City of San Juan Bautista
The “City of History”
www.san-juan-bautista.ca.us
CITY COUNCIL
REGULAR MEETING
TUESDAY, AUGUST 19, 2025, 5:15 P.M.
HYBRID MEETING
City Hall, Council Chambers
311 Second Street, San Juan Bautista, California
AGENDA
ZOOM WEBINAR PARTICIPATION
The meeting can also be accessed by the public in the following methods: Through Zoom (https://zoom.us/join) per the instruction stated below, and on Facebook.
Please note: If all Council Members are present in person, public participation by Zoom or viewing on Facebook is for convenience only, and is not required by law. If the Zoom or Facebook feed is lost for any reason the meeting may be paused while a fix is attempted but the meeting may continue at the discretion of the presiding officer.
JOIN ZOOM WEBINAR TO PARTICIPATE LIVE
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To participate telephonically:
call 1 (669) 900-6833
Webinar ID: 883 7332 0235
1. CALL TO ORDER
A. Pledge of Allegiance
B. Roll Call
2. CLOSED SESSION 5:15 P.M. – 6:00 P.M.
Receive public communication from the audience on Closed Session items. The City Council will recess to closed session pursuant to:
a. Conference with Legal Counsel—Existing Litigation – Orozco v. City of San Juan Bautista, et al. (California Government Code section 54956.9(d)(1)) b. Conference with Legal Counsel—Anticipated Litigation – Significant exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of Section 54956.9(e)(2): (Enforcement Action by State Water Resources Control Board and an additional matter with facts and circumstances that might result in litigation, which are not yet known to a potential plaintiff.) Page | 2 City Council August 19, 2025
3. PROCLAMATION
A. Celebrating California’s 175th Birthday, September 9, 2025 and naming California History Week, September 7-13, 2025
B. National Senior Citizens Day, August 21, 2025.
4. PRESENTATION
A. Central Coast Community Energy Annual Presentation (Cynthia Quiane) B. San Juan School Project Update (Barbara DillVarga, Superintendent)
5. PUBLIC COMMENT
Public comments generally are limited to three minutes per speaker on items that are not on the agenda and are under the City’s subject matter jurisdiction. The Mayor may further limit the time for public comments depending on the agenda schedule.
CLOSE CITY COUNCIL MEETING /
OPEN SAN JUAN BAUTISTA FINANCE AUTHORITY MEETING
PUBLIC FINANCING AUTHORITY MEETING
AGENDA
1. ACTION ITEMS
A. Consideration of Resolutions Authorizing the Execution and Delivery of the Series 2025A and Series 2025B Wastewater Revenue Bonds and Approval of Corresponding Financing Documents in Connection with the San Juan Bautista to Hollister Force Main Development Project
Recommendation: Approve the Public Financing Authority RESOLUTION No. 2025-001, approving the form of the Financing Documents and authorizing the issuance and sale of the Bonds to USDA.
ADJOURN THE SAN JUAN BAUTISTA PUBLIC FINANCE AUTHORITY MEETING /
RECONVENE THE CITY COUNCIL MEETING
Page | 3 City Council August 19, 2025
6. ACTION
A. Consideration of Resolutions Authorizing the Execution and Delivery of the Series 2025A and Series 2025B Wastewater Revenue Bonds and Approval of Corresponding Financing Documents in Connection with The San Juan Bautista to Hollister Force Main Development Project
Recommendation: Approve a RESOLUTION Approving the form of the Trust Agreements, Installment Sale Agreements, Assignment Agreements, Irrevocable Payment Instructions, and USDA Purchase Offer, (collectively, the “Financing Documents”), and authorizing execution and delivery of the Series 2025A and Series 2025B Wastewater Revenue Bonds (collectively, the “Bonds”); and Approve a RESOLUTION Approving and adopting the USDA RUS Bulletin 1780-27 Loan Resolutions, which are required by the United States Department of Agriculture ("USDA") in order to close on the Bonds..
B. League of California Cities Voting Delegate
Recommendation: Delegate a Voting Delegate and Alternate for the League of California Cities Annual Conference and Expo, October 8-10, 2025.
7. ADMINISTRATIVE REPORT
A. Treasurer’s Report and Monthly Financial Statements
8. CONSENT
All matters listed under the San Juan Bautista City Council Consent Agenda may be enacted by one motion unless a member of the City Council or the public requests discussion or a separate vote.
A. Approve the Affidavit of Posting Agenda
B. Waive Reading of Resolutions and Ordinances on the Agenda Beyond Title C. Traffic Impact Mitigation Fee (TIMF) Nexus Study
Recommendation: Approve a RESOLUTION Authorizing the City Manager to enter into a Memorandum of Understanding between the Council of San Benito County of Governments; County of San Benito; City of Hollister, and the City of San Juan Bautista regarding the update to the Traffic Impact Mitigation Fee (TIMF) Nexus Study.
D. Personnel Policies
Recommendation: Approve a RESOLUTION Repealing and Replacing Resolution No. 2018-26 and Resolution No. 2021-66, Approving the City of San Juan Bautista Personnel Policies, and Repealing and Replacing the Provisions of any Resolution in Conflict.
E. Approve the Regular Meeting Minutes of May 20, 2025.
F. Approve the Special Meeting Minutes of June 4, 2025.
G. Approve the Special Meeting Minutes of June 9, 2025.
9. DISCUSSION
A. Discussion on Considering the Establishment of a Policy for City-Sponsored Events Conducted by or In Partnership with Nonprofit Organizations.
10. INFORMATIONAL ITEMS AND REPORTS
A. City Manager’s Report
Page | 4 City Council August 19, 2025
a. Public Safety Department Update
b. Fire Department Update
c. Sheriff Department Update
B. Reports from City Council Representatives to Regional Organizations and Committees C. City Council and Staff Announcements
This is an opportunity for the Council and staff to share the community calendar and announce upcoming dates of interest to the public.
11. ADJOURNMENT
AGENDA MATERIAL / ADDENDUM
Any addendums will be posted not later than 72 hours before regular meetings or 24 hours of special meetings unless otherwise allowed under the Brown Act. City Council reports may be viewed at the City of San Juan Bautista City Hall at 311 Second Street San Juan Bautista and are posted on the City website www.san-juan-bautista.ca.us subject to Staff’s ability to post the documents before the meeting, or City Clerk Elizabeth Soto at [email protected] or calling (831) 623-4661 during normal business hours.
In compliance with the Americans with Disabilities Act, and Govt. Code 54953(a), the city will make reasonable arrangements to ensure accessibility to this meeting. If you need special assistance to participate in this meeting, please contact the City Clerk, a minimum of 48 hours prior to the meeting at (831) 623-4661.
If you challenge any planning or land use decision made at this meeting in court, you may be limited to raising only those issues you or someone else raised at the public hearing held at this meeting, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Please take notice that the time within which to seek judicial review of any final administrative determination reached at this meeting is governed by Section 1094.6 of the California Code of Civil Procedure.
A Closed Session may be called during this meeting pursuant to Government Code §54956.9 (d)(2) if a point has been reached where, in the opinion of the legislative body of the City on the advice of its legal counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the City.
PUBLIC COMMENT PROCEDURES
If you wish to make a public comment and are attending in person, please fill out a speaker card. If you are attending via Zoom, join the Zoom Webinar, and use the "Raise Hand" or if joining by telephone, press *9 on your telephone keypad icon.
SUBMISSION OF PUBLIC COMMENTS
Written comments may be submitted via mail to the City Clerk at City Hall (P.O. Box 1420, San Juan Bautista, CA 95045), or emailed to [email protected] no later than 3:00 p.m. on the Monday before the meeting.
Written comments will be read into the record provided that the reading does not exceed three (3) minutes.
PUBLIC NOTIFICATION
This agenda was posted on Thursday, August 14, 2025 on the bulletin board at City Hall, 311 Second Street, the bulletin board at the City Library, 801 Second Street, the bulletin board at the entrance to the United States Post Office, 301 The Alameda, and the City’s website. Meetings are streamed live at https://www.facebook.com/cityofsanjuanbautista/.
San Juan Bautista
California
~ Celebrating California’s 175th Birthday, September 9, 2025 and Naming September 7 – 13, 2025 as “California History Week ~ WHEREAS, California received statehood on September 9th, 1850, becoming the 31st state admitted into the union, and this historic event deserves to be well celebrated as a state holiday; and
WHEREAS, the California State Legislature voted in August of 1999 to designate the week surrounding September 9th of each year as California History Week with special emphasis on September 9th – California Admission Day; and
WHEREAS, the Order of the Native Daughters of the Golden West established in 1886 is a fraternal and patriotic organization of diverse California-born leaders chartered in our mission to preserve California history and better the quality of life for all Californians; and WHEREAS, the Order honors California by preserving the California Pioneers Roster, funding California Mission and historic monument restoration and lighthouse preservation, offering numerous scholarships and grants for Veterans services, children’s needs, and college; and
WHEREAS, San Juan Bautista Parlor No. 179, chartered in 1910, operates in our Adobe home at 203 4th Street, San Juan Bautista and partners with organizations with similar missions to preserve and promote California history in these ways, and wishes to celebrate California Admission Day.
NOW, THEREFORE, I, Mayor Leslie Q. Jordan, on behalf of the San Juan Bautista City Council, do hereby designate September 7 – 13, 2025 as “California History Week”
in the City of San Juan Bautista and encourage all community members to celebrate this momentous part of California history.
Dated this 19th day of August, 2025
_____________________________
Leslie Q. Jordan, Mayor
San Juan Bautista
California
~ National Senior Citizens Day, August 21, 2025 ~
WHEREAS, National Senior Citizens Day was established to recognize the wisdom, achievements, and invaluable contributions of older Americans to our communities, our economy, and our shared cultural heritage; and
WHEREAS, approximately 78 million people age 65 and older will reside in America by 2035, which will surpass the United States population of people under 18 for the first time in the nation’s history; and
WHEREAS, the senior citizens of San Juan Bautista have played a vital role in building and shaping the City through their hard work, leadership, and dedication to family and community; and WHEREAS, our senior residents serve as living connections to our history and traditions, generously sharing their knowledge, skills, and life experiences with younger generations; and WHEREAS, the City of San Juan Bautista is committed to fostering respect, appreciation, and support for older adults, ensuring they have opportunities to live active, healthy, and fulfilling lives; and WHEREAS, National Senior Citizens Day provides an opportunity for all residents to celebrate our elders, express gratitude for their lasting impact, and reaffirm our dedication to promoting their dignity and well-being; and
NOW, THEREFORE, I, Mayor Leslie Q. Jordan, on behalf of the San Juan Bautista City Council, do hereby recognize August 21, 2025 as “NATIONAL SENIOR CITIZENS DAY” in the city, and encourage all residents to honor and celebrate our senior citizens through acts of kindness, appreciation, and community engagement.
Dated this 19th day of August, 2025
_____________________________
Leslie Q. Jordan, Mayor
3CE Annual Update
San Juan Bautista
August 19th, 2025
1 Together,
Power for Good
2 2024 Energy Highlights
Sourced 409 Megawatts
of clean & renewable energy in 2024, enough to power
350,850 households with renewable energy.
Sourcing Renewable Energy
avoided more than 445,000 metric tons of CO2,the
equivalent of taking 105,911 gasoline-powered passenger vehicles off the road for a year.
3 Renewable Energy Progress Megawatts
(Oct.)
4 • Balances intermittent renewables
• Supports stability
• Reduces reliance on fossil fuels
• Drives affordability
• Empowers customers
Battery Energy Storage Systems
Support the Renewable Transition
Supply Trend September 2022
• Labor Day Weekend
2022
• Flex Alert
• Text message from
Governor's Office
6 Supply Trend July 2024
• Independence Day
holiday weekend
2024
7 Utility Scale Battery Safety
8 Willow Rock Energy Storage Center
• Storage is essential for CA's transition to carbon-free energy • Utilizes compressed air to generate power on demand
• Largest compressed air energy storage project in the world • 200 megawatts for 3CE customers
Energy Storage Innovation
Advanced Compressed Air Energy Storage (A-CAES)
9 Our Energy Future
New Renewable Energy Projects
10 Aratina Solar + Storage
● 120 MW to power 90,000 homes
Atlas Solar + Storage
● 150 MW to power 105,100 homes
Victory Pass Solar + Storage – ONLINE
● 100 MW to power 68,000 homes
Community Engagement
• Ongoing outreach through events, webinars, and
workshops
• Added bilingual staff and expanded translated
materials
• Adopted Underserved Communities Action Plan
• Increased access with interpreters and bilingual
promotion
11 Community Programs
Up to
$4,000 (EV)
Up to
$100,000 (Charger)
Electrify Your
Ride
Electrify
Your Home*
$2,000-$4,000
per unit
(+$1,000)
Income-Qualified/Disaster
Rebuild
New Construction
Electrification
Program
$5,000
per ADU
$3,000
per Affordable Unit
$2,000
per Market Rate Unit
$15,000
per SFH Disaster Rebuild
Agricultural
Electrification
Program
50% up to $10,000
Tier 1 Equipment
50% up to $50,000
Tier 2 Equipment
(+$5,000-$25,000)
Income-Qualified Small
Businesses
Residential
Battery Rebate
Program
Up to
$13,000
$300 per kWh of Battery
Storage, up to 26 kWh
12 *Electrify Your Home Program on pause until October 2025.
Member Agency Programs
No-Cost Technical
Assistance Program
Plan Your
Fleet
Electric Bus
Program
50% up to
$200,000
per E Bus
+$50,000
Per additional E Bus
up to $400,000
Charge Your
Fleet
Up to
$150,000
Electrify
Your Fleet
Up to
$150,000
Reach Codes
Program
No-Cost Technical
Assistance Program
13 Making a Difference
Community Investment
Snapshot of Rebates & Incentives:
● 2,843 electric vehicles
● 2,085 EV chargers
● 1,663 projects for EV readiness
● 38 electric buses
● 746 all-electric water heaters & HVAC systems
● 1,458 all-electric affordable housing units
● 93 all-electric agriculture equipment projects
14 Community Investment
Rebates & Incentives
San Juan Bautista 3CE Investment:
• $9,819 - REACH
• $10,000 – Ag Electrification
• $75,168 – Electric Bus
• $46,703 – Electrify Your Ride
Hollister 3CE Investment:
• $84,064 – Ag Electrification
• $1,500 – Electrify Your Home
• $297,673 – Electrify Your Ride
• $60,000 – New Construction Electrification
15 Legislative Update
• EV and Home Energy Tax Credits
• Federal Taxes and & Tax Credits
• Resource Adequacy Slice of Day
• Pathways Initiative (SB 540)
16 Thank You!
Contact Us:
• Northern Region: Sophia Schwirzke ([email protected]) • Southern Region: Spencer Brandt ([email protected])
• Senior Advisor for Policy and Legislative Affairs: Das Williams ([email protected])
Learn more & apply for programs at 3Cenergy.org
Item: 1.A
Public Financing Authority Meeting
August 19, 2025
Page |1
CITY OF SAN JUAN BAUTISTA
PUBLIC FINANCING AUTHORITY STAFF REPORT
DATE: AUGUST 19, 2025
DEPARTMENT: CITY MANAGER
FROM: ASHLEY COLLICK, CITY MANAGER
BY: CAMERON WEIST, PRINCIPAL, WEIST LAW
TITLE: CONSIDERATION OF RESOLUTIONS AUTHORIZING THE
EXECUTION AND DELIVERY OF THE SERIES 2025A AND SERIES 2025B
WASTEWATER REVENUE BONDS AND APPROVAL OF
CORRESPONDING FINANCING DOCUMENTS IN CONNECTION WITH
THE SAN JUAN BAUTISTA TO HOLLISTER FORCE MAIN
DEVELOPMENT PROJECT
RECOMMENDED MOTION:
Approve the Public Financing Authority Resolution No. 2025-001, approving the form of the Financing Documents and authorizing the issuance and sale of the Bonds to USDA RECOMMENDATION:
Staff recommends that the Board of Directors of the San Juan Bautista Public Financing Authority (the “Authority”) adopt the following resolution:
1. Public Financing Authority Resolution No. 2025-001, approving the form of the Financing Documents and authorizing the issuance and sale of the Bonds to USDA.
BACKGROUND / DISCUSSION:
On January 31, 2023, City Council adopted Resolution No. 2023-10 authorizing the issuance of Series 2023 Wastewater Revenue Bond Anticipation Notes (the “BANs”) to finance the San Juan Bautista to Hollister Force Main Development Project (the “Project”). The BANs were issued on February 15, 2023 in a not-toexceed principal amount of $14,600,000 and sold to First Foundation Public Finance (the “Bank”).
Following a successful construction phase, the Project is now complete and eligible for permanent financing.
Prior to issuance of the BANs, the City received a commitment from USDA to provide long-term take-out financing, subject to the terms and conditions outlined in USDA’s Letter of Conditions, dated November 30, 2022, as amended (the “LOC”).
Page | 2
To facilitate the USDA take-out financing (the “Financing”) and legally structure the repayment mechanism, the City and the Authority propose to issue two series of tax-exempt revenue bonds in the combined amount of $10,268,000:
• Series 2025A Wastewater Revenue Bonds in the amount of $7,000,000; and • Series 2025B Wastewater Revenue Bonds in the amount of $3,268,000.
The breakdown of the Financing into Series 2025A and Series 2025B is due to the maximum amount threshold requirements of USDA. The Bonds will be purchased directly by USDA and amortized over 40 years at a fixed interest rate of 2.750%. Annual debt service is estimated at approximately $425,000, payable solely from Net Revenues of the City’s Wastewater Enterprise Fund.
FINANCING STRUCTURE
The Financing utilizes a standard California installment sale structure, acceptable to USDA and consistent with Government Code Sections 6500 et seq. and 54300 et seq., in which the Authority serves as issuer and seller of the Bonds.
Key steps in the structure include:
• The Authority issues the Bonds to USDA, receiving Bond proceeds at closing. • The Authority and City enter into Installment Sale Agreements under which the City makes semiannual payments (the “Installment Payments”) in amounts equal to the debt service on the Bonds. • The Authority assigns its rights under the Installment Sale Agreements to the Trust Administrator, who is designated as the City Manager, pursuant to Trust Agreements. • The Trust Administrator remits Installment Payments directly to USDA per the terms of the Trust Agreements and Assignment Agreements.
• Proceeds of the Bonds are wired to the Bank to fully retire the outstanding BANs, under Irrevocable Payment Instructions.
• USDA holds the Bonds to maturity, with no underwriting or prepayment penalty risk. • This financing mechanism does not create a general obligation of the City. Only Net Revenues from the Wastewater Enterprise Fund are pledged toward repayment.
SUMMARY OF THE RESOLUTION AND FINANCING DOCUMENTS
The subject resolutions authorize and approve the form of all the foundational legal documents (the “Financing Documents”) necessary to provide for the successful issuance of the Bonds. The adoption of the Resolutions is a legal prerequisite to allow for the completion of the appropriate documentation necessary for Page | 3
the USDA/Bondfinalization. The accompanying Financing Documents comprise a financing structure that is considered standard for California government agencies to legally incur debt secured by wastewater enterprise fund revenues, and is acceptable to USDA, as the purchaser of the Bonds.
In using this financing structure, an installment sale arrangement must be established with a third-party nonprofit entity experienced in tax-exempt debt transactions in California. The Authority is being utilized as such independent nonprofit entity for this financing transaction.
The Financing Documents are being presented to the Council as “form-only documents.” The subject resolutions authorize and direct authorized representatives of the City to finalize the Financing Documents as and when appropriate, and to do all things necessary to provide for the issuance of the Bonds, which is expected to occur sometime towards the middle of September.
A brief description of each of the Financing Documents is as follows:
Installment Sale Agreements (2025A and 2025B): These agreements provide for the sale of the Project to the Authority, and then back to the City in exchange for the City’s promise to make future semi-annual Installment Payments to the Authority, which semi-annual payments are commensurate with the debt service on the Bonds. This agreement also requires the City to maintain Net Revenues in excess of 120% total annual debt service on the Bonds and all parity debt. The Installment Sale Agreement also requires the City to maintain the Project in serviceable condition throughout the term of the Bonds, to pay taxes, if any, and to maintain various forms of insurance, among other things.
Trust Agreements (2025A and 2025B): These documents provides for execution and delivery of the Bonds to USDA in exchange for proceeds in the par amount thereof, and further establishes the covenants and specifics of the Bonds, including (i) the application of proceeds to pay for the reimbursement, acquisition and construction costs of the Project, (ii) the establishment of a debt service reserve funds, (iii) the establishment of a short-lived assets reserve funds, (iv) the Trust Administrator’s duties, (v) repayment mechanisms, (vi) default and remedies provisions, and (vii) the Bond Owners (i.e., USDA) rights and remedies.
Assignment Agreements (2025A and 2025B): This document provides the terms and conditions under which the Authority assigns the City’s Installment Payments to the Trust Administrator, for ultimate payment to USDA.
Purchase Offer: The City (through the Authority) will sell the Bonds to USDA pursuant to the terms of the Purchase Offer. The Purchase Offer states the conditions under which USDA will purchase the Bonds and requires the City to deliver all the duly authorized and executed documents and opinions at closing. The City also covenants that there is no material litigation against the City which would impair its ability to make Installment Payments or affect the Bonds. The sale is scheduled in accordance with the parameters described above.
Irrevocable Payment Instructions: These are irrevocable instructions pursuant to which the proceeds of the Bonds will be sent to First Foundation Public Finance and used exclusively for the purpose of prepaying and defeasing the BANs.
Page | 4
In addition to approving the form of the Financing Documents, the Resolutions also designate the Mayor, Mayor Pro Tem, City Manager, and City Clerk as “Authorized Representatives” of the City and Authority for the purposes of structuring and providing for the execution of the Financing Documents and the corresponding issuance and delivery of the Bonds, and pursuant to the Resolutions are each authorized, jointly and severally, for and in the name of and on behalf of the City and the Authority, to execute and deliver any and all documents and certificates that may be required to be executed in connection with the execution and delivery of the Bonds, and to do any and all things and take any and all actions which may be necessary or advisable, in their discretion, to effectuate the actions which the Council/Board has intended with the adoption of the subject Resolutions.
FISCAL IMPACT
The attached Resolutions establish the legal and financial framework for the issuance of the Bonds for purposes of paying off BANs and replacing with long-term, low-interest USDA debt. Pursuant to the Installment Sale Agreements, the City promises the owners of the Bonds (i.e., USDA) to annually budget and appropriate from the Wastewater Enterprise Fund sufficient funds to make all Installment Payments pursuant to the Installment Sale Agreements. The interest rate is set at 2.750%. Annual payments are expected to average approximately $425,000 per year for 40 years.
ALTERNATIVES
1. Adopt the respective subject resolutions as presented, thereby authorizing and approving the issuance of the Bonds.
2. Do not approve but provide alternative direction to staff.
ATTACHMENTS
1. Resolution No. 2025-xx
2. Resolution No. 2025-xx
3. Resolution No. PFA 2025-001
4. Form of Series 2025A Installment Sale Agreement
5. Form of Series 2025B Installment Sale Agreement
6. Form of Series 2025A Trust Agreement
7. Form of Series 2025B Trust Agreement
8. Form of Series 2025A Assignment Agreement
9. Form of Series 2025B Assignment Agreement
10. USDA Purchase Offer
11. Form of Irrevocable Payment Instructions
NOTE: ALL DOCUMENTS REFERENCED ABOVE ARE ON FILE WITH THE CITY CLERK AND AUTHORITY SECRETARY.
Page | 1
PUBLIC FINANCING AUTHORITY RESOLUTION NO. 2025-001
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SAN JUAN BAUTISTA
PUBLIC FINANCING AUTHORITY APPROVING THE FORM OF AND
AUTHORIZING AND DIRECTING EXECUTION AND DELIVERY OF TRUST
AGREEMENTS, INSTALLMENT SALE AGREEMENTS, ASSIGNMENT
AGREEMENTS AND CERTAIN OTHER DOCUMENTS IN CONNECTION WITH THE
AUTHORIZATION, PREPARATION, SALE AND DELIVERY OF THE SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY, SERIES 2025A AND SERIES 2025B
WASTEWATER REVENUE BONDS, AND AUTHORIZING AND DIRECTING
CERTAIN ACTIONS WITH RESPECT THERETO
WHEREAS, the San Juan Bautista Public Financing Authority (the “Authority”), a joint exercise of powers authority organized and existing under the laws of the State of California, was formed pursuant to the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), and is authorized pursuant to Article 4 of the Act to borrow money for the purpose of, among other things, making loans, buying securities, purchasing facilities, and providing for installment sale arrangements to assist the City of San Juan Bautista (the “City”) in furtherance of its public purposes; and
WHEREAS, on January 31, 2023, the City Council of the City (the “City Council”) adopted Resolution No. 2023-10, authorizing and directing the execution and delivery of Series 2023 Wastewater Revenue Bond Anticipation Notes (the “BANs”) to finance a portion of the costs associated with the acquisition and construction of the City’s San Juan Bautista to Hollister Force Main Development Project (the “Project”); and
WHEREAS, the BANs were issued on February 15, 2023, and sold to First Foundation Public Finance (the “Bank”) on a draw-down basis in an amount not to exceed $14,600,000; and WHEREAS, prior to issuing the BANS, the City received a commitment from the United States Department of Agriculture (“USDA”) to provide long-term take-out financing upon completion of the Project; and
WHEREAS, the Project has now been completed in accordance with the terms and conditions set forth in the “Letter of Conditions” issued by USDA on November 30, 2022, as amended (the “LOC”); and
WHEREAS, to facilitate the payoff of the BANs (the “Financing”), the City has requested the assistance of the Authority to cause the execution, issuance and delivery of Series 2025A Wastewater Revenue Bonds (San Juan Bautista to Hollister Force Main Development Project) in the principal amount of $7,000,000 (the “Series 2025A Bonds”), and Series 2025B Wastewater Revenue Bonds (San Juan Bautista to Hollister Force Main Development Project) in the principal amount of $3,268,000 (the “Series 2025B Bonds,” and together with the Series 2025A Bonds, the “Bonds”); and
Page | 2
WHEREAS, the Series 2025A Bonds are being issued pursuant to and secured by a Series 2025A Trust Agreement (the “Series 2025A Trust Agreement”), dated as of September 1, 2025, by and among the City, the Authority and the City Manager, as trust administrator (the “Trust Administrator”), a copy of which has been presented at this meeting and is on file with the Secretary of the Board (the “Secretary”); and
WHEREAS, the Series 2025B Bonds are being issued pursuant to and secured by a Series 2025B Trust Agreement (the “Series 2025B Trust Agreement,” and together with the Series 2025A Trust Agreement, the “Trust Agreements”), dated as of September 1, 2025, by and among the City, the Authority and the Trust Administrator, a copy of which has been presented at this meeting and is on file with the Secretary; and
WHEREAS, the Bonds will be sold to USDA pursuant to (i) a Resolution adopted by the City Council on August 19, 2025 (the “City Resolution”), and (ii) this Resolution (collectively, the “Resolutions”); and
WHEREAS, the City will purchase the Project from the Authority pursuant to a Series 2025A Installment Sale Agreement and a Series 2025B Installment Sale Agreement (together, the “Installment Sale Agreements”), each dated as of September 1, 2025, by and between the Authority and the City, under which the City will make installment payments (the “Installment Payments”) from the Net Revenues (as defined therein) of its wastewater enterprise; and WHEREAS, in connection with the Financing, the Authority will assign to the Trust Administrator all of its rights under the respective Installment Sale Agreements pursuant to a Series 2025A Assignment Agreement and a Series 2025B Assignment Agreement (together, the “Assignment Agreements”), each dated as of September 1, 2025; and WHEREAS, the Bonds will be sold to USDA pursuant to USDA’s Purchase Offer (the “Purchase Offer”) on the terms set forth therein and in the Trust Agreements and Installment Sale Agreements, provided that the interest rate does not exceed 2.750%; and WHEREAS, the Authority, with the aid of its staff, has reviewed the Trust Agreements, Installment Sale Agreements, Assignment Agreements, and Purchase Offer (collectively, the “Legal Agreements”), the forms of which are on file with the Secretary, and the Board of Directors of the Authority (the “Board”) wishes at this time to approve the foregoing in the public interests of the Authority; and
WHEREAS, in compliance with Section 5852.1 of the California Government Code (the “Code”), the Board has received and disclosed good faith estimates related to the Financing as set forth in Sections 5 and 6 hereof; and
WHEREAS, all conditions precedent to the execution and delivery of the Bonds, as required by the Constitution and laws of the State of California, have been satisfied, and the Authority is duly authorized and empowered to consummate the transactions described herein; and
NOW, THEREFORE, IT IS HEREBY DETERMINED AND RESOLVED BY THE Page | 3
BOARD OF DIRECTORS OF THE SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY AS FOLLOWS:
Section 1. Recitals and Findings. The Board hereby specifically finds and declares that each of the statements, findings and determinations of the Authority set forth in the recitals set forth above and in the preambles of the documents approved herein are true and correct.
Section 2. Authorized Representatives. The Chair, Vice Chair, Executive Director, Treasurer, Secretary, and any other person authorized by the Board to act on behalf of the Authority shall each be an “Authorized Representative” of the Authority for the purposes of structuring and providing for the issuance of the Bonds, and are hereby authorized, jointly and severally, for and in the name of and on behalf of the Authority, to execute and deliver any and all documents and certificates that may be required to be executed in connection with the execution and delivery of the Bonds, and to do any and all things and take any and all actions which may be necessary or advisable, in their discretion, to effectuate the actions which the Board has approved in this Resolution.
Section 3. Authorization of Bonds. The Board hereby approves and authorizes the issuance of the Series 2025A Bonds in a principal amount of not to exceed $7,000,000, as well as the Series 2025B Bonds in a principal amount of not to exceed $3,268,000, all as set forth herein and in the Legal Agreements. The Board hereby finds and determines that the issuance and sale of the Bonds by the Authority to USDA will result in savings in effective interest rates, underwriting costs and issuance costs and thereby result in significant public benefits to the City.
Section 4. Approval of Legal Agreements. The form of the Installment Sale Agreements, the Trust Agreements, Purchase Offer and the Assignment Agreements presented at this meeting are approved. The Chair, Vice Chair, Executive Director, Treasurer or Secretary of the Authority, and any other person authorized by the Board to act on behalf of the Authority, is authorized and directed to execute, deliver or acknowledge said agreements. The Legal Agreements shall be executed or acknowledged, as the case may be, in substantially the forms hereby approved, with such changes, insertions and omissions as may be recommended by the City and/or Authority and approved by the officers executing the same, said execution being conclusive evidence of such approval.
Section 5. Good Faith Estimates Regarding the Series 2025A Bonds. Set forth below are good faith estimates required under Section 5852.1 of the Code for the Series 2025A Bonds.
The following estimates have no bearing on, and should not be misconstrued as, any not-to-exceed financial parameters authorized by this resolution.
(a) The true interest cost of the Series 2025A Bonds is estimated at 2.750%, calculated as provided in Section 5852.1(a)(1)(A) of the Code.
(b) The finance charge of the Series 2025A Bonds, including all fees and charges paid to third parties, is estimated at $0.
(c) Proceeds of the Series 2025A Bonds received by the Authority of $7,000,000 Page | 4
(estimated) less the finance charge set forth in (b) above, is equal to $7,000,000. (d) The total payment amount calculated as provided in Section 5852.1(a)(1)(D) of the Code is estimated at [$11,535,682].
The foregoing are estimates and the final costs will depend on market conditions at the time of closing, and can be expected to vary from the estimated amounts set forth above.
Section 6. Good Faith Estimates Regarding the Series 2025B Bonds. Set forth below are good faith estimates required under Section 5852.1 of the Code for the Series 2025B Bonds.
The following estimates have no bearing on, and should not be misconstrued as, any not-to-exceed financial parameters authorized by this resolution.
(a) The true interest cost of the Series 2025B Bonds is estimated at 2.750%, calculated as provided in Section 5852.1(a)(1)(A) of the Code.
(b) The finance charge of the Series 2025B Bonds, including all fees and charges paid to third parties, is estimated at $0.
(c) Proceeds of the Series 2025B Bonds received by the Authority of $3,268,000 (estimated) less the finance charge set forth in (b) above, is equal to $3,268,000. (d) The total payment amount calculated as provided in Section 5852.1(a)(1)(D) of the Code is estimated at [$5,385,933].
The foregoing are estimates and the final costs will depend on market conditions at the time of closing, and can be expected to vary from the estimated amounts set forth above.
Section 7. Other Actions. The Chair, Vice Chair, Executive Director, Treasurer, Secretary or Deputy Secretary, and such other officers of the Authority are authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the sale and delivery of the Bonds, and the delivery of the Purchase Offer, Installment Sale Agreement, Trust Agreement and Assignment Agreement and otherwise effectuate the purposes of this Resolution.
Section 8. Effect. This Resolution shall take effect immediately from and after the date of its passage and adoption.
THE FOREGOING RESOLUTION WAS PASSED AND ADOPTED by the Board of Directors of the San Juan Bautista Public Financing Authority at its regular meeting held on August 19, 2025, by the following roll call vote:
AYES:
NOES:
Page | 5
ABSENT:
ABSTAIN:
APPROVED:
__________________________
Leslie Q. Jordan, Agency Chair
ATTEST:
____________________________
Elizabeht Soto, Agency Secretary
SERIES 2025A INSTALLMENT SALE AGREEMENT
Dated as of September 1, 2025
by and between the
SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY,
as Seller
and the
CITY OF SAN JUAN BAUTISTA,
as Purchaser
Relating to
$7,000,000
SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY
(CITY OF SAN JUAN BAUTISTA)
SERIES 2025A WASTEWATER REVENUE BONDS
(SAN JUAN BAUTISTA TO HOLLISTER FORCE MAIN DEVELOPMENT PROJECT) -iTABLE OF CONTENTS
Page
ARTICLE I
GENERAL
Section 1.01. Definitions ................................................................................................................................................. 2 Section 1.02. Representations, Covenants and Warranties. ............................................................................................. 2 Section 1.03. Written Certificates ................................................................................................................................... 2 Section 1.04. Exhibits ..................................................................................................................................................... 3
ARTICLE II
DEPOSITS; PAYMENTS; PREPAYMENT OF 2023 NOTES; ENTERPRISE FUND Section 2.01. Deposit of Moneys .................................................................................................................................... 4 Section 2.02. Prepayment of the 2023 Notes .................................................................................................................. 4 Section 2.03. Management of the Series 2025A Project ................................................................................................. 4 Section 2.04. Establishment of Enterprise Fund ............................................................................................................. 4 Section 2.05. Application and Purpose of the Enterprise Fund ....................................................................................... 4
ARTICLE III
SERIES 2025A PROJECT SALE AND TITLE; SERIES 2025A
INSTALLMENT PAYMENTS; NET REVENUES
Section 3.01. Sale ............................................................................................................................................................ 4 Section 3.02. Title ........................................................................................................................................................... 4 Section 3.03. Assignment by the Authority .................................................................................................................... 4 Section 3.04. Term of the Series 2025A Installment Sale Agreement ............................................................................ 4 Section 3.05. Series 2025A Installment Payments .......................................................................................................... 5 Section 3.06. Special Obligation of the City ................................................................................................................... 5 Section 3.07. Pledge of Net Revenues; Transfer to Pay Series 2025A Installment Payments; Release from Lien ......... 6 Section 3.08. Rate Covenant ........................................................................................................................................... 6 Section 3.09. Limitations on Future Obligations Secured by Net Revenues ................................................................... 7 Section 3.10. Additional Payments ................................................................................................................................. 7 Section 3.11. Payments to Series 2025A Reserve Fund .................................................................................................. 7 Section 3.12. Payments to Short-Lived Assets Series 2025A Reserve Fund ................................................................... 8
ARTICLE IV
PREPAYMENT OF SERIES 2025A INSTALLMENT PAYMENTS
Section 4.01. Prepayment ................................................................................................................................................ 8 Section 4.02. Optional Prepayment ................................................................................................................................. 8 Section 4.03. Mandatory Prepayment From Net Proceeds of Insurance or Condemnation ............................................. 9 Section 4.04. Credit for Amounts on Deposit. ................................................................................................................ 9 Section 4.05. Security Deposit ........................................................................................................................................ 9
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.01. Maintenance, Taxes and Assessments, Contests. .....................................................................................10 Section 5.02. Modification of Series 2025A Project ......................................................................................................10 Section 5.03. Installation of City’s Equipment. .............................................................................................................11 Section 5.04. Public Liability and Property Damage Insurance .....................................................................................11 Section 5.05. Fire and Extended Coverage Insurance. ...................................................................................................11 Section 5.06. Insurance Net Proceeds; Form of Policies ................................................................................................12 Section 5.07. Application of Net Proceeds. ....................................................................................................................12 Section 5.08. Advances ..................................................................................................................................................13 -iiARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS; INDEMNITY
Section 6.01. Disclaimer of Warranties..........................................................................................................................13 Section 6.02. Access to the Series 2025A Project and Records .....................................................................................13 Section 6.03. Indemnity .................................................................................................................................................13
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default Defined ........................................................................................................................14 Section 7.02. Remedies on Default ................................................................................................................................14 Section 7.03. No Remedy Exclusive. .............................................................................................................................15 Section 7.04. Prosecution and Defense of Suits .............................................................................................................15 Section 7.05. No Additional Waiver Implied by One Waiver ........................................................................................15 Section 7.06. Application of the Proceeds. ....................................................................................................................15 Section 7.07. Liability Limited to Net Revenues ...........................................................................................................16 Section 7.08. Trust Administrator and Series 2025A Bond Owners to Exercise Rights ................................................16 Section 7.09. Pro Rata Application of Net Revenues .....................................................................................................16
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Assignment, Sale or Lease by the City .....................................................................................................16 Section 8.02. Amendment of Series 2025A Installment Sale Agreement ......................................................................17 Section 8.03. Binding Effect ..........................................................................................................................................17 Section 8.04. Applicable Law ........................................................................................................................................17 Section 8.05. Severability ..............................................................................................................................................17 Section 8.06. Captions ...................................................................................................................................................17 Section 8.07. Net Contract .............................................................................................................................................17 Section 8.08. Further Assurances and Corrective Instruments .......................................................................................17 Section 8.09. Authority and City Representatives ..........................................................................................................17 Section 8.10. Notices .....................................................................................................................................................17 Section 8.11. Execution in Counterparts ........................................................................................................................18 Exhibit A Description of the Series 2025A Project ............................................................................................... A-1 Exhibit B Schedule of Series 2025A Installment Payments ................................................................................... B-1 SERIES 2025A INSTALLMENT SALE AGREEMENT
THIS SERIES 2025A INSTALLMENT SALE AGREEMENT, dated as of September 1, 2025, by and between the SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY, a California public financing authority formed and existing under the joint powers authority laws of the State of California, as seller (the “Authority”), and the CITY OF SAN JUAN BAUTISTA, a municipal corporation and general law city duly organized and existing under and by virtue of the constitution and laws of the State of California, as purchaser (the “City”);
W I T N E S S E T H:
WHEREAS, the City and the Authority have each adopted a resolution agreeing to enter into certain contractual relations with each other for the purpose, among other things, of undertaking the acquisition and financing or refinancing of certain capital improvements (as more particularly described in Exhibit A hereto, the “Series 2025A Project”) to the City’s wastewater system (the “Enterprise” or “Wastewater System”); and
WHEREAS, the Authority has been formed for the purpose, among others, of assisting municipalities such as the City in the financing of public capital improvements within or of benefit to the City; and
WHEREAS, on February 15, 2023 the City previously sold its $14,600,000 (not to exceed) aggregate principal amount of Series 2023 Wastewater Revenue Bond Anticipation Notes (the “2023 Notes”) to First Foundation Public Finance, a Delaware statutory trust and wholly owned subsidiary of First Foundation Bank (the “Bank”), the proceeds of which were used to construct a portion of the City’s San Juan Bautista to Hollister Force Main Development Project (the “Series 2025A Project”); and WHEREAS, to refinance the 2023 Notes, the Authority will cause the execution and delivery of Series 2025A Wastewater Revenue Bonds in the principal amount of $7,000,000 (the “Series 2025A Bonds”); and
WHEREAS, the City has determined to purchase the Series 2025A Project from the Authority pursuant to this Series 2025A Installment Sale Agreement; and WHEREAS, the City will make installment payments pursuant to this Series 2025A Installment Sale Agreement (the “Series 2025A Installment Payments”) from the Net Revenues (as defined herein) of the Wastewater System in order to purchase the Series 2025A Project from the Authority; and WHEREAS, the Series 2025A Bonds will be issued pursuant to the terms and conditions of a Series 2025A Trust Agreement, dated as of September 1, 2025 (the “Series 2025A Trust Agreement”) by and among the Authority, the City and the City Manager of the City, as trust administrator (the “Trust Administrator”); and
WHEREAS, the Authority will assign its right to receive Series 2025A Installment Payments to the Trust Administrator, pursuant to a Series 2025A Assignment Agreement, dated as of September 1, 2025
INSTALLMENT SALE AGREEMENT
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(the “Series 2025A Assignment Agreement”) for the benefit of the Owners (as defined herein) of the Series 2025A Bonds; and
NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
GENERAL
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in the Series 2025A Trust Agreement, shall, for all purposes of this Series 2025A Installment Sale Agreement, have the meanings specified therein.
Section 1.02. Covenants and Representations of the City. The City makes the following covenants and representations to the Authority as of the Closing Date:
(a) The City is a municipal corporation and general law city duly organized and existing under and by virtue of the constitution and laws of the State, and has full legal right, power and authority to enter into this Series 2025A Installment Sale Agreement and to carry out and consummate all transactions contemplated hereby, and by proper action has duly authorized the execution and delivery of this Series 2025A Installment Sale Agreement . (b) The representatives of the City executing this Series 2025A Installment Sale Agreement are fully authorized to execute the same.
(c) This Series 2025A Installment Sale Agreement has been duly authorized, executed and delivered by the City, and constitutes the legal, valid and binding agreement of the City, enforceable against the City in accordance with its terms; except as the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and except as such enforceability may be subject to the exercise of judicial discretion in accordance with principles of equity. (d) The execution and delivery of this Series 2025A Installment Sale Agreement, the consummation of the transactions herein contemplated and the fulfillment of or compliance with the terms and conditions hereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it or the Series 2025A Project are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially adversely affect the consummation of the transactions contemplated by this Series 2025A Installment Sale Agreement,
INSTALLMENT SALE AGREEMENT
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or the financial condition, assets, properties, Series 2025A Project or operations of the Wastewater System, including but not limited to the performance of the City’s obligations under this Series 2025A Installment Sale Agreement.
(e) No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of this Series 2025A Installment Sale Agreement or the consummation of any transaction herein and therein contemplated, except as have been obtained or made and as are in full force and effect.
(f) There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or threatened against or affecting the City or the Wastewater System which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Series 2025A Installment Sale Agreement or upon the financial condition, assets, properties or operation of the City or Wastewater System, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Series 2025A Installment Sale Agreement, or the financial conditions, assets, properties or operations of the City or Wastewater System, including but not limited to the performance of the City’s obligations under this Series 2025A Installment Sale Agreement. (g) The City and the Series 2025A Project comply in all material respects with all applicable Environmental Regulations, including, without limitation, regulations governing air pollution, soil and water pollution, the use, generation, storage, treatment, removal, handling or disposal of hazardous substances, other materials or wastes, and the emission of electromagnetic or nuclear radiation.
(h) The City has heretofore established the Enterprise Fund into which the City deposits and will continue to deposit all Gross Revenues, and which the City will maintain throughout the Term of this Series 2025A Installment Sale Agreement. (i) There are no outstanding bonds, notes, loans, leases, installment sale agreements or other obligations issued or incurred by the City which have any security interest in or claim upon the Net Revenues, which security interest or claim is superior to the Installment Payments. Except for the Series 2025B Bonds and the 2015 Installment Sale Agreement, each of which have a pledge of Net Revenues on a parity basis with the Series 2025A Installment Payments, the City has not issued or incurred any obligations payable on a parity with, or senior to, the pledge of the Net Revenues to the Series 2025A Installment Payments under this Series 2025A Installment Sale Agreement.
(j) No event has occurred and no condition exists which would constitute an Event of Default with respect to this Series 2025A Installment Sale Agreement or which, with the passing of time or with the giving of notice or both would become such an Event of Default.
INSTALLMENT SALE AGREEMENT
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(k) The Series 2025A Project has not been the subject of a previous conveyance by the City.
(l) The City has not issued or incurred any obligations which are currently outstanding having any priority in payment out of the Gross Revenues or the Net Revenues over the payment of the Series 2025A Installment Payments as provided herein.
Section 1.03. Written Certificates.
(a) Contents. Every Written Certificate provided for in this Series 2025A Installment Sale Agreement with respect to compliance with any provision hereof (other than Written Certificates delivered on the Closing Date) shall include (a) a statement that the person making or giving such Written Certificate or opinion has read such provision and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the Written Certificate is based; (c) a statement that, in the opinion of such person, he or she has made or caused to be made such examination or investigation as is necessary to enable him or her to express an informed opinion with respect to the subject matter referred to in the instrument to which his or her signature is affixed; (d) a statement of the assumptions upon which such Written Certificate is based, and that such assumptions are reasonable; and (e) a statement as to whether, in the opinion of such person, such provision has been complied with. (b) Reliance. Any such Written Certificate made or given by a City Representative may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, unless such City Representative knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such Written Certificate may be based, as aforesaid, is erroneous.
Any such certificate or opinion made or given by counsel or an accountant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the City, as the case may be) upon a certificate or opinion of or representation by a City Representative, unless such counsel or accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such person’s certificate or opinion or representation may be based is erroneous. The same City Representative, or the same counsel or accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Series 2025A Installment Sale Agreement, but different officers, counsel or accountants may certify to different matters, respectively.
Section 1.04. Exhibits. The following Exhibits are attached to, and by this reference are incorporated herein to this Series 2025A Installment Sale Agreement:
Exhibit A: Series 2025A Project Description
Exhibit B: Series 2025A Installment Payments Schedule
INSTALLMENT SALE AGREEMENT
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ARTICLE II
DEPOSITS; PAYMENTS; PREPAYMENT OF 2023 NOTES; ENTERPRISE FUND Section 2.01. Deposit of Moneys. The Authority shall cause to be deposited with the Trust Administrator the proceeds of the Series 2025A Bonds (to be an aggregate of $7,000,000) in the funds as provided in the Series 2025A Trust Agreement.
Section 2.02. Prepayment of the 2023 Notes. Prepayment of 2023 Notes shall be made from the moneys deposited with the Trust Administrator in the Redemption Account, which moneys shall be disbursed for such purpose in accordance and upon compliance with Sections 3.02 and 3.03, respectively, of the Series 2025A Trust Agreement. The City hereby covenants to pay necessary Delivery Costs in excess of amounts available from Series 2025A Bond proceeds from any legally available source of funds.
Section 2.03. Management of the Series 2025A Project. The Authority hereby appoints the City as its agent to manage and maintain the Series 2025A Project.
Section 2.04. Establishment of Enterprise Fund. The City covenants that it shall establish and maintain or shall have established and maintained the Enterprise Fund. All Gross Revenues received shall be deposited when and as received in trust in the Enterprise Fund.
Section 2.05. Application and Purpose of the Enterprise Fund. Subject to the provisions of any outstanding Parity Obligations, money on deposit in the Enterprise Fund shall be applied and used first, to pay Operations and Maintenance Expenses, and thereafter, to pay all amounts due and payable with respect to the Series 2025A Bonds and Parity Obligations. So long as the Government is the Owner of the Series 2025A Bonds, revenue accumulated over and above that needed to pay Operation and Maintenance Expenses, Debt Service and reserves may only be retained or used to make prepayments on the Series 2025A Bonds and/or the Series 2025B Bonds.
ARTICLE III
SERIES 2025A PROJECT SALE AND TITLE; SERIES 2025A INSTALLMENT PAYMENTS; NET REVENUES
Section 3.01. Sale. The Authority hereby sells, bargains and conveys the Series 2025A Project to the City, and the City hereby purchases the Series 2025A Project from the Authority upon the terms and conditions set forth in this Series 2025A Installment Sale Agreement.
Section 3.02. Title. The City and the Authority agree that title to the Series 2025A Project, and each component thereof, shall be deemed conveyed to and vested in the City upon the completion of the acquisition, construction and installation thereof. The Authority and its officers shall take all actions necessary to vest in the City all of the Authority’s rights in and title to the Series 2025A Project.
Section 3.03. Assignment by the Authority. The Authority’s right, title and interest in this Series 2025A Installment Sale Agreement, including the right to receive and enforce payment of the Series 2025A Installment Payments to be made by the City under this Series 2025A Installment Sale Agreement, have
INSTALLMENT SALE AGREEMENT
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been assigned to the Trust Administrator, subject to certain exceptions, pursuant to the Series 2025A Assignment Agreement, to which assignment the City hereby consents. The City understands and agrees that the Authority has assigned its right, title and interest (but not its duties or obligations) in this Series 2025A Installment Sale Agreement to the Trust Administrator pursuant to the Series 2025A Assignment Agreement for the benefit of the Owners of the Series 2025A Bonds. The Authority hereby directs the City, and the City hereby agrees, to pay to the Trust Administrator at the Trust Administrator’s Trust Office or at such other place as the Trust Administrator shall direct in writing, all payments payable by the City pursuant to this Series 2025A Installment Sale Agreement.
Section 3.04. Term of the Series 2025A Installment Sale Agreement. The Term of the Series 2025A Installment Sale Agreement shall be as provided in the Series 2025A Trust Agreement.
Section 3.05. Series 2025A Installment Payments.
(a) Obligation to Pay. The City agrees to pay to the Authority, its successors and assigns, as the purchase price of the Series 2025A Project, the Series 2025A Installment Payments, consisting of components of principal and interest, on the Series 2025A Installment Payment Dates and in the amounts specified in Exhibit B hereto, except such amounts shall be reduced by moneys on deposit in the Series 2025A Installment Payment Fund and credited to the payment of Series 2025A Installment Payments next due. The Series 2025A Installment Payments shall be payable solely from Net Revenues as hereinafter provided.
(b) Reduction upon Partial Prepayment. In the event the City prepays less than all of the remaining principal components of the Series 2025A Installment Payments pursuant to Sections 4.02 and 4.03 hereof, the amount of such prepayment shall be applied to reduce the principal component of the subsequent remaining Series 2025A Installment Payments in inverse order of maturity.
(c) Rate on Overdue Payments. In the event the City should fail to make any of the payments required in this Section 3.05 so that there are insufficient moneys on hand in the Series 2025A Installment Payment Fund to pay any Series 2025A Installment Payment in full on an Series 2025A Installment Payment Date, the Series 2025A Installment Payment in default shall continue as an obligation of the City until the amount in default shall have been fully paid and the City agrees to pay the same with interest thereon, to the extent permitted by law, from the date thereof at the rate of interest payable with respect to the Series 2025A Bonds.
Section 3.06. Special Obligation of the City.
(a) Limitations. The City’s obligation to pay the Series 2025A Installment Payments shall be a special obligation limited solely to Net Revenues. Under no circumstances shall the City be required to advance any moneys derived from any source of income other than the Net Revenues and other sources specifically identified herein for the payment of the Series 2025A Installment Payments, nor shall any other funds or property of the City be liable for the payment of the Series 2025A Installment Payments.
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(b) Obligations Unconditional. Subject to Section 3.06(a), the obligations of the City to make the Series 2025A Installment Payments from Net Revenues and to perform and observe the other agreements contained herein shall be absolute and unconditional and shall not be subject to any defense or any right of set-off, counterclaim or recoupment arising out of any breach of the City, the Authority or the Trust Administrator of any obligation to the City or otherwise with respect to the Series 2025A Project, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority or the Trust Administrator. (c) Obligations Specified. Until such time as all the Series 2025A Installment Payments shall have been fully paid or prepaid, the City:
(i) will not suspend, abate, or discontinue any payments specified in Section 3.05 hereof;
(ii) will perform and observe all other agreements contained in this Series 2025A Installment Sale Agreement; and
(iii) will not terminate the Term of this Series 2025A Installment Sale Agreement for any cause, including, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Series 2025A Project, the taking by eminent domain of title to or temporary use of any or all of the Series 2025A Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either thereof or any failure of the Authority or the Trust Administrator to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Series 2025A Trust Agreement, the Series 2025A Assignment Agreement or this Series 2025A Installment Sale Agreement. (d) Authority Obligations. Nothing contained in this Section 3.06 shall be construed to release the Authority from the performance of any of the agreements on its part herein contained, and in the event the Authority shall fail to perform any such agreements on its part, the City may institute such action against the Authority as the City may deem necessary to compel performance so long as such action does not abrogate the obligations of the City contained in Section 3.06(b) above. 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 right of possession, occupancy and use hereunder, and in such event the Authority hereby agrees to cooperate fully with the City and to take such action necessary to effect the substitution of the City for the Authority in such action or proceeding if the City shall so request.
Section 3.07. Pledge of Net Revenues; Transfer to Pay Series 2025A Installment Payments; Release from Lien.
(a) Pledge of Net Revenues. The City hereby agrees that the payment of the Series 2025A Installment Payments shall be secured by a first pledge, charge and lien upon Net Revenues which pledge, charge and lien are on parity with any Parity Obligations, and Net Revenues
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sufficient to pay the Series 2025A Installment Payments as they become due and payable are hereby pledged, charged, assigned, transferred and set over by the City to the Authority and its assigns for the purpose of securing payment of the Series 2025A Installment Payments. The Net Revenues shall constitute a trust fund for the security and payment of the Series 2025A Installment Payments.
(b) Transfer to Pay Series 2025A Installment Payments. In order to provide for the payment of Series 2025A Installment Payments when due, the City shall, on or before each Series 2025A Installment Payment Date, transfer to the Trust Administrator for deposit into the Series 2025A Installment Payment Fund the amount indicated in Exhibit B attached hereto as required for the next occurring Series 2025A Installment Payment Date. Notwithstanding Exhibit B attached hereto, the City shall be obligated to make Series 2025A Installment Payments sufficient to pay all principal and interest due with respect to the Series 2025A Bonds.
Section 3.08. Rate Covenant. The City hereby covenants that it shall prescribe, revise and collect such charges for the services and facilities of the Wastewater System which, after allowances for contingencies and error in the estimates, shall produce Gross Revenues sufficient in each Fiscal Year to provide Net Revenues equal to at least 1.20 times (i) the Series 2025A Installment Payments coming due and payable during such Fiscal Year, (ii) all payments required with respect to Parity Obligations, and (iii) amounts required to replenish the Series 2025A Reserve Fund, as required by Section 6.06 of the Series 2025A Trust Agreement.
Section 3.09. Limitations on Future Obligations Secured by Net Revenues. (a) No Obligations Superior to Series 2025A Installment Payments. In order to protect further the availability of the Net Revenues and the security for the Series 2025A Installment Payments and any Parity Obligations, the City hereby agrees that the City shall not, so long as any Series 2025A Bonds are outstanding, issue or incur any obligations payable from Gross Revenues or Net Revenues superior to the Series 2025A Installment Payments or any Parity Obligations.
(b) Parity Obligations. The City further covenants that, except for obligations issued or incurred to prepay the Series 2025A Installment Payments in full pursuant to Section 4.02 hereof, the City shall not issue or incur any Parity Obligations unless:
(i) The City is not in default under the terms of this Series 2025A Installment Sale Agreement;
(ii) Net Revenues, calculated on sound accounting principles, either (i) as shown by the books of the City for the latest Fiscal Year, as verified by a certificate of an Authorized Representative of the City, or (ii) as shown by the books of the City for any more recent twelve (12) month period selected by the City, as verified by a certificate or opinion of an Independent Certified Public Accountant employed by the City, plus in either case (at the option of the City) the Additional Revenues, shall be at least equal to one hundred twenty percent (120%) of the amount of Maximum Annual Debt Service on all outstanding Parity Obligations and the Parity Obligations to be issued.
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(iii) At the discretion of the City, a reserve fund may be funded for such proposed Parity Obligations which may be at least equal to the amount resulting from the application on the closing date of such Parity Obligations of the formula contained in the definition of “Series 2025A Reserve Requirement.”
(iv) So long as all of the Outstanding Series 2025A Bonds are held by the Original Purchaser, the prior written consent of such Original Purchaser shall have been obtained.
Section 3.10. Additional Payments. In addition to the Series 2025A Installment Payments, the City shall pay, from Net Revenues, when due all costs and expenses incurred by the Authority to comply with the provisions of the Series 2025A Trust Agreement and this Series 2025A Installment Sale Agreement, including, without limitation all Delivery Costs (to the extent not paid from amounts on deposit in the Redemption Account), compensation due to the Trust Administrator for its fees, costs and expenses incurred under the Series 2025A Trust Agreement and the Series 2025A Assignment Agreement and all costs and expenses of attorneys, auditors, engineers and accountants.
Section 3.11. Payments to Series 2025A Reserve Fund. In addition to the Series 2025A Installment Payments, the City shall make payments to the Series 2025A Reserve Fund of 10% of one annual Debt Service payment on the Series 2025A Bonds per year for ten years or until the balance is equal to one annual Debt Service payment on the Series 2025A Bonds (the “Series 2025A Reserve Requirement”). Prior written concurrence from the Government must be obtained before funds may be withdrawn from this account during the life of the Series 2025A Bonds. When funds are withdrawn during the life the Series 2025A Bonds, payments to the Series 2025A Reserve Fund will continue until the Series 2025A Reserve Requirement is reached.
Section 3.12. Payments to Short-Lived Assets Series 2025A Reserve Fund. In addition to the Series 2025A Installment Payments, the City shall deposit $17,179.60 into the Short-Lived Assets Series 2025A Reserve Fund, and shall maintain for as long as any of the Series 2025A Bonds remain outstanding to pay for repairs and/or replacement of major Wastewater System assets in the order of priority set forth in Section 5.04 of the Series 2025A Trust Agreement.
The City may withdraw amounts on deposit in the Short-Lived Assets Series 2025A Reserve Fund from time to time to pay for timely replacement of “short-lived assets” of the Wastewater System, which for purposes of this Section shall mean any component or assets of the Wastewater System, including without limitation pumps, paint and small equipment, that will need to be repaired or replaced over a one to fifteenyear period, the cost of which is not included within the definition of Operation and Maintenance Costs.
Notwithstanding the foregoing, before each June 30 the City shall evaluate the status and condition of short-lived assets of the Wastewater System and, if such evaluation suggests that a lesser or greater deposit is required in order to provide for the timely replacement of any short-lived assets, the City may upon consultation by the City with the Government decrease the amount of the annual deposit into the Short-Lived Assets Series 2025A Reserve Fund if a lesser amount is indicated, but shall increase the amount of the annual deposit in to the Short-Lived Assets Series 2025A Reserve Fund if a greater amount is indicated.
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ARTICLE IV
PREPAYMENT OF SERIES 2025A INSTALLMENT PAYMENTS
Section 4.01. Prepayment. The City shall have the right to prepay the Series 2025A Installment Payments, but only in the manner, at the times and in all respects in accordance with the provisions of this Article IV.
Section 4.02. Optional Prepayment. Subject to the terms and conditions of this Section 4.02, the Authority hereby grants an option to City to prepay without penalty the Series 2025A Installment Payments in full, by paying the total unpaid principal component of the Series 2025A Installment Payments as set forth in Exhibit B or in part, but not in an amount of less than the Denomination Amount or any integral multiple thereof, at any one time. Said option may be exercised on any date following written notice by the City to the Authority and the Trust Administrator of the exercise of such option at least thirty (30) days prior to date designated for prepayment. Such option shall be exercised in the event of prepayment in full, by depositing with the Trust Administrator by the applicable prepayment date cash in an amount sufficient to pay the total unpaid principal component of the Series 2025A Installment Payments as set forth in Exhibit B, together with any Series 2025A Installment Payments then due but unpaid together with accrued interest to the prepayment date, or, in the event of prepayment in part, by depositing with the Trust Administrator by the applicable date of prepayment, an amount divisible by the Denomination Amount equal to the amount desired to be prepaid together with any Series 2025A Installment Payments then due but unpaid together with accrued interest on the amount to be prepaid to the prepayment date.
In the event of prepayment in part, prepayments will be applied in inverse order of maturity and the Authority or City shall revise the Exhibit B Schedule of Series 2025A Installment Payments, which schedule shall take into account such prepayment and shall be and become for all purposes thereafter the “Amended Exhibit B to this Series 2025A Installment Sale Agreement.” Section 4.03. Mandatory Prepayment from Net Proceeds of Insurance or Condemnation. The City shall be obligated to prepay the Series 2025A Installment Payments in whole or in part on any Series 2025A Installment Payment Date from and to the extent of any Net Proceeds of any insurance or condemnation award theretofore deposited in the Series 2025A Installment Payment Fund for such purpose pursuant to Section 5.07 hereof or pursuant to Section 7.02 of the Series 2025A Trust Agreement. The City and the Authority hereby agree that such Net Proceeds shall be credited towards the City’s obligations under this Section 4.03. Except in the case of such prepayment of the Series 2025A Installment Payments in full, such payment shall be in addition to the Series 2025A Installment Payment required to be paid by the City on such date.
Section 4.04. Credit for Amounts on Deposit. In the event the City elects or is required to prepay the Series 2025A Installment Payments in full under this Article IV, such that the Series 2025A Trust Agreement shall be discharged by its terms as a result of such prepayment, all amounts then on deposit in the Series 2025A Installment Payment Fund or the Series 2025A Reserve Fund shall be credited towards the amounts required to be so prepaid.
Section 4.05. Security Deposit. Notwithstanding any other provision of this Series 2025A Installment Sale Agreement, the City may, on any date, secure the payment of Series 2025A Installment
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Payments by a deposit with the Trust Administrator, as escrow holder under an escrow deposit and trust agreement as referenced in Section 14.01(d) of the Trust Agreement, of:
(a) All Series 2025A Installment Payments. in the case of a security deposit relating to all Series 2025A Installment Payments, either (i) an amount which, together with amounts on deposit in the Series 2025A Installment Payment Fund and the Series 2025A Reserve Fund, is sufficient to pay all unpaid Series 2025A Installment Payments, including the principal and interest components thereof, in accordance with the Series 2025A Installment Payment schedule set forth in Exhibit B attached hereto, or (ii) Discharge Obligations, together with cash, if required, in such amount as will, in the opinion of nationally-recognized bond counsel and of an independent certified public accountant, together with interest to accrue thereon and, if required, all or a portion of moneys or Discharge Obligations then on deposit in the Series 2025A Installment Payment Fund and the Series 2025A Reserve Fund, be fully sufficient to pay all unpaid Series 2025A Installment Payments on their Series 2025A Installment Payment Date; or (b) Portion of Series 2025A Installment Payments. in the case of a security deposit relating to a portion of the Series 2025A Installment Payments both (i) a Written Certificate executed by a City Representative designating the portion of the Series 2025A Installment Payments to which the deposit pertains, and (ii) cash or Discharge Obligations, in such amount as will, together with interest to be received thereon, if any, and an allocable portion of amounts on deposit in the Series 2025A Installment Payment Fund and the Series 2025A Reserve Fund, be fully sufficient in the opinion of an independent certified public accountant, to pay the portion of the Series 2025A Installment Payments designated in the aforesaid City Representative’s Written Certificate.
(c) Effect. In the event of a deposit pursuant to this Section 4.05, all obligations of the City under this Series 2025A Installment Sale Agreement pertaining to the portion of the Series 2025A Installment Payments for which the deposit has been made shall cease and terminate, excepting only the obligation of the City to make, or cause to be made, all Series 2025A Installment Payments, or the portion of Series 2025A Installment Payments to which the deposit pertains, from the deposit made by City pursuant to this Section 4.05. Such deposit shall be deemed to be and shall constitute a special fund for the payment of Series 2025A Installment Payments in accordance with the provisions of this Series 2025A Installment Sale Agreement; and further provided that any security deposit relating to the Series 2025A Project shall not affect the covenant of the City contained in Section 3.09 hereof in the event such security deposit is insufficient to pay or prepay all Series 2025A Installment Payments relating to the Series 2025A Project when and as the same become due and payable. Upon said deposit, the Authority will execute or cause to be executed any and all documents as may be necessary to release the security provided hereby to the extent of such deposit.
(d) Notwithstanding any contrary provision contained herein, so long as the Government is the Owner of the Series 2025A Bonds, the Series 2025A Bonds may not be defeased.
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ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.01. Maintenance, Taxes and Assessments, Contests. (a) Operation. The City covenants to operate the Wastewater System in an efficient and economical manner and operate, maintain and preserve the Wastewater System in good repair and working order in accordance with customary standards and practices applicable to similar facilities
(b) Taxes and Assessments. The City shall also pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or the City or levied, assessed or charged against the Wastewater System or the respective interests or estates therein; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the Term of this Series 2025A Installment Sale Agreement as and when the same become due.
(c) Contest. The City may, at the City’s expense and in its name, in good faith contest any such taxes, assessments and charges and, in the event of any such contest, may permit the taxes, assessments or charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City that, in the opinion of Independent Counsel, by nonpayment of any such items, the Series 2025A Project or any part thereof will be subject to loss or forfeiture, in which event the City shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority.
Section 5.02. Modification of Series 2025A Project. The City shall, at its own expense, have the right to remodel the Series 2025A Project or to make additions, modifications and improvements thereto.
All such additions, modifications and improvements shall thereafter comprise part of the Series 2025A Project and be subject to the provisions of this Series 2025A Installment Sale Agreement. Such additions, modifications and improvements shall not in any way damage the Series 2025A Project or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the Series 2025A Project, upon completion of any additions, modifications and improvements made pursuant to this Section 5.02, shall be of a value which is not substantially less than the value of the Series 2025A Project immediately prior to the making of such additions, modifications and improvements.
Section 5.03. Installation of City’s Equipment. The City may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed other items of equipment or other personal property in or upon the Series 2025A Project. All such items shall remain the sole property of the City, in which neither the Authority nor the Trust Administrator shall have any interest, and may be modified or removed by the City at any time provided that the City shall repair and restore any and all damage to the Series 2025A Project resulting from the installation, modification or removal of any such items. Nothing in this Series 2025A Installment Sale Agreement shall prevent the City from purchasing items to be installed pursuant to this Section 5.03 under a conditional sale or lease purchase contract, or
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subject to a vendor’s lien or security agreement, as security for the unpaid portion of the purchase price thereof.
Section 5.04. Public Liability and Property Damage Insurance. (a) Insurance Policies. The City shall maintain or cause to be maintained, throughout the Term of this Series 2025A Installment Sale Agreement, insurance policies, including a standard comprehensive general insurance policy or policies in protection of the City, its members, officers, agents and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the construction or operation of the Wastewater System (but only if such insurance is available at reasonable cost on the open market from reputable insurance companies). Such policy or policies shall afford protection in such amounts, with such deductibles, as are usually covered in connection with operations similar to the Wastewater System.
Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried by the City, and may be maintained in the form of insurance maintained through a nonprofit public benefit Authority created for such purpose or in the form of selfinsurance by the City. (b) Self-Insurance. If the City shall maintain self-insurance, it shall supply to the Trust Administrator a statement of sufficiency by an independent insurance consultant or the City’s risk manager on an annual basis as described in Section 5.06 hereof. (c) Application of Net Proceeds. The Net Proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the insurance proceeds shall have been paid.
Section 5.05. Fire and Extended Coverage Insurance.
(a) Insurance Policies. The City shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Series 2025A Installment Sale Agreement, insurance against loss or damage to any above-ground structures, including City-owned equipment and machinery housed therein, constituting any part of the Wastewater System by fire and lightning, with extended coverage insurance but not including earthquake insurance. Such insurance need not include reservoirs, standpipes and elevated tanks. Such insurance shall be in an amount which is not less than 100% of the replacement cost of the Series 2025A Project. Such insurance may be subject to a deductible clause of not to exceed ten percent of said replacement cost for any one loss.
Such insurance may be maintained as part of or in conjunction with any other fire and extended coverage insurance carried or required to be carried by the City, and may be maintained in the form of insurance maintained through a nonprofit public benefit Authority created for such purpose or in the form of self-insurance by the City.
(b) Self-Insurance. If the City shall maintain self-insurance, it will supply to the Trust Administrator a statement of sufficiency by an independent insurance consultant or the City’s risk manager on an annual basis as described in Section 5.06 hereof.
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(c) Application of Net Proceeds. Net Proceeds of such insurance shall be applied as provided in Section 5.07 hereof.
Section 5.06. Insurance Net Proceeds; Form of Policies. The insurance required by Section 5.05 hereof shall provide that all applicable proceeds thereunder shall be payable to the Trust Administrator for the benefit of the Series 2025A Bond Owners. The City shall pay or cause to be paid when due the premiums for all insurance policies required by this Series 2025A Installment Sale Agreement. All such policies shall provide that the Authority and the Trust Administrator are named as additional insureds and that the Trust Administrator shall be given thirty (30) days’ notice of each expiration, any intended cancellation thereof or reduction of the coverage provided thereby. The Trust Administrator shall not be responsible for the sufficiency of any insurance herein required or for the obtaining of such insurance and shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the City. The City shall cause to be delivered to the Trust Administrator annually, no later than the end of each Fiscal Year, a Written Series 2025A Bond signed by a City Representative stating that the City is in compliance with Sections 5.04 and 5.05 of this Agreement.
The Trust Administrator may conclusively rely on such Written Series 2025A Bonds.
Section 5.07. Application of Net Proceeds.
(a) From Insurance Award. The Net Proceeds of any insurance award resulting from any damage to or destruction of the Series 2025A Project by fire or other casualty shall be deposited in the Insurance and Condemnation Fund by the Trust Administrator promptly upon receipt thereof and, if the City Representative notifies the Trust Administrator in writing of the City’s determination that the replacement, repair, restoration, modification or improvement of the Series 2025A Project is not economically feasible or in the best interest of the City, then such Net Proceeds shall be promptly transferred by the Trust Administrator to the Series 2025A Installment Payment Fund to be applied as provided in Section 4.03 hereof. All Net Proceeds deposited in the Insurance and Condemnation Fund and not so transferred shall be applied to the prompt replacement, repair, restoration, modification or improvement of the Series 2025A Project by the City, upon receipt of a requisition, signed by the City Representative and, so long as all of the Outstanding Series 2025A Bonds are held by the Original Purchaser, the Owner of the Series 2025A Bonds stating with respect to each payment to be made (i) the requisition number, (ii) the name and address of the person, firm or Authority to whom payment is due, (iii) the amount to be paid and (iv) that each obligation mentioned therein has been properly incurred, is a proper charge against the Insurance and Condemnation Fund, has not been the basis of any previous withdrawal, and specifying in reasonable detail the nature of the obligation. Any balance of the Net Proceeds remaining after such work has been completed shall be transferred to the Series 2025A Installment Payment Fund. The City covenants that it will commence such replacement, repair, restoration, modification or improvement or indicate that such replacement, repair, restoration, modification or improvement is not economically feasible within 180 days of receipt of such Net Proceeds. (b) From Eminent Domain Award. The Net Proceeds of any eminent domain award shall be deposited in the Insurance and Condemnation Fund to be held and applied by the Trust Administrator pursuant to Section 7.02 of the Series 2025A Trust Agreement.
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Section 5.08 Advances. If the City shall fail to perform any of its obligations under this Article V, the Authority may, but shall not be obligated to, take such action as may be necessary to cure such failure, including the advancement of money, and the City shall be obligated to repay all such advances as soon as possible, with interest at the rate of interest with respect to the Series 2025A Bonds from the date of the advance to the date of repayment.
ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS; INDEMNITY
Section 6.01. Disclaimer of Warranties. The Authority makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City for the Series 2025A Project, or any other representation or warranty with respect to the Series 2025A Project or any item thereof. In no event shall the Authority be liable for incidental, indirect, special or consequential damages, in connection with or arising out of this Series 2025A Installment Sale Agreement or the Series 2025A Trust Agreement for the existence, furnishing, functioning or City’s use of the Series 2025A Project.
Section 6.02. Access to the Series 2025A Project and Records. To the extent permitted by law, the City agrees that the Authority, any Authority Representative, and the Authority’s successors or assigns shall have the right at all reasonable times to enter upon and to examine and inspect the Series 2025A Project. The City further agrees that the Authority, any Authority Representative, and the Authority’s successors or assigns shall have such rights of access to the Series 2025A Project as may be reasonably necessary to cause the proper maintenance of the Series 2025A Project in the event of failure by the City to perform its obligations hereunder. In addition, the City agrees that the Authority, any Authority Representative, and the Authority’s successors or assigns shall have the right at all reasonable times to inspect and examine all books, papers and records of the Authority and the City pertaining to the Series 2025A Project and the Series 2025A Bonds, to make copies thereof and to take non-privileged memoranda therefrom or with respect thereto as may be desired.
Section 6.03. Indemnity. The City shall and hereby agrees to indemnify and save the Authority and its successors and assigns harmless from and against all claims, losses and damages, including legal fees and expenses, arising out of: (a) the use, maintenance, condition or management of, or from any work or thing done on the Series 2025A Project by the City; (b) any breach or default on the part of the City in the performance of any of its obligations under this Series 2025A Installment Sale Agreement; (c) any act or negligence of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Series 2025A Project; (d) any act or negligence of any assignee or sublessee of the City with respect to the Series 2025A Project; or (e) the construction of the Series 2025A Project or the authorization of payment of the Delivery Costs by the City or the Authority. No indemnification is made under this Section
6.03, or elsewhere in this Series 2025A Installment Sale Agreement for willful misconduct, negligence, or breach of duty under this Series 2025A Installment Sale Agreement by the Authority, its officers, agents, employees, successors or assigns.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default Defined. The following shall be “events of default” under this Series 2025A Installment Sale Agreement and the terms “events of default” and “default” shall mean, whenever they are used in this Series 2025A Installment Sale Agreement, any one or more of the following events:
(a) Failure by the City to pay any Series 2025A Installment Payment by the Series 2025A Installment Payment Date or failure to make any other payment required to be paid hereunder at the time specified herein; or
(b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed in this Series 2025A Installment Sale Agreement or the Series 2025A Trust Agreement, other than as referred to in clause (a) of this Section 7.01, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority, the Trust Administrator or the Owners of not less than twenty-five percent (25%) in aggregate principal amount of Series 2025A Bonds then Outstanding; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Authority, the Trust Administrator or such Owners, as applicable, shall not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the City within the applicable period and diligently pursued until the default is corrected; or (c) The filing by the City of a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or the approval by a court of competent jurisdiction of a petition filed with or without the consent of the City seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction assumes custody or control of the City or of the whole or any substantial part of its property; or
(d) An event of default shall have occurred and be continuing with respect to any Parity Obligations.
Section 7.02. Remedies on Default. Whenever any event of default referred to in Section 7.01 hereof shall have happened and be continuing, the Authority shall have the right, at its option and without any further demand or notice, to:
(a) declare all principal components of the unpaid Series 2025A Installment Payments, together with accrued interest at the rate or rates specified in the respective Outstanding Series 2025A Bonds from the immediately preceding Series 2025A Installment Payment Date on which payment was made, to be immediately due and payable, whereupon the same shall become due and payable; and
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(b) take whatever action at law or in equity may appear necessary or desirable to collect the Series 2025A Installment Payments then due or thereafter to become due during the Term of this Series 2025A Installment Sale Agreement, or enforce performance and observance of any obligation, agreement or covenant of the City under this Series 2025A Installment Sale Agreement.
Section 7.03. 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 Series 2025A Installment Sale Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article VII it shall not be necessary to give any notice, other than such notice as may be required in this Article VII or by law.
Section 7.04. Prosecution and Defense of Suits. The City shall promptly, upon request of the Authority or its 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 Series 2025A Project whether now existing or hereafter developing and shall prosecute all such suits, actions and other proceedings as may be appropriate for such purpose and, to the extent permitted by law, shall indemnify or cause to be indemnified the Authority and its assignee for all loss, cost, damage and expense, including attorneys’ fees, which they or any of them may incur by reason of any such defect, cloud, suit, action or proceedings.
To the extent permitted by law, the City shall defend, or cause to be defended, against every suit, action or proceeding at any time brought against the Authority or its assignee upon any claim arising out of the receipt, application or disbursement of any of the Net Revenues or involving the rights or duties of the Authority or its assignee under this Series 2025A Installment Sale Agreement or the Series 2025A Trust Agreement; provided, that the Authority and its assignee at their election may appear in and defend any such suit, action or proceeding. The City shall indemnify or cause to be indemnified the Authority and its assignee against any and all liability claimed or asserted by any person, arising out of such receipt, application or disbursement. Notwithstanding any contrary provision hereof, this covenant shall remain in full force and effect, even though all Series 2025A Installment Payments have been fully paid and satisfied, until a date which is three (3) years following the payment of the last of the Series 2025A Installment Payments.
Section 7.05. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Series 2025A Installment Sale 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.
Section 7.06. Application of the Proceeds. The Trust Administrator, as assignee of the Authority, shall apply all amounts received under this Article VII as set forth in Section 3.03 of the Series 2025A Trust Agreement.
Section 7.07. Liability Limited to Net Revenues. Notwithstanding any provision of this Series 2025A Installment Sale Agreement, the City’s liability to pay the Series 2025A Installment Payments and
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other amounts hereunder shall be limited solely to Net Revenues as provided in Sections 3.06 and 3.07 hereof. In the event that Net Revenues shall be insufficient at any time to pay an Series 2025A Installment Payment in full, the City shall not be liable to pay or prepay such Series 2025A Installment Payment other than from Net Revenues.
Section 7.08. Trust Administrator and Series 2025A Bond Owners to Exercise Rights. Such rights and remedies as are given to the Authority under this Article VII have been assigned by the Authority to the Trust Administrator under the Series 2025A Assignment Agreement, to which assignment the City hereby consents. Such rights and remedies shall be exercised by the Trust Administrator and the Owners of the Series 2025A Bonds as provided in the Series 2025A Trust Agreement.
Section 7.09. Pro Rata Application of Net Revenues. If, at any time, there is a deficiency in Net Revenues available to pay the Series 2025A Installment Payments, any amounts due with respect to Parity Obligations, amounts required to replenish the Series 2025A Reserve Fund or amounts required to replenish any reserve fund established for Parity Obligations, available Net Revenues shall be applied on a pro rata basis to the payment of such Series 2025A Installment Payments and to the payment of amounts due with respect to Parity Obligations, then to the replenishment of the Series 2025A Reserve Fund and to the replenishment of any reserve fund established for Parity Obligations.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Assignment, Sale or Lease by the City.
(a) Assignment or Sale. This Series 2025A Installment Sale Agreement may not be assigned by the City, and the Wastewater System may not be sold by the City during the Term of this Series 2025A Installment Sale Agreement.
(b) Lease. The City may lease the Series 2025A Project, or any portion thereof, with the consent of the Owner of the Series 2025A Bonds so long as all of the Outstanding Series 2025A Bonds are held by the Original Purchaser thereof, and subject to all of the following conditions:
(i) This Series 2025A Installment Sale Agreement and the obligation of the City to make Series 2025A Installment Payments hereunder shall remain obligations of the City;
(ii) The City shall, within thirty (30) days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trust Administrator a true and complete copy of the documents accomplishing such lease;
(iii) No such lease by the City shall cause the Series 2025A Project to be used for a purpose other than a governmental or proprietary function authorized under the provisions of the Constitution and laws of the State; and
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(iv) No such lease shall cause the interest component of the Series 2025A Installment Payments to become subject to federal income taxes or State personal income taxes.
Section 8.02. Amendment of Series 2025A Installment Sale Agreement. The City will not alter, modify or cancel or agree or consent to alter, modify or cancel this Series 2025A Installment Sale Agreement, except as permitted by Article X of the Series 2025A Trust Agreement, without the written consent of the Trust Administrator and the Authority.
Section 8.03. Binding Effect. This Series 2025A Installment Sale Agreement shall inure to the benefit of and shall be binding upon the Authority and the City and their respective successors and assigns.
Section 8.04. Applicable Law. This Series 2025A Installment Sale Agreement shall be governed by and construed in accordance with the laws of the State.
Section 8.05. Severability. In the event any provision of this Series 2025A Installment Sale 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 8.06. Captions. The captions or headings in this Series 2025A Installment Sale Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provision, Article or Section of this Series 2025A Installment Sale Agreement.
Section 8.07. Net Contract. This Series 2025A Installment Sale Agreement shall be deemed and construed to be a “net contract” and the City hereby agrees that the Series 2025A Installment Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever.
Section 8.08. 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 correcting any inadequate or incorrect description of the Series 2025A Project hereby sold or intended so to be or for carrying out the expressed intention of this Series 2025A Installment Sale Agreement.
Section 8.09. Authority and City Representatives. Whenever under the provisions of this Series 2025A Installment Sale Agreement the approval of the Authority or the City is required, or the Authority or the City is required to take some action at the request of the other, such approval or such request shall be given for the Authority by an Authority Representative and for the City by a City Representative, and any party hereto shall be authorized to rely upon any such approval or request.
Section 8.10. Notices. All notices, Written Certificates or other communications hereunder shall be sufficiently given and shall be deemed to have been received 48 hours after deposit in the United States mail with postage fully prepaid:
If to the City: City of San Juan Bautista
311 Second Street
INSTALLMENT SALE AGREEMENT
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San Juan Bautista, CA 95045
Attention: City Manager
If to the Authority: San Juan Bautista Public Financing Authority 311 Second Street
San Juan Bautista, CA 95045
Attention: Executive Director
If to the Trust Administrator: City Manager
City of San Juan Bautista
311 Second Street
San Juan Bautista, CA 95045
Attention: City Manager
If to the Government: Rural Development, United States
Department of Agriculture
777 Sonoma Ave, ‘E’ Street Annex
Santa Rosa, CA 95404
Attention: Area Specialist
And
Rural Development, United States
Department of Agriculture
430 G Street, Suite 4169
Davis, CA 95616
Attention: Community Programs Specialist
The Authority, the City, the Trust Administrator and the Government, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent.
Section 8.11. Execution in Counterparts. This Series 2025A Installment Sale 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.
[Signature Page to Follow on Next Page]
INSTALLMENT SALE AGREEMENT
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IN WITNESS, the Authority has caused this Series 2025A Installment Sale Agreement to be executed in its corporate name by its duly authorized officer, and the City has caused this Series 2025A Installment Sale Agreement to be executed in its name by its duly authorized officer, as of the date first above written.
SAN JUAN BAUTISTA PUBLIC FINANCING
AUTHORITY, as Seller
By
Authorized Signatory
CITY OF SAN JUAN BAUTISTA, as Purchaser
By
Authorized Signatory
Exhibit A
EXHIBIT A
DESCRIPTION OF THE SERIES 2025A PROJECT
The 2025A Project generally consists of part or all of (i) the decommissioning of the existing Sequencing Batch Reactor pond plan and converting it into an emergency storage basin, (ii) the construction of a new pump station to deliver equalized and screened raw sewage to the City of Hollister Wastewater Treatment Plant, (iii) the construction of a new 10-inch diameter high-density polyethylene pipe for treatment disposal at the City of Hollister Wastewater Treatment Plant, and (iv) all other work contemplated by the USDA Letter of Conditions (the “LOC”) dated November 28, 2022, as well as the corresponding Preliminary Engineering Report referenced therein. The scope of work also includes site piping and grading, demolition, construction, instrumentation, and all necessary appurtenances, permits, rights-of-way, and other real or personal property useful in connection with the 2025A Project, along with all additions, extensions, expansions, improvements, and equipment upgrades.
The 2025A Project may include any other capital additions or replacements within the Wastewater System, provided such work is approved by both USDA and the City, and the use of Series 2025A Bond proceeds for such improvements does not, in and of itself, adversely affect the tax-exempt status of Series 2025A Bonds.
Exhibit B
EXHIBIT B
SCHEDULE OF SERIES 2025A INSTALLMENT PAYMENTS*
*The following schedule is subject to modification by the actual advances made by the Original Purchaser, as evidenced in the form of single Series 2025A Bond. Such evidence of advances shall, in all cases, be controlling.
Series 2025A
Installment
Payment Date
Principal
Component
Interest
Component
Total Series 2025A
Installment
Payment
04/1/2026 $150,000 $135,819 $285,819
10/1/2026 - 94,188 94,188
04/1/2027 100,000 94,188 194,188
10/1/2027 - 92,813 92,813
04/1/2028 105,000 92,813 197,813
10/1/2028 - 91,369 91,369
04/1/2029 105,000 91,369 196,369
10/1/2029 - 89,925 89,925
04/1/2030 110,000 89,925 199,925
10/1/2030 - 88,413 88,413
04/1/2031 110,000 88,413 198,413
10/1/2031 - 86,900 86,900
04/1/2032 115,000 86,900 201,900
10/1/2032 - 85,319 85,319
04/1/2033 120,000 85,319 205,319
10/1/2033 - 83,669 83,669
04/1/2034 120,000 83,669 203,669
10/1/2034 - 82,019 82,019
04/1/2035 125,000 82,019 207,019
10/1/2035 - 80,300 80,300
04/1/2036 130,000 80,300 210,300
10/1/2036 - 78,513 78,513
04/1/2037 130,000 78,513 208,513
10/1/2037 - 76,725 76,725
04/1/2038 135,000 76,725 211,725
10/1/2038 - 74,869 74,869
04/1/2039 140,000 74,869 214,869
10/1/2039 - 72,944 72,944
04/1/2040 145,000 72,944 217,944
10/1/2040 - 70,950 70,950
04/1/2041 145,000 70,950 215,950
10/1/2041 - 68,956 68,956
04/1/2042 150,000 68,956 218,956
10/1/2042 - 66,894 66,894
04/1/2043 155,000 66,894 221,894
10/1/2043 - 64,763 64,763
Exhibit B
4/1/2044 160,000 64,763 224,763
10/1/2044 - 62,563 62,563
4/1/2045 165,000 62,563 227,563
10/1/2045 - 60,294 60,294
4/1/2046 170,000 60,294 230,294
10/1/2046 - 57,956 57,956
4/1/2047 170,000 57,956 227,956
10/1/2047 - 55,619 55,619
4/1/2048 175,000 55,619 230,619
10/1/2048 - 53,213 53,213
4/1/2049 180,000 53,213 233,213
10/1/2049 - 50,738 50,738
4/1/2050 185,000 50,738 235,738
10/1/2050 - 48,194 48,194
4/1/2051 190,000 48,194 238,194
10/1/2051 - 45,581 45,581
4/1/2052 195,000 45,581 240,581
10/1/2052 - 42,900 42,900
4/1/2053 205,000 42,900 247,900
10/1/2053 - 40,081 40,081
4/1/2054 210,000 40,081 250,081
10/1/2054 - 37,194 37,194
4/1/2055 215,000 37,194 252,194
10/1/2055 - 34,238 34,238
4/1/2056 220,000 34,238 254,238
10/1/2056 - 31,213 31,213
4/1/2057 225,000 31,213 256,213
10/1/2057 - 28,119 28,119
4/1/2058 230,000 28,119 258,119
10/1/2058 - 24,956 24,956
4/1/2059 240,000 24,956 264,956
10/1/2059 - 21,656 21,656
4/1/2060 245,000 21,656 266,656
10/1/2060 - 18,288 18,288
4/1/2061 250,000 18,288 268,288
10/1/2061 - 14,850 14,850
4/1/2062 260,000 14,850 274,850
10/1/2062 - 11,275 11,275
4/1/2063 265,000 11,275 276,275
10/1/2063 - 7,631 7,631
4/1/2064 275,000 7,631 282,631
10/1/2064 - 3,850 3,850
4/1/2065 280,000 3,850 283,850
Totals $7,000,000 $4,535,682 $11,535,682
SERIES 2025B INSTALLMENT SALE AGREEMENT
Dated as of September 1, 2025
by and between the
SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY,
as Seller
and the
CITY OF SAN JUAN BAUTISTA,
as Purchaser
Relating to
$3,268,000
SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY
(CITY OF SAN JUAN BAUTISTA)
SERIES 2025B WASTEWATER REVENUE BONDS
(SAN JUAN BAUTISTA TO HOLLISTER FORCE MAIN DEVELOPMENT PROJECT) -iTABLE OF CONTENTS
Page
ARTICLE I
GENERAL
Section 1.01. Definitions ................................................................................................................................................. 2 Section 1.02. Representations, Covenants and Warranties. ............................................................................................. 2 Section 1.03. Written Certificates ................................................................................................................................... 2 Section 1.04. Exhibits ..................................................................................................................................................... 3
ARTICLE II
DEPOSITS; PAYMENTS; PREPAYMENT OF 2023 NOTES; ENTERPRISE FUND Section 2.01. Deposit of Moneys .................................................................................................................................... 4 Section 2.02. Prepayment of the 2023 Notes .................................................................................................................. 4 Section 2.03. Management of the Series 2025B Project ................................................................................................. 4 Section 2.04. Establishment of Enterprise Fund ............................................................................................................. 4 Section 2.05. Application and Purpose of the Enterprise Fund ....................................................................................... 4
ARTICLE III
SERIES 2025B PROJECT SALE AND TITLE; SERIES 2025B
INSTALLMENT PAYMENTS; NET REVENUES
Section 3.01. Sale ............................................................................................................................................................ 4 Section 3.02. Title ........................................................................................................................................................... 4 Section 3.03. Assignment by the Authority .................................................................................................................... 4 Section 3.04. Term of the Series 2025B Installment Sale Agreement ............................................................................. 4 Section 3.05. Series 2025B Installment Payments .......................................................................................................... 5 Section 3.06. Special Obligation of the City ................................................................................................................... 5 Section 3.07. Pledge of Net Revenues; Transfer to Pay Series 2025B Installment Payments; Release from Lien .......... 6 Section 3.08. Rate Covenant ........................................................................................................................................... 6 Section 3.09. Limitations on Future Obligations Secured by Net Revenues ................................................................... 7 Section 3.10. Additional Payments ................................................................................................................................. 7 Section 3.11. Payments to Series 2025B Reserve Fund .................................................................................................. 7 Section 3.12. Payments to Short-Lived Assets Series 2025B Reserve Fund ................................................................... 8
ARTICLE IV
PREPAYMENT OF SERIES 2025B INSTALLMENT PAYMENTS
Section 4.01. Prepayment ................................................................................................................................................ 8 Section 4.02. Optional Prepayment ................................................................................................................................. 8 Section 4.03. Mandatory Prepayment From Net Proceeds of Insurance or Condemnation ............................................. 9 Section 4.04. Credit for Amounts on Deposit. ................................................................................................................ 9 Section 4.05. Security Deposit ........................................................................................................................................ 9
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.01. Maintenance, Taxes and Assessments, Contests. .....................................................................................10 Section 5.02. Modification of Series 2025B Project ......................................................................................................10 Section 5.03. Installation of City’s Equipment. .............................................................................................................11 Section 5.04. Public Liability and Property Damage Insurance .....................................................................................11 Section 5.05. Fire and Extended Coverage Insurance. ...................................................................................................11 Section 5.06. Insurance Net Proceeds; Form of Policies ................................................................................................12 Section 5.07. Application of Net Proceeds. ....................................................................................................................12 Section 5.08. Advances ..................................................................................................................................................13 -iiARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS; INDEMNITY
Section 6.01. Disclaimer of Warranties..........................................................................................................................13 Section 6.02. Access to the Series 2025B Project and Records .....................................................................................13 Section 6.03. Indemnity .................................................................................................................................................13
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default Defined ........................................................................................................................14 Section 7.02. Remedies on Default ................................................................................................................................14 Section 7.03. No Remedy Exclusive. .............................................................................................................................15 Section 7.04. Prosecution and Defense of Suits .............................................................................................................15 Section 7.05. No Additional Waiver Implied by One Waiver ........................................................................................15 Section 7.06. Application of the Proceeds. ....................................................................................................................15 Section 7.07. Liability Limited to Net Revenues ...........................................................................................................16 Section 7.08. Trust Administrator and Series 2025B Bond Owners to Exercise Rights.................................................16 Section 7.09. Pro Rata Application of Net Revenues .....................................................................................................16
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Assignment, Sale or Lease by the City .....................................................................................................16 Section 8.02. Amendment of Series 2025B Installment Sale Agreement.......................................................................17 Section 8.03. Binding Effect ..........................................................................................................................................17 Section 8.04. Applicable Law ........................................................................................................................................17 Section 8.05. Severability ..............................................................................................................................................17 Section 8.06. Captions ...................................................................................................................................................17 Section 8.07. Net Contract .............................................................................................................................................17 Section 8.08. Further Assurances and Corrective Instruments .......................................................................................17 Section 8.09. Authority and City Representatives ..........................................................................................................17 Section 8.10. Notices .....................................................................................................................................................17 Section 8.11. Execution in Counterparts ........................................................................................................................18 Exhibit A Description of the Series 2025B Project ................................................................................................ A-1 Exhibit B Schedule of Series 2025B Installment Payments.................................................................................... B-1 SERIES 2025B INSTALLMENT SALE AGREEMENT
THIS SERIES 2025B INSTALLMENT SALE AGREEMENT, dated as of September 1, 2025, by and between the SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY, a California public financing authority formed and existing under the joint powers authority laws of the State of California, as seller (the “Authority”), and the CITY OF SAN JUAN BAUTISTA, a municipal corporation and general law city duly organized and existing under and by virtue of the constitution and laws of the State of California, as purchaser (the “City”);
W I T N E S S E T H:
WHEREAS, the City and the Authority have each adopted a resolution agreeing to enter into certain contractual relations with each other for the purpose, among other things, of undertaking the acquisition and financing or refinancing of certain capital improvements (as more particularly described in Exhibit A hereto, the “Series 2025B Project”) to the City’s wastewater system (the “Enterprise” or “Wastewater System”); and
WHEREAS, the Authority has been formed for the purpose, among others, of assisting municipalities such as the City in the financing of public capital improvements within or of benefit to the City; and
WHEREAS, on February 15, 2023 the City previously sold its $14,600,000 (not to exceed) aggregate principal amount of Series 2023 Wastewater Revenue Bond Anticipation Notes (the “2023 Notes”) to First Foundation Public Finance, a Delaware statutory trust and wholly owned subsidiary of First Foundation Bank (the “Bank”), the proceeds of which were used to construct a portion of the City’s San Juan Bautista to Hollister Force Main Development Project (the “Series 2025B Project”); and WHEREAS, to refinance the 2023 Notes, the Authority will cause the execution and delivery of Series 2025B Wastewater Revenue Bonds in the principal amount of $3,268,000 (the “Series 2025B Bonds”); and
WHEREAS, the City has determined to purchase the Series 2025B Project from the Authority pursuant to this Series 2025B Installment Sale Agreement; and WHEREAS, the City will make installment payments pursuant to this Series 2025B Installment Sale Agreement (the “Series 2025B Installment Payments”) from the Net Revenues (as defined herein) of the Wastewater System in order to purchase the Series 2025B Project from the Authority; and WHEREAS, the Series 2025B Bonds will be issued pursuant to the terms and conditions of a Series 2025B Trust Agreement, dated as of September 1, 2025 (the “Series 2025B Trust Agreement”) by and among the Authority, the City and the City Manager of the City, as trust administrator (the “Trust Administrator”); and
WHEREAS, the Authority will assign its right to receive Series 2025B Installment Payments to the Trust Administrator, pursuant to a Series 2025B Assignment Agreement, dated as of September 1, 2025 (the
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“Series 2025B Assignment Agreement”) for the benefit of the Owners (as defined herein) of the Series 2025B Bonds; and
NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
GENERAL
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in the Series 2025B Trust Agreement, shall, for all purposes of this Series 2025B Installment Sale Agreement, have the meanings specified therein.
Section 1.02. Covenants and Representations of the City. The City makes the following covenants and representations to the Authority as of the Closing Date:
(a) The City is a municipal corporation and general law city duly organized and existing under and by virtue of the constitution and laws of the State, and has full legal right, power and authority to enter into this Series 2025B Installment Sale Agreement and to carry out and consummate all transactions contemplated hereby, and by proper action has duly authorized the execution and delivery of this Series 2025B Installment Sale Agreement . (b) The representatives of the City executing this Series 2025B Installment Sale Agreement are fully authorized to execute the same.
(c) This Series 2025B Installment Sale Agreement has been duly authorized, executed and delivered by the City, and constitutes the legal, valid and binding agreement of the City, enforceable against the City in accordance with its terms; except as the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and except as such enforceability may be subject to the exercise of judicial discretion in accordance with principles of equity. (d) The execution and delivery of this Series 2025B Installment Sale Agreement, the consummation of the transactions herein contemplated and the fulfillment of or compliance with the terms and conditions hereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it or the Series 2025B Project are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially adversely affect the consummation of the transactions contemplated by this Series 2025B Installment Sale Agreement,
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or the financial condition, assets, properties, Series 2025B Project or operations of the Wastewater System, including but not limited to the performance of the City’s obligations under this Series 2025B Installment Sale Agreement.
(e) No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of this Series 2025B Installment Sale Agreement or the consummation of any transaction herein and therein contemplated, except as have been obtained or made and as are in full force and effect.
(f) There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or threatened against or affecting the City or the Wastewater System which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Series 2025B Installment Sale Agreement or upon the financial condition, assets, properties or operation of the City or Wastewater System, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Series 2025B Installment Sale Agreement, or the financial conditions, assets, properties or operations of the City or Wastewater System, including but not limited to the performance of the City’s obligations under this Series 2025B Installment Sale Agreement. (g) The City and the Series 2025B Project comply in all material respects with all applicable Environmental Regulations, including, without limitation, regulations governing air pollution, soil and water pollution, the use, generation, storage, treatment, removal, handling or disposal of hazardous substances, other materials or wastes, and the emission of electromagnetic or nuclear radiation.
(h) The City has heretofore established the Enterprise Fund into which the City deposits and will continue to deposit all Gross Revenues, and which the City will maintain throughout the Term of this Series 2025B Installment Sale Agreement. (i) There are no outstanding bonds, notes, loans, leases, installment sale agreements or other obligations issued or incurred by the City which have any security interest in or claim upon the Net Revenues, which security interest or claim is superior to the Installment Payments. Except for the Series 2025A Bonds and the 2015 Installment Sale Agreement, each of which have a pledge of Net Revenues on a parity basis with the Series 2025B Installment Payments, the City has not issued or incurred any obligations payable on a parity with, or senior to, the pledge of the Net Revenues to the Series 2025B Installment Payments under this Series 2025B Installment Sale Agreement.
(j) No event has occurred and no condition exists which would constitute an Event of Default with respect to this Series 2025B Installment Sale Agreement or which, with the passing of time or with the giving of notice or both would become such an Event of Default.
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(k) The Series 2025B Project has not been the subject of a previous conveyance by the City.
(l) The City has not issued or incurred any obligations which are currently outstanding having any priority in payment out of the Gross Revenues or the Net Revenues over the payment of the Series 2025B Installment Payments as provided herein.
Section 1.03. Written Certificates.
(a) Contents. Every Written Certificate provided for in this Series 2025B Installment Sale Agreement with respect to compliance with any provision hereof (other than Written Certificates delivered on the Closing Date) shall include (a) a statement that the person making or giving such Written Certificate or opinion has read such provision and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the Written Certificate is based; (c) a statement that, in the opinion of such person, he or she has made or caused to be made such examination or investigation as is necessary to enable him or her to express an informed opinion with respect to the subject matter referred to in the instrument to which his or her signature is affixed; (d) a statement of the assumptions upon which such Written Certificate is based, and that such assumptions are reasonable; and (e) a statement as to whether, in the opinion of such person, such provision has been complied with. (b) Reliance. Any such Written Certificate made or given by a City Representative may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, unless such City Representative knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such Written Certificate may be based, as aforesaid, is erroneous.
Any such certificate or opinion made or given by counsel or an accountant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the City, as the case may be) upon a certificate or opinion of or representation by a City Representative, unless such counsel or accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such person’s certificate or opinion or representation may be based is erroneous. The same City Representative, or the same counsel or accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Series 2025B Installment Sale Agreement, but different officers, counsel or accountants may certify to different matters, respectively.
Section 1.04. Exhibits. The following Exhibits are attached to, and by this reference are incorporated herein to this Series 2025B Installment Sale Agreement:
Exhibit A: Series 2025B Project Description
Exhibit B: Series 2025B Installment Payments Schedule
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ARTICLE II
DEPOSITS; PAYMENTS; PREPAYMENT OF 2023 NOTES; ENTERPRISE FUND Section 2.01. Deposit of Moneys. The Authority shall cause to be deposited with the Trust Administrator the proceeds of the Series 2025B Bonds (to be an aggregate of $3,268,000) in the funds as provided in the Series 2025B Trust Agreement.
Section 2.02. Prepayment of the 2023 Notes. Prepayment of 2023 Notes shall be made from the moneys deposited with the Trust Administrator in the Redemption Account, which moneys shall be disbursed for such purpose in accordance and upon compliance with Sections 3.02 and 3.03, respectively, of the Series 2025B Trust Agreement. The City hereby covenants to pay necessary Delivery Costs in excess of amounts available from Series 2025B Bond proceeds from any legally available source of funds.
Section 2.03. Management of the Series 2025B Project. The Authority hereby appoints the City as its agent to manage and maintain the Series 2025B Project.
Section 2.04. Establishment of Enterprise Fund. The City covenants that it shall establish and maintain or shall have established and maintained the Enterprise Fund. All Gross Revenues received shall be deposited when and as received in trust in the Enterprise Fund.
Section 2.05. Application and Purpose of the Enterprise Fund. Subject to the provisions of any outstanding Parity Obligations, money on deposit in the Enterprise Fund shall be applied and used first, to pay Operations and Maintenance Expenses, and thereafter, to pay all amounts due and payable with respect to the Series 2025B Bonds and Parity Obligations. So long as the Government is the Owner of the Series 2025B Bonds, revenue accumulated over and above that needed to pay Operation and Maintenance Expenses, Debt Service and reserves may only be retained or used to make prepayments on the Series 2025B Bonds and/or the Series 2025A Bonds.
ARTICLE III
SERIES 2025B PROJECT SALE AND TITLE; SERIES 2025B INSTALLMENT PAYMENTS; NET REVENUES
Section 3.01. Sale. The Authority hereby sells, bargains and conveys the Series 2025B Project to the City, and the City hereby purchases the Series 2025B Project from the Authority upon the terms and conditions set forth in this Series 2025B Installment Sale Agreement.
Section 3.02. Title. The City and the Authority agree that title to the Series 2025B Project, and each component thereof, shall be deemed conveyed to and vested in the City upon the completion of the acquisition, construction and installation thereof. The Authority and its officers shall take all actions necessary to vest in the City all of the Authority’s rights in and title to the Series 2025B Project.
Section 3.03. Assignment by the Authority. The Authority’s right, title and interest in this Series 2025B Installment Sale Agreement, including the right to receive and enforce payment of the Series 2025B Installment Payments to be made by the City under this Series 2025B Installment Sale Agreement, have
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been assigned to the Trust Administrator, subject to certain exceptions, pursuant to the Series 2025B Assignment Agreement, to which assignment the City hereby consents. The City understands and agrees that the Authority has assigned its right, title and interest (but not its duties or obligations) in this Series 2025B Installment Sale Agreement to the Trust Administrator pursuant to the Series 2025B Assignment Agreement for the benefit of the Owners of the Series 2025B Bonds. The Authority hereby directs the City, and the City hereby agrees, to pay to the Trust Administrator at the Trust Administrator’s Trust Office or at such other place as the Trust Administrator shall direct in writing, all payments payable by the City pursuant to this Series 2025B Installment Sale Agreement.
Section 3.04. Term of the Series 2025B Installment Sale Agreement. The Term of the Series 2025B Installment Sale Agreement shall be as provided in the Series 2025B Trust Agreement.
Section 3.05. Series 2025B Installment Payments.
(a) Obligation to Pay. The City agrees to pay to the Authority, its successors and assigns, as the purchase price of the Series 2025B Project, the Series 2025B Installment Payments, consisting of components of principal and interest, on the Series 2025B Installment Payment Dates and in the amounts specified in Exhibit B hereto, except such amounts shall be reduced by moneys on deposit in the Series 2025B Installment Payment Fund and credited to the payment of Series 2025B Installment Payments next due. The Series 2025B Installment Payments shall be payable solely from Net Revenues as hereinafter provided.
(b) Reduction upon Partial Prepayment. In the event the City prepays less than all of the remaining principal components of the Series 2025B Installment Payments pursuant to Sections 4.02 and 4.03 hereof, the amount of such prepayment shall be applied to reduce the principal component of the subsequent remaining Series 2025B Installment Payments in inverse order of maturity.
(c) Rate on Overdue Payments. In the event the City should fail to make any of the payments required in this Section 3.05 so that there are insufficient moneys on hand in the Series 2025B Installment Payment Fund to pay any Series 2025B Installment Payment in full on an Series 2025B Installment Payment Date, the Series 2025B Installment Payment in default shall continue as an obligation of the City until the amount in default shall have been fully paid and the City agrees to pay the same with interest thereon, to the extent permitted by law, from the date thereof at the rate of interest payable with respect to the Series 2025B Bonds.
Section 3.06. Special Obligation of the City.
(a) Limitations. The City’s obligation to pay the Series 2025B Installment Payments shall be a special obligation limited solely to Net Revenues. Under no circumstances shall the City be required to advance any moneys derived from any source of income other than the Net Revenues and other sources specifically identified herein for the payment of the Series 2025B Installment Payments, nor shall any other funds or property of the City be liable for the payment of the Series 2025B Installment Payments.
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(b) Obligations Unconditional. Subject to Section 3.06(a), the obligations of the City to make the Series 2025B Installment Payments from Net Revenues and to perform and observe the other agreements contained herein shall be absolute and unconditional and shall not be subject to any defense or any right of set-off, counterclaim or recoupment arising out of any breach of the City, the Authority or the Trust Administrator of any obligation to the City or otherwise with respect to the Series 2025B Project, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority or the Trust Administrator. (c) Obligations Specified. Until such time as all the Series 2025B Installment Payments shall have been fully paid or prepaid, the City:
(i) will not suspend, abate, or discontinue any payments specified in Section 3.05 hereof;
(ii) will perform and observe all other agreements contained in this Series 2025B Installment Sale Agreement; and
(iii) will not terminate the Term of this Series 2025B Installment Sale Agreement for any cause, including, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Series 2025B Project, the taking by eminent domain of title to or temporary use of any or all of the Series 2025B Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either thereof or any failure of the Authority or the Trust Administrator to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Series 2025B Trust Agreement, the Series 2025B Assignment Agreement or this Series 2025B Installment Sale Agreement. (d) Authority Obligations. Nothing contained in this Section 3.06 shall be construed to release the Authority from the performance of any of the agreements on its part herein contained, and in the event the Authority shall fail to perform any such agreements on its part, the City may institute such action against the Authority as the City may deem necessary to compel performance so long as such action does not abrogate the obligations of the City contained in Section 3.06(b) above. 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 right of possession, occupancy and use hereunder, and in such event the Authority hereby agrees to cooperate fully with the City and to take such action necessary to effect the substitution of the City for the Authority in such action or proceeding if the City shall so request.
Section 3.07. Pledge of Net Revenues; Transfer to Pay Series 2025B Installment Payments; Release from Lien.
(a) Pledge of Net Revenues. The City hereby agrees that the payment of the Series 2025B Installment Payments shall be secured by a first pledge, charge and lien upon Net Revenues which pledge, charge and lien are on parity with any Parity Obligations, and Net Revenues
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sufficient to pay the Series 2025B Installment Payments as they become due and payable are hereby pledged, charged, assigned, transferred and set over by the City to the Authority and its assigns for the purpose of securing payment of the Series 2025B Installment Payments. The Net Revenues shall constitute a trust fund for the security and payment of the Series 2025B Installment Payments.
(b) Transfer to Pay Series 2025B Installment Payments. In order to provide for the payment of Series 2025B Installment Payments when due, the City shall, on or before each Series 2025B Installment Payment Date, transfer to the Trust Administrator for deposit into the Series 2025B Installment Payment Fund the amount indicated in Exhibit B attached hereto as required for the next occurring Series 2025B Installment Payment Date. Notwithstanding Exhibit B attached hereto, the City shall be obligated to make Series 2025B Installment Payments sufficient to pay all principal and interest due with respect to the Series 2025B Bonds.
Section 3.08. Rate Covenant. The City hereby covenants that it shall prescribe, revise and collect such charges for the services and facilities of the Wastewater System which, after allowances for contingencies and error in the estimates, shall produce Gross Revenues sufficient in each Fiscal Year to provide Net Revenues equal to at least 1.20 times (i) the Series 2025B Installment Payments coming due and payable during such Fiscal Year, (ii) all payments required with respect to Parity Obligations and (iii) amounts required to replenish the Series 2025B Reserve Fund, as required by Section 6.06 of the Series 2025B Trust Agreement.
Section 3.09. Limitations on Future Obligations Secured by Net Revenues. (a) No Obligations Superior to Series 2025B Installment Payments. In order to protect further the availability of the Net Revenues and the security for the Series 2025B Installment Payments and any Parity Obligations, the City hereby agrees that the City shall not, so long as any Series 2025B Bonds are outstanding, issue or incur any obligations payable from Gross Revenues or Net Revenues superior to the Series 2025B Installment Payments or any Parity Obligations.
(b) Parity Obligations. The City further covenants that, except for obligations issued or incurred to prepay the Series 2025B Installment Payments in full pursuant to Section 4.02 hereof, the City shall not issue or incur any Parity Obligations unless:
(i) The City is not in default under the terms of this Series 2025B Installment Sale Agreement;
(ii) Net Revenues, calculated on sound accounting principles, either (i) as shown by the books of the City for the latest Fiscal Year, as verified by a certificate of an Authorized Representative of the City, or (ii) as shown by the books of the City for any more recent twelve (12) month period selected by the City, as verified by a certificate or opinion of an Independent Certified Public Accountant employed by the City, plus in either case (at the option of the City) the Additional Revenues, shall be at least equal to one hundred twenty percent (120%) of the amount of Maximum Annual Debt Service on all outstanding Parity Obligations and the Parity Obligations to be issued.
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(iii) At the discretion of the City, a reserve fund may be funded for such proposed Parity Obligations which may be at least equal to the amount resulting from the application on the closing date of such Parity Obligations of the formula contained in the definition of “Series 2025B Reserve Requirement.”
(iv) So long as all of the Outstanding Series 2025B Bonds are held by the Original Purchaser, the prior written consent of such Original Purchaser shall have been obtained.
Section 3.10. Additional Payments. In addition to the Series 2025B Installment Payments, the City shall pay, from Net Revenues, when due all costs and expenses incurred by the Authority to comply with the provisions of the Series 2025B Trust Agreement and this Series 2025B Installment Sale Agreement, including, without limitation all Delivery Costs (to the extent not paid from amounts on deposit in the Redemption Account), compensation due to the Trust Administrator for its fees, costs and expenses incurred under the Series 2025B Trust Agreement and the Series 2025B Assignment Agreement and all costs and expenses of attorneys, auditors, engineers and accountants.
Section 3.11. Payments to Series 2025B Reserve Fund. In addition to the Series 2025B Installment Payments, the City shall make payments to the Series 2025B Reserve Fund of 10% of one annual Debt Service payment on the Series 2025B Bonds per year for ten years or until the balance is equal to one annual Debt Service payment on the Series 2025B Bonds (the “Series 2025B Reserve Requirement”). Prior written concurrence from the Government must be obtained before funds may be withdrawn from this account during the life of the Series 2025B Bonds. When funds are withdrawn during the life the Series 2025B Bonds, payments to the Series 2025B Reserve Fund will continue until the Series 2025B Reserve Requirement is reached.
Section 3.12. Payments to Short-Lived Assets Series 2025B Reserve Fund. In addition to the Series 2025B Installment Payments, the City shall deposit $8,020.40 into the Short-Lived Assets Series 2025B Reserve Fund, and shall maintain for as long as any of the Series 2025B Bonds remain outstanding to pay for repairs and/or replacement of major Wastewater System assets in the order of priority set forth in Section 5.04 of the Series 2025B Trust Agreement.
The City may withdraw amounts on deposit in the Short-Lived Assets Series 2025B Reserve Fund from time to time to pay for timely replacement of “short-lived assets” of the Wastewater System, which for purposes of this Section shall mean any component or assets of the Wastewater System, including without limitation pumps, paint and small equipment, that will need to be repaired or replaced over a one to fifteenyear period, the cost of which is not included within the definition of Operation and Maintenance Costs.
Notwithstanding the foregoing, before each June 30 the City shall evaluate the status and condition of short-lived assets of the Wastewater System and, if such evaluation suggests that a lesser or greater deposit is required in order to provide for the timely replacement of any short-lived assets, the City may upon consultation by the City with the Government decrease the amount of the annual deposit into the Short-Lived Assets Series 2025B Reserve Fund if a lesser amount is indicated, but shall increase the amount of the annual deposit in to the Short-Lived Assets Series 2025B Reserve Fund if a greater amount is indicated.
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ARTICLE IV
PREPAYMENT OF SERIES 2025B INSTALLMENT PAYMENTS
Section 4.01. Prepayment. The City shall have the right to prepay the Series 2025B Installment Payments, but only in the manner, at the times and in all respects in accordance with the provisions of this Article IV.
Section 4.02. Optional Prepayment. Subject to the terms and conditions of this Section 4.02, the Authority hereby grants an option to City to prepay without penalty the Series 2025B Installment Payments in full, by paying the total unpaid principal component of the Series 2025B Installment Payments as set forth in Exhibit B or in part, but not in an amount of less than the Denomination Amount or any integral multiple thereof, at any one time. Said option may be exercised on any date following written notice by the City to the Authority and the Trust Administrator of the exercise of such option at least thirty (30) days prior to date designated for prepayment. Such option shall be exercised in the event of prepayment in full, by depositing with the Trust Administrator by the applicable prepayment date cash in an amount sufficient to pay the total unpaid principal component of the Series 2025B Installment Payments as set forth in Exhibit B, together with any Series 2025B Installment Payments then due but unpaid together with accrued interest to the prepayment date, or, in the event of prepayment in part, by depositing with the Trust Administrator by the applicable date of prepayment, an amount divisible by the Denomination Amount equal to the amount desired to be prepaid together with any Series 2025B Installment Payments then due but unpaid together with accrued interest on the amount to be prepaid to the prepayment date.
In the event of prepayment in part, prepayments will be applied in inverse order of maturity and the Authority or City shall revise the Exhibit B Schedule of Series 2025B Installment Payments, which schedule shall take into account such prepayment and shall be and become for all purposes thereafter the “Amended Exhibit B to this Series 2025B Installment Sale Agreement.” Section 4.03. Mandatory Prepayment from Net Proceeds of Insurance or Condemnation. The City shall be obligated to prepay the Series 2025B Installment Payments in whole or in part on any Series 2025B Installment Payment Date from and to the extent of any Net Proceeds of any insurance or condemnation award theretofore deposited in the Series 2025B Installment Payment Fund for such purpose pursuant to Section 5.07 hereof or pursuant to Section 7.02 of the Series 2025B Trust Agreement. The City and the Authority hereby agree that such Net Proceeds shall be credited towards the City’s obligations under this Section 4.03. Except in the case of such prepayment of the Series 2025B Installment Payments in full, such payment shall be in addition to the Series 2025B Installment Payment required to be paid by the City on such date.
Section 4.04. Credit for Amounts on Deposit. In the event the City elects or is required to prepay the Series 2025B Installment Payments in full under this Article IV, such that the Series 2025B Trust Agreement shall be discharged by its terms as a result of such prepayment, all amounts then on deposit in the Series 2025B Installment Payment Fund or the Series 2025B Reserve Fund shall be credited towards the amounts required to be so prepaid.
Section 4.05. Security Deposit. Notwithstanding any other provision of this Series 2025B Installment Sale Agreement, the City may, on any date, secure the payment of Series 2025B Installment
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Payments by a deposit with the Trust Administrator, as escrow holder under an escrow deposit and trust agreement as referenced in Section 14.01(d) of the Trust Agreement, of:
(a) All Series 2025B Installment Payments. in the case of a security deposit relating to all Series 2025B Installment Payments, either (i) an amount which, together with amounts on deposit in the Series 2025B Installment Payment Fund and the Series 2025B Reserve Fund, is sufficient to pay all unpaid Series 2025B Installment Payments, including the principal and interest components thereof, in accordance with the Series 2025B Installment Payment schedule set forth in Exhibit B attached hereto, or (ii) Discharge Obligations, together with cash, if required, in such amount as will, in the opinion of nationally-recognized bond counsel and of an independent certified public accountant, together with interest to accrue thereon and, if required, all or a portion of moneys or Discharge Obligations then on deposit in the Series 2025B Installment Payment Fund and the Series 2025B Reserve Fund, be fully sufficient to pay all unpaid Series 2025B Installment Payments on their Series 2025B Installment Payment Date; or (b) Portion of Series 2025B Installment Payments. in the case of a security deposit relating to a portion of the Series 2025B Installment Payments both (i) a Written Certificate executed by a City Representative designating the portion of the Series 2025B Installment Payments to which the deposit pertains, and (ii) cash or Discharge Obligations, in such amount as will, together with interest to be received thereon, if any, and an allocable portion of amounts on deposit in the Series 2025B Installment Payment Fund and the Series 2025B Reserve Fund, be fully sufficient in the opinion of an independent certified public accountant, to pay the portion of the Series 2025B Installment Payments designated in the aforesaid City Representative’s Written Certificate.
(c) Effect. In the event of a deposit pursuant to this Section 4.05, all obligations of the City under this Series 2025B Installment Sale Agreement pertaining to the portion of the Series 2025B Installment Payments for which the deposit has been made shall cease and terminate, excepting only the obligation of the City to make, or cause to be made, all Series 2025B Installment Payments, or the portion of Series 2025B Installment Payments to which the deposit pertains, from the deposit made by City pursuant to this Section 4.05. Such deposit shall be deemed to be and shall constitute a special fund for the payment of Series 2025B Installment Payments in accordance with the provisions of this Series 2025B Installment Sale Agreement; and further provided that any security deposit relating to the Series 2025B Project shall not affect the covenant of the City contained in Section 3.09 hereof in the event such security deposit is insufficient to pay or prepay all Series 2025B Installment Payments relating to the Series 2025B Project when and as the same become due and payable. Upon said deposit, the Authority will execute or cause to be executed any and all documents as may be necessary to release the security provided hereby to the extent of such deposit.
(d) Notwithstanding any contrary provision contained herein, so long as the Government is the Owner of the Series 2025B Bonds, the Series 2025B Bonds may not be defeased.
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ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.01. Maintenance, Taxes and Assessments, Contests. (a) Operation. The City covenants to operate the Wastewater System in an efficient and economical manner and operate, maintain and preserve the Wastewater System in good repair and working order in accordance with customary standards and practices applicable to similar facilities
(b) Taxes and Assessments. The City shall also pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or the City or levied, assessed or charged against the Wastewater System or the respective interests or estates therein; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the Term of this Series 2025B Installment Sale Agreement as and when the same become due.
(c) Contest. The City may, at the City’s expense and in its name, in good faith contest any such taxes, assessments and charges and, in the event of any such contest, may permit the taxes, assessments or charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City that, in the opinion of Independent Counsel, by nonpayment of any such items, the Series 2025B Project or any part thereof will be subject to loss or forfeiture, in which event the City shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority.
Section 5.02. Modification of Series 2025B Project. The City shall, at its own expense, have the right to remodel the Series 2025B Project or to make additions, modifications and improvements thereto.
All such additions, modifications and improvements shall thereafter comprise part of the Series 2025B Project and be subject to the provisions of this Series 2025B Installment Sale Agreement. Such additions, modifications and improvements shall not in any way damage the Series 2025B Project or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the Series 2025B Project, upon completion of any additions, modifications and improvements made pursuant to this Section 5.02, shall be of a value which is not substantially less than the value of the Series 2025B Project immediately prior to the making of such additions, modifications and improvements.
Section 5.03. Installation of City’s Equipment. The City may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed other items of equipment or other personal property in or upon the Series 2025B Project. All such items shall remain the sole property of the City, in which neither the Authority nor the Trust Administrator shall have any interest, and may be modified or removed by the City at any time provided that the City shall repair and restore any and all damage to the Series 2025B Project resulting from the installation, modification or removal of any such items. Nothing in this Series 2025B Installment Sale Agreement shall prevent the City from purchasing items to be installed pursuant to this Section 5.03 under a conditional sale or lease purchase contract, or
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subject to a vendor’s lien or security agreement, as security for the unpaid portion of the purchase price thereof.
Section 5.04. Public Liability and Property Damage Insurance. (a) Insurance Policies. The City shall maintain or cause to be maintained, throughout the Term of this Series 2025B Installment Sale Agreement, insurance policies, including a standard comprehensive general insurance policy or policies in protection of the City, its members, officers, agents and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the construction or operation of the Wastewater System (but only if such insurance is available at reasonable cost on the open market from reputable insurance companies). Such policy or policies shall afford protection in such amounts, with such deductibles, as are usually covered in connection with operations similar to the Wastewater System.
Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried by the City, and may be maintained in the form of insurance maintained through a nonprofit public benefit Authority created for such purpose or in the form of selfinsurance by the City. (b) Self-Insurance. If the City shall maintain self-insurance, it shall supply to the Trust Administrator a statement of sufficiency by an independent insurance consultant or the City’s risk manager on an annual basis as described in Section 5.06 hereof. (c) Application of Net Proceeds. The Net Proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the insurance proceeds shall have been paid.
Section 5.05. Fire and Extended Coverage Insurance.
(a) Insurance Policies. The City shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Series 2025B Installment Sale Agreement, insurance against loss or damage to any above-ground structures, including City-owned equipment and machinery housed therein, constituting any part of the Wastewater System by fire and lightning, with extended coverage insurance but not including earthquake insurance. Such insurance need not include reservoirs, standpipes and elevated tanks. Such insurance shall be in an amount which is not less than 100% of the replacement cost of the Series 2025B Project. Such insurance may be subject to a deductible clause of not to exceed ten percent of said replacement cost for any one loss.
Such insurance may be maintained as part of or in conjunction with any other fire and extended coverage insurance carried or required to be carried by the City, and may be maintained in the form of insurance maintained through a nonprofit public benefit Authority created for such purpose or in the form of self-insurance by the City.
(b) Self-Insurance. If the City shall maintain self-insurance, it will supply to the Trust Administrator a statement of sufficiency by an independent insurance consultant or the City’s risk manager on an annual basis as described in Section 5.06 hereof.
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(c) Application of Net Proceeds. Net Proceeds of such insurance shall be applied as provided in Section 5.07 hereof.
Section 5.06. Insurance Net Proceeds; Form of Policies. The insurance required by Section 5.05 hereof shall provide that all applicable proceeds thereunder shall be payable to the Trust Administrator for the benefit of the Series 2025B Bond Owners. The City shall pay or cause to be paid when due the premiums for all insurance policies required by this Series 2025B Installment Sale Agreement. All such policies shall provide that the Authority and the Trust Administrator are named as additional insureds and that the Trust Administrator shall be given thirty (30) days’ notice of each expiration, any intended cancellation thereof or reduction of the coverage provided thereby. The Trust Administrator shall not be responsible for the sufficiency of any insurance herein required or for the obtaining of such insurance and shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the City. The City shall cause to be delivered to the Trust Administrator annually, no later than the end of each Fiscal Year, a Written Series 2025B Bond signed by a City Representative stating that the City is in compliance with Sections 5.04 and 5.05 of this Agreement.
The Trust Administrator may conclusively rely on such Written Series 2025B Bonds.
Section 5.07. Application of Net Proceeds.
(a) From Insurance Award. The Net Proceeds of any insurance award resulting from any damage to or destruction of the Series 2025B Project by fire or other casualty shall be deposited in the Insurance and Condemnation Fund by the Trust Administrator promptly upon receipt thereof and, if the City Representative notifies the Trust Administrator in writing of the City’s determination that the replacement, repair, restoration, modification or improvement of the Series 2025B Project is not economically feasible or in the best interest of the City, then such Net Proceeds shall be promptly transferred by the Trust Administrator to the Series 2025B Installment Payment Fund to be applied as provided in Section 4.03 hereof. All Net Proceeds deposited in the Insurance and Condemnation Fund and not so transferred shall be applied to the prompt replacement, repair, restoration, modification or improvement of the Series 2025B Project by the City, upon receipt of a requisition, signed by the City Representative and, so long as all of the Outstanding Series 2025B Bonds are held by the Original Purchaser, the Owner of the Series 2025B Bonds stating with respect to each payment to be made (i) the requisition number, (ii) the name and address of the person, firm or Authority to whom payment is due, (iii) the amount to be paid and (iv) that each obligation mentioned therein has been properly incurred, is a proper charge against the Insurance and Condemnation Fund, has not been the basis of any previous withdrawal, and specifying in reasonable detail the nature of the obligation. Any balance of the Net Proceeds remaining after such work has been completed shall be transferred to the Series 2025B Installment Payment Fund. The City covenants that it will commence such replacement, repair, restoration, modification or improvement or indicate that such replacement, repair, restoration, modification or improvement is not economically feasible within 180 days of receipt of such Net Proceeds. (b) From Eminent Domain Award. The Net Proceeds of any eminent domain award shall be deposited in the Insurance and Condemnation Fund to be held and applied by the Trust Administrator pursuant to Section 7.02 of the Series 2025B Trust Agreement.
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Section 5.08 Advances. If the City shall fail to perform any of its obligations under this Article V, the Authority may, but shall not be obligated to, take such action as may be necessary to cure such failure, including the advancement of money, and the City shall be obligated to repay all such advances as soon as possible, with interest at the rate of interest with respect to the Series 2025B Bonds from the date of the advance to the date of repayment.
ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS; INDEMNITY
Section 6.01. Disclaimer of Warranties. The Authority makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City for the Series 2025B Project, or any other representation or warranty with respect to the Series 2025B Project or any item thereof. In no event shall the Authority be liable for incidental, indirect, special or consequential damages, in connection with or arising out of this Series 2025B Installment Sale Agreement or the Series 2025B Trust Agreement for the existence, furnishing, functioning or City’s use of the Series 2025B Project.
Section 6.02. Access to the Series 2025B Project and Records. To the extent permitted by law, the City agrees that the Authority, any Authority Representative, and the Authority’s successors or assigns shall have the right at all reasonable times to enter upon and to examine and inspect the Series 2025B Project. The City further agrees that the Authority, any Authority Representative, and the Authority’s successors or assigns shall have such rights of access to the Series 2025B Project as may be reasonably necessary to cause the proper maintenance of the Series 2025B Project in the event of failure by the City to perform its obligations hereunder. In addition, the City agrees that the Authority, any Authority Representative, and the Authority’s successors or assigns shall have the right at all reasonable times to inspect and examine all books, papers and records of the Authority and the City pertaining to the Series 2025B Project and the Series 2025B Bonds, to make copies thereof and to take non-privileged memoranda therefrom or with respect thereto as may be desired.
Section 6.03. Indemnity. The City shall and hereby agrees to indemnify and save the Authority and its successors and assigns harmless from and against all claims, losses and damages, including legal fees and expenses, arising out of: (a) the use, maintenance, condition or management of, or from any work or thing done on the Series 2025B Project by the City; (b) any breach or default on the part of the City in the performance of any of its obligations under this Series 2025B Installment Sale Agreement; (c) any act or negligence of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Series 2025B Project; (d) any act or negligence of any assignee or sublessee of the City with respect to the Series 2025B Project; or (e) the construction of the Series 2025B Project or the authorization of payment of the Delivery Costs by the City or the Authority. No indemnification is made under this Section
6.03, or elsewhere in this Series 2025B Installment Sale Agreement for willful misconduct, negligence, or breach of duty under this Series 2025B Installment Sale Agreement by the Authority, its officers, agents, employees, successors or assigns.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default Defined. The following shall be “events of default” under this Series 2025B Installment Sale Agreement and the terms “events of default” and “default” shall mean, whenever they are used in this Series 2025B Installment Sale Agreement, any one or more of the following events:
(a) Failure by the City to pay any Series 2025B Installment Payment by the Series 2025B Installment Payment Date or failure to make any other payment required to be paid hereunder at the time specified herein; or
(b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed in this Series 2025B Installment Sale Agreement or the Series 2025B Trust Agreement, other than as referred to in clause (a) of this Section 7.01, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority, the Trust Administrator or the Owners of not less than twenty-five percent (25%) in aggregate principal amount of Series 2025B Bonds then Outstanding; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Authority, the Trust Administrator or such Owners, as applicable, shall not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the City within the applicable period and diligently pursued until the default is corrected; or (c) The filing by the City of a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or the approval by a court of competent jurisdiction of a petition filed with or without the consent of the City seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction assumes custody or control of the City or of the whole or any substantial part of its property; or
(d) An event of default shall have occurred and be continuing with respect to any Parity Obligations.
Section 7.02. Remedies on Default. Whenever any event of default referred to in Section 7.01 hereof shall have happened and be continuing, the Authority shall have the right, at its option and without any further demand or notice, to:
(a) declare all principal components of the unpaid Series 2025B Installment Payments, together with accrued interest at the rate or rates specified in the respective Outstanding Series 2025B Bonds from the immediately preceding Series 2025B Installment Payment Date on which payment was made, to be immediately due and payable, whereupon the same shall become due and payable; and
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(b) take whatever action at law or in equity may appear necessary or desirable to collect the Series 2025B Installment Payments then due or thereafter to become due during the Term of this Series 2025B Installment Sale Agreement, or enforce performance and observance of any obligation, agreement or covenant of the City under this Series 2025B Installment Sale Agreement.
Section 7.03. 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 Series 2025B Installment Sale Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article VII it shall not be necessary to give any notice, other than such notice as may be required in this Article VII or by law.
Section 7.04. Prosecution and Defense of Suits. The City shall promptly, upon request of the Authority or its 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 Series 2025B Project whether now existing or hereafter developing and shall prosecute all such suits, actions and other proceedings as may be appropriate for such purpose and, to the extent permitted by law, shall indemnify or cause to be indemnified the Authority and its assignee for all loss, cost, damage and expense, including attorneys’ fees, which they or any of them may incur by reason of any such defect, cloud, suit, action or proceedings.
To the extent permitted by law, the City shall defend, or cause to be defended, against every suit, action or proceeding at any time brought against the Authority or its assignee upon any claim arising out of the receipt, application or disbursement of any of the Net Revenues or involving the rights or duties of the Authority or its assignee under this Series 2025B Installment Sale Agreement or the Series 2025B Trust Agreement; provided, that the Authority and its assignee at their election may appear in and defend any such suit, action or proceeding. The City shall indemnify or cause to be indemnified the Authority and its assignee against any and all liability claimed or asserted by any person, arising out of such receipt, application or disbursement. Notwithstanding any contrary provision hereof, this covenant shall remain in full force and effect, even though all Series 2025B Installment Payments have been fully paid and satisfied, until a date which is three (3) years following the payment of the last of the Series 2025B Installment Payments.
Section 7.05. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Series 2025B Installment Sale 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.
Section 7.06. Application of the Proceeds. The Trust Administrator, as assignee of the Authority, shall apply all amounts received under this Article VII as set forth in Section 3.03 of the Series 2025B Trust Agreement.
Section 7.07. Liability Limited to Net Revenues. Notwithstanding any provision of this Series 2025B Installment Sale Agreement, the City’s liability to pay the Series 2025B Installment Payments and
INSTALLMENT SALE AGREEMENT
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other amounts hereunder shall be limited solely to Net Revenues as provided in Sections 3.06 and 3.07 hereof. In the event that Net Revenues shall be insufficient at any time to pay an Series 2025B Installment Payment in full, the City shall not be liable to pay or prepay such Series 2025B Installment Payment other than from Net Revenues.
Section 7.08. Trust Administrator and Series 2025B Bond Owners to Exercise Rights. Such rights and remedies as are given to the Authority under this Article VII have been assigned by the Authority to the Trust Administrator under the Series 2025B Assignment Agreement, to which assignment the City hereby consents. Such rights and remedies shall be exercised by the Trust Administrator and the Owners of the Series 2025B Bonds as provided in the Series 2025B Trust Agreement.
Section 7.09. Pro Rata Application of Net Revenues. If, at any time, there is a deficiency in Net Revenues available to pay the Series 2025B Installment Payments, any amounts due with respect to Parity Obligations, amounts required to replenish the Series 2025B Reserve Fund or amounts required to replenish any reserve fund established for Parity Obligations, available Net Revenues shall be applied on a pro rata basis to the payment of such Series 2025B Installment Payments and to the payment of amounts due with respect to Parity Obligations, then to the replenishment of the Series 2025B Reserve Fund and to the replenishment of any reserve fund established for Parity Obligations.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Assignment, Sale or Lease by the City.
(a) Assignment or Sale. This Series 2025B Installment Sale Agreement may not be assigned by the City, and the Wastewater System may not be sold by the City during the Term of this Series 2025B Installment Sale Agreement.
(b) Lease. The City may lease the Series 2025B Project, or any portion thereof, with the consent of the Owner of the Series 2025B Bonds so long as all of the Outstanding Series 2025B Bonds are held by the Original Purchaser thereof, and subject to all of the following conditions:
(i) This Series 2025B Installment Sale Agreement and the obligation of the City to make Series 2025B Installment Payments hereunder shall remain obligations of the City;
(ii) The City shall, within thirty (30) days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trust Administrator a true and complete copy of the documents accomplishing such lease;
(iii) No such lease by the City shall cause the Series 2025B Project to be used for a purpose other than a governmental or proprietary function authorized under the provisions of the Constitution and laws of the State; and
INSTALLMENT SALE AGREEMENT
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(iv) No such lease shall cause the interest component of the Series 2025B Installment Payments to become subject to federal income taxes or State personal income taxes.
Section 8.02. Amendment of Series 2025B Installment Sale Agreement. The City will not alter, modify or cancel or agree or consent to alter, modify or cancel this Series 2025B Installment Sale Agreement, except as permitted by Article X of the Series 2025B Trust Agreement, without the written consent of the Trust Administrator and the Authority.
Section 8.03. Binding Effect. This Series 2025B Installment Sale Agreement shall inure to the benefit of and shall be binding upon the Authority and the City and their respective successors and assigns.
Section 8.04. Applicable Law. This Series 2025B Installment Sale Agreement shall be governed by and construed in accordance with the laws of the State.
Section 8.05. Severability. In the event any provision of this Series 2025B Installment Sale 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 8.06. Captions. The captions or headings in this Series 2025B Installment Sale Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provision, Article or Section of this Series 2025B Installment Sale Agreement.
Section 8.07. Net Contract. This Series 2025B Installment Sale Agreement shall be deemed and construed to be a “net contract” and the City hereby agrees that the Series 2025B Installment Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever.
Section 8.08. 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 correcting any inadequate or incorrect description of the Series 2025B Project hereby sold or intended so to be or for carrying out the expressed intention of this Series 2025B Installment Sale Agreement.
Section 8.09. Authority and City Representatives. Whenever under the provisions of this Series 2025B Installment Sale Agreement the approval of the Authority or the City is required, or the Authority or the City is required to take some action at the request of the other, such approval or such request shall be given for the Authority by an Authority Representative and for the City by a City Representative, and any party hereto shall be authorized to rely upon any such approval or request.
Section 8.10. Notices. All notices, Written Certificates or other communications hereunder shall be sufficiently given and shall be deemed to have been received 48 hours after deposit in the United States mail with postage fully prepaid:
INSTALLMENT SALE AGREEMENT
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If to the City: City of San Juan Bautista
311 Second Street
San Juan Bautista, CA 95045
Attention: City Manager
If to the Authority: San Juan Bautista Public Financing Authority 311 Second Street
San Juan Bautista, CA 95045
Attention: Executive Director
If to the Trust Administrator: City Manager
City of San Juan Bautista
311 Second Street
San Juan Bautista, CA 95045
Attention: City Manager
If to the Government: Rural Development, United States
Department of Agriculture
777 Sonoma Ave, ‘E’ Street Annex
Santa Rosa, CA 95404
Attention: Area Specialist
And
Rural Development, United States
Department of Agriculture
430 G Street, Suite 4169
Davis, CA 95616
Attention: Community Programs Specialist
The Authority, the City, the Trust Administrator and the Government, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent.
Section 8.11. Execution in Counterparts. This Series 2025B Installment Sale 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.
[Signature Page to Follow on Next Page]
INSTALLMENT SALE AGREEMENT
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IN WITNESS, the Authority has caused this Series 2025B Installment Sale Agreement to be executed in its corporate name by its duly authorized officer, and the City has caused this Series 2025B Installment Sale Agreement to be executed in its name by its duly authorized officer, as of the date first above written.
SAN JUAN BAUTISTA PUBLIC FINANCING
AUTHORITY, as Seller
By
Authorized Signatory
CITY OF SAN JUAN BAUTISTA, as Purchaser
By
Authorized Signatory
Exhibit A
EXHIBIT A
DESCRIPTION OF THE SERIES 2025B PROJECT
The 2025B Project generally consists of part or all of (i) the decommissioning of the existing Sequencing Batch Reactor pond plan and converting it into an emergency storage basin, (ii) the construction of a new pump station to deliver equalized and screened raw sewage to the City of Hollister Wastewater Treatment Plant, (iii) the construction of a new 10-inch diameter high-density polyethylene pipe for treatment disposal at the City of Hollister Wastewater Treatment Plant, and (iv) all other work contemplated by the USDA Letter of Conditions (the “LOC”) dated November 28, 2022, as well as the corresponding Preliminary Engineering Report referenced therein. The scope of work also includes site piping and grading, demolition, construction, instrumentation, and all necessary appurtenances, permits, rights-of-way, and other real or personal property useful in connection with the 2025B Project, along with all additions, extensions, expansions, improvements, and equipment upgrades.
The 2025B Project may include any other capital additions or replacements within the Wastewater System, provided such work is approved by both USDA and the City, and the use of Series 2025B Bond proceeds for such improvements does not, in and of itself, adversely affect the tax-exempt status of Series 2025B Bonds.
Exhibit B
EXHIBIT B
SCHEDULE OF SERIES 2025B INSTALLMENT PAYMENTS*
*The following schedule is subject to modification by the actual advances made by the Original Purchaser, as evidenced in the form of single Series 2025B Bond. Such evidence of advances shall, in all cases, be controlling.
Series 2025B
Installment
Payment Date
Principal
Component
Interest
Component
Total Series 2025B
Installment
Payment
04/1/2026 $71,000 $63,408 $134,408
10/1/2026 - 43,959 43,959
04/1/2027 47,000 43,959 90,959
10/1/2027 - 43,313 43,313
04/1/2028 48,000 43,313 91,313
10/1/2028 - 42,653 42,653
04/1/2029 49,000 42,653 91,653
10/1/2029 - 41,979 41,979
04/1/2030 51,000 41,979 92,979
10/1/2030 - 41,278 41,278
04/1/2031 52,000 41,278 93,278
10/1/2031 - 40,563 40,563
04/1/2032 54,000 40,563 94,563
10/1/2032 - 39,820 39,820
04/1/2033 55,000 39,820 94,820
10/1/2033 - 39,064 39,064
04/1/2034 57,000 39,064 96,064
10/1/2034 - 38,280 38,280
04/1/2035 58,000 38,280 96,280
10/1/2035 - 37,483 37,483
04/1/2036 60,000 37,483 97,483
10/1/2036 - 36,658 36,658
04/1/2037 61,000 36,658 97,658
10/1/2037 - 35,819 35,819
04/1/2038 63,000 35,819 98,819
10/1/2038 - 34,953 34,953
04/1/2039 65,000 34,953 99,953
10/1/2039 - 34,059 34,059
04/1/2040 67,000 34,059 101,059
10/1/2040 - 33,138 33,138
04/1/2041 68,000 33,138 101,138
10/1/2041 - 32,203 32,203
04/1/2042 70,000 32,203 102,203
10/1/2042 - 31,240 31,240
04/1/2043 72,000 31,240 103,240
10/1/2043 - 30,250 30,250
Exhibit B
4/1/2044 74,000 30,250 104,250
10/1/2044 - 29,233 29,233
4/1/2045 76,000 29,233 105,233
10/1/2045 - 28,188 28,188
4/1/2046 78,000 28,188 106,188
10/1/2046 - 27,115 27,115
4/1/2047 80,000 27,115 107,115
10/1/2047 - 26,015 26,015
4/1/2048 83,000 26,015 109,015
10/1/2048 - 24,874 24,874
4/1/2049 85,000 24,874 109,874
10/1/2049 - 23,705 23,705
4/1/2050 87,000 23,705 110,705
10/1/2050 - 22,509 22,509
4/1/2051 90,000 22,509 112,509
10/1/2051 - 21,271 21,271
4/1/2052 92,000 21,271 113,271
10/1/2052 - 20,006 20,006
4/1/2053 95,000 20,006 115,006
10/1/2053 - 18,700 18,700
4/1/2054 97,000 18,700 115,700
10/1/2054 - 17,366 17,366
4/1/2055 100,000 17,366 117,366
10/1/2055 - 15,991 15,991
4/1/2056 103,000 15,991 118,991
10/1/2056 - 14,575 14,575
4/1/2057 105,000 14,575 119,575
10/1/2057 - 13,131 13,131
4/1/2058 108,000 13,131 121,131
10/1/2058 - 11,646 11,646
4/1/2059 111,000 11,646 122,646
10/1/2059 - 10,120 10,120
4/1/2060 114,000 10,120 124,120
10/1/2060 - 8,553 8,553
4/1/2061 118,000 8,553 126,553
10/1/2061 - 6,930 6,930
4/1/2062 121,000 6,930 127,930
10/1/2062 - 5,266 5,266
4/1/2063 124,000 5,266 129,266
10/1/2063 - 3,561 3,561
4/1/2064 128,000 3,561 131,561
10/1/2064 - 1,801 1,801
4/1/2065 131,000 1,801 132,801
Totals $3,268,000 $2,117,933 $5,385,933
.
SERIES 2025A TRUST AGREEMENT
by and among the
CITY OF SAN JUAN BAUTISTA
and
SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY
and the
CITY MANAGER
OF THE CITY OF SAN JUAN BAUTISTA,
as Trust Administrator
Dated as of September 1, 2025
Relating to
$7,000,000
SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY
(CITY OF SAN JUAN BAUTISTA)
SERIES 2025A WASTEWATER REVENUE BONDS
(SAN JUAN BAUTISTA TO HOLLISTER FORCE MAIN DEVELOPMENT PROJECT) i
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; AUTHORIZATION; EXHIBITS
Section 1.01. Definitions ............................................................................................................................ 2 Section 1.02. Authorization ...................................................................................................................... 11 Section 1.03. Content of Written Certificates .......................................................................................... 11 Section 1.04. Exhibits ............................................................................................................................... 12
ARTICLE II
THE SERIES 2025A BONDS
Section 2.01. Authorization ...................................................................................................................... 12 Section 2.02. Date .................................................................................................................................... 12 Section 2.03. Maturity; Interest Rates ...................................................................................................... 12 Section 2.04. Interest ................................................................................................................................ 13 Section 2.05. Form of Series 2025A Bond; Legends ............................................................................... 13 Section 2.06. Execution and Authentication ............................................................................................ 13 Section 2.07. Transfer and Exchange ....................................................................................................... 14 Section 2.08. Series 2025A Bond Mutilated, Lost, Destroyed or Stolen ................................................. 14 Section 2.09. Payment .............................................................................................................................. 15 Section 2.10. Execution of Documents and Proof of Ownership ............................................................. 15 Section 2.11. Series 2025A Bond Register .............................................................................................. 16 Section 2.12. CUSIP Numbers ................................................................................................................. 16
ARTICLE III
SERIES 2025A REDEMPTION ACCOUNT
Section 3.01. Series 2025A Redemption Account ................................................................................... 16 Section 3.02. Prepayment of the 2023 Notes ........................................................................................... 16 Section 3.03. Payment of Delivery Costs ................................................................................................. 16
ARTICLE IV
PREPAYMENT OF SERIES 2025A BONDS
Section 4.01. Prepayment ......................................................................................................................... 17 Section 4.02. Selection of Series 2025A Bonds for Prepayment ............................................................. 17 Section 4.03. Notice of Prepayment ......................................................................................................... 17 Section 4.04. Partial Prepayment of Series 2025A Bonds ....................................................................... 18 Section 4.05. Effect of Notice of Prepayment .......................................................................................... 18 Section 4.06. Purchase of Series 2025A Bonds ....................................................................................... 19
ARTICLE V
SERIES 2025A INSTALLMENT PAYMENTS; SERIES 2025A
INSTALLMENT PAYMENT FUND
Section 5.01. Assignment of Rights in Series 2025A Installment Sale Agreement ................................. 19 Section 5.02. Establishment of Series 2025A Installment Payment Fund ............................................... 19 ii
Section 5.03. Deposits .............................................................................................................................. 20 Section 5.04. Application of Moneys ....................................................................................................... 20 Section 5.05. Surplus ................................................................................................................................ 21
ARTICLE VI
SERIES 2025A RESERVE FUND
Section 6.01. Establishment of Series 2025A Reserve Fund ................................................................... 21 Section 6.02. Deposits .............................................................................................................................. 21 Section 6.03. Transfers ............................................................................................................................. 21 Section 6.04. Application in Event of Deficiency in the Series 2025A Installment Payment Fund ....... 21 Section 6.05. Transfer to Make All Series 2025A Installment Payments ................................................ 21 Section 6.06. Replenishment of Series 2025A Reserve Fund .................................................................. 22 Section 6.07. Establishment and Application of Short-Lived Assets Series 2025A Reserve Fund ......... 22
ARTICLE VII
INSURANCE AND CONDEMNATION FUND; INSURANCE; EMINENT DOMAIN Section 7.01. Establishment of Insurance and Condemnation Fund; Application of Net Proceeds of Insurance Award ............................................................................................................ 22 Section 7.02. Application of Net Proceeds of Eminent Domain Award .................................................. 22 Section 7.03. Excess Net Proceeds ........................................................................................................... 23 Section 7.04. Cooperation ........................................................................................................................ 23 ARTICLE VIII:
MONEYS IN FUNDS; INVESTMENT
Section 8.01. Held in Trust ....................................................................................................................... 23 Section 8.02. Investments Authorized ...................................................................................................... 23 Section 8.03. Allocation of Earnings........................................................................................................ 24 Section 8.04. Accounting ......................................................................................................................... 24 Section 8.05. Acquisition, Disposition and Valuation of Investments ..................................................... 24
ARTICLE IX
THE TRUST ADMINISTRATOR
Section 9.01. Appointment of Trust Administrator .................................................................................. 24 Section 9.02. Liability of Trust Administrator ......................................................................................... 25 Section 9.03. Merger or Consolidation .................................................................................................... 25 Section 9.04. Protection and Rights of the Trust Administrator .............................................................. 26 Section 9.05. Appointment of Trustee...................................................................................................... 28
ARTICLE X
MODIFICATION OR AMENDMENT OF AGREEMENTS
Section 10.01. Amendments Permitted .................................................................................................... 28 Section 10.02. Procedure for Amendment with Written Consent of Series 2025A Bond Owners .......... 29 Section 10.03. Disqualified Series 2025A Bonds .................................................................................... 30 Section 10.04. Effect of Supplemental Agreement .................................................................................. 30 iii
Section 10.05. Endorsement or Replacement of Series 2025A Bonds Delivered After Amendments .... 30 Section 10.06. Amendatory Endorsement of Series 2025A Bond ........................................................... 30
ARTICLE XI
COVENANTS
Section 11.01. Compliance With and Enforcement of Series 2025A Installment Sale Agreement ......... 30 Section 11.02. Payment of Taxes ............................................................................................................. 31 Section 11.03. Observance of Laws and Regulations .............................................................................. 31 Section 11.04. Further Assurances ........................................................................................................... 31 Section 11.05. Filing ................................................................................................................................ 31 Section 11.06. Private Activity Bond Limitation ..................................................................................... 31 Section 11.07. Federal Guarantee Prohibition .......................................................................................... 31 Section 11.08. Rebate Requirement ......................................................................................................... 31 Section 11.09. No Arbitrage ..................................................................................................................... 32 Section 11.10. Maintenance of Tax-Exemption ....................................................................................... 32
ARTICLE XII
LIMITATION OF LIABILITY
Section 12.01. Limited Liability of City .................................................................................................. 32 Section 12.02. No Liability of the Authority for Trust Administrator Performance ................................ 32 Section 12.03. Indemnification of Trust Administrator ........................................................................... 32 Section 12.04. Limitation of Rights to Parties and Series 2025A Bond Owners ..................................... 33
ARTICLE XIII
EVENTS OF DEFAULT AND REMEDIES OF SERIES 2025A BOND OWNERS Section 13.01. Assignment of Rights ....................................................................................................... 33 Section 13.02. Remedies .......................................................................................................................... 33 Section 13.03. Application of Funds ........................................................................................................ 34 Section 13.04. Institution of Legal Proceedings ....................................................................................... 34 Section 13.05. Non-waiver ....................................................................................................................... 34 Section 13.06. Remedies Not Exclusive .................................................................................................. 35 Section 13.07. Power of Trust Administrator to Control Proceedings ..................................................... 35 Section 13.08. Limitation on Series 2025A Bond Owners’ Right to Sue ................................................ 35 Section 13.09. Parties Interested Herein .................................................................................................. 36
ARTICLE XIV
MISCELLANEOUS
Section 14.01. Discharge .......................................................................................................................... 36 Section 14.02. Records ............................................................................................................................. 37 Section 14.03. Notices .............................................................................................................................. 37 Section 14.04. Governing Law ................................................................................................................. 38 Section 14.05. Binding Effect; Successors ............................................................................................... 38 Section 14.06. Execution in Counterparts ................................................................................................ 38 Section 14.07. Destruction of Canceled Series 2025A Bonds ................................................................. 38 Section 14.08. Headings ........................................................................................................................... 38 iv
Section 14.09. Limitation of Rights to Parties and Series 2025A Bond Owners ..................................... 38 Section 14.10. Waiver of Notice .............................................................................................................. 39 Section 14.11. Payments Due on Other than Business Day ..................................................................... 39 Section 14.12. Payment of Unclaimed Moneys ....................................................................................... 39 Section 14.13. Separability of Invalid Provisions .................................................................................... 39 Exhibit A Form of Series 2025A Bond ........................................................................................ A-1 SERIES 2025A TRUST AGREEMENT
THIS SERIES 2025A TRUST AGREEMENT, dated as of September 1, 2025, is by and among SAN JUAN BAUTISTA PUBLIC FINANCING AUTHORITY, a California public financing authority formed and existing under the joint powers authority laws of the State of California (the “Authority”), the CITY OF SAN JUAN BAUTISTA, a municipal corporation and general law city duly organized and existing under and by virtue of the constitution and laws of the State of California (the “City”), and the City Manager of the City, as Trust Administrator (the “Trust Administrator”); W I T N E S S E T H:
WHEREAS, the City and the Authority propose to undertake the acquisition and financing of certain capital improvements described herein (the “Series 2025A Project”) to the City’s municipal wastewater system (the “Enterprise” or “Wastewater System”); and WHEREAS, to help finance the Series 2025A Project, the City has agreed to purchase the Series 2025A Project from the Authority pursuant to, and in accordance with the terms set forth in the Series 2025A Installment Sale Agreement, dated as of September 1, 2025, by and between the City and the Authority (the “Series 2025A Installment Sale Agreement”); and WHEREAS, concurrently with the execution of this Series 2025A Trust Agreement, it is contemplated that the Trust Administrator will authenticate and deliver the San Juan Bautista Public Financing Authority (City of San Juan Bautista), Series 2025A Wastewater Revenue Bonds (San Juan Bautista to Hollister Force Main Development Project), in the aggregate principal amount of $7,000,000 (the “Series 2025A Bonds”), evidencing a direct, undivided fractional interest in certain Series 2025A Installment Payments to be made by the City, pursuant to the terms and conditions of the Series 2025A Installment Sale Agreement (the “Series 2025A Installment Payments”); and WHEREAS, all rights to receive the Series 2025A Installment Payments have been assigned without recourse by the Authority to the Trust Administrator, for the benefit of the Owners of the Series 2025A Bonds, pursuant to the Series 2025A Assignment Agreement, dated as of September 1, 2025, by and between the City and the Authority (the “Series 2025A Assignment Agreement”); and WHEREAS, in consideration of such assignment, concurrently with the execution of this Series 2025A Trust Agreement, the Trust Administrator will authenticate and deliver the Series 2025A Bonds to the United States of America, acting through the Rural Utilities Service (interchangeably, the “USDA” or “Government”), as the initial purchasers thereof, each secured by, among other things, the Series 2025A Installment Payments; and
WHEREAS, the City and Authority after due investigation and deliberation have each adopted respective resolutions authorizing the financing of the Series 2025A Project through the execution and delivery of the Series 2025A Bonds; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Series 2025A Trust Agreement do exist, have happened and have been performed in regular and due time, form and
TRUST AGREEMENT
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manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Series 2025A Trust Agreement; and
WHEREAS, the City has determined that all acts and proceedings required by law necessary to make the Series 2025A Bonds, when executed, authenticated and delivered by the Trust Administrator and duly issued, the valid, binding and legal special obligations of the City, and to constitute this Series 2025A Trust Agreement a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Series 2025A Trust Agreement have been in all respects duly authorized; and NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; AUTHORIZATION; EXHIBITS
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section
1.01 shall, for all purposes of this Series 2025A Trust Agreement and of any trust agreement supplemental hereto and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. In addition, all terms defined in the Series 2025A Installment Sale Agreement and not otherwise defined herein shall have the respective meanings specified in the Series 2025A Installment Sale Agreement.
“Additional Revenues” means, with respect to the issuance of any Parity Obligations, an allowance for Net Revenues arising from (i) any increase in the charges made for service from the Wastewater System, adopted prior to the incurring of such Parity Obligations and effective within eighteen (18) months following the date of incurring such Parity Obligations, in an amount equal to the total amount by which the Net Revenues for the Wastewater System would have been increased if such increase in charges had been in effect during the whole of the most recent completed Fiscal Year or during any more recent twelve (12) month period selected by the City, (ii) any increase in service connections to the Wastewater System, prior to the incurring of such Parity Obligations, in an amount equal to the total amount by which the Net Revenues for the Wastewater System would have been increased if such connections had been in existence during the whole of the most recent complete Fiscal Year or during any more recent twelve (12) month period selected by the City, all as shown by the certificate or opinion of an Independent Financial Consultant, and (iii) any additions to or improvements or extensions of the Wastewater System to be constructed with the proceeds of such Parity Obligations, and also for net revenues from any such additions, improvements or extensions which have been constructed from moneys from any source but which, during all or any part of such Fiscal Year, were not in service, all in an amount equal to 85% of the estimated additional average annual Net Revenues to be derived from such additions, improvements and extensions for the first 36-month period following closing of the proposed Parity Obligations, all as shown by the certificate or opinion of an Independent Engineer or Independent Financial Consultant. “Series 2025A Assignment Agreement” means the Series 2025A Assignment Agreement, dated as of September 1, 2025, by and between the Authority and the Trust Administrator, together with any amendments or supplements thereto.
TRUST AGREEMENT
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“Authority” means the San Juan Bautista Public Financing Authority, a California public financing authority formed and existing under the joint powers authority laws of the State of California, with the power and authority to, among other things, issue the Series 2025A Bonds under the Bond Law. “Authority Board” means the Board of Directors of the Authority. “Authority Representative” means the Chairman, Vice Chairman, Executive Director, Treasurer or Secretary of the Authority, or any other person authorized by resolution of the Authority Board to act on behalf of the Authority under or with respect to this Series 2025A Trust Agreement. “Bank” means First Foundation Public Finance, a Delaware statutory trust and wholly owned subsidiary of First Foundation Bank (including its successors and assigns), as the purchaser and owner of the 2023 Notes.
“Bond Counsel” means (a) The Weist Law Firm, and (b) any other attorney or firm of attorneys of nationally recognized expertise with respect to legal matters relating to municipal obligations, the interest on which is excludable from gross income pursuant to Section 103 of the Tax Code. “Bond Law” means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with section 6584) of the Act, as in existence on the Closing Date or as thereafter amended from time to time.
“Series 2025A Bond Maturity Date” means April 1, 2065, which is the date on which the final principal component of the Series 2025A Installment Payments evidenced and represented thereby shall become due and payable.
“Series 2025A Bond Register” means the Series 2025A Bond Register relating to the Series 2025A Bonds maintained by the Trust Administrator in accordance with Section 2.11 of this Series 2025A Trust Agreement.
“Series 2025A Bonds” means the $7,000,000 San Juan Bautista Public Financing Authority (City of San Juan Bautista), Series 2025A Wastewater Revenue Bonds (San Juan Bautista to Hollister Force Main Development Project), dated the Closing Date, executed and delivered pursuant to this Series 2025A Trust Agreement.
“Series 2025B Bonds” means the $3,268,000 San Juan Bautista Public Financing Authority (City of San Juan Bautista), Series 2025B Wastewater Revenue Bonds (San Juan Bautista to Hollister Force Main Development Project), dated the Closing Date, executed and delivered pursuant to this Series 2025B Trust Agreement.
“Business Day” means any day other than (i) a Saturday or a Sunday or (ii) a day on which the City offices are authorized or obligated by law or executive order to be closed. “City” means the City of San Juan Bautista, a municipal corporation and general law city duly organized and existing under and by virtue of the constitution and laws of the State of California.
TRUST AGREEMENT
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“City Council” means the City Council as the legislative body of the City. “City Representative” means the Mayor, Mayor Pro Tem, City Manager, Treasurer, Finance Director, City Clerk or Acting City Clerk, or any other official of the City authorized by the City Council to act for, and on behalf of, the City.
“Closing Date” means the date upon which there is a physical delivery of the Series 2025A Bonds in exchange for the amount representing the purchase price of all or the first advance of a portion of the purchase price of the Series 2025A Bonds by the Original Purchaser.
“Code” means the Internal Revenue Code of 1986, as amended. Each reference to a section of the Code herein shall be deemed to include the United States Treasury regulations, including temporary and proposed regulations relating to each such section that are applicable to the Parity Obligations or the use of the proceeds thereof.
“County” means the County of San Benito, California.
“Debt Service” means, for any Fiscal Year, the sum of (l) the interest falling due during such Fiscal Year on all Parity Obligations (that are outstanding under the documents or agreements pursuant to which they were issued), assuming that all outstanding serial Parity Obligations are retired as scheduled and that all outstanding term Parity Obligations are redeemed as scheduled (except to the extent that such interest has been fully capitalized and is invested in Federal Securities that mature at times and in such amounts as are necessary to pay the interest to which such amounts are pledged), (2) the principal amount of all serial Parity Obligations (that are outstanding under the documents or agreements pursuant to which they were issued) falling due by their terms during such Fiscal Year, and (3) the minimum amount of term Parity Obligations (that are outstanding under the documents or agreements pursuant to which they were issued) required to be paid or called and redeemed during such Fiscal Year, together with the redemption premiums, if any, thereon; provided that, whenever interest as described herein accrues at other than a fixed rate, such interest shall be assumed to be a rate equal to the greater of (i) the actual rate on the date of calculation, or if the Parity Obligations are not yet outstanding, the initial rate (if established and binding), (ii) if the Parity Obligations have been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation, and (iii) (x) if interest on the Parity Obligations is excludable from gross income under the applicable provisions of the Code, the most recently published Bond Buyer Bond Revenue Index (or comparable index if no longer published) plus one hundred fifty (150) basis points, or (y) if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities, plus one hundred fifty (150) basis points. “Delivery Costs” means all items of expense directly or indirectly payable by or reimbursable to the City or the Authority relating to the financing and refinancing of the Series 2025A Project from the proceeds of the Series 2025A Bonds, including but not limited to fees and expenses of Bond Counsel and municipal advisor, filing and recording costs, settlement costs, printing costs, reproduction and binding costs, fees and charges of the Trust Administrator, financing discounts, legal fees and charges, financial and other professional consultant fees, fees for execution, transportation and safekeeping of the Series 2025A Bonds, travel expenses and charges and fees in connection with the foregoing.
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“Denomination Amount” means the minimum denomination of each Series 2025A Bond which is One Thousand Dollars ($1,000).
“Discharge Obligations” means (a) cash, or (b) non-callable Federal Securities. “Enterprise Fund” means the wastewater enterprise fund of the City in which Gross Revenues are to be deposited.
“Environmental Regulation” means any federal, state or local law, statute, code, ordinance, regulation, requirement or rule relating to dangerous, toxic or hazardous pollutants, hazardous substances, chemical waste, materials or substances.
“Event of Default” means an event of default under Section 7.01 of the Series 2025A Installment Sale Agreement.
“Fair Market Value” means for purposes of valuing the Permitted Investments, the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Tax Code) and, otherwise, the term “fair market value” means the acquisition price in a bona fide arm’s length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Tax Code, (iii) the investment is a United States Treasury Security--State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled investment fund in which the City and related parties do not own more than a ten percent (10%) beneficial interest if the return paid by such fund is without regard to the source of investment. The Trust Administrator shall have no duty in connection with the determination of Fair Market Value other than to follow the investment directions of a City Representative in any written directions of a City Representative. “Federal Securities” means direct general obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury) the United States of America, or obligations the timely payment of principal of and interest on which are guaranteed by, the United States of America.
“2023 Financing Agreement” means the financing agreement, dated as of February 1, 2023, by and between the City and the Bank relating to the issuance of the 2023 Notes. “Fiscal Year” means any period of twelve (12) consecutive months established by the City as its fiscal year and shall initially mean the period commencing July 1 of one year and ending on June 30 of the following year.
“Generally Accepted Accounting Principles” means the uniform accounting and reporting procedures prescribed by the California State Controller or his or her successor for cities in the State of
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California, or failing the prescription of such procedures means generally accepted accounting principles as presented and recommended by the American Institute of Certified Public Accountants or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor. “Finance Director” means the person who is the City’s Finance Director or his or her deputy or assistant.
“Government” means the United States of America, acting through the Rural Utilities Service (or successor agency, bureau or division).
“Gross Revenues” means for any Fiscal Year or other period, all gross income and revenue received by the City from the ownership and operation of the Wastewater System, including, without limiting the generality of the foregoing, (a) all rates, fees and charges received for, and all other income and receipts derived by the City from the operation of the Wastewater System or arising from the Wastewater System determined in accordance with generally accepted accounting principles, including all rates, fees and charges received by the City for the Wastewater System service and the other services of the Wastewater System, (b) all proceeds of insurance (if any) covering business interruptions loss relating to the Wastewater System, (c) the earnings on and income derived from the investment of such income, rents, rates, fees, charges or other monies to the extent that the use of such earnings and income is limited by or pursuant to law to the Wastewater System, (d) the proceeds derived by the City directly or indirectly from the sale, lease or other disposition of a part of the Wastewater System, and (e) all other monies howsoever derived by the City from the operation of the Wastewater System or arising from the Wastewater System, including major facility charges; provided, that the term “Revenues” shall not include contributions in aid of construction or refundable customers’ deposits or any other deposits subject to refund until such deposits have become the property of the City.
“Independent Certified Public Accountant” means any firm of certified public accountants appointed by the City that is independent according to the Statement of Auditing Standards No. 1 of the American Institute of Certified Public Accountants.
“Independent Counsel” means an attorney or a firm of attorneys duly admitted to the practice of law before the highest court of the state in which he or such firm maintains an office and who is not an employee of the Authority, the Trust Administrator or the City. “Independent Engineer” means any registered engineer or firm of engineers generally recognized to be well-qualified in engineering matters relating to wastewater systems similar to the Wastewater System, appointed and paid by the City, and who or each of whom:
(1) is in fact independent and not under the domination of the City; (2) does not have a substantial financial interest, direct or indirect, in the City; and (3) is not connected with the City as a council member, officer or employee of the City, but may be regularly retained to make reports to the City.
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“Independent Financial Consultant” means a financial consultant qualified in the field of municipal finance, appointed and paid by the City, and who:
(1) is in fact independent and not under the domination of the City or any member thereof; (2) does not have a substantial financial interest, direct or indirect, in the operations of the City; and
(3) is not connected with the City as an officer or employee of the City or any member thereof, but may be regularly retained to audit the accounting records of and make reports thereon to the City.
“Series 2025A Installment Payment” means any payment required to be paid by the City to the Authority pursuant to Section 3.05 of the Series 2025A Installment Sale Agreement. “Series 2025A Installment Payment Date” means each Interest Payment Date. “Series 2025A Installment Payment Fund” means the fund designated “City of San Juan Bautista, Series 2025A Installment Payment Fund” established and held by the Trust Administrator pursuant to Article III of this Series 2025A Trust Agreement.
“Series 2015 Installment Sale Agreement” means the Series 2015 Wastewater Installment Sale Agreement, dated as of December 1, 2015, by and between the Authority and the City, and any duly authorized and executed amendment or supplement thereto, in the original aggregate principal amount of $5,238,000.
“Series 2025A Installment Sale Agreement” means the Series 2025A Installment Sale Agreement, dated as of September 1, 2025, by and between the Authority and the City, and any duly authorized and executed amendment or supplement thereto.
“Insurance and Condemnation Fund” means the fund by that name established pursuant to Article VII of this Series 2025A Trust Agreement and held by the Trust Administrator. “Series 2025A Interest Fund” means the fund by that name established in Section 5.04 herein. “Interest Payment Date” means April 1 and October 1 of each year, commencing April 1, 2026. “Interest Rate” means the rate of interest to be paid on the Series 2025A Bond which is 2.750% per annum.
“Listed Event” means, so long as the City has outstanding any Parity Obligations subject to Rule 15c2-12, any of the events required to be reported with respect to such Parity Obligations pursuant to Rule 15c2-12(b)(5).
“Maximum Annual Debt Service” means the greatest amount of Debt Service with respect to the Parity Obligations to which reference is made coming due in any Fiscal Year including the Fiscal Year in which the calculation is made or any subsequent Fiscal Year.
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“Net Proceeds” means any insurance proceeds or condemnation award paid with respect to the Series 2025A Project, remaining after payment therefrom of all expenses incurred in the collection thereof. “Net Revenues” means Gross Revenues less Operation and Maintenance Expenses. “2023 Notes” means the outstanding principal amount of City of San Juan Bautista, Series 2023 Bond Anticipation Notes (San Juan Bautista to Hollister Force Main Development Project), issued by the City on February 15, 2023.
“Operation and Maintenance Expenses” means the reasonable and necessary costs and expenses paid or incurred by the City for maintaining and operating the Wastewater System, determined in accordance with Generally Accepted Accounting Principles, including but not limited to (a) all associated treatment and disposal costs, (b) costs of electricity and other forms of energy supplied to the Wastewater System, (c) the reasonable expenses of management and repair and other costs and expenses necessary to maintain and preserve the Wastewater System in good repair and working order, (d) the reasonable administrative costs of the City attributable to the operation and maintenance of the Wastewater System, such as salaries and wages of employees, overhead, taxes (if any) and insurance premiums, and (e) all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms hereof or of any resolution authorizing the issuance of any Parity Obligations or of such Parity Obligations, such as compensation, reimbursement and indemnification of the trustee for any such Parity Obligations and fees and expenses of accountants and independent engineers, but in all cases excluding (i) debt service payable on obligations incurred by the City with respect to the Wastewater System, (ii) costs of capital additions, replacements, betterments, extensions or improvements which under Generally Accepted Accounting Principles are chargeable to a capital account, (iii) depreciation, replacement and obsolescence charges or reserves therefor, and (iv) amortization of intangibles or other bookkeeping entries of a similar nature.
“Original Purchaser” means the Government as the first purchaser of the Series 2025A Bonds (evidenced by a single fully registered Series 2025A Bond) upon their delivery by the Trust Administrator on the Closing Date.
“Outstanding,” when used as of any particular time with respect to Series 2025A Bonds, means (subject to the provisions of Section 10.03 of this Series 2025A Trust Agreement) all Series 2025A Bonds theretofore executed and delivered by the Trust Administrator under this Series 2025A Trust Agreement except:
(a) Series 2025A Bonds theretofore canceled by the Trust Administrator or surrendered to the Trust Administrator for cancellation; (b) Series 2025A Bonds for the payment or prepayment of which funds or eligible securities in the necessary amount, including accrued interest thereon, shall have theretofore been deposited with the Trust Administrator (whether upon or prior to the maturity or prepayment date of such Series 2025A Bonds), provided that, if such Series 2025A Bonds are to be prepaid prior to maturity, notice of such prepayment shall have been given as provided in Section 4.03 of this Series
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2025A Trust Agreement or provision satisfactory to the Trust Administrator shall have been made for the giving of such notice; and
(c) Series 2025A Bonds in lieu of or in exchange for which other Series 2025A Bonds shall have been executed and delivered by the Trust Administrator pursuant to Section 2.09 of this Series 2025A Trust Agreement.
“Owner” or “Series 2025A Bond Owner” or “Registered Owner,” or any similar term, means the person or entity in whose name a Series 2025A Bond shall be registered. “Parity Obligations” means the Series 2015 Installment Sale Agreement, the Series 2025A Bonds, the Series 2025B Bonds and any other indebtedness or other obligation (including bonds, certificates, leases and installment sale agreements) hereafter issued or incurred in accordance with Section 3.09(b) of the Series 2025A Installment Sale Agreement and secured by a pledge of and lien on Net Revenues equally and ratably with the Series 2025A Installment Payments.
“Payment Instructions” means the written Irrevocable Payment Instructions dated as of September 1, 2025, given by the City to the Bank, directing the transfer of Series 2025A Bond Proceeds to the Bank to facilitate the corresponding prepayment of the 2023 Notes. “Permitted Investments” means any of the following 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, provided that the same are of appropriate maturity and acquired at Fair Market Value:
(i) Federal Securities and any investment fund, including money market funds or other investment policy arrangement which purchases and holds exclusively Federal Securities; (ii) Obligations issued by federal land banks or federal home loan banks; or obligations, participations, or other instruments issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association; or obligations, participations, or other instruments issued by a federal agency or a United States government-sponsored enterprise; (iii) Investments in repurchase agreements under the terms of which the underlying collateral is transferred to the possession of the Trust Administrator of any securities authorized by paragraphs (i) and (ii) above which have a fair market value (valued at cost) at least equal to 105% of the amount invested in the repurchase agreement and are free of third party claims; (iv) Nonnegotiable certificates of deposit issued by a nationally chartered bank, a bank chartered by the State of California or a foreign banking Authority, authorized pursuant to Section 1756 of the California Financial Code to transact business in the State of California by accepting deposits, or a State of California or federal savings and loan association, provided that such certificates of deposit are fully collateralized in the manner required for collateralization of trust funds;
(v) Any investment agreement, guarantee or other investment vehicle or security issued by, secured by or otherwise representing the general obligations of a financial institution whose long-term unsecured, uninsured and unguaranteed obligation or claims-paying ability is rated AA or better by any Rating Agency at the time of its issuance, provided that: (a) the
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agreement is not subordinated to any other obligations of such financial institution; and (b) if the financial institution fails to maintain a rating of AA or better (without regard to gradations), the City and/or the Authority shall have the right to demand collateral in the form of securities authorized by paragraphs (i) and (ii) above pledged to secure the investment agreement. Such collateral shall be pledged through the Trust Administrator and shall have a fair market value (valued at cost) of at least 105% of the value of funds remaining in the investment agreement.
Further, the City and/or the Authority shall have the right to withdraw all funds without penalty should the financial institution fail to provide collateral as required under this paragraph; (vi) Investments otherwise defined in Section 53601 of the California Government Code, as amended from time to time; provided that the Trust Administrator shall not be obligated to invest in any form of investment pursuant to this subparagraph (vi) except upon receipt of a certificate of a City Representative that any directed investment to be made pursuant to this subparagraph (vi) meets this definition as set forth in this subparagraph (vi); and (vii) The Local Agency Investment Fund of the State or any state administered pool investment fund in which the City is statutorily permitted or required to invest will be deemed a permitted investment.
“Prepayment” means any payment applied towards the prepayment of the Series 2025A Installment Payments, in whole or in part, pursuant to Article IV of the Series 2025A Installment Sale Agreement. “Principal Amount” means the aggregate authorized principal amount of the Series 2025A Bonds which is $7,000,000.
“Principal Component Payment” means each principal portion of each Series 2025A Installment Payment made pursuant to Section 2.03 hereof.
“Series 2025A Principal Fund” means the fund by that name established in Section 5.04 herein. “Principal Payment Date” means April 1 of each year, commencing with April 1, 2026, and ending on April 1, 2065.
“Proceeds” when used with reference to the Series 2025A Bonds, means the face amount of the Series 2025A Bonds, plus accrued interest and premium, if any, and less original issue discount, if any. “Series 2025A Project” means the improvements to the Wastewater System described in Exhibit A to the Series 2025A Installment Sale Agreement.
“Rating Category” means, with respect to any Permitted Investment, one or more of the generic categories of rating by S&P applicable to such Permitted Investment, without regard to any refinement or gradation of such rating category by a plus or minus sign. “Series 2025A Redemption Account” means the account by that name established by the City pursuant to Section 4.3b(3) of the 2023 Financing Agreement. “Regular Record Date” means the close of business on the fifteenth (15th) day of the month preceding each Interest Payment Date, whether or not such fifteenth (15th) day is a Business Day.
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“Series 2025A Reserve Fund” means the fund of that name established under Article VI of this Series 2025A Trust Agreement and held by the Trust Administrator. “Series 2025A Reserve Installment Payments” means the amount required to be paid by the City to the Trust Administrator from Net Revenues pursuant to Section 3.11 of the Series 2025A Installment Sale Agreement, and which shall be applied to the Series 2025A Reserve Fund as set forth in Sections 6.01 through 6.06 herein.
“Series 2025A Reserve Requirement” means an amount required pursuant to Section 3.11 of the Series 2025A Installment Sale Agreement.
“S&P” means Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc., New York, New York, or its successors.
“Short-Lived Assets Series 2025A Reserve Fund” means the fund by that name established and maintained pursuant to Section 6.07 herein.
“State” means the State of California.
“Subordinate Debt” means indebtedness or other obligations (including leases and installment sale agreements) hereafter issued or incurred and secured by a pledge of and lien on Net Revenues subordinate to the Series 2025A Installment Payments.
“Tax Code” means the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced in the Series 2025A Installment Sale Agreement or this Series 2025A Trust Agreement) as it may be amended to apply to obligations issued on the Closing Date, together with applicable temporary and final regulations promulgated under the Tax Code. “Term of the Series 2025A Installment Sale Agreement” means the time during which the Series 2025A Installment Sale Agreement is in effect which begins on the Closing Date and ends on April 1, 2065, unless sooner terminated pursuant to the terms of the Series 2025A Installment Sale Agreement. “Trust Administrator” means the City Manager of the City, or any successor thereto, acting as Trust Administrator pursuant to this Series 2025A Trust Agreement. “Series 2025A Trust Agreement” means this Series 2025A Trust Agreement, dated as of September 1, 2025, by and among the Trust Administrator, the Authority and the City, together with any amendments or supplements thereto permitted to be made thereunder. “Series 2025B Trust Agreement” means the Series 2025B Trust Agreement, dated as of September 1, 2025, by and among the Trust Administrator, the Authority and the City, together with any amendments or supplements thereto permitted to be made thereunder. “Trust Office” means the office of the Trust Administrator at the offices of the City in San Juan Bautista, California, or at such other address designated by the Trust Administrator by written notice filed with the City and the Authority.
“Wastewater System” means, collectively, the whole and each and every part of the Wastewater System of the City, including all properties and assets, real and personal, tangible and intangible, of the
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City, now or hereafter existing, used or pertaining to the collection, transmission, treatment and disposal of wastewater existing on the date hereof, and including sewage treatment plants, outfall, force mains, pumping stations, ejector stations, pipes, valves, machinery and all other appurtenances necessary, useful or convenient for the collection, treatment, transmission or disposal of sewage, and any necessary lands, rights of way and other real or personal property useful in connection therewith, and all additions, extensions, expansions, improvements and betterments thereto and equippings thereof; provided, that to the extent the City is not the sole owner of an asset or property or to the extent that an asset or property is used in part for the above-described Wastewater System purposes, only the City’s ownership, leasehold, easement or other interest in such asset or property or only the part of the asset or property so used for Wastewater System purposes shall be considered to be part of the Wastewater System. “Written Certificate” of the City means a written certificate signed in the name of the City by a City Representative as contemplated by and containing the elements required by Section 1.03 of this Series 2025A Trust Agreement and Section 1.03 of the Series 2025A Installment Sale Agreement.
Section 1.02. Authorization. Each of the parties hereby represents and warrants that it has full legal authority and is duly empowered to enter into this Series 2025A Trust Agreement, and has taken all actions necessary to authorize the execution of this Series 2025A Trust Agreement by the officers and persons signing it.
Section 1.03. Content of Written Certificates.
(a) Contents. Every Written Certificate provided for in this Series 2025A Trust Agreement with respect to compliance with any provision hereof, except Written Certificates delivered on the Closing Date and the certificate of destruction pursuant to Section 14.07, shall include (a) a statement that the person making or giving such Written Certificate or opinion has read such provision and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the Written Certificate is based; (c) a statement that, in the opinion of such person, he has made or caused to be made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed; (d) a statement of the assumptions upon which such Written Certificate is based, and that such assumptions are reasonable; and (e) a statement as to whether, in the opinion of such person, such provision has been complied with.
(b) Reliance. Any such Written Certificate made or given by a City Representative may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, unless such City Representative knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such Written Certificate may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel or an accountant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the City, as the case may be) upon a certificate or opinion of or representation by a City Representative, unless such counsel or accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such person’s certificate or opinion or representation may be based, as aforesaid, is erroneous. The same City Representative, or the same counsel or accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Series 2025A Trust Agreement, but different officers, counsel or accountants may certify to different matters, respectively.
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Section 1.04. Exhibits. The following Exhibits are attached to, and by this reference are made a part of, this Series 2025A Trust Agreement: Exhibit A (Form of Series 2025A Bond).
ARTICLE II
THE SERIES 2025A WASTEWATER REVENUE BONDS
Section 2.01. Authorization. The Trust Administrator is hereby authorized and directed upon written request from either the City or the Authority to execute and deliver, to the Original Purchaser, a single Series 2025A Bond in the Principal Amount evidencing undivided fractional interests in the Series 2025A Installment Payments and the Prepayments. The aggregate principal amount of the Series 2025A Bonds shall not in any case exceed the aggregate payments by the Original Purchaser therefor, as such payments and the dates thereof are endorsed on the single, fully registered Series 2025A Bond. No provision is made for the Series 2025A Bonds to be executed and delivered in blocks or phases as the Original Purchaser’s regulations for single delivery have been satisfactorily met.
Section 2.02. Date. Each Series 2025A Bond shall be dated as of the date of delivery thereof.
Section 2.03. Principal; Interest; Maturity. The Series 2025A Bonds shall mature on April 1 in the years and in the principal amounts as shown below (each, a “Principal Component Payment”). Interest with respect thereto shall be computed at the Interest Rate of 2.750% per annum, calculated on the basis of a 365-day year.
The annual Principal Component Payments are as follows:
Maturity
Date
Principal
Due
Maturity
Date
Principal
Due
04/1/2026 $150,000 04/1/2046 $170,000
04/1/2027 100,000 04/1/2047 170,000
04/1/2028 105,000 04/1/2048 175,000
04/1/2029 105,000 04/1/2049 180,000
04/1/2030 110,000 04/1/2050 185,000
04/1/2031 110,000 04/1/2051 190,000
04/1/2032 115,000 04/1/2052 195,000
04/1/2033 120,000 04/1/2053 205,000
04/1/2034 120,000 04/1/2054 210,000
04/1/2035 125,000 04/1/2055 215,000
04/1/2036 130,000 04/1/2056 220,000
04/1/2037 130,000 04/1/2057 225,000
04/1/2038 135,000 04/1/2058 230,000
04/1/2039 140,000 04/1/2059 240,000
04/1/2040 145,000 04/1/2060 245,000
04/1/2041 145,000 04/1/2061 250,000
04/1/2042 150,000 04/1/2062 260,000
04/1/2043 155,000 04/1/2063 265,000
04/1/2044 160,000 04/1/2064 275,000
04/1/2045 165,000 04/1/2065 280,000
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Section 2.04. Interest. The interest evidenced and represented by the Series 2025A Bonds shall be payable on April 1 and October 1 of each year (each, an “Interest Payment Date”), commencing on April 1, 2026 and continuing to and including the Series 2025A Bond Maturity Date or upon prepayment prior thereto, and shall evidence and represent the sum of the portions of the Series 2025A Installment Payments designated as interest components (each, an “Interest Component Payment”) coming due on the Interest Payment Dates during the interest period immediately preceding each of the Interest Payment Dates.
Interest shall be calculated with respect to the Original Purchaser’s aggregate payments for the single Series 2025A Bond from the respective date(s) of advances thereof, as such payments and dates thereof are endorsed on the single Series 2025A Bond and computed on the basis of a 365-day year (and actual days elapsed). Each Interest Component Payment shall be computed by multiplying the portion of Series 2025A Installment Payments designated as principal with respect to such Series 2025A Bond by the rate of interest applicable to such Series 2025A Bond.
Interest on any Series 2025A Bond shall be payable from the Interest Payment Date next preceding the date of execution thereof, unless (i) such Series 2025A Bond is executed on an Interest Payment Date, in which event interest shall be payable from such Interest Payment Date, or (ii) such Series 2025A Bond is executed after the close of business on the fifteenth (15th) day of the month immediately preceding the following Interest Payment Date and prior to such Interest Payment Date, in which event interest shall be payable from such Interest Payment Date, or (iii) such Series 2025A Bond is executed on or before March 15, 2026, in which event interest shall be payable from the date of delivery thereof; provided, however, that if at the time of execution of any Series 2025A Bond, interest with respect thereto is in default, interest with respect thereto shall be payable from the Interest Payment Date to which interest has previously been paid or made available for payment. Payment of interest with respect to any Series 2025A Bond shall be made to the person appearing on the Series 2025A Bond Register of the Trust Administrator as the Owner thereof as of the fifteenth (15th) day of the month preceding such Interest Payment Date, such interest to be paid as specified in Section 2.09 hereof.
Section 2.05. Form of Series 2025A Bond; Legends. The Series 2025A Bonds shall be delivered in the form of a fully registered Series 2025A Bond, without coupons, in the Denomination Amount or any integral multiple thereof, except that one annual amount may be any odd amount, and no Series 2025A Bond may have principal maturing in more than one year. The Series 2025A Bonds shall be numbered in such manner as the Trust Administrator deems appropriate. At the option of the Original Purchaser of the Series 2025A Bonds, a single, fully-registered Series 2025A Bond may be executed and delivered, in lieu of serial, registered Series 2025A Bonds, which single Series 2025A Bond shall mature in installments of the same principal amounts and on the same dates as the registered Series 2025A Bonds it represents. The single Series 2025A Bond shall be substantially in the form set forth in Exhibit A attached hereto and by this reference incorporated herein. The Series 2025A Bonds may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions of this Series 2025A Trust Agreement as may be necessary or desirable to comply with custom, or otherwise.
Section 2.06. Execution and Authentication. The Series 2025A Bonds shall be signed in the name and on behalf of the Authority with the manual or facsimile signature of its Chair, Vice Chair or Treasurer, and shall be delivered to the Trust Administrator for authentication. In case any officer of the Authority who shall have signed any of the Series 2025A Bonds shall cease to be such officer before the Series 2025A Bonds so signed shall have been authenticated or delivered by the Trust Administrator or issued by the
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Authority, such Series 2025A Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though the individual who signed the same had continued to be such officer of the Authority.
Only such of the Series 2025A Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, manually or by facsimile signature authenticated on behalf of the Trust Administrator, shall be valid or obligatory for any purpose or entitled to the benefits of this Series 2025A Trust Agreement, and such certificate of the Trust Administrator shall be conclusive evidence that the Series 2025A Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Series 2025A Trust Agreement.
Section 2.07. Transfer and Exchange. The following shall apply to transfers and exchanges of Series 2025A Bonds, provided that no transfer or exchange of Series 2025A Bonds shall be required to be made during the fifteen (15) days prior to the date of selection of Series 2025A Bonds for prepayment, or of any Series 2025A Bond selected for prepayment:
(a) Transfer of Series 2025A Bonds. Any Series 2025A Bond may, in accordance with its terms, be transferred upon the books required to be kept pursuant to the provisions of Section 2.11 hereof by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Series 2025A Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trust Administrator, duly executed.
Whenever any Series 2025A Bond shall be surrendered for transfer, the Trust Administrator shall deliver a new Series 2025A Bond or Series 2025A Bonds of the same maturity, interest rate and aggregate principal amount in authorized denominations to the transferee thereof. The Trust Administrator may require the payment by the Series 2025A Bond Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. (b) Exchange of Series 2025A Bonds. Any Series 2025A Bond may be exchanged at the Trust Office, for a like aggregate principal amount of Series 2025A Bonds of other authorized denominations of the same maturity. The Trust Administrator may require the payment by the Series 2025A Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.
Notwithstanding anything herein or elsewhere to the contrary, there shall be not any transfers or exchanges while Government is owner, unless requested by the Government.
Section 2.08. Series 2025A Bond Mutilated, Lost, Destroyed or Stolen. If any Series 2025A Bond shall become mutilated, the Trust Administrator, at the expense of the Owner of said Series 2025A Bond, shall execute and deliver a new Series 2025A Bond of like maturity and principal amount in authorized denominations in exchange and substitution for the Series 2025A Bond so mutilated, but only upon surrender to the Trust Administrator of the Series 2025A Bond so mutilated. Every mutilated Series 2025A Bond so surrendered to the Trust Administrator shall be canceled by it and destroyed in accordance with Section 14.07 hereof, and the Trust Administrator shall deliver a certificate of destruction to the City.
If any Series 2025A Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trust Administrator and, if such evidence is satisfactory to the Trust Administrator and if an indemnity satisfactory to the Trust Administrator and the Authority shall be given, the Trust Administrator, at the expense of the Series 2025A Bond Owner, shall execute and deliver a new Series
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2025A Bond of like tenor and maturity and numbered as the Trust Administrator shall determine in lieu of and in substitution for the Series 2025A Bond so lost, destroyed or stolen. The Trust Administrator may require payment of an appropriate fee for each new Series 2025A Bond delivered under this Section 2.08 and of the expenses which may be incurred by the Trust Administrator in carrying out the duties under this Section 2.08. Any Series 2025A Bond delivered under the provisions of this Section 2.08 in lieu of any Series 2025A Bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits of this Series 2025A Trust Agreement with all other Series 2025A Bond secured by this Series 2025A Trust Agreement. The Trust Administrator shall not be required to treat both the original Series 2025A Bond and any substitute Series 2025A Bond as being Outstanding for the purpose of determining the principal amount of Series 2025A Bond which may be executed and delivered hereunder or for the purpose of determining any percentage of Series 2025A Bond Outstanding hereunder; the Trust Administrator shall consider only the substitute Series 2025A Bond as Outstanding for such purpose. Notwithstanding any other provision of this Section 2.08, in lieu of delivering a new Series 2025A Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the Trust Administrator may make payment with respect to such Series 2025A Bond upon receipt of indemnity satisfactory to the Trust Administrator.
Section 2.09. Payment. Except as otherwise provided herein, payment of interest due with respect to any Series 2025A Bond on any Interest Payment Date shall be made to the person appearing on the Series 2025A Bond Register as the Owner thereof as of the Regular Record Date immediately preceding such Interest Payment Date, such interest to be paid by check mailed on the Interest Payment Date by first class mail to such Owner at his address as it appears on the Series 2025A Bond Register as of such Regular Record Date. The principal and prepayment price with respect to a Series 2025A Bond at maturity or upon prior prepayment shall be payable by check denominated in lawful money of the United States of America upon surrender of the Series 2025A Bond at the Trust Office. If the Government is the Owner of the single, fully-registered Series 2025A Bond, surrender shall not be required for payment, except for final payment, and payment of principal shall be made on each Principal Payment Date and payment of interest shall be made on each Interest Payment Date to the Registered Owner, unless otherwise requested by the Registered Owner, by the Pre-Authorized Debit (PAD) payment process (i.e., the City’s payments shall be electronically debited from the Series 2025A Installment Payment Fund on each Interest Payment Date in accordance with the PAD process established by Form SF-5510 and Form RD 3550-28, both entitled “Authorization Agreement for Pre-Authorized Payments”).
Section 2.10. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Series 2025A Trust Agreement to be signed or executed by Series 2025A Bond Owners may be in any number of concurrent instruments of similar tenor, and may be signed or executed by such Owners in person or by their attorneys or agents appointed by an instrument in writing for that purpose, or by any bank, trust company or other depository for such Series 2025A Bond. Proof of the execution of any such instrument, or of any instrument appointing any such attorney or agent, and of the holding and ownership of Series 2025A Bonds shall be sufficient for any purpose of this Series 2025A Trust Agreement (except as otherwise herein provided), if made in the following manner:
(a) The fact and date of the execution by any Owner or such Owner’s attorney or agent of any such instrument and of any instrument appointing any such attorney or agent, may be proved by a certificate, which need not be acknowledged or verified, of an officer of any bank or trust company located within the United States of America, or of any notary public, or other officer authorized to take acknowledgments of deeds to be recorded in such jurisdictions, that the persons
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signing such instruments acknowledged before such notary or officer the execution thereof. Where any such instrument is executed by an officer of a Authority or association or a member of a partnership on behalf of such Authority, association or partnership, such certificate shall also constitute sufficient proof of the authority of such officer or member. (b) The fact of the holding of a Series 2025A Bond by any Owner and the amount, the maturity and the numbers of such Series 2025A Bond and the date of the Owner’s holding the same may be proved by reference to the Series 2025A Bond Register maintained by the Trust Administrator provided for in Section 2.11 hereof. The Trust Administrator may conclusively assume that such ownership continues until transfer as provided in Section 2.07(a) hereof. (c) Nothing contained in this Article II shall be construed as limiting the Trust Administrator to such proof, it being intended that the Trust Administrator may accept any other evidence of the matters herein stated which the Trust Administrator may deem sufficient. Any request or consent of the Owner of any Series 2025A Bond shall bind every future Owner of the same Series 2025A Bond in respect of anything done or suffered to be done by the Trust Administrator in pursuance of such request or consent.
Section 2.11. Series 2025A Bond Register. The Trust Administrator will keep or cause to be kept, at the Trust Office, sufficient books for the registration and transfer of the Series 2025A Bonds which shall be open at all reasonable times with reasonable prior notice during normal business hours of the Trust Administrator to inspection by the City and the Authority; and, upon presentation for such purpose, the Trust Administrator shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Series 2025A Bonds as hereinbefore provided.
Section 2.12. CUSIP Numbers. The Trust Administrator, the City and the Authority shall not be liable for any defect or inaccuracy in any CUSIP number that appears on any Series 2025A Bond or in any prepayment notice. The Trust Administrator may, in its discretion, include in any prepayment notice a statement to the effect that any CUSIP numbers on the Series 2025A Bond have been assigned by an independent service and are included in such notice solely for the convenience of the Owners and that neither the Trust Administrator, the City nor the Authority shall be liable for any inaccuracies in such numbers. CUSIP numbers shall not be required if the Government is the Original Purchaser of a single, fully registered Series 2025A Bond.
ARTICLE III
SERIES 2025A REDEMPTION ACCOUNT
Section 3.01. Series 2025A Redemption Account. The City has heretofore established the Series 2025A Redemption Account and shall continue to keep such fund separate and apart from all other funds and moneys held by the City; and shall administer such account as provided herein. There shall be deposited in the Series 2025A Redemption Account all of the proceeds of sale of the Series 2025A Bonds (other than the Delivery Costs).
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Section 3.02. Prepayment of the 2023 Notes.
(a) Except as provided in subsection (b) below and in Section 3.03, amounts in the Series 2025A Redemption Account shall be disbursed in accordance with the Payment Instructions.
Disbursements from the Series 2025A Redemption Account shall be made by the City immediately upon receipt of the proceeds of sale of the Series 2025A Bonds to USDA as the Original Purchaser of the Series 2025A Bonds.
(b) The City shall be responsible for the safekeeping and investment (in accordance with Section 8.02 hereof) of the moneys held in the Series 2025A Redemption Account and the payment thereof in accordance with this Section 3.02.
Section 3.03. Payment of Delivery Costs. The City shall be responsible for the payment of all Delivery Costs upon receipt of each sequentially numbered requisition, with bills, invoices or statements attached, signed by a City Representative setting forth the amounts to be disbursed for payment or reimbursement of Delivery Costs and the name and address of the person or persons to whom said amounts are to be disbursed.
ARTICLE IV
PREPAYMENT OF SERIES 2025A BONDS
Section 4.01. Prepayment.
(a) Generally. The Series 2025A Bonds shall not be subject to prepayment prior to maturity, except in the manner, at the times and in all respects in accordance with the provisions of this Article IV.
(b) Prepayment from Net Proceeds of Insurance and Condemnation and from Unexpended Proceeds. The Series 2025A Bonds are subject to prepayment in whole on any date and in part on any Interest Payment Date from the (i) Net Proceeds of any insurance or condemnation award and (ii) Unexpended Proceeds, which are, in either case deposited in the Series 2025A Installment Payment Fund and credited towards the prepayment made by the City pursuant to Section 4.03 of the Series 2025A Installment Sale Agreement, at a prepayment price equal to the principal amount thereof, together with accrued interest to the date fixed for prepayment, without premium.
(c) Optional Prepayment. In addition, the Series 2025A Bonds are subject to prepayment in whole or in part at any time, at the principal amount with respect thereto, without premium, and with accrued interest to the date fixed for prepayment from the proceeds of optional prepayments made by the City pursuant to the Series 2025A Installment Sale Agreement:
Section 4.02. Selection of Series 2025A Bonds for Prepayment. Whenever provision is made in this Series 2025A Trust Agreement for the prepayment of Series 2025A Bonds and less than all Outstanding Series 2025A Bonds are called for prepayment, the Trust Administrator shall select Series 2025A Bonds for prepayment in inverse order of maturity, unless otherwise requested by City and agreed to by Original Purchaser in its reasonable discretion, as long as the Original Purchaser is the sole owner of all then Outstanding 2025A Bonds. The Trust Administrator shall promptly notify the City and the Authority in
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writing of the Series 2025A Bonds so selected for prepayment, and the City or the Authority shall immediately thereafter revise Exhibit B of the Series 2025A Installment Sale Agreement to reflect such prepayment and shall be and become for all purposes thereafter the “Amended Exhibit B to the Series 2025A Installment Sale Agreement.”
Section 4.03. Notice of Prepayment.
(a) General. Notice of any such prepayment shall be given by the Trust Administrator on behalf and at the expense of the City by mailing a copy of a prepayment notice by first class mail at least thirty (30) days and not more than sixty (60) days prior to the date fixed for prepayment to such Owner of the Series 2025A Bond or Series 2025A Bonds to be redeemed at the address shown on the Series 2025A Bond Register maintained by the Trust Administrator; provided, however, that neither the failure to receive such notice nor any defect in any notice shall affect the sufficiency of the proceedings for the prepayment of the Series 2025A Bonds. (b) Contents. All notices of prepayment shall be dated and shall state: (i) the prepayment date, (ii) the prepayment price, (iii) if less than all Outstanding Series 2025A Bonds are to be prepaid, the identification (and, in the case of partial prepayment, the respective principal amounts) of the Series 2025A Bonds to be prepaid, (iv) that on the prepayment date the prepayment price will become due and payable with respect to each such Series 2025A Bond or portion thereof called for prepayment, and that interest with respect thereto shall cease to accrue from and after said date, (v) the place where such Series 2025A Bonds are to be surrendered for payment of the prepayment price, which place of payment shall be the Trust Office. (c) Deposit. Prior to the mailing of any prepayment notice (other than a prepayment notice relating to Series 2025A Bonds that are to be refunded with the proceeds of refunding Series 2025A Bonds or other refunding obligations), the City shall deposit, or cause to be deposited, with the Trust Administrator an amount of money sufficient to pay the prepayment price of all the Series 2025A Bonds or portions of Series 2025A Bonds which are to be prepaid on the applicable prepayment date. In the case of a prepayment notice relating to Series 2025A Bonds that are to be refunded, the City shall deposit, or cause to be deposited, with the Trust Administrator on or prior to the applicable prepayment date, an amount of money sufficient to pay the prepayment price of all the Series 2025A Bonds or portions of Series 2025A Bonds which are to be prepaid on such prepayment date.
(d) Prepayment. Notice of prepayment having been given as aforesaid, the Series 2025A Bonds or portions of Series 2025A Bonds so to be redeemed shall, on the prepayment date, become due and payable at the prepayment price therein specified, and from and after such date (so long as the City makes full payment of the prepayment price) interest with respect to such Series 2025A Bonds or portions of Series 2025A Bonds shall cease to be payable. Upon surrender of such Series 2025A Bonds for prepayment in accordance with said notice, such Series 2025A Bonds shall be paid by the Trust Administrator at the prepayment price. Installments of interest due on or prior to the prepayment date shall be payable as herein provided for payment of interest. Upon surrender for any partial prepayment of any Series 2025A Bond, there shall be executed and delivered for the Owner a new Series 2025A Bond or Series 2025A Bonds of the same maturity in the amount of the unprepaid principal. All Series 2025A Bonds which have been prepaid shall be canceled by the Trust Administrator, shall not be reissued, and shall be destroyed pursuant to Section 14.07. If the
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Government is the Owner, prepayment shall be endorsed on the single, fully registered Series 2025A Bond registered to the Government.
(e) CUSIP. The Trust Administrator shall have no responsibility for a defect in any CUSIP number that appears on any Series 2025A Bond or in the prepayment notice. The prepayment notice may provide that the CUSIP numbers have been assigned by an independent service and are included in the notice solely for the convenience of Series 2025A Bond Owners and that the Trust Administrator and the City shall not be liable in any way for inaccuracies in said numbers.
Section 4.04. Partial Prepayment of Series 2025A Bonds. Upon surrender of any Series 2025A Bond prepaid in part only, the Trust Administrator shall execute and deliver to the Owner thereof, at the expense of the City, a new Series 2025A Bond or Series 2025A Bonds of authorized denominations equal in aggregate principal amount to the unprepaid portion of the Series 2025A Bond surrendered and of the same interest rate and the same maturity.
Section 4.05. Effect of Notice of Prepayment. After notice has been given and the moneys for the prepayment, including interest to the applicable Interest Payment Date and premium, if any, having been set aside in the Series 2025A Installment Payment Fund, the Series 2025A Bond to be redeemed shall become due and payable on the Interest Payment Date, and, upon presentation and surrender thereof at the Trust Office specified in such notice, such Series 2025A Bond shall be paid at the unpaid principal amount with respect thereto, and any unpaid and accrued interest to the Interest Payment Date.
If, on the Interest Payment Date, moneys for the prepayment of all of the principal of the Series 2025A Bond to be prepaid, together with interest to such Interest Payment Date, shall be held by the Trust Administrator so as to be available therefor on such Interest Payment Date, and, if notice of prepayment thereof shall have been given, then, from and after such Interest Payment Date, interest with respect to the Series 2025A Bond to be prepaid shall cease to accrue and become payable. If such moneys shall not be so available on the Interest Payment Date, interest with respect to such Series 2025A Bond shall continue to be payable at the same rates as it would have been payable had the Series 2025A Bond not been called for prepayment. All moneys held by or on behalf of the Trust Administrator for the prepayment of a particular Series 2025A Bond shall be held in trust for the account of the Owner of the Series 2025A Bond so to be prepaid. The Trust Administrator shall not be liable for any interest earned on the amounts so held.
Section 4.06. Purchase of Series 2025A Bonds. In lieu of prepayment of Series 2025A Bonds as provided in this Article IV, amounts held by the Trust Administrator for such prepayment may also be used on any Interest Payment Date, upon receipt by the Trust Administrator at least ninety (90) days prior to the next scheduled Interest Payment Date of the written request of a City Representative, for the purchase of Series 2025A Bonds at public or private sale as and when and at such prices (including brokerage, accrued interest and other charges) as the City may in its discretion direct, but not to exceed the prepayment price which would be payable if such Series 2025A Bonds were prepaid; provided, however, that no Series 2025A Bond shall be purchased in lieu of prepayment with a trade settlement date less than seventy-five (75) days prior to the relevant prepayment date. The aggregate principal number of Series 2025A Bonds of the same maturity purchased in lieu of prepayment pursuant to this Section 4.06 shall not exceed the aggregate principal amount of Series 2025A Bonds of such maturity which would otherwise be subject to such prepayment. Remaining moneys, if any, shall be deposited in the Series 2025A Installment Payment Fund.
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ARTICLE V
SERIES 2025A INSTALLMENT PAYMENTS; SERIES 2025A INSTALLMENT PAYMENT FUND Section 5.01. Assignment of Rights in Series 2025A Installment Sale Agreement. The Authority has, pursuant to the Series 2025A Assignment Agreement, transferred, assigned and set over to the Trust Administrator all of its rights, title and interest in the Series 2025A Installment Sale Agreement (excepting only its rights under Sections 5.08, 6.03 and 7.04 thereof), including but not limited to all of the Authority’s rights to receive and collect all of the Series 2025A Installment Payments, any Prepayment and all other amounts required to be deposited in the Series 2025A Installment Payment Fund pursuant to the Series 2025A Installment Sale Agreement or pursuant hereto. All Series 2025A Installment Payments, any Prepayment and such other amounts which the Authority may at any time be entitled, shall be paid directly to the Trust Administrator and, in the event of the receipt or collection of Series 2025A Installment Payments by the Authority, such payments shall be deemed to be held or to have been collected or received by the Authority as agent of the Trust Administrator.
Section 5.02. Establishment of Series 2025A Installment Payment Fund. The Trust Administrator shall establish the Series 2025A Installment Payment Fund. All moneys at any time deposited by the Trust Administrator in the Series 2025A Installment Payment Fund shall be held by the Trust Administrator in trust for the benefit of the Owners of the Series 2025A Bonds. So long as any Series 2025A Bonds are Outstanding, neither the City nor the Authority shall have any beneficial right or interest in the Series 2025A Installment Payment Fund or the moneys deposited therein, except only as provided in this Series 2025A Trust Agreement, and such moneys shall be used and applied by the Trust Administrator as hereinafter set forth.
Section 5.03. Deposits. There shall be deposited in the Series 2025A Installment Payment Fund all Series 2025A Installment Payments, Series 2025A Reserve Installment Payments and Prepayments received by the Trust Administrator, including any moneys received by the Trust Administrator for deposit therein pursuant to Sections 4.01, 5.05, 6.02, hereof or Article IV of the Series 2025A Installment Sale Agreement, and any other moneys required to be deposited therein pursuant to the Series 2025A Installment Sale Agreement or pursuant to this Series 2025A Trust Agreement.
Section 5.04. Application of Moneys in the Series 2025A Installment Payment Fund. All amounts in the Series 2025A Installment Payment Fund shall be used to (i) pay any billed delinquent interest, (ii) pay any past due interest installments, (iii) pay any past due principal installments, and (iv) to deposit in the following respective funds (each of which is hereby created and each of which the Trust Administrator, the Authority or the City hereby covenants and agrees to cause to be maintained so long as any Series 2025A Bonds are Outstanding) at the following times and in the following order of priority, and the moneys in each of such funds shall be applied, used and withdrawn only for the purposes and uses hereinafter authorized.
(1) Series 2025A Interest Fund;
(2) Series 2025A Principal Fund;
(3) Series 2025A Reserve Fund; and
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(4) Short-Lived Assets Series 2025A Reserve Fund.
(a) Series 2025A Interest Fund. The Trust Administrator shall transfer from the Series 2025A Installment Payment Fund and deposit in the Series 2025A Interest Fund for receipt before April 1 and October 1 of each year (each, an “Interest Payment Date”), beginning on April 1, 2026, an amount of money from the Series 2025A Installment Payment Fund which is equal to the aggregate amount of the interest becoming due and payable on all Outstanding Series 2025A Bonds on such Interest Payment Date.
No deposit need be made into the Series 2025A Interest Fund if the amount contained therein is at least equal to the amount of the interest becoming due and payable on all Outstanding Series 2025A Bonds on such Interest Payment Date. All money in the Series 2025A Interest Fund shall be used and withdrawn by the Trust Administrator solely for the purpose of paying the interest on the Outstanding Series 2025A Bonds; provided that any earnings on deposit in the Series 2025A Interest Fund after payment of interest on Series 2025A Bonds on an Interest Payment Date shall be transferred to the Series 2025A Installment Payment Fund.
(b) Series 2025A Principal Fund. The Trust Administrator shall deposit in the Series 2025A Principal Fund before April 1 of each year, an amount of money from the Series 2025A Installment Payment Fund equal to the Principal Component Payment payable on such Principal Payment Date. All money in the Series 2025A Principal Fund shall be used by the Trust Administrator to pay or purchase the Series 2025A Bonds in accordance with Article IV hereof; provided that any earnings on deposit in the Series 2025A Principal Fund after payment of Principal Component Payment of the Series 2025A Bonds on a Principal Payment Date shall be transferred to the Series 2025A Installment Payment Fund. (c) Series 2025A Reserve Fund. All moneys at any time on deposit in the Series 2025A Reserve Fund shall be held by the Trust Administrator in trust for the benefit of the Owners of the Series 2025A Bonds, and applied solely as provided in Article VI herein. (d) Short-Lived Assets Series 2025A Reserve Fund. All moneys at any time on deposit in the Short-Lived Assets Series 2025A Reserve Fund shall be held by the Trust Administrator, and applied solely as provided in Article VI herein.
Section 5.05. Surplus. Any surplus remaining in the Series 2025A Installment Payment Fund, after payment of all Series 2025A Bonds after each Principal Payment Date, and accrued interest (if any) and payment of any applicable fees, costs and expenses to the Trust Administrator, or provision for such prepayment or payment having been made to the satisfaction of the Trust Administrator, shall be withdrawn by the Trust Administrator and remitted to the City.
ARTICLE VI
SERIES 2025A RESERVE FUNDS
Section 6.01. Establishment of Series 2025A Reserve Fund. The Trust Administrator shall establish the Series 2025A Reserve Fund and shall keep such fund separate and apart from all other funds and moneys held by the Trust Administrator. All moneys at any time on deposit in the Series 2025A Reserve Fund shall be held by the Trust Administrator in trust for the benefit of the Owners of the Series 2025A Bonds, and applied solely as provided herein.
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Section 6.02. Deposits. There shall be deposited in the Series 2025A Reserve Fund the amounts specified in Section 3.11 of the Series 2025A Installment Sale Agreement.
Section 6.03. Transfers. The Trust Administrator shall, on or before each April 1 and October 1, transfer any moneys in the Series 2025A Reserve Fund in excess of the Series 2025A Reserve Requirement as provided in Section 8.03 hereof.
Section 6.04. Application in Event of Deficiency in the Series 2025A Installment Payment Fund. If, on any Interest Payment Date, the moneys available in the Series 2025A Installment Payment Fund do not equal the amount of the principal, interest and prepayment premium (if any) with respect to the Series 2025A Bonds then coming due and payable, with prior written concurrence from the Government first had and obtained, the Trust Administrator shall apply the moneys available in the Series 2025A Reserve Fund to make delinquent Series 2025A Installment Payments on behalf of the City and transfer the amount necessary for this purpose to the Series 2025A Installment Payment Fund. Upon receipt of any delinquent Series 2025A Installment Payment with respect to which moneys have been advanced from the Series 2025A Reserve Fund such Series 2025A Installment Payment shall be deposited in the Series 2025A Reserve Fund to the extent of such advance.
Section 6.05. Transfer to Make All Series 2025A Installment Payments. If on any Series 2025A Installment Payment Date, the moneys on hand in the Series 2025A Reserve Fund and the Series 2025A Installment Payment Fund are sufficient to pay all Outstanding Series 2025A Bonds, including all principal and interest the Trust Administrator shall, upon the written direction of a City Representative, accompanied by all amounts then on hand in the Series 2025A Reserve Fund, deposit such funds in the Series 2025A Installment Payment Fund to be applied to the payment of the Series 2025A Installment Payments or Prepayments on behalf of the City, and such moneys shall be distributed to the Owners of the Series 2025A Bonds in accordance with Article II and Article IV of this Series 2025A Trust Agreement.
Section 6.06. Replenishment of Series 2025A Reserve Fund. The City shall maintain or cause to be maintained in the Series 2025A Reserve Fund an amount equal to the amounts required to be deposited therein pursuant to Section 3.11 of the Series 2025A Installment Sale Agreement, and thereafter the amount of the Series 2025A Reserve Requirement. If, on any date of computation, amounts on hand in the Series 2025A Reserve Fund are less than such required amounts because of a transfer therefrom made in accordance with Section 6.04 hereof, the City shall pay to the Trust Administrator, within one (1) year from the date of such deficiency, an amount necessary to bring the amounts on deposit in the Series 2025A Reserve Fund to the amount required to be maintained therein; provided, however, that the period of time permitted herein for the replenishment of the Series 2025A Reserve Fund by the City shall not affect any other provision of this Series 2025A Trust Agreement.
Section 6.07. Establishment and Application of Short-Lived Assets Series 2025A Reserve Fund. The Trust Administrator shall establish and maintain a separate “Short-Lived Assets Series 2025A Reserve Fund” as a special reserve fund for repair and/or replacement of short-lived assets of the Wastewater System, and shall keep such fund separate and apart from all other funds and moneys held by the Trust Administrator.
The Short-Lived Assets Series 2025A Reserve Fund shall be administered in accordance with Section 3.12 of the Series 2025A Installment Sale Agreement.
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Upon the redemption in full of all outstanding Series 2025A Bonds, the City shall close the ShortLived Assets Series 2025A Reserve Fund and the balance therein shall be released to the City and used for any legally permissible purpose of the Wastewater System.
ARTICLE VII
INSURANCE AND CONDEMNATION FUND; INSURANCE; EMINENT DOMAIN Section 7.01. Establishment of Insurance and Condemnation Fund; Application of Net Proceeds of Insurance Award. Any Net Proceeds of insurance against accident to or destruction of any structure constituting any part of the Series 2025A Project collected by the City in the event of any such accident or destruction shall be transferred by the City to the Trust Administrator pursuant to Section 5.07 of the Series 2025A Installment Sale Agreement and the Trust Administrator shall deposit such moneys in a special fund designated as the “Insurance and Condemnation Fund” to be applied and disbursed by the Trust Administrator as provided in Section 5.07(a) of the Series 2025A Installment Sale Agreement.
Section 7.02. Application of Net Proceeds of Eminent Domain Award. If all or any part of the Series 2025A Project shall be taken by eminent domain (or sold to a government threatening to exercise the power of eminent domain) the Net Proceeds therefrom shall be transferred by the City to the Trust Administrator for deposit in the Insurance and Condemnation Fund pursuant to Section 5.07(b) of the Series 2025A Installment Sale Agreement and shall be applied and disbursed by the Trust Administrator as follows:
(a) If the City determines that such eminent domain proceedings have not materially affected the operation of the Series 2025A Project, or the ability of the City to meet any of its obligations under the Series 2025A Installment Sale Agreement, and if the City determines that such proceeds are: (i) not needed for repair, replacement or rehabilitation of the Series 2025A Project, upon receipt of a Written Certificate from the City the Trust Administrator shall transfer such proceeds to the Series 2025A Installment Payment Fund to be credited towards the prepayments required to be paid pursuant to Section 4.03 of the Series 2025A Installment Sale Agreement and applied to the prepayment of Series 2025A Bonds in the manner provided in Article IV hereof, or (ii) needed for repair or rehabilitation of the Series 2025A Project, upon receipt of a Written Certificate from the City the Trust Administrator shall pay to the City, or to its order, from said proceeds such amounts as the City may expend for such repair or rehabilitation, upon the filing of requisitions of the City Representative.
(b) If (i) less than all of the Series 2025A Project shall have been taken in such eminent domain proceedings, and if the City determines that such eminent domain proceedings have materially affected the operation of the Series 2025A Project or the ability of the City to meet any of its obligations under the Series 2025A Installment Sale Agreement or (ii) all of the Series 2025A Project shall have been taken in such eminent domain proceedings, then upon receipt of written instruction from the City the Trust Administrator shall transfer such proceeds to the Series 2025A Installment Payment Fund to be credited toward the prepayment required to be paid pursuant to Section 4.03 of the Series 2025A Installment Sale Agreement and applied to the prepayment of Series 2025A Bonds in the manner provided in Article IV hereof.
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Section 7.03. Excess Net Proceeds. After all of the Series 2025A Bonds have been retired and the entire amount of principal and interest with respect to the Series 2025A Bonds and any remaining fees and expenses of the Trust Administrator have been paid in full, the Trust Administrator shall transfer any remaining funds to the City.
Section 7.04. Cooperation. The Authority shall cooperate with the City at the expense of the City in filing any proof of loss with respect to any insurance policy maintained pursuant to Article V of the Series 2025A Installment Sale Agreement and in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Series 2025A Project or any part thereof.
ARTICLE VIII
MONEYS IN FUNDS; INVESTMENT
Section 8.01. Held in Trust. The moneys and investments held by the Trust Administrator under this Series 2025A Trust Agreement, except for those held in the Series 2025A Redemption Account, are irrevocably held in trust for the benefit of the Owner(s) of the Series 2025A Bonds, and for the purposes herein specified, and such moneys, and any income or interest earned thereon, shall be expended only as provided in this Series 2025A Trust Agreement, and shall not be subject to levy or attachment or lien by or for the benefit of any creditor of either the Authority, the Trust Administrator or the City or any Owner of a Series 2025A Bond, or any of them until after the Series 2025A Bonds have been paid in full.
Section 8.02. Investments Authorized. Moneys held by the Trust Administrator hereunder shall be invested and reinvested by the Trust Administrator, to the maximum extent practicable, in Permitted Investments. Unless otherwise directed, the Trust Administrator shall invest the affected moneys in Permitted Investments described in paragraph (vii) of the definition thereof. A City Representative may, by written order filed with the Trust Administrator, direct investment of moneys held by the Trust Administrator in specific Permitted Investments. Investments purchased with moneys on deposit in the Series 2025A Reserve Fund shall have a term not greater than five years. Investments, if registrable, shall be registered in the name of and held by the Trust Administrator or the Trust Administrator’s nominee.
Such investments and reinvestments shall be made giving full consideration to the time at which funds are required to be available. The Trust Administrator may act as principal or agent in the making or disposing of any investment. The Trust Administrator shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with this Article VIII. The Trust Administrator shall be entitled to rely conclusively upon the written instructions of a City Representative directing investments as to the fact that each investment is permitted by the laws of the State and constitutes a Permitted Investment hereunder, and the Trust Administrator shall not be required to make further investigation with respect thereto. To the extent that any of the requirements concerning any Permitted Investment embodies a legal conclusion, the Trust Administrator shall be entitled to conclusively rely upon a Written Certificate or certificate from the appropriate party or an opinion of counsel to such party that such requirement has been met.
Section 8.03. Allocation of Earnings. All interest or income received by the Trust Administrator on investment of the Series 2025A Redemption Account and Series 2025A Installment Payment Fund shall, as received, be retained in the applicable fund. Amounts retained in the Series 2025A Installment Payment Fund pursuant to this Section 8.03 shall be applied as a credit against the Series 2025A Installment Payment due by the City pursuant to the Series 2025A Installment Sale Agreement on the Series 2025A Installment
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Payment Date following the date of deposit. All interest or income received by the Trust Administrator on investment of the Series 2025A Reserve Fund shall be retained in the Series 2025A Reserve Fund in the event that amounts on deposit in the Series 2025A Reserve Fund are less than the Series 2025A Reserve Requirement. Pursuant to Section 6.03 hereof, in the event that amounts then on deposit in the Series 2025A Reserve Fund equal or exceed the Series 2025A Reserve Requirement, such excess shall be transferred to the Series 2025A Installment Payment Fund and shall be applied as a credit against the Series 2025A Installment Payment due by the City pursuant to the Series 2025A Installment Sale Agreement on the Series 2025A Installment Payment Date following the date of deposit. Transfers to the Series 2025A Installment Payment Fund from the Series 2025A Reserve Fund shall be made by the Trust Administrator on or prior to each Series 2025A Installment Payment Date.
Section 8.04. Accounting. The Trust Administrator shall furnish to the City a semi-annual accounting of all investments, transactions and disbursements made by the Trust Administrator.
Section 8.05. Acquisition, Disposition and Valuation of Investments. (a) Except as otherwise provided in subsection (b) of this Section 8.05, the City covenants that all investments of amounts deposited in any fund or account created by or pursuant to this Series 2025A Trust Agreement, or otherwise containing gross proceeds of the Series 2025A Bonds (within the meaning of section 148 of the Tax Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by this Series 2025A Trust Agreement or the Tax Code) at Fair Market Value.
(b) Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Tax Code and (unless valuation is undertaken at least annually) investments in the Series 2025A Reserve Fund shall be valued at their present value (within the meaning of section 148 of the Tax Code).
ARTICLE IX
THE TRUST ADMINISTRATOR
Section 9.01. Appointment of Trust Administrator. The Trust Administrator is hereby appointed by the Authority and the City for the purpose of receiving all moneys required to be deposited with the Trust Administrator hereunder and to allocate, use and apply the same as provided in this Series 2025A Trust Agreement.
(a) General. The Trust Administrator is hereby authorized to pay or redeem the Series 2025A Bonds when duly presented for payment at maturity, or on prepayment, and to cancel all Series 2025A Bonds upon payment thereof. The Trust Administrator shall keep accurate records of all funds administered by it and of all Series 2025A Bonds paid and discharged. The Trust Administrator shall be compensated for its services rendered pursuant to the provisions of this Series 2025A Trust Agreement and shall be reimbursed for costs and expenses, including attorney’s fees, incurred in connection therewith, subject to the provisions of any written agreement between the Trust Administrator and the City.
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(b) Successor. So long as no Event of Default shall have occurred and be continuing, the City may, with the written consent of the Owners, remove the Trust Administrator initially appointed, and any successor thereto, on thirty (30) days written notice and may appoint a successor or successors thereto; provided that any such successor shall be a bank or trust company which shall be a corporation organized and doing business under the laws of any state, the City or the United States of America, authorized under such laws to exercise corporate trust powers, which shall have (or, in the case of a corporation included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state authority, so long as any Series 2025B Bonds are Outstanding. If such corporation publishes a report of condition at least annually pursuant to law or to the requirements of any supervising or examining authority above referred to then for the purpose of this Section 9.01 the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Any removal of the Trust Administrator shall not be effective until written acceptance of appointment by the successor Trust Administrator. (c) Resignation. The Trust Administrator may at any time resign by giving written notice to Authority and the City and by providing notice by first class mail, postage prepaid, to the Owners at their addresses as shown on the Series 2025A Bond Register maintained by the Trust Administrator. Said mailing shall be made prior to the proposed effective date of resignation. Upon receiving such notice of resignation, the City, with the written consent of the Owners, shall promptly appoint a successor Trust Administrator by an instrument in writing; provided, however, that in the event that the City does not appoint a successor Trust Administrator within thirty (30) days following receipt of such notice of resignation, the Authority may appoint a successor Trust Administrator and in the event that Authority does not appoint such successor Trust Administrator, the resigning Trust Administrator, at the expense of the City, may petition any appropriate court having jurisdiction to appoint a successor Trust Administrator. Any resignation or removal of the Trust Administrator and appointment of a successor Trust Administrator shall become effective upon acceptance of appointment by the successor Trust Administrator and receipt by the Trust Administrator of any fees and expenses due and payable to it.
Section 9.02. Liability of Trust Administrator. The recitals of facts, covenants and agreements herein and in the Series 2025A Bonds contained shall be taken as statements, covenants and agreements of Authority and the City, and the Trust Administrator neither assumes any responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Series 2025A Trust Agreement or of the Series 2025A Bonds nor shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Series 2025A Bonds assigned to or imposed upon the Trust Administrator.
Section 9.03. Merger or Consolidation. Any company into which the Trust Administrator may be merged or converted or with which any of them may be consolidated or any company resulting from any merger, conversion or consolidation to which any of them shall be a party or any company to which the Trust Administrator may sell or transfer all or substantially all of its corporate trust business, provided that such company shall be eligible under Section 9.01, shall be the successor to the Trust Administrator without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
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Section 9.04. Protection and Rights of the Trust Administrator. The following provisions shall apply to the Trust Administrator in the event the Trust Administrator is not then an officer or employee of the City and shall also apply to the Trust Administrator in the event the Trust Administrator is then an officer or employee of the City, but only to the extent that such provisions do not conflict with such Trust Administrator’s duties as a City officer or employee.
(a) Good Faith. The Trust Administrator shall be protected and shall incur no liability in acting or proceeding in good faith upon any resolution, notice, telegram, request, consent, waiver, certificates, statement, affidavit, voucher, bond, requisition or other paper or document which it shall in good faith believe to be genuine and to have been passed or signed by the proper board or person or to have been prepared and furnished pursuant to any of the provisions of this Series 2025A Trust Agreement, and the Trust Administrator shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements.
(b) Ownership Claims. The Trust Administrator shall not be bound to recognize any person as an Owner of any Series 2025A Bond or to take any action at such Owner’s request unless such Series 2025A Bond shall be deposited with the Trust Administrator or satisfactory evidence of the ownership of such Series 2025A Bond shall be furnished to the Trust Administrator. (c) Counsel. The Trust Administrator may consult with counsel, who may be counsel to the City, with regard to legal questions and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith in accordance therewith.
(d) Proof. Whenever in the administration of its duties under this Series 2025A Trust Agreement, the Trust Administrator shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) shall be deemed to be conclusively proved and established by the Written Certificate of the City Representative or Authority Representative and such Written Certificate shall be full warranty to the Trust Administrator for any action taken or suffered under the provisions of this Series 2025A Trust Agreement upon the faith thereof, but in its discretion the Trust Administrator may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. (e) Owner. The Trust Administrator may become the Owner of Series 2025A Bonds with the same rights it would have if it were not Trust Administrator; may acquire and dispose of other bonds or evidence of indebtedness of the City with the same rights it would have if it were not the Trust Administrator; and may act as a depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Series 2025A Bonds, whether or not such committee shall represent the Owners of the majority in principal amount of the Series 2025A Bond then Outstanding. (f) Powers and Liability. The Trust Administrator may execute any of the powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers,
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and shall be entitled to advice of counsel concerning all matters of its duty hereunder, and the Trust Administrator shall not be liable for the default or misconduct of any such attorney, agent, or receiver selected by it with reasonable care. The Trust Administrator shall not be liable for the exercise of any discretion or power under this Series 2025A Trust Agreement or for anything whatever in connection with the funds and accounts established hereunder, except only for its own willful misconduct or negligence.
(g) Limits of Liability. The Trust Administrator undertakes to perform such duties, and only such duties as are specifically set forth in this Series 2025A Trust Agreement and no implied duties or obligations shall be read into this Series 2025A Trust Agreement against the Trust Administrator. No provision in this Series 2025A Trust Agreement shall require the Trust Administrator to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not assured to it. In accepting the duties hereby enumerated, the Trust Administrator acts solely as Trust Administrator for the Owners and not in its individual capacity and all persons, including without limitation the Owners and the City or Authority having any claim against the Trust Administrator arising from this Series 2025A Trust Agreement shall look only to the funds and accounts held by the Trust Administrator hereunder for payment except as otherwise provided herein. Under no circumstances shall the Trust Administrator be liable in its individual capacity for the obligations evidenced by the Series 2025A Bonds. The Trust Administrator shall not be liable in its individual capacity with respect to any action taken or omitted to be taken by the Trust Administrator in good faith in accordance with the written request of the Owners of the Series 2025A Bonds. (h) No Representations. The Trust Administrator makes no representation or warranty, express or implied as to the title, value, design, compliance with specifications or legal requirements, quality, durability, operation, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City of the Series 2025A Project. In no event shall the Trust Administrator be liable for incidental, indirect, special or consequential damages in connection with or arising from the Series 2025A Installment Sale Agreement or the Series 2025A Trust Agreement for the existence, furnishing or use of the Series 2025A Project. (i) Enforcement; Knowledge. The Trust Administrator shall not be responsible for the sufficiency or enforceability of the Series 2025A Installment Sale Agreement or the assignment under the Series 2025A Assignment Agreement of its rights to receive Series 2025A Installment Payments. The Trust Administrator shall not be deemed to have knowledge of any Event of Default hereunder or under the Series 2025A Installment Sale Agreement except failure by the City to make Series 2025A Installment Payments unless the Trust Administrator shall be specifically notified in writing of such Event of Default.
(j) Released and Unclaimed Funds. The Trust Administrator shall not be accountable for the use or application by the City or any other party of any funds which the Trust Administrator has released under this Series 2025A Trust Agreement. Subject to applicable escheat laws, any amounts unclaimed two (2) years after the final prepayment or maturity date of the Series 2025A Bond, whichever occurs first, shall be paid by the Trust Administrator to the City, and
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thereafter, the Owner of any Series 2025A Bond remaining unpaid shall look to the City for the payment of such Series 2025A Bond.
Section 9.05. Appointment of Trust Administrator. In the event that an Event of Default shall occur or if it shall otherwise be necessary for the Trust Administrator to enforce payment of the Series 2025A Installment Payments, Prepayments or any other amount required to be deposited into the Series 2025A Installment Payment Fund or the Insurance and Condemnation Fund, or to exercise any of the remedies set forth in Article XIII hereof, or if it is determined that the Trust Administrator is unable to perform any of the other duties hereunder, the City, with the written consent of the Government as the Owner, shall appoint a bank or trust company as Trust Administrator hereunder (the “Trust Administrator”) to succeed to the duties and responsibilities of the Trust Administrator hereunder, such appointment to be effective immediately upon written notice thereof to the Trust Administrator. Any Trust Administrator appointed in such circumstances shall meet the requirements of Section 9.01(b) hereof. Upon such appointment, the term “Trust Administrator” in this Agreement shall also refer to such Trust Administrator.
ARTICLE X
MODIFICATION OR AMENDMENT OF AGREEMENTS
Section 10.01. Amendments Permitted.
(a) With Consent. This Series 2025A Trust Agreement and the rights and obligations of the Owners of the Series 2025A Bonds and the Series 2025A Installment Sale Agreement and the rights and obligations of the parties thereto, may be modified or amended at any time by a supplemental agreement which shall become effective when the written consent of the Owners of at least sixty percent (60%) in aggregate principal amount of the Series 2025A Bonds then Outstanding, exclusive of Series 2025A Bonds disqualified as provided in Section 10.03, shall have been filed with the Trust Administrator. No such modification or amendment shall (1) extend or have the effect of extending the fixed maturity of any Series 2025A Bond or reducing the interest rate with respect thereto or extending the time of payment of interest, or reducing the amount of principal thereof or reducing any premium payable upon the prepayment thereof, without the express consent of the Owner of such Series 2025A Bond, or (2) reduce or have the effect of reducing the percentage of Series 2025A Bonds required for the affirmative vote or written consent to an amendment or modification of the Series 2025A Installment Sale Agreement, or (3) modify any of the rights or obligations of the Trust Administrator without its written assent thereto. Any such supplemental agreement shall become effective as provided in Section 10.02. (b) Without Consent. This Series 2025A Trust Agreement and the rights and obligations of the Owners of the Series 2025A Bonds and the Series 2025A Installment Sale Agreement and the rights and obligations of the parties thereto, may be modified or amended at any time by a supplemental agreement, without the consent of any such Owners, but only to the extent permitted by law and only (1) to cure, correct or supplement any ambiguous or defective provision contained herein or therein, or (2) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which shall not, in the opinion of nationally recognized bond counsel, materially adversely affect the interest of the Owners of the Series 2025A Bonds, or (3) if and to the extent specified in an opinion of nationally recognized bond counsel filed with the City, the Authority and the Trust Administrator, to make such additions,
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deletions or modifications as may be necessary to assure compliance with section 148(f) of the Tax Code or otherwise as may be necessary to assure exclusion from gross income for purposes of federal income taxation of the interest component of Series 2025A Installment Payments. Any such supplemental agreement shall become effective upon its execution and delivery by the parties hereto or thereto as the case may be.
(c) Counsel. The Trust Administrator may obtain an opinion of Independent Counsel that any amendment entered into hereunder complies with the provisions of this Article X and the Trust Administrator may rely conclusively on such opinion.
Section 10.02. Procedure for Amendment with Written Consent of Series 2025A Bond Owners.
(a) General. This Series 2025A Trust Agreement or the Series 2025A Installment Sale Agreement may be amended by supplemental agreement as provided in this Section 10.02 in the event the consent of the Owners of the Series 2025A Bonds is required pursuant to Section 10.01.
A copy of such supplemental agreement, together with a request to the Series 2025A Bond Owners for their consent thereto, shall be mailed by the Trust Administrator to the Owner of each Series 2025A Bond at his address as set forth in the Series 2025A Bond Register, but failure to mail copies of such supplemental agreement and request shall not affect the validity of the supplemental agreement when assented to as provided in this Section 10.02. (b) Effective. Such supplemental agreement shall not become effective unless there shall be filed with the Trust Administrator the written consent of the Owners of at least sixty percent (60%) in aggregate principal amount of the Series 2025A Bonds then Outstanding (exclusive of Series 2025A Bonds disqualified as provided in Section 10.03) and a notice shall have been mailed as hereinafter provided in this Section 10.02. Each such consent shall be effective only if accompanied by proof of ownership of the Series 2025A Bond for which such consent is given, which proof shall be such as is permitted by Section 2.11. Any such consent shall be binding upon the Owner of the Series 2025A Bond giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Trust Administrator within five (5) Business Days of the date when the notice of consent hereinafter in this Section 10.02 provided for has been mailed. Any revocation received by the Trust Administrator later than five (5) Business Days after such notice has been mailed shall be of no force and effect.
(c) Notice. After the Owners of the required percentage of Series 2025A Bonds shall have filed their consents to such supplemental agreement, the Trust Administrator shall mail a notice to the Owners of the Series 2025A Bonds in the manner hereinbefore provided in this Section 10.02 for the mailing of such supplemental agreement at the notice of adoption thereof, stating in substance that such supplemental agreement has been consented to by the Owners of the required percentage of Series 2025A Bonds and will be effective as provided in this Section 10.02 (but failure to mail copies of said notice shall not affect the validity of such supplemental agreement or consents thereto). A record, consisting of the papers required by this Section 10.02 to be filed with the Trust Administrator, shall be conclusive proof of the matters therein stated until
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the contrary is proved. Such supplemental agreement shall be deemed conclusively binding upon the parties hereto and the Owners of all Series 2025A Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty (60) day period.
Section 10.03. Disqualified Series 2025A Bonds. Series 2025A Bonds owned or held by or for the account of the City or by any person directly or indirectly controlled or controlled by, or under direct or indirect common control with the City (except any Series 2025A Bond held in any pension or retirement fund) shall not be deemed Outstanding for the purpose of any vote, consent, waiver or other action or any calculation of Outstanding Series 2025A Bonds provided for in this Series 2025A Trust Agreement, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Series 2025A Trust Agreement.
Section 10.04. Effect of Supplemental Agreement. From and after the time any supplemental agreement becomes effective pursuant to this Article X, this Series 2025A Trust Agreement or the Series 2025A Installment Sale Agreement, as the case may be, shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties hereto or thereto and all Owners of Series 2025A Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any supplemental agreement shall be deemed to be part of the terms and conditions of this Series 2025A Trust Agreement or the Series 2025A Installment Sale Agreement, as the case may be, for any and all purposes.
The City may adopt appropriate regulations to require each Series 2025A Bond Owner, before such Owner’s consent provided for in this Article X shall be deemed effective, to reveal whether the Series 2025A Bond as to which such consent is given is disqualified as provided in Section 10.03.
Section 10.05. Endorsement or Replacement of Series 2025A Bonds Delivered After Amendments. The City may determine that Series 2025A Bonds delivered after the effective date of any action taken as provided in this Article X shall bear a notation, by endorsement or otherwise, in form approved by the Trust Administrator, as to such action. In that case, upon demand of the Owner of any Series 2025A Bond Outstanding at such effective date and presentation of his or her Series 2025A Bond for the purpose at the Trust Office, a suitable notation shall be made on such Series 2025A Bond. The City may determine that new Series 2025A Bond, so modified as in the opinion of the City is necessary to conform to such Series 2025A Bond Owners’ action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Series 2025A Bond then Outstanding, such new Series 2025A Bond shall be exchanged at the Trust Office, without cost to such Owner, for a Series 2025A Bond of the same character then Outstanding, upon surrender of such Series 2025A Bond.
Section 10.06. Amendatory Endorsement of Series 2025A Bond. The provisions of this Article X shall not prevent any Series 2025A Bond Owner from accepting any amendment as to the particular Series 2025A Bond held by him, provided that due notification thereof is made on such Series 2025A Bond.
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ARTICLE XI
COVENANTS
Section 11.01. Compliance With and Enforcement of Series 2025A Installment Sale Agreement. The City and the Authority covenant and agree with the Owners of the Series 2025A Bonds to perform all obligations and duties imposed on them under the Series 2025A Installment Sale Agreement and this Series 2025A Trust Agreement. The City or the Authority, immediately upon receiving or giving any notice or communication or other document in any way relating to or affecting their respective interests in the Series 2025A Project which may or can in any manner affect such interest, will deliver the same, or a copy thereof, to the Trust Administrator. The City and the Authority 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 or might be a ground for cancellation or termination of the Series 2025A Installment Sale Agreement.
Section 11.02. Payment of Taxes. The City will, subject to any right of challenge thereof, pay or cause to be paid all taxes, assessments and other governmental charges, if any, that may be levied, assessed or charged upon the Series 2025A Project or any part thereof, promptly as and when the same shall become due and payable; and the City will keep the Trust Administrator advised in writing of such payments. The City will not suffer the Series 2025A Project, or any part thereof, to be sold for any taxes, assessments or other charges whatsoever, or to be forfeited therefor.
Section 11.03. Observance of Laws and Regulations. The City will well and truly keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on it with respect to the Wastewater System 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 by the City with respect to the Wastewater System 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 11.04. Further Assurances. The Authority, the City and the Trust Administrator (at the cost and request of the City or the Authority) will 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 Series 2025A Trust Agreement, and for the better assuring and confirming unto the Owners of the Series 2025A Bonds the rights and benefits provided herein.
Section 11.05. Filing. The City shall be responsible for the filing of any supplemental instruments or documents of further assurance as may be required by law in order to perfect or renew the security interests created by this Series 2025A Trust Agreement. Neither the Trust Administrator nor the Authority shall be responsible for such filing.
Section 11.06. Private Activity Bond Limitation. The City and the Authority shall assure that proceeds of the Series 2025A Bonds are not so used as to cause the Series 2025A Bonds or the Series 2025A Installment Sale Agreement to satisfy the private business tests of section 141(b) of the Tax Code or the private loan financing test of section 141(c) of the Tax Code.
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Section 11.07. Federal Guarantee Prohibition. The City and the Authority shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Series 2025A Bonds or the Series 2025A Installment Sale Agreement to be “federally guaranteed” within the meaning of section 149(b) of the Tax Code.
Section 11.08. Rebate Requirement. The City and the Authority shall take any and all actions necessary to assure compliance with section 148(f) of the Tax Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Series 2025A Bonds and the Series 2025A Installment Sale Agreement.
Section 11.09. No Arbitrage. The City and the Authority shall not take, or permit or suffer to be taken by the Trust Administrator or otherwise, any action with respect to the proceeds of the Series 2025A Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date would have caused the Series 2025A Bonds or the Series 2025A Installment Sale Agreement to be “arbitrage bonds” within the meaning of section 148 of the Tax Code.
Section 11.10. Maintenance of Tax-Exemption. The City and the Authority shall take all actions necessary to assure the exclusion of interest with respect to the Series 2025A Bonds from the gross income of the Owners of the Series 2025A Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the Closing Date.
ARTICLE XII
LIMITATION OF LIABILITY
Section 12.01. Limited Liability of City. Except for the payment of Series 2025A Installment Payments and Prepayments when due in accordance with the Series 2025A Installment Sale Agreement and the performance of the other covenants and agreements of the City contained in said Agreement, the City shall have no pecuniary obligation or liability to any of the other parties or to the Owners of the Series 2025A Bonds with respect to this Series 2025A Trust Agreement or the terms, execution, delivery or transfer of the Series 2025A Bonds, or the distribution of Series 2025A Installment Payments to the Owners by the Trust Administrator except as expressly set forth herein.
Section 12.02. No Liability of the Authority for Trust Administrator Performance. In the event that a Trust Administrator shall be appointed pursuant to Section 9.05 to perform the duties of Trust Administrator hereunder, neither the City nor the Authority shall have any obligation or liability to the other party or to the Owners of the Series 2025A Bonds with respect to the performance by such Trust Administrator of any duty imposed upon such Trust Administrator under this Series 2025A Trust Agreement.
Section 12.03. Indemnification of Trust Administrator. In the event that a Trust Administrator shall be appointed pursuant to Section 9.05 to perform the duties of Trust Administrator hereunder, the City shall to the extent permitted by law indemnify and save such Trust Administrator, its officers, employees, directors and agents harmless from and against all claims, losses, costs, expenses, liability and damages, including legal fees and expenses, arising out of:
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(a) the use, maintenance, condition or management of, or from any work or thing done on, the Series 2025A Project by the Authority or the City; (b) any breach or default on the part of the Authority or the City in the performance of any of their respective obligations under the Series 2025A Installment Sale Agreement, this Series 2025A Trust Agreement and any other agreement made and entered into for purposes of the Series 2025A Project;
(c) any act of the Authority or the City or of any of their respective agents, contractors, servants, employees or licensees with respect to the Series 2025A Project; (d) any act of any assignee of, or purchaser from the Authority or the City or of any of its or their respective agents, contractors, servants, employees or licensees with respect to the Series 2025A Project;
(e) the acquisition, construction, installation and equipping of the Series 2025A Project or the authorization of payment of Delivery Costs; (f) the actions of any other party, including but not limited to (i) the ownership, operation or use of the Series 2025A Project by the Authority or the City, (ii) the Trust Administrator’s exercise and performance of its powers and duties hereunder, or (iii) the offering and sale of the Series 2025A Bonds. No indemnification will be made under this Section 12.03 or elsewhere in this Series 2025A Trust Agreement for willful misconduct or negligence under this Series 2025A Trust Agreement by such Trust Administrator, its officers or employees. The City’s obligations hereunder shall remain valid and binding notwithstanding maturity and payment of the Series 2025A Bonds or resignation or removal of such Trust Administrator.
Section 12.04. Limitation of Rights to Parties and Series 2025A Bond Owners. Nothing in this Series 2025A Trust Agreement or in the Series 2025A Bonds expressed or implied is intended or shall be construed to give any person other than the City, the Authority, the Trust Administrator and the Owners of the Series 2025A Bonds, any legal or equitable right, remedy or claim under or in respect of this Series 2025A Trust Agreement or any covenant, condition or provision hereof; and all such covenants, conditions and provisions are and shall be for the sole and exclusive benefit of the City, the Authority, the Trust Administrator and said Owners.
ARTICLE XIII
EVENTS OF DEFAULT AND REMEDIES OF SERIES 2025A BOND OWNERS Section 13.01. Assignment of Rights. Pursuant to the Series 2025A Assignment Agreement, the Authority transfers, assigns and sets over to the Trust Administrator all of the Authority’s rights under the Series 2025A Installment Sale Agreement (excepting only the Authority’s rights under Sections 6.03 and
7.04 thereof), including without limitation the Authority’s rights to exercise such rights and remedies conferred on the Authority pursuant to the Series 2025A Installment Sale Agreement as may be necessary or convenient (i) to enforce payment of the Series 2025A Installment Payments, Prepayments and any other amounts required to be deposited in the Series 2025A Installment Payment Fund or the Insurance and
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Condemnation Fund, and (ii) otherwise to exercise the Authority’s rights and take any action to protect the interests of the Trust Administrator or the Series 2025A Bond Owners in an Event of Default.
Section 13.02. Remedies. If an Event of Default shall happen, then and in each and every such case during the continuance of such Event of Default, the Trust Administrator may exercise any and all remedies available hereunder pursuant to law or granted pursuant to the Series 2025A Installment Sale Agreement.
Upon the occurrence of an Event of Default, the Trust Administrator may, and shall, at the written direction of the Owners of a majority of the principal amount of Series 2025A Bonds then Outstanding, by written notice to the City, declare the principal of the Series 2025A Installment Payments to be immediately due and payable, whereupon that portion of the principal of the Series 2025A Installment Sale Agreement thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in this Series 2025A Trust Agreement or in the Series 2025A Installment Payments to the contrary notwithstanding.
Remedies shall be cumulative with respect to the Trust Administrator and the Owners. If any remedial action is discontinued or abandoned, the Trust Administrator and the Owners shall be restored to their former positions.
Section 13.03. Application of Funds. All moneys received by the Trust Administrator pursuant to any right given or action taken under the provisions of this Article XIII or of Article VII of the Series 2025A Installment Sale Agreement, shall be applied by the Trust Administrator in the order following upon presentation of the several Series 2025A Bonds and the stamping thereon of the payment if only partially paid or upon the surrender thereof if fully paid:
(a) First, to the payment of the costs and expenses of the Trust Administrator hereunder (including, but not limited to, the costs and expenses of itself and its counsel) and, after such payment to the Trust Administrator, of the Series 2025A Bond Owners in declaring such Event of Default, including reasonable compensation to its or their agents, attorneys and counsel, together with interest on all such amounts advanced as provided in the Series 2025A Installment Sale Agreement; (b) Second, to the payment of the whole amount then owing and unpaid with respect to the Series 2025A Bonds for principal and interest, with interest on the overdue principal and installments of interest at the rate or rates specified in the respective Series 2025A Bonds (but such interest on overdue installments of interest shall be paid only to the extent funds are available therefor following payment of principal and interest and interest on overdue principal, as aforesaid), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid with respect to the Series 2025A Bonds, then such moneys shall be applied in the following order of priority: (1) delinquent interest, (2) past due interest installments, (3) past due principal installments, (4) current interest due, and (5) current principal due.
Section 13.04. Institution of Legal Proceedings. If one or more Events of Default shall happen and be continuing, the Trust Administrator in its discretion may, and upon the written request of the Owners of a majority in principal amount of the Series 2025A Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of the Owners of Series 2025A Bonds by a suit in equity or action at law, for the specific performance of any covenant or agreement
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contained herein, or in aid of the execution of any power herein granted, or by mandamus or other appropriate proceeding for the enforcement of any other legal or equitable remedy as the Trust Administrator shall deem most effectual to enforce any of its rights or duties hereunder.
Section 13.05. Non-waiver. Nothing in this Article XIII or in any other provision of this Series 2025A Trust Agreement, or in the Series 2025A Bonds, shall affect or impair the obligation of the City, which is absolute and unconditional subject to Section 3.06 of the Series 2025A Installment Sale Agreement, to pay or prepay the Series 2025A Installment Payments as provided in the Series 2025A Installment Sale Agreement, or affect or impair the right of action, which is also absolute and unconditional, of the Series 2025A Bond Owners to institute suit to enforce such payment. No delay or omission of the Trust Administrator or of any Owner of any of the Series 2025A Bonds to exercise any right or power arising upon the happening of any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein, and every power and remedy given by this Article XIII to the Trust Administrator or to the Owners of Series 2025A Bonds may be exercised from time to time and as often as shall be deemed expedient by the Trust Administrator or the Series 2025A Bond Owners.
Section 13.06. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trust Administrator or to the Series 2025A Bond Owners is intended to be exclusive of any other remedy, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise.
Section 13.07. Power of Trust Administrator to Control Proceedings. In the event that the Trust Administrator, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of a majority in principal amount of the Series 2025A Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Series 2025A Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trust Administrator shall not, unless there no longer continues an Event of Default hereunder, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of at least a majority in principal amount of the Series 2025A Bonds Outstanding hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation.
Section 13.08. Limitation on Series 2025A Bond Owners’ Right to Sue. No Owner of any Series 2025A Bond shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Series 2025A Trust Agreement, unless (a) such Owner shall have previously given to the Trust Administrator written notice of the occurrence of an Event of Default hereunder; (b) the Owners of at least a majority in aggregate principal amount of all the Series 2025A Bond then Outstanding shall have made written request upon the Trust Administrator to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trust Administrator reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trust Administrator shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trust Administrator.
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Notwithstanding any contrary provision contained herein, so long as the Government is the Owner of the Series 2025A Bonds, such rights and remedies as are given to the Trust Administrator under this Article may be exercised by the Government in its own name without any tender of indemnity to the Trust Administrator.
Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Series 2025A Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Series 2025A Bond shall have any right in any manner whatever by his or their action to enforce any right under this Series 2025A Trust Agreement, except in the manner herein provided, and that all proceedings at law or in equity with respect to an Event of Default shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Series 2025A Bonds.
The right of any Owner of any Series 2025A Bond to receive payment of said Owner’s proportionate interest in the Series 2025A Installment Payments as the same become due, or to institute suit for the enforcement of such payment, shall not be impaired or affected without the consent of such Owner, notwithstanding the foregoing provisions of this Section 13.08 or any other provision of this Series 2025A Trust Agreement.
Section 13.09. Parties Interested Herein. Nothing in this Series 2025A Trust Agreement expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the City, the Authority, the Trust Administrator and the Owners any right, remedy or claim under or by reason of this Series 2025A Trust Agreement, or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Series 2025A Trust Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the City, the Authority, the Trust Administrator and the Owners.
ARTICLE XIV
MISCELLANEOUS
Section 14.01. Discharge. The Outstanding Series 2025A Bonds may be paid and discharged in any one or more of the following ways:
(a) Payment. By paying or causing to be paid the principal with respect to and interest with respect to all Series 2025A Bonds Outstanding, as and when the same become due and payable;
(b) Deposit. By depositing with the Trust Administrator, in trust, at or before maturity, money which, together with the amounts then on deposit in the Series 2025A Installment Payment Fund and the Series 2025A Reserve Fund, is fully sufficient to pay all Series 2025A Bonds Outstanding, including all principal and interest;
(c) Escrow. By irrevocably depositing with the Trust Administrator or an escrow agent, in trust, cash or Discharge Obligations in such amount as an independent nationally recognized certified public accountant shall determine in a written report delivered to the Trust
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Administrator or escrow agent will, together with the interest to accrue thereon and moneys then on deposit in the Series 2025A Installment Payment Fund and the Series 2025A Reserve Fund, if required, together with the interest to accrue thereon, be fully sufficient to pay and discharge all Series 2025A Bonds (including all principal and interest) at or before their respective maturity dates; or
(d) Security Deposit. By depositing with the Trust Administrator, under an escrow deposit and trust agreement, security for the payment of Series 2025A Installment Payments as more particularly described in Section 4.05 of the Series 2025A Installment Sale Agreement, said security to be held by the Trust Administrator, as agent for City, and to be applied by the Trust Administrator to Series 2025A Installment Payments representing the obligation of the City under the Series 2025A Installment Sale Agreement, as described in Section 4.05 of the Series 2025A Installment Sale Agreement;
(e) Effect. Notwithstanding that any Series 2025A Bonds shall not have been surrendered for payment, all rights hereunder of the Owners of the Series 2025A Bonds and all obligations of the Authority, the Trust Administrator and the City under this Series 2025A Trust Agreement with respect to all Outstanding Series 2025A Bonds shall cease and terminate, except only the obligation of the Trust Administrator to pay or cause to be paid, from Series 2025A Installment Payments paid by or on behalf of the City from deposits pursuant to paragraphs (b) through (d) of this Section 14.01, to the Owners of the Series 2025A Bonds not so surrendered and paid all sums due with respect thereto, and in the event of deposits pursuant to paragraphs (b) through (d) of this Section 14.01, the Series 2025A Bonds shall continue to represent direct, undivided and fractional interests of the Owners thereof in Series 2025A Installment Payments under the Series 2025A Installment Sale Agreement.
(f) Payment Date. All monies held or deposited pursuant to subsections (b) through (d), above, shall be used to pay and prepay Series 2025A Bonds on the earliest possible date. (g) Surplus Funds. Any funds held by the Trust Administrator, at the time of one of the events described above in subsections (a) through (d) above, which are not required for the payment to be made to Owners, or for payments to be made to the Trust Administrator by the City (including attorneys’ fees), shall be paid over to the City.
Notwithstanding any contrary provision contained herein, so long as the Government is the Owner of the Series 2025A Bonds, the Series 2025A Bonds may not be defeased.
Section 14.02. Records. The Trust Administrator shall keep complete and accurate records of all moneys received and disbursed under this Series 2025A Trust Agreement, which shall be available for inspection by the City, the Authority, and the Owners of not less than 10% in aggregate principal amount of the Series 2025A Bonds Outstanding, or the agent of any of them, upon reasonable prior notice and during regular business hours.
Section 14.03. Notices. All written notices to be given under this Series 2025A Trust Agreement shall be given by mail first class, postage prepaid, to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other parties in writing from time to time. Any such
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notice shall be deemed to have been received 48 hours after deposit in the United States mail, with postage fully prepaid.
If to the City: City of San Juan Bautista
311 2nd Street / P.O. Box 1420
San Juan Bautista, CA 95045
Attention: City Manager
If to the Authority: San Juan Bautista Public Financing Authority 311 2nd Street / P.O. Box 1420
San Juan Bautista, CA 95045
Attention: Executive Director
If to the Trust Administrator: City Manager
City of San Juan Bautista
311 2nd Street / P.O. Box 1420
San Juan Bautista, CA 95045
Attention: City Manager
If to the Government: Rural Development, United States
Department of Agriculture
777 Sonoma Ave, ‘E’ Street Annex
Santa Rosa, CA 95404
Attention: Area Specialist
And
Rural Development, United States
Department of Agriculture
430 G Street, Suite 4169
Davis, CA 95616
Attention: Community Programs Specialist
Section 14.04. Governing Law. This Series 2025A Trust Agreement shall be construed and governed in accordance with the laws of the State.
Section 14.05. Binding Effect; Successors. This Series 2025A Trust Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Whenever in this Series 2025A Trust Agreement the Authority, the City or the Trust Administrator is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Series 2025A Trust Agreement contained by or on behalf of the Authority, the City or the Trust Administrator shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.
Section 14.06. Execution in Counterparts. This Series 2025A Trust 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 agreement.
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Section 14.07. Destruction of Canceled Series 2025A Bonds. Whenever in this Series 2025A Trust Agreement provision is made for the surrender to or cancellation by the Trust Administrator and the delivery to the City of any Series 2025A Bond, the Trust Administrator may, in lieu of such cancellation and delivery, destroy such Series 2025A Bond and deliver a certificate of such destruction to the City.
Section 14.08. Headings. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Series 2025A Trust Agreement. All references herein to “Articles,” “Sections,” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Series 2025A Trust Agreement; and the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Series 2025A Trust Agreement as a whole and not to any particular Article, Section or subdivision hereof.
Section 14.09. Limitation of Rights to Parties and Series 2025A Bond Owners. Nothing in this Series 2025A Trust Agreement or in the Series 2025A Bonds expressed or implied is intended or shall be construed to give to any person other than the Authority, the City, the Trust Administrator and the Owners of the Series 2025A Bonds, any legal or equitable right, remedy or claim under or in respect of this Series 2025A Trust Agreement or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the City, the Trust Administrator and the Owners of the Series 2025A Bonds delivered hereunder.
Section 14.10. Waiver of Notice. Whenever in this Series 2025A Trust Agreement the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
Section 14.11. Payments Due on Other than Business Day. If the date for making any payment as provided in this Series 2025A Trust Agreement is not a Business Day, such payment must be made on the previous Business Day.
Section 14.12. Payment of Unclaimed Moneys. Notwithstanding any provisions of this Series 2025A Trust Agreement, any moneys held by the Trust Administrator in trust for the payment of the principal or interest due with respect to any Series 2025A Bond and remaining unclaimed two years from the date of payment or prepayment of such Series 2025A Bond, or if the law shall have been changed and the City has notified the Trust Administrator of such change or the Trust Administrator notifies the City, then on the date thirty (30) days prior to the then applicable escheat provision of State law, shall, on such date, be repaid to the City free from the trusts created by this Series 2025A Trust Agreement, and all liability of the Trust Administrator with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the City as aforesaid, the Trust Administrator may (at the cost and request of the City) first mail to the Owners to whom such amounts have not yet been paid, at the addresses shown on the Series 2025A Bond Register, a notice, in such form as may be deemed appropriate by the Trust Administrator with respect to the amounts so payable and with respect to the provisions relating to the repayment to the City of the moneys held for the payment thereof. The Trust Administrator shall not be liable for any interest on funds held by it. The City shall not be liable for any interest on the
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sums paid to it pursuant to this Section 14.12 and shall not be regarded as a Trust Administrator of such money.
Section 14.13. Separability of Invalid Provisions. In case any one or more of the provisions contained in this Series 2025A Trust Agreement or in the Series 2025A Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such invalidity, illegality or unenforceability shall not affect any other provision of this Series 2025A Trust Agreement, and this Series 2025A Trust Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The parties hereto hereby declare that they would have entered into this Series 2025A Trust Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the delivery of the Series 2025A Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Series 2025A Trust Agreement may be held illegal, invalid or unenforceable.
[Signature Page to Follow on Next Page]
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IN WITNESS WHEREOF, the parties have executed this Series 2025A Trust Agreement as of the date and year first above written.
CITY OF SAN JUAN BAUTISTA
By
City Manager
CITY MANAGER OF THE
CITY OF SAN JUAN BAUTISTA,
as Trust Administrator
By
City Manager
SAN JUAN BAUTISTA
PUBLIC FINANCING AUTHORITY
By: ____________________________
Authorized Signatory
TRUST AGREEMENT
Exhibit A