Agenda, joint meeting — Sanger City Council, May 5, 2022

ANY WRITINGS OR DOCUMENTS PROVIDED TO A MAJORITY OF THE CITY COUNCIL LESS THAN 72 HOURS PRIOR TO A

REGULAR MEETING REGARDING ANY ITEM ON THIS AGENDA WILL BE MADE AVAILABLE FOR PUBLIC INSPECTION, DURING NORMAL BUSINESS HOURS, AT THE CITY CLERK’S OFFICE & CITY HALL LOBBY LOCATED AT 1700 7TH STREET AND SANGER LIBRARY 1812 7TH STREET, SANGER, CA 93657. THE DOCUMENTS ARE ALSO AVAILABLE ON THE CITY’S WEBSITE, WWW.CI.SANGER.CA.US.

AGENDA

JOINT MEETING OF THE SANGER CITY COUNCIL AND

SANGER FINANCING AUTHORITY

THURSDAY, May 5, 2022
6:00 P.M.

COUNCIL CHAMBER
1700 7th Street, Sanger, California 93657

Prior to action by the Council on any item on this agenda, the public may comment on that item.

A. CALL TO ORDER

B. OPENING CEREMONIES

Invocation
Flag Salute
Roll Call

C. A GENDA APPROVAL, ADDITIONS AND/OR DELETIONS

D. CEREMONIAL MATTERS

1. Proclamation of National Public Works Week and Recognition of Public Works Employees.

2. Proclamation Recognizing Municipal Clerks Week

AVAILABLE FOR REVIEW 72 HOURS

PRIOR TO THE CITY COUNCIL MEETING
AT THE SANGER LIBRARY, CITY CLERK’S

OFFICE AND THE SANGER CITY HALL
LOBBY.

The Council Chamber will be open to the public.

This meeting will also be available for public viewing and participation through Zoom.

Webl ink: https://us02web.zoom.us/j/83526621168
Telep hone number: 1-669-900-9128
Mee ting ID: 835 2662 1168

Public comment will be accepted in person, via Zoom, and by email at [email protected]. 1 City Council Agenda
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E. PUBLIC HEARING

None

F. PRESENTATIONS

1. REACT

G. P UBLIC FORUM
(This portion of the meeting is reserved for persons desiring to address the Council on any matter not otherwise on the agenda and within the jurisdiction of the City Council.

Speakers shall address all comments to the Mayor and the Council as a body and not to any particular Councilmember or member of the staff. Speakers should limit their comments to three (3) minutes.)

H. CONSENT CALENDAR
(Matters listed under the consent calendar are considered routine and will be enacted by one mo tion and one vote. There will be no separate discussion of these items. If discussion i s desired, a member of the audience or a Councilmember may request an item be removed from the Consent Calendar and it will be considered separately.)

None

I. DEPARTMENT REPORTS

Recess and Convene in Joint Session Sanger Financing Authority

1. SUBJECT: Resolution Authorizing the Execution and Delivery of an Indenture and Term Sheet in Connection with the Issuance of City of Sanger 2022A Water Revenue Refunding Bonds, and Related Actions.

RECOMMENDATION: That the City Council approve Resolution 2022-40 of the City Council of the City of Sanger, Authorizing the Execution and Delivery by the City of an Indenture and Term Sheet in connection with the issuance of City of Sanger 2022A Water Revenue Refunding Bonds, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of Not to Exceed $4,200,000, and Authorizing the Execution of Necessary Documents and Certificates and Related Actions, in accordance with Council’s direction approved during the January 20, 2022, City Council meeting.

2. SUBJECT: Resolution Authorizing the Execution and Delivery of an Escrow Agreement in Connection with the Issuance of City of Sanger 2022A Water Revenue Refunding Bonds, and Related Actions.

RECOMMENDATION: That the Financing Authority approve Resolution 2022-03 of the Financing Authority of the City of Sanger, Authorizing the Execution and Delivery by the Authority of an Escrow Agreement in connection with the issuance of City of Sanger 2022A Water Revenue Refunding Bonds, and Authorizing the Execution of Necessary Documents and Certificates and Related Actions, in accordance with Council’s direction approved during the January 20, 2022 City Council meeting.
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3. SUBJECT: Resolution Authorizing the Execution and Delivery of an Indenture and Term Sheet in Connection with the Issuance of City of Sanger 2022B Wastewater Revenue Refunding Bonds, and Related Actions RECOMMENDATION: That the City Council approve Resolution 2022-41 of the City Council of the City of Sanger, Authorizing the Execution and Delivery by the City of an Indenture and Term Sheet in connection with the issuance of City of Sanger 2022B Wastewater Revenue Refunding Bonds, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of Not to Exceed $7,000,000, and Authorizing the Execution of Necessary Documents and Certificates and Related Actions, in accordance with Council’s direction approved during the January 20, 2022 City Council meeting.

4. SUBJECT: Resolution Authorizing the Execution and Delivery of an Escrow Agreement in Connection with the Issuance of City of Sanger 2022B Wastewater Revenue Refunding Bonds, and Related Actions.

RECOMMENDATION: That the Financing Authority approve Resolution 2022-04 of the Financing Authority of the City of Sanger, Authorizing the Execution and Delivery by the Authority of an Escrow Agreement in connection with the issuance of City of Sanger 2022B Wastewater Revenue Refunding Bonds, and Authorizing the Execution of Necessary Documents and Certificates and Related Actions, in accordance with Council’s direction approved during the January 20, 2022 City Council meeting.

Adjourn Joint Session and Resume City Council Meeting

5. SUBJECT: Introduction/1 st reading of Fireworks Ordinance.

RECOMMENDATION: That the City Council consider waiving the full reading and introduce this ordinance no. 2022-05 regarding fireworks within the City of Sanger.

6. SUBJECT: Measure S Gang/Drug Prevention/Intervention Services Grant Program Awards for FY 2022/23.

RECOMMENDATION: That the City Council consider the Citizen’s Oversight Committee’s (COC) recommendation to: 1) select Sanger Young Life, Boys and Girls Club and SAM Academy as the approved grant recipients for Measure S Gang Intervention/Prevention award; 2) The Citizen Oversight Committee considered presentations by Sanger Young Life, Boys & Girls Club, SAM Academy and Double Dragon Kenpo Karate. The COC is not recommending approval and funding for Double Dragon Kenpo Karate.

J. CI TY MANAGER/STAFF COMMUNICATION

1. COVID-19 Update – informational only.

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K. MATTERS INITIATED BY CITY COUNCIL MEMBERS
(This portion of the meeting is reserved for Council Members to initiate new matters and to request updates and/or status on existing matters. Under this section, the Council may also take action on any items specifically agendized.)

1. Consideration and/or direction for allocation of remaining funds from $800,000 already allocated for Council-initiated projects.

a. SUBJECT: Consideration of Grant writing/advocacy options.

RECOMMENDATION: That the City Council provide direction Grant Writer services including but not limited to i) issuance of Request for Quotes (RFQ) for consultant grant writer services, ii) resumption of contract services with the most recent consultant grant writer, CrisCom at same terms through June 2023, iii) Creation of a full time Grant Writer staff position, iv) combination of above options.

b. Consideration and/or direction to purchasing boxing club equipment.

L. AD JOURNMENT

In compliance with the Americans with Disabilities Act, if you need special assistance to participate at this meeting, please contact the City Cl erk’s Office at 559/876-6300 Ext 1350. Notification of 48 hours prior to the meeting will enable the City Clerk to make reasonable arrangements to ensure accessibility to this meeting (28 CFR 35.102.35.104 ADA Title II).

I certify under the penalty of perjury, under the laws of the State of California that the foregoing agenda was posted in accordance with the applicable legal requirements. Dated this 29th day of April 2022.

Corina Tamez, Deputy City Clerk
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Stradling Yocca Carlson & Rauth
Draft of 4/25/22

4870-7103-2860v4/022765-0008

INDENTURE OF TRUST
Dated as of May 1, 2022
By and between
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
and the

CITY OF SANGER
Relating to
$__________

CITY OF SANGER
2022A WATER REVENUE REFUNDING BONDS

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ARTICLE I

DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS
Section 1.01. Definitions .............................................................................................................. 3 Section 1.02. Content of Certificates and Opinions.................................................................... 11 Section 1.03. Interpretation......................................................................................................... 12

ARTICLE II

THE 2022A BONDS
Section 2.01. Authorization of 2022A Bonds ............................................................................. 12 Section 2.02. Terms of the 2022A Bonds ................................................................................... 13 Section 2.03. Transfer of 2022A Bonds ..................................................................................... 14 Section 2.04. Exchange of 2022A Bonds ................................................................................... 14 Section 2.05. Registration Books ................................................................................................ 14 Section 2.06. Form and Execution of 2022A Bonds .................................................................. 15 Section 2.07. 2022A Bonds Mutilated, Lost, Destroyed or Stolen ............................................. 15 Section 2.08. Initial Delivery of 2022A Bonds .......................................................................... 16 Section 2.09. Conversion to Tax-Exempt Rate .......................................................................... 16

ARTICLE III

ISSUANCE OF 2022A BONDS; APPLICATION OF PROCEEDS
Section 3.01. Issuance of the 2022A Bonds ............................................................................... 16 Section 3.02. Application of Proceeds of the 2022A Bonds ...................................................... 17 Section 3.03. Establishment and Application of Costs of Issuance Fund ................................... 17 Section 3.04. Validity of 2022A Bonds ...................................................................................... 17

ARTICLE IV

REDEMPTION OF 2022A BONDS
Section 4.01. Terms of Redemption ........................................................................................... 17 Section 4.02. Selection of 2022A Bonds for Redemption .......................................................... 19 Section 4.03. Notice of Redemption ........................................................................................... 19 Section 4.04. Effect of Redemption ............................................................................................ 19

ARTICLE V

REVENUES, FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST Section 5.01. Pledge and Assignment; Revenue Fund ............................................................... 20 Section 5.02. Allocation of Revenues ......................................................................................... 21 Section 5.03. A pplication of Interest Account ............................................................................ 22 Section 5.04. Application of Principal Account ......................................................................... 22 21 TABLE OF CONTENTS
(continued)
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Section 5.05. Application of Redemption Fund ......................................................................... 22 Section 5.06. Investments ........................................................................................................... 22 Section 5.07. Rebate Fund .......................................................................................................... 23 Section 5.08. Establishment and Application of Rate Stabilization Fund .................................. 25 Section 5.09. Reserved ............................................................................................................... 25 Section 5.10. Application of Funds and Accounts When No 2022A Bonds are Outstanding .... 25

ARTICLE VI

PARTICULAR COVENANTS
Section 6.01. Punctual Payment ................................................................................................. 25 Section 6.02. Extension of Payment of 2022A Bonds ................................................................ 25 Section 6.03. Against Encumbrances ......................................................................................... 25 Section 6.04. Power to Issue 2022A Bonds and Make Pledge and Assignment ........................ 26 Section 6.05. Accounting Records and Financial Statements .................................................... 26 Section 6.06. Tax Covenants ...................................................................................................... 26 Section 6.07. Waiver of Laws ..................................................................................................... 27 Section 6.08. Further Assurances ............................................................................................... 27 Section 6.09. Budgets ................................................................................................................. 28 Section 6.10. Observance of Laws and Regulations ................................................................... 28 Section 6.11. Compliance with Contracts ................................................................................... 28 Section 6.12. Prosecution and Defense of Suits ......................................................................... 28 Section 6.13. [Reserved.] ............................................................................................................ 29 Section 6.14. Additional Contracts and Bonds ........................................................................... 29 Section 6.15. Against Sale or Other Disposition of Property ..................................................... 29 Section 6.16. Against Competitive Facilities ............................................................................. 30 Section 6.17. Maintenance and Operation of the Water System ................................................ 30 Section 6.18. Payment of Claims ................................................................................................ 30 S
ection 6.19. Insurance ............................................................................................................... 30 Section 6.20. Payment of Taxes and Compliance with Governmental Regulations .................. 31 Section 6.21. Amount of Rates and Charges .............................................................................. 31 Section 6.22. Collection of Rates and Charges ........................................................................... 31 Section 6.23. Eminent Domain Proceeds ................................................................................... 31 Section 6.24. Enforcement of Cont racts ..................................................................................... 31

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES OF 2022A BOND OWNERS
Section 7.01. Events of Default .................................................................................................. 32 Section 7.02. Remedies Upon Event of Default ......................................................................... 32 Section 7.03. Application of Revenues and Other Funds After Default ..................................... 33 Section 7.04. Trustee to Represent 2022A Bond Owners .......................................................... 34 Section 7.05. 2022A Bond Owners’ Direction of Proceedings .................................................. 34 Section 7.06. Suit by Owners ..................................................................................................... 35 Section 7.07. Absolute Obligation of the City ............................................................................ 35 Section 7.08. Remedies Not Exclusive ....................................................................................... 35 22 TABLE OF CONTENTS
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Section 7.09. No Waiver of Default ........................................................................................... 35

ARTICLE VIII

THE TRUSTEE
Section 8.01. Duties, Immunities and Liabilities of Trustee ...................................................... 36 Section 8.02. Merger or Consolidation ....................................................................................... 37 Section 8.03. Liability of Trustee ............................................................................................... 37 Section 8.04. Right to Rely on Documents ................................................................................. 40 Section 8.05. Preservation and Inspection of Documents .......................................................... 40 Section 8.06. Compensation and Indemnification ...................................................................... 40

ARTICLE IX

MODIFICATION OR AMENDMENT OF THE INDENTURE
Section 9.01. Amendments Permitted ........................................................................................ 41 Section 9.02. Effect of Supplemental Indenture ......................................................................... 42 Section 9.03. Endorsement of 2022A Bonds; Preparation of New 2022A Bonds ..................... 42 Section 9.04. Amendment of 2022A Bonds ............................................................................... 42

ARTICLE X

DEFEASANCE
Section 10.01. Discharge of Indenture ......................................................................................... 43 Section 10.02. Discharge of Liability on 2022A Bonds ............................................................... 43 Section 10.03. Deposit of Money or Securi ties with Trustee ....................................................... 43 Section 10.04. Payment of 2022A Bonds After Discharge of Indenture ...................................... 44

ARTICLE XI

MISCELLANEOUS
Section 11.01. Liability of City Limited to Revenues .................................................................. 45 Section 11.02. Successor Is Deemed Included in All Refere nces to Predecessor ........................ 45 Section 11.03. Limitation of Rights to Parties and 2022A Bond Owners .................................... 45 Section 11.04. Waiver of Notice; Requirement of Mailed Notice ................................................ 45 Section 11.05. Destruction of 2022A Bonds ................................................................................ 45 Section 11.06. Severability of Invalid Provisions ........................................................................ 45 Section 11.07. Notices .................................................................................................................. 46 Section 11.08. Evidence of Rights of 2022A Bond Owners ........................................................ 46 S
ection 11.09. Disqualified 2022A Bonds ................................................................................... 46 Section 11.10. Money Held for 2022A Bonds ............................................................................. 47 Section 11.11. Funds and Accounts .............................................................................................. 47 Section 11.12. Waiver of Personal Liability ................................................................................. 47 Section 11.13. Execution in Several Counterparts ....................................................................... 47 23 TABLE OF CONTENTS
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Section 11.14. Choice of Law....................................................................................................... 47 Section 11.15. Additional Rights of Original Purchaser .............................................................. 47

Signatures ............................................................................................................................ S-1 Exhibit A Form of 2022A Bond .......................................................................................... A-1 Exhibit B Description of Prior Project ................................................................................ B-1 Exhibit C Form of Purchaser’s Certificate .......................................................................... C-1 Exhibit D Form of Election of Conversion to Tax-Exempt Rate ........................................ D-1 Exhibit E Form of Opinion and Reliance Letter of Bond Counsel ..................................... E-1 Exhibit F Form of Owner’s Certificate ............................................................................... F-1

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INDENTURE OF TRUST
This INDENTURE OF TRUST is made and entered into and dated as of May 1, 2022 (the “Indenture”), by and between the CITY OF SANGER, a municipal corporation that is duly organized and existing under the Constitution of the State of California (the “City”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association that is duly organized and existing under the laws of the United States of America, as trustee hereunder (the “Trustee”).

RECITALS
A. The City previously entered into an Installment Sale Agreement (the “ 2013 Installment Sale Agreement”), dated as of November 1, 2013, with the Sanger Financing Authority (the “Authority”) in connection with the issuance by the Authority of its Water Revenue Bonds, Series 2013 (the “2013 Bonds”), the proceeds of which were used to finance the acquisition and construction of certain improvements and facilities of the City’s municipal water system.

B. The City desires to pay and prepay the installment payments due under the 2013 Installment Sale Agreement (the “2013 Installment Payments”) in full, causing the payment and redemption of the 2013 Bonds in full.

C. The City is authorized pursuant to Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with Section 53570) of the Government Code of the State of California to issue water revenue refunding bonds for the purpose of paying and prepayi ng the 2013 Installment Sale Agreement.

D. In order to provide for the authentication and delivery of w ater revenue refunding bonds (the “ 2022A Bonds ”), to establish and declare the terms and conditions upon which such 2022A Bonds are to be issued and secured and to secure the payment of the principal thereof and interest and premium, if any, thereon, the City has authorized the execution and delivery of this Indenture.

E. The City has determined that all acts and proceedings required by law necessary to make the 2022A Bonds, when executed by the City, authenticated and delivered by the Trustee, and duly issued, the valid, binding and legal special obligations of the City, and to constitute the Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of the Indenture have been in all respects duly authorized;

GRANTING CLAUSES
The City, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the mutual covenants herein contained and of the purchase and acceptance of the 2022A Bonds by the Owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, in order to secure the payment of the principal of and the interest and premium (if any) on the 2022A Bonds at any time issued and Outstanding under the Indenture and to secure the performance and observance of all the covenants and conditions therein and herein set forth, does hereby assign and pledge unto, and grant a security interest in, the following (the “Trust 25 2
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Estate”) to the Trustee, and its successors in trust and assigns forever, for the securing of the performance of the obligations of the City to the 2022A Bond Owners hereinafter set forth:

FIRST
All right, title and interest of the City in and to the Revenues (as such term is defined herein), including, but without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive and receipt for any Revenues payable to or receivable by the City under the Constitution of the State, the Government Code of the State, the Indenture and any other applicable laws of the State or otherwise, to bring actions and proceedings thereunder for the enforcement thereof, and to do any and all things which the City is or may become entitled to do thereunder, subject to the terms hereof.

SECOND
All moneys and securities held in funds and accounts of this Indenture, except amounts held in the Costs of Issuance Fund and the Rebate Fund, and all other rights of every name and nature from time to time herein or hereafter by delivery or by writing of any kind pledged, assigned or transferred as and for additional security hereunder to the Trustee by the City or by anyone on its behalf, or with its written consent, and to hold and apply the same, subject to the terms hereof.

TO HAVE AND TO HOLD all and singular the Trust Estate, whether now owned or hereafter acquired, unto the Trustee and its respective successors in trust and assigns forever for the benefit of the Owners, and such pledge shall constitute a lien on and security interest in such Trust Estate;
IN TRUST, upon the terms and trusts herein set forth for the benefit, security and protection of the Owner of the 2022A Bonds;
PROVIDED, HOWEVER, that if the City, its successors or assigns shall well and truly pay, or cause to be paid, the principal of and interest and any redemption premium on the 2022A Bonds due or to become due thereon, at the times and in the manner provided in the 2022A Bonds according to the true intent and meaning thereof, and shall well and truly keep, perform and observe all of the covenants and conditions pursuant to the terms of the Indenture to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee all sums of money due or to become due in accordance with the terms and provisions hereof, then upon such final payments or deposits as herein provided, the Indenture and the rights hereby granted shall cease, terminate and be void; otherwise the Indenture shall remain in full force and effect.

It is expressly declared that all 2022A Bonds issued and secured hereunder are to be issued, authenticated and delivered, and all sold property, rights and interests, including, without limitation, the Revenues, hereby assigned and pledged, are to be dealt with and disposed of, under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes hereinafter expressed, and the City has agreed and covenanted and does hereby covenant and agree with the Trustee, for the benefit of the Owners from time to time of the 2022A Bonds, as follows:
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ARTICLE I

DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall, for all purposes of the Indenture and of any indenture supplemental hereto and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined.

Accountant’s Report. The term “Accountant’s Report” means a report signed by an Independent Certified Public Accountant.

Accredited Investor. The term “Accredited Investor” is as defined in Rule 501(a)(1),(2),(3), or (7) of the Securities Act of 1933, as amended.

Authority. The term “Authority” means the Sanger Financing Authority.

Authorized Denomination. The term “Authorized Denomination” means, for the 2022A Bond, the principal amount thereof, as reduced by payment or redemption, as provided therein.

Authorized Representative. The term “Authorized Representative” means, with respect to the City, its Mayor, Mayor Pro Tem, City Clerk, City Manager , Finance Director or any other person designated as an Authorized Representative of the City by a Certificate of the City signed by its Mayor, Mayor Pro Tem, City Clerk, City Manager or Finance Director and filed with the Trustee.

Bond Counsel. The term “Bond Counsel” means Stradling Yocca Carlson & Rauth, a Professional Corporation, or another firm of nationally recognized attorneys experienced in the issuance of obligations the interest on which is excludable from gross income under Section 103 of the Code.

Bonds. The term “Bonds” means all revenue bonds or notes of the City authorized, executed, issued and delivered by the City, the payments of which are payable from Net Revenues on a parity with the 2022A Bonds and which are secured by a pledge of and lien on Revenues as described in Section 5.01 hereof, including the City’s 2022A Water Revenue Refunding Bonds.

Bond Year. The term “Bond Year” has the meaning that is set forth in the Tax Certificate.

Business Day. The term “Business Day” means: (1) a day which is not a Saturday, Sunday or legal holiday on which banking institutions in the State, or in any other state in which the Office of the Trustee is located, are closed; or (2) a day on which the New York Stock Exchange is not closed.

Certificate; Direction; Request; Requisition. The terms “Certificate,” “Direction,” “Request” and “Requisition” of the City mean a written certificate, direction, request or requisition signed in the name of the City by its Authorized Representative. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. If and to the extent required by Section 1.02, each such instrument shall include the statements provided for in Section 1.02.
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City. The term “City” means the City o f Sanger, a municipal corporation that is duly organized and existing under the general laws and Constitution of the State of California.

Closing Date. The term “Closing Date” means the date on which the 2022A Bonds are delivered to the original purchaser thereof.

Code. The term “Code” means the Internal Revenue Code of 1986, as amended.

Contracts. The term “Contracts” means all contracts of the City previously or hereafter authorized and executed by the City, the payments under which are payable from Net Revenues on a parity with the 2022A Bonds and which are secured by a pledge and lien on Revenues as described in Section 5.01 hereof, but excluding contracts entered into for operation and maintenance of the Water System.

Costs of Issuance. The term “Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City and related to the authorizati on, issuance, sale and delivery of the 2022A Bonds, including but not limited to costs of preparation and reproduction of documents, printing expenses, filing and recording fees, initial fees and charges of the Trustee and Escrow Agent and counsel to the T rustee and Escrow Agent, legal fees and charges, fees and disbursements of consultants and professionals, fees and charges for preparation, execution and safekeeping of the 2022A Bonds and any other cost, charge or fee in connection with the original issuance of the 2022A Bonds.

Costs of Issuance Fund. The term “Costs of Issuance Fund” means the fund by that name established pursuant to Section 3.03.

Date of Taxability . The term “Date of Taxability ” means the date from and after which interest on the 2022A Bonds is subject to federal income taxation as a result of a Determination of Taxability.

Debt Service. The term “Debt Service” means, for any period of calculation, the sum of:
(1) the interest accruing during such period on all outstanding Bonds, assuming that all outstanding serial Bonds are retired as scheduled and that all outstanding term Bonds are prepaid or paid from sinking fund payments as scheduled (except to the extent that such interest is capitalized or is reasonably anticipated to be reimbursed to the City by the United States of America pursuant to Section 54AA of the Code (Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5, 23 Stat. 115 (2009), enacted February 17, 2009)), or any future similar program);
(2) that portion of the principal amount of all outstanding serial Bonds maturing in such period or maturing in the next succeeding period accruing during such period, in each case computed as if such principal amounts were deemed to accrue daily during such period in equal amounts;
(3) that portion of the principal amount of all outstanding term Bonds required to be prepaid or paid in such period or during the next succeeding period in each case comput ed as if such principal amounts were deemed to accrue daily during such period in equal amounts; and 28 5
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(4) that portion of the Contracts required to be made during such period or during the next succeeding period, in each case computed as if such payments on such Contracts were deemed to accrue daily during such period in equal amounts (except to the extent that the interest portion of such Contracts is capitalized);
provided that, as to any such Bonds or Contracts bearing or comprising interest at other than a fixed rate, the rate of interest used to calculate Debt Service shall be the greater of: (a) the actual interest rate on such Bonds or Contracts on the date of calculation, or if the indebtedness is not yet outstanding, the initial interest rate (if est ablished and binding); (b) if the Bonds or Contracts have been outstanding for at least twelve months, the average rate over the twelve calendar months immediately preceding the date of calculation; and (c) (i) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Code, the most recently published Securities Industry and Financial Markets Association Index for tax-exempt variable rate obligations; or (ii) if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities plus 50 basis points; provided, however, that for purposes of any portion of Section 6.14 (Additional Contracts and Bonds ) and Section 6.21 (Amount of Rates and Charges), measuring actual debt service coverage during a test period, variable rate indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the test period; and provided further that, if any series or issue of such Bonds or Contracts have twenty-five percent (25%) or more of the aggregate principal amount of such series or issue due in any one year, Debt Service shall be determined for the Fiscal Year of determination as if the principal of and interest on such series or issue of such Bonds or Contracts were being paid from the date of incurrence thereof in substantially equal annual amounts over a period of twenty-five (25) years from the date of calculation; and
provided further that, as to any such Bonds or Contracts or portions thereof bearing no interest but which are sold at a discount and which discount accretes with respect to such Bonds or Contracts or portions thereof, such accreted discount shall be treated as interest in the calculation of Debt Service; and
provided further that, the amount on deposit in a debt service reserve fund on any date of calculation of Debt Service shall be deducted from the amount of principal due at the final maturity of the Bonds and Contracts for which such debt service reserve fund was established and in each prec eding year until such amount is exhausted; and
provided further that, Debt Service shall not include interest which is paid from investment earnings on amounts on deposit in reserve funds and transferred to the Payment Fund; and Default Rate. The term “Default Rate” means the interest rate on the 2022A Bonds then in effect, plus 3.0% per annum.

Determination of Taxability. The term “Determination of Taxability ” means any determination, decision, or decree made by the Commissioner or any District Director of the Internal Revenue Service, or by any court of competent jurisdiction, that as a result of any actions or omissions of the City with respect to the 2022A Bonds the interest payable on the 2022A Bonds is includable in the gross income for federal income tax purposes of the Owner of the 2022A Bonds, provided, however, that no such Determination of Taxability shall be deemed to have occurred if the City is contesting such determination in good faith and is diligently proceeding to prosecute such 29 6
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contest until the earliest of (a) a final determination from which no appeal may be taken with respect to such determination, or (b) abandonment of such appeal by the City.

Escrow Agent . The term “Escrow Agent” m eans U.S. Bank Trust Company, N ational Association, as escrow agent under the Escrow Agreement, or any successor thereto.

Escrow Agreement. The term “Escrow Agreement” means that certain Escrow Agreement, dated as of May 1, 2022, by and between the City and the Escrow Agent, for the purpose of defeasing the 2013 Bonds.

Event of Default. The term “Event of Default” means any of the events specified in Section

7.01. Federal Securities . The term “Federal Securities” means any direct, noncallable general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or noncallable obligations the timely payment of principal of and interest on which are fully and unconditionally guaranteed by the United States of America.

Fiscal Year. The term “Fiscal Year” means the twelve month period beginning on July 1 of each year and ending on the next succeeding June 30, both dates inclusive, or any other twelve month period hereafter selected and designated as the official fiscal year period of the City.

Fitch. The term “Fitch” means Fitch Ratings, Inc., or any successor thereto.

Generally Accepted Accounting Principles . The term “Generally Accepted A ccounting Principles” means the uniform accounting and reporting procedures set forth in publications of 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.

Indenture. The term “Indenture” means the Indenture of Trust, dated as of May 1, 2022, by and between the City and the Trustee, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture.

Independent Certified Public Accountant. The term “Independent Certified Public Accountant” means any firm of certified public accountants appointed by the City, each of whom is independent of the City pursuant to the Statement on Auditing Standards No. 1 of the American Institute of Certified Public Accountants.

Independent Financial Consultant. The term “Independent Financial Consultant” means a financial consultant or firm of such consultants appointed by the City, who, or each of whom: (1) is in fact independent and not under domination of the City; (2) does not have any substantial interest, direct or indirect, with the City; (3) is not connected with the City as an officer or employee thereof, but who may be regularly retained to make reports thereto; and (4) is registered as a “municipal advisor,” as defined in Section 15B of the Securities Exchange Act of 1934, as amended.

Interest Account. The term “Interest Account” means the account by that name in the Payment Fund established pursuant to Section 5.02.
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Interest Payment Date. The term “Interest Payment Date” means December 15, 2022 and each June 15 and December 15 thereafter until maturity of the 2022A Bonds, or the earlier redemption thereof.

Investment Agreement. The term “Investment Agreement” means any investment agreement (including guaranteed investment contracts, forward delivery agreements, repurchase agreements or similar obligations) with, or guaranteed by, an entity the long-term unsecured obligations or the claims paying ability of which are rated “A” or better by a nationally recognized rating agency (without regard to gradations or modifiers within such category) at the time of initial investment.

Moody’s. The term “Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.

Net Proceeds. The term “Net Proceeds” means, when used with respect to any casualty insurance or condemnation award, the proceeds from such insurance or condemnation award remaining after payment of all expenses (including attorneys’ fees) incurred in the collection of such proceeds.

Net Revenues . The term “Net Revenues” means, for any period, the Revenues for such period less the Operation and Maintenance Costs for such period. When held by the Trustee in any funds or accounts established hereunder, Net Revenues shall include all interest or gain derived from the investment of amounts in any of such funds or accounts.

Office. The term “Office” means with respect to the Trustee, the corporate trust office of the Trustee in Los Angeles, California, or such other or additional offices as may be specified in writing by the Trustee to the City, except that with respect to presentation of 2022A Bonds for payment or for registration of transfer and exchange, such term means the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted.

Operation and Maintenance Costs. The term “Operation and Maintenance Costs” means costs spent or incurred for maintenance and operation of the Water System calculated in accordance with Generally Accepted Accounting Principles applicable to governmental agencies, including, but not limited to, the reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Water System in good repair and working order, and including administrative costs of the City that are charged directly or apportioned to the Water System , including but not limited to salaries and wages of employees, payments to the Public Employees Retirement System, overhead, insurance, taxes (if any), fees of auditors, accountants, attorneys or engineers and insurance premiums, and including all other reasonable and necessary costs of the City or charges (other than debt service payments) required to be paid by it to comply with the terms of the 2022A Bonds or of this Indenture or any Contract or of any resolution or indenture authorizing the issuance of any Bonds or of such Bonds; but excluding in all cases depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature.

Opinion of Counsel. The term “Opinion of Counsel” means a written opinion of counsel (including but not limited to counsel to the City) selected by the City. If and to the extent required by the provisions of Section 1.02, each Opinion of Counsel shall include the statements provided for in Section 1.02.
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Original Purchaser. The term “Original Purchaser” means Webster Bank , National Association, as the initial purchaser of the 2022A Bonds, and any affiliate thereof.

Outstanding. The term “Outstanding,” when used as of any particular time with reference to 2022A Bonds, means (subject to the provisions of Section 11.09) the 2022A Bonds theretofore or thereupon being authenticated and delivered by the Trustee under the Indenture except: (i) 2022A Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; and (ii) 2022A Bonds for the transfer or exchange of or in lieu of or in substitution for which other 2022A Bonds shall have been authenticated and delivered by the Trustee pursuant to the Indenture.

Owner; Owners 2022A Bond Owner. The term “Owner ,” “Owners” or “ 2022A Bond Owner,” whenever used herein with respect to the 2022A Bond, means the person in whose name the ownership of the 2022A Bond is registered on the Registration Books. For all purposes of this Indenture, all references to “Owners” shall mean the registered Owner of the single 2022A Bond issued hereunder.

Payment Fund. The term “Payment Fund” means the fund by that name established pursuant to Section 5.02.

Permitted Investments. The term “Permitted Investments” means any of the following which at the time of investment are legal investments under the l aws of the State for the moneys proposed to be invested therein. The Trustee is entitled to rely upon the written investment direction of the City as a representation that such investment constitutes a legal investment under the laws of the State.
(a) for all purposes, including but not limited to defeasance investments in refunding escrow accounts: (1) cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in paragraph (2) below); and (2) direct obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury, including REFCORP Interest STRIPS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America; and
(b) for all purposes other than defeasance investments in refunding escrow accounts: (1) obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including the Export - Import Bank; Farmers Home Administration; General Services Administration; U.S. Maritime Administration; Government National Mortgage Association (GNMA); U.S. Department of Housing & Urban Development (PHA’s); and Federal Housing Administration; (2) bonds, notes or other evidences of indebtedness rated at least “AA-” or “Aa3” by the applicable Rating Agency issued by Fannie Mae or the Federal Home Loan Mortgage Corporation with remaining maturities not exceeding three years; (3) U.S. dollar denominated deposit accounts, certificates of deposit (including those placed by a third party pursuant to a separate agreement between the City and the Trustee), other deposit products, time deposits, trust funds, trust accounts, interest -bearing deposits, overnight bank deposits, interest - bearing money market accounts, federal funds and banker’s acceptances with domestic commercial banks (including the Trustee and its affiliates) which are either insured by the Federa l Deposit Insurance Corporation or have a rating on their short term certificates of deposit on the date of purchase of “A-1” or “A-1+” by S&P and “P -1” by Moody’s and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); 32 9
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(4) commercial paper which is rated at the time of purchase in the single highest classification, “A-1+” by S&P and “P-1” by Moody’s and which matures not more than 270 days after the date of purchase; (5) investments in a money market fund rated “AAm”, “AAm -G”, “AAAm” or “AAAm- G” or better by S&P, including such funds for which the Trustee or an affiliate receives and retains a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise; (6) pre-refunded municipal obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice and which are rated, based on the escrow, in the highest rating category of S&P and Moody’s; (7) any Investment Agreement; and (8) the Local Agency Investment Fund.

Principal Account . The term “Principal Account” means the account by that name in the Payment Fund established pursuant to Section 5.02.

Prior Project. The term “Prior Project” means the capital improvements to the Water System financed from proceeds of the 2013 Bonds, as described in Exhibit B.

Purchaser’s Certificate. The term “Purchaser’s Certificate” means a letter in substantially the form that is set forth in Exhibit C.

Qualified Institutional Buyer . The term “Qualified Institutional Buyer” means “qualified institutional buyer” as defined in Rule 144A promulgated under the Securities Act of 1933, as in effect on the date hereof.

Rate Stabilization Fund . The term “Rate Stabilization Fund” means the fund by that name established pursuant to Section 5.08.

Rating Agencies. The term “Rating Agencies” means S&P, Moody’s or Fitch, as the context dictates.

Rebate Fund. The term “Rebate Fund” means the fund by that name established pursuant to Section 5.07.

Record Date. The term “Record Date” means, with respect to any Interest Payment Date, the first (1st) day of the calendar month in which such Interest Payment Date occurs, whether or not such day is a Business Day.

Redemption Date. The term “Redemption Date” means the date fixed for an optional redemption prior to maturity of the 2022A Bonds.

Redemption Fund. The term “Redemption Fund” means the fund by that name established pursuant to Section 5.05.

Redemption Price. The term “Redemption Price” means, with respect to any 2022A Bond, the principal amount of such 2022A Bond plus the interest accrued to the Redemption Date and the applicable premium, if any, payable upon redemption thereof pursuant to the provisions of such 2022A Bond and the Indenture.
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Registration Books. The term “Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the 2022A Bonds pursuant to Section 2.05.

Responsible Officer of the Trustee. The term “Responsible Officer of the Trustee” means any officer within the corporate trust services division (or any successor group or department of the Trustee) including any vice president, assistant vice president, assistant secretary or any other officer or assistant officer of the Trustee within the Office (or any successor corporate trust office) customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Office because of such person’s knowledge of any familiarity with the particular subject and having direct responsibility for the administration of this Indenture.

Revenue Fund. The term “Revenue Fund” means the Water Fund of the City and/or such other fund or account of the City in which Revenues are deposited.

Revenues. The term “Revenues” means all interest, profits or other income derived from the investment of amounts in any fund or account established pursuant to this Indenture.

Separate Facilities. The term “Separate Facilities” means any capital items acquired on or after the date hereof and which were not financed from the proceeds of Bonds or Contracts of the City having a parity claim on the Revenue Fund or Revenues.

S&P. The term “S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, or any successor thereto.

State. The term “State” means the State of California.

Supplemental Indenture. The term “Supplemental Indenture” means any indenture hereafter duly authorized and entered into between the City and the Trustee, supplementing, modifying or amending the Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.

Tax Certificate . The term “Tax Certificate” means the Tax Certificate dated the Closing Date, concerning certain matters pertaining to the use and investment of proceeds of the 2022A Bonds issued by the City on the date of issuance of the 2022A Bonds, including any and all exhibits attached thereto.

Taxable Interest. The term “Taxable Interest” means the interest borne by the 2022A Bonds prior to the Tax -Exempt Reissuance Date, which interest shall be included in gross income for federal income tax purposes.

Taxable Rate. The term “Taxable Rate” means the rate of 4.09% per annum.

Tax-Exempt Interest. The term “Tax-Exempt Interest” means the interest to be borne by the 2022A Bonds on and after the Tax -Exempt Reissuance Date, which interest is ex cluded from gross income for federal income tax purposes.

Tax-Exempt Rate. The term “Tax-Exempt Rate” means the rate of 3.228% per annum. 34 11
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Tax-Exempt Reissuance Date. The term “Tax-Exempt Reissuance Date” means the date on which the 2022A Bonds bearing Taxable Interest are reissued (for federal income tax purposes) for Bonds bearing Tax-Exempt Interest pursuant to Section 2.09 hereof.

Trustee. The term “Trustee” means U.S. Bank Trust Company, N ational Association , a national banking association duly organized and existing under the laws of the United States of America, or its successor as Trustee hereunder as provided in Section 8.01. 2013 Bonds. The term “2013 Bonds” means the Sanger Financing Authority Water Revenue Bonds, Series 2013.
2013 Installment Payments. The term “2013 Installment Payments” means the installment payments owed by the City under the 2013 Installment Sale Agreement. 2013 Installment Sale Agreement. The term “201 3 Installment Sale Agreement” means that certain Installment Sale Agreement, dated as of November 1, 2013, by and between the City and the Authority.
2022A Bonds; 2022A Bond. The term “2022A Bonds” and “2022A Bond” means the City of Sanger 2022A W ater Revenue Refunding Bonds issued by the City and at any time Outstanding pursuant to the Indenture. For all purposes of this Indenture, all references to “2022A Bonds” shall mean the single fully registered 2022A Bond issued under this Indenture.

Water Fund. The term “Water Fund” means the City’s existing water system fund, established and held by the City with respect to the City’s Water System.

Water System. The term “Water System” means any and all facilities, properties and improvements at any time controlled or operated by the City used or pertaining to the supply of water, consisting of the entire water production and distribution enterprise of the City, including all additions, extensions, expansions, improvements and betterments thereto and equipping thereof and any necessary lands, rights of way and other real and personal property useful in connection therewith, but exclusive of any portion of the existing system not required for the continued operation thereof; provided however, that to the extent the City is not the sole owner of an as set or property, or lessee thereof from the City, only the City’s ownership interest in such asset or property or leasehold interest therein from the City shall be considered a part of the Water System.

Written Consent of the City; Written Order of the Cit y; Written Request of the City; Written Requisition of the City. The terms “Written Consent of the City,” “Written Order of the City,” “Written Request of the City” and “Written Requisition of the City” mean, respectively, a written consent, order, request or requisition signed by or on behalf of the City by an Authorized Representative of the City or by any two persons who are specifically authorized by resolution of the City to sign or execute such a document on its behalf.

Section 1.02. Content of Certificates and Opi nions. Every certificate or opinion provided for in the Indenture except the certificate of destruction provided for in Section 11.05 hereof, with respect to compliance with any provision hereof shall include: (a) a statement that the person making or giving such 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 certificate or opinion is based; (c) a statement that, in the opinion of such person he or she 35 12
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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 certificate or opinion 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.

Any such certificate or opinion made or given by an officer of the City may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an Independent Certified Public Accountant or Independent Financial Consultant, unless such officer 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 certificate or statement may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel or an Independent Certified Public Accountant or Independent Financial Consultant may be based, insofar as it relates to factual matters (with respect to which information is in the po ssession of the City) upon a certificate or opinion of or representation by an officer of the City, unless such counsel or Independent Certified Public Accountant or Independent Financial Consultant 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 officer of the City, or the same counsel or Independe nt Certified Public Accountant or Independent Financial Consultant, as the case may be, need not certify to all of the matters required to be certified under any provision of the Indenture, but different officers, counsel or Independent Certified Public Accountants or Independent Financial Consultants may certify to different matters, respectively.

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

ARTICLE II

THE 2022A BONDS
Section 2.01. Authorization of 2022A Bonds . The City hereby authorizes the issuance hereunder of the 2022A Bonds, which shall constitute special obligations of the City, for the purpose of defeasing the 2013 Installment Payments, and the associated 201 3 Bonds, in full. The 2022A Bonds are issued as a single, fully registered bond and hereby designated the “City of Sanger 2022A Water Revenue Refunding Bonds” in the aggregate principal amount of $__________. The 36 13
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Indenture constitutes a continuing agreement with the Owners from time to time of the 2022A Bonds to secure the full payment of the principal of and interest and premium (if any) on the 2022A Bonds, subject to the covenants, provisions and conditions herein contained.

Section 2.02. Terms of the 2022A Bonds.

The 2022A Bonds shall mature on June 15, 2043. From the Closing Date of the 2022A Bonds until the Tax-Exempt Reissuance Date, the 2022A Bonds shall bear interest at the Tax able Rate (calculated on the basis of a 360-day year comprised of twelve 30-day months) and on and after the Tax -Exempt Reissuance Date, if any, the 2022A Bonds shall bear interest at the Tax -Exempt Rate (calculated on the basis of a 360-day year comprised of twelve 30- day months); provided, however, that so long as any event of default as provided in Section 7.01 shall have occurred and is continuing, the interest rate on the 2022A Bonds may, at the option of the Owner of the 2022A Bonds, be increased to the Default Rate and interest thereon shall be calculated in accordance with the definition of Default Rate; provided further, however, from and after the Date of Taxability following a Determination of Taxability, the interest rate on the 2022A Bonds shall be increased to the Taxable Rate. Interest on the 2022A Bonds shall be payable on each Interest Payment Date, commencing December 15, 2022. The 2022A Bonds shall be issued in fully registered form, registered in the Registration Books in the name of the Original Purchaser, as a single certificate d bond, without coupons.

Interest on the 2022A Bonds shall be payable on each Interest Payment Date to the person whose name appears on the Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Trustee sent by first class mail on the applicable Interest Payment Date to the Owner at the address of such Owner as it appears on the Registration Books (except that in the case of an Owner of one million dollars ($1,000,000) or more in principal amount, such payment may, at such Owner’s option, be made by wire transfer of immediately available funds to an account in the United States in accordance with written instructions provided to the Trustee by such Owner prior to the Record Date.

Principal of and premium (if any) on any 2022A Bond shall be paid by check of the Trustee. Both the principal of and interest and premium (if any) on the 2022A Bonds shall be payable in lawful money of the United States of America.

Notwithstanding anything herein to the contrary, so long as the 2022A Bonds are owned by the Original Purchaser: (i) the Trustee shall pay principal of and interest and premium on, if any, on the 2022A Bonds when due by wire transfer in immediately available funds to the Original Purchaser in accordance with such wire transfer instructions as shall be filed by the Original Purchaser with the Trustee from time to time; (ii) payments of principal on the 2022A Bonds shall be made without the requirement for presentation and surrender by the Original Purchaser, provided that principal which is payable at maturity shall be made only upon presentation and surrender at the Office of the Trustee; and (iii) the Trustee shall not be required to give notice to the Original Purchaser of the mandatory sinking fund payments described in Section 4.01(c).

The 2022A Bond shall be dated the date of initial delivery, and shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless: (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) unless it is authenticated on or before December 1, 2022, in which event it shall bear interest from the date of initial delivery; provided, however, that if, as of the date of authentication of the 2022A Bond, interest thereon is in default, such 2022A Bond 37 14
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shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. Interest on the 2022A Bonds shall be calculated on the basis of a 360- day year composed of twelve 30-day months.

The 2022A Bonds shall be initially delivered as a single registered Bond in the name of the Original Purchaser and shall not be delivered as book-entry Bonds. The 2022A Bonds shall not be assigned CUSIPS, be issued pursuant to any type of offering document or official statement and shall not receive a rating from any rating agency.

Section 2.03. Transfer of 2022A Bonds . Subject to the limitations in the following paragraph, the 2022A Bond may, in accordance with its terms, be transferred upon the Registration Books by the person in whose name it is registered to (a) an affiliate or the Owner or (b) banks, insurance compan ies or other financial institutions , in person or by such person’s duly authorized attorney, upon surrender of such 2022A Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. The Trustee shall not be required to register the transfer of the 2022A Bond during the period in which the 2022A Bond has been called for redemption. Whenever any 2022A Bond shall be surrendered for transfer, the City shall execute and the Trustee shal l authenticate and shall deliver a new 2022A Bond or Bonds in an Authorized D enomination. The Trustee shall require the 2022A Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.

Nothing herein shall limit the right of the Owner or its assignees to sell or assign a participation interest in the 2022A Bond to one or more entities listed in (a) or (b) of this paragraph.

A 2022A Bond Owner may only transfer the 2022A Bonds to a new 2022A Bond Owner in whole, and not in part, and only if the new 2022A Bond Owner has delivered a Purchaser’s Certificate (in the form that is set forth in Exhibit C) to the City and the Trustee and if the new 2022A Bond Owner is either an Accredited Investor or a Qualified Institutional Buyer. For purposes of such a transfer, the Trustee may rely upon all new 2022A Bond Owner representations as set forth in the Purchaser’s Certificate.

The transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Code Section 6045, as amended. The Trust ee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.

Section 2.04. Exchange of 2022A Bonds. 2022A Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount, in an Authorized Denomination. The Trustee shall not be required to exchange any 2022A Bond during the period in which the 2022A Bonds have been called for redemption. The Trustee shall require the 2022A Bond Owner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange.

Following any exchange of 2022A Bonds, the Trustee will cancel and destroy the 2022A Bonds that it has received.

Section 2.05. Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the 2022A Bonds, which shall upon reasonable notice and at reasonable times be open to inspection during regular business hours by the City and the Owners; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be 38 15
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registered or transferred, on such records, the ownership of the 2022A Bonds as hereinbefore provided.

The person in whose name any 2022A Bond shall be registered shall be deemed the Owner thereof for all purposes hereof, and payment of or on account of the interest on and principal and Redemption Price of by such 2022A Bonds shall be made only to or upon the order in writing of such registered Owner, which payments shall be valid and effectual to satisfy and discharge liability upon such 2022A Bond to the extent of the sum or sums so paid.

Section 2.06. Form and Execution of 2022A Bonds . The 2022A Bonds shall be in substantially the form set forth in Exhibit A hereto. The 2022A Bonds shall be executed in the name and on behalf of the City with the manual or facsimile signature of its City Manager . The 2022A Bonds may carry a seal, and such seal may be in the form of a facsimile of the City’s seal and may be reproduced, imprinted or impressed on the 2022A Bonds. The 2022A Bonds shall then be delivered to the Trustee for authentication by it. In case any of the officers who shall have signed or attested the 2022A Bonds shall cease to be such officer or officers of the City before the 2022A Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the City, such 2022A Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the City as though those who signed and attested the same had continued to be such officers of the City, and also any 2022A Bonds may be signed and attested on behalf of the City by such persons as at the actual date of execution of such 2022A Bonds shall be the proper officers of the City although at the nominal date of such 2022A Bonds any such person shall not have been such officer of the City.

Only such of the 2022A Bonds as shall bear thereon a certificate of authentication substantially in the form set forth in Exhibit A hereto, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of the Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the 2022A Bond s so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of the Indenture.

Section 2.07. 2022A Bonds Mutilated, Lost, Destroyed or Stolen. If any 2022A Bond shall become mutilated, the City, at the expense of the Owner of said 2022A Bond , shall execute, and the Trustee shall thereupon authenticate and deliver, a new 2022A Bond of like tenor, series and authorized denomination in exchange and substitution for the 2022A Bonds so mutilated, but only upon surrender to the Trustee of the 2022A Bond so m utilated. Every mutilated 2022A Bond so surrendered to the Trustee shall be canceled by it and upon the Written Request of the City delivered to, or upon the order of, the City. If any 2022A Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the City, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new 2022A Bond in an Authorized Denomination in lieu of and in substitution for the 2022A Bond so lost, destroyed or stolen (or if any such 2022A Bond shall have matured or shall be about to mature, instead of issuing a substitute 2022A Bond, the Trustee may pay the same without surrender thereof). The City may require payment by the Owner of a sum not exceeding the actual cost of preparing each new 2022A Bond issued under this Section and of the expenses which may be incurred by the City and the Trustee in the premises. Any 2022A Bond issued under the provisions of this Section in lieu of any 2022A Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the City whether or not the 2022A Bond so alleged to be lost, destroyed, or 39 16
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stolen be at any time enforceable by anyone, and shall be entitled to the benefits of the Indenture.

Notwithstanding any other provision of this Section, in lieu of delivering a new 2022A Bond for a 2022A Bond which has been mutilated, lost, destroyed or stolen and which has matured or has been selected for redemption, the Trustee may make payment of such 2022A Bond upon receipt of indemnity satisfactory to the Trustee.

Section 2.08. Initial Delivery of 2022A Bonds . The 2022A Bonds shall be initially delivered as registered bonds in the name of the Owner and shall not be delivered as book entry bonds.

Section 2.09. Conversion to Tax-Exempt Rat e. The 2022A Bonds shall initially be issued bearing Taxable Interest. The interest rate on the 2022A Bonds shall convert to the Tax-Exempt Rate on any Business Day on or after June 15, 2023 , upon the satisfaction of the following conditions precedent to such conversion:
(a) The written election of the City to the Owner and the Trustee to convert the interest rate payable with respect to the 2022A Bonds to the Tax-Exempt Rate in the form attached hereto as Exhibit D;
(b) The issuance of an opinion of Bond Counsel to the effect that subject to the City’s compliance with certain covenants, interest payable with respect to the 2022A Bonds is excludable from gross income of the Owner thereof for federal income tax purposes, and is not included as an item of tax preference in computing the alternative minimum tax imposed on individuals under the Code substantially in the form attached hereto as Exhibit E; (c) Delivery of a Tax Certificate executed by the City with respect to certain tax matters relating to the 2022A Bonds after interest payable with respect thereto is converted to a Tax-Exempt Rate;
(d) Delivery of a new 2022A Bond to the Owner and the remittance of the prior 2022A Bond;
(e) The selection by the Owner of one of the four post -conversion optional redemption schedules provided in the form attached hereto as Exhibit F, which shall become applicable to the 2022A Bonds on and after the Tax-Exempt Reissuance Date to maturity or prior redemption; and
(f) The City prepares, executes and files on the Tax-Exempt Reissuance Date an IRS Form 8038-G (or other required information return) for filing after the Tax-Exempt Reissuance Date.

ARTICLE III

ISSUANCE OF 2022A BONDS; APPLICATION OF PROCEEDS
Section 3.01. Issuance of the 2022A Bonds . At any time after the execution of the Indenture, the City may execute and the Trustee shall authenticate and, upon Written Request of the City, deliver the 2022A Bonds in the aggregate principal amount of $__________. 40 17
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Section 3.02. Application of Proceeds of the 2022A Bonds. The proceeds of the sale of the 2022A Bonds received by the Trustee in the amount of $__________, together with $_____ being held in connection with the 2013 Bonds, shall be applied by the Trustee as follows:
(a) the Trustee shall transfer $__________ to the Escrow Agent for deposit to the Escrow Fund created under the Escrow Agreement; and
(b) the Trustee shall deposit $__________ into the Costs of Issuance Fund.

The Trustee may establish temporary funds or accounts in its records to record and facilitate such deposits.

Section 3.03. Establishment and Application of Costs of Issuance Fund. The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Costs of Issuance Fund.” The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay the Costs of Issuance upon submission of Written Requisitions of the City stating the person to whom payment is to be made, the amount to be paid along with payment instructions, the purpose for which the obligation was incurred, that such payment is proper charge against said fund and that payment for such charge has not previously been made.

Each such Written Requisition of the City shall be
sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On the six month anniversary of the issuance of the 2022A Bonds, or upon the earlier Written Request of the City, all amounts remaining in the Costs of Issuance Fund shall be transferred by the Trustee to the Interest Account and the Costs of Issuance Fund shall be closed.

Investment earnings on amounts on deposit in the Costs of Issuance Fund shall be applied in accordance with Section 5.06 hereof.

Section 3.04. Validity of 2022A Bonds . The validity of the authorization and issuance of the 2022A Bonds is not dependent on and shall not be affected in any way by any proceedings taken by the City or the Trustee with respect to any other agreement. The recital contained in the 2022A Bonds that the same are issued pursuant to the Constitution and laws of the State shall be conclusive evidence of the validity and of compliance with the provisions of law in their issuance.

ARTICLE IV

REDEMPTION OF 2022A BONDS
Section 4.01. Terms of Redemption.
(a) Prior to the Tax- Exempt Reissuance Date, t he 2022A Bonds shall be subject to optional redemption, as a whole but not in part , on any Interest Payment Date , as directed by the City in a Written Request provided to the Trustee and the Owner at least 3 0 days (or such lesser number of days acceptable to the Trustee and the O wner in the sole discretion of the Trustee and the Owner, such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:
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Redemption Date Redemption Price
June 15, 2024 to and including December 15, 2026 102%
June 15, 2027 to and including December 15, 2028 101
June 15, 2029 and any Interest Payment Date thereafter 100

(b) On and after the Tax-Exempt Reissuance Date, if any, the 2022A Bonds shall be subject to redemption in accordance with the selection of the Owner as provided in Section

2.09(e) hereof.
(c) The 2022A Bonds are subject to mandatory sinking fund redemption in part (by lot) on June 15, 2023 and each June 15 thereafter, in integral multiples of $1,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Mandatory Sinking Fund
Redemption Date
(June 15)
Principal
Amount
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043*

* Final Maturity.

If some but not all of the 2022A Bonds are redeemed pursuant to subsections (a) or (b) above, the principal amount of the applicable 2022A Bonds to be redeemed pursuant to this subsection (c) on any subsequent June 15 will be reduced, by $1,000 or an integral multiple thereof, as designated by the City in a Written Order of the City filed with the Trustee; provided, however, that the aggregate amount of such reductions shall not exceed the aggregate amount of the applicable 2022A Bonds redeemed pursuant to subsections (a) and (b) above. 42 19
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Section 4.02. Selection of 2022A Bond s for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the 2022A Bonds, the Trustee shall select the 2022A Bonds for redemption as a whole or in part on any date as directed by the City and by lot within each maturity in integral multiples of $1,000 in accordance with Section 4.01 hereof. The Trustee will promptly notify the City in writing of the numbers of the 2022A Bonds or portions thereof so selected for redemption.

Section 4.03. Notice of Redemption. Notice of redemption shall be mailed by first class mail at least thirty (30) days but not more than sixty (60) days before any Redemption Date, to the Owner of the 2022A Bonds at its address appearing on the Registration Books. The notice of redemption shall state the date of the notice, the Redemption Date, the place or places of redemption, the Redemption Price, and the Outstanding principal amount of the 2022A Bond. Such notice shall also state that on the Redemption Date there will become due and payable on the 2022A Bonds the Redemption Price thereof, together with interest accrued thereon to the Redemption Date, and that (provided that moneys for redemption have been deposited with the Trustee) from and after such Redemption Date interest thereon shall cease to accrue. Neither the failure to receive such notice nor any defect in the notice or the mailing thereof will affect the validity of the redemption of any 2022A Bond. Notice of redemption of 2022A Bonds shall be given by the Trustee, at the expense of the City, for and on behalf of the City.

With respect to any notice of optional redemption of 2022A Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on the 2022A Bonds and that, if such moneys shall not have been so received, said notice shall be of no force and effect and the Trustee shall not be required to redeem the 2022A Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made, and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.

Section 4.04. Effect of Redemption. Notice of redemption having been duly given as aforesaid, and moneys for payment of the Redemption Price of, together with interest accrued to the date fixed for redemption on, the 2022A Bonds so ca lled for redemption being held by the Trustee, on the Redemption Date designated in such notice, the 2022A Bonds so called for redemption shall become due and payable, interest on the 2022A Bonds so called for redemption shall cease to accrue, the 2022A Bonds shall cease to be entitled to any benefit or security under the Indenture, and the Owner of said 2022A Bonds shall have no rights in respect thereof except to receive payment of the Redemption Price thereof. The Trustee shall, upon surrender for payment of any of the 2022A Bonds, pay the 2022A Bonds at the Redemption Price.

After the 2022A Bonds shall have been redeemed pursuant to the provisions of this Article , the 2022A Bonds shall be canceled and destroyed upon surrender thereof to the Trustee. 43 20
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ARTICLE V

REVENUES, FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST Section 5.01. Pledge and Assignment; Revenue Fund.
(a) All of the Revenues, all amounts held in the Revenue Fund described in subsection (b) below, all amounts that are transferred from the Rate Stabilization Fund to the Revenue Fund as described in Section 5.08, and any other amounts (including proceeds of the sale of the 2022A Bonds) held in any fund or account established pursuant to the Indenture (except the Costs of Issuance Fund, the Rebate Fund and the Rate Stabilization Fund (other than those amounts which are transferred by the City from the Rate Stabilization Fund to the Revenue Fund)) are hereby irrevocably pledged to secure the payment of the principal of and interest, and the premium, if any, on the 2022A Bonds in accordance with their terms and the provisions of the Indenture, and the Revenues shall not be used for any other purpose while the 2022A Bond s remain Outstanding; provided that out of the Revenues there may be apportioned such sums for such purposes as are expressly permitted herein. Said pledge, together with the pledge created by all other Contracts and Bonds, shall constitute a first lien on and security interest on Revenues and, subject to application of Revenues and all amounts on deposit therein as permitted herein, the Revenue Fund and other funds and accounts created hereunder for the payment of the principal of and interest, and the premium, if any, on the 2022A Bonds and all Contracts and Debt Service on Bonds in accordance with the terms hereof, and shall attach, be perfected and be valid and binding from and after the Closing Date, without any physical delivery thereof or further act and shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the City, irrespective of whether such parties have notice hereof.
(b) In order to carry out and effectuate the pledge and lien contained herein, the City agrees and covenants that all Revenues shall be received by the City in trust hereunder and shall be deposited when and as received in the Revenue Fund, which fund the City agrees and covenants to maintain and to hold separate and apart from other funds so long as the 2022A Bonds and any Contracts or Debt Service on Bonds remain unpaid. Moneys in the Revenue Fund shall be used and applied by the City as provided herein. All moneys in the Revenue Fund shall be held in trust and shall be applied, used and withdrawn for the purposes set forth in this Section.

The City shall, from the moneys in the Revenue Fund, pay all Operation and Maintenance Costs (including amounts reasonably required to be set aside in contingency reserves for Operation and Maintenance Costs, the payment of which is not then immediately required) as such Operation and Maintenance Costs become due and payable. All remaining moneys in the Revenue Fund shall be set aside by the City at the following times for the transfer to the following respective s pecial funds in the following order of priority:
(i) Interest and Principal Payments. Not later than the Business Day prior to each Interest Payment Date, the City shall, from the moneys in the Revenue Fund, transfer to the Trustee for deposit in the Payment Fund or the Redemption Fund the payments of interest and principal or mandatory sinking fund payments, as applicable, on the 2022A Bonds due and payable on such Interest Payment Date. The City shall also, from the moneys in the Revenue Fund, transfer to the applicable trustee for deposit in the respective payment fund, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, any other Debt Service in accordance with the provisions of any Bond or Contract. 44 21
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(ii) Reserve Funds. After making the payments, allocations or transfers provided for in subsection (i) above, the City shall, from the remaining moneys in the Revenue Fund, thereafter, without preference or priority and in the event of any insufficiency of such moneys ratably without any discrimination or preference, transfer to the applicable trustee for such reserve funds and/or accounts, if any, as may have been established in connection with Bonds or Contracts, that sum, if any, necessary to restore such funds or accounts to an amount equal to the reserve requirement applicable to such Bonds or Contracts, as applicable. (iii) Subordinate Obligations. After making the payments, allocations or transfers provided for in subsections (i) and (ii) above, the City shall, from the remaining moneys in the Revenue Fund, thereafter, without preference or priority and in the event of any insufficiency of such moneys ratably without any discrimination or preference, transfer to the applicable trustee for deposit in the respective payment fund, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, any debt service on obligations which are payable from Net Revenues on a subordinate basis to Bonds and Contracts. (iv) Surplus. Moneys on deposit in the Revenue Fund on any date when the City reasonably expects such moneys will not be needed for the payment of Operation and Maintenance Costs or any of the purposes described in clauses (b)(i), (b)(ii) or (b)(iii) may be deposited in the Rate Stabilization Fund or expended by the City at any time for any purpose permitted by law.
(v) Investments. All moneys held by the City in the Revenue Fund shall be invested in Permitted Investments and the investment earnings thereon shall remain on deposit in such fund, except as otherwise provided herein.

Section 5.02. Allocation of Revenues. There is hereby established with the Trustee the Payment Fund, which the Trustee covenants to maintain and hold in trust separate and apart from other funds held by it so long as any principal of and interest on the 2022A Bonds remain unpaid.

Except as directed herein, all payments of interest and principal on the 2022A Bonds received by the Trustee pursuant to Section 5.01(b) shall be promptly deposited by the Trustee upon receipt thereof into the Payment Fund; except that all moneys received by the Trustee and required hereunder to be deposited in the Redemption Fund shall be promptly deposited therein. All payments of in terest and principal on the 2022A Bonds deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in the Indenture. The Trustee shall also establish and hold an Interest Account and a Principal Account within the Payment Fund.

The Trustee shall transfer from the Payment Fund and deposit into the following respective accounts, the following amounts in the following order of priority and at the following times, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:
(a) Not later than the Business Day preceding each Interest Payment Date, the Trustee shall deposit in the Interest Account that sum, if any, required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such date on the 2022A Bonds then Outstanding. No deposit need be made into the Interest Account so long as there shall be in such fund moneys sufficient to pay the interest becoming due and payable on such date on the 2022A Bonds then Outstanding. 45 22
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(b) Not later than the Business Day preceding each date on which the principal of the 2022A Bonds shall become due and payable hereunder, the Trustee shall deposit in the Principal Account that sum, if any, required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the 2022A Bonds coming due and payable on such date. No deposit need be made into the Principal Account so long as there shall be in such fund moneys sufficient to pay the principal becoming due and payable on such date on all 2022A Bonds then Outstanding.

Section 5.03. Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the 2022A Bonds as it shall become due and payable (including accrued interest on any 2022A Bonds purchased or accelerated prior to maturity pursuant to the Indenture).

Section 5.04. Application of Principal Account. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the 2022A Bonds at maturity, purchase or acceleration; provided, however, that at any time prior redemption of any such 2022A Bonds, upon written direction of the City, the Trustee shall apply such amounts t o the purchase of 2022A Bond s at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed pursuant to a Written Request of the City, except that the purchase price (exclusive of accrued interest) may not exceed the Redemption Price then applicable to the 2022A Bonds.

Section 5.05. Application of Redemption Fund. There is hereby established with the Trustee a special fund designated as th e “Redemption Fund.” All amounts in the Redemption Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the Redemption Price of the 2022A Bonds to be redeemed on the Redemption Date pursuant to Section 4.01; provided, however, that at any time prior to redemption of the 2022A Bonds, upon written direction of the City, the Trustee shall apply such amounts to the purchase of 2022A Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed pursuant to a Written Request of the City, except that the purchase price (exclusive of accrued interest) may not exceed the Redemption Price then applicable to the 2022A Bonds.

Section 5.06. Investments. All moneys in any of the funds or accounts established with the Trustee pursuant to the Indenture shall be invested by the Trustee solely in Permitted Investments.

Such investments shall be directed by the City pursuant to a Written Request of the City filed with the Trustee at least two (2) Business Days in advance of the making of such investments. In the absence of any such directions from the City, the Trustee shall invest any such moneys in Permitted Investments described in clause (b)(5) of the definition thereof; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a written direction from the City specifying a specific money market fund and, if no such written direction from the City is so received, the Trustee shall hold such moneys uninvested. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account.

All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the Interest Account unless otherwise provided in the Indenture. For purposes of acquiring any investments hereunder, the Trustee may commingle funds (other than the Rebate Fund) held by it hereunder upon the Written Request of the City. The Trustee 46 23
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may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section 5.06.

The City acknowledges that to the extent that regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The City further understands that trade confirmations for s ecurities transactions effected by the Trustee will be available upon request at no additional cost and other trade confirmations may be obtained from the applicable broker. The Trustee will furnish the City with periodic cash transaction statements which shall include detail for all investment transactions effected by the Trustee hereunder. Upon the City’s election, such statements will be delivered via the Trustee’s online service and upon electing such service, paper statements will be provided only upon request.

The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee under the Indenture.

The City shall invest, or cause to be invested, all moneys in any fund or accounts established with the Trustee as provided in the Tax Certificate.

For investment purposes, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately. In making any valuations of investments hereunder, the Trustee may utilize and rely on generally recognized pricing information services (including brokers and dealers in securities) that may be available to the Trustee, including those available through the Trustee accounting system, and shall value such investments at market value.

Section 5.07. Rebate Fund.
(a) Establishment. Upon the conversion to the Tax-Exempt Rate on the Tax- Exempt Reissuance Date, t he Trustee shall establish a fund for the 2022A Bonds designated the “Rebate Fund” when required in accordance herewith. Absent an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest on the 2022A Bonds will not be adversely affected, the City shall cause to be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for the 2022A Bonds shall be governed by this Section and the Tax Certificate, unless and to the extent that the City delivers to the Trustee an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest on the 2022A Bonds will not be adversely affected if such requirements are not satisfied.

Notwithstanding anything to the contrary contained herein or in the Tax Certificate, the Trustee:
(i) shall be deemed conclusively to have complied with the provisions thereof if it follows the directions of the City; (ii) shall have no liability or responsibility to enforce compliance by the City with the terms of the Tax Certificate; (iii) may rely conclusively on the City’s calculations and determinations and certifications relating to rebate matters; and (iv) shall have no responsibility to independently make any calculations or determinations or to review the City’s calculations or determinations thereunder.
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(i) Computation. Within 55 days of the end of each fifth Bond Year, the City shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate ( e.g., the temporary investments exceptions of Section 148(f)(4)(B) and the construction expenditures exception of Section 148(f)(4)(C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “ 1½% Penalty”) has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulations (the “ Rebatable Arbitrage”). The City shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Transfer. Within 55 days of the end of each fifth Bond Year, upon the Written Request of the City, an amount shall be deposited to the Rebate Fund by the Trustee from any Net Revenues legally available for such purpose (as specified by the City in the aforesaid Written Request), if and to the extent required so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with clause (i) of this subsection (a). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon Written Request of the City, the Trustee shall withdraw the excess from the Rebate Fund and then transfer such amount to the Payment Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed by Written Request of the City, to the United States Treasury, out of amounts in the Rebate Fund:
(A) Not later than 60 days after the end of: (X) the fifth Bond Year; and (Y) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and (B) Not later than 60 days after the payment of the 2022A Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code and Section 1.148-3 of the Treasury Regulations.

In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the City shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038- T (prepared by the City), or shall be made in such other manner as provided under the Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the 2022A Bond s and the payments described in s ubsection (a) above being made may be withdrawn by the City and utilized in any manner by the City. 48 25
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(c) Survival of Defeasance. Notwithstanding anything in this Section to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance or payment in full of the 2022A Bonds.

Section 5.08. Establishment and Application of Rate Stabilization Fund. The City shall establish, maintain and hold in trust a special fund designated as the “Rate Stabilization Fund.” The City agrees and covenants to maintain and to hold such fund separate and apart from other funds so long as the 2022A Bonds or any other Contracts or Bonds that remain unpaid. Money transferred by the City from the Revenue Fund to the Rate Stabilization Fund in accordance with Section 5.01(b)(iv) will be held in the Rate Stabilization Fund and applied in accordance herewith.

The City may withdraw all or any portion of the amounts on deposit in the Rate Stabilization Fund and transfer such amounts to the Revenue Fund for application in accordance with Section 5.01 or, in the event the 2022A Bonds are discharged in accordance with Article X, transfer all or any portion of such amounts for application in accordance with Article X. Any such amounts transferred from the Rate Stabilization Fund to the Revenue Fund in accordance with the Indenture constitute pledged Revenues.

Section 5.09. Reserved.

Section 5.10. Application of Funds and Accounts When No 2022A Bonds are Outstanding.

On the date on which the 2022A Bonds shall be retired hereunder or provision mad e therefor pursuant to Article X and after payment of all amounts due the Trustee hereunder, all moneys then on deposit in any of the funds or accounts (other than the Rebate Fund) established with the Trustee pursuant to the Indenture shall be withdrawn by the Trustee and paid to the City for use by the City at any time for any purpose permitted by law.

ARTICLE VI

PARTICULAR COVENANTS
Section 6.01. Punctual Payment. The City shall punctually pay or cause to be paid the principal and interest to become due in respect of the 2022A Bonds, in strict conformity with the terms of the 2022A Bonds and of the Indenture, according to the true intent and meaning thereof, but only out of Net Revenues and other assets pledged for such payment as provided in the Indenture.

Section 6.02. Extension of Payment of 2022A Bonds . The City shall not directly or indirectly extend or assent to the extension of the maturity of the 2022A Bonds or the time of payment of any claims for interest by the purchase of such 2022A Bonds or by any other arrangement, and in case the maturity of the 2022A Bonds or the time of payment of any such claims for interest shall be extended, such 2022A Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of the Indenture, except subject to the prior payment in full of the principal of the 2022A Bonds then Outstanding and of all claims for interest thereon which shal l not have been so extended. Nothing in this Section shall be deemed to limit the right of the City to issue Bonds for the purpose of refunding the Outstanding 2022A Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the 2022A Bonds.

Section 6.03. Against Encumbrances. The City will not make any pledge of or place any lien on Revenues or the moneys in the Revenue Fund except as provided herein. The City may at 49 26
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any time, or from time to time, execute Contracts or issue Bonds as perm itted herein. The City may also at any time, or from time to time, incur evidences of indebtedness or incur other obligations for any lawful purpose which are payable from and secured by a pledge of lien on Revenues on any moneys in the Revenue Fund as may from time to time be deposited therein, provided that such pledge and lien shall be subordinate in all respects to the pledge of and lien thereon provided herein.

Section 6.04. Power to Issue 2022A Bonds and Make Pledge and Assignment. The City is duly authorized pursuant to law to issue the 2022A Bonds, to enter into the Indenture and to pledge and assign the Revenues and other assets purported to be pledged and assigned under the Indenture in the manner and to the extent provided in the Indenture. The 2022A Bonds a nd the provisions of the Indenture are and will be the legal, valid and binding special obligations of the City in accordance with their terms, and the City shall and the Trustee may, at all times, subject to the provisions of Article VIII and to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the 2022A Bond Owners under the Indenture against all claims and demands of all persons whomsoever.

Section 6.05. Accounting Records and Financial Statements. (a) The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate trust industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of 2022A Bonds and all funds and accounts established by it pursuant to the Indenture. Such books of record and account shall be available for inspection by the City upon reasonable prior notice during business hours and under reasonable circumstances.
(b) The City will keep appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Water System , which records shall be available for inspection by the Trustee (which shall have no duty to inspect such records) at reasonable hours and under reasonable conditions.
(c) The City will prepare and file with the Owner annually by 270 days after the end of each Fiscal Year (commencing with the Fiscal Year ending June 30, 2022) audited financial statements of the City for the preceding Fiscal Year prepared in accordance with Generally Accepted Accounting Principles, together with an Accountant’s Report thereon. In the event that the audited financial statements are not available within 27 0 days after the end of such Fiscal Year, the City will furnish unaudited financial statements to the Owner, and will then supply the audited financial statements immediately upon the availability thereof. The City shall also provide the Owner with its budget within thirty (30) days after the adoption thereof The Trustee shall have no duty to review, verify or analyze such financial statements, and shall hold such financial statements solely as a repository for the benefit of the 2022A Bond Owner. The Trustee shall not be deemed to have notice of any information contained therein, or default or Event of Default which may be disclosed therein in any manner.
(d) The City shall also provide the Owner with any additional information reasonably requested by the Owner.

Section 6.06. Tax Covenants. On and after the Tax-Exempt Reissuance Date, if any, this Section 6.06 shall apply to the 2022A Bonds. Notwithstanding any other provision of the Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of the portion of interest on 50 27
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the 2022A Bonds will not be adversely affected for federal income tax purposes, the City covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income with respect to the 2022A Bonds and specifically covenants, without limiting the generality of the foregoing, as follows:
(a) Private Activity. The City will not take or omit to take any action or make any use of the proceeds of the 2022A Bonds or of any other moneys or property that would cause the 2022A Bonds to be “private activity bonds” within the meaning of Section 141 of the Code; (b) Arbitrage. The City will make no use of the proceeds of the 2022A Bonds or of any other amounts or property, regardless of the source, and will not take or omit to take any action that would cause the 2022A Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(c) Federal Guarantee. The City will make no use of the proceeds of the 2022A Bonds and will not take or omit to take any action that would cause the 2022A Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (d) Information Reporting. The City will take or cause to be taken all necessary action to comply with the informational reporting requirement s of Section 149(e) of the Code necessary to preserve the exclusion of interest on the 2022A Bonds pursuant to Section 103(a) of the Code;
(e) Hedge Bonds. The City will make no use of the proceeds of the 2022A Bonds or any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action that would cause the 2022A Bonds to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the City takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest on the 2022A Bonds for federal income tax purposes; and (f) Miscellaneous. The City will take no action and refrain from taking any action inconsistent with its expectations stated in the Tax Certificate executed by the City in connection with the issuance of the 2022A Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein.

This Section and the covenants set forth herein shall not be applicable to, and nothing contained herein shall be deemed to prevent the City from i ssuing or executing and delivering additional obligations, the interest with respect to which has been determined by Bond Counsel to be subject to federal income taxation.

Section 6.07. Waiver of Laws . The City shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in the Ind enture or in the 2022A Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the City to the extent permitted by law.

Section 6.08. Further Assurances. The City will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out 51 28
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the intention or to facilitate the performance of the Indenture and for the better assuring and confirming unto the Owners of the 2022A Bonds of the rights and benefits provided in the Indenture.

Section 6.09. Budgets. On or prior to the fifteenth day of each Fiscal Year, the City shall certify to the Trustee that the amounts budgeted for payment of the principal of and interest on the 2022A Bonds are fully adequate for the payment of all such payments for such Fiscal Year. If the amounts so budgeted are not adequate for the payment of the principal of and interest on the 2022A Bonds due under the Indenture, the City will take such action as may be necessary to cause such annual budget to be am ended, corrected or augmented so as to include therein the amounts required to be raised by the City in the then ensuing Fiscal Year for the payment of the principal of and interest on the 2022A Bonds due under the Indenture and will notify the Trustee of the proceedings then taken or proposed to be taken by the City.

Section 6.10. Observance of Laws and Regulations. To the extent necessary to assure its performance hereunder, the City will well and truly keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on the City by contract, or prescribed by any law of the United States of America, or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of any and every right, privilege or franchise now owned or hereafter acquired by the City, respectively, including its right to exist and carry on its business, to the end that such contracts, rights and franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired.

Section 6.11. Compliance with Contracts . The City will neither take nor omit to take any action under any contract if the effect of such act or failure to act would in any manner impair or adversely affect the ability of the City to pay principal of or interest on the 2022A Bonds; and the City will comply with, keep, observe and perform all agreements, conditions, covenants and terms, express or implied, required to be performed by it contained in all other contracts affecting or involving the Water System, to the extent that the City is a party thereto.

Section 6.12. Prosecution and Defense of Suits. The City shall promptly, upon request of the Trustee or any 2022A Bond Owner, from time to time take such action as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the Wate r System or any part thereof, whether now existing or hereafter developing, shall prosecute all such suits, actions and other proceedings as may be appropriate for such purpose and shall indemnify and save the Trustee (including all of its employees, offic ers and directors), the Trustee and every 2022A Bond Owner harmless from all loss, cost, damage and expense, including attorneys’ fees, which they or any of them may incur by reason of any such defect, cloud, suit, action or proceeding.

The City shall defend against every suit, action or proceeding at any time brought against the Trustee (including all of its employees, officers and directors) or any 2022A Bond Owner upon any claim arising out of the receipt, application or disbursement of any of the payments of principal of or interest on the 2022A Bonds or involving the rights of the Trustee or any 2022A Bond Owner under the Indenture; provided that the Trustee or any 2022A Bond Owner at such party’s election may appear in and defend any such suit, action or proceeding. The City shall indemnify and hold harmless the Trustee and the 2022A Bond Owners against any and all liability claimed or asserted by any person, arising out of such receipt, application or disbursement, and shall indemnify and hold harmless the 2022A Bond Owners against any attorneys’ fees or other expenses which any of them may incur in connection with any litigation (including pre -litigation activities) to which any of them may become a party by reason of ownership of 2022A Bonds. The City shall promptly reimburse 52 29
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any 2022A Bond Owner in the full amount of any attorneys’ fees or other expenses which such Owner may incur in litigation or otherwise in order to enforce such party’s rights under the Indenture or the 2022A Bonds, provided that such litigation shall be concluded favorably to such party’s contentions therein.

Section 6.13. [Reserved.]
Section 6.14. Additional Contracts and Bonds . The City may at any time execute any Contract or issue any Bonds, as the case may be, in accordance herewith; provided that (a) The Net Revenues for any consecutive twelve calendar month period during the eighteen calendar month period preceding the date of adoption by the City Council of the City of the resolution authorizing the issuance of such Bonds or the date of the execution of such Contract, as the case may be, as evidenced by both a calculation prepared by the City and a special report prepared by an Independent Certified Public Accountant or an Independent Financial Consultant on such calculation on file with the City , shall have produced a sum equal to at least one hundred ten percent (110%) of the Debt Service for such twelve month period; and (b) The Net Revenues for any consecutive twelve calendar month period during the eighteen calendar month period preceding the date of the execution of such Contract or the date of adoption by the City Council of the City of the resolution authorizing the issuance of such Bonds, as the case may be, including adjustments to give effect as of the first day of such twelve month period to increases or decreases in rates and charges for the Water System approved and in effect as of the date of calculation, as evidenced by both a calculation prepared by the City and a special report prepared by an Independent Certified Public Accountant or an Independent Financial Consultant on such calculation on file with the City, shall have produced a sum equal to at least one hundred ten percent (110%) of the sum of: (1) the Debt Service for such twelve month period; plus (2) the Debt Service which would have accrued on any Contracts executed or Bonds issued since the end of such twelve month period, assuming that such Contracts had been executed or Bonds had been issued at the beginning of such twelve month period; plus (3) the Debt Service which would have accrued had such proposed additional Contract been executed or such proposed additional Bonds been issued at the beginning of such twelve month period.

Notwithstanding the foregoing, Contracts executed or Bonds to refund Bonds or Contracts may be deli vered without satisfying the conditions set forth above if aggregate Debt Service after such Contracts are executed or Bonds are issued is not greater than aggregate Debt Service would have been prior to the execution of such Contracts or the issuance of such Bonds.

Furthermore, notwithstanding the foregoing, the City may at any time issue evidence of indebtedness or incur other obligations for any lawful purpose that are payable from and secured by a lien on Revenues or money in the Revenue Fund as may from time to time be deposited therein on a basis that is subordinate to the 2022A Bonds.

Section 6.15. Against Sale or Other Disposition of Property. The City will not enter into any agreement or lease which impairs the operation of the Water System or any part thereof necessary to secure adequate Revenues for the payment of the principal of and interest on the 2022A Bonds, or which would otherwise impair the operation of the Water System. Any real or personal property which has become nonoperative or which is not needed for the efficient and proper operation of the Water System , or any material or equipment which has become worn out, may be 53 30
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sold if such sale will not impair the ability of the City to pay the principal of and interest on the 2022A Bonds and if the proceeds of such sale are deposited in the Revenue Fund.

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

Section 6.16. Against Competitive Facilities . To the extent that it can so legally obligate itself, the City covenants that it will not acquire, construct, maintain or operate and will not, to the extent permitted by law and within the scope of its powers, permit any other public or private agency, corporation, district or political subdivision or any person whomsoever to acquire, construct, maintain or operate within the City any municipal water system that is competitive with the Water System.

Section 6.17. Maintenance and Operation of the Water System. The City will maintain and preserve the Water System in good repair and working order at all times and will operate the Water System in an efficient and economical manner and will pay all Operation and Maintenance Costs as they become due and payable.

Section 6.18. Payment of Claims. The City will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien on the Revenues or the funds or accounts created hereunder or on any funds in the hands of the City pledged to pay the principal of or interest on the 2022A Bonds or to the Owners prior or superior to the lien under the Indenture.

Section 6.19. Insurance.
(a) The City will procure and maintain or cause to be procured and maintained insurance on the Water System with responsible insurers in such amounts and against such risks (including damage to or destruction of the Water System) as are usually covered in connection with facilities similar to the Water System so long as such insurance is available from reputable insurance companies.

In the event of any damage to or dest ruction of the Water System caused by the perils covered by such insurance, the Net Proceeds thereof shall be applied to the reconstruction, repair or replacement of the damaged or destroyed portion of the Water System . The City shall begin such reconstruction, repair or replacement promptly after such damage or destruction shall occur, and shall continue and properly complete such reconstruction, repair or replacement as expeditiously as possible, and shall pay out of such Net Proceeds all costs and expenses in connection with such reconstruction, repair or replacement so that the same shall be completed and the Water System shall be free and clear of all claims and liens.

If such Net Proceeds exceed the costs of such reconstruction, repair or replacement, then the excess Net Proceeds shall be applied by the City in any manner permitted by law. (b) The City will procure and maintain such other insurance which it shall deem advisable or necessary to protect its interests, which insurance shall afford protection in such 54 31
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amounts and against such risks as are usually covered in connection with municipal retail water systems similar to the Water System.
(c) Any insurance required to be maintained by paragraph (a) above and, if t he City determines to procure and maintain insurance pursuant to paragraph (b) above, such insurance, may be maintained under a self-insurance program so long as such self-insurance is maintained in the amounts and manner usually maintained in connection w ith municipal retail water systems similar to the Water System and is, in the opinion of an accredited actuary, actuarially sound.

Section 6.20. Payment of Taxes and Compliance with Governmental Regulations. The City will pay and discharge all taxes, assessments and other governmental charges which may hereafter be lawfully imposed upon the Water System , or any part thereof or upon the Revenues when the same shall become due. The City will duly observe and conform with all valid regulations and requirements of any governmental authority relative to the operation of the Water System, or any part thereof, but the City shall not be required to comply with any regulations or requirements so long as the validity or application thereof shall be contested in good faith.

Section 6.21. Amount of Rates and Charges. The City shall, to the fullest extent permitted by law, fix and prescribe, at the commencement of each Fiscal Year, rates and charges for the Water System which are reasonably expected, at the commencement of such Fiscal Year, to be at least sufficient to yield during each Fiscal Year Net Revenues equal to one hundred ten percent (110%) of the Debt Service and any amounts required to be paid to the provider of a reserve fund surety bond, if any, in such Fiscal Year. The City may mak e adjustments from time to time in such rates and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates and charges then in effect unless the Net Revenues from such reduced rates and charges will at all times be sufficient to meet the requirements of this section. To the extent that the covenant with respect to rates and charges in connection with any Bonds or Contracts differs from the foregoing covenant, the City shall also comply with the covenant with re spect to rates and charges in connection with such Bonds or Contracts.

Section 6.22. Collection of Rates and Charges . The City will have in effect at all times by-laws, rules and regulations requiring each customer to pay the rates and charges applicable to the Water System and providing for the billing thereof and for a due date and a delinquency date for each bill.

Section 6.23. Eminent Domain Proceeds. If all or any part of the Water System shall be taken by eminent domain proceedings, the Net Proceeds thereof shall be applied ei ther to additions, betterments, extensions or improvements to the Water System or, if the City elects not to apply such Net Proceeds to such capital items or if such Net Proceeds are not fully expended for such purposes, such Net Proceeds not required by the City for such purposes shall be deposited in the Revenue Fund.

Section 6.24. Enforcement of Contracts. The City will not voluntarily consent to or permit any rescission of, nor will it consent to any amendment to or otherwise take any action under or in connection with any contracts previously or hereafter entered into if such rescission or amendment would in any manner impair or adversely affect the ability of the City to pay principal of and interest on the 2022A Bonds.
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ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES OF 2022A BOND OWNERS
Section 7.01. Events of Default. The following events shall be Events of Default hereunder:
(a) Default by the City in the due and punctual payment of the principal of t he 2022A Bonds, the principal of any Bonds or the principal with respect to any Contract, when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise.
(b) Default by the City in the due and punctual payment of any installment of interest on the 2022A Bonds, any installment of interest on any Bond or any installment of interest with respect to any Contract, when and as the same shall become due and payable. (c) Default by the City in the observance of any of the other covenants, agreements or conditions on its part in the Indenture or in the 2022A Bonds, or required by any Bond or indenture relating thereto or by any Contract, if such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the City by the Trustee or by the Owners of the 2022A Bonds Outstanding, a majority in principal amount of 2022A Bonds O utstanding, or a majority in principal amount outstanding with respect to such Contract, as applicable; provided, however, that, if in the reasonable opinion of the City the default stated in the notice can be corrected, but not within such thirty (30) day period, and corrective action is instituted by the City within such thirty (30) day period and diligently pursued in good faith until the default is corrected, such default shall not be an Event of Default hereunder; provided, however, that such extended cure period shall not be longer than 90 days from the delivery date of such default notice. (d) The City shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or a court of competent jurisdiction shall approve a petition filed with or without the consent of the City seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the City or of the whole or any substantial part of its property. (e) Payment of the principal of any Bond or with respect to any Contract is accelerated in accordance with its terms.

Section 7.02. Remedies Upon Event of Default. If any Event of Default specified in Section 7.01(d) or (e) shall occur and be continuing, the Trustee shall, and for any other Event of Default, the Trustee may, and, at the written direction of the Owners of the 2022A Bonds at the time Outstanding, shall, in each case, upon notice in writing to the City, declare the principal of the 2022A Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration, the same shall become and shall be immediately due and payable, anything in the Indenture or in the 2022A Bonds contained to the contrary notwithstanding. 56 33
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Nothing contained herein shall permit or require the Trustee to accelerate payments due under the Indenture if the City is not in default of its obligation hereunder.

Any such declaration is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been obta ined or entered, the City shall deposit with the Trustee a sum sufficient to pay all the principal of and installments of interest on the 2022A Bonds payment of which is overdue, with interest on such overdue principal at the rate borne by the 2022A Bonds to the extent permitted by law, and the reasonable fees, disbursements and expenses of the Trustee, or shall deposit with the applicable trustee with respect to any Contract a sum sufficient to pay all the principal and installments of interest with respec t to such Contract payment of which is overdue, with interest on such overdue principal at the rate borne by such Contract to the extent permitted by law, and the reasonable charges and expenses of the applicable trustee with respect to such Contract, or s hall deposit with the applicable trustee with respect to any Bond a sum sufficient to pay all the principal of and installment of interest on such Bond payment of which is overdue, with interest on such overdue principal at the rate borne by such Bonds to the extent permitted by law, and the reasonable charges and expenses of the applicable trustee with respect to such Bonds, and any and all other Events of Default actually known to a Responsible Officer of the Trustee or the applicable trustee with respect to such Contract or Bonds (other than in the payment of principal of and interest on the 2022A Bonds, payment of principal and interest with respect to such Contract or payment of principal and interest on such Bond, as applicable, due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then and in every such case the Trustee shall on behalf of the Owner of the 2022A Bonds, rescind and annul such declaration and its consequences and waive such Event of Default; but no such rescission and annulment shall extend to or shall affect any subsequent Event of Default, or shall impair or exhaust any right or power consequent thereon.

Section 7.03. Application of Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Revenues held or thereafter received by the Trustee and any other funds then held or thereafter received by the Trustee under any of the provisions of the Indenture (other than amounts held in the Rebate Fund) shall be applied in the following order:
(a) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the 2022A Bonds, Contract or Bonds and payment of reasonable fees and expenses of the Trustee (including reasonable fees and disbursements of i ts counsel) incurred in and about the performance of its powers and duties under the Indenture; (b) If and as directed by the City, to the payment of Operation and Maintenance Costs; and
(c) To the payment of the principal of and interest then due on the 2022A Bonds (upon surrender thereof if fully paid), in accordance with the provisions of the Indenture, and if and as directed by the City, to the payment of the principal and interest then due with respect to such Contract in accordance with the provisions thereof and the payment of the principal of and interest then due on such 2022A Bonds in accordance with the provisions thereof and of any indenture related thereto, in the following order of priority:

First: To the payment to the persons entitled thereto of all installments of interest then due on the 2022A Bonds, with respect to such Contract or on such Bonds, as applicable, 57 34
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in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; and
Second: To the payment to the persons entitled thereto of the unpaid principal of the 2022A Bonds, principal with respect to such Contract or principal of any Bonds, as applicable, which shall have become due, whether at maturity or by acceleration or redemption, with interest on the overdue principal at the Default Rate, and, if the amount available shall not be sufficient to pay in full the 2022A Bonds, all amounts due under such Contract or all the Bonds, as applicable, together with such interest, then to the payment thereof ratably, according to the amounts of pri ncipal due on such date to the persons entitled thereto, without any discrimination or preference; and Third: If there shall exist any remainder after the foregoing payments, such remainder shall be paid to the City.

Section 7.04. Trustee to Represent 2022A Bond Owners. The Trustee is hereby irrevocably appointed (and the successive Owners of the 2022A Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney in fact of the Owners of the 2022A Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the 2022A Bonds or the Indenture and applicable provisions of law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the 2022A Bond Owners, the Trustee in its discretion may, and upon the written request of the Owner of the 2022A Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall proceed to protect or enforce its rights or the rights of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Owners under the 2022A Bonds or the Indenture or any law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Revenues and other assets pledged under the Indenture, pending such proceedings. All rights of action under the Indenture or the 2022A Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of the 2022A Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Owners of such 2022A Bonds, subject to the provisions of the Indenture.

Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any 2022A Bond Owner any plan of reorganization, arrangement, adjustment, or composition affecting the 2022A Bonds or the rights of any 2022A Bond Owner thereof, or to authorize the Trustee to vote in respect of the claim of any 2022A Bond Owner in any such proceeding without the approval of the 2022A Bond Owners so affected.

Section 7.05. 2022A Bond Owners’ Direction of Proceedings. Anything in the Indenture to the contrary notwithstanding, the Owners of the 2022A Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction to direct the method of conduct in all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be 58 35
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otherwise than in accordance with law and the provisions of the Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee (which determination the Trustee has no duty to make) would be unjustly prejudicial to the 2022A Bond Owners not parties to such direction.

Section 7.06. Suit by Owners. No Owner of 2022A Bonds shall have the right to i nstitute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under the Indenture with respect to such 2022A Bonds, unless: (a) such Owners shall have given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of the 2022A Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) such Owner shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee shall have failed to comply with such request for a period of sixty (60) days after such writte n request shall have been received by, and said tender of indemnity shall have been made to, the Trustee; and (e) no direction inconsistent with such written request shall have been given to the Trustee during such sixty (60) day period by the Owners of the 2022A Bonds then Outstanding.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of 2022A Bonds of any remedy hereunder or under law; it being understood and intended that no Owners of 2022A Bonds shall have any right in any manner whatever by their action to affect, disturb or prejudice the security of the Indenture, or to enforce any right under the 2022A Bonds, the Indenture, or applicable law with respect to the 2022A Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding 2022A Bonds, subject to the provisions of the Indenture.

Section 7.07. Absolute Obligation of the City . Nothing in this Section 7.07 or in any other provision of the Indenture or in the 2022A Bonds shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the principal of and interest on the 2022A Bonds to the Owners of the 2022A Bonds at the maturity thereof, or upon call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the 2022A Bonds.

Section 7.08. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of the 2022A Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.

Section 7.09. No Waiver of Default. No delay or omission of the Trustee or of any Owner of the 2022A Bonds to exercise any right or power arising upon the occurrence 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.
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ARTICLE VIII

THE TRUSTEE
Section 8.01. Duties, Immunities and Liabilities of Trustee. (a) The Trustee shall, prior to an Event of Default, and after the curing or waiving of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in the Indenture, and no implied covenants or duties shall be read into the Indenture against the Trustee. The Trustee shall, during the existence of any E vent of Default (which has not been cured or waived), exercise such of the rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. (b) The City may remove the Trustee at any time upon thirty days’ prior notice, unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of the 2022A Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible in accordance with subsection (e) of this Sect ion, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee and thereupon shall promptly appoint a successor Trustee by an instrument in writing. (c) The Trustee may at any time resign by giving written notice of such resignation to the City and by giving the 2022A Bond Owners notice of such resignation by mail at the address shown on the Registration Books. Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee by an instrument in writing. (d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within forty-five (45) days of giving notice of removal or notice of resignation as aforesaid, the retiring Trustee or the 2022A Bond Owner may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under the Indenture shall signify its acceptance of such appointment by executing and delivering to the City and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all of the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the City or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all of the right, title and interest of such predecessor Trustee in and to any property held by it under the Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the City shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and 60 37
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confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the City shall mail or cause the successor trustee to mail a notice of the succession of such Trustee to the trusts hereunder to the 2022A Bond Owners at the address shown on the Registration Books. If the City fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the City.
(e) Any Trustee appointed under the provisions of this Section in succession to the Trustee shall be a trust company, banking association or bank having the powers of a trust company, having a combined capital and surplus of at least Seventy Five Million Dollars ($75,000,000), and subject to supervision or examination by the Office of the Comptroller of the Currency. If such bank, banking association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such trust company, banking association or bank shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section.

Section 8.02. Merger or Consolidation. Any trust company, banking association or bank into which the Trustee may be merged or converted or with which it may be consolidated or any trust company, banking association or bank resulting from any merger, conversion or consolidation to which it shall be a party or any trust company, banking association or bank to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such trust company, banking association or bank shall be eligible under subsection (e) of Section 8.01, shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

Section 8.03. Liability of Trustee.
(a) The recitals of facts herein and in the 2022A Bonds shall be taken as statements of the City, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of the Indenture or the 2022A Bonds, nor shall the Trustee incur any responsibility in respect thereof, other than as expres sly stated herein in connection with the respective duties or obligations herein or in the 2022A Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the 2022A Bond s. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct.

The Trustee may become the Owner of 2022A Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depository for 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 2022A Bond Owners, whether or not such committee shall represent the Owners of the 2022A Bonds then Outstanding.
(b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall b e proved that the Trustee was negligent in ascertaining the pertinent facts.
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(c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of the 2022A Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under the Indenture.
(d) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by the Indenture.
(e) The Trustee shall not be deemed to have knowledge of any default or Event of Default hereunder or any other event which, with the passage of time, the giving of notice, or both, would constitute an Event of Default hereunder unless and until a Responsible Officer of the Trustee shall have actual knowledge of such event or the Trustee shall have been notified in writ ing, in accordance with Section 11.07, of such event by the City or the Owners of the 2022A Bonds then Outstanding. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance by the City of any of the terms, conditions, covenants or agreements herein or any of the documents executed in connection with the 2022A Bonds, or as to the existence of an Event of Default thereunder or an event which would, with the giving of notice, the passage of time, or both, constitute an Event of Default thereunder. The Trustee shall not be responsible for the validity, effectiveness or priority of any collateral given to or held by it.
(f) No provision of the Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of any of its rights or powers.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Indenture, including at the request, order or direction of any of the Owners pursuant to the Indenture, unless such Owners shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilit ies which might be incurred by it in compliance with such request or direction. No permissive power, right or remedy conferred upon the Trustee hereunder shall be construed to impose a duty to exercise such power, right or remedy. (h) Whether or not herein expressly so provided, every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article VIII.
(i) The Trustee shall have no responsibility or liability with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the 2022A Bonds. (j) The immunities extended to the Trustee also extend to its directors, officers, employees and agents.
(k) The Trustee may execute any of the trusts or powers of the Indenture and perform any of its duties through attorneys, agents and receivers and shall not be answerable for the conduct of the same if appointed by it with reasonable care. 62 39
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(l) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the Water System , malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.
(m) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“ Instructions”) given pursuant to this Indenture and delivered using Electronic Means (“Electronic Means ” shall mean the following communications methods: e - mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“ Authorized Officers ”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City . The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City ; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its pa rticular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. (n) The Trustee shall not be concerned with or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.
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(o) The permissive right of the Trustee to do things enumerated herein shall not be construed as a duty and it shall not be answerable for other than its negligenc e or willful misconduct.

Section 8.04. Right to Rely on Documents. The Trustee shall be protected in acting upon any notice, resolution, requisition, request, consent, order, certificate, report, opinion, notes, direction, facsimile transmission, electronic mail or oth er paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be counsel of or 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 and in accordance therewith.

The Trustee may treat the Owners of the 2022A Bonds appearing in the Trustee’s Registration Books as the absolute owners of the 2022A Bonds for all purposes and the Trustee shall not be affected by any notice to the contrary.

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

Section 8.05. Preservation and Inspection of Documents. All documents that are received by the Trustee under the provisions of the Indenture shall be retained in its possession during the term hereof in accordance with applicable document retention policies and shall be subject at all reasonable times to the in spection of the City and any 2022A Bond Owner, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonable conditions.

Section 8.06. Compensation and Indemnification. The City shall pay to the Trustee from time to time all reasonable compensation for all services rendered under the Indenture, and also all reasonable expenses, charges, legal and consulting fees and other disbursements and those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under the Indenture.

The City shall indemnify, defend and hold harmless the Trustee, its officers, employees, directors and agents from and against any loss, costs, claims, liability or expense (including fees and expenses of its attorneys and advisors) incurred without gross negligence or willful misconduct on its part, arising out of or in connection with the execution of the Indenture, acceptance or administration of this trust or any other document or transaction executed in connection herewith, including costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers hereunder. The rights of the Trustee and the obligations of the City under this Section 8.06 shall survive removal or resignation of the Trustee hereunder or the discharge of the 2022A Bonds and the Indenture.
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When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. Upon an Event of Default, and only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment on account of principal of and premium, if any, and interest on any 2022A Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by it.

ARTICLE IX

MODIFICATION OR AMENDMENT OF THE INDENTURE
Section 9.01. Amendments Permitted.
(a) The Indenture and the rights and obligations of the City and of the Owners of the 2022A Bonds and of the Trustee may be modified or amended from time to time and at any time by an indenture or indentures supplemental thereto, which the City and the Trustee may enter into when the written consent of the Owners of the 2022A Bonds t hen Outstanding, shall have been filed with the Trustee. No such modification or amendment shall: (1) extend the fixed maturity of the 2022A Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the rate of interest or the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of the 2022A Bond, or permit the creation of any lien on the Revenues and other assets pl edged under the Indenture prior to or on a parity with the lien created by the Indenture except as permitted herein, or deprive the Owners of the 2022A Bonds of the lien created by the Indenture on such Revenues and other assets except as permitted herein, without the consent of the Owners of the 2022A Bonds then Outstanding. It shall not be necessary for the consent of the 2022A Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the City and the Trustee of any Supplemental Indenture pursuant to this subsection (a), the Trustee shall mail a notice, setting forth in general terms the substance of such Supplemental Indenture, to the Owners of the 2022A Bonds at the address shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. (b) The Indenture and the rights and obligations of the City, the Trustee and the Owners of the 2022A Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the City and the Trustee may enter into without the consent of any 2022A Bond Owners, if the Trustee shall receive an opinion of Bond Counsel to the effect that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Owners of the Outstanding 2022A Bonds, including, without limitation, for any one or more of the following purposes:
(1) to add to the covenants and agreements of the City contained in the Indenture other covenants and agreements thereafter to be observed, to pledge or assign additional security for the 2022A Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the City;
(2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, contained in the 65 42
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Indenture, or in regard to matters or questions arising under the Indenture, as the City may deem necessary or desirable;
(3) to modify, amend or supplement the Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereunder in effect, and to add such other terms conditions and provisions as may be permitted by said act or similar federal statute; and
(4) on or after the Tax- Exempt Reissuance Date, to modify, amend or supplement the Indenture in such manner as to cause interest on the 2022A Bonds to remain excludable from gross income under the Code.
(c) The Trustee may in its discretion, but shall not be obligated to, enter into any such Supplemental Indenture authorized by subsections (a) or (b) of this Section which materially adversely affects the Trustee’s own rights, duties or immunities under the Indenture or otherwise. (d) Prior to the Trustee entering into any Supplemental Indenture hereunder, there shall be delivered to the Trustee an opinion of Bond Counsel stating, in substance, that such Supplemental Indenture has been adopted in compliance with the requirements of the Indenture and , only after the Tax- Exempt Reissuance Date, that the adoption of such Supplemental Indenture will not, in and of itself, adversely affect the exclusion of interest on the 2022A Bonds from federal income taxation and from state income taxation.

Section 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, the Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under the Indenture of the City, the Trustee and the Owners of the 2022A Bonds Outstanding shall thereafter be determined, exercised and enforced thereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of the Indenture for any and all purposes.

Section 9.03. Endorsement of 2022A Bonds ; Preparation of New 2022A Bonds . 2022A Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Trustee so determines shall, bear a notation by endorsement or otherwise in form approved by the City and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand on the Owner of the 2022A Bonds Outstanding at the time of such execution and presentation of his or her 2022A Bonds for the purpose at the Office of the Trustee or at such additi onal offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such 2022A Bonds. If the Supplemental Indenture shall so provide, new 2022A Bonds so modified as to conform, in the opinion of the City and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the City and authenticated by the Trustee, and upon demand on the Owners of the 2022A Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to the 2022A Bond Owner, for 2022A Bonds then Outstanding, upon surrender for cancellation of such 2022A Bonds, in equal aggregate principal amount of the same maturity.

Section 9.04. Amendment of 2022A Bonds. The provisions of this Article shall not prevent any 2022A Bond Owner from accepting any amendment as to the 2022A Bonds held by such Owner. 66 43
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ARTICLE X

DEFEASANCE
Section 10.01. Discharge of Indenture. The 2022A Bonds may be paid by the City in any of the following ways, provided that the City also pays or causes to be paid any other sums payable hereunder by the City:
(a) by paying or causing to be paid the principal of and interest and redemption premiums (if any) on the 2022A Bonds, as and when the same become due and payable; (b) by depositing with the Trustee or an escrow agent , in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem all 2022A Bonds then Outstanding; or
(c) by delivering to the Trustee, for cancellation by it, the 2022A Bonds then Outstanding.

If the City shall also pay or cause to be paid all other sums payable hereunder by the City, then and in that case, at the election of the City (as evidenced by a Certificate of the City, filed with the Trustee, signifying the intention of the City to discharge all such indebtedness and the Indenture), and notwithstanding that the 2022A Bonds shall not have been surrendered for payment, the Indenture and the pledge of Revenues and other assets made under the Indenture and all covenants, agreements and other obligations of the City under the Indenture shall cease, terminate, become void and be completely discharged and satisfied, except for the City’s obligations under Section 8.06. In such event, upon the Written Request of the City, the Trustee shall execute and deliver to the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver all moneys or securities or other property held by it pursuant to the Indenture which are not required for the payment or redemption of 2022A Bonds not theretofore surrendered for such payment or redemption to the City.

Section 10.02. Discharge of Liability on 2022A Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section

10.03) to pay or redeem any Outstanding 2022A Bonds (whether upon or prior to the maturity or the Redemption Date of such 2022A Bonds), provided that, if such Outstanding 2022A Bonds are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Article IV or provisions satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the City in respect of such 2022A Bonds shall cease, terminate and be completely discharged, and the Owners thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject however, to the provisions of Section 10.04.

The City may at any time surrender to the Trustee for cancellation by it the 2022A Bonds previously issued and delivered, which the City may have acquired in any manner whatsoever, and such 2022A Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.

Section 10.03. Deposit of Money or Securities with Trustee. Whenever in the Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any 2022A Bonds, the money or securities so to be 67 44
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deposited or held may include money or securities held by the Trustee in the funds and accounts established pursuant to the Indenture and shall be:
(a) lawful money of the United States of America in an amount equal to the principal amount of such 2022A Bonds and all unpaid interest thereon to maturity, except that, in the case of 2022A Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in Article IV or provisions satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount of such 2022A Bonds and all unpaid interest and premium, if any, thereon to the Redemption Date; or
(b) Federal Securities the principal of and interest on which when due will, in the written opinion of an Independent Certified Public Accountant or Independent Financial Consultant filed with the City and the Trustee, provide money sufficient to pay the principal of and all unpaid interest to maturity, or to the Redemption Date (with premium, if any), as the case may be, on the 2022A Bonds to be paid or redeemed, as such principal, interest and premium, if any, become due, provided that in the case of 2022A Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice; provided, in each case, that: (i) the Trustee shall have been irrevocably instructed (by the terms of the Indenture or by Written Request of the City) to apply such money to the payment of such principal, interest and premium, if any, with respect to such 2022A Bonds; (ii) the City shall have delivered to the Trustee an opinion of Bond Counsel addressed to the City, the Trustee to the effect that such 2022A Bonds have been discharged in accordance with the Indenture (which opinion may rely upo n and assume the accuracy of the Independent Certified Public Accountant’s or Independent Financial Consultant’s opinion referred to above).

Section 10.04. Payment of 2022A Bonds After Discharge of Indenture. Notwithstanding any provisions of the Indenture, any moneys held by the Trustee in trust for the payment of the principal of, or interest on, the 2022A Bonds and remaining unclaimed for two (2) years after the principal of the 2022A Bonds has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in the Indenture), if such moneys were so held at such date, or two (2) years after the date of deposit of such moneys if deposited after said date when the 2022A Bonds became due and payable, shall be repaid to the City (without liability for interest) free from the trusts created by the Indenture upon receipt of an indemnification agreement acceptable to the City and the Trustee indemnifying the Trustee with respect to claims of Owners of 2022A Bonds which have not yet been paid, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the City as aforesaid, the Trustee shall at the written direction of the City (at the cost of the City) first mail to the Owners of 2022A Bonds which have not yet been paid, at the address shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the 2022A Bonds so payable and not presented and with respect to the provisions relating to the repayment to the City of the moneys held for the payment thereof.
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ARTICLE XI

MISCELLANEOUS
Section 11.01. Liability of City Limited to Revenues . Notwithstanding anything in the Indenture or the 2022A Bonds, but subject to the priority of payment with respect to Operation and Maintenance Costs, the City shall not be required to advance any moneys derived from any source other than the Revenues, the Revenue Fund and other moneys pledged under the Indenture for any of the purposes mentioned in the Indenture, whether for the payment of the principal of or interest on the 2022A Bonds or for any other purpose of the Indenture. Nevertheless, the City may, but shall not be required to, advance for any of the purposes hereof any funds of the City which may be made available to it for such purposes.

The obligation of the City to pay interest and principal on the 2022A Bonds is a special obligation of the City payable solely from the Net Revenues and amounts on deposit in the Revenue Fund, and does not constitute a debt of the City or of the State of California or of any political subdivision thereof (other than the City) in contravention of any constitutional or statutory debt limitation or restriction.

Section 11.02. Successor Is Deemed Included in All Reference s to Predecessor . Whenever in the Indenture either the City or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in the Indenture contained by or on behalf of the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 11.03. Limitation of Rights to Parties and 2022A Bond Owners. Nothing in the Indenture or in the 2022A Bonds expressed or implied is intended or shall be construed to give to any person other than the City, the Trustee and the Owners of the 2022A Bond s, any legal or equitable right, remedy or claim under or in respect of the Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the City, the Trustee and the Owners of the 2022A Bonds.

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

Section 11.05. Destruction of 2022A Bonds . Whenever in the Indenture provision is made for the cancellation by the Trustee and the delivery to the City of the 2022A Bonds, the Trustee shall destroy such 2022A Bonds as may be allowed by law, and, upon the City’s request, deliver a certificate of such destruction to the City.

Section 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in the Indenture or in the 2022A Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in the Indenture and such invalidity, illegality or unenforceability 69 46
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shall not affect any other provision of the Indenture, and the Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The City hereby declares that it would have entered into the Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the 2022A Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of the Indenture may be held illegal, invalid or unenforceable.

Section 11.07. Notices. Any notice to or demand upon the City or the Trustee shall be deemed to have been sufficiently given or served for all purposes by being sent by facsimile, electronic mail, overnight mail or courier, or by being deposited, first class mail, postage prepaid, in a post office letter box, addressed, as the case may be, to the City at City of Sanger, 1700 7th Street, Sanger, California 93657, Attention: City Manager (or such other address as may have been filed in writing by the City with the Trustee), or to the Trustee at 633 West 5 th Street, 24 th Floor, Los Angeles, California 90071; Attention: Global Corporate Trust.

Section 11.08. Evidence of Rights of 2022A Bond Owners. Any request, consent or other instrument required or permitted by the Indenture to be signed and executed by 2022A Bond Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such 2022A Bond Owners in person or by an agent or agents duly appointed in writing.

Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any person of 2022A Bonds transferable by delivery, shall be sufficient for any purpose of the Indenture and shall be conclusive in favor of the Trustee and the City if made in the manner provided in this Section.

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

The Ownership of 2022A Bonds shall be proved by the Registration Books.

Any request, consent, or other instrument or writing of the Owner of any 2022A Bonds shall bind every future Owner of the same 2022A Bond and the Owner of every 2022A Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the City in accordance therewith or reliance thereon.

Section 11.09. Disqualified 2022A Bonds . In determining whether the Owners of the requisite aggregate principal amount of 2022A Bonds have concurred in any demand, request, direction, consent or waiver under the Indenture, 2022A Bonds which are actually known by a Responsible Officer of the Trustee to be owned or held by or for the account of the City, or by any other obligor on the 2022A Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the City or any other obligor on the 2022A Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, unless all 2022A Bonds are so owned or held, in which case such 2022A Bonds shall not be disregarded and shall be deemed to be Outstanding. 2022A Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such 2022A Bonds and 70 47
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that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the City or any other obligor on the 2022A Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request, the City shall certify to the Trustee those 2022A Bonds that are disqualified pursuant to this Section 11.09 and the Trustee may conclusively rely on such certificate.

Section 11.10. Money Held for 2022A Bonds . The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to the 2022A Bonds shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the 2022A Bonds entitled thereto, subject, however, to the provisions of Section

10.04 hereof but without any liability for interest thereon.

Section 11.11. Funds and Accounts. Any fund or account required by the Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with corporate trust industry standards to the extent practicable, and with due regard for the requirements of Section 6.05(a) and for the protection of the security of the 2022A Bonds and the rights of every Owner thereof.

Section 11.12. Waiver of Personal Liability. No member, officer, agent, employee, consultant or attorney of the City shall be individually or personally liable for the payment of the principal of or premium or interest on the 2022A Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such member, officer, agent, employee, consultant or attorney from the performance of any official duty provided by law or by the Indenture.

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

Section 11.14. Choice of Law . THE INDENTURE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.

Section 11.15. Additional Rights of Original Purchaser. The following provisions shall apply so long as the Original Purchaser owns 100% of the 2022A Bonds:
(a) Notwithstanding any other provision of this Indenture, the Original Purchaser shall have the right to consent to the appointment of a successor Trustee appointed by the City after the resignation or removal of the Trustee.
(b) Notwithstanding any other provision of this Indenture, the Original Purchaser shall have the right to consent to any amendment to this Indenture. (c) The City shall inform the Original Purchaser promptly upon the occurrence of an Event of Taxability or an Event of Default.
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(d) The Original Purchaser is hereby expressly made a third party beneficiary of this Indenture.
(e) The City shall pay or reimburse the Original Purchaser for any and all charges, fees, costs and expenses that the Original Purchaser may reasonably pay or incur, as a result of any action or omission by the City, in connection with the following: (i) the administration, enforcement, defense, or preservation of any rights or security hereunder; (ii) any amendment, waiver, or similar action with respect to or related to this Indenture whether or not executed or completed; or (iii) any litigation or other dispute in connection with this Indenture.
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IN WITNESS WHEREOF, the City has caused the Indenture to be signed in its name by its Authorized Representative, and the Trustee, in token of its acceptance of the duties and obligations of the Trustee created hereunder, has caused the Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.

CITY OF SANGER
By:

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

Its: Authorized Officer

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EXHIBIT A
FORM OF 2022A BOND

THE REGISTERED OWNER OF THIS BOND ACKNOWLEDGES AND AGREES THAT

THIS BOND MAY ONLY BE TRANSFERRED UPON SATISFACTION OF THE REQUIREMENTS

IN THE INDENTURE, INCLUDING THE DELIVERY TO THE CITY AND THE TRUSTEE OF A PURCHASER’S CERTIFICATE IN THE FORM REQUIRED BY THE INDENTURE. ANY

TRANSFER OF THIS BOND IN VIOLATION OF THE TRANSFER RESTRICTIONS CONTAINED IN THE INDENTURE SHALL BE VOID AND OF NO EFFECT.

No. R-1 $__________

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

CITY OF SANGER
2022A WATER REVENUE REFUNDING BONDS

INTEREST RATE MATURITY DATE ORIGINAL ISSUE DATE

4.09% June 15, 2043 May ___, 2022

REGISTERED OWNER WEBSTER BANK , NATIONAL ASSOCIATION
PRINCIPAL AMOUNT: ____________________ THOUSAND DOLLARS The CITY OF SANGER , a municipal corporation that is duly organized and existing under the Constitution of the State of California (the “City”), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the “Registered Owner”), on the Maturity Date specified above (subject to any right of prior redemption hereinafter provided for), the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this Bond (unless: (i) this Bond is authenticated after the fi rst day of the calendar month in which an interest payment date occurs, whether or not such day is a business day, and on or before the following interest payment date, in which event it shall bear interest from such interest payment date; or (ii) this Bond is authenticated on or before December 1, 2022, in which event it shall bear interest from the Original Issue Date identified above; provided, however, that if as of the date of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on this Bond), at the Interest Rate per annum specified above, payable on December 15, 2022 and each June 15 and December 15 thereafter until maturity, or the earlier redemption hereof, calculated on th e basis of a 360 day year composed of twelve 30 day months. Notwithstanding the foregoing, so long as any event of default shall have occurred and is continuing, the interest rate on this Bond may, at the option of the Owner of the Bond, be increased to the Default Rate as provided in the Indenture (as hereinafter defined); provided further, however, from and after the Date of Taxability following a Determination of Taxability, the interest rate on th is Bond shall be increased to the Taxable Rate. Principal hereof and premium, if any, upon early redemption hereof are payable by check of U.S. Bank Trust Company, N ational Association, as trustee (the “Trustee”). Interest 74 A-2
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hereon is payable by check of the Trustee sent by first class mail on the applicable in terest payment date to the Registered Owner hereof at the Registered Owner’s address as it appears on the registration books of the Trustee as of the close of business on the fi rst day of the month in which each interest payment date occurs (except that in the case of a Registered Owner of one million dollars ($1,000,000) or more in principal amount, such payment may, at such Registered Owner’s option, be made by wire transfer of immediately available funds to an account in the United States in accordance with written instructions provided to the Trustee by such Registered Owner prior to the first (1st) day of the month in which such interest payment date occurs).

Notwithstanding anything in the Indenture or this Bond to the contrary, so long as this Bond is owned by Webster Bank, National Association (the “Original Purchaser”): (i) the Trustee shall pay principal of and interest and premium on, if any, on this Bond when due by wire transfer in immediately available funds to the Original Purchaser in accordance with such wire transfer instructions as shall be filed by the Original Purchaser with the Trustee from time to time; (ii) payments of principal on this Bond shall be made without the requirement for presentation and surrender by the Original Purchaser, provided that principal which is payable at maturity shall be made only upon presentation and surrender at the Office of the Trustee; and (iii) the Trustee shall not be required to give notice to the Original Purchaser of the mandatory sinking fund payments described in this Bond.

This Bond is not a debt of the State of California, or any of its political subdivisions (other than the City), and neither the State, nor any of its political subdivisions (other than the City), is liable hereon, nor i n any event shall this Bond be payable out of any funds or properties of the City other than the Net Revenues (as such term is defined in the Indenture of Trust, dated as of May 1, 2022 (the “Indenture”), by and between the City and the Trustee) and other moneys pledged therefor under the Indenture. The obligation of the City to make payments in accordance with the Indenture is a limited obligation of the City as set forth in the Indenture and the City shall have no liability or obligation in connection he rewith except with respect to such payments to be made pursuant to the Indenture. This Bond does not constitute an indebtedness of the City in contravention of any constitutional or statutory debt limitation or restriction.

This Bond constitutes the entir e issue of a duly authorized issue of bonds of the City designated as the “City of Sanger 2022A Water Revenue Refunding Bonds” (the “2022A Bonds”), of an aggregate principal amount of ____________________Thousand Dollars ($__________),issued pursuant to the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with Section 53570) of the Government Code of the State of California, and pursuant to the Indenture and the resolution authorizing the issuance of the 2022A Bonds.

Reference is hereby made to the Indenture (a copy of which is on file at the office of the City) and all supplements thereto for a description of the terms on which the 2022A Bonds are issued, the provisions with regard to the nature and extent of the Net Revenues, and the rights thereunder of the Owners of the 2022A Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the City hereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees.

The 2022A Bonds have been issued in fully registered form without coupons. 75 A-3
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The 2022A Bonds have been issued by the City for the purpose of paying and prepaying certain obligations of the City to refinance certain capital improvements to the City’s municipal Water System.

This Bond and the interest, premium, if any, hereon is a special obligation of the City, secured by a pledge and lien on the Revenues and any other amounts on deposit in certain funds and accounts created under the Indenture, and payable from the Net Revenues. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest and premium (if any) on this Bond.

The Indenture and the rights and obligations of the City and the Owners of the 2022A Bond s and the Trustee may be modified or amended from time to time and at any time with the written consent of the Owners of the 2022A Bonds then Outstanding, in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall extend the fixed maturity of the 2022A Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the O wner of the 2022A Bonds, or permit the creation of any lien on the Revenues and other assets pledged under the Indenture prior to or on a parity with the lien created by the Indenture except as permitted in the Indenture, or deprive the Owners of the 2022A Bonds of the lien created by the Indenture on such Revenues and other assets, except as expressly provided in the Indenture, without the consent of the Owners of the 2022A Bonds then Outstanding.

The Indenture and the rights and obligations of the City, of the Trustee and the Owners of the 2022A Bonds may also be modified or amended for certain purposes described more fully in the Indenture at any time in the manner, to the extent and upon the terms provided in the Indenture by a supplemental indenture, which the City and the Trustee may enter into without the consent of any 2022A Bond Owners, if the Trustee shall receive an opinion of Bond Counsel to the effect that the provisions of such supplemental indenture will not materially adversely affect the interests of the Owners of the Outstanding 2022A Bonds.
[Prior to Tax -Exempt Reissuance Date : The 2022A Bonds shall be subject to optional redemption, as a whole but not in part , on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee and t he Owner at least 30 days (or such lesser number of days acceptable to the Trustee and the Owner in the sole discretion of the Trustee and the Owner , such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
June 15, 2024 to and including December 15, 2026 102%
June 15, 2027 to and including December 15, 2028 101
June 15, 2029 and any Interest Payment Date thereafter 100

At the City’s option and upon satisfaction of certain conditions set forth in the Indenture, on any business date on or after June 15, 2023, the interest rate on this Bond shall convert to the Tax- Exempt Rate (defined in the Indenture), and the optional redemption provisions applicable to the 2022A Bonds will be modified in the manner described in the Indenture.] 76 A-4
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[Post Tax-Exempt Reissuance Date (option to be selected by Owner of the Bond):
[OPTION 1: The 2022A Bonds shall be subject to optional redemption , as a whole but not in part, on any Interest Payment Date , as directed by the City in a Written Request provided to the Trustee and the Owner at least 30 days (or such lesser number of days acceptable to the Trustee and the Owner in the sole discretion of the Trustee and the Owner, such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
June 15, 2024 to and including December 15, 2026 102%
June 15, 2027 to and including December 15, 2028 101
June 15, 2029 and any Interest Payment Date thereafter 100

OPTION 2: The 2022A Bonds shall be subject to optional redemption, as a whole but not in part, on any Interest Payment Date , as directed by the City in a Written Request provided to the Trustee and the Owner at least 30 days (or such lesser number of days acceptable to the Trustee and the Owner in the sole discretion of the Trustee and the Owner, such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
June 15, 2024 to and including December 15, 2028 101%
June 15, 2029 and any Interest Payment Date thereafter 100

OPTION 3: The 2022A Bonds shall be subject to optional redemption, as a whole but not in part, on any Interest Payment Date , as directed by the City in a Written Request provided to the Trustee and the Owner at least 30 days (or such lesser number of days acceptable to the Trustee and the Owner in the sole discretion of the Trustee and the Owner, such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
June 15, 2024 and any Interest Payment Date thereafter 100%

OPTION 4: The 2022A Bonds are not subject to optional redemption prior to maturity.]] The 2022A Bonds are subject to mandatory sinking fund redemption in part (by lot) on June 15, 2023 and each June 15 thereafter, in integral multiples of $1,000 at a Redem ption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, as set forth in the Indenture.

If some but not all of the 2022A Bonds are redeemed pursuant to the optional redemption provision of the Indenture, as described above, the principal amount of the applicable 2022A Bonds to be redeemed on any subsequent June 15 will be reduced, by $1,000 or an integral multiple thereof, as designated by the City in a Written Order of the City filed with the Trustee; provided, however, 77 A-5
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that the aggregate amount of such reductions shall not exceed the aggregate amount of the applicable 2022A Bonds redeemed pursuant to the optional redemption provision of the Indenture.

As provided in the Indenture, notice of redemption shall be mailed by the Trustee by first class mail at least 30 days but not more than 60 days prior to the date fixed for redemption to the Registered Owner of the Bond at its address appearing on the registration books of the Trustee, but neither the failure to receive such notice nor any defect in the notice or the mailing thereof shall affect the validity of the redemption.

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

If an Event of Default, as defined in the Indenture, shall occur, the principal of this Bond and the interest accrued thereon may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture.

This Bond is transferable by the Registered Owner hereof, in person or by his or her duly authorized attorney in writing, at the Office of the Trustee but only in the manner, subject to the limitations and upon payment of the taxes and charges provided in the Indenture and upon surrender and cancellation of this Bond. Upon registration of such transfer, a new Bond of the same series, for the same Outstanding principal amount of this Bond will be issued to the transferee in exchange therefor.

This Bond may be exchanged at said Office of the Trustee for a single Bond in like Outstanding principal amount of the same series and same maturity, but only in the manner, subject to the limitations and upon payment of the taxes and charges provided in the Indenture.

The Trustee shall not be required to register the transfer or exchange of this Bond during the period in which this Bond has been selected for redemption.

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

It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, ha ve happened or have been performed in due and regular time, form and manner as required by the Indenture and the laws of the State of California and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any limit under any laws of the State of California, and is not in excess of the amount of 2022A Bonds permitted to be issued under the Indenture.

This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee.
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IN WITNESS WHEREOF, the City has caused this Bond to be executed in its name and on its behalf with the manual or facsimile signature of its City Manager as of this _____ day of May , 2022.

CITY OF SANGER
By:

Its: City Manager

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[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION
TO APPEAR ON BONDS]
This is the 2022A Bond described in the within-mentioned Indenture.

Dated:

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

Its: Authorized Signatory

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[FORM OF ASSIGNMENT]
For value received the undersigned hereby sells, assigns and transfers unto

(Name, Address and Tax Identification or
Social Security Number of Assignee)
the within registered Bond and hereby irrevocably constitute(s) and appoint(s) __________________ _________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.

Dated:

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

Signature Guaranteed:

Note: Signature guarantee shall be made by a
guarantor institution participating in
the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee.
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EXHIBIT B

DESCRIPTION OF PRIOR PROJECT
Component Capital Cost
The Prior Project is comprised of system wide water meter replacements and repairs as well as the installation of advanced water meter infrastructure that allows for all of the water meter data within the City to be transferred real time to a central location for analysis and billing.

The Prior Project also includes system wide leak detection sensors that will also transmit to the same centralized location. $3,900,519.00

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EXHIBIT C
FORM OF PURCHASER’S CERTIFICATE
__________, 20__
City of Sanger
Sanger, California
U.S. Bank Trust Company, National Association
Los Angeles, California
Re: City of Sanger 2022A Water Revenue Refunding Bonds
Ladies and Gentlemen:

The undersigned (the “ Purchaser”) hereby acknowledges that it is purchasing $__________ aggregate principal amount of City of Sanger 2022A Water Revenue Refunding Bonds, consisting of a single, fully registered bond (the “Bond”) issued in the Authorized Denomination amount pursuant to an Indenture of Trust, dated as of May 1, 2022 (the “Authorizing Document”), by and between the City of Sanger (the “Issuer”) and U.S. Bank Trust Company, National Association, as trustee.

Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Authorizing Document.

The Purchaser acknowledges that the proceeds of the Bond will be used for the purposes, and Bond principal and interest thereon shall be payable solely from the sources, described in the Authorizing Document.

In connection with the Purchaser’s extension of credit through its purchase of the B ond, hereby makes the following representations upon which you may rely:

1. The Purchaser has the authority and is duly authorized to extend credit to the Issuer by purchasing the Bond and to execute this letter and any other instruments and documents required to be executed by the Purchaser in connection with its purchase of the Bond.

The Purchaser (a) is a
bank, any entity directly or indirectly controlled by the bank or under common control with the bank, other than a broker, dealer or municipal securiti es dealer registered under the Securities Exchange Act of 1934, or a consortium of such entities; and (b) has the present intent to hold the Bond to maturity or earlier redemption.

2. The Purchaser is (a) a “qualified institutional buyer” as that term is d efined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or (b) an “accredited investor” as that term is defined in Rule 501(a)(1),(2),(3), or (7) under the Securities Act.

3. The Purchaser is not purchasing the Bond for more than one account or with a view to distributing the Bond other than to an affiliate.

4. The Purchaser understands that the Bond is not, and is not intended to be, registered under the Securities Act and that such registration is not legally required as of the date hereof, and 83 C-2
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further understands that the Bond (a) is not being registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating agency, and (d) will be delivered in a form that may not be readily marketable.

5. The Purchaser acknowledges that it has either been supplied with or been given access to information which it has requested from the Issuer and to which a reasonable lender would attach significance in making lending decisions, and the Purchaser has had the opportunity to ask questions and receive answers from knowledgeable individuals, including its own counsel, concerning the Issuer and the Bond and the security therefor so that, as a reasonable lender, the Purchaser has been able to make a decisio n to purchase the Bond. The Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its prospective purchase of the Bond.

6. The Purchaser acknowledges that the obligations of the Issuer under the Authorizing Document do not constitute obligations of the Issuer for which the Issuer is obligated to levy or pledge, or has levied or pledged, general or special taxes. The Bond is a limited obligation of the Issuer but is not a debt of the Issuer, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction.

7. The Purchaser has made its own inquiry and analysis with respect to the Bond and the security therefor, and other material factors affecting the security and payment of the Bond. The Purchaser is aware that there are certain economic and regulatory variables and risks that could adversely affect the security for the Bond. The Purchaser has reviewed the documents executed in conjunction with the issuance of Bond, or summaries thereof, including, without limitation, the Authorizing Document.

8. The Purchaser acknowledges and agrees that the Issuer take s no responsibility for, and makes no representation to the Purchaser , or any subsequent purchaser, with regard to, a sale, transfer or other disposition of the Bond in violation of the provisions of the Authorizing Document, or any securities law or income tax law consequences thereof. The Purchaser also acknowledges that, with respect to the Issuer’s obligations and liabilities, the Purchaser is solely responsible for compliance with the sales restrictions on the Bond in connection with any subsequent transfer of the Bond made by the Purchaser.

9. The Purchaser agrees that it is bound by and will abide by the provisions of the Authorizing Document relating to transfer, the restrictions noted on the face of the Bond and this Purchaser Letter. The Purchaser also covenants to comply with all applicable federal and state securities laws, rules and regulations in connection with any resale or transfer of the Bond by the Purchaser.

10. The Purchaser acknowledges that the sale of the Bond to the Purchaser is made in reliance upon the certifications, representations, and warranties herein made to the addressees hereto.

11. The interpretation of the provisions hereof shall be governed and construed in accordance with State of California law without regard to principles of conflicts of laws. 84 C-3
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12. All representations of the Purchaser contained in this letter shall survive the execution and delivery of the Bond to the Purchaser as representations of fact existing as of the date of execution and delivery of this Purchaser’s Certificate.

13. Inasmuch as the Bond represents a negotiated transaction, the Purchaser is not acting as a fiduciary of the Issuer, but rather is acting solely in its capacity as the initial O wner, for its own loan account. The Purchaser acknowledges and agrees that (i) the transaction contemplated herein is an arm’s length commercial transaction between the Issuer and the Purchaser and its affiliates, (ii) in connection with such transaction, the Purchaser and its affiliates are acting solely as a pri ncipal and not as an advisor including, without limitation, a “Municipal Advisor” as such term is defined in Section 15B of the Securities and Exchange Act of 1934, as amended, and the related final rules (the “Municipal Advisor Rules”), (iii) the Purchase r and its affiliates are relying on the purchaser exemption in the Municipal Advisor Rules, (iv) the Purchaser and its affiliates have not provided any advice or assumed any advisory or fiduciary responsibility in favor of the Issuer with respect to the transaction contemplated by the Bond and the discussions, undertakings and procedures leading thereto (whether or not the Purchaser, or any affiliate of the Purchaser, has provided other services or advised, or is currently providing other services or advis ing the Issuer on other matters) and (v) the Purchaser and its affiliates have financial and other interests that differ from those of the Issuer. [PURCHASER/TRANSFEREE]
By:

Its:

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EXHIBIT D

CITY OF SANGER
2022A WATER REVENUE REFUNDING BONDS
Election of Conversion to the Tax-Exempt Rate
The undersigned, _________ of the City of Sanger (the “City”), hereby provides notice on behalf of the City that the City elect s to convert the interest rate payable with respect to the above - referenced bonds (the “Bonds”) to the Tax-Exempt Rate on the date hereof . Capitalized terms used herein and not defined shall have the meanings given such terms in the Indenture of Trust dated as of May 1, 2022, by and between the City and U.S. Bank Trust Company, National Association, as trustee, pursuant to which the Bonds were issued.

Dated: __________, 20__ CITY OF SANGER
By:

Title:

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EXHIBIT E
[Tax-Exempt Reissuance Date]
City of Sanger
Sanger, California
Re: $_________ City of Sanger 2022A Water Revenue Refunding Bonds Ladies and Gentlemen:

We have examined the Constitution and the laws of the State of California, a certified record of the proceedings of the City of Sanger (the “City”) taken in connection with the conversion of the interest rate payable with respect to City of Sanger 2022A Water Revenue Refunding Bonds in the aggregate principal amount of $__________ (the “Bonds”) to the tax-exempt rate and such other information and documents as we consider necessary to render this opinion. In rendering this opinion, we have relied upon certain representations of fact and certifications made by the City, the purchaser of the Bonds and others. We have not undertaken to verify through independent investigation the accuracy of the representations and certifications relied upon by us.

The Bonds have been issued pursuant to Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with Section 53570) of the Government Code of the State of California and the Indenture of Trust dated as of May 1, 2022 by and between the City and U.S. Bank Trust Company, National Association (the “Indenture”). Capitalized terms used herein and not defined shall have the meanings given such terms in the Indenture.

Based upon our examination of the foregoing, and in reliance thereon and on all matters of fact as we deem relevant under the circumstances, and upon consideration of applicable laws, we are of the opinion that:

1. Under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest on the Bonds on and after the date hereof is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals.

2. Interest on the Bonds is exempt from State of California personal income tax.

The opinions expressed herein as to the exclusion from gross income of interest on the Bonds are based upon certain representations of fact and certifications made by the City and are subject to the condition that the City compl y with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”) that must be satisfied subsequent to the reissuance of the Bonds to assure that such interest on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of reissuance of the Bonds. The City has covenanted to comply with all such requirements. 87 E-2
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The opinions expressed herein may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture and the Tax Certificate relating to the Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. No opinion is expressed herein as to the effect on the exclusion from gross income of interest on the Bonds for federal income tax purposes with respect thereto if any such action is taken or omitted based upon the opinion or advice of counsel other than ourselves. Other than expressly stated herein, we express no other opinion regarding tax consequences with respect to the Bonds.

The opinions expressed herein are based upon our analysis and interpretation of existing laws, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. We call attention to the fact that the rights and obligations under the Indenture, the Tax Certificate and the Bonds are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State of California.

Our opinion is limited to matters governed by the laws of the State of California and federal tax law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

Respectfully submitted,

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[FORM OF RELIANCE LETTER]
[Tax-Exempt Reissuance Date]
[Bond Owner]
[Trustee]
Re: $_________ City of Sanger 2022A Water Revenue Refunding Bonds Ladies and Gentlemen:

On the date hereof, we delivered to the City of Sanger (the “City”) our opinion (the “Opinion”) in connection with the conversion of the interest rate payable with respect to the above - captioned bonds (the “Bonds”) to the tax -exempt rate, which have been issued pursuant to Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with Section 53570) of the Government Code of the State of Cal ifornia and the Indenture of Trust dated as of May 1, 2022 by and between the City and U.S. Bank Trust Company, National Association (the “Indenture”). You are authorized to rely on the Opinion as if it were addressed to you.

This letter is being furnished to you solely for your benefit in connection with the conversion of the interest rate payable with respect to of the Bonds to the tax- exempt rate and is not to be used, circulated, quoted or otherwise referred to for any other purpose without our prior written consent.

The Opinion is limited to matters governed by the laws of the State of California and federal tax law, and we assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction. No attor ney-client relationship has existed or exists between our firm and you in connection with the Bonds or by virtue of this letter and we are not assuming any professional responsibility to any other person whomsoever.

Respectfully submitted,
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EXHIBIT F
OWNER’S CERTIFICATE
IT IS HEREBY CERTIFIED by the undersigned, __________ (the “Owner”) with respect to the conversion of the interest rate payable with respect to the City of Sanger 2022A Water Revenue Refunding Bonds (the “Bonds ”) to the Tax -Exempt Rate on the date hereof (the Bonds bearing interest at the Tax-Exempt Rate is referred to herein as the “Tax-Exempt Bonds”) that:

1. The Owner hereby selects the following optional redemption provision to be applicable to the Tax-Exempt Bonds from and after the date hereof:
[OWNER PICKS ONE OF THE FOLLOWING FOUR OPTIONS]
[Option No. 1]
The 2022A Bonds shall be subject to optional redemption, as a whole but not in part , on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee and the Owner at least 30 days (or such lesser number of days acceptable to the Trustee and the Owner in the sole discretion of the Trustee and the Owner , such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
June 15, 2024 to and including December 15, 2026 102%
June 15, 2027 to and including December 15, 2028 101
June 15, 2029 and any Interest Payment Date thereafter 100

[Option No. 2]
The 2022A Bonds shall be subject to optional redemption, as a whole but not in part , on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee and the Owner at least 30 days (or such lesser number of days acceptable to the Trustee and the Owner in the sole discretion of the Trustee and the Owner , such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
June 15, 2024 to and including December 15, 2028 101%
June 15, 2029 and any Interest Payment Date thereafter 100

[Option No. 3]
The 2022A Bonds shall be subject to optional redemption, as a whole but not in part , on any Interest Payment Date thereafter, as directed by the City in a Written Request provided to the Trustee and the Owner at least 30 days (or such lesser number of days acceptable to the Trustee and the Owner in the sole discretion of the Trustee and the Owner , such notice for the convenience of the 90 F-2
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Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
June 15, 2024 and any Interest Payment Date thereafter 100%

[Option No. 4]
The 2022A Bonds are not subject to optional redemption prior to maturity.]

2. The Owner hereby acknowledges receipt of the “City of Sanger 2022A Water Revenue Refunding Bonds,” in the principa l amount of $__________, maturing, bearing interest at the Tax -Exempt Rate and subject to redemption prior to maturity as provided in the Indenture of Trust dated as of May 1, 2022 by and between the City and U.S. Bank Trust Company, National Association (the “Indenture”) and as set forth above, and the Tax -Exempt Bonds is registered in the name of the Owner.

3. The Owner intends to retain the Tax -Exempt Bonds for its own portfolio until maturity and does not intend to reoffer the Tax-Exempt Bonds to the public.

4. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture.

WITNESS my hand on this ___________, 20__.

[OWNER]
By .

Authorized Officer
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Stradling Yocca Carlson & Rauth
Draft of 4/18/2022

4876-1364-1499v3/022765-0009

INDENTURE OF TRUST
Dated as of May 1, 2022
By and between
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
and the

CITY OF SANGER
Relating to
$__________

CITY OF SANGER
2022B WASTEWATER REVENUE REFUNDING BONDS

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ARTICLE I

DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS
Section 1.01. Definitions .............................................................................................................. 3 Section 1.02. Content of Certificates and Opinions.................................................................... 12 Section 1.03. Interpretation......................................................................................................... 12

ARTICLE II

THE 2022B BONDS
Section 2.01. Authorization of 2022B Bonds ............................................................................. 13 Section 2.02. Terms of the 2022B Bonds ................................................................................... 13 Section 2.03. Transfer of 2022B Bonds ...................................................................................... 14 Section 2.04. Exchange of 2022B Bonds ................................................................................... 14 Section 2.05. Registration Books ................................................................................................ 15 Section 2.06. Form and Execution of 2022B Bonds .................................................................. 15 Section 2.07. 2022B Bonds Mutilated, Lost, Destroyed or Stolen ............................................. 15 Section 2.08. Initial Delivery of 2022B Bonds ........................................................................... 16 Section 2.09. Conversion to Tax-Exempt Rate .......................................................................... 16

ARTICLE III

ISSUANCE OF 2022B BONDS; APPLICATION OF PROCEEDS
Section 3.01. Issuance of the 2022B Bonds ............................................................................... 17 Section 3.02. Application of Proceeds of the 2022B Bonds ....................................................... 17 Section 3.03. Establishment and Application of Costs of Issuance Fund ................................... 17 Section 3.04. Validity of 2022B Bonds ...................................................................................... 17

ARTICLE IV

REDEMPTION OF 2022B BONDS
Section 4.01. Terms of Redemption ........................................................................................... 17 Section 4.02. Selection of 2022B Bonds for Redemption .......................................................... 19 Section 4.03. Notice of Redemption ........................................................................................... 19 Section 4.04. Partial Redemption of 2022B Bonds .................................................................... 19 Section 4.05. Effect of Redemption ............................................................................................ 19

ARTICLE V

REVENUES, FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST Section 5.01. Pledge and Assignment; Revenue Fund ............................................................... 20 Section 5.02. A llocation of Revenues ......................................................................................... 21 Section 5.03. Application of Interest Account ............................................................................ 22 144

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Section 5.04. Application of Principal Account ......................................................................... 22 Section 5.05. Application of Redemption Fund ......................................................................... 22 Section 5.06. Investments ........................................................................................................... 22 Section 5.07. Rebate Fund .......................................................................................................... 23 Section 5.08. Establishment and Application of Rate Stabilization Fund .................................. 25 Section 5.09. Reserved ............................................................................................................... 25 Section 5.10. Application of Funds and Accounts When No 2022B Bonds are Outstanding .... 25

ARTICLE VI

PARTICULAR COVENANTS
Section 6.01. Punctual Payment ................................................................................................. 25 Section 6.02. Extension of Payment of 2022B Bonds ................................................................ 25 Section 6.03. Against Encumbrances ......................................................................................... 26 Section 6.04. Power to Issue 2022B Bonds and Make Pledge and Assignment ........................ 26 Section 6.05. Accounting Records and Financial Statements .................................................... 26 Section 6.06. Tax Covenants ...................................................................................................... 27 Section 6.07. Waiver of Laws ..................................................................................................... 27 Section 6.08. Further Assurances ............................................................................................... 28 Section 6.09. Budgets ................................................................................................................. 28 Section 6.10. Observance of Laws and Regulations ................................................................... 28 Section 6.11. Compliance with Contracts ................................................................................... 28 Section 6.12. Prosecution and Defense of Suits ......................................................................... 28 Section 6.13. [Reserved.] ............................................................................................................ 29 Section 6.14. Additional Contracts and Bonds ........................................................................... 29 Section 6.15. Against Sale or Other Disposition of Property ..................................................... 30 Section 6.16. Against Competitive Facilities ............................................................................. 30 Section 6.17. Maintenance and Operation of the Wastewater System ....................................... 30 S
ection 6.18. Payment of Claims ................................................................................................ 30 Section 6.19. Insurance ............................................................................................................... 30 Section 6.20. Payment of Taxes and Compliance with Governmental Regulations .................. 31 Section 6.21. Amount of Rates and Charges .............................................................................. 31 Section 6.22. Collection of Rates and Charges ........................................................................... 31 Section 6.23. Eminent Domain Proceeds ................................................................................... 31 Section 6.24. Enforcement of Contracts ..................................................................................... 31

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES OF 2022B BOND OWNERS
Section 7.01. Events of Default .................................................................................................. 32 Section 7.02. Remedies Upon Event of Default ......................................................................... 32 Section 7.03. Application of Revenues and Other Funds After Default ..................................... 33 Section 7.04. Trustee to Represent 2022B Bond Owners .......................................................... 34 Section 7.05. 2022B Bond Owners’ Direction of Proceedings .................................................. 35 Section 7.06. Suit by Owners ..................................................................................................... 35 Section 7.07. Absolute Obligation of the City ............................................................................ 35 145

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Section 7.08. Remedies Not Exclusive ....................................................................................... 35 Section 7.09. No Waiver of Default ........................................................................................... 36

ARTICLE VIII

ARTICLE IX

MODIFICATION OR AMENDMENT OF THE INDENTURE
Section 9.01. Amendments Permitted ........................................................................................ 41 Section 9.02. Effect of Supplemental Indenture ......................................................................... 42 Section 9.03. Endorsement of 2022B Bonds; Preparation of New 2022B Bonds ...................... 42 Section 9.04. Amendment of Particular 2022B Bonds ............................................................... 43

ARTICLE X

DEFEASANCE
Section 10.01. Discharge of Indenture ......................................................................................... 43 Section 10.02. Discharge of Liability on 2022B Bonds ............................................................... 43 Section 10.03. Deposit of Money or Securities with Trustee ....................................................... 44 Section 10.04. Payment of 2022B Bonds After Discharge of Indenture ...................................... 44

ARTICLE XI

MISCELLANEOUS
Section 11.01. Liability of City Limited to Revenues .................................................................. 45 Section 11.02. Successor Is Deemed Included in All References to Predecessor ........................ 45 Section 11.03. Limitation of Rights to Parties and 2022B Bond Owners .................................... 45 Section 11.04. Waiver of Notice; Requirement of Mailed Notice ................................................ 45 Section 11.05. Destruction of 2022B Bonds ................................................................................ 46 Section 11.06. Severability of Invalid Provisions ........................................................................ 46 Section 11.07. Notices .................................................................................................................. 46 Section 11.08. E vidence of Rights of 2022B Bond Owners ......................................................... 46 Section 11.09. Disqualified 2022B Bonds .................................................................................... 47 Section 11.10. Money Held for Particular 2022B Bonds ............................................................. 47 Section 11.11. Funds and Accounts .............................................................................................. 47 Section 11.12. Waiver of Personal Liability ................................................................................. 47 146

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Section 11.13. Execution in Several Counterparts ....................................................................... 47 Section 11.14. Choice of Law....................................................................................................... 47 Section 11.15. Additional Rights of Original Purchaser .............................................................. 48

Signatures ............................................................................................................................ S-1 Exhibit A Form of 2022B Bond .......................................................................................... A-1 Exhibit B Description of Prior Project ................................................................................ B-1 Exhibit C Form of Purchaser’s Certificate .......................................................................... C-1 Exhibit D Form of Election of Conversion to Tax-Exempt Rate ........................................ D-1 Exhibit E Form of Opinion and Reliance Letter of Bond Counsel ..................................... E-1 Exhibit F Form of Owner’s Certificate ............................................................................... F-1

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RECITALS
A. The City previously entered into an Installment Sale Agreement (the “ 2013 Installment Sale Agreement”), dated as of November 1, 2013, with the Sanger Financing Authority (the “Authority”) in connection with the issuance by the Authority of its Subordinate Wastewater Revenue Bonds, Series 2013 (the “2013 Bonds”), the proceeds of which were used to finance certain capital improvements to the City’s municipal wastewater system.

C. The City is authorized pursuant to Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with Section 53570) of the Government Code of the State of California to issue w astewater revenue refunding bonds for the purpose of paying and prepaying the 2013 Installment Sale Agreement.

D. In order to provide for the authentication and delivery of w astewater revenue refunding bonds (the “2022B Bonds”), to establish and declare the terms and conditions upon which such 2022B Bonds are to be issued and secured and to secure the payment of the principal thereof and interest and premium, if any, thereon, the City has authorized the execution and delivery of this Indenture.

E. The City has determined that all acts and proceedings required by law necessary to make the 2022B Bonds, when executed by the City, authenticated and delivered by the Trustee, and duly issued, the valid, binding and legal special obligations of the City, and to constitute the Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of the Indenture have been in all respects duly authorized;

GRANTING CLAUSES
The C ity, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the mutual covenants herein contained and of the purchase and acceptance of the 2022B Bonds by the owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, in order to secure the payment of the principal of and the interest and premium (if any) on all 2022B Bonds at any time issued and Outstanding under the Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, does hereby assign and pledge unto, and grant a security interest in, the following (the “ Trust Estate”) to the Trustee, and its successors in trust and assigns 148

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forever, for the securing of the performance of the obligations of the City to the 2022B Bond Owners hereinafter set forth:

TO HAVE AND TO H OLD all and singular the Trust Estate, whether now owned or hereafter acquired, unto the Trustee and its respective successors in trust and assigns forever for the benefit of the Owners, and such pledge shall constitute a lien on and security interest in such Trust Estate;
IN TRUST, upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all present and future owners of the 2022B Bonds issued under and secured by the Indenture without privilege, priority or distinction as to the lien or otherwise of any of the 2022B Bonds over any of the other 2022B Bonds;
PROVIDED, HOWEVER, that if the City, its successors or assigns shall well and truly pay, or cause to be paid, the principal of and interest and any redemption premium on the 2022B Bond s due or to become due thereon, at the times and in the manner provided in the 2022B Bonds according to the true intent and meaning thereof, and shall well and truly keep, perform and observe all of the covenants and conditions pursuant to the terms of the Indenture to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee all sums of money due or to become due in accordance with the terms and provisions hereof, then upon such final payments or deposits as herein provided, the Indenture and the rights hereby granted shall cease, terminate and be void; otherwise the Indenture shall remain in full force and effect.

It is expressly declared that all 2022B Bonds issued and secured hereunder are t o be issued, authenticated and delivered, and all sold property, rights and interests, including, without limitation, the Revenues, hereby assigned and pledged, are to be dealt with and disposed of, under, upon and subject to the terms, conditions, stipula tions, covenants, agreements, trusts, uses and purposes hereinafter expressed, and the City has agreed and covenanted and does hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time to time of the 2022B Bonds, as follows:
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ARTICLE I

Accountant’s Report. The term “Accountant’s Report” means a report signed by an Independent Certified Public Accountant.

Accredited Investor. The term “Accredited Investor” is as defined in Rule 501(a)(1),(2),(3), or (7) of the Securities Act of 1933, as amended.

Authority. The term “Authority” means the Sanger Financing Authority.

Authorized Denomination. The term “Authorized Denomination” means, for the 2022B Bond, the principal amount thereof, as reduced by payment or redemption, as provided therein.

Authorized Representative. The term “Authorized Representa tive” means, with respect to the City, its Mayor, Mayor Pro Tem, City Clerk, City Manager , Finance Director or any other person designated as an Authorized Representative of the City by a Certificate of the City signed by its Mayor, Mayor Pro Tem, City Clerk, City Manager or Finance Director and filed with the Trustee.

Bonds. The term “Bonds” means all revenue bonds or notes of the City authorized, executed, issued and delivered by the City, the payments of which are payable from Net Revenues on a parity with the 2022B Bonds and which are secured by a pledge of and lien on Revenues as described in Section 5.01 hereof, including the City’s 2022A Wastewater Revenue Refunding Bonds.

Bond Year. The term “Bond Year” has the meaning that is set forth in the Tax Certificate.

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City. The term “City” means the City of Sanger , a municipal corporation that is duly organized and existing under the general laws and Constitution of the State of California.

Closing Date. The term “Closing Date” means the date on which the 2022B Bonds are delivered to the original purchaser thereof.

Code. The term “Code” means the Internal Revenue Code of 1986, as amended.

Contracts. The term “Contracts” means all contracts of the City previously or hereafter authorized and executed by the City, the payments under which are payable from Net Revenues on a parity with the 2022B Bonds and which are secured by a pledge and lien on Revenues as described in Section 5.01 hereof, but excluding contracts entered into for operation and maintenance of the Wastewater System.

Costs of Issuance. The term “Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City and related to the authorization, issuance, sale and delivery of the 2022B Bonds, including but not limited to costs of preparation and reproduction of documents, printing expenses, filing and recording fees, initial fees and charges of the Trustee and Escrow Agent and counsel to the Trustee and Escrow Agent, legal fees and charges, fees and disbursements of consultants and professionals, fees and charges for preparation, execution and safekeeping of the 2022B Bonds and any other cost, charge or fee in connection with the original issuance of the 2022B Bonds.

Costs of Issuance Fund. The term “Costs of Issuance Fund” means the fund by that name established pursuant to Section 3.03.

Date of Taxability . The term “Date of Taxability ” means the date from and after which interest on the 2022B Bonds is subject to federal income taxation as a result of a Determination of Taxability.

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(4) that portion of the Contracts required to be made during such period or during the next succeeding period, in each case computed as if such payments on such Contracts were deemed to accrue daily during such period in equal amounts (except to the extent that the interest portion of such Contracts is capitalized);
provided that, as to any such Bonds or Contracts bearing or comprising interest at other than a fixed rate, the rate of interest used to calculate Debt Service shall be the greater of: (a) the actual interest rate on such Bonds or Contracts on the date of calculation, or if the indebtedness is not yet outstanding, the initial interest rate (if est ablished and binding); (b) if the Bonds or Contracts have been outstanding for at least twelve months, the average rate over the twelve calendar months immediately preceding the date of calculation; and (c) (i) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Code, the most recently published Securities Industry and Financial Markets Association Index for tax-exempt variable rate obligations; or (ii) if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities plus 50 basis points; provided, however, that for purposes of any portion of Section 6.14 (Additional Contracts and Bonds ) and Section 6.21 (Amount of Rates and Charges), measuring actual debt service coverage during a test period, variable rate indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the test period; and provided further that, if any series or issue of such Bonds or Contracts have twenty-five percent (25%) or more of the aggregate principal amount of such series or issue due in any one year, Debt Service shall be determined for the Fiscal Year of determination as if the principal of and interest on such series or issue of such Bonds or Contracts were being paid from the date of incurrence thereof in substantially equal annual amounts over a period of twenty-five (25) years from the date of calculation; and
provided further that, as to any such Bonds or Contracts or portions thereof bearing no interest but which are sold at a discount and which discount accretes with respect to such Bonds or Contracts or portions thereof, such accreted discount shall be treated as interest in the calculation of Debt Service; and
provided further that, the amount on deposit in a debt service reserve fund on any date of calculation of Debt Service shall be deducted from the amount of principal due at the final maturity of the Bonds and Contracts for which such debt service reserve fund was established and in each prec eding year until such amount is exhausted; and
provided further that, Debt Service shall not include interest which is paid from investment earnings on amounts on deposit in reserve funds and transferred to the Payment Fund; and Default Rate. The term “De fault Rate” means the interest rate on the 2022B Bonds then in effect, plus 3.0% per annum.

Determination of Taxability. The term “Determination of Taxability ” means any determination, decision, or decree made by the Commissioner or any District Director of the Internal Revenue Service, or by any court of competent jurisdiction, that as a result of any actions or omissions of the City with respect to the 2022B Bonds the interest payable on the 2022B Bonds is includable in the gross income for federal income tax purposes of the Owner of the 2022B Bonds , provided, however, that no such Determination of Taxability shall be deemed to have occurred if the City is con testing such determination in good faith and is diligently proceeding to prosecute such 152

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contest until the earliest of (a) a final determination from which no appeal may be taken with respect to such determination, or (b) abandonment of such appeal by the City.

Escrow Agent. The term “Escrow Agent” means U.S. Bank Trust Company, N ational Association, as escrow agent under the Escrow Agreement, or any successor thereto.

Event of Default. The term “Event of Default” means any of the events specified in Section

7.01. Federal Securities. The term “Federal Securiti es” means any direct, noncallable general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or noncallable obligations the timely payment of principal of and interest on which are fully and unconditionally guaranteed by the United States of America.

Fitch. The term “Fitch” means Fitch Ratings, Inc., or any successor thereto.

Generally Accepted Accounting Principles . The term “Generally Accepted Accounting Principles” means the uniform accounting and reporting procedures set forth in publications of 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.

Independent Financial Consultant. The term “Ind ependent Financial Consultant” means a financial consultant or firm of such consultants appointed by the City, who, or each of whom: (1) is in fact independent and not under domination of the City; (2) does not have any substantial interest, direct or indirect, with the City; (3) is not connected with the City as an officer or employee thereof, but who may be regularly retained to make reports thereto; and (4) is registered as a “municipal advisor,” as defined in Section 15B of the Securities Exchange Act of 1934, as amended.

Interest Account. The term “Interest Account” means the account by that name in the Payment Fund established pursuant to Section 5.02.
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Interest Payment Date. The term “Interest Payment Date” means December 15, 2022 and each June 15 and December 15 thereafter until maturity of the 2022B Bonds, or the earlier redemption thereof.

Moody’s. The term “Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.

Office. The term “Office” means with respect to the Trustee, the corporate trust office of the Trustee in Los Angeles, California, or such other or additional offices as may be specified in writing by the Trustee to the City, except that with respect to presentation of 2022B Bonds for payment or for registration of transfer and exchange, such term means the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted.

Operation and Maintenance Costs. The term “Operation and Maintenance Costs” means costs spent or incurred for maintenance and operation of the Wastewater System calculated in accordance with Generally Accepted Accounting P rinciples applicable to governme ntal agencies, including, but not limited to, the reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Wastewater System in good repair and working order, and including administrative costs of the City that are charged directly or apportioned to the Wastewater System, including but not limited to salaries and wages of employees, payments to the Public Employees Retirement System, overhead, insurance, taxes (if any), fees of auditors, accountants, attorneys or engineers and insurance premiums, and including all other reasonable and necessary costs of the City or charges (other than debt service payments) required to be paid by it to comply with the terms of the 2022B Bonds or of this Indenture or any Contract or of any resolution or indenture authorizing the issuance of any Bonds or of such Bonds; but excluding in all cases depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature.

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Original Purchaser. The term “Original Purchaser” means First Foundation Public Finance, a Delaware statutory trust and wholly owned subsidiary of First Foundation Bank, as the initial purchaser of the 2022B Bonds, and its successors and assigns.

Outstanding. The term “Outstanding,” when used as of any particular time with reference to 2022B Bonds, means (subject to the provisions of Section 11.09) all 2022B Bonds theret ofore or thereupon being authenticated and delivered by the Trustee under the Indenture except: (i) 2022B Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (ii) 2022B Bonds with respect to which all liability of the City shall have been discharged in accordance with Section 10.02, including 2022B Bonds (or portions thereof) described in Section 11.09; and (iii) 2022B Bonds for the transfer or exchange of or in lieu of or in substitution for which other 2022B Bonds shall have been authenticated and delivered by the Trustee pursuant to the Indenture.

Owner; 2022B Bond Owner. The term “Owner” or “ 2022B Bond Owner,” whenever used herein with respect to a 2022B Bond, means the person in whose name the ownership of such 2022B Bond is registered on the Registration Books.

Payment Fund. The term “Payment Fund” means the fund by that name established pursuant to Section 5.02.

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after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (4) commercial paper which is rated at the time of purchase in the single highest classification, “A-1+” by S&P and “P-1” by Moody’s and which matures not more than 270 days after the date of purchase; (5) investments in a money market fund rated “AAm”, “AAm -G”, “AAAm” or “AAAm- G” or better by S&P, including such funds for which the Trustee or an affiliate receives and retains a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise; (6) pre-refunded municipal obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice and which are rated, based on the escrow, in the highest rating category of S&P and Moody’s; (7) any Investment Agreement; and (8) the Local Agency Investment Fund.

Principal Account . The term “Principal Account” means the account by that name in the Payment Fund established pursuant to Section 5.02.

Prior Project. The term “Prior Project” means the capital improvements to the Wastewater System financed from proceeds of the 2013 Bonds, as described in Exhibit B.

Purchaser’s Certificate. The term “Purchaser’s Certificate” means a letter in substantially the form that is set forth in Exhibit C.

Rate Stabilization Fund . The term “Rate Stabilization Fund” means the fund by that name established pursuant to Section 5.08.

Rating. The term “Rating” means any currently effective rating on the 2022B Bonds issued by a Rating Agency.

Rating Agencies. The term “Rating Agencies” means S&P, Moody’s or Fitch, as the context dictates.

Rebate Fund. The term “Rebate Fund” means the fund by that name established pursuant to Section 5.07.

Redemption Date. The term “Redemption Date” means the date fixed for an optional redemption prior to maturity of the 2022B Bonds.

Redemption Fund. The term “Redemption Fund” means the fund by that name established pursuant to Section 5.05.

Redemption Price. The term “Redemption Price” means, with respect to any 2022B Bond (or portion thereof), the principal amount of such 2022B Bond (or portion) plus the interest accrued to 156

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the applicable Redemption Date and the applicable premium, if any, payable upon redemption thereof pursuant to the provisions of such 2022B Bond and the Indenture.

Registration Books. The term “Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the 2022B Bonds pursuant to Section 2.05.

Revenue Fund. The term “Revenue Fund” means the Wastewater Fund of t he City and/or such other fund or account of the City in which Revenues are deposited.

Revenues. The term “Revenues” means all income, rents, rates, fees, charges and other moneys derived from the ownership of or operation of the Wastewater System, including, without limiting the generality of the foregoing: (1) all income, rents, rates, fees, charges, business interruption insurance proceeds or other moneys derived by the City from the collection, treatment and disposal of wastewater or other services or facilities provided in the conduct or operation of the business of the Wastewater System; and (2) the earnings on and income derived from the investment of such income, rents, rates, fees, charges, proceeds or other moneys, including City reserves, but excluding in all cases: (x) customers’ deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City; (y) any proceeds of taxes or benefit assessments restricted by law to be used by the City to pay amounts due on bonds or other obligations heretofore or hereafter incurred; and (z) any and all revenues derived from the ownership or operation of or in connection with, and pledged to, Separate Facilities.

S&P. The term “S&P” means S&P Global Ratings , a Standard & Poor’s Financial Services LLC business, or any successor thereto.

State. The term “State” means the State of California.

Tax Certificate . The term “Tax Certificate” means the Tax Certificate dated the Closing Date, concerning certain matters pertaining to the use and investment of proceeds of the 2022B 157

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Bonds issued by the City on the date of issuance of the 2022B Bonds, including any and all exhibits attached thereto.

Taxable Interest. The term “Taxable Interest ” means the interest borne by the 2022B Bonds prior to the Tax -Exempt Reissuance Date, which interest shall be included in gross income for federal income tax purposes.

Taxable Rate. The term “Taxable Rate” means the rate of 4.05% per annum.

Tax-Exempt Interest. The term “Tax-Exempt Interest” means the interest to be borne by the 2022B Bonds on and after the Tax-Exempt Reissuance Date, which interest is excluded from gross income for federal income tax purposes.

Tax-Exempt Rate. The term “Tax-Exempt Rate” means the rate of 2.96% per annum.

Tax-Exempt Reissuance Date. The term “Tax-Exempt Reissuance Date” means the date on which the 2022B Bonds bearing Taxable Interest are reissued (for federal income tax purposes) for Bonds bearing Tax-Exempt Interest pursuant to Section 2.09 hereof.

Trustee. The term “Trustee” means U.S. Bank Trust Company, N ational Association , a national banking association duly organized and existing under the laws of the United States of America, or its successor as Trustee hereunder as provided in Section 8.01. 2013 Bonds . The term “2013 Bonds” means the Sanger Financing Authority Subordinate Wastewater Revenue Bonds, Series 2013.
2013 Installment Payments. The term “2013 Installment Payments” means the installment payments owed by the City under the 2013 Installment Sale Agreement. 2013 Installment Sale Agreement. The term “201 3 Installment Sale Agreement” means that certain Installment Sale Agreement, dated as of Novemb er 1, 2013, by and between the City and the Authority.
2022B Bonds . The term “ 2022B Bonds” means the City of Sanger 2022B Wastewater Revenue Refunding Bonds issued by the City and at any time Outstanding pursuant to the Indenture.

Wastewater Service. The term “Wastewater Service” means the w astewater collection and treatment service that is made available or provided by the Wastewater System.

Wastewater System. The term “Wastewater System” means the whole and each and every part of the wastewater system (including the recycled water storage and distribution system) of the City, including all real property and buildings whether owned or operated by the City or another party, including the por tion thereof existing on the date hereof, and including all additions, betterments, extensions and improvements to such Wastewater System or any part thereof hereafter acquired or constructed, but not including any Separate Facilities.

Written Consent of the City; Written Order of the City; Written Request of the City; Written Requisition of the City. The terms “Written Consent of the City,” “Written Order of the City,” “Written Request of the City” and “Written Requisition of the City” mean, respectively, a written consent, order, request or requisition signed by or on behalf of the City by an Authorized 158

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Representative of the City or by any two persons who are specifically authorized by resolution of the City to sign or execute such a document on its behalf.

Section 1.02. Content of Certificates and Opinions . Every certificate or opinion provided for in the Indenture except the certificate of destruction provided for in Section 11.05 hereof, with respect to compliance with any provision hereof shall include: (a) a statem ent that the person making or giving such 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 certificate or opinion 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 t he instrument to which his or her signature is affixed; (d) a statement of the assumptions upon which such certificate or opinion 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.

Any such certificate or opinion made or given by an officer of the City may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an Independent Certified Public Accountant or Independent Financial Consultant, unless such officer 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 certificate or state ment may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel or an Independent Certified Public Accountant or Independent Financial Consultant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the City) upon a certificate or opinion of or representation by an officer of the City, unless such counsel or Independent Certified Public Accountant or Independent Financial Consultant 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 officer of the City, or the same counsel or Independent Certified Public Accountant or Independent Financial Consultant, as the case may be, need not certify to all of the matters required to be certified under any provision of the Indenture, but different officers, counsel or Independent Certified Public Accountants or Independent Financial Consultants may certify to different matters, respectively.

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

THE 2022B BONDS
Section 2.01. Authorization of 2022B Bonds . The City hereby authorizes the issuance hereunder of the 2022B Bonds, which shall constitute special obligations of the City, for the purpose of defeasing the 2013 Installment Payments, and the associated 2013 Bonds, in full. The 2022B Bonds are hereby desi gnated the “City of Sanger 2022B Wastewater Revenue Refunding Bonds” in the aggregate principal amount of $__________. The Indenture constitutes a continuing agreement with the Owners from time to time of the 2022B Bonds to secure the full payment of the principal of and interest and premium (if any) on all the 2022B Bonds, subject to the covenants, provisions and conditions herein contained.

Section 2.02. Terms of the 2022B Bonds.

The 2022B Bonds shall mature on June 15, 2043. From the Closing Date of the 2022B Bonds until the Tax-Exempt Reissuance Date, the 2022B Bonds shall bear interest at the Taxable Rate (calculated on the basis of a 360-day year comprised of twelve 30-day months) and on and after the Tax-Exempt Reissuance Date, if any, the 2022B Bonds shall bear interest at the Tax-Exempt Rate (calculated on the basis of a 360 -day year comprised of twelve 30-day months); provid ed, however, that so long as any event of default as provided in Section 7.01 shall have occurred and is continuing, the interest rate on the 2022B Bonds may, at the option of the Owner of the Bonds, be increased to the Default Rate and interest thereon shall be calculated in accordance with the definition of Default Rate; provided further, however, from and after the Date of Taxability following a Determination of Taxability, the interest rate on the 2022B Bonds shall be increased to the Taxable Rate. Interest on the Bonds shall be payable on each Interest Payment Date, commencing December 15, 2022. The Bonds shall be issued in fully registered form, registered in the Registration Books in the name of the Original Purchaser, as a single certificated bond, without coupons.

Interest on the 2022B Bonds shall be payable on each Interest Payment Date to the person whose name appears on the Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Trustee sent by first class mail on the applicable Interest Payment Date to the Owner at the address of such Owner as it appears on the Registration Books (except that in the case of an Owner of one million dollars ($1,000,000) or more in principal amount, such payment may, at such Owner’s option, be made by wire transfer of immediately available funds to an account in the United States in accordance with written instructions provided to the Trustee by such Owner prior to the Record Date.

Principal of and premium (if any) on any 2022B Bond shall be paid by check of the Trustee. Both the principal of and interest and premium (if any) on the 2022B Bonds shall be payable in lawful money of the United States of America.

Notwithstanding anything herein to the contrary, so long as the 2022B Bonds are owned by the Original Purchaser: (i) the Trustee shall pay principal of and interest and premium on, if any, on the 2022B Bonds when due by wire transfer in immediately available funds to the Original Purchaser in accordance with such wire transfer instructions as shall be filed by the Original Purchaser with the Trustee from time to time; (ii) payments of principal on the 2022B Bonds shall be made without the requirement for presentation and surrender by the Original Purchaser, provided that principal which is payable at maturity shall be made only upon presentation and surrender at the Office of the 160

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Trustee; and (iii) the Trustee shall not be required to give notice to the Original Purchaser of the mandatory sinking fund payments described in Section 4.01(c).

Each 2022B Bond shall be dated the date of initial delivery, and shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless: (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) unless it is authenticated on or before December 1, 2022, in which event it shall bear interest from the date of initial delivery; provided, however, that if, as of the date of authentication of any 2022B Bond, interest thereon is in default, such 2022B Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. Interest on the 2022B Bonds shall be calculated on the basis of a 360- day year composed of twelve 30-day months.

The 2022B Bonds shall be initially delivered as a single registered Bond in the name of the Original Purchaser and shall not be delivered as book-entry Bonds. The 2022B Bonds shall not be assigned CUSIPS, be issued pursuant to any type of offering document or official statement and shall not receive a rating from any rating agency.

Section 2.03. Transfer of 2022B Bonds . Subject to the limitations in the following paragraph, any 2022B Bond may, in accordance with its terms, be transferred upon the Registration Books by the person in whose name it is registered, in person or by such person’s duly authorized attorney, upon surrender of such 2022B Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. The Trustee shall not be required to register the transfer of any 2022B Bond during the period in which the Trustee is selecting 2022B Bonds for redemption and any 2022B Bond that has been selected for redemption.

Whenever any 2022B Bond or Bonds shall be surrendered for transfer, the City shall execute and the Trustee shall authenticate and shall deliver a new 2022B Bond or Bonds in an Authorized Denomination. The Trustee shall require the 2022B Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.

A 2022B Bond Owner may only transfer the 2022B Bonds to a new 2022B Bond Owner in whole, and not in part, and only if the new 2022B Bond Owner has delivered a Purchaser’s Certificate (in the form that is set forth in Exhibit C) to the City and the Trustee and if the new 2022B Bond Owner is either an Accredited Investor or a Qualified Institutional Buyer. For purposes of such a transfer, the Trustee may rely upon all new 2022B Bond Owner representations as set forth in the Purchaser’s Certificate.

The transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Code Section 6045, as amended. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.

Section 2.04. Exchange of 2022B Bonds. 2022B Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount, in an Authorized Denomination. The Trustee shall not be required to exchange any 2022B Bond during the period in which the Trustee is selecting 2022B Bonds for redemption and any 2022B Bond that has been selected for redemption. The Trustee shall require the 2022B Bond Owner requesting such exchange to pay any tax or other 161

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governmental charge required to be paid with respect to such exchange. Following any exchange of 2022B Bonds, the Trustee will cancel and destroy the 2022B Bonds that it has received.

Section 2.05. Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the 2022B Bonds, which shall upon reasonable notice and at reasonable times be open to inspection during regular business hours by the City and the Owners; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the 2022B Bonds as hereinbefore provided.

The person in whose name any 2022B Bond shall be registered shall be deemed the Owner thereof for all purposes hereof, and payment of or on account of the interest on and princi pal and Redemption Price of by such 2022B Bonds shall be made only to or upon the order in writing of such registered Owner, which payments shall be valid and effectual to satisfy and discharge liability upon such 2022B Bond to the extent of the sum or sums so paid.

Section 2.06. Form and Execution of 2022B Bonds . The 2022B Bonds shall be in substantially the form set forth in Exhibit A hereto. The 2022B Bonds shall be executed in the name and on behalf of the City with the manual or facsimile signature of its City Man ager. The 2022B Bonds may carry a seal, and such seal may be in the form of a facsimile of the City’s seal and may be reproduced, imprinted or impressed on the 2022B Bonds. The 2022B Bonds shall then be delivered to the Trustee for authentication by it. In case any of the officers who shall have signed or attested any of the 2022B Bonds shall cease to be such officer or officers of the City before the 2022B Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the City, such 2022B Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the City as though those who signed and attested the same had continued to be such officers of the City, and also any 2022B Bonds may be signed and attested on behalf of the City by such persons as at the actual date of execution of such 2022B Bonds shall be the proper officers of the City although at the nominal date of such 2022B Bonds any such person shall not have been such officer of the City.

Only such of the 2022B Bonds as shall bear thereon a certificate of authentication substantially in the form set forth in Exhibit A hereto, manually or electronically executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of the Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the 2022B Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of the Indenture.

Section 2.07. 2022B Bonds Mutilated, Lost, Destroyed or Stolen. If any 2022B Bond shall become mutilated, the City, at the expense of the Owner of said 2022B Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new 2022B Bond of like tenor, series and authorized denomination in exchange and substitution for the 2022B Bonds so mutilated, but only upon surrender to the Trustee of the 2022B Bond so mutilated. Every mutilated 2022B Bond so surrendered to the Trustee shall be canceled by it and upon the Written Request of the City delivered to, or upon the order of, the City. If any 2022B Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the City, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new 2022B Bond in 162

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an Authorized Denomination in lieu of and in substitution for the 2022B Bond so lost, destroyed or stolen (or if any such 2022B Bond shall have matured or shall be about to mature, instead of issuing a substitute 2022B Bond, the Trustee may pay the same without surrender thereof). The City may require payment by the Owner of a sum not exceeding the actual cost of preparing each new 2022B Bond issued under this Section and of the expenses which may be incurred by the City and the Trustee in the premises. Any 2022B Bond issued under the provisions of this Section in lieu of any 2022B Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the City whether or not the 2022B Bond so alleged to be lost, destroyed, or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of the Indenture with all other 2022B Bonds secured by the Indenture. Notwithstanding any other provision of this Section, in lieu of delivering a new 2022B Bond for a 2022B Bond which has been mutilated, lost, destroyed or stolen and which has matured or has been selected for redemption, the Trustee may make payment of such 2022B Bond upon receipt of indemnity satisfactory to the Trustee.

Section 2.08. Initial Delivery of 2022B Bonds . The 2022B Bonds shall be initially delivered as registered bonds in the name of the Owner and shall not be delivered as book entry bonds.

Section 2.09. Conversion to Tax-Exempt Rate . The 2022B Bonds shall initially be issued bearing Taxable Interest. The interest rate on the 2022B Bonds shall convert to the Tax-Exempt Rate on any Business Day on or after June 15, 2023 , upon the satisfaction of the following conditions precedent to such conversion:
(a) The written election of the City to the Owner and the Trustee to convert the interest rate payable with respect to the 2022B Bonds to the Tax-Exempt Rate in the form attached hereto as Exhibit D;
(b) The issuance of an opinion of Bond Counsel to the effec t that subject to the City’s compliance with certain covenants, interest payable with respect to the 2022B Bonds is excludable from gross income of the Owner thereof for federal income tax purposes, and is not included as an item of tax preference in compu ting the alternative minimum tax imposed on individuals under the Code substantially in the form attached hereto as Exhibit E; (c) Delivery of a Tax Certificate executed by the City with respect to certain tax matters relating to the 2022B Bonds after interest payable with respect thereto is converted to a Tax-Exempt Rate;
(d) Delivery of a new 2022B Bond to the Owner and the remittance of the prior 2022B Bonds;
(e) The selection by the Owner of one of the four post -conversion optional redemption schedules provided in the form attached hereto as Exhibit F, which shall become applicable to the 2022B Bonds on and after the Tax-Exempt Reissuance Date to maturity or prior redemption; and
(f) The City prepares, executes and files on the Tax-Exempt Reissuance Date an IRS Form 8038-G (or other required information return) for filing after the Tax-Exempt Reissuance Date.
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ARTICLE III

ISSUANCE OF 2022B BONDS; APPLICATION OF PROCEEDS
Section 3.01. Issuance of the 2022B Bonds . At any time after the execution of the Indenture, the City may execute and the Trus tee shall authenticate and, upon Written Request of the City, deliver the 2022B Bonds in the aggregate principal amount of $__________.

Section 3.02. Application of Proceeds of the 2022B Bonds. The proceeds of the sale of the 2022B Bonds received by the Trustee in the amount of $__________, together with $_____ being held in connection with the 2013 Bonds, shall be applied by the Trustee as follows:
(a) the Trustee shall transfer $__________ to the Escrow Agent for deposit to the Escrow Fund created under the Escrow Agreement; and
(b) the Trustee shall deposit $__________ into the Costs of Issuance Fund.

The Trustee may establish temporary funds or accounts in its records to record and facilitate such deposits.

Each such Written Requisition of the City shall be
sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On the six month anniversary of the issuance of the 2022B Bonds, or upon the earlier Written Request of the City, all amounts remaining in the Costs of Issuance Fund shall be transferred by the Trustee to the Interest Account and the Costs of Issuance Fund shall be closed.

Investment earnings on amounts on deposit in the Costs of Issuance Fund shall be applied in accordance with Section 5.06 hereof.

Section 3.04. Validity of 2022B Bonds . The validity of the authorization and issuance of the 2022B Bonds is not dependent on and shall not be affected in any way by any proceedings taken by the City or the Trustee with respect to any other agreement. The recital contained in the 2022B Bonds that the same are issued pursuant to the Constitution and laws of the State shall be conclusive evidence of the validity and of compliance with the provisions of law in their issuance.

ARTICLE IV

REDEMPTION OF 2022B BONDS
Section 4.01. Terms of Redemption.
(a) Prior to the Tax-Exempt Reissuance Date, t he 2022B Bonds shall be subj ect to optional redemption, as a whole or in part, on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee and the Original Purchaser at least 35 days (or such lesser 164

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number of days acceptable to the Trustee and t he Original Purchaser in the sole discretion of the Trustee and the Original Purchaser, such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
Through and including December 15, 2023 103%
June 15, 2024 to and including December 15, 2025 102
June 15, 2026 to and including December 15, 2027 101
June 15, 2028 and any Interest Payment Date thereafter 100

(b) On and after the Tax-Exempt Reissuance Date, if any, the 2022B Bonds shall be subject to redemption in accordance with the selection of the Owner as provided in Section

2.09(e) hereof.
(c) The 2022B Bonds are subject to mandatory sinking fund redemption in part (by lot) on June 15, 2023 and each June 15 thereafter, in integral multiples of $1,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Mandatory Sinking Fund
Redemption Date
(June 15)
Principal
Amount
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043*

* Final Maturity.
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If some but not all of the 2022B Bonds are redeemed pursuant to subsections (a) or (b) above, the principal amount of the applicable 2022B Bonds to be redeemed pursuant to this subsection (c) on any subsequent June 15 will be reduced, by $1,000 or an integral multiple thereof, as designated by the City in a Written Order of the City filed w ith the Trustee; provided, however, that the aggregate amount of such reductions shall not exceed the aggregate amount of the applicable 2022B Bonds redeemed pursuant to subsections (a) and (b) above.

Section 4.02. Selection of 2022B Bond s for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the 2022B Bonds, the Trustee shall select the 2022B Bonds for redemption as a whole or in part on any date as directed by the City and by lot within each maturity in integral multiples of $1,000 in accordance with Section 4.01 hereof. The Trustee will promptly notify the City in writing of the numbers of the 2022B Bonds or portions thereof so selected for redemption.

Section 4.03. Notice of Redemption. Notice of redemption shall be mailed by first cl ass mail at least twenty (20) days but not more than sixty (60) days before any Redemption Date, to the respective Owners of any 2022B Bonds designated for redemption at their addresses appearing on the Registration Books. Each notice of redemption shall state the date of the notice, the Redemption Date, the place or places of redemption, the Redemption Price, the maturities, and, in the case of 2022B Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the Redemption Date there will become due and payable on each of said 2022B Bonds or parts thereof designated for redemption the Redemption Price thereof or of said specified portion of the principal thereof in the case of a 2022B Bond to be redeemed in part only, together with interest accrued thereon to the Redemption Date, and that (provided that moneys for red emption have been deposited with the Trustee) from and after such Redemption Date interest thereon shall cease to accrue. Neither the failure to receive such notice nor any defect in the notice or the mailing thereof will affect the validity of the redemption of any 2022B Bond. Notice of redemption of 2022B Bonds shall be given by the Trustee, at the expense of the City, for and on behalf of the City.

With respect to any notice of optional redemption of 2022B Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such 2022B Bonds to be redeemed and that, if such moneys shall not have been so received, said notice shall be of no force and effect and the Trustee shall not be required to redeem such 2022B Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made, and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.

Section 4.04. Partial Redemption of 2022B Bonds . Upon redemption of any 2022B Bond in part only, the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, a new 2022B Bond or 2022B Bonds in an A uthorized Denomination equal in aggregate principal amount to the unredeemed portion of the 2022B Bonds.

Section 4.05. Effect of Redemption. Notice of redemption having been duly given as aforesaid, and moneys for payment of the Redemption Price of, together with interest accrued to the date fixed for redemption on, the 2022B Bonds (or portions thereof) so called for redemption being held by the Trustee, on the Redemption Date designated in such notice, the 2022B Bonds (or portions 166

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thereof) so called for redemption shall become due and payable, interest on the 2022B Bonds so called for redemption shall cease to accrue, said 2022B Bonds (or portions thereof) shall cease to be entitled to any benefit or security under the Indenture, and the Owners of said 2022B Bonds shall have no rights in respect thereof except to receive payment of the Redemption Price thereof. The Trustee shall, upon surrender for payment of any of the 2022B Bonds to be redeemed on their Redemption Dates, pay such 2022B Bonds at the Redemption Price.

All 2022B Bonds redeemed pursuant to the provisions of this Article shall be canceled and destroyed upon surrender thereof to the Trustee.

ARTICLE V

REVENUES, FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST Section 5.01. Pledge and Assignment; Revenue Fund.
(a) All of the Revenues, all amounts held in the Revenue Fund described in subsection (b) below, all amounts that are transferred from the Rate Stabilization Fund to the Revenue Fund as described in Section 5.08, and any other amounts (including proceeds of the sale of the 2022B Bonds) held in any fund or account established pursuant to the Indenture (except the Costs of Issuance Fund, the Rebate Fund and the Rate Stabilization Fund (other than those amounts which are transferred by the City from the Rate Stabilization Fund to the Revenue Fund)) are hereby irrevocably pledged to secure the payment of the principal of and interest, and the premium, if any, on the 2022B Bonds in accordance with their terms and the provisions of the Indenture, and the Revenues shall not be used for any other purpose while the 2022B Bond s remain Outstanding; provided that out of the Revenues there may be apportioned such sums for such purposes as are expressly permitted herein. Said pledge, together with the pledge created by all other Contracts and Bonds, shall constitute a first lien on and security interest on Revenues and, subject to application of Revenues and all amounts on deposit therein as permitted herein, the Revenue Fund and other funds and accounts created hereunder for the payment of the principal of and interest, and the premium, if any, on the 2022B Bonds and all Contracts and Debt Service on Bonds in accordance with the terms hereof, and shall attach, be perfected and be valid and binding from and after the Closing Date, without any physical delivery thereof or further act and shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the City, irrespective of whether such parties have notice hereof.
(b) In order to carry out and effectuate the pledge and lien contained herein, the City agrees and covenants that all Revenues shall be received by the City in trust hereunder and shall be deposited when and as received in the Revenue Fund, which fund the City agrees and covenants to maintain and to hold sep arate and apart from other funds so long as the 2022B Bonds and any Contracts or Debt Service on Bonds remain unpaid. Moneys in the Revenue Fund shall be used and applied by the City as provided herein. All moneys in the Revenue Fund shall be held in trust and shall be applied, used and withdrawn for the purposes set forth in this Section.

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be set aside by the City at the following times for the transfer to the following respective special funds in the following order of priority:
(i) Interest and Principal Payments. Not later than the Business Day prior to each Interest Payment Date, the City shall, from the moneys in the Revenue Fund, transfer to the Trustee for deposit in the Payment Fund or the Redemption Fund the payments of interest and principal or mandatory sinking fund payments, as applicable, on the 2022B Bonds due and payable on such Interest Payment Date. The City shall also, from the moneys in the Revenue Fund, transfer to the applicable trustee for deposit in the respective payment fund, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, any other Debt Service in accordance with the provisions of any Bond or Contract. (ii) Reserve Funds. After making the payments, allocations or transfers provided for in subsection (i) above, the City shall, from the remaining moneys in the Revenue Fund, thereafter, without preference or priority and in the event of any insufficiency of such moneys ratably without any discrimination or preference, transfer to the applicable trustee for such reserve funds and/or accounts, if any, as may have been established in connection with Bonds or Contracts, that sum, if any, necessary to restore such funds or accounts to an amount equal to the reserve requirement applicable to such Bonds or Contracts, as applicable. (iii) Subordinate Obligations. After making the payments, allocations or transfers provided for in subsections (i) and (ii) above, the City shall, from the remaining moneys in the Revenue Fund, thereafter, without preference or priority and in the event of any insufficiency of such moneys ratably without any discrimination or preference, transfer to the applicable trustee for deposit in the respective payment fund, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, any debt service on obligations which are payable from Net Revenues on a subordinate basis to Bonds and Contracts. (iv) Surplus. Moneys on deposit in the Revenue Fund on any date when the City reasonably expects such moneys will not be needed for the payment of Operation and Maintenance Co sts or any of the purposes described in clauses (b)(i), (b)(ii) or (b)(iii) may be deposited in the Rate Stabilization Fund or expended by the City at any time for any purpose permitted by law.
(v) Investments. All moneys held by the City in the Revenue Fund shall be invested in Permitted Investments and the investment earnings thereon shall remain on deposit in such fund, except as otherwise provided herein.

Except as directed herein, all payments of interest and principal on the 2022B Bonds re ceived by the Trustee pursuant to Section 5.01(b) shall be promptly deposited by the Trustee upon receipt thereof into the Payment Fund; except that all moneys received by the Trustee and required hereunder to be deposited in the Redemption Fund shall be promptly deposited therein. All payments of interest and principal on the 2022B Bonds deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in the Indenture. The Trustee shall also establish and hold an Interest Account and a Principal Account within the Payment Fund. 168

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The Trustee shall transfer from the Payment Fund and deposit into the following respective accounts, the following amounts in the following order of priority and at the following times, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:
(a) Not later than the Business Day preceding each Interest Payment Date, the Trustee shall deposit in the Interest Account that sum, if any, required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such date on all 2022B Bonds then Outstanding. No deposit need be made into the Interest Account so long as there shall be in such fund moneys sufficient to pay the interest becoming due and payable on such date on all 2022B Bonds then Outstanding. (b) Not later than the Business Day preceding each date on which the principal of the 2022B Bonds shall become due and payable hereunder, the Trustee shall deposit in the Principal Account that sum, if any, required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the 2022B Bonds coming due and payable on such date. No deposit need be made into the Principal Account so long as there shall be in such fund moneys sufficient to pay the principal becoming due and payable on such date on all 2022B Bonds then Outstanding.

Section 5.03. Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the 2022B Bonds as it shall become due and payable (including accrued interest on any 2022B Bonds purchased or accelerated prior to maturity pursuant to the Indenture).

Section 5.04. Application of Principal Account. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the 2022B Bonds at maturity, purchase or acceleration; provided, however, that at any time prior to selection for redemption of any such 2022B Bonds, upon written direction of the City, the Trustee shall apply such amounts to the purchase of 2022B Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed pursuant to a Written Request of the City, except that the purchase price (exclusive of accrued interest) may not exceed the Redemption Price then applicable to the 2022B Bonds.

Section 5.05. Application of Redemption Fund. There is hereby established with the Trustee a special fund designated as the “Redemption Fund.” All amounts in the Redem ption Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the Redemption Price of the 2022B Bonds to be redeemed on any Redemption Date pursuant to Section 4.01; provided, however, that at any time prior to selection for redemption of any such 2022B Bonds, upon written direction of the City, the Trustee shall apply such amounts to the purchase of 2022B Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued in terest, which is payable from the Interest Account) as shall be directed pursuant to a Written Request of the City, except that the purchase price (exclusive of accrued interest) may not exceed the Redemption Price then applicable to the 2022B Bonds.

Section 5.06. Investments. All moneys in any of the funds or accounts established with the Trustee pursuant to the Indenture shall be invested by the Trustee solely in Permitted Investments.

Such investments shall be directed by the City pursuant to a Written Request of the City filed with 169

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the Trustee at least two (2) Business Days in advance of the making of such investments. In the absence of any such directions from the City, the Trustee shall invest any such moneys in Permitted Investments described in clause (b)(5) of the definition thereof; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a written direction from the City specifying a specific money market fund and, if no such written direction from the City is so received, the Trustee shall hold such moneys uninvested. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account.

All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the Interest Account unless otherwise provided in the Indenture. For purposes of acquiring any investments hereunder, the Trustee may commingle funds (other than the Rebate Fund) held by it hereunder upon the Written Request of the City. The Trustee may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section 5.06.

The City acknowledges that to the extent that regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request at no additional cost and other trade confirmations may be obtained from the applicable broker. The Trustee will furnish the City with periodic cash transaction statements which shall include detail for a ll investment transactions effected by the Trustee hereunder. Upon the City’s election, such statements will be delivered via the Trustee’s online service and upon electing such service, paper statements will be provided only upon request.

The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee under the Indenture.

The City shall invest, or cause to be invested, all moneys in any fund or accounts established with the Trustee as provided in the Tax Certificate.

Section 5.07. Rebate Fund.
(a) Establishment. Upon the conversion to the Tax-Exempt Rate on the Tax- Exempt Reissuance Date, t he Trustee shall establish a fund for the 2022B Bonds designated the “Rebate Fund” when required in accordance herewith. Absent an opinion of Bond Counse l that the exclusion from gross income for federal income tax purposes of interest on the 2022B Bonds will not be adversely affected, the City shall cause to be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United 170

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States Treasury. All amounts on deposit in the Rebate Fund for the 2022B Bonds shall be governed by this Section and the Tax Certificate, unless and to the extent that the City delivers to the Trustee an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest on the 2022B Bonds will not be adversely affected if such requirements are not satisfied.

Notwithstanding anything to the contrary contained herein or in the Tax Certificate, the Trustee:
(i) shall be deemed conclusively to have complied with the provisions thereof if it follows the directions of the City; (ii) shall have no liability or responsibility to enforce compliance by the City with the terms of the Tax Certificate; (iii) may rely conclusively on the City’s calculations and determinations and certifications relating to rebate matters; and (iv) sh all have no responsibility to independently make any calculations or determinations or to review the City’s calculations or determinations thereunder.
(i) Computation. Within 55 days of the end of each fifth Bond Year, the City shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate ( e.g., the temporary investments exceptions of Section 148(f)(4)(B) and the construction expenditures exception of Section 148(f)(4)(C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “ 1½% Penalty”) has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulations (the “ Rebatable Arbitrage”). The City shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Transfer. Within 55 days of the end of each fifth Bond Year, upon the Written Request of the City, an amount shall be deposited to the Rebate Fund by the Trustee from any Net Revenues legally available for such purpose (as specified by the City in the aforesaid Written Request), if and to the extent required so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with clause (i) of this subsection (a). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon Written Request of the City, the Trustee shall withdraw the excess from the Rebate Fund and then transfer such amount to the Payment Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed by Written Request of the City, to the United States Treasury, out of amounts in the Rebate Fund:
(A) Not later than 60 days after the end of: (X) the fifth Bond Year; and (Y) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and (B) Not later than 60 days after the payment of all of the 2022B Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code and Section 1.148-3 of the Treasury Regulations.

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received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038- T (prepared by the City), or shall be made in such other manner as provided under the Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the 2022B Bond s and the payments described in subsection (a) above being made may be withdrawn by the City and utilized in any manner by the City. (c) Survival of Defeasance. Notwithstanding anything in this Section to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance or payment in full of the 2022B Bonds.

Section 5.08. Establishment and Application of Rate Stabilization Fund. The City shall establish, maintain and hold in trust a special fund designated as the “Rate Stabilization Fund.” The City agrees and covenants to maintain and to hold such fund separate and apart from other funds so long as the 2022B Bonds or any other Contracts or Bonds that remain unpaid. Money transferred by the City from the Revenue Fund to the Rate Stabilization Fund in accordance with Section 5.01(b)(iv) will be held in the Rate Stabilization Fund and applied in accordance herewith.

The City may withdraw all or any portion of the amounts on deposit in the Rate Stabilization Fund and transfer such amounts to the Revenue Fund for application in accordance with Section 5.01 or, in the event that all or a portion of the 2022B Bonds are discharged in a ccordance with Article X, transfer all or any portion of such amounts for application in accordance with Article X. Any such amounts transferred from the Rate Stabilization Fund to the Revenue Fund in accordance with the Indenture constitute pledged Revenues.

Section 5.09. Reserved.

Section 5.10. Application of Funds and Accounts When No 2022B Bonds are Outstanding.

On the date on which all 2022B Bonds shall be retired hereunder or provision made therefor pursuant to Article X and after payment of all amounts due the Trustee hereunder, all moneys then on deposit in any of the funds or accounts (other than the Rebate Fund) established with the Trustee pursuant to the Indenture shall be withdrawn by the Trustee and paid to the City for use by the City at any time for any purpose permitted by law.

ARTICLE VI

PARTICULAR COVENANTS
Section 6.01. Punctual Payment. The City shall punctually pay or cause to be paid the principal and interest to become due in respect of all of the 2022B Bonds, in strict conformity with the terms of the 2022B Bonds and of the Indenture, according to the true intent and meaning thereof, but only out of Net Revenues and other assets pledged for such payment as provided in the Indenture.

Section 6.02. Extension of Payment of 2022B Bonds . The City shall not directly or indirectly extend or assent to the extension of the maturity of any of the 2022B Bonds or the time of payment of any claims for interest by the purchase of such 2022B Bonds or by any other 172

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arrangement, and in case the maturity of any of the 2022B Bonds or the time of payment of any such claims for interest shall be extended, such 2022B Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of the Indenture, except subject to the prior payment in full of the principal of all of the 2022B Bonds then Outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section shall be deemed to limit the right of the City to issue Bonds for the purpose of refunding any Outstanding 2022B Bonds, and such issuance shall not be deemed to constitute an extension of maturity of 2022B Bonds.

Section 6.03. Against Encumbrances. The City will not make any pledge of or place any lien on Revenues or the moneys in the Revenue Fund except as provided herein. The City may at any time, or from time to time, execute Contracts or issue Bonds as permitted herein. The City may also at any time, or from time to time, incur evidences of indebtedness or incur other obligations for any lawful purpose which are payable from and secured by a pledge of lien on Revenues on any moneys in the Revenue Fund as may from time to time be deposited therein, provided that such pledge and lien shall be subordinate in all respects to the pledge of and lien thereon provided herein.

Section 6.04. Power to Issue 2022B Bonds an d Make Pledge and Assignment. The City is duly authorized pursuant to law to issue the 2022B Bonds, to enter into the Indenture and to pledge and assign the Revenues and other assets purported to be pledged and assigned under the Indenture in the manner and to the extent provided in the Indenture. The 2022B Bonds and the provisions of the Indenture are and will be the legal, valid and binding special obligations of the City in accordance with their terms, and the City shall and the Trustee may, at all tim es, subject to the provisions of Article VIII and to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the 2022B Bond Owners under the Indenture against all claims and demands of all persons whomsoever.

Section 6.05. Accounting Records and Financial Statements. (a) The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate trust industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of 2022B Bonds and all funds and accounts established by it pursuant to the Indenture. Such books of record and account shall be available for inspection by the City upon reasonable prior notice during business hours and under reasonable circumstances.
(b) The City will keep appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Wastewater System, which r ecords shall be available for inspection by the Trustee (which shall have no duty to inspect such records) at reasonable hours and under reasonable conditions.
(c) The City will prepare and file with the Owner annually by 270 days after the end of each Fiscal Year (commencing with the Fiscal Year ending June 30, 2022) audited financial statements of the City for the preceding Fiscal Year prepared in accordance with Generally Accepted Accounting Principles, together with an Accountant’s Report thereon. The City shall also provide the Owner with its budget within thirty (30) days after the adoption thereof The Trustee shall have no duty to review, verify or analyze such financial statements, and shall hold such financial statements solely as a repository for the benefit of the 2022B Bond Owners. The Trustee shall not be deemed to have notice of any information contained therein, or default or Event of Default which may be disclosed therein in any manner.
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(d) The City shall also provide the Owner with any additional information reasonably requested by the Owner.

Section 6.06. Tax Covenants. On and after the Tax-Exempt Reissuance Date, if any, this Section 6.06 shall apply to the 2022B Bonds. Notwithstanding any other provision of the Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of the portion of interest on the 2022B Bonds will not be adversely affected for federal income tax purposes, the City covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income with respect to the 2022B Bonds and specifically covenants, without limiting the generality of the foregoing, as follows:
(a) Private Activity. The City will not take or omit to take any action or make any use of the proceeds of the 2022B Bonds or of any other moneys or property that would cause the 2022B Bonds to be “private activity bonds” within the meaning of Section 141 of the Code; (b) Arbitrage. The City will make no use of the proceeds of the 2022B Bonds or of any other amounts or property, regardless of the source, and will not take or omit to take any action that would cause the 2022B Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(c) Federal Guarantee. The City will make no use of the proceeds of the 2022B Bonds and will not take or omit to take any action that would cause the 2022B Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (d) Information Reporting. The City will take or cause to be taken all necessary action to comply with the informational reporting requirement s of Section 149(e) of the Code necessary to preserve the exclusion of interest on the 2022B Bonds pursuant to Section 103(a) of the Code;
(e) Hedge Bonds. The City will make no use of the proceeds of the 2022B Bonds or any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action that would cause the 2022B Bonds to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the City takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest on the 2022B Bonds for federal income tax purposes; and (f) Miscellaneous. The City will take no action and refrain from taking any action inconsistent with its expectations stated in the Tax Certificate executed by the City in connection with the issuance of the 2022B Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein.

This Section and the covenants set forth herein shall not be applicable to, and nothing contained herein shall be deemed to prevent the City from issuing or executing and delivering additional obligations, the interest with respect to which has been determined by Bond Counsel to be subject to federal income taxation.

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or in the 2022B Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the City to the extent permitted by law.

Section 6.08. Further Assurances. The City will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Indenture and for the better assuring and confirming unto the Owners of the 2022B Bonds of the rights and benefits provided in the Indenture.

Section 6.09. Budgets. On or prior to the fifteenth day of each Fiscal Year, the City shall certify to the Trustee that the amounts budgeted for payment of the principal of and interest on the 2022B Bonds are fully adequate for the payment of all such payments for such Fiscal Year. If the amounts so budgeted are not adequate for the payment of the principal of and interest on the 2022B Bonds due under the Indenture, the City will take such action as may be necessary to cause such annual budget to be amended, corrected or augmented so as to include therein the amounts required to be raised by the City in the then ensuing Fiscal Year for the payment of the principal of and interest on the 2022B Bonds due under the Indenture and will notify the Trustee of the proceedings then taken or proposed to be taken by the City.

Section 6.10. Observance of Laws and Regulations. To the extent necessary to as sure its performance hereunder, the City will well and truly keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on the City by contract, or prescribed by any law of the United States of America, or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of any and every right, privilege or franchise now owned or hereafter acquired by the City, respectively, including its right to exist and carry on its business, to the end that such contracts, rights and franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired.

Section 6.11. Compliance with Contracts . The City will neither take nor omit to take any action under any contract if the effect of such act or failure to act would in any manner impair or adversely affect the ability of the City to pay principal of or interest on the 2022B Bonds; and the City will comply with, keep, observe and perform all agreements, conditions, covenants and terms, express or implied, required to be performed by it contained in all other contracts affecting or involving the Wastewater System, to the extent that the City is a party thereto.

Section 6.12. Prosecution and Defense of Suits . The City shall promptly, upon request of the Trustee or any 2022B Bond Owner, from time to time take such action as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the Wastewater System or any part thereof, whether now existing or hereafter developing, shall prosecute all such suits, actions and other proceedings as may be appropriate for such purpose and shall indemnify and save the Trustee (including all of its employees, officers and directors), the Trustee and every 2022B Bond Owner harmless from all loss, cost, damage and expense, including attorneys’ fees, which they or any of them may incur by reason of any such defect, cloud, suit, action or proceeding.

The City shall defend against every suit, action or proceeding at any time brought against the Trustee (including all of its employees, officers and directors) or any 2022B Bond Owner upon any claim arising out of the receipt, application or disbursement of any of the payments of principal of or interest on the 2022B Bonds or involving the rights of the Trustee or any 2022B Bond Owner under the Indenture; provided that the Trustee or any 2022B Bond Owner at such party’s election may appear in and defend any such suit, action or proceeding. The City shall indemnify and hold 175

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harmless the Trustee and the 2022B Bond Owners against any and all liability claimed or asserted by any person, arising out of such receipt, application or disbursement, and shall indemnify and hold harmless the 2022B Bond Owners against any attorneys’ fees or other expenses which any of them may incur in connection with any litigation (including pre -litigation activities) to which any of them may become a party by reason of ownership of 2022B Bonds. The City shall promptly reimburse any 2022B Bond Owner in the full amount of any attorneys’ fees or other expenses which such Owner may incur in litigation or otherwise in order to enforce such party’s rights under the Indenture or the 2022B Bonds, provided that such litigation shall be concluded favorably to such party’s contentions therein.

Section 6.13. [Reserved.]
Section 6.14. Additional Contracts and Bonds . The City may at any time execute any Contract or issue any Bonds, as the case may be, in accordance herewith; provided that (a) The Net Revenues for any consecutive twelve calendar month period during the eighteen calendar month period preceding the date of adoption by the City Council of the City of the resolution authorizing the issuance of such Bonds or the date of the execution of such Contract, as the case may be, as evidenced by both a calculation prepared by the City and a special report prepared by an Independent Certified Public Accountant or an Independent Financial Consultant on such calculation on file with the City, shall have produced a sum equal to at least one hundred twenty percent (120%) of the Debt Service for such twelve month period; and (b) The Net Revenues for any consecutive twelve calend ar month period during the eighteen calendar month period preceding the date of the execution of such Contract or the date of adoption by the City Council of the City of the resolution authorizing the issuance of such Bonds, as the case may be, including adjustments to give effect as of the first day of such twelve month period to increases or decreases in rates and charges for the Wastewater Service approved and in effect as of the date of calculation, as evidenced by both a calculation prepared by the Cit y and a special report prepared by an Independent Certified Public Accountant or an Independent Financial Consultant on such calculation on file with the City, shall have produced a sum equal to at least one hundred twenty percent (120%) of the sum of: (1) the Debt Service for such twelve month period; plus (2) the Debt Service which would have accrued on any Contracts executed or Bonds issued since the end of such twelve month period, assuming that such Contracts had been executed or Bonds had been issued at the beginning of such twelve month period; plus (3) the Debt Service which would have accrued had such proposed additional Contract been executed or such proposed additional Bonds been issued at the beginning of such twelve month period.

Notwithstanding the foregoing, Contracts executed or Bonds to refund Bonds or Contracts may be delivered without satisfying the conditions set forth above if aggregate Debt Service after such Contracts are executed or Bonds are issued is not greater than aggregate Debt Service would have been prior to the execution of such Contracts or the issuance of such Bonds.

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Section 6.15. Against Sale or Other Disposition of Property. The City will not enter into any agreement or lease which impairs the operation of the Wastewater System or any part thereof necessary to secure adequate Revenues for the payment of the principal of and interest on the 2022B Bonds, or which would otherwise impair the operation of the Wastewater System. Any real or personal property which has become nonoperative or which is not needed for the efficient and proper operation of the Wastewater System, or any material or equipment which has become worn out, may be sold if such sale will not impair the ability of the City to pay the principal of and interest on the 2022B Bonds and if the proceeds of such sale are deposited in the Revenue Fund.

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

Section 6.16. Against Competitive Facilities . To the extent that it can so legally obligate itself, the City covenants that it will not acquire, construct, maintain or operate and will not, to the extent permitted by law and within the scope of its powers, permit any other public or private agency, corporation, district or political subdivision or any person whomsoever to acquire, construct, maintain or operate within the City any municipal wastewater system that is competitive with the Wastewater System.

Section 6.17. Maintenance and Operation of the Wastewater System. The City will maintain and preserve the Wastewater System in good repair and working order at all times and will operate the Wastewater System in an efficient and economical manner and will pay all Operation and Maintenance Costs as they become due and payable.

Section 6.18. Payment of Claims. The City will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien on the Revenues or the funds or accounts created hereunder or on any funds in the hands of the City pledged to pay the principal of or interest on the 2022B Bonds or to the Owners prior or superior to the lien under the Indenture.

Section 6.19. Insurance.
(a) The City will procure and maintain or cause to be procured and maintained insurance on the Wastewater System with responsible insurers in such amounts and against suc h risks (including damage to or destruction of the Wastewater System) as are usually covered in connection with facilities similar to the Wastewater System so long as such insurance is available from reputable insurance companies.

In the event of any damage to or destruction of the Wastewater System caused by the perils covered by such insurance, the Net Proceeds thereof shall be applied to the reconstruction, repair or replacement of the damaged or destroyed portion of the Wastewater System. The City shall begin such reconstruction, repair or replacement promptly after such damage or destruction shall occur, and shall continue and properly complete such reconstruction, repair or replacement as expeditiously as possible, and shall pay out of such Net Proceeds all costs and expenses in connection with such reconstruction, repair or replacement so that the same shall be completed and the Wastewater System shall be free and clear of all claims and liens.
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If such Net Proceeds exceed the costs of such reconstruction, repair or replacement, then the excess Net Proceeds shall be applied by the City in any manner permitted by law. (b) The City will procure and maintain such other insurance which it shall deem advisable or necessary to protect its interests, which insurance shall afford protection in such amounts and against such risks as are usually covered in connection with municipal retail wastewater systems similar to the Wastewater System.
(c) Any insurance required to be maintained by paragraph (a) above and, if the City determines to procure and maintain insurance pursuant to paragraph (b) above, such insurance, may be maintained under a self-insurance program so long as such self-insurance is maintained in the amounts and manner usually maintained in connection with municipal retail wastewater systems similar to the Wastewater System and is, in the opinion of an accredited actuary, actuarially sound.

Section 6.20. Payment of Taxes and Compliance with Governmental Regulations. The City will pay and discharge all taxes, assessments and other governmental charges which may hereafter be lawfully imposed upon the Wastewater System, or any part thereof or upon the Revenues when the same shall become due. The City will duly observe and conform with all valid regulations and requirements of any governmental authority relative to the operation of the Wastewater System, or any part thereof, but the City shall not be required to comply with any regulations or requirements so long as the validity or application thereof shall be contested in good faith.

Section 6.21. Amount of Rates and Charges. The City shall, to the fullest extent permitted by law, fix and prescribe, at the commencement of each Fiscal Year, rates and charges for the Wastewater Service which are reasonably expected, at the commencement of suc h Fiscal Year, to be at least sufficient to yield during each Fiscal Year Net Revenues equal to one hundred twenty percent (120%) of the Debt Service and any amounts required to be paid to the provider of a reserve fund surety bond, if any, in such Fiscal Year. The City may make adjustments from time to time in such rates and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates and charges then in effect unless the Net Revenues from such reduced rates and charges will at all times be sufficient to meet the requirements of this section. To the extent that the covenant with respect to rates and charges in connection with any Bonds or Contracts differs from the foregoing covenant, the City shall also comply with the covenant with respect to rates and charges in connection with such Bonds or Contracts.

Section 6.22. Collection of Rates and Charges . The City will have in effect at all times by-laws, rules and regulations requiring each customer to pay the rates and charges applicable to the Wastewater Service and providing for the billing thereof and for a due date and a delinquency date for each bill.

Section 6.23. Eminent Domain Proceeds. If all or any part of the Wastewater System shall be taken by eminent domain proceedings, the Net Proceeds thereof shall be applied either to additions, betterments, extensions or improvements to the Wastewater System or, if the City elects not to apply such Net Proceeds to such capital items or if such Net Proceeds are not fully expended for such purposes, such Net Proceeds not required by the City for such purposes shall be deposited in the Revenue Fund.

Section 6.24. Enforcement of Contracts. The City will not voluntarily consent to or permit any rescission of, nor will it consent to any amendment to or otherwise take any action under or in 178

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connection with any contracts previously or hereafter entered into if such rescission or amendment would in any manner impair or adversely affect the ability of the City to pay principal of and interest on the 2022B Bonds.

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES OF 2022B BOND OWNERS
Section 7.01. Events of Default. The following events shall be Events of Default hereunder:
(a) Default by the City in the due and punctual payment of the principal of any 2022B Bonds, the principal of any Bonds or the principal with respect to any Contract, when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise.
(b) Default by the City in the due and punctual payment of any installment of interest on any 2022B Bonds, any installment of interest on any Bond or any installment of interest with respect to any Contract, when and as the same shall become due and payable. (c) Default by the City in the observance of any of the other covenants, agreements or conditions on its part in the Indenture or in the 2022B Bonds, or required by any Bond or indenture relating thereto or by any Contract, if such default shall have continued for a period of thirty (30) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the City by the Trustee or by the Owners of not less than a majority in aggregate principal amount of 2022B Bonds Outstanding, a majority in principal amount of such Bond outstanding, or a majority in principal amount outstanding with respect to such Contract, as applicable; provided, however, that, if in the reasonable opinion of the City the default stated in the notice can be corrected, but not within such thirty (30) day period, and corrective action is instituted by the City within such thirty (30) day period and diligently pursued in good fait h until the default is corrected, such default shall not be an Event of Default hereunder; provided, however, that such extended cure period shall not be longer than 90 days from the delivery date of such default notice.
(d) The City shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or a court of competent jurisdiction shall approve a petition filed with or without the consent of the City seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the City or of the whole or any substantial part of its property. (e) Payment of the principal of any Bond or with respect to any Contract is accelerated in accordance with its terms.

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notice in writing to the City, declare the principal of all of the 2022B Bond s then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration, the same shall become and shall be immediately due and payable, anything in the Indenture or in the 2022B Bonds contained to the contrary notwithstanding.

Nothing contained herein shall permit or require the Trustee to ac celerate payments due under the Indenture if the City is not in default of its obligation hereunder.

Any such declaration is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay all the principal of and installments of interest on the 2022B Bonds payment of which is overdue, with interest on such overdue principal at the rate borne by the respective 2022B Bonds to the extent permitted by law, and the reasonable fees, disbursements and expenses of the Trustee, or shall deposit with the applicable trustee with respect to any Contract a sum sufficient to pay all the principal and installments of interest with respect to such Contract payment of which is overdue, with interest on such overdue principal at the rate borne by such Contract to the extent permitted by law, and the reasonable charges and expenses of the applicable trustee with respect to such Contract, or shall deposit with the applicable trustee with respect to any Bond a sum sufficient to pay all the principal of and installment of interest on such Bond payment of which is overdue, with interest on such overdue principa l at the rate borne by such Bonds to the extent permitted by law, and the reasonable charges and expenses of the applicable trustee with respect to such Bonds, and any and all other Events of Default actually known to a Responsible Officer of the Trustee or the applicable trustee with respect to such Contract or Bonds (other than in the payment of principal of and interest on the 2022B Bonds, payment of principal and interest with respect to such Contract or payment of principal and interest on such Bond, as applicable, due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then and in every such case the Trustee shall on behalf of the Owners of all of the 2022B Bonds, rescind and annul such declaration and its consequences and waive such Event of Default; but no such rescission and annulment shall extend to or shall affect any subsequent Event of Default, or shall impair or exhaust any right or power consequent thereon.

Section 7.03. Application of Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Revenues held or thereafter received by the Trustee and any other funds then held or thereafter received by the Trustee under any of the provisions of the Indenture (other than amounts held in the Rebate Fund) shall be applied in the following order:
(a) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the 2022B Bonds, Contract or Bonds and payment of reasonable fees and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under the Indenture; (b) If and as directed by the City, to the payment of Operation and Maintenance Costs; and
(c) To the payment of the principal of and interest then due on the 2022B Bonds (upon presentation of the 2022B Bonds to be paid, and stamping or otherwise noting thereon of the payment if only partially paid, or surrender thereof if fully paid), in accordance with the provisions of the Indenture, and if and as directed by the City, to the payment of the principal and interest then 180

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due with respect to such Contract in accordance with the provisions thereof and the payment of the principal of and interest then due on such 2022B Bonds in accordance with the provisions thereof and of any indenture related thereto, in the following order of priority:

First: To the paymen t to the persons entitled thereto of all installments of interest then due on the 2022B Bonds, with respect to such Contract or on such Bonds, as applicable, in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; and
Second: To the payment to the persons entitled thereto of the unpaid principal of any 2022B Bonds, principal with respect to such Contract or principal of any Bonds, as applicable, which shall have become due, whether at maturity or by acceleration or redemption, with interest on the overdue principal at the Default Rate, and, if the amount available shall not be sufficient to pay in full all the 2022B Bonds, all amounts due under such Contract or all the Bonds, as applicable, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference; and Third: If there shall exist any remainder after the foregoing payments, such remainder shall be paid to the City.

Section 7.04. Trustee to Represent 2022B Bond Owners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the 2022B Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney in fact of the Owners of the 2022B Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the 2022B Bonds or the Indenture and applicable provisions of law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the 2022B Bond Owners, the Trustee in its discretion may, and upon the written request of the Owners of a majority in aggregate principal amount of the 2022B Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall proceed to protect or enforce its rights or the rights of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Owners under the 2022B Bonds or the Indenture or any law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Revenues and other assets pledged under the Indenture, pending such proceedings. All rights of action under the Indenture or the 2022B Bond s or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the 2022B Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such 2022B Bonds, subject to the provisions of the Indenture.

Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any 2022B Bond Owner any plan of reorganization, arrangement, adjustment, or composition affecting the 2022B Bonds or the rights of any 2022B Bond Owner thereof, or to 181

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authorize the Trustee to vote in respect of the claim of any 2022B Bond Owner in any such proceeding without the approval of the 2022B Bond Owners so affected.

Section 7.05. 2022B Bond Owners’ Direction of Proceedings. Anything in the Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the 2022B Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction to direct the method of conduct in all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of the Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee (which determination the Trustee has no duty to make) would be unjustly prejudicial to 2022B Bond Owners not parties to such direction.

Section 7.06. Suit by Owners. No Owner of any 2022B Bonds shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under the Indenture with respect to such 2022B Bonds, unless: (a) such Owners shall have given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of not less than fifty percent (50%) in aggregate principal amount of the 2022B Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) such Owner or Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee shall have failed to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee; and (e) no direction inconsistent with such written request shall have been given to the Trustee during such sixty (60) day period by the Owners of a majority in aggregate principal amount of the 2022B Bonds then Outstanding.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of 2022B Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of 2022B Bonds shall have any right in any manner whatever by their action to affect, disturb or prejudice the security of the Indenture or the rights of any other Owners of 2022B Bonds, or to enforce any right under the 2022B Bonds, the Indenture, or applicable law with respect to the 2022B Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding 2022B Bonds, subject to the provisions of the Indenture.

Section 7.07. Absolute Obligation of the City . Nothing in this Section 7.07 or in any other provision of the Indenture or in the 2022B Bonds shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the principal of and interest on the 2022B Bonds to the respective Owners of the 2022B Bonds at their respective dates of maturity, or upon call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the 2022B Bonds.

Section 7.08. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of the 2022B Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in 182

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addition to any other remedy given hereunder or now or here after existing at law or in equity or otherwise.

Section 7.09. No Waiver of Default. No delay or omission of the Trustee or of any Owner of the 2022B Bonds to exercise any right or power arising upon the occurrence 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.

ARTICLE VIII

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conveyance, shall become vested with all of the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the City or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all of the right, title and interest of such predecessor Trustee in and to any property held by it under the Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the City shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the City shall mail or cause the successor trustee to mail a notice of the succession of such Trustee to the trusts hereunder to each rating agency which is then rating the 2022B Bonds and to the 2022B Bond Owners at the addresses shown on the Registration Books. If the City fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the City. (e) Any Trustee appointed under the provisions of this Section in succession to the Trustee shall be a trust company, banking association or bank having the powers of a trust company, having a combined capital and surplus of at least Seventy Five Million Dollars ($75,000,000), and subject to supervision or examination by the Office of the Comptroller of the Currency. If such bank, banking association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such trust company, banking association or bank shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section.

Section 8.02. Merger or Consolidation. Any trust company, banking association or bank into which the Trustee may be merged or converted or with which it may be consolidated or any trust company, banking association or bank resulting from any merger, conversion or consolidation to which it shall be a party or any trust company, banking association or bank to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such trust company, banking association or bank shall be eligible under subsection (e) of Section 8.01, shall be the succes sor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

Section 8.03. Liability of Trustee.
(a) The recitals of facts herein and in the 2022B Bonds shall be taken as statements of the City, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of the Indenture or the 2022B Bonds, nor shall the Trustee incur any responsibility in respect thereof, other than a s expressly stated herein in connection with the respective duties or obligations herein or in the 2022B Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authenticatio n on the 2022B Bond s. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. 184

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The Trustee may become the Owner of 2022B Bonds with the same rights it would have if i t were not Trustee, and, to the extent permitted by law, may act as 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 2022B Bond Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the 2022B Bonds then Outstanding. (b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be prove d that the Trustee was negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority (or such other percentage provided for herein) in aggregate principal amount of the 2022B Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under the Indenture.
(d) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by the Indenture.
(e) The Trustee shall not be deemed to have knowledge of any default or Event of Default hereunder or any other event which, with the passage of time, the giving of notice, or both, would constitute an Event of Default hereunder unless and until a Responsible Officer of t he Trustee shall have actual knowledge of such event or the Trustee shall have been notified in writing, in accordance with Section 11.07, of such event by the City or the Owners of not less than fifty percent (50%) of the 2022B Bonds then Outstanding. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance by the City of any of the terms, conditions, covenants or agreements herein or any of the documents executed in connection with the 2022B Bonds, or as to the existence of an Event of Default thereunder or an event which would, with the giving of notice, the passage of time, or both, constitute an Event of Default thereunder. The Trustee shall not be responsible for the validity, effectiveness or priority of any collateral given to or held by it.
(f) No provision of the Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of any of its rights or powers.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Indenture, including at the request, order or direction of any of the Owners pursuant to the Indenture, unless such Owners shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. No permissive power, right or remedy conferred upon the Trustee hereunder shall be construed to impose a duty to exercise such power, right or remedy. (h) Whether or not herein expressly so provided, every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article VIII.
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(i) The Trustee shall have no responsibility or liability with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the 2022B Bonds. (j) The immunities extended to the Trustee also extend to its directors, officers, employees and agents.
(k) The Trustee may execute any of the trusts or powers of the Indenture and perform any of its duties through attorneys, agents and receivers and shall not be answerable for the conduct of the same if appointed by it with reasonable care. (l) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the Wastewater System, malicious mischief, condemnation, and unusually sev ere weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.
(m) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“ Instructions”) given pursuant to this Indenture and delivered using Electronic Means (“Electronic Means ” shall mean the following communications methods: e - mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“ Authorized Officers ”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City . The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may 186

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be more secure methods of transmitting Instructions than the method(s) selected by the City ; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. (n) The Trustee shall not be concerned with or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.
(o) The permissive right of the Trustee to do things enumerated herein shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct.

Section 8.04. Right to Rely on Documents. The Trustee shall be protected in acting upon any notice, resolution, requisition, request, consent, order, certificate, report, opinion, notes, direction, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be counsel of or 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 and in accordance therewith.

The Trustee may treat the Owners of the 2022B Bonds appearing in the Trustee’s Registration Books as the absolute owners of the 2022B Bonds for all purposes and the Trustee shall not be affected by any notice to the contrary.

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

Section 8.05. Preservation and Inspection of Documents. All documents that are received by the Trustee under the provisions of the Indenture shall be retained in its possession during the term hereof in accordance with applicable document retention policies and shall be subject at all reasonable times to the inspection of the City and any 2022B Bond Owner, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonable conditions.

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The City shall indemnify, defend and hold harmless the Trustee, its officers, employees, directors and agents from and against any loss, costs, claims, liability or expense (including fees and expenses of its attorneys and advisors) incurred without gross negligence or willful misconduct on its part, arising out of or in connection with the execution of the Indenture, acceptance or administration of this trust or any other document or transaction executed in connection herewith, including costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers hereunder. The rights of the Trustee and the obligations of the City under this Section 8.06 shall survive removal or resignation of the Trustee hereunder or the discharge of the 2022B Bonds and the Indenture.

When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. Upon an Event of Default, and only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment on account of principal of and premium, if any, and interest on any 2022B Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by it.

ARTICLE IX

MODIFICATION OR AMENDMENT OF THE INDENTURE
Section 9.01. Amendments Permitted.
(a) The Indenture and the rights and obligations of the City and of the Owners of the 2022B Bonds and of the Trustee may be modified or amended from time to time and at any time by an indenture or indentures supplemental thereto, which the City and the Trustee may enter into when the written consent of the Owners of a majority in aggregate principal amount of all 2022B Bonds then Outstanding, exclusive of 2022B Bonds disqualified as provided in Section 11.09 hereof, shall have been filed with the Trustee. No such modification or amendment shall: (1) extend the fixed maturity of any 2022B Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the rate of interest or the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of each 2022B Bond so affected; or (2) reduce the aforesaid percentage of 2022B Bonds the consent of the Owners of which is required to affect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under the Indenture prior to or on a parity with the lien created by the Indenture except as permitted herein, or deprive the Owners of the 2022B Bonds of the lien created by the Indenture on such Revenues and other assets except as permitted herein, without the consent of the Owners of all of the 2022B Bond s then Outstanding. It shall not be necessary for the consent of the 2022B Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the City and the Trustee of any Supplemental Indenture pursuant to this subsection (a), the Trustee shall mail a notice, setting forth in general terms the substance of such Supplemental Indenture, to each Rating Agency and the Owners of the 2022B Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture.
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(b) The Indenture and the rights and obligations of the City, the Trustee and the Owners of the 2022B Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the City and the Trustee may enter into without the consent of any 2022B Bond Owners, if the Trustee shall receive an opinion of Bond Counsel to the effect that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Owners of the Outstanding 2022B Bonds, including, without limitation, for any one or more of the following purposes:
(1) to add to the covenants and agreements of the City contained in the Indenture other covenants and agreements thereafter to be observed, to pledge or assign additional security for the 2022B Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the City;
(2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, contained in the Indenture, or in regard to matters or questions arising under the Indenture, as the City may deem necessary or desirable;
(3) to modify, amend or supplement the Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereunder in effect, and to add such other terms conditions and provisions as may be permitted by said act or similar federal statute; and
(4) on or after the Tax- Exempt Reissuance Date, to modify, amend or supplement the Indenture in such manner as to cause interest on the 2022B Bonds to remain excludable from gross income under the Code.
(c) The Trustee may in its discretion, but shall not be obligated to, enter into any such Supplemental Indenture authorized by subsections (a) or (b) of this Section which materially adversely affects the Trustee’s own rights, duties or immunities under the Indenture or otherwise. (d) Prior to the Trustee entering into any Supplemental Indenture hereunder, there shall be delivered to the Trustee an opinion of Bond Counsel stating, in substance, that such Supplemental Indenture has been adopted in compliance with the requirements of the Indenture and , only after the Tax- Exempt Reissuance Date, that the adoption of such Supplemental Indenture will not, in and of itself, adversely affect the exclusion of interest on the 2022B Bonds from federal income taxation and from state income taxation.

Section 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, the Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under the Indenture of the City, the Trustee and all Owners of 2022B Bonds Outstanding shall thereafter be det ermined, exercised and enforced thereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of the Indenture for any and all purposes.

Section 9.03. Endorsement of 2022B Bonds ; Preparation of New 2022B Bonds . 2022B Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Trustee so determines shall, bear a notation by endorsement or otherwise in form approved by 189

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the City and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand on the Owner of any 2022B Bonds Outstanding at the time of such execution and presentation of his or her 2022B Bonds for the purpose at the Office of the Trustee or at such additi onal offices as the Trustee may select and designate for that purpose, a suitable notation shall be made on such 2022B Bonds. If the Supplemental Indenture shall so provide, new 2022B Bonds so modified as to conform, in the opinion of the City and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the City and authenticated by the Trustee, and upon demand on the Owners of any 2022B Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to any 2022B Bond Owner, for 2022B Bonds then Outstanding, upon surrender for cancellation of such 2022B Bonds, in equal aggregate principal amount of the same maturity.

Section 9.04. Amendment of Particular 2022B Bonds. The provisions of this Article shall not prevent any 2022B Bond Owner from accepting any amendment as to the particular 2022B Bonds held by such Owner.

ARTICLE X

DEFEASANCE
Section 10.01. Discharge of Indenture. The 2022B Bonds may be paid by the City in any of the following ways, provided that the City also pays or causes to be paid any other sums payable hereunder by the City:
(a) by paying or causing to be paid the principal of and interest and redemption premiums (if any) on the 2022B Bonds, as and when the same become due and payable; (b) by depositing with the Trustee or an escrow agent , in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem all 2022B Bonds then Outstanding; or
(c) by delivering to the Trustee, for cancellation by it, all of the 2022B Bonds then Outstanding.

If the City shall also pay or cause to be paid all other sums payable hereunder by the City, then and in that case, at the election of the City (as evidenced by a Certificate of the City, filed with the Trustee, signifying the intention of the City to discharge all such indebtedness and the Indenture), and notwithstanding that any 2022B Bonds shall not have been surrendered for payment, the Indenture and the pledge of Revenues and other assets made under the Indenture and all covenants, agreements and other obligations of the City under the Indenture shall cease, terminate, become void and be completely discharged and satisfied, except for the City’s obligations under Section 8.06. In such event, upon the Written Request of the City, the Trustee shall execute and deliver to the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver all moneys or securities or other property held by it pursuant to the Indenture which are not required for the payment or redemption of 2022B Bonds not theretofore surrendered for such payment or redemption to the City.

Section 10.02. Discharge of Liability on 2022B Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 190

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10.03) to pay or redeem any Outstanding 2022B Bonds (whether upon or prior to the maturity or the Redemption Date of suc h 2022B Bonds), provided that, if such Outstanding 2022B Bonds are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Article IV or provisions satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the City in respect of such 2022B Bonds shall cease, terminate and be completely discharged, and the Owners thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject however, to the provisions of Section 10.04.

The City may at any time surrender to the Trustee for cancellation by it any 2022B Bonds previously issued and delivered, which the City may have acquired in any manner wha tsoever, and such 2022B Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.

Section 10.03. Deposit of Money or Securities with Trustee. Whenever in the Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any 2022B Bonds, the money or securities so to be deposited or held may include money or securities held by the Trustee in the funds and accounts established pursuant to the Indenture and shall be:
(a) lawful money of the United States of America in an amount equal to the principal amount of such 2022B Bonds and all unpaid interest thereon to maturity, except that, in the case of 2022B Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in Article IV or provisions satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount of such 2022B Bonds and all unpaid interest and premium, if any, thereon to the Redemption Date; or
(b) Federal Securities the principal of and interest on which when due will, in the written opinion of an Independent Certified Public Accountant or Independent Financial Consultant filed with the City and the Trustee, provide money sufficient to pay the principal of and all unpaid interest to maturity, or to the Redemption Date (with premium, if any), as the case may be, on the 2022B Bonds to be paid or redeemed, as such principal, interest and premium, if any, become due, provided that in the case of 2022B Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice; provided, in each case, that: (i) the Trustee shall have been irrevocably instructed (by the terms of the Indenture or by Written Request of the City) to apply such money to the payment of such principal, interest and premium, if any, with respect to such 2022B Bonds; (ii) the City shall have delivered to the Trustee an opinion of Bond Counsel addressed to the City, the Trustee to the effect that such 2022B Bonds have been discharged in accordance with the Indenture (which opinion may rely upon and assume the accuracy of the Independent Certified Public Accountant’s or Independent Financial Consultant’s opinion referred to above).

Section 10.04. Payment of 2022B Bonds After Discharge of Indenture. Notwithstanding any provisions of the Indenture, any moneys held by the Trustee in trust for the payment of the principal of, or interest on, any 2022B Bonds and remaining unclaimed for two (2) years after the principal of all of the 2022B Bonds has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in the Indenture), if such moneys were so held at such date, or two (2) 191

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years after the date of deposit of such moneys if deposited after said date when all of the 2022B Bonds became due and payable, shall be repaid to the City (without liability for interest) free from the trusts created by the Indenture upon receipt of an indemnification agreement acceptable to the City and the Trustee indemnifying the Trustee with respect to claims of Owners of 2022B Bonds which have not yet been paid, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the City as aforesaid, the Trustee shall at the written direction of the City (at the cost of the City) first mail to the Owners of 2022B Bonds which have not yet been paid, at the addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the 2022B Bonds so payable and not presented and with respect to the provisions relating to the repayment to the City of the moneys held for the payment thereof.

ARTICLE XI

MISCELLANEOUS
Section 11.01. Liability of City Limited to Revenues . Notwi thstanding anything in the Indenture or the 2022B Bonds, but subject to the priority of payment with respect to Operation and Maintenance Costs, the City shall not be required to advance any moneys derived from any source other than the Revenues, the Revenue Fund and other moneys pledged under the Indenture for any of the purposes mentioned in the Indenture, whether for the payment of the principal of or interest on the 2022B Bonds or for any other purpose of the Indenture. Nevertheless, the City may, but shall not be required to, advance for any of the purposes hereof any funds of the City which may be made available to it for such purposes.

The obligation of the City to pay interest and principal on the 2022B Bonds is a special obligation of the City payable solely from the Net Revenues and amounts on deposit in the Revenue Fund, and does not constitute a debt of the City or of the State of California or of any political subdivision thereof (other than the City) in contravention of any constitutional or st atutory debt limitation or restriction.

Section 11.02. Successor Is Deemed Included in All References to Predecessor. Whenever in the Indenture either the City or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in the Indenture contained by or on behalf of the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 11.03. Limitation of Rights to Pa rties and 2022B Bond Owners. Nothing in the Indenture or in the 2022B Bonds expressed or implied is intended or shall be construed to give to any person other than the City, the Trustee and the Owners of the 2022B Bond s, any legal or equitable right, remedy or claim under or in respect of the Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the City, the Trustee and the Owners of the 2022B Bonds.

Section 11.04. Waiver of Notice; Requirement of Mailed Notice. Whenever in the Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Whenever in the Indenture any notice shall be required to be given by mail, such 192

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requirement shall be satisfied by the deposit of such notice in the United States mail, postage prepaid, by first class mail.

Section 11.05. Destruction of 2022B Bonds . Whenever in the Indenture provision is made for the cancellation by the Trustee and the delivery to the City of any 2022B Bonds, the Trustee shall destroy such 2022B Bonds as may be allowed by law, and, upon the City’s request, deliver a certificate of such destruction to the City.

Section 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in the Indenture or in the 2022B Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in the Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of the Indenture, and the Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The City hereby declares that it wo uld have entered into the Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the 2022B Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of the Indenture may be held illegal, invalid or unenforceable.

Section 11.08. Evidence of Rights of 2022B Bond Owners. Any request, consent or other instrument required or permitted by the Indenture to be signed and executed by 2022B Bond Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such 2022B Bond Owners in person or by an agent or agents duly appointed in writing.

Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any person of 2022B Bonds transferable by delivery, shall be sufficient for any purpose of the Indenture and shall be conclusive in favor of the Trustee and the City if made in the manner provided in this Section.

The Ownership of 2022B Bonds shall be proved by the Registration Books.

Any request, consent, or other instrument or writing of the Owner of any 2022B Bonds shall bind every future Owner of the same 2022B Bond and the Owner of every 2022B Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the City in accordance therewith or reliance thereon. 193

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Section 11.09. Disqualified 2022B Bonds . In determining whether the Owners of the requisite aggregate principal amount of 2022B Bonds have concurred in any demand, request, direction, consent or waiver under the Indenture, 2022B Bonds which are actually known by a Responsible Officer of the Trustee to be owned or held by or for the account of the City, or by any other obligor on the 2022B Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the City or any other obligor on the 2022B Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, unless all 2022B Bonds are so owned or held, in which case such 2022B Bonds shall not be disregarded and shall be deemed to be Outstanding. 2022B Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such 2022B Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the City or any other obligor on the 2022B Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request, the City shall certify to the Trustee those 2022B Bonds that are disqualified pursuant to this Section 11.09 and the Trustee may conclusively rely on such certificate.

Section 11.10. Money Held for Particular 2022B Bonds. The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular 2022B Bonds (or portions of 2022B Bonds in the case of registered 2022B Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the 2022B Bonds entitled thereto, subject, however, to the provisions of Section

10.04 hereof but without any liability for interest thereon.

Section 11.12. Waiver of Personal Liability. No member, officer, agent, employee, consultant or attorney of the City shall be individually or personally liable for the payment of the principal of or premium or interest on the 2022B Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such member, officer, agent, employee, consultant or attorney from the performance of any official duty provided by law or by the Indenture.

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

Section 11.14. Choice of Law . THE INDENTURE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.
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Section 11.15. Additional Rights of Original Purchase r. The following provisions shall apply so long as the Original Purchaser owns 100% of the 2022B Bonds:
(a) Notwithstanding any other provision of this Indenture, the Original Purchaser shall have the right to consent to the appointment of a successor Trustee appointed by the City after the resignation or removal of the Trustee.
(b) Notwithstanding any other provision of this Indenture, the Original Purchaser shall have the right to consent to any amendment to this Indenture. (c) The City shall inform the Original Purchaser promptly upon the occurrence of an Event of Taxability or an Event of Default.
(d) The Original Purchaser is hereby expressly made a third party beneficiary of this Indenture.
(e) The City shall pay or reimburse the Original Purchaser for any and all charges, fees, costs and expenses that t he Original Purchaser may reasonably pay or incur, as a result of any action or omission by the City, in connection with the following: (i) the administration, enforcement, defense, or preservation of any rights or security hereunder; (ii) any amendment, waiver, or similar action with respect to or related to this Indenture whether or not executed or completed; or (iii) any litigation or other dispute in connection with this Indenture.
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IN WITNESS WHEREOF, the City has caused the Indenture to be signed in i ts name by its Authorized Representative, and the Trustee, in token of its acceptance of the duties and obligations of the Trustee created hereunder, has caused the Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.

CITY OF SANGER
By:

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

Its: Authorized Officer

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EXHIBIT A
FORM OF 2022B BOND

THE REGISTERED OWNER OF THIS BOND ACKNOWLEDGES AND AGREES THAT

THIS BOND MAY ONLY BE TRANSFERRED UPON SATISFACTION OF THE REQUIREMENTS

IN THE INDENTURE, INCLUDING THE DELIVERY TO THE CITY AND THE TRUSTEE OF A PURCHASER’S CERTIFICATE IN THE FORM REQUIRED BY THE INDENTURE. ANY

TRANSFER OF THIS BOND IN VIOLATION OF THE TRANSFER RESTRICTI ONS CONTAINED IN THE INDENTURE SHALL BE VOID AND OF NO EFFECT.

No. R-1 $__________

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

CITY OF SANGER
2022B WASTEWATER REVENUE REFUNDING BONDS

INTEREST RATE MATURITY DATE ORIGINAL ISSUE DATE

4.05% June 15, 2043 May ___, 2022

REGISTERED OWNER FIRST FOUNDATION PUBLIC FINANCE
PRINCIPAL AMOUNT: ____________________ THOUSAND DOLLARS The CITY OF SANGER , a municipal corporation that is duly organized and existing under the Constitution of the State of California (the “City”), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the “Registered Owner”), on the Maturity Date specified above (subject to any right of prior redemption hereinafter provided for), the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this Bond (unless: (i) this Bond is authenticated after the fi rst day of the calendar month in which an interest payment date occurs, whether or not such day is a business day, and on or before the following interest payment date, in which event it shall bear interest from suc h interest payment date; or (ii) this Bond is authenticated on or before December 1, 2022, in which event it shall bear interest from the Original Issue Date identified above; provided, however, that if as of the date of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on this Bond), at the Interest Rate per annum specified above, payable on December 15, 2022 and each June 15 and December 15 thereafter until maturity, or the earlier redemption hereof, calculated on the basis of a 360 day year composed of twelve 30 day months. Notwithstanding the foregoing, so long as any event of default shall have occurred and is continuing, the interest rate on this Bonds may, at the option of the Owner of the Bond, be increased to the Default Rate as provided in the Indenture (as hereinafter defined); provided further, however, from and after the Date of Taxability following a Determination of Taxability, the interest rate on the Bonds shall be increased to the Taxable Rate. Principal hereof and premium, if any, upon early redemption hereof are payable by check of U.S. Bank Trust Company, N ational Association, as trustee (the “Trustee”). Interest 197

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hereon is payable by check of the Trustee sent by first class mail on the applicable interest payment date to the Registered Owner hereof at the Registered Owner’s address as it appears on the registration books of the Trustee as of the close of business on the fi rst day of the month in which each interest payment date occurs (except that in the case of a Registered Owner of one million dollars ($1,000,000) or more in principal amount, such payment may, at such Registered Owner’s option, be made by wire transfer of immediately available funds to an account in the United States in accordance with written instructions provided to the Trustee by such Registered Owner prior to the first (1st) day of the month in which such interest payment date occurs).

Notwithstanding anything in the Indenture or this Bond to the contrary, so long as this Bond is owned by First Foundation Public Finance, a Delaware statutory trust and wholly-owned affiliate of First Foundation Bank (the “Original Purchaser”): (i) the Trustee shall pay principal of and interest and premium on, if any, on this Bond when due by wire transfer in immediately available funds to the Original Purchaser in accordance with such wire transfer instructions as shall be filed by the Original Purchaser with the Trustee from time to time; (ii) payments of principal on this Bond shall be made without the requirement for presentation and surrender by the Original Purchaser , provided that principal which is payable at maturity shall be made only upon presentation and surrender at the Office of the Trustee; and (iii) the Trustee shall not be required to give notice to the Original Purchaser of the mandatory sinking fund payments described in this Bond.

This Bond is not a debt of the State of California, or any of its political subdivisions (other than the City), and neither the State, nor any of its political subdivisions (other than the City), is liable hereon, nor in any event shall this Bond be payable out of any funds or properties of the City other than the Net Revenues (as such term is defined in the Indenture of Trust, dated as of May 1, 2022 (the “Indenture”), by and between the City and the Trustee) and other moneys pledged therefor under the Indenture. The obligation of the City to make payments in accordance with the Indenture is a limited obligation of the City as set forth in the Indenture and the City shall have no liability or obligation in connection herewith except with respect to such payments to be made pursuant to the Indenture. This Bond does not constitute an indebtedness of the City in contravention of any constitutional or statutory debt limitation or restriction.

This Bond is one of a duly authorized issue of bonds of the City designated as the “City of Sanger 2022B Wastewater Revenue Refunding Bonds” (the “ 2022B Bonds”), of an aggregate principal amount of ____________________ Thousand Dollars ($__________), all of like tenor and date (except for such variation, if any, as may be required to designate varying series, numbers or interest rates) and all issued pursuant to the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with Section 53570) of the Government Code of the State of California, and pursuant to the Indenture and the resolution authorizing the issuance of the 2022B Bonds.

Reference is hereby made to the Indenture (copies of which are on file at the office of the City) and all supplements thereto for a description of the terms on which the 2022B Bonds are issued, the provisions with regard to the nature and extent of the Net Revenues, and the rights thereunder of the Owners of the 2022B Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the City hereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees.

The 2022B Bonds have been issued in fully registered form without coupons. 198

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The 2022B Bonds have been issued by the City for the purpose of paying and prepaying certain obligations of the City to refinance certain capital improvements to the City’s municipal wastewater system.

This Bond and the interest, premium, if any, hereon and all other 2022B Bonds and the interest and premium, if any, thereon (to the extent set forth in the Indenture) are special obligations of the City, secured by a pledge and lien on the Revenues and any other amounts on deposit in certain funds and accounts created under the Indenture, and payable from the Net Revenues. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest and premium (if any) on this Bond.

The Indenture and the rights and obligations of the City and the Owners of the 2022B Bonds and the Trustee may be modified or amended from time to time and at any time with the written consent of the Owners of a majority in aggregate principal amount of all 2022B Bonds then Outstanding, exclusive of 2022B Bonds disqualified as set forth in the Indenture, in the manner, to the extent and upon the terms provided in the Indenture, but no such modi fication or amendment shall: (i) extend the fixed maturity of any 2022B Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the owner of each 2022B Bond so affected; or (ii) reduce the aforesaid percentage of 2022B Bonds the consent of the Owners of which is required to affect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under the Indenture prior to or on a parity with the lien created by the Indenture except as permitted in the Indenture, or deprive the Owners of the 2022B Bonds of the lien created by the Indenture on such Revenues and other assets, except as expressly provided in the Indenture, without the consent of the Owners of all of the 2022B Bonds then Outstanding.

The Indenture and the rights and obligations of the City, of the Trustee and the Owners of the 2022B Bonds may also be modified or amended for certain purposes described more fully in the Indenture at any time in the manner, to the extent and upon the terms provided in the Indenture by a supplemental indenture, which the City and the Trustee may enter into without the consent of any 2022B Bond Owners, if the Trustee shall receive an opinion of Bond Counsel to the effect that the provisions of such supplemental indenture will not materially adversely affect the interests of the Owners of the Outstanding 2022B Bonds.
[Prior to Tax -Exempt Reissuance Date: The 2022B Bonds shall be subject to optional redemption, as a whole or in part, on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee and the Original Purchaser at least 35 days (or such lesser number of days acceptable to the Trustee and the Original Purchaser in the sole discretion of the Trustee and the Original Purchaser, such notice for the convenience of the Trustee), at the following Rede mption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:
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Redemption Date Redemption Price
Through and including December 15, 2023 103%
June 15, 2024 to and including December 15, 2025 102
June 15, 2026 to and including December 15, 2027 101
June 15, 2028 and any Interest Payment Date thereafter 100

At the City’s option and upon satisfaction of certain conditions set forth in the Indenture, on any business date on or after June 15, 2023, the interest rate on this Bond shall convert to the Tax- Exempt Rate (defined in the Indenture), and the optional redemption provisions applicable to the 2022B Bonds will be modified in the manner described in the Indenture.] [Post Tax-Exempt Reissuance Date (option to be selected by Owner of the Bond):
[OPTION 1: The 2022B Bonds shall be subject to redemption prior to their respective stated maturities, as a whole or in part, on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
December 15, 2024 to and including December 15, 2025 102% June 15, 2026 to and including December 15, 2027 101
June 15, 2028 and any Interest Payment Date thereafter 100

OPTION 2: The 2022B Bonds shall be subject to redemption prior to their respective stated maturities, as a whole or in part, on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trus tee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
December 15, 2024 to and including December 15, 2027 101% June 15, 2028 and any Interest Payment Date thereafter 100

OPTION 3: The 2022B Bonds shall be subject to redemption prior to their respective stated maturities, as a whole or in part, on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
December 15, 2024 and any Interest Payment Date thereafter 100%

OPTION 4: The 2022B Bonds are not subject to optional redemption prior to maturity.]] 200

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The 2022B Bonds are subject to mandatory sinking fund redemption in part (by lot) on June 15, 2023 and each June 15 thereafter, in integral multiples of $1,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, as set forth in the Indenture.

If some but not all of the 2022B Bonds are redeemed pursuant to the optional redemption provision of the Indenture, as describe d above, the principal amount of the applicable 2022B Bond s to be redeemed on any subsequent June 15 will be reduced, by $1,000 or an integral multiple thereof, as designated by the City in a Written Order of the City filed with the Trustee; provided, howe ver, that the aggregate amount of such reductions shall not exceed the aggregate amount of the applicable 2022B Bonds redeemed pursuant to the optional redemption provision of the Indenture.

As provided in the Indenture, notice of redemption shall be mailed by the Trustee by first class mail at least 20 days but not more than 60 days prior to the date fixed for redemption to the respective Owners of any 2022B Bonds designated for redemption at their addresses appearing on the registration books of the Trust ee, but neither the failure to receive such notice nor any defect in the notice or the mailing thereof shall affect the validity of the redemption.

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

If an Event of Default, as defined in the Indenture, shall occur, the principal of all of the 2022B Bonds and the interest accrued thereon may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture.

This Bond is transferable by the Registered Owner hereof, in person or by his or her duly authorized attorney in writing, at the Office of the Trustee but only in the manner, subject to the limitations and upon payment of the taxes and charges provided in the Indenture and upon surrender and cancellation of this Bond. Upon registration of such transfer, a new 2022B Bond or 2022B Bonds of the same series, of authorized denomination or denominations, for the same aggregate principal amount of the same maturity will be issued to the transferee in exchange therefor.

This Bond may be exchanged at said Office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations of the same series and same maturity, but only in the manner, subject to the limitations and upon payment of the taxes and charges provided in the Indenture.

The Trustee shall not be required to register the transfer or exchange of this Bond during the period in which the Trustee is selecting 2022B Bonds for redemption or if this Bond has been selected for redemption.

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

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other indebtedness of the City, does not exceed any limit under any laws of the State of California, and is not in excess of the amount of 2022B Bonds permitted to be issued under the Indenture.

IN WITNESS WHEREOF, the City has caused this Bond to be executed in its name and on its behalf with the manual or facsimile signature of its City Manager as of this _____ day of May , 2022.

CITY OF SANGER
By:

Its: City Manager

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[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION
TO APPEAR ON BONDS]
This is one of the Bonds described in the within-mentioned Indenture.

Dated:

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

Its: Authorized Signatory

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[FORM OF ASSIGNMENT]
For value received the undersigned hereby sells, assigns and transfers unto

Dated:

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

Signature Guaranteed:

Note: Signature guarantee shall be made by a
guarantor institution participating in
the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee.
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EXHIBIT B

DESCRIPTION OF PRIOR PROJECT
Component Capital Cost
The Prior Project consists of the installation of a 1.1MW solar photovoltaic system to power the City’s wastewater treatment plant and the City Yard facilities. The Prior Project also includes the replacement of two blower pumps with two high efficiency blowers wit h variable
speed control, the rebuilding of the final effluent pump, new controls such as dissolved oxygen and pH probes, solenoid valves, and analyzers. The project will also include the retrofitting of many exterior lights with LED technology and the replacement of HVAC systems. $5,955,146.00

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EXHIBIT C
FORM OF PURCHASER’S CERTIFICATE
__________, 20__
City of Sanger
Sanger, California
U.S. Bank Trust Company, National Association
Los Angeles, California
Re: City of Sanger 2022B Wastewater Revenue Refunding Bonds Ladies and Gentlemen:

The undersigned (the “ Purchaser”) hereby acknowledges that it is purchasing $__________ aggregate principal amount of City of Sanger 2022B Wastewater Revenue Refunding Bonds (the “Bond”) issued in the Authorized Denomination amount pursuant to an Indenture, dated as of May 1, 2022 (the “Authorizing Document”), by and between the City of Sanger (the “Issuer”) and U.S. Bank Trust Company, National Association, as trustee. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Authorizing Document.

In connection with the sale of the Bond to the Purchaser, the Purchaser hereby makes the following representations upon which you may rely:

The Purchaser (a) is a
bank, any entity directly or indirectly controlled by the bank or under common control with the bank, other than a broker, dealer or municipal securities dealer registered under the Securities Exchange Act of 1934, or a consortium of such entities; and (b) has the present intent to hold the Bond to maturity or earlier redemption.

2. The Purchaser is (a) a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or (b) an “accredited investor” as that term is defined in Rule 501(a)(1),(2),(3), or (7) under the Securities Act.

3. The Purchaser is not purchasing the Bond for more than one account or with a view to distributing the Bond.

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“Blue Sky” laws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating agency, and (d) will be delivered in a form that may not be readily marketable.

8. The Purchaser acknowledges and agrees that the Issuer take s no responsibility for, and makes no representation to the Purchaser , or any subsequent purchaser, with regard to, a sale, transfer or other disposition of the Bond in violation of the provisions of the Authorizing Document, or any securities law or income tax law consequences thereof. The Purchaser a lso acknowledges that, with respect to the Issuer’s obligations and liabilities, the Purchaser is solely responsible for compliance with the sales restrictions on the Bond in connection with any subsequent transfer of the Bond made by the Purchaser.

10. The Purchaser acknowledges that the sale of the Bond to the Purchaser is made in reliance upon the certifications, representations, and warranties herein made to the addressees hereto.

11. The interpretation of the provisions hereof shall be governed and construed in accordance with State of California law without regard to principles of conflicts of laws.

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13. Inasmuch as the Bond represents a negotiated transaction, the Purchaser is not acting as a fiduciary of the Issuer, but rather is acting solely in its capacity as the initial O wner, for its own loan account. The Purchaser acknowledges and agrees that (i) the transaction contemplated herein is an arm’s length commercial transaction between the Issuer and the Purchaser and its affiliates, (ii) in connection with such transaction, the Purchaser and its affiliates are acting solely as a prin cipal and not as an advisor including, without limitation, a “Municipal Advisor” as such term is defined in Section 15B of the Securities and Exchange Act of 1934, as amended, and the related final rules (the “Municipal Advisor Rules”), (iii) the Purchaser and its affiliates are relying on the purchaser exemption in the Municipal Advisor Rules, (iv) the Purchaser and its affiliates have not provided any advice or assumed any advisory or fiduciary responsibility in favor of the Issuer with respect to the transaction contemplated by the Bond and the discussions, undertakings and procedures leading thereto (whether or not the Purchaser, or any affiliate of the Purchaser, has provided other services or advised, or is currently providing other services or advisi ng the Issuer on other matters) and (v) the Purchaser and its affiliates have financial and other interests that differ from those of the Issuer. [PURCHASER/TRANSFEREE]
By:

Its:

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EXHIBIT D

CITY OF SANGER
2022B WASTEWATER REVENUE REFUNDING BONDS
Election of Conversion to the Tax-Exempt Rate
The undersigned, _________ of the City of Sanger (the “City”), hereby provides notice on behalf of the City that the City elect s to convert the interest rate payable with respect to the above - referenced bonds (the “Bonds”) to the Tax-Exempt Rate on the date hereof . Capitalized terms used herein and not defined shall have the meanings given such terms in the Indenture dated as of May 1, 2022, by and between the City and U.S. Bank Trust Company, National Association, pursuant to which the Bonds were issued.

Dated: __________, 20__ CITY OF SANGER
By:

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EXHIBIT E
[Tax-Exempt Reissuance Date]
City of Sanger
Sanger, California
Re: $_________ City of Sanger 2022B Wastewater Revenue Refunding Bonds Ladies and Gentlemen:

We have examined the Constitution and the laws of the State of California, a certified record of the proceedings of the City of Sanger (the “City”) taken in connection with the conversion of the interest rate payable with respect to City of Sanger 2022B Wastewater Revenue Refunding Bonds in the aggregate principal amount of $__________ (the “Bonds”) to the tax-exempt rate and such other information and documents as we consider necessary to render this opinion. In rendering this opinion, we have relied upon certain representations of fact and certifications made by the City, the purchaser of the Bonds and others. We have not undertaken to verify through independent investigation the accuracy of the representations and certifications relied upon by us.

1. Under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest on the Bonds on and after the date hereof is excluded from gross income for federal income tax purpos es and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals.

2. Interest on the Bonds is exempt from State of California personal income tax.

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The opinions expressed herein may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture and the Tax Certificate relating to the Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. No opinion is expressed herein as to the effect on the exclusion from gross income of interest on the Bonds for federal income tax purposes with respect to any Bond if any such action is taken or omitted based upon the opinion or advice of counsel other than ourselves. Other than expressly stated herein, we express no other opinion regarding tax consequences with respect to the Bonds.

Respectfully submitted,

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[FORM OF RELIANCE LETTER]
[Tax-Exempt Reissuance Date]
[Bond Owner]
[Trustee]
Re: $_________ City of Sanger 2022B Wastewater Revenue Refunding Bonds Ladies and Gentlemen:

On the date hereof, we delivered to the City of Sanger (the “City”) our opinion (the “Opinion”) in connection with the conversion of the interest rate payable with respect to the above - captioned bonds (the “Bonds”) to the tax -exempt rate, which have been issued pursuant to Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 (commencing with Section 53570) of the Government Code of the State of California and the Indenture of Trust dated as of May 1, 2022 by and between the City and U.S. Bank Trust Company, National Association (the “Indenture”). You are authorized to rely on the Opinion as if it were addressed to you.

The Opinion is limited to matters governed by the laws of the State of California and federal tax law, and we assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction. No attorney-client relationship has existed or exists between our firm and you in connection with the Bonds or by virtue of this letter and we are not assuming any professional responsibility to any other person whomsoever.

Respectfully submitted,
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EXHIBIT F
OWNER’S CERTIFICATE
IT IS HEREBY CERTIFIED by the undersigned, __________ (the “Owner”) with respect to the conversion of the interest rate payable with respect to the City of Sanger 2022B Wastewater Revenue Refunding Bonds (the “Bonds”) to the Tax -Exempt Rate on the date hereof (the Bonds bearing interest at the Tax-Exempt Rate is referred to herein as the “Tax-Exempt Bonds”) that:

1. The Owner hereby selects the following optional redemption provision to be applicable to the Tax-Exempt Bonds from and after the date hereof:
[OWNER PICKS ONE OF THE FOLLOWING FOUR OPTIONS]
[Option No. 1]
The 2022B Bonds shall be subject to redemption prior to their respective stated maturities, as a whole or in part, on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be rede emed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
December 15, 2024 to December 15, 2025 102%
June 15, 2026 to and including December 15, 2027 101
June 15, 2028 and any Interest Payment Date thereafter 100

[Option No. 2]
The 2022B Bonds shall be subject to redemption prior to their respective stated maturities, as a whole or in part, on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee), at the following Redemption Prices, expressed as a percentage of the principal amount to be redee med, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
December 15, 2024 to and including December 15, 2027 101% June 15, 2028 and any Interest Payment Date thereafter 100

[Option No. 3]
The 2022B Bonds shall be subject to redemption prior to their respective stated maturities, as a whole or in part, on any Interest Payment Date, as directed by the City in a Written Request provided to the Trustee at least 35 days (or such lesser number of days acc eptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee), at the following 213

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Redemption Prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest thereon to the Redemption Date:

Redemption Date Redemption Price
December 15, 2024 and any Interest Payment Date thereafter 100%

[Option No. 4]
The 2022B Bonds are not subject to optional redemption prior to maturity.]]

2. The Owner hereby acknowledges receipt of the “City of Sanger 2022B Wastewater Revenue Refunding Bonds,” in the principal amount of $__________, maturing, bearing interest at the Tax -Exempt Rate and subject to redemption prior to maturity as provided in the Indenture of Trust dated as of May 1, 2022 by and between the City and U.S. Bank Trust Company, National Association (the “Indenture”) and as set forth above, and the Tax -Exempt Bonds is registered in the name of the Owner.

3. The Owner intends to retain the Tax -Exempt Bonds for its own portfolio until maturity and does not intend to reoffer the Tax-Exempt Bonds to the public.

4. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture.

WITNESS my hand on this ___________, 20__.

[OWNER]
By .

Authorized Officer
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Sanger City CouncilMay 5, 2022

Sanger City Council
May 5, 2022