Purchase Agreement any Parity Obligations, including but not limited to any costs, fees and charges for preparation and execution of this Installment Purchase Agreement or any Parity Obligations and any other cost, charge or fee incurred in connection with the delivery of this Installment Purchase Agreement or such Parity Obligations. “Default” means any event or circumstance which, passage of time or the giving of notice or, following the applicable cure period or any of the foregoing, would constitute an Event of Default.
“Escrow Account” means the Escrow Account established and held pursuant to the Escrow Agreement.
“Escrow Agent” means Argent Institutional Trust Company, a Florida trust company, and any successor escrow agent.
“Escrow Agreement” means the Escrow and Account Control Agreement dated April 1, 2025 by and among the Authority, the City, the Assignee and the Escrow Agent pursuant to which the Project Fund will be held.
“Event of Default” means any of the events of default as defined in Section 5.1. “Federal Securities” means any direct general non-callable obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations the timely payment of principal of and interest on which are directly guaranteed by the United States of America. “Finance Director” means the City’s finance director.
“Financing Documents” means this Installment Purchase Agreement, the Assignment Agreement, the Escrow Agreement and any and all other documents from time to time evidencing, securing, or delivered to the Authority in connection with, this Installment Purchase Agreement. “Fiscal Year” means each twelve-month period during the Term of this Installment Purchase Agreement, commencing on July 1 in any calendar year and ending on June 30 in the next succeeding calendar year, or any other twelve-month period selected by the City as its fiscal year period.
“Generally Accepted Accounting Principles” means United States generally accepted accounting principles, or those required of the regulatory agency having jurisdiction over the City, including but not limited to the Government Accounting Standard Board, if applicable, or such other commission or body as may be agreeable to the Assignee. “Governmental Authority” means any governmental or quasi-governmental entity, including any court, department, commission, board, bureau, agency, administration, central bank, service, district or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government, or any arbitrator, mediator or other person with authority to bind a party at law.
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5 “Independent Certified Public Accountant” means an independent certified public accountant or any firm of certified public accountants appointed by the City. “Installment Payment Date” means each date upon which Installment Payments are due and payable as set forth on Exhibit B hereto.
“Installment Payments” means all payments required to be paid by the City on any date under this Installment Purchase Agreement and pursuant to Section 3.3 and 3.6, including any prepayment thereof pursuant to Section 6.2 or 6.3 and includes all amounts as specified in the Schedule of Installment Payments, consisting of a principal component and an interest component, and in all cases sufficient to repay such principal component and interest thereon at the applicable Contract Rate (or Taxable Rate if then in effect).
“Installment Purchase Agreement” means this Installment Purchase Agreement, dated as of April 1, 2025, between the Authority and the City.
“Maintenance and Operation Costs” means the reasonable and necessary costs and expenses paid by the City for maintaining and operating the System, including but not limited to the reasonable expenses of management and repair and other costs and expenses necessary to maintain and preserve the System in good repair and working order, and including but not limited to administrative costs of the City attributable to the System and the financing thereof, including salaries and wages of employees, payment to employees
“Material Adverse Change” means an event or occurrence which adversely affects in a material manner (a) the assets, liabilities, condition (financial or otherwise), business, facilities or operations of the City or the System, (b) the ability of the City to carry out its business in the manner conducted as of the date of this Installment Purchase Agreement or Parity Obligations or to meet or perform its obligations under this Installment Purchase Agreement, any Financing Document or Parity Obligations on a timely basis, (c) the validity or enforceability of this Installment Purchase Agreement or Parity Obligations, or (d) the exclusion of the interest component of the Installment Payments or Parity Obligations, as applicable, from gross income for federal income tax purposes or the exemption of such interest for state income tax purposes. “Maximum Annual Debt Service means, as of the date of any calculation, the maximum sum obtained for the current or any future Fiscal Year during the Term of this Installment Purchase Agreement by totaling the aggregate amount of (1) the Installment Payments coming due in such Fiscal Year, and (2) the principal and interest coming due and payable in such Fiscal Year on any Parity Obligations, including the principal amount coming due and payable by operation of mandatory sinking fund redemption. There shall be excluded from such calculation any principal of and interest on the Installment Payments and any Parity Obligations which have been defeased or discharged, or for the payment of which a security deposit has been posted. In determining the debt service on Parity Obligations for which interest is calculated at a variable interest rates, such Parity Obligation shall be assumed to bear interest at a fixed interest rate equal to the highest variable rate borne over the preceding 24 months by outstanding variable rate debt of the City, or, if no such variable rate debt is at the time outstanding, by variable rate debt for which the interest rate is computed by reference to an index comparable to that to be utilized in determining the interest rate for the Parity Obligation proposed to be issued. With respect to any Parity Obligation 24438.70027\43315153.4
6 that is a tax incentive bond (such as a Build America Bond), such interest shall be equal to the net interest paid by the City after taking into account any anticipated payments to be received by or on behalf of the City from the United States of America. “Net Proceeds” means any insurance proceeds or condemnation award paid with respect to the System, if any, remaining after payment therefrom of all expenses incurred in the collection thereof.
“Net Revenues” means for any period, an amount equal to all of the Revenues received during such period, minus the amount required to pay all Maintenance and Operation Costs becoming payable during such period.
“Parity Obligations” means all other bonds, notes, installment sale agreements, leases, or other obligations of the City, including this Installment Purchase Agreement, payable from and secured by a pledge of and lien upon any of the Net Revenues incurred on a parity with the Installment Payments, issued in accordance with Section 4.14 hereof, including, but not limited to the 2015 Installment Purchase Contract.
“Person” means any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof). “Project” means the equipment, fixtures and other goods and property listed in the Exhibit A hereto and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to this Installment Purchase Agreement. “Project Costs” means the total cost of the Project, including related soft costs such as freight, installation and taxes and other capitalizable costs, and other costs incurred in connection with the acquisition, installation and/or financing of the Project. “Project Fund” means the Escrow Account.
“Resolution of Issuance” means Resolution No. __ adopted on April 1, 2025. “Revenue Fund” means the fund established under Section 3.9 and held by the City for the receipt and deposit of Revenues.
“Revenues” means all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of the System, including, without limiting the generality of the foregoing, (1) all income, rents, rates, fees, charges, business interruption insurance proceeds or other moneys derived by City from the sale, furnishing and supplying of the water 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 System, plus (2) the earnings on and income derived from the investment of such income, rents, rates, fees, charges, or other moneys, including City reserves, plus (3) the proceeds of any stand-by or water availability charges collected by City, but excluding in all cases customer deposits, connection fees, development impact fees or any other deposits or advances subject to refund until such deposits or advances have become the property of City. 24438.70027\43315153.4
7 ”Schedule of Installment Payments” means the schedule set forth in Exhibit B. “Subordinate Obligations” means all obligations of the City that are subordinate in all respects, including priority and payment and enforcement, to the Installment Payments and payments required under Parity Obligations.
“System” means the existing facilities and property owned or operated by the City in connection with the water supply services of the City, together with all extensions thereof and improvements thereto hereafter acquired, constructed or installed by the City. For the avoidance of doubt, the term System is synonymous with the definitions of “Enterprise” under the 2015 Installment Sale Agreement.
“System Obligation” means any long-term obligation of the City payable from and/or secured by (in whole or in part) any of the Revenue Fund (or any portion thereof) or any Revenues (or any portion thereof), including this Installment Purchase Agreement and all other Parity Obligations and Subordinate Obligations.
“Taxable Rate” means, 5.5142%.
“Tax Code” means the Internal Revenue Code of 1986, as amended. Any reference herein to a provision of the Tax Code shall include all applicable temporary and permanent regulations promulgated under the Tax Code.
“Term of this Installment Purchase Agreement” or “Term” means the time during which this Installment Purchase Agreement is in effect, as provided in Section 3.4.

SECTION 1.2. Liability of City Limited to Net Revenues. Notwithstanding anything to the contrary contained in this Installment Purchase Agreement, the City shall not be required to advance any money derived from any source of income other than the Net Revenues, for the payment of the principal of or interest or prepayment premiums, if any, on the Installment Payments or for the performance of any covenants herein contained, nor for the maintenance and operation of the System from any source of income other than the Revenues. The City may, however, advance funds for any such purpose so long as such funds are derived from a source legally available for such purpose without incurring any indebtedness. The Installment Payments and any prepayment premiums upon the prepayment thereof shall be payable exclusively from the Net Revenues only as provided in this Installment Purchase Agreement. The credit of the City is not otherwise pledged for the payment of the Installment Payments or interest thereon. The principal of and interest on the Installment Payments and any prepayment premiums upon the prepayment thereof shall not be payable from or secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or any of its income, receipts, or revenues, except the Net Revenues pledged to the payment thereof as provided in this Installment Purchase Agreement.

SECTION 1.3. Benefits of Installment Purchase Agreement Limited to Parties.

Nothing contained herein, expressed or implied, is intended to give to any person other than the City and the Authority any right, remedy or claim under or pursuant hereto. Any agreement or covenant required herein to be performed by or on behalf of the City shall be for the sole and exclusive benefit of the Authority.
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8 SECTION 1.4. Successor Is Deemed Included in all References to Predecessor.

Whenever the City 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, and all agreements and covenants required hereby to be performed by or on behalf of the City shall be assumed fully by and will bind and inure to the benefit of the successors thereof whether so expressed or not.

SECTION 1.5. Waiver of Personal Liability. No member of the City’s Board of Directors and no officer, agent, or employee of the City, or of any department or agency thereof, shall be individually or personally liable for the payment of the principal of or interest on this Installment Purchase Agreement, but nothing contained herein shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or hereby.

SECTION 1.6. 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. 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 Installment Purchase Agreement as a whole and not to any particular article, section, subdivision or clause hereof.

SECTION 1.7. 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 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; but the Authority shall retain all the rights and benefits accorded to it under any applicable provisions of law.

SECTION 1.8. Exhibits. The following Exhibits are attached to, and by reference made a part of this Installment Purchase Agreement:

Exhibit A: Description of the Project.

Exhibit B: Schedule of Installment Payments.

Exhibit C: Form of Investor Letter to be executed by the Assignee.

ARTICLE 2

REPRESENTATIONS, COVENANTS AND WARRANTIES
SECTION 2.1. Representations, Covenants and Warranties of the City. The City represents, covenants and warrants to the Authority as follows:
(a) Installment Purchase Agreement. Each representation and warranty and all information set forth in this Installment Purchase Agreement, each other Financing Document 24438.70027\43315153.4
9 and/or any other document submitted in connection with, or to induce the Authority to enter into this Installment Purchase Agreement is correct in all material respects as of the Closing Date. (b) Due Organization and Existence. The City is a municipal corporation and political subdivision of the State of California, duly organized and existing under the laws of the State of California, with full power and authority to enter into this Installment Purchase Agreement and each other Financing Document and conduct its business. (c) Authorization. The laws of the State of California authorize the City to enter into this Installment Purchase Agreement and each other Financing Document and to enter into the transactions contemplated hereby and thereby, and to carry out its obligations under this Installment Purchase Agreement and each other Financing Document and the Board of Directors of the City has duly authorized the execution and delivery of this Installment Purchase Agreement and each other Financing Document.
(d) Conflicting Agreements. Neither the execution and delivery of the this Installment Purchase Agreement or any other Financing Document nor the fulfillment of or compliance with the terms and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the City is now a party or by which the City or any of its property is bound, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrances whatsoever upon any of the property or assets of the City, other than as set forth herein. (e) Consents and Approvals. All consents, approvals, authorizations, orders, licenses or permits of any Governmental Authority, legislative body, board, agency or commission having jurisdiction of the matter, that are required for the due authorization by, or that would constitute a condition precedent to or the absence of which would materially adversely affect the making or accepting of this Installment Purchase Agreement and the execution, delivery of and performance of any Financing Document by the City have been duly obtained (except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of this Installment Purchase Agreement, as to which no representation is made).
(f) Budgets; Full Disclosure. All budgets, projections, feasibility studies, and other documentation submitted by the City to the Authority in connection with, or to induce the Authority to enter into, this Installment Purchase Agreement and the other Financing Documents to which it is a party are based upon assumptions that are true and correct, and as of the Closing Date, no fact has come to light, and no event has occurred, that would cause any assumption made therein to be misleading or untrue. Neither this Installment Purchase Agreement or any other Financing Document nor other certificate, statement, agreement, or document furnished to the Authority in connection with this Installment Purchase Agreement or any other Financing Document (a) contains any untrue statement of a material fact, or (b) fails to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. The City is not aware of any Material Adverse Change that has not been disclosed in writing to the Authority. 24438.70027\43315153.4
10 (g) Accurate Financial Information. Each submission of financial information or documents relating to the City will constitute a representation and warranty by the City that such information and documents (a) are true and accurate in all material respects, and (b) do not fail to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. (h) System Condition. The System reasonably meets present demand in all material respects, is constructed in a good and professional manner, is in good working order and condition, and complies in all material respects with all applicable law. (i) Rate Matters. The City’s rates for the provision of water have been approved, if applicable, by any and all necessary governmental regulatory authorities, including, without limitation, each public service commission or public utilities commission that may have jurisdiction over the operations and rates of the City. Further, to the City’s actual knowledge there is no pending or threatened proceeding before any Governmental Authority, the objective or result of which is or could be to materially reduce or otherwise materially adversely change any of the City’s rates for the provision of water services, or otherwise have a material adverse effect on the condition, financial or otherwise, operations, properties, or business of the System. (j) Litigation. There is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court, government agency, public board or body, is pending for which the City has been served or, to the City’s actual current knowledge, threatened against the City: (i) in any way affecting the existence of the City or in any way challenging the respective powers of the several offices or the titles of the officials of the City to such offices; (ii) affecting or seeking to prohibit, restrain or enjoin the making, execution or delivery of this Installment Purchase Agreement or the other Financing Documents or the application of the proceeds of this Installment Purchase Agreement or the other Financing Documents; (iii) in any way contesting or affecting, as to the City, the validity or enforceability of this Installment Purchase Agreement or the other Financing Documents; (iv) in any way contesting the powers of the City or its authority with respect to the adoption of Resolution of Issuance, or the execution and delivery of this Installment Purchase Agreement or the other Financing Documents; or (v) in any way contesting or challenging the consummation of the transactions contemplated hereby or thereby or that might materially adversely affect the ability of the City to perform and satisfy its obligations under this Installment Purchase Agreement or the other Financing Documents; nor to the best of the City’s knowledge is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the proceedings authorizing this Installment Purchase Agreement or the other Financing Documents or the performance by the City of its obligations hereunder or thereunder, or the authorization, execution, delivery or performance by the City of this Installment Purchase Agreement or the other Financing Documents.
(k) Valid and Binding Obligation. This Installment Purchase Agreement and each of the Financing Documents is a valid and binding obligation of the City enforceable in accordance with its terms.
(l) Pledge and Other Liens. The pledge in Section 3.9(b) of this Installment Purchase Agreement constitutes a lien on and a pledge of all Net Revenues and there are no other liens on 24438.70027\43315153.4
11 the Net Revenues as of the Closing Date except those in favor of the 2015 Installment Sale Agreement on a pari passu basis with this Installment Purchase Agreement. (m) Due Execution. The City has duly authorized and executed this Installment Purchase Agreement and the other Financing Documents in accordance with the laws of the State. (n) No Default Event of Non-Appropriation. The City is not in default and has not failed to appropriate funds required under the terms, conditions or provisions of any agreement or instrument to which the City has issued debt in the past ten years. (o) Outstanding Parity Obligations. The City has not issued or incurred any obligations which are currently outstanding having any priority in payment out of the Revenues or the Net Revenues over the payment of the Installment Payments as provided herein. As of the date of this Installment Purchase Agreement, the 2015 Installment Sale Agreement constitutes the only outstanding Parity Obligations. Other than the lien granted to the 2015 Installment Sale Agreement on a pari passu basis with this Installment Purchase Agreement, the City has not granted any lien in the Net Revenues or the Project that would be senior in priority to, or pari passu with, the first priority lien granted to the Authority on the Net Revenues and the Project under this Installment Purchase Agreement.
(p) Project Representations.
i. The City has complied and will comply with such procurement and public bidding requirements as may be applicable to the acquisition and construction by the City of the Project.
ii. During the Term, the Project will be used by the City only for the purpose of performing essential governmental or proprietary functions of the City consistent with the permissible scope of the City’s authority. The City does not intend to sell or otherwise dispose of the Project or any interest therein prior to the last Installment Payment scheduled to be paid hereunder.
iii. The City has an immediate need for the Project and expects to make immediate use of the Project. The City’s need for the Project is not temporary and the City does not expect the need for any item of the Project to diminish during the Term. iv. The City is the fee owner of the real estate where the Project is and will be located (the “Real Property”) and has good and marketable title thereto, and there exists no mortgage, pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on or with respect to such Real Property. In the event any lien, encumbrance, restriction, asserted encumbrance, claim, dispute or other issue exists or arises with respect to the City’s legal title to or valid and marketable, beneficial use and enjoyment of the Real Property or impairs or adversely impacts Authority’s right, title or interest in the Project or any of Authority’s rights or remedies under this Installment Purchase Agreement with respect to the Project (each of the foregoing referred to as a “Real Property Issue”), City will take all steps necessary to promptly quiet, resolve and/or eliminate such Real Property Issue to the satisfaction of Authority and ensure that City and Authority have adequate access to and use of (including beneficial use and enjoyment of) the Real Property for all 24438.70027\43315153.4
12 purposes of the Project contemplated herein and City shall ensure that its fee interest in the Real Property and Authority’s right, title or interest in the Project and rights or remedies under this Installment Purchase Agreement with respect to the Project remain free and clear of Real Property Issues.

SECTION 2.2. Representations, Covenants and Warranties of the Authority. The Authority represents, covenants and warrants to the City as follows:
(a) Due Organization and Existence. The Authority is a joint powers authority organized and existing under the laws of the State of California. (b) Authorization. The Authority is authorized to enter into this Installment Purchase Agreement and each other Financing Document to which it is a party and the transactions contemplated hereby, and the Authority has duly authorized the execution and delivery of this Installment Purchase Agreement and each other Financing Document to which it is a party. (c) No Violations. Neither the execution and delivery of this Installment Purchase Agreement nor any other Financing Document to which it is a party nor the fulfillment of or compliance with the terms and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority or its property is bound, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the Authority. (d) Litigation. To the best knowledge of the Authority, there is no pending or threatened action or proceeding against the Authority or for which the Authority has received actual notice before any court or administrative agency which will materially adversely affect the ability of the Authority to perform its obligations under this Installment Purchase Agreement or any other Financing Document to which it is a party.
(e) Investor Letter. The Authority will cause the Assignee to deliver to the City a certificate or letter substantially in the form set forth in Exhibit C attached hereto, and will abide by all transfer restrictions herein and therein.

ARTICLE 3

TERMS OF AGREEMENT
SECTION 3.1. Purchase of Project and City; Risk of Loss.. (a) The Authority agrees to provide funds, in a single advance on the Closing Date solely through proceeds received from the Assignment Agreement, in the Acquisition Amount to the City via wire transfer, as set forth in written instructions provided by the City, for the City to acquire property and easements which are necessary for the acquisition, construction and/or installation of the Project and for the acquisition, construction and/or installation of the Project.

The Authority hereby appoints the City as its agent to carry out all phases of the acquisition, design construction, installation and/or equipping of the Project and the City, as agent of the Authority, 24438.70027\43315153.4
13 assumes all rights, duties, responsibilities and liabilities of the Authority regarding the acquisition, design, construction, installation and/or equipping of the Project. Title to the Project, and each and every portion thereof shall vest in the City upon the acquisition, design and construction thereof; provided, however, the City shall be subject to the payment of Installment Payments as described under this Installment Purchase Agreement and any other amounts due hereunder, to the remedies of the Authority in the Event of Default as provided in Article 5 hereof. The City, as agent of the Authority, may enter into any purchase order, construction management agreement, architecture or engineering contract or construction contract required for the design, acquisition, construction, installation and completion of the Project. The Authority hereby assigns to the City all rights and powers to enforce such purchase orders or contracts as are required for design, acquisition, construction, installation, purchase and completion of the Project, which enforcement may be by auction at law or in equity; provided that the assignment made by the Authority herein shall not prevent the Authority, or its assignee, from asserting any rights or remedies legally available to it. Any appointment of the City as agent of the Authority is limited solely to the extent required under applicable law to render enforceable this Installment Purchase Agreement and to enable the City to acquire, construct, own and operate the Project, but shall not operate to bind or obligate the Authority for any purpose whatsoever. The City shall not represent to any person that it is acting as agent for the Authority.
(b) Risk of Loss. Whether or not covered by insurance or self insurance, the City hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any persons or property arising from the Project from any cause whatsoever, and no such loss of or damage to or liability arising from the Project shall relieve the City of the obligation to make the Installment Payments or to perform any other obligation under this Installment Purchase Agreement. Whether or not covered by insurance or self insurance, the City hereby agrees to reimburse the Authority and the Assignee (to the fullest extent permitted by applicable law, but only from legally available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages suffered or incurred by reimburse the Authority or the Assignee, regardless of the cause thereof and all expenses incurred in connection therewith (including, without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest received) arising out of or as a result of (a) entering into this Installment Purchase Agreement or any of the transactions contemplated hereby, (b) the ordering, acquisition, ownership use, operation, condition, purchase, delivery, acceptance, rejection, storage or return of any item of the Project, (c) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Project resulting in damage to property or injury to or death to any person, and/or (d) the breach of any covenant of the City under or in connection with this Installment Purchase Agreement or any material misrepresentation provided by the City under or in connection with this Installment Purchase Agreement. The provisions of this Section 3.1(b) shall continue in full force and effect notwithstanding the full payment of all obligations under this Installment Purchase Agreement or the termination of the Term of this Installment Purchase Agreement for any reason. (c) Disclaimer of Warranties. The Authority and Assignee make no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of any of the Project, or any other warranty or representation, express or implied, with respect thereto and, as to the Authority and the Assignee, the City’s acquisition of the Project shall be on an “as is” basis. In no event shall the Assignee be liable for any incidental, indirect, special or consequential damage in connection with or arising 24438.70027\43315153.4
14 out of this Installment Purchase Agreement, the Project or the existence, furnishing, functioning or the City’s use of any item, product or service provided for in this Installment Purchase Agreement.

SECTION 3.2. Security Interest. As additional security for the payment and performance of all of the City’s obligations hereunder, the City hereby grants to Assignee as assignee of the Authority (a) a first priority security interest in the Project, together with all replacements, repairs, restorations, modifications and improvements thereof or thereto and all accessories, equipment, parts and appurtenances appertaining or attached to any of the Project, and all substitutions, renewals, or replacements of and additions, improvements, accessions and accumulations to any and all of such Project, together with all the rents, issues, income, profits, proceeds and avails therefrom, (b) first priority security interest constituting a first lien on moneys and investments held from time to time in the Project Fund, (c) a first priority security interest constituting a first lien on the Revenue Fund and Net Revenues on a parity basis with the other Parity Obligations, (d) a first priority security interest constituting a first lien on all accounts, chattel paper, deposit accounts, documents, instruments, general intangibles and investment property (including any securities accounts and security entitlements relating thereto) evidenced by or arising out of or otherwise relating to the foregoing collateral described in clauses (b) and (c) above, as such terms are defined in Article 9 of the California Commercial Code, and (e) any and all proceeds of any and all of the foregoing, including, without limitation, insurance proceeds (collectively, the “Collateral”). The City authorizes the Assignee to file (and City agrees to execute, if applicable) such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to the Assignee, which the Assignee deems necessary or appropriate to establish and maintain the Assignee’s security interest in the Collateral, including, without limitation, such financing statements with respect to personal property and fixtures under Article 9 of the California Commercial Code and treating such Article 9 as applicable to entities such as City. Notwithstanding the foregoing or anything herein to the contrary, the Authority acknowledges and agrees that its security interest in the Project may be subordinated to the rights of the holders of the Parity Obligations, and it shall not exercise any remedies with respect to its security interest in the Project if doing so would impair the operation of the System or any part thereof necessary to secure adequate Net Revenues for the payment of the interest on and principal of the Parity Obligations, or which would otherwise impair the rights of the holders of Parity Obligations with respect to the Net Revenues or the operation of the System.

SECTION 3.3. Repayment of the Project by the City; Event of Taxability. (a) The City hereby agrees to purchase from the Authority the Project at a purchase price equal to the Acquisition Amount together with interest on the unpaid principal balance of the Acquisition Amount, payable in Installment Payments, payable on each Installment Payment Date as set forth in Exhibit B. If any Installment Payment or other amount payable hereunder is not paid within ten (10) days of its due date, the City shall pay an administrative late charge of five percent (5%) of the amount not timely paid or the maximum amount permitted by law, whichever is less. (b) Upon the occurrence of an Event of Taxability, the interest component of Installment Payments and any charge on Installment Payments or other amounts payable based on the Contract Rate shall have accrued and be payable at the Taxable Rate retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for federal income tax purposes (which retroactive date 24438.70027\43315153.4
15 shall be the earliest date as of which the interest component of any Installment Payment is deemed includable in the gross income of the owner or owners thereof for federal income tax purposes, which may be earlier than the date of delivery of such determination by the Internal Revenue Service), and the City will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate.

For purposes of this Section, “Event of Taxability” means the circumstance of the interest component of any Installment Payment paid or payable pursuant to this Installment Purchase Agreement becoming includible for federal income tax purposes in an owner’s gross income as a consequence of any act, omission or event whatsoever, including but not limited to the matters described in the immediately succeeding sentence, and regardless of whether the same was within or beyond the control of the City. An Event of Taxability shall be presumed to have occurred upon (a) the receipt by the Assignee or the City of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency or other written correspondence which legally holds that the interest component of any Installment Payment is includable in the gross income of the owner thereof; (b) the issuance of any public or private ruling of the Internal Revenue Service that the interest component of any Installment Payment is includable in the gross income of the owner thereof; or (c) receipt by the Assignee or the City of a written opinion of a nationally recognized firm of attorneys experienced in matters pertaining to the tax exempt status of interest on obligations issued by states and their political subdivisions, selected by the Assignee and acceptable to the City, to the effect that the interest component of any Installment Payment has become includable in the gross income of the owner thereof for federal income tax purposes.

For all purposes of this definition, an Event of Taxability shall be deemed to occur on the date as of which the interest component of any Installment Payment is deemed includable in the gross income of the owner thereof for federal income tax purposes.

SECTION 3.4. Substitution of the Project. The City may substitute other property or components of the Project, but only if the City first obtains the prior written consent of the Assignee in its sole and absolute discretion, which consent shall not be unreasonably withheld, and files with the Authority a statement of the City which:
(a) identifies the property, facilities or combination thereof, to be substituted and the components of the Project that they will replace; and
(b) states that the estimated costs of the substituted property, facilities or combination thereof is not less than the cost of the components of the Project being replaced; and (c) states that such substitution will not adversely affect Net Revenues or otherwise result in a Material Adverse Change.

SECTION 3.5. Term. The Term of this Installment Purchase Agreement shall commence on the Closing Date, and shall end on the date upon which all Installment Payments and all other sums due to the Authority and Assignee hereunder shall be paid in full.

SECTION 3.6. Payments Generally. The Authority has assigned its right to receive payments hereunder to the Assignee. Payments shall be made on or prior to each Installment Payment Date by wire transfer in immediately available funds to the Assignee in accordance with 24438.70027\43315153.4
16 written instructions provided by the Assignee to the City. Any such written instructions shall be provided by the Assignee to the City at least five days prior to the first Installment Payment Date provided that any failure of the City to receive written instructions shall not delay, impair or eliminate the City’s obligation to timely pay Installment Payments.

SECTION 3.7. Taxes. Any payment by the City to the Authority will be made net of any taxes (other than income and similar taxes imposed on or measured by the Authority’s overall net income). The City shall be responsible for the payment of all such taxes.

SECTION 3.8. Conditions Precedent.

The Authority’s obligation to extend financing under this Installment Purchase Agreement is subject to the condition precedent that the Authority receive, in form and substance satisfactory to the Authority, each of the following:
(a) Installment Purchase Agreement. A duly executed copy of this Installment Purchase Agreement and all instruments and documents contemplated hereby and thereby. (b) Evidence of Authority. Such certified board resolutions, certificates of incumbency, and other evidence that the Authority may require that this Installment Purchase Agreement, all instruments and documents executed in connection herewith have been duly authorized and executed.
(c) Insurance. Such evidence as the Authority may require that the City is in compliance with Section 4.5 below.
(d) Consents and Approvals. Evidence as the Authority may require that all regulatory and other consents and approvals referred to in Section 2.1 have been obtained and are in full force and effect.
(e) Opinions of Counsel. The City shall provide (i) an opinion of special counsel regarding the validity of this Installment Purchase Agreement; (ii) the entering into and performance of the Financing Documents by the City and the execution and delivery of this Installment Purchase Agreement and the incurrence of debt thereunder complies in all respects with the limitations and restrictions set forth in all of the Contracts and Parity Obligations including the 2015 Installment Sale Agreement; (iii) this Installment Purchase Agreement establishes a first lien on and pledge of the Net Revenues and other funds pledged thereby for the security of the Installment Payments and other amounts payable under this Installment Purchase Agreement, on a parity with the 2015 Installment Sale Agreement and any other Contract or Parity Obligation including issued in accordance with the terms of the Agreement; (iv) this Installment Purchase Agreement establishes a first lien on and pledge of the Net Revenues and other funds pledged thereby for the security of the Installment Payments and other amounts payable under this Installment Purchase Agreement, on a parity with the 2015 Installment Sale Agreement and any other Contract or Parity Obligation including issued in accordance with the terms of the Agreement; (v) the City has duly and validity adopted Resolution No. __ on April 1, 2025 (“Resolution”) at a meeting of the City Council that was duly noticed and held and at which a quorum was present and acting throughout in accordance with the law of the State of California that are applicable to the City, and such Resolution is in full force and effect and has not been modified, amended or 24438.70027\43315153.4
17 rescinded; and (vi) the portion of Installment Payments designated as interest is excluded from gross income for Federal income tax purposes under Section 103 of the Code and is exempt from State of California personal income taxes; and such interest is not a specific item of tax preference for purposes of the federal alternative minimum tax; and (vii) the tax-exempt status of interest on the interest component of Installment Payments under State laws. (f) Opinion of City Attorney. An opinion of City Attorney to the City to the effect that (i) the City is duly organized, validly existing, and in good standing under the laws of the State, (ii) the City has duly received all requisite approvals and has the legal power to enter into and perform under the Financing Documents, (iii) all proceedings of the City necessary to be taken in connection with the authorization, execution, delivery and performance of the Financing Documents have been duly taken and all such authorizations are presently in effect, (iv) the Financing Documents have been duly executed and delivered by the City and each constitutes the valid and binding obligation of the City enforceable against the City in accordance with its terms, except as enforceability may be limited: by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the rights of creditors generally and by general equitable principles which may limit the right to obtain the remedy of specific performance of obligation other than the obligation to pay money, and (v) the execution, delivery, and performance by the City of the Financing Documents does not as of the date of the opinion: (a) violate any provision of any law, rule or regulation, any judgment, order or ruling of any court or governmental agency, articles of organization, articles of incorporation, other charter documents, bylaws or operating agreement, as applicable, of the City, or any agreement, indenture, mortgage, or other instrument to which the City is a party or by which the City or any of its properties within the system is bound; or (b) be in conflict with, result in a breach of, or constitute with the giving of notice or passage of time, or both, a default under any such agreement, indenture, mortgage, or other instrument; (vi) no consent, permission, authorization, order or license of any governmental authority is necessary in connection with the execution, delivery, performance, or enforcement of the Financing Documents, except such as have been obtained and are in full force and effect; and (vii) the authorization, approval, execution and delivery of the Financing Documents and all other proceedings of the City relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, procurement and public bidding laws and all other applicable State or Federal laws; (viii) to the best of such counsel’s knowledge, there are no actions, suits, or proceedings affecting the City or any of its assets pending or threatened before any governmental entity which: (a) if adversely decided could have a material adverse effect on the City’s condition, financial or otherwise, operations, properties or business, or on its ability to perform its obligations under the Financing Documents; or (b) could adversely affect the transactions contemplated by the Financing Documents or the pledge of Net Revenues to repay Installment Payments and other amounts payable under this Installment Purchase Agreement on a pari passu basis with the 2015 Installment Sale Agreement and any other Contract or Parity Obligation or the security interest of Assignee or its assigns, as the case may be, in the Project, the Project Fund or other Collateral thereunder; or (c) seeks to rescind, terminate, modify, or suspend any consent, permission, authorization, order or license of any governmental authority referred to above.

SECTION 3.9. Nature of City’s Obligations.
(a) Special Obligation. The City’s obligation to pay the Installment Payments is a special obligation of the City limited solely to the Net Revenues and all amounts on deposit in the 24438.70027\43315153.4
18 Revenue Fund and the Project Fund. Under no circumstances is the City required to advance moneys derived from any source of income other than the Net Revenues and other sources specifically identified herein for the payment of the Installment Payments, and no other funds or property of the City are liable for the payment of the Installment Payments. Notwithstanding the foregoing provisions of this Section, however, nothing herein prohibits the City voluntarily from making any payment hereunder from any source of available funds of the City. (b) Obligations Absolute. The obligations of the City to pay the Installment Payments from the Net Revenues and to perform and observe the other agreements contained herein are absolute and unconditional and are not subject to any defense or any right of setoff, counterclaim or recoupment arising out of any breach of the City or the Authority of any obligation to the City or otherwise with respect to the System, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority. Until such time as all of the Installment Payments have been fully paid or prepaid, the City:
(i) will not suspend or discontinue payment of any Installment Payments; (ii) will perform and observe all other agreements contained in this Installment Purchase Agreement; and
(iii) will not terminate this Installment Purchase Agreement for any cause, including, without limiting the generality of the foregoing, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the System, sale of the System, the taking by eminent domain of title to or temporary use of any component of the System, commercial frustration of purpose, any change in the tax or other laws of the United States of America or the State of California or any political subdivision of either thereof or any failure of the Authority to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Installment Purchase Agreement. (c) Protection of Rights. If the Authority fails to perform any such agreements on its part, the City may institute such action against the Authority as the City deems necessary to compel performance so long as such action does not abrogate the obligations of the City contained in the preceding subsection (b). The City may, however, at the City’s own cost and expense and in the City’s own name or in the name of the Authority prosecute or defend any action or proceeding or take any other action involving third persons which the City deems reasonably necessary in order to secure or protect the City’s rights hereunder, and in such event the Authority will (upon reasonable notice, and at the sole expense of the City) cooperate fully with the City to the extent reasonably necessary and take such action reasonably necessary to effect the substitution of the City for the Authority in such action or proceeding if the City shall so request. (d) Budget and Appropriation of Installment Payments. During the Term of this Installment Sale Agreement, the City shall adopt all necessary budgets and make all necessary appropriations of the Installment Payments from the Net Revenues. In the event any Installment Payment requires the adoption by the City of any supplemental budget or appropriation, the City shall promptly adopt the same. The covenants on the part of the City contained in this subsection (d) shall be deemed to be and shall be construed to be duties imposed by law, and it shall be the 24438.70027\43315153.4
19 duty of each and every public official of the City to take such actions and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out the perform the covenants and agreements in this subsection (d). (e) The City agrees that it will perform and comply with each and every covenant and agreement required to be performed or observed by it each Contract and each other Parity Obligation. All events of default and remedies contained in each Contract and each other Parity Obligation, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety (amended to also take into account this Installment Purchase Agreement and all of the obligations of the City and Installment Payments and other amounts payable under this Installment Purchase Agreement) all of which shall be deemed to be made for the benefit of the Assignee and shall be enforceable against the City (the “Incorporated Provisions”). To the extent that any such Incorporated Provision permits the City or any other party to waive compliance with such provision or requires that a document, opinion or other instrument or any event or condition be acceptable or satisfactory to the City or any other party, for purposes of this Installment Purchase Agreement, such provision shall be complied with unless it is specifically waived by the Assignee in writing in its sole and absolute discretion and such document, opinion or other instrument and such event or condition shall be acceptable or satisfactory only if it is acceptable or satisfactory to the Assignee which shall only be evidenced by the written approval by the Assignee of the same in its sole and absolute discretion. No termination or amendment to any Incorporated Provision or release of the City made pursuant to any Contract or any other Parity Obligation, shall be effective to terminate or amend such Incorporated Provisions or release the City with respect thereto in each case as incorporated by reference herein without the prior written consent of the Assignee in its sole and absolute discretion. The City shall continue to observe the Incorporated Provisions for the benefit of the Assignee until the termination of such Parity Obligation or payment in full of the applicable Contract. All such Incorporated Provisions shall be in addition to the express covenants contained herein and shall not be limited by the express covenants contained herein nor shall such Incorporated Provisions be a limitation on the express covenants contained herein. (f) In the event that the City shall, directly or indirectly, enter into or otherwise consent to any instrument which such instrument provides any Person with different or more restrictive covenants, different or additional events of default and/or greater rights and remedies with respect to any System Obligation or other instrument or all or any portion of the Revenues, Net Revenues or all or any portion of the System than are provided to the Assignee in this Installment Purchase Agreement, the City shall provide the Assignee with a copy of each such instrument and such different or more restrictive covenants, different or additional events of default and/or greater rights and remedies shall automatically be deemed to be incorporated into this Installment Purchase Agreement and the Assignee shall have the benefits of such different or more restrictive covenants, different or additional events of default and/or greater rights and remedies as if specifically set forth herein. The City shall promptly enter into an amendment to this Installment Purchase Agreement to include different or more restrictive covenants, different or additional events of default and/or greater rights and remedies; provided that the Assignee shall have and maintain the benefit of such different or more restrictive covenants, different or additional events of default and/or greater rights and remedies even if the City fails to provide such amendment. 24438.70027\43315153.4
20 The City will preserve and protect the security of the Parity Obligations and the rights of the Assignee and the other owners of the Parity Obligations, and will warrant and defend their rights against all claims and demands of all persons. From and after the execution and delivery of this Installment Purchase Agreement, this Installment Purchase Agreement shall be incontestable by the City.

SECTION 3.10. Revenue Fund; Pledge of Net Revenues.
(a) Revenue Fund; Receipt and Deposit of Net Revenues. There has heretofore been established a special fund known as the “City of San Jacinto Revenue Fund,” which fund is the same fund as the Revenue Fund described in Section 3.8 of the 2015 Installment Sale Agreement and which fund shall continue to be held and maintained by the City so long as this Installment Purchase Agreement and any Parity Obligations are outstanding. All of the Net Revenues and all amounts on deposit in the Revenue Fund are hereby irrevocably pledged to the punctual payment of the Installment Payments and any Parity Obligations. The Net Revenues and such other funds may not be used for any other purpose so long as any of the Installment Payments and any Parity Obligations remain unpaid; except that out of the Net Revenues there may be apportioned such sums, for such purposes, as are expressly permitted by this Section 3.10. In accordance with Section 5451 of Title 1, Chapter 5.5 of the California Government Code, this pledge shall constitute a first and exclusive lien on the Net Revenues and such other moneys for the payment of the Installment Payments and any Parity Obligations in accordance with the terms hereof and the terms of the instruments authorizing the issuance of any Parity Obligations. The City shall deposit all Revenues as and when received by it in the Revenue Fund and the City agrees and covenants that all Revenues deposited by it in the Revenue Fund will be accounted for through and held in trust in the Revenue Fund for the benefit of the Authority and for the benefit of the owners of any Parity Obligations on a pari passu basis. The City shall withdraw from such Revenue Fund and transfer to the Authority an amount of Net Revenues equal to the aggregate amount of the Installment Payment when and as the same becomes due and payable. In addition, the City shall withdraw from such fund or funds such amounts of Net Revenues at such times as required to pay the principal of and interest on any Parity Obligations and otherwise comply with the provisions of the instruments authorizing the issuance of any Parity Obligations. (b) Pledge of Net Revenues. All the Net Revenues are irrevocably pledged by the City to the punctual payment of the interest on and principal of and redemption premiums, if any, on the Installment Payments and the payment of any Contract Payments, subject to the provisions permitting the application thereof for the purposes and on the conditions and terms set forth in this Installment Purchase Agreement. This pledge shall constitute a first lien on the Net Revenues and such other money for the payment of the Installment Payments and the payment of any Contract Payments, in accordance with the terms of this Installment Purchase Agreement and any Parity Obligations. The principal of and interest on the Installment Payments and any prepayment premiums upon the prepayment thereof shall not be payable from or secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or any of its income, receipts, or revenues, except the Net Revenues pledged to the payment thereof as provided in this Installment Purchase Agreement.
(c) Other Uses Permitted. The City shall manage, conserve and apply the Net Revenues in such a manner that all deposits required to be made under the preceding paragraph 24438.70027\43315153.4
21 will be made at the times and in the amounts so required. Subject to the foregoing sentence, so long as no Default has occurred and is continuing hereunder or would result therefrom, the City may at any time and from time to time use and apply Net Revenues for (i) the acquisition and construction of improvements to the System; (ii) the prepayment of this Installment Purchase Agreement or Parity Obligations; or (iii) any other lawful purpose of the City.

SECTION 3.11. Project Fund. Subject to the terms and conditions of this Installment Purchase Agreement, the Authority shall cause the Assignee to provide the Acquisition Amount and deposit the Acquisition Amount in the Project Fund under the Escrow Agreement. The Assignee’s approval of disbursement of funds under the Escrow Agreement is contingent on the City’s compliance with the terms and conditions of this Installment Purchase Agreement and the Escrow Agreement. When amounts are requested from the Project Fund, the City shall promptly execute and deliver Disbursement Requests to the Assignee pursuant to the Escrow Agreement for the purpose of effecting disbursements from the Project Fund to pay (or reimburse) Project Costs for the Project so acquired and installed. In connection with the execution and delivery by the City to Assignee of the final Disbursement Request, the City shall deliver to Assignee a “Final Acceptance Certificate” in the form attached hereto as Exhibit D. Assignee shall not have any responsibility to pay amounts for any Project Costs or Costs of issuance with respect to the Financing Documents or the Project that individually or collectively exceed the Acquisition Amount.

ARTICLE 4

COVENANTS OF THE CITY
SECTION 4.1. Reports and Notices.
(a) Annual Financial Statements. No later than 270 days after the end of each Fiscal Year commencing with Fiscal Year 2024/25 the City shall deliver to the Authority audited financial statements of the City prepared in accordance with the accounting standards set forth by the Government Accounting Standard Board. Such financial statements will: (1) be audited by independent certified public accountants selected by the City; and (2) be accompanied by a report of such accountants containing an opinion. Notwithstanding the foregoing, if audited financial statements are not available within such 270 day period, the City shall provide to the Authority a statement to that effect together with unaudited financial statements reasonably acceptable to the Authority, and shall thereafter provide to the Authority its audited financial statements within 30 days of the City Council meeting at which such audited financial statements are received by the City Council of the City.

Each such audit, in addition to whatever matters may be thought proper by the accountant to be included therein, shall include a summary statement showing the amount of Revenues and the amount of all other funds collected which are required to be pledged or otherwise made available as security for payment of principal of and interest on the Parity Obligations (including the Installment Payments), the disbursements from the Revenues and other funds in reasonable detail. The City shall also provide the Assignee with the City’s approved operating budget for each Fiscal Year within 30 days of approval by the City Council. Any reports required to be delivered to the Assignee may be provided via electronic mail or through the Municipal Securities 24438.70027\43315153.4
22 Rulemaking Board Electronic Municipal Market Access website. The City further agrees to provide such additional information to the Assignee as Assignee may from time to time reasonably request. Credit information relating to the City may be disseminated among Assignee and any of its affiliates and any of their respective successors and assigns. (b) Notice of Default. Promptly after becoming aware thereof, the City shall provide to the Authority notice of the occurrence of an Event of Default, including, without limitation, any error in the City’s financial information previously provided to the Authority and the occurrence of any breach, default, event of default or event that, with the giving of notice and/or the passage of time and/or the occurrence of any other condition, would become a breach, default or event of default under this Installment Purchase Agreement.
(c) Notice of Certain Events. The City shall provide to the Authority (1) notice at least 30 days prior thereto, of any change in the principal place of business of the City or the office where its records concerning its accounts are kept; and (2) all other notices required to be provided hereunder.

SECTION 4.2. Existence as City. The City shall continue to municipal corporation under the laws of the State of California during the term of this Installment Purchase Agreement.

SECTION 4.3. Change in Business. The City shall not, without the prior written consent of the Assignee, engage in any business activities or operations substantially different from or unrelated to the City’s present business activities or operations.

SECTION 4.4. Liens against the System. The City shall keep the System and the Project free of all levies, Liens, and encumbrances except those created by this Installment Purchase Agreement. With respect to the System, the City shall not, without the prior written consent of the Assignee, create, incur, assume, or allow to exist any mortgage, deed of trust, pledge, lien (including the lien of an attachment, judgment, or execution), security interest, or other encumbrance of any kind upon any of the System’s property, real or personal (collectively, “Liens”). The foregoing restrictions will not apply to:
(a) Liens in favor of the Authority and the Assignee under the Financing Documents;
(b) Liens for taxes, assessments, or governmental charges that are not past due; (c) pledges and deposits under workers’ compensation, unemployment insurance, and social security laws;
(d) pledges and deposits to secure the performance of bids, tenders, contracts (other than contracts for payment of money), and like obligations arising in the ordinary course of business as conducted on the date hereof;
(e) Liens imposed by the law in favor of mechanics, material suppliers, warehouses, and like persons that secure obligations if such Lien is being diligently contested in good faith for a period of thirty days, and the City has posted a bond or posted cash collateral for the full amount of such claim;
24438.70027\43315153.4
23 (f) easements, rights-of-way, restrictions, and other similar encumbrances that, in the aggregate, do not materially interfere with the occupation, use, and enjoyment of the property or assets encumbered thereby in the normal course of business or materially impair the value of the property subject thereto;
(g) purchase money Liens to secure indebtedness permitted hereunder so long as such security interest is subordinated and subject in all respects to the terms of this Installment Purchase Agreement and the Contracts and Parity Obligations and all rights of the Assignee and the other holders of the Parity Obligations, and the secured party shall not exercise any remedies with respect to its security interest if doing so would impair the operation of the System or any part thereof necessary to secure adequate Revenues or Net Revenues for the payment of the interest on and principal of the Parity Obligations (including this Installment Purchase Agreement), or which would otherwise impair the rights of the holders of Parity Obligations (including the Assignee) with respect to the Revenues or Net Revenues or the operation of the System; and/or (h) Liens relating to Parity Obligations issued in compliance with the provisions of Section 4.14 hereof if such Liens equally and ratably secures all of this Installment Purchase Agreement and the Parity Obligations; and/or (i) existing liens as of the Closing Date and disclosed to the Authority and Assignee in writing prior to the Closing Date and which do not adversely affect the value of, or materially impair, the operation, use or Revenues of the System.

SECTION 4.5. Insurance. The City shall maintain insurance with reputable and financially sound insurance companies or associations, including self-insurance to the extent customary, acceptable to the Authority in such amounts and covering such risks as are usually carried by companies engaged in the same or similar business and similarly situated, and make such increases in the type or amount of coverage as the Authority may reasonably request. All such policies insuring any collateral for the City’s obligations to the Authority will have additional insured, mortgagee and lender’s loss payee clauses or endorsements, as applicable, in form and substance satisfactory to the Authority. At the Authority’s request, the City agrees to deliver to the Authority such proof of compliance with this section as the Authority may require.

The City shall at all times maintain with responsible insurers all such insurance on the System as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to the System. The City shall also maintain, with responsible insurers, worker’s compensation insurance and insurance against public liability and property damage to the extent reasonably necessary to protect the City, the Authority and the Assignee.

Any insurance required to be maintained hereunder may be maintained under and in accordance with a joint exercise of powers agreement, and may be maintained by the City in the form of self insurance or in the form of participation by the City in a program of pooled insurance.

The City shall during the Term of this Installment Purchase Agreement, maintain or cause to be maintained liability insurance naming Assignee and its assigns as additional insured that protects Assignee from liability with limits of at least $5,000,000 per occurrence for bodily injury and property damage coverage (such liability insurance coverage may be in a combination of 24438.70027\43315153.4
24 primary general liability and/or excess liability umbrella coverage), and in all events issued in form and amount satisfactory to Assignee and by an insurance company that is authorized to do business in the State and having a financial strength rating by A.M. Best Company of “A ” or better; and worker’s compensation coverage as required by the laws of the State. In the event the City is permitted, at Assignee’s sole discretion, to self insure, the City shall provide to Assignee a self insurance letter in form and substance satisfactory to Assignee. The City shall furnish to Assignee evidence of all such insurance or self insurance coverage described in this Section throughout the Term of this Installment Purchase Agreement. The City shall not cancel or modify such insurance or self insurance coverage in any way without first giving written notice thereof to Assignee at least thirty (30) days in advance of such cancellation or modification.

SECTION 4.6. System Maintenance. The City shall maintain in good repair, working order and condition (ordinary wear and tear excepted) in accordance with the general practice of other businesses of similar character and size, the System, and make all alterations, replacements, and improvements thereto as may from time to time be necessary in order to ensure that its properties remain in good working order and condition. The City agrees that at the Authority’s request, which request may not be made more than once a year, the City will furnish to the Authority a report on the condition of the City’s property prepared by a professional engineer satisfactory to the Authority.

SECTION 4.7. Against Sale or Other Disposition of the System. The City will not sell or otherwise dispose of the System or any part thereof essential to the proper operation of the System or that would have a Material Adverse Change on the Net Revenues received or receivable by the City, unless the Installment Payments and the Parity Obligations have been fully paid or provision has been made therefor. The City will not enter into any lease or agreement which impairs the operation of the System or any part thereof necessary to secure adequate Net Revenues for the payment of the interest on and principal of, prepayment premium and redemption premiums, if any, on the Installment Payments and the Parity Obligations, or which would otherwise impair the rights of the Authority or the owners of the Parity Obligations with respect to the Net Revenues or the operation of the System or the tax-exempt status of the interest component of Installment Payments.

The City covenants that neither the System as a whole or substantially as a whole nor any property that is a part thereof which is essential to its proper operation or to the maintenance of the Revenues shall be mortgaged or otherwise encumbered, sold, leased, pledged or disposed of. The Revenues shall not be mortgaged, encumbered, sold, leased, pledged or disposed of or used or have any charge placed thereon except as authorized by the terms of this Installment Purchase Agreement. The City further covenants that it will not enter into any agreement or transaction, including one leasing, selling or otherwise disposing of nonessential property included as part of the System, which impairs the operation of the System or any part of the System necessary to secure adequate Net Revenues (or any portion thereof) to pay all Installment Payments and all Parity Obligations and any other System Obligations, or which otherwise would materially impair the rights of the City with respect to the Net Revenues (or any portion thereof) or the operation of the System (or any portion thereof).

SECTION 4.8. Eminent Domain Proceeds. If all or any part of the System shall be taken by eminent domain proceedings, the net proceeds shall be used as follows:
24438.70027\43315153.4
25 (a) Except as provided herein, the City covenants that the System will not be encumbered, sold, leased, pledged, any charge placed thereon, or otherwise disposed of, as a whole or substantially as a whole if such encumbrance, sale, lease, pledge, charge or other disposition would materially impair the ability of the City to pay the Installment Payments or the principal of or interest on any Parity Obligations, or would materially adversely affect its ability to comply with the terms of this Installment Purchase Agreement or the instruments authorizing the issuance of any Parity Obligations. The City shall not enter into any agreement which impairs the operation of the System or any part of it necessary to secure adequate Net Revenues to pay the Installment Payments and any Parity Obligations, or which otherwise would impair the rights of the Authority with respect to the Net Revenues. If any substantial part of the System is sold, the payment therefor must either (a) be used for the acquisition or construction of improvements and extensions or replacement facilities or (b) be applied to prepay or redeem the Installment Payments and any Parity Obligations, on a pro rata basis, in the manner provided herein and in the instruments authorizing such Parity Obligations.
(b) Any amounts received as awards as a result of the taking of all or any part of the System by the lawful exercise of eminent domain, if and to the extent that such right can be exercised against such property of the City, shall either (a) be used for the acquisition or construction of improvements and extension or replacement facilities of the System, or (b) be applied to prepay or redeem the Installment Payments and any Parity Obligations, on a pro rata basis, in the manner provided herein and in the instruments authorizing such Parity Obligations.

SECTION 4.9. Amounts of Rates, Fees and Charges; Financial Covenants. (a) The City will, at all times while any of the Installment Payments remain outstanding, fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the System during each Fiscal Year and manage the operation of the System for each Fiscal Year so as to yield Revenues at least sufficient, after making reasonable allowances for contingencies and errors in the estimates, to pay the following amounts during such Fiscal Year in the following order of priority:
(i) All current Maintenance and Operation Costs;
(ii) The interest on and principal of and prepayment premium (if any) the Installment Payments and the payments for the Parity Obligations, without preference or priority;
(iii) All payments required for compliance with the terms of this Installment Purchase Agreement and each other Parity Obligation, including without limitation, any obligation to maintain a reserve fund at a certain level, collectively, on a parity basis; (iv) All payments to meet any other obligations of the City which are charges, liens or encumbrances upon, or payable from, the Revenues; and (v) To the extent all of the foregoing amounts have been paid and no Event of Default or Default has occurred, payments with respect to the Subordinate Obligations and any other System Obligations as they become due and payable. 24438.70027\43315153.4
26 (b) Debt Service Coverage Ratio. The City will at the end of each Fiscal Year of the City, commencing with the Fiscal Year ending June 30, 2025, the Debt Service Coverage Ratio of: (i) Net Revenues for such Fiscal Year; to (ii) Maximum Annual Debt Service for such Fiscal Year.

SECTION 4.10. Enforcement of and Performance Under Parity Obligations. The City shall enforce all material provisions of any contracts to which it is a party, an assignee, successor in interest to a party, or third-party beneficiary, in any case where such contracts provide for water to be produced, transmitted and distributed by the System or provide for payments or services to be rendered to the City. Further, the City will comply with, keep, observe and perform all material agreements, conditions, covenants and terms, express or implied, required to be performed by it, contained in all contracts affecting or involving the System, to the extent that the City is a party thereto.

SECTION 4.11. Collection of Charges, Fees and Rates. The City will have in effect at all times rules and regulations requiring each customer to pay the applicable charges, fees and rates and providing for the billing thereof. In each case where such bill remains unpaid in whole or in part after it becomes delinquent, the City will take necessary actions to enforce the collection procedures contained in the rules and regulations.

SECTION 4.12. Against Encumbrances. The City will not mortgage or otherwise encumber, pledge or place any charge or lien upon the System or any of the Revenues or Net Revenues except as provided in this Installment Purchase Agreement and will not issue any obligations secured by or payable from Net Revenues on a parity with, or senior to, the Installment Payments and Parity Obligations.

The City further covenants that the City shall not issue or incur any Subordinate Obligation unless:
(a) Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the resolution approving the instrument pursuant to which such Subordinate Obligation is issued or incurred, as shown by the books of the City shall, after deducting all amounts required for the payment of Installment Payments and all Parity Obligations, have amounted to at least 1.00 times the sum of the maximum annual debt service on all Subordinate Obligations and System Obligations outstanding immediately subsequent to the incurring of such additional obligations. (b) The City must be in compliance with all covenants set forth in this Installment Purchase Agreement and each other Parity Obligation and Contract and System Obligation (including, but not limited to, covenants relating to the issuance of Subordinate Obligations taking into account such proposed Subordinate Obligations) and no Default or Event of Default shall have occurred or be continuing.
(c) The Subordinate Obligations must provide that:
(i) The proceeds of such Subordinate Obligations must be applied to the acquisition, construction, improvement, financing or refinancing of additional facilities, 24438.70027\43315153.4
27 improvements or extensions of existing facilities within the System, or otherwise for facilities, improvements or property which the City determines are of benefit to the System, or for the purpose of refunding any Parity Obligations and Subordinate Obligations in whole or in part, including all costs (including costs of issuing such Subordinate Obligations and including capitalized interest on such Subordinate Obligations during any period which the City deems necessary or advisable) relating thereto; (ii) Interest on such Subordinate Obligations must be payable no more frequently than any Installment Payment Date (and not on any additional dates); and (iii) The principal of such Subordinate Obligations must be payable on no more frequently than any Installment Payment Date (and not on any additional dates) in which principal is payable on Installment Payments.

The City shall not be required to obtain the consent of the Assignee required pursuant to Section 7.3.

SECTION 4.13. Execution of Parity Obligations. The City may at any time execute any Parity Obligations the Contract Payments under which are payable on a parity with the Installment Payments; provided, that such Parity Obligations meet the conditions and requirements for the issuance of Parity Obligations under Section 4.14 below.

SECTION 4.14. Conditions for Entering into Parity Obligations. The City may at any time enter into a Parity Obligation payable from the Net Revenues and secured by a lien and charge upon the Net Revenues equal to and on a parity with the lien and charge securing this Installment Purchase Agreement, without the consent of Assignee required pursuant to Section

7.3, but only subject to specific conditions precedent, which are summarized below:
(a) The City is not in default under the terms of this Installment Purchase Agreement and the City shall be in compliance with all agreements, conditions, covenants and terms contained in this Installment Purchase Agreement (including, without limitation, the provisions of Sections

4.9 and 4.11) and in each other Parity Obligations required to be observed or performed by it, and a certificate signed by the Finance Director to that effect shall have been filed with the Assignee (this condition shall not apply where the purpose of a Parity Obligation proposed to be issued is to cure such non-compliance, provided that the certification shall identify such noncompliance and state that the issuance of such Parity Obligations and application of the proceeds thereof will cure such noncompliance).
(b) The execution of the Parity Obligation shall have been duly authorized pursuant to all applicable laws.
(c) The Net Revenues for the most recent Fiscal Year for which audited financial statements are available shall have produced Net Revenues equal to at least one hundred twenty percent (120%) of the Maximum Annual Debt Service as calculated after the date of such Parity Obligation and a certificate signed by the Finance Director with supporting calculations based on the audited financial statements demonstrating such compliance delivered to Assignee to that effect shall have been filed with the Authority; provided, that in the event that all or a portion of such Parity Obligation being entered into is for the purpose of refunding and retiring any 24438.70027\43315153.4
28 outstanding Parity Obligation, interest and principal payments on the Parity Obligation to be so refunded and retired from the proceeds of such Parity Obligation being issued shall be excluded from the foregoing computation of Maximum Annual Debt Service. (d) The Contract Payment Dates for any Parity Obligations shall be:
(i) for interest payments, payable no more frequently than semiannually on any Installment Payment Date (i.e. February 7 and August 7, and not on any additional dates); and
(ii) for principal payments, payable no more frequently than semiannually on any Installment Payment Date (i.e. February 7 and August 7, and not on any additional dates).

SECTION 4.15. Tax Covenants.

The City hereby covenants that, notwithstanding any other provision of this Installment Purchase Agreement, it will make no use of the proceeds of this Installment Purchase Agreement or of any other amounts, regardless of the source, or of any property or take any action, or refrain from taking any action, that would cause this Installment Purchase Agreement to be “arbitrage bonds” within the meaning of Section 148 of the Tax Code.

The City will not use or permit the use of either System or any portion thereof by any person other than a governmental unit as such term is used in Section 141 of the Tax Code, in such manner or to such extent as would result in the loss of exclusion from gross income for federal income tax purposes of the interest payable pursuant to this Installment Purchase Agreement under Section 103 of the Tax Code.

The City will not make any use of the proceeds from this Installment Purchase Agreement or any other funds of the City, or take or omit to take any other action, that would cause the obligation provided herein to be “federally guaranteed” within the meaning of Section 149(b) of the Tax Code or “private activity bonds” within the meaning of Section 141 of the Tax Code. To that end, so long as the Installment Payments are unpaid, the City, with respect to such proceeds and such other funds, will comply with all requirements of such Sections and all regulations of the United States Department of the Treasury issued thereunder and under the Tax Code to the extent such requirements are, at the time, applicable and in effect.

The City shall promptly file or cause to be filed an information report for the Installment Payments in compliance with Section 149 (e) of the Tax Code.

The City has complied with the Tax Code, with respect to this Installment Purchase Agreement, and the City shall not knowingly take or omit to take any action that, under existing law which may adversely affect the exclusion from gross income for federal income tax purposes, or the exemption from any applicable State tax of the interest on Installment Purchase Agreement.

SECTION 4.16. Reconstruction of System; Application of Insurance Proceeds. If any useful portion of the System shall be damaged or destroyed, the City shall, as expeditiously as possible, continuously and diligently pursue or cause to be pursued the reconstruction or 24438.70027\43315153.4
29 replacement thereof, unless the City shall file with the Authority a written certificate of an engineer qualified to render such certificate to the effect that such reconstruction or replacement is not in the best interests of the City and the Authority. All amounts collected from insurance against accident to or destruction of any portion of the System shall be used to repair or rebuild such damaged or destroyed portion of the System or if determined not to repair or rebuild such portion and in any event to the extent not so applied, must either (a) be used for the acquisition or construction or improvements and extensions or replacement facilities or (b) be applied to prepay or redeem the Installment Payments and any Parity Obligations, on a pro rata basis, in the manner provided in the Installment Sale Agreement and the Installment Purchase Agreement and in any other instruments authorizing such Parity Obligations. The proceeds of any insurance paid on account of such damage or destruction, other than business interruption loss insurance or public liability insurance, shall be deposited by the City in a special account, held in trust by the City, and made available for, and to the extent necessary applied to, the cost of such reconstruction or replacement, if any and applied pursuant to this Section. Pending such application, such proceeds may be invested by the City in investments permitted by Section 53601 of the California Government Code which mature not later than such times as shall be necessary to provide moneys when needed to pay such cost of reconstruction or replacement. Any balance of such proceeds of insurance not required by the City for the purposes aforesaid shall be deemed Revenues.

SECTION 4.17. Records and Accounts. The City covenants and agrees that it shall keep proper books of record and accounts of the System, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the System, the Revenues and the Net Revenues. Said books shall at all reasonable times be subject to the inspection of the Authority and the Assignee.

SECTION 4.18. Collection of Charges. The City covenants and agrees that, except to the extent that the City is required under agreements and/or contracts existing on the effective date of this Installment Purchase Agreement, no water service from the System may be furnished or rendered to the United States of America, the State, or any private corporation or person free of charge, or for consideration lower than that charged other persons for similar service in accordance with the City’s regulations. The City covenants that it shall maintain and enforce valid regulations for the payment of bills for water service and wastewater treatment and disposal service.

SECTION 4.19. Against Competing Utility. The City will not acquire, construct, operate or maintain, and will not, within the fullest scope of its lawful powers, permit any other private or public corporation, political subdivision, district or agency, or any person whomsoever to acquire, construct, operate or maintain any water system, sewer system or sewer utility in an area presently served by the System.

SECTION 4.20. Compliance with this Installment Purchase Agreement. The City will faithfully observe and perform or cause to be faithfully observed and performed all the covenants, conditions and requirements of this Installment Purchase Agreement, and will not suffer or permit any default to occur hereunder. The City will not do or permit anything to be done, or omit or refrain from doing anything, in any case where any such act done or permitted to be done, or any such omission of or refraining from action, would constitute an Event of Default hereunder. Upon request by the Authority, the City shall provide a written certificate of the City 24438.70027\43315153.4
30 to the effect that it is in compliance with all covenants, conditions and requirements of this Installment Purchase Agreement, other than those expressly waived by Authority.

SECTION 4.21. Observance of Laws and Regulations. The City will well and truly keep, observe and perform or cause to be kept, observed and performed all valid and lawful obligations or regulations now or hereafter imposed on it by contract, or prescribed by any law of the United States, or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of any and every right, privilege or franchise now owned or hereafter acquired and enjoyed by the City, including the City’s right to exist and carry on business as a water district, to the end that such rights, privileges and franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired.

SECTION 4.22. Budget. The City hereby covenants to take such action as may be necessary to include all Installment Payments and all other amounts due hereunder in its annual budget and to make the necessary annual appropriations for all such Installment Payments and all other amounts due hereunder. The covenants on the part of the City herein contained shall be deemed to be and shall be construed to be ministerial duties imposed by law and it shall be the ministerial duty of each and every public official of the City to take such action and do such things as are required by law in the performance of such official duty of such officials to enable the City to carry out and perform the covenants and agreements on the part of the City contained in this Installment Purchase Agreement.

SECTION 4.23. Inspection. Permit the Authority or its agents, upon reasonable notice and during normal business hours or at such other times as the parties may agree, to inspect and visit any of its properties, examine and make excerpts from its books and records, and to discuss its business affairs, finances and accounts with its officers, directors, employees, and independent certified public accountants and to conduct reviews of any collateral.

SECTION 4.24. Further Assurances and Other Information. From time to time and at its expense, execute and deliver such documents and do such other acts and things as the Authority in its sole discretion may deem necessary or advisable from time to time in order to more fully carry out the provisions and purpose of this Installment Purchase Agreement, including delivery of such other information regarding the condition or operations, financial or otherwise, of the City as the Authority may from time to time reasonably request, including, but not limited to, copies of all pleadings, notices and communications referred to in Section 4.1 herein.

SECTION 4.25. Delivery of Original Documents. The City shall deliver to the Authority the original executed versions of this Installment Purchase Agreement, the Financing Documents and the certificates, instruments and documents required to be executed hereunder.

SECTION 4.26. No Public Registration. Without the prior written consent of the Assignee, this Installment Purchase Agreement shall not be (i) assigned a rating by any credit rating agency, (ii) registered with The Depository Trust Company or any other securities depository, (iii) offered pursuant to any type of offering document or official statement or (iv) assigned a CUSIP number.
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31 SECTION 4.27. Indemnity for Taxes. At all times the City shall indemnify and hold and save the Authority and the Assignee harmless from and against any and all actions or causes of action, claims, demands, liabilities, loss, damage or expense of whatsoever kind and nature incurred by the Authority as a result of the non-payment of any documentary stamp tax, intangible tax, interest or penalties associated therewith or any other local, state or federal assessment required to be paid, but not paid in conjunction with the indebtedness evidenced by this Installment Purchase Agreement. The City agrees to pay to the Authority and the Assignee, their successors and assigns, all sums of money requested by the Authority or the Assignee hereunder within ten days of such request, which the Authority or the Assignee will or may advance, pay or cause to be paid, or become liable to pay, on account of or in connection with failure to pay as required by the regulations of the Governmental Authority so imposing said payment. The Authority and the Assignee will be entitled to charge for any and all disbursements made by it in good faith, under the reasonable belief that it or the City is or was liable for the amount so assessed. Any default by the City in making any payments required under this covenant will constitute a payment Event of Default under this Installment Purchase Agreement and the Authority or the Assignee may, at its option, declare the entire amount of principal plus accrued interest thereon due and payable without The parties to this Installment Purchase Agreement contemplate that the Project will be used for a governmental or proprietary purpose of the City and that the Project will therefore be exempt from all property taxes. If the lease, sale, purchase, operation, use, possession or acquisition of the Project or the System is nevertheless determined to be subject to taxation, the City shall pay when due all sales and other taxes, special assessments, governmental and other charges of any kind that are at any time lawfully assessed or levied against or with respect to the Project or the System, the Installment Payments or any part of either thereof, or which become due during the Term of this Installment Purchase Agreement, whether assessed against the City, the Authority or Assignee. The City shall pay all utility and other charges incurred in the operation, use and maintenance of the Project and the System. The City shall pay such taxes, assessments or charges as the same may become due. The City shall pay the fee charged by the California Debt and Investment Advisory Commission with respect to this Installment Purchase Agreement pursuant to Section 8856 (or any successor provision) of the California Government Code. The obligation of the City under this Section 4.27 shall survive termination of this Agreement.

SECTION 4.28. ERISA. The City and its subsidiaries, for so long as this Installment Purchase Agreement remains outstanding, will remain in compliance in all material respects with the applicable provisions of ERISA, the failure to comply with which has or may have a material adverse effect on the City.

ARTICLE 5

EVENTS OF DEFAULT AND REMEDIES
SECTION 5.1. Events of Default and Acceleration of Installment Purchase Agreement. Any of the following events shall constitute an event of default:
(a) Events of Default.
24438.70027\43315153.4
32 (i) If default shall be made in the due and punctual payment of the interest component of Installment Payments payable pursuant to this Installment Purchase Agreement or with respect to any Parity Obligation when and as the same shall become due and payable; or
(ii) If default shall be made in the due and punctual payment of the principal component of Installment Payments of or prepayment premium, if any, on or of any sinking fund installment pursuant to this Installment Purchase Agreement or with respect to any Parity Obligation when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; or
(iii) If default shall be made by the City in the observance or performance of any of the other agreements, conditions, covenants or terms on its part contained in this Installment Purchase Agreement, 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 Authority, which may give notice in its discretion; provided, that such default shall not constitute an Event of Default if the City shall commence to cure such default within such thirty (30)-day period and thereafter diligently and in good faith shall proceed to cure such default within a reasonable period of time but not later than an additional thirty (30) days; or
(iv) If the City shall file 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 City, 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 City or of the whole or any substantial part of its property; or
(v) Any representation or warranty made or deemed to be made by or on behalf of the City in this Installment Purchase Agreement or any other Financing Document or in any certificate, financial or other statement furnished by or on behalf of the City to the Authority pursuant hereto or thereto shall prove to have been inaccurate, misleading or incomplete in any material respect when made; or
(vi) Any material provision of this Installment Purchase Agreement or any other Financing Document shall at any time for any reason cease to be the legal, valid and binding obligation of the City or the Authority or shall cease to be in full force and effect, or shall be declared to be unenforceable, invalid or void, or the validity or enforceability thereof shall be contested by the City or the Authority, or the City or the Authority shall renounce the same or deny that it has any further liability hereunder or thereunder; or (vii) Dissolution, termination of existence, insolvency or business failure of the City; or
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33 (viii) Any court of competent jurisdiction with jurisdiction to rule on the validity of any provision of this Installment Purchase Agreement shall find or rule that this Installment Purchase Agreement is not valid or not binding on the City; or (ix) The City should, after any applicable grace period, breach or be in default under the terms of this Installment Purchase Agreement or any other agreement between the City and the Authority or any affiliate of the Authority; or (x) A judgment, decree, or order for the payment of money will have been rendered against the System which has a material adverse effect on the City and either: (1) enforcement proceedings will have been commenced; (2) a lien prohibited by this Installment Purchase Agreement will have been obtained; or (3) such judgment, decree, or order will continue unsatisfied and in effect for a period of 30 consecutive days without being vacated, discharged, satisfied, bonded, or stayed pending appeal; or (xi) This Installment Purchase Agreement or any Schedule ceases to be legal, valid, binding and enforceable against the City or is in any way terminated (except in accordance with its terms) or becomes or is declared ineffective or inoperative; or (xii) The City has a Material Adverse Change; or
(xiii) Any default occurs (i) under any Parity Obligations or Subordinate Obligations instrument or any other System Obligation; or (ii) any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which the City is an obligor if such default (A) arises under any other agreement for borrowing money, lease financing of property or provision of credit provided by Assignee or any affiliate of Assignee, or (B) arises under any Parity Obligation or Subordinate Obligation instrument or any other System Obligation under which there is outstanding, owing or committed an aggregated amount in excess of $100,000.00; or (xiv) the City fails to maintain insurance required under Section 4.5 hereof, or (iii) observe and perform any covenant, condition or agreement on its part to be observed or performed under Sections 4.4, 4.7, 4.9, 4.12 and/or 4.14 hereof; or (xv) The City shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of the City, or of all or a substantial part of the assets of the City, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable Federal bankruptcy law, or (v) be subject to any liquidation, readjustment, reorganization, moratorium or insolvency proceeding; or (xvi) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator for the City or the System or of all or a substantial part of the assets of the City or the System.
(b) Remedies on Default. Whenever any Event of Default shall have happened and be continuing, the Authority shall have the right, at its option upon notice to the City, to declare the 24438.70027\43315153.4
34 unpaid aggregate principal components of the Installment Payments as identified on Exhibit B hereto, and the interest accrued thereon, to be immediately due and payable, whereupon the same shall immediately become due and payable.

The Authority shall also have the right, at its option upon notice to the City, to (i) apply to and obtain from any court of competent jurisdiction such decree or order as may be necessary to require officials of the City to charge and collect rates for services provided by the City and the System sufficient to meet all requirements of this Installment Purchase Agreement, (ii) take whatever action at law or in equity as may appear necessary or desirable to collect the Installment Payments then due or thereafter to become due during the Term of this Installment Purchase Agreement, or enforce performance and observance of any obligation, agreement or covenant of the City under this Installment Purchase Agreement, subject to the following paragraph, (iii) Assignee may terminate the Escrow Agreement and apply any proceeds in the Project Fund to the Installment Payments scheduled to be paid hereunder, and (iv) Assignee may take whatever action at law or in equity as may appear necessary or desirable to enforce its rights under the Escrow Agreement or as a secured party in any or all of the Project or the Escrow Account; and/or Assignee may exercise any and all rights and remedies conferred under any Parity Obligation or Contract, including any Incorporated Provision.

Notwithstanding any provision of this Installment Purchase Agreement, the City’s liability to pay the Installment Payments and other amounts hereunder shall be limited solely to Net Revenues as provided in Article 3 hereof. In the event that Net Revenues shall be insufficient at any time to pay the principal and interest on the Installment Payments in full, the City shall not be liable to pay or prepay such delinquent Installment Payments other than from Net Revenues.

In addition, the City shall be liable for, and hereby agrees to pay, all legal costs and expenses, including court costs, incurred by the Assignee in the enforcement of any of the remedies listed above or any other remedy available to the Assignee.

SECTION 5.2. Application of Funds Upon Acceleration or Event. Following an Event of Default, the City shall cause all Net Revenues to be applied to the payment of the principal of and interest then due on the Parity Obligations including this Installment Purchase Agreement (upon presentation of the Parity Obligations to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) as follows: (a) Unless the principal of all of the Parity Obligations including this Installment Purchase Agreement shall have become or have been declared due and payable,
FIRST: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; and
SECOND: To the payment to the persons entitled thereto of the unpaid principal of any the Parity Obligations including this Installment Purchase Agreement which shall have become due, whether at maturity or by call for redemption, with interest on the overdue principal at the rate borne by such Parity Obligations including this Installment Purchase Agreement, and, if the 24438.70027\43315153.4
35 amount available shall not be sufficient to pay in full all such Parity Obligations, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference; and additionally once delinquent payments are paid ratably, as follows:
(b) There shall be created in the Revenue Fund a separate principal and interest subaccount (each a “Principal and Interest Subaccount”) for each Parity Obligation (including this Installment Purchase Agreement) and there shall be transferred, on the last day of each calendar month, from Net Revenues in the Revenue Fund, and credited to the respective Principal and Interest Subaccount, an amount equal to the sum of:
(i) one-twelfth (1/12) of the principal coming due on the next succeeding Contract Payment Date for each Parity Obligation for which principal is scheduled to be paid on an annual basis (including this Installment Purchase Agreement); (ii) one-sixth (1/6) of the principal coming due on the next succeeding Contract Payment Date for each Parity Obligation for which principal is scheduled to be paid on a semiannual basis;
(iii) one-twelfth (1/12) of the interest coming due on the next succeeding Contract Payment Date for each Parity Obligation for which interest is scheduled to be paid on an annual basis; and
(iv) one-sixth (1/6) of the interest coming due on the next succeeding Contract Payment Date for each Parity Obligation for which interest is scheduled to be paid on a semiannual basis (including each Installment Payment Date for this Installment Purchase Agreement); until the amount available in the respective Principal and Interest Subaccount shall equal the principal or interest, as applicable, payable on the next succeeding Contract Payment Date. (c) If the principal of all of the Parity Obligations including this Installment Purchase Agreement shall have become or have been declared due and payable, Net Revenues shall be applied to the payment of the principal and interest then due and unpaid upon such Parity Obligations including this Installment Purchase Agreement, with interest on the overdue principal at the rate borne by such Parity Obligations including this Installment Purchase Agreement, and, if the amount available shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Parity Obligation over any other Parity Obligation, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference.

Notwithstanding anything in any other instrument to the contrary, following an Event of Default, no portion of any Net Revenues shall pay any amounts on any Subordinate Obligations or other System Obligations other than Parity Obligations including this Installment Purchase Agreement until all Parity Obligations including this Installment Purchase Agreement have been paid current and all Events of Default have been fully cured. 24438.70027\43315153.4
36 SECTION 5.3. Other Remedies of the Authorityby 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 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
(c) by suit in equity upon the happening of an Event of Default to require the City and its Board of Directors, officers and employees to account as the trustee of an express trust.

SECTION 5.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Installment Purchase Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article 5 it shall not be necessary to give any notice, other than such notice as may be required, in this Article 5 or by law.

SECTION 5.5. Agreement to Pay Attorneys’ Fees and Expenses. In the event either party to this Installment Purchase Agreement should default under any of the provisions hereof and the non-defaulting party should employ attorneys (including in-house counsel) or incur other expenses for the collection of moneys or the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the non-defaulting party the reasonable fees of such attorneys (including the allocable cost of in-house counsel) and such other expenses so incurred by the non-defaulting party.

SECTION 5.6. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Installment Purchase Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.

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 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.
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37 SECTION 5.7. Prosecution and Defense of Suits. The City shall promptly, upon request of the Assignee, from time to time take or cause to be taken such action as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the System whether now existing or hereafter developing and shall prosecute all such suits, actions and other proceedings as may be appropriate for such purpose.

ARTICLE 6

PREPAYMENT OF AGREEMENT
SECTION 6.1. Optional Prepayment. From and after the date specified (if any) in the Schedule of Installment Payments (the “Prepayment Option Commencement Date”), on the Installment Payment Dates specified in the Schedule of Installment Payments, upon not less than forty-five (45) days prior written notice, and upon payment in full of the sum of all Installment Payments then due plus the then applicable Prepayment Price, which shall include a prepayment premium on the unpaid Outstanding Balance as set forth in the Schedule of Installment Payments plus all other amounts then owing hereunder.

After payment of the applicable Prepayment Price and all other amounts then owing hereunder in accordance with this Section 6.1 of this Installment Purchase Agreement, Assignee’s security interests in and to the Project will be terminated and the City will own such Project free and clear of Assignee’s security interest in such Project.

SECTION 6.2. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain. The City shall prepay the unpaid principal components of the Installment Payments in whole on any date or in part, on any Installment Payment Date from all amounts collected from insurance against accident to or destruction of any portion of the System shall be used to repair or rebuild such damaged or destroyed portion of the System or if determined not to repair or rebuild such portion and in any event to the extent not so applied, must either (a) be used for the acquisition or construction or improvements and extensions or replacement facilities or (b) be applied to prepay or redeem the Installment Payments and any Parity Obligations, on a pro rata basis, in the manner provided in this Installment Sale Agreement and the Installment Purchase Agreement authorizing such Parity Obligations.

Except as provided herein, the City covenants that the System will not be encumbered, sold, leased, pledged, any charge placed thereon, or otherwise disposed of, as a whole or substantially as a whole if such encumbrance, sale, lease, pledge, charge or other disposition would materially impair the ability of the City to pay the Installment Payments or the principal of or interest on any Parity Obligations, or would materially adversely affect its ability to comply with the terms of this Installment Sale Agreement or the instruments authorizing the issuance of any Parity Obligations. The City shall not enter into any agreement which impairs the operation of the System or any part of it necessary to secure adequate Net Revenues to pay the Installment Payments and any Parity Obligations, or which otherwise would impair the rights of the Corporation with respect to the Net Revenues. If any substantial part of the System is sold, the payment therefor must either (a) be used for the acquisition or construction of improvements and extensions or replacement facilities or (b) be applied to prepay or redeem the Installment Payments 24438.70027\43315153.4
38 and any Parity Obligations, on a pro rata basis, in the manner provided herein and in the instruments authorizing such Parity Obligations.

Any amounts received as awards as a result of the taking of all or any part of the System by the lawful exercise of eminent domain, if and to the extent that such right can be exercised against such property of the City, shall either (a) be used for the acquisition or construction of improvements and extension or replacement facilities of the System, or (b) be applied to prepay or redeem the Installment Payments and any Parity Obligations, on a pro rata basis, in the manner provided herein and in the instruments authorizing such Parity Obligations.

SECTION 6.3. Effect of Prepayment. In the event that the City prepays all the Installment Payments in full and all other sums due to the Authority hereunder in full pursuant to Article 6, the City’s obligations under this Installment Purchase Agreement shall thereupon cease and terminate, including but not limited to the City’s obligation to pay Installment Payments under this Installment Purchase Agreement.

Mandatory prepayment of unexpended proceeds is provided as follows:
(a) Any funds not applied to Project Costs and remaining in the Project Fund on the earliest of (i) the expiration of the Acquisition Period, (ii) the date on which the City delivers to the Assignee the executed Disbursement Request to effect the final disbursement to pay (or reimburse) Project Costs from the Project Fund or (iii) a termination of the Project Fund as provided in the Escrow Agreement shall be applied by Assignee on each successive Installment Payment Date thereafter to pay all or a portion of the Installment Payment due and owing in the succeeding twelve (12) months and any remaining amounts shall be applied by Assignee as prepayment to the applicable unpaid Principal Portion of Installment Payments owing hereunder in the inverse order of the Installment Payment Dates at a price of 100% of such prepaid Principal Portion plus accrued interest thereon to the prepayment date. (b) In connection with any partial prepayment of Installment Payments, Assignee shall prepare a new Schedule of Installment Payments reflecting the application of such prepayments in the inverse order of the Installment Payment Dates and deliver the same to the City, which shall be binding, absent manifest error.

ARTICLE 7

MISCELLANEOUS
SECTION 7.1. Notices. All written notices to be given under this Installment Purchase Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by telecopier or other form of telecommunication or electronic mail, at its number set forth below. Notice shall be effective either (a) upon transmission by telecopier or other form of telecommunication, (b) 48 hours after deposit in the United States of America first class mail, postage prepaid, or (c) in the case of personal delivery to any person or electronic mail, upon actual receipt. The Authority and the City may, by written notice to the other party, from time to time modify the address or number to which communications are to be given hereunder. 24438.70027\43315153.4
39 If to the Authority, as follows:

City of San Jacinto Public Financing Authority
595 S San Jacinto Avenue
San Jacinto, CA 92583
Attn: Executive Director
If to the City, as follows:

City of San Jacinto
595 S San Jacinto Avenue
San Jacinto, CA 92583
Attn: City Manager
SECTION 7.2. Assignment by the Authority. The Authority’s rights under this Installment Purchase Agreement, including the right to receive and enforce payment of the Installment Payments to be made by the City under this Installment Purchase Agreement and security interest in the Project shall be assigned to the Assignee. Assignee’s right, title and interest in and to this Installment Purchase Agreement, the Installment Payments and any other amounts payable by the City hereunder, the Escrow Agreement, its security interest in the Project (collectively, the “Assigned Rights”), may be assigned and reassigned by Assignee at any time, in whole or in part, to one or more assignees or sub assignees without the necessity of obtaining the consent of the City; provided, that any such assignment, transfer or conveyance (i) shall be made only to investors each of whom the Assignee reasonably believes is a “qualified institutional buyer” as defined in Rule 144A(a)(1) promulgated under the Securities Act of 1933, as amended, or an “accredited investor” as defined in Section 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended, and in either case is purchasing the Assigned Rights (or any interest therein) for its own account with no present intention to resell or distribute such Assigned Rights (or interest therein), subject to each investor’s right at any time to dispose of the Assigned Rights (or any interest therein) as it determines to be in its best interests, (ii) shall not result in more than 35 owners of the Assigned Rights or the creation of any interest in the Assigned Rights in an aggregate principal component that is less than $100,000 and (iii) shall not require the City to make Installment Payments, to send notices or otherwise to deal with respect to matters arising hereunder or under the Escrow Agreement with or to more than one Servicer (as such term is defined below), and any trust agreement, participation agreement or custodial agreement under which multiple ownership interests in the Assigned Rights are created shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, trustee, owner, servicer or other fiduciary or agent acting on behalf of all of the assignees (herein referred to as the “Servicer”) to act on their behalf with respect to the Assigned Rights, including with respect to the exercise of rights and remedies of Assignee on behalf of such owners upon the occurrence of an Event of Default under this Installment Purchase Agreement.

Unless to an affiliate controlling, controlled by or under common control with Assignee, no assignment, transfer or conveyance permitted by this Section 7.1 shall be effective as against the City until the City shall have received a written notice of assignment that discloses the name and address of each such assignee and an Investor Letter in substantially the form attached hereto in Exhibit C; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, participation interests, trust certificates or partnership interests with respect to the Installment Payments payable under this Installment Purchase Agreement, it shall thereafter be sufficient that the City receives notice of the name and address of the bank, trust company or other entity that acts as the Servicer. During the Term of this Installment Purchase Agreement, the City shall keep, or cause to be kept, a complete and accurate record of all such assignments in form necessary to comply with Section 149 of the Code.

The City shall retain all such notices as a register of all assignees and shall make all payments to the assignee or assignees or Servicer last designated in such register. The City shall not have the 24438.70027\43315153.4
40 right to and shall not assert against any assignee any claim, counterclaim or other right the City may have against Assignee. Assignments in part may include without limitation assignment of all of Assignee’s security interest in and to the Project and all rights in, to and under this Installment Purchase Agreement related to such Project, and all of Assignee’s security interest in and to the Collateral, or all rights in, to and under the Escrow Agreement. Upon any assignment the Authority shall provide the City a written notice of such assignment naming the assignee. If Assignee notifies the City of its intent to assign this Installment Purchase Agreement, the City agrees that it shall execute and deliver to Assignee a Notice and Acknowledgement of Assignment substantially in the form of Exhibit E attached hereto within five (5) business days after its receipt of such request.

The City acknowledges and agrees that the Authority has entered into the Assignment Agreement with Assignee concurrently with this Installment Purchase Agreement pursuant to which the Authority has assigned its rights and obligations under this Installment Purchase Agreement to the Assignee.

The Authority or any assignee has the right to make additional assignments of its rights and obligations under this Installment Purchase Agreement, but the City shall not be required to pay more than a single payee, regardless of the number of assignees, and no such assignment will be effective as against the City unless and until the City consents to such assignment. The City shall pay all Installment Payments hereunder under the written direction of the Authority or the assignee named in the most recent assignment or notice of assignment filed with the City. During the Term of this Installment Purchase Agreement, the City shall keep a complete and accurate record of all such notices of assignment.

SECTION 7.3. Assignment by the City. None of the City’s right, title, and interest in, to and under this Installment Purchase Agreement or any portion of the Project, the Escrow Agreement, the Escrow Account or the other Collateral may be assigned, encumbered or subleased by the City for any reason, and any purported assignment, encumbrance or sublease without Assignee’s prior written consent, which consent shall not be unreasonably withheld, shall be null and void. In connection with any such assignment by the City, the City shall provide the Authority with an opinion of bond counsel that the assignee is legally obligated to pay all Installment Payments and other sums hereunder and to satisfy all of the obligations of the City under this Installment Purchase Agreement and the other Financing Documents, and that such assignment shall not adversely affect the exclusion of interest payable pursuant to this Installment Purchase Agreement from gross income for federal income tax purposes and the exemption of such interest for State of California income tax purposes.

SECTION 7.4. Amendment of this Installment Purchase Agreement. This Installment Purchase Agreement may be amended only in writing by the City and the Authority with the prior written consent of the Assignee.

SECTION 7.5. Binding Effect. This Installment Purchase Agreement shall inure to the benefit of and shall be binding upon the Authority and the City and their respective successors and assigns The Assignee is deemed to be a third-party beneficiary of this Installment Purchase Agreement..
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41 SECTION 7.6. Severability. In the event any provision of this Installment Purchase Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

SECTION 7.7. Net-Net-Net Parity Obligation. This Installment Purchase Agreement shall be deemed and construed to be a “net-net-net” contract, and the City hereby agrees that the Installment Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever.

SECTION 7.8. Further Assurances and Corrective Instruments. The Authority and the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for carrying out the expressed intention of this Installment Purchase Agreement. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Installment Purchase Agreement, and for the better assuring and confirming unto the owners of the Parity Obligations the rights and benefits provided herein and in the Parity Obligations.

SECTION 7.9. Execution in Counterparts. This Installment Purchase Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

SECTION 7.10. Applicable Law and Venue. This Installment Purchase Agreement shall be governed by and construed in accordance with the laws of the State of California. The parties hereto consent and submit to the jurisdiction of the State and venue in any state or Federal court of such State of California in Riverside County for the purposes of any suit, action or other proceeding arising in connection with this Installment Purchase Agreement.

SECTION 7.11. Captions. The captions or headings in this Installment Purchase Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Section of this Installment Purchase Agreement.

SECTION 7.12. USA Patriot Act Notice. The Authority hereby notifies the City that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify, and record information that identifies the City in accordance with the USA Patriot Act. The City covenants and agrees it will not, and agrees to cause each of its subsidiaries not to, at any time, directly or indirectly be (a) a person with whom the Authority is restricted from doing business under any Anti-Terrorism Law, (b) engaged in any business involved in making or receiving any contribution of funds, goods or services to or for the benefit of such a person or in any transaction that evades or avoids, or has the purpose of evading or avoiding, the prohibitions set forth in any AntiTerrorism Law, or (c) otherwise in violation of any Anti-Terrorism Law (the City will and will cause each of its subsidiaries to provide to the Authority any certifications or information that the Authority requests to confirm compliance by the City and its subsidiaries with any Anti-Terrorism Law). “Anti-Terrorism Law” means any law relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the laws comprising or implementing the Authority Secrecy Act, and the Laws administered by the United States Treasury Department’s 24438.70027\43315153.4
42 Office of Foreign Asset Control, as any of the foregoing laws may from time to time be amended, renewed, extended, or replaced.

SECTION 7.13. Costs and Expenses. To the extent allowed by law, the City agrees to pay all reasonable out-of-pocket costs and expenses (including the fees and expenses of counsel retained or employed by the Authority) incurred by the Authority and any participants of the Authority in connection with the origination, administration, collection and enforcement of this Installment Purchase Agreement, including, without limitation, all costs and expenses incurred in obtaining, perfecting, maintaining, determining the priority of, and releasing any security for the City’s obligations to the Authority, and any stamp, intangible, transfer or like tax incurred in connection with this Installment Purchase Agreement or the recording hereof or thereof.

SECTION 7.14. Indemnification. To the extent allowed by law, the City indemnifies the Authority, the Assignee, its affiliates and its and their respective officers, directors, employees, agents and advisors (each an “Indemnitee”) against, and holds each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including fees and expenses of employed or retained counsel) incurred by any Indemnitee or asserted against any Indemnitee by any third party arising out of or as a result of (a) the execution or delivery of any Financing Document, (b) the acquisition, construction, ownership, operation and all other matters relating to, the acquisition, construction, ownership, operation and all other matters relating to the Project and the System or the grant of agency made by the Authority under Section 3.1 hereunder, the performance or nonperformance by the City of its obligations under any Financing Document or the consummation of the transactions contemplated thereby, including the use of the proceeds therefrom, (c) breach of representations, warranties or covenants of the City under this Installment Purchase Agreement, or (d) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, including any such items or losses relating to or arising under environmental Laws or pertaining to environmental matters, regardless whether any Indemnitee is a party thereto; provided that such indemnity will not, as to an Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the active negligence or willful misconduct of such Indemnitee. The obligation of the City under this Section

7.14 shall survive termination of this Agreement.

SECTION 7.15. Waiver of Jury Trial. To the extent allowed by law, the City and the Authority each hereby irrevocably waives any right it may have to a trial by jury in connection with any action directly or indirectly arising out of or relating to this Installment Purchase Agreement and any other Financing Document. Each party hereto (i) certifies that no representative, administrative agent or attorney of any other person has represented, expressly or otherwise, that such other person would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to enter into this Installment Purchase Agreement by, among other things, the mutual waivers and certifications in this section. If the waiver of jury trial contained herein is unenforceable for any reason, then the parties hereto agree that the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision.
24438.70027\43315153.4
43 (Signature page follows)
24438.70027\43315153.4
S-1
IN WITNESS WHEREOF, the Authority has caused this Installment Purchase Agreement to be executed in its corporate name by its duly authorized officer, and the City has caused this Installment Purchase Agreement to be executed in its name by its duly authorized officer, as of the date first above written.

CITY OF SAN JACINTO PUBLIC FINANCING

AUTHORITY
By: ______________________________________
Robert Johnson, Executive Director
ATTEST:

By: _______________________________
Julia Espinoza, Secretary

CITY OF SAN JACINTO
By: ______________________________________
Robert Johnson, City Manager
ATTEST:

By: _____________________________
Julia Espinoza, City Clerk
-Signature PageInstallment Purchase Agreement
24438.70027\43315153.4
A-1

EXHIBIT A

DESCRIPTION OF THE PROJECT
The Project consists of improvements to the City’s Grand Well, located at 906 Industrial Way. Improvements will be constructed that will equip the Grand Well with a 600-horsepower motor and pump capable of delivering 2,500 gallons per minute. Additionally, the existing treatment plant and clarifier tank adjacent to the well will be demolished and will be replaced with a new clarifier tank that expands the existing clarifier pit and a new treatment plant facility. The Project will also involve installing all necessary electrical components for the well, treatment plant, and existing booster pumps. Further improvements will be made to the existing water reservoir, along with security enhancements to the well site.

The Project is located on Assessor Parcel Number: 435020029 Legal description of site: 3.41 ACRES M/L IN POR LOT 154 MB 008/357 SD SAN JACINTO RANCHO Lot 154 Subdivision Name SAN JACINTO RANCHO Acres 003.41 M/L Lot Type Lot RecMapType Map Book Recorded COCode SD Map Plat B 008 Map Plat P 357 Portion Lot Portion.
24438.70027\43315153.4
B-1

EXHIBIT B

SCHEDULE OF INSTALLMENT PAYMENTS
Date
Funding/Outstanding
Balance Principal
Interest
@ 4.3204 Payment
[ADD prepay with
premium amts
Apr-10-25 $9,097,000
Aug-07-25 $ 183,000.00 $ 121,183.26 $ 304,183.26
Feb-07-26 182,000.00 192,560.23 374,560.23
Aug-07-26 152,000.00 188,628.66 340,628.66
Feb-07-27 152,000.00 185,345.16 337,345.16
Aug-07-27 159,000.00 182,061.66 341,061.66
Feb-07-28 159,000.00 178,626.94 337,626.94
Aug-07-28 166,000.00 175,192.22 341,192.22
Feb-07-29 166,000.00 171,606.29 337,606.29
Aug-07-29 173,000.00 168,020.36 341,020.36
Feb-07-30 173,000.00 164,283.21 337,283.21
Aug-07-30 180,000.00 160,546.06 340,546.06
Feb-07-31 181,000.00 156,657.70 337,657.70
Aug-07-31 188,000.00 152,747.74 340,747.74
Feb-07-32 189,000.00 148,686.57 337,686.57
Aug-07-32 196,000.00 144,603.79 340,603.79
Feb-07-33 197,000.00 140,369.80 337,369.80
Aug-07-33 206,000.00 136,114.20 342,114.20
Feb-07-34 205,000.00 131,664.19 336,664.19
Aug-07-34 214,000.00 127,235.78 341,235.78
Feb-07-35 214,000.00 122,612.95 336,612.95
Aug-07-35 223,000.00 117,990.12 340,990.12
Feb-07-36 224,000.00 113,172.88 337,172.88
Aug-07-36 234,000.00 108,334.03 342,334.03
Feb-07-37 233,000.00 103,279.16 336,279.16
Aug-07-37 243,000.00 98,245.90 341,245.90
Feb-07-38 244,000.00 92,996.61 336,996.61
Aug-07-38 254,000.00 87,725.72 341,725.72
Feb-07-39 254,000.00 82,238.81 336,238.81
Aug-07-39 266,000.00 76,751.91 342,751.91
Feb-07-40 265,000.00 71,005.77 336,005.77
Aug-07-40 277,000.00 65,281.24 342,281.24
Feb-07-41 277,000.00 59,297.49 336,297.49
Aug-07-41 289,000.00 53,313.74 342,313.74
Feb-07-42 289,000.00 47,070.76 336,070.76
Aug-07-42 301,000.00 40,827.78 341,827.78
Feb-07-43 302,000.00 34,325.58 336,325.58
Aug-07-43 315,000.00 27,801.77 342,801.77
Feb-07-44 315,000.00 20,997.14 335,997.14
Aug-07-44 328,000.00 14,192.51 342,192.51
Feb-07-45 329,000.00 _____7,107.06 336,107.06
$9,097,000 $9,097,000.00 $4,470,702.75 $13,567,702.75
24438.70027\43315153.4
C-1

EXHIBIT C

FORM OF INVESTOR LETTER
LENDER’S CERTIFICATE

CITY OF SAN JACINTO

INSTALLMENT PURCHASE AGREEMENT
(the “Obligation”)
In connection with that certain Installment Purchase Agreement dated April 1, 2025 (the “Obligation”) entered into by the City of San Jacinto (the “Issuer”) and City of San Jacinto Public Financing Authority (the “Authority”), Banc of America Public Capital Corp., as assignee of the Authority (the “Lender”), the Lender hereby states:

1. The Lender has knowledge and experience in financial and business matters relating to the Obligation and is capable of evaluating the merits and risks of the Obligation and is able to bear the economic risks thereof.

2. The Lender has made such investigation of the financial information provided by the Issuer as the Lender, in the exercise of its business judgment, considers appropriate under the circumstances. In making its decision to acquire the Obligation, the Lender has relied on the accuracy and completeness of information provided by the Issuer. The Lender has not required the Issuer to deliver any offering document in connection with the issuance of the Obligation.

3. The Lender is aware that investment in the Obligation involves various risks, that the Obligation is not a general obligation of the Issuer, and that payment of the Obligation is secured only from the sources described in the resolution or ordinance of the Issuer authorizing the Obligation (the “Authorizing Measure”) and the Installment Purchase Agreement and related Financing documents identified therein.

4. Neither the Lender nor any of its affiliates is acting as a fiduciary for the Issuer or in the capacity of broker, dealer, underwriter, or municipal advisor with respect to the Obligation.

Neither the Lender nor any of its affiliates has provided or will provide any financial, legal, tax, accounting or other advice to the Issuer with respect to the Obligation; it being understood that the Issuer has sought and obtained and will obtain such advice (including as it relates to structure, timing, terms, and similar matters) with respect to the Obligation from its own advisors (and not the Lender or any of its affiliates) to the extent that the Issuer desired or desires to obtain such advice.

5. The Lender acknowledges that the Authorizing Measure is not being qualified under the Trust Indenture Act of 1939, as amended, and the Obligation is not being registered in reliance upon the exemption from registration under Section 3(a)(2) of the Securities Act of 1933, as amended, and that neither the Issuer nor bond counsel shall have any obligation to effect any such registration or qualification.
24438.70027\43315153.4
C-2

6. The Lender is not acting as a broker or other intermediary and is making the Financing and acquiring the Obligation as an investment for its own account and not with a present view to a resale or other distribution to the public. The Lender understands that the Obligation may not be transferred except in compliance with applicable federal and state laws.

7. The Lender is an “accredited investor” within the meaning of the Securities Act of 1933, as amended, and Regulation D thereunder.

DATED as of __________, 20__
BANC OF AMERICA PUBLIC CAPITAL CORP.[
By:

Name:

Title:
24438.70027\43315153.4
D-1

EXHIBIT D
$9,097,000

CITY OF SAN JACINTO PUBLIC FINANCING AUTHORITY
2025 INSTALLMENT FINANCING
(WATER SYSTEM IMPROVEMENTS)

FINAL ACCEPTANCE CERTIFICATE
The undersigned hereby states and certifies:
(i) that she is the duly appointed, qualified and acting Finance Director of the City (the “City”) and as such she is authorized to sign a written certificate of the City; (ii) that, pursuant to Section 3.11 of the Installment Purchase Agreement as defined below, the final Disbursement Request has been submitted by the City and the City delivers to the assignee Assignee a this Final Acceptance Certificate as of the date set forther below.

Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Installment Purchase Agreement, dated as of April 1, 2025, by and between the City of San Jacinto Public Financing Authority, a joint powers authority duly organized and existing under the laws of the State of California, and the City of San Jacinto, a municipal corporation duly organized and existing under the laws of the State of California.

Date: __________

CITY OF SAN JACINTO
_______________________
Finance Director
24438.70027\43315153.4
E-1

EXHIBIT E
$9,097,000

CITY OF SAN JACINTO PUBLIC FINANCING AUTHORITY
2025 INSTALLMENT FINANCING
(WATER SYSTEM IMPROVEMENTS)

NOTICE OF ACKNOWLEDGEMENT OF ASSIGNMENT
The undersigned officer of the City acknowledges that it has received the Authority’s written notice of an assignment under the Installment Purchase Agreement.

Date: __________

CITY OF SAN JACINTO
_______________________
Finance Director

San Jacinto City CouncilApril 1, 2025

San Jacinto City Council
April 1, 2025